Fundamentals Of Real Estate Appraisal Exam #1

Front 1

How to Find Loan to Value (LTV)

Back 1

The amount of money borrowed compared to the value of the property. Found by Mortgage Amount ÷ Value

Front 2

Financial Institutions Reform, Recovery & Enforcement Act of 1989 (FIRREA)

Back 2

Federal legislation that mandates state licensing or certification for appraisers performing appraisals in certain federally related transactions. This law recognizes USPAP as the current industry standard for appraisals and identifies the Appraisal Foundation as the authority for professional appraisal standards.

Front 3

Uniform Standards of Professional Appraisal Practice (USPAP)

Back 3

Minimal criteria for appraisal competency promulgated by the Appraisal Foundation at the direction of Congress to be applied to appraisals that require the services of a certified appraiser.

Front 4

General Real Estate Appraiser Certification Education Requirements

Back 4

1. 300 hours basic core curriculum

2. 3,000 hours of experience in no fewer than 30 months

3. Bachelor's degree

Front 5

Fair Housing Amendment Act of 1988

Back 5

Prohibits discrimination on the basis of race, color, religion, sex or national origin in housing sales, rentals or financing.

Front 6

Led-based paint was prohibited in...

Back 6

1978

Front 7

Appraising Effective Date

Back 7

The date you were on the property.

Front 8

PEGS

Back 8

A principle affecting value that says all factors influencing real estate - physical, economic, governmental, and social - are constantly changing and thus property value itself is subject to constant change

Front 9

Bundle of Rights

Back 9

Rights of ownership in real estate, including using, renting, selling, or giving away the real estate

Front 10

Lot and Block System

Back 10

A type of legal description used for platted property, the description states only the property's lot number and block number in a particular subdivision

Front 11

Metes and Bounds System

Back 11

A type of legal description that starts at an easily identifiable point of beginning, then describes the property's boundaries in terms of courses and distances, returning to point of beginning

Front 12

Condominiums

Back 12

Property developed for co-ownership, with each co-owner having separate interest in an individual unit and an undivided interest in the common areas of the property

Front 13

Deed

Back 13

An instrument that conveys grantor's interest, if any, in real property

Front 14

Eminent Domain

Back 14

Government's constitutional power to take (or appropriate or condemn) private property for public use as long as the owner is paid just compensation

Front 15

Quitclaim Deeds

Back 15

Deeds that convey any interest in a piece of real property the grantor has at the time the deed is executed, a quitclaim deed makes no warranties regarding title if any held by the grantor

Front 16

Gentrification

Back 16

Process of rapid revitalization of properties in a neighborhood which causes current residents to be displaced

Front 17

Growth

Back 17

First stage a neighborhood goes through in its life cycle, where property values tend to rise as development activity begins and continues

Front 18

Arm's Length Transaction

Back 18

A transaction that occurred under typical conditions in the marketplace, where each of the parties is acting in its own best interests. There is no pressure and seller and buyer are knowledgeable of market conditions

Front 19

Market Price

Back 19

The price that property sold for in an actual transaction

Front 20

Market Value

Back 20

The most likely price a property should bring in a competitive and open market

Front 21

P.E.T.E

Back 21

P = Police Power

E = Eminent Domain

T = Taxation

E = Escheat

These are not rights that an individual would have

Front 22

Planned Unit Development (PUD)

Back 22

Type of development that features individually owned parcels together with a shared common area

Front 23

Leased Fee Estate

Back 23

The ownership interest that the landlord or lessor maintains in a property under a lease with the rights of use and occupancy being conveyed or granted to a tenant or lessee. The ownership interest in a leasedproperty

Front 24

D.U.S.T

Back 24

D = Demand

U = Utility

S = Supply

T = Transferability

It is the economic basis of all real estate decisions and is often used intuitively by many sellers and buyers.

Front 25

Principle of Substitution

Back 25

An appraisal principle that holds that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property, assuming no costly delay is encountered in making the substitution. "Would you pay $200,000 for a property if similar property down the street sold for $125,000? No"

Front 26

Life Cycle

Back 26

Four stages through which a property will pass, or GEDR: Growth, Equilibrium, Decline, Revitalization

Front 27

Appraisal Process

Back 27

1. Identify problem

2. Determine scope of work

3. Gather data

4. Inspection & data analysis

5. Form opinion of land value

6. Form opinion of value through three approaches: sales, cost, income

7. Make final opinion

8. Report

Front 28

Fee Simple Estate

Back 28

Greatest possible right of ownership

Front 29

Lease Hold Estate

Back 29

Lessee's right to possess and use real estate during term of lease

Front 30

Demography

Back 30

Scientific study of population statistics

Front 31

Cost

Back 31

Amount initially paid for a good or service

Front 32

Market Value is based on...

Back 32

Most probable price

Front 33

Mortgagee

Back 33

The Lender

Front 34

Mortgagor

Back 34

The Borrower

Front 35

The Single-Family Detached Standard of Measurement

Back 35

Living Area

Front 36

Ideal Housing Position on a Lot

Back 36

Facing South

Front 37

Platform

Back 37

Most common type of frame construction for one- and two-story houses

Front 38

Substructure

Back 38

Part of the house anatomy. Includes footings

Front 39

Example of a Foundation Wall

Back 39

Monolithic Concrete Slab

Front 40

Rectangular Survey System

Back 40

Land area is divided into townships, measured and numbered starting at intersection of a baseline running east to west, and a principle meridian running north to south.