Exam (elaborations)
Module 2. Idaho Real Estate Questions and Answers
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Module 2. Idaho Real Estate
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Module 2. Idaho Real EstateAppraisal - answerThe process of estimating and supporting an opinion of value as of a
certain date.
Market Value - answerA real estate appraiser estimates the market value or fair market
value
4 Characteristics of Demand - answer1. Demand
2. Utility
3. Scarcity
4. Transferability
Anticipation - answerThe value of a property may increase or decrease based on
potential purchaser's belief that some future event will benefit or detract from the value
of the property
Change - answerReal estate conditions, both physical and economic, do not remain
constant and this in turn changes value
Competition - answerCompetition results from the interaction between supply and
demand
Conformity - answerThe maximum value for a property is reached when it conforms to
the surrounding land use
Contribution - answerThe value of an improvement is equal to its contribution to the
added value of the property.
Increasing and Diminishing Returns - answerReturns refers to the relationship between
the cost of an improvement and the value it adds to the property
Plottage - answerCombining or consolidating adjacent lots into one larger lot, the
resulting land value will be higher than the sum of the values of the separate lots
Assemblage - answerThe process of merging the lots
Regression - answerThe value of a better property will be lessened by the presence of
poorer properties
, Substitution - answerThe maximum value of a property is equal to the cost of
purchasing or constructing equally desirable properties
Supply and Demand - answerProperty values will be affected both by the supply of
property and by buyer demand for it
Topography - answerBuilders prefer gently rolling land that looks more appealing but is
not so steep that it would increase development costs
Shape - answerIrregularly shaped lots are not as valuable as rectangular lots
Size - answerThe width and depth of the lot determines its potential uses and affects its
value
Exposure - answerHow a lot is positioned to the light, air or view affects its value
Soil - answerThe ability of the ground to support a structure affects construction costs
Corner Influence - answerA corner location has greater value for commercial property
Location - answerThis is the site of the property in relation to other uses and physical
features
Consumer Price Index (CPI) - answerMeasures inflation
Appraisal Foundation - answerA private, non-profit organization composed of
representatives from all the major appraisal organizations and other related professional
groups
Appraisal Foundation - Objectives - answer- Establish uniform appraisal standards
- Develop minimum criteria for the certification and recertification of qualified appraisers
- Maintain systems for the appraisers
Uniform Residential Appraisal Report (URAR) - answerMost common appraisal report
used today for government agencies such as: Fannie Mae, Freddie Mac, HUD, VA,
FHMA
Appraisal Qualifications Board - answerEstablishes minimum criteria for state certified
appraisers and endorses uniform examinations for certification
Appraisal Standards Board - answerSets minimum standards for appraisals performed
in federally related transactions
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) -
answerIntended to upgrade the professionalism and competency of appraisers
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