CMA Property Valuation and Appraisal

Question 1

Which appraisal approach estimates value by comparing the subject property to recently sold similar properties?

Accepted Answer

Sales comparison approach

Answer

Cost approach

Answer

Income capitalization approach

Answer

Discounted cash flow approach

Question 2

What is the primary purpose of an appraisal in a mortgage transaction?

Accepted Answer

To establish collateral value for the lender

Answer

To set the listing price

Answer

To determine property taxes

Answer

To calculate homeowner's insurance

Question 3

What does the term 'loan-to-value ratio' (LTV) represent in mortgage lending?

Accepted Answer

The loan amount divided by the appraised property value

Answer

The ratio of interest to principal

Answer

The monthly payment divided by gross income

Answer

The ratio of fees to loan amount

Question 4

Which federal agency publishes conforming loan limits that affect property valuation thresholds?

Accepted Answer

FHFA

Answer

FHA

Answer

CFPB

Answer

HUD

Question 5

What is a 'drive-by' or exterior-only appraisal?

Accepted Answer

An appraisal where the appraiser only inspects the exterior of the property

Answer

An appraisal conducted without visiting the property

Answer

A desktop review using public records only

Answer

An automated valuation model (AVM) report

Question 6

What does 'market value' mean in the context of a real estate appraisal?

Accepted Answer

The most probable price a property would sell for in an arm's-length transaction

Answer

The highest price ever paid for similar homes

Answer

The assessed value set by the county

Answer

The replacement cost of the structure