Ch 1

Question 1

How many acres does it include (the numbers are in feet)?

Answer 1

First we have to divide the irregular shape into standard shapes that we can deal with. If you drop two lines as indicated in red, you form two rectangles and a right triangle.

It is important that it be a right triangle: the height must be perpendicular to the base and they form a 90 degree angle. Then we can apply the age old formula for the area of a triangle that the area is one half the base times the height (A = ½ BH).

Rectangle A = 60 x 60 = 3,600 SF
Rectangle B = 110 x 120 = 13,200 SF
Triangle C = 20 x 110 ÷ 2 = 1,100 SF
_________

Total 17,900 SF

17,900 SF ÷ 43,560 = .41 acre

Question 2

Problem 1-1

A site has 4.7 acres. You analyze the market and determine it could have four possible uses that would be legally permitted, physically possible and financially feasible. Which one would be the highest and best use of the site?

A. Used as a site for a large single unit house it would be worth $150,000.

B. Used as a site for 2 duplexes, it would be worth $40,000 per unit.

C. Used as a site for a small medical center, it would be worth $35,000 per acre.

D. Used as a site for an office complex, it would be worth $25 per SF of rentable space. It could support two buildings that each measure 40’ x 85’.

Answer 2

Problem 1-1 Solution:

A. Present value = $150,000

B. 4 units X $40,000 = $160,000

C. 4.7 acres x $35,000 = $164,500

D. 40’ x 85’ x 2 buildings =
6,800 SF x $25 = $170,000

Therefore Alternative D is the highest and best use. It produces the highest return to the site

Question 3

An old deed describes a property as being 8 chains and 12 links by 4 chains and 48 links. How many acres are in the property?

Answer 3

A. 8 chains = 66 feet x 8 = 528 feet
12 links x .66 feet = 7.92 feet
______
Total 535.92 feet

4 chains = 66 feet x 4 = 264 feet
48 links x .66 feet = 31.68 feet
______
Total 295.68 feet

535.92 feet x 295.68 = 158,461
158,461 ÷ 43,560 = 3.6378 acres

Question 4

Another old deed says a property is bounded on the north by Smith and then runs easterly along that line for 46 poles; then it runs southerly for 72 poles along the lands of Johnson; then it runs westerly along a line parallel to the first line for a distance of 46 poles also along the lands of Johnson; and thence it returns in a northerly direction along the lands of Roberts to the point and place of beginning. If the property is worth $12,000 per acre, how much is it worth?

Answer 4

46 poles x 16.5 feet = 759 feet

72 poles x 16.5 feet = 1,188 feet

759 feet x 1,188 feet = 901,692 SF
901,692 SF · 43,560 = 20.7 Acres

20.7 acres x $12,000 = $248,400

Question 5

A rancher owns 5 full sections, 3 half sections, 5 quarter sections, and 7 quarter-quarter sections. How many acres does the farmer own?

Answer 5

Number of Sections

5 full sections x 640 acres = 3,200 acres

3 half sections x 320 = 960

5 quarter sections x 160 = 800

7 quarter-quarter sections x 40 = 280
_____

5,240 acres

Question 6

A. How many square feet are in the site?

B. How many acres?

C. If it sells for $150,000, how much did it sell for per square foot?

D. How much did it sell for per acre?

Answer 6

A. Rectangle 312 x 348 = 108,576 SF
Triangles 2 x 158 x 348 ÷ 2 = 54,984 SF
__________

Total 163,560 SF

B. 163,560 SF ÷ 43560 = 3.75 acres

C. $150,000 ÷ 163,560 = $.92
D. $150,000 ÷ 3.75 = $40,000

Question 7

SALES COMPARISON Method

Answer 7

In the sales comparison method, the appraiser develops a value indication by comparing the subject to sales of similar properties and making adjustments to the sale prices or unit prices of the comparable properties. It is the preferred method for valuing sites and should be used whenever possible.

Question 8

Extraction Method

Answer 8

In the extraction method, the appraiser uses sales of improved properties and subtracts the contributory value of the improvements to arrive at an indicated value for the site. This method has good application in urban areas where there are few sales of vacant sites.

Question 9

ALLOCATION Method

Answer 9

In the allocation method, the appraiser analyzes sales of improved properties to establish a ratio of land value to total property value, and then applies this ratio to the subject property or comparable sale(s). This method also has good application in urban areas where there are few sales of vacant sites. Allocation ratios can be established through research and analysis.

Question 10

SUBDIVISION DEVELOPMENT Method

Answer 10

The subdivision development method has limited applicability; it can only be used to value properties for which the highest and best use is subdivision or development. In this method, an appraiser estimates the future sale prices of the lots, deducts expenses and entrepreneurial incentive, and discounts the future net sale proceeds to a present value.

Question 11

LAND RESIDUAL Method

Answer 11

In the land residual method, the appraiser takes the net operating income (NOI) attributable to an improved property, analyzes it, and breaks it down into the income to the building and income to the land. The income attributable to the land is capitalized at a market-derived rate. This method is only suitable for income-producing properties.

Question 12

GROUND RENT CAPITALIZATION Method

Answer 12

The ground rent capitalization method is used for sites that are leased, or can be leased. The ground rent for the subject is capitalized at a market-derived rate to indicate a value conclusion. As with the land residual method, this method is suitable only for income-producing properties.

