Questions (not multiple choice) Flashcards
1
Q
The ability of a product to satisfy a human want, need or desire.
A
Utility
2
Q
The price a willing buyer will pay and a willing seller will sell for, if neither is under undue pressure
A
Market Value
3
Q
What are the four characteristics of value?
A
Demand, utility, scarcity, transferability
4
Q
The purpose of USPAP
A
To promote and maintain a high level of public trust in appraisal practice.
5
Q
Depreciation caused by a loss of utility is
A
Functional Obsolescence
6
Q
What is a property’s highest and best use?
A
The use of the property that provides the greatest financial return
7
Q
The three approaches to value
A
- Sales Comparison Approach
- Cost Approach
- Income Approach
8
Q
The presence of lower priced properties in an area will cause a decline in the value of the subject property is called _______
A
Regression
9
Q
The process of combining several parcels of land into one larger tract
A
Assemblage
10
Q
What is postponed maintenance on property that results in increased physical depreciation (wear and tear)
A
Deferred Maintenance
11
Q
The final step in the appraisal process using weighted averages to determine an estimate of value
A
Reconcilation
12
Q
What are the 5 attributes of land?
A
- Immobile
- Durability
- Uniqueness
- Finite
- Useful
13
Q
The difference between real estate and real property?
A
Real Estate: A parcel of land and its improvements
Real Property: Ownership, rights, benefits
14
Q
What does USPAP stand for?
A
Uniform Standards of Professional Appraisal Practice
15
Q
What is the important consideration regarding special use properties?
A
Their value may be affected to their limited purpose use
16
Q
What are the 4 agents of production?
A
- Land 2. Labor 3. Capital 4. Entrepreneurial Benefit
17
Q
The condition of a property measured in years, also know as______
A
Effective Age
18
Q
What are the 4 phases that a neighborhood goes through?
A
- Growth 2. Stability 3. Decline 4. Revitalization
19
Q
What is the most complete form of ownership of a property?
A
Fee Simple
20
Q
What are the 4 government powers that can be imposed on a property?
A
- Police power 2. Eminent Domain 3. Escheat 4. Taxation
21
Q
What are the (5) rights in property, or “sticks” in the bundle?
A
- Right to sell
- Right to lease
- Right to occupy
- Right to mortgage
- Right to give away
22
Q
The absolute rights to a property limited to the lifetime of the designated party, also known as _____
A
Life Estate
23
Q
Are the user and payer of the appraisal report always the client?
A
NO!
The client could be an agent. The client is the person who is engaging with the appraiser.
24
Q
The right to use another’s real property for a particular use is a(n)_______
A
easement
25
Property sold in a less than typical marketing period and exposure is what type of value?
Liquidation value
26
What are the 4 tests of highest and best use?
1. Physically possible
2. Legally possible
3. Economically Feasible
4. Maximally Productive
27
______ Land is the portion over and above what is needed for the highest and best use, and does not have a stand alone value
Surplus Land
28
____ Land is land that is not necessary to support improvements. It has its own value.
Excess Land
29
The conversion of income value is called?
Capitalization
30
A fee appraiser seeks to get on the approved list for a local mortgage company. In order to be considered for approval, the lender requires appraisers to provide sample appraisal reports performed within the past year. Can the appraiser provide the reports without violating USPAP?
Yes, if all the essential elements of confidential information are removed through redaction of the process of aggregation
31
Who has oversight authority over state appraisal boards?
ASC
| Appraisal Subcommittee
32
The concept that a higher priced property will be worth less in a lower-prices neighborhood than it would in a neighborhood of comparable properties is the definition of the principle of
regression
33
Trespassing on the domain of another is the definition of
encroachment
34
A firm agreement to preform an act, refrain from acting of make a payment or delivery is the definition of
Promise
35
The right to construct and maintain tunnels, subways, subcellars, pipelines, sewers, etc. is the definition of what kind of rights
Subsurface
36
A facade easement is what type of easement?
