Real Estate Appraisal Exam 1 with
Complete Solutions
Appraisal - ANSWER-is an opinion of value
Value - ANSWER-the worth, usefulness, or utility of an object to someone for some
purpose
Market Value - ANSWER-most probable selling price of a property in a competitive and
open market
Informal Appraisal - ANSWER-best described as the "market analysis" made by brokers
and salespeople when listing or selling a given property
Formal Appraisals - ANSWER-a means of reaching an opinion of value by the
methodical collection and analysis of relevant market data most often reported in writing
Market Transactions - ANSWER-Purchase, sale or exchange; financing; leasing;
management; insurance coverage; remodeling and development; feasibility and highest
and best use studies; and exercise of purchase and lease options.
Legal Transactions - ANSWER-Eminent domain - condemnor and condemnee; Property
tax assessment and tax appeals case; estate, inheritance, and gift taxes; income tax
casualty loss, deprecation basis and capital gains reporting; personal and corporate
legal actions; environmental impact reports; fire or title insurance claims; marital and
partnership dissolutions; landlord-tenant and property damage lawsuits; loan
foreclosures; company liquidation or merger; bankruptcy; security for bail bonds.
USPAP - ANSWER-Uniform Standards of Professional Appraisal Practice
Uniform Standards of Professional Appraisal Practice - ANSWER-places ethical
obligations on the appraiser and minimum appraisal standards that must be adhered to
by all professional appraisers.
Appurtenant Rights - ANSWER-is a right giving the owners of one property, the
dominant estate, a right to use some or all of another property, the servient estate, in a
specific way that benefits their property. An easement to gain access is the most
common type.
, That Which is Immovable by Law - ANSWER-objects that have been declared to be real
property by a specific law or court action. An example would be a monument that holds
historic significance.
Fee - ANSWER-means ownership
Bundle of Rights - ANSWER-Possession or Control; Use and Enjoy; Exclusion;
Disposition
Governmental Restrictions - ANSWER-PETE
PETE - ANSWER-Police Power, Eminent Domain, Taxation, Escheat
Private Restrictions - ANSWER-covenants, easements, mortgages, leases
Market Restrictions - ANSWER-economic growth or decline
Police Power - ANSWER-building and safety, general welfare, community planning
Eminent Domain - ANSWER-sovereign body taking back private property for public use
and paying "just compensation"
Taxation - ANSWER-sovereign body may imposes taxes as needed as long as they are
fair
Escheat - ANSWER-the sovereign body will take back the title to the property if the
owner dies or disappears and leaves no relatives or heirs
Legal Descriptions - ANSWER-Subdivision Plat, Metes and Bounds, Government
(Rectangular) Survey
Contract - ANSWER-an agreement between two or more persons which creates an
obligation to do or not to do a particular act
Requirements for a Valid Contract - ANSWER-1. Competent parties
2. Meeting of the minds
3. Consideration
4. Legal Objective
5. No defects to mutual assent such as fraud, duress, error, or undue influence
Fixture - ANSWER-When personal property is attached to real estate
Steps in the Appraisal Process - ANSWER-1. Identify the appraisal problem to be
solved
2. Identify appropriate solutions
3. Execute the appropriate scope of work
Complete Solutions
Appraisal - ANSWER-is an opinion of value
Value - ANSWER-the worth, usefulness, or utility of an object to someone for some
purpose
Market Value - ANSWER-most probable selling price of a property in a competitive and
open market
Informal Appraisal - ANSWER-best described as the "market analysis" made by brokers
and salespeople when listing or selling a given property
Formal Appraisals - ANSWER-a means of reaching an opinion of value by the
methodical collection and analysis of relevant market data most often reported in writing
Market Transactions - ANSWER-Purchase, sale or exchange; financing; leasing;
management; insurance coverage; remodeling and development; feasibility and highest
and best use studies; and exercise of purchase and lease options.
Legal Transactions - ANSWER-Eminent domain - condemnor and condemnee; Property
tax assessment and tax appeals case; estate, inheritance, and gift taxes; income tax
casualty loss, deprecation basis and capital gains reporting; personal and corporate
legal actions; environmental impact reports; fire or title insurance claims; marital and
partnership dissolutions; landlord-tenant and property damage lawsuits; loan
foreclosures; company liquidation or merger; bankruptcy; security for bail bonds.
USPAP - ANSWER-Uniform Standards of Professional Appraisal Practice
Uniform Standards of Professional Appraisal Practice - ANSWER-places ethical
obligations on the appraiser and minimum appraisal standards that must be adhered to
by all professional appraisers.
Appurtenant Rights - ANSWER-is a right giving the owners of one property, the
dominant estate, a right to use some or all of another property, the servient estate, in a
specific way that benefits their property. An easement to gain access is the most
common type.
, That Which is Immovable by Law - ANSWER-objects that have been declared to be real
property by a specific law or court action. An example would be a monument that holds
historic significance.
Fee - ANSWER-means ownership
Bundle of Rights - ANSWER-Possession or Control; Use and Enjoy; Exclusion;
Disposition
Governmental Restrictions - ANSWER-PETE
PETE - ANSWER-Police Power, Eminent Domain, Taxation, Escheat
Private Restrictions - ANSWER-covenants, easements, mortgages, leases
Market Restrictions - ANSWER-economic growth or decline
Police Power - ANSWER-building and safety, general welfare, community planning
Eminent Domain - ANSWER-sovereign body taking back private property for public use
and paying "just compensation"
Taxation - ANSWER-sovereign body may imposes taxes as needed as long as they are
fair
Escheat - ANSWER-the sovereign body will take back the title to the property if the
owner dies or disappears and leaves no relatives or heirs
Legal Descriptions - ANSWER-Subdivision Plat, Metes and Bounds, Government
(Rectangular) Survey
Contract - ANSWER-an agreement between two or more persons which creates an
obligation to do or not to do a particular act
Requirements for a Valid Contract - ANSWER-1. Competent parties
2. Meeting of the minds
3. Consideration
4. Legal Objective
5. No defects to mutual assent such as fraud, duress, error, or undue influence
Fixture - ANSWER-When personal property is attached to real estate
Steps in the Appraisal Process - ANSWER-1. Identify the appraisal problem to be
solved
2. Identify appropriate solutions
3. Execute the appropriate scope of work
