Mass Appraisal Techniques Flashcards
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Read the first 7 Mass Appraisal Techniques flashcards as text
In mass appraisal, 'time trending' of sales is performed primarily to:
Answer: Adjust historical sales prices to reflect current market conditions at the assessment date
Time trending adjusts sale prices to the lien date so that sales from different periods can be validly compared within the same model.
Which of the following best describes an 'arm's length' transaction in the context of mass appraisal sales ratio studies?
Answer: A sale between unrelated, motivated parties with adequate market exposure
An arm's length transaction occurs between independent, willing parties with full knowledge of the facts, making it a valid market indicator.
In additive multiple regression for mass appraisal, what does a negative coefficient for 'distance to city center' most likely indicate?
Answer: Properties closer to the city center tend to have higher values
A negative coefficient means that as distance increases, value decreases — indicating proximity to the city center adds value.
What is the purpose of an 'equalization study' in the context of mass appraisal?
Answer: To compare assessment levels across different jurisdictions or property classes for fairness and uniformity
Equalization studies compare assessment ratios across jurisdictions or classes to identify and correct systematic inequities in assessments.
A mass appraisal model that consistently undervalues newer properties compared to older properties of similar market value is exhibiting:
Answer: Horizontal inequity based on age bias
Systematic under- or over-appraisal of a specific property characteristic (like age) within the same value range is a form of horizontal inequity.
Which data source is typically considered most reliable for establishing land values in mass appraisal when improved sale data is abundant?
Answer: Vacant land sales
Vacant land sales provide the most direct market evidence of land value because no allocation or abstraction from improvements is required.
In the context of mass appraisal model calibration, what does a high R-squared (R²) value indicate?
Answer: A large proportion of the variation in sale prices is explained by the model's variables
R² measures the proportion of variance in the dependent variable (sale price) explained by the independent variables, with values closer to 1.0 indicating a better-fitting model.