Basic Appraisal Procedures

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True or False: There is one universal definition of market value used in real property appraisal.
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Terms in this set (145)
According to USPAP, the credibility of assignment results is measured ______________.within the context of intended useA property's known zoning is Residential, but an appraiser values it on the basis of its zoning being Commercial. Proper disclosures are made in the report. The appraiser has used __________ in this appraisal.A hypothetical conditionWhat is the first step in the valuation process?Define the problemThe SCOPE OF WORK RULE says that "the appraiser must be prepared to demonstrate that the scope of work is sufficient to produce _________________"credible assignments resultsThe valuation process is a systematic procedure employed to provide the answer to a(n) ________ question about the value of __________.client's, real property"Documentation necessary to support an appraiser's analyses, opinions, and conclusions" is the definition ofworkfileThe effective date of value can bea present, past, or future dateScope of work applies toBoth appraisals and appraisal review assignmentsThe party or parties who engage, by employment or contract, an appraiser in a specific assignment is theclientValuation Processa systematic set of procedures an appraiser follows to provide answers to a client's questions about real property valueSteps in the Valuation Process1. Define the problem 2. Determine the Scope of Work 3. Gather, record, and verify the data 4. Determine the highest and best use 5. Estimate the land value 6. Estimate the value by each of the three approaches (if applicable) 7. Reconcile the estimated values into the final opinion of value 8. Report the final opinion of valueClientThe party or parties who engage, by employment or contract, an appraiser in a specific assignmentInformation on employment and unemployment trends in an area would be consideredgeneral dataWhich influences typically exert the greatest pressure on property values?local influencesWhen completing an appraisal assignment, comparable sales information that the appraiser gathers would be considered _________ data.specificTrue or False: General data tends to influence all properties in an area equally.TrueInformation on tax rates in an area would be consideredgeneral dataThe largest source for demographic information isU.S. Bureau of the CensusTrue or False: Government data sources for general data are found on a national level only.FalseWhich zones are identified by FEMA as Special Flood Hazard Areas?zones A and VWhich of these items would NOT be typically found in the deed for the subject property?zoning classificationFEMA stands forFederal Emergency Management AgencyYou check the FEMA flood map, and the subject property is located in Zone C. Is this a Special Flood Hazard Area (SFHA)?NoIn residential mortgage lending appraisals, it is more common for lenders and AMCs to ask for _________ maps to be included in appraisal reports.aerialTrue or False: The usefulness of MLS information can be dramatically increased through verification with a selling or listing agent.TrueYou can obtain topographic maps fromTopozoneThe largest repository of demographic information in the U.S. is theCensus BureauComparable sale and rental properties would be considered ________ data.specificWhich of these organizations is responsible for preparing flood maps for U.S. communities?FEMAThe external forces that exert the most pressure are generally at the __________level.neighborhood"Data that relates to the four forces that affect real property values—social, economic, governmental, and environmental forces. This type of data is usually not specific to any particular property but is applicable in many assignments of similar types of properties. Also known as macro-level data" is the definition ofgeneral dataWho is the primary intended user for MLS information?agents and brokersBEA stands forBureau of Economic AnalysisWhich of these organizations conducts extensive research on current construction trends?NAHBWhich appraisal term is defined as: "Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics"?Specific dataWhich of the following pieces of information would MOST likely be found in the deed?Current owner of recordWhich of these is the best source for traffic count information?Department of TransportationIt is common in appraisal reports to include a map that shows the location of the ____________.subject property and comparable salesA deed will typically provide information on all of the following EXCEPTassessed valueWhich of the following would NOT be considered general data?subject property tax assessmentSpecific data would include:Lot sizeTrue or False: The difference between land and site is that land is improved, while site is not.FalseA 1-acre vacant land parcel is worth $90,000 as a single family homesite, $45,000 per unit as a site for a duplex, or $2.50 per square foot as a site for an industrial building. What is the highest and best use of the property?industrial building site"Real property for which the expansion, redevelopment, or reuse of the real estate may be complicated by the presence of environmental contamination that needs to be remediated to appropriate regulatory standards" is the definition ofbrownfieldA rectangular parcel of land has 114 feet of frontage and is 222 feet deep. It sold for $280,000. What did it sell for per front foot?