General Questions: F - M Flashcards
Which of the following is a type of FEE Time Sharing ?
Interval Ownership
Foundation supports include which of the following?
Footings
The most common structural Framing Material for homes in North America is;
Wood
What Form of Ownership is a combination of Fee-Simple of a defined space and tenancy in common of shared areas?
Condominium
Which of the following Factors is LEAST likely to be considered when using the Direct C Approach to value?
The comparables replacement cost
Which of the following relate to Green building practices ?
1) Development density
2) Use of renewable material
3) Innovative design
4) All of the above
Graphic Analysis can be used to illustrate systematic relationships in land values. Bob the Appraiser is graphing
sales prices against the number of units per lot in a proposed subdivision development. As he number of units
per lot increases, the sale price per lot decreases.
Which type of CURVE will result when comparing these 2 variables ?
Downward sloping to the Right, as the 2 are negatively related
Jason is an Appraiser in the city of Main.
What should he do if the Highest and Best Use of a site is based on a predicted change in Zoning?
Jason must investigate the probability that such a change will occur
In many situations the HBU of a piece of property will probably not change, due to the stability, age, and
maturity of the neighborhood. In such situations the appraiser:
Should always make a comment on the HBU in every report
What should Dave’s Appraisal report include if the Highest and Best Use of the subject’s land as though vacant
is different than the HBU of his property as improved?
1) The report should include identification of each HBU separately
2) The report should include a statement explaining the HBU of the land as though vacant was determined
under the theoretical presumption that the land is vacant and available for development
3) The report should include a statement that explains that the HBU of the property as improved was based on
the continued economic viability of the property in its current state
YES - 4) All of the above statements should be included in the appraisal report
HBU Analysis requires an estimate of the use as though vacant and as improved:
1) To estimate the value of the improvements
2) To ensure that appraisers recognize that the property could be worth more without the buildings than with
them
3) To estimate any functional obsolescence caused by inappropriate improvements
YES - 4) For all of the reasons listed above
A piece of land in Mississauga is improved with a single family dwelling built in the 1950’s. Recent sales in the
neighborhood show that similar improved properties have market values of $425,000. However, this part of
the city is in transition, with vacant properties rezoned to multi-family use selling for $530,000. Given changes
to the OCP, you believe that it is reasonably probable the subject may be rezoned to multi-family dwelling.
Research with contractors shows the cost of demolishing the house and seeking rezoning will total $40,000.
Based on this info, what is the HBU for the property ?
The HBU involves demolishing the existing improvements & redeveloping the site to multi-family use
A client has recently purchased a large home in an area that is now zoned multiple family. The house has a full
basement, a large main floor consisting of 5 rooms, a second floor with 4 bedrooms, and a 3rd floor with 2
bedrooms. Your investigation indicates that the house has a number of possible uses.
- A single family residence
- As a rental property renovated into 3 separate suites
- As a rental property renovated into 8 bedrooms with common area and a kitchen
- Converted into 2 strata suites, 1 on the main floor, and 1 on the 2nd and 3rd floors.
The basement will be kept as common property for utilities and storage.
When conducting your HBU study you will :
Value each alternative separately and state them in your report
The concept of HBU of land as though vacant is based on the premise that:
Any existing improvements can be demolished
Which of the following is MOST likely to Increase the Demand for residential real estate?
Interest Rates are Decreasing and are expected to continue to Decrease.
Which of the following is an Inappropriate Basis for making site Adjustments ?
Basing Adjustments on the Appraisers expertise and general market knowledge
Improvements that make NO contribution to property value typically constitute a, _____ equivalent to the
cost of their demolition.
Value Penalty
A Value Penalty equivalent to the cost of its demolition must be deducted from the property value to indicate
the unimproved land value.
The Income from renting garage space in an apartment building is:
Included as other income in potential gross income
The anticipated Net Income that remains after deducting all Operating Expenses but before Mortgage Debt
Service is deducted is called:
NOI or Net Operating Income
In estimating the market value of a property,
which of the following is an appraiser LEAST LIKELY to consider Relevant?
