Site Valuation and Cost Approach Flashcards
1 acre = ___ square chains
1 acre = 10 square chains
1 Chain = ___ Feet, or ___ Rods
1 Chain = 66 Feet, or 4 Rods
1 Furlong = ___Feet, or ___ Chains
1 Furlong = 660 Feet, or 10 Chains
1 of 6
The four economic factors that are necessary to create value are utility, _____________, ___________, and _______________.
- Scarcity, demand, purchasing power
- Desire, effective demand, purchasing power
- Effective purchasing power, exclusivity, demand
- Scarcity, desire, effective purchasing power
Scarcity, desire, effective purchasing power
1 Rod = ___ Feet, or ___ Links
1 Rod = 16½ Feet, or 25 Links
1 square mile is ____ acres
1 square mile is 640 acres
A building component or site improvement expected to have the same useful life as the entire structure, is a _______________.
- Long-lived item
- Short-lived item
- Long-lived component
- Physical component
Long-lived item
A building component with an expected remaining economic life that is shorter than the remaining economic life of the entire structure defines ____________.
- A long-lived item
- A short-lived item
- Deferred maintenance
- Short-lived depreciation
A short-lived item
A building has an interior height of 20 feet. If the current local market for that type of building wanted a 30-foot height, then the subject would suffer a loss in value due to a:
- Physical inadequacy
- Functional inadequacy
- Functional superadequacy
- Outmoded item
Functional inadequacy
A corner location is most desirable for a(n) __________ property.
- Residential
- Retail
- Industrial
- Apartment
Retail
A foundation with 4 foot thick walls would called ____________.
- A superadequacy
- An overbuilding
- Supportable value
- Superfluous
A superadequacy
“A list of expressed assurances and limitations on land use; often found in contracts between a land subdivider and a lot purchaser” is the definition of:
- Deed restrictions
- Conditions, Covenants and Restrictions
- Building Code
- Transferable Development Rights
Conditions, Covenants and Restrictions
A loss in property value from any cause is called _____________.
- Obsolescence
- Depreciation
- Decline
- Deterioration
Depreciation
A lot that has all clearing and grading completed, with all public utilities that are available at the property line and all engineering and adjoining roads completed is called a(n) ________________.
- Approved lot
- Finished lot
- Buildable lot
- Plat
Finished lot
A lot that has all clearing and grading completed, with all public utilities that are available at the property line and all engineering and adjoining roads completed is called a(n) ________________.
- Municipal lot
- Improved lot
- Finished lot
- Approved lot
Finished lot
A map or sketch of an individual property that shows property lines and may include features such as soils, building locations, vegetation, and topography is called a:
- Plot
- Plat
- Parcel
- Survey
Plat
“A method of estimating land value in which sales of improved properties are analyzed to establish a typical ratio of land value to total property value and this ratio is applied to the property being appraised or the comparable sale being analyzed” is the definition of the _________________ method of land valuation.
- Allocation
- Extraction
- Land Residual
- Ground Rent capitalization
Allocation Method
“A method of estimating land value in which the depreciated cost of the improvements on the improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land” is the definition of the ________________ method of land valuation.
- Allocation
- Extraction
- Land Residual
- Ground Rent capitalization
Extraction
“A method of estimating land value in which the net operating income attributable to the land is isolated and capitalized to produce an indication of the land’s contribution to the total property” is the definition of the _____________________ method of land valuation.
- Discounted Cash Flow
- Extraction
- Land Residual
- Ground Rent capitalization
Land Residual
A partially enclosed body of water where saltwater from the sea mixes with freshwater from rivers, streams, and creeks is called a(n) _____________.
- Wetlands
- Tidewater
- Marsh Land
- Estuary
Estuary
A “perc” test is used to measure the __________ of the soil.
- Strength
- Composition
- Drainage
- Stability
Drainage
A Pole and a __________ are the same thing.
