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APPRAISAL FINAL 2 Flashcards

1
Q

Which is NOT an item for which the appraiser would normally be responsible?
a. accurately describing the subject
b. completing a survey of the site
C. estimating market value
d. gathering all necessary appraisal data

A

b. completing a survey of the site

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2
Q

The area that a structure’s foundation rests upon is called a
a. footer.
b. joist.
c. pier.
d. slab.

A

a. footer.

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3
Q

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

A

a. school district

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4
Q

Trade fixtures can best be described as
a. item attached to real estate for business purposes.
b. items that were once personal property but are now real property.
C. lights and plumbing items attached to the real estate.
d. items that a landlord installs for the use of business tenants.

A

a. item attached to real estate for business purposes.

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5
Q

Using the information in the following table, calculate the annual depreciation of a house using the straight-line method.

Current Building Cost-$200,000
Effective Age-25 years
Actual Age-40 years
Expected Useful Life- 50 years
a. $2500
b. $5,000
c. $8,000
d. $10,000

A

a. $2500

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6
Q

In calculating square footage of a residential house, which is NOT considered part of the primary living space?
a. any room on the second floor
b. living and dining rooms
C. porches
d. both a and b

A

C. porches

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7
Q

In counting rooms in the house, which would typically NOT be counted in the total number of rooms?
a. a basement recreation room
b. bedrooms on the second floor
C. living and dining room-only if above grade
d. both a and b

A

a. a basement recreation room

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8
Q

A functional problem (or obsolescence) in a home pertains to
a. items outside the boundary of the subject.
b. location.
C. proximity to shopping.
d. the utility of the property, such as room layout.

A

d. the utility of the property, such as room layout.

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9
Q

The value most often sought in an appraisal is
a. depreciated value.
b. market value.
C. replacement value.
d. value in use.

A

b. market value.

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10
Q

Using a GMRM, the income approach requires the appraiser to
a. convert net income into a value estimate.
b. divide net income by the rate.
C. multiply the gross rent by a multiplier.
d. use gross rent divided by the property value.

A

C. multiply the gross rent by a multiplier.

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11
Q

Market value is the most
a. probable annual income.
b. probable selling price.
C. recent annual rent.
d. recent transfer price.

A

b. probable selling price.

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12
Q

The rental amount according to lease terms is defined as ___ rent.
a. contract
b. effective
C. market
d. term

A

a. contract

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13
Q

In analyzing a comparable sale where the seller paid points, the appraiser must
a. adjust the comparable for any impact seller paid points may have had on the sale price.
b. adjust the subject for any impact seller paid points may have had on the sale price.
C. contact the lender to verify current interest rates and loan program information.
d. contact the lender to verify the going rates for points.

A

a. adjust the comparable for any impact seller paid points may have had on the sale price.

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14
Q

An external obsolescence pertains to
a. a family room located in the basement.
b. the placement of bedrooms in relation to the bathroom.
c. a railroad track running along side the lot.
d. the size of the kitchen.

A

c. a railroad track running along side the lot.

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14
Q

Using the information provided, calculate the value of an apartment building using direct capitalization.
Annual Income-$150,000
Monthly Expenses-$2,000
Capitalization Rate-9%

a. $1,134,000
b. $1,400,000
C. $1,644,444
d. $1,666,667

A

b. $1,400,000

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15
Q

Which approach to value deals primarily with the amount of money an owner can receive from a rental property?
a. cost approach
b. income approach
C. sales comparison method
d. square foot method

A

b. income approach

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16
Q

Which principle is the value of adjustments done for the sales comparison approach generally based on?
a. change
b. conformity
C. highest and best use
d. substitution

A

d. substitution

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17
Q

In residential appraisals, a commonly utilized method of depreciation is the ___ method.
a. age-life
b. quantity of survey
C. square foot
d. unit in place

A

a. age-life

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18
Q

The process of estimating the value of a property by adding the estimated cost to replace a building, minus depreciation, plus the estimated site value, is known as the
a. cost approach.
b. functional obsolescence.
C. physical curable valuation.
d. quantitative survey method.

A

a. cost approach.

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19
Q

The period of time during which a structure may reasonably be expected to perform the function for which it was designed is known as its
a. chronological age.
b. effective age.
c. physical life span.
d. total economic life.

A

d. total economic life.

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20
Q

An improvement to a property that is not likely to contribute its cost to the total market value of the subject property is known as
a. improvement depreciation.
b. negative contribution.
C. over improvement.
d. physical loss amenity.

A

C. over improvement.

21
Q

The lack of sufficient information for sales of similar properties is a limitation of the ___ approach.
a. comparative unit
b. cost
C. rental valuation
d. sales comparison

A

d. sales comparison

22
Q

In completing a market analysis, an item contributing value and representing a variance between the subject property and a comparable sale requires the
a. comparable to be adjusted accordingly.
b. conclusions to be altered.
c. principle of change to be used.
d. subject property to be adjusted accordingly.

A

a. comparable to be adjusted accordingly.

23
Q

The financial terms of a sale
a. are irrelevant if the buyer paid full asking price.
b. have no influence on the price.
C. may have an impact on the price paid.
d. can be disregarded if it involved seller financing.

