Procedures Flashcards
T/F The effective date of the valuation must be the date on which the appraiser inspected the subject property?
False
An assignment-specific assumption, as of the effective date, which if found to be false, could alter the appraiser’s opinions or conclusions is the definition of
Hypothetical Conditions
What is the fist step of the valuation process?
Define the problem
What is the final step in the valuation process?
Report the final opinion of value
What appraisal term is defined as “the type of data and the extent of research and analyses”
Scope of Work
T/F Real Property appraisal reports may be written or oral
True
An appraisal report must contain sufficient information to allow ________ to understand the scope of work
Intended Users
In the highest and best use analysis, which criterion is applied last?
Maximally Productive
The scope of work rule says “the appraiser must be prepared to demonstrate that the scope of work is sufficient to produce
credible assignment results
An appraiser encounters an underground storage tank. If there is no evidence of any observable leak, the appraiser could indicate a value opinion based on the _______ that the tank is not leaking
Extraordinary Assumption
Documentation necessary to support an appraiser’s analyses, opinions, and conclusions” is the definition of
Work-file
Which would not be a sub-step in defining the problem?
Highest and Best Use
A 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 a _______ in this appraisal
hypothetical condition
The objective for an assignment is its
Purpose
What is the last step in the valuation process?
Report the final opinion of value
The effective date of value can be
a present, past, or future date
T/F General data tends to influence all properties in an area equally
True
When completing an appraisal assignment, comparable sales information that the appraiser gathers would be considered _______ data
specific
T/F Government data sources for general data are found on a national level only
False
Professional or trade associations offering general data include all of the following except
Federal Emergency Management Agency
FEMA stands for
Federal Emergency Management Agency
T/F Census Tract Number can be found on a deed?
False
In residential mortgage lending appraisals, it is more common for lenders and AMCs to ask for what?
Aerial map
Is Zone C a Special Flood Hazard Area on a FEMA Map?
No, Zones A and V are
Google can give you
both street maps and aerial maps
Local and regional multiple listing services typically concentrate on
Single Unit Residential
The largest repository of demographic information in the US is the
Census Bureau
T/F Lot Size is considered Specific Data?
True
It is common in appraisal reports to include a map that shows the location of the
Subject Property and comparable sales
You can obtain topographic maps from
Topozone
Multiple Listing Services can be utilized for gathering
both general and specific data
Who is the best source for traffic count information
Department of Transportation
T/F the difference between land and site is that land is improved while site is not
False
T/F Condemnation appraisals often require an appraiser to develop a separate opinion of site value
True, separate site valuations are often required in assessments and taxation, condemnation appraisals, highest and best use analysis, and other situations
A parcel of raw land has been improved so that it is ready to be used for a specific purpose, the land has now become
a site
The most commonly-used land appraisal report form
is a generic form
T/F A postal mailing address is equivalent to a legal description?
False
A rectangular parcel of land has 114 frontage and is 222 deep. It sold for $280,000. What did it sell for per front foot?
$2456
T/F In the sales comparison method, quantitative adjustments are based on dollars, while qualitative adjustment are based on percentages?
True, when utilizing sales comparison, adjustments to the comparable sales may be made either on a quantitative or qualitative basis, quantitative adjustments are usually made on a percentage or dollar basis
A property sold for $120K. An old building on the property has a cost new of $300K and is 75% depreciated. What is the indicated site value by extraction?
$45,000
300,000 * .75 = 225,000
300,000-225,000 = 75,000
c120,000 – 75,000 = 45K
The subdivision development method of land valuation is a variation of ___________
Discounted Cash Flow Analysis, (the subdivision development method is a variation of a discounted cash flow analysis. It involves complex calculations over a future time frame and then discounts projected income and expenses back to present worth estimates
Another name for the extraction method of site valuation is
Abstraction
An improved property has a net operating income of $75K. The appraiser estimates that $61K of the income is attributable to the building. The land capitalization rate is 8%. What is the estimated land value?
$175,000 (75,000-61,000 = 14,000 income attributable to the land. 14,000/0.08 = $175,000
Which method of site valuation is based on a typical ratio of land value to total property value
allocation
Developers usually value land on a basis of price per
buildable units
Tax rate per 1000 in a city is $12.80. If the taxes are $1,984 what is the properties assessed value?
$155,000 (1984/12.80=155x100 = 155,000
A commercial site currently rents for $4k per month, the applicable land capitalization rate is 6%. What is the value of the site by the ground rent capitalization method?
$800,000
The most common source of brownfield contamination is
petroleum
Which type of valuation would typically include a separate site valuation?
taxes and assessment, cost approach, highest and best use
The summation approach is another name for the ________ approach
Cost
The ________ method has good application in valuing land in rural areas and in older, urban areas
Extraction
Which of the following is a technique for site valuation?