- Rod
- Chain
- Furlong
- Link
Rod
A Pole and a __________ are the same thing.
- Rod
- Chain
- Furlong
- Meter
Rod
A property would be in a FEMA Flood Hazard Area if it is located in Zone _______.
- A only
- C only
- A or V
- A or X
A or V
A property would be in a FEMA Flood Hazard Area if it is located in Zone:
- A only
- C only
- A or V
- A or X
A or V
A record showing the location, size, and owner of each plot of land in a stated area is called a ______________. More Definitions,
- Plat book
- Deed book
- Legal description
- Assessment map
Plat book
A record showing the location, size, and owner of each plot of land in a stated area is called a ______________.
- Plat book
- Deed
- Cadastral Record
- Registry
Plat book
A swimming pool in Maine would suffer from ________________.
- Physical inadequacies
- Functional obsolescence
- External obsolescence
- Underutility
Functional obsolescence
A vacant land parcel contains 5.35 acres. It is worth $75,000 per acre as residential land, and $375,000 as a commercial site. If the zoning allows both, what is the highest and best use?
- Commercial
- Either
- Residential
- Both
Residential
A vacant land parcel contains 5.35 acres. It is worth $75,000 per acre as residential land, and $450,000 as a commercial site. If the zoning allows both, what is the highest and best use?
- Commercial
- Either
- Residential
- Both
Commercial
A vacant land parcel contains 7.2 acres. It is worth $60,000 per acre as residential land, and $375,000 as a commercial site. If the zoning allows both, what is the highest and best use?
- Commercial
- Interim use
- Not enough information is available
- Residential
Residential
A(n) ____________ means to study or scrutinize - to discuss meaning.
- Critique
- Diagnosis
- Analysis
- Analogy
Analysis
Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat is the definition of _________________.
- Fee Simple Estate
- Free simple
- Leasehold Estate
- Life estate
Fee Simple Estate
Access to rail lines, navigable waterways, and Interstate highways are important to ____________ land.
- Agricultural
- Residential
- Retail
- Industrial
Industrial
According to Joseph Rabianski, author of the assigned reading article “Comments on the Concept and Definition of Highest and Best use,” why should the term “adequately supported” be removed from the definition of highest and best use?
- It is too stringent a requirement
- It is too weak and vague
- Highest and best use is just an opinion and does not require support
-
It is too weak and vague
According to the required reading, how many definitions of highest and best use appear in The Appraisal of Real Estate?
- Zero
- One
- Two
- Three
Three
All base costs in the MVS are calculated to include the type of heating and/or cooling system listed for that class and quality level – in a ________ climate.
- Mild
- Moderate
- Average
- Extreme
Moderate
All of these are considered to be “First Level adjustments”, EXCEPT for ____________________.
- Market Conditions
- Financing Terms
- Property Rights Conveyed
- Physical Conditions
Physical Conditions
All of these are negative easements, EXCEPT _______________.
- Conservation Easements
- Right of way access.
- Historic Preservation Easements
- Life Interests
Right of way access.
All of these are negative easements, EXCEPT
- Conservation Easements
- Historic Preservation Easements
- Life Interests
- Right of way access
Right of way access
All of these terms mean the same thing, EXCEPT for ___________.
- Actual age
- Effective age
- Historical age
- Chronological age
Effective age
All of these terms mean the same thing, EXCEPT for _________________.
- Actual age
- Effective age
- Historical age
- Chronological age
Effective age
An alternative to cost per square foot for a warehouse is the cost per ________.
- Lineal foot
- Cubic foot
- Square foot
- Vertical foot
Cubic foot
An appraiser is trying to compile a list of potential legal uses for a piece of vacant property. What problem might he encounter in making this determination?
- Legality is subject to manipulation by local officials
- The legality of a use can only be determined after a lengthy court case
- Most communities throughout the U.S. do not have zoning ordinances
- All of these
Legality is subject to manipulation by local officials
An easement for ingress and egress is an example of a ______________ easement.
