Examen
Chapter 12 Value and Appraisal questions with actual answers.
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Chapter 12 Value and Appraisal questions with actual answers.
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Chapter 12 Value and Appraisalquestions with actual answers.
The power of a good or service to command other goods or services in exchange is ANS - value.
Market price is the ANS - amount, in terms of money, paid for the property.
Which of the following types of depreciation is always incurable? ANS - External obsolescence.
The elements necessary for property to possess value include ANS - A. demand.
B. utility.
C. transferability
The statement that no prudent person would pay more for a parcel of real property than the price of a
reasonably close alternative which is available without undue delay, refers to the principle of ANS -
substitution. The value of real property is generally influenced by the cost of acquiring a substitute
(comparable) property. When two or more commodities of similar utility are available, the one with the
lower price generally will receive the greater demand. People generally do not pay more for a property
than the cost of buying land and building a similar residence.
A neighborhood which maintains high property values because of its similar but not identical
architectural styles is benefiting from the principle of ANS - conformity. Residences that do not
conform to the design, type of construction, condition and maintenance, etc. of other homes in the
neighborhood generally suffer some degree of loss in value. An over-improvement or under-
improvement indicates lack of conformity and usually suffers some degree of loss in value.
An appraiser was hired to prepare a feasibility study for a 24-unit apartment building in which the owner
was considering putting in a swimming pool. What basic principle of appraising would be used? ANS -
Contribution. - The effect of value of one component is dependent on its contribution to the sale.
, Joe Ego has his "dream house" constructed for $250,000 in an area where most new constructed homes
are not as well-equipped and typically sell for about $180,000. The value of Ego's house is likely to be
affected by the principle of ANS - regression.
A property may decrease in value by being in a neighborhood with properties of lesser value.
Highest and best use is ANS - the reasonable, possible, and probable use of the property that will yield
the highest return on investment.
The principle of value that reflects the fact that the present use of a property may be different from its
use ten years from now is the principle of ANS - change. Nothing remains static. Changes in physical
and economic conditions as well as the actions of buyers and sellers generally continue.
The first thing appraisers should know in undertaking an appraisal is ANS - the purpose of the appraisal.
The purpose of the appraisal is significant because it affects the choice of method and selection of data.
For instance, an appraisal of the same property for the fire insurance and one for investment purposes
will result in different estimates of value.
When figuring square footage of a house for appraisal purposes, use ANS - outside measurements.
Which of the following should have no influence on an appraisal compensation? ANS - The value
estimated in the appraisal..
Time spent, complexity of the appraisal, and expenses incurred are legit factors.
In the comparison approach to appraisal, after adjustments are made for each comparable, the result is
ANS - the adjusted market value.
An appraiser who is using the comparison method to appraise a single-family residence would never use
the selling price of which of the following? ANS - A similar home that was sold by owners who were
forced to sell at any price because of financial difficulties.
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