Real Estate Appraisal 376 questions
with correct answers
____________ basically answers the question, "How much could my money have earned if I had put it into a different investment?" - CORRECT ANSWER-Cost of
Capital
"Back when the west was yet to be won, Sandra's family was the first to find and use a pond, and they still have primary righ ts to it." - CORRECT ANSWER-Prior
Appropriation
"Last year, we could have sold for $20,000 more, but there just aren't enough buyers in the current market," you explain to your client. - CORRECT ANSWER-Competition
"Nostalgia sets in as you walk to the water pump next to the barn." - CORRECT ANSWER-Percolating
"There's no better way to spend a morning than sitting on your dock throwing a ball into the lake for your yellow lab." - CORRECT ANSWER-Littoral
"Who knew the small creek flowing along the edge of your backyard would be the prime setting for many hours of father/son bon ding?" - CORRECT ANSWER-Riparian
2 Types of REIT's - CORRECT ANSWER-Mortgage REIT
Equity REIT
3 Steps to the Cost Approach : - CORRECT ANSWER-Step 1: Estimate the reproduction/replacement cost of the existing structure
Step 2: Subtract the amount of depreciation from the estimated improvement cost
Step 3: Add the site value to the depreciated cost estimate
5 Examples of Deed Restrictions: - CORRECT ANSWER-- Exterior Material Color
- No boats or RV's in the driveway
- Property Size and Setbacks
- Architectural Designs
- Fence height and style
A _______________________ Real Property Appraiser can appraise any residential property, regardless of value or complexity, and vacant land that will be developed
as residential property. They aren't qualified to appraise commercial property. - CORRECT ANSWER-certified residential
A ________________________ Real Property Appraiser can appraise any residential or non-residential property, regardless of value or complexity. - CORRECT
ANSWER-certified general
A ___________________________ Real Property Appraiser can appraise one- to four-unit residential properties that are valued up to $1 million and are not complex in
nature. They aren't qualified to appraise non-residential property. - CORRECT ANSWER-licensed residential
A buyer wants to know if an investment property is worth the asking price. - CORRECT ANSWER-Appraiser
A buyer wants to win the property by making a competitive offer. - CORRECT ANSWER-Real Estate Professional
A decrease in property value due to external issues such as pollution, traffic, and other nuisances - CORRECT ANSWER-External obsolescence
A decrease in property value due to the effects of ordinary wear and tear on the condition of the building = - CORRECT ANSWER-Physical deterioration
A decrease in property value resulting from poor or outdated design or material = - CORRECT ANSWER-Functional obsolescence
A lender needs to know the value of a property acting as security for a conventional mortgage. - CORRECT ANSWER-Appraiser
A lender requests an appraisal of a property under foreclosure. What type of value is the lender most likely to be interested in? - CORRECT ANSWER-Liquidation value
A property needs major renovations. - CORRECT ANSWER-Drives values down
A real estate appraisal may be used to ______. - CORRECT ANSWER-Set a value for property that's part of an estate
A seller wants to know what recent local sales are in order to set a listing price. - CORRECT ANSWER-Real Estate Professional
A seller would like an appraisal to help set a listing price for the property. - CORRECT ANSWER-Not Required
A thorough identification of the property, which provides the reader with a true picture of the property being valued, is loc ated in the ___________ section of the narrative
appraisal report. - CORRECT ANSWER-Introduction
Aaron, who's in the process of selling his home, is furious. Two of the houses that have recently been built as part of a new subdivision that abuts his property are several
feet over his property line. What issues may be caused by this encroachment? - CORRECT ANSWER-- Title problems for Aaron, which may impact the sale of his home
- Inability of the buyer of Aaron's home to secure a loan, if there's an issue with the title
- Additional costs for the developer to have the two homes moved
- Costly redesign and development delays for the subdivision developer
, Above-ground pool - CORRECT ANSWER-Personal property
Agreements between two or more parties: - CORRECT ANSWER-Covenants
AIR sets certain criteria when selecting an appraiser.
