Which federal law requires federally regulated lenders to use licensed or certified appraisers for most real estate transactions above a certain threshold?
Why FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989) Is Correct
Answer B: FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989)
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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Key Terms to Know
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property 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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