Section 1-5

Which of the following is an example of a metes-and-bounds description?

Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road southwesterly from the dwelling house of the late Jebediah Smith now occupied by the widow Callie Thorton and in the west line of the highway leading by the dwelling house now occupied by the widow Callie Thorton

Price range of market

Broker, title reports, property managers or owners, Federal Housing Administration, local board of REALTORS®

Direct Capitalization

Calculate the projected net operating income for a property over the next year, then apply a capitalization rate.

Method of annexation

Can the item be removed without damaging what it is attached to?

Tax structure and rates

City hall or county courthouse, assessor's office

Traffic patterns

City hall or county courthouse, city or county engineering commission, area planning commissions, or highway and road commissions

Utilities available

City hall or county courthouse, public utility companies

Zoning

City hall or courthouse, county or city engineering commission, area planning commissions

In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

Comparables

When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?

Competition

Eminent domain is the governments' power to take private land for public use. What is it called when the government actually seizes someone's property?

Condemnation

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?

Conditions of sale

When a new, energy-efficient, seven-bedroom home is built in the middle of a neighborhood comprised of houses similar in age, size, and construction, this principle is called what?

Conformity

Township

Consists of 36 one-square-mile sections

Section

Consists of 640 acres

Q1

Constructed with exceptionally high-quality workmanship, materials, and finishes.

Q4

Constructed with mostly stock or builder grade-quality workmanship, materials, and finishes.

Q6

Constructed with simple or no plans, often using the lowest-quality building materials.

Which approach to value measures the cost to produce a property, including land acquisition and construction costs?

Cost approach

Cost approach

Cost data on construction of a like property and accrued depreciation data on the subject property

With the cost approach to value, what is the replacement cost?

Cost to build a functionally equivalent improvement

Reproduction cost

Cost to build an exact replica of the subject with the same materials and deficiencies

Each appraisal approach relies on something different to determine value. What does the cost approach measure?

Cost to rebuild the property

Insured value

Cost to replace or rebuild a property

Legal life estate

Created automatically by law when certain events occur

Conventional life estate

Created by a property owner, who grants or transfers the property to an individual for a lifetime

What acronym can be used to remember factors that influence real property value?

DUST

In the data source field, described on page 22 of the UAD, the appraiser must note the source of market data used to verify the accuracy of the data. Which two of the following types of information can be entered into these fields?

Days on market A multiple listing service identifier

Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"

Demand

In the second step of the appraisal process, the appraiser identifies the data needed. What's another term used to describe this step?

Determine the scope of work

Appraisal Qualifications Board

Develops minimum appraiser licensing and certification requirements

Metes

Direction and distance of a line forming the boundary of a property

Gross income multiplier

Divide the sales price of a comparable property by its annual gross income. Use the result on the subject property to determine a value.

Gross rent multiplier

Divide the sales price of a comparable property by its gross rental income. Use the result on the subject property to determine a value.

Rectangular government survey

Divides land into six-mile-square townships, which are further divided

tranferability

Ease at which another can purchase the property

Township lines

East-west lines that do not run through the initial point

Sergei has just purchased his first house. He owns it; no one else does! No one tells him what he can do with the house—he decides. No one shares his house with him or holds any interest in the house (except his lender, of course). What ownership type is this?

Estate in severalty

Personal Property

Everything that is not real property

Appraisal Independence Requirements are protections that were instituted by ______.

Fannie Mae

A fee simple defeasible estate can be further divided into either a fee simple determinable or a fee simple subject to a condition subsequent. Which type gives the original owner of the property the right to reclaim possession of the property by taking action?

Fee simple subject to a condition subsequent

Employment level

Financial institutions, local chamber of commerce, government councils, labor organizations

After an appraiser has finished gathering the necessary data from comparables for the subject property, which element of comparison must be applied first?

Financing

Your resource contains several questions appraisers use to test comparability. With these in mind, select the five factors Steve will consider as he selects comparables.

Financing Terms Location Market Conditions Physical Characteristics Conditions of Sale

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?

Financing terms and cash equivalency

Rico is an appraiser who is performing a valuation on a property. What's another term for what Rico is doing?

