Calculations Flashcards
A property recently sold for $800,000 with a $75,000 down payment. The seller held the mortgage with an annual interest rate of 5%, amortized monthly over 20 years. The market interest rate is 7%. What is the cash-equivalent value of the mortgage assuming that it is held for the full term?
A. $617,140
B. $680,982
C. $692,140
D. $755,982
A. $617,140
Step 1: Calculate the Monthly Mortgage Payment with 5%
Loan amount: 725,000
Step 2: Calculate the Present Value of These Payments at the Market Rate (7%)
= $617,140
The borrower agreed to a purchase price of $800,000, but the property’s cash-equivalent value (if financed at market rates) is only $692,140 ($617,140 plus down payment $75,000). If they needed to resell soon, they might not recover the full $800,000.
Gen App SCA Section 1 Practice Test
You confirm the sale price of a comparable home at $300,000. The buyer obtained a $325,000 loan from a local bank to use in purchasing the home. What is the cash-equivalent sale price of the home?
A $275,000
B. $300,000
C. $325,000
D. cannot be determined
B. $300,000
The cash-equivalent sale price remains $300,000, as that is the actual market price for the property, regardless of the financing arrangement.
Gen App SCA Section 1 Practice Test
You are appraising an old commercial building located in the central business district. The value of the site, if vacant, would be $500,000. You estimate demolition costs to remove the commercial building at $40,000. What is the highest and best use of the property if the current value as improved is $475,000?
A. continued use as a commercial building on an interim basis
B. moving the building to a less valuable site
C. removal of the existing improvements and redevelopment of the site
D. renovation of the existing building
A. Continued use as a commercial building on an interim basis
Since the current value ($475,000) exceeds the site’s value if vacant ($460,000), the highest and best use is to retain the existing improvements until redevelopment becomes more financially feasible.
Gen App SCA Section 2 Practice Test
You are appraising an industrial building on a site zoned for office use. You have concluded that the value of the vacant office site is $300,000 and the value of the vacant industrial site is $90,000. You have also concluded that the industrial property value is $400,000. If the highest and best use as improved is industrial, what is the contributory value of the improvements?
A. $90,000
B. $100,000
C. $190,000
D. $310,000
B. $100,000
Gen App SCA Section 2 Practice Test
You are appraising an office building. Another office building sold 1 year ago for $800,000. An appropriate adjustment for changing market conditions is 10% annually. The sale had favorable financing that contributed $25,000 to the sale price. What is the adjusted price of this comparable building?
A. $852,500
B. $855,000
C. $907,500
D. $960,000
A. $852,500
Financing first, then market condition
$800K minus $25K (bc the buyer paid a higher sale price to get the seller’s favorable mortgage rate)
= $775K
plus 10%
=$852,500
Gen App SCA Section 4 Practice Test
A comparable property sold 2 years ago for $725,000 and again last week for $841,000. What is the appropriate annual appreciation rate on a straight-line basis?
A. 7.4%
B. 8.0%
C. 13.8%
D. 16.0%
B. 8.0%
HP12c
$725,000 enter
$841,000 ∆%
2/
Read 8
Gen App SCA Section 4 Practice Test
A comparable sale is leased at $20,000 per year for 9 years. The market rent for the subject property’s fee simple estate is $25,000 per year. The adjustment for real property rights conveyed based on a discount rate of 9% is x which would be x to the comparable’s sale price.
$29,976
added
HP
5,000 enter CHS PMT
9 n
9i
PV
Read 29,976
Gen App SCA Review Quiz Part 13
A comparable property is leased at $35,000 per year for 7 years. The market rent for the subject property’s fee simple estate is $28,000 per year. The adjustment to the comparable sale for real property rights conveyed, based on a discount rate of 8%, is x, which would be x from the comparable’s sale price.
$36,445
subtracted
HP
7,000 enter CHS PMT
7 n
8i
PV
Read 36,445
Gen App SCA Review Quiz Part 13
A 3,000-square-foot comparable building was leased for $4.50 per square foot per year above the market rent over the remaining lease term of 5 years. If rent for the subject property is at a market rate and the appropriate discount rate is 9%, what is the adjustment for real property rights conveyed?
A. –$95,956
B. –$52,510
C. $52,510
D. $95,956
B. –$52,510
Gen App SCA Section 5 Practice Test
A 2,500-square-foot comparable building was leased for $5,000 per year below the market rent over the remaining 3 years of the lease. If rent for the subject property is at a market rate and the appropriate discount rate is 8%, what is the adjustment for real property rights conveyed?
A. –$35,098
B. –$12,885
C. $12,885
D. $35,098
C. $12,885
Gen App SCA Section 5 Practice Test
Properties in the subject property’s area are worth 75% of those in the comparable properties’ area. If the average price of the comparable properties is $300,000, what is the adjustment to the comparable sales?
A. –$75,000
B. –$60,000
C. $60,000
D. $75,000
A. –$75,000
Gen App SCA Section 5 Practice Test
If no adjustment is required for differences in building area, what is the range of the adjustment for real property rights conveyed for properties renting at above- market rates?
