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Michigan Certified Assessing Officer (MCAO) > Module 2 > Flashcards

Module 2 Flashcards

1
Q

Legal Descriptions are:

A

the way real property, or real estate, is legally identified, conveyed, assessed and taxed.

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2
Q

Four common types of legal descriptions

A
  1. Rectangular survey
  2. metes and bounds
  3. platted description
  4. condominium description
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3
Q

Why are legal descriptions important?

A

They uniquely describe and identify property.

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4
Q

How many sections in a geographical township?

A

36 sections

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5
Q

How many acres in a geographical township?

A

640 acres

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6
Q

How many miles in a geographical township?

A

36 Square Miles

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7
Q

How many acres are located in a parcel with the description: the W 1/2 of the SE 1/4 of the NW 1/4 of Section 12, Town 8 North, Range 3 West.

Please show your work.

A

Each section contains 640 acres
SE ¼ = 160 acres (640 divided into 4 quarters = 160 acres)
The W ½ of the SE ¼ = 80 acres (160/2)
The NW ¼ would be 20 acres (80/4)

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8
Q

Define the word Town

A

A six square mile area of land

containing 36 sections, numbered according to its position north or south of the base line

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9
Q

Define the term Metes and Bounds (a.k.a. bearings and distance)

A

A method where land is described using local geographical features in combination with directions and distances.

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10
Q

What is a platted description and give an example.

A

When a rectangular survey description or metes and bounds is further subdivided into platted lots, the resulting parcels are described by reference to a specific lot number and subdivision name. Example: Lot 10, Plat of Riverview Estates

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11
Q

Name two land exemptions from ad valorem taxation that are excluded for a legal tax roll description.

A

Railroad Right of Way,
County Drains and
Public Highway Right of Way

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12
Q

Define a Meander Line.

A

run along the margin of a stream or lake , is not generally a boundary

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13
Q

What is a Government Lot and why are they special?

A

a fractional subsection, not described as an aliquot part of a section but is designated by a number.

special subdivisions of land created when rivers or lakes prevented the subdivision of a section into regular 40 or 160 acre tracts.

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14
Q

Most common errors found in acreage descriptions

A 
Starting point, 
Twice assessed,
Exception indefinite, 
Personal boundary, 
Does not close, 
Fractional descriptions
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15
Q

What is a tax map?

A

Line maps showing the current parcel and usually have road, section boundaries, rivers, villages or cities.

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16
Q

Name three essential items for a tax map,

A
  1. Location: name of streets, roads etc.
  2. Location: lot lines / property lines or both.
  3. Location: Lot, block, and parcel numbers.
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17
Q

What is the Principal Meridian?

A

A true north and south line used for survey control which runs through an arbitrary point that is the starting point for laying out sections of land within a given area.

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18
Q

What is the Base Line?

A

A true or approximate parallel of latitude running through an arbitrary point chosen as the starting point for laying out sections of land within a given area.

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19
Q

What is Commercial Forest Reserve Property and how it described on the roll?

A

real property exempt from ad valorem taxation, subject to a specific tax.
^separated from the assessment roll, listed on a separate roll following the personal property roll.

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20
Q

List units of comparison that would be used for residential property, why and why are units of comparison important.

A

per front foot, value per square foot, or value per acre. Square foot is the most widely used because it is an area measurement it considers all the land in a parcel and can be used to value any and all types of land.

Selecting the proper unit of comparison is important in gaining an understanding of how the market is behaving.

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21
Q

Find the percent change for the paired sales:
1st Sale - $235,000 August 5, 2016
Resale - $315,000 July 1, 2018

A

(315,000 / 235,000) - 1 = 0.34 = 34.0%

  1. 34 / 24 months = 0.014 (1.4%) per month
  2. 014 x 12 months = 0.168 (16.8) per year
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22
Q

Use the following data and determine a possible ratio of sale price to bldg. What ratio would you use for land value? Which method is this?

SALES               BLDG
PRICE               VALUE              RATIO
424,000          318,000 = 
383,000          279,600 = 
359,000          276,400 = 
401,000          284,700 = 
375,500         282,000 = 
431,000          319,000 = 
398,000         306,000 =
TOTAL =
             METHOD =
A

SALES BLDG
PRICE VALUE RATIO
424,000 318,000 = 25%
383,000 279,600 = 27%
359,000 276,400 = 23%
401,000 284,700 = 29%
375,500 282,000 = 25%
431,000 319,000 = 26%
398,000 306,000 = 23%
TOTAL = 2,771,500 2,065,700 = 25%

             METHOD = ALLOCATION
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23
Q

An improved property was recently sold for $455,000. An estimate of the improvements was 314,000 RCN and were 12 years old. What is the implied land value? What method did you just use?