Formal appraisal

Tony is an appraiser who's performing a valuation on a property. What's another term for what Tony is doing?

Formal appraisal

A form of depreciation or loss in value caused by defects in design defines which of the following terms?

Functional obsolescence

Homes in a new home development have been built with a floor plan that doesn't appeal to today's buyers. In a cost approach valuation of the houses, what sort of depreciation will the appraiser apply?

Functional obsolescence

Which of the following might involve old wiring or plumbing?

Functional obsolescence

Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.

GRM

General data

Geographic and economic features of the nation, region, city, and neighborhood

An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?

Gross income multiplier

Agreement of the parties

Have the parties agreed (in writing) on whether an item will stay or go?

Compared with condominiums, the monthly fees for a cooperative owner are typically ______.

Higher

When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

Highest and best use

Functional obsolescence

House is overbuilt for the area

Physical deterioration

Improper maintenance of property

As you know, real estate includes everything in the definition of land, plus all things permanently attached to it, naturally or artificially. Artificial attachments include things such as fencing, buildings, and walkways. What's another name for these artificial attachments?

Improvements

Where on the Uniform Residential Appraisal Report is information about the building's exterior and interior materials and condition noted?

Improvements

C3 improvement

Improvements are well-maintained and feature limited physical depreciation due to normal wear and tear.

C2 improvement

Improvements feature no deferred maintenance, little or no physical depreciation and require no repairs

C4 improvement

Improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear.

C1 improvement

Improvements have been recently constructed and have not been previously occupied. There's no physical depreciation.

C6 improvement

Improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe.

Freehold estate

Includes the right of ownership for an unspecified length of time

Leasehold Estate

Includes the right of use, but not ownership, for a specified period of time

income approach

Income and expense data from properties similar to the subject

Which approach to value is typically used for investment property of two- to four-family units?

Income approach

Which of the following approaches to value uses a capitalization rate?

Income approach

Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?

Income generated

Each appraisal approach relies on something different to determine value. What does the income approach analyze?

Income the property could generate

What sort of an adjustment will an appraiser make for a difference between a comparable and the subject when the comparable's feature is less valuable?

Increase the sales price

Which of these describes an encroachment?

Intrusion of a structure or object on another's land

Janice, who has lived in an apartment for many years, is interested in moving to a cooperative. She submits an application to the cooperative's review board, but her application is rejected. The board ______.

Is not required to inform her why her application was rejected

Area planning commision

Is the neighborhood growing and why?

Observation

Is the neighborhood urban, suburban, or rural?

The first step in the appraisal process is to identify the problem. What is the importance of stating the problem up front? Select all that apply.

It informs the appraiser's approach. It helps the appraiser identify the type of data she may need.

How would you define an appraisal's use to your clients?

It's an unbiased opinion of property value that's based on researching a variety of factors, such as recent sales of comparable properties nearby. The value comes from a licensed appraiser and is valid for the date you receive it.

Thelma, Sidney, and Shirley meet at the Crusty Acres Retirement Center. Tired of unsalted oatmeal and an 8:30 curfew, they decide to ditch this joint, pool their resources, and buy a happenin' little condo uptown. Because they want to ensure that no one is displaced from the condo in the event of one owner's death, they decide to hold title in such a way that if any of them dies, the others own the deceased person's shares. How should they hold title?

Joint tenancy

Real estate

Land, plus all things permanently attached to it naturally or artificially

AIR sets certain criteria when selecting an appraiser. Which of these appraiser requirements does AIR specify? Select all that apply.

Licensed or certified in the state where the property is located. Knowledgeable about the local market. Qualified to appraise the property involved in the transaction. Able to access the data needed to perform an appraisal

Which of the following statements about a license is true?

Licenses may be revoked by the owner at any time, unless a termination date has been specified by contractual agreement

According to the Appraisal Foundation, which is the most important factor for appraisers to consider when selecting comparables?

Location

Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?

Lot and block

Which type of legal description do courts prefer?

