12 Ch13 Conclusion - Sheet1

Question 1

How can an appraiser extract and support a location adjustment from one market area to another?

Answer 1

Compare land sale prices for similar lots, Compare sale prices of common “benchmark” homes, Compare rental amounts for similar homes

Question 2

Where does an appraiser typically obtain most of the information necessary for problem identification?

Answer 2

Communication with the client

Question 3

When the appraiser believes something directly related to a specific assignment to be true, but there is some degree of uncertainty, he or she must employ

Answer 3

An extraordinary assumption

Question 4

What is the first step in the appraisal process?

Answer 4

Problem identification

Question 5

A 10 year old home recently sold for $320,000. The site value is $110,000. The cost new of the home would be $250,000. What would be the total economic life indicated by this property?

Answer 5

62.5 years

Question 6

Barb purchases a property from Tony, and immediately grants a life estate in the property to Henry. Which party is the reverter?

Answer 6

Barb

Question 7

When an exterior only inspection is made, acceptable alternative sources for physical characteristics and condition of a property may include

Answer 7

MLS data, Prior appraisal reports prepared by others, County assessment records

Question 8

Typically, an adjustment for discount or bonus factor is

Answer 8

Expressed as a percentage

Question 9

The subject property has an effective age of 25, and a total economic life of 60 years. The cost new of the subject property improvements is $675,000. What is the dollar amount of accrued depreciation that should be applied in the cost approach?

Answer 9

$281,250

Question 10

What type of written appraisal report allows the appraiser to start with a “blank canvas” and then create the report as he or she sees fit?

Answer 10

Narrative report

Question 11

A property at the edge of the city is currently used as a parking lot, but due to growth patterns, it is likely to be used as a building site within the foreseeable future. How would its current use as a parking lot BEST be described?

Answer 11

Interim use

Question 12

A property is suitable for the construction of either a 1,400 square foot one-story home, or a 2,400 square foot two-story home. The cost to construct the one-story home is $240,000, the developer’s fee is $30,000, and it will be worth $375,000 when it is completed. The two-story home will cost $300,000, the developer’s fee is $37,500, and it will be worth $425,000 when completed. Which use produces the greatest land value?

Answer 12

The one-story home

Question 13

An appraiser is engaged to value a single-family home for a mortgage refinance. When the appraiser arrives at the property, she realizes it is an operating restaurant. The appraiser contacts the client. What is the MOST likely outcome?

Answer 13

The assignment will be cancelled

Question 14

A single family home situated in a commercial area is worth $80,000. The site value is $70,000. If the home were converted to office use, at a cost of $15,000, it would be worth $92,000. What is the highest and best use of the property as improved?

Answer 14

Continuation as a single-family home.

Question 15

Bertha is appraising a single-family home that is situated on a commercially-zoned lot, for a residential mortgage lender. Based on the facts of the situation, what is the lender likely to ask her?

Answer 15

If the improvement can be rebuilt if destroyed

Question 16

The USPAP reporting requirements set forth in Standards Rule 2-2 are

Answer 16

Minimum requirements

Question 17

The subject property has a present value of $325,000. In valuing a life estate, you are forecasting that property values will increase at an annual rate of 4%. What is the estimated future value of the subject property after 5 years?

Answer 17

$395,412

Question 18

If a client-requested appraisal report form does not contain sufficient information for the report to be properly understood, what should an appraiser do?

Answer 18

Supplement the form with the required information

Question 19

Life Tenant A has a life expectancy of 4 years. Life Tenant B has a life expectancy of 7 years. Which one of these would require the use of a LOWER discount rate when valuing a life estate?

Answer 19

Life Tenant A

Question 20

The test criteria for highest and best use include all of the following

Answer 20

Maximally productive, Financially feasible, Physically possible

Question 21

An appraiser is valuing a property located next door to an automobile salvage yard. He has no sales of properties adjacent to salvage yards, so he uses recent sales of properties in the same general area, and makes an adjustment for the subject’s view. What is this technique called?

Answer 21

Discount factor

Question 22

In the appraisal of a complex property, highest and best use analysis will help determine

Answer 22

What factors will require adjustments, Which properties will be used as comparables, Which approaches will be used

Question 23

What does the course author mean by the statement “you must be a thinking appraiser”?

Answer 23

It is more important to think than it is to move fast

Question 24

When reporting value, USPAP requires you to report

Answer 24

The type, definition and source of the definition

Question 25

When appraising a complex property, you must utilize the valuation approaches

Answer 25

in ways that go beyond normal practice

Question 26

What is another name for the market survey technique?

Answer 26

Contingent Valuation Method

Question 27

The subject property has a three-car detached garage/shop building, 1,200 square feet, which costs $35 per square foot to construct. Your research indicates that 30% of the cost of these buildings is typically returned in value. What adjustment would you make in the sales comparison approach to a comparable sale that does not have a detached garage building?

Answer 27

$12,600

Question 28

With regard to effective age and remaining life, what must an appraiser avoid?

Answer 28

Making an unsupported assumption or premise

Question 29

Why is highest and best use analysis often simpler in the appraisal of residential property, as opposed to commercial property?

Answer 29

The potential uses are already limited by zoning and deed restrictions

Question 30

In highest and best use analysis, legal permissibility considerations might include

Answer 30

Historic district controls, Environmental regulations, Building codes

Question 31

A property is zoned R-3, and is suitable for construction of up to three residential units. A single-family home can be built at a cost of $125,000, which will be worth $200,000 when complete. A duplex can be built at a cost of $250,000, which will be worth $310,000 when complete. A three-unit can be built at a cost of $325,000, and it will be worth $375,000 when complete. What is the maximally productive use?

Answer 31

Single-family home

Question 32

If an appraiser determines he or she lacks necessary knowledge or experience to competently complete an assignment, the appraiser

Answer 32

May still accept the assignment

Question 33

You are appraising a single-family home for a local mortgage lender. When inspecting the property, you discover that the inside of the home has been gutted down to the studs. When should you notify your client about the condition of the property?

Answer 33

As soon as you discover it

Question 34

When the subject is located in an area that is unique, and it is not possible to find sales from another market area, the only option may be

Answer 34

Going back farther in time

Question 35

The subject property has an effective age of 10, and a remaining economic life of 40 years. The cost new of the subject property improvements is $880,000. What is the percentage of accrued depreciation that should be applied in the cost approach?

Answer 35

20%

Question 36

What two dates must be in every written real property appraisal report, as required by Standards Rule 2-2?

Answer 36

Effective date and date of report

Question 37

An appraiser might overcome a lack of necessary knowledge or experience by

Answer 37

Seeking the assistance of another appraiser

Question 38

Robert is appraising a single-family home for liquidation value, and he is writing an Appraisal Report in a narrative format. Which statement is TRUE regarding the reporting requirements for this assignment?

Answer 38

The report must state the type and definition of value, and cite the source for the definition

Question 39

A use that was lawfully established and maintained, but no longer conforms to the use regulations in the zone where it is located

Answer 39

A legal non-conforming use

Question 40

A single-family home is constructed on two residential lots, right on the lot line. As a result, neither lot can be sold off. How would this situation BEST be described?

Answer 40

Surplus land