300 Review Questions - Chapter 1 PDF

1\. The definition of mass appraisal is the systematic appraisal of groups of properties, as of a given date, using standardized procedures and \_\_\_\_\_\_\_\_\_\_\_. - a\) Statistical testing - b\) Market analysis - c\) Financial modeling - d\) Historical data Answer: a) Statistical t...

1\. The definition of mass appraisal is the systematic appraisal of groups of properties, as of a given date, using standardized procedures and \_\_\_\_\_\_\_\_\_\_\_. - a\) Statistical testing - b\) Market analysis - c\) Financial modeling - d\) Historical data Answer: a) Statistical testing\ Explanation: Mass appraisal involves standardized procedures and statistical testing to ensure uniformity across properties. 2\. Building costs, economic conditions, and interest rates are \_\_\_\_\_\_\_ factors. - a\) Demand - b\) Supply - c\) Market - d\) Economic Answer: b) Supply\ Explanation: These factors directly influence the supply of properties. 3\. Location, condition, and construction quality are \_\_\_\_\_\_\_ factors. - a\) Market - b\) Supply - c\) Demand - d\) Property Answer: c) Demand\ Explanation: These factors affect how much demand a property will attract. 4\. The basic structure of a model for the sales comparison approach is \_\_\_\_\_\_\_\_\_\_. - a\) MV = LV + BV - b\) MVs = Sc + ADie - c\) NOI/Cap rate - d\) Cost x Market Factor Answer: b) MVs = Sc + ADie\ Explanation: This formula applies to the sales comparison approach. 5\. \_\_\_\_\_\_\_\_\_\_\_ involves the determination of what data to include in the model and in what format. - a\) Model calibration - b\) Model implementation - c\) Model specification - d\) Data standardization Answer: c) Model specification\ Explanation: Model specification is about deciding what data is relevant and in what format to use it. 6\. Determining the rates used in a model, such as adjusting formulas, tables, or schedules to the current market is known as \_\_\_\_\_\_\_\_\_\_\_. - a\) Model calibration - b\) Data adjustment - c\) Model validation - d\) Market analysis Answer: a) Model calibration\ Explanation: Model calibration involves fine-tuning the model to reflect the current market accurately. 7\. MV = LV + BV is the basic model structure for the \_\_\_\_\_\_\_\_ approach. - a\) Sales comparison - b\) Income - c\) Cost - d\) Market Answer: c) Cost\ Explanation: This formula applies to the cost approach, where market value equals land value plus building value. 8\. Net operating incomes and capitalization rates are requirements for the \_\_\_\_\_\_\_\_\_\_ model. - a\) Cost - b\) Sales comparison - c\) Income - d\) Hybrid Answer: c) Income\ Explanation: The income model relies on net operating income and capitalization rates. 9\. Property valuation models seek to explain or predict the \_\_\_\_\_\_\_\_\_ of properties from real estate sales and related data. - a\) Cost - b\) Income - c\) Market value - d\) Depreciation Answer: c) Market value\ Explanation: Valuation models are designed to predict or explain the market value based on sales data. 10\. The hybrid (additive/multiplicative) cost model would be \_\_\_\_\_\_\_\_\_\_\_. - a\) MV = LV + BV - b\) MV = GO x Pt x LSIZE + IPL x BSIZE - c\) MV = NOI / Cap Rate - d\) MVs = Sc + ADie Answer: b) MV = GO x Pt x LSIZE + IPL x BSIZE\ Explanation: This is the hybrid cost model, which is a combination of additive and multiplicative structures. 11\. The \_\_\_\_\_\_\_\_\_\_ is acceptable when it meets or exceeds the expectations of parties who are regularly intended users for similar assignments; and what an appraiser\'s peers\' actions would be in performing the same or a similar assignment. - a\) Scope of work - b\) Model specification - c\) Market analysis - d\) Income approach Answer: a) Scope of work\ Explanation: The scope of work is acceptable when it meets or exceeds the expectations of intended users and appraiser peers. 12\. How many steps are in the general appraisal process? - a\) 3 - b\) 5 - c\) 7 - d\) 9 Answer: c) 7\ Explanation: The general appraisal process typically involves seven steps. 13\. An appraiser establishes the date of value opinion, defines the value to be developed, and identifies the property rights to be appraised. This is part of the \_\_\_\_\_\_\_\_\_\_. - a\) Scope of work - b\) Defining the valuation problem - c\) Model calibration - d\) Market analysis Answer: b) Defining the valuation problem\ Explanation: These activities are part of defining the valuation problem. 14\. The scope of work rule has three parts and they are: - a\) Identify the problem, review the data, complete the analysis - b\) Identify the problem, determine and perform the scope of work, disclose the scope of work - c\) Analyze the market, develop the model, report the results - d\) Review sales data, define the property, report the appraisal Answer: b) Identify the problem, determine and perform the scope of work, disclose the scope of work\ Explanation: The scope of work rule has three parts, starting with identifying the problem.