Aceable Agent - Principles of Real Estate 2 EXAM ELABORATIONS
Aceable Agent Principles of Real Estate 2
QUESTIONS AND VERIFIED ANSWERS 2025 UPDATE | 100% SOLVED
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1. Amortization The repayment of a loan principle over time
2. Arrears Payment for an item or service after it's received
3. Down Payment The initial payment made when buying something on credit, a ____________ is
paid directly by the buyer to the seller
4. Proration The allocation or distribution of an annual expense across smaller chunks of time
5. Acreage A unit of measurement used to determine the size of land; 1 acre = 43560 square
feet
6. Appraisal The value of property, based on factors determined by a certified appraiser
7. General data Information about the area surrounding a property, this could include the city,
region, and neighborhood in which the property is situated
8. Specific Data Information regarding the property itself
9. Limited Appraisal A simple, abbreviated version of a regular appraisal
10. Market Value The price for which a property would sell if offered openly under normal condi-
tions. This refers to the economic principle, it's the price that a buyer and seller
would probably accept
11. Appraised Value Refers to the value given by a licensed appraiser during the mortgage origination
process. Appraisers are chosen by the lender but paid for by the homebuyer.
12. Assessed Value Refers to the value placed on a property by a governmental unit for use in levying
annual real estate taxes
13. Loan-to-Value The limit on the value of a loan, usually a certain percentage of the home's
Ratio (LTV) appraised value or sales price, whichever is lower
14. Subject Property The property that is being evaluated in any given appraisal
, Aceable Agent Principles of Real Estate 2
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15. Highest and Best What is achieved when a property is used for the most appropriate purpose with
Use the highest returns
16. Principle of Antic- The present value of a property is affected by the anticipated income or utility that
ipation property will give to the property owner
17. Principle of Con- A property's overall value is made of the combined value of each of its parts
tribution
18. Principle of Sub- The value of something is effected by the cost of getting a similar (substitute) item
stitution elsewhere
19. Principle of The condition of a property, the desirability of its location, and the market in which
Change it exists can always change
20. Principle of Con- Values are the highest when houses in a neighborhood look roughly the same
formity
21. Principle of Re- Lower value properties surrounding a subject property are can drag down the
gression value of a property
22. Principle of Pro- Higher value properties of a subject property can bump of the value of a property
gression
23. Sales Compari- Determining value by comparing the subject property to similar properties
son Approach ("comps") that have sold recently. It's most commonly used for single family
residences.
24. Cost Approach Determining value by considering how much the same property would cost to
build brand new at current prices (replacement cost), then adjusting for depre-
ciation
25.
, Aceable Agent Principles of Real Estate 2
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Income Ap- Determining value by considering how much income the property would generate
proach when used as rental property
26. Depreciation The loss of value because of obsolescence or deterioration
27. Functional Obso- Loss of value because a property's function or appearance has gone out of style
lescence or has been replaced by a more appealing version
28. External Obso- Loss of value caused by negative forces outside the property which are beyond
lescence the control of the owner (unfavorable changes in the environment or market)
29. Deterioration Loss of value caused by physical wear and tear over time
30. Chronological The literal age of a property; a home built 30 years ago has a ________________
age age of 30
31. Effective Age An estimated age that is influenced by the updates and quality of maintenance of
the property; a 30 year house that has been well cared for might have an effective
age of 15
32. Reconciliation When an appraiser compares estimates using different techniques (cost ap-
proach, sales approach, and/or income approach) and comes to a single number
for value
33. Appraisal Report a report from a licensed appraiser that sums up a property's market value based
on collected data
34. Appraisal Review a review of the appraisal report to make sure the appraisal meets the lender's
standards
35. Desk Review When a lender carries an appraisal review at the desk (as opposed to sending
someone to the field) to make sure the original appraisal is accurate
36. Field Review
Aceable Agent Principles of Real Estate 2
QUESTIONS AND VERIFIED ANSWERS 2025 UPDATE | 100% SOLVED
Study online at https://quizlet.com/_9vve60
1. Amortization The repayment of a loan principle over time
2. Arrears Payment for an item or service after it's received
3. Down Payment The initial payment made when buying something on credit, a ____________ is
paid directly by the buyer to the seller
4. Proration The allocation or distribution of an annual expense across smaller chunks of time
5. Acreage A unit of measurement used to determine the size of land; 1 acre = 43560 square
feet
6. Appraisal The value of property, based on factors determined by a certified appraiser
7. General data Information about the area surrounding a property, this could include the city,
region, and neighborhood in which the property is situated
8. Specific Data Information regarding the property itself
9. Limited Appraisal A simple, abbreviated version of a regular appraisal
10. Market Value The price for which a property would sell if offered openly under normal condi-
tions. This refers to the economic principle, it's the price that a buyer and seller
would probably accept
11. Appraised Value Refers to the value given by a licensed appraiser during the mortgage origination
process. Appraisers are chosen by the lender but paid for by the homebuyer.
12. Assessed Value Refers to the value placed on a property by a governmental unit for use in levying
annual real estate taxes
13. Loan-to-Value The limit on the value of a loan, usually a certain percentage of the home's
Ratio (LTV) appraised value or sales price, whichever is lower
14. Subject Property The property that is being evaluated in any given appraisal
, Aceable Agent Principles of Real Estate 2
Study online at https://quizlet.com/_9vve60
15. Highest and Best What is achieved when a property is used for the most appropriate purpose with
Use the highest returns
16. Principle of Antic- The present value of a property is affected by the anticipated income or utility that
ipation property will give to the property owner
17. Principle of Con- A property's overall value is made of the combined value of each of its parts
tribution
18. Principle of Sub- The value of something is effected by the cost of getting a similar (substitute) item
stitution elsewhere
19. Principle of The condition of a property, the desirability of its location, and the market in which
Change it exists can always change
20. Principle of Con- Values are the highest when houses in a neighborhood look roughly the same
formity
21. Principle of Re- Lower value properties surrounding a subject property are can drag down the
gression value of a property
22. Principle of Pro- Higher value properties of a subject property can bump of the value of a property
gression
23. Sales Compari- Determining value by comparing the subject property to similar properties
son Approach ("comps") that have sold recently. It's most commonly used for single family
residences.
24. Cost Approach Determining value by considering how much the same property would cost to
build brand new at current prices (replacement cost), then adjusting for depre-
ciation
25.
, Aceable Agent Principles of Real Estate 2
Study online at https://quizlet.com/_9vve60
Income Ap- Determining value by considering how much income the property would generate
proach when used as rental property
26. Depreciation The loss of value because of obsolescence or deterioration
27. Functional Obso- Loss of value because a property's function or appearance has gone out of style
lescence or has been replaced by a more appealing version
28. External Obso- Loss of value caused by negative forces outside the property which are beyond
lescence the control of the owner (unfavorable changes in the environment or market)
29. Deterioration Loss of value caused by physical wear and tear over time
30. Chronological The literal age of a property; a home built 30 years ago has a ________________
age age of 30
31. Effective Age An estimated age that is influenced by the updates and quality of maintenance of
the property; a 30 year house that has been well cared for might have an effective
age of 15
32. Reconciliation When an appraiser compares estimates using different techniques (cost ap-
proach, sales approach, and/or income approach) and comes to a single number
for value
33. Appraisal Report a report from a licensed appraiser that sums up a property's market value based
on collected data
34. Appraisal Review a review of the appraisal report to make sure the appraisal meets the lender's
standards
35. Desk Review When a lender carries an appraisal review at the desk (as opposed to sending
someone to the field) to make sure the original appraisal is accurate
36. Field Review
