Basic Appraisal Procedures

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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
direct
Building permits and worker's compensation are examples of __________costs.
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?
$1,984A 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 dataMultiple listing services can be utilized for gathering _______________.deferred maintenanceFunctional obsolescence could be caused by all of the following EXCEPTNAHBExtensive research on current construction trends and figures is conducted bycomparative-unitThe cost estimating method most commonly used by residential appraisers is the ____________ method.GLA, interiorWhen measuring a condominium you should calculate ____ using _______ measurements.availability of utilitiesA deed could provide all of the following information about a property EXCEPTcasing, bedrockDrilled wells need to use __________ until the drilling enters ___________.Site"Land that is improved so that it is ready to be used for a specific purpose" is the definition of109.3You 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?actualThe URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables.identify, credibleThe 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.is optionalFannie Mae says the cost approach ____________________.client's, real propertyThe valuation process is a systematic procedure employed to provide the answer to a(n) _______ question about the value of _________.school buildingAn example of a special purpose property would be a(n)FEMAFlood maps are prepared byhypothetical 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 ofrevitalizationWhich of the stages in the life cycle of a market area does not always occur?percolationThe 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 problemThe first step in the valuation process is100Most residences today require a minimum of _____ amps.when it is necessary for credible resultsUnder USPAP, when is an appraiser required to develop the cost approach in a real property appraisal?$1,138,842A 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?105.3You 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?siteIn most residential appraisals, the appraiser valuescostThe "summation approach" is another name for the _______________ approach.44.8You 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?comparable sales, subject propertyIn the sales comparison approach, we always adjust the _________; we never adjust the ____________.conductorsMaterials that transfer energy quickly are called _______________.eminent domainCondemnation occurs when a municipality exercisesarm's length, duressIn a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________.contributionWhen estimating the amount of adjustments for differences among properties, the most important principle is the principle of _______________.qualityWhich of the following would NOT be a common adjustment when appraising land?poured concreteKeyways are employed in which type of foundation walls?buildable unitDevelopers often value land on a basis of price perunit-in-placeSegregated cost method is another name for the _________ method.biasedAn appraiser must not allow the intended use of an assignment or a client's objectives to cause the assignment results to be __________.manufacturedA ___________ home has a permanent steel chassis, wheels and axles.any causeDepreciation is defined as "a loss in property value from _________. "highest and best use analysisWhich would NOT be a sub-step in defining the problem?externalWhich type of depreciation occurs off the site?$1,279.70If a property is assessed at $134,000 and the rate per thousand is $9.55, how much are total property taxes?front footProperty that fronts on a lake is usually valued on a basis of price perDepartment of TransportationTraffic counts can be obtained from the localacreThe most common unit of comparison for land in rural areas is price per _______.$3,750A 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?$500,000A 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?$1,046,720A 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 equivalencyIf a comparable property sells with atypical financing, we may have to make an adjustment for ___________.1007The Fannie Mae Single Family Comparable Rent Schedule is designated as Formof the report and the effective date of the appraisalEach written appraisal report must contain the dateClient, name or typeThe intended user of an appraisal is the __________ and any other user, as identified by _________.hot waterAn expansion tank is part of a ___________ heating system.$84,300An 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?twice, foundation wallFootings should be ________ as wide as the ____________.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 improvementsCurbs, gutters and grading are examples ofcape codA one-and-a-half-story house is commonly known as aknob and tubeWhich was the earliest form of electrical wiring?balloon frameWhat type of framing became popular in the 1800s with the advent of the steam-powered sawmill?platform frameThe most common type of framing in residential construction today island residual and ground rent capitalizationWhich site valuation methods should only be utilized when the subject property is income-producing by nature?replacement costIf an appraiser uses a cost manual to estimate cost new for a property, the result is12.4%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 areaWhat 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 ofreproduction"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 economicA short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure.sales comparisonThe 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$98,000A property sold for $250,000. The reproduction cost of the building was $380,000 and it was 60% depreciated. By extraction, what is the value of the land?indirectAppraisal fees are examples of _______________ costs.it is a generic formWhich entity produces the most commonly-used land appraisal report form?manufacturedA _______________ home is built in accordance with the HUD Code.zoning ordinancesAll of the following could be sources of general data EXCEPTqualitativeRanking analysis is a form of __________ analysis.gross rent multiplierWhich type of valuation analysis would typically NOT include a separate site valuation?$316,400A 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 incentiveAn 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 representsintended useThe 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 _______________.costThe summation approach is another name for the _______________ approach.directConstruction materials and workers' wages are examples of __________costs.contract, effective date of the appraisalMarket condition adjustments should always be calculated from the time of the ________ to the ___________.replacementIf a cost manual is used, the result is _____________ cost.contract"The actual rental income specified in a lease" is the definition of ___________ rent.the appraiserThe identification of relevant characteristics is a judgment made byentrepreneurial incentive"The amount an entrepreneur expects to receive for his or her contribution to a project" is the definition ofincome-producing or suitable for income productionThe ground rent capitalization method should only be used when appraising a property that iszoningA deed could provide all of the following information about a property EXCEPTland residualToday the _______________ technique of site valuation is used primarily in highest and best use analysis.360Two squares of 180-pound roof shingles would weigh _____ pounds.allocationThe method that treats the land value as a percentage of the total value is the __________ method.report the final opinion of valueThe last step in the valuation process isForm 1004 and Form 1007When 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 assessmentWhich 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 itA 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?