REAL ESTATE APPRAISAL
By Michael Lustig
Copyright 2011 Real Estate License Services, Inc.
Smashwords Edition
REAL ESTATE APPRAISAL
Textbook and Student Workbook, Combined
Course
by Correspondence.
For Qualification For a California Real Estate
Broker
License or to Extend a California Real Estate Sales
License (D.R.E.Approval #1222-90)
New Department of Real Estate Rules Allow You to Avoid All Quizzes and to Go Straight to Your Final Exam, Which is Open Book! You May Suggest Your Own Test Administrator Also! For Details, Please Turn This Page and Read the Student Instructions/General Information Page.
REAL
ESTATE LICENSE SERVICES
5059 Newport Avenue, #209
San
Diego, CA 92107
(619) 222-2425
Includes “Student Instructions,” Quiz Questions and Answers, and Page References for the Quiz Questions for the Course “Real Estate Appraisal.” Please Read and follow the complete “Student Instructions” just after this page.
Copyright 2011, 2003, 2000, 1991, 1990, 1989, 1988, 1987, 1983 Real Estate License Services, Inc. Copyright registered. All rights reserved. No part of this material may be reprinted, reproduced, transmitted, stored in a retrieval system, placed in a computer or on the Internet, or otherwise utilized, in any form or by any means electronic or mechanical, including photocopying or recording, now existing or hereinafter invented, nor may any part of this course be used for teaching without permission from the copyright holder.
STUDENT INSTRUCTIONS/GENERAL INFORMATION
The California Department of Real Estate DOES NOT REQUIRE COMPLETION OF QUIZ- ZES OR ESSAYS PRIOR TO YOUR FINAL EXAM. Study the "Written Assignment" questions based on the chapter readings as well as the answers with page references that are on the following page. YOU DO NOT NEED TO SEND IN ANY "WRITTEN ASSIGNMENT" ANSWERS. To complete this course, just study the practice questions and answers, take the final exam online or on paper and, if on paper, make sure the final exam question sheets and completed Scantron answer forms are returned to us along with the completed "Certification of Test Administrator." THE FINAL EXAM IS OPEN BOOK. If you have any questions, please call (619) 222-2421.
1) This course consists of text reading and a final examination.
2) Practice questions ("Written Assignments") covering most of the chapters in the book are based on the text reading in each chapter. Answers to those practice questions (with page references) are included for your convenience and may be found on the page after this page. The "Written Assignments" are for your practice only. NO QUIZ QUESTIONS ARE REQUIRED PRIOR TO YOUR FINAL EXAM.
3) The minimum time limit to complete one course is 20 days from the date of enrollment. The maximum time limit to complete one course is six (6) months from the date of enrollment. Two three (3) month extensions may be obtained (see section below on Extensions and Re-enrollments). Under no circumstances can your enrollment last beyond twelve (12) months.
FINAL EXAMINATION: When you are ready to take the final test, please fill out the form "Request To Take Final Exam." You may mail it to Real Estate License Services, 5059 Newport Ave., #209, San Diego, California 92107, or fax to (619) 222-8593. Real Estate License Services will arrange for your final examination online or with a test administrator. If your final exam is not online, you may suggest who your test administrator will be. The examination consists of 100 multiple choice questions and you must complete it within 150 minutes (2.5 hours). When you finish the test, If your final exam is not online, turn it in to the test administrator, who will mail it to Real Estate License Services. The questions used for the final exam must be mailed to Real Estate License Services along with the answers.
GRADING OF THE FINAL EXAM AND ISSUING OF CERTIFICATES: A passing grade is based on a minimum passing score of 60% on the final examination. Only the final examination grade is used in determining the student's overall grade. Students will be assigned a letter grade, but the grading system reflects the 60% passing requirements.
% OF POINTS = GRADE
100% - 90% = A
89% - 80% =
B
79% - 70% = C
69% - 60% = D
59% - 0%
= Fail. In this case the course would have to be repeated and passed
in order to receive credit.
An official certificate of your course grade will be mailed to you within two weeks after receipt of your completed final examination if taken with a test administrator. Additional certificates are $15.00 each.
