Aceable Agent Real Estate Principals 2 Exam 2023/2024
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AceableAgent Real Estate Principals 2
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AceableAgent Real Estate Principals 2
Aceable Agent Real Estate Principals 2 Exam 2023/2024
General Data - ANSWER-Is information about a property's location. This could include the city, region, and neighborhood in which the poperty uis situated.
Specific Data - ANSWER-Is information regarding the property itself.
Principle if...
Aceable Agent Real Estate Principals 2
Exam 2023/2024
General Data - ANSWER-Is information about a property's location. This could include the city, region,
and neighborhood in which the poperty uis situated.
Specific Data - ANSWER-Is information regarding the property itself.
Principle if Anticipation - ANSWER-The idea that the present value of a property is affected by the
ANTICIPATED income or utility that property will give its property owner.
Principle of Contribution - ANSWER-The idea that a property's overall value is made up of the combined
value of each of its parts. But the CONTRIBUTORY value of an item is not always equal to the price of
that item.
Principle of Substitution - ANSWER-States that the value of something is affected by the cost of getting a
similar (substitute) item elsewhere.
Principle of Change - ANSWER-Reminds us that the the condition of a property, the desirability of its
location, and the market in which it exists can always change, which could affect the value of the
property.
Principles of Supply and Demand - ANSWER-States that when supply is low and demand is high, prices
will increase. And if supply is plentiful and demand is low? Prices will then drop.
Principle of Conformity - ANSWER-Claims that maximum value is realized when land use is in harmony
with surrounding standards.
Principles of Regression and Progression - ANSWER-States that the presence of higher value or lower
homes near the subject property can change its value.
,DUST - ANSWER-Is a acronym to help us remember the four characteristics that make real estate
valuable: Demand, Utility, Scarcity and Transferability.
Demand - ANSWER-If there are multiple buyers interested in a property, the property with increase in
value.
Utility - ANSWER-Properties need to be useful or serve some kind of purpose in order to have value to a
buyer. An empty lot, for example, may not look like it has much utility, but to a buyer who wants to build
a custom home in that area, it's quite useful.
Scarcity - ANSWER-If the amount of housing in an area is low in supply, it grows in value.
Transferability - ANSWER-Whether it's government rules or a title issue, anything that limits the
transferability of real estate makes it less valuable.
Appraisal Report - ANSWER-A REPORT from a licensed appraiser that's sums up a property's market
value based on collected data. The lender usually asks for this during the mortgage origination process.*
The Buyer - ANSWER-The appraisal report is usually paid by...
The Lender - ANSWER-The appraiser that will complete the appraisal report is usually chosen by...
*After a buyers offer is accepted and the LENDER is trying to give the buyer final approval.
Appraisal Review - ANSWER-To double-check the accuracy of the appraisal. Conducted by another
professional (either an independent or in-house specialist).
Market Value - ANSWER-Is the price for which a property will sell if offered openly under normal
conditions. (All about the present)
Depreciation - ANSWER-The lose of value because of obsolescence (becoming obsolete) or deterioration.
, Effective Age - ANSWER-An estimated age that is influenced by the updates and quality of maintenance
of the property.
Comparative Market Analysis (CMA) - ANSWER-Uses information regarding recently sold homes in the
area to arrive at an indication of what the fair market value of a similar property would be.
Sales Comparison Approach (or Direct Sales Comparison) - ANSWER-An appraiser collects data from the
previous sales of similar properties in the area with similar features: amenities, square footage, number
of rooms, and location.
*Also known as Market Data Approach.
*An appraiser gathers at least three comparison sales, or comparables.
*Used mostly for owner-occupied residential property and vacant land.
Cost Approach - ANSWER-An appraiser needs to estimate the current costs of reconstructing the
property with improvements (the replacement cost). This estimate is added to the value of the land, and
then depreciation of the home since it was first built is subtracted.
*Used mostly for new construction.
Quantity Survey Method - ANSWER-The appraiser tallies the value of everything that goes into the cost.
*Method used for determining value within the cost approach.
Unit-In-Place Method - ANSWER-Takes direct and indirect costs into account, combines them into a
simplified cost for a building component.
*Method used for determining value within the cost approach.
Square Foot Method - ANSWER-The appraiser estimates a cost per square foot for that specific type of
building and multiplies it by the square footage of the structure.
*Method used for determining value within the cost approach.
Income Approach - ANSWER-Determines the amount of income the property could make over a year and
references the sale of other rental properties in the area.
*Used mostly for commercial properties.
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