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My Appraisal Procedures > Chapter 9,10,11 > Flashcards

Chapter 9,10,11 Flashcards

1
Q

Severe-cold climate

A

The northern-most portions of states that border
Canada often fall into this group—along with Alaska

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2
Q

Cold climate

A

This area takes a broad path across the country and includes
states that experience freezing temperatures during the winter months.
Some examples are New York, Iowa, Oregon, and northern California

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3
Q

Mixed-humid climate

A

This area includes the Mid-Atlantic states and
extends to the northeast portion of Texas. Some examples are North
Carolina, Tennessee, and the northern portions of Georgia and Louisiana

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4
Q

Hot-humid climate

A

The southwest portion of the country
includes states such as New Mexico, Arizona, Southern California, and
parts of Texas

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5
Q

Mr. Chatsworth’s residence is on the historic register, and he wants to know
the insurable value in order to replicate the building in the event of fire or storm
damage. What type of cost should the appraiser use?
A. direct cost
B. replacement cost
C. reproduction cost
D. indirect cost

A

C

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6
Q

What area is included in gross living area?
A. all floor areas in the house, garage, porches, decks, etc.
B. finished and habitable floor areas above grade
C. finished floor areas above and below grade
D. open non-floored area of a two-story foyer

A

B

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7
Q

Because of the unique attributes of the cost approach, it is ideally suited for
A. estimating insurable value.
B. estimating market value for lenders.
C. estimating value in a condemnation.
D. subdivision development analysis.

A

A

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8
Q

Steve has estimated the cost of excavation, the floor, wall, and roof components,
and the packaged costs for the electrical, heating, and plumbing. What cost
method is Steve using?
A. comparative unit method
B. price-index method
C. quantity survey method
D. unit-in-place method

A

D

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9
Q

Fogarty knows that the original cost of the building three years ago was
$750,000. If the cost index was 235 when the structure was built, what is the
estimated cost now if the index is at 267.9?
A. $657,895
B. $855,000
C. $996,750
D. $1,117,735

A

B. (267.9 / 235 = 1.14 × $750,000 = 855000)

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10
Q

What is the predominant type of frame construction used after World War II?
A. balloon
B. concrete block and stucco
C. platform
D. post and beam

A

C.

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11
Q

An appraiser observes that the distance between a private sewage system’s drain
field and the water well does not meet the minimum requirements. Under which
component of a building does this fall?
A. electrical
B. foundation
C. framing
D. plumbing

A

D

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12
Q

What type of foundation is likely to be found in housing that is located in a warm
climate and subject to occasional standing water?
A. basement wall foundation
B. monolithic slab foundation
C. pier foundation
D. slab with stem wall foundation

A

C

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13
Q

An earth-sheltered dwelling would likely be placed into which of the following
categories of housing design?
A. contemporary
B. specialized
C. split level
D. zero-story

A

B

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14
Q

An appraiser is analyzing the cost on a 1,500 sq.-ft., one-story residence and has
estimated the base cost at $75 per sq. ft. If the local multiplier is 1.10 and the
current cost multiplier is 1.05, what is the cost for the dwelling?
A. $107,386
B. $117,857
C. $129,937
D. $241,875

A

C

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15
Q

Reilly is counting the plumbing fi xtures in a second-fl oor bath and found that there
are two sinks, a toilet, a bathtub, and a separate shower stall. How many plumbing
fi xtures should Reilly include in his count?
A. 3
B. 4
C. 5
D. 7

A

C

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16
Q

In an appraisal of a typical detached residential structure, an appraiser
determines the gross living area by
A. measuring the exterior perimeter dimensions of the residence and
multiplying it by the current cost modifier.
B. using the exterior perimeter dimensions of the residence.
C. using the interior dimensions of the residence’s overall perimeter shell.
D. using the size provided by the real estate broker.

A

B

17
Q

Low Cost (building)

A

These buildings are generally constructed to minimum code
requirements often with little regard for architectural appearance or amenities

18
Q

Average (Building)

A

Buildings are generally
designed for maximum economic potential. They comply with standard code
construction and have simple ornamentation and finishes

19
Q

Good (Buildings)

A

These buildings are designed for good appearance, comfort, and
convenience, as well as an element of prestige. Ornamentation treatment is
usually of higher quality, and interiors are designed for upper-class rentals

20
Q

Excellent (buildings

A

These are sometimes referred to as prestige buildings. On an
economic basis, part of the cost must be written off to pride of ownership and
some of the income intangibly derived from advertising. Excellent dwellings
are generally built for the established professional or those with higher
incomes and have some degree of expensive finishes and fixtures

21
Q

3 categories of depreciation:

A
  1. Physical deterioration
  2. Functional obsolescence
  3. External obsolescence
22
Q

Physical deterioration

A

This is the slow destruction (or wear and tear) of the
structural components that goes on every day, from the moment a building is
completed

23
Q

Functional obsolescence

A

The impairment of functional capacity attributed to
a particular property according to market tastes and standards

24
Q

External obsolescence

A

a loss in value from physical or economic causes external to the
property

25
Q

Depreciation

A

In appraisal, a loss in the value of improvements from any
cause; the difference between the cost of an improvement on the effective
date of the appraisal and the value of the improvement on the same date

26
Q

Book depreciation

A

In accounting, the amount of capital recapture deducted
on an owner’s books. This is not market derived. It is the basis of deductions
for income tax purposes

27
Q

Actual age

A

The number of years that have elapsed since construction of an improvement
was completed

28
Q

Effective age

A

The age of property that is based on the amount of observed deterioration
and obsolescence it has sustained

29
Q

Economic life

A

The period over which improvements to real estate contribute to property value

30
Q

Remaining economic life

A

The estimated period over which existing improvements are expected to
contribute economically to a property.

31
Q

What is the effective age?

A 15-year-old house with good maintenance
and overall condition.

A

15 years or less

32
Q

What is the effective age?

Same house, ( 15 year, good cond.) but now 25 years old. Updated
with new roof shingle, water heater, and
furnace. Also new floor covers and new
counters and sink in the kitchen.

A

Less than 25 years,
possibly 15 years

33
Q

What is the effective age? ( 15 year, good cond.)

Same house, but now 50 years old. Same level
of updates as when 25 years old, but includes
complete redo of kitchen and baths. Siding
replaced and retrofi tted with energy-effi cient
windows, addition of Energy Star® appliances
and lighting, and new energy-effi cient heating
and air conditioning system

A

Maybe 20 years

34
Q

What is the effective age? ( 15 year, good cond.)

Same house, 75 years old, but nothing done
since it was updated at age 50. House is kept
clean and neat. Real estate agent mentions in the
listing data sheet that house needs fresh décor.

A

40 to 45 years

35
Q

What is the effective age? ( 15 year, good cond.)

Same house, 100 years old. Structure has
been moved to a desirable location and placed
on a new foundation. Interior is totally gutted
and new components installed throughout.

A

Could be
10 to 15 years

36
Q

Market extraction method

A

This method relies on the availability of comparable sales from which you can
extract the depreciation.

37
Q

Economic age-life method

A

A method of estimating depreciation in which the ratio between the effective
age of a building and its total economic life is applied to the current cost of
the improvements to obtain a lump-sum deduction; also known as the age-life
method.

38
Q

Breakdown method

A

A method of estimating depreciation in which the total diminution in the value of
a property is estimated by analyzing and measuring each cause of depreciation
(physical, functional, and external) separately.

My Appraisal Procedures (9 decks)

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