basic appraisal principles
Using the rectangular survey method, the SE 1/4 of Section 10 contains how many acres?
160 acres
A parcel of land that is legally described as 1/4 of 1/4 of 1/4 of 1/4 of a section has
2.5 acres
How many acres are contained in a typical 36 square mile township?
23,040 acres (640x36)
Rita purchased a time-share property that included a one-week, expense-paid trip to the Cayman Islands as an inducement to buy the property. The trip was valued at $3,000. If the property sold for $28,000, what is the cash equivalent price?
25,000
How many acres are in a square mile?
640
_____________________ is the value of an investment to a particular investor.
Investment value
Government lots are
Irregular parcels that do not fit into the range/township model.
In the following rectangular survey, which quarter is largest: the (1) northwest 1/4 of the (2) northwest 1/4 of the (3) northwest 1/4 of the (4) northwest 1/4?
(4)
A judgment has been placed against Mark after he was found at fault for an accident resulting in severe damage to another car and the hospitalization of its driver. In this case, what type of lien is placed against Mark's property?
A general lien because all assets of the debtor are affected in a judgment
The Acme Corporation set up a land trust in a property it owns and conveys it to a nonprofit organization for a specified period of time. What best identifies Acme's position in the trust?
Acme is the trustor.
When an appraiser values real property, what is actually being valued?
All interests, benefits, and rights inherent in the ownership of real estate
A document signed only by the seller is enforceable.
False
The Federal Government receives a portion of the real estate taxes paid by the property owner.
False
Value estimate is the preferred way to state your conclusion of market value.
False
An appraiser has accepted an appraisal assignment and begins working on it. During the course of the assignment, the appraiser discovers that he doesn't have the competency required to complete the assignment, but feels he can acquire the necessary competency. What is the best course of action the appraiser should take in this situation?
He must notify the client of the competency issue and take the necessary steps to gain competency in order to complete the assignment.
An appraiser is analyzing a newly constructed property that sold for the price of $750,000. This price is more than the verified cost to develop the property into a finished condition. Must the appraiser's value opinion be less than or at the least equal to the cost?
No, cost and value may differ and there may be credible reasons why the appraiser's value of the property may be higher than the cost
An elderly homeowner hires a contractor to remodel her kitchen and signs a contract. Before the project begins, the homeowner receives a legal notice in the mail about a specific type of lien that may be enforced on the property. She doesn't understand the notice but is concerned that she is the victim of a contractor's scam. Should she contact the authorities?
No, the law requires contractors to notify homeowners that they will have the right to place a lien against the property if they are not paid in full for their labor and materials.
Who gives a mortgage to whom?
The mortgagor gives the mortgage to the mortgagee.
After purchasing a wooded fifty acres on a scenic riverfront, Jack was transferred out of state for his job. In the interest of having some money to curb the cost of his move, Jack sold the land to Mike on the condition that no permanent dwellings would be erected to disturb the landscape. Mike has used the land as a youth campground for seven years now. The camp is doing so well that Mike would like to build a small office with a sleeping area that he could occupy while running the grounds. Does Mike have the right to build on the land?
No. Jack granted a fee simple defeasible estate to Mike. If Mike disturbs the landscape, Jack may become the owner again because he retained a future interest in the land
An appraiser's research of land sales revealed that a recently immigrated family purchased 100 acres of agricultural land. The price was not consistent with other land sales in the area. When the appraiser interviewed the parties to the transaction, she learned that the family wanted to hold the land for future investment potential and that had influenced their offer. However, the land will likely remain agricultural for at least the next 30 years based on the comprehensive plan. What component of the market value definition must the appraiser consider in analyzing the land sale?
Parties to the transaction must be informed or well advised.
Which of the following is the best example of an appraiser that has performed an appraisal service in a careless or negligent manner? The appraiser turned in the appraisal report past the date it was due. The appraiser made a series of errors that individually might not significantly affect the results of the appraisal, but that in total affect the credibility of those results. The appraisal report had several typos. The appraiser mislabeled one of the rooms in the building sketch, although it was correctly stated in the report content.
The appraiser made a series of errors that individually might not significantly affect the results of the appraisal, but that in total affect the credibility of those results.
After installing a heating and air conditioning unit in Jim and Mary's house, Todd waited over 120 days for payment. Reluctantly, he filed a lien on the property but was dismayed to find out that he was in line with the bank, an equity company, and the county for payment of liens. Who has first priority to be paid?
The county for failure to pay property taxes.
A county highway department wanted to buy the remaining owner's interest in land located under an existing county road in a rural area. Often in cases like this, the public road was established decades earlier and the land owner was never paid for their land because some type of road had always been there prior to the county assuming responsibility. What right did the county have to use the land as a road prior to this point?
The county had a prescriptive easement.
