Exam (elaborations)
Champions School of Real Estate-Principles of Real Estate II (Q&A)
Champions School of Real Estate-Principles of Real Estate II (Q&A)
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Champions School of Real Estate-Principles of Real Estate II
Appraisal Correct Ans - an appraiser's opinion of value, used to
determine market value property to secure the loan
Loan to Value Ratio Correct Ans - Percentage of value or sales price
that a lender is willing to finance
Desk Review Correct Ans - an appraisal that simply reviews a checklist
of items as they analyze the appraisal report for completeness and acceptable
conclusions
Field Review Correct Ans - An independent 3rd party appraiser will be
contracted to review the appraisal report to verify accuracy of data, elements
and procedures used.
Limited Appraisals Correct Ans - an exterior only or drive by
inspection
Highest and Best use Correct Ans - the legal use that gives the greatest
return in money or amenities.
Principal of contribution Correct Ans - the value of a property is equal
to the sum of the contributory value of each of its component parts. Cost does
not equal value
Principle of change Correct Ans - Change is constant, and are always
effecting value
Principle of Anticipation Correct Ans - the purchase price is affected
by the expectation of future appeal and benefits
Principle of Substitution Correct Ans - value of commodity is
influenced by the cost of acquiring a substitute or comparable item
, Principal of Conformity Correct Ans - value is maximized when there
is a reasonable degree of homogeneity or sameness in a neighborhood.
Principle of Increasing and Decreasing Returns Correct Ans - improve
but don't over improve; improve property when the value added by the
improvement exceeds the cost of the improvement.
Principle of Supply and Demand Correct Ans - Demand is great and
supply is short, prices increase; supply is high demand is low prices decrease
Principle of regression Correct Ans - lower priced properties in the
area will cause a decline in the value of the subject property
Principle of Competition Correct Ans - Absence of competition will
cause prices to increase in the marketplace; increased competition tend to
bring prices down
Characteristics of Value Correct Ans - Demand
Utility
Scarcity
Transferability
Demand Correct Ans - must be sufficient demand for the property for
it to have value
Utility Correct Ans - Must be able to fulfill a need.
Scarcity Correct Ans - If a type of property is to abundant it has
reduced value. If Market is flooded values will be flat
Transferability Correct Ans - If the property cannot be transferred, it is
of little value.
Market Value Correct Ans - The most probable price a property should
bring in a competitive and open market.
Ad Valorem Correct Ans - according to value
Ad Valorem Taxes Correct Ans - taxes that are based on assessed value
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