A

$314,000 x 0.88 = $276,320
$455,000 - $276,320 = $178,680
$179,000 = Implied Land Value
Extraction Method

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24
Q

Lot “A” sold recently for $35,000 the new owner stated that he offered $5,000 extra because of the mature shade trees on the lot. Lot “B” is for sale and has no mature shade trees on it. How much do you think they can sell lot “B” for? What type of adjustment do you have to make?

A

Lot “B” = $35,000 - $5,000 = $30,000

Physical Changes

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25
Q

Explain the extraction method.

A

Another alternative method of land valuation

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26
Q

When is the allocation method used?

A

Not enough vacant land sales, but there are recently sales of improved properties (especially applicable in residential appraisal situations)

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27
Q

When could extraction method be used?

A

Not enough vacant land sales (however works fairly well on relatively new structures that have recently sold as long as a proper Economic Condition Factor has been calculated)

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28
Q

What is also necessary to use extraction method?

A

Proper Economic Condition Factor calculation

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29
Q

What is the first step in the allocation method?

A

Determining a typical ratio of land value to total property value.

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30
Q

Find the annual percent change between sales:
1st Sale - $125,000 June 1, 2014
Resale - $195,000 October 31, 2018

A

(195,000 / 125,000) - 1 = 0.56 = 56%

  1. 56 / 52 months = 0.011 (1.1%) per month
  2. 1% x 12 months = 13.2% per year
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31
Q

What is the purpose of a depth factor?

A

To adjust land value for differences in the actual depth (usually in urban or suburban settings) of a parcel compared to the standard or typical depth for an area.

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32
Q

Depth factor formula:

A

Depth factor = √actual lot depth ÷ standard lot depth

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33
Q

Three approaches for an appraisal.

A
  1. sales comparison
  2. income
  3. costs
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34
Q

Assessor deal with ___ descriptions

A

tax

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35
Q

Title companies and real estate agents deal with _____ descriptions

A

legal

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36
Q

The following is an example of a _________ ______
description: “The North one-half of the Southwest
one-quarter of Section 24, Township 22 North, Range
2 East” or “N1/2 SW 1/4, Sec 24, T22N, R2E”.

A

Rectangular survey

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37
Q

The cardinal rule to reading a Rectangular Survey

A

read description backwards, from right to left or

from the largest unit to the smallest unit.

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38
Q

What is T22N, R2E referring to?

A

Township reference: Township 22 North, Range 2 East.

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39
Q

“Metes” refers to:

A

A boundary, a straight line between points and direction (north, south, east or west) indicated

40
Q

“Bounds” refers to:

A

a boundary, running along a creek, a fence, or an adjoining public road way.

41
Q

Principal Meridian (“Michigan Meridian”)

A

A true north and south line used for survey control which runs through an arbitrary point that is chosen as a starting point for laying out sections of land within a given area.

42
Q

Base Line:

A

A true or approximate parallel of latitude running through an arbitrary point that is chosen as a starting point for laying out sections of land within a given area.

43
Q

Town:

A

A six mile square area of land containing 36 sections which is numbered according to its position either north or south of the base line.

44
Q

Range:

A

A range is a vertical column of townships in the Public Land Survey System.

45
Q

Section:

A

A one square mile block of land containing 640 acres and comprises one thirty-sixth of a township.

46
Q

Aliquot Part or Subdivision of a Section:

A

Is the standard subdivisions of that section, such as half section, quarter section, or quarter-quarter section. (Quarter sections are designated as NE, NW, SW, and SE).

47
Q

Government Lot:

A

A fractional subsection (less than a full quarter section in area) which is not described as an aliquot part of the section, but is rather designated by a number, for example, “Lot 2” or “Gov’t Lot 2”. (special subdivisions of land which were created when rivers or lakes prevented the subdivision of a section into regular 40 or 160 acre tracts).

48
Q

Meander Line:

A

A traverse line run along the margin of a stream or a lake and is not generally a boundary in the usual sense as the bank itself typically marks the limits of the survey.

49
Q

Meander Corner:

A

Is set at each point where a standard township or section line intersects the bank of a navigable body of water or other meandered streams and lakes.

