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03 Site Valuation and Cost Approach > Ch 2-3 Quiz > Flashcards

Ch 2-3 Quiz Flashcards

1
Q

____________ soils absorb water quickly and swell up, causing cracking.

A

Expansive

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2
Q

“A list of expressed assurances and limitations on land use, often found in contracts between a land subdivider and a lot purchaser” is the definition of

A

CC&R

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3
Q

A comparable sale recently sold for $300,000. The typical land value to property value ratio in that area is 40:60. By allocation, what is the value of the land in that comparable sale?

A
  1. $300,000 x .4 = $120,000. (Chapter 3)
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4
Q

A comparable sale recently sold for $340,000. The typical land value to property value ratio in that area is 30:70. By allocation, what is the value of the land in that comparable sale?

A
  1. $340,000 x .3 = $102,000. (Chapter 3)
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5
Q

A lot is L-shaped and consists of two rectangles that measure 245.63 feet x 468.5 feet and 112.48 feet x 288.03 feet. What is the total area of the lot in square feet?

A

147475.27. 245.63 x 468.5 = 115,077.66 112.48 x 288.03 = 32,397.61. 115,077.66 + 32,397.61 = 147,475.27 (Chapter 2)

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6
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 is the definition of the ___________________ method of site valuation.

A

Allocation

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7
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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8
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 is the definition of the ___________________ method of site valuation.

A

Land Residual

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9
Q

A parcel contains 4.5 acres. It is worth $50,000 per acre as residential land and $200,000 as a commercial site. If the zoning allows both, what is the highest and best use?

A

Residential.

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10
Q

A parcel contains 6 acres and would be permitted to have 5 commercial units. It is worth $40,000 per acre as residential land and $50,000 per permitted unit as a commercial site. If the zoning allows both, what is the highest and best use?

A

Commercial.

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11
Q

A parcel is valued at $140,000. Zoning allows it to be subdivided into 5 lots and it is estimated that each lot could sell for $45,000. Site development costs (sewer, grading, road, etc.) would amount to $70,000. What is the highest and best use?

A

Develop it. As is value is $140,000. As developed, 5 lots at $45,000 = 225,000 less development cost $70,000 = net value of $155,000. Highest and best use would be development, because it maximizes the land value. (Chapter 3)

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12
Q

A parcel is valued at $190,000. Zoning allows it to be subdivided into 6 lots and it is estimated that each lot could sell for $42,000. Site development costs (sewer, grading, road, etc.) would amount to $80,000. What is the Highest and Best Use?

A

Leave it alone. As is value is $190,000. As developed, 6 lots at $42,000 = 252,000 less development costs of $80,000 = a net value of $172,000, which is less than the value as a single entity. The highest and best use would not be to subdivide the property. (Chapter 3)

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13
Q

A percolation test measures the _____________ of the soil.

A

Permeability

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14
Q

A property has a large 1.5 -acre homesite in an area where 0.5 acre sites are typical. Due to frontage restrictions, this additional acre cannot be subdivided off and built on. What is this additional acre considered?

A

Surplus land

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15
Q

A property owner has a 4-acre site in an area where 1-acre sites are common. This additional land cannot be subdivided off and sold, and it is not capable of its own highest and best use. This is an example of:

A

Surplus land

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16
Q

A property sold for $200,000. The reproduction cost of the building was $240,000 and its estimated deprecation was 75%. By extraction, what is the value of the land?

A
  1. $240,000 x .75 = 180,000 depreciation. $240,000 - $180,000 = 60,000 contributory value of building. $200,000 - 60,000 = $140,000 land value. (Chapter 3)
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17
Q

A property sold for $260,000. The reproduction cost of the building was $440,000 and its estimated deprecation was 80%. By extraction, what is the value of the land?

A
  1. $440,000 x .8 = 352,000 depreciation. $440,000 - 352,000 = 88,000 contributory value of building. $260,000 - 88,000 = $172,000 land value. (Chapter 3)
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18
Q

A property sold for $375,000. The reproduction cost of the building was $600,000 and its estimated deprecation was 70%. By extraction, what is the value of the land?

A

$195,000. $600,000 x .7 = 420,000 depreciation. $600,000 - $420,000 = 180,000 contributory value of building. $375,000 - $180,000 = $195,000 land value. (Chapter 3)

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19
Q

A residentially-zoned site could be appraised under the __________ that the zoning was commercial.

A

Hypothetical condition

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20
Q

An interest in real property that conveys use, but not ownership, of a portion of an owner’s property is a(an) ________.

A

Easement

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21
Q

By definition, mass appraisals typically employ which of the following?

A

Standard methodology, Statistical testing, Common data

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22
Q

Corner locations are generally beneficial in which type of properties?

A

Commercial

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23
Q

Designing the size of septic systems is based on ______.

A

Percolation tests

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24
Q

If a lot contains 235,790 square feet, how many acres is that?

A

5.41. 235,790 / 43560 = 5.41 acres

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25
Q

If a property has a ground rent of $60,000 per year, which is market rent, and the appropriate capitalization rate is 9%, what is the value of the land, by the ground rent capitalization method?

A
  1. $60,000 / .09 = $666,667. (Chapter 3)
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26
Q

If a property has a ground rent of $75,000 per year, which is market rent, and the appropriate capitalization rate is 11%, what is the value of the land, by the ground rent capitalization method?

A
  1. $75,000 / 0.11 = $681,818. (Chapter 3)
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27
Q

In the most commonly used land appraisal form, which are the line items that are listed for adjustment?

A

Date of sale, Location, Site/view

28
Q

Nationwide Permits are required for projects impacting as little as ______ of wetlands.

A

0.5 acre

29
Q

Nationwide soils maps are available from the _______________.