- Negative
- Conservation
- Gross
- Positive
Positive
“An exact description that enables the real estate to be located and identified” is the definition of:
- Plat
- Survey description
- Legal description
- Title
Legal description
An interest in real estate restricting future land use to preservation, conservation, wildlife habitat, or some combination of those uses is the definition of _____________ easement.
- Conservation
- Historic Preservation
- Environmental
- Green
Conservation
An interest in real estate restricting future land use to preservation, conservation, wildlife habitat, or some combination of those uses is the definition of _______________ easement.
- Historic Preservation
- Licensing
- Air rights
- Conservation
Conservation
Appraisal fees are part of _________________ costs.
- Direct
- Indirect
- Hard
- Entrepreneurial
Indirect
Assemblage is _______________.
- A value
- A cost
- The same as plottage
- The first step in the life cycle
A cost
Assemblage (cost) is the process of joining several parcels to form a larger parcel; the resulting increase in value is called plottage (value)
Bearings are called _________.
- Bounds
- Headings
- Metes
- Angles
Metes
Bearings are called _________.
- Bounds
- Links
- Metes
- Angles
Metes
Building permits are part of _________________ costs.
- Direct
- Indirect
- Soft
- Entrepreneurial
Direct
CC&Rs are commonly found in _______________.
- Subdivisions
- School buildings
- Agricultural areas
- Industrial areas
Subdivisions
CC&Rs are commonly found in _______________________.
- Farms
- Industrial parks
- Subdivisions
- Medical facilities
Subdivisions
Class C buildings have _________________________ construction.
- Wood frame
- Masonry or reinforced concrete
- Steel
- Prefabrcated
Masonry or reinforced concrete
Class __ buildings have combustible construction.
- A
- S
- C
- D
D
Class ___ buildings have prefabricated structural members.
- B
- C
- S
- D
S
Columns or beams obstructing open space would be classified as what type of functional obsolescence?
- Layout problem
- Inadequacy
- Superadequacy
- Deferred maintenance
Layout problem
Contractor’s overhead and profit are part of _________________ costs.
- Direct
- Indirect
- Soft
- Entrepreneurial
Direct
Cost data may be obtained from all of these sources EXCEPT for ___________.
- Appraiser’s files
- Cost estimating services
- Assessor’s offices
- Local building contractors
Assessor’s offices
Cost manuals, such as the Marshall Valuation Service, can be used to calculate which kinds of costs?
- Comparative Unit only
- Unit-in-Place only
- Comparative Unit and Unit-in-Place
- Comparative Unit, Unit-in-Place, and Quantity Survey
Comparative Unit and Unit-in-Place
Deferred maintenance is always considered to be _________________.
- Curable
- Incurable
- Long-lived
- Short-lived
Curable
Depreciation is defined as a loss in value from:
- Wear and tear
- Physical or functional causes
- Any cause
- Obsolescence
Any cause
Difference between Adjacent vs Adjoining
**“Adjacent” in some legal dictionaries suggests two objects that are very close, but not necessarily touching. “Adjoining”definitely denotes two objects that are joined - that is, touching. **
Difference between “contiguous” and “contiguity”
**“Contiguous” does not necessarily imply two objects actually touching, but in some legal dictionaries is taken to mean two objects that are close, but definitely not touching. “Contiguity” is sometimes defined as implying actual joining. **
Difference between due vs true
Due, true: Older legal descriptions sometimes made reference to “due” or “true” North as a basis of bearings, and it is generally held by the courts that these words had definable differences in meaning, with “due” meaning northerly (not precisely located), and “true” implying location of North by astronomical or solar observations
Each piece of real estate has _______________ highest and best use(s).
