Course 101 - Online Version

The Fundamentals of Real Property Appraisal is designed to provide the students with an understanding and working knowledge of the procedures and techniques required to estimate the market value of vacant and improved properties. This course concentrates on the skills necessary for estimating the market value of properties using two approaches to value: the cost approach and the sales comparison approach.

Registration for the March 27-May 8 course is now full.

Course Dates

The first class of the online version of Course 101 will start March 27, 2017 and will end May 8th, 2017. The course is limited to 25 students and is being offered at an introductory price of $449 for IAAO members and $675 for non-members. This first class is not IDECC approved but future classes (late 2017) are anticipated to be approved by IDECC.

Instructional Methods

Instructional methods utilized in Course 101 Online includes instructor videos, narrated power point presentations, assigned readings and discussion boards, exercises and frequent checks for understanding.

Course Audience

This course was designed for professionals who estimate the value of real property or any individual involved or interested in Assessment administration duties. This is a fundamental course and there are no pre-requisites.

Course Materials

The following reference material is provided by IAAO:

  • e Version of Course 101 Student Reference Manual
  • e Version of Property Assessment Valuation Textbook (PAV)

Cancellation Policy

Students who wish to cancel their registration should notify IAAO in writing. 

  • If the cancellation request is received ten or more days before the class start date, IAAO will remove the student from the class and refund the registration fee, less a $50 cancellation fee.  
  • If the cancellation request is received nine or less days before the class start date, no refund will be given.  Course 101 Online classes will be repeated on a regular basis so if a student wishes they may transfer their registration to another class start date that is more convenient for their schedule.
  • If the cancellation request is received on or after the class start date, IAAO will not refund the registration fee and there is no longer an option to transfer to another class.
  • IAAO reserves the right to cancel a class up to five days prior to the class start date.  Should IAAO cancel a class, the student will be notified and given the option of transferring their registration to another class start date, or receiving a refund of their course registration fee. 

Required Technology

  • A calculator is required. 
  • Current version of Google Chrome, Firefox, or Safari
  • Current version of Adobe Flash
  • If accessing the course using a mobile device, it must be a large-screen device such as an iPhone 6+ or iPad

Course Goals

  • Answer multiple choice questions related to the application of theory and principles of appraisal practice in estimating accurate market values.
  • Apply the direct sales comparison approach to determine the land value in a single-property appraisal online task.
  • Develop the cost approach (estimating land/site value, cost of improvements, and total depreciation) for an online case study.
  • Estimate market value using the sales comparison approach by establishing and posting a market data grid to the course discussion board.

Course Outline and Objectives

Lesson 1 – Intro to Assessment/Appraisal

  • Define the term ad valorem
  • Describe the basic responsibilities of the assessor
  • Explain the reasons for using maps in the assessment function
  • Identify the purpose of USPAP

Lesson 2 – The Property Tax

  • Express tax rates in the decimal or whole number forms of dollars per hundred dollars, dollars per thousand dollars or mills.
  • Calculate tax rates from given data.
  • Use the EAT Triangle to calculate Effective Tax Rate, Assessed Value and Tax Rate

Lesson 3 – Concepts of Property and Property Rights

  • Differentiate between Real and Personal Property

Lesson 4 – Nature of Property Value; Basic Principles

  • Define terms related to value Generalize the relationship between market value and sales price
  • Identify the 12 (Basic) Principles of Value

Lesson 5 – Economics of Supply and Demand

  • Generalize changes in the market based on Supply and Demand
  • Define the term "supply"
  • Define the term "demand"
  • Identify the elements of Supply
  • Identify the elements of Demand
  • Define the term "equilibrium" as it relates to supply and demand

Lesson 6 – Highest and Best Use Analysis

  • Define "Highest and Best Use" as it relates to appraisal practice
  • Recognize the correct order of the four criteria applied to determine highest and best use
  • Define the term "interim use"
  • Generalize the highest and best use of a property given appropriate information

Lesson 7 – The Appraisal Process: Trends Affecting Property Value; Four Forces or Factors of Value; Neighborhoods

  • Identify the correct order of the steps of the appraisal process.
  • Identify the requirements to complete the steps for the appraisal process.
  • Identify the three approaches to value Identify the steps in each of the three approaches to value. Identify which of the 3 approaches of value is being used, given appropriate information.
  • Identify the 7 trends affecting property values.
  • Identify the four forces of value. Describe the typical life cycle of a neighborhood

Lesson 8 – Mapping and Parcel Identification; Parcel Identification Systems; Legal Description Systems: Metes and Bounds

  • Identify reasons for using maps in the assessment function
  • List six requirements of a parcel Identification system
  • Identify five pieces of information a Metes and Bounds description should always contain

Lesson 9 – Legal Descriptions Systems: Public Land Survey Systems

  • Recognize the term "Parcel Identifier Identify the number of sections and acres in a township
  • Apply guidelines for determining the size of a parcel using a PLSS description
  • Read a compass bearing
  • Use the PLSS legal description to identify and describe a given property

Lesson 10 – Nature of Land Valuation; Land Valuation Theory; Market Value, Use Value, and Highest and Best Use

  • Define land and differentiate between unimproved and improved land
  • Name five attributes of land
  • Identify the appraisal principle which describes income to the land

Lesson 11 – Site/Land Data Analysis; Intro to Site/Land Valuation Methods

  • Identify the primary sort to analyze land sales
  • Identify techniques, trends and factors important in Site/Land data analysis
  • Identify types of site-specific data
  • Identify the three primary approaches to land valuation
  • Estimate value using the Sales & Comparison Approach

