AceableAgent Real Estate Principals 2 Exam Questios with 100% Correct Answers

AceableAgent Real Estate Principals 2 Exam Questios with 100% Correct Answers General Data - answerIs information about a property's location. This could include the city, region, and neighborhood in which the poperty uis situated. Specific Data - answerIs information regarding the property itself. Principle if Anticipation - answerThe 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 Contribution - answerThe 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 Substitution - answerStates that the value of something is affected by the cost of getting a similar (substitute) item elsewhere. Principle of Change - answerReminds us that the 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. Principles of Supply and Demand - answerStates that when supply is low and demand is high, prices will increase. And if supply is plentiful and demand is low? Prices will then drop. Principle of Conformity - answerClaims that maximum value is realized when land use is in harmony with surrounding standards. Principles of Regression and Progression - answerStates that the presence of higher value or lower homes near the subject property can change its value. DUST - answerIs a acronym to help us remember the four characteristics that make real estate valuable: Demand, Utility, Scarcity and Transferability. Demand - answerIf there are multiple buyers interested in a property, the property with increase in value. Utility - answerProperties need to be useful or serve some kind of purpose in order to have value to a buyer. An empty lot, for example, may not look like it has much utility, but to a buyer who wants to build a custom home in that area, it's quite useful. Scarcity - answerIf the amount of housing in an area is low in supply, it grows in value. Transferability - answerWhether it's government rules or a title issue, anything that limits the transferability of real estate makes it less valuable. Appraisal Report - answerA REPORT from a licensed appraiser that's sums up a property's market value based on collected data. The lender usually asks for this during the mortgage origination process.* The Buyer - answerThe appraisal report is usually paid by... The Lender - answerThe appraiser that will complete the appraisal report is usually chosen by... *After a buyers offer is accepted and the LENDER is trying to give the buyer final approval. Appraisal Review - answerTo double-check the accuracy of the appraisal. Conducted by another professional (either an independent or in-house specialist). Market Value - answerIs the price for which a property will sell if offered openly under normal conditions. (All about the present) Depreciation - answerThe lose of value because of obsolescence (becoming obsolete) or deterioration. Effective Age - answerAn estimated age that is influenced by the updates and quality of maintenance of the property. Comparative Market Analysis (CMA) - answerUses information regarding recently sold homes in the area to arrive at an indication of what the fair market value of a similar property would be. Sales Comparison Approach (or Direct Sales Comparison) - answerAn appraiser collects data from the previous sales of similar properties in the area with similar features: amenities, square footage, number of rooms, and location. *Also known as Market Data Approach. *An appraiser gathers at least three comparison sales, or comparables. *Used mostly for owner-occupied residential property and vacant land. Cost Approach - answerAn appraiser needs to estimate the current costs of reconstructing the property with improvements (the replacement cost). This estimate is added to the value of the land, and then depreciation of the home since it was first built is subtracted. *Used mostly for new constructi