CMA Property Valuation and Appraisal 2

Question 1

What is an Automated Valuation Model (AVM)?

Accepted Answer

A software-based property value estimate using statistical modeling and public data

Answer

AVMs use algorithms, comparable sales, and public records to generate a property value estimate without a physical inspection.

Question 2

Which appraisal approach is most commonly used for income-producing properties such as apartment buildings?

Accepted Answer

Income capitalization approach

Answer

The income capitalization approach values a property based on the net operating income it generates, making it ideal for investment properties.

Question 3

What term describes an appraisal that comes in lower than the agreed purchase price?

Accepted Answer

Appraisal gap

Answer

An appraisal gap occurs when the appraised value is less than the purchase price, potentially requiring renegotiation or additional borrower funds.

Question 4

What is 'adjusting for comparables' in the sales comparison approach?

Accepted Answer

Adding or subtracting dollar amounts to account for differences between the subject property and comparable sales

Answer

Appraisers adjust comparable sale prices upward or downward to account for differences in features like size, condition, or amenities.

Question 5

Which form is the standard Fannie Mae appraisal report for single-family residential properties?

Accepted Answer

Form 1004

Answer

Fannie Mae Form 1004 (Uniform Residential Appraisal Report) is the standard form used for appraisals of single-family properties.

(CMA) Certified Mortgage Advisor Practice Test