Property Valuation & Appraisal Flashcards

In the sales comparison approach, what adjustment is made when a comparable property has a feature that the subject property LACKS?

Answer: A positive adjustment is added to the comparable's sale price

When a comparable has a superior feature that the subject lacks, a positive adjustment is added to the comparable to make it more like the inferior subject property.

What is 'market conditions adjustment' (also called 'time adjustment') in the appraisal process?

Answer: Correcting comparable sale prices to reflect changes in market conditions between the sale date and the effective appraisal date

A market conditions adjustment corrects for the fact that property values may have changed between when a comparable sold and the current effective date of the appraisal.

What is the primary reason VA appraisers are assigned by the VA rather than selected by the lender?

Answer: Independence ensures the appraiser is not pressured by parties with financial interest in the transaction

VA appraisers are assigned by the VA to maintain independence and prevent lenders or real estate agents from pressuring the appraiser toward a predetermined value.

In areas near military installations, what market factor may cause property values to fluctuate significantly?

Answer: BRAC (Base Realignment and Closure) announcements

BRAC announcements can dramatically affect local real estate markets by signaling base closures (depressing values) or expansions (boosting values) near military installations.

Which of the following best describes 'functional obsolescence' in property appraisal?

Answer: A loss in value due to a deficiency or superadequacy in the property's design or layout

Functional obsolescence is a loss in value resulting from outmoded or unacceptable property features such as poor floor plans, outdated kitchens, or inadequate electrical systems.

When appraising a property on or near a military installation, what unique consideration may an appraiser need to address?

Answer: Deed restrictions, easements, or noise zones from military operations may affect value

Properties near military installations may be subject to noise zones, accident potential zones, or deed restrictions that can affect marketability and value.

What is the purpose of the 'reconciliation' step at the end of the appraisal process?

Answer: To weigh the results of the approaches used and arrive at a single final value opinion

Reconciliation is the final step where the appraiser weighs the reliability of each approach used and arrives at a single, supportable opinion of value.