An appraisal for a federally related transaction in Colorado must be performed by:
Why B. A state-licensed or state-certified appraiser, as required by FIRREA (Financial Institutions Reform, Recovery and Enforcement Act) Is Correct
Answer B: B. A state-licensed or state-certified appraiser, as required by FIRREA (Financial Institutions Reform, Recovery and Enforcement Act)
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.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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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