Appraisers must always adjust the value of the "comparable" property, not the "subject" property. If the comparable property has an extra feature, such as a pool or extra bedroom, they need to estimate its worth and subtract it from the overall value.


These are questions that the above text answers:

1. What is the role of appraisers in real estate?
2. When adjusting property values, which property do appraisers focus on?
3. What should appraisers do if the comparable property has additional features?
4. How do appraisers estimate the worth of extra features in a comparable property?
5. What is the significance of adjusting the value of the comparable property?
6. What factors do appraisers consider when subtracting the worth of extra features from the overall value?
7. What is the purpose of adjusting property values in real estate appraisal?
9. What is the difference between the "comparable" property and the "subject" property in real estate appraisal?
10. How do appraisers determine the overall value of a property after adjusting for extra features in the comparable property?

An appraiser adjusts the value of a "comparable property" (a property similar to the one being valued) in the direction of the "subject property" (the property being valued). If the subject property has an added feature, the value of that feature in the marketplace will be added to the comparable property, making the two more alike.


These are questions that the above text answers:

1. What is a comparable property in real estate appraisal?
2. What is the subject property in real estate appraisal?
3. How does an appraiser adjust the value of a comparable property?
4. What is the purpose of adjusting the value of a comparable property?
5. What is the marketplace value of an added feature in real estate?
7. What is the role of an appraiser in real estate valuation?
8. What is the significance of adjusting the value of a comparable property to match the subject property?
9. How does an appraiser determine the value of an added feature in the marketplace?
10. Why is it important for a comparable property to be adjusted to match the subject property in real estate appraisal?

The value of a residence in an owner-occupied subdivision is not based on the amount of income it generates. Instead, it should be appraised using an approach other than the "income approach", which is only suitable for "income-generating rental properties".


These are questions that the above text answers:

1. What is the recommended approach for appraising an owner-occupied property in a residential subdivision?
2. What type of properties is the income approach suitable for?
4. What is the alternative to the income approach for appraising owner-occupied properties?
5. How should the value of a residence in an owner-occupied subdivision be assessed?
6. What is the purpose of the income approach in real estate appraisal?
8. What factors should be considered when appraising an owner-occupied property?
10. What approach should be used to appraise income-generating rental properties?

The "principle of substitution" states that the value of a property is the same as what it would cost to buy a similar one on the open market. The "principle of contribution" means that improvements to a property only add to its value as much as they cost. The "principle of anticipation" suggests that the value of a property today is affected by what is expected to happen in the future. Finally, the "principle of balance" is the idea that a property is worth the most when there is the right amount of land and improvements.


These are questions that the above text answers:

1. What is the principle of substitution in property valuation?
2. How does the principle of contribution relate to property value?
3. What does the principle of anticipation suggest about property value?
4. What is the principle of balance in real estate?
9. What factors are considered in the principle of substitution?
10. How do improvements to a property relate to the principle of contribution?

The property's "highest and best use" is when it is used in a way that creates the most value and income.


These are questions that the above text answers:

1. What is the definition of "highest and best use" in real estate?
2. What does it mean for a property to have a "highest and best use"?
3. What factors determine the "highest and best use" of a property?
4. How does the concept of "highest and best use" relate to real estate appraisal?
5. What is the goal of determining the "highest and best use" of a property?
6. How does the "highest and best use" of a property impact its value?
7. Can the "highest and best use" of a property change over time?
8. Is the "highest and best use" of a property subjective or objective?
9. How does the concept of "highest and best use" affect the decision-making process in real estate development?

The principle of "substitution" is the foundation of all appraisals, including the "market data approach". This principle states that a buyer will not pay more for a property than the cost of a similar property, and a seller will not accept less than the price of a similar property.


These are questions that the above text answers:

1. What is the principle that serves as the foundation for all appraisals?
2. What approach in appraising property values is based on the principle of substitution?
3. According to the principle of substitution, what will a buyer not do?
4. According to the principle of substitution, what will a seller not do?
5. What is the basis for determining the value of a property in the market data approach?
6. What is the relationship between the cost of a property and the price of a similar property, according to the principle of substitution?
7. What is the role of the principle of substitution in real estate appraisals?
8. How does the principle of substitution impact the pricing of properties?
9. What is the underlying concept behind the market data approach in appraising property values?
10. How does the principle of substitution influence the behavior of buyers and sellers in the real estate market?

A "narrative report" is the most detailed type of property appraisal report. It includes "detailed descriptions" of the property. An "appraisal letter" is a shortened version of the report, making it a simple statement.


These are questions that the above text answers:

1. What is a narrative report in property appraisals?
2. How does a narrative report differ from an appraisal letter?
3. What does a narrative report include?
4. What is the purpose of an appraisal letter?
5. What is the level of detail in a narrative report?
6. What is the level of detail in an appraisal letter?
7. What is the main difference between a narrative report and an appraisal letter?
8. What is the benefit of using a narrative report in property appraisals?
9. How does an appraisal letter simplify the property appraisal process?

The cost approach to appraisal is not very helpful when evaluating an "old structure" with "functional deficiencies" because it is hard to accurately calculate the amount of depreciation due to both the age and condition of the property. This is not a problem when appraising newer properties or estimating what it will cost to develop a property.


These are questions that the above text answers:

1. Why is the cost approach to appraisal not very helpful for evaluating an "old structure" with "functional deficiencies"?
2. What are the limitations of the cost approach when appraising properties with both age and condition factors?
3. What factors make it difficult to determine the amount of depreciation for properties with age and condition issues?
4. What types of properties are more suitable for the cost approach to appraisal?
5. What is the main advantage of the cost approach when appraising newer properties?
6. What is the main disadvantage of the cost approach when appraising older properties?
7. What is the primary purpose of the cost approach when evaluating property development costs?

