Calculations Flashcards
A property recently sold for $800,000 with a $75,000 down payment. The seller held the mortgage with an annual interest rate of 5%, amortized monthly over 20 years. The market interest rate is 7%. What is the cash-equivalent value of the mortgage assuming that it is held for the full term?
A. $617,140
B. $680,982
C. $692,140
D. $755,982
A. $617,140
Step 1: Calculate the Monthly Mortgage Payment with 5%
Loan amount: 725,000
Step 2: Calculate the Present Value of These Payments at the Market Rate (7%)
= $617,140
The borrower agreed to a purchase price of $800,000, but the property’s cash-equivalent value (if financed at market rates) is only $692,140 ($617,140 plus down payment $75,000). If they needed to resell soon, they might not recover the full $800,000.
Gen App SCA Section 1 Practice Test
You confirm the sale price of a comparable home at $300,000. The buyer obtained a $325,000 loan from a local bank to use in purchasing the home. What is the cash-equivalent sale price of the home?
A $275,000
B. $300,000
C. $325,000
D. cannot be determined
B. $300,000
The cash-equivalent sale price remains $300,000, as that is the actual market price for the property, regardless of the financing arrangement.
Gen App SCA Section 1 Practice Test
You are appraising an old commercial building located in the central business district. The value of the site, if vacant, would be $500,000. You estimate demolition costs to remove the commercial building at $40,000. What is the highest and best use of the property if the current value as improved is $475,000?
A. continued use as a commercial building on an interim basis
B. moving the building to a less valuable site
C. removal of the existing improvements and redevelopment of the site
D. renovation of the existing building
A. Continued use as a commercial building on an interim basis
Since the current value ($475,000) exceeds the site’s value if vacant ($460,000), the highest and best use is to retain the existing improvements until redevelopment becomes more financially feasible.
Gen App SCA Section 2 Practice Test
You are appraising an industrial building on a site zoned for office use. You have concluded that the value of the vacant office site is $300,000 and the value of the vacant industrial site is $90,000. You have also concluded that the industrial property value is $400,000. If the highest and best use as improved is industrial, what is the contributory value of the improvements?
A. $90,000
B. $100,000
C. $190,000
D. $310,000
B. $100,000
Gen App SCA Section 2 Practice Test
You are appraising an office building. Another office building sold 1 year ago for $800,000. An appropriate adjustment for changing market conditions is 10% annually. The sale had favorable financing that contributed $25,000 to the sale price. What is the adjusted price of this comparable building?
A. $852,500
B. $855,000
C. $907,500
D. $960,000
A. $852,500
Financing first, then market condition
$800K minus $25K (bc the buyer paid a higher sale price to get the seller’s favorable mortgage rate)
= $775K
plus 10%
=$852,500
Gen App SCA Section 4 Practice Test
A comparable property sold 2 years ago for $725,000 and again last week for $841,000. What is the appropriate annual appreciation rate on a straight-line basis?
A. 7.4%
B. 8.0%
C. 13.8%
D. 16.0%
B. 8.0%
HP12c
$725,000 enter
$841,000 ∆%
2/
Read 8
Gen App SCA Section 4 Practice Test
A comparable sale is leased at $20,000 per year for 9 years. The market rent for the subject property’s fee simple estate is $25,000 per year. The adjustment for real property rights conveyed based on a discount rate of 9% is x which would be x to the comparable’s sale price.
$29,976
added
HP
5,000 enter CHS PMT
9 n
9i
PV
Read 29,976
Gen App SCA Review Quiz Part 13
A comparable property is leased at $35,000 per year for 7 years. The market rent for the subject property’s fee simple estate is $28,000 per year. The adjustment to the comparable sale for real property rights conveyed, based on a discount rate of 8%, is x, which would be x from the comparable’s sale price.
$36,445
subtracted
HP
7,000 enter CHS PMT
7 n
8i
PV
Read 36,445
Gen App SCA Review Quiz Part 13
A 3,000-square-foot comparable building was leased for $4.50 per square foot per year above the market rent over the remaining lease term of 5 years. If rent for the subject property is at a market rate and the appropriate discount rate is 9%, what is the adjustment for real property rights conveyed?
A. –$95,956
B. –$52,510
C. $52,510
D. $95,956
B. –$52,510
Gen App SCA Section 5 Practice Test
A 2,500-square-foot comparable building was leased for $5,000 per year below the market rent over the remaining 3 years of the lease. If rent for the subject property is at a market rate and the appropriate discount rate is 8%, what is the adjustment for real property rights conveyed?
