Chapter 19: Real Estate Appraisal

Question 1

In an old retail building, which would most likely be an example of incurable functional obsolescence?

Answer 1

Closely-spaced internal support columns

Question 2

What is not a characteristic of value?

Answer 2

Obsolescence

Question 3

The fact that still serviceable building is torn down is an indication of?

Answer 3

Functional and external depreciations

Question 4

An appraiser is responsible for?

Answer 4

Estimating value

Question 5

The term depreciation refers to?

Answer 5

Real estates loss of value from any cause

Question 6

What would be classified as external depreciation?

Answer 6

Poorly maintained properties in the neighborhood

Question 7

It is necessary to calculate a dollar value for depreciation when using what?

Answer 7

The cost approach to value

Question 8

The income approach as used by an appraiser makes use of what?

Answer 8

Capitalization

Question 9

In the valuation of a large apartment complex, the most weight would be given to which approach to value?

Answer 9

The income approach

Question 10

In the cost approach to value, the appraiser makes use of?

Answer 10

The estimated replacement cost of the building

Question 11

The salsa comparison approach to value would be most important when estimating the value of?

Answer 11

An existing residence

Question 12

In the income approach, the appraise makes use of?

Answer 12

Capitalization rate

Question 13

An appraiser who is using the sale comparison approach to value would use all of the following comparable properties…

Answer 13

Sold in the last six months

Sold recently and is located in the same neighborhood

Sold recently but is located on a much larger lot

Question 14

Using what would require the value of the land to be calculated separately from the value of the improvements.

Answer 14

The cost approach

Question 15

Reconciliation is best described as?

Answer 15

Analyzing the results obtained from the three approaches to value

Question 16

A building is baked at $215,000 and contains 4 apartments that rent for $470 each per month. The owner estimates that the bet operating income is 65 percent of the gross rental receipts. What is the capitalization rate?

Answer 16

6.8 percent

Question 17

The gross rent multiplier is used as a guideline for estimating value based on?

Answer 17

The relationship of the sales prices to the gross rental income

Question 18

Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called?

Answer 18

Physical depreciation

Question 19

The find the value of a property using the income approach to value, if the net operating income and capitalization rate were known, the appraiser would?

Answer 19

Divide the net operating income by the capitalization rate

Question 20

An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would include reference to.

Answer 20

The highest and best use of the parcel

The most probable price the parcel will bring

The physical dimensions of the parcel

Question 21

When appraising a commercial al property, the appraiser is most concerned with the?

Answer 21

Income generated by the property

Question 22

In the appraisal of an office building, what would be classified as external depreciation?

Answer 22

A law requiring the building to be retrofitted with fire sprinklers

Question 23

The period of time over which an improvement to the property will contribute to its value is know as?

Answer 23

Economic life

Question 24

When estimating the value of property using the cost approach, all of the following would be considered by the appraiser

Answer 24

Loss of value due to uncollected delinquent rent

Estimated loss attributable to an outdated heating system

Quality of materials and workmanship in the original structure

Question 25

The market price of real estate is generally the same as?

Answer 25

The sales price

Question 26

Reconciliation is an appraisal term used to describe?

Answer 26

The appraisers analysis and comparison of the results of each appraisal approach

Question 27

An appraiser has been hired to prepare an appraisal on a property that includes an element old mansion that is now used as an insurance company office. Which approach to value would the appraiser rely on most?

Answer 27

Income approach

Question 28

A house with outmoded plumbing is suffering from?

Answer 28

Functional obsolescence

Question 29

By today’s standards a 4 bedroom house with one bathroom would be considered to be?

Answer 29

Functional obsolete

Question 30

In the cost approach an appraiser uses what?

Answer 30

An estimate of the buildings replacement cost

Question 31

The purpose of an appraisal is to?

Answer 31

Estimate the value of a property

Question 32

In the income approach what is considered when calculation the net operating income?

Answer 32

Real estate taxes

Management fees

Utilities

Question 33

A buyer is considering the purchase of an apartment building in an area where there is limited multi-family zoning. This situation would be best described by the economic characteristic of?

Answer 33

Scarcity

Question 34

An appraisal report contains all of the following

Answer 34

A reconciliation of value

The date of the appraisal

The report of final opinion

Question 35

The subject property has three bedrooms and two baths. A comparable property has two bedrooms and one bath. What is true?

Answer 35

The value of the comparable will be adjusted upwards.

Question 36

The income approach to value would be most important in the appraisal of?

Answer 36

An office building