- Only one
- At least one
- Two or more
- Many
At least one
Each section is theoretically one square mile, or ___ acres
Each section is theoretically one square mile, or 640 acres
(West & North sections of a township were used for error and curvature correction, and are often smaller)
Each township has ___ numbered sections, starting in ____ corner
Each township has 36 numbered sections, starting in the Northeast corner
Economic feasibility is indicated if the cost to cure is __________ or ________ the anticipated increase in the value of the property.
- Equal to, more than
- At least equal to, more than
- At least equal to, less than
- Equal to, less than
Equal to, less than
Economic theory holds that supply and demand tend to move toward a point of:
- Equilibrium
- Saturation
- Proportionate balance
- Disequilibrium
Equilibrium
Entrepreneurial incentive is the ___________ profit. Entrepreneurial profit is the __________on a development or improvement.
- Actual, estimated profit
- Expectation of future, profit actually earned
- Estimated, profit potentially earned,
- True, profit and loss
Expectation of future, profit actually earned
Expansive soils may commonly be found in the:
- Northeast
- South
- Midwest
- Southwest and Plains States
Southwest and Plains States
External obsolescence is either _______________________.
- Curable or incurable
- Temporary or permanent
- Generic or pertinent
- Primary or secondary
Temporary or permanent
External obsolescence is more commonly __________.
- Next door
- Internal
- Curable
- Market wide
Market wide
Fannie Mae says you _______________ to do a Cost Approach.
- Are not required
- Are required
- Occasionally required
- May wish
Are not required
Farm and ranch land values are often measured by the _____________ of the land.
- Productivity
- Topography
- Bearing strength
- P.H.
Productivity
Foam and concrete foundations are called:
- SIPs
- CIFs
- ICFs
- PCFs
ICFs
ICF stands for Insulated Concrete Forms. Insulated Concrete Forms (ICF) are hollow foam blocks that are stacked into the shape of the exterior walls of a building, reinforced with steel rebar, and then filled with concrete.
Functional obsolescence is defined as the impairment of functional capacity of improvements according to __________________.
- Typical standards
- Comparable standards
- Code standards
- Market tastes and standards
Market tastes and standards
Functional obsolescence is defined as the impairment of functional capacity of improvements according to ____________________.
- Market value
- Typical standards
- Market tastes and standards.
- Code standards
Market tastes and standards.
Functional obsolescence is measured by comparing the subject improvements to the ideal improvement as identified _____________________.
- In the Scope of work
- In the Improvements section
- In the highest and best use analysis
- By the client
In the highest and best use analysis
Functional obsolescence is related to which of the four basic characteristics of value?
- Scarcity
- Utility
- Desire
- Transferability
Utility
Functional obsolescence is related to which of the four basic characteristics of value?
- Utility
- Scarcity
- Desire
- Transferability
Utility
Functional obsolescence is sometimes called:
- Functional inutility
- Functional utility
- External obsolescence
- Physical inutility
Functional inutility
Functional obsolescence is treated as a loss in value in which Approach to Value?
- Sales Comparison Approach
- Cost Approach.
- Income Approach.
- All three Approaches
All three Approaches
Functional obsolescence may be found in what type(s) of building?
- New buildings only
- Old buildings only
- Custom designed buildings only
- Any type
Any type
Functional obsolescence:
- Can be curable or incurable
- Is always curable
- Is always incurable
- Is curable if the cost to cure is at least as much as the increase in value
Can be curable or incurable
Highest and best use is defined as “the ______________ and _________________use of vacant land or an improved property …”
- Physically possible, legal
- Most probable, most profitable
- Appropriately supported, most probable
- Reasonably probable, legal
Reasonably probable, legal
Highest and best use of a land or site as though vacant is generally defined as: Among all reasonable, alternative uses, the use that yields the highest present land value, after payments are made for _______________________________.
- Labor
- Capital
- Coordination
- All of these
All of these
If a building was recently built, you may be able to ascertain the contract cost from any of these sources, EXCEPT _____________.
- Marshall and Swift
- Builder
- Local building department
- Lender
Marshall and Swift
If a property exhibits a large or unusual amount of depreciation, then the most accurate cost estimate method to use would be the _______________ cost estimate.