What is NOT true about the scope of work in the appraiser's valuation process? The actual scope of work performed must be disclosed in the appraisal report. The scope of work is determined when the report is written. The appraiser must be prepared to demonstrate that the scope of work is sufficient to produce credible assignment results The scope of work is decided after the appraiser has identified the problem to be solved
The scope of work is determined when the report is written.
Jackson has a condominium unit in which her association has the right of first refusal on any sale of her property. What does this mean when Jackson decides to sell her condominium unit?
The unit must first be offered to the association at the same price before an outside offer can be accepted
When an appraiser analyzes a legal description that uses the method of metes and bounds, what is the best way to describe metes?
They are measures that include direction and distance.
What would be considered a potential disadvantage for the seller in a land contract?
They have no recourse if the buyer defaults on the contract.
___________________ is an opinion of the worth of a property as of a specified time.
Value
Appurtenant means
attached
Which of the following types of deed would most likely be used in a tax forfeiture sale?
bargain and sale deed
Who owns an "easement in gross?"
a corporation or government entity
Hooper gave permission to a nearby business neighbor to place a sign on his corner property to advertise the neighbor's liquidation sale. What has Hooper given his neighbor?
a license
A claim against real property to secure repayment of a debt is
a lien.
In order to improve the value of her property, Terri recently tore down her run-down fence panels and replaced them with new vinyl ones. About a week after she completed the project, she received a notice in the mail from the city that her new fence was in violation of recent changes to the setbacks for corner lots and that she would be fined daily until she removed the fence. Terri was confused because she viewed her upgrade as repairing an old fence since the line of it remained unchanged. Nevertheless, the city remained unmoved. The new fence was no longer grandfathered in as the old one had been. Eventually, the battle made it to court. Terri obtained testimonies from her neighbors that they were in favor of the fence and she finally got special permission from the city to leave it in place. Terri's new fence is an example of
a zoning variance.
The involuntary transfer process by which a party takes possession and use of another's land over a period of years is known as
adverse possession.
A tangible benefit of real property that enhances its attractiveness or increases the satisfaction of the user, but is not essential to use is called
an amenity.
Sanchez is appraising a property for a client with the intended use of filing a tax appeal. In this type of assignment, which of the following choices best describes Sanchez's role?
an independent and impartial appraiser that is neutral to any position of the parties involved in the matter
Which of the following is one of the assignment elements that an appraiser must identify prior to acceptance?
assignment conditions
What is the likely result of an appraiser sufficiently diligent in their appraisal practice?
assignment results that are credible
Which of the following is NOT a characteristic used to identify a fixture? association agreement attachment adaptation
association
Kenny and Cindy recently attended an open house for a new construction in one of Ottawa's better subdivisions. The house was everything they were looking for with many upgrades and a floor plan that exactly suited their needs. They were contemplating their offer until they stepped onto the back porch and saw a backyard view of a sanitation company that specialized in renting portable toilets. Several freshly cleaned outhouses were lined up along one end of the property and large trucks were busy moving items back and forth across the lot. The realtor claimed that the subdivision contractor planned to provide a fence along the edge of the industrial park, but Kenny and Cindy weren't swayed. Perhaps the city should have planned for a
buffer strip.
An appraiser has the ____________ to support the scope of work decision and the level of information included in a report.
burden of proof
Concurrent ownership is also known as
co-ownership.
Which of the following best describes what an appraiser does in an assignment? analyzes data to determine value analyzes data to determine price competently performs valuation services in a manner that is independent, impartial, and objective settles disputes in real estate matters
competently performs valuation services in a manner that is independent, impartial, and objective
The total dollar expenditure to develop an improvement is called
cost
The developer of Westgate Subdivision would like to market it as a large-lot residential neighborhood with a nostalgic "Williamsburg" appearance. The developer has installed top-of-the-line decorative street lamps and curving streets. Furthermore, he has stipulated that brick-exterior dwellings of at least 3,000 square feet be built on each lot, and that the construction of any site improvements that do not fit with the nostalgic theme be prohibited. How are these specifications by the developer typically classified?
deed restrictions
Escheat is applied by the government when an owner
dies without a will and without heirs.
Market value is expressed as of a specified date. Which of the following best represents the date of an appraiser's value opinion?
effective date
Corn in a cornfield is an example of a(n)
embelment
An agreement that is presumed to exist because of the parties' actions is called an implied contract. In contrast, an agreement that is put into words (spoken or written) is what type of contract?
express contract
Making a series of small errors in an appraisal is acceptable so long as it does not significantly affect the value conclusion.
false
The ________ has responsibility for holding/managing the property in a trust.
fiduciary
In theory, the supply of land is considered to be
finite
Estates in land can be broken down into which two categories?
freehold and leasehold
Which of the following items is best identified as personal property?
furniture
The market value of a business property including the real property and intangible assets is called
going-concern value.