Subdivision development, sales comparison, and allocation
Fannie Mae states that in calculating the gross living area of a detached home, an appraiser must use ________ measurements
exterior
T/F Modular homes have no permanently attached tags or labels that ID them as modular homes
True
A bilevel home is also often referred to as a ______ home
split entry
The ________ area of the site is used for family activities and if often found in the _______ yard
private, rear
Footings should be at least ________ average frost penetration levels
one foot below
In framing, _________ are constructed above window and door openings
headers
A monolithic slab on grade foundation
is essentially one giant footing
In modern construction, the most common subflooring material is
plywood or OSB board
Which of these is not a disadvantage of hot water heat?
It is inefficient and creates drafts and dust
An inch of plywood has an R-factor of
1
In a home’s plumbing system, grey water comes from
sinks and laundry
In electricity, voltage measures _______ while amperage measures __________
pressure, volume
T/F Heat pumps are essentially reversible air conditioners
True
Which is not a purpose of sheathing in new construction?
Provide decorative detail
A __________ home has a permanent steel chassis, wheels and axles
manufactured
When calculating gross living area, you would not include
covered porches
The difference between the cost of an improvement and its market value on the effective date of the appraisal is
depreciation
T/F if the sales comparison approach cannot be developed because of a lack of sales data, the cost approach cannot be developed either?
False
T/F if appraising something other than fee simple interest, an appraiser can make an adjustment to the indicated value by cost approach in order to reflect the value of the property interest being appraised?
True
T/F the cost approach is most applicable in situations where the site value is not well-supported
False
The most common unit of construction cost in residential properties is cost per
Square Foot
Most fire and casualty insurance policies are based on the _________ cost of a structure
replacement
Financing costs and marketing costs necessary to achieve occupancy are examples of _______ costs
indirect
T/F Cost estimating services do not include an allowance for entrepreneurial profit or incentive
True, if you use a cost service such as Marshall & Swift, entrepreneurial incentive or profit will not be included. Cost services include direct and indirect costs in their cost figures – but will NOT include entrepreneurial profits or incentives
With regard to electricity, voltage is equal to
pressure
A factory-built house constructed in compliance with the standards of the applicable regional, state, or local building code is a ________ home
modular
According to the EPA, _________ are the “most energy efficient, environmentally clean, and cost effective space conditioning systems available
geothermal heat exchange systems
Which is the most recent type of construction materials?
floor trusses
Which type of foundation wall would use a keyway in its construction?
poured concrete
________ are used to anchor the sill plate to the foundation
J-bolts
Which is not true of early pipe-less furnaces?
They were not very efficient
________ is not a source of grey water in a house
a toilet
Gross living area should not be include:
a basement family room
Which of these is NOT one of the traditional cost estimating methods?
Direct-indirect, unit-in-place, comparative-unit, quantity survey
The unit-in-place method is sometimes called the _________ method
segregated cost
When using Marshall & Swift, adjustments need to be made for construction costs in various locations of the country, this is accomplished through use of
Local Multipliers
With Marshall & Swift, you can produce a cost estimate using the
comparative unit or unit-in-place method
Another name for soft costs is
indirect costs
All of the following are situations where the cost approach has good applicability, except for
the improvements do not represent the highest and best use of the land as if vacant
If a cost manual is used the result is ________ cost
replacement costs
Expenditures for the labor and materials used in the construction of improvements is the definition of
direct costs
Most fire and casualty insurance is written to pay an amount equal to the _______ cost of the structure
replacement
A property has a cost new of $345,000, site value of $90,000, and accrued depreciation of $75,000. What is its value by the cost approach?
$360,000
The simplest, quickest, and least accurate method of estimating costs is the _________ cost
comparative-unit
Appraisal, accounting, and legal fees are examples of ________ costs
indirect
A house contains 2,312 square feet. It was constructed in 2009 at a cost of $72.32 per SF. The cost index at that time was 201.4 and the cost index today is 265.8. What is the estimated cost to build the building today? (Round the index to 2 decimal places)
$220,709
Which would NOT be a typical source of building costs for an appraiser?
the property owner
The basic principle underlying the cost approach is the principle of
substitution
The oldest of the three traditional appraisal approaches is the _____ approach
cost
What type of depreciation is generally considered to be incurable
External Obsolescence
A 10 year old house will always experience
physical deterioration
Physical deterioration is best described as
wear and tear
T/F External obsolescence can be shared between building and land?
True, in most cases the loss of value will be shared by both land and building components
T/F A building may be obsolete and valueless even though it is still standing and is physically sound
True
The period over which improvements to real estate contribute to real property value is the definition of
economic life
