Aceable Principles of Real Estate 2 Review Exam Questions & Answers 100% Correct!

Real Estate Settlement Procedures Act (RESPA) - ANSWERSto protect consumers from abusive lending practices. General data - ANSWERSis information about a property's location. This could include the city, region, and neighborhood in which the property is situated. The appraisal report is usually paid by - ANSWERSthe buyer Specific data - ANSWERSinformation regarding the property itself. What types of data do Appraisers use? - ANSWERSBOTH Specific Data and General Data The appraiser that will complete the appraisal report is usually chosen by - ANSWERSthe lender Market value is: - ANSWERSNot the same thing as the sales price An opinion, not a fact Not always agreed upon by all appraisers price for which a property will sell if offered openly under normal conditions. Market value is all about the present. What will someone pay for their property TODAY? Depreciation - ANSWERSa concept well known by appraisers, is the loss of value because of obsolescence (becoming obsolete) or deterioration. Depreciation is also tied closely with a property's effective age, Effective Age - ANSWERSan estimated age that is influenced by the updates and quality of maintenance of the property. An appraiser's job: - ANSWERSa licensed real estate agent cannot perform an appraisal unless they are also a licensed appraiser. supply impartial and unbiased information in order to estimate the value of a property. appraisal report - ANSWERSa report from a licensed appraiser that sums up a property's market value based on collected data. Principle of Anticipation - ANSWERSThe idea that the present value of a property is affected by the anticipated income or utility that property will give its property owner. Principle of Anticipation EXAMPLE - ANSWERSJimmy is buying a property and plans to rent it out for business purposes — his ability to make income off of rent is affecting the amount he is willing to bid on the house. Principle of Contribution - ANSWERSThe idea that a property's overall value is made up of the combined value of each of its parts. But the contributory value of an item is not always equal to the price of that item. Principle of Contribution EXAMPLE - ANSWERSJimmy renovated his kitchen, but was disappointed that the appraisal of his house only added part of the cost of the renovation to his house's value — Jimmy learned that his house's overall value is made up of the value of all of the parts. (The broken-down A/C affects his house's value as much as the new kitchen.) Principle of Substitution - ANSWERSStates that the value of something is affected by the cost of getting a similar (substitute) item elsewhere. EXAMPLE: Jimmy wants to put his house for sale, and his neighbor Shane, who has an almost identical house in his neighbor, put his house up for sale — Jimmy is carefully watching Shane (and vice versa). Principle of Change - ANSWERSReminds us that the condition of a property, the desirability of its location, and the market in which it exists can always change, which could affect the value of the property. EXAMPLE: Jimm