Historic Preservation
37
USPAP includes performance standards for the appraisal of
real property, personal property, and business/intangible property
38
A right or interest in a property is a(n)
Estate
39
Which type of investment has historically generated the highest return on investment?
Real Estate
40
what kind of contract is one that has not been fully performed or completed?
Executory
41
Mary Jones has a property with no road frontage. She has an access right of way across the property of her neighbor Bob Smith for ingress, egress, and regress. Who has the dominant tenement in this situation?
Mary Jones
42
The Federal Reserve can influence the level of economic activity by
Regulating the availability of money and the rate of interest
43
The appraisal standards and qualification criteria promulgated by the boards of The Appraisal Foundation achieves legal authority by adoption, citation or implementation by
Government Agencies
44
The price expected for a whole property, e.g., a house, or a part of a property, e.g., a plumbing fixture, that is removed from the premises usually for use elsewhere” is the definition of ____________ value.
Salvage
45
Property Owner A has the right to develop his property into 10 lots. He sells this right to nearby Property Owner B who wishes to develop his property into additional lots. This is an example of
Transferable Development Rights
46
In the 1970s, who developed uniform rules for mortgage underwriting?
Fannie Mae and Freddie Mac
47
Definition of appraisal:
An opinion of value
48
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified by the lease
Leasehold Estate
49
Who are the main lenders (3) on the secondary mortgage market?
Fannie Mae, Freddie Mac, Ginnie Mae
50
In a trust deed, the title to a property is vested in WHO until the mortgage lien is satisfied?
Trustee
51
There are stipulations that make a deed valid. What does NOT have to happen to make a deed valid?
Having the deed recorded
52
Cost approach formula
Property value = Land value + (cost new-accumulated depreciation)
53
Which entity is responsible for making periodic changes to USPAP?
ASB. Appraisal Standards Board.
54
The real property market is generally classified as a(n) _____ market.
Imperfect
55
“The rate at which vacant space in a property or a group of properties for sale or lease has been or is expected to be successfully sold or leased over a specified period of time” is the definition of a(n) __________ rate.
Absorption rate
56
Under the current qualification criteria, an applicant for Appraiser Trainee must have completed ___ creditable hours of experience.
0 hours of experience
57
The primary purpose of USPAP is to protect
Public Trust
58
The website with the largest amount of demographics information is
Cencus.gov
59
Which entity is responsible for monitoring state appraiser licensing and certification agencies?
ASC
| Appraisal Subcommittee
60
Short term money instruments are traded on the
Money Market
61
Who is responsible for appointing members to the ASB and AQB?
Board of Trustees
62
The four components of the Appraiser Qualification Criteria are:
Qualifying education, examination, experience, continuing education
63
As part of the overall requirement for continuing education, certified and licensed appraisers must complete the 7-Hour National USPAP Update Course or its equivalent ________ calendar year(s).
every 2
64
Twenty years ago, most appraisal reports that were sent electronically were sent using _____ technology; today, most appraisals are sent electronically using a _______ format.
EDI, PDF
65
Low interest rates encourage __________, while high interest rates encourage _________.
borrowing, saving
66
When comparing printers, make sure to compare the cost per
Printed page
67
A problem with the real property market is that the amount of ________ is slow to change.
Supply
68
When estimating the value of a fireplace in a single-family home, the most important principle is the principle of
Contribution
69
Normally the first step in highest and best use analysis is to research the uses that are
Legally permissible
70
The Uniform Commercial Code covers the sale of goods over $________.
