Valuation & Appraisal Flashcards
6 cards from real Real Estate practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Valuation & Appraisal flashcards as text
The principle of conformity holds that maximum value is achieved when:
Answer: Properties in an area are similar in size, style, and use
Conformity states that properties attain maximum value when they are similar to surrounding properties, supporting consistent market expectations.
Highest and best use is defined as the use that is:
Answer: Physically possible, legally permissible, financially feasible, and maximally productive
Highest and best use is the reasonably probable and legal use of property that produces the highest value, considering physical, legal, and financial factors.
Assessed value is used primarily for:
Answer: Calculating property taxes
Assessed value is set by the local tax assessor as a basis for calculating property tax obligations and may differ significantly from market value.
A Comparative Market Analysis (CMA) is typically prepared by a:
Answer: Real estate agent to help price a home for listing
A CMA is an informal analysis performed by a real estate agent comparing recent sales, active listings, and expired listings to recommend a listing price.
The principle of regression states that a higher-value property placed among lower-value properties will:
Answer: Experience a decline in value
Regression holds that a superior property's value is pulled down when surrounded by inferior properties, the opposite of the principle of progression.
Which approach to value would an appraiser emphasize most when valuing a new single-family home?
Answer: Sales comparison approach
For residential properties, the sales comparison approach using recent comparable sales is the primary and most reliable method.