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APR 106 > APR 106 > Flashcards

APR 106 Flashcards

1
Q

The Valuation Process is

A

“a systematic set of procedures an appraiser
follows to provide answers to a client’s questions about real property
value.”

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2
Q

The process begins with the _____________ and concludes with an _____________

A

appraisal assignment, appraisal

report

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3
Q

use of the appraisal ad valorem

A

property taxation

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4
Q

client for ad valorem

A

county treasurer

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5
Q

Appraisal Date Ad Valorem Colorado

A

June 30, even year by CRS

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6
Q 
When appraising for ad valorem, the type of value, property interests, date of
value opinion (level of value), and data collection period are provided by
A

Colorado Revised Statutes and the Colorado Constitution

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7
Q

The client definition

A

“the party or parties who engage, by employment or

contract, an appraiser in a specific assignment.”

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8
Q

“The type and extent of research and analyses in an appraisal or
appraisal review assignment”.

A

Scope of Work

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9
Q

HBU tests

A

physically possible,

legally permissible, financially feasible, and most profitable

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10
Q

_______ is the

analysis of conclusions from the three approaches to arrive at a final value opinion

A

Reconciliation

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11
Q

The final step in the valuation process is

A

Report of Defined Value

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12
Q

Individual appraisal reporting = USPAP STANDARD __

A

2

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13
Q

The report must be written in a manner that is not ________

A

misleading.

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14
Q 
For a mass appraisal the \_\_\_\_\_\_ may include:
 property records
 sale ratios and other statistical studies
 appraisal manuals and documentation
 market studies
 model building documentation
 regulations
 statutes and other acceptable forms.
A

work-file

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15
Q

“the process of valuing a universe of properties as of
a given date using standard methodology, employing common data, and allowing for
statistical testing.”

A

MASS APPRAISAL

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16
Q

“Improved land or a lot in a finished state so that it is ready
to be used for a specific purpose.”

A

a site

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17
Q

“A development right that cannot be used by the landowner, or that
the owner chooses not to use, but can be conveyed to landowners
in another location or leased for a period of years to then revert
back to the original owner;

A

TDR

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18
Q

The ________________ technique is the most reliable and common method of land
valuation.

A

sales comparison

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19
Q

“The characteristics or attributes of properties and transactions that
cause the prices of real property to vary.”

A

Elements of Comparison

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20
Q

Transactional Adjustments

A 
 Real property rights
 Financing
 Conditions of the sale
 Expenditures made immediately after the purchase
 Market conditions (time)
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21
Q

Property Adjustments

A 
 Location
 Physical characteristics
 Economic characteristics
 Use
 Non-realty components
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22
Q

_________ is defined as:
“Land that is not needed to serve or support the existing use. The
highest and best use of the excess land may or may not be the same
as the highest and best use of the improved.

A

Excess land

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23
Q

_________ is defined as:
“Land that is not currently needed to support the existing use but
cannot be separated from the property and sold off for another use.
Surplus land does not have an independent highest and best use
and may or may not contribute value to the improved parcel.”

A

Surplus land

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24
Q

The ______ technique involves determination of the contributory value of the
improvements as part of the total sales price of an improved property. The
balance of the sales price is attributed to the land.

A

extraction

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25
Q

Using the_______ technique, a portion of the total property value is assigned to
the land. It establishes relationships based on the economic principles of
balance and conformity.

A

allocation

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26
Q

“The procedure in which a discount rate is applied to a set of
projected income streams and a reversion.

A

DCF

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27
Q

When adjusting for the elements of comparison using the paired sales technique, the
appraiser should first adjust for ______adjustments, and then ______adjust for adjustments

A

transactional, property

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28
Q

STEPS TO IDENTIFYING A PROBLE

A

 Identify client and intended users
 Identify the intended use
 Identify the purpose of the assignment (type of value)
 Identify the effective date of the opinion
 Identify the relevant characteristics of the property
 Assignment conditions

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29
Q

“A set of procedures through which an appraiser derives a value indication for an income-producing property by converting its anticipated benefits (cash flows and reversion) into property value.

A

income approach

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30
Q

“The term of ownership of an investment is known as the __________! The presumed period of ownership; a period of time over which expected net operating income is projected for purposes of analysis and valuation is known as the _________!”

A

holding period, projection period

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31
Q

The duration of the income stream is expected to be at least as long as necessary to recover invested capital. This period is known as the _____________.

A

capital recovery period

32
Q

There are three primary sources of data used to analyze and determine correct
vacancy and collection rates:

A

 The historical record of the subject.
 Market studies of comparable and similar properties.
 Published studies in periodicals and other publications.

33
Q

“The conversion of income into value.”

A

Capitalization

34
Q

“A method used to convert an estimate of a single year’s income expectancy into an
indication of value in one direct step, either by dividing the net income estimate by
an appropriate capitalization rate or by multiplying the income estimate by an
appropriate factor.

