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02 Basic App Proc Quiz > Ch 12 Final Exam > Flashcards

Ch 12 Final Exam Flashcards

1
Q

A house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. What is the amount of long-lived depreciation attributable to the building?

A
  1. Exercise 2. 12 + 38 = 50 years total economic life. Determine Cost of Long-lived Items by subtracting deferred maintenance and short lived items Cost from total replacement cost: $212,340 - $670 - $20,000 = $191,670. Determine depreciation percentage by diving effective life by total economic life: 12 / (12 + 38 = 50) = 24%. Multiply the Cost of the Long-Lived Items by the depreciation percentage: $191,760 X 24% = $46,000.
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2
Q

__________ occurs within a property; while _________occurs off the site.

A

Physical deterioration and functional obsolescence, external obsolescence

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3
Q

“An amount paid for the use of land, improvements or a capital good” is the definition of

A

rent

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4
Q

“The relationship or ratio between the sale price or value of a property and its periodic gross rental income” is the definition of

A

gross rent multiplier

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5
Q

“A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis” is the definition of

A

hypothetical condition

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6
Q

“A method of estimating land value in which the depreciated cost of the improvements on an improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land” is the definition of the ___________ method of site valuation.

A

extraction

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7
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 ” is the definition of

A

direct capitalization

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8
Q

“Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat” is the definition of

A

fee simple estate

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9
Q

“Data that relates to the four forces that affect real property values—social, economic, governmental, and environmental forces” is the definition of

A

general data

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10
Q

“Real property for which the expansion, redevelopment, or reuse of the real estate may be complicated by the presence of environmental contamination that needs to be remediated to appropriate regulatory standards ” is the definition of

A

brownfield

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11
Q

“The actual rental income specified in a lease” is the definition of ___________ rent.

A

contract

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12
Q

“The age of property that is based on the amount of observed deterioration and obsolescence it has sustained” is the definition of ____________ age.

A

effective

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13
Q

“The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout” is the definition of__________ cost.

A

replacement

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14
Q

“The estimated cost to construct, at current prices as of the effective appraisal date, an exact duplicate or replica of the building being appraised, using the same materials…” is the definition of _______________ cost.

A

reproduction

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15
Q

“The relationship or ratio between the sale price or value of a property and its gross annual rental income” is the definition of

A

gross income multiplier

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16
Q

“The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease” is the definition of _______________.

A

leasehold interest

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17
Q

A ___________ home has a permanent steel chassis, wheels and axles.

A

manufactured

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18
Q

A _______________ home is built in accordance with the HUD Code.

A

manufactured

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19
Q

A 5 year old water heater with an expected life of 12 years and a replacement cost of $825 will have experienced depreciation of $__________.

A

344.03

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20
Q

A building was constructed in July 2000 for $654,200. The cost index at that time was 138.5. The current cost index is 221.8. What is the indicated reproduction cost of the building today?

A

1046720

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21
Q

A comparable new house just sold for $440,000. You estimate the value of the site at $90,000 and the cost of the site improvements at $15,000. It has 2,885 square feet of GLA. What is its unit cost?

A

116.12

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22
Q

A comparable sale of a new house just sold for $640,000. You estimate the value of the site at $120,000 and the cost of the site improvements at $18,000. It has 2,940 square feet of GLA. What is its unit cost?

A

170.75

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23
Q

A deed could provide all of the following information about a property EXCEPT

A

zoning

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24
Q

A deed could provide which of the following information about a property?

A

owner of record, easements, deed restrictions

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25
Q

A dwelling has a reproduction cost of $625,000. It is 10 years old and has an effective age of 12. Its remaining economic life is estimated to be 48 years. What is the depreciated value of the improvements by the age-

A
  1. Age-Life Method. 12 + 48 = 60 years (total economic life). 12 ÷ 60 = .20 or 20% depreciation. $625,000 X .20 = $125,000 depreciation. $625,000 - $125,000 = $500,000.
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26
Q

A factory-built house constructed in compliance with the HUD code is _________ home.

A

manufactured

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27
Q

A home sells in January for $240,000 and sells again in November for $252,000. When the home resold it had not been improved at all. What is the indicated adjustment for change in market conditions, per month?

A

0.005

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28
Q

A house cost $295,000 to build new. It is 5 years old and has sustained a total of 8% depreciation. It sits on a lot worth $45,000. What is its value by the cost approach?

