Exam (elaborations)
REE 4103 Real Estate Valuation and Appraisal Final Exam (1)
REE 4103 Real Estate Valuation and Appraisal Final Exam (1)
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REE 4103 Real Estate Valuation andAppraisal Final Exam
What is the sales comparison approach? - ANS-an opinion of market value is developed
by comparing properties similar to the subject property that have recently sold, are listed
for sale, or are under contract
Units of Comparison - ANS-the components into which a property may be divided for
purposes of comparison (price per square foot, room, seat.) These units usually
facilitate analysis even when the properties are not very comparable.
Reconciliation - ANS-Is necessary in nearly all sales analyses because the appraiser
will usually analyze many sales that may lead to several different conclusions.
Comparative Analysis - ANS-general term used to identify the process in which
quantitative and qualitative techniques are applied to comparable sales to derive a
value indication in the sales comparison approach.
Data Analysis Techniques - ANS-Paired data analysis is based on the premise that
when two properties are equivalent in all respects but one, the value of the single
difference can be measured to indicate the difference in price between the two
properties.
paired data analysis - ANS-a quantitative technique used to identify and measure
adjustments to sale prices or rents of comparable properties; to apply this technique,
sales or rental data on nearly identical properties is analyzed to isolate a single
characteristic's effect on value or rent.
bracketing - ANS-a process in which an appraiser determines a probable range of
values for a property by applying qualitative techniques of comparative analysis to a
group of comparable sales.
Concessions - ANS-a financial payment, special benefit, or non-realty item included in
the sale contract or rental agreement as an incentive to the sale or lease.
Market conditions - ANS-although the adjustment for market conditions is often referred
to as a "time" adjustment, time is not the cause of the adjustment. Market conditions
that change over time create the need for an adjustment not time itself.
, Non-realty components of value - ANS-non-realty components of value include chattel,
business concerns, and other items that do not constitute real property but are included
in either the sale price of the comparable property or the ownership interest in the
subject property.
Kelo v. City of New London - ANS-the taking of private land for economic development,
and particularly for private sector development, has come under public scrutiny since
the supreme court decision
off-site improvements - ANS-improvements such as streets, sidewalks, curbing, traffic
signals, and water and sewer mains, located off the property itself but necessary to
facilitate development.
on-site improvements - ANS-improvements such as grading, landscaping, fences,
gutters, paving, drainage and irrigation systems, walks, and other physical
enhancements to the land.
highest and best use - ANS-site value must always be considered in terms of highest
and best use; even if the site has improvements, the site value is based on its highest
and best use as though vacant and available for development to its most economic use.
Which is the preferred methodology for valuation? - ANS-sales comparison is the
preferred methodology for developing a site value conclusion
Which is the most common technique for valuating land? - ANS-Sales comparison
market extraction - ANS-is a technique in which land value is extracted from the sale
price of an improved property by deducting the contributory value of the improvement,
often estimated at their depreciated cost.
allocation - ANS-the allocation method is based on the principle of balance and the
related concept of contribution.
the market and physical condition - ANS-of the appraised property usually suggest
whether an exact replica of the subject property (reproduction cost) or a substitute
property of similar size and use (replacement cost) would be the basis of a more
suitable comparison.
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