Section 4: Real Estate Appraisals in
Texas 2025
_______ is the principle that the more similar properties there are on the market, the
lower the price will be driven. - ANSWER-Competition
A 20-unit apartment building sells for $5 million. The property can bring in $400,000 in
annual gross income. What is the gross income multiplier (GIM)? - ANSWER-12.5
A fire destroyed Meredith's house. Meredith contacted her insurance company, and she
was shocked to learn her insurance policy didn't fully cover what she paid for the
property. How does the insurance company determine the replacement value of her
home? - ANSWER-The amount it would cost to completely replace her home
A form of depreciation or loss in value caused by defects in design is called _______. -
ANSWER-Functional obsolescence
A loss in value caused by an undesirable or hazardous influence offsite is which type of
depreciation? - ANSWER-External depreciation
A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the
capitalization rate for the strip mall? - ANSWER-7.9%
After analyzing the subject property, the appraiser will identify some comparable
properties that have been recently sold. What's next? - ANSWER-Compare the
comparables to the subject property and make adjustments to the sales price of the
comparables where they are different.
After making adjustments to the comparables he selected, Danny came up with a
recommended listing price range for the Schumacher's house. Who ultimately
determines what the listing price for the property will be? - ANSWER-Seller
An appraiser is working to reconcile the value of an office building. Which approach
should he use? - ANSWER-Income
An appraiser will analyze the subject property first when using the sales comparison
approach. What's next? - ANSWER-Identify comparable properties that have been
recently sold.
An investor is analyzing a property by looking at its ability to produce future income. The
property is a 10-unit apartment building. Which of the following would be used to
determine this value? - ANSWER-Gross income multiplier
, Appraisal - ANSWER-Unbiased estimate of value of a specific property on a specific
date
Appraisal Part II - ANSWER--Prepared by a certified appraiser (most of the time)
-Offers a detailed analysis of market conditions, the property itself, comparables, recent
sales and listings, land value, and construction costs
-Determines property value, which lenders use in the mortgage process
Appraisal Practices Board - ANSWER-Responsible for finding and distributing thoughts
on known valuation methods and techniques.
Appraisal Standards Board - ANSWER-Determines the rules for creating an appraisal
and reporting its results. It also encourages the use, understanding, and implementation
of the Uniform Standards of Professional Appraisal Practice (USPAP) as required by
FIRREA.
Appraisals - ANSWER--Costs $400+
-Performed by a state-licensed or certified appraiser
-Multiple methods of performing the appraisal are used, including sales comparison and
cost. Appraisers may also use the income approach for income-producing properties.
-Very detailed
-Prepared for the lender, buyer, seller, or sometimes the courts
Appraisals differ from CMAs in part because appraisers perform a more detailed
analysis of a property, and they also use three approaches to value (cost, income, and
sales comparison). Which five of these factors does a certified appraiser consider when
determining a property's value? - ANSWER--Similar properties in proximity to the
subject property
-Recent sales and listings
-Land value
-Construction costs
-The property
Appraiser - ANSWER--Usually hired by the lender or buyer, or sometimes the seller
-Determines a property's worth
-Provides unbiased estimate of value
Appraiser Qualifications Board - ANSWER-Determines the qualification criteria for state
licensing, certification, re-certification of appraisers.
Appraiser trainee - ANSWER-This is the first step to obtaining a license or certification.
As an appraiser, Vladimir's first step in the valuation process is to identify the problem.
What are two benefits of stating the problem up front? - ANSWER--It informs the
appraiser's approach.
-It helps the appraiser identify the type of data required.
Texas 2025
_______ is the principle that the more similar properties there are on the market, the
lower the price will be driven. - ANSWER-Competition
A 20-unit apartment building sells for $5 million. The property can bring in $400,000 in
annual gross income. What is the gross income multiplier (GIM)? - ANSWER-12.5
A fire destroyed Meredith's house. Meredith contacted her insurance company, and she
was shocked to learn her insurance policy didn't fully cover what she paid for the
property. How does the insurance company determine the replacement value of her
home? - ANSWER-The amount it would cost to completely replace her home
A form of depreciation or loss in value caused by defects in design is called _______. -
ANSWER-Functional obsolescence
A loss in value caused by an undesirable or hazardous influence offsite is which type of
depreciation? - ANSWER-External depreciation
A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the
capitalization rate for the strip mall? - ANSWER-7.9%
After analyzing the subject property, the appraiser will identify some comparable
properties that have been recently sold. What's next? - ANSWER-Compare the
comparables to the subject property and make adjustments to the sales price of the
comparables where they are different.
After making adjustments to the comparables he selected, Danny came up with a
recommended listing price range for the Schumacher's house. Who ultimately
determines what the listing price for the property will be? - ANSWER-Seller
An appraiser is working to reconcile the value of an office building. Which approach
should he use? - ANSWER-Income
An appraiser will analyze the subject property first when using the sales comparison
approach. What's next? - ANSWER-Identify comparable properties that have been
recently sold.
An investor is analyzing a property by looking at its ability to produce future income. The
property is a 10-unit apartment building. Which of the following would be used to
determine this value? - ANSWER-Gross income multiplier
, Appraisal - ANSWER-Unbiased estimate of value of a specific property on a specific
date
Appraisal Part II - ANSWER--Prepared by a certified appraiser (most of the time)
-Offers a detailed analysis of market conditions, the property itself, comparables, recent
sales and listings, land value, and construction costs
-Determines property value, which lenders use in the mortgage process
Appraisal Practices Board - ANSWER-Responsible for finding and distributing thoughts
on known valuation methods and techniques.
Appraisal Standards Board - ANSWER-Determines the rules for creating an appraisal
and reporting its results. It also encourages the use, understanding, and implementation
of the Uniform Standards of Professional Appraisal Practice (USPAP) as required by
FIRREA.
Appraisals - ANSWER--Costs $400+
-Performed by a state-licensed or certified appraiser
-Multiple methods of performing the appraisal are used, including sales comparison and
cost. Appraisers may also use the income approach for income-producing properties.
-Very detailed
-Prepared for the lender, buyer, seller, or sometimes the courts
Appraisals differ from CMAs in part because appraisers perform a more detailed
analysis of a property, and they also use three approaches to value (cost, income, and
sales comparison). Which five of these factors does a certified appraiser consider when
determining a property's value? - ANSWER--Similar properties in proximity to the
subject property
-Recent sales and listings
-Land value
-Construction costs
-The property
Appraiser - ANSWER--Usually hired by the lender or buyer, or sometimes the seller
-Determines a property's worth
-Provides unbiased estimate of value
Appraiser Qualifications Board - ANSWER-Determines the qualification criteria for state
licensing, certification, re-certification of appraisers.
Appraiser trainee - ANSWER-This is the first step to obtaining a license or certification.
As an appraiser, Vladimir's first step in the valuation process is to identify the problem.
What are two benefits of stating the problem up front? - ANSWER--It informs the
appraiser's approach.
-It helps the appraiser identify the type of data required.