Lesson 12 – Site/Land Valuation Methods: Sales Comparisons

  • Identify sequences of adjustment made in the direct sales comparison approach
  • Recognize which method of land valuation compares the property being appraised to comparable, recently sold vacant properties
  • Use the sales comparison approach to solve simplified problems in site valuation
  • Identify the appropriate unit of comparison for specified uses

Lesson 13 – Site/Land Valuation Methods: Allocation and Abstraction

  • Calculate percentage of value, given land to building ratio
  • Recognize which land valuation method replicates the actions of sub dividers and developers
  • Apply land allocation valuation premises to determine the value of a subject property, given appropriate data
  • Apply land abstraction valuation premises to determine the value of a subject property, given appropriate data

Lesson 14 – Site/Land Valuation Methods: Anticipated Use or Development; Capitalization of Ground Rent; Land Residual Capitalization; Assemblage and Portage

  • Identify a situation in which the Anticipated Use or Development method would be used to value property
  • Identify a situation in which Capitalization of Ground Rent would be the best choice to estimate value
  • Identify a situation in which Land Residual Capitalization would be the appropriate choice for estimating value
  • Determine whether assemblage or plottage has been used in described scenarios

Lesson 15 – Theory and Premises; Steps in the Cost Approach; Application of Appraisal Principles; Characteristics of Cost

  • Identify the Cost Approach formula. List the steps in applying the cost approach formula.
  • Identify the appraisal principles underlying the cost approach.
  • Identify characteristics which affect cost. Solve simplified problems calculating building square footage.

Lesson 16 – Elements of Cost; Concepts of Estimating Cos

  • Define Replacement Cost new
  • Differentiate between Replacement Cost New, Reproduction Cost New, Historical Cost and Trended Historical Cost.
  • Identify an item as a direct or indirect cost
  • Differentiate between entrepreneurial profit and entrepreneurial profit and entrepreneurial incentive

Lesson 17 – Four Methods of Estimating Costs; Cost Manuals

  • Identify four methods of estimating cost. Identify major facts about each of the four methods of estimating cost.
  • Use a simulated cost manual to solve simplified problems in valuations.
  • Calculate cost new and indicated property value correctly using the steps for the cost approach.
  • Identify the desirable features of cost manuals

Lesson 18 - Depreciation: Overview and Indirect

  • Define depreciation.
  • Identify the two indirect methods of measuring depreciation.
  • Identify the three direct ways of measuring depreciation.
  • Identify the three types of depreciation.
  • Use the sales comparison method to determine depreciation and calculate value for a subject property, given appropriate information

Lesson 19 – Depreciation Direct

  • Define terms related to the age-life method of estimating depreciation Recognize the definition of the term Effective Age. Identify the formula for Economic Age- Life Depreciation.
  • Calculate Economic Age-Life percentage of depreciation.
  • Calculate depreciation.

Lesson 20 – Depreciation Types- Physical Deterioration

  • Classify types of deterioration as curable or not curable.
  • Estimate value using the Observed Condition/Breakdown method.
  • Calculate the amount of total physical deterioration suffered by the subject residence given appropriate data.
  • Identify the 3 types of physical deterioration.
  • Calculate the amount of curable physical deterioration, given appropriate data.
  • Calculate the amount of incurable deterioration

Lesson 21 – Depreciation Types – Functional Obsolescence and External (economic) Obsolescence Calculate External Obsolescence given actual rent, rent of similar properties, GRM and land-to- building ratio.

  • Calculate value loss of a property given appropriate data
  • Recognize the definition of curable Functional Obsolescence.
  • Identify the three types of obsolescence.
  • Identify the three types of Curable Functional Obsolescence.
  • Identify the two types of Incurable Functional Obsolescence.

Lesson 22 – Fundamental Premises; Appraisal Principles; Advantage and Disadvantages

  • Identify the major premise of the sales comparison approach to value.
  • Identify the underlying principle of the adjustment process in the sales comparison approach.
  • Identify a condition which is not adaptable to the sales comparison approach. Identify an advantage to the sales comparison approach.
  • Identify a disadvantage to the sales comparison approach.

Lesson 23 – Formula for the Sales Comparison Approach; Steps in Applying the Sales Comparison Approach (SCA)

  • Identify the formula for the Sales Comparison Approach.
  • Follow the steps correctly to apply adjustments under the comparable sales approach.

Lesson 24 – Application of SCA: Selecting Units of Comparison; Lump-Sum Dollar Adjustments; Percentage Adjustments

  • Select appropriate units of comparison to estimate value.
  • Identify factors which would vary in similarity/dissimilarity between the subject and comparable properties.
  • Follow the steps correctly to apply lump sum adjustments under the comparable sales approach. Identify the five methods for making adjustments.

Lesson 25 – Application of SCA: Demo & Exercise – Market Condition Analysis Using Resales; Demo & Exercises Using Paired Sales

  • Follow the steps correctly to apply adjustments under the comparable sales approach.
  • Identify reasons for using resales to analyze market condition.
  • Identify reasons for using paired sales to analyze market condition.

Lesson 26 – Application of SCA: Demo & Exercises – Contributory Value of Components Using Paired Sales (Exercise 4-5 and 4-6)

  • Determine the contributory value of property components when estimating adjustments to comparable sales.
  • Identify factors which should be taken into account when applying data

Lesson 27 – Application of SCA: Demo & Exercises Exercise (Exercise 4-7 and 4-8)

  • Follow the steps correctly to apply adjustments under the comparable sales approach.