500
71
The principle of supply and demand states that the price of a commodity, good, or service varies __________, but not necessarily _____________, with demand.
directly, proportionately
72
"A business arrangement in which two or more persons jointly own a business and share in its profits and losses” is the definition of
partnership
73
What is the purpose of a state's statute of frauds?
prohibits fraud in real estate transactions
74
Multiple Listing Services (MLS) can be utilized for gathering what kind of data
general and specific data
75
The basic principle underlying the cost approach is the principle of
substitution
76
“Data concerning the property being appraised, comparable sale and rental properties, and relevant local market characteristics” is the definition of
Specific Data
77
An appraiser must not allow the intended use of an assignment or a client’s objectives to cause the assignment results to be __________.
biased
78
A one-and-a-half-story house is commonly known as a
cape-cod
79
“Data that relates to the four forces that affect real property values—social, economic, governmental, and environmental forces” is the definition of
general data
80
If an appraiser uses a cost manual to estimate cost new for a property, the result is
replacement cost
81
The ground rent capitalization method should only be used when appraising a property that is
income producing/suitable for income production
82
The first step in the valuation process is
define the problem
83
The most complex method of site valuation is the _______________ method.
subdivision development
84
Which of the stages in the life cycle of a market area does not always occur?
revitalization
85
The cost approach formula states that reproduction or replacement cost new _______________, _______________ equals property value.
minus depreciation, plus site value
86
A short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure.
Expected remaining economic,
| Remaining economic
87
In a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________.
arm's length, duress
88
An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. This 25% figure represents
entrepreneurial incentive
89
Which was the earliest form of electrical wiring?
knob and tube
90
An estimate of remaining economic life is required by
VA
91
"An amount paid for the use of land, improvements or a capital good" is the definition of
RENT
92
“A method of estimating land value in which the depreciated cost of the improvements on an improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land” is the definition of the ___________ method of site valuation
extraction
93
GRMs are derived by dividing the __________ by the property's ___________ at the time of sale.
sale price, gross monthly unfurnished market rent
94
When measuring a condominium you should calculate ____ using _______ measurements.
GLA, interior
95
“The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout” is the definition of__________ cost.
Replacement
96
J-bolts are used to anchor the _________ to the __________.
sill plate, foundation
97
Parging is used on which kind of foundation wall?
concrete block
98
Construction materials and workers' wages are examples of __________costs.
direct
99
An appraisal with an effective date at some point in the future is called a(n) ___________ appraisal.
prospective
100
The Fannie Mae Single Family Comparable Rent Schedule is designated as Form
1007
101
EIFS is also known as
synthetic stucco
102
Architectural and engineering fees are examples of _____________ costs.
indirect
103
The "summation approach" is another name for the _______________
cost approach
104
It is common in appraisal reports to include a map that shows the location of the _______________.
subject property and comparable sales
105
Condemnation occurs when a municipality exercises
Eminent domain
106
Under USPAP, when is an appraiser required to develop the cost approach in a real property appraisal?
When it is necessary for credible results
107
“Expenditures or allowances for items other than labor and materials that are necessary for construction, but are not typically part of the construction contract” is the definition of
indirect costs
108
“Improved land or a lot in a finished state so that it is ready to be used for a specific purpose”.
site
109
The method that estimates land value based on a percentage of the total property value is the _______________ method.
allocation
110
The most commonly used method for valuing sites is the ____________ method.
sales comparison
111
“A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis” is the definition of
hypothetical condition
112
Building permits and worker's compensation are examples of __________costs.
direct
113
Flood maps are prepared by
FEMA
114
Soil maps produced by the Natural Resources Conservation Service are based on
Aerial Maps
115
“The amount by which contract rent exceeds market rent at the time of the appraisal....” is the definition of __________ rent.
Excess
116
The most common heating systems in residential construction today are
Forced warm air
117
Developers often value land on a basis of price per
buildable unit
118
Fannie Mae requires a single-unit residential appraisal report to include photographs of
the subject property and comparable sites
119
What are the three general types of depreciation?
physical, functional, and external
120
The identification of relevant characteristics is a judgment made by
the appraiser
121
When appraising a duplex, an appraiser should use __________ area.
gross building
122
Each written appraisal report must contain the date
| of
the report and the effective date of the appraisal
123
“An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the motivations of either the buyer or a seller in a transaction”
conditions of sale
124
The cost estimating method most commonly used by residential appraisers is the ____________ method.