Lot and block

Appraisal Subcommittee

Maintains oversight of state licensing requirements

Kent is an appraiser on his way to a property for a site visit. Which of the following will he do once he's on site?

Make a sketch to show the shape of the property

There are two categories of REITs, the names of which reflect an investment choice. What are they?

Mortgage REIT Equity REIT

In which four of these scenarios would an appraiser likely use the cost approach?

Movie theatre Winery and vineyard Newly constructed home $10 million property

Now let's see if you recall how to read a rectangular government survey description. In your resources, there's an image for a parcel of land in Kennedy Township. Which of the following accurately describes this parcel of land?

NW ¼ SE ¼ NE ¼ Section 1, Kennedy Township

Which one of the following statements about community property rights is true?

Nine states have community property rights.

Range lines

North-south lines that do not run through the initial point

American Society of Appraisers (ASA)

One of the oldest appraisal organizations in the world, ASA members represent a variety of appraisal specialties, including real, personal, tangible, and intangible property.

Prk

Park view

Easement appurtenant

Permanent right to use another's land for the benefit of a neighbor

Neighborhood boundaries

Personal observation, broker, city hall or courthouse, plat maps

Hazards and nuisances

Personal observation, neighbors

What does NAR have to say about the USPAP?

Persons who perform appraisals of real property shall be licensed or certified by their respective state regulatory agency and the appraisal shall be conducted in accordance with standards established in the Uniform Standards of Professional Appraisal Practice (USPAP).

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last?

Physical characteristics

Which of the following occurs when the property is damaged or just has normal wear and tear?

Physical depreciation

Bounds

Physical features that define the boundaries of the land

What other name is the lot-and-block system known by?

Plat reference system

Which of the following is a key consideration and starting reference for a metes and bounds description?

Point of beginning

PwrLn

Power lines

Market value

Price a property will bring under normal conditions

Mortgage value

Price at which the lender will offer a loan

The fewer properties on the market, the greater the scarcity. What's the effect on prices?

Prices are pushed upward.

Your client, Skip, is an investor who's just opened a thriving new sporting goods store in a location outside the city. What principle of value indicates that his thriving business will attract others to engage in similar activity in the same area, driving down his profits?

Principle of competition

The subject property is going under contract for $375,000 and is located in a residential neighborhood. The gross living area is 2,600 square feet, and it's located on a half-acre lot. The house is a two stories and has a three-car attached garage. Assume that all other variables except for the ones mentioned below are similar to the subject property. Which property is most similar to the subject property?

Property A has a three-car attached garage.

Which of the following properties would require the fewest adjustments in comparison with a two-story, split-level subject property that has been well-maintained with limited depreciation due to normal wear and tear and was built 10 years ago?

Property D is a one-and-a-half-story home built 15 years ago.

Which of the following is a piece of specific data an appraiser may gather?

Property lot size

Now that we've reviewed what police power is, let's look at our first public form of landownership restriction: taxation. In what way does taxation limit private landownership?

Property owners are required to pay property taxes and if they don't pay, the unpaid taxes become a lien against the property.

lot and block

Provides plat references

By what other name is the rectangular government survey system known?

Public Land Survey System (PLSS)

Dwellings with this URAR quality rating are of basic quality and lower cost. Some of them may not be suitable for year-round occupancy, and electrical, plumbing, and other mechanical systems and equipment may be minimal or nonexistent.

Q6

The more a home fits in with the others in the neighborhood, the more value it has on the market. With this in mind, which two of these styles would be comparable to one another?

Ranch +Split-Level

Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?

Rectangular government survey

Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management?

Rectangular government survey

Scarcity

Reflection of market supply, which relates to demand

Replacement cost

Reflects the cost to build a functionally equivalent improvement

Demand

Relates to how popular or desirable a property is

Which of the following is a normal part of an appraiser's job?

Report writing

Investment value

Return on investment that a property may provide

Disposition

Right to determine how, when, and whether the property is to be sold and transferred

Easement in gross

Right to use the land (not necessarily an adjoining property)

In which field of the sales comparison grid would you find an indication of an arm's length sale?

Sale or financing concessions

What information is needed to complete both a CMA and an appraisal?

