Property ValuationIntermediateArizona Exam

In Arizona, the URAR form used for residential appraisals requires the appraiser to report the 'neighborhood' based on:

AThe demographic composition of the area, which FNMA requires appraisers to analyze and report when it may be affecting the marketability of neighborhood properties
BObjective characteristics including location, boundaries, land use, value trends, and market conditionsCorrect
CThe appraiser's professional judgment about the subjective desirability of the neighborhood, since market value reflects buyer perceptions rather than objective data
DOnly physical boundaries such as streets, rivers, and zoning lines, since USPAP prohibits characterizing a neighborhood on the basis of any other factor

Why Objective characteristics including location, boundaries, land use, value trends, and market conditions Is Correct

Answer B: Objective characteristics including location, boundaries, land use, value trends, and market conditions

URAR requires objective neighborhood analysis based on location, boundaries, characteristics, land use, price ranges, value trends, and market conditions—not subjective opinions. Appraisers must analyze neighborhoods without regard to demographic composition.

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

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