Chapter 15

Question 0

Is the value of a particular property to a particular investor

Answer 0

Investment value

Question 1

Characteristics of value?

Answer 1

(DUST) Demand, utility, scarcity, and transferability.

Question 2

Is the amount that can be received from the sale of the parts from a demolished structure

Answer 2

Salvage value

Question 3

Is the amount remaining after all assets of a business have been sold in a hurried but not forced sale and all liabilities have been paid

Answer 3

Liquidation value

Question 4

Is the value assigned by the property appraiser for as valorem tax purposes

Answer 4

Assessed value

Question 5

Recognizes that one would pay more for a property than the amount necessary to acquire and acceptable substitute

Answer 5

Principle of substitution

Question 6

When a lower priced property is built in an area of more expensive property

Answer 6

Principle of progression

Question 7

When a higher priced property is constructed in an area of lower priced properties

Answer 7

Principle of regression

Question 8

Purpose of an appraisal

Answer 8

The purpose of an appraisal is to estimate some type of defined value and that’s it.

Question 9

Function of an appraisal to a client

Answer 9

The way in which the appraiser’s client will use the appraisal for its work. To whetter sell or not, to buy or not.

Question 10

If the subject property is superior to the comparable property, the comparable price is

Answer 10

Adjusted upward

Question 11

If the subject property is inferior to the comparable property, the comparable sales price is

Answer 11

Adjusted downward

Question 12

The cost depreciation approach is base on the

Answer 12

Principle of substitution

Question 13

A detailed inventory and precise cost for each item required to construct the main improvement is compiled

Answer 13

Quantity survey method

Question 14

The cost of each component estimated by using square foot

Answer 14

Unit in place method

Question 15

Unit of comparison is cost per square foot or per cubic foot of an entire building. (Benchmark building)

Answer 15

Unit of comparison method

Question 16

Loss of value due to normal wear and tear from use, negligence or aging of the building. Can be incurable or curable

Answer 16

Physical deterioration

Question 17

Is a loss in value due to the failure of a property to meet current consumer preferences due to changes in building design or standards. It can be curable or incurable.

Answer 17

Functional obsolence

Question 18

Is a loss in value caused by factors beyond the boundaries of the subject property. Landfill, wastewater. Is considered incurable.

Answer 18

External obsolescence

Question 19

The cost-depreciation approach may be only approach to estimate value of special purpose such as

Answer 19

Schools and churches

Question 20

Is based on the assumptions that the value of a property can produce in the future using substitution and acticipation

Answer 20

The income capitalization approach

Question 21

Four elements interact to create or affect the value of real estate? (DUST)

Answer 21

Demand- need

utility- use

scarcity- rare to find

transferability- has to be transferable

Question 22

Replacement cost

Answer 22

To contract a comparable building with equal utility to the subject building, but using modern materials, design, features

Question 23

Reproduction cost

Answer 23

To construct at current prices an exact duplicate of the building being appraised.