Property Valuation And Appraisal Flashcards
What type of depreciation considers factors outside the property lines?
Economic obsolescence
What is correct regarding functional obsolescence?
It is curable
What do you deduct from gross income to get Net Operation Income (NOI)?
Leasing commissions
What do you not deduct from gross income to get Net Operation Income (NOI)?
Debt services
What has happened when traffic patterns change and cause business to drop?
Economic obsolescence
Which is an over-improvement?
Building an 1,800 sq. ft. home amongst 1,200 sq. ft. homes
It is necessary to know all these numbers to derive market value in the income approach except:
Gross income, Effective gross income, Net operating income, Annual depreciation charge
Annual depreciation charge
Using a cap rate in the income approach helps one determine?
The market value of an income producing property
What is the formula to determine value in the income approach?
The net operating income divided by the cap rate
Assembling lots to make one large parcel worth more than the combined values is called?
Plottage
Where there are lots of comparable sales, which approach to value
Market data approach
Determining a property’s most valuable use is the study of?
Highest and best use
What types of properties would the cost approach to value be best to use
Properties where no comparable exists
In the market data approach, what would you do if a comparable had an upgrade the subject didn’t have?
Deduct from the comparable
Agents use which approach to value usually in residential sales?
Sales data approach
Which approach to value requires we determine the amount of depreciation?
The cost approach
Which is not an approach to value in appraising?
Appraisal approach
An appraisal is an ___ of value.
Opinion
What principle of value addresses how well a property conforms to its surroundings?
Progression/ regression
What type of appraisal is most commonly used in a residential sale?
Form report
Which considerations are most important to note in the comparables using the market data approach?
Number of bedrooms, the types of window treatments, heat source, or square footage of the improvements.
Number of bedrooms
Which statement is true regarding the cost approach to value?
You deduct the amount of accrued depreciation from the cost to build/rebuild
Which item would be an example of depreciation accounted for in the cost approach?
property rights, 27.7 and 39.9 year IRS depreciation schedules, a movable storage shed or broken windows
Broken windows
In the market data approach, what step would an appraiser take first?
Determine highest and best use
