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08 Sales Comparison and Income Approaches > Quiz Sales Comparison Approach Ch 7-8 > Flashcards

Quiz Sales Comparison Approach Ch 7-8 Flashcards

1
Q

“Curable, physical deterioration that should be corrected immediately…” is the definition of

A

Deferred maintenance items

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2
Q

“Items of wear and tear on a property that should be fixed now to protect the value or income- producing ability of the property, such as a broken window, a dead tree, a leak in the roof, or a faulty roof that must be completely replaced. These items are almost always curable” is the definition of

A

Deferred maintenance

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3
Q

“The ability of a property or building to be useful and to perform the function for which it is intended according to current market tastes and standards” is the definition of

A

Functional utility

(has the word useful = utility and
has the word function = functional)

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4
Q

“The estimated period during which improvements will continue to contribute to property value” is the definition of

A

Remaining economic life

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5
Q

“A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises” is the definition of

A

Neighborhood

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6
Q

“The age of property that is based on the amount of observed deterioration and obsolescence it has sustained” is the definition of _________ age.

A

Effective

(deterioration!
how does it appear?)

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7
Q

“The geographic region from which a majority of demand comes and in which the majority of competition is located……..” is the definition of

A

Market area

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8
Q

“The period of time over which a structure may reasonably be expected to perform the function for which it was designed” is the definition of ______________ life.

A

Useful

(designed… kind of the beginning of the property)

(copper piping lasts longer than galvanized steel. However, useful life has little use for appraisers.)

The concept of useful life is used when estimating depreciation of short-lived items using the breakdown method, but otherwise it has little applicability for real property appraisers.

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9
Q

A broken windowpane an example of

A

Deferred maintenance

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10
Q

A district is an area characterized by ____________ land use.

A

Homogeneous

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11
Q

A market area is usually

A

No set size

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12
Q

A neighborhood is an area characterized by ____________ land use.

A

Complementary

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13
Q

A property sells for $295,000 and the site value is $50,000. The reproduction cost of the improvements is $312,000. The house is 12 years old. What is the average annual percent of depreciation?

A

1.8%. $295,000 - $50,000 = $245,000. $245,000 ÷ $312,000 = .785. 1.00 - .785 = .215 or 21.5% depreciated. 21.5 ÷ 12 = 1.8% per year

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14
Q

A property sells for $350,000 and the site value is $60,000. The cost new of the improvements is $480,000. What is the dollar amount of depreciation indicated by this sale?

A
  1. $350,000 - $60,000 = $290,000. $480,000 - $290,000 = $190,000.
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15
Q

A property sells for $450,000 and the site value is $120,000. The cost new of the improvements is $572,000. What is the percentage of depreciation?

A

42%. $450,000 - $120,000 = $330,000. $572,000 - $330,000 = $242,000. $242,000 ÷ $572,000 = .42 or 42%.

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16
Q

All of the following are items that indicate poor construction practices

A

Cracked walls, Leaky roofs, Unsealed siding

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17
Q

An appraiser can reasonably assume that xx homes in a subdivision are of the xx xx quality.

A

Most homes in a subdivision are of the same general quality.

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18
Q

An estimate of remaining economic life is required when completing the URAR:

A

By FHA and VA

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19
Q

Business, medical, or theater areas could be types of

A

Districts

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20
Q

Condition is determined by

A

The maintenance and care the house has received

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21
Q

Fannie Mae requires the appraiser to _______________ the factors in the neighborhood that may affect the market value or marketability of the properties in the market area.

A

Research, analyze, and report on

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22
Q

For residential properties, location on a(n) _____________ is generally the most preferable.

A

Cul-de-sac

23
Q

Generally speaking, which is the LEAST desirable topography for a site?

A

Steep

24
Q

“The estimated period over which existing improvements are expected to contribute economically to a property; an estimate of the number of years remaining in the economic life of a structure or structural components as of the effective date of the appraisal; used in the economic age-life method of estimating depreciation.” is the definition of

A

Remaining economic life

(remaining economic life is in the definition)

(lenders do not give 30 year loans on 10 years of remaining economic life)

25
Q

“The period over which improvements to real estate contribute to property value.” is the definition of

A

Economic life

(for how long does the building add value to the site?)

26
Q

Historical age is another name for _____________ age.

A

Chronological

27
Q

If a property is depreciating at the rate of 1.7% per year, what is its total economic life?

A

58.8 years. 1.00 ÷ 0. 017 = 58.8 years

28
Q

In northern climes, a ___________ exposure may be preferable.

A

Southern

29
Q

In the appraisal of a single-unit residence, a finished basement should

A

Be calculated separately from the GLA

30
Q

Quality is determined by

A

The materials and construction practices used during the building process

31
Q

Senior developments or historic areas could be examples of

Here: What kind of area?

A

Sub-districts

32
Q

Site factors might include all of the following

A

Traffic, Topography, Access

33
Q

Standard terminology for describing the style of a residence would not include

A

One story

34
Q

Remaining economic life is estimated by xx the xx xx of the xx from the total xx xx.

A

subtracting the effective age of the improvement from the total economic life.

35
Q

The age that the property appears to be, based on maintenance and updating, is its___________ age.

A

Effective

36
Q

The concept of real estate value being linked to location comes to us from the economist

A

Alfred Marshall

37
Q

The condition of a single-unit residence is determined by

A

The maintenance and care the house has received

38
Q

The definition of neighborhood has changed from a grouping of __________ to a grouping of ____________ people, buildings and uses.

A

Homogenous, congruous

39
Q

The Fannie Mae Selling Guide says, “The appraiser must report neighborhood conditions __________.”

A

In factual and specific terms. Fannie Mae requires appraisers to report neighborhood conditions in factual, specific terms and be impartial and specific in describing favorable or unfavorable factors in a neighborhood.

40
Q

The four categories of external market factors are

A

Social, Economic, Governmental, and Environmental

41
Q

What is one of the best ways to determine neighborhood boundaries?

A

Driving around the area

42
Q

What is one of the Fannie Mae says neighborhood boundaries can be identified by all of the following features ways to determine neighborhood boundaries?

A

Physical characteristics, Type of structures, Architectural styles

43
Q

When describing the area of a large lot (1 acre or more), we usually use

A

Acres

44
Q

When describing the area of a small lot (less than 1 acre), we usually use

A

Square feet

45
Q

When describing the area of a small lot, we usually use

A

Square feet

46
Q

Whenever possible, your comparables should be in

A

The same market area as your subject

47
Q

Which is the most inclusive term?

A

Market area

48
Q

Which is the most recent term?

A

Market area

49
Q

Which term concentrates more on where people live and work?

A

Market area

50
Q

Which would normally constitute a market area boundary?

A

A river, A town line, A census tract

51
Q

Which would be considered an energy efficient items?

A

Double paned windows, High R-factor insulation, Solar panels

52
Q

Which would be considered market area factors?

A

Climate, Density, Access to shopping

53
Q

Which would be factors when analyzing utilities at a site?

A

Rates, Availability, Connection costs

54
Q

Which would normally be considered to be site factors?

A

Exposure, Utilities, Soil conditions

08 Sales Comparison and Income Approaches (23 decks)

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