A. $20,000 to $30,000
B. $20,000 to $40,000
C. $30,000 to $40,000
D. $20,000 to $60,000
C. $30,000 to $40,000
Compare Above Market Range to At Market
Gen App SCA Section 5 Practice Test
You are appraising the leased fee interest in a property for which the contract rent is estimated to be $7,500 above market rent. Based on this, you have calculated an adjustment to the fee simple estate of a comparable sale of $30,000. What adjustment would be used in the cost approach analysis for the subject property?
A. –$30,000
B. –$7,500
C. $7,500
D. $30,000
D. $30,000
Gen App SCA Section 5 Practice Test
You are analyzing the recent sale of a 5,000-square-foot office building with tenant improvements estimated to cost $40 per square foot of building area. The subject property contains standard tenant improvements that cost $25 per square foot. The subject property and the comparable sale are similar in all other respects. You estimate total physical deterioration of the tenant improvements to be 10%. What is the adjustment for the additional tenant improvements?
A. $7,500
B. $67,500
C. $75,000
D. $82,500
B. $67,500
Gen App SCA Section 5 Practice Test
You are appraising a commercial building containing 4,000 square feet located on a 10,000-square-foot site. You have estimated the value of the building at $75.00 per square foot of building area, but it could be as much as 10% more, or $82.50 per square foot. The estimated value of the site is $5.00 per square foot, but it could be 15% more, or $5.75 per square foot. What overall range in value is possible based on these estimates?
A. $300,000 to $330,000
B. $330,000 to $357,500
C. $350,000 to $357,500
D. $350,000 to $387,500
D. $350,000 to $387,500
4,000 x $75 = $300,000
4,000 x $82.50 = $330,000
10,000 x $5 = $50,000
10,000 x $5.75 = $57,500
Gen App SCA Section 5 Practice Test
You are confirming the recent $910,000 sale price of an industrial building containing 13,000 square feet. Comparable buildings in this market sell for $60 per square foot of building area. This building was in a superior location in relation to the subject property and the other sales. What is the adjustment for this sale’s superior location?
A. –$130,000
B. –$65,000
C. $65,000
D. $130,000
A. –$130,000
Building 13,000 sf x $60 = $780,000
$910,000 sale price minus $780,000 = $130,000
Gen App SCA Section 5 Practice Test
What is the coefficient of variation for the sale price per building square foot?
A. 0.07
B. 0.13
C. 0.21
D. 0.32
A. 0.07
HP
f REG
20∑+
18.75∑+
22∑+
19∑+
g x
g s
19.94/
Read 0.07
Gen App SCA Section 5 Practice Test
You are currently appraising a small retail building that sold 3 years ago for $225,000. You are analyzing a comparable building that sold 6 months ago for $350,000. The market has been increasing 10% per year on a straight-line basis over the last 2 years. Calculate the adjustment for market conditions.
$17,500
“currently appraising”
6 months = 5%
$350,000 x 5% = $17,500
Gen App SCA Section 6 Practice Test
You are confirming a comparable sale with one of the parties to the transaction. You are told that the buyer paid $50,000 down and the seller held a note for the balance in the amount of $150,000 at 5% interest, amortized monthly for 25 years. The market interest rate is currently 7%. The seller also informs you that the financing increased the purchase price from $200,000 to $220,000. What is the adjustment for financing?
$20,000
Gen App SCA Section 6 Practice Test
If the mean building size is 3,400 square feet and the standard deviation is 234.52 square feet, calculate the coefficient of variation.
6.9%
Gen App SCA Section 6 Practice Test
A property sold 19 months ago for $750,000. It was recently listed for sale for $950,000 and sold for $900,000. What monthly compound rate of appreciation did the seller realize?
0.96%
HP
750,000 CHS PV
900,000 FV
19N
i
Read 0.96
you do not hit the blue g button because we are not dividing by 12.
Gen App SCA Section 6 Practice Test
Which of the following correlation coefficients indicates that the data pairs lie close to a straight line?
A. –0.01
B. –0.99
C. 0.50
D. 0.70
B. –0.99
The correlation coefficient measures the strength and direction of a linear relationship between two variables. It ranges from -1 to 1.
r= 1 or −1 → Perfect linear relationship
r close to 0 → Weak or no linear relationship
r close to ±1 → Strong linear relationship
Gen App SCA Section 6 Practice Test
A property sold for $400,000. Adjustments included a positive $35,000 for a swimming pool and a negative $25,000 for its larger site. What is the total gross adjustment as a percentage of the sale price?
15%
HP
400,000 enter
60,000 ∆%
Read -85
100+
Read 15
Gen App SCA Section 7 Practice Test
Sale 1 $300,000
Sale 2 $380,000
Sale 3 $390,000
Sale 4 $400,000
Sale 5 $400,000
What is the median?
$390,000
Gen App SCA Self Study