REFUNDS: Students may apply in writing to REAL ESTATE LICENSE SERVICES, mailing address, 5059 Newport Ave., #209, San Diego, California 92107 within 15 days from the date of enrollment and cancel and receive a refund for the full tuition. All REAL ESTATE LICENSE SERVICES materials must be returned in good condition at the time of cancellation; the materials should not be soiled, torn or marked upon. Refunds are not allowed if any work has been submitted.
EXTENSIONS AND RE-ENROLLMENTS: If the course has not been completed within six (6) months of enrollment, the student may receive an extension of three (3) months by paying an extension fee of $35.00. If at the end of that three month extension the student still has not completed the course, a second three (3) month extension may be obtained by paying an additional fee of $30.00. IN NO CASE MAY THE PERIOD OF ENROLLMENT EXTEND BEYOND TWELVE (12) MONTHS. If the student has not completed the course within 12 months from the original date of enrollment, the enrollment expires and no further extensions are allowed. The student must re-enroll and begin the course over again in order to complete the course. The student may re-enroll under such circumstances for a discounted re-enrollment of $40.00 per course.
TRANSFERS: Courses may be transferred to another person by paying a transfer fee of $30.00 per course. Transfers are not allowed if any work has already been submitted.
REAL ESTATE APPRAISAL
To finish this course, you need to do the following:
1. Quizzes are NOT required. Included below are the answers to the questions at the end of each chapter. Page references for topics in each question and answer are also listed. Read the book and study the questions and answers. You may take your final exam 18 days after having possession of the textbook.
2. When you are ready to take your final exam, please fill out the form “Request To Take Final Exam,” and fax it to (619) 222-8593 or mail it to: Real Estate License Services, 5059 Newport Avenue, #209, San Diego, CA 92107. Real Estate License Services will arrange for your final exam online or with a test administrator.
Answers with Page References to Practice Questions at the end of Each Chapter in this Textbook:
TABLE OF CONTENTS
Chapter 2 REAL ESTATE AND APPRAISAL LAW
Chapter 4 THE APPRAISAL PROCESS
Chapter 5 SITE ANALYSIS AND VALUATION
Chapter 6 THE CONSTRUCTION PROCESS
Chapter 7 THE MARKET DATA APPRAISAL APPROACH
Chapter 8 THE COST APPRAISAL APPROACH
Chapter 9 THE INCOME APPRAISAL APPROACH
Chapter 10 TOOLS FOR AN APPRAISAL
Chapter 11 BUSINESS ASPECTS OF APPRAISAL
Chapter 12 LEGAL LIABILITY OF THE APPRAISER
Chapter 13 APPRAISAL FOR GOVERNMENT PROGRAMS
PREFACE
This book is intended to provide the reader with a thorough understanding of the appraisal process. After studying the covered topics, you will be able to incorporate this information into your business.
For your assistance, this book is divided into three sections. Section one discusses the various principles associated with real estate appraisal. Section two examines the different appraisal procedures. Section three applies the information as they pertain to the many types of real estate.
While every effort has been taken to insure that the enclosed information is current, laws and techniques are constantly being revised. Therefore, do not use this book as a substitute for professional assistance. Also, masculine pronouns are utilized in the book. This practice is only an editorial device and not intended to actually imply gender.
Chapter 1
REAL
PROPERTY
INTRODUCTION
The real estate appraisal process places a value upon real property. It is imperative that you understand the differences between real property and personal property. A real estate appraiser normally only deals with real property.
REAL PROPERTY V. PERSONAL PROPERTY
Before examining the various types of real property, we need to differentiate between real property and personal property. “Real estate” is merely another term for real property. Therefore, for the purposes of the remainder of this book, real estate appraisal only includes real property.
Personal property is sometimes called “chattel.” It includes all property which is not classified as real property. This negative definition does not initially provide much assistance for you. However, after our subsequent discussion on real property, it should be clear what property constitutes personal property. As an immediate general rule, personal property is usually that property which is movable. Real property is generally immovable.
As an historical note, property was originally thought of as a bundle of rights. The rights that a party had in property constitutes what was considered real property. The current view of real property is substantially different. Real property is the thing of which there may be ownership. The rights to the subject property is now related to ownership. The topic of property ownership is not germane to a discussion on real estate appraisal. Therefore, this book will not delve into it any further.
It is important to understand that property can change classifications. It depends upon the use of the property. Soil is initially considered to be real property. If it is dug up and transported as top soil, it becomes personal property.