50
Q

One Chain =

A

66 feet

51
Q

One Link =

A

7.92 inches or 0.66 feet

52
Q

One Rod =

A

16.5 feet

53
Q

One Acre =

A

43,560 square feet

54
Q

One Square Acre =

A

208.71 feet x 208.71 feet

55
Q

One Section =

A

5,280 feet square or one mile square

56
Q

Each Quarter Section =

A

2,640 feet square or 160 acres

57
Q

Each Quarter-quarter Section =

A

1,320 feet square or 40 acres

58
Q

Acres in a non-fractional section =

A

640

59
Q

Time or location formula:

A

((B ÷ A) – 1)

60
Q

A paired sales analysis is:

A

A technique to identify and measure adjustments to sales /rents prices of comparable properties.

61
Q

3 methods for land valuation (SEA):

A
  1. Sales Comparison Method
  2. Extraction Method
  3. Allocation Method
62
Q

How do you determine the class of a residential property? What would cause an adjustment to a class? Give an example

A

The quality of construction materials used and observed workmanship help determine class. Refinements outside of the normal construction of a particular class could cause an adjustment to be made to the class. Ex: Construction of average-quality materials using a custom-made plan with special interior and exterior features.

63
Q

What is used to determine the size for rates? What happens when there are mixed story heights? What size for rates would you use for a ranch that is 980 square feet? What if there was a 2 story addition with a total of 1,152 square feet?

A

The area of the first floor determines the size for rates. If there are mixed story heights, the total first floor area would determine the size for rates. The size for rates for a 980 sf ranch would be 1,000. The size for rates for the ranch and a 2 story addition would be 1,550 (1,152/2 = 576 + 980 = 1,556).

64
Q

What is effective age and actual age? What would cause there to be a difference between the two?

A

Actual age is when the structure was built. Effective age reflects the condition of the property and may be more or less that actual age. Good maintenance could extend the life of the structure. Also remodeling and renovations could cause a difference between effective age and actual age.

65
Q

What is the calculator cost method? Who is it used by? How is it organized?

A

The calculator cost method is used for estimating reproduction costs by using average construction costs for different types and qualities of construction. Assessors use the manuals. Volume is organized by quality or class of construction. Volume II is organized primarily by occupancy.

66
Q

Are water and sanitary sewer costs are included in the cost per square foot for residential buildings? If not, how should they be handed? Are they included in the cost per square foot for commercial/industrial buildings? Explain why or why not.

A

Water and sanitary sewer costs are not included in the cost per square foot for residential buildings and need to be added in separately as either an addition to the structure on the back of the property record card or if using locally derived costs, they would be entered under land improvements on the front of the property record
card. Assessors Manual Vol. I under water and waste disposal for each class. Water and sanitary sewer costs are included for many of the commercial/industrial buildings under the calculator section.

67
Q

What components will you expect to find in a class C house?

A

Average construction materials and workmanship. Stock-type plans with little or no changes in the architect. Some aesthetic features as stock items such as brick/stone trim. Few built-ins with average quality. Interior would be drywall. 7’ basement walls with a concrete block and floor. 2” x 10” floor joists.

68
Q

Name five items that must be on the front of a residential appraisal card.

A

Owners name and address, unit of government, real property description, parcel code number, property address, public improvements, land value computations, building value, total value of property, assessment history, date examined and name of person interviewed.

69
Q

List five items on the back of a residential record card.

A

Year build and yr remodeled, exterior wall type, basement, crawl and or slab, type of basement walls , basement finish especially walkout, type of heat, plumbing items, water and waste disposal-is there a well, septic system or city water and public sewer, built ins, fireplaces (type), porches (number and type) garage, class of house, size for rates, space for sketch, and an area to calculate cost new less depreciation including county multiplier, depreciation, and ECF multiplier.

70
Q

If a house has both a basement and a crawl space what adjustment, if any, would you make? Why?

A

A deduction would be made to the square ft cost with basement for the crawl space. The Assessor’s Manuals assume a basement and deductions need to be made for crawl and slabs.

71
Q

How many baths are in the average home? What if there are more or less?

A

One – additions and/or subtractions would be made for additional bathrooms or lack thereof.

72
Q

What are some examples that would require additions or adjustments when computing the value of an average house? Name at least six.

A

Heating and cooling, plumbing (number of bathrooms and fixtures), finished basements, built-ins garage door openers, garages, finished basements, porches and decks.

73
Q

What is meant by the term common wall? What is it used in reference to? What do you do when there is a common wall? Why would you do that?

A

A common wall is referred to when there is an attached garage. You would deduct the common wall to keep from valuing that wall twice as the values for garages are for 4 walls.

