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ch 11 sec 1 to 6 questions with actual answers for appraiser
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Ch 11 sec 1 to 6 questions with actualanswers for appraiser
apraisal ANS - An appraisal is an estimate or opinion of a property's value.
licensing or certification ANS - California doesn't require all appraisers to be licensed or certified, but it
offers licensing and certification for those who need them to comply with federal law.
An appraiser must be licensed or certified to perform an appraisal in a federally related loan transaction
if the loan amount is greater than $250,000.
value ANS - Value can be defined as the present worth of future benefits.
It can also be defined as an item's ability to command other items in exchange. Another definition of
value is the relationship between a desired thing and the person who desires it.
elements of value ANS - To have value, an item must have four characteristics called the elements of
value. These are utility, scarcity, demand, and transferability.
value in use ANS - Value in use reflects how useful the property is to a particular person, the owner.
Value in use is also called utility value.
market value ANS - Market value is the most probable price the property should bring under all
conditions needed for a fair sale. Market value is also called value in exchange.
A self employed appraiser ANS - Fee appraiser. That is someone who performs appraisals for a fee, as
opposed to an appraiser who works for an institutional lender or a government agency.
, Also referred to as exchange value. ANS - Market value. Market value is the most probably price that a
property should bring in a competitive and open market under all conditions requisite to a fair sale. It is
also known as exchange value.
An opinion or estimate value ANS - Appraisal. An appraisal is an opinion or estimate of value, not a
determination of value. Buyers and sellers determine value.
the price actually paid for a property. ANS - Market price. Market price is the price actually paid for a
property, regardless of whether the parties to the transaction were well informed and acting free of
unusual pressure.
A sale between unrelated parties. ANS - Arms length Transactions. An arms length transaction is one in
which the parties don't have an existing personal or business relationship. The price paid in a sale that
wasn't an arm's length transaction isn't a reliable indication of market value.
The value of property to its owner or user ANS - Utility value. Also called value in use, utility value is the
value placed on the property by a particular person, such as its owner.
Highest and best use ANS - An appraiser doesn't just consider how the property is currently being used,
but also what its highest and best use would be.
The highest and best use is the use which, at the time of appraisal, is most likely to produce the greatest
net return from the property.
change ANS - The principle of change states that a property's value changes constantly, in response to
changing social, economic, governmental, and environmental conditions, and in response to changes in
the property itself.
Every property has a four-phase life cycle: integration, equilibrium, disintegration, and rejuvenation.
anticipation ANS - According to the principle of anticipation, people buy property in anticipation of
receiving benefits from it in the future.
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