Chapter 5 - Basic Appraisal Concepts

Question 1

Modern definitions of the word “appraisal” have replaced the word estimate with ________.

An appraisal is defined as: The act or process of developing an _________ of value.

Answer 1

opinion

Question 2

“An identified parcel or tract of land, including improvements, if any” is the definition of

Answer 2

Real Estate

Question 3

An appraisal is best described as

• an opinion of value
• the estimated cost to replace the property
• a guarantee of the true worth of the property
• an estimate of value

Answer 3

An opinion of value

Question 4

Land is a long-lasting asset and has a long economic life as compared to other assets. What characteristic of land does this refer to?

• unique location
• immobility
• durability
• finite supply

Answer 4

durability

Question 5

Which of these items is LEAST likely to be considered part of the real estate?

• rose bushes
• central air conditioner
• chandelier
• window air conditioner

Answer 5

Window Air Conditioner

Question 6

“The interests, benefits, and rights inherent in the ownership of real estate” is the definition of

• real estate
• real property

Answer 6

Real Property

Question 7

True or False? By exercising one of his/her bundle of rights, a property owner may be giving up another one of those rights from the bundle.

Answer 7

True

Question 8

The Fifth Amendment to the U.S. Constitution guarantees payment of ________ for the taking of private property.

• just compensation
• top dollar
• an equally desirable substitute property
• time and money

Answer 8

Just compensation

Question 9

True or False? When people buy and sell land and buildings in the marketplace, they are actually buying and selling real property rights.

Answer 9

True

Question 10

A property owner hires a contractor to construct an addition on his home, but does not pay the contractor when the work is completed. The contractor may place a __________ on the property to recover the debt.

Answer 10

Mechanic’s lien

Question 11

Private restrictions on property rights include all of the following EXCEPT

• mortgages
• escheat
• mechanic’s liens
• deed restrictions

Answer 11

Escheat

Question 12

Which of the following would likely NOT be considered personal property?

• area rug
• washing machine
• wall to wall carpet
• drapes

Answer 12

Wall to wall carpet

Question 13

The right of government that gives the state titular ownership of a property when its owner dies without a will or any ascertainable heirs is call ______?

Answer 13

Escheat

Question 14

Which is NOT a characteristic of land?

• durability
• mobility
• unique location
• finite supply

Answer 14

Mobility

Question 15

“The interests, benefits, and rights, inherent in the ownership of real estate” is the definition of

Answer 15

Real Property

Question 16

Trade fixtures are only found in ___________ property.

Answer 16

Rented

Question 17

Public limitations on private property rights include all of the following EXCEPT

• CC&Rs
• taxation
• eminent domain
• escheat

Answer 17

CC&R’s

Question 18

“A pledge of a described property interest as collateral or security for the repayment of a loan under certain terms and conditions” is the definition of

Answer 18

Mortgage

Question 19

“The right of government, through which property is regulated, to protect public safety, health, morals, and general welfare” is the definition of

Answer 19

Police Power

Question 20

__________ rights are considered to be vertical rights.

Answer 20

Air

Question 21

Which is NOT a public restriction of private property rights?

• taxation
• easement
• police power
• escheat

Answer 21

Easement

Question 22

“A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be sold to landowners in another location” are called ___________________ rights.

Answer 22

Transferable Development

Question 23

Another name for trade fixture is

Answer 23

Chattel Fixture

Question 24

The right of government to take private property for public use upon the payment of just compensation is called

Answer 24

Eminent Domain

Question 25

Police power would include all of the following EXCEPT * building codes * zoning * taxation * fire codes

Answer 25

Taxation

Question 26

"The right of government, through which property is regulated, to protect public safety, health, morals, and general welfare” is the definition of

Answer 26

Police Power

Question 27

The public restriction on property rights that allows the government to place a lien on a property is

Answer 27

Taxation

Question 28

Physical land and appurtenances attached to the land is the definition of * real estate * real property

Answer 28

Real Estate

Question 29

The right of government to take private property for public use upon the payment of just compensation is called

Answer 29

Eminent Domain

Question 30

Public limitations on private property rights include all of the following EXCEPT * CC&Rs * taxation * eminent domain * escheat

Answer 30

CC&R's

Question 31

"a valuation service that is provided by an appraiser as a consequence of an agreement with a client." is a definition of \_\_\_\_\_\_\_\_\_\_?

Answer 31

Appraisal

Question 32

The process of eminent domain is administered through * escheat * condemnation * just compensation * police power

Answer 32

Condemnation

Question 33

"Land and all things that are a natural part of the land, e.g., trees and minerals, as well as things that are attached to the land by people, e.g., buildings and site improvements. All permanent building attachments such as plumbing, heating and cooling systems; electrical wiring; and built-in items like elevators or lifts " is a definition of?

Answer 33

Real Estate

Question 34

the physical thing, tangible thing that we can see and touch it is: * real estate * real property

Answer 34

real estate

Question 35

Name 4 important characteristics of land:

Answer 35

* Unique location * Immobility * Durability * Finite Supply

Question 36

*The rights to the use and profits of the underground portion of a designated property; usually refers to the right to extract minerals or the right to construct and maintain tunnels, subways, subcellars, pipelines, sewers - is a definition of*

Answer 36

Subsurface Rights

Question 37

*“The right to undisturbed use and control of designated air space above a specific land area within stated elevations.” is a definition of?*

Answer 37

Air Rights *Air rights may be acquired to construct a building above the land or building of another or to protect the light and air of an existing or proposed structure on an adjoining lot.*

Question 38

**What are Transferable development rights?**

Answer 38

*A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be conveyed to landowners in another location or leased for a period of years to then revert back to the original owner*

Question 39

*"An article that was once personal property but has since been installed or attached to the land or building in a rather permanent manner so that it is regarded in law as part of the real estate." is a definition of?*

Answer 39

Fixture (don't mistake with Trade Fixture!)

Question 40

What is Personal Property?

Answer 40

Personal property is generally something that is portable. We can pick it up (or load it on the back of a truck or trailer) and take it with us. *Any tangible or intangible article that is subject to ownership and not classified as real property, including identifiable tangible objects that are considered by the general public as being “personal” such as furnishings, artwork, antiques, gems, and jewelry, collectibles, machinery and equipment; and intangible property that is created and stored electronically such as plans for installation art, choreography emails, or designs for digital tokens. (USPAP, 2020-2021 ed.)*

Question 41

The appraisal of **personal** property is covered in STANDARDS ? and ? of USPAP.

Answer 41

7 & 8

Question 42

What are Trade Fixtures?

Answer 42

*Articles placed in or attached to rented buildings by a tenant to help carry out the trade or business of the tenant are generally regarded as trade fixtures. For example, a tenant's shelves used to display merchandise are trade fixtures and **retain the character of personal property,** as opposed to all other fixtures that were but are no longer personal property when they are attached to and become part of the real estate. Despite the consensus on the concept of trade fixtures in general, applicable law and custom govern when a specific item is a trade fixture in a particular assignment. Also called **chattel fixture**.*

Question 43

*“An interest or interests in real estate. ” is a definition of*

Answer 43

Real property

Question 44

**Real property** is what we appraise. When you appraise real property, it is vital that you research and understand what particular property _______ (i.e., the property interest) you are appraising. Then you need to identify the property interest being appraised in your appraisal report.

Answer 44

rights

Question 45

The bundle of ________ includes the _________ to: * Use the property * Sell it * Lease it * Give it away * Transfer it by will or trust * Choose not to do anything

Answer 45

rights