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08 Sales Comparison and Income Approaches > Final Exam > Flashcards

Final Exam Flashcards

1
Q

__________analysis is based on numbers and results in either dollar or percentage amounts.

A

Quantitative

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2
Q

“A business arrangement in which two or more persons jointly own a business and share in its profits and losses” is the definition of

A

Partnership

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3
Q

“A lump-sum payment or series of payments to the lender that reduces the interest payments of the borrower” is the definition of

A

Buydown

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4
Q

“A type of market area characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural” is the definition of

A

District

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5
Q

“Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics” is the definition of

A

Specific data

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6
Q

“The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted” is the definition of

A

Net operating income

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7
Q

“The appraisal principle that real property value is created and sustained when the characteristics of a property conform to the demands of its market” is the definition of the principle of

A

Conformity

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8
Q

“The number of years elapsed since an original structure was built” is sometimes described by all of the following terms?

A

Chronological age, Historic age, Actual age

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9
Q

“The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires” is the definition of

A

Leased fee interest

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10
Q

“The perception that value is created by the expectation of benefits to be derived in the future” is the definition of the principle of

A

Anticipation

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11
Q

“The periodic expenditures necessary to maintain the real estate and continue production of the effective gross income, assuming prudent and competent management” is the definition of

A

Operating expenses

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12
Q

“Type of building development designed as a grouping of complementary land uses, such as housing, schools, recreation, retail, office, and industrial parks, contained within a single master development; usually includes common area and common area maintenance obligations in the form of owners association dues“ is the definition of

A

Planned unit development

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13
Q

“When several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution” is the definition of the Principle of

A

Substitution

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14
Q

A $144,000 mortgage has monthly payments for 25 years, at 6.40% interest. How much are the monthly payments?

A

963.32

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15
Q

A $167,500 mortgage, with 6.8% interest, has a monthly payment of $1,162.67. How many years was the original term of the loan?

A

25

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16
Q

A 4 unit property sold for $182,000. Its contract rent for each unit was $975 per month and its market rent was $925 per month. In a fee simple appraisal what would be the GIM?

A

4.1

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17
Q

A comparable property sold 3 months ago for $162,000. The market shows appropriate adjustments to be: Market conditions adjustment +$8,500 Location adjustment +$5,000 Quality adjustment -$10,000. What is the adjusted sales price of the comparable?

A

165500

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18
Q

A comparable property sold 3 months ago for $162,000. The market shows appropriate adjustments to be: Market conditions adjustment +$8,500 Location adjustment +$5,000 Quality adjustment -$10,000. What is the amount of total gross adjustments?

A

23500

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19
Q

A comparable property sold 3 months ago for $162,000. The market shows appropriate adjustments to be: Market conditions adjustment +$8,500 Location adjustment +$5,000 Quality adjustment -$10,000. What is the indicated net adjustment to the comparable property?

A

3500

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20
Q

A comparable property sold 3 months ago for $186,000. The market shows appropriate adjustments to be: Market conditions adjustment +$5,500 Location adjustment +$7,500 Quality adjustment -$12,000. What is the adjusted sales price of the comparable?

A

187000

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21
Q

A district is characterized by ____________ land uses, where a neighborhood is characterized by _______________ land uses.

A

Homogeneous, complementary

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22
Q

A mortgage of $214,000, written for 20 years, has a monthly payment of $1,595.53. What is the interest rate?

A

0.065

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23
Q

A mortgage that is not fully amortized at maturity and requires a lump sum payment of the outstanding balance is called a ____________ mortgage.

A

Balloon

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24
Q

A parcel of vacant land sold for $300,000 and then one year later sold for $325,000. What was the percentage of appreciation indicated by this sale and re-sale?

A

0.083

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25
Q

A property has a first mortgage of $200,000, a second mortgage of $50,000, and a third mortgage of $20,000. It is foreclosed and sold for $245,000. The holder of the third mortgage gets $_______ and the holder of the second mortgage receives $ _________.

