Chapter 8 Physical characteristic adjustments Flashcards
Items that indicate poor construction practices include:
Drafts Cracked walls or ceilings Sagging floors Unsealed siding Leaky roofs Out-of-plumb doors or windows Gaps in vinyl or Formica Uneven masonry Corners not square Square corners on trim - not mitered
Marshall & Swift recognizes the following categories of quality in construction:
Low Fair Average Good Very good Excellent
When describing the area of a small lot, we usually use Acres Square Feet Rods Cubic feet
square feet
Quality is determined by
What the builder says
The season during which improvements were constructed
The materials and construction practices used during the building process
The marketing program of the contractor
The materials and construction practices used during the building process
An appraiser can reasonably assume that
Most homes in a subdivision are of the same general quality
No homes in a subdivision are of the same general quality
Quality has nothing to do with subdivision location
All subdivisions in a geographic area are of the same general quality
most homes in a subdivision are of the same general quality
The number of years that have elapsed since construction of an improvement was completed; also called historical or chronological age
actual age
The age of property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age”
effective age
The period of time over which a structure or a component of a property may reasonably be expected to perform the function for which it was designed
useful life
the period over which improvements to real estate contribute to property value.
economic life
CONDITION ADJUSTMENT RANKING
C1-C6
We can divide physical defects into three categories:
Deferred maintenance Items that must be fixed right away
Short-lived components that have depreciated
Long-lived components that have depreciate
“The period of time over which a structure may reasonably be expected to perform the function for which it was designed” is the definition of \_\_\_\_\_\_\_\_\_\_\_\_\_\_ life. Physical Useful Economic Effective
useful
“The age of property that is based on the amount of observed deterioration and obsolescence it has sustained” is the definition of \_\_\_\_\_\_\_\_\_ age. Actual Historical Chronological Effective
effective
Condition is determined by Quality The housing style The maintenance and care the house has received The functional utility of the house
the maintenance and care the house has received
A unit of comparison used primarily in residential appraisal. No national standard exists on what constitutes a room. The generally accepted method is to consider as separate rooms only those rooms that are effectively divided and to exclude bathrooms.
room count
When calculating gross living area
The appraiser should use the exterior building dimensions per floor to calculate the above-grade gross living area of a property.
For units in condo or co-op projects, the appraiser should use interior perimeter unit dimensions to calculate the gross living area.
Garages and basements, including those that are partially above-grade, must not be included in the above-grade room count.
Reporting Format:
Line 1: Total Square Footage – Numeric to 5 digits, whole numbers only
Line 1: Finished Square Footage – Numeric to 5 digits, whole numbers only
Line 1: Basement Access – Appraiser must select one value from the specified list (values wo, wu, or in)
Line 2: Room Count/Type – Numeric to 1 digit*
*For bathrooms, the format is n.n – full baths separated from half baths with a period (.).
Line 1: 1000sf750sfwu
Line 2: 1rr1br1.0ba2o
The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards; the efficiency of a building’s use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms
functional utility
In the appraisal of a single-family residence, a finished basement should
Always be counted in the total room count
Be included in total room count only if it has finished flooring
Be calculated as part of the GLA
Be calculated separately from the GLA
be calculated separately from the GLAF
A broken windowpane an example of Deferred maintenance Incurable depreciation A short lived item A long-lived item
DEFERRED MAINTENANCE
"Items of wear and tear on a property that should be fixed now to protect the value or income- producing ability of the property, such as a broken window, a dead tree, a leak in the roof, or a faulty roof that must be completely replaced. These items are almost always curable" is the definition of Functional obsolescence Short-lived components Deferred maintenance Expected repairs
deferred maintenance
The concept of \_\_\_\_\_\_\_ life is logical but is of little use to appraisers. Physical Economic Useful Actual
useful
A property sells for $350,000 and the site value is $60,000. The cost new of the improvements is $480,000. What is the dollar amount of depreciation indicated by this sale? $160,000 $190,000 $250,000 $290,000
$190,000
480,000 - 350,000 + 60,000
Which would NOT be considered as an energy efficient item? Double paned windows High R-factor insulation Solar panels Stainless steel appliances
stainless steel appliances
If a property is depreciating at the rate of 1.7% per year, what is its economic life? 58.8 years 60 years 62.2 years 65 years
- 8 yrs
1. 00 / 1.7
A property sells for $295,000 and the site value is $50,000. The reproduction cost of the improvements is $312,000. The house is 12 years old. What is the average annual percent of depreciation?
- 2%
- 8%
- 1%
- 3%
1.8%
"The number of years elapsed since an original structure was built” is the definition of \_\_\_\_\_\_\_\_\_\_\_ age. Chronological Effective Economic Physical
chronological
"Curable, physical deterioration that should be corrected immediately…” is the definition of Short-lived items Deferred maintenance items Long-lived items Janitorial items
deferred maintenance items
Fannie Mae says for units in condominiums, the appraiser should use \_\_\_\_\_\_\_\_\_\_\_\_ dimensions to calculate the Gross Living Area. Exterior Interior or exterior Interior Cubic footage
interior
A property sells for $450,000 and the site value is $120,000. The cost new of the improvements is $572,000. What is the percentage of depreciation? 24% 36% 42% 58%
42%
$450,000 - $120,000 = $330,000.
$572,000 - $330,000 = $242,000.
$242,000 ÷ $572,000 = .42 or 42%.
When describing the area of a large lot (1 acre or more), we usually use Acres Square feet Rods Cubic feet
acres
Historical age is another name for \_\_\_\_\_\_\_\_\_\_\_\_\_ age. Physical Effective Economic Chronological
chronological
