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Aceable Agent Principles of Real Estate 2 Exam Questions and Answers - Graded A
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Aceable Agent Principles of Real Estate 2 Exam
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Aceable Agent Principles of Real Estate 2 ExamAmortization - Answer- The repayment of a loan principle over time
Arrears - Answer- Payment for an item or service after it's received
Down Payment - Answer- The initial payment made when buying something on credit, a
____________ is paid directly by the buyer to the seller
Proration - Answer- The allocation or distribution of an annual expense across smaller chunks of time
Acreage - Answer- A unit of measurement used to determine the size of land; 1 acre = 43560 square feet
Appraisal - Answer- The value of property, based on factors determined by a certified appraiser
General data - Answer- Information about the area surrounding a property, this could include the city, region, and neighborhood in which the property is situated
Specific Data - Answer- Information regarding the property itself
Limited Appraisal - Answer- A simple, abbreviated version of a regular appraisal
Market Value - Answer- The price for which a property would sell if offered openly under
normal conditions. This refers to the economic principle, it's the price that a buyer and seller would probably accept
Appraised Value - Answer- Refers to the value given by a licensed appraiser during the mortgage origination process. Appraisers are chosen by the lender but paid for by the homebuyer.
Assessed Value - Answer- Refers to the value placed on a property by a governmental unit for use in levying annual real estate taxes
Loan-to-Value Ratio (LTV) - Answer- The limit on the value of a loan, usually a certain percentage of the home's appraised value or sales price, whichever is lower Subject Property - Answer- The property that is being evaluated in any given appraisal
Highest and Best Use - Answer- What is achieved when a property is used for the most appropriate purpose with the highest returns
Principle of Anticipation - Answer- The present value of a property is affected by the anticipated income or utility that property will give to the property owner
Principle of Contribution - Answer- A property's overall value is made of the combined value of each of its parts
Principle of Substitution - Answer- The value of something is effected by the cost of getting a similar (substitute) item elsewhere
Principle of Change - Answer- The condition of a property, the desirability of its location,
and the market in which it exists can always change
Principle of Conformity - Answer- Values are the highest when houses in a neighborhood look roughly the same
Principle of Regression - Answer- Lower value properties surrounding a subject property are can drag down the value of a property
Principle of Progression - Answer- Higher value properties of a subject property can bump of the value of a property
Sales Comparison Approach - Answer- Determining value by comparing the subject property to similar properties ("comps") that have sold recently. It's most commonly used for single family residences.
Cost Approach - Answer- Determining value by considering how much the same property would cost to build brand new at current prices (replacement cost), then adjusting for depreciation
Income Approach - Answer- Determining value by considering how much income the property would generate when used as rental property
Depreciation - Answer- The loss of value because of obsolescence or deterioration
Functional Obsolescence - Answer- Loss of value because a property's function or appearance has gone out of style or has been replaced by a more appealing version
External Obsolescence - Answer- Loss of value caused by negative forces outside the property which are beyond the control of the owner (unfavorable changes in the environment or market) Deterioration - Answer- Loss of value caused by physical wear and tear over time
Chronological age - Answer- The literal age of a property; a home built 30 years ago has a ________________ age of 30
Effective Age - Answer- An estimated age that is influenced by the updates and quality of maintenance of the property; a 30 year house that has been well cared for might have an effective age of 15
Reconciliation - Answer- When an appraiser compares estimates using different techniques (cost approach, sales approach, and/or income approach) and comes to a single number for value
Appraisal Report - Answer- a report from a licensed appraiser that sums up a property's market value based on collected data
Appraisal Review - Answer- a review of the appraisal report to make sure the appraisal meets the lender's standards
Desk Review - Answer- When a lender carries an appraisal review at the desk (as opposed to sending someone to the field) to make sure the original appraisal is accurate
Field Review - Answer- When a third party appraiser is sent back out to the property to check the validity of the first appraisal
Fair Market Value - Answer- The price for which a property will sell if offered openly under normal market conditions
Subject Property - Answer- The property that is subject of the CMA
Comparative Market Analysis - Answer- Also known as a CMA, this is a report generated by a license holder that compares prices of recently sold homes (comparables) in order to estimate the fair market value of a similar property (the "subject property")
Government Sponsored Enterprises - Answer- Publicly traded institutions that were created by Congress to provide liquidity, stability, and affordability to the mortgage market
General Agricultural Mortgage Corporation - Answer- A government-sponsored enterprise (GSE) providing a secondary market for agricultural and rural mortgage loans; also known as Farmer Mac
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