Comparative unit
125
Appraisers are cautioned to identify the exact _______________ of market value, and its _______________, applicable in each appraisal completed for the purpose of market value.
definition, authority
126
“The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease” is the definition of _______________.
leasehold interest
127
In the age-life method of estimating depreciation, the ___________ age is divided by the ____________ life.
effective age, total economic life
128
Price per room is a common unit of comparison when appraising
2-4 unit residential properties
129
Market condition adjustments should always be calculated from the time of the ________ to the ___________.
contract, effective date of the appraisal
130
What unit of measurement is typically used for single-family homes?
gross living area
131
Which type of depreciation occurs off the site?
external
132
Appraisal fees are examples of _______________ costs.
indirect
133
The valuation process is a systematic procedure employed to provide the answer to a(n) _______ question about the value of _________.
client's, real property
134
The results of a _________ test will determine if there is suitable drainage and the size of the drain field that will be required for a septic system.
percolation
135
Materials that transfer energy quickly are called __________ and those that transfer energy slowly are called __________.
conductors, insulators
136
In what type of heating system would you find an expansion tank?
hot water
137
What is another name for "indirect costs"?
soft costs
138
In the sales comparison approach, we always adjust the _________; we never adjust the ____________.
comparable sales, subject property
139
“The actual rental income specified in a lease” is the definition of ___________ rent.
contract
140
The SCOPE OF WORK RULE says that in each real property appraisal assignment, the appraiser must _______ the problem to be solved, and determine and perform the scope of work necessary to develop ________ assignment results.
identify, credible
141
When appraising a duplex, an appraiser should use __________ area.
gross building
142
In the sales comparison approach, sales data on __________ sales should be collected.
at least three
143
An appraiser encounters an underground storage tank and there are no signs of leakage or failure. An appraisal could be performed under the presumption that the tank is not leaking and the property is not contaminated. This would be an example of a(n)
extraordinary assumption
144
The _______________ method has good application in valuing land in rural areas and in older, urban areas.
extraction
145
Early ductless heating systems were called
gravity systems
146
Building permits and worker's compensation are examples of __________costs.
direct
147
The most complex method of site valuation is the _______________ method.
subdivision development
148
If a comparable property sells with atypical financing, we may have to make an adjustment for ___________.
financing terms
149
The most common unit of comparison for land in rural areas is price per _______.
acre
150
The intended user of an appraisal is the __________ and any other user, as identified by _________.
client, name or type
151
“The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing” is the definition of
Mass Appraisal
152
Extensive research on current construction trends and figures is conducted by
NAHB
153
Keyways are employed in which type of foundation walls?
Poured Concrete
154
Today the _______________ technique of site valuation is used primarily in highest and best use analysis.
land residual
155
Segregated cost method is another name for the _________ method.
unit-in-place
156
The URAR form can be used to report the appraisal of which of the following property types?
One-unit property
One-Unit with an accessory unit
Unit in a PUD
157
Which site valuation methods should only be utilized when the subject property is income-producing by nature?
Land residual and ground rent capitalization
158
“The total period a building lasts or is expected to last...” is the definition of _________ life.
physical
159
The credibility of assignment results is always measured in the context of the _______________.
intended use
160
“The anticipated income from all operations of the real estate after an allowance is made for vacancy and collection losses and an addition is made for any other income” is the definition of ____________ income.
effective gross
161
A management fee usually is based on a percentage of the _________ income.
gross
162
A _______________ home has a permanent steel chassis, wheels and axles.
Manufactured
163
Drilled wells need to use __________ until the drilling enters ___________.
Casing, bedrock
164
Which type of valuation analysis would typically NOT include a separate site valuation?
Gross rent multiplier
