Real Est App Flashcards by Sheila Garner

___________________ are exercises in applied economic analysis and require the use of logical, systematic methods
for the collecting, analyzing and processing of data to produce supportive, well documented value estimates.

a. Single‐property appraisal
b. Mass appraisal
c. Both single‐property and mass appraisal
d. None of the above
2/5/2013

c. Both single‐property and mass appraisal

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The scope of work rule has three parts and they are:
1. ________________________
2. ________________________
3 _________________________

The scope of work rule has three parts and they are:
1. Identify the problem to be solved
2. Determine and perform the scope of work necessary to develop a credible assignment
3 Disclose the scope of work in the report

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An appraiser must do which of the following for each
appraisal:
a. Identify the problem to be solved
b. Determine and perform the scope of work necessary to develop creditable assignment results
d. Disclose the scope of work in the report
d. All of the above

d. All of the above

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A similarity between single property appraisal is:

a. Statistical quality control procedures
b. Emphasis on standardization
c. Use of valuation schedules, tables, and formulas
d. Use of the same approaches to value

d. Use of the same approaches to value

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The first step in the appraisal process is problem identification (also know as defining the valuation problem). Which of the following is not part of the problem identification process:

a. Define the value to be developed
b. Competitive properties
c. Date of value
d. Identify limiting conditions or limitations

B Competitive properties

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As used in mass appraisal, a basic gross incomemodel is expressed as:

a. NOI x OAR
b. GI x GIM
c. NOI / OAR
d. GI / GIM

b. GI x GIM

v
———
I x F

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As used in mass appraisal, a net gross income model is expressed as:

a. NOI x OAR
b. GI x GIM
c. NOI / OAR
d. GI / GIM

c. NOI / OAR

v -----------  I  x R

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Real estate prices are a function of supply and demand factors operating simultaneously within a market. The _____________
factors relate to availability, ____________ factors include such things as condition, size and location.
a) Supply – supply
b) Demand – demand
c) Demand – supply
d) Supply – demand

d) Supply – demand

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Which of the following distinguish the batch procession method of file updating:

a. Data is keyed to a temporary “hold” file
b. Files are updated directly in real time
c. Edits are built into data entry programs and reported
immediately
d. Master files are updated after each record is keyed and
errors resolved (records are processed one by one)

a. Data is keyed to a temporary “hold” file

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A reappraisal should begin and end with:

a. Planning and organizing
b. Ratio Study
c. Analysis of available resources and appraisal procedures
d. Pilot Study

A reappraisal should begin and end with:

b. Ratio Study

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Data quality reviews, data distributions (i.e. ‐frequency distributions), market patterns (i.e. scatter diagrams, and time trends are part of what component of a mass appraisal system.

a. Model development
b. Data collection and maintenance
c. Model application review and reconciliation
d. Exploratory data analysis

d. Exploratory data analysis

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Which is not part of the model development:

a. Specification
b. Calibration
c. Final value determination
d. Quality assurance

Which is not part of the model development:

c. Final value determination

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In data collection and maintenance, market data involves:

a. Cost data
b. Sales data
c. Income data
d. All of the above

d. All of the above

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A data edit where the number of rooms is less that the number of bedrooms or the total number of rooms is less than the number of bathrooms is a:

a. Hard edit
b. Range edit
c. Consistency (logic) edit
d. None of the above

c. Consistency (logic) edit

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Five appraisers are available to field canvass 4800 parcels. Each appraiser
can work 15 parcels per day, on average. How many days will it take to complete the field canvass?

a. 64
b. 160
b. 32
c. 84

Determine how many parcels can be
inspected per day by total staff
• Then divide that number into total
parcels to be inspected
• This equals to days to complete
• 15 appraisals per day X 5 appraisers =
75 4800 parcels to do divided (/) by 75
per day = 64 days to complete

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A corner lot (yes/no) or a swimming pool (yes/no) are examples of
what type of variable
a. A binary variable
b. A discrete variable
c. A continuous variable
d. A quantitative variable

a. A binary variable

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A qualitative discrete variable is:

a. Heating type
b. Number of baths
c. Garage size
d. Construction grade

d. Construction grade

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What is the third quartile of the following garage size data:

