Foundational Concepts & Principles Flashcards
7 cards from real CAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Foundational Concepts & Principles flashcards as text
Which principle states that value is created and sustained when the characteristics of a property conform to the demands of its market?
Answer: Principle of Conformity
The principle of conformity holds that maximum value is realized when a property's use and style conform to those of surrounding properties in the same market area.
An appraisal reviewer identifies that an appraiser used a 20-year-old zoning map that has since been updated. This is best described as a failure related to which appraisal principle?
Answer: Principle of Change
The principle of change recognizes that economic and social forces constantly alter property values, requiring appraisers to use current market data.
Under USPAP, which term describes the process of developing and communicating an opinion of value?
Answer: Appraisal practice
USPAP defines 'appraisal practice' as valuation services performed by an individual acting as an appraiser, including appraisal, appraisal review, and appraisal consulting.
The concept that a property's value is influenced by the economic productivity remaining in its competitive life is most directly tied to which principle?
Answer: Principle of Anticipation
The principle of anticipation holds that value is the present worth of future benefits, including the remaining economic life of the improvements.
Which type of value is most commonly the focus of federally regulated real estate transactions and is defined as the most probable price a property would sell for in a competitive, open market?
Answer: Market value
Market value is the standard required for federally related transactions under FIRREA and represents the most probable price in an arm's-length transaction.
A reviewer notes that the subject appraisal did not disclose a prior service by the same appraiser on the property. Which USPAP rule does this most likely violate?
Answer: Ethics Rule — Management section
USPAP's Ethics Rule — Management section requires appraisers to disclose prior services on the same property within the prior three-year period.
When reviewing an appraisal, the CAR must determine whether the appraiser's scope of work was adequate. Which USPAP standard primarily governs this determination?
Answer: Standard 3
Standard 3 governs appraisal review and requires the reviewer to evaluate whether the scope of work in the work under review was appropriate for the intended use.