IAAO Course 101 Review Test Questions with Verified Answers Graded A
Tax Rate (def.) - -Percent of assessed Principle of Conformity - -Value of a
value at which each property is taxed in a given property depends on its relationship to its
district. surroundings; maximum market value is achieved
when reasonable similarity among improvements
in the neighborhood.
Tax Rate (formula) - -Tax revenue
(amount) / Assessed value
Principle of Competition - -Created by the
potential for profits; availability must be in
Property Tax (formula) - -Subject assessed harmony with demand; if one or the other is in
value / Tax rate excess prices will decrease or increase.
Budget Revenue (formula) - -Total budget Principle of Balance - -Applied to an
- Other taxes individual property; maximum value is obtained
when the four agents of production are balanced
- land, labor, capital and management.
Effective Tax Rate (def.) - -Reflects the
relationship between total property taxes on real
property and the property's market value. Principle of Change - -Market value is
never constant; estimate of market value is only
valid as of a specific date & changes in the
Effective Tax Rate (formula) - - market will impact future value estimates.
Assessment ratio (level) X Tax rate
Principle of Anticipation - -Value created by
Jurisdictions tax rate is derived by (formula) - the expected future benefits from the property;
-Budget revenue (budget -other taxes) / related to the Principle of Change.
Assessed value
Principle of Consistent Use - -Property
Assessment Ratio (def.) - -Estimated must be valued with a single use for the entire
fractional relationship between the assessed property; land cannot be valued with one use and
values and market values of a group of improvements with another.
properties.
Principle of Contribution - -Value of
Assessment Ratio (formula) - -Assessed component depends on its contribution to the
value / Market value whole; basis for adjustments in the sales
comparison approach.
Neighborhood Life Cycle - -Growth,
Stability, Decline & Revitalization Principle of Supply - -Amount of product
producers are willing to sell under various
conditions during a given period.
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, IAAO Course 101 Review Test Questions with Verified Answers Graded A
2) Determine property rights conveyed
3) Purpose or function of the appraisal
Principle of Demand - -Amount of product 4) Date of appraisal (date of value)
producers are willing and able to buy during a 5) Definition of value
given period; given the choices available.
Property Rights Conveyed (bundle of rights) -
Principle of Increasing & Decreasing Returns - -SLUGER
-Addition of successive increments of one 1) right to Sell
agent of production will decrease future incomes 2) right to Lease or rent
or amenities; or additions of successive 3) right to Use
increments of one agent of productions added, 4) right to Give away
future income or amenities will increase to a 5) right to Enter or leave
point. 6) right to Refuse to do anything
Principle of Progression - -Association with Governmental Restrictions - -PETE
better properties of the same type increase value 1) Police power
of a lower priced property. 2) Eminent domain
3) Taxation
4) Escheate
Principle of Regression - -Association with
lower quality properties of the same area
decrease the value of a better quality property. Estates in Property (types) - -1) Fee simple
2) Leasehold interest
3) Leased fee interest
Principle of Substitution - -Market value of 4) Possessory interest
a property set by cost of acquiring an equally 5) Life estate
desirable and valuable property; underlies the 3
approaches to appraisal (value).
Fee Simple - -Ownership of all rights to the
property except governmental restrictions.
Principle of Surplus Productivitiy - -Net
income remaining after the costs of labor,
management and capital have been satisfied; Leasehold Interest - -Tenant rights
income earned by land; increase income =
increase value.
Lease Fee Interest - -Landlord rights
Types of Neighborhood Boundaries - -
Natural, Political and Man-made Possessory Interest - -Rights of possession
and use of property
Basic steps in definition of the appraisal problem
are... - -1) Identify the property Life Estate - -Ownership limited to the life
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Tax Rate (def.) - -Percent of assessed Principle of Conformity - -Value of a
value at which each property is taxed in a given property depends on its relationship to its
district. surroundings; maximum market value is achieved
when reasonable similarity among improvements
in the neighborhood.
Tax Rate (formula) - -Tax revenue
(amount) / Assessed value
Principle of Competition - -Created by the
potential for profits; availability must be in
Property Tax (formula) - -Subject assessed harmony with demand; if one or the other is in
value / Tax rate excess prices will decrease or increase.
Budget Revenue (formula) - -Total budget Principle of Balance - -Applied to an
- Other taxes individual property; maximum value is obtained
when the four agents of production are balanced
- land, labor, capital and management.
Effective Tax Rate (def.) - -Reflects the
relationship between total property taxes on real
property and the property's market value. Principle of Change - -Market value is
never constant; estimate of market value is only
valid as of a specific date & changes in the
Effective Tax Rate (formula) - - market will impact future value estimates.
Assessment ratio (level) X Tax rate
Principle of Anticipation - -Value created by
Jurisdictions tax rate is derived by (formula) - the expected future benefits from the property;
-Budget revenue (budget -other taxes) / related to the Principle of Change.
Assessed value
Principle of Consistent Use - -Property
Assessment Ratio (def.) - -Estimated must be valued with a single use for the entire
fractional relationship between the assessed property; land cannot be valued with one use and
values and market values of a group of improvements with another.
properties.
Principle of Contribution - -Value of
Assessment Ratio (formula) - -Assessed component depends on its contribution to the
value / Market value whole; basis for adjustments in the sales
comparison approach.
Neighborhood Life Cycle - -Growth,
Stability, Decline & Revitalization Principle of Supply - -Amount of product
producers are willing to sell under various
conditions during a given period.
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, IAAO Course 101 Review Test Questions with Verified Answers Graded A
2) Determine property rights conveyed
3) Purpose or function of the appraisal
Principle of Demand - -Amount of product 4) Date of appraisal (date of value)
producers are willing and able to buy during a 5) Definition of value
given period; given the choices available.
Property Rights Conveyed (bundle of rights) -
Principle of Increasing & Decreasing Returns - -SLUGER
-Addition of successive increments of one 1) right to Sell
agent of production will decrease future incomes 2) right to Lease or rent
or amenities; or additions of successive 3) right to Use
increments of one agent of productions added, 4) right to Give away
future income or amenities will increase to a 5) right to Enter or leave
point. 6) right to Refuse to do anything
Principle of Progression - -Association with Governmental Restrictions - -PETE
better properties of the same type increase value 1) Police power
of a lower priced property. 2) Eminent domain
3) Taxation
4) Escheate
Principle of Regression - -Association with
lower quality properties of the same area
decrease the value of a better quality property. Estates in Property (types) - -1) Fee simple
2) Leasehold interest
3) Leased fee interest
Principle of Substitution - -Market value of 4) Possessory interest
a property set by cost of acquiring an equally 5) Life estate
desirable and valuable property; underlies the 3
approaches to appraisal (value).
Fee Simple - -Ownership of all rights to the
property except governmental restrictions.
Principle of Surplus Productivitiy - -Net
income remaining after the costs of labor,
management and capital have been satisfied; Leasehold Interest - -Tenant rights
income earned by land; increase income =
increase value.
Lease Fee Interest - -Landlord rights
Types of Neighborhood Boundaries - -
Natural, Political and Man-made Possessory Interest - -Rights of possession
and use of property
Basic steps in definition of the appraisal problem
are... - -1) Identify the property Life Estate - -Ownership limited to the life
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