Unit 7 Appraisal

Question 1

The process of converting a future income stream into an expression of present value is:

Answer 1

Capitalization

Question 2

The cost of replacing an improvement with another or similar quality but not an exact replica is:

Answer 2

Replacement cost

Question 3

Loss in value due to causes external to the property is:

Answer 3

Economic obsolescence

Question 4

A method of valuing a property by comparing the subject to similar properties that have recently sold is the :

Answer 4

Market data approach

Question 5

Demand, utility, scarcity, and transferability are essential elements of :

Answer 5

VALUE

remember DUST or STUD

Question 6

An appraisal is an:

Answer 6

Estimate of value

Question 7

To arrive at a value using the income capitalization approach, an appraiser divides the net operating income by the :

Answer 7

Capitalization rate

Question 8

The sales comparison approach is based on the principle of :

Answer 8

Substitution

Question 9

True or False

An appraiser calculates accrued depreciation in the cost approach.

Answer 9

True

Question 10

When an appraiser figures the accrued depreciation, outdating plumbing fixtures should be considered:

Answer 10

Functional obsolescence

Question 11

An appraiser estimating operating expenses would be using the :

Answer 11

Income approach