Property Valuation & Appraisal Flashcards

What is the effective date of an appraisal, and why is it important for military relocation transactions?

Answer: The date the appraiser signs the report; it determines how long the NOV is valid from that date

The effective date is the date to which the appraiser's opinion of value applies, and the NOV's 6-month validity period runs from this date.

Which of the following is a characteristic of 'arm's length' transactions that appraisers require comparable sales to represent?

Answer: Sales where buyer and seller act independently with no special relationship or pressure

Arm's length transactions occur between unrelated parties acting in their own self-interest without undue pressure, ensuring the sale price reflects true market value.

What is the significance of a 'subject to' appraisal in the VA loan process?

Answer: The property value is conditioned on completion of specified repairs or improvements

A 'subject to' appraisal means the stated value is contingent upon completion of identified repairs, and the VA will not guarantee the loan until those items are addressed.

In property appraisal, what does the term 'assemblage' mean, and why might it be relevant near military installations?

Answer: The combining of two or more adjacent parcels into one larger parcel, which may create 'plottage' value

Assemblage is the merging of adjacent parcels, and the resulting increase in value (plottage) can be relevant when land near bases is consolidated for development.

How does the VA handle properties with solar panels that are leased (not owned) by the homeowner during the appraisal process?

Answer: Leased solar panels are a personal property item and typically cannot be added to the VA loan; the lease obligation must be reviewed

Leased solar panels are considered personal property rather than real property improvements, so they don't add to the appraised value and the lease obligation affects the buyer's qualification.

What is a 'drive-by' or exterior-only appraisal, and when might it be used in a military relocation scenario?

Answer: A limited appraisal using only exterior observation and public records, sometimes used for refinances but generally not for VA purchase loans

Exterior-only appraisals are limited in scope and not acceptable for VA purchase loan originations, which require a full interior inspection appraisal.

When an MRP professional advises a military client on pricing a home for resale, what appraisal concept should guide the listing price strategy?

Answer: Price based on a Competitive Market Analysis (CMA) reflecting recent comparable sales and current market conditions

A CMA using recent comparable sales and current market trends provides the most reliable basis for a listing price that aligns with what a VA appraiser is likely to support.