Appraisal Principles > Principles > Flashcards

Principles Flashcards

(49 cards)

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1
Q

What is an appraiser

A

Someone who determines a value of property
Opinion of value that is unbiased
Can value intangible, personal property, & real property
Perform assignment ethically & competently

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2
Q

Six Assignment Elements

A
  1. Client and other intended users
  2. Intended Use
  3. Purpose (type and definition)
  4. Effective Date of Opinion and Conclusion
  5. Subject of Assignment and relevant characteristics
  6. Assignment conditions
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3
Q

Scope of Work

A

The type of data and the extend of research & analysis

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4
Q

Competency

A
  1. Property type & the interest to be appraised
  2. The Market and market participation
  3. Geographic location
  4. Intended Use
  5. Laws, regulation, and client requirement to be applied
  6. Analytic methods and procedures
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5
Q

Competent appraisal practice

A

Working in an unfamiliar location must acquire an understanding of the market and property type to ensure credible assignment results

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6
Q

Valuation Process

A

Systematic procedure that an appraiser employs to answers the client’s question about the value of real property

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7
Q

Sufficient Diligence

A
  1. Be aware of & understand methods & techniques
  2. Not commit substantial error of omissions
  3. No make a series of errors
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8
Q

Suprasurface Rights

A

Air rights

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9
Q

Land

A

The solid surface of the earth, as distinguished from water

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10
Q

Appurtenance

A

Riparian and Littoral Rights (attached) to the land cand cannot be retained by the seller after property is sold

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11
Q

Littoral Rights (Water Rights)

A

Rights pertaining to properties abutting an ocean, lake, or pond (non-flowing water) with use of shoreline

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12
Q

Real Property

A

All rights, interest, and benefits relating to the ownership

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13
Q

Appurtenance

A

Something added or appended to a property that then becomes inherent to the property

Riparian and Littoral Rights

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14
Q

Subsurface Rights

A 
Rights to use and profit of underground portion of property
Rights to Extract 
Rights to Construct
Mineral Rights
Oil & Gas Rights
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15
Q

Land Rights

A

Government and Legal
Economic
Social
Environmental and Geographical

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16
Q

Bundle of Rights

A

Total range of ownership interests in real property

  1. Possession
  2. Transfer
  3. Lease
  4. Mortgage
  5. Improve
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17
Q

Partial Interests

A

Divided or undivided rights in real estate that represent less than whole

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18
Q

Real Estate

A

Land and anything permanently attached to

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19
Q

Four forces of market

A

Government and Legal
Economic
Social - i.e. environmental preservation, historic
preservation, private vs public development
Environmental and Geographical

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20
Q

Trade Fixtures

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A

Articles placed in or attached to rented buildings by a tenant to help carry out the trade or business of the tenant

21
Q

Estate

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A

Rights or interest in property

22
Q

Estate

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A

Rights or interest in property.

Two categories - Freehold or Leasehold

23
Q

Fixtures

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A

Article once personal property that becomes affixed in such a manner as to become real estate

24
Q

Freehold estate

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A

Fee simple estate or Life Estate

25
Life Estate
Rights of use, occupancy, and control limited to lifetime of a designated party
26
Life Tenant
Person who owns an estate in real property for their lifetime, lifetime of another, or an indefinite period limited by lifetime
27
Lease
Lessor - The landlord Lessee - The tenant Does not terminate upon death of lessor
28
Estate Tenancy
Definite or fixed period of time regardless of death of lessor. Early termination must be agreed upon by both parties. Lessee can sublet
29
Estate Tenancy for years
Definite or fixed period of time regardless of death of lessor. Early termination must be agreed upon by both parties. Lessee can sublet
30
Encumbrance
Claim or liability that affects or limits title to property Two types 1. Liens (Monetary) 2. Encumbrances (Use or Physical condition)
31
Easement by prescription
Rights to use another's land, which is established by exercising this right openly, hostilely, and continuously over a period of time
32
Adverse possesion
Involuntary transfer of property without owners consentt.
33
Adverse possesion
Involuntary transfer of property without owners consent.
34
Condemnation
Land taken for public use
35
Four Types of Deeds
General Warranty - Binds grantor and heirs to defend title conveyed to the grantee against claim Special Warranty - Grantor provides two covenants (1) Grantor received title to property (2) Grantor and heirs will defend errors and omission Bargain & Sale - Conveys but does not guarantee clear title, typically in foreclosure and tax sales Quitclaim - Grantor conveys interest held in property to grantee w/o warranty of title. Least protective
36
Elements of a deed
1. Identifies parties 2. Legally competent 3. Conveyance 4. Legal Description 5. Consideration (typically $) 6. Executed by written document 7. Acceptance by grantor and grantee
37
Reservation
Clause found in a legal instrument and conveyance that creates a new right of interest on behalf of grantor ( i.e. maintain oil rights)
38
Reservation
Clause found in a legal instrument and conveyance that creates a new right of interest on behalf of grantor ( i.e. maintain oil rights)
39
1 acre equals
43,560
40
Sole Ownership
Ownership in severalty (separate or set apart) Owns the property separate from anyone else
41
REIT
Real Estate Investment Trust - Trust the combines capital from many investors.( like a mutual fund) 90% of taxable income distributed to shareholders with at least 100 investors and no few than 5 investors can won more than 50% of the value during last half of tax year
42
Syndication
Private or public partnership that pools funds for the acquisition & development of RE projects
43
4 Types of Ownership
1. Tenancy in common - Two or more people with an undivided fractional interest. Each owner can buy, sell, mortgage or transfer there % w/o consent of others. Upon death shares pass to heirs ( or designee in will) 2. Joint Tenancy - Two or more owners with rights of survivorship. Upon death shares pass to other owners w/o passing to heirs. Must have language in agreement to assume transfer of ownership outside of owners 3. Tenancy in the Entirety - Married couples. Upon death passes to surviving spouse. Avoids probate 4. Community Property - Each spouse has 1/2 undivided and can be passed based on will
44
Separate Property
Can be passed by spouse w/o consent of other
45
Community Property
Must have consent of both spoused
46
Types of Ownership
Ownership in severalty Co-Ownership (4 Types) Trust
47
Trust
R/E can be transferred to another person ( called Fiduciary)
48
Types of Trust
1. Living Trust - While property owner is alive 2. Testamentary Trust - Established by will after death 3. Land Trust - Property conveyed to trustee
49
Four forces of value
Demand Utility Desire Transferability
Appraisal Principles
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