Practice Exam #2

Quiz #2: Agents and the New Appraisal Process

In this new era of real estate, today’s agent must know more about appraisers and the appraisal process, and know how to turn low appraisals into closed sales. Take this short quiz to find out how well you measure up on the new appraisal process.

Q. Agents and appraisers ______ the market, they do not _______ the market.

Estimate – Analyze

Study – Report

Report – Create

Use – Create

Q. When most people ask about an appraisal they only want to know one answer:

The total square footage

The final value

The number of bedrooms and baths

How many comparables were used in the report

Q. The circumstances of comparable sales often play a key role in the valuation process and are one of the reasons why local knowledge is imperative:

False

True

Q. Being a professional real estate practitioner requires all the following, Except:

Explaining to sellers that your value opinion is exactly what their house will sell for

Forming opinions

The knowledge to research and analyze large amounts of information

Estimating property values

Q. Making a determination of value requires:

The ability to investigate and evaluate large amounts of information and a fundamental knowledge of local real estate

The ability to calculate the estimated gross income and depreciated value of the subject property

Knowing how to calculate the formula for the effective age of the land

A broker’s or an appraisal license

Q. The MLS is one of the most powerful databases in the world, and is:

Used exclusively by Realtor® members

Regulated by each local MLS association and the national MLS standards committee

Created one sales at a time, by each listing agent

Available to any paid subscriber

Q. An appraisal is a series of steps that leads to:

A narrow value range

A value conclusion

An absolute guaranteed value, generally valid for three months

An exact, absolute determination of value

Q. Whenever there is an appraisal that comes in below the contract price:

The contract is automatically voided

The appraiser must complete a new appraisal using different comparables

The outcome depends on the agents, buyers and sellers, and the lender

All parties to the contract must meet and renegotiate

Q. When three brokers (or appraisers) look at the same house:

They will each develop their own personal opinion of value

They will all calculate the same square footage

They will all view the design and market appeal the same

They will all have the same opinion of value

Q. USPAP defines an appraisal as:

An act or process of developing an opinion of value

An opinion of value for a specific range of dates

An unbiased value based on anticipated property returns and sales closed within one year

The professional valuation of personal and/or business property based on current listings

Q. At some point __________can become a deterrent rather than a benefit to value:

Location

Square footage

Condition

Age

Q. Property valuation is:

An art

Based on a number that is definable, extractable, and absolute

A science

Available in most public records

Q. What is NAR’s new “ultimate information resource” set to be released in 2010, which will provide access to tax and assessment data; property data; neighborhood, demographic and psychographic information; maps, trends and reports; and zoning, permits, environmental, neighborhoods, and school districts - and be exclusive to members of NAR?

The ABR - Automated Broker’s Resource

The RPR - Realtor’s Property Resource

The RPID - Realtor’s Property Information Database

The UPR - Ultimate Property Resource

Q. Sometimes after you lose a listing, and then find out it is listed for a much higher price than you recommended:

It’s satisfying to watch the listing expire and then have the price reduced to the value you originally suggested, or lower

It confirms that value is based on an opinion

It helps you to better understand the values in that neighborhood

It makes you rethink your CMA process and calculations

Q. After the buyer’s agent gets notified the appraisal is “at or above” the sales price:

That’s generally the end of the appraisal discussion

They thoroughly examine the report to verify its accuracy

Buyers meet with the lender to review the appraisal

They briefly scan the report to check which comparables were used

Q. At some point in every loan transaction:

The appraiser and underwriter set the final purchase price

You find out if the appraisal is a “go” or a “no”

The appraiser decides if the transaction is fair and should proceed

Buyers and sellers meet to discuss the appraised value

Q.What is the first line most people look at in an appraisal report?

The legal names listed in the report to verify the information is correct

The appraiser’s signature and credentials

The addresses of the comparables and the pictures

The final value

Q. Residential property values are typically based on:

The principle of anticipation

The science of real estate

Local tax assessment

The principle of substitution

Q. One method of determining a proper per-item adjustment is by the use of:

Paired Sales Analysis

Appraisers experience

The “Comp Adjustment” book

Kelly Blue Book of Construction Costs

Q. Regardless of who provides it or where it comes from, once any details are reported in the “closed” or “sold” information within MLS:

All of the above

It is instantly viewed as fact

It is used by agents, appraisers, insurance underwriters, assessors, and by many others in a wide variety of functions

It is considered part of “the most trusted source of real estate information in the world”

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