Biochemistry /Real Estate Notes PSI Exam Prep: Valuation and Market Analysis Part 1
Real Estate Notes PSI Exam Prep: Valuation and Market Analysis Part 1
This deck covers key concepts in real estate valuation and market analysis, including appraisal processes, market value principles, and property value determinants.
It is a formal opinion of value that a real estate have, based on supportable evidence, for a specific purpose, party, and property, as of a specific date.
An appraisal
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Key Terms
Term
Definition
It is a formal opinion of value that a real estate have, based on supportable evidence, for a specific purpose, party, and property, as of a specific date.
An appraisal
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It is the process of forming an opinion of a property’s value.
Valuation (formal appraisal)
Appraisers follow the Uniform Standards of Professional Appraisal Practice (USPAP) and use these steps:
State the problem; Identify data needed; Gather and analyze data; Determine highest and best use; Estimate the land value; Use one or more of the thre...
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Residential properties valued at ___________ or less are exempt from federal appraisal requirements.
$400,000
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Does FHA loans should be appraised?
Yes, by a state licensed appraiser
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Does VA loans should be appraised?
Yes, by a VA licensed appraiser
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| Term | Definition |
|---|---|
It is a formal opinion of value that a real estate have, based on supportable evidence, for a specific purpose, party, and property, as of a specific date. | An appraisal |
It is the process of forming an opinion of a property’s value. | Valuation (formal appraisal) |
Appraisers follow the Uniform Standards of Professional Appraisal Practice (USPAP) and use these steps: | State the problem; Identify data needed; Gather and analyze data; Determine highest and best use; Estimate the land value; Use one or more of the three approaches to valuation; Reconcile values to determine the final appraised value |
Residential properties valued at ___________ or less are exempt from federal appraisal requirements. | $400,000 |
Does FHA loans should be appraised? | Yes, by a state licensed appraiser |
Does VA loans should be appraised? | Yes, by a VA licensed appraiser |
What AIR stands for? | Appraiser Independence Requirements of 2010 |
What are the 3 requirements of AIR appraisers? | State Certified; Local Market knowledge; Qualify to appraise |
It is the most probable price a property will sell for in an open market if neither the buyer nor the seller is under duress. | Market value |
It is a property’s objective worth and may not equal price or cost. | Value |
It is the amount to recreate that property if it disappeared off the face of the earth today. | Cost |
It is the amount a buyer paid for a property and the seller accepted. | Market price |
It refers to a property’s legal and feasible use that would be the most profitable. | The principle of highest and best use |
How popular or desirable a property is. | Demand |
The property’s function | Utility |
Relates to market supply | Scarcity |
The ease with which another person can purchase the property; a property with a title defect may suffer a loss of value because of the difficulty of being able to transfer title to another. | Transferability |
What a property is worth to the person using it. | Value in use |
What the local taxing authority thinks a property is worth. | Assessed value |
Price at which the property can be loaned on or sold for at a foreclosure sale. | Mortgage value |
Cost to replace or rebuild a property. | Insurance value |
The return on investment a property may provide. | Investment Value: |
A property’s value is determined in part by how well it conforms to its surrounding area (how similar it is to other properties in the neighborhood). | The principle of conformity |
A property’s value is determined in part based on what else is available. | The principle of competition |
A reasonable person will not pay more for a property if a comparable one can be had for less. | The principle of substitution |