Property Valuation
In Hawaii, an appraiser must be licensed or certified to prepare an appraisal for use in a:
AA. Personal investment decision with no lender involvement
BB. Federally related transaction (mortgage with a federally regulated lender)✓ Correct
CC. Cash sale between private parties
DD. Listing price analysis for a real estate agent
Explanation
FIRREA (1989) requires appraisals used in federally related transactions (loans from federally regulated lenders) to be performed by state-licensed or state-certified appraisers.
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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.
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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