Property Valuation & Appraisal Flashcards
7 cards from real MRP 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
What document does the VA issue to communicate the appraiser's determined value of a property to the lender and borrower?
Answer: Notice of Value (NOV)
The VA issues a Notice of Value (NOV) that states the appraiser's opinion of value and any required repairs or conditions.
When a VA appraisal comes in below the purchase price, what option is available to the veteran buyer?
Answer: The buyer can invoke the VA escape clause and withdraw without penalty
The VA escape clause allows veteran buyers to withdraw from a purchase contract without forfeiting earnest money if the property appraises below the purchase price.
Which appraisal approach is typically given the MOST weight for single-family residential properties used in VA loans?
Answer: Sales comparison approach
The sales comparison approach is given the most weight for single-family homes because it best reflects actual market activity and buyer behavior.
How long is a VA appraisal (Notice of Value) valid for loan purposes?
Answer: 1 year
A VA Notice of Value is valid for 180 days (approximately 6 months) from the date it is issued.
What is the term for the process where a VA-assigned appraiser inspects the property to ensure it meets Minimum Property Requirements (MPRs)?
Answer: VA appraisal with MPR review
The VA appraisal process includes review of Minimum Property Requirements (MPRs) to ensure the property is safe, structurally sound, and sanitary.
Under the cost approach to property valuation, what does 'depreciation' refer to?
Answer: The loss in value from any cause affecting improvements
Depreciation in the cost approach represents the loss in value of improvements due to physical deterioration, functional obsolescence, or external obsolescence.
When a military member receives PCS orders and must sell quickly, how might this affect the property's market value determination?
Answer: A forced or distressed sale price should NOT be used as a comparable
Appraisers should not use distressed or forced sales as comparables because they do not reflect typical market conditions between willing buyers and sellers.