Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Real Estate > Chapter 21 - Appraising Real Estate > Flashcards

Chapter 21 - Appraising Real Estate Flashcards

1
Q

Which approach to value makes use of a rate of investment return?

  • Income Approach
  • Gross Income Multiplier
  • Sales Comparison Approach
  • Coast Approach
A

-Income Approach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

The characteristics of value include which of the following?

  • Anticipation
  • Balance
  • Competition
  • Scarcity
A

-Scarcity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

There are two vacant adjacent lots, each worth approximately $50,000. If their owner sells them as a single lot, however, the combined parcel will be worth $120,000. What principle does this illustrate?

A

-Plottage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

An appraiser is responsible for …

A

estimating value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Who is permitted to draw up an appraisal?

A

Appraiser

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

A written analysis or opinion drawn up relating to the probable sales price of a property is …

A

a comparative market analysis (CMA)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

If a property’s annual net income is $24,000 and it is valued at $300,000 what is its capitalization rate?

A

-8%

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

The market value of a parcel of real estate is

A

an estimate of the most probable price it should bring

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Capitalization is the process by which annual net income is used as the basis to

A

-estimate value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

From the reproduction or replacement cost of the building, an appraiser deducts depreciation, which represents

A

loss of value due to any cause

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which principle of value indicates that a developer’s profitable real estate project will attract others to engage in similar activity in the same area and thus drive down profits?

A

Competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

The appraised value of a residence with four bedrooms and one bathroom would probably be reduced because of

  • incurable physical deterioration
  • curable physical deterioration
  • functional obsolescence
  • external obsolescence
A

-functional obsolescence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

The principle of anticipation is the basis of the …

A

income approach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

The early houses that a developer built in a neighborhood were smaller than the homes built later when demand for the homes increased. The early homes have a higher value than their square footage would expect due to the principle of …

A

-progression

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

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

  • Termite damage to the structural components of the building
  • Antiquated restroom facilities
  • A poor architectural design resulting in a cluttered floor plan
  • Next door to a closed factory
A

-Next door to a closed factory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Who is permitted to appraise any property for any reason?

A

-State-certified general real estate appraiser

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Who, or what, determines value?

A

-Indicated by market

18
Q

One of the most important steps in making an appraisal is that of …

A

-determining the highest and best use of a property

19
Q

When appraising real estate, the first consideration of the appraiser should be the …

A

highest and best use of the property

20
Q

In Pennsylvania, who is permitted to perform a broker’s price opinion (BPO)?

A

-an appraiser

21
Q

The income approach to value is MOST important in the appraisal of …

A

an office building

22
Q

In an old retail building, which of the following would MOST likely be a cause of incurable functional obsolescence?

  • Deficient and inadequate lighting
  • Closely spaced internal support columns
  • An unattractive store front
  • a decrease in the area’s population
A

-Closely spaced internal support columns

23
Q

All of the following are characteristics of value EXCEPT

  • Scarcity
  • Transferability
  • obsolescence
  • utility
A

-obsolescence-

24
Q

Multiple structural cracks in the foundation of a home would MOST likely be an example of …

A

-incurable physical deterioration

25
Q

The term DEPRECIATION refers to the …

A

loss of value in real estate from any cause

26
Q

An appraiser’s report should seek to determine the …

A

highest and best use of the property

27
Q

Which of the following would be classified as external depreciation?

  • A leaking roof that needs to be completely replaced
  • Poorly maintained properties in the neighborhood
  • A poorly designed floor plan that could be modified
  • Convenient access to schools and recreational facilities
A

-Poorly maintained properties in the neighborhood

28
Q

It is necessary to calculate a dollar value for depreciation when using which of the following?

  • The sales comparison approach to value
  • The cost approach to value
  • The income approach to value
  • Gross rent multipliers
A

-The cost approach to value

29
Q

The income approach as used by an appraiser makes use of which of the following?

  • Equalization
  • Depreciation
  • Appreciation
  • Capitilaization
A

-Capitilaization

30
Q

In the valuation of a large apartment complex, the MOST weight would be given to which of the following approaches to value?

  • The cost approach
  • The income approach
  • The sales comparison approach
  • All approaches equally weighted
A

-The income approach

31
Q

The sales comparison approach to value would be MOST important when estimating the value of …

A

-an existing residence

32
Q

In the income approach, the appraiser makes use of …

A

-capitalization rate

33
Q

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

  • a similar home that was sold within the last six months
  • a similar home that was sold recently but is located in another similar neighborhood within 1/4 mile
  • a similar home that was sold by the owners who sold the property to a relative
  • a similar home that was sold recently but is located on a much larger lot.
A

-a similar home that was sold by the owners who sold the property to a relative

34
Q

Reconciliation is BEST described as …

A

analyzing the results obtained from the three approaches to value.

35
Q

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

A

relationship of the sales prices to the rental income

36
Q

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

A

-physical depreciation

37
Q

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

  • the highest and best use of the parcel
  • the listed price of the parcel
  • the most probable price the parcel will bring
  • the physical dimensions of the parcel
A

-the listed price of the parcel

38
Q

The period over which an improvement to the property will contribute to its value is known as its …

A

-economic life

39
Q

When appraising a commercial property, the appraiser is MOST concerned with …

A

income generated by the property

40
Q

Which if the following is considered specific data?

  • Dimensions of the subject property
  • Employment opportunities in the area
  • Proximity of the subject property to public transportation
  • Building codes within the municipality
A

-Dimensions of the subject property

41
Q

A house with outdated plumbing is suffering from …

A

functional obsolescence

Real Estate (22 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions