final exam Flashcards
When a commercial lease requires the tenant to pay and or perform and pay for all of the property’s real estate taxes and operating expenses, which of the following terms would you use to denote such a lease?
A net, net, net or fully net lease
The essential difference between the two reporting options comes down to two words:
Summarize and state
What type of fire departments are usually found in a township?
Either a volunteer or paid full-time department
USPAP says that in an Appraisal Report you must ____________ the Intended Use.
state
USPAP now requires that an appraiser “___________to safeguard access to confidential information”
Take reasonable steps
When a Sales Comparison Approach is applicable to an appraisal assignment, USPAP requires an appraiser to analyze comparable sales data as are available to indicate a value conclusion. In that context how would you explain what USPAP meant by the use of the word “sales data”?
Any agreements of sale, options and listings of the comparable properties that occurred prior to the effective date
Which of the following can be used to summarize the definitions of a site’s ingress and egress?
Ingress describes the access onto the site while egress describes the access off or out of the site
Most of the information necessary for problem identification can be obtained by the appraiser through communication with the
Client
STANDARD 2 of USPAP states that in appraising real property, an appraiser must communicate each analysis, opinion, and conclusion in a manner that is __________________.
Not misleading
A partially enclosed body of water where saltwater from the sea mixes with freshwater is a(n)
Estuary
When creating a narrative appraisal it is “best practice” to have what follow the title page?
A cover letter or transmittal letter
Occasionally a lessor will write a lease stating that any rent will not begin until a month or more after occupancy. Such clause is usually given as an inducement to lease. This effectively reduces the actual average annual rent of the lease. Which of the following terms would you use to denote such inducement?
Free rent
How would you explain how the appraiser obtained a market-derived cap rate?
That the appraiser derived the cap rate from information obtained from recent sales in the marketplace
Functional obsolescence is the impairment of functional capacity of improvements according to market _______________.
tastes and standards.
The wear and tear from regular use, the impact of the elements on the property or damage to the property
physical deterioration of a building
When a site has frontage on more than one street, how should the appraiser summarize that?
By identifying which is the primary and which is the secondary frontage
What is the benefit of a community of having a diverse economy?
It provides more employment stability than an economy concentrated in one or two industries
Which of the following items would only be applicable when summarizing an office building?
The floor ratio efficiency factor
Wetlands and waterways regulation and permitting falls under
U.S. Army Corps of Engineers
The Comment to STANDARD 2 of USPAP says the form, format, and style of a report are functions of the needs of ____________________.
Intended users and appraisers
When writing the summary of the building(s) and improvements, in addition to summarizing the construction details, what is the entire body of your summary also going to do for the intended user?
Convey a sense of quality about the building and improvements
The ASB changed the definition of assignment results to specify that __________are not assignment results.
Physical characteristics
Navigable waters are owned and controlled by
either the state or federal government
Which of the following statements would you use in your explanation of the Direct Capitalization technique or method?
The appraiser converts the underwritten annual NOI into an indication of value by dividing the NOI of a single year by an overall percentage factor or rate.
You are writing the micro area description, and you have already addressed certain location items in your initial or macro area description. Which of these is an example of items that you would not need to address again in the micro area description unless they were located within the township?
Major landmarks, national parks, monuments, mountains, major hospitals and major military installations.
When the elements of a property are divided for comparison purposes (such as: price per square foot, price per bedroom and price per room) , this is called:
Units of comparison
The effective date of an appraisal can be:
A past date, the current date, or a future date
In the Government/Rectangular Survey, a “township” is how many miles square?
6
Management is a section of which USPAP rule?
Ethics Rule
When the government has the right to levy taxes on real property this is called:
Taxation
Single family residential appraisers are not required to demonstrate expertise in capitalization techniques.
false
If a property is assessed at $400,000 and the property taxes for the year totaled $8,400, what was the mill rate used to determine the taxes owed?
21
A house sold for $95,550 which was 11% more than the original cost of the house. The original cost of the house was:
$ 86,081
(Legal interest) Crops that require annual planting are called:
Emblements
The rights and interests are divided into two descriptions and those are:
Private rights and public rights.
Which of the following is not an FRT?
A loan guaranteed by the Veterans Administration.
The major drawback to the Sales Comparison Approach is:
It is historic in nature
An appraiser recently reviewed an appraisal report that contained a commonly used form that had been signed by two appraisers on the appraiser line (left hand of the form). Which of the following statements is true?
This does not violate USPAP, so long as both those signatures also appear on the certification.
The Jones’ house sold for $157,500 at a loss of 6%. What was the original cost.
$ 167,554
A home has a chronological age of 20 years. It’s estimated effective age is 12 years. The remaining economic life is 48 years. The estimated total economic life is 60 years. The estimated effective age is determined by considering all types of depreciation. Using the age life method, what is the percent(rounded) of depreciation of the property?
20%
PGIM is monthly or annual?
annual
The annual property tax on a subject is $1,188. The taxing authority assesses this type of property at 55% of market value. What is the assessor’s estimate of market value of the subject if the tax rate is 18 mills?
$120,000
What part of the government has the responsibility for monetary policy?
Federal Reserve
A_______is used to convey real property which contains warranties of title and the grantor agrees to defend the premises against the lawful claims of third persons.
Warranty Deed
For the past several years, high waters have been dumping substantial amounts of soil onto Doug’s property. This event is known as:
Accretion
When a property has the lowest asking price and the same utility as other properties, yet attracts the greatest demand this is called:
Substitution
Which of the following is a “Federally Related Transaction”?
A loan originating from a FDIC insured depository institution.
