APPRAISAL FINAL 1

Question 1

The opinion of value in an appraisal report is valid
a. as of the effective date of the appraisal only.
b. for three months after the appraisal date.
c. for six months after the appraisal date.
d. for one year after the appraisal date.

Answer 1

a. as of the effective date of the appraisal only.

Question 2

An appraisal report is NOT required to include
a. the address of the subject property.
b. a final estimate of value.
c. the signature of the appraiser.
d. the contract price of the property.

Answer 2

d. the contract price of the property.

Question 3

Which value approach would most likely be emphasized for an apartment building in an established neighborhood?
a. cost approach
b. income approach
c. sales comparison approach
d. all three approaches would be averaged

Answer 3

b. income approach

Question 4

A vacant land parcel described as the NE 14 of Section 17 is selling for $1,200 per acre. What is the sale price of the parcel?
a. $48,000
b. $96,000
c. $192,000
d. $768,000

Answer 4

c. $192,000

Question 5

Market value is
a. equal to the cost of production.
b. the most probable selling price to a typical buyer..
c. what a property sold for.
d. what one buyer is willing to pay.

Answer 5

b. the most probable selling price to a typical buyer..

Question 6

Market price is the
a. amount, in dollars, actually paid for the property.
b. amount, in dollars, asked for by the seller.
c. amount, in dollars, a property should bring on the open market.
d. the most probable selling price to a typical buyer.

Answer 6

a. amount, in dollars, actually paid for the property.

Question 7

The cost approach does NOT require an estimate of
a. depreciation.
b. site improvements and building costs.
c. site value.
d. net operating income.

Answer 7

d. net operating income.

Question 8

When using the income approach, appraisers do NOT assume that
a. buyers estimate the duration of income when buying income property.
b. future income is always less valuable than present income.
c. value is directly related to income.
d. future income is always more valuable than present income

Answer 8

d. future income is always more valuable than present income

Question 9

Using the information in the following table, calculate depreciation using the age-life method.

Replacement Cost- $173,000
Effective Age- 15 years
Remaining Economic Life- 60 years

a. $6,920
b. $8,650
c. $34,600
d. $43,250

Answer 9

c. $34,600

Question 10

The single most important value factor is
a. age
b. condition
c. location
d. size

Answer 10

c. location

Question 11

Which characteristics create value in real estate?
a. durability and transferability
b. immobility and durability
c. scarcity and utility
d. utility and immobility

Answer 11

c. scarcity and utility

Question 12

The four broad forces which affect value are
a. cost, income, market, and correlation.
b. demand, scarcity, utility, and transferability.
c. density, variety, human scale, and architecture.
d. economic, governmental, social, and physical.

Answer 12

d. economic, governmental, social, and physical.

Question 13

A neighborhood’s life cycle is an example of
a. anticipation.
b. change.
c. highest and best use.
d. substitution.

Answer 13

b. change.

Question 14

In analyzing a vacant site to estimate its value, the first step is to determine
a. its highest and best use.
b. its list price.
c. the price of comparable vacant sites.
d. the price the owner paid for it

Answer 14

a. its highest and best use.

Question 15

If a developer purchased a lot measuring 348’ x 1,000’ and the sale price was $5,000 per acre, how much did the developer pay?
a. $34,800
b. $37,395
c. $38,360
d. $39,945

Answer 15

d. $39,945

Question 16

The data required for a site analysis includes
a. economic characteristics of the neighborhood and community.
b. physical characteristics of the site.
c. zoning information.
d. all of the above

Answer 16

d. all of the above

Question 17

Prior to inspecting the site, an appraiser should obtain information on the
a. size and shape of the parcel.
b. utilities and soil type.
c. zoning and easements.
d. all of the above

Answer 17

d. all of the above

Question 18

As the depth of the lot increases, the value per front footage
a. decreases.
b. decreases, and then begins to increase.
c. increases at a decreasing rate.
d. increases in direct proportion to the depth.