A. –$35,098
B. –$12,885
C. $12,885
D. $35,098
C. $12,885
Gen App SCA Section 5 Practice Test
Properties in the subject property’s area are worth 75% of those in the comparable properties’ area. If the average price of the comparable properties is $300,000, what is the adjustment to the comparable sales?
A. –$75,000
B. –$60,000
C. $60,000
D. $75,000
A. –$75,000
Gen App SCA Section 5 Practice Test
If no adjustment is required for differences in building area, what is the range of the adjustment for real property rights conveyed for properties renting at above- market rates?
A. $20,000 to $30,000
B. $20,000 to $40,000
C. $30,000 to $40,000
D. $20,000 to $60,000
C. $30,000 to $40,000
Compare Above Market Range to At Market
Gen App SCA Section 5 Practice Test
You are appraising the leased fee interest in a property for which the contract rent is estimated to be $7,500 above market rent. Based on this, you have calculated an adjustment to the fee simple estate of a comparable sale of $30,000. What adjustment would be used in the cost approach analysis for the subject property?
A. –$30,000
B. –$7,500
C. $7,500
D. $30,000
D. $30,000
Gen App SCA Section 5 Practice Test
You are analyzing the recent sale of a 5,000-square-foot office building with tenant improvements estimated to cost $40 per square foot of building area. The subject property contains standard tenant improvements that cost $25 per square foot. The subject property and the comparable sale are similar in all other respects. You estimate total physical deterioration of the tenant improvements to be 10%. What is the adjustment for the additional tenant improvements?
A. $7,500
B. $67,500
C. $75,000
D. $82,500
B. $67,500
Gen App SCA Section 5 Practice Test
You are appraising a commercial building containing 4,000 square feet located on a 10,000-square-foot site. You have estimated the value of the building at $75.00 per square foot of building area, but it could be as much as 10% more, or $82.50 per square foot. The estimated value of the site is $5.00 per square foot, but it could be 15% more, or $5.75 per square foot. What overall range in value is possible based on these estimates?
A. $300,000 to $330,000
B. $330,000 to $357,500
C. $350,000 to $357,500
D. $350,000 to $387,500
D. $350,000 to $387,500
4,000 x $75 = $300,000
4,000 x $82.50 = $330,000
10,000 x $5 = $50,000
10,000 x $5.75 = $57,500
Gen App SCA Section 5 Practice Test
You are confirming the recent $910,000 sale price of an industrial building containing 13,000 square feet. Comparable buildings in this market sell for $60 per square foot of building area. This building was in a superior location in relation to the subject property and the other sales. What is the adjustment for this sale’s superior location?
A. –$130,000
B. –$65,000
C. $65,000
D. $130,000
A. –$130,000
Building 13,000 sf x $60 = $780,000
$910,000 sale price minus $780,000 = $130,000
Gen App SCA Section 5 Practice Test
What is the coefficient of variation for the sale price per building square foot?
A. 0.07
B. 0.13
C. 0.21
D. 0.32
A. 0.07
HP
f REG
20∑+
18.75∑+
22∑+
19∑+
g x
g s
19.94/
Read 0.07
Gen App SCA Section 5 Practice Test
You are currently appraising a small retail building that sold 3 years ago for $225,000. You are analyzing a comparable building that sold 6 months ago for $350,000. The market has been increasing 10% per year on a straight-line basis over the last 2 years. Calculate the adjustment for market conditions.
$17,500
“currently appraising”
6 months = 5%
$350,000 x 5% = $17,500
Gen App SCA Section 6 Practice Test
You are confirming a comparable sale with one of the parties to the transaction. You are told that the buyer paid $50,000 down and the seller held a note for the balance in the amount of $150,000 at 5% interest, amortized monthly for 25 years. The market interest rate is currently 7%. The seller also informs you that the financing increased the purchase price from $200,000 to $220,000. What is the adjustment for financing?
$20,000
Gen App SCA Section 6 Practice Test
If the mean building size is 3,400 square feet and the standard deviation is 234.52 square feet, calculate the coefficient of variation.
6.9%
Gen App SCA Section 6 Practice Test
A property sold 19 months ago for $750,000. It was recently listed for sale for $950,000 and sold for $900,000. What monthly compound rate of appreciation did the seller realize?
0.96%
HP
750,000 CHS PV
900,000 FV
19N
i
Read 0.96
you do not hit the blue g button because we are not dividing by 12.
Gen App SCA Section 6 Practice Test
Which of the following correlation coefficients indicates that the data pairs lie close to a straight line?