A

Direct capitalization

35
Q

Which of the following is not a correct form of the IRV Formula?

a) I = R x V
b) R = I x V
c) R = I -:- V
d) V = I -:- R

A

b

36
Q

An individual has $500,000 to invest and expects a 10 percent overall return for the

investment. What net income would a property have to have to meet his return expectations?
a) $50,000
b) $500,000
c) $5,000,000
d) $50,000,000

A

A

37
Q

Joel James, MAI. is, developing an income approach for a 18-unit apartment building. He has
collected market rent information and determined the PGI. He has been able to collect market
vacancy rates but hasn’t located an amount for collection loss. What is the name of the current
income he has reached?
a) Effective gross income
b) Effective gross rents
c) Effective net income
d) Expected gross rents

A

D

38
Q

A property has an annual net income of $240,000. An investor requires an RO of 8 percent.
What should the investor pay for this property?
a) $1,920,000
b) $2,400,000
c) $3,000,000
d) $19,200,000

A

C

39
Q 
In the preceding questions if the income remains the same, but the value decreases, what must
happen to RO ?
a) Remain the same
b) Increases
c) Decreases
d) none of the above
A

B

40
Q 
What is the effective tax rate when you have a mill levy of 65 and an assessment
percentage of 30%?
a) .0105
b) .0195
c) .0250
d) .1950
A

B

41
Q

What is the value of a commercial property if you have an effective gross income of $283,500,
allowable expenses of $20,500 and a RO of 12.5%?
a) $ 164,000
b) $2,104,000
c) $2,140,000
d) $2,268,000

A

B

42
Q

What is the value of a commercial property if you have an effective gross income of $283,500,
allowable expenses of $20,500 and a RO of 12.5%?
a) $ 164,000
b) $2,104,000
c) $2,140,000
d) $2,268,000

A

B

43
Q

What is the value of a commercial property if you have an effective gross income of $283,500,
allowable expenses of $20,500 and a RO of 12.5%?
a) $ 164,000
b) $2,104,000
c) $2,140,000
d) $2,268,000

A

B

44
Q

Which of the following does not affect the capitalization rate?

a) Reliability of gross income.
b) Income and expense ratio.
c) Stability of the income stream.
d) The gross national product. (GNP).

A

D

45
Q

Which of the following is an allowable expense?

a) Capital expenditures.
b) Miscellaneous one-time expenses.
c) Landscaping.
d) Debt service.

A

C

46
Q

Chris McDowell has collected financing information for an appraisal of a duplex. He has
obtained a loan-to-value ratio, an equity dividend rate, and a mortgage constant. What can he
derive from this information?
a) PGI
b) OER
c) RO
d) VM

A

C

47
Q

Characteristics of an income stream are:

1) ______________________________
2) ______________________________
3) ______________________________
4) ______________________________

A

QUALITY
QUANTITY
DURATION
TIMING

48
Q

Operating expense ratios …

a) should only be used for mass appraisal
b) may be used for individual expenses
c) may only be used for total operating expenses
d) VM represents the mortgage loan amount

A

B

49
Q

Colorado Constitution Article X, Section 20, sometimes called ______________, which was approved by Colorado voters in November 1992, became effective for the 1993 assessment year. This amendment to the Colorado Constitution eliminated consideration of the cost approach to value for the valuation of residential property for ad valorem tax purposes in Colorado.

A

the taxpayers bill of rights (TABOR)

50
Q

_____________ is the period over which improvements contribute to property value

A

Total Economic Life

51
Q

__________ is the total time a building might last or is expected to last as opposed to its
economic life.

A

Physical life

52
Q

loss in value for any reason

A

depreciation

53
Q

“One cause of depreciation; an impairment of desirability and usefulness
caused by new inventions, changes in design, improved processes for
production, or external factors that make a property less desirable
valuable for a continued use; may be either functional or external.

A

obsolescence

54
Q

“Items of physical deterioration or functional obsolescence that are
economically feasible to cure.

A

curable

55
Q

______________ is that which is not economically feasible or practical to correct; where the cost to remedy the problem would outweigh the value
benefit to the property after its correction.

A

incurable depreciation

56
Q

“The amount of money it will take to remedy a cause of depreciation.”

A

cost to cure

57
Q

___________ cost is the cost of producing an exact replica of a building or improvement.

A

reproduction

58
Q

________ cost is the cost to produce a building or improvement
having the same utility.

A

replacement

59
Q

Which of the following is not a direct cost?

a. Lumber
b. Labor
c. Building permits
d. Equipment rental

A

C

60
Q

The __________method is the most comprehensive method of estimating
cost, which breaks out materials and labor for each building component.

A

quantity survey

61
Q

The __________method is the most common method of estimating cost used in mass
appraisal.

A

comparative unit

62
Q 
List the five principal characteristics that influence cost.
1.
2.
3.
4.
5.
A 
Design type
construction type
quality
shape 
size (floor area)
63
Q

The __________ ratio is found by dividing the ground area of a building
by the perimeter of its outside walls.

A

area-perimeter

64
Q

Physical curable deterioration is generally measured by the

A

cost to cure

65
Q

Super-adequacy is known as what type of depreciation?

a. Functional
b. Physical
c. External
d. Desegmentation

A

A

66
Q

The ________method of measuring depreciation requires separation of
depreciation into all its various causes.

A

breakdown

67
Q

The economic age-lifemethod assumes straight-line depreciation.
TRUE OR FALSE

A

TRUE

68
Q

The Real Property Transfer Declaration (TD-1000) is __________
The only persons allowed to review this information are; the grantee,
the grantor IF they filed it, the assessor and his/her employees, the
PTA and DPT employees and the auditor!

A

confidential!

69
Q

highest point of wall

A

double top plate

70
Q

between foundation and floor system

A

sill plate

71
Q

greater the r value, the greater the degree of

A

insulation

72
Q

The ____________ plan shows where an improvement is located in relation to the lot
lines.

A

site/plot

73
Q

The _________________ view shows the interior of an improvement from the side and
may provide types of construction techniques.

A

section

74
Q 
Which type of foundation requires caissons or extended piers to support the
improvement?
a) Wall
b) Deep
c) Shallow
d) Footing
A

b DEEP

75
Q

The beam that crosses over the top of a window is called a ______________________

A

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APR 106 (1 decks)

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