Exam (elaborations)
Texas Real Estate Principles II Course (Combines Glossary Terms From Section Handbooks) - Q&A
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Texas Real Estate Principles II Course (Combines Glossary Terms From Section Handbooks) - Q&A
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Texas Real Estate Principles II Course (CombinesGlossary Terms From Section Handbooks) - Q&A
The Appraisal Foundation (TAF) Right Ans - A national organization
comprised of representatives of major appraisal organizations and those of
related industries
Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
Right Ans - Requires that federally related appraisals be conducted by a state-
licensed or certified appraiser
Uniform Standards of Professional Appraisal Practice (USPAP) Right Ans -
The generally accepted standards for professional appraisal practice in North
America, which describes the way in which an appraisal is communicated
Federally related transactions Right Ans - Transactions for sale, lease,
purchase, investment, refinancing, or exchange of real property in which a
federal financial agency or regulatory authority is involved
Appraisal Right Ans - An estimate of value as of a specific date and for a
specific use; may only be performed by a licensed, certified appraiser
Comparative market analysis (CMA) Right Ans - An estimate of market
value based on recent comparable sales for similar properties
Broker price opinion (BPO) Right Ans - An opinion of value prepared by a
real estate licensee; similar to a comparative market analysis, but not as
detailed; a lender or relocation company generally orders the BPO
Market value Right Ans - the price at which a buyer and seller would agree
to go through with a transaction under usual market conditions
Assessed value Right Ans - What the local taxing authority thinks a
property is worth (the value a property's tax rate is set by)
Cost Right Ans - What it would cost to recreate a property
,Price Right Ans - What a buyer has paid for a property and what the seller
has accepted
Value Right Ans - What a property is worth
Demand Right Ans - How many willing and able buyers are in the current
market
Utility Right Ans - How able a property is to satisfy a buyer's needs
Scarcity Right Ans - A lack of supply
Transferability Right Ans - The ease with which the seller can convey the
property
Principle of anticipation Right Ans - The value of property today is the
current value of the total anticipated future benefits
Principle of competition Right Ans - The more similar properties that are
on the market, the lower the price will be driven
Principle of conformity Right Ans - Value is created and maintained when
the characteristics of a property conform to the demands of the market
Principle of contribution Right Ans - A change in a property impacts it
value as a whole
Principle of highest and best use Right Ans - The most profitable use of the
property that is both legal (conforms to zoning) and economically feasible
(won't cost more than the increase in value)
Principle of plottage Right Ans - The joining or assemblage of two
neighboring land parcels increases the property value
Principle of regression Right Ans - The value a higher-quality property
decreases by being near a lower-quality property
Principle of progression Right Ans - The value a lower-quality property
increases by being near a higher-quality property
, Principle of substitution Right Ans - A property's value is determined by
what it would cost to purchase a similar substitute property
Sales comparison approach Right Ans - An approach to determining value
using similar recent sales data
Cost approach Right Ans - An appraisal valuation method based on the cost
to replace or reproduce a property
Depreciation Right Ans - A loss in value
Physical depreciation Right Ans - A loss in value caused by deterioration in
physical condition
Functional obsolescence Right Ans - A loss in value caused by defects in
design, such as a poor floor plan or atypical or inconvenient sizes/types of
rooms
Income approach Right Ans - An approach to determining value used for
investment properties based on the income it will produce
Gross rent multiplier (GRM) Right Ans - A figure used as a multiplier of
gross monthly rent of a property; used to estimate property value for
properties of one to four units
Gross income multiplier (GIM) Right Ans - A figure used as a multiplier of
gross annual income of a property; used to estimate property value for
properties of five-plus units
Adjustable-rate mortgage (ARM) Right Ans - A loan where the rate is
adjusted, usually annually, based on the behavior of the economic index with
which it's associated (e.g., the consumer price index)
Amortized loan Right Ans - Any loan in which periodic payments go toward
both principal and interest; in a typical amortized loan, most of the initial
payments go toward interest, with ever-increasing amounts going toward the
principal (the loan balance), until the loan is paid off
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