Texas Real Estate State Exam with
Verified Solutions
Eminent Domain ✔️✔️The right of the government to take private property for public use
through the action of condemnation
Inverse Condemnation ✔️✔️When an individual forces the govt to buy his property
Taxation ✔️✔️Property taxes are the highest priority lein on real property
Assessed Value ✔️✔️value of property for tax purposes
Special assessment tax ✔️✔️Ex. Govt provides new side walk in neighborhood can charge the
owner's of neighborhood this tax
Escheat ✔️✔️Property reverts to the state dies with no will,no heirs, no kindred. Also property
is abandoned
Riparian rights ✔️✔️rights for rivers,streams, small bodies of water
Littoral rights ✔️✔️Lakes, Oceans, large bodies of water
,Prior Appropriation Theory ✔️✔️first landowner to claim riparian rights exclusive rights
Market Value ✔️✔️price a willing seller will sell for, and price willing buyer will pay
4 Characteristics of Value (DUST) ✔️✔️Demand, Utility,Scarcity,Transferability
CMA Comparative Market Analysis ✔️✔️a tool licensee use to determine price for their
property using current listings,recent sales and expired listings
3 Basic approaches to Appraisals ✔️✔️market data or sales comparison,income or
capitalization method, and replacement cost or summation approach
Market data approach ✔️✔️mostly residential properties compares sales to similar properties
in the area 3-5 sales no more than 6 months old
Income approach ✔️✔️or capitalization method used for income producing properties GRM x
rent = Price or use GIM
Cost approach ✔️✔️also know as summation approach how much it would cost to reproduce
or build examples are churches or govt buildings,new construction
, 3 types of depreciation in cost approach ✔️✔️Physical deterioration,Functional obsolescence,
Economic obsolescence
Appraisers Principles to Value (9) ✔️✔️Highest and Best use, Principle of Substitution,
Principle of Conformity, Principle of Increasing and Decreasing Returns, Principle of
Contribution, The Principle of Regression, The principle of Competition, The Principle of
Change, The Principle of Anticipation
Assemblage or plottage ✔️✔️combining several parcels of land into one
Steps in Appraisers process (5) ✔️✔️1.Purpose 2. Collect and Verify info 3. Est. value using
as many approaches as needed 4. Reconciliation 5. Prepare report
Appraisers ✔️✔️must follow USPAP (Uniform standards of Professional Appraisal Practice)
some lenders require Fannie Mae appraisal
Chronological age ✔️✔️age of property in years
Deferred Maintenance ✔️✔️type of physical depreciation (ordinary wear and tear)
Straight line method ✔️✔️a method of depreciation of equal annual installment amounts.
Verified Solutions
Eminent Domain ✔️✔️The right of the government to take private property for public use
through the action of condemnation
Inverse Condemnation ✔️✔️When an individual forces the govt to buy his property
Taxation ✔️✔️Property taxes are the highest priority lein on real property
Assessed Value ✔️✔️value of property for tax purposes
Special assessment tax ✔️✔️Ex. Govt provides new side walk in neighborhood can charge the
owner's of neighborhood this tax
Escheat ✔️✔️Property reverts to the state dies with no will,no heirs, no kindred. Also property
is abandoned
Riparian rights ✔️✔️rights for rivers,streams, small bodies of water
Littoral rights ✔️✔️Lakes, Oceans, large bodies of water
,Prior Appropriation Theory ✔️✔️first landowner to claim riparian rights exclusive rights
Market Value ✔️✔️price a willing seller will sell for, and price willing buyer will pay
4 Characteristics of Value (DUST) ✔️✔️Demand, Utility,Scarcity,Transferability
CMA Comparative Market Analysis ✔️✔️a tool licensee use to determine price for their
property using current listings,recent sales and expired listings
3 Basic approaches to Appraisals ✔️✔️market data or sales comparison,income or
capitalization method, and replacement cost or summation approach
Market data approach ✔️✔️mostly residential properties compares sales to similar properties
in the area 3-5 sales no more than 6 months old
Income approach ✔️✔️or capitalization method used for income producing properties GRM x
rent = Price or use GIM
Cost approach ✔️✔️also know as summation approach how much it would cost to reproduce
or build examples are churches or govt buildings,new construction
, 3 types of depreciation in cost approach ✔️✔️Physical deterioration,Functional obsolescence,
Economic obsolescence
Appraisers Principles to Value (9) ✔️✔️Highest and Best use, Principle of Substitution,
Principle of Conformity, Principle of Increasing and Decreasing Returns, Principle of
Contribution, The Principle of Regression, The principle of Competition, The Principle of
Change, The Principle of Anticipation
Assemblage or plottage ✔️✔️combining several parcels of land into one
Steps in Appraisers process (5) ✔️✔️1.Purpose 2. Collect and Verify info 3. Est. value using
as many approaches as needed 4. Reconciliation 5. Prepare report
Appraisers ✔️✔️must follow USPAP (Uniform standards of Professional Appraisal Practice)
some lenders require Fannie Mae appraisal
Chronological age ✔️✔️age of property in years
Deferred Maintenance ✔️✔️type of physical depreciation (ordinary wear and tear)
Straight line method ✔️✔️a method of depreciation of equal annual installment amounts.
