Basic Appraisal Procedures Exam Questions
In the highest and best use analysis, when an appraiser is evaluating the land as though vacant, what is one of the four criteria the appraiser will evaluate?(Ans- the physical possibility of an intended use
the appraiser's collection of supply and demand data has application to what areas of the data collection process?(Ans- both market area data and comparable property data
In the appraiser's data collection process that involves a market value assignment, which of the following is an example of general data?(Ans- economic indicators for the region
In which step of the valuation process does an appraiser analyze the ideal improvement for the appraised property?(Ans- data analysis- highest and best use
Prior to accepting an assignment, an appraiser is analyzing IRS regulations regarding noncash charitable contributions that will apply to the valuation of a conservation easement. What part of the valuation process is the appraiser following?(Ans- identification of the problem- assignment conditions
Which of the following best defines the valuation process that appraisers use to perform appraisal assignments?(Ans- a systematic procedure used to solve a client's real property valuation problem
A residential dwelling is situated on a site measuring 150 feet x 200 feet.The zoning of the site has changed from residential to commercial in the 1 / 3
last year and the site is large enough to allow a commercial building.Similar residential zoned sites are selling for $2.00 per square foot. Similar commercially zoned sites are selling for $90,000. What is the indicated value based on the highest and best use of the site as though vacant?(Ans- $90,000
An appraiser is analyzing supply and demand to understand prevalent market motivations affecting properties similar to the client's property. What type of analysis is the appraiser performing here?(Ans- market analysis
The appraiser's initial collection of comparable property data is best categorized as (Ans- both general data and specific data
There are valuation scenarios in which it may be permissible for an appraiser's conclusion to be different given the same property and with the same effective date. Which of the following intended use scenarios should NOT be expected to have a significant difference in the value conclusion?(Ans- The first scenario is for a lender located in the subject's geographic area and the second scenario is for a lender located in another part of the country.
The Valuation Process (Ans- a systematic set of procedures an appraiser follows to provide answers to a client's questions about real property value
Client (Ans- the party or parties who engage, by employment or contract, an appraiser in a specific assignment
Intended User (Ans- the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser, based on communication with the client at the time of the assignment 2 / 3
Intended Use (Ans- the use(s) of an appraiser's reported appraisal or appraisal review assignment results, as identified by the appraiser based on communication with the client at the time of the assignment. -- what they will do with the appraiser's opinions and conclusions stated in the appraisal report
Purpose of the assignment (Ans- the objective of an assignment e.g., in an appraisal assignment, to develop an opinion of the defined value of a specified interest in real estate
Market value (Ans- the most commonly sought value, considers typical investors not under duress
Use value (Ans- refers to the value that a property may have in a particular use, not necessarily in the use that would maximize value
Insurable value (Ans- used for insurance purposes to replace the building in the event of destruction, which may have nothing to do with market value
Investment value (Ans- this is the value of a property to a particular investor. Think about an adjoining owner that may be justified in paying a price (investment value) higher than other non-adjoining owners (market value)
Assessed value (Ans- this value is generally used by tax assessing authorities for ad valorem (at value) tax purposes. In many markets, the assessed value represents only a percentage (e.g. one-third) of the market value
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