Question 1

The principle of appraising that considers the amount of value that may be added by an improvement is&#10;A) Substitution&#10;B) Anticipation&#10;C) Conformity&#10;D) Contribution

Accepted Answer

The principle of contribution considers the amount of value that may be added by an improvement. This principle states that the value of a component or improvement is determined by its contribution to the overall value of the property. Therefore, D is the correct answer. Substitution refers to the principle of substitution, which states that a buyer will not pay more for a property than the cost of acquiring a comparable substitute. Anticipation refers to the principle of anticipation, which states that the value of a property is affected by its ability to generate future benefits. Conformity refers to the principle of conformity, which states that the maximum value of a property is achieved when there is a reasonable degree of similarity between the property and its surroundings.

Question 2

A condominium type of unit is more popular than a cooperative apartment unit because&#10;A) It generally provides more living space&#10;B) They are located in more desirable living areas&#10;C) Ownership rights in a condo permit resale without approval of others&#10;D) A greater number are available

Accepted Answer

One of the main differences between a condominium and a cooperative apartment is that ownership rights in a condominium permit resale without the approval of others. This gives condo owners greater flexibility and control over their property and is one reason why condominiums are often more popular than cooperative apartments. The other options (A, B, and D) are not necessarily true for all condominiums and do not explain why they are more popular than cooperatives.

Question 3

Which FHA software technology allows a approved FHA seller/servicer to find a FHA approved appraiser?&#10;A) Desktop Underwriter&#10;B) FHA Connection&#10;C) Loan Prospector&#10;D) Uniform Appraisal Dataset

Accepted Answer

The FHA Connection is a software technology that allows an FHA approved seller/servicer to find a list of FHA approved appraisers. This is done through the FHA Appraiser Roster, which allows users to search for appraisers by location, name, or status. The other options listed - Desktop Underwriter, Loan Prospector, and Uniform Appraisal Dataset - do not provide this specific function.

Question 4

What is that the maximum time that an approved FHA Appraisers appraisal report is valid on construction loans&#10;A) 90 Days&#10;B) 120 Days&#10;C) 180 Days&#10;D) 1 year

Accepted Answer

The answer of What is that the maximum time that...

Question 5

Which of the following types of legal description is most commonly found in urban areas?&#10;A) Geodetic or government survey&#10;B) Metes and Bounds&#10;C) General Survey&#10;D) Lot and Block

Accepted Answer

Lot and Block is the most commonly used legal description in urban areas because it is based on a plat map and uses lot and block numbers to identify parcels of land. This method is easier to use and understand compared to other legal descriptions such as metes and bounds or government survey, which are more commonly used in rural areas or undeveloped land.

Question 6

The kind of depreciation most closely associated with inadequate building design is&#10;A) Design inadequacy&#10;B) Physical deterioration&#10;C) Functional obsolescence&#10;D) External obsolescence

Accepted Answer

Functional obsolescence refers to a reduction in utility or desirability due to factors such as poor floor plan, inadequate design or layout, outdated equipment or technology, or changes in zoning laws. Inadequate building design falls under functional obsolescence as it affects the functionality and usability of the building. Physical deterioration refers to wear and tear on the building itself, while external obsolescence occurs due to factors beyond the owner's control, such as changes in the neighborhood. Design inadequacy is not a recognized type of depreciation.

Question 7

The sales comparison approach to value is most widely used for which of the following types of properties?&#10;A) Residential property&#10;B) Income producing property&#10;C) Buildings serving specialized purposes&#10;D) For transactions involving government agencies

Accepted Answer

The sales comparison approach to value is most commonly used for residential property because it involves comparing the subject property to similar properties that have recently sold in the same area. Income producing property and buildings serving specialized purposes may have different methods of valuation, such as the income approach or cost approach. The approach used for transactions involving government agencies would depend on the specific situation and property type.

Question 8

The underlying theories that support evaluation of a property are called:&#10;A) Approaches to value&#10;B) Qualification for designations&#10;C) Principles of appraisal&#10;D) Whatever local practices prevail

Accepted Answer

The underlying theories that support evaluation of a property are known as "Principles of appraisal." These principles guide the appraisal process, ensuring that property evaluations are conducted systematically and based on established methodologies.

Question 9

Which of the following statements regarding certification of appraisers is correct?&#10;A) It is illegal to undertake an appraisal unless that person is properly certified&#10;B) Appraisers may be certified by each state as long as federal guidelines are adhered to&#10;C) Certified appraisers must be used for every loan whether or not the lender is federally related&#10;D) All appraisers with peer designations have been grandfathered into state certified status.

Accepted Answer

Appraisers can be certified by each state as long as they adhere to federal guidelines, but it is not mandatory to use certified appraisers for every loan. It is also not true that all appraisers with peer designations have been grandfathered into state certified status. Option A is not correct because it is not always illegal to undertake an appraisal without certification.

Question 10

If the appropriate present worth factor is .90909 and it is applied to an income stream of $35,000, the discounted value would be&#10;A) $18,333&#10;B) $31,818&#10;C) $38,500&#10;D) $66,818

Accepted Answer

Discounted Value = Present Worth Factor x Income Stream
Discounted Value = 0.90909 x $35,000
Discounted Value = $31,818

Question 11

The capitalization value of a $30,000 income stream to an investor seeking a 12.5 percent return is:&#10;A) $120,000&#10;B) $200,000&#10;C) $240,000&#10;D) $480,000

Accepted Answer

The answer of The capitalization value of a $30,000 income...

Question 12

The normal method to reach a final estimate of value in a narrative appraisal is&#10;A) an adjusted average of the approaches to value as determined by the judgment of the appraiser.&#10;B) whatever value is shown by the major approach.&#10;C) a mathematically determined average of all approaches.&#10;D) only the capitalized value as determined by the current market rate of return.

Accepted Answer

The answer of The normal method to reach a final...

Deck 10: Property Analysis