If the normal or intrinsic value of the property corresponds to its market value
John is considering renting out the basement in his home.
Where would he go to determine whether or not the use is Legally Conforming or illegal ?
Municipal Office
Market Value is:
The amount of money a property should sell for on the open market
In the Market Delineation Process , which of the following factors is typically NOT used by an Appraiser
in identifying a specific real estate market?
Social preferences
The interaction of which of the following Market Statistics can help measure Trends in real estate markets?
1) Vacancy rates and rental rates
2) Capitalization rates and vacancy rates
3) Changes in supply and home price changes
4) All of the above
The Measured front property line that abuts a street is called it’s;
Frontage
Jack is performing a Market Area Analysis . Which of the following would he identify as a Social influence,
as opposed to Economic, Government or Environmental?
The number of people in the city unemployed
Your assignment is to determine the demand for a proposed residential subdivision of 50 lots on the outskirts
of your city. Which of the following correctly lists the steps in carrying out A SIX STEP Market Analysis ?
Property productivity analysis, Market delineation, Demand analysis and forecast, Competitive supply analysis and forecast, Supply and Demand study, and Capture estimation
The current MLS system shows the following data for 5-10-year-old homes priced from $500,000 - $550,000.
- 13 current listings
- 4 pending sales (offer accepted but not closed)
- 12 sales within the last 12 months
Over the last 5 years the same market usually has had about a six month supply of homes for sale. New home
builders and brokers are advertising for the 1st time in many years. The average number of days on the market
is 10% longer than in previous years. What does this info indicate about this Market ?
It is oversupplied and prices will be stable at best
The Market Extraction Method subtracts the _________ from the known _______ of an improved property to arrive at an estimated Value of the land.
The Market Extraction Method subtracts the Depreciated cost of improvements from the known sale price of an improved property to arrive at an estimated Value of the land.
The course textbook outlines a 6 step process for the Market Analysis of single –family subdivisions.
Which of the following describes the process in Step 2 – Market Delineation ?
Characteristics of likely buyers, such as income and age are analyzed
An opinion of Market Value via the Direct Comparison Approach is through the eyes of:
Well-Informed Purchasers
You have selected 3 indices to compare with your subject property and, after completion of Qualitative
Analysis, you realize that they are ALL Superior to the subject property.
This information tells you that the subjects Market Value is:
LESS THAN the selling price of the lowest price index
Fred is an Appraiser who has the task of Appraising a residential site close to the downtown core of Fernie.
Fred has observed a pattern in the Ratio of building to Land Value in the downtown core. There have NOT been many recent sales.
Which Method would be the MOST appropriate to use to establish an Approximate Land Value ?
Allocation Method – Can be used when a Ratio of Site Value to property is extracted from comparable sales in
competitive locations. It is then applied to the Sale Price of the subject property to develop the Site Value.
The most detailed and comprehensive Method of Cost Estimating is the , _____ method.
The ______, method of cost estimating is relatively uncomplicated, practical, and widely used.
Quantity Survey, Comparative-unit Method – Because it is based on the sales of similar improvements.
Which Method for estimating depreciation Allocates Depreciation among individual building components ?
Observed Condition or Breakdown Method measures each category of Depreciation.
Which Method of Estimating Accrued Depreciation is the most directly verifiable from Market Evidence ?
Extraction Method
Which of the Land Surveying Methods was developed as an outgrowth of the rectangular survey system and
can be used to simplify the locational description of small parcels?
Lot and Block system
Alice Brooks, an appraiser, based on the value of the subject site on Market Information indicating that for
properties comparable to the subject, the Land value was 33% of the total property value.
This demonstrates which Land Valuation Method ?
Allocation – Also known as the Land Ratio Method – uses a ratio of site value to property value which is
extracted from comp sales in competitive locations, and then applies it to the sale price of the subject property to develop the site value.
