Advanced Techniques & Methods Flashcards
7 cards from real CAR practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Advanced Techniques & Methods flashcards as text
When reviewing a complex mixed-use property appraisal, which technique is most appropriate for allocating value between residential and commercial components?
Answer: Paired sales analysis isolating each use type
Paired sales analysis isolating each use type provides the most defensible market-based allocation by directly comparing properties with similar component ratios.
A reviewer finds that an appraiser used a 4% terminal capitalization rate on a property where market evidence supports 5.5%. This discrepancy most likely results in:
Answer: An overstated reversion value in the DCF model
A terminal cap rate that is too low overstates the projected sale price (reversion value) at the end of the holding period, inflating the DCF conclusion.
Which statistical measure should a reviewer prioritize when assessing whether comparable sales used in a sales comparison approach are truly comparable?
Answer: Coefficient of variation of the adjusted sale prices
The coefficient of variation of adjusted sale prices measures relative dispersion after all adjustments, indicating how tightly the comps cluster around a central value indicator.
In reviewing a retrospective appraisal for estate tax purposes, the reviewer notes the appraiser used current market data. The most critical deficiency is:
Answer: Using data that post-dates the effective date of value
A retrospective appraisal must reflect market conditions and data available as of the historical effective date, not conditions at the time of report preparation.
A reviewer evaluates a cost approach where functional obsolescence was calculated using the rent loss capitalization method. Which condition best justifies this specific technique?
Answer: Market rents for the subject and competing properties differ measurably due to a functional defect
The rent loss capitalization method is appropriate when a functional deficiency causes a measurable rent differential between the subject and competing properties without the deficiency.
When reviewing a 'going concern' appraisal of a hotel, the reviewer must ensure the appraiser properly segregated which components?
Answer: Land, improvements, furniture/fixtures/equipment, and business value
Going concern appraisals require separate identification and allocation of real property, personal property (FF&E), and intangible business value.
A reviewer observes that an appraiser made a net adjustment of +32% to a single comparable sale. Under USPAP guidance, the most appropriate reviewer action is to:
Answer: Flag the comparable and assess whether the appraiser provided adequate support for the adjustments
USPAP does not establish numeric thresholds for adjustments; the reviewer must assess whether the appraiser provided credible market support regardless of the adjustment magnitude.