Which of these appraiser requirements does AIR specify? - CORRECT ANSWER-- Licensed or certified in the state where the property is located.
- Knowledgeable about the local market.
- Qualified to appraise the property involved in the transaction.
- Able to access the data needed to perform an appraisal.
Always works for a flat fee - CORRECT ANSWER-Appraiser
Amount a property will bring in a quick sale - CORRECT ANSWER-Liquidation value
An appraiser is using the land residual technique to determine an investment property's value. The building is valued at $500 ,000, and the typical rate of return for this
type of investment is 10%. The investor requires a NOI of $150,000 per year. What's the amount of NOI the land must earn? - CORRECT ANSWER-$100,000
An attorney requests an appraisal to value an estate for inheritance purposes. - CORRECT ANSWER-Not Required
Andy evaluates if his plan to build a warehouse on an empty lot is legal and will be profitable. - CORRECT ANSWER-Highest and best use
Apply or DOES NOT apply to a deed restriction:
Can be placed on an individual property, an entire subdivision, or a neighborhood - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
Ensures compliance with zoning and public safety, and preserves real property value - CORRECT ANSWER-Does not apply
Apply or DOES NOT apply to a deed restriction:
Limits the use or appearance of a given property - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
May run with the land forever, and will appear on all future deeds, or it may have a time limit - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
Must be placed by the property owner within a year of purchasing the property - CORRECT ANSWER-Does not apply
Appraisal Report - CORRECT ANSWER-Contains most detail. Can be a narrative (most often for commercial properties) or a form (such as the URAR for residential
properties)
Appraiser trainee - CORRECT ANSWER-75 hours
Appraisers develop an estimate of market rent for residential properties by ___________ and comparing rents across the subject and comparable properties. - CORRECT
ANSWER-Converting monthly rental income to annual dollars per room
Area map sources : - CORRECT ANSWER-Climate and natural resources
Bathroom towel rods - CORRECT ANSWER-Real property
Bob gives a life estate to Candy, who has two children. The children are named as fee simple owners should Candy die. - CORRECT ANSWER-Estate in Remainder
BOTH real estate professionals and appraisers need to be knowledgeable about: - CORRECT ANSWER-- Real Estate Market
- Mortgage Market
Can be passed down to heirs : - CORRECT ANSWER-Fee Simple Estate
Can the item be removed without damaging what it is attached to? - CORRECT ANSWER-Method of annexation
Can work for a lender, buyer, or seller - CORRECT ANSWER-Appraiser
Capitalization is the process of converting ______ to value. - CORRECT ANSWER-income
Certified general real property appraiser - CORRECT ANSWER-300 hours
Certified residential real property appraiser - CORRECT ANSWER-200 hours
Changes in demographics and population growth are examples of which type of real estate value influencer? - CORRECT ANSWER-Social
Characteristics of a Sole Proprietorship - CORRECT ANSWER-- Business model consisting of one person (such as an independent contractor)
- Business can be conducted and title to property held using your own name
- Business can be conducted and title to property held using your name in combination with the business name
- Ownership of property is called ownership in severalty
Chuck has the right to own and possess Leroy's property after Leroy's cousin, named in a life estate, dies. - CORRECT ANSWER-Estate in Remainder
Co-op - CORRECT ANSWER-- Often prohibits subletting
- Personal property ownership
- Own shares of the corporation
- These may be difficult to resell because applicants need to obtain board approval
- They tend to have higher monthly maintenance fees because taxes, fees, and mortgage payments are included.
