Lesson 15 Flashcards
An official valuation of property for ad valorem tax purposes is BEST described as
An assessment appraisal
Real estate values are MOST affected by
Location
Which statement is TRUE of real estate appraisers of property secured by federally related loans?
They must hold a state appraiser’s license or certification
An appraisal is needed to judge all of the following EXCEPT
Book Value
All of the following statements are true EXCEPT
External obsolescence is the result of one’s personal financial condition
An appraisal of real estate
Estimates Value
If the replacement cost shows a higher value than the appraised value, which of the following has MOST probably occurred?
Accrued Depreciation
Physical deterioration MOST closely means
Wear & Tear
Assume that the trend in architectural design is toward more contemporary-styled homes. Because of this trend, a conservatively designed home will tend to
decrease in value more rapidly
The sales comparison approach to value is an indication of the
Range of probable value
A new office building constructed in an old neighborhood is for sale. What is the BEST method of appraisal to use?
RCN minus depreciation plus land
An appraiser was informed that a new freeway exit ramp was going to be built that would be servicing a previously undeveloped piece of property under appraisal. Knowing this information the appraiser decided to add some additional value to the appraisal. What appraising principle was the appraiser applying?
Anticipation
In appraising a single-family home, the appraiser makes adjustments to the sales price of three comparable properties. The estimate of value would MOST likely be the
Adjusted value of the comparable property that is most similar to the subject property
The useful life of a building, or period of time after which the income provided by it is NOT sufficient to warrant its maintenance, is called
economic life
Market value could be determined BEST by considering
comparison, income, replacement
Of the three methods of appraising properties, the replacement cost approach is particularly appropriate and would give the MOST accurate value in the appraisal of a(n)
New Home
A post office of unique design and construction is BEST appraised by which of approach?
Cost
In appraising income-producing property, the remaining useful life of a building is considered to be the time remaining
That the property can be profitably used.
The value of land plus the reproduction cost less depreciation is the formula for which appraisal approach?
Cost
An appraiser often makes a distinction between the physical life and the economic life of an improvement. Regarding these two ways to measure “life” which is generally TRUE?
Economic life ceases first
Lots are valued at $30,000. Reproduction cost of the dwelling is $170,000. If properties are now selling for $140,000, the accrued depreciation is
$60,000
A buyer purchased a commercial warehouse for $750,000. fixed expenses are $15,000 per year and operating expenses are $49,000 per year. If the buyer wants a 9 percent return, how much gross rental income does he need each month?
$10,958 (A 9 percent return on a $750,000 investment is $67,500. Add the expenses ($67,500 + $15,000 + $49,000) and then divide by 12 months.)
Assume that three rental buildings had sales prices and rents as follows: $107,250 and $16,500: $105,625 and $16,250: $112,125 and $17,250. What value would most likely be indicated on a similar building if rents were $16,750?
$108,875 (A 9 percent return on a $750,000 investment is $67,500. Add the expenses ($67,500 + $15,000 + $49,000) and then divide by 12 months.)
The gross rent multiplier (GRM) is calculated by dividing the sales price by the
Monthly gross income
Determine the multiplier of a duplex that sells for $200,000 and has gross rents of $2,000. What would a similar duplex be valued if it had gross rents of $2,500?
$250,000 (200,000 / 2,000 = 100 (GRM) 2,500 X 100 = $250,000)
The difference between reproduction cost and the present value of a building is:
Depreciation
Two of the elements necessary to constitute fraud are that the misrepresentation concerns a material fact and that the party to whom the statement is made has the right to rely on it. A third element necessary is that:
The broker knew the truth
All of the following are examples of external obsolescence EXCEPT:
Direct effect of inclement weather
The direct sales comparison (market data) approach to appraising is BEST used when:
Many comparable sales exist
Functional obsolescence can be created by:
An overimmprovement
Economic life refers to the period:
Over which a property may be profitable utilized
Given the annual income of a property, what is the BEST method to determine its value?
Capitalization method
The term reproduction cost new, as used in the cost approach to estimating value, means the present cost of reproducing the subject improvement:
With the same or very similar materials
For appraisal purposes, which of the following factors has the GREATEST influence on a property’s value?
The local economic conditions
Highest and best use refers to:
Optimum use to produce best net return
A home located in an area where there are factories with a great deal of smoke and dust experiences
Economic/External obsolescence
All of the following are examples of physical deterioration as defined by the cost approach to value EXCEPT
Rundown neighborhood
