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Questions and Answers
What is the premise that an informed buyer will not pay more for a property than they would for an acceptable comparable property known as?
Which of the following is NOT considered one of the broad forces of value in real estate (P-E-G-S)?
In a buyer's market, what is typically true?
Joey has been trying to sell his home for six months. On more than one occasion, prospective buyers have stated they would buy the home if it wasn't for the neighborhood with less attractive properties. Joey's home is affected by the change. This situation is an example of:
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Danni bought her home for $120,000, spent $20,000 on an in-ground pool, and sold it for $130,000. This scenario demonstrates:
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What does determining a value opinion for a defined type of value focus on?
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What are the three possible effective dates for an appraisal?
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Who are considered the appraiser's peers?
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What is considered general data in real estate?
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Which of the following sets of characteristics represent the four characteristics of value?
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appraisal peers are
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Study Notes
Real Estate Appraisal
- The principle that an informed buyer will not pay more for a property than they would for an acceptable comparable property is known as the substitution principle.
Broad Forces of Value
- The four broad forces of value are P-E-G-S, which stands for Physical, Economic, Governmental, and Social.
Market Conditions
- In a buyer's market, there are more homes than buyers, and property values tend to be lower.
- In a seller's market, there are more buyers than homes, and property values tend to be higher.
Principles of Value
- Progression occurs when the value of a lesser property is increased by its proximity to a higher-value property.
- Regression occurs when the value of a higher-value property is decreased by its proximity to a lower-value property.
- The law of diminishing returns states that as the quantity of a good or service increases, the marginal value of each additional unit decreases.
Appraisal Process
- The effective date of an appraisal can be a current date, a retrospective date, or a prospective date.
- The purpose of an appraisal is to determine a value opinion for a defined type of value.
- Appraiser's peers are other appraisers with expertise and competency in a similar type of assignment.
Data Sources
- Secondary data sources include information gathered from sources such as national surveys, landlords, and participants to transactions.
- General data includes information about the market, such as plot maps, restrictive deed conditions, topography, and utility providers.
Characteristics of Value
- The four characteristics of value are demand, utility, supply, and transferability.
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Description
Test your knowledge on property value and market analysis in real estate with this Chapter 1 quiz. Questions cover topics such as the premise of an informed buyer, forces affecting property value, and market conditions. Challenge yourself with +3 bonus questions included!
