CAR Appraisal Reviewer Property Valuations 2

Question 1

When reviewing an appraisal using the income capitalization approach, which factor most directly affects the capitalization rate selected by the appraiser?

Accepted Answer

Market-derived investor yield expectations and risk

Answer

Capitalization rates are market-derived and reflect investor yield expectations, risk, and alternative investment returns for similar properties.

Question 2

A reviewer finds that an appraiser used paired sales analysis to extract an adjustment for a swimming pool. What is the primary concern if only two paired sales were used?

Accepted Answer

Two pairs may be insufficient to account for other variables that differ between the pairs

Answer

A single paired sale or two pairs may not isolate the feature's contribution because other differing variables can distort the extracted adjustment.

Question 3

Under USPAP, an appraisal reviewer who signs a review report as a reviewer is certifying that:

Accepted Answer

The review was performed in compliance with applicable standards

Answer

By signing the review report, the reviewer certifies that the review was performed according to applicable USPAP Standards and the reviewer's professional judgment.

Question 4

An appraiser reports a site value of $180,000 using only one land sale that occurred 18 months ago. As a reviewer, your primary concern should be:

Accepted Answer

Insufficient market evidence and potential time-trend adjustments needed

Answer

A single land sale from 18 months ago raises concerns about adequacy of market support and whether a time adjustment for market conditions was applied.

Question 5

Which of the following best describes the concept of 'effective age' as used in the cost approach?

Accepted Answer

The age the improvements appear to be based on condition and utility, regardless of actual age

Answer

Effective age reflects how old a structure appears based on its condition, maintenance, and functional utility, and may differ significantly from its actual chronological age.

(CAR) Certified Appraisal Reviewer Practice Test

(CAR) Certified Appraisal Reviewer Practice Test

CAR Appraisal Reviewer Property Valuations 2