Chapter 20- Study Guide

What is an appraisal?

• An estimate your opinion of value based on supportable evidence.

• An actual value based on supportable evidence.

• A written analysis or opinion relating to the probable sale price of a specific property.

• The process of estimating the value of a property by examining and comparing actual sales of comparable properties.

What is the role of an appraiser?

• To estimate the value of a property

• To design architectural plans

• To manage real estate transactions

• To provide legal advice on property matters

What does CMA stand for in real estate?

• Comparative Market Analysis

• Certified Mortgage Advisor

• Commercial Management Association

• Construction Management Agreement

List the four characteristics of value using the acronym DUST.

• Demand, Utility, Scarcity, Transferability.

• Durability, Usability, Stability. Tangibility.

• Density, Uniqueness, Simplicity, Transparency.

• Diversity, Usefulness, Security, Tradability.

What is the difference between market value and market price?

• Market value is the estimated worth of an asset, while market price is the actual price at which it is bought or sold.

• Market value is the actual price at which an asset is bought or sold, while market price is the estimated worth of an asset.

• Market value and market price are the same and can be used interchangeably.

• Market value is determined by the government, while market price is determined by the stock market.

What is the process of estimating the value of a property by examining and comparing actual sales of comparable properties called?

• Cost approach

• Sales comparison approach

• Depreciation

• Income approach

Which approach is also known as the market data approach?

• Cost approach

• Sales comparison approach

• Depreciation

• Income approach

Fill in the blank: The principle of _______ is most useful in the appraisal of newer or special-purpose buildings such as schools, churches, and public buildings.

• substitution

• conformity

• progression

• regression

What are the three classes of depreciation for appraisal purposes?

• Physical deterioration, functional obsolescence, external depreciation

• Market conditions, financing concessions, property rights

• Location, physical features, amenities

Fill in the blank: _______ is a loss in value resulting from the properties physical deterioration, external depreciation, and functional obsolescence.

• Accrued depreciation

• Capital appreciation

• Market inflation

• Asset enhancement