A. –0.01
B. –0.99
C. 0.50
D. 0.70
B. –0.99
The correlation coefficient measures the strength and direction of a linear relationship between two variables. It ranges from -1 to 1.
r= 1 or −1 → Perfect linear relationship
r close to 0 → Weak or no linear relationship
r close to ±1 → Strong linear relationship
Gen App SCA Section 6 Practice Test
A property sold for $400,000. Adjustments included a positive $35,000 for a swimming pool and a negative $25,000 for its larger site. What is the total gross adjustment as a percentage of the sale price?
15%
HP
400,000 enter
60,000 ∆%
Read -85
100+
Read 15
Gen App SCA Section 7 Practice Test
Sale 1 $300,000
Sale 2 $380,000
Sale 3 $390,000
Sale 4 $400,000
Sale 5 $400,000
What is the median?
$390,000
Gen App SCA Self Study
The client requests an opinion of the market value of the subject property’s leased fee estate. The contract rent exceeds market rent by $15,000 per year. The subject property’s lease has 9 more years to run. The value indication from a comparable property sale of a fee simple estate is $600,000.
19. What is the dollar amount of the adjustment to the comparable sale for real property rights conveyed if the discount rate for the leasehold is 10%? (Round to the nearest dollar.)
$86,385 plus
HP
15,000 CHS PMT
9n
10i
PV
Read 86385
Gen App SCA Self Study
The client requests an opinion of the market value of the subject property’s leased fee estate. The subject property’s lease has 9 more years to run. The value indication from a comparable property sale of a fee simple estate is $600,000.
20. If the subject property’s contract rent is $15,000 per year below market rent, what is the dollar amount of the adjustment to the comparable sale for real property rights conveyed if the discount rate for the leasehold is 8%? (Round to the nearest dollar.)
Minus $93,703
HP
15,000 CHS PMT
9n
8i
PV
Read 93,703
Gen App SCA Self Study
A property sold recently with a $125,000 down payment. The seller held a mortgage for the balance of the sale price at an interest rate of 5.0%, amortized over 25 years. The monthly mortgage payment is $4,559.80. The market interest rate is 6%. What is the cash-equivalent sale price if the mortgage is held full term?
$832,712
HP
f CLX
5 gi
25 gn
4,559.80 CHS PMT
PV
Read $779,999.60
6 gi
PV
Read 707,712
125,000 plus
$832,712
Gen App SCA Self Study
A property recently sold for $800,000 with a $75,000 down payment. The seller held the mortgage with an annual interest rate of 5%, amortized monthly over
20 years. The market interest rate is 7%. What is the cash-equivalent value of the mortgage assuming that it is held for the full term?
$617,139
HP
f CLX
5gi
20gn
725000 CHS PV
PMT
7gi
PV
Read 617,139
Gen App SCA Self Study
A property recently sold for $1,000,000 with a $50,000 down payment. The seller held the mortgage with an annual interest rate of 6.5%, amortized monthly over 25 years. The market interest rate is 7.0%. What is the cash-equivalent sale price assuming that the mortgage is held for the full term?
$957,563
HP
f CLX
6.5gi
25gn
950,000 CHS PV
PMT
7gi
PV
Read 907,563
Plus $50,000
= $957,563
Gen App SCA Self Study
A multitenant retail building recently sold for $1,400,000. During the time it was offered for sale, it was common knowledge that the building needed a new roof. Shortly after the transaction closed, the buyer secured a roofing bid of $150,000, checked references, hired a roofing contractor, negotiated a rent forgiveness of $1,200 for one tenant who would be inconvenienced by the job, supervised the job, and processed payment to the roofer. The property manager’s contract calls for an 8% charge for supervising capital expenditures.
Considering the required adjustment to this sale for expenditures made immediately after purchase, what is the adjusted sale price?
$1,563,200
1,400,000
plus 150,000 roof
plus 1,200 rent
plus 12,000 fee
= 1,563,200
Gen App SCA Self Study
An appraiser is analyzing two sales in order to estimate a market conditions adjustment. The sales are similar in all respects except the date of sale.
Sale 1 sold 18 months ago for $975,000.
Sale 2 sold 2 months ago for $910,000.
What is the monthly percent change for market conditions on a compound basis?
minus 0.430%
HP
f CLX
975,000 CHS PV
910,000 FV
16 n
i
Read -0.430
Gen App SCA Self Study
The subject property is a single-unit residence located on a site zoned for commercial use. The value of the vacant commercial site is $500,000, and the value of the vacant residential site is $75,000. The property value is $900,000. What is the contributory value of the improvements?
