Basic Appraisal Procedures Final Exam with 100% Correct Answer.

Basic Appraisal Procedures Final Exam with 100% Correct Answer. 8 Steps in the Valuation Process Correct Answer 1) Define the problem 2) Determine scope of work 3) Gather, record and verify the data 4) Determine the highest and best use 5) Estimate the land value 6) Estimate value by each of the 3 approaches (if applicable) 7) Reconcile the estimated values into the final opinion of value 8) Report the final opinion of value Defining the Problem: 6 Sub-steps within Correct Answer -Identification and location of the real estate -Identification of the property rights -Definition of value -Purpose and intended use of the appraisal -Effective date of the opinion of value -Any special limiting conditions Real Property Correct Answer *the interests, benefits and rights inherent in the ownership of real estate -partial estates: life estate, easement & encroachment -specialized form of ownership: condo, coop, PUD, & timeshare Effective Date of the Value Opinion Correct Answer -two dates are essential to an appraisal report -the effective date of value can be a past (retrospective), current or future (prospective) date, in many cases it's the date the appraiser inspects the property; the decision will be made in concert with the client's needs -the date of the report is the date you sign and issue the final report Any Special Limiting Conditions Correct Answer -two common types are: extraordinary assumption & hypothetical condition Extraordinary Assumption Correct Answer *an assumption, directly related to a specific assignment, as of the effective date of the assignment results, which if found to be false, could alter the appraiser's opinions or conclusions -it presumes as fact otherwise uncertain information about physical, legal or economic characteristics of the subject property; or about conditions external to the property such as market conditions or trends; or about the integrity of data used in an analysis Hypothetical Condition Correct Answer *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 -it is contrary to known facts about physical, legal or economic characteristics of the subject property; or about conditions external to the property, such as market conditions or trends; or about the integrity of data used in an analysis -this type of appraisal could be significantly misleading to intended users if the use of the hypothetical condition were not properly disclosed