74
Q

What are we looking for when we talk about overhangs? What would be some examples? How would value be assigned to them?

A

Overhangs are typically living space that do not have foundations or are above an area that already includes a foundation. Examples would be bay windows that are either 1 story in height or ½ story in height and a finished area over a garage. The overhang schedule in the Class section would be used to price out the areas. Variations from heat such as air would be priced as a dollar adjustment according to the schedule.

75
Q

What is Unit in Place? Where do you find it? Give three examples of what it could be used for in your appraisal.

A

Unit in Place costs convert square foot costs in to whole dollar costs for an entire residence. They are located in Assessors Manual Volume I. Examples: swimming pools, fences, sheds, boat docks, land improvements, anything to do with a residential structure.

76
Q

You determine from a picture that the class of a property should be a C but upon inspection you find: the basement walls are 10 course, 8” concrete blocks, there are 2 baths, a 30 gallon water heater, laminated plastic kitchen cabinets, a single compartment kitchen sink, gas heat and air, small windows, asbestos siding, small closets, and concrete steps to the outside doors. The overall house is in average condition but well maintained. What would be your determination of class after the inspection?

A

First, you determine class by inspection, not by pictures. Pictures give you an idea on the condition of the building, inspection tells you the construction. The house could still be a C class but you could adjust it down based on the some of the CD descriptions given.

77
Q

What is a duplex and how is it measured and valued?

A

Duplexes are single-family attached residences that are usually 2 units and are measured by the ground area and adjusted for story height. They are joined by a common wall. They are valued based on an outside unit by the actual total square foot of the units measured by Class.

78
Q

One of the properties you recently measured is a Bi-Level. Using a Class C vinyl house, what would be the square foot cost for 960 square feet? If the lower floor was almost all finished, how would you handle that?

A

Square foot cost would be $141.48 with no adjustments due to the lower level finish.

79
Q

In some of the influent areas of the State, you may find a Class A structure. What are you looking for to justify using this class?

A

An architecturally built house with excellent quality materials and workmanship. Many built-ins, special features both inside and out, plaster interiors, higher pitch roofs, many large windows, slate, ceramic tile and hardwood floors, higher basement ceilings, and hardwood cabinets in kitchen and baths.

80
Q

List the six classes of single family residences and give a brief description of each class.

A 
A – Architect built
B – Custom built
BC – Standard deluxe
C – Standard
CD – Tract typed
D – Economy
81
Q

How are sizes for rates computed for a single family home if there are mixed story heights? Give a short explanation using a house with part 1 story and part 2 story with each having 500 square feet on main floor area.

A

The total first floor area determines the size for rates. Example: house with part 1 story and part 2 story. 500 square feet of 2 story and 500 feet of 1 story. Total sizes for rates would be 1000 feet. Rates would be used for both would be under the 1000 square foot size as a 1 story and as a 2 story house. The 2 story square foot is multiplied by the 2 story rate and the area of the 1 story is multiplied by the 1 story rate to determine the non-depreciated reproduction cost of the house.

82
Q

Does it make a difference what type of garage is on a residential property? Why?

A

Yes. An attached garage would have a common wall or walls with the house that would be included in the sizes for rates for the house itself. The common wall(s) should be adjusted for (subtracted). A detached garage would be priced as a garage.

83
Q

What is living area? How is it computed?

A

Living area is the area computed using the exterior dimensions of the entire living area of the residence. It could be said it is the total of the main floor square footage. Living area contains all that is necessary to provide the owner with a residence.

84
Q

What are the methods available to compute the costs of commercial and industrial buildings? Give a brief description of the methods.

A

Calculator method – provides the average square foot costs for various classes, occupancy types and qualities of buildings, together with modifiers for common deviations from the descriptions of the typical buildings listed.
Segregated Cost Method – the first sections listed give the cost per square foot of the major building components. Unit in Place costs are provided for adjusting or building up component costs for and pricing miscellaneous items.
Comparative Cost Indexes – provides information in which known historical costs may be converted directly to present-day costs.

85
Q

How is ground area computed and why is it computed? What should be the final result of these calculations?

A

Ground area is computed by measuring all the exterior dimensions of the ground floor only, excluding the garage, to calculate the total square footage from these measurements. After adjusting for floor height, the final result is the total square foot of the residence along with a sketch of the property.