The cost of a "improvement" and its effect on the "value" of a property are usually not the same. The "contribution" of the improvement is usually less than what it cost. An appraiser is typically more interested in the amount it adds to the "value" of the property.


These are questions that the above text answers:

1. What is the difference between the cost of an improvement and its effect on the value of a property?
2. Is the contribution of an improvement usually equal to or less than its cost?
3. What is an appraiser typically more interested in when assessing the value of a property?
4. What is the focus of a real estate appraisal?
5. How does an improvement affect the value of a property?
7. What factors does an appraiser consider when determining the value of a property?
8. How does an appraiser assess the contribution of an improvement to the value of a property?
10. What is the relationship between the cost of an improvement and its impact on the value of a property?

The "utility" of the land, the "condition" of the buildings or other structures on it, and the "bundle of rights" associated with it all have an influence on an appraiser's final evaluation of a property. The original price of the property has no effect on its current worth.


These are questions that the above text answers:

1. What factors affect a property's worth in real estate appraisal?
2. How does the condition of buildings or structures on a property influence its appraisal value?
3. What is the significance of the "bundle of rights" in determining a property's worth?
4. What is the role of the land's utility in the appraisal process?
5. How does an appraiser evaluate the condition of buildings or structures on a property?
6. What are the factors that an appraiser considers when determining the worth of a property?

The "principle of conformity" means that properties that are similar in style, size, and quality tend to be worth more than those that are more improved than the "conforming level." This is sometimes known as "regression."


These are questions that the above text answers:

1. What is the principle of conformity in real estate?
2. How does the principle of conformity impact the value of properties?
3. What factors determine whether a property conforms to the principle of conformity?
4. What is the relationship between the style, size, and quality of a property and its value?
5. What is meant by the term "regression" in relation to the principle of conformity?
6. How does the principle of conformity affect properties that are more improved than the conforming level?
7. What are some examples of properties that would be considered to conform to the principle of conformity?
8. How does the principle of conformity differ from the principle of regression in real estate?
9. Can properties that do not conform to the principle of conformity still have value?
10. Are there any exceptions to the principle of conformity in real estate?

"Capitalization rate" (or "cap rate") is used when appraising a property using the "income approach," not the "replacement cost method." The "replacement cost method" is one way to determine the value of a property using the "cost approach."


These are questions that the above text answers:

1. What is the purpose of using the capitalization rate in property appraisal?
2. In what method of property appraisal is the capitalization rate used?
3. What is the replacement cost method used for in property appraisal?
4. What is another name for the capitalization rate?
5. What is the income approach in property appraisal?
6. What is the cost approach in property appraisal?
7. How is the value of a property determined using the replacement cost method?
8. Can the capitalization rate be used in the cost approach method of property appraisal?
9. What is the role of the capitalization rate in property appraisal?

The "income approach" is a way to figure out the current value of a property based on the money it will make from "rental income" in the future. There are three ways to figure out the value of a property: the "cost approach", the "income approach", and the "sales comparison approach".


These are questions that the above text answers:

1. What is the income approach in real estate appraisal?
2. How does the income approach determine the value of a property?
3. What are the three methods used to determine the value of a property?
4. What is rental income and how does it factor into the income approach?
5. What is the cost approach in real estate appraisal?
6. What is the sales comparison approach in real estate appraisal?
7. How does the income approach differ from the cost approach and the sales comparison approach?
8. Why is the income approach considered important in determining the value of a property?
9. What factors are considered when using the income approach in real estate appraisal?
10. How does the income approach help in unlocking the value of real estate?

In the "sales comparison method," the appraiser adjusts the price of a similar property to match the value of the one being appraised. For example, if a comparable property is "superior," the appraiser will reduce its price to make it more comparable to the one being appraised.


These are questions that the above text answers:

1. What is the purpose of the sales comparison method in real estate appraisal?
2. How does the appraiser adjust the price of a comparable property in the sales comparison method?
3. What is the role of the sales comparison method in determining the value of a property?
4. What is the purpose of making a comparable property more comparable to the one being appraised?
5. How does the sales comparison method help in determining the value of a property?
6. What factors does the appraiser consider when adjusting the price of a comparable property?
7. How does the sales comparison method account for differences between the property being appraised and the comparable property?
8. What is the significance of using the sales comparison method in real estate appraisal?

A "VA guaranteed loan" requires an appraisal to make sure the agreed-upon sales price or amount of the loan is justified. If you don't need mortgage financing, then an appraisal is usually not necessary. In the case of a new subdivision, the lender usually agrees to fund all sales transactions as part of the loan when the land was bought. If the buyer's credit is good enough, no extra appraisal is needed.


These are questions that the above text answers:

1. What is the purpose of an appraisal in a VA guaranteed loan?
2. When is an appraisal typically not necessary?
3. What is the lender's role in funding sales transactions in a new subdivision?
4. When is an extra appraisal not needed in a new subdivision?
5. What is the requirement for an appraisal in a VA guaranteed loan?
6. What is the condition for not needing an extra appraisal in a new subdivision?
7. When is an appraisal necessary in a VA guaranteed loan?
8. What is the lender's responsibility in funding sales transactions in a new subdivision?
9. What is the role of the buyer's credit in determining the need for an extra appraisal in a new subdivision?