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Basic Appraisal Procedures Final Exam Study Guide, Exams of Industrial Engineering

A study guide for the basic appraisal procedures final exam. It covers a wide range of topics related to real estate appraisal, including calculating gross rent multipliers, identifying types of obsolescence, understanding the sales comparison approach, determining depreciation, and differentiating between various cost concepts. The study guide provides definitions, explanations, and practice questions to help students prepare for the final exam. It seems to be a comprehensive resource for students enrolled in a real estate appraisal course or program, covering the key concepts and procedures necessary for conducting a thorough property valuation.

Typology: Exams

2023/2024

Available from 09/30/2024

charleswest
charleswest 🇺🇸

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Download Basic Appraisal Procedures Final Exam Study Guide and more Exams Industrial Engineering in PDF only on Docsity! Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. The most common heating systems in residential construction today are -hot water -heat pumps -forced warm air -electric radiant - anshot water A _______________ home has a permanent steel chassis, wheels and axles. -panelized -modular -pre-cut -manufactured - ansmanufactured "The total period a building lasts or is expected to last..." is the definition of _________ life. -useful -expected -real -physical - ansphysical "The actual rental income specified in a lease" is the definition of ___________ rent. -deficit -contract -market -lease - anscontract A comparable new house just sold for $440,000. You estimate the value of the site at $90,000 and the cost of the site improvements at $15,000. It has 2,885 square feet of GLA. What is its unit cost? -$108.44 -$116.12 -$120.46 -$124.90 - ans-$116.12 Comparative - Unit Method - Market Derivation. $440,000 - $90,000 - $15,000 = $335,000. $335,000 ÷ 2,885 = $116.12. A one-and-a-half-story house is commonly known as a -cape cod -ranch -split-level -split-entry - anscape cod Appraisal fees are examples of _______________ costs. Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -direct -indirect -unnecessary -replacement - ansindirect Separate site valuations would likely be required in which of the following situations: -cost approach -condemnation appraisals -highest and best use analysis -any of the above - ansany of the above When measuring a condominium you should calculate ____ using _______ measurements. -GLA, exterior -GBA, interior -GLA, interior -GBA, exterior - ansGLA, interior 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 range of the GRMs? -24.7 -25.6 -27.2 -28.7 - ans24.7 It is common in appraisal reports to include a map that shows the location of the _______________. -subject property only -subject property and support facilities -subject property and comparable sales -subject property and local schools - ans-subject property and comparable sales "Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics" is the definition of -specialized data -specific data -general data -neighborhood data - ansspecific data In the sales comparison approach, sales data on __________ sales should be collected. -one or two -no more than two -exactly three -at least three - ansat least three Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. 94.3 95.6 96.3 99.9 - ans95.6 Which would NOT be a sub-step in defining the problem? -definition of value -effective date of value -identification of the property rights -highest and best use analysis - anshighest and best use analysis Which site valuation methods should only be utilized when the subject property is income- producing by nature? -land residual and ground rent capitalization -land residual and subdivision development -ground rent capitalization and subdivision development -extraction and allocation - ans-land residual and ground rent capitalization 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? 105.3 109.3 115 there is no median - ans109.3 A house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. What is the amount of long-lived depreciation attributable to the building? -$1,489 -$23,691 -$31,653 -$46,000 - ans$46,000 Exercise 2. 12 + 38 = 50 years total economic life. Determine Cost of Long-lived Items by subtracting deferred maintenance and short lived items Cost from total replacement cost: $212,340 - $670 - $20,000 = $191,670. Determine depreciation percentage by diving effective life by total economic life: 12 / (12 + 38 = 50) = 24%. Multiply the Cost of the Long-Lived Items by the depreciation percentage: $191,760 X 24% = $46,000. A partial estate could be created by the existence of all the following EXCEPT -life estate -easement Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -encroachment -condominium - anscondiominium Two squares of 180-pound roof shingles would weigh _____ pounds. -180 -360 -520 -Not enough information to determine - ans360 The most common unit of comparison for land in urban areas is price per _______. -square foot -cubic foot -area -lot - anssquare foot Which would NOT be a form of concurrent ownership? -tenancy in severalty -tenancy in common -joint tenancy -tenancy by the entirety - ans-tenancy in severalty 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? -1.0% -10.2% -11.5% -12.4% - ans12.4% Market Conditions Adjustments. $219,540 ÷ $195,320 = 1.124 or an increase of 12.4%. 