General Appraiser- Market Analysis
and Highest & Best Use Questions
and Answers.
MARKET ANALYSIS - Answer a process for examining the demand for ans supply of a property
type and the geographic market area for that property type.
HIGHEST AND BEST USE - Answer the reasonable probable and legal use of vacant land or an
improved property that is physically possible, appropriately supported, financially feasible, and
that results in the highest value.
the four criteria the highest and best use must meet are legal permissibly, physical possibility,
financial feasibility, and maximum productivity.
alternatively, the probable use of land or improved property -- specific with respect to user and
timing of the use --- that is adequately supported and results in the highest present value
MARKET - Answer a set of arrangements in which buyers and sellers are brought together
through the price mechanism; the aggregate of possible buyers and sellers and the transactions
between them
a gathering of people for the buying and selling of things; by extension, the people gathered for
this purpose
APPRAISAL - Answer the act or process of developing an opinion of value
an opinion of value
a market analysis that culminates in an opinion of value for a particular property
the use determines value - Answer
the market determines use - Answer
the THREE ingredients necessary for a POTENTIAL market - Answer 1. demand
2. supply
3. prices
the FOUR ingredients necessary for an ACTUAL market - Answer 1. demand
,2. supply
3. prices
4. ABSORPTION
the FOUR factors that CREATE VALUE in real property - Answer 1. utility
2. desire
3. effective buying power
4. scarcity
EQUILIBRIUM PRICE - Answer the price at which the amount willingly supplied and the
amount willingly demanded are equal. the price at which supply is perfectly allocated
5 STEPS OF THE SCIENTIFIC METHOD - Answer 1. identify the problem
2. formulate a hypothesis
3. establish data requirements
4. apply appropriate methodology
5. reconcile the findings to solve the problem
a market analysis that culminates in an opinion of value for a particular property - Answer
appraisal
a purchaser's wish for an item to satisfy human needs or individual wants beyond the essentials
required to support life - Answer desire
a generally known process of problem solving and research in the natural and social sciences -
Answer scientific method
the undersupply for examining the demand for and supply of a property type and the
geographic market area for that property - Answer scarcity
a process for examing the demand for and supply of a property type and the geographic market
area for that property type - Answer market analysis
the ability of a property to satisfy a human want, need, or desire - Answer utility
, MARKET STUDY - Answer a macroeconomic analysis that examines the GENERAL market
conditions of supply, demand, and pricing or the demographics of demand for a specific area or
property type. a market study may also include analyses of construction and absorption trends
MARKETABILITY STUDY - Answer a MICROECONOMIC study that examines the marketability
of a given property or class of properties, usually focusing on the market segments in which the
property is likely to generate demand. marketability studies are useful in determining a specific
highest and best use, testing development proposals, and projecting an appropriate tenant mix
PRIMARY DATA - Answer information that is gathered first-hand by the analyst for a particular
assignment. facts and information collected specifically for the purpose of the investigation at
hand
SECONDARY DATA - Answer information not directly complied by the analyst. facts and
information gathered not for the immediate study at hand but for some other purpose
characterizing market analysis by the way demand is measured - Answer inferred demand
analysis
fundamental demand analysis
PROJECTION - Answer a prediction of the future that is an extension of current and historical
trends
INFERRED DEMAND - Answer demand of projected on the basis of current market conditions,
historical rates of change, and absorption patterns
FORECAST - Answer a prediction of the future based on the fundamental forces of demand
FIRST PREMISE - Answer real estate exists to house economic activities, supply services, and
provide amenities to meet human needs
THREE FUNDAMENTAL FORCES OF DEMAND - Answer population
income
employment
SECOND PREMISE - Answer the relationship among these forces of demand are important no
matter which type of market analysis is done
THIRD PREMISE - Answer there is a hierarchy to the fundamental forces of demand
and Highest & Best Use Questions
and Answers.
MARKET ANALYSIS - Answer a process for examining the demand for ans supply of a property
type and the geographic market area for that property type.
HIGHEST AND BEST USE - Answer the reasonable probable and legal use of vacant land or an
improved property that is physically possible, appropriately supported, financially feasible, and
that results in the highest value.
the four criteria the highest and best use must meet are legal permissibly, physical possibility,
financial feasibility, and maximum productivity.
alternatively, the probable use of land or improved property -- specific with respect to user and
timing of the use --- that is adequately supported and results in the highest present value
MARKET - Answer a set of arrangements in which buyers and sellers are brought together
through the price mechanism; the aggregate of possible buyers and sellers and the transactions
between them
a gathering of people for the buying and selling of things; by extension, the people gathered for
this purpose
APPRAISAL - Answer the act or process of developing an opinion of value
an opinion of value
a market analysis that culminates in an opinion of value for a particular property
the use determines value - Answer
the market determines use - Answer
the THREE ingredients necessary for a POTENTIAL market - Answer 1. demand
2. supply
3. prices
the FOUR ingredients necessary for an ACTUAL market - Answer 1. demand
,2. supply
3. prices
4. ABSORPTION
the FOUR factors that CREATE VALUE in real property - Answer 1. utility
2. desire
3. effective buying power
4. scarcity
EQUILIBRIUM PRICE - Answer the price at which the amount willingly supplied and the
amount willingly demanded are equal. the price at which supply is perfectly allocated
5 STEPS OF THE SCIENTIFIC METHOD - Answer 1. identify the problem
2. formulate a hypothesis
3. establish data requirements
4. apply appropriate methodology
5. reconcile the findings to solve the problem
a market analysis that culminates in an opinion of value for a particular property - Answer
appraisal
a purchaser's wish for an item to satisfy human needs or individual wants beyond the essentials
required to support life - Answer desire
a generally known process of problem solving and research in the natural and social sciences -
Answer scientific method
the undersupply for examining the demand for and supply of a property type and the
geographic market area for that property - Answer scarcity
a process for examing the demand for and supply of a property type and the geographic market
area for that property type - Answer market analysis
the ability of a property to satisfy a human want, need, or desire - Answer utility
, MARKET STUDY - Answer a macroeconomic analysis that examines the GENERAL market
conditions of supply, demand, and pricing or the demographics of demand for a specific area or
property type. a market study may also include analyses of construction and absorption trends
MARKETABILITY STUDY - Answer a MICROECONOMIC study that examines the marketability
of a given property or class of properties, usually focusing on the market segments in which the
property is likely to generate demand. marketability studies are useful in determining a specific
highest and best use, testing development proposals, and projecting an appropriate tenant mix
PRIMARY DATA - Answer information that is gathered first-hand by the analyst for a particular
assignment. facts and information collected specifically for the purpose of the investigation at
hand
SECONDARY DATA - Answer information not directly complied by the analyst. facts and
information gathered not for the immediate study at hand but for some other purpose
characterizing market analysis by the way demand is measured - Answer inferred demand
analysis
fundamental demand analysis
PROJECTION - Answer a prediction of the future that is an extension of current and historical
trends
INFERRED DEMAND - Answer demand of projected on the basis of current market conditions,
historical rates of change, and absorption patterns
FORECAST - Answer a prediction of the future based on the fundamental forces of demand
FIRST PREMISE - Answer real estate exists to house economic activities, supply services, and
provide amenities to meet human needs
THREE FUNDAMENTAL FORCES OF DEMAND - Answer population
income
employment
SECOND PREMISE - Answer the relationship among these forces of demand are important no
matter which type of market analysis is done
THIRD PREMISE - Answer there is a hierarchy to the fundamental forces of demand
