Mass Appraisal Techniques Flashcards
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Read the first 7 Mass Appraisal Techniques flashcards as text
Which statistical measure is used in mass appraisal to indicate the uniformity of appraisal ratios within a property class?
Answer: Coefficient of Dispersion (COD)
The Coefficient of Dispersion (COD) measures the average deviation of appraisal ratios from the median ratio, indicating uniformity.
In mass appraisal, a Price-Related Differential (PRD) greater than 1.03 generally indicates:
Answer: Regressivity, where higher-value properties are under-appraised relative to lower-value properties
A PRD above 1.03 indicates regressivity, meaning higher-value properties tend to have lower assessment ratios than lower-value properties.
Which type of multiple regression analysis is most commonly used when the relationship between property value and its characteristics is multiplicative rather than additive?
Answer: Log-linear (semi-log) regression
Log-linear regression is used when variables have a multiplicative relationship, as taking the logarithm transforms this into an additive (linear) model.
In a Computer-Assisted Mass Appraisal (CAMA) system, what is the primary function of a 'neighborhood delineation'?
Answer: Grouping properties that share similar market influences to improve model accuracy
Neighborhood delineation groups properties with similar locational and market influences so appraisal models can reflect those shared characteristics accurately.
An assessor is comparing two mass appraisal models. Model A has a COD of 12 and Model B has a COD of 18. Which model demonstrates better appraisal uniformity?
Answer: Model A, because a lower COD indicates tighter clustering of ratios around the median
A lower COD indicates less variation in appraisal ratios, meaning Model A produces more uniform assessments.
Which mass appraisal approach relies on the principle that a buyer will pay no more for a property than the cost to acquire a similar site and construct a comparable building?
Answer: Cost Approach
The Cost Approach is based on the principle of substitution — a buyer will not pay more than the cost to reproduce or replace the improvements plus land value.
When using the income approach in mass appraisal for a commercial property, which step directly converts the net operating income (NOI) into an estimate of value?
Answer: Dividing NOI by the capitalization rate
Value is estimated by dividing NOI by the capitalization rate (V = NOI / Cap Rate), converting the income stream into a present value.