REE 4103 EXAM 2 UCF BOTTS QUESTIONS &
ANSWERS
Sales comparison approach - Answer -An opinion of market value is developed by
comparing properties similar to the subject property that have recently been sold, are
listed for sale or are under contract
What is a major premise of the sales comparison approach? - Answer -An opinion of
the market value of a property can be supported by studying the market's reaction to
comparable and competitive properties
Comparative analysis of properties and transactions - Answer -_____ focuses on
similarities and differences that affect value, called elements of comparison
Procedure of the sales comparison approach - Answer -1. Research the competitive
market for information on properties that are similar to the subject property and that
have recently sold.
2. Verify the information by confirming that the data obtained is factually accurate and
that the transactions reflect arm's length market considerations.
3. Select the most relevant units of comparison
4. Look for differences
5. Reconcile the carious value indications
What are some primary data sources for sales data? - Answer -Public records
(courthouse records, tax records), commercially available data from multiple listing and
subscription services, published articles in newspapers and online, and interviews with
market participants (attorneys, appraisers, brokers)
The Uniform Standards of Professional Appraisal Practice (USPAP) - Answer -____
requires appraisers to analyze and report all agreements of sale, options and listings of
the subject property current as of the effective date
*Arm's length transaction - Answer -A transaction between unrelated parties under no
duress.
If all comparable properties are identical to the subject property what happens? -
Answer -No adjustments to sales prices will be required
Elements of comparison - Answer -The characteristics of properties and transactions
that help explain the reasons prices of real estate vary
What is necessary in nearly all sales analyses because the appraiser will usually
analyze many sales that lead to several different conclusions? - Answer -Reconciliation
, If a comparable property is 20% superior to the subject in some areas and 20% inferior
in other areas, what is the net adjustment and the gross adjustment? - Answer -Net
adjustment is 0%
Gross adjustment is 40%
Comparative analysis - Answer -The general term used to identify the process in the
sales comparison approach in which quantitative and qualitative techniques are applied
to comparable sales data to derive a value indication
*Paired data analysis is based on the premise that when ____ - Answer -Two
properties are equivalent in all respects but one, the value of the single difference can
be measured by the difference in price between the two properties
Bracketing - Answer -A process in which an appraiser determines a probable range of
values for a property by applying qualitative techniques of comparative analysis to a
group of comparable sales
*The basic elements of comparison considered in comparative analysis - Answer -Real
property rights conveyed, financing terms, condition of sale, market conditions, location,
physical, economic and legal characteristics and non realty components of value
*Adjustments for differences in the elements of comparison are made to what? -
Answer -The price of each comparable property. Adjustments can be made to the total
price, common unit price or both.
Conditions of sale - Answer -The definition of market value used in most assignments
requires "typical motivations of buyers and sellers" with no pressure on either party to
consummate the sale
*Concessions - Answer -Often a seller may give a financial incentive to induce a buyer
to make an offer on the seller's property rather than on a competitor's property
Comparable sales that occurred under market conditions different from those applicable
to the subject on the effective date require what? - Answer -Adjustment for any
differences that affect their values
Physical characteristics - Answer -Differences such as size, soils, site access,
topography and quality of construction
Furniture, fixtures and equipment in a hotel or restaurant - Answer -Examples of
personal property that may be included in a comparable sale
Units of comparison for single unit residential property - Answer -Total property price
and price per square foot of gross living area
ANSWERS
Sales comparison approach - Answer -An opinion of market value is developed by
comparing properties similar to the subject property that have recently been sold, are
listed for sale or are under contract
What is a major premise of the sales comparison approach? - Answer -An opinion of
the market value of a property can be supported by studying the market's reaction to
comparable and competitive properties
Comparative analysis of properties and transactions - Answer -_____ focuses on
similarities and differences that affect value, called elements of comparison
Procedure of the sales comparison approach - Answer -1. Research the competitive
market for information on properties that are similar to the subject property and that
have recently sold.
2. Verify the information by confirming that the data obtained is factually accurate and
that the transactions reflect arm's length market considerations.
3. Select the most relevant units of comparison
4. Look for differences
5. Reconcile the carious value indications
What are some primary data sources for sales data? - Answer -Public records
(courthouse records, tax records), commercially available data from multiple listing and
subscription services, published articles in newspapers and online, and interviews with
market participants (attorneys, appraisers, brokers)
The Uniform Standards of Professional Appraisal Practice (USPAP) - Answer -____
requires appraisers to analyze and report all agreements of sale, options and listings of
the subject property current as of the effective date
*Arm's length transaction - Answer -A transaction between unrelated parties under no
duress.
If all comparable properties are identical to the subject property what happens? -
Answer -No adjustments to sales prices will be required
Elements of comparison - Answer -The characteristics of properties and transactions
that help explain the reasons prices of real estate vary
What is necessary in nearly all sales analyses because the appraiser will usually
analyze many sales that lead to several different conclusions? - Answer -Reconciliation
, If a comparable property is 20% superior to the subject in some areas and 20% inferior
in other areas, what is the net adjustment and the gross adjustment? - Answer -Net
adjustment is 0%
Gross adjustment is 40%
Comparative analysis - Answer -The general term used to identify the process in the
sales comparison approach in which quantitative and qualitative techniques are applied
to comparable sales data to derive a value indication
*Paired data analysis is based on the premise that when ____ - Answer -Two
properties are equivalent in all respects but one, the value of the single difference can
be measured by the difference in price between the two properties
Bracketing - Answer -A process in which an appraiser determines a probable range of
values for a property by applying qualitative techniques of comparative analysis to a
group of comparable sales
*The basic elements of comparison considered in comparative analysis - Answer -Real
property rights conveyed, financing terms, condition of sale, market conditions, location,
physical, economic and legal characteristics and non realty components of value
*Adjustments for differences in the elements of comparison are made to what? -
Answer -The price of each comparable property. Adjustments can be made to the total
price, common unit price or both.
Conditions of sale - Answer -The definition of market value used in most assignments
requires "typical motivations of buyers and sellers" with no pressure on either party to
consummate the sale
*Concessions - Answer -Often a seller may give a financial incentive to induce a buyer
to make an offer on the seller's property rather than on a competitor's property
Comparable sales that occurred under market conditions different from those applicable
to the subject on the effective date require what? - Answer -Adjustment for any
differences that affect their values
Physical characteristics - Answer -Differences such as size, soils, site access,
topography and quality of construction
Furniture, fixtures and equipment in a hotel or restaurant - Answer -Examples of
personal property that may be included in a comparable sale
Units of comparison for single unit residential property - Answer -Total property price
and price per square foot of gross living area