A

C. may have an impact on the price paid.

24
Q

Which approach to value for owner-occupied, single- family housing is based primarily on information obtained by analyzing comparable sales?
a. cost approach
b. income approach
C. sales comparison approach
d. unit in place approach

A

C. sales comparison approach

25
Q

Which would likely result in functional obsolescence?
a. a company closing a factory in the area
b. a house with five bedrooms and one bathroom
C. a new freeway built near a neighborhood
d. a zoning change

A

b. a house with five bedrooms and one bathroom

26
Q

While closed sales are required for the sales comparison approach, why would analyzing listed properties be useful?
a. A listing can be used as a third comparable property.
b. Location adjustments can be extracted from listings.
c. They are necessary for determining time adjustments.
d. They provide evidence of substitution and the upper limit of value.

A

d. They provide evidence of substitution and the upper limit of value.

27
Q

After freeway construction, the volume of business on a street decreased by 50%. This can be considered a(n)
a. amenity.
b. appurtenance.
C. external obsolescence.
d. functional obsolescence.

A

C. external obsolescence.

28
Q

Which would be considered an external obsolescence?
a. changes in zoning
b. normal wear and tear
C. poor architectural design
d. termite and pest control

A

a. changes in zoning

29
Q

A 25-year-old property sells for $125,000. If the site is worth $25,000 and the building would cost $200,000 to replace today, what is the annual rate of depreciation?
a. 0.5%
b. 1.0%
C. 2.0%
d. 5.0%

A

C. 2.0%

30
Q

The capitalization approach using a GMRM means to
a. convert net income into a value estimate
b. divide the cost of a building by annual rent.
C. divide the net income by the rate.
d. multiply the gross rent by a multiplier.

A

d. multiply the gross rent by a multiplier.

31
Q

In applying the gross monthly rent multiplier to the subject property, the appraiser would use___ rent.
a. current actual
b. gross market
C. historic
d. net market

A

b. gross market

32
Q

The monthly rent being paid for a rental property is called ___ rent
a. contract
b. effective
C. historic
d. market

A

a. contract

33
Q

In determining whether an item is a fixture, and therefore part of the real estate, which is least important?
a. annexation or attachment
b. intent
C. purpose
d. value

A

d. value

34
Q

An unfurnished house rents for $6,000 per year. An appraiser estimates the value of the subject at $80,000. What’s the monthly gross rent multiplier?
a. 7.50
b. 13.33
C. 133
d. 160

A

d. 160

35
Q

The most detailed method of estimating a reproduction cost for a structure is
a. comparative unit.
b. index.
C. quantity survey.
d. square foot.

A

C. quantity survey.

36
Q

The duration of time during which a structure may be financially efficient is its
a. chronological age,
b. economic life.
C. effective age.
d. observable life.

A

b. economic life.

37
Q

Real estate markets are said to be imperfect because
a. buyers and sellers are not always well informed.
b. most properties are alike.
c. property is easily and quickly developed.
d. supply always exceeds demand.

A

a. buyers and sellers are not always well informed.

38
Q

The land valuation method that uses a ratio of land to improved value is called
a. allocation.
b. capitalization.
C. extraction.
d. land residual.

A

a. allocation.

39
Q

A rectangular parcel of land containing five acres has 600 feet of road frontage. Depth is___ feet.
a. 363
b. 495
C. 661
d. 726

A

a. 363

40
Q

A comparable sale that sold for $102,000 requires the adjustments below. What percent is the total of gross adjustments?

Location + $5,000

Condition - $7,500

Physical Characteristics + $2,500

a. 0%
b. 4.9%
C. 9.8%
d. 14.7%

A

d. 14.7%

41
Q

The sales comparison approach is based on the assumption that an informed buyer would pay ___ for a property than the cost of acquiring another property of the same utility.
a. less
b. no more
c. substantially less
d. substantially more

A

b. no more

42
Q

While actual sales are preferred for the sales comparison approach, properties that have recently been listed may have some influence on an appraisal because listings indicate a(n)
a. lower limit of value.
b. market preference.
C. market value.
d. upper limit of value.

A

d. upper limit of value.

43
Q

The property described below is selling for $2,700 per acre. What is the total purchase price?

S 1/2 of SW 14 of SW 14 of Section 6 and the N 1/2 of NW 1/4 of Section 7
a. $216,000
b. $243,000
C. $270,000
d. $324,000

A

C. $270,000

44
Q

In the sales comparison approach, assume Sale #1 sold for $60,000 and, in the appraiser’s opinion, it is 15% superior to the subject property. What is the value of the subject?
a. $9,000
b. $51,000
C. $55,000
d. $69,000

A

b. $51,000

45
Q

The second bedroom of a house must be accessed through the first bedroom. This is considered
a. an amenity.
b. an aversion.
C. eminent domain.
d. functional obsolescence.

A

d. functional obsolescence.

46
Q

If the gross monthly rent multiplier is 180 and monthly rent is $600, what’s the value of the subject?
a. $108,000
b. $110,000
C. $160,000
d. $180,000

A

a. $108,000

47
Q

Replacement cost new and reproduction cost new are
a. always the same.
b. only different in custom-built homes.
C. only the same in new construction.
d. only the same for historical properties.

A

C. only the same in new construction.

48
Q

A house rents unfurnished for $500 per month. Using the gross monthly rent multiplier method, the appraiser estimates value of the subject at $80,000. What’s the monthly gross rent multiplier?
a. 0.16
b. 1.60
C. 16.0
d. 160.0

A

d. 160.0

49
Q

The effective age of a house has been established at 30 years. The remaining economic life is 50 years. What is the percent of depreciation?
a. 16.7%
b. 26.7%
c. 37.5%
d. 60.0%

A

c. 37.5%

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