Chapter 18 Real Estate Appraisal
Terms in this set (50)
The income approach to value would be most important in the appraisal of a/n
downtown office building
In an old retain building, which of the following would most likely be a source of incurable functional obsolescence ?
Closely spaced internal support columns
All of the following are characteristics of value EXCEPT
If the potential gross rental income from a property is $20,000, the vacancy rate is 5 percent, and the additional income from the laundry facilities and extra storage is $700, what is the effective gross income?
An appraiser is responsible for
The term depreciation refers to the
loss of value in real estate from any cause
Which of the following is the most important in the appraisal process?
Highest and best use of the property
Which of the following would be classified as external depreciation
Poorly maintained properties in the neighborhood
It is necessary to calculate a dollar value for depreciation when using which of the following?
The cost approach to value
The income approach as used by an appraiser makes use of which of the following?
In the valuation of a large apartment complex, the most weight would be given to which of teh following approaches to value?
The income approach
In the cost approach to value, the appraiser makes use of
the estimated replacement cost of the building.
The sales comparison approach to value would be most important when estimating the value of a/n
In the income approach, the appraiser makes use of
An appraiser who is using the sales comparison approach to value would NOT use which of the following similar homes as a comparable properties? One that was
sold by the owners who were undergoing a foreclosure
Using which of the following would require the value of the land to be calculated separately from the value of the improvements?
The cost approach
Reconciliation is best described as
analyzing the results obtained from the three approaches to value
A building is valued at $215,000 and contains 4 apartments that rent for $470 each per month. The owner estimates that the net operating income is 65 percent of the gross rental receipts. What is the capitalization rate?
All of the following are steps in the appraisal process EXCEPT
considering the seller's estimate of the property's value
The gross rent multiplier is used as a guideline for estimating value based on
relationship of sales prices to the rental income
Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called
To find the value of a property using the income approach to value, if the net operating income and the capitalization rate were known, the appraiser would
divide the net operating income by the capitalization rate
An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would NOT include reference to
the listed price of the parcel
When appraising a commercial property, the appraiser is most concerned with the
income generated by the property
In the appraisal of an office building, which of the following would be classified as external depreciation
A law requiring the building to be retrofitted with fire sprinklers
The period of time over which an improvement to the property will remain useful for its original purpose is known as its
All of the following would be considered specific data EXCEPT
The employment opportunities in the area
When estimating the value of property using the cost approach, which of the following would NOT be considered by an appraiser?
Loss of value due to uncollected delinquent rent
The market price of a parcel of real estate is
The price it sold for
Reconciliation is an appraisal term used to describe
The appraiser's analysis and comparison of the results of all three appraisal approaches
An appraiser has been hired to prepare an appraisal on a property that includes an elegant old mansion that is now used as an insurance company office. Which approach to value would the appraiser rely on most?
A house with outmoded plumbing is suffering from
A home with its kitchen next to the master bedroom would be considered
In the cost approach an appraiser uses which of the following
An estimate of the buildings replacement cost
The purpose of an appraisal is to
estimate the value of a property
In the income approach, which of the following is NOT considered when calculating net operating income?
Capitalization is a process used to
Convert income into value
The purchase and putting together of several pieces of land is BEST called
Price is best described as
the amount of money a buyer and seller agree to exchange to complete a transaction
Four principal determinants of value underlying the price for a product are
Desire, Utility, Scarcity, and purchasing power
A town has a rapidly growing population, but there are no longer any vacant lots around the lake to build more houses. In this case, it is likely that the price of existing homes on the lake
If there is a significant undersupply of homes in a market, construction will tend to increase. This is an example of
The market tending toward equilibrium
If commercial real estate rental prices are falling in a market, it is likely that
The market is over supplied
Which of the following is an important economic characteristic of real estate?
The demand must literally come to the supply
The foremost factor contributing to commercial and residential demand in a market a
A construction boom in a market is an indication that prices
have been increasing
A local government could stimulate the real estate market by
Expanding the sewer system
Two important concerns of retain property users are
Trade are population and spending patterns.
In the sales comparison approach, an adjustment is warranted if
The seller offers below market seller financing
To complete the sales comparison approach, the appraiser
weighs the comparables