234 322 400 440 476
240 350 400 448 504
286 675 418 456 560
302 380 440 460 640
a. 448
b. 456
c. 459
d. 460
2/5/2013 35

Percentile
K= (p)(n) + p
K= .75 (20) + .75 = 15.75
Observation 15 in array is 456 #
Observation 16 in array is 460#
Difference 460 – 456 = 4
4 x .75 = 3
Third Quartile = 456 + 3 = 459
2/5/2013 36

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The most common measure of dispersion is:

a. Mean
b. Weighted Mean
c. Median
d. Standard Deviation

d. Standard Deviation

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A logical step of dividing data into class intervals is:

a. A histogram
b. A data array
c. A scatter diagram
d. All of the above

A histogram

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Scatter diagrams show the relationship between ___________ variables.

a) Binary and independent
b) Dependent and independent
c) Discrete and independent
d) None of the above

b) Dependent and independent

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What can be used to show several variables simultaneously or the same
variable for different strata:
a. Scatter diagrams
b. Polygons
c. Histograms
d. Cross tabulations

b. Polygons

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As used in data analysis which is not a feature of box‐plots:

a. Shows distribution of continuous and discrete variables
b. Represents the inter‐quartile
range (ICR)
c. Cases beyond the “whiskers” are outliers and extreme outliers
d. Indicates a normal
distribution of the data

d. Indicates a normal distribution of the data

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A ____________ is a graphical representation of a frequency distribution.

a. Histogram
b. Pie chart
c. Polygon
d. Scatter diagram

Histogram

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What is the standard deviation of the ages of 5 homes. The ages of the homes are 13,15,22,40 and 50 years old . a. 5.6 b. 7.9 c. 11.1 d. 16.3

d. 16.3

The relationship between the variables, construction grade and neighborhood , would best be illustrated by a: a. Scatter diagrams b. Frequency distribution c. Histograms d. Contingency table

d. Contingency table

A good way to show the distribution of qualitative variables is: a. Cross‐tabulation b. Histograms c. Polygons d. Scatter diagrams

a. Cross‐tabulation

The relationship between sale price and construction quality in each of three neighborhoods would best be illustrated by a: a. Pie chart b. Cross tabulation c. Histograms d. Line chart

d. Line chart

A sales ratio analysis conducted for Area A reveals a 76% level of appraisal. The target area of Area A is 95%. The sales ratio analysis also indicated that values are fairly uniform in the area. The assessor wishes to update values by the use of a trend factor. Given the above data, what is the appropriate trend factor? a. .80 b. 1.02 c. 1.25 d. 1.025

c. 1.25 Trend Factor = Target Level / Current Level Trend Factor = .95/.76 = 1.25 This is a 25% increase

The best (preferred) method for developing an adjustment to a sales price for financing is: a. Determine the value of non‐market financing and adjust sales price b. Reject the sales as non‐useable c. Use without adjustment d. None of the above

a. Determine the value of non‐market financing and adjust sales price Methods of adjustment • Determine value of non‐market financing adjust the sales price ( preferred –best‐ method); OR • Apply percentage adjustments based on type of financing or property type (preferred to doing nothing or rejecting sales).

An adjustment to a sales price for financing should NOT be considered when: a. Buyer assumes an existing mortgage b. Buyer pays points c. Buyer assumes an existing lease d. Seller pays points

b. Buyer pays points

The most common method of estimating cost in mass appraisal is: a. Quantity survey method b. Comparative unit method c. Trended original cost method d. Unit‐in‐place method

Comparative unit method ``` Most common method in mass appraisal. • Tends to produce replacement costs • Adjustments are made for differences from base specifications. • All costs expressed as # • One base rate is developed for each building class • # costs obtained from outside source or developed in house • Costs arrayed in schedules and indexed by bldg. type, Size, etc. • Costs schedules can be expressed as formulas – lump sum adjustments for items not included in comparative # rate – these adjustments may come from unit in place method. 2/5/2013 82 ```