- Modified
- Replacement
- Both reproduction and replacement
- Reproduction
Reproduction
If a property is older or exhibits unusual construction, then the most accurate cost estimate method to use would be the _______________ cost estimate.
- Reproduction
- Replacement
- Both reproduction and replacement
- Substitution
Reproduction
If costs do not change in the same relationship to values, construction costs may get out of synch with current values. This is an example of the principle of:
- Supply and Demand
- Conformity
- Substitution
- Change
Supply and Demand
If the scope of work specified by the client does not permit development of credible assignment results, the appraiser must either change the scope of work to what he or she determines is necessary to develop credible assignment results or:
- Put a disclosure in the appraisal report
- Associate with another appraiser
- Renegotiate the employment contract
- Withdraw from the assignment
Withdraw from the assignment
“Improved land or a lot in a finished state so that it is ready to be used for a specific purpose” is the definition of
- Situs
- Site
- Improved land
- Land improvements
Site
Improved sales in older urban areas are frequently valued by the _____________method.
- Allocation
- Extraction
- Subdivision Development
- Ratio
Extraction
In land appraisals it may be possible, or necessary, to analyze data on _______________of vacant land parcels.
- Current listings
- Offers
- Options
- All of these
All of these
In law, the solid surface on the earth, as distinguished from water, is a definition of _____________.
- Land
- Site
- Situs
- Land rights
Land
In law, the solid surface on the earth, as distinguished from water, is a definition of _____________.
- Site
- Site improvements
- Land
- Land rights
Land
In rural areas, size is generally measured in terms of _________.
- Square feet
- Front feet
- Acres
- Cubic feet
Acres
In rural areas, size is generally measured in terms of __________.
- Square feet
- Front foot
- Cubic foot
- Acres
Acres
In the MVS system, buildings that do not fit into any other classification are entered into:
- Class A
- Class C
- Class S
- Class D
Class D
In the SCOPE OF WORK RULE in USPAP it says “For each appraisal and appraisal review assignment, an appraiser must _________ the problem to be solved, determine and perform the scope of work necessary to develop __________ assignment results, and __________ the scope of work in the report.”
- Identify, meaningful, disclose
- Report, credible, identify
- Identify, credible, disclose
- Disclose, pertinent, report
Identify, credible, disclose
In the SCOPE OF WORK RULE, it says an appraiser must properly identify the ____________ in order to determine the appropriate scope of work.
- Client
- Mortgage potential
- Client’s tax bracket
- Problem to be solved
Problem to be solved
In urban locations, lot size is generally measured in:
- Square feet
- Cubic feet
- Front feet
- Acres
Square feet
Interest rates will affect the ____________ purchasing power of potential buyers of all kinds of real estate.
- Alternative
- Comparative
- Effective
- Competitive
Effective
Interest rates will affect the _____________ purchasing power of potential buyers of all kinds of real estate.
- Maximum
- Durable
- Effective
- Pro-rated
Effective
IRS only allows us to charge-off depreciation on our tax return against which portion of the overall value?
- Land
- Building improvements
- Site improvements
- Homestead
Building improvements
It is commonly held that the Cost Approach has diminishing applicability as a property:
- Becomes more complex
- Ages
- Becomes larger in size
- Becomes more single purpose
Ages
It is commonly held that the Cost Approach has diminishing applicability as a property becomes __________.
- More complex
- Older
- Larger in size
- More single purpose
Older
It is commonly held that the Cost Approach has _____________ applicability as a property ages.
- Increasing
- Diminishing
- Proportional
- No
Diminishing
Items of wear and tear on a property that should be fixed now to protect the value or income-producing ability of the property, is the definition of ___________________________.
- Deterioration
- Short-lived item
- Deferred maintenance
- Short-lived maintenance
Deferred maintenance
Labor and materials are part of ___________ costs.
