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
The most common source of brownfield contamination is
petroleum
The ground rent capitalization method is most applicable when appraising a _______ interest.
leased fee
What is another name for the cost approach?
Summation approach
True or False: Condemnation appraisals often require an appraiser to develop a separate opinion of site value.
TRUE
What is another name for the cost approach?
the summation approach
A property sold for $50,000. The reproduction cost of the building was $80,000 and it was 60% depreciated. By extraction, what is the value of the land?
- Extraction Method. $80,000 X 60% (0.60) = $48,000. $80,000 - $48,000 = $32,000 (which represents the current depreciated value of the improvements). Total sale price of $50,000 - $32,000 depreciated value of improvements = $18,000 land value.
“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
brownfield
Another name for the extraction method of site valuation is
abstraction
A parcel is valued at $450,000 as a single entity. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $60,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?
Leave it as one parcel
An appraiser has valued a subject property at $320,000. The appraiser’s research indicates that site values in the subject’s area are typically 20% of property values. What is the indicated value of the subject’s site by the allocation method?
64000
True or False: The extraction method of site valuation typically has good applicability in older urban areas.
TRUE
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 front foot?
2456
Relative comparison analysis and ranking analysis are __________ methods.
qualitative
A property with an old house sold for $220,000. The current replacement cost of the house was $280,000 and it was 75% depreciated. What is the site value of the property by extraction?
- $280,000 x .75 = $210,000 depreciation. $280,000 - $210,000 = $70,000 contributory value of the house. $220,000 sale price - $70,000 contributory value of the house = $150,000 site value.
The tax rate per thousand in a municipality is $12.80. If the property taxes are $1,984 for a particular property, what is the property’s assessed value?
$155,000. Assessments and Taxation. $1,984 ÷ $12.80 = 155 (thousands) or $155,000.
Improvements that could be made to raw land in order to make a site would include
, grading, fill
Ranking analysis is a ___________ method for estimating site value.
qualitative
The ___________method has good application in valuing land in rural areas and in older, urban areas.
extraction
Property in built-up urban residential areas is usually valued on the basis of price per
square foot
True or False: A postal mailing address is equivalent to a legal description.
FALSE
A commercial site currently rents for $4,000 per month. The applicable land capitalization rate is 6%. What is the value of the site by the ground rent capitalization method?
800000
$4,000 x 12 / 6% = $800,000
True or False: The difference between land and site is that land is improved, while site is not.
FALSE
“Improved land or a lot in a finished state so that it is ready to be used for a specific purpose” is the definition of
site. land that is improved and ready to go.
GPS stands for
Global Positioning System
Which of the following is a technique for site valuation?
Subdivision development, Sales comparison, Allocation
The most commonly-used land appraisal report form
is a generic form
What is the power of a government entity to take private property for the public good?
Eminent domain
The subdivision development method of land valuation is a variation of
discounted cash flow analysis. It involves complex calculations over a future time frame and then discounts projected income and expenses back to present worth estimates.
A 1-acre vacant land parcel is worth $90,000 as a single family homesite, $45,000 per unit as a site for a duplex, or $2.50 per square foot as a site for an industrial building. What is the highest and best use of the property?
industrial building site
A site rents for $800 per month, and the ground rent capitalization rate is 8%. What is the value of the site by the ground rent capitalization method?
120000
