Session 3.1A: Key Concepts of Appraisal Quiz

What is the definition of appraisal?

• A legal document proving ownership of a property

• A professional estimate of the value of property at a given time for a specific purpose

• The sale price of a property in an open market

• The amount of tax due on a property

What does the accuracy of an appraisal depend on?

• The number of bids received at auction

• The availability of pertinent data and the competence of the appraiser

• The market trends in the area

• The condition of the local economy

Which of the following is NOT a purpose of appraisal?

• To estimate the value of a property

• To provide a basis for taxation

• To set the government's minimum selling price

• To increase the resale value of the property

When is an appraisal typically required?

• During routine maintenance

• For financing and credit purposes

• After a property is rented out

• When no changes are needed in ownership

Acquisition Cost (AC) refers to:

• The appraised value of a property

• The amount a property is expected to sell for

• The price paid to acquire a property, including associated expenses like taxes and fees

• The salvage value of the property at the end of its life

The Appraised Value (AV) of a property is best described as:

• The price determined at auction

• An estimate provided by an appraiser based on facts and interpretation of the property's condition

• The price of a property when first acquired

• The price a property can sell for in the current market

A property is considered Beyond Economic Repair when:

• The maintenance costs exceed 50% of its current market value

• It has been in use for over 20 years

• It is no longer functional

• Its appraisal value drops significantly

Condition Factor (CF) is used to adjust the appraisal based on:

• The cost of spare parts

• The market price of similar properties

• The actual condition of the property in comparison to an ideally functioning model

• The property's estimated remaining life

The Currency Fluctuation Factor (CFF) accounts for:

• Changes in the exchange rate of the peso from the time of acquisition to appraisal

• The physical deterioration of the property

• Changes in the price index of goods

• The frequency of repairs

Current Market Value (CMV) is the estimated price of a property:

• Based on its acquisition cost

• If sold on the open market

• When it was first purchased

• After accounting for depreciation