A

0, $45,000

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26
Q

A property owner wants to replace his roof in 10 years. How much must he invest annually at 4.5% compound interest to accumulate $12,000 to replace the roof?

A

934.49

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27
Q

A property recently sold for $265,000 and land value was estimated to be $50,000. The cost new of the improvements today would be $362,000. The improvements are 22 years old. What is the annual % of depreciation?

A

0.0185

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28
Q

A property recently sold for $265,000 and land value was estimated to be $50,000. The cost new of the improvements today would be $362,000. The improvements are 22 years old. What is the percent of total depreciation?

A

0.41

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29
Q

A property recently sold for $265,000 and land value was estimated to be $50,000. The cost new of the improvements today would be $362,000. The improvements are 22 years old. What is the total dollar amount of depreciation?

A

147000

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30
Q

A property sold for $146,000. Its contract rent was $800 and its market rent was $850. What was the GRM?

A

171.8

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31
Q

A property sold for $165,000. It had two 6-room apartments, one 5-room apartment and a 2-room studio apartment. What did it sell for per room?

A

8684

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32
Q

A property sold for $167,000 and then a year later for $178,000. What was the percentage of appreciation?

A

0.066

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33
Q

A property sold in April for $216,500. It sold again 9 months later for $245,750. What was its average monthly rate of appreciation?

A

0.015

34
Q

A property was listed on August 12, 2021 and sold on February 14, 2022. How many days was it on the market?

A

186

35
Q

A purchaser bought a property for $257,000, put 20% down and borrowed the rest at 6.15% interest for 30 years. The lender charged 1.5 points at the closing. How much was paid for the points?

A

3084

36
Q

Adjustments in the sales comparison approach can be made as

A

Dollar amounts or percentage amounts

37
Q

Adjustments should be made in the sales comparison approach when there is a _____________ difference between the subject property and a comparable sale.

A

Significant

38
Q

All of the following are examples of negative easements

A

Conservation easement, Drainage easement, Historic preservation easement

39
Q

All of the following are types of qualitative techniques

A

Relative comparison analysis, Ranking analysis, Personal interviews

40
Q

An office building has an effective gross income of $832,500 and its total operating expenses are $290,750. What is its expense ratio?

A

0.35

41
Q

At a 9% annual “discount” rate, what is the present worth of a $25,000 lump sum if you will not receive it for another 12 years?

A

8888.37

42
Q

Fannie Mae says that neighborhood boundaries may be identified by all of the following

A

Physical characteristics, Land use, Site size

43
Q

How much do I have to put aside each year, at 5% interest, to accumulate $12,000 to replace a boiler in 7 years?

A

1403.36

44
Q

How much is [(143.45 + 235.70 - 17)+ (45.8 x 17.2)] ÷ (4.5 x 32)?

A

7.99

45
Q

In comparison with other investments, real estate generally has a higher ______________ but less ____________.

A

Return, liquidity

46
Q

In the SRIPAR, which of the following are unit indicators?

A

Sale price per room, Sale price per SF of GBA, Sale price per bedroom

47
Q

In the URAR adjustment grid, the first adjustment factor we find is

A

Sale or financing concessions

48
Q

Management expenses might include any of the following

A

Collecting rents, Advertising, Bookkeeping

49
Q

Prior to agreeing to perform an assignment, an appraiser must have the _____________ to complete the assignment competently.

A

Knowledge and experience

50
Q

Property that is burdened by an easement is called a __________estate.

A

Servient

51
Q

Quality of construction is determined by both the ___________ and _____________.

A

Materials, construction practices

52
Q

Sale price and rent at time of sale for a series of sales: $145,000 - $1,100; $140,000 - $1,050; $133,500 - $1,000; $150,000 - $1,100; $128,000 - $950; $117,000 - $900; $137,500 - $1,000; What is the mean of the rents?

A

1014

53
Q

Sale prices and rents at time of sale: $145,000 - $1,100; $140,000 - $1,050; $133,500 - $1,000; $150,000 - $1,100; $128,000 - $950; $117,000 - $900; $137,500 - $1,000; What is the median rent?

