Real Estate Appraisal Final Exam
Questions and Answers
What is the difference between a formal and informal appraisal? - ANS-a formal
appraisal relies upon the collection and analysis of relevant data instead of intuition
Definition of Market Value? - ANS-the most probable selling price
What are the ethics standards covered by USPAP? - ANS-Conduct
Confidentiality- don't tell anyone value except your client
Competency
Management
Record keeping- have to keep for 5 years
Scope of Work
Jurisdictional Exception
What is standard 1 in the appraisal standards covered by USPSP? - ANS-Real property
Appraisal Development. "In developing a real property appraisal...."
What is standard 2 in the appraisal standards covered by USPSP? - ANS-Real property
Appraisal Reporting. "In reporting the result of a real property appraisal..."
What are the four components of real property? - ANS-1. the land
2. objects permanently affixed to the land
3. that which is appurtenant or legally tied to the land ex. easement
4. that which is immovable by law
What are the 5 rights that come with ownership of real estate? - ANS-1. the right to
occupy
2. the right to sell
3. the right to exclude others
4. right to borrow against
5. right to convey ownership by inheritance or gift
What are the 5 tests of a fixture? - ANS-Method of Annexation
Adaptability of the object
Relationship of the parties
Intent of the parties
Agreement of the parties
What are improvement characteristics? - ANS--exterior and interior features
, -appeal and marketability
-construction quality
-physical condition
-effective age
What are the general classifications for building construction? - ANS-Class A - fireproof
steel, concrete or masonry frames, floors and roofs
Class B - fire resistant concrete or masonry frames, floors, and roofs
Class C - masonry walls, wood or exposed steel upper floor and roof structures
Class D - wood or light steel frames and roofs
What are the factors that affect the selection of materials for a building? - ANS--climate
-cost
-durability
-availability
-style
-code requirements
What are the 3 tests for comparability? - ANS--a competitive property
-an open market transaction
-a recent date of sale
What are the 4 elements of comparison? - ANS--terms and conditions of sale
-time of sale
-location
-physical features
What are the 4 steps in the market method of appraising land? - ANS--locate vacant
land sales
-compare each sale
-adjust prices for differences
-arrive at value
When should you use site value by allocation or abstraction? - ANS--when vacant land
sales are not available
-to appraise shared land interests
What are the key concepts to understand using the sales comparison approach? -
ANS--the importance of substitution
-the simplicity of market comparisons
-the relationship to statistics
-the relevance of adjustments
-the significance of market data
Questions and Answers
What is the difference between a formal and informal appraisal? - ANS-a formal
appraisal relies upon the collection and analysis of relevant data instead of intuition
Definition of Market Value? - ANS-the most probable selling price
What are the ethics standards covered by USPAP? - ANS-Conduct
Confidentiality- don't tell anyone value except your client
Competency
Management
Record keeping- have to keep for 5 years
Scope of Work
Jurisdictional Exception
What is standard 1 in the appraisal standards covered by USPSP? - ANS-Real property
Appraisal Development. "In developing a real property appraisal...."
What is standard 2 in the appraisal standards covered by USPSP? - ANS-Real property
Appraisal Reporting. "In reporting the result of a real property appraisal..."
What are the four components of real property? - ANS-1. the land
2. objects permanently affixed to the land
3. that which is appurtenant or legally tied to the land ex. easement
4. that which is immovable by law
What are the 5 rights that come with ownership of real estate? - ANS-1. the right to
occupy
2. the right to sell
3. the right to exclude others
4. right to borrow against
5. right to convey ownership by inheritance or gift
What are the 5 tests of a fixture? - ANS-Method of Annexation
Adaptability of the object
Relationship of the parties
Intent of the parties
Agreement of the parties
What are improvement characteristics? - ANS--exterior and interior features
, -appeal and marketability
-construction quality
-physical condition
-effective age
What are the general classifications for building construction? - ANS-Class A - fireproof
steel, concrete or masonry frames, floors and roofs
Class B - fire resistant concrete or masonry frames, floors, and roofs
Class C - masonry walls, wood or exposed steel upper floor and roof structures
Class D - wood or light steel frames and roofs
What are the factors that affect the selection of materials for a building? - ANS--climate
-cost
-durability
-availability
-style
-code requirements
What are the 3 tests for comparability? - ANS--a competitive property
-an open market transaction
-a recent date of sale
What are the 4 elements of comparison? - ANS--terms and conditions of sale
-time of sale
-location
-physical features
What are the 4 steps in the market method of appraising land? - ANS--locate vacant
land sales
-compare each sale
-adjust prices for differences
-arrive at value
When should you use site value by allocation or abstraction? - ANS--when vacant land
sales are not available
-to appraise shared land interests
What are the key concepts to understand using the sales comparison approach? -
ANS--the importance of substitution
-the simplicity of market comparisons
-the relationship to statistics
-the relevance of adjustments
-the significance of market data
