An appraisal is:
a. a person who values property in a competent, objective, and impartial manner.
b. a biased estimation of value.
c. the work performed by an appraiser.
d. a written statement depicting the appraiser's opinion
(c) An appraisal is an unbiased estimate or opinion of a specific property's value on a given date. The work done by an appraiser is called appraisal. An appraiser is a person who is expected to value property in a competent, objective, and impartial manner. Page 2
Why do lenders usually use the services of an appraiser?
a. To ensure that the property value is high enough to cover the loan amount
b. Because of a legal contract between The Appraisal Foundation and FNMA
c. For income tax reasons
d. None of the above
(a) Lenders need to be sure that the value of the real estate being used as collateral for a loan is enough to cover the amount of the loan and thus protect investors. Page 3
A prospective appraisal looks at the:
a. amount of money paid for a property
b. value of a property as if additional modifications ad already been completed
c. value of a property at a point of time in the past
d. value of a property at a future point in time
(d) A prospective appraisal looks at the value of a property at a future point in time. For example, a lender who is providing a construction loan might ask an appraiser to determine if houses should be built for sale in a particular area. Part of the appraiser's work would be to value the houses oas if they were finished. Page 4
The money, labor, and material are the ________ to build a property:
(b) Cost represents expenses in money, labor, material, or sacrifices in acquiring or producing something. Remember that the cost or price of a property is not always the same as its value. Page 5
Who or what created The Appraisal Foundation?
a. The Appraisal Qualifications Board
b. The eight U.S.0based appraisal assocations that had helped create USPAP
c. The Appraisal Standards Board
(b) The eight U.S.-based appraisal associations that had helped create USPAP founded a private, non-profit organization called The Appraisal Foundation (TAF). The Appraisal Foundation includes two independent boards: the Appraiser Qualifications Board (AQB) and the Appraiser Standards Board (ASB). Page 7
Appraisers' overvaluation of real estate helped cause the:
a. Great Depression
b. Savings and Loan Crisis
c. Tax Reform Act of 1986
d. change to stricter licensing requirements in 2008
(b) In examining the causes and consequences of the S&L Loan Crisis, many of the loans that defaulted were based on inflated real estate values. In some cases, this overvaluation was due to appraiser incompetence or as result of appraisers yielding to pressure from lenders to manufacture values high enough to make the loan work. Page 8
The mission of the Appraisal Subcommittee is to:
a. develop, publish, interpret, and amend USPAP
b. establish the iminimum education, experience, and examination requirements for appraisers
c. ensure that real estate appraisers are sufficiently trained and tested
d. promote and maintain a high level of public trsut and confidence in professional appraisal practice
(c) The appraisal Subcommittee's mission is to ensure that real estate appraisers are sufficiently trained and tested since real estate appraisers play such an important role in the economy. Page 10
Which of the following is not a license level?
a. Trainee License
b. Residential License
c. Certified Trainee
d. Certified Residential
(c) Most states have the following four levels of real estate appraiser licensing: Training License, Residential License, Certified Residential, and Certified General. No states have a "Certified Trainee" level. Page 11
Under the current requirements, how many house of experience are needed to obtain a trainee license?
a. 2,000 hours
b. 3,000 hours
c. At least two years
d. No experience is required
(d) Although each state my vary somewhat in what is required for different license levels, no state that has a trainee license requires experience in order to obtain that license. Pages 11 & 12
Starting on January 1, 2008, a bachelor's degree is required to obtain which of the following license levels?
a. Trainee License
b. Residential License
c. Certified Residential
d. Certified General
(d) Starting January 1, 2008, 300 hours of education along with a bachelor's degree or 30 units in specified college courses is the required education for the Certified General level. Page 13