Question 13

Which improvements do not make a site?

Answer 13

Minor improvements like
fence
landscaping
crops
do not turn land into a site

Question 14

What improvements make a site?

Answer 14

• Roads
• Curbs and gutters
• Water
• Sewer
• Grading
• Fill
• Drainage
• Site plans
• Site approval
• Zoning changes
• Permits

Question 15

1. A plan, map, or chart of a city, town, section, or subdivision indicating the location and boundaries of individual properties.
   2.
   A map or sketch of an individual property that shows property lines and may include features such as soils, building locations, vegetation, and topography.
2. A map intended to show the division of land into lots or parcels. Upon recordation with the appropriate authorities, land included in the plat can thenceforth be legally described by reference to the plat, omitting a metes and bounds description. (IAAO)
   defines

Answer 15

Plat

Question 16

a description of land that identifies the real estate according to a system established or approved by law; an exact description that enables the real estate to be located and defined.
Defines:

Answer 16

Legal description

Question 17

A record showing the location, size and owner of each plot of land in a stated area.

Answer 17

Plat book

Question 18

Metes and bounds utilized a system of xx. The xxx were the directions that a boundary line traveled from a benchmark. It indicated x relative to north or south.

The xx were how long the boundary line ran.

Answer 18

bearings and distances
bearings (or metes)
direction

distances (or bounds)

Question 19

A distinct piece of land; a piece of land that forms a part of a district, community, city block, etc.
A piece of land in one ownership, whether platted or unplatted.
defines

Answer 19

Lot

Lot is a pretty generic term. See the definition below for “parcel.” It is very similar.

Question 20

A parcel of land; an area of real estate that is frequently divided into smaller parcels.
defines

Answer 20

Tract

Question 21

a piece of land of any size in one ownership
defines

Answer 21

Parcel

Question 22

How many feet are 4 chains and 30 links?

Answer 22

284 feet
[(4 x 66) + (30 x .667)].

Question 23

A lot contains .74 acres of land. How many SF is that?

Answer 23

1 ac = 43,560 SF
0.74 ac = x

43,560 x 0.75 = 32,234 SF

Question 24

How many acres does it include (the numbers are in feet)?

Answer 24

Rectangle A = 60 x 60 = 3,600 SF Rectangle B = 110 x 120 = 13,200 SF Triangle C = 20 x 110 / 2 = 1,100 SF Total 17,900 SF
17,900 SF / 43,560 = .41 acre

Question 25

A site has 4.7 acres. You analyze the market and determine it could have four possible uses that would be legally permitted, physically possible and financially feasible. Which one would be the highest and best use of the site?
A. Used as a site for a large single unit house it would be worth $150,000.
B. Used as a site for 2 duplexes, it would be worth $40,000 per unit.
C. Used as a site for a small medical center, it would be worth $35,000 per acre.
D. Used as a site for an office complex, it would be worth $25 per SF of rentable space. It could support two build- ings that each measure 40’ x 85’.

Answer 25

A. Present value = $150,000
B. 4 units X $40,000 = $160,000 C. 4.7 acres x $35,000 = $164,500 D. 40’ x 85’ x 2 buildings =
6,800 SF x $25 = $170,000
Therefore Alternative D is the highest and best use. It produces the highest return to the site.

Question 26

An old deed describes a property as being 8 chains and 12 links by 4 chains and 48 links. How many acres are in the property?

Answer 26

8 chains = 66 feet x 8 = 528 feet 12 links x .667 feet = 8 feet Total 536 feet
4 chains = 66 feet x 4 = 264 feet 48 links x .667 feet = 32 feet Total 296 feet
536 feet x 296 = 158,656 158,656 / 43,560 = 3.64 acres

Question 27

Another old deed says a property is bounded on the north by Smith and then runs easterly along that line for 46 poles; then it runs southerly for 72 poles along the lands of Johnson; then it runs westerly along a line parallel to the first line for a distance of 46 poles also along the lands of Johnson; and thence it returns in a northerly direction along the lands of Roberts to the point and place of beginning. If the property is worth $12,000 per acre, how much is it worth?

Answer 27

46 poles x 16.5 feet = 759 feet
72 poles x 16.5 feet = 1,188 feet 759 feet x 1,188 feet = 901,692 SF 901,692 SF · 43,560 = 20.7 Acres 20.7 acres x $12,000 = $248,400

Question 28

A rancher owns 5 full sections, 3 half sections, 5 quarter sections, and 7 quarter-quarter sections. How many acres does she own?

Answer 28

5 full sections x 640 acres = 3,200 acres
3 half sections x 320 = 960
5 quarter sections x 160 = 800
7 quarter-quarter sections x 40 = 280
5,240 acres

Question 29

Look at the site below and then answer the questions that follow. The dimensions are in feet, and both sides of the property are symmetrical.

A. How many square feet are in the site?
B. How many acres?
C. If it sells for $150,000, how much did it sell for per square foot?
D. How much did it sell for per acre?

Answer 29

A. Rectangle 312 x 348 = 108,576 SF
Triangles 2 x 158 x 348 ÷ 2 = 54,984 SF Total
163,560 SF
B. 163,560 SF ÷ 43560 = 3.75 acres
C. $150,000 ÷ 163,560 = $.92
D. $150,000 ÷ 3.75 = $40,000