Valuing and Financing Property Flashcards
7 cards from real Wisconsin Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Valuing and Financing Property flashcards as text
Which appraisal approach relies most heavily on recent sales of comparable properties to estimate value?
Answer: Sales comparison approach
The sales comparison approach estimates value by comparing the subject to similar recently sold properties and adjusting for differences.
In the sales comparison approach, adjustments are always made to which property?
Answer: The comparable properties
Adjustments are made to the comparable sales, never to the subject property, to make them equivalent to the subject.
A homeowner adds a feature the subject lacks. How is the comparable adjusted?
Answer: Subtract value from the comparable
If a comparable is superior, its price is adjusted downward to reflect the subject lacking that feature.
The principle of substitution in appraisal states that a buyer will pay no more than:
Answer: The cost of acquiring an equally desirable substitute
Under substitution, value is limited by the cost to acquire an equally desirable alternative property.
Which factor would MOST likely decrease a property's market value?
Answer: Proximity to a newly built landfill
A nearby landfill is external obsolescence that typically reduces market value.
The four essential elements of value are demand, utility, scarcity, and:
Answer: Transferability
The four elements of value (DUST) are demand, utility, scarcity, and transferability.
An appraisal is best defined as:
Answer: An opinion or estimate of value
An appraisal is a professional's supported opinion or estimate of value, not a guarantee.