A

1000

54
Q

The ________________ approach is the most commonly used approach for appraising residential property.

A

Sales comparison

55
Q

The focus of most residential appraisals is _____________ value.

A

Market

56
Q

The four categories of external market factors that affect property values are:

A

Social, Economic, Governmental, and Environmental

57
Q

The HP 12C calculator has ____ data storage registers.

A

20

58
Q

The income approach would be required by Fannie Mae for __________ properties, but not for ___________ properties.

A

3 unit, 1 unit

59
Q

The most basic form of concurrent ownership is

A

Tenancy in common

60
Q

The reciprocal of 5 is

A

0.2

61
Q

The sales comparison approach can be used for

A

Residential, commercial and industrial properties

62
Q

Under state licensing statutes, licensed or certified appraisers are allowed to appraise _______________ residential units.

A

Up to 4

63
Q

Using a discount rate of 6.25%, what is the worth today of a mortgage with a current balance of $186,000, bearing 4.5% interest, annual payments of 11,625.00 then all due and payable at the end of 18 years?

A

156646.72

64
Q

Using the six functions of a dollar table, what is the sinking annual deposit amount if you planned to replace the roof of your investment property (at a cost of $4,500) in 15 years and you expected the funds to grow at the rate of 9% per year? (For this problem, assume payments are made at the end of each period.)

A

153.26

65
Q

What is the future value of $25,000 if you deposited it today in a savings account paying 4.75% interest per year, and left it, without making any other deposits, for 13 years?

A

45702.76

66
Q

What is the future value of an annuity if you deposited $1,500 each year for 7 years into a savings account paying 9% interest per year?

A

15042.71

67
Q

What is the future value of an annuity if you deposited $4,000 each year for 11 years into a savings account paying 3.25% interest per year?

A

53581.14

68
Q

What is the median of the GRMs in the following dataset? $145,000 - $1,100; $140,000 - $1,050; $133,500 - $1,000; $150,000 - $1,100; $128,000 - $950; $117,000 - $900; $137,500 - $1,000.

A

133.5

69
Q

What is the sinking fund factor amount if you planned to replace the swimming pool of your investment property (at a cost of $50,000) in 12 years and you expected the funds to grow at the rate of 6% per year?

A

2796.09

70
Q

What is the sinking fund factor amount if you planned to replace the swimming pool of your investment property (at a cost of $50,000) in 12 years and you expected the funds to grow at the rate of 6% per year?

A

2796.09

71
Q

What’s the value today of the right to receive a lump sum of $85,000 in 10 years, discounted at 8%?

A

39371.45

72
Q

Which is the more recent term?

A

Market area

73
Q

Which measure of central tendency is most affected by extreme values?

A

Mean

74
Q

Which of the following is an insured loan?

A

FHA

75
Q

You buy a new motor home for $55,125. You get a 15% rebate but pay 7% state sales tax and 2.5% county sales tax. What is the net amount you have to pay?

A

51307.59

76
Q

You live in a ski resort town. Real estate prices typically drop 20% during spring and summer. A house sold for $350,000 in January. What would it sell for in July?

A

280000

77
Q

You started with $28,456.20 in your bank account. You made the following withdrawals: $1,200.00, $268.00, and $3,250.75. You made the following deposits: $2,400.00, $750.00, and $149.75. What is your current bank balance?

A

27037.2

78
Q

Your research of a comparable sale reveals that the purchase price was $160,000, but the purchaser realized the property needed extensive repairs to the mechanical systems. The estimated cost to cure the problems was $25,000 but the actual costs turned out to be $18,000. What should you do?

A

Adjust the sale price of the property $25,000

79
Q

Your stock went from $123.50 to $219.25 in 6 years. What is the average change per year?

A

0.1292

80
Q

Zoning and building codes would be classified as _________ factors that affect value.

A

Governmental

08 Sales Comparison and Income Approaches (23 decks)

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