Sale prices for comparable properties

sales comparision

Sales data on comparable properties

You're acting as a listing agent for a seller who's moving to a different state and needs to unload a property quickly. You list the property for $180,000, but sell within the week at $167,000. The appraisal shows that your listing price was an accurate value of the house. What is $167,000 in this scenario?

Sales price

Information shown in this area of the Uniform Residential Appraisal Report includes the property's dimensions, area, shape, specific zoning classification, zoning description, and zoning compliance.

Site

What's the first step an appraiser will perform when conducting an appraisal?

State the problem.

Specific data

Subject site and improvements, including a physical description

The three approaches are based on certain principles of value. On which value principle is the sales comparison approach based?

Substituion

The economic principle of ______ says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.

Substitution

Where's an appraiser most likely to find accurate information about property taxes in a market area?

Tax assessor records

Jack, Jerry, and Joe are brothers. Their parents die, leaving them the family home. Each holds an undivided interest in the entire property, and there is no right of survivorship. If one of them dies, that brother's share will go to whomever he has stipulated in his will. What ownership type describes Jack, Jerry, and Joe's situation?

Tenancy in common

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?

Termination of co-ownership by partition

If some information about the subject property in the sales comparison grid appears to be incorrect, in what three places would you look to verify information about the subject property?

The Subject, Contract, Site, and Improvements sections on page one of the URAR The sales contract for the transaction Your own observation of the property

Salvage value

The amount for which improvements can be sold

Enters a zero

The appraiser considers a difference and determines that no adjustment should be made.

Which statement best describes the most common approach used to reconcile the three appraisal approaches?

The appraiser may weigh one or two approaches more heavily than the others, as appropriate for the property type.

You're acting as the buyer's agent in a transaction. The lender requested an appraisal, which was performed. How is an appraisal typically paid for in this situation?

The appraiser's fee will appear as a buyer cost paid at closing.

Which of the following is an arm's length transaction?

The buyer and seller are unknown to one another.

As you'll see on the sample URAR, Steve rated the condition of the floors as C2 and the condition of the walls as C3. Based on these ratings, what must be true about the walls compared to the floors?

The condition of the floors (C2) shows less physical depreciation than the condition of the walls (C3).

Your client's next obvious question would be: "What's an opinion of value?"

The estimate of value of one specific property as of one specific date for one specific party

Steve continues his observation of the exterior and notes the materials of the exterior walls, the roof surface, gutters and downspouts, window types, storm sash and screens. He gives each feature a rating of C3. Which of the following statements best describes this rating?

The exterior walls are well-maintained and feature limited physical depreciation due normal wear and tear.

If you're reading the Uniform Residential Appraisal Report and see the condition of the exterior walls rated a "C4," and the condition of the roof rated a "C2," which of the following must be true?

The exterior walls show more physical depreciation than the roof does.

What is reconciliation?

The final estimate of value based on results of the appraiser's approaches to value

He circles the building to get a closer look at the foundation. He notes "Concrete/C4" for the foundation walls. Which of the following statements best describes the condition of the foundation walls Steve is rating?

The foundation walls feature some minor deferred maintenance and physical deterioration due to normal wear and tear.

Grant and Amy live very happily in a PUD. They both work and enjoy living in a community that has everything their family needs in a relatively small area. Which three of the following are included in Grant and Amy's PUD ownership?

The home in which they live The property on which their home is built Shared common area

The Appraisal Institute (AI)

The largest professional real estate appraisal organization, AI offers designations to those who meet education, examination, and experience requirements in areas related to commercial, industrial, agriculture, residential, and land valuation

Principal meridian

The north-south line that runs through the initial point

How is the grid that's used in the rectangular government survey system laid out?

The numbers start in the northeastern corner and follow a zigzag pattern.

Fee simple defeasible

The property holder owns the property subject to a condition. If the condition is breached, the property will go back to the original owner.

Fee simple absolute

The property owner is granted all rights to the property by law.

Which two of these items would you tell your client are included in an appraisal?

