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Flashcards in SUMMARY OF COURSES Deck (114):
1

appraiser

expected to perform valuation services

2

appraisal

opinion of value

3

Appraisal process-4 points

-written or oral opinion of value
-can be specific $ amount, range, or relationship
-does not establish value.
-Real, personal, intangible property

4

Real property

Real estate including fixtures+interests, rights, and benefits

5

Bundle of Rights (SLUGER)

SLUGER
-Sell
-lease
-use
-give away
-enter or leave
-refuse to do any

6

land is ___ and ____

immobile, durable
-each parcel is unique in location and composition

7

sq ft in an acre

43560

8

acres in a section

640

9

metes and bounds

metes-measurements of length
bounds are boundaries in relation to a marker
-earliest form, still primary for 21 states, used for odd shaped parcels

10

governmental survey rectangular

checkerboard, baseline (E-W), meridian (N-S)

11

sq miles in township

36 (sections)

12

no restrictions, owned by one entity, could be business (corporation, REIT, syndication)

ownership in severalty

13

specified undivided interest, no right of survivorship, default

tenancy in common

14

equal shares, right of survivor-ship, must be declared

joint tenancy

15

combining 2 or more parcels, under one ownership/use, may or may not be contiguous

assemblage

16

increased value from assemblage

plottage

17

governmental limitations (PETE)

Police power
Eminent domain
Taxation
Escheat

18

1 mill

.001

19

property reverting to state when owner dies intestate

escheat

20

effective tax rate

tax bill/property value

21

Private Limitations - DEALLER

Deed Restrictions
Easement
Adverse Possession
Lease
Liens
Encroachment
Reservation

22

continuous possession with eventual claim of title

adverse possession

23

take private property for public use through condemnation process

eminent domain

24

leased fee

lessor/owner leased fee interest

25

life estate

use occupy control, limited to lifetime of life tenant

26

The deed provides the greatest amount of warranty.
A. Quitclaim.
B. General warranty.
C. Special warranty.
D. Bargain and sale.

B. General Warranty

27

A property is leased to Jim Smyth. Which term describes Mr. Smyth’s interest in the
property?
A. Fee simple.
B. Life estate.
C. Leasehold.
D. Leased fee.

C

28

Mr. Ibrahimovic received a tax bill for $1,888.60 on his primary residence. The total
mill levy in his tax area is 89.38. What is the value of his property?

265,452

29

What form of legal description provides lengths and directions?
A. Recorded plat.
B . Metes and bounds.
C. Rectangular survey.
D. Rectangular and metes and bounds.

B

30

ECONOMIC FACTORS- USED

Utility
Scarcity
Effective Purchasing Power
Desirability

31

economic forces PEGS

PHYSICAL/ENVIRONMENTAL
Economic
Governmental
Social

32

PHYSICAL/ENVIRONMENTAL FORCES

climate
water
topography
soil
natural hazards
contamination
location

33

Government Forces

public services
building/zoning codes
land use regulations
legislative action

34

cost

The sacrifice of money, goods, and services necessary to bring an item into
existence
-cost is a fact, not a value

35

price

amount paid, may or may not be justified, can be value, can be amount offered or asking

36

4 agents of production LLCE

Land
Labor
Capital
Entrepreneurial Coordination (management)

37

value in use

Value in use is the value of a particular property for a particular use. Its value is subjective to its owner, user, or as an integral part of a production operation.

38

value in exchange

Value in exchange (exchange value) is the value, in terms of money, of any commodity in a typical market. Based upon actions of buyers and sellers.

39

business value

going concern, The market value of all the tangible and
intangible assets of an established and operating business with an indefinite life

40

insurance value

Insurance value is a replacement value which depends on the physical characteristics of a home, as well as the price of labor and materials in the area. This value is heavily reliant on the cost approach, for replacement costs in the event of property destruction. In most areas, these costs increase with time.

41

investment value

Investment value is the specific value of an investment to a particular investor or class of investors based on individual investment requirements; distinguished
from market value, which is impersonal and detached.

42

Value in use is generally associated with:
A. The market approach to value.
B. The value to a particular owner or occupant.
C. The market value paid to the end user of abundant properties.
D. Valuation of middle income residential properties.

B

43

current value based on future benefit (income, appreciation, functionality)

anticipation

44

agents of production in state of equilibirum

Balance

45

value is never constant, cause and effect, abrupt or gradual

Change

46

2 or more parties acting independently to secure the business of a third party

competition

47

correspondence in form, nature, character. To be in harmony

conformity

48

inferior property value enhanced by surrounding nicer properties

progression

49

superior property value is diminished by surrounding inferior properties

regression

50

alternatives that satisfy the same need, want, desire

substitution

51

residual return after other agents of production are paid

surplus productivity

52

tests fror HBU (highest best use)

physically possible
legally permissable
financially feasible
maximally profitable

53

“the party or parties who engage, by employment or
contract, an appraiser in a specific assignment.”