The most detailed method of estimating cost is: a. Quantity survey method b. Comparative unit method c. Trended original cost method d. Unit‐in‐place method

a. Quantity survey method ``` A complete itemization of cost for each building component and sub‐component. • Indirect cost estimated separately • Tends to produce reproduction cost. • Limited in mass appraisal • Method requires detailed knowledge of construction and familiarity with local labor laws and work rules ```

As used in mass appraisal, the Trended Original Cost Method is best used for: a. Appraising unique properties b. Validating cost estimates produced by other methods c. Effective of new construction where trend factors are small d. All of the above

d. All of the above An index of historical costs to current costs • Tends to produce reproduction cost

``` As used in mass appraisal, the Unit‐in‐Place Cost Method is best used for: a. Develop benchmark costs b. Adjust for non‐standard features c. Appraise unique properties d. All of the above ```

d. All of the above ``` Estimate costs of each major building component on a per unit basis Horizontal Cost Components (per # basis) Floors Roofing Foundation Electrical system, Etc. Vertical Cost Components (per linear foot) Exterior walls Interior partitions Etc. Lump Sum Items (handled separately) Water heaters Fireplaces Etc. 88 ```

You have the historical cost of a building and want to trend it to current cost. The cost factor table you are using is based on 1960 = 100. The cost factor for the original cost is 150. The current cost factor is 180. What is the appropriate factor for trending the historical cost to current? a. 120% b. 150% c. 180% d. None of the above

. 120% To develop a trend factor from cost table indexes ‐ used to bring an original cost to current. Trend Fac. = current cost fac./original cost fac. 180/150 = 120%

Desirable Features to consider when acquiring a cost manual is (are) : a. Applicability to most building types b. Clear, well‐ illustrated and easy to use c. Easy to update d. All of the above

d. All of the above

In acquiring a cost manual, possible sources are: a. Commercial cost services b. Mass appraisal companies c. State agencies or develop In‐house (based on local costs) d. All of the above

d. All of the above

You have a current cost of a building of $200,000. You review the cost manual and the current cost factor is 180. The cost factor for three years ago is 150. The cost factor table you are using is based on 1960 = 100. What would the building cost for this building three years ago? a. 360,000 b. 300,000 c. 240,000 d. 166,600

d. 166,600 A factor can be developed from cost table indexes, to adjust original current cost back to some time in the past. • Factor = original cost factor/ current cost factor • 150/180 = .833 • Bldg. Cost 3 yrs. ago = .833 X 200,000 = 166,600

In mass appraisal, cost models follow the structure of: a. Hybrid (generic) b. Additive c. Multiplicative d. None of the Above

a. Hybrid (generic) ``` Cost models follow the structure of generic (hybrid) models: MV = GQ * (PI * QI) + (PL * QL) + OA ```

``` Mass appraisal cost models contain both direct and indirect costs. An example of a direct cost would be: a. Building permits b. Insurance c. Taxes d. Construction supervision ```

d. Construction supervision

The model is the most flexible model structure, but it is the most difficult to calibrate. a. Hybrid (generic) b. Additive c. Multiplicative d. None of the Above

a. Hybrid (generic) Note: The generic model is also termed a "hybrid" model because it combines both the additive and multiplicative structures. GQ items are expressed as factors or multipliers.Neighborhood factors are the prime example. Improvementrelated items include building, garage, and basement areas, fireplaces, baths, and so on. Each is multiplied by a price or rate, which may be modified based on building condition, etc. Land areas are multiplied by land rates, which may be adjusted for traffic, shape etc. The generic is the most flexible model structure; however it is the most difficult to calibrate. In each model, the dependent variable is value and the independent variables are property characteristics

