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Principles of Real Estate 2 Champion
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Principles of Real Estate 2 Champion
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Principles of Real Estate 2 ChampionAn opinion of value Correct Ans - The appraised value of a property is:
assessed value Correct Ans - the amount that your local government
determines your property to be worth for tax purposes
subject property Correct Ans - The property that is being appraised.
ad valorem Correct Ans - according to value
Principle of Conformity Correct Ans - Maximum value is found when
there is a reasonable degree of similarity or homogeneity
USPAP (Uniform Standards of Professional Appraisal Practice) Correct
Ans - Standards that have been established by the Appraisal Standards
Board of the Appraisal Foundation.
appraisal Correct Ans - An appraiser's opinion of value.
URAR (Uniform Residential Appraisal Report) Correct Ans - Fannie
Mae Form 1004/Freddie Mac 70
Principle of Progression Correct Ans - The value of a subject property
is increased by the value of surrounding properties
Market Value Correct Ans - The most probable price a property should
bring in a competitive and open market under all conditions requisite to a fair
sale.
value Correct Ans - Does not always equal price.
Scarcity Correct Ans - if a type of property in a market area is too
abundant, it has reduced value.
Highest and Best Use Correct Ans - The legal use of property giving the
greatest return in money or amenities
, Principal of Substitution Correct Ans - the value of a commodity is
influenced by the cost of acquiring a substitute or comparable item.
Field Review Correct Ans - Many lenders, especially when dealing with
high-LTV loans, will order this type of appraisal
Principle of Anticipation Correct Ans - States that the purchase price is
affected by the expectation of future appeal and benefits
Functional Obsolescence Correct Ans - The loss in desirability of the
style, layout, or function of an element of a property over time.
Sales Comparison Correct Ans - The approach that estimates value by
comparing the subject property with recently sold similar properties
External Obsolescence Correct Ans - loss of value due to factors
beyond the property boundaries
Forclosure Correct Ans - when a bank takes back a property and
auctions it off to recover the unpaid loan amount
loan pools Correct Ans - investors assign large blocks of loans as
collateral to back mortgage backed securities.
Primary Mortgage Market Correct Ans - the loan origination market
where borrowers and lenders negotiate mortgage terms
Redlining Correct Ans - a practice in which banks refuse to make loans
to people living in certain geographic locations
Underwriting Correct Ans - the process of making a lending decision.
Origination Correct Ans - The process of making or initiating a new
mortgage loan.
PMI (Private Mortgage Insurance) Correct Ans - Insurance that
protects the lender in case the borrower defaults and is unable to repay the
loan. Generally a borrower must pay PMI if their equity is less than 20% of the
home's value.
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