SAEE - Core Valuation Principles Questions and Answers Flashcards
6 cards from real SAEE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 SAEE - Core Valuation Principles Questions and Answers flashcards as text
In the sales comparison approach, what type of adjustment is made when a comparable property has a feature that the subject property lacks?
Answer: A negative adjustment to the comparable
When a comparable has a superior feature the subject lacks, a negative adjustment is applied to the comparable's sale price to account for the difference.
Which valuation principle states that property value is created by the expectation of future benefits to be derived from ownership?
Answer: Principle of anticipation
The principle of anticipation holds that value is based on the present worth of all future benefits expected from property ownership.
What is 'functional obsolescence' in the context of the cost approach?
Answer: Value loss from outdated design features or layout deficiencies within the property
Functional obsolescence refers to a loss in value resulting from deficiencies or superadequacies in the building's design, layout, or mechanical systems.
When reconciling the three approaches to value, what should an appraiser consider most heavily?
Answer: Weight each approach based on its relevance and reliability given the property type and available data
Reconciliation requires the appraiser to consider the strengths and weaknesses of each approach relative to the specific property type, data quality, and purpose of the appraisal.
The principle of contribution in real estate valuation is best described as which of the following?
Answer: The value of any component is measured by how much it adds to the total property value
The principle of contribution states that the value of a component is measured by the amount it contributes to the overall value of the property, not by its individual cost.
Which factor would most likely cause an appraiser to apply a location adjustment in the sales comparison approach?
Answer: The comparable is located on a busy commercial street while the subject is on a quiet residential road
A location adjustment accounts for differences in the desirability or characteristics of the sites where the subject and comparable properties are situated.