86
Q

Calculate the size for rate and the total square footage for the following example: (show all work). 20’ x 40’ 1 story over a slab, 34’2” x 40’ 2 story over a basement, 26’ x’24’ 1 story over a slab, 20 x 24 garage

A

40 x 20 = 800, 34 x 40 = 1360, 26 x 24 = 624 for a total of 2784, 2800 for size for rate. Square foot would be 2784 + 1360 for the 2 story = 4144

87
Q

List the five classes of construction used for commercial and industrial properties and give a brief description of the unique characteristics of each class

A

A – Fireproofed, protected structural steel frame welded, bolted or riveted together.
B – Reinforced concrete frame in which columns and beams can be either formed or precast concrete. It is a fire-resistant structure.
C – Have masonry or reinforced concrete construction. Wall may be load-bearing or non-bearing with open concrete, steel or wood columns supporting the floor. Class C Mill has thick masonry walls with heavy timer frames – usually found in older downtown sections of older cities.
D – Are made of combustible construction.
S – Are made of incombustible construction and prefabricated structural members

88
Q

Calculate the size for rate and the total square footage for the following example (show all work). 29’10” x 40’ 1 ½ story over a crawl, 20’ x 24’1” 1 story over a slab, 24 x 24 garage, 12 x 6 porch

A

30 x 40 = 1200, 20 x 24 = 480 for a total of 1680, 1700 for size for rate
Square foot would be 1200 x 1.5 = 1800 plus 480 = 2280 total square foot

89
Q

What are some of the typical items not included in the square foot costs used by the Calculator Method? Name at least 6.

A

Variations in heating and cooling, elevators, sprinklers, variations from the base story height, multiplier from the floor area/perimeter table, variation from base story height, basements, mezzanines.

90
Q

What is the class and square foot cost for an average large discount store constructed of brick with a steel frame? If the average square foot was 10,000 and the perimeter was 700 feet, what would be the floor area-perimeter multiplier?

A

Class C Average - $69.70 (VOL II CAL 360)

Floor Area-Perimeter - 1.054 (VOL II CAL 361)

91
Q

What is the class and square foot cost for a good dental office constructed of 2’x4’s with brick trim. Heat is package A.C. The story height is 8’. What would be the story height multiplier?

A

Class D Average - $155.45 (VOL II CAL 226)

Story Height Multiplier - 0.900 (VOL II CAL 227)

92
Q

What would be the class and square foot price of a 60 x 60 general purpose barn? Pole construction, inside is a dirt floor, open stalls, few electrical lights. What would be the floor area-perimeter multiplier?

A

Class D Pole, Low Cost - $13.75 (VOL I Pg. 225)

Floor Area-Perimeter Multiplier - 0.945 (VOL I 222)

93
Q

What would be the class, size for rate, and square foot price of an average sided one story duplex (two units) with a total of 800 square feet?

A

Class C

Sizes for Rates = 400 - $126.09 (VOL I Pg. 62)

94
Q

A property owner is building a new house on his lot and as of December 31st he has only finished enough of the house to have the rough inspections approved. The outside of the house looks done, but the inside is not completed. What percentage value would the house be at for the assessment roll? Hint: Volume I explains this

A

Plans .5%, plan check & permit 1.7%, survey .3%, water meter & temporary facilities .5%, sewer connection .5%, excavation, forms, concrete & backfill 10.2%, lumber, rough 9%, carpenter labor, rough 9.1%, Roofing 2.3%, exterior finish 5.9%, Sash, doors & shutters 3.3%, hardware, rough .3%, plumbing 5.4%, electrical 4.5%, heating 6.5% completed for 60%.

95
Q

What would be the class, ground floor area, size for rates and square foot price of a typical 2 story brick home on a crawl that has ½” drywall, painted, 2” x 4” studs, 16” on center, all carpeted except the kitchen and bath which have vinyl flooring, 100 amp electrical, and #235 asphalt shingles? The house measures 24’ x 60’.

A

Class C
24’ x 60’ = 1,440 sq. ft. ground floor area
Sizes for Rates 1450, $172.04 (VOL I Pg. 67)

96
Q

Not all commercial buildings fit the typical examples given in the calculator section of the manuals. Many have different kinds of heat. What is package heating and cooling? What is H.V.A.C.? What is warm and cool air? What are ducts?

A

Package heating and cooling is similar to warm and cool air except for the capacity and amount of ductwork involved.
H.V.A.C. stands for heating, ventilating and air conditioning.
Warm and cool air is generated at a main plant (furnace) and then distributed throughout a building by a duct systems. Ducts are enclosures for distributing warm or cool air.

Michigan Certified Assessing Officer (MCAO) (3 decks)

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