COURSE 101 - REVIEW -CHAPT 1

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Questions and Answers

The property tax is an __________ tax, meaning it is based on value.

Sales-Based

Usage

Specific Assessment

Ad Valorem (correct)

The assessor is responsible for the , , and __ of all taxable property.

Enforcement, Evaluation, Reporting

Discovery, Listing, Valuation (correct)

Estimation, Recording, Selling

Allocation, Distribution, Taxation

The taxable location of personal property is referred to as its __________.

Address

Situs (correct)

Possession

Asset

An estimate of value, usually in writing, of an adequately described property, as of a given date, is termed a(n) __________.

Appraisal Signup and view all the answers

A jurisdiction's tax rate is determined by dividing the to be derived from property tax by the total of the taxing jurisdiction.

Budget, Total Assessed Value Signup and view all the answers

The type of value usually estimated by the assessor is __________ value.

Market Signup and view all the answers

The __________ reflects the ratio between the current tax bill and the property value.

Effective Tax Rate Signup and view all the answers

In order for a property to have value, it must have , , , and .

Utility, Scarcity, Demand, Transferability Signup and view all the answers

The use that generates the highest net return to a property over a reasonable time period is called its __________.

Highest and Best Use Signup and view all the answers

The principle of __________ states that maximum value of a neighborhood is attained when the uses of land are perfectly complementary.

Balance Signup and view all the answers

Which appraisal principle affirms that land cannot be valued on the basis of one use while improvements are valued on the basis of another?

Principle of Consistent Use Signup and view all the answers

Which of the following are the four tests that the appraiser must make in the analysis of the highest and best use?

Legally permissible, Physically possible, Financially feasible, Most productive Signup and view all the answers

__________ is a parcel of land and any structures or improvements that are permanently affixed thereto.

Real Estate Signup and view all the answers

Property is considered __________ if it can be moved without causing any damage or change to either the item of property or the structure to which it is attached.

Personal Property Signup and view all the answers

Assessment level times the tax rate equals the __________.

Effective Tax Rate Signup and view all the answers

__________ is the point at which the forces of supply and forces of demand meet.

Equilibrium Signup and view all the answers

Highest and Best Use analysis can be conducted under which two scenarios?

As if vacant, As if improved Signup and view all the answers

The typical life cycle of a neighborhood includes:

Growth, Stability, Decline, Revitalization Signup and view all the answers

What elements of the marketplace are most likely to contribute to a change in demand?

Consumer tastes and preferences, Consumer income, Price of related commodities, Consumer expectations, Price of the commodity Signup and view all the answers

Market value is defined as the most probable price of a property in terms of money, assuming:

All of the above Signup and view all the answers

__________ refers to the amount of goods that producers are willing to sell at a given price during a specified time period.

Supply Signup and view all the answers

Ownership of all legal rights to property is limited by government in four ways:

Taxation, Police power, Eminent domain, Escheat Signup and view all the answers

The seven steps of the appraisal process are as follows:

Definition of the problem, Scope of work, Preliminary survey and planning, Data collection and analysis, Highest and best use, Application of the data and the three approaches, Correlation/reconciliation to final estimate Signup and view all the answers

The basis for the adjustments in the sales comparison approach to value is the principle of:

Contribution Signup and view all the answers

__________ represents the value of a property for a specific use.

Value in use Signup and view all the answers

The principle of __________ states that value is created by the expected future benefits to be derived from the property.

Anticipation Signup and view all the answers

The six basic rights associated with property are as follows:

Sell, Lease, Use, Giveaway, Enter or leave, Refuse to do any of the above Signup and view all the answers

The ownership of all legal rights to property is known as __________.

Fee simple ownership Signup and view all the answers

Determining the identity of the property to be appraised is a part of the __________ step in the appraisal process.

First Signup and view all the answers

The three types of boundaries used to delineate neighborhoods are , , and __.

Physical, Economic, Social Signup and view all the answers

Under the step in the appraisal process that is termed data collection and analysis, specific data include:

Physical data, Sales data, Site data, Economic data Signup and view all the answers

The four forces that influence value and must be considered in neighborhood analysis are as follows:

Physical (environmental), Economic, Governmental, Social Signup and view all the answers

The typical life cycle of a neighborhood can be extended or shortened by changes in __________ factors.

Economic Signup and view all the answers

An area of complementary land uses in which all properties are similarly influenced by the four forces affecting value is termed a __________.

Neighborhood Signup and view all the answers

Municipal services, planning, and zoning are examples of __________ factors that affect neighborhoods.

Governmental Signup and view all the answers

What are the four basic elements of supply?

Cost of production, Price of other goods, Entrepreneur expectations, Number of sellers Signup and view all the answers

The underlying principle for the three approaches to appraisal is __________.

Substitution Signup and view all the answers

Study Notes

Property Taxes & Valuation

Property taxes are ad valorem, meaning they are based on the value of the property
The assessor is responsible for finding, listing, and valuing all taxable properties
The situs is the taxable location of personal property
An appraisal is a written estimate of value
A jurisdiction's tax rate is determined by dividing the budget by the total assesed value
Assessors typically value property using market value
The effective tax rate reflects the ratio of the property tax bill to the property's market value
In order for a property to have value, it must have utility, scarcity, demand, and transferability
The highest and best use of a property is the use that generates the greatest economic return over time

Appraisal Principles

The principle of balance states that maximum value is attained when land uses are complementary
The principle of consistent use states that land and improvements must be valued under the same highest and best use
The principle of contribution states that the value of a component is measured by how it contributes to the property's value

Real Estate Basics

Real estate is a parcel of land and any permanently affixed improvements
Personal property is movable and can be removed without damage to the property
Equilibrium is the point where the forces of supply and demand meet

Highest And Best Use

Highest and best use analysis is conducted under two scenarios: as if vacant and as if improved
The typical life cycle of a neighborhood includes growth, stability, decline, and revitalization

Market Factors

Demand is influenced by consumer tastes, preferences, income, expectations, and the price of related products
Market value is the most probable price a property would sell for under typical market conditions

Ownership Rights & Government Limits

The six basic property rights are: sell, lease, use, give away, enter or leave, and refuse to do any of the above
The fee simple ownership means complete ownership of all rights to a property
Government limits ownership through taxation, police power, eminent domain, and escheat

Appraisal Process

The seven steps of the appraisal process are: definition of the problem, scope of work, preliminary survey, data collection and analysis, highest and best use, application of approaches, and correlation/reconciliation
In the data collection and analysis step, specific data includes physical data, sales data, site data, and economic data

Neighborhood Analysis

Four forces influence neighborhood value: physical (environmental), economic, governmental, and social
Economic factors can significantly extend or shorten a neighborhood's life cycle
A neighborhood is an area of complementary land uses where properties are similarly influenced by the forces of value
Municipal services, planning, and zoning are examples of governmental factors that affect neighborhoods

Supply & Demand

The four basic elements of supply are: cost of production, price of other goods, entrepreneur expectations, and number of sellers

Valuation Approaches

The principle of substitution underlies all three appraisal approaches: sales comparison, cost, and income.

Additional Concepts

Anticipation is the principle that value is created by expected future benefits
Value in use represents a property's value for a specific use

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Description

Explore the fundamentals of property taxes and appraisal principles in this quiz. Understand key concepts such as ad valorem taxes, situs, market value, and the highest and best use of properties. Test your knowledge of how assessors determine property values and effective tax rates.