Ch 3 Quiz Flashcards
Sidewalks, curbs, and landscaping are examples of
site improvements
The most commonly-used method for valuing sites is the _____________ method.
sales comparison
Which methods can be used for site valuation?
Sales Comp Approach
Allocation
Extraction
Ground Rent Capitalization
Land Residual
Subdivision Development
A site is currently rented for $600 per month and the ground rent capitalization rate is 7.5%. What is the indicated value of the site?
96000
$600 x 12 / 7.5% = $96,000
True or False: GPS systems can be used to locate vacant land parcels.
TRUE
A property sold for $120,000. An old building on the property has a cost new of $300,000 and it is 75% depreciated. What is the indicated site value by extraction?
45000
$120,000
Minus depreciated value of Improvements $75,000
= Land Value $45,000
$300,000 x 25% = current value of improvements = $75,000
A parcel of raw land has been improved so that it is ready to be used for a specific purpose. The land has now become
a site
Which would be typical adjustments when preparing a sales comparison approach for a vacant land parcel?
• Traffic, cul-de-sac, etc.
• Size
• Shape
• Topography
• Exposure
• Usable area
• Corner location
• Floodplain
• Utilities
• Soil conditions
The summation approach is another name for the _________ approach.
cost
What is the name of the process that the government uses when it takes private property for public good?
Condemnation. Condemnation Appraisals. when a municipality exercises power of eminent domain, the process is called condemnation – a property is condemned.
Appraisal regulatory agencies state that one of the problems with the allocation method is
appraisers often have no workfile support for the ratio they use
In the sales comparison method, quantitative adjustments are based on dollars, while qualitative adjustments are based on percentages.
FALSE
The ground rent capitalization method is most applicable when appraising which of the following __________.
land under a McDonalds restaurant where McDonalds owns the building. The land under a McDonalds restaurant is often leased land where McDonalds has leased the land from a land owner, constructed a restaurant building, then sub-leases the building to a new McDonalds franchisee. Thus, appraising the landowner’s interest in the land under the building would require a ground rent capitalization process using the income approach as the primary approach to value to determine the value of the leased fee interest.
When using the sales comparison method in valuing a site, adjustments should be made for differences that are __________.
significant
Which would NOT be considered to be a site improvement?
sub-soil composition
A rectangular parcel of land has 114 feet of frontage and is 222 feet deep. It sold for $280,000. What did it sell for per square foot?
11.06
“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…” is the definition of the __________ method.
allocation
An improved property has a net operating income of $75,000. The appraiser estimates that $61,000 of the income is attributable to the building. The land capitalization rate is 8%. What is the estimated land value?
- $75,000 - $61,000 = $14,000 income attributable to land. $14,000 / 0.08 = $175,000
Which method of site valuation is based on a typical ratio of land value to total property value?
allocation
Property that fronts on a lake is often valued using what unit of comparison?
Price per front foot