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? -$1,054,868 -$1,098,253 -$1,118,800 -$1,046,720 - ans-$1,046,720 An expansion tank is part of a ___________ heating system. -hot water -heat pump -electric radiant -forced warm air - anshot water Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 80%. What is the land value? -$7,000 -$87,500 -$305,000 -$299,500 - ans$305,000 The last step in the valuation process is -report the final opinion of value -estimate land value -define the problem -determine the scope of work - ansreport the final opinion of value Which of the following would NOT be general data? -mortgage rates -unemployment rates -subject property assessment -property tax rates - anssubject property assessment 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 mode of the GRMs? -96.3 -95.6 -94.3 -There is no mode - ansthere is no mode Each of these is a variable expense EXCEPT -payroll -utilities -maintenance -taxes - anstaxes If a cost manual is used, the result is _____________ cost. -replacement -reproduction -depreciated -insurable - ansreplacement A property sold for $2,350,000. The net operating income was verified as $294,640. The capitalization rate indicated by sale is ____%. -11.4% Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -increasing and decreasing returns -anticipation -none of the above - anssubstitution Which was the earliest form of electrical wiring? -aluminum -Romex -knob and tube -BX - ansknob and tube "The type of data and the extent of research and analyses" is the definition of -required data -scope of work -valuation process -workflow diagram - ansscope of work Developers often value land on a basis of price per -cubic yard -front foot -square foot -buildable unit - ansbuildable unit Price per room is a common unit of comparison when appraising: -2-4 unit residential properties -vacant lots -one unit residences -retail stores - ans-2-4 unit residential properties 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 ______________. -comparative market analysis -Form 1004 only -Form 1004 and Form 1007 -Form 1025 - ans-Form 1004 and Form 1007 An appraisal with an effective date at some point in the future is called a(n) ___________ appraisal. -retrospective -speculative -prospective -effective - ansProspective "The age of property that is based on the amount of observed deterioration and obsolescence it has sustained" is the definition of ____________ age. Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -actual -historic -chronological -effective - anseffective "The amount by which contract rent exceeds market rent at the time of the appraisal...." is the definition of __________ rent. -excess -deficit -effective -economic - ansexcess "The type of data and the extent of research and analyses" is the definition of -required data -scope of work -valuation process -workflow diagram - ansScope of Work Another name for girder is: -heater -beam -heat pump -frame - ansBEAM The cost approach formula states that ________, minus depreciation, __________ , equals property value -cost new, minus land value -replacement cost, minus external obsolescence -depreciated cost, plus site value -cost new, plus site value - ans-cost new, plus site value The cost approach formula states that cost new, minus depreciation, plus site value, equals property value The URAR form can be used to report the appraisal of which of the following property types? -one-unit property -one-unit with an accessory unit -unit in a PUD -all of the above - ansAll of the above What unit of measurement is typically used for single-family homes? -gross lineal footage Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -gross building area -gross living area -total leasable area - ansGross living Area "A method used to convert an estimate of a single year's income expectancy into an indication of value in one direct step, either by dividing the net income estimate by an appropriate capitalization rate or by multiplying the income estimate by an appropriate factor " is the definition of -discounted cash flow analysis -yield capitalization -direct capitalization -indirect capitalization - ansDirect Capitalization In most residential appraisals, the appraiser values -site -land -neither site or land -improvements only - ansSITE Ranking analysis is a form of __________ analysis. -quantitative -cost/benefit -qualitative -statistical - ansQualitative An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 75%. What is the land value? - $175,000 - $250,000 - $287,500 - $295,500 - ans- $287,500 Example 1. $350,000 X .25 = $87,500 (remaining building value). $375,000 - $87,500 = $287,500 (land value). 