Compensation is owed to the landowner when the action deprives the owner of all economically viable uses of the property, and the owner can no longer get a reasonable
return on the investment in the property: - CORRECT ANSWER-Taking
Condemnation is when the government takes someone's property with the belief that the action will serve the public good: - CORRECT ANSWER-Eminent domain
with correct answers
____________ basically answers the question, "How much could my money have earned if I had put it into a different investment?" - CORRECT ANSWER-Cost of
Capital
"Back when the west was yet to be won, Sandra's family was the first to find and use a pond, and they still have primary righ ts to it." - CORRECT ANSWER-Prior
Appropriation
"Last year, we could have sold for $20,000 more, but there just aren't enough buyers in the current market," you explain to your client. - CORRECT ANSWER-Competition
"Nostalgia sets in as you walk to the water pump next to the barn." - CORRECT ANSWER-Percolating
"There's no better way to spend a morning than sitting on your dock throwing a ball into the lake for your yellow lab." - CORRECT ANSWER-Littoral
"Who knew the small creek flowing along the edge of your backyard would be the prime setting for many hours of father/son bon ding?" - CORRECT ANSWER-Riparian
2 Types of REIT's - CORRECT ANSWER-Mortgage REIT
Equity REIT
3 Steps to the Cost Approach : - CORRECT ANSWER-Step 1: Estimate the reproduction/replacement cost of the existing structure
Step 2: Subtract the amount of depreciation from the estimated improvement cost
Step 3: Add the site value to the depreciated cost estimate
5 Examples of Deed Restrictions: - CORRECT ANSWER-- Exterior Material Color
- No boats or RV's in the driveway
- Property Size and Setbacks
- Architectural Designs
- Fence height and style
A _______________________ Real Property Appraiser can appraise any residential property, regardless of value or complexity, and vacant land that will be developed
as residential property. They aren't qualified to appraise commercial property. - CORRECT ANSWER-certified residential
A ________________________ Real Property Appraiser can appraise any residential or non-residential property, regardless of value or complexity. - CORRECT
ANSWER-certified general
A ___________________________ Real Property Appraiser can appraise one- to four-unit residential properties that are valued up to $1 million and are not complex in
nature. They aren't qualified to appraise non-residential property. - CORRECT ANSWER-licensed residential
A buyer wants to know if an investment property is worth the asking price. - CORRECT ANSWER-Appraiser
A buyer wants to win the property by making a competitive offer. - CORRECT ANSWER-Real Estate Professional
A decrease in property value due to external issues such as pollution, traffic, and other nuisances - CORRECT ANSWER-External obsolescence
A decrease in property value due to the effects of ordinary wear and tear on the condition of the building = - CORRECT ANSWER-Physical deterioration
A decrease in property value resulting from poor or outdated design or material = - CORRECT ANSWER-Functional obsolescence
A lender needs to know the value of a property acting as security for a conventional mortgage. - CORRECT ANSWER-Appraiser
A lender requests an appraisal of a property under foreclosure. What type of value is the lender most likely to be interested in? - CORRECT ANSWER-Liquidation value
A property needs major renovations. - CORRECT ANSWER-Drives values down
A real estate appraisal may be used to ______. - CORRECT ANSWER-Set a value for property that's part of an estate
A seller wants to know what recent local sales are in order to set a listing price. - CORRECT ANSWER-Real Estate Professional
A seller would like an appraisal to help set a listing price for the property. - CORRECT ANSWER-Not Required
A thorough identification of the property, which provides the reader with a true picture of the property being valued, is loc ated in the ___________ section of the narrative
appraisal report. - CORRECT ANSWER-Introduction
Aaron, who's in the process of selling his home, is furious. Two of the houses that have recently been built as part of a new subdivision that abuts his property are several
feet over his property line. What issues may be caused by this encroachment? - CORRECT ANSWER-- Title problems for Aaron, which may impact the sale of his home
- Inability of the buyer of Aaron's home to secure a loan, if there's an issue with the title
- Additional costs for the developer to have the two homes moved
- Costly redesign and development delays for the subdivision developer
, Above-ground pool - CORRECT ANSWER-Personal property
Agreements between two or more parties: - CORRECT ANSWER-Covenants
AIR sets certain criteria when selecting an appraiser.
