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Basic Appraisel Procedures > Valuation Process > Flashcards

Valuation Process Flashcards

1
Q

T/F There is one universal definition of market value used in real prop. Appraisal?

A

False

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2
Q

Steps in the Valuation Process

A

1.Define the problem
2.Determine scope of work
3.Gather, record, verify data
4.Determine highest and best use
5.Estimate land value
6.Estimate value by 3 approaches
7.Reconcile estimated values into final opinion
8.Report final opinion

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3
Q

Step 1 in Valuation Process

A

Define the problem

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4
Q

Step by step procedure that can be applied to any type of appraisel assignment

A

Valuation Process

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5
Q

An interest or interests in real estate is the definition of

A

Real Property

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6
Q

T/F Effective date of the valuation must be the date on which the appraiser inspected subject property

A

False. Can be past, present, or future date.

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7
Q

An appraisel report must specify date of_________ and date of __________

A

Appraisel and report. Two dates necessary

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8
Q

Who is responsible for identifying the intended use of an appraisel?

A

Appraiser

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9
Q

Final step in valuation Process?

A

Report final opinion of value

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10
Q

Identify, from sources reasonably reliable, characteristics of the prop. that are relevant to the type and def. of value & use of appraiseal including its location & physical legal and economic characteristics

A

Standards Rule 1-2 (e)

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11
Q

Most common usage for prospective value opinions?

A

Proposed improvement or development

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12
Q

Most common type of value sought by appraisers?

A

Market Value

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13
Q

Type of value stated as an opinion, that presumes transfer of prop., as of a certain date, under specific conditions, identified by appraiser as applicable.

A

Market Value

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14
Q

Identify type and definition of value, if to be market value, ascertain whether it is to be most probable price
(i) in terms of cash
(ii) financial arrangements equivalent to cash
(iii) in other precisely defined terms
(iv)if opinion is based on non market financing

A

Standards Rule 1-2 (c)

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15
Q

Purpose of an Assignement

A

To develop an opinion of the defined value of a specified interest in real estate

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16
Q

The use of an appraisers reported appraisal, as identified by appraiser based on communication with client

A

Intended Use

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17
Q

The client and any other part as identified as users of the appraisal

A

Intended User

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18
Q

Identify the client and other users

A

Standards Rule 1-2(a)

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19
Q

Identify the effective date of the appraisers opinions and conclusions

A

Standards Rule 1-2 (d)

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20
Q

An assignment specific assumption, as pf the effective date, which if found to be false, could alter the appraisers conclusions

A

Extraordinary Assumption

21
Q

USPAP requires ______________ disclosure of hypothetical conditions

A

Clear and conspicuous

22
Q

Appraisel term defined as: Condition directly related to specific assignnment, which is contrary to what is known by the appraiser to exist, but used for the purpose of analysis

A

Hypothetical Condition

23
Q

Accomplishing the first 4 action steps provides basis for deciding which of property’s characteristics are relevant for the assignment

A

AO (advisory opinion) 22

24
Q

Assignment conditions

A

Assumptions, extraordinary assumptions, hypothetical conditions. Laws and reg’s, and other conditions which affect scope of work

25
Q

Step 2 in the Valuation Process

A

Scope of Work

26
Q

The type and extent of research and anylses in an appraisel or appraisel review assignment

A

Scope of Work

27
Q

Understanding which analysis, methods and techniques are necessary and what data to correctly complete the analyses

A

AO-22

28
Q

Determine the scope of work necessary to produce credible results in accordance with this rule

A

Scope of Work Rule, Standards Rule 1-2(h)

29
Q

1 Identify problem to be solved
2 determine and prefrontal scope of work necessary
3 disclose scope of work in report

A

Scope of Work Rule

30
Q

Summarize scope of work used to develop the appraisel (includes disclosure of research and analysis preformed or not preformed)

A

Standard Rule 2-2 (a) (viii)

31
Q

Data, info., and documentation necessary to supports appraiser’s opinions and conclusions and show compliance with USPAP

A

Workfile

32
Q

Gather, record. And verify Data

A

Step 3 of Valuation Process

33
Q

In valuation practice, the process of validating or establishing the truth about info. From another source

A

Verify

34
Q

Appraiser must verify sale info. with __________,___________, or ____________

A

Buyer, seller, or one of their representatives or clearly state how the sale was verified and to what extent.

35
Q

T/F According to Fannie Mae, use of sales data-particularly comp. sales data- provided by parties who have financial interest in the sale w/o appraisers verification of info. from disinterested source is acceptable.

A

False, acceptable to use, but only if verified by disinterested party

36
Q

Determining highest and best use

A
  1. Legally permissible
    2.physically possible
  2. Financially feasible
  3. Maximally productive
37
Q

Step 5 in Valuation Process

A

Estimate the land Value

38
Q

Step 4 in Valuation

A

Determine Highest and Best Use

39
Q

Step 6 in Valuation

A

Estimate Value by any applicable approach. Cost, Sales Comparison, or Income Capitalization

40
Q

Step 7 in Valuation

A

Reconcile Estimated Value. Come to one reasoned opinion as to value, as of effective date.

41
Q

Final Step in Valuation

A

Report Final Opinion of Value. Standard 2 USPAP.

42
Q

Appraiser must be prepared to demonstrate that scope of work is sufficient to produce

A

Credible assignment results

43
Q

An appraisal report must contain sufficient info. to allow __________ to understand the scope of work.

A

Intended user

44
Q

According to USPAP, the credibility of assignment results is measured ___________

A
45
Q

Effective date of value can be

A
46
Q

Which is not an appraisers source for a legal description?

A

Postal address

47
Q

Scope of Work applies to

A

Both appraisels and review assignments

48
Q

An appraiser must comply with the SCOPE OF WORK RUKE when completing

A

An appraisel assignment only

Basic Appraisel Procedures (5 decks)

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