A car dealership along a roadway is so successful that other dealerships begin opening along the same road. This is an example of which appraisal principle?
When collecting and analyzing data for an appraisal, the appraiser should verify the data by checking information from atLEASThow many different sources?
When interest rates are so high that most potential buyers cannot afford to get a loan and property values are declining, this refers to
the demand for the property.
The value of a commercial property increases because it is believed a major highway interchange might be built close to it. This is an example of the principle of
Adding more bathrooms to a three-bedroom house that has only one bathroom may be an example of
incurable functional obsolescence.
The first step in the appraisal process is to state the problem or purpose of the appraisal. The second step is to
list the data needed and the sources.
When appraisers evaluate the facts and form a final opinion of value for a property, they are
reconciling valuation approaches.
According to the income approach, if the capitalization rate increases, the property value
Brokers and sales agents often use a simplified version of the sales comparison approach for residential real estate called a comparative
What is the primary difference between a price placed on a property by a real estate sales person and a value placed by a professional appraiser?
Real estate agent pricing is informal, while professional appraisers offer a formal or accurate number.
Honest and accurate valuations of property are now considered critical because
inflated appraisals are at least partially blamed for the real estate collapse of 2007 and the following recession.
Which of the following isNOTan appraisal license or certification level?
Certified special real estate appraiser
What exam must be passed by a board member of an appraisal management company?
No examination is required.
Must real estate appraisers, at any level, have real estate sales licenses as a prerequisite?
No, there are no real estate sales prerequisites.
Which of the following terms is best defined as analyzing the results obtained by the three approaches to value to determine a final opinion of value?
Which approach involves a subject property and three or more comparable properties?
In the sales comparison approach, the sales price of the comparable property is adjusted to account for physical conditions and
When a sales agent prepares a brokers price opinion (BPO), what statement must be included?
That a BPO is not an appraisal
How much experience is required to become a state-licensed real estate appraiser?
No experience, only satisfactory passage of the state licensing exam
Which of the following dilemmas fits under the appraisal principle of contribution?
Should an owner install solar cells to reduce his electric bill, even though the payback is 20 years?
A purchaser wants a four-bedroom home with a large family room because he has three children and a large extended family that visits frequently. His ultimate selection of a home based on his basic needs and desires for particular bedroom and living spaces represents which characteristic of value?
Why are appraisal management companies (AMCs) needed?
To make sure appraisers are independent of lenders, thus reducing fraud.
Who sets the listing price of a property?
The seller, based on what they feel the property is worth
The stated purpose of the Texas Appraiser Licensing and Certification Board (TALCB) is to
Which person mayNOTconduct an appraisal for a residential property with an estimated value of $225,000 in a federally related transaction?
TREC-licensed real estate broker or sales agent
Under what circumstances might a seller want an appraiser to place a value on the property?
If the seller feels the property is unique and should be priced differently from what is suggested by the comps
Under Texas law, how soon must an appraiser be paid for his work?
Within 60 days
What is the purpose of a Market Conditions Addendum?
To provide a clear and accurate understanding of market trends and conditions in the neighborhood
The success of a retail store may attract investors to open similar retail stores in the area. Which basic principle of appraisal value does this illustrate?
Which opinion of value or price are lenders, attorneys, and loss mitigation companiesMOSTlikely to accept?
Appraisals and broker price opinions
What is a major flaw in comparative market analyses (CMAs) that real estate sales agents should discuss with their clients?
That CMAs typically include prices on homes that have not sold—many times because sellers were far too optimistic about the value of their property
To arrive at a property’s value using the cost approach, calculate the value of the land
put to the highest and best use.
How much continuing education is required for appraisers?
28 classroom hours, including 7 hours of theUSPAPupdate course
Which economic principle states that there is one legal function that provides a property its greatest value?
Highest and best use
If the value of a residential property increases because the zoning changed from residential to commercial, this is an example of the principle of
Which classification permits a person with no real estate appraisal experience to enter the real estate appraisal profession and work toward the requirements to become a licensed appraiser?
Approved appraiser trainee
The final step in estimating property value using the income approach is to
apply the cap rate to property’s NOI.
Step 1 in estimating property value using the income approach is to
estimate annual potential gross income.
Who determines the listing price for a residential property?
Which of the following isNOTa characteristic of an appraisal?
An appraisal determines the listing price of a property.
Why do sales agents collect a fee for a broker price opinion, but not a comparative market analysis?
There is considerably more work involved in putting together a BPO.
Appraisers are now obligated to report the presence of any environmental factors that could pose a risk to property values. What sort of environmental risks might be reported?
Proximity to a gas station (leaking underground storage tanks)
Land loss due to rising ocean levels (global climate change)
Proximity to oil fields where fracking may take place (potential ground movement)
Which of the following is theMOSTcommon appraisal report used today?
Uniform Residential Appraisal Report (URAR)
What license type applicant must take the 15-hourUSPAPcourse?
Certified residential appraiser
Certified general appraiser
An ideal CMA would include the value of similar homes sold
in the last six months.
The initialsAMCstand for what in real estate?
appraisal management company
Under certain circumstances, appraisers may omit the step of going inside a property but may nevertheless submit an appraisal report. What is that appraisal called?
A drive-by appraisal
Why should appraisers include such things as maps, photos, floor plans ,and other documents in their final report?
To offer as much documentation and clarification as possible about how the appraiser arrived at the value
Which of the following statements isTRUE?
A comparative market analysis is a comparison of recently sold properties that are similar to a seller’s parcel of real estate.
The four characteristics of value are demand, utility, scarcity, and
If a homeowner hopes to borrow money to do substantial improvements, what kind of information might an appraiser collect?
Values of other nearby homes with the same improvements as those being considered by the homeowner.
Adding a second bedroom to a one-bedroom house substantially increases its value. Adding one bedroom to a five-bedroom house mayNOTincrease its value at all. This is an example of the principle of
increasing and diminishing return.
A large, lavish house located in a neighborhood of much smaller, modest homes has less value than one in a development with other large, lavish homes. This is an example of the principle of