$2,456True or False: GPS systems can be used to locate vacant land parcels.TrueTrue or False: The extraction method of site valuation typically has good applicability in older urban areas.TrueWhich method of site valuation is based on a typical ratio of land value to total property value?allocationAn appraiser has valued a subject property at $320,000. The appraiser's research indicates that site values in the subject's area are typically 20% of property values. What is the indicated value of the subject's site by the allocation method?$64,000Another name for the extraction method of site valuation isabstractionThe tax rate per thousand in a municipality is $12.80. If the property taxes are $1,984 for a particular property, what is the property's assessed value?$155,000The ___________method has good application in valuing land in rural areas and in older, urban areas.extractionDevelopers usually value land on a basis of price perbuildable unitA parcel is valued at $450,000 as a single entity. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $60,000. Site development costs (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?Leave it as one parcelProperty that fronts on a lake is often valued using what unit of comparison?Price per front footA property contains 2.1 acres and is worth: A. $115,000 as single home site B. $40,000 per unit as a site for a triplex and C. $60,000 per acre as a retail site. All uses are physically possible, economically feasible and legally permitted. Which is the highest and best use?CA commercial site currently rents for $4,000 per month. The applicable land capitalization rate is 6%. What is the value of the site by the ground rent capitalization method?$800,000The most common source of brownfield contamination ispetroleumA site is currently rented for $600 per month and the ground rent capitalization rate is 7.5%. What is the indicated value of the site?$96,000A property sold for $50,000. The reproduction cost of the building was $80,000 and it was 60% depreciated. By extraction, what is the value of the land?$18,000Property in built-up urban residential areas is usually valued on the basis of price persquare footThe summation approach is another name for the _________ approach.costSidewalks, curbs, and landscaping are examples ofsite improvementsWhat is the power of a government entity to take private property for the public good?Eminent domainThe ground rent capitalization method is most applicable when appraising which of the following under a McDonalds restaurant where McDonalds owns the buildingWhich of these is NOT a technique used for site valuation?Breakdown methodWhat is another name for the cost approach?Summation approachTrue or False: Modular homes have no permanently attached tags or labels that identify them as modular homes.TrueWhich type of home is built to meet the HUD Code?manufactured homeWhich architect is known for one-story "prairie style" homes?Frank Lloyd WrightThe HUD label on a manufactured homeis a metal tag on the outside of the homeThe Manufactured Home Construction and Safety Standards is also known as theHUD CodeFannie Mae states that in calculating the gross living area (GLA) of a detached home, an appraiser must use __________ measurements.exteriorFootings should be at least _____________ average frost penetration foot belowIn framing, __________ are constructed above window and door openings.headersRoof slope is expressed as ____________ over ___________.rise, runTrue or False: Balloon framing has replaced platform framing as a modern building technique.FalseU-shaped traps are installed under every plumbing fixture in order toprevent sewer gases from venting back into the houseWhich of these is NOT a disadvantage of hot water heat?it is inefficient and creates drafts and dustTrue or false: Heat pumps are essentially reversible air conditioners.TrueTrue or False: HVAC is an acronym that stands for Heating, Ventilating, and Air Conditioning systems.TrueThe most common type of heat system in new construction today isforced warm airIn electricity, voltage measures __________ , while amperage measures __________ .pressure, volumeIn a home's plumbing system, grey water comes fromsinks and laundryWhat type of wiring is most commonly found in new residential construction?plastic coated or Romex"Total area of finished, above-grade residential space; calculated by measuring the outside perimeter of the structure and includes only finished, habitable, above-grade living space" is the definition ofgross living areaYou are appraising a single-unit detached dwelling. How would you measure the gross living area?Using exterior measurementsSlab-on-grade foundations are most popular in the ______________.South and SouthwestThe modern "central" heating system with one central furnace didn't appear until around ________.1880Which of these is NOT a source of grey water in a house?ToiletAn expansion tank is part of which type of heating system?hot waterThe Natural Resources Conservation Service produces soil maps that are based onaerial mapsWhen measuring a condominium