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Valuation and Appraisal questions with actual answers.
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Valuation and Appraisal questions with actual answers.
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Valuation and Appraisal questions withactual answers.
What does the purpose of the appraisal help define? ANS -purpose of the appraisal helps define how the
appraisal process will be laid out
What does the intended use of the appraisal help decide? ANS -The intended use helps decide which
report type is most appropriate for communicating the results of the process.
Value (worth) ANS -Value or worth is the present and future anticipated enjoyment or profit from the
ownership of property. It is the relationship between the thing desired and the purchaser. It is also the
power of one commodity to attract other commodities in exchange.
Market Price ANS -the actual sales price of the property
Market Value ANS -the price for which the property should sell. Market value has very little to do with
the original cost. Neither cost nor appreciation is considered an essential element of value.
What is the job of an appraiser? ANS -The job of an appraiser is to determine the special factors of a sale
and assign a value based on each individual transaction.
What are two basic types of value a parcel can be categorized in? ANS -market value and value in use.
Market Value (fair market value) ANS -The price a property would bring if freely offered on the open
market, with both a willing buyer and a willing seller, is known as market value, or fair market value.
Market value is sometimes called the objective value, since it may be determined by actual data.
Value in Use (utility value) ANS -Value in use (also known as utility value) is the usefulness of the
property to a specific user.
, Amenities ANS -Features that add value to a property are called amenities.
subjective value ANS -due to the subjective nature of the user's preference regarding amenities, value
could actually decrease. This is called subjective value.
what are the 4 elements of value that must be present for a property to have market value? (D.U.S.T.)
ANS -demand, utility, scarcity, and transferability.
Demand ANS -Demand is the desire to buy or obtain a commodity. Effective demand is desire coupled
with purchas- ing power. Demand and purchasing power available will affect the value of a property.
Utility ANS -Utility is the ability of a property to satisfy a need or desire, such as shelter, income, or
amenities. Functional utility is the ability of a property to be useful and perform the function for which it
is intended according to current market tastes and standards. The ultimate test of functional utility is
marketability.
Scarcity ANS -Scarcity refers to the availability of a commodity in the market- place. An oversupply
diminishes value whereas an undersupply (or increased demand) increases value.
Transferability ANS -Transferability means that title to the property is unclouded and marketable.
the 4 forces influencing Value (P.E.P.S.) ANS -Value is created, maintained, modified, and destroyed by
the relationship of the following four forces: physical characteristics, economic influences, political or
governmental regulations, and social ideals.
what is used to estimate the value of commercial properties? ANS -A depth table is used to estimate the
value of commercial properties.
Corner influence ANS -Commercial properties benefit from more exposure, while residential parcels may
lose privacy and incur higher maintenance costs from increased frontage.
Thoroughfare Condition ANS -Thoroughfare condition: Width of streets, traffic congestion, and condition
of pavement affect the value of properties fronting on those streets.
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