LATEST IAAO 101 - Review Questions WITH ANSWERS

The property tax is an ____ __________ tax, meaning it is based on value. - ANSWER ad valorem The assessor is responsible for the _______, ________, and __________ of all taxable property. - ANSWER discovery listing valuation The taxable location of personal property is referred to as its __________. - ANSWER situs An estimate of value, usually in writing, of an adequately described property, as of a given date, is termed ___ ___________. - ANSWER an appraisal A jurisdiction's tax rate is determined by dividing the _________ to be derived from property tax by the total _________ ____________ of the taxing jurisdiction. - ANSWER budget assessed valuation The type of value usually estimated by the assessor is __________ value. - ANSWER market The _________ ________ _________ reflects the ratio between the current tax bill and the property value. - ANSWER effective tax rate In order for a property to have value, it must have ______, _______, ________ and __________ __________ _________. - ANSWER utility scarcity desirability effective purchasing power The use that generates the highest net return to a property over a reasonable time period is called ________ _______ _________ _________. - ANSWER highest and best use The principle of __________ states that maximum value of a neighborhood is attained when the uses of land are perfectly complementary. - ANSWER balance Which appraisal principle affirms that land cannot be valued on the basis of one use while improvements are valued on the basis of another? - ANSWER Consistent use List the four tests that the appraiser must make in the analysis of the highest and best use. - ANSWER Legally permissible Physically possible Financially feasible Most productive _______ ________ is a parcel of land and any structures or improvements that are permanently affixed thereto. - ANSWER Real estate Property is considered ________ if it can be moved without causing any damage or change to either the item of property or the structure to which it is attached. - ANSWER personal Assessment level times the tax rate equals the _________ ______ ________. - ANSWER effective tax rate ____________ is the point at which the forces of supply and forces of demand meet. - ANSWER Equilibrium List the two types of highest and best use analysis. - ANSWER A. As if vacant. B. As if improved. The typical life cycle of a neighborhood includes ________, ________, _______ and ___________. - ANSWER growth stability decline revitalization What elements of the marketplace are most likely to contribute to a change in demand? - ANSWER Consumer tastes and preferences Consumer income Price of related commodities Consumer expectations Price of the commodity Market value is defined as the most probable price of a property in terms of money, assuming - ANSWER A. Buyer and seller are typically motivated B. A reasonable time is allowed for exposure in the open market. C. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto. D. All of the above. ________ refers to the amount of goods that producers are willing to sell at a given price during a specified time period. - ANSWER Supply Ownership of all legal rights to property is limited by government in four ways: - ANSWER Taxation Police Power Eminent domain Escheat An assessed value not statutorily at 100 percent of market value is known as a _________ assessment. - ANSWER fractional The underlying principle for the three approaches to appraisal is ___________. - ANSWER substitution The seven steps of the appraisal process are as follows: - ANSWER Definition of the problem Scope of work Preliminary survey and planning Data collection and analysis Highest and best use Application of the data and the three approaches Correlation/reconciliation to final value estimate The basis for the adjustments in the sales comparison approach to value is the principle of ______________. - ANSWER contribution ______ ____ ______ represents the value of a property for a specific use. - ANSWER Value in use List any two types of private encumbrances that can be placed on ownership of real property. - ANSWER Rights of co-owners Condo and subdivision restrictions Covenants, conditions and restrictions found in the chain of title to the property Mortgages Easements and rights of way Liens and judgments Leases The principle of ____________ states that value is created by the expected future benefits to be derived from the property. - ANSWER anticipation