1 USPAP before is Ad hoc committee
2 no bias at all for appraiser,
3 CLIENT = party who engage specific assignment (not payor)
4 personalized evidence indicate authentication = signiture
5 HC = sth known false on eff date + TRUE for analysis'purpose
6 A101 = Appraiser's 1ndependent Objective 1mpartial
7 not apply scope of work rule = if provide OtherThanAppraisal / A-Review/ A-consulting
8 should comply with uspap, BY CHOICE, even if not legally obligated
9 NOT an expectation when act in role of app= holding state license/ cert [not expecting!]
10 standards establish benchmark to measure ETHICS & COMPET
11 if assignment include ADVOCACY, ind can NOT accept as appraisal practice
12 requirement of 1O1 without accomodating person interest = EthcsRule's Conduct
13 when MUST disclose Research& Analysis NOTperformed = when necessary for IUser understnd report properly and not misled
14 S3.2 says REVIEWER need to identify if assign include opinion!
15 a reviewer must not sign the work under review unless he INTEND TO ACCEPT RESPONsisbility as cosigner
16 R1-2 elaborate app obligation Problem Id AND scope of work
17 Rule 1-3 app obligation in mkt value: deve H&BU , cocnsider effect of use and value of land use, analysis S&D
18 Rule 1-6 recon = 2step process
19 solving valuation problems = 2 action: deve and rept
20 app PP, R-7-2 obligate app to id item and character enough to est RELATIVE QUALITY of item within its type
21 oral pp app repot must add substantive set forth in S-8-2 for SUMMARY APP REPT
22 self contained app rept for PP : support and rationale 4 app's opinion of mk/mkt level that deve in assignmt must be DESCRIBED
23 s-9-2 require app in businss (entity pursuing an economic activity) / intangible to indentify STANDARD of value
25 scope of work rule: when app is providing service other than app/ App Review / consulting service which NOT APPLY (jurisdictional exception rule + statement + definitions)
26 scope of work = prob ID + scope of work acceptability + disclosrue obligtn
27 condition to limit scope of work to such a degree - NO IF ASSIGN result are not credible in context of the intended use
28 Jurisdictional exception rule apply when USPAP is precluded by law/ regulation
MORE IN-DEPTH FOR APPRAISER:
EOA ExtraOrdinary Assumption [lack of fact benefit cos with fact, price drop assumed]
HC Hypothecatical Condition
RELife [Remaining Econo Life (HUD / VA required only)
ELife less EffectiveAge (not life cos only part) is RELife
cinderblock wall [backyard is enclosed by it]
Datasource: FARES AIRD mls
Ad hoc committee == original compilation of app standard later known as USPAP was developed by AH C
red-acted = to make ready for publication,
red-acted = to make ready for publication,
FIRST CLASS QUIZ 17 SECTION 2 80%
1 Location, size and shape of the property, view, accessibility are the primary factors affecting physical value. Reputation of area is a social factor.
2 An appraiser must first look at highest and best use as the subject property being vacant.
3 Real property has value proportionate to the expected use of that property, whether it is a single-family residence or an income-producing property
4 The principle of change holds that it is the future, not the past, which is of prime importance in estimating value.
5 Typically, the principle of competition follows three steps: (1) market demand generates profits, (2) profits generate competition, and (3) competition stabilizes profits
6An estate [ Estate from period to period and Estate at will ] period to period and an estate at will typically require 30-days notice to quit.
7 If any one of the unities is missing, a __________ is created. == TIC
8 Off-site factors are those improvements not directly on the site that add to the site's utility. These factors include availability and quality of off-site improvements or infrastructure such as water, sewer, utility, and transportation systems.
9 Deed restrictions are limitations that dictate certain uses that may or may not be made of the property. Page 100
10 Grade is the slope of the surface of the ground expressed as a percentage. An example would be a 2% grade, where the slope climbs 2 feet for every 100 feet of horizontal distance.
11 moderately sloping lot has a steepness of approximately__________%. = 10-15
12 The interior wall material most often used in residential construction is drywall—also called sheetrock, plasterboard, or gypsum board
13 Another type (of landscaping) is called xeriscaping, in which water efficiency is achieved by using plants appropriate for the natural environmen
14 foundation material used most often is concrete, a mixture of sand, gravel, and cement. Page 113
15Each component is important, and only with the proper blend of style and utility does the residence reach its maximum desirability
16 Assessment data is normally not used as it has reliability problems and assessments can be a function of law--not necessarily value.