- Hard
- Soft
- Indirect
- Depreciated
Hard
Land adjustments are made on a _________________.
- Quantitative basis
- Qualitative basis
- Quantitative basis or a Qualitative basis
- Contributory basis
Quantitative basis or a Qualitative basis
Land and site are generally analyzed and valued by appraisers ____________________.
- In separate reports
- In a similar fashion
- In separate approaches
- On separate pages
In a similar fashion
Land and site are generally analyzed and valued by appraisers ____________________
- In separate approaches
- On separate pages
- In separate reports
- In a similar fashion.
In a similar fashion.
Land consists of the surface of the earth and everything
- Above it only
- Below it only
- Above it and below it
- Deeded to it
Above it and below it
Land in its natural state is defined as
- Site
- Land
- Raw Land
- Bare land
Raw Land
“Land that is not currently needed to support the existing use but cannot be separated from the property and sold off for another use” is the definition of ___________
- Excess land
- Surplus land
- Interim land
- Non-essential land
Surplus land
Madison Square Garden is an example of the use of __________ rights.
- Air
- Subsurface
- Water
- Subterranean
Air
Many states are __________________ states, which means that they do not keep records of sale prices.
- Confidentiality
- Restricted Data
- Non-disclosure
- Torrens System
Non-disclosure
Marketing fees are part of _________________ costs.
- Direct
- Indirect
- Hard
- Entrepreneurial
Indirect
Marshall & Swift’s cost estimates do not include:
- Architect’s fees
- Entrepreneurial incentive
- Engineer’s fees
- Contractor’s overhead and profit
Entrepreneurial incentive
Mass appraisals are most frequently used by _______________.
- Residential appraisers
- Data collectors
- Assessors
- Insurance companies
Assessors
Most buildings have _________________ lives that are shorter than their physical lives.
- Economic
- Actual
- Useful
- Chronological
Economic
Most Class A buildings are _________ .
- Low Rise
- Mid Rise
- High Rise
- Mixed use
High Rise
Most MLS services are geared toward ______________.
- Commercial use
- Multifamily residences
- Urban properties
- Residential housing
Residential housing
Most U.S. communities and many global markets choose to abide by the Codes provided by the _______________.
- International Code Council
- U.S. Code Council
- EPA
- U.S. Army Corps of engineers
International Code Council
Most U.S. communities and many global markets choose to abide by the Codes provided by the _____________________.
- U.S. Code Council
- International Code Council
- NOAA
- U.S.Army Corps of engineers
International Code Council
Neighborhood A had 28 land sales in 11 months and Neighborhood B had 52 land sales in 24 months. Which has the fastest absorption rate?
- Neighborhood A
- Neighborhood B
-
-
Neighborhood A
Neighborhood A had 28 land sales in 11 months and Neighborhood B had 52 land sales in 24 months. Which has the fastest absorption rate?
- Neighborhood B
- Neighborhood A
-
-
Neighborhood A
One mile = ___ Furlongs
1 Mile = 8 Furlongs
One site has municipal water and sells for $40,000. A similar site has none and sells for $30,000. This is a called a _______________ analysis.
- Binary
- Paired Data
- Statistical
- Quality
Paired Data
Part of the definition of Replacement Cost includes: The estimated cost to construct, at current prices as a specific date, ……………………… using __________ materials and ______________ standards, design, and layout.”
- Contemporary, current
- Current, up to date
- Similar, similar
- Modern, current
Modern, current
Physical deterioration does NOT include:
- Deferred maintenance
- Incurable short-lived components
- Curable short-lived components
- Incurable long-lived components
Curable short-lived components
Place these four stages in the life cycle of a neighborhood in the proper sequence. Revitalization Decline Growth Stability
- Stability, decline, revitalization, growth
- Decline, stable, revitalization, growth
- Growth, stability, decline, revitalization
- Growth, stability, revitalization, decline
Growth, stability, decline, revitalization
