Idaho Real Estate Pre-Licensure Course Module 2 Exam Questions With Correct Answers

An appraisal is an ______ or opinion of value based on supportable evidence and approved methods. - Answer estimate A ______ ______ ______ (CMA) is an an analysis of probable value of real estate done by an individual other than an appraiser. A real estate agent (can/cannot) charge for a CMA. - Answer Comparable Market Analysis cannot A ______ ______ ______ (BPO) is an opinion of value of real estate done by a licensee with a broker level license. They (can/cannot) charge for a BPO. - Answer Broker Price Opinion can Progression (brings up/brings down) the value of a property - Answer brings up Regression (brings up/brings down) the value of a property - Answer brings down Principle of Progression and Regression - Does the property ______ to its surroundings. - Answer conform Principle of Substitution - The value of a property cannot exceed the ______ of equivalent substitute properties that are available in the market. Reasonable buyers compare similar properties on the market and choose the (most/least) expensive one that meets their needs. - Answer cost least Principle of Highest and Best Use - The most ______ single use to which a property may be put. 3 possible uses 1)______ 2)______ 3)______. - Answer profitable 1) Physically 2) Legally 3) Economically feasible Plottage is the increase in value or utility resulting from the consolidation (assemblage) of ______ or more adjacent lots into one larger lot - Answer 2 Types of appraisal reports - a ______ report is the most common type of report - Answer Form Types of appraisal reports - a ______ appraisal is the longest type of report - Answer Narrative Types of appraisal reports - ask "are there any ______?" - Answer conditions Three approaches to value are 1) ______ ______ Approach (aka Sales Comparison Approach) 2) ______ Approach and 3) ______ Approach - Answer Market Data Cost Income A Market Data Approach (aka: Sales Comparison Approach) is used when ______ properties are available. This is the (most/least) reliable approach. - Answer comparable most The goal in a Market Data Approach (aka: Sales Comparison Approach) is to find comparisons with as (many/little) adjustments as possible. - Answer little Market Data Approach (aka: Sales Comparison Approach) - Important: if the comparable property is superior to the subject we (add/deduct) to/from its value. If the comparable property is inferior we (add/dedeuct) to/from its value - Answer deduct add Cost Approach (Replacement Cost) is the most applicable in a new structure build appraisal or a custom structure such as ______, ______ or ______. This is also used when ______ do not exist. - Answer schools, churches or hospitals comparables ______ is the loss of value from any source - Answer Depreciation Three components of depreciation are ______ ______, ______ ______ and ______ or ______ ______. - Answer physical deterioration, functional obsolescence and external or economic obsolescence Physical deterioration is a (sudden/gradual) decline. This includes peeling paint, bad roof, broken windows and termite damage. - Answer gradual Functional obsolescence is an outdated design or feature that are ______. This includes low ceilings, a 6 bedroom/1 bathroom, a split entry and knob and tube wiring. - Answer curable or possibly curable External or economic obsolescence are conditions outside the property line that are ______. This includes being in an airport flight path, being next to the freeway or having lots of businesses close by. - Answer incurable Steps for cost approach - 1) estimate the value of land (using the market approach) 2) estimate the cost of the new improvements to build or rebuild 3) estimate the amount of accrued depreciation 4) ______ the amount of accrued depreciation from the cost new in step 2 5) add land value to the depreciated cost of the structure to arrive at a total value - Answer deduct