Study Items Flashcards
Which method in the cost approach takes the actual cost of a building at some time in the past and brings it up to current cost by using a cost index,
Index Method
Which method in the cost approach is the most commonly used?
Comparative Unit Method
Which method in the cost approach has limited applicability?
Index Method
The method in which an appraiser will take the cost per square foot or cubic foot of a comparable structure and multiply it by the number of square feet of the subject to help determine reproduction cost or replacement cost is called:
Comparative Unit Method
Which method in the cost approach breaks down large elements of costs into segments, derived from local markets or cost services, & multiplies the segments by the number of square feet in the particular segment? (This method is sometimes referred to as the “Segregated Cost Method”)
Unit-In-Place Method
Which method in the cost approach breaks components of the structure down to fine details, requiring thorough and detailed knowledge of construction? (This method often requires an experienced contractor or cost estimator)
Quantity Survey Method
What issues are caused by Legal Non-Conforming Use in the cost approach method to valuation?
It is not reflect in the site value or improvement value of the cost approach, so it requires another increment of value to be added
What technique of appraising land utilizes a ratio of site value to total property value from comparable improved properties to estimate the value of the subject property?
Allocation Method
Which method of land & site valuation is most often used for sites in a new development?
Subdivision Method
What is the appraisers purpose in obtaining a deed description in site analysis?
To determine boundaries
Combining two or more sites into one parcel is referred to as what?
Plottage Value
Combining two or more parcels into one ownership is referred to as what?
Assemblage
How is balloon framing identified?
By the wall studs extending from the foundation to the roof line
What is the formula for determining % of depreciation?
Effective Age / Total Economic LIfe
The period of time over which a structure or a component of a property may be reasonably be expected to perform the function for which it was designed defines:
Useful Life
The period of time over which improvements to real estate contribute to property value is referred to as:
Economic LIfe
What is the appropriate formula to estimate remaining economic life?
Subtracting the effective age of the improvement from the total economic life
What is referred to as the age of a property that is based on the amount of observed deterioration and obsolescence it sustained, & in some cases, differ from its chronological age?
Effective Age
The dollar amount required to construct an exact duplicate of the subject improvements, at current prices is called:
Reproduction Cost
The number of years since a structure or building was originally built is referred to as:
Chronological Age
A dwelling with a full basement can usually be expected to have a foundation constructed with:
Footings
The ability of the property to perform the function for which it was intended, in terms of current market tastes and standards is?
Functional Utility
The cost approach is built on which theory?
Theory of Substitution
What total property square footage is of most concern to a tenant who is searching for a rental property?
Gross Leasable Area (GLA)
The technique of estimating site value by deducting the depreciated cost of improvements from the sale price describes what?
Extraction Technique
Post and Beam Framing is primarily used in the construction of:
Old Barns
The dollar amount required to reconstruct a building or other improvements, which have the same or equivalent utility as the original is called:
Replacement Cost
The distinction between a ‘curable’ and ‘incurable’ item is based primarily upon:
Its resulting contributory value in the market
Fee’s, permits, licenses, insurance, & taxes interest are all examples of:
Indirect or Soft Costs
When estimating the cost to recreate the improvements on a site, as they exist today, the appraiser would use which of the following?
Reproduction Costs
What method of estimating ‘cost new’ is most used by appraisers?
Square Foot
A special purpose property that is obsolete should be valued by the:
Land Value less Demolition
Determining the ‘replacement’ costs on an improvement, the appropriate calculation for an item of ‘functional obsolescence-super adequacy’ would be:
No adjustment necessary
Which site valuation method subtracts the contribution of improvements from total value of the property?
Extraction Method
An amount paid for an income producing property is called:
Market Price
What is the method by which a government can take private property?
Condemnation
What is the right of the Government to take private property for public use upon the payment of just compensation?
Escheat
The value a property has to a specific owner or organization as opposed to the value to the market in general is the definition of what?
Value In Use
When the Board of Zoning Appeals grants someone the ability to construct or improve a property that is not authorized by current zoning ordinance this is called:
A Variance
To ensure a business entity will continue to operate as a viable and competitive entity in the marketplace, the value of a business plus the amount of the real property is sought. This is called what type of value?
Going Concern Value.
