Market Analysis & Valuation Flashcards
7 cards from real CGA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Market Analysis & Valuation flashcards as text
An appraiser is valuing a property in a rapidly declining neighborhood. Which principle MOST directly explains the downward pressure on property values in that area?
Answer: Principle of regression
The principle of regression holds that a higher-value property located among lower-value properties will be pulled down in value toward the level of surrounding properties.
Which data source would an appraiser MOST likely use to identify market rent for a commercial retail property?
Answer: CoStar or LoopNet lease comparables databases
CoStar and LoopNet are commercial real estate databases that compile lease transaction data, making them primary sources for market rent comparables.
Under USPAP, a 'restricted appraisal report' differs from an 'appraisal report' primarily in that a restricted report:
Answer: Is intended for use only by the client, with limited disclosure of methods
A restricted appraisal report is limited in content and intended solely for the client's use, without disclosing the full scope of work, methods, and data used.
Which element of comparison in the sales comparison approach accounts for differences in the legal rights being conveyed?
Answer: Real property rights conveyed
Real property rights conveyed is the first element of comparison and accounts for differences such as fee simple versus leased fee interest that affect what is actually being transferred.
A property generates potential gross income of $120,000. The vacancy and collection loss rate is 5% and operating expenses are $45,000. What is the net operating income (NOI)?
Answer: $69,000
EGI = $120,000 × (1 − 0.05) = $114,000; NOI = $114,000 − $45,000 = $69,000.
In mass appraisal for ad valorem taxation, which statistical measure is used to evaluate the uniformity of assessments across a jurisdiction?
Answer: Coefficient of Dispersion (COD)
The Coefficient of Dispersion (COD) measures the average percentage deviation of individual assessment ratios from the median ratio, indicating how uniformly properties are assessed.
When an appraiser identifies a 'buyer's market,' which market condition is MOST likely present?
Answer: Excess inventory with properties selling below list price after extended DOM
A buyer's market is characterized by high inventory, extended days on market, and properties selling below list price as buyers hold negotiating power.