unit, you should calculate _____ using ______measurements.GLA, interiorAccording to the EPA, ______________systems are the "most energy efficient, environmentally clean, and cost effective space conditioning systems available."geothermal heat exchange systemsWhich was NOT true of early pipeless furnaces?They had fansWhen calculating the gross living area of a dwelling, you would NOT include:Covered porchesWhich of these is the most recent type of siding?fiber-cementTrue or False: If the sales comparison approach cannot be developed because of a lack of sales data, the cost approach cannot be developed either.FalseAfter an appraiser estimates cost new, he/she subtracts ____________ then adds _______________ to arrive at an indicated value by cost approach.depreciation, site valueTrue or False: The cost approach is most applicable in situations where the site value is not well-supported.FalseThe cost approach would likely be MOST applicable in a situation wherethe subject is a special purpose propertyWhich of these would be considered an indirect cost when constructing an office building?lease-up costs to achieve occupancyFinancing costs and marketing costs necessary to achieve occupancy are examples of ____________ costs.indirectWhen a published cost manual is used, the result is ____________ cost.replacementWhich would be an example of a direct cost when constructing a building?building permitOf the traditional methods of cost estimating, the least complicated and least accurate method is the _________ method.comparative-unitTrue or False: Most appraisers do not possess the level of expertise needed to apply the quantity survey method of cost estimating.TrueA rectangular-shaped two-story home measures 28 feet by 40 feet. How many lineal feet are there in the foundation?136Which of these is NOT one of the traditional cost estimating methods?direct-indirectFannie Mae says the cost approach optionalA building was constructed in August 1999 for $2,340,000. The cost index at that time was 192.3. The current cost index is 302.1. What is the indicated cost new of the building today? (Round the index to 2 decimal places)$3,673,800You are performing the cost approach on an old house. By engaging in painstaking research, you are able to estimate the cost to construct an exact duplicate of the house, using all the actual materials that were used in its construction. What type of cost have you estimated?Reproduction costAppraisal, accounting and legal fees are examples of ____________ costs.indirect"A loss in value from any cause" is the definition of what appraisal term?DepreciationYou read a construction contract for a new house and its cost is $675,330. It has 3,150 square feet. What is its construction cost per square foot?$214.39"Expenditures for the labor and materials used in the construction of improvements" is the definition ofdirect costs_______________ is defined as "a loss in property value from any cause."DepreciationAnother name for soft costs is ________.indirect costsThe most popular cost service among residential appraisers isMarshall & SwiftThe most comprehensive and accurate method of cost estimating is the ___________ method.quantity surveyMost fire and casualty insurance is written to pay an amount equal to the _______________ cost of the structure.replacementWhich type of depreciation is generally considered to be incurable?external obsolescenceIn most situations, which of these would be considered an example of a superadequacy?all of theseWhich of these is NOT a cause of functional obsolescence?deferred maintenanceA 10-year-old house will always havephysical deteriorationDepreciation is defined as a loss in property value fromany causeThe difference between the cost of an improvement and its market value on the effective date of the appraisal isdepreciationTrue or False: A building may be obsolete and valueless even though it is still standing and is physically sound.TrueA building has an effective age of 25 and a total economic life of 80 years. What is its remaining economic life?55The number of years that have elapsed since a building was constructed is itsactual ageA building has an effective age of 18 and a total economic life of 60 years. It cost $520,000 new and its site value is $125,000. What is the indicated percentage of age-life depreciation?30%A property is found to suffer $20,000 in external obsolescence because of its proximity to an industrial plant. The subject's land represents 20% of its value. What is the dollar amount of external obsolescence attributable to the building improvements?$16,000True or False: Physical deterioration can be divided into three categories: deferred maintenance; short-lived components; and long-lived components.TrueA building has a cost new of $400,000. Deferred maintenance items have been identified at a cost of $9,000. Short-lived depreciation has been identified at $15,000; these short-lived items have a total cost of $45,000. The building has an effective age of 20 years and a total economic life of 50 years. What is the amount of depreciation attributable to the long-lived items?$138,400A hot water furnace in a building costs $22,000 to replace. It has an expected life of 30 years, and it is 24 years old. How much shortlived depreciation is attributable to this item?$17,600