Property Valuation & Appraisal Flashcards
6 cards from real BC Real Estate Trading Services Course practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property Valuation & Appraisal flashcards as text
In BC, a formal appraisal report for mortgage lending purposes must be prepared by:
Answer: An Accredited Appraiser Canadian Institute (AACI) or Canadian Residential Appraiser (CRA) member
Formal appraisals for mortgage lending must be prepared by accredited appraisers — AACI (commercial/complex) or CRA (residential) designations from the Appraisal Institute of Canada.
In BC residential valuation, a comparable property that sold 18 months ago may require a 'time adjustment' because:
Answer: Market prices may have changed since the comparable sold, affecting its current relevance
A time adjustment accounts for the change in market conditions between the date a comparable sold and the effective date of appraisal. In a rising market, older sales are adjusted upward.
In BC, which of the following increases a residential property's market value?
Answer: Proximity to good schools, parks, and transit
Proximity to good schools, parks, and transit are positive locational factors that increase market value. These amenities are consistently valued by buyers in BC real estate markets.
In the income approach for BC commercial property, a lower capitalization rate indicates:
Answer: Lower risk and higher value for the same income level
Value = NOI ÷ Cap Rate. A lower cap rate applied to the same NOI produces a higher value. Lower cap rates reflect lower perceived risk — typical for high-demand, well-located properties.
In BC, a property's assessed value is PRIMARILY used for:
Answer: Calculating annual municipal property taxes
BC Assessment values are used by municipalities to calculate property taxes. The municipal tax rate (mill rate) is applied to the assessed value to determine the annual property tax bill.
In BC real estate valuation, 'economic life' of a building refers to:
Answer: The period over which the building contributes positively to the property's value
Economic life is the period during which the improvements contribute to the property value. It ends when the land value alone exceeds the total property value (i.e., the building has no remaining economic contribution).