17 Multiple regression analysis is a statistical technique for estimating a particular variable, such as a probable sales price, using more than one other known variable
18 Joe was hired to appraise a single-family home in a new subdivision. With no resale data yet available, which of the following techniques might Joe use to obtain his results? hint The contingent valuation methodology is a method used to identify how a particular feature affects the value of a property by asking those who are knowledgeable about that market (i.e. other appraisers and agents). It is also called the survey method and is generally used when there is no sales data available. Page 195
19 Fannie Mae has a general guideline that comparable sales over six months old should not be used
20 Flipping occurs when a person buys a property at one price and quickly sells it to another at an inflated price, usually within a short period. The sale may appear to be an arm's length transaction. However, the inflated sales price is often designed to defraud the lender. That is, if the second sale occurs on the same day or within a few days of the initial closing.
21 Adjustments that affect overall property value are made first, followed by those which only affect individual property features. Property rights conveyed is typically the first element in the sequence of adjustments
22 Point estimate of value is the final value indication reported as a single dollar amount. Most clients require a point estimate of value. Page 359
23 As the age of a house increases, the validity of the cost approach decreases because of the difficulty of estimating depreciation. Page 349
24 The values indicated by the three approaches should generally not differ more than 10%. If the spread in values exceeds 10%, the approaches should be re-examined and possibly adjusted to narrow the difference. Page 348
25 When calculating market value using the sales comparison approach, if there are greater variations the appraiser may choose the mean price, as this would tend to smooth the differences. Page 358
26 The vacancy and collection loss allowance in apartment properties is typically estimated at between 2% to 7% of the gross income. The allowance set by the appraiser is based on his or her judgment of the subject property and the surrounding neighborhood. Page 251
27 Some items normally included in an owner's operating statement are not included in the operating statement prepared by the appraiser. Page 259
28 The summary of income and expenses prepared by the appraiser is called a reconstructed operating statement. An appraiser's reconstructed operating statement is intended to reflect a stabilized estimate of income and expenses. Page 259
29 The main principle behind the income approach is the principle of anticipation. The principle of anticipation states that value is created by the benefits to be derived in the future. Page 245
30 Column 6 is often used to identify the size of regular payments (annually in this case) required to pay off a debt over a specified period. Homeowner John obtained a 30-year, $400,000 fixed-rate loan at 6.5% to purchase his house. Which function of one dollar would he use to determine the annual payments required to pay off the debt?
31 The summation method establishes a safe rate for an investment and adds or subtracts this basic rate according to the proper interest rate for the subject property. Page 297
31 b? In the past, some have referred to the "cost approach" as the "summation approach." A real estate appraisal using this method will value the land less any ...
32 The mortgage constant is the ratio of annual debt service to the principal amount of the mortgage loan. The band of investment derives a capitalization rate by combining the mortgage constant (capitalization rate) with the investor capitalization
33 composite capitalization rate provides both a return on the investment and a return of the investment value. It differs from an overall capitalization rate because it is derived from known proportion of both interest rate and recapture rate. Page 286
34 Recapture rate is applicable only to the net income from improvements. When buildings or other improvements contribute to the production of income, an allowance must be made for recapture of the value of the improvements. Pages 285
35 The return or profit from an investment is also known as the yield. Page 285
36 HP12C calculator uses Polish Notation and can be used in a reverse mode. It is more commonly referred to as RPN. Page 323
37 Appraisers need to determine if adjustments need to be made for financing concessions. A typical concession would be seller financing with a balloon payment. Page 333
39 However, there are two major differences between the two types. .... The Gross Rent Multiplier (GRM) refers to the ratio between a property's gross monthly ... The Gross Income Multiplier uses all income sources and is annualized. ...
40 market value is also known as objective value;
market value is also known as objective value / value in exchange [sure from the book]
i rememberutility value is subjective value [unsure but I remember I am right!]
41 growth (deve) - stablility -- decline -- revitalization == neighborhood lifecycly
42 slab on grade foundation = structure sit directly on ground
monolithic slab require wide base and steel reinforcement, not alone support interior load bearing walls so interior footing is trenched in before slab is poured
floating slab = 2 section for the floor and another for foundation wall, each poured separately
screeded slab = wooden floor built on concrete slab with no crawspace underneath
on 18 answer is A
on 19 useable area suitable for all building
on 24 gross building are answer c, including basement and attics
56 hp12c use function and clear
on 57 all is correct
GLB ACT?? The history of the GLBA has its roots in the separation of banks, brokerage companies, and insurance companies. As a result of the financial failures of the Great Depression, Congress in 1933 passed the Glass-Steagall Act prohibiting national and state banks from affiliating with securities companies. In 1956, Congress passed the Bank Holding Company Act that prohibited a bank from controlling a non-bank company. In 1982 Congress amended the Bank Holding Act to further forbid banks from conducting general insurance underwriting or agency activities. This changed, however, in 1999, when the GLBA repealed sections of these acts and allowed banks to engage in a wide range of financial services.
surplus productivity ?
surplus productivity ?