Appraisal Principles and Practices, Exams of Business Economics

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✔✔An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. This 25% figure represents $252,000 ✔✔The subject is a 15 year old duplex that would cost $240,000 to build new today. It is in good condition and you estimate the effective age to be 10 years. Your estimate of total economic life is 50 years. Its land value is $60,000. What is its value by the cost approach? leave it as one parcel ✔✔A single parcel is valued at $450,000. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use? 2 - 4 unit residential properties ✔✔Price per room is a common unit of comparison when appraising 96.3 ✔✔When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. What is the mean of the GRMs? gross income multiplier ✔✔"The relationship or ratio between the sale price or value of a property and its gross annual rental income" is the definition of

Basic Appraisal Procedures Test

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guaranteed ✔✔A mortgage in which a party other than the borrower assumes payment in the event of default is a(n) mortgage. conductors, insulators ✔✔Materials that transfer energy quickly are called and those that transfer energy slowly are called. +$10,000 ✔✔In your sales grid, you made adjustments of +$5,000, +$3,500, - $2,500, + $8,000, and - $4,000. What is your net adjustment? $1,984 ✔✔A municipality assesses property at 100% of value. If a property is assessed at $155,000 and the rate per thousand is $12.80, how much are total property taxes? both general and specific data ✔✔Multiple listing services can be utilized for gathering . deferred maintenance ✔✔Functional obsolescence could be caused by all of the following EXCEPT NAHB ✔✔Extensive research on current construction trends and figures is conducted by direct ✔✔Building permits and worker's compensation are examples of costs.

casing, bedrock ✔✔Drilled wells need to use until the drilling enters. comparative-unit ✔✔The cost estimating method most commonly used by residential appraisers is the method. GLA, interior ✔✔When measuring a condominium you should calculate using measurements. availability of utilities ✔✔A deed could provide all of the following information about a property EXCEPT Site ✔✔"Land that is improved so that it is ready to be used for a specific purpose" is the definition of 109.3 ✔✔You calculate the following gross rent multipliers for comparable properties: 121.2, 105.3, 111.2, 150.1, 108.3, 105.3, 109.8, 108.8. What is the median of the GRMs? actual ✔✔The URAR sales comparison grid requires you to enter in the age of the subject property and comparables.

is optional ✔✔Fannie Mae says the cost approach. the answer to a(n) question about the value of. identify, credible ✔✔The SCOPE OF WORK RULE says that in each real property appraisal assignment, the appraiser must the problem to be solved, and determine and perform the scope of work necessary to develop assignment results. client's, real property ✔✔The valuation process is a systematic procedure employed to provide school building ✔✔An example of a special purpose property would be a(n) FEMA ✔✔Flood maps are prepared by hypothetical condition ✔✔"A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis" is the definition of revitalization ✔✔Which of the stages in the life cycle of a market area does not always occur? percolation ✔✔The results of a test will determine if there is suitable drainage and the size of the drain field that will be required for a septic system.

define the problem ✔✔The first step in the valuation process is 100 ✔✔Most residences today require a minimum of amps. when it is necessary for credible results ✔✔Under USPAP, when is an appraiser required to develop the cost approach in a real property appraisal? $1,138,842 ✔✔A building was constructed in July 2000 for $754,200. The cost index at that time was 133.6. The current cost index is 201.8. What is the indicated cost new of the building today? 105.3 ✔✔You calculate the following gross rent multipliers for comparable properties: 121.2, 105.3, 111.2, 150.1, 108.3, 105.3, 109.8, 108.8. What is the mode of the GRMs? site ✔✔In most residential appraisals, the appraiser values cost ✔✔The "summation approach" is another name for the approach. 44.8 ✔✔You calculate the following gross rent multipliers for comparable properties: 121.2, 105.3, 111.2, 150.1, 108.3, 105.3, 109.8, 108.8. What is the range of the GRMs?

sold in an transaction, with no undue. comparable sales, subject property ✔✔In the sales comparison approach, we always adjust the ; we never adjust the. conductors ✔✔Materials that transfer energy quickly are called. eminent domain ✔✔Condemnation occurs when a municipality exercises arm's length, duress ✔✔In a market value appraisal, every comparable sale should have been contribution ✔✔When estimating the amount of adjustments for differences among properties, the most important principle is the principle of. quality ✔✔Which of the following would NOT be a common adjustment when appraising land? poured concrete ✔✔Keyways are employed in which type of foundation walls? buildable unit ✔✔Developers often value land on a basis of price per unit-in-place ✔✔Segregated cost method is another name for the _ method.

biased ✔✔An appraiser must not allow the intended use of an assignment or a client's objectives to cause the assignment results to be. manufactured ✔✔A home has a permanent steel chassis, wheels and axles. any cause ✔✔Depreciation is defined as "a loss in property value from. " highest and best use analysis ✔✔Which would NOT be a sub-step in defining the problem? external ✔✔Which type of depreciation occurs off the site? $1,279.70 ✔✔If a property is assessed at $134,000 and the rate per thousand is $9.55, how much are total property taxes? front foot ✔✔Property that fronts on a lake is usually valued on a basis of price per Department of Transportation ✔✔Traffic counts can be obtained from the local acre ✔✔The most common unit of comparison for land in rural areas is price per. $3,750 ✔✔A house is rented for $1,050 per month, but lacks air conditioning. Comparable houses with air conditioning, rent for $1,100 per month. The appropriate gross rent multiplier is

75. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? $500,000 ✔✔A dwelling has a reproduction cost of $625,000. It is 10 years old and has an effective age of 12. Its remaining economic life is estimated to be 48 years. What is the depreciated value of the improvements by the age-life method, before including the site value? $1,046,720 ✔✔A building was constructed in July 2000 for $654,200. The cost index at that time was 138.5. The current cost index is 221.8. What is the indicated reproduction cost of the building today? cash equivalency ✔✔If a comparable property sells with atypical financing, we may have to make an adjustment for. 1007 ✔✔The Fannie Mae Single Family Comparable Rent Schedule is designated as Form of the report and the effective date of the appraisal ✔✔Each written appraisal report must contain the date Client, name or type ✔✔The intended user of an appraisal is the and any other user, as identified by.

twice, foundation wall ✔✔Footings should be as wide as the. $84,300 ✔✔An 8-unit apartment building has 5 units rented at $850 per month and 3 units rented at $925 per month. What is its gross income? effective gross ✔✔"The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses" is the definition of income. site improvements ✔✔Curbs, gutters and grading are examples of cape cod ✔✔A one-and-a-half-story house is commonly known as a knob and tube ✔✔Which was the earliest form of electrical wiring? balloon frame ✔✔What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? platform frame ✔✔The most common type of framing in residential construction today is hot water ✔✔An expansion tank is part of a heating system.

component with an life that is shorter than the life of the entire land residual and ground rent capitalization ✔✔Which site valuation methods should only be utilized when the subject property is income-producing by nature? replacement cost ✔✔If an appraiser uses a cost manual to estimate cost new for a property, the result is 12.4% ✔✔Condos in your market area sold for a median price of $195,320 twelve months ago and the median price of condos for the current month is $219,540. What is the percentage of change in market conditions? gross living area ✔✔What unit of measurement is typically used for single-family homes? specific data ✔✔"Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics" is the definition of reproduction ✔✔"The estimated cost to construct, at current prices as of the effective appraisal date, an exact duplicate or replica of the building being appraised, using the same materials..." is the definition of cost. expected remaining economic, remaining economic ✔✔A short-lived item is a building structure.

sales comparison ✔✔The most commonly used approach for valuing sites is the approach. mass appraisal ✔✔"The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing" is the definition of $98,000 ✔✔A property sold for $250,000. The reproduction cost of the building was $380, and it was 60% depreciated. By extraction, what is the value of the land? indirect ✔✔Appraisal fees are examples of costs. it is a generic form ✔✔Which entity produces the most commonly-used land appraisal report form? manufactured ✔✔A home is built in accordance with the HUD Code. zoning ordinances ✔✔All of the following could be sources of general data EXCEPT qualitative ✔✔Ranking analysis is a form of analysis.

calculated from the time of the to the. gross rent multiplier ✔✔Which type of valuation analysis would typically NOT include a separate site valuation? $316,400 ✔✔A house cost $295,000 to build new. It is 5 years old and has sustained a total of 8% depreciation. It sits on a lot worth $45,000. What is its value by the cost approach? entrepreneurial incentive ✔✔An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. This 25% figure represents intended use ✔✔The credibility of assignment results is always measured in the context of the . leasehold interest ✔✔"The tenant's possessory interest created by a lease" is the definition of . cost ✔✔The summation approach is another name for the approach. direct ✔✔Construction materials and workers' wages are examples of costs. contract, effective date of the appraisal ✔✔Market condition adjustments should always be

contract ✔✔"The actual rental income specified in a lease" is the definition of rent. the appraiser ✔✔The identification of relevant characteristics is a judgment made by entrepreneurial incentive ✔✔"The amount an entrepreneur expects to receive for his or her contribution to a project" is the definition of income-producing or suitable for income production ✔✔The ground rent capitalization method should only be used when appraising a property that is zoning ✔✔A deed could provide all of the following information about a property EXCEPT land residual ✔✔Today the technique of site valuation is used primarily in highest and best use analysis. 360 ✔✔Two squares of 180-pound roof shingles would weigh pounds. replacement ✔✔If a cost manual is used, the result is cost.

allocation ✔✔The method that treats the land value as a percentage of the total value is the method. report the final opinion of value ✔✔The last step in the valuation process is Form 1004 and Form 1007 ✔✔When the property being appraised is a one-family property that will be used as an investment property, Fannie Mae requires that the appraiser must prepare a . subject property assessment ✔✔Which of the following would NOT be general data? 0.5% ✔✔A home sells in January for $240,000 and sells again in November for $252,000. When the home resold it had not been improved at all. What is the indicated adjustment for change in market conditions, per month? subdivide it ✔✔A parcel is valued at $450,000 as a single unit. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $70,000. Site development costs (sewer, grading, road, etc.) would cost $65,000. What is the highest and best use?