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? - $210,000 - $220,000 - $237,500 - $252,000 - ans- $252,000 Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -hard costs -soft costs -entrepreneurial incentive -book value - ansSoft Costs Footings need to be _______________ below average frost penetration levels. -exactly 6 inches -no more than 9 inches -at least 12 inches -at least 36 inches - ansAt least 12 inches Footings need to be AT LEAST 12 INCHES below average frost penetration levels Building permits and worker's compensation are examples of __________costs. -direct -indirect -soft -replacement - ansDirect Building permits and worker's compensation are examples of DIRECT costs "An amount paid for the use of land, improvements or a capital good" is the definition of -rent -contract price -sale price -market rent - ansRENT "The total period a building lasts or is expected to last..." is the definition of _________ life. -useful -expected -real -physical - ansPhysical The total period a building lasts or is expected to last is the definition of PHYSICAL life Construction materials and workers' wages are examples of __________costs. -direct -indirect -reproduction -replacement - ansDIRECT Extensive research on current construction trends and figures is conducted by Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -HUD -U.S. Census Bureau -NAHB -local MLS systems - ansNAHB What is the most common type of framing currently being used in new homes? -platform frame -balloon frame -log frame -post and beam - ansPlatform frame Under USPAP, when is an appraiser required to develop the cost approach in a real property appraisal? -whenever the client might find it helpful -when it is necessary for credible results -in all assignments -this approach is never required - answhenever it is necessary for credible results The most complex method of site valuation is the _______________ method. -allocation -cost -sales comparison -subdivision development - ansSUBDIVISON COMPARISON The most complex method of site valuation is the SUBDIVISION COMPARISON method. The cost approach formula states that reproduction or replacement cost new _______________, _______________ equals property value. -plus depreciation, minus land value -minus depreciation, plus indexed costs -plus depreciation, plus site value -minus depreciation, plus site value - ansMinus Depreciation, plus site value The cost approach formula states that reproduction or replacement cost new, MINUS DEPRECIATION, PLUS SITE VALUE, equals property value 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. -potability -pH -slope -percolation - ansPercolation Which cost estimating method is the most detailed and time-consuming to develop? Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -index -quantity survey -unit-in-place -none of the above - ansQuantity Survey The Quantity Survey cost estimating method is the most detailed and time-consuming to develop. All of the following could be sources of general data EXCEPT -utility companies -school districts -zoning ordinances -departments of transportation - ans-zoning ordinances Zoning ordinances wouldn't provide general data What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? -platform frame -balloon frame -log frame -post and joist - ansBalloon Frame Balloon Framing became popular in the 1800's with the advent of the steam-powered sawmill 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? - $1,013,861 - $1,098,253 - $1,107,835 - $1,138,842 - ans- $1,138,842 Cost Index Trending Solution. 201.8 ÷ 133.6 = 1.51. $754,200 X 1.51 = $1,138,842. 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? - 1.0% - 10.2% - 11.5% - 12.4% - ans12.4% Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. Points. $200,000 - $20,000 = $180,000. $180,000 X .03 = $5,400. The most common brownfield contaminant is -sulphur -cyanide -lead -petroleum - ansPetroleum Keyways are employed in which type of foundation walls? -stone -wood -concrete block -poured concrete - ansPoured Concrete "The relationship or ratio between the sale price or value of a property and its periodic gross rental income" is the definition of -yield rate -operating expense ratio -gross rent multiplier -capitalization rate - ansgross rent multiplier If a comparable property sells with atypical financing, we may have to make an adjustment for ___________. -market conditions -depreciation -expenditures made immediately after purchase -financing terms - ansFinancing terms If a comparable property sells with atypical financing, we may have to make an adjustment for FINANCNG TERMS Which entity produces the most commonly-used land appraisal report form? -Freddie Mae -HUD/FHA -VA -It is a generic form - ansIt is a generic form A comparable new house just sold for $440,000. You estimate the value of the site at $90,000 and the cost of the site improvements at $15,000. It