Principles of real estate II (Champions)Questions & Answers(RATED A+)
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Principles of real estate II (
Institution
Principles Of Real Estate II (
Functional obsolescence - ANSWER Refers to the loss in desirability of the style, layout or function of an element of a property over time
Sales comparison - ANSWER best indicator of value for existing properties
highest and best use - ANSWER the legal use for property that gives the great...
Principles of real estate II
(Champions)Questions & Answers(RATED
A+)
Functional obsolescence - ANSWER Refers to the loss in desirability of the style, layout or function of
an element of a property over time
Sales comparison - ANSWER best indicator of value for existing properties
highest and best use - ANSWER the legal use for property that gives the greatest return in money
and/or amenities
external obsolescence - ANSWER the loss in value of a property caused by factors outside the
property itself
principle of contribution - ANSWER suggests the value of a property is equal to the sum of the
contributory value of each of its components. most important aspect is that cost does not equal
value
most important aspect of principle of contribution - ANSWER cost does not equal value (for
example...swimming pool)
principle of change - ANSWER forces acting on a parcel of land are always affecting the value of the
land
principle of anticipation - ANSWER the purchase price is affected by the expectation of future appeal
and benefits
principle of substitution - ANSWER the value of a commodity if influenced by the cost of acquiring a
substitute or comparable item.
principle of conformity - ANSWER value is maximized when there is a reasonable degree of
homogeneity in a neighborhood
, principle of increasing and decreasing returns - ANSWER when the value added by an improvement
exceeds the cost...do not over improve.
principle of supply and demand - ANSWER when demand is high and supply is short, prices go up -
and vice versa
principle of regression - ANSWER presence of lower-priced properties in the area will cause a decline
in the value of the subject property
principle of progression - ANSWER presence of higher-priced properties in the area will cause an
increase in the value of the subject property
principle of competition - ANSWER the absence of competition will cause prices to increase in the
marketplace. Increased competition will bring prices down.
characteristics of value - ANSWER DUST; demand, utility, scarcity, transferability
market value - ANSWER the most probable pice a property should bring in a competitive and open
market under all conditions requisite to a fair sale.
types of appraisal reviews - ANSWER desk review and field review`
desk review - ANSWER a type of appraisal review. reviews cover a checklist of items as they analyze
the appraisal report
field review - ANSWER a type of appraisal review. many lenders, especially high LTV loans, will order
a field review of the appraisal. Independent third-party appraiser will review the report, then verify
the information.
limited appraisal - ANSWER a type of appraisal review. some lenders accept this drive-by type of
review for low LTV or low risk loans.
ad valorem taxes - ANSWER based on the assessed value of the property and the existing tax rate.
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