The property's probable monetary value on the open market The appraiser's opinion of the property's condition

Value in use

The property's worth to the person using it

Which of these best describes the purpose of FIRREA Title XI?

The public's and federal government's financial interests are protected during a real estate transaction by ensuring that real estate appraisals are performed with professional integrity.

What will an appraiser use sales data on comparable properties for?

The sales comparison approach

The appraiser must provide a data source used to obtain data on each comparable sale. For example, "MRIS#AA123456789;DOM220" gives the abbreviation for an MLS organization with the listing identifier and indicates the "days on market." What are two reasons why it's important to include such information in the sales comparison grid?

The sales comparison approach depends on accurate sales price data that can be verified. The source of data is required by the UAD specifications.

When Edmund died, he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall that was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?

The strip mall

Adds to the sales price

The subject property has a valuable feature not found in the comparable.

Subtracts from the sales price

The subject property is missing a valuable feature found in the comparable.

Going-concern

The value of the property as a functioning business

Which of the following is true about air rights?

They allow the owner to use the open space above buildings.

Joint tenancy and tenancy by the entirety are very similar. There's one factor that makes Madge and Steve tenants by the entirety instead of joint tenants. What is it?

They are spouses.

Whereas with tenancy in common, only the unity of possession is required, joint tenancy requires several unities. Which of these unities are required for joint tenancy? Select all that apply.

Time Title Interest Possession

Do you know what legislation established congressional oversight of appraiser qualifications and appraisal standards?

Title XI of FIRREA

Aaron, who's in the process of selling his home, is furious. Two of the houses that have recently been built as part of a new subdivision that abuts his property are several feet over his property line. What issues may be caused by this encroachment?

Title problems for Aaron, which may impact the sale of his home Inability of the buyer of Aaron's home to secure a loan, if there's an issue with the title Additional costs for the developer to have the two homes moved Costly redesign and development delays for the subdivision developer

Why does an appraiser need an understanding of business and economics?

To appropriately include information about the status of the economy when arriving at a value for a subject property

Why does an appraiser need to be good at analysis? (We're talking the logical kind of analysis, not the psychological kind you may use with clients.

To process multiple types of data about a property in order to arrive at a single value To determine the scope of work and plan an appropriate process for valuing the subject property

What is the purpose of the appraiser independence requirements?

To protect parties, such as investors and homebuyers

You'll become familiar with the data requirements for each section of this form as you work through this course. For now, let's review the purpose of this form. What's the purpose of the Uniform Residential Appraisal Report?

To provide the lender with an accurate opinion of the property's market value

Why might an appraiser look at title reports?

To verify that the owner has a clear title to the property

A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.

Transfer ownership before death and avoid probate

All trusts have three parties: the trustor, the beneficiary, and the ______.

Trustee

Which of the following provides the lender with an accurate opinion of a property's market value?

Uniform Residential Appraisal Report

USPAP is a vital part of the modern real estate appraisal practice. What does USPAP stand for?

Uniform Standards of Professional Appraisal Practice

What standards do appraisers follow?

Uniform Standards of Professional Appraisal Practice

Soren is an appraiser. As such, what guidelines must he follow?

Uniform Standards of Professional Appraisal Practice (USPAP)

Metes and bounds

Uses monuments, compass headings, and directions

Easement by necessity

Usually involves access to a road

There are a lot more sellers than buyers in the current market. How does this demand influence value?

Value is pushed downward.

Each appraisal approach relies on something to help determine a property's value. What does the sales comparison approach rely upon?

Value of similar properties in the market

Intention of person placing it

Was the item intended to be temporary or permanent?

Wtr

Water view

Tax assessor recxords

What are the property values for other properties in the neighborhood?

Q3

Workmanship exceeds acceptable standards, and many materials and finishes have been upgraded from "stock" standards.

Julian and Clara want to leave their real estate holdings to their children. If at all possible, they'd like those holdings to avoid the probate process after they're deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?

Yes, a living trust would avoid probate.

certified residential Real Property Appraiser

can appraise any residential property, regardless of value or complexity, and vacant land that will be developed as residential property.