Theodore died without a will or any known relatives. The state took the property and auctioned it off. The state’s right to do this is known as
Escheat
The four agents of production are:
Land, labor, capital, and entrepreneurship
The term “value of the equity” means:
The market value of the real property less the mortgage debt
The value of a property or part of a property (such as a fixture) that is removed from the premises, usually for use elsewhere (such as the value of a fixture as a fixture)
Salvage Value
The value of properties, the room count, & the income level of the typical buyer define:
A Submarket
The economic base of a community is
the economic activity of a community that enables it to attract income from outside its borders
What type of analysis has to do with the characteristics of a particular parcel of real estate?
Marketability Study
What type of analysis is concerned with the characteristics of a property type, such as the office market?
Market Analysis
If the rate of inflation in the United States is increasing from 2.0% to 3.1%, the prices of most goods and services should
Increase at an increasing rate
When an appraiser researches the market directly with participants and the data has not been previously collected, this is known as
Primary Data
Time-distance relationships between a property use and supporting facilities describes what?
Linkages
Land that is not needed to support the subject’s primary highest and best use or not needed to support existing improvements that can be sold separately is:
Excess Land
Highest & Best Use is required in what types of appraisals?
Market Value Appraisals
The subject real estate is a 0.5-acre site located in an area zoned for single-unit residential properties. It has a small office building on it. The office use was established prior to the imposition of the current zoning classification and would not be permitted now. Commercial land prices in this area are $15 per square foot of land, and residential site values are $2.00 per square foot. What is the value of the site?
$43,560, the use itself is transferred along with the land, though the value of the land is subject to zoning
A method by which the density of zoning is controlled by planning, but the density (one unit per acre vs. 10 units per acre) is marketable between the owners in the community describes what?
Transferable development rights (TDRs)
What is the result of when the highest and best use of a site as though vacant is different than the highest and best use as improved?
Functional Obsolescence
investors like Fannie Mae and Freddie Mac, who buy and sell mortgage loans are included in which market?
Secondary Mortgage Market
A mortgage loan that starts with a $0 or low balance and increases because the owner receives a level payment instead of making a payment is called a
Reverse Mortgage Loan
The present worth of future benefits as anticipated by market participants describes:
Market Value
The four agents of production are:
Land, labor, capital, and entrepreneurial coordination
The positive and negative characteristics of real estate that determine its productivity in real estate refers to what?
Attributes
Changes in price due to shifts in demand or supply refers to what?
Price Elasticity
A geographic area from which a retail center draws its customers defines what?
Trade Area
The physical land and appurtenances affixed to the land describes what?
Real Estate
All interests, benefits, and rights inherent in the ownership of real estate refers to what?
Real Property
Personal property that is installed in a permanent way for use in the tenant’s business on leased property is classified as
Trade Fixture
freestanding refrigerator, range/oven, and clothes washer and dryer are all classified as:
Personal Property
An agreement between two parties to allow ingress and egress to a property over the land owned by one of the parties is known as
Easement
The highest and fullest estate in land is the
Fee Simple
An estate held by two or more persons, each of whom has an undivided interest, though do not possess right of survivorship refers to:
Tenancy In Common
Ownership by two or more persons with the right of survivorship refers to:
Joint Tenancy
Rights of use, occupancy, and control, limited to the lifetime of a designated party is a(n):
Life Interest (Life Estate)
The ownership interest held by the lessor (landlord), which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires
Leased Fee Interest
The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease
Leasehold Interest
When someone builds something over the property line, trespassing on another property refers to:
Encroachment
An estate in property held by one owner is:
Tenancy is Severalty
In the measurement of gross rentable area in an office, the areas that would be excluded are the
Vertical penetrations, such as the staircases and elevator shafts
What type of measurement is most commonly used in residential properties that includes finished areas above grade that are heated and/or cooled?
Gross Living Area
What type of measurement is most commonly used in retail centers?
Gross Leasable Area
A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses; also called full-service lease
Gross Lease
A lease in which the landlord passes on all expenses to the tenant is:
Net Lease
The most common comparison for two- to four-unit properties that includes the total finished area including any interior common areas, such as stairways and hall-ways of the improvements based on exterior measurements refers to:
Gross Building Area (GBA)
