Texas RE Principles II Exam Prep -
Specializations and Appraisal-2025
Anticipation - ANSWER-This says that the value of property today is the current value of
the total anticipated future benefits.
Appraisal - ANSWER-An estimate of value at a specific point in time by a licensed or
certified appraiser. This may ONLY be performed by a licensed or certified appraiser.
Appraiser - ANSWER-A person holding certification to estimate the value of real
property according to standardized principles of valuation
BPO - ANSWER-Broker's price opinion; an opinion of value prepared by a real estate
licensee. This must not be called an "appraisal."
CMA - ANSWER-Competitive market analysis; an opinion of value. This term is used
interchangeably with BPO.
Competition - ANSWER-This impacts value in that the more similar properties there are
on the market, the lower the price
will be driven.
Conformity - ANSWER-This says that value is created and maintained when the
characteristics of a property conform to the demands of the market.
Contribution - ANSWER-This has to do with how a change in a property impacts the
value as a whole.
Cost approach - ANSWER-Approach to value that measures value as a cost of
production, including acquisition
of the land and the construction costs.
Curable depreciation - ANSWER-An item of physical deterioration or functional
obsolescence where the cost to cure the item is less than or the same as the
anticipated increase in the value of the property after the item is cured
Developer - ANSWER-A person who constructs improvements on raw land
DUST - ANSWER-An acronym for Demand, Utility, Scarcity, and Transferability, which
are the four factors that influence value
External depreciation or "economic obsolescence" - ANSWER-A loss in value caused
by an undesirable or
hazardous influence offsite
Specializations and Appraisal-2025
Anticipation - ANSWER-This says that the value of property today is the current value of
the total anticipated future benefits.
Appraisal - ANSWER-An estimate of value at a specific point in time by a licensed or
certified appraiser. This may ONLY be performed by a licensed or certified appraiser.
Appraiser - ANSWER-A person holding certification to estimate the value of real
property according to standardized principles of valuation
BPO - ANSWER-Broker's price opinion; an opinion of value prepared by a real estate
licensee. This must not be called an "appraisal."
CMA - ANSWER-Competitive market analysis; an opinion of value. This term is used
interchangeably with BPO.
Competition - ANSWER-This impacts value in that the more similar properties there are
on the market, the lower the price
will be driven.
Conformity - ANSWER-This says that value is created and maintained when the
characteristics of a property conform to the demands of the market.
Contribution - ANSWER-This has to do with how a change in a property impacts the
value as a whole.
Cost approach - ANSWER-Approach to value that measures value as a cost of
production, including acquisition
of the land and the construction costs.
Curable depreciation - ANSWER-An item of physical deterioration or functional
obsolescence where the cost to cure the item is less than or the same as the
anticipated increase in the value of the property after the item is cured
Developer - ANSWER-A person who constructs improvements on raw land
DUST - ANSWER-An acronym for Demand, Utility, Scarcity, and Transferability, which
are the four factors that influence value
External depreciation or "economic obsolescence" - ANSWER-A loss in value caused
by an undesirable or
hazardous influence offsite