has 2,885 square feet of GLA. What is its unit cost? - $108.44 - $116.12 - $120.46 Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. - $124.90 - ans- $116.12 Comparative - Unit Method - Market Derivation. $440,000 - $90,000 - $15,000 = $335,000. $335,000 ÷ 2,885 = $116.12. The credibility of assignment results is always measured in the context of the _______________. -intended use -value needed for the client's purposes -applicable state requirements -highest and best use - ansIntended Use In what type of heating system would you find an expansion tank? -active solar -forced hot air -hot water -passive solar - ansHot Water 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? - $297,200 - $316,400 - $318,500 - $340,000 - ans- $316,400 Which type of depreciation occurs off the site? -curable -short-lived -physical -external - ansexternal A short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure. -economic life, long-lived -expected remaining economic, remaining economic -useful, anticipated -anticipated, economic life - ansexpected remaining economic, remaining economic "Data that relates to the four forces that affect real property values—social, economic, governmental, and environmental forces" is the definition of -census data -specialized data -generic data -general data - ansGeneral Data Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. Which of the stages in the life cycle of a market area does not always occur? -growth -stability -decline -revitalization - ansRevitalization Which of the following would NOT be a common adjustment made in sales comparison when appraising land? -size -quality -shape -topography - ansQuality Which of the following would NOT be general data? -mortgage rates -unemployment rates -subject property assessment -property tax rates - ansSubject property assessment This would be specific data "A method of estimating land value in which the depreciated cost of the improvements on an 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 site valuation. -allocation -land residual -subdivision development -extraction - ansExtraction Curbs, gutters and grading are examples of -site -site improvements -personal property -temporary improvements - ansSite improvements The identification of relevant characteristics is a judgment made by -the client -the intended user -Fannie Mae and Freddie Mac -the appraiser - ansthe appraiser "The actual rental income specified in a lease" is the definition of ___________ rent. Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -roof covering- -water heater -foundation -carpeting - ansfoundation Modular homes are constructed to meet __________ code requirements. -HUD -State and Local -ANSI -United Nations - ans-State and Local A house has a total cost new of $212,340. It is 12 years old and has an estimated remaining economic life of 38 years. The cost to cure deferred maintenance items is $670. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified totaling $4,850. What is the amount of long-lived depreciation attributable to the building? -$1,489 -$23,691 -$31,653 -$46,000 - ans$46,000 Exercise 2. 12 + 38 = 50 years total economic life. Determine Cost of Long-lived Items by subtracting deferred maintenance and short lived items Cost from total replacement cost: $212,340 - $670 - $20,000 = $191,670. Determine depreciation percentage by diving effective life by total economic life: 12 / (12 + 38 = 50) = 24%. Multiply the Cost of the Long-Lived Items by the depreciation percentage: $191,760 X 24% = $46,000. "Expenditures or allowances for items other than labor and materials that are necessary for construction, but are not typically part of the construction contract" is the definition of -direct costs -entrepreneurial incentive -indirect costs -entrepreneurial profit - ans-indirect costs "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 -assessment rolls -statistical appraisal -universal appraisal -mass appraisal - ansmass appraisal Developers often value land on a basis of price per -cubic yard Basic Appraisal Procedures Final Exam Study Guide Latest Updated 2024/2025. -front foot -square foot -buildable unit - ansbuildable unit The ________ approach is particularly applicable in the appraisal of special purpose properties. -cost -sales comparison -income capitalization -modified replacement - ansCOST "The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted" is the definition of -capital -effective gross income -taxable income -net operating income - ansnet operating income A property contains 3.2 acres and is worth: A. $155,000 as single home site; B. $75,000 per unit as a site for a duplex; or C. $50,000 per acre as a retail site. All uses are physically possible, economically feasible and legally permitted. Which is the highest and best use? A, single home site B, duplex site C, retail site All are highest and best uses - ansC. Retail site The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. -actual -effective -economic -actual and effective - ansactual