$400,000
When to Use Which Land Value?
If the highest and best use of the property were residential, then we would use $75,000 as the land value.
But since the land’s highest and best use is commercial (as indicated by the market), we must use $500,000.
That’s why the correct calculation subtracts $500,000 from $900,000, giving $400,000 as the contributory value of the improvements.
Gen App SCA Self Study
A 125-unit apartment building was constructed 12 years ago. Current zoning restrictions would allow only 100 units to be constructed on the site if it were vacant today. The appraiser has developed the following value indications by the three approaches:
Cost approach $7,500,000 (based on the site as though vacant)
Sales comparison approach $7,800,000
Income capitalization approach $7,900,000
If the final conclusion of value is $7,900,000, what is the bonus value due to the nonconformance of the property?
$400,000
If this property were vacant today, only 100 units could be built, and its value would be $7,500,000.
Since it has 125 units due to grandfathering, the market values it higher at $7,900,000.
The bonus value of $400,000 represents the added benefit of having extra units beyond zoning limits.
Gen App SCA Self Study
An industrial building has an eave height of 30 feet. Market rent for this building is the same as rent being paid for industrial buildings with a standard eave
height of 20 feet. In the cost approach analysis, the estimated total functional obsolescence is $40,000 because of the subject property’s excess eave height. (This includes $30,000 for the depreciated reproduction cost of the excess eave height and $10,000 for the added costs of ownership.) Two of the comparable sales have eave heights of 30 feet, while the remaining sales have eave heights of 20 feet. What is the adjustment to be made to the comparable sales that contain a 20-foot eave height?
Minus $10,000
The market does not recognize added value beyond 20 feet.
Gen App SCA Self Study
The assignment is to appraise a 5,000-square-foot industrial building. A comparable property recently sold for $375,000, but it was 1,000 square feet larger than the subject property. Research indicates that an appropriate adjustment for the additional space is $60 per square foot. What is the appropriate adjustment to the sale price of the comparable?
$60,000
Gen App SCA Self Study
An analysis of five comparable sales indicates the following adjusted values:
Sale 1: $550,000
Sale 2: $625,000
Sale 3: $540,000
Sale 4: $630,000
Sale 5: $575,000
$540,000 - $630,000
Gen App SCA Self Study
The subject of an appraisal assignment is a 4,500-square-foot warehouse. A comparable building recently sold for $225,000, but it contained 500 additional square feet of air-conditioned office space. Research indicates that an appropriate adjustment for this additional office space should be $40 per square foot. What is the adjusted price of the sale?
$205,000
Gen App SCA Self Study
An appraiser has analyzed five office sales. Their sale prices and overall comparison with the subject property are shown below:
Sale 1 $500,000 inferior
Sale 2 $600,000 superior
Sale 3 $550,000 inferior
Sale 4 $625,000 superior
Sale 5 $650,000 superior
$550,000 to $600,000
Note: need to put in order
inferior
inferior
subject
superior
superior
superior
Gen App SCA Self Study
The subject property is a 10,500-square-foot office building located on an 18,000-square- foot site. The following sales are comparable to the subject property in all respects except size. What is the indicated sale price per SF of building area for the subject property? What is the indicated sale price of the subject property?
$80
$840,000
Need to arrange in order:
9,000
9,200
9,500
10,200 / $85
Subject 10,500 = $80
10,800 / $75
Gen App SCA Self Study
The subject property is a three-story office building containing 5,000 square feet on each floor, located on a 20,000-square-foot site.
What is the floor area ratio?
0.75: 1
Gen App SCA Self Study
The subject property is a three-story office building containing 5,000 square feet on each floor, located on a 20,000-square-foot site.
What is the site coverage ratio?
0.25: 1
Gen App SCA Self Study
A comparable industrial building sold 1 year ago for $950,000. An appropriate adjustment for changing market conditions is –10% annually. The location of this larger building is $50,000 inferior to that of the subject property. What is the indicated value of the subject property?
Gen App SCA Self Study
the exam had 3 calculations about Regression Analysis. this was not in the practice tests or review exam but it is in the study material. need to add this to the deck. need to be able to determine sales price of subject based on sales $per SF. given info was $sales price and SF and $price/SF. Also need to be able to calculate coefficient of variation using regression analysis for the 4 sales that were given.
How to solve for changing holding period of mortgage when seller financed with HP12C
- Solve for PV/PMT
- change n, solve for FV
- change i, solve for PV
- Add down payment
Make cards for Trend analysis, Sensitivity Analysis, Scenario