The client definition

54

“The type and extent of research and analyses in an appraisal or
appraisal review assignment”.

Scope of Work

55

_______ is the
analysis of conclusions from the three approaches to arrive at a final value opinion

Reconciliation

56

The report must be written in a manner that is not ________

misleading.

57

“Improved land or a lot in a finished state so that it is ready
to be used for a specific purpose.”

a site

58

_________ is defined as:
“Land that is not needed to serve or support the existing use. The
highest and best use of the excess land may or may not be the same
as the highest and best use of the improved.

Excess land

59

_________ is defined as:
“Land that is not currently needed to support the existing use but
cannot be separated from the property and sold off for another use.
Surplus land does not have an independent highest and best use
and may or may not contribute value to the improved parcel.”

Surplus land

60

The ______ technique involves determination of the contributory value of the
improvements as part of the total sales price of an improved property. The
balance of the sales price is attributed to the land.

extraction

61

Using the_______ technique, a portion of the total property value is assigned to
the land. It establishes relationships based on the economic principles of
balance and conformity.

allocation

62

“The procedure in which a discount rate is applied to a set of
projected income streams and a reversion.

DCF

63

When adjusting for the elements of comparison using the paired sales technique, the
appraiser should first adjust for ______adjustments, and then ______adjust for adjustments

transactional, property

64

“The conversion of income into value.”

Capitalization

65

_____________ is the period over which improvements contribute to property value

Total Economic Life

66

__________ is the total time a building might last or is expected to last as opposed to its
economic life.

Physical life

67

“One cause of depreciation; an impairment of desirability and usefulness
caused by new inventions, changes in design, improved processes for
production, or external factors that make a property less desirable
valuable for a continued use; may be either functional or external.

obsolescence

68

“Items of physical deterioration or functional obsolescence that are
economically feasible to cure.

curable

69

______________ is that which is not economically feasible or practical to correct; where the cost to remedy the problem would outweigh the value
benefit to the property after its correction.

incurable depreciation

70

“The amount of money it will take to remedy a cause of depreciation.”

cost to cure

71

___________ cost is the cost of producing an exact replica of a building or improvement.

reproduction

72

________ cost is the cost to produce a building or improvement
having the same utility.

replacement

73

Which of the following is not a direct cost?
a. Lumber
b. Labor
c. Building permits
d. Equipment rental

C

74

The __________method is the most comprehensive method of estimating
cost, which breaks out materials and labor for each building component.

quantity survey

75

The __________method is the most common method of estimating cost used in mass
appraisal.

comparative unit

76

Physical curable deterioration is generally measured by the

cost to cure

77

Super-adequacy is known as what type of depreciation?
a. Functional
b. Physical
c. External
d. Desegmentation

A

78

An ordinary-looking home can have a hidden issue that can make the property complex.

True
False

TRUE

79

Complex properties are always identified by the appraiser and/or the client before the assignment is accepted.

True
False

False

80

Ramon owns a home. He grants his Aunt Marie, the right to live in and occupy the home as long Ramon's father is still alive. This right is best described as a

Fee simple estate
Equitable interest
Life estate
Life estate pur autre vie

Life estate pur autre vie

Life estate is defined as "total rights of use, occupancy, and control, limited to the lifetime of a designated party". This is a special type of life estate situation, known as a life estate pur autre vie because the life estate is based not on Marie's life, but on the life of another person. Ch 1, Ownership Interests Can Make a Property Complex

81

As it refers to the sales comparison approach, what is meant by "bracketing"?

ONE COMPARABLE SUPERIOR AND INFERIOR TO SUBJECT

82

On the URAR appraisal form, which approach or approaches is/are required?

Cost Approach
Sales comparison and cost approaches
Sales comparison, cost, and income approaches
Sales comparison approach

Sales comparison approach

83

An appraiser is valuing a property located next door to an automobile salvage yard. He has no sales of properties adjacent to salvage yards, so he uses recent sales of properties in the same general area, and makes an adjustment for the subject's view. What is this technique called?

Discount factor
Contingent valuation method
Qualitative analysis
Going back in time

Discount factor

84

An appraiser is valuing a property with water frontage. She has no sales of waterfront properties, so she uses sales of non-waterfront properties in the subject's area and makes an adjustment for the water frontage. What is this technique called?

Quantity survey
Market survey
Qualitative analysis
Bonus factor

Bonus factor

85

Appraiser Al is valuing a property that is subject to a life estate. According to the actuarial table, the 92-year-old life tenant has a death probability of 0.228968, and a life expectancy of 3.15. Which statement is TRUE?

