Chapter 7 Flashcards
The income approach to value would be most important in the appraisal of a(n):
Office building
The effective gross annual income from a property is $112,000. Total expenses for this year are $53,700. What capitalization rate was used to obtain a valuation of $542,325?
10.75 percent
When appraising real estate, the first consideration of the appraiser should be the:
Highest and best use of the property
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
The income approach
In the cost approach to value, the appraiser makes use of:
The estimated replacement cost of the building
An appraiser who is using the sales comparison approach to determine value would use all of the following comparable properties:
Sold over 6 months ago, Sold recently but is located in another similar neighborhood, Sold recently but is located on a much larger lot
An appraiser who is using the sales comparison approach to determine value would use all of the following comparable properties EXCEPT a similar home that was:
Sold by the owners who were undergoing a foreclosure
All of the following are characteristics of value:
scarcity, transferability, utility.
All of the following are characteristics of value EXCEPT:
obsolescence.
An appraiser is responsible for:
estimating value.
The term depreciation refers to the:
real estate’s loss of value from any cause.
Which of the following would be classified as external depreciation?
Poorly maintained properties in the neighborhood
It is necessary to calculate a dollar value for depreciation when using which of the following?
The cost approach to value
Using which of the following would require the value of the land to be calculated separately from the value of the improvements?
The income approach
The cost approach;
The sales comparison approach
The gross rent multiplier
The cost approach;
The income approach as used by an appraiser makes use of which of the following?
Equalization
Depreciation
Appreciation
Capitalization
Capitalization
The sales comparison approach to value would be most important when estimating, the value of a(n):
existing residence.
Reconciliation is best described as:
analyzing the results obtained from the three approaches to value.
A building is valued at $215,000 and contains 4 apartments that rent for $470 each per month. The owner estimates that the net operating income is 65 percent of the gross rental receipts. What is the capitalization rate?
6.8 percent
The steps in the appraisal process include all of the following:
gathering specific data on the subject property, gathering general data for the area of the subject property, applying the three approaches to value to the collected data.
The steps in the appraisal process include all of the following EXCEPT:
considering the seller’s estimate of the property’s value.
The gross rent multiplier is used as a guideline for estimating value based on:
the relationship of the sales price to the gross monthly income.
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:
physical depreciation.
To find the value of a property using the income approach to value, if the net operating income and the capitalization rate were known, the appraiser would:
divide the net operating income by the capitalization rate.
An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would include reference to all of the following:
he highest and best use of the parcel, the most probable price the parcel will bring, the physical dimensions of the parcel.