Answer 18

c. increases at a decreasing rate.

Question 19

If a property’s effective gross income is $14,351.40 and vacancy is calculated at 6.2%, what is the potential gross income?

a. $15,200.00
b. $15,241.19
c. $15,267.45
d. $15,300.00

Answer 19

d. $15,300.00

Question 20

The utility of property is most affected by
a. building codes, restrictions, and zoning.
b. credit controls and the Federal Reserve.
c. interest rates and time value of money
d. property taxes and escheat.

Answer 20

a. building codes, restrictions, and zoning.

Question 21

When reflected to the subject, the comparable property had a fireplace with a contributory value of $1,500, but lacked a half bath with a contributory value of $2,500. What was the net adjustment to the comparable?
a. - $1,000
b. + 1,000
c. - $4,000
d. + $4,000

Answer 21

b. + 1,000

Question 22

What type of obsolescence is represented by severe structural damage to a basement foundation?
a. economic
b. external
c. functional
d. physical

Answer 22

d. physical

Question 23

The effective age of a house does NOT consider
a. external market area factors.
b. the floor plan and design.
c. the physical condition and marketability.
d. the actual age of the house.

Answer 23

d. the actual age of the house.

Question 24

The gross living area of an improved residential property is determined by measuring the
a. exterior dimensions of the dwelling, including the garage.
b. exterior dimensions of the dwelling, not including the garage.
c. interior dimensions of each room, added together.
d. interior dimensions of each room and the garage, added together.

Answer 24

b. exterior dimensions of the dwelling, not including the garage.

Question 25

When building a new home, what is the order of the first four construction steps?
a. foundation, framing, drywall, and rough-ins
b. framing, rough-ins, site work, and foundation
c. rough-ins, framing, foundation, and site work
d. site work, foundation, framing, and rough-ins

Answer 25

d. site work, foundation, framing, and rough-ins

Question 26

Of the following architectural styles, which is typically a one-floor plan design?
a. bi-level
b. Cape Cod
C. Ranch
d. split-level

Answer 26

C. Ranch

Question 27

Which circumstance might cause a transaction NOT to be arm’s length?
a. Market conditions are known by seller.
b. Property has been adequately exposed.
c. Seller was not influenced by haste or duress.
d. Seller was not knowledgeable of value.

Answer 27

d. Seller was not knowledgeable of value.

Question 27

The maximum a typical buyer will pay for a property feature is related to the theory of
a. change.
b. conformity.
c. progression.
d. substitution.

Answer 27

d. substitution.

Question 28

In analyzing comparable sales, an appraiser should
a. adjust the comparable sales to the subject property.
b. adjust the subject property to the comparable sales.
c. average all of the comparable sales and adjust the subject accordingly.
d. adjust the comparable sales relative to each other

Answer 28

a. adjust the comparable sales to the subject property.

Question 29

You would expect market price to equal market value if the
a. parties to the sale were related.
b. sale was a foreclosure.
c. sale was made with an anticipation of change in use (zoning change).
d. transaction was arm’s length.

Answer 29

d. transaction was arm’s length.

Question 30

An appraiser is performing an appraisal of an older apartment building in an established neighborhood for which they have data on several similar apartment buildings. However, none have sold in the past five years. Which approach will be concluded as the most credible?

a. comparative unit
b. cost
c. income
d. sales comparison

Answer 30

c. income

Question 31

What sales data does NOT need to be confirmed for the sales comparison approach?
a. gross living area
b. property condition at the time of the sale
c. terms and circumstances of the sale
d. names of the previous owners

Answer 31

d. names of the previous owners

Question 32

Adjustments to the sale price of comparable sale properties are measured by the
a. amount a typical buyer will pay for an item.
b. cost per square foot.
c. principle of conformity.
d. quantity survey method.

Answer 32

a. amount a typical buyer will pay for an item.

Question 33

For the appraisal of an older single-family residential dwelling, where should the appraiser put their reliance?
a. cost conclusions
b. market rents
c. recent listings
d. recent sales

Answer 33

d. recent sales

Question 34

The increase or decrease in value that helps estimate market value of a property by comparing its features to those of comparable sales is referred to as an
a. adjustable comparison.
b. adjusted basis.
c. adjustment.
d. amended value.

Answer 34

c. adjustment.

Question 35

A document also referred to as a tax or assessors map is a(n)
a. assemblage plan.
b. plat map.
c. plottage map.
d. topographical map.

Answer 35

b. plat map.

Question 36

Which is an example of general data on a subject property?
a. school district
b. site topography
c. utility source
d. view

Answer 36

a. school district

Question 37

If a property is functionally and physically sound and acceptable to the market, but located next to a noisy and dirty industrial site, the effective age will be
a. at its peak.
b. higher.
c. lower.
d. unaffected.

Answer 37

b. higher.

Question 38

The sales comparison approach for valuing a site is difficult in older, built-up neighborhoods because
a. adjustments to sale prices are not required.
b. the method is too indirect.
c. the ratio of land to building is not constant.
d. vacant site sales are often scarce.

Answer 38

d. vacant site sales are often scarce.

Question 39

In valuing acreage suitable for residential development, a commonly applied method is the method.
a. abstraction
b. land residual
c. plottage
d. subdivision analysis

Answer 39

d. subdivision analysis

Question 40

The subject of an appraisal is a two-story dwelling with an exterior dimension of 22’ x 66’ and a full basement. Half of the basement is finished. What is the gross living area?
a. 1,452 square feet
b. 2,904 square feet
c. 3,630 square feet
d. 4,356 square feet

Answer 40

b. 2,904 square feet

Question 41

Which is NOT a recognized method of site valuation?
a. land residual
b. plottage comparison
c. sales comparison
d. subdivision analysis

Answer 41

b. plottage comparison

Question 42

In the income approach, residential properties are usually analyzed using
a. a capitalization rate.
b. comparable listings.
c. contract rent for apartment buildings in the same area as the subject.
d. a gross rent multiplier.

Answer 42

d. a gross rent multiplier.

Question 43

An appraiser is asked to appraise a vacant residential site. The neighborhood is about 75% built up. Most lots in the area are 55’ to 65’ wide. The vacant lot is 60’ wide. Comparable sales indicate lots are selling from $180 to $225 per front foot. What is the estimate for the subject lot?
a. $7,100-$10,125
b. $9,900-$11,400
c. $10,800-$13,500
d. $13,500-$16,500

Answer 43

c. $10,800-$13,500

Question 44

Physical differences and their affect on the value of land or site can be determined only by the
a. adjustments shown for the date of sale.
b. land development method.
c. market’s reaction in terms of dollars.
d. rules of excess depth.

Answer 44

c. market’s reaction in terms of dollars.

Question 45

Which approach would be most appropriate in the appraisal of a uniquely designed and recently constructed public library building?
a. building residual approach
b. cost approach
c. income approach
d. sales comparison approach

Answer 45

b. cost approach

Question 46

The use of the reproduction cost new of a building when cost estimating for a subject building eliminates all
a. external obsolescence.
b. functional obsolescence.
c. physical deterioration.
d. physical deterioration and functional obsolescence.

Answer 46

c. physical deterioration.

Question 47

Replacement cost refers to estimating the cost of a
a. building of the same age.
b. replica building.
c. rural appurtenance.
d. similar building using modern materials.

Answer 47

d. similar building using modern materials.

Question 48

In the cost approach, an opinion of value is developed by adding the
a. depreciated cost new of improvements to depreciated site value.
b. depreciated cost new of improvements to estimated site value.
c. new cost of the improvements to the depreciated site value.
d. new cost of the improvements to the estimated site value.

Answer 48

b. depreciated cost new of improvements to estimated site value.

Question 49

Which is a functional obsolescence?
a. broken A/C unit
b. clogged drain
c. inoperable faucet
d. no heating source

Answer 49

d. no heating source