Module 21 Basic Appraisal Principles Questions and Answers Latest Updated

Module 21 Basic Appraisal Principles Questions and Answers Latest Updated effective date the date to which an appraiser's analyses, opinions, and conclusions apply; also referred to as date of value. relevant characteristics features that may affect a property's value or marketability such as legal, economic, or physical characteristics physical characteristics attributes of a property that are observable or measurable as a matter of fact, as distinguished from opinions and conclusions, which are the result of some level of analysis or judgement. Matt bought a home on Lake Eagle. Typically, one boating dock is shared between two homes in the neighborhood. An easement allows access to the dock. Matt is debating adding his own dock. The permit and construction cost are rather expensive, and he wants to see what impact it will have on the value. Matt ordered an appraisal thru Anne's Appraisal Service. What purpose should the report perform? The purpose is to form an opinion of market value of the property under two scenarios: the value as if the personal dock was there and the price as if the dock was not. Appraiser Joan was hired by the Smiths. Upon consulting with the Smiths, she learned that they plan to add a landscaped pond and retreat-style patio off their rear deck with an estimated cost at $17,000. While they are looking forward to the end result, they are concerned they will not be able to recapture the cost if they choose to sell their home down the line. What service can Joan provide for them? Acting as an appraiser, Joan can research the market to determine how the dwelling and updated landscaping will react in terms of value. Matt and Sarah had an offer accepted for their new home. They plan on financing with City Mortgage and have set an appointment to speak with Jackie Martin, a loan officer. After Jackie met with Matt and Sarah, she ordered an appraisal on the home. Who is the intended user? City Mortgage, which will be loaning the money after underwriting is approved Isaiah performed an appraisal ordered by Wellford Mortgage when James and his wife refinanced with them. James phoned this morning requesting his wife's name be removed from the report. He would like to use the report in their divorce proceedings. After paying a heavy fee for his rush appraisal, he feels he is entitled to this change. How should Isaiah respond? Isaiah should decline James' request completely. The scope of work for James and his wife's refinance would have included the fact that the the intended use was to secure financing for the dwelling for Wellford Mortgage, not for James to determine his assets in the divorce. Marge and Jack are planning to refinance their rental property which is located next door to their home. The rental property is a one-story, two-bedroom, one-bathroom dwelling with no garage, and approximately 1,200 square feet of gross living area. Shortly after meeting with the loan officer, the appraiser contacted them and inspected the rental property. All the comparable sales used in the report are single-family dwellings located in the market area. The monthly rent was not addressed in the report. Which of the following indicate the best value for this property? single-family residence where the sales comparison approach is the primary method of valuation Russell has excluded an approach to value that was not applicable in the assignment he was working on. What is true about Russell's decision? it is part of the scope of work determination Bob was asked by an attorney to complete an appraisal to be used in the filing of Mr. Smith's estate taxes. The property was inspected on March 15. The date of Mr. Smith's passing was January 2. How should Bob refer to the effective date of the appraisal? He should call the effective date a retrospective date. What must an appraiser do prior to determining the appropriate scope of work in a real property appraisal assignment that will lead to credible assignment results? identify the problem After reading Devin's appraisal report, an identified intended user of the report was confused as to the extent of analysis performed in the appraisal. What error did the Devin potentially commit in this instance? The report must contain enough information to allow the intended users to understand the scope of work the appraiser performed. The City has asked you to appraise a vacant former service station. You are uncertain about its environmental status and use an extraordinary assumption. T/F True The City has asked you to appraise a vacant former service station. You are uncertain about its environmental status and use a hypothetical condition. False After accepting an assignment, an appraiser decided to change the extent of the property observation from an exterior-only inspection to a complete interior inspection. What aspect of development is affected and must be addressed by the appraiser? the scope of work You have been asked to appraise a mixed-use building with three apartments and a beauty salon. The owner occupies the salon, the apartments are rented to university students on annual leases. What ownership would be conveyed if the property were sold? leased fee simple leasehold leased fee fee simple leased fee Sue and Joe live on 4th Street in Freemont Lakes. They have recently agreed to sell their home to Joe's brother, Mike. The sale price that was indicated on the contract was what they felt the market value of the house was at the time of the sale. Mike has often helped Joe and his wife complete work on the property. At the time of inspection, Joe stated the real sales price was $20,000 less than the one reported on the contract in order to pay Mike for some of his work. What are the assignment conditions? There are no limiting conditions other than those required by Fannie Mae and Freddie Mac. The value is current and based on market trends within a typical market time. The appraiser should not deduct $20,000 from the market value and call the lender to discuss.