What two types of data does an appraiser gather?

general and specific

Glfvw

golf course view

C5 improvement

improvements feature obvious deferred maintenance and are in need of significant repairs

Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?

income

Easement

right acquired by one party to use another party's land for a special purpose.

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

$147,000 The value of the home that rents for $820 monthly isn't relevant to your calculation, which is 147 x $1,000 = $147,000. Remember that GRM is just an estimate of value.

To be able to make valid computations of adjustments, the elements of comparison must be applied in a particular order. Which element must be applied first?

1. financing terms and cash equivalency, 2. conditions of sale, 3. market conditions, 4. location, and 5. physical characteristics.

We mentioned earlier that one section is a square mile or 640 acres. Using the same parcel of land as the previous question, determine how many acres it is.

10 acres

A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?

7.9%

Appraiser trainee

75 hours- education required to obtain that license.

Now let's review some of the benefits associated with holding real estate in a land trust. Which four of the following items are benefits of a land trust?

A beneficiary interest in the land can be conveyed without having to go through the formality of a deed. A land trust is a grantor trust that is revocable. Asset transfers into trusts are protected by the Garn-St. Germain Depository Institutions Act. The identity of the trust owner is not made public.

What is a REIT?

A company that owns and usually operates income-producing real estate and provides investment opportunities to shareholders in these properties

Tenancy at sufferance

A hold-over tenant (someone who didn't leave when their lease expired) has this kind of possession.

Estate for years

A lease that ends on a specific date, survives the death of either party, and is inheritable.

Tenancy at will

A lease without an established time period that may be terminated at will by either party and is not inheritable.

When stating the problem, which of the following does the appraiser need to identify the subject property?

A legal description and mailing address

What is a principal meridian?

A north-south line used as a reference point in the rectangular government survey system

What is a section?

A one-square-mile square formed in the use of the rectangular government survey system

Under which circumstance can the state use its power of escheat?

A property owner dies without a will in place, and no heirs or creditors can be found.

What rating scale do appraisers use to indicate the condition of the subject property and comparable properties?

A range from C1 for "like new" to C6 for "major repairs needed"

What would you expect to find in the condition field for a comparable property in the sales comparison grid of the URAR?

A rating from the C1‒C6 scale

What type of property is Aileen appraising if she's using the income approach?

A short-term lake rental

What type of property is Valerie appraising if she's using the sales comparison approach?

A single-family residence built six years ago

Easement by prescription

Acquired through years of use

External depreciation

Airport noise

What type of property is Gerald appraising if he's using the cost approach?

An industrial warehouse

The value principle of ______ is the basis of the income approach to appraisal.

Anticipation

At what point during ownership may a property owner place a restriction on a deed?

Any time

Yield capitalization

Apply an expected rate of return to income from the entire holding period to find the current property value.

As you know, most real estate purchases are financed, and lenders rely upon an accurate property value estimate that will ultimately serve as collateral for the loan. Which valuation method does the lender rely upon?

Appraisal

Which of the following groups is responsible for developing the minimum federal licensing and certification requirements for real property appraisers?

Appraisal Qualifications Board

Which of the following is a true statement about how adjustments are made in the sales comparison approach?

Appraisers adjust upward when a comparable is missing a feature found in the subject property.

Population trends

Area planning commissions, US Census Bureau data, local chamber of commerce, government councils

Site value

Assumes the land is vacant and bases opinion on highest and best use

Licensed residential real property appraiser

150 hours-education required to obtain that license.

Certified residential real property appraiser

200 hours- education required to obtain that license.

Certified general real property appraiser

300 hours-education required to obtain that license.

Let's test your memory of land descriptions a little more. Related to the metes and bounds method of legal land description, what is a monument?

A permanent physical marker that's either man-made or natural

Not all of your clients are going to know what a real estate appraisal is. Let's assume you're meeting with a client who poses the question, "What's an appraisal?" How would you respond?

