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Appraisal Exam Practice
The opinion of value in an appraisal report is valid - as of the effective date of the appraisal only An appraisal report is NOT required to include - The contract price of the property Which value approach would most likely be emphasized for an apartment building in an established neighborhood? - Income approach A vacant land parcel described as the NE 1/4 of section 17 is selling for $1,200 per acre. What is the sale price of the parcel? - $192, Market value is - The most probable selling price to a typical buyer Market price is the - amount, in dollars, actually paid for the property The cost approach does NOT require an estimate of - Net operating income When using the income approach, appraisers do NOT assume that - Future income is always more valuable than present income Using the information in the following table, calculate depreciation using the age-life method. Replacement cost-$173, Effective age-15 years Remaining economic life-60 years - $34, The single most important value factor is - Location Which characteristics create value in real estate? - Scarcity and utility
The four broad forces which affect value are - Economic, governmental, social, and physical A neighborhood's life cycle is an example of - Change In analyzing a vacant size to estimate its value, the first step is to determine - Its highest and best use If a developer purchased a lot measuring 348' x 1,000' and the sale price was $5,000 per acre, how much did the developer pay? - $39, The data required for a site analysis includes a. economic characteristics of the neighborhood and community b. physical characteristics of the site c. zoning information d. all of the above - All of the above Prior to inspecting the site, an appraiser should obtain information on the a. size and shape of the parcel b. utilities and soil type c. zoning and easements d. all of the above - All of the above As the depth of the lot increases, the value per front footage - Increases at a decreasing rate If a property's effective gross income is $14,351.40 and vacancy is calculated at 6.2%, what is the potential gross income? - $15,300. The utility of property is most affected by - Building codes, restrictions, and zoning
Adjustments to the sale price of comparable sale properties are measured by the - Amount a typical buyer will pay for an item For the appraisal of an older single-family residential dwelling, where should the appraiser put his reliance? - Recent sales The increase of decrease in value that helps estimate market value of a property by comparing its features to those of comparable sales is referred to as an - Adjustment A document also referred to as a tax or assessors map is a(n) - Plat map Which is an example of general data on a subject property? - School district If a property is functionally and physically sound and acceptable to the market, but located next to a noisy and dirty industrial site, the effective age will be - Higher The sales comparison approach for valuing a site is difficult in older, built-up neighborhoods because - Vacant sites are often scarce In valuing acreage suitable for residential development, a commonly applied method is the _____ method - Subdivision analysis The subject of an appraisal is two-story dwelling with an exterior dimension of 22' x 66' and a full basement. Half of the basement is finished. What is the gross living area? - 2,904 square feet Which is NOT a recognized method of site valuation? - Plottage comparison In the income approach, residential properties are usually analyzed using - A gross rent multiplier
An appraiser is asked to appraise a vacant residential site. The neighborhood is about 75% built up. Most lots in the area are 55' to 65' wide. The vacant lot is 60' wide. Comparable sales indicate lots are selling from $180 to $225 per front foot. What is the estimate for the subject lot? - $10,800-$13, Physical differences and their affect on the value of land or site can be determined only by the - Market's reaction in terms of dollars Which approach would be most appropriate in the appraisal of a uniquely designed and recently constructed public library building? - Cost approach The use of the reproduction cost new of a building when cost estimating for a subject building eliminates all - Physical deterioration Replacement cost refers to estimating the cost of a - Similar building using modern materials In the cost approach, an opinion of value i developed by adding the - Depreciated cost new of improvements to estimated site value Which is a functional obsolescence? - No heating source Which is NOT an item for which the appraiser would normally be responsible? - Completing a survey of the site The area that a structure's foundation rests upon is called a - Footer Which is an example of general data on a subject property? - School district Trade fixtures can best be described as - Items attached to real estate for business purposes Using the information in the following table, calculate the annual depreciation of a house using the straight-line method. Current Building Cost- $200,
Which approach to value deals primarily with the amount of money an owner can receive from a rental property? - Income Approach Which principle is the value of adjustments done for the sales comparison approach generally based on?
- Substitution In residential appraisals, a commonly utilized method of depreciation is the ________ method - Age-life The process of estimating the value of a property by adding the estimated cost to replace a building, minus depreciation, plus the estimated site value, is known as the - Cost approach The period of time during which structure may reasonably be expected to perform the function for which it was designed is known as its - Total economic life An improvement to a property that is not likely to contribute its cost to the total market value of the subject property is known as - Over improvement The lack of sufficient information for sale of similar properties is limitation of the __________ approach - Sales comparison In completing a market analysis, an item contributing value and representing a variance between the subject property and a comparable sale requires the - Comparable to be adjusted properly The financial terms of a sale - May have an impact on the price paid Which approach to value for owner-occupied, single-family housing is based primarily on information obtained by analyzing comparable sales? - Sales comparison approach Which would likely result in functional obsolescence? - A house with 5 bedrooms and 1 bathroom
While closed sales are required for the sales comparison approach, why would analyzing listed properties be useful? - They provide evidence of substitution and the upper limit of value After freeway construction, the volume of business on a street decreased by 50%. This can be considered a(n) - External obsolescence Which would be considered an external obsolescence? - Changes in zoning A 25-year-old property sells for $125,000. If the site is worth $25,000 and the building would cost $200,000 to replace today, what is the annual rate of depreciation? - 2.0% The capitalization approach using a GMRM means to - Multiply the gross rent by a multiplier In applying the gross monthly rent multiplier to the subject property, the appraiser would use __________ rent - Gross market The monthly rent being paid for a rental property is called __________ rent - Contract In determining whether an item is a fixture, and therefore part of the real estate, which is least important? - Value An unfurnished house rents for $6,000 per year. An appraiser estimates the value of the subject a $80,000. Whats the monthly gross rent multiplier? - 160 The most detailed method of estimating a reproduction cost for a structure is - Quantity survey The duration of time during which a structure may be financially efficient is its - Economic life Real estate markets are said to be imperfect because - Buyers and sellers are not always well informed The land valuation method that uses a ratio of land to improve value is called - Allocation
The effective age of a house has been established at 30 years. The remaining economic life is 50 years. What is the percent of depreciation? - 37.5%