A

316400

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29
Q

A house cost $395,000 to build new. It is 5 years old and has sustained a total of 10% depreciation. It sits on a lot worth $65,000. What is its indicated value by the cost approach?

A

420500

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30
Q

A house is rented for $1,050 per month, but lacks air conditioning. Comparable houses with air conditioning rent for $1,100 per month. The appropriate gross rent multiplier is 85. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning?

A

4250

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31
Q

A house is rented for $1,050 per month, but lacks air conditioning. Comparable houses with air conditioning, rent for $1,100 per month. The appropriate gross rent multiplier is 75. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning?

A

3750

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32
Q

A management fee usually is based on a percentage of the _________ income.

A

gross

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33
Q

A mortgage in which a party other than the borrower assures payment in the event of default is a(n) _____________ mortgage.

A

guaranteed

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34
Q

A one

A

cape cod

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35
Q

A parcel is valued at $450,000 as a single unit. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $70,000. Site development costs (sewer, grading, road, etc.) would cost $65,000. What is the highest and best use?

A

Subdivide it

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36
Q

A property contains 3.2 acres and is worth: A. $155,000 as single home site; B. $75,000 per unit as a site for a duplex; or C. $50,000 per acre as a retail site. All uses are physically possible, economically feasible and legally permitted. Which is the highest and best use?

A

C, retail site

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37
Q

A property sold for $2,350,000. The net operating income was verified as $294,640. The capitalization rate indicated by sale is ____%.

A

0.125

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38
Q

A property sold for $250,000. The reproduction cost of the building was $380,000 and it was 60% depreciated. By extraction, what is the value of the land?

A

98000

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39
Q

A single parcel is valued at $450,000. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?

A

Leave it as one parcel

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40
Q

A single unit residence sold for $126,000. It was rented for $1,100 per month but the market rent was $1,200. What is the GRM indicated by this sale?

A

105

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41
Q

All of the following could be sources of general data EXCEPT

A

zoning ordinances

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42
Q

All of the following could be sources of specific data EXCEPT

A

U.S. Census Bureau

43
Q

All of the following would be considered short-lived items EXCEPT

A

foundation

44
Q

An 8-unit apartment building has 5 units rented at $850 per month and 3 units rented at $925 per month. What is its gross income?

A

84300

45
Q

An appraiser must not allow the intended use of an assignment or a client’s objectives to cause the assignment results to be __________.

A

biased

46
Q

An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. This 25% figure represents

A

entrepreneurial incentive

47
Q

An estimate of remaining economic life is required by

A

VA. Yes, it is required by VA and FHA.

48
Q

An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 80%. What is the land value?

A
  1. Extraction Method. $350,000 X .2 = $70,000 (current building value). $375,000 - $70,000 = $305,000 (land value).
49
Q

Another name for girder is

A

beam

50
Q

Appraisal fees are examples of _______________ costs.

A

indirect

51
Q

Appraisers are cautioned to identify the exact _______________ of market value, and its _______________, applicable in each appraisal completed for the purpose of market value.

A

definition, authority

52
Q

Architectural and engineering fees are examples of _____________ costs.

A

indirect

53
Q

Condos in your market area sold for a median price of $195,320 twelve months ago and the median price of condos for the current month is $219,540. What is the percentage of change in market conditions?

A

0.124

54
Q

Construction materials and workers’ wages are examples of __________costs.

A

direct

55
Q

Depreciation is defined as “a loss in property value from _________. “

A

any cause

56
Q

Developers often value land on a basis of price per

A

buildable unit

57
Q

Each of these is a variable expense EXCEPT

A

taxes

58
Q

Each written appraisal report must contain the date

A

of the report and the effective date of the appraisal

59
Q

Fannie Mae says the appraiser must base his or her analysis and any adjustments to comparable sales on

A

market data

60
Q

Fannie Mae says the cost approach ____________________.

A

is optional

61
Q

Fill, grading and permits are examples of improvements that create a

A

Site

62
Q

Footings need to be _______________ below average frost penetration levels.

A

at least 12 inches

63
Q

GLA includes _______________ but not _______________.

A

above grade finished area, garages

64
Q

GRMs are derived by dividing the __________ by the property’s ___________ at the time of sale.

A

sale price, gross monthly unfurnished market rent

65
Q

If a cost manual is used, the result is _____________ cost.

