CFE Market Analysis & Valuation Methods Flashcards
6 cards from real CFE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CFE Market Analysis & Valuation Methods flashcards as text
When a Florida property appraiser uses the gross rent multiplier (GRM) technique, what two data points are required?
Answer: Monthly or annual gross rent and comparable sale price
GRM is calculated by dividing the sale price of a comparable property by its gross rent — applying the resulting multiplier to the subject's gross rent yields a value estimate.
Under the IAAO standards used by Florida property appraisers, what is the acceptable median assessment ratio range for residential properties?
Answer: 0.90–1.10
IAAO standards recommend a median assessment ratio between 0.90 and 1.10 for residential properties, indicating assessments are within 10% of market value.
What is 'functional obsolescence' in property valuation?
Answer: Value loss resulting from deficiencies or superadequacies within the property itself
Functional obsolescence is a loss in value due to features within the property that are outdated, deficient, or superadequate relative to current market standards.
In a Florida mass appraisal context, what is a 'stratified analysis' used for?
Answer: Analyzing assessment ratios separately within defined subgroups to detect inequities
Stratified analysis divides the assessment population into subgroups (by value range, neighborhood, or property type) to identify systematic over- or under-assessment within specific segments.
Which appraisal term describes a transaction between a knowledgeable buyer and seller with no undue pressure, used as the basis for just value in Florida?
Answer: Arm's-length transaction
An arm's-length transaction is one between independent, informed parties acting in their own self-interest without compulsion, and serves as the market standard for just value determination.
When reconciling multiple valuation approaches in an appraisal, a Florida evaluator should give the most weight to the approach that:
Answer: Is most applicable given the property type and quality/quantity of available data
Reconciliation requires the evaluator to assign the most weight to the approach that best fits the property type and benefits from the most reliable and abundant data.