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CPE > CPE > Flashcards

CPE Flashcards

1
Q

What is Functional Obsolescence?

A

functional utility is the overall usefulness and desirability of a property
loss of value in a property due to changes in style, taste, etc.
it’s the inability to work the way it used to

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2
Q

What is External Obsolescence?

A

loss in value as a result of impairment in utility and desirability caused by factors outside the property boundaries

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3
Q

What is Physical Deterioration?

A

a loss in value due to normal wear and tear and disintegration
deterioration CANNOT be avoided

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4
Q

What is a Fixer Upper?

A

most common example of single family residence

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5
Q

What is categorized as curable or incurable?

A

physical deterioration and functional obsolescence

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6
Q

What is Super Structure?

A

skeleton of the building ALWAYS physically incurable

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7
Q

How many methods are used to measure depreciation and what are they?

A

5 methods (2 indirect and 3 direct)
indirect - sales comparison and capitalization
direct - economic age-life, modified economic age-life and breakdown method

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8
Q

What is Direct Method?

A

involves measuring the depreciation of subject property
LOOKING MYSELF

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9
Q

What is Indirect Method?

A

use sales of comparable properties (market extraction) and income loss from properties to measure depreciation
LOOKING ONLINE

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10
Q

What are the primary methods used by most appraisers to estimate the total depreciation of a property?

A

sales comparison (indirect method) and economic age-life (direct method)

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11
Q

Depreciation of the subject property is based on what?

A

the depreciation of comparable sales in the market
recently sold properties of similar age, condition, and desirability

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12
Q

What is the Mass Appraisal Method?

A

depreciation is usually estimated by using depreciation tables

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13
Q

What is the primary method of estimating depreciation in the assessors office?

A

developing depreciation tables from comparable sales in mass appraisal

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14
Q

What are the 2 Indirect Methods?

A

Sales Comparison and Capitalization

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15
Q

What is Physical Life?

A

total period a building lasts or is expected to last rather than its economic life

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16
Q

What is Economic Life?

A

total number of years during which the improvements on the site/land contribute to total property value

17
Q

What is Effective Age?

A

the age of property based on the amount of observed deterioration

18
Q

Age and Life Relationships of Depreciation

A

Chronological Age

19
Q

Effective Age + Remaining Economic Age =

A

Total Economic Life

20
Q

What is Remaining Economic Life?

A

estimated number of years remaining during which the improvements continue to contribute to total property value

21
Q

Total Economic Life - Effective Age =

A

Remaining Economic Life

22
Q

In determining the period during which the improvements continue to contribute to total property value the apprasier must what?

A

must consider the present condition of the improvements AND other known factors that might affect its future use

23
Q

What is Actual Age?

A

amount of time that passed between construction of an improvement and the date of appraisal
also known as historical or chronological age, it is a fact or objective figure

24
Q

What is Economic Age-life Method? (Straight-Life)

A

mechanical method of handling depreciation borrowed from the accounting profession3
allocates a uniform percentage of value loss each year over the economic life of the improvement

25
Q

What is the simplest method to use?

A

economic age-life

26
Q

Effective Age / Total Economic Life (EA + REL =)

A

depreciation (expressed as a %)

27
Q

What is Breakdown Method?

A

requires a separation of elements of depreciation into various categories
observed condition

28
Q

What is Superadequacy?

A

more than what you need
current cost new less physical deterioration charged plus to remove less salvage value

29
Q

If spending money to cure the item does NOT result in a value increment equal to OR greater than the expenditure…is this Curable or Incurable?

A

incurable

30
Q

What are examples of Curable Physical Deterioration?

A

repair a screen door
repair roof gutters
repair roof eaves

CPE (1 decks)

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