Valuation & Appraisal – California Real Estate Salesperson Exam
Master the key concepts of real estate valuation and appraisal for the California Real Estate Salesperson Exam. These 25 flashcards cover appraisal methods, value principles, terminology, and regulatory requirements tested on the state exam.
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Preview Questions
Question 1
What is the definition of 'market value' as used in real estate appraisal?
Answer
Market value is the most probable price a property would bring in a competitive, open market under fair sale conditions, with both buyer and seller acting knowledgeably and without undue pressure.
Question 2
What is the difference between 'value in use' and 'value in exchange'?
Answer
Value in use is the subjective value a property has to a specific user for a specific purpose, while value in exchange (market value) is the objective price the property would command in the open market.
Question 3
What are the four essential elements of value remembered by the acronym 'DUST'?
Answer
DUST stands for Demand, Utility, Scarcity, and Transferability — all four must be present for a property to have market value.
Question 4
Which federal law requires appraisers of federally related transactions to be state-licensed or state-certified?
Answer
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989) requires that appraisers for federally related transactions be state-licensed or state-certified.
Question 5
What is a Comparative Market Analysis (CMA) and who typically prepares it?
Answer
A CMA is an informal estimate of market value prepared by a real estate licensee (not a licensed appraiser) that compares similar recently sold properties to help price a listing or assist a buyer.
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