A professional appraiser's opinion of value

Liquidation value

Amount a property will bring in a quick sale

Say you've listed a property in a rural area. Homes are scattered, sometimes miles apart. On top of that, the homes come in all shapes and sizes: low-cost manufactured, new energy-efficient custom, old farmhouses, dome homes ... you name it. In other words, it's a situation where you and the appraiser will have a hard time finding comparables. So here's the question: Which two of these are reasons that comparables matter?

An appraiser needs comparables as part of the analysis used to determine any property's value. Comparables help you determine an appropriate listing or purchase price.

Another type of fixture that both licensees and appraisers deal with is trade fixtures. Do you recall what a trade fixture is?

Any item that a tenant attaches to a rental building or space that is used for business purposes

Let's begin with the basics. What is a fixture?

Any natural items that are permanently attached to the land Any man-made items that are permanently attached to the land

What are improvements with regard to property?

Artificial attachments to land that include items such as fencing, buildings, and walkways

Which of the following actions toward an appraiser would be considered improper?

Asking an appraiser to remove information about adverse property conditions from an appraisal report

LaTonya's aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya's sister was even married there. That's why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property?

Disposition

You'll recall that the definition of real property includes interests, benefits, and rights. Can you identify what the rights are? Which five of these rights associated are with real property?

Enjoyment Disposition Possession Control Exclusion

What does the I in the acronym MARIA stand for, when determining whether an item is a fixture?

Intention in placing item on land

What type of value may consumers be interested in if they are looking for the potential rate of return?

Investment value

In a federally related transaction, the lender is required to hire an appraiser who ______.

Is state-licensed or state-certified

Adaptability for use

Is the item being used as personal property or real property—has it been adapted / customized?

What are the three most common systems used to describe land in the U.S.?

Lot and block Metes and bounds Rectangular government survey

The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?

Method of annexation

What are the five tests to determine if an item is a fixture and part of the real estate?

Method of annexation Agreement of the parties Relationship of the parties Adaptability of item for land's use Intention of person placing it

When it comes to a property's highest and best use, which of the following applies?

Profitability

Appraisal Practices Board

Provides appraisers with guidance on appraisal issues

Even though Vlad is eager to explain how different an appraiser is from you, the real estate professional, there are some areas where you share skills and knowledge. Which two of these areas are ones that both an appraiser and a real estate professional should be knowledgeable about?

Real estate market Mortgage market

Real Property

Real estate, plus the interests, benefits, and rights automatically included with real estate ownership

Control

Right to determine interest in the property for others

Possession

Right to occupy the property

Enjoyment

Right to possess the land without harassment or interference

Exclusion

Right to refuse other interests in your property

Which two of these loan transactions must comply with AIR?

Single-family residence, conventional loan Four-unit residence, conventional loan

Window coverings, light fixtures, and mounted TVs are often items that confuse buyers and sellers when differentiating between real and personal property. Identify the three items that are personal property and would move with the seller.

Sofa Rug +Table TV + electronics

Utility

Speaks to the property's function

Melanie is an experienced real estate licensee, and she's had several encounters with Rick, an appraiser who she feels isn't performing his work according to the standards required by USPAP. She's finally ready to lodge a complaint when his shoddy work causes one of her transactions to fall through. Who's responsible for requiring Rick, a licensed appraiser, to follow professional standards?

State regulators

A lot-and-block system survey is a two-step process.

Step 1: A rectangular or metes-and-bounds description is referenced Step 2: The land is divided into lots with numerical designations of the parcels

Land

The earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

Base line

The east-west line that runs through the initial point

In a metes-and-bounds description, you may recall that the point of beginning is extremely important. Why is the point of beginning so important?

The entire description is based off of the point of beginning.

Relationship of the parties

When a dispute occurs, courts tend to favor tenants and buyers over landlords and sellers.

National Association of Real Estate Appraisers (NAREA)

With members in all 50 states, NAREA provides standards, guidelines, and ethics to be followed by its members.

Appraisal Standards Board

Writes the Uniform Standards of Professional Appraisal Practice (USPAP)

certified general Real Property Appraiser

can appraise any residential or non-residential property, regardless of value or complexity.

licensed residential Real Property Appraiser

can appraise one- to four-unit residential properties that are valued up to $1 million and are not complex in nature.