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02 Basic App Proc Quiz > Ch 2-3 > Flashcards

Ch 2-3 Flashcards

1
Q

Data that relates to the four forces that affect real property values are xxxx forces. This type of data is usually not specific to any particular property but is applicable in many assignments of similar types of properties. Also known as xx data.” defines xx

A

social, economic, governmental, and environmental forces.
macro-level
General Data

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2
Q

Usually it is the xxx influences that exert the greatest pressure.

A

closer and more proximate

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3
Q

Sources of General Data

A
  1. Government
  2. Trade associations
  3. Utility companies
  4. School districts
  5. Universities
  6. Departments of transportation
  7. Planning boards
  8. Multiple listing services
  9. Chambers of commerce
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4
Q

Some common sources of specific data include:

A
  1. Deeds
  2. Location maps
  3. Tax maps
  4. Flood maps
  5. Assessor’s records
  6. Title companies
  7. Zoning ordinances
  8. Multiple listing services
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5
Q

The Deed will give you info about

A
  • The legal description of the property
  • The owners of record
  • Easements of record
  • Deed restrictions
  • Chain of title (when the property was purchased and from whom)
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6
Q

If you are appraising the property for a mortgage, ask the lender for a copy of x

A

the Deed.

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7
Q

Flood maps are prepared by the xxx

A

Federal Emergency Management Agency (FEMA)

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8
Q

SFHA

A

Special Flood Hazard Area

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9
Q

Designated Flood Zones are

A

V and A

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10
Q

Most MLS systems provide limited information regarding listings and sales of xx. Typically, most xx sales and listings will not appear in a local or regional MLS. The main focus of most local and regional MLS systems is on xx.

A

vacant land
commercial and industrial
residential properties

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11
Q

Define Land

A
  1. In law, the solid surface on the earth, as distinguished from water.
  2. One of the four agents of production in economic theory”
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12
Q

Land has x improved.

A

not been

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13
Q

What are the agents of production:

A

land, labor, capital, entrepreneurial coordination

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14
Q

Land is x - site is x.

A

raw
improved

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15
Q

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

A

Site

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16
Q

Examples of what makes Land a site?

A
  • Roads
  • Curbs and gutters
  • Water
  • Sewage disposal
  • Grading
  • Fill
  • Drainage
  • Site plans
  • Site approval
  • Zoning changes
  • Permits
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17
Q

In most residential appraising, we are valuing x rather than x.

A

site
land

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18
Q

Separate site valuations may be required in:

A
  • Cost approach
  • Assessments and taxation
  • Condemnation appraisals (process of eminent domain)
  • Certain income capitalization methods * Highest and best use analysis
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19
Q

The cost approach is sometimes referred to as the x

A

summation approach (outdated).

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20
Q

In developing the cost approach we start with the xx

A

site value.

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21
Q

Tne amount of real estate taxes should be x in either situation. The total taxes are the product of x

A

equal
assessed value multiplied by a tax rate.

22
Q

A property is worth $100,000. If it is assessed at $100,000 and the rate per thousand is $5, the taxes would be x

A

$500.

23
Q

Most states mandate that the total assessed value for each property be broken into two components:

A

land and total values.

24
Q

Condemnation appraisals are required when a x exercises xx

A

municipality
power of eminent domain.

25
Q

We need to analyze the highest and best use of the land xxx, as well as the highest and best use of the property as it is xx

A

as though vacant
presently improved.

26
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. defines:

A

A brownfield

27
Q

Brownfield - real property, the expansion, redevelopment or reuse of which may be complicated by the presence or potential presence, of a hazardous substance, pollutant or contaminant. defines

A

Brownfield

28
Q

The EPA estimates there are about 500,000 brownfields nationwide. x is the most common contaminant;

A

Petroleum

29
Q

There are six ways to develop an opinion of site or land value:

A
  1. SALES COMPARISON - Comparison with recent sales
  2. EXTRACTION - Subtracts estimated improvement value to arrive at land value
  3. ALLOCATION - Uses land-to-value ratios based on improved sale comparables
  4. SUBDIVISION DEVELOPMENT - Subtracts estimated development costs from discounted sale proceeds
  5. LAND RESIDUAL- Divides up and capitalizes the income between land and improvements
  6. GROUND RENT CAPITALIZATION - Capitalizes income from leased land
30
Q

The most commonly-used approach for valuing sites is the x method.

