Property Valuation and Appraisal Flashcards
6 cards from real Arizona Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property Valuation and Appraisal flashcards as text
In Arizona, real property is assessed for tax purposes at what percentage of its full cash value for residential properties?
Answer: 10%
In Arizona, residential properties (Class 3) are assessed at 10% of their full cash value for property tax purposes.
What does 'net operating income' (NOI) represent in income property analysis?
Answer: Gross rental income minus vacancy and operating expenses
NOI is calculated by subtracting vacancy/credit losses and all operating expenses (excluding debt service) from gross potential income.
Which appraisal principle states that value is created and maintained when property characteristics conform to the standards of the surrounding area?
Answer: Principle of conformity
The principle of conformity holds that property value is maximized when it conforms to the surrounding neighborhood in use, design, and size.
An appraiser performing an Arizona residential appraisal discovers unpermitted additions. What should the appraiser do?
Answer: Note the unpermitted additions in the report as they may affect value and marketability
The appraiser must note unpermitted additions in the report because they can affect value, marketability, financing, and may require the owner to bring them into compliance.
What is 'accrued depreciation' in the cost approach to appraisal?
Answer: The total loss in value from all causes since the property was built
Accrued depreciation is the total loss in value from all causes — physical deterioration, functional obsolescence, and economic obsolescence — since the property was constructed.
Which of the following best describes 'highest and best use' as used by Arizona appraisers?
Answer: The legally permissible, physically possible, financially feasible, and maximally productive use of a property
Highest and best use is the reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive, resulting in the highest value.