Property ValuationIntermediateArizona Exam

In Arizona, an appraisal that is completed 'retrospectively' (for a date in the past) is called:

AA deferred appraisal performed after closing but before title insurance is issued, available only for properties involved in active probate proceedings

BA retrospective (or retroactive) appraisal—required for tax appeals, estate valuations, and some litigationCorrect

CAn as-is appraisal with an effective date that precedes the inspection date, which USPAP allows only when the client provides written authorization

DAn interim value report that estimates value between two prior appraisals using a trending factor reviewed and approved by the applicable lending guidelines

Why A retrospective (or retroactive) appraisal—required for tax appeals, estate valuations, and some litigation Is Correct

Answer B: A retrospective (or retroactive) appraisal—required for tax appeals, estate valuations, and some litigation

A retrospective (retroactive) appraisal values a property as of a past date, typically required for estate tax purposes, litigation (damages as of incident date), and property tax appeals. The appraiser uses market data available as of the effective date.

Exam Tip: Property Valuation

Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.

Key Property Valuation Terms in This Question

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Lien

A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.

Title Insurance

Insurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.

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Key Terms to Know

Appraisal

A professional estimate of a property's market value prepared by a licensed or certified appraiser.

Capitalization Rate (Cap Rate)

A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.

Comparable Sales (Comps)

Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.

Gross Rent Multiplier (GRM)

A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.

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