A

sales comparison

31
Q

In contrast to improved property, in using the Sales Comparison Approach for vacant land, the appraiser will typically need to use xxx instead of the minimum of three sales. However, the appraiser is generally permitted to use land sales that have occurred xxx

A

more sales, probably six or more comparable sales
further back in time.

32
Q

The most common situations when we use percentages in appraising sites are when we are comparing xxx

A

locations and market conditions.

33
Q

finding and comparing two individual sales that are similar except for one significant difference describes:

A

paired sales analysis

34
Q

study trends among groups of property sales describes

A

group data analysis

35
Q

Land Appraisal Report Form (not Fannie or Freddie)
At the bottom is one last field in which you may enter an adjustment for xxx.
Interestingly enough, the placement of the field for sales concessions adjustments is x to traditional
appraisal theory which dictates that adjustments for sales concessions be made x adjustments for date of sale (market conditions), location, and physical characteristics.

A

sales or financing concessions
contrary
before

36
Q

What kind of price unit is appropriate for waterfront properties and for commercial properties along a major roadway?

A

Price per front foot

37
Q

The xx also has good application in many older urban areas.
Another reason why you might use the xx in rural areas is that there is often a lack of land sales in those areas.

A

extraction method
extraction method

38
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. “ defines

A

Extraction Method

39
Q

Another word for Extraction Method

A

Abstraction Method

40
Q

A run-down neighborhood grocery store on a good corner location in a desirable older neighborhood recently sold for $400,000.
The reproduction cost of the improvements today would be $250,000 and the total depreciation is estimated to be 80%.
By extraction, what is the land value?

A

$350,000

$250,000 x 20% remaining value of improvements = $50,000

$400,000 minus $50,000 = $350,000

41
Q

“A method of estimating land value in which sales of improved properties are analyzed to establish a typical ratio of land value to total property value and this ratio is applied to the property being appraised or the comparable sale being analyzed. “ defines

A

Allocation Method

(Ratio of total value)

42
Q

Support for an allocation ratio may be derived from:

A
  • Mass appraisals
  • Observed patterns
  • Consultations with developers on their costs * An appraiser’s files
  • Published studies
43
Q

Real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium.

Real property value is created and sustained when the characteristics of a property conform to the demands of its market.

A

Principle of Balance

Principle of Conformity

44
Q

…large number of suppositions that must be made about selling prices for the lots and absorption by the market, along with extensive projections of expenses.

A

Subdivision Development Method

45
Q

“A method of estimating land value in which the net operating income attributable to the land is isolated and capitalized to produce an indication of the land’s contribution to the total property.” defines

A

Land Residual Method

46
Q

Which method deals with income as the basis for value and only should be used in the appraisal of income producing properties.

A

Land Residual Method (rarely used)

47
Q

basic income capitalization formula

A

Value = Income/Rate

48
Q

“A method of estimating land value; applied by capitalizing ground rent at a market-derived rate. This method is useful when comparable rents, rates, and factors can be developed from an analysis of sales of leased land or other market sources. “ defines

A

Ground Rent Capitalization Method

49
Q

Income generated by a lease is called

A

Ground Rent

50
Q

Comparable 1 sold for $400,000 and is greatly superior to the subject; Comparable 2 sold for $250,000 and is significantly inferior to the subject; Comparable 3 sold for $300,000 and is slightly inferior. Which analysis can be applied?

A

Relative Comparison Analysis
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02 Basic App Proc Quiz (21 decks)

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