CAR Foundational Concepts & Principles 2

Question 1

Which principle states that value is created and sustained when the characteristics of a property conform to the demands of its market?

Accepted Answer

Principle of Conformity

Answer

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.

Question 2

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?

Accepted Answer

Principle of Change

Answer

The principle of change recognizes that economic and social forces constantly alter property values, requiring appraisers to use current market data.

Question 3

Under USPAP, which term describes the process of developing and communicating an opinion of value?

Accepted Answer

Appraisal practice

Answer

USPAP defines 'appraisal practice' as valuation services performed by an individual acting as an appraiser, including appraisal, appraisal review, and appraisal consulting.

Question 4

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?

Accepted Answer

Principle of Anticipation

Answer

The principle of anticipation holds that value is the present worth of future benefits, including the remaining economic life of the improvements.

Question 5

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?

Accepted Answer

Market value

Answer

Market value is the standard required for federally related transactions under FIRREA and represents the most probable price in an arm's-length transaction.

(CAR) Certified Appraisal Reviewer Practice Test

(CAR) Certified Appraisal Reviewer Practice Test

CAR Foundational Concepts & Principles 2