Which of these appraiser requirements does AIR specify? - CORRECT ANSWER-- Licensed or certified in the state where the property is located.
- Knowledgeable about the local market.
- Qualified to appraise the property involved in the transaction.
- Able to access the data needed to perform an appraisal.
Always works for a flat fee - CORRECT ANSWER-Appraiser
Amount a property will bring in a quick sale - CORRECT ANSWER-Liquidation value
An appraiser is using the land residual technique to determine an investment property's value. The building is valued at $500 ,000, and the typical rate of return for this
type of investment is 10%. The investor requires a NOI of $150,000 per year. What's the amount of NOI the land must earn? - CORRECT ANSWER-$100,000
An attorney requests an appraisal to value an estate for inheritance purposes. - CORRECT ANSWER-Not Required
Andy evaluates if his plan to build a warehouse on an empty lot is legal and will be profitable. - CORRECT ANSWER-Highest and best use
Apply or DOES NOT apply to a deed restriction:
Can be placed on an individual property, an entire subdivision, or a neighborhood - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
Ensures compliance with zoning and public safety, and preserves real property value - CORRECT ANSWER-Does not apply
Apply or DOES NOT apply to a deed restriction:
Limits the use or appearance of a given property - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
May run with the land forever, and will appear on all future deeds, or it may have a time limit - CORRECT ANSWER-Applies
Apply or DOES NOT apply to a deed restriction:
Must be placed by the property owner within a year of purchasing the property - CORRECT ANSWER-Does not apply
Appraisal Report - CORRECT ANSWER-Contains most detail. Can be a narrative (most often for commercial properties) or a form (such as the URAR for residential
properties)
Appraiser trainee - CORRECT ANSWER-75 hours
Appraisers develop an estimate of market rent for residential properties by ___________ and comparing rents across the subject and comparable properties. - CORRECT
ANSWER-Converting monthly rental income to annual dollars per room
Area map sources : - CORRECT ANSWER-Climate and natural resources
Bathroom towel rods - CORRECT ANSWER-Real property
Bob gives a life estate to Candy, who has two children. The children are named as fee simple owners should Candy die. - CORRECT ANSWER-Estate in Remainder
BOTH real estate professionals and appraisers need to be knowledgeable about: - CORRECT ANSWER-- Real Estate Market
- Mortgage Market
Can be passed down to heirs : - CORRECT ANSWER-Fee Simple Estate
Can the item be removed without damaging what it is attached to? - CORRECT ANSWER-Method of annexation
Can work for a lender, buyer, or seller - CORRECT ANSWER-Appraiser
Capitalization is the process of converting ______ to value. - CORRECT ANSWER-income
Certified general real property appraiser - CORRECT ANSWER-300 hours
Certified residential real property appraiser - CORRECT ANSWER-200 hours
Changes in demographics and population growth are examples of which type of real estate value influencer? - CORRECT ANSWER-Social
Characteristics of a Sole Proprietorship - CORRECT ANSWER-- Business model consisting of one person (such as an independent contractor)
- Business can be conducted and title to property held using your own name
- Business can be conducted and title to property held using your name in combination with the business name
- Ownership of property is called ownership in severalty
Chuck has the right to own and possess Leroy's property after Leroy's cousin, named in a life estate, dies. - CORRECT ANSWER-Estate in Remainder
Co-op - CORRECT ANSWER-- Often prohibits subletting
- Personal property ownership
- Own shares of the corporation
- These may be difficult to resell because applicants need to obtain board approval
- They tend to have higher monthly maintenance fees because taxes, fees, and mortgage payments are included.
Compensation is owed to the landowner when the action deprives the owner of all economically viable uses of the property, and the owner can no longer get a reasonable
return on the investment in the property: - CORRECT ANSWER-Taking
Condemnation is when the government takes someone's property with the belief that the action will serve the public good: - CORRECT ANSWER-Eminent domain