There is a 2.28% chance that the life tenant will die this year.
The life tenant can be expected to live a little over 3 years.
Al has a death probability of approximately 23% this year.
All of these statements are true.

The life tenant can be expected to live a little over 3 years.

86

Bertha is appraising a single-family home that is situated on a commercially-zoned lot, for a residential mortgage lender. Based on the facts of the situation, what is the lender likely to ask her?

If the property owner has applied for a zoning change
If the improvement can be rebuilt if destroyed
To provide an estimate of legal fees necessary to receive a non-conforming use certificate
To verify with the zoning officer that a zoning change is imminent

If the improvement can be rebuilt if destroyed

With a nonconforming use, the highest and best use as though vacant will be different than the highest and best use as improved. If the existing use does not conform to current zoning, the lender will want to know if the improvements can be rebuilt after a fire or other natural disaster. Ch 3, Legally Permissible

87

is is the earliest system and was employed in the 13 original colonies in the East and Southeast United States.

Metes and bounds

88

Bounds are best described as

Distances
Boundaries
Bearings
Benchmarks

Distances

89

A distinct piece of land; a piece of land that forms a part of a district, community, city block, etc.
A piece of land in one ownership, whether platted or unplatted.

lot

90

A parcel of land; an area of real estate that is frequently divided into smaller parcels.

Tract -

91

How many links are in a chain?

16.5
66
100
660

100

92

How many feet are in a chain?

16.5
66
660
5,280

66

93

In the Government Survey System, each township is divided into ____ sections.

16
32
36
40

36

94

1 POLE=____FT

16.5

95

Properties in a Special Flood Hazard area are those designated by FEMA as being in _________.

Zone A only
Zones A and V
Zone C only
Zones C and V

Zones A and V

96

The right to perform a specific action on a property owned by another

affirmative easement

97

A property that is served or benefitted by an easement. The opposite of the servient estate, which granted the easement. Also known as the dominant tenement and the servient tenement, respectively.

dominant estate

98

An easement preventing a property owner from certain, otherwise permitted, uses of his or her land, e.g., agreeing not to do something such as building a wall or fence blocking an adjoining property's view.

Negative easement

99

Conservation easements
Historic preservation easements
Facade easements
Scenic easements
These are examples of

Negative easement

100

A method of estimating land value in which sales of improved properties are analyzed to establish a typical ratio of land value to total property value and this ratio is applied to the property being appraised or the comparable sale being analyzed.

allocation method

101

he basic principle underlying the cost approach is the principle of _________.

Competition
Substitution
Highest and best use
Anticipation

Substitution

102

The cost to construct a building “embodying all the deficiencies, superadequacies, and obsolescence of the subject building” is the ____________ cost.

Replication
Replacement
Improvement
Reproduction

Reproduction

103

Roof covering, carpeting and water heaters are examples of _____________ items.

Physical, curable
Deferred maintenance
Short-lived
Long-lived

Short-lived

104

When applying age-life ratios we utilize the _______ lives of those components.

Economic
Actual
Effective
Useful

Useful

105

The house you are appraising has a total cost new of $214,552. It is 15 years old and has an estimated remaining economic life of 45 years. The cost to cure deferred maintenance items is $825. Short lived items of depreciation have been identified totaling $8,600. What is the amount of long-lived depreciation attributable to the building?

$46,902.23
$51,281.75
$55,873.91
$58,717.32

$51,281.75

106

Deferred maintenance is considered to be __________; the short-lived and long-lived components are __________.

Incurable, incurable
Curable, curable
Incurable, curable
Curable, incurable

Curable, incurable

107

A method of estimating land value in which the net operating income attributable to the land is capitalized to produce an indication of the land’s contribution to the total property is the definition of the _____________ method of site valuation.

Allocation
Land residual
Extraction
Subdivision development

Land residual

108

A large sample is ______ or more.

5
10
20
30

30

109

"The number of values in a calculation of a statistic that are free to vary" is the definition of

average deviation
average absolute deviation
degrees of freedom
standard error

degrees of freedom

110

r2 measures how well the _____________ fits the _______.

regression line, cost new
regression coefficient, mean
regression line, data
dispersion, variance

regression line, data

111

"A numerical range around a sample mean accompanied with a statement of how confident one is that the true population mean lies within the interval" is the definition of

confidence zone
probability zone
confidence interval
coefficient of determination

confidence interval

112

If interest rates on bank interest-bearing accounts are too low, investors will invest their money elsewhere. This demonstrates the concept of

intermediation
disintermediation
rate creep
inflation spread

disintermediation

113

What is presumed as fact otherwise uncertain information?

Extraordinary Assumptions

114

What is a condition that is contrary to what is known, but is used for the purpose of analysis

Hypothetical Condition