Property Valuation & Appraisal Flashcards
7 cards from real CRM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Property Valuation & Appraisal flashcards as text
Which professional designation certifies an individual specifically to appraise residential properties up to four units?
Answer: Licensed Residential Appraiser
A Licensed Residential Appraiser is authorized to appraise non-complex one-to-four unit residential properties below a federally established threshold.
What does a 'reconciliation' step involve at the conclusion of an appraisal?
Answer: Weighing the results of multiple valuation approaches to arrive at a final value opinion
Reconciliation is the appraiser's reasoned judgment process of weighing each approach's credibility to produce a single final value estimate.
Under USPAP, what is the appraiser's obligation regarding a 'scope of work' determination?
Answer: The appraiser must identify and perform the scope of work necessary to produce credible assignment results
USPAP's Scope of Work Rule requires the appraiser to identify and complete the research and analysis necessary for credible results, regardless of client preferences.
When a comparables adjustment grid shows a negative dollar adjustment for a feature on a comparable property, it means:
Answer: The comparable is superior in that feature relative to the subject
A negative adjustment on a comparable indicates the comparable is better than the subject in that feature, so its price must be reduced to reflect the subject's lesser quality.
What is 'market rent' as used in residential property appraisal?
Answer: The rental income a property would command in the open market under competitive conditions
Market rent is the estimated rent a property would attract from knowledgeable tenants in a competitive, open market at a given date.
Which of the following would MOST likely cause a residential property's capitalization rate to increase?
Answer: Rising market risk and investor uncertainty
Higher perceived risk drives investors to demand greater returns, resulting in a higher capitalization rate and therefore a lower value for the same income stream.
The principle of substitution, which underpins all three approaches to value, states that:
Answer: A rational buyer will pay no more for a property than the cost of acquiring an equally desirable substitute
The principle of substitution establishes the upper limit of value based on what buyers would pay for an equivalent alternative in the market.