An assignment that involves an opinion of value but does not have an appraisal or an appraisal review as its primary purpose is called what?
Appraisal Consulting
The Statements on Appraisal Standards:
Have the same force as the Appraisal Standards themselves
According to USPAP, a Highest and Best Use analysis is:
A requirement which may be necessary in some appraisals assignments
The Federal Reserve Board effectuates monetary control by:
Adjusting the reserve requirement
In the Government/Rectangular Survey, the imaginary lines that run east to west are called:
Base Lines
What is a common range of an amount of fuel that can be saved by good quality doors and storm windows?
10-20%
A value that is determined by the individual for his or hers goals or needs with the property is called:
Investment value
The recording of a deed that provides everyone with a notice that a valid conveyance has occurred is called:
Deed Recordation
The definition of MODERNIZATION is:
Bringing a property up to current standards
The Gross Rent Multiplier is technically an extension of the ________ approach to value.
Sales
In a Restricted Use appraisal report, the client is:
The only intended user
The equity yield rate is a full measure of investment performance.
True
The role of the word “comment” in USPAP is:
To interpret and establish a context for the issue.
During a review of another appraiser’s residential property appraisal report, appraiser Smith discovers pertinent information which could impact the appraisal as of the effective date. This data is important enough that the original appraiser would probably include this data in his analysis. Although the events creating this data occurred prior to the appraisal effective date, the information was not made available until after the report date. Which of the following is the most appropriate option for appraiser Smith?
use the applicable data in a new appraisal, but not change the original appraiser’s appraisal report.
Carl bought a summer home on the shore of Eagle Bear Lake five years ago. Over the years, the water has receded and left his dock permanently surrounded by dry land. What is this an example of?
Reliction
In the Government/Rectangular Survey, a “quarter section” has how many acres?
160
What principle holds that the value of a particular component is measured as the amount its absence would detract from the value of the whole?
Contribution
“Balloon Framing” is identified by the:
the wall studs extending from the foundation to the roof line
A GIM (PGIM) is a percentage of gross income to value.
false
In the term “Metes and Bounds”, what does the word “Bounds” mean?
Direction
The Preamble of USPAP states that Uniform Standards are:
Also for the benefit of the users of appraisal services
Scope of work is determined by the:
Assignment.
According to USPAP, which of the following would require a “Hypothetical Condition”?
Current effective date, proposed construction.
If a owner has a partial ownership or a lease for a specified amount of time, this would be called a
Time-Share
loan constant
annual debt service/loan amount
The “Zoning” system is based on what power of the government?
Police
According to USPAP, an appraiser is;
independent, impartial, objective.
Jack and Jill own a property together as tenants in the entireties. Jack falls down and breaks his crown and his will names his son, John, as the inheritor of the property. Which of the following statements is correct?
Jill owns the property in severalty
A mortgagor is another word for:
Borrower
When a property has the lowest asking price and the same utility as other properties, yet attracts the greatest demand this is called:
Substitution
When applying the Sales Comparison Approach, what is the minimum amount of comparable sales the appraiser must use?
There is no set minimum.
In the valuation process, one of the elements of defining the problem is:
identifying the property rights
An ‘OER’ is a percentage of expense to total gross income:
False
A discount rate is a yield rate used to convert future income into present value.
True
What is the term that means “GOING TO THE STATE”?
Escheat
A rate derived from a single year’s NOI and the total property value is called;
an overall rate
The Secondary Mortgage Market consists of;
Lender sponsored and controlled entities with government oversight and protection
A Ridge Board (or Ridge Beam) is:
the beam located at the highest horizontal part of the roof to support the upper ends of the common rafters
Bridging is installed to prevent the joists from:
bending sideways
In regard to USPAP, contingent compensation is:
Allowed only if the compensation is not dependent on an act that requires or encourages unethical behavior.
In the Government/Rectangular Survey, the “Quadrangles/Checks” are how many miles square?
24
In the Government/Rectangular Survey, a “township” has how many square miles?
36
A mortgagee is another word for:
Lender
The following is performed to confirm whether or not the conditions of an appraisal have been met. This will not change the effective date of the value opinion.
Recertification of Value
Fred, an appraiser trainee with a firm recently submitted a report to his supervisory appraiser. The supervisory appraiser asked Fred to make changes to the report that resulted in a value opinion with which Fred did not agree. Which of the following statements is most accurate.
Although Fred is a trainee, if he does not agree with the opinions and conclusions of the report he cannot sign the letter of transmittal, the report or the certification.
A land contract:
A way for the vendor to help the vendee finance the property
The Appraisal Foundation is:
An Organization of sponsors
The overall Capitalization Rate can be estimated using the Operating Expense Ratio and the Effective Gross Income Multiplier (EGIM). What is the formula used?
Cap Rate = (1-Operating Expense Ratio) / EGIM
Which term describes a study of real estate market conditions for specific types of property?
Market analysis
The equity dividend rate (also called the equity capitalization rate) is the annualized rate of return that equity investors receive. What is the formula to figure the Equity Dividend Rate (EDR)?
EDR = Before Tax Cash Flow / Equity Investment
In the income approach, the owner’s income statement may be ‘restructured’. The reason for this is:
the owner will tend to minimize expenses and costs of business
A “under the roof insulation” should have a minimum “R” value of:
R-20 to R-24
An owner removed items from a property prior to selling it. These removed items could not be considered which of the following:
Appurtenant
Which USPAP rule acts as a “severability clause”?
Jurisdictional Exception Rule.
For functional obsolescence to be curable the:
cost of replacing the feature must be the same as or less than the anticipated increase in value