A

Natural Resources Conservation Service. The USDA Soil Conservation Service is now known as the Natural Resources Conservation Service. Their maps show soil types superimposed over black-and-white aerial photographs of the county. (Chapter 2)

30
Q

Plottage is a value

A

TRUE

31
Q

Price per front foot is a common measure of comparison when appraising what type of properties?

A

Waterfront and commercial

32
Q

Properties in a Special Flood Hazard area are those designated by FEMA as being in _________.

A

Zones A and V

33
Q

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

A

Balance

34
Q

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

A

Conformity

35
Q

Some areas of the country are still unzoned.

A

TRUE

36
Q

The combining of two or more parcels, usually but not necessarily contiguous, into one ownership or use, is the definition of ______.

A

Assemblage

37
Q

The easiest site to develop is one that is _______.

A

Gently sloping

38
Q

The increment of value that often occurs when two or more sites are combined to produce greater utility, resulting in a higher productivity or income than could be obtained from the individual smaller sites, is the definition of ________.

A

Plottage value

39
Q

The median sale price of homes in a market area and the median land sale price in that market area could be used in calculating land values by the ___________ method.

A

Allocation

40
Q

The most accurate and understandable method of site valuation is the _____________ method.

A

Sales comparison. The most commonly used method for valuing sites is the sales comparison method. It is the preferred method, the most accurate, the most understandable, and should be utilized whenever possible. (Chapter 2)

41
Q

The most commonly used land appraisal form is a Fannie Mae form.

A

FALSE. The most common land appraisal report form is a generic form, and is not produced by Fannie Mae. Fannie does not purchase loans on vacant land. (Chapter 2)

42
Q

The most commonly used method of site valuation is the _______________ method.

A

Sales comparison

43
Q

The right to perform a specific action on a property owned by another is called _________.

A

An affirmative easement

44
Q

The subdivision development method is a variation of _________________________ analysis.

A

Discounted Cash Flow

45
Q

The subdivision development method should only be used when ________.

A

The highest and best use for subdivision and development. This method should only be used in a specific situation - when the highest and best use of the land is for subdivision and development. (Chapter 3)

46
Q

The subject property has a total value of $234,000 by the sales comparison approach. A competitive neighborhood nearby has home sales with a median value of $240,000, and recent lot sales at $60,000. By allocation, what would be the value of the subject land?

A
  1. $60,000 / $240,000 = .25 or 25%. $234,000 x .25 = $58,500. (Chapter 3)
47
Q

The subject property has a total value of $315,000 by the sales comparison approach. A competitive neighborhood nearby has home sales with a median value of $300,000, and recent lot sales at $75,000. By allocation, what would be the value of the subject land?

A
  1. $75,000 / $300,000 = .25 or 25%. $315,000 x .25 = $78,750. (Chapter 3)
48
Q

The temporary use to which a site or improved property is put until a different use becomes maximally productive is the definition of __________ use.

A

Interim

49
Q

The two methods that have frequent application in both rural and urban areas are the _____________ method and the _____________ method.

A

Allocation, Extraction

50
Q

The value of an improved subject property by the sales comparison approach is $450,000. The allocation ratio, as indicated by sales of other properties in the area, indicates that the land-to-total-value ratio is 60%. What is the indicated site value of this property by the allocation method?

A

$270,000. $450,000 x .6 = $270,000.

51
Q

We should only adjust for items that are _____________.

A

Significant

52
Q

We usually make percentage based adjustments when we adjust for __________ and ________________.

A

Location and market conditions

53
Q

Wetlands Maps are available from _______.

A

U.S. Fish and Wildlife Service

54
Q

Which agency is authorized to issue Nationwide Permits for filling or dredging wetland areas?

A

Army Corps of Engineers. The Army Corps of Engineers was authorized to administer the policy and requires a nationwide permit (NWP) be obtained before any wetlands are filled or drained. (Chapter 2)

55
Q

Which is a true statement regarding adjustments in the sales comparison method?

A

Quantitative adjustments may be made on either a dollar amount or a percentage basis.

56
Q

Which of these are negative easement?

A

Conservation easement, Historic preservation easement, Facade easement

57
Q

Which would be a normal source of information to develop support for an allocation ratio?

A

Published studies, Mass appraisals, Consultations with developers

58
Q

Which would be examples of private restrictions?

A

Easement, Land lease,

59
Q

You find a comparable sale that recently sold for $260,000. The typical land value to property value ratio in that area is 35:65. By allocation, what is the value of the land in that comparable sale?

A
  1. $260,000 x .35 = $91,000. (Chapter 3)
60
Q

For residential properties, a large amount of traffic by a site is usually a _______ factor.

A

Negative

61
Q

A residentially-zoned site could be appraised under the _____________ that the zoning was commercial.

A

Hypothetical condition.

62
Q

What type of soils absorb water quickly and swell up, causing cracking?

A

Expansive

63
Q

A home has a large 4-acre site in an area where 2-acre sites are common. This additional 2 acres can be subdivided off and sold as a homesite. What is this additional 2 acres considered?

A

Excess land. Land that is not needed to serve or support the existing improvement. 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 parcel. Excess land may have the potential to be sold separately and is valued separately. (Chapter 2)

64
Q

Some areas of the country are still unzoned. Which statement is TRUE regarding the lack of zoning?

A

This may be either an advantage or a disadvantage, depending on the property type.

65
Q

A site has a total of 95 acres. However, 14 acres is in a protected wetland area and 23 acres is encumbered by a utility easement. What is the net usable area?

A
  1. 95 - 14 - 23 = 58 acres net. (Chapter 2)
66
Q

When embarking on a detailed highest and best use study, the first step is usually

A

Check to see what uses are allowed under the zoning

03 Site Valuation and Cost Approach (13 decks)

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