The manner in which a client utilizes the information and opinions contained in the appraisal report may be best identified as
intended use
Which description best identifies the term real estate?
land and everything permanently attached to the land
In a leased property, the landlord has a ___________ interest.
leased fee
Mayes owns a property but has leased it to Jacobs. Which term describes Jacobs' interest in the property?
leasehold interest
Appraisers must develop and communicate their work in a manner that is _________ and that does not __________their services to intended user.
meaningful, misrepresent
When a financial institution puts together a loan for a property owner, the lender is referred to as the
mortgagee
What characteristic makes land unique?
no two parcels can occupy the same space on the face of the earth
While inspecting a Victorian two-story for a refinance, Edgar noticed the couple who owned the home had installed a separate lockable entry door in the front hall and another at the top of the stairs to separate the main level from the upper level. They had also converted one of the upstairs bedrooms into a kitchen. The couple had obviously converted the upstairs into a separate apartment. Later, Edgar checked the zoning map in his office and found that the property is zoned single-family residential. He called the clerk's office and found that no changes had been made to the zoning. The property is
not in legal use according to its zoning. Edgar should appraise the home as a single-family dwelling and make functional adjustments for the lockable entrance doors and the upstairs kitchen.
An appraiser performing an assignment in an unfamiliar geographic location must spend sufficient time analyzing the location to understand the _______ of the local market.
nuances
Undivided interest is a term that applies to
only tenancy by the entirety. only joint tenancy. only tenancy in common
What type of ownership does a Real Estate Investment Trust operate under?
ownership in severalty
Ownership held by an individual or single entity is called
ownership in severalty.
Which answer is an example of a legal description of the rectangular survey method?
part of the Northwest Quarter of Section 25, Township 17N, Range 3E
Building codes fall under which form of government control?
police power
Which of the following is a lien?
property tax
Which of the following is an example of an "easement in gross?"
public sidewalk easement
What property type best describes a structure built to be permanently attached to the land?
real estate
What method of legal description is most frequently used west of the Mississippi and Ohio Rivers?
rectangular survey
In a "metes and bounds" description a monument
refers to a fixed object used to establish boundaries.
A property owner discovered during a loan refinance that a previously unknown public easement may prevent the owner from building an addition to the residence. The owner believes this will have an impact on any future sale of the property. What real right property is affected in this situation?
right to improve
Range lines
run north and south
Business Office Supply (BOS) rents a warehouse from an out-of-state landlord on a five-year lease. In the second year of the rental agreement, BOS found a warehouse that was more accommodating for their growing operation. They moved to the new warehouse and subleased the old warehouse space to an auto parts supplier. What best identifies the lease between Business Office Supply and the auto parts supplier?
sandwich
The present or anticipated undersupply of an item relative to the demand for it is called
scarcity
What is the strategy for solving a client's valuation problem in which the appraiser determines the type and extent of research and analyses the assignment requires?
scope of work
In the rectangular survey method, which section is located directly north of section 23?
section 14
Purchasing a cooperative unit means you are buying
shares of stock.
Condominium ownership most closely resembles
single-family ownership
A city may levy a(n) ___________ for a sidewalk project.
special assessment
A lease with rent that increases at specific intervals is a
step-up lease.
A property owner's solar panel system is affected by the large shadow created from a newly constructed billboard on an adjacent property. What property right is potentially involved in this situation?
suprasurface rights
Jillian is appraising Mark and Sarahs soon-to-be purchased home so that they can finance through Action Mortgage. Mr. Fergison the seller, is still occupying the home and agreed to show Jillian around on the agreed upon inspection date. Mr. Fergison was more than eager to inform Jillian of everything he knew about the home from the oak flooring to the diameter and number of the trees in the established landscaping. He also told her about the new sidewalk which is scheduled to be constructed down the entire street a month after Mark and Sarah are to take possession of the home. He told her that the new buyers would have to pay for the cost of the concrete and the labor but that the results would definitely add value to the final appraisal. The city is currently bidding out estimates for the labor to reduce the costs. When appraising this dwelling Jillian must
take the pending special assessment into account as it could negatively impact the appraised value.
A competency issue best applies to which of the following examples? the appraiser's knowledge of a specific analytical method the appraiser's identification of the client and other intended users the appraiser's method of communicating the assignment results the
the appraiser's knowledge of a specific analytical method
A defeasible estate is limited by
the occurrence or non-occurrence of a specific event.
Survey lines that run east and west at six-mile intervals and are located either north or south of a baseline may be best identified as what type of lines?
township lines
Another term for an encroachment is
trespass
Deed restrictions remain in effect when a property is sold.
true
The definition of value used in an appraisal is a critical decision.
true
In a basic trust, the fiduciary is known as the
trustee
The purpose of the assignment is also referred to as
type and definition of value.
A house of worship would likely fall into which category of value types?
use value
Limited market properties fall into which category of value types?
use value
Littoral and riparian rights refer to ________ rights.
water