A

replacement

66
Q

In a federally related transaction, a licensed residential appraiser is permitted to appraise non-complex 1-4 unit residential properties with a transaction value of less than ________ and complex 1-4 unit residential properties with a transaction value less than _________.

A

$1,000,000, $250,000

67
Q

In most residential appraisals, the appraiser values

A

site

68
Q

In the age-life method of estimating depreciation, the ___________ age is divided by the ____________ life.

A

effective age, total economic life

69
Q

In the sales comparison approach, sales data on __________ sales should be collected.

A

at least three

70
Q

It is common in appraisal reports to include a map that shows the location of the _______________.

A

subject property and comparable sales

71
Q

Market condition adjustments should always be calculated from the time of the ________ to the ___________.

A

contract, effective date of the appraisal

72
Q

Materials that transfer energy quickly are called _______________.

A

conductors

73
Q

Modular homes are constructed to meet __________ code requirements.

A

State and Local

74
Q

Price per room is a common unit of comparison when appraising

A

2-4 unit residential properties

75
Q

Ranking analysis is a form of __________ analysis.

A

qualitative

76
Q

Segregated cost method is another name for the _________ method.

A

unit-in-place

77
Q

The “summation approach” is another name for the _______________ approach.

A

cost

78
Q

The credibility of assignment results is always measured in the context of the _______________.

A

intended use

79
Q

The Fannie Mae Single Family Comparable Rent Schedule is designated as Form

A

1007

80
Q

The first step in the valuation process is

A

define the problem

81
Q

The ground rent capitalization method should only be used when appraising a property that is

A

income-producing or suitable for income production

82
Q

The intended user of an appraisal is the __________ and any other user, as identified by _________.

A

client, name or type

83
Q

The last step in the valuation process is

A

report the final opinion of value

84
Q

The method that treats the land value as a percentage of the total value is the __________ method.

A

allocation

85
Q

The most commonly used method for valuing sites is the ____________ method.

A

sales comparison

86
Q

The SCOPE OF WORK RULE says that in each real property appraisal assignment, the appraiser must _______ the problem to be solved, and determine and perform the scope of work necessary to develop ________ assignment results.

A

identify, credible

87
Q

The subject is a 15 year old duplex that would cost $240,000 to build new today. It is in good condition and you estimate the effective age to be 10 years. Your estimate of total economic life is 50 years. Its land value is $60,000. What is its value by the cost approach?

A
  1. Cost Approach Using Age- Life Method. 10 ÷ 50 = .20 or 20% depreciation. $240,000 X .20 = $48,000 depreciation. $240,000 - $48,000 = $192,000. $192,000 + $60,000 - $252,000
88
Q

The summation approach is another name for the _______________ approach.

A

cost

89
Q

The URAR form can be used to report the appraisal of which of the following property types?

A

one-unit property, one-unit with an accessory unit, unit in a PUD

90
Q

Today the _______________ technique of site valuation is used primarily in highest and best use analysis.

A

land residual

91
Q

Two squares of 180-pound roof shingles would weigh _____ pounds.

A

360

92
Q

USPAP says a cost approach must be developed when it is necessary for

A

credible results

93
Q

When describing roofing shingles, a “square” contains __________ square feet.

A

100

94
Q

When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. What is the mean of the GRMs?

A

96.3

95
Q

When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. What is the range of the GRMs?

A

24.7

96
Q

When estimating the amount of adjustments for differences among properties, the most important principle is the principle of _______________.

A

contribution

97
Q

When the property being appraised is a one-family property that will be used as an investment property, Fannie Mae requires that the appraiser must prepare a ______________.

A

Form 1004 and Form 1007

98
Q

Which site valuation methods should only be utilized when the subject property is income-producing by nature?

A

land residual and ground rent capitalization

99
Q

Which type of depreciation occurs off the site?

A

external

100
Q

Which type of valuation analysis would typically NOT include a separate site valuation?

A

gross rent multiplier

101
Q

Which was the earliest form of electrical wiring?

A

knob and tube

102
Q

Which would NOT be a sub-step in defining the problem?

A

highest and best use analysis

103
Q

You calculate the following gross rent multipliers for comparable properties: 121.2, 105.3, 111.2, 150.1, 108.3, 105.3, 109.8, 108.8. What is the mode of the GRMs?

A

105.3

104
Q

You examine a construction contract to build a 2,448 square foot house and the total cost is $197,450. What was the cost per square foot?

A

80.66

02 Basic App Proc Quiz (21 decks)

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