Property Valuation and Appraisal

Question 1 of 25

What is the objective of most appraisals?

determining investment value of a property
determining loan value of a property
determining market value of a property
determining insurance value of a property

Question 2 of 25

Market value is different from market price in that market price ___.

is always 10% below market value
is a fact that has actually occurred
is taxable and market value is not
is not an actual value, but just an idea

Question 3 of 25

The sales comparison approach to valuation is directly related to ____.

the principle of anticipation
all pending, canceled and short-sale listings
the quality and amount of sales data available
market investment return rates

Question 4 of 25

Jane is depositing $400 dollars in a savings account in hopes of earning interest. If the annual rate of interest is 6%, and she keeps the money in her account for 5 years, what would her balance be at the end of the 5 year period?

$535.29
$4194.30
$2000.00
$424.06

Question 5 of 25

Interest paid on the accrued interest as well as the principal is called ____.

simple interest
exponential interest
compensating interest
compound interest

Question 6 of 25

Of these individuals, who can perform an appraisal?

real estate appraiser
all of these
real estate agent
real estate broker

Question 7 of 25

How is land different than other property assets?

It is fixed and immobile.
Its value is not tied to nearby housing values.
It retains its value better than other property assets.
It cannot decline in value.

Question 8 of 25

You may need to know the value of the house you inherited ____.

for appraisal tax purposes
for real valuation purposes
for estate tax purposes
for income tax purposes

Question 9 of 25

An appraisal is ____.

an exact value of a particular piece of property
a predetermined value of a particular piece of property
an estimated value of a particular piece of property
the investment value of a particular piece of property

Question 10 of 25

When estimating the value for a particular piece of property, an appraiser will not investigate ____.

physical factors
environmental factors
future factors
social factors

Question 11 of 25

Most appraisers work ____.

for the real estate agency, on a fee-for-service basis
for the real estate agency, on a retainer
independently, on a fee-for-service basis
for the property owner, on a fee-for-service basis

Question 12 of 25

The property being appraised is called ____.

the subject property
the object property
the adjunct property
the valuation property

Question 13 of 25

An appraisal will not help you with ____.

mortgage approval
estate valuation
eminent domain
calculating commissions

Question 14 of 25

Location is ____.

irrelevant in determining property value
the only factor in determining property value
important in determining property value
unimportant in determining property value

Question 15 of 25

The location of a piece of property ____.

can both increase and decrease its value
can decrease its value
does not affect its value
can increase its value

Question 16 of 25

Heavy vehicle traffic will ____.

decrease the value of property
affect the value of property based on whether it is residential or commercial
not affect the value of property
increase the value of property

Question 17 of 25

The change in value of a piece of property based in its location is not affected by ____.

amenities and services
past performance
hazards and nuisances
proximity to transportation

Question 18 of 25

Fair market value cannot be established unless a transaction is considered ____.

free of probate
recorded
unilateral
arm’s length

Question 19 of 25

Value in use is ____.

added property value based on a typical person using it for a typical purpose
the value of using a property that anyone can benefit from financially
added property value based on a specific person using it for a specific purpose
added property value based on a government sanction allowing it to be used for general purposes

Question 20 of 25

Investment value is ____.

the potential value increase for any person
the potential value increase for any property
the value to a specific investor with a specific plan for the property
the value to a typical investor with no plan for the property

Question 21 of 25

Property taxes are based on ____.

the price the home was most recently listed at
an appraisal by a Certified Residential Appraiser
the price that the home most recently sold for
an appraisal by the municipal tax assessor

Question 22 of 25

Why would a lender order an appraisal prior to giving a loan?

to make sure that the home is worth way more than the sales price
to ensure that the property’s value is at least equal to the sales price, and not ever make the loan if it is below the sales price
to determine the term of the loan
to assess the property’s value relative to its sales price, and use this to determine the risk of making the loan

Question 23 of 25

Which of the following is not one of the three methods of property appraisal?

the remodeling cost approach
the income approach
the cost of replacement approach
the sales comparison approach

Question 24 of 25

Which appraisal approach would an insurance underwriter be most likely to use?

none of these
the sales comparison approach
the income approach
the cost approach

Question 25 of 25

In real estate valuation, what does reconciliation entail?

Apologizing to your spouse or significant other for spending too much time doing real estate valuation.
Analyzing the six factors that determine land value, paying special attention to transportation linkages and infrastructure.
Doing market research to determine the highest and best use of the subject property.
Two or more different value indicators are analyzed, weighed according to their reliability and relevance, then combined into a single value.

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