One of the strengths of “feedback” is that it: : a. Produces separate land and building values b. Requires adequate sales c. Produces poor values when data is incorrect d. Does not use a standard algorithm

a. Produces separate land and building values

The following equation: MVs = GQ*(P1*Q1) + (PL*QL) + OA is a ____________ model? a. Multiplicative b. Generic Hybrid c. Simple additive d. None of the above

b. Generic Hybrid

One of the limitations to multiple regression analysis is that it: a. Is directly rooted in the market b. Does not produce separate land and building values c. Contains effective diagnostics for evaluating model accuracy d. Requires less detailed data than the cost approach

B. Does not produce separate land and building values

Additive models for the sales comparison approach assumes that the impact of property characteristics upon value is _________ and therefore can be added. a. Interactive b. Independent c. Multiplicative d. None of the above

b. Independent Mass Appraisal Model Structures: Additive model MVS = bO + (b1 * X1) + (b2 * X2) + (b3 * X3) ``` Additive models assume that the impact of property characteristics upon value is independent and therefore can be added ```

Per unit value analysis requires the stratification of properties, the calculation of appropriate units of comparison and the selection of the most appropriate unit based on: a. Premium influence centers b. Negative influence centers c. Measures of central tendency and dispersion d. A selected sample from each strata

c. Measures of central tendency and dispersion Note: Use per unit values ‐ calculate measures of central tendency (median and mean) and measures of dispersion (coefficient of dispersions and standard deviation) to choose best per unit value

``` MV = b0 + (b1 * X1) + (b2 * X2) + (b3 * X3) ... is known as the _______ model. a. Additive b. Multiplicative c. Generic (hybrid) d. Simple ```

a. Additive Mass appraisal model structures can be divided into three basic types: hybrid (generic), additive, and multiplicative. Different tools are used to calibrate each. Simplified terminology is used in Course 300. However, full terminology is used in later courses. Note: Additive models assume that the impact of property characteristics upon value is independent and therefore can be added

MV = GQ * (PI * QI) + (PL * QL) + OA ... is known as the model. a. Additive b. Multiplicative c. Generic (hybrid) d. Simple

.C. Generic (hybrid)

The trial and error process for quantifying the relationship between dependent (sale price) and independent variables (property characteristics) is the a. Multiple Regression Analysis (MRA) b. Adaptive Estimation Feedback (AEP) c. Automated Comparable Sales d. Comparable Sales Approach

b. Adaptive Estimation Feedback (AEP)

Adaptive Estimation Procedure (AEP) operates by: a. Minimizing the squared errors b. Finding the most comparable sales c. Adjusting to information gained as sales are sequentially considered and reconsidered d. Developing smooth and consistent location adjustments

c. Adjusting to information gained as sales are sequentially | considered and reconsidered

In stratification and location analysis, Location Value Response Service Analysis (LSRSA) is a technique: a. that involves the study distances from value influence centers b. where market boundaries are less “choppy” – in the “low” area c. that requires a Geographic Information System (GIS) that can help develop a location adjustment to be used for modeling d. All of the above

d. All of the above

``` Which is a not a strength of multiple regression analysis (MRA) a. Plentiful software b. Rich diagnostics c. Directly rooted in the market d. Can calibrate generic models ```

c. Directly rooted in the market

Which is not a strength of Adaptive Estimation Procedure (AEP) operates by: a. Directly rooted in the market b. Requires less detailed data than the cost approach c. Produces separate land and building values d. Limited software

d. Limited software

Which is not a strength of Adaptive Estimation Procedure (AEP): a. the values are directly rooted in the market b. there is no standard algorithm c. Requires less data that cost approach d. Produces a separate land and building value

b. there is no standard algorithm

Which is an advantage of the Automate Comparable Sales algorithms is: a. the values are not directly rooted in the market b. the values are not based on a standard equation or table c. the user can specify variables used to determine comparability d. The approach is conceptually different from the traditional sales comparison approach

c. the user can specify variables used to determine comparability

Cluster analysis a method of: a. a method of addressing location b. the values are not based on a standard equation or table c. a method of grouping homogeneous groups of properties based on selected characteristics d. finding and computing distances from value influence centers approach

c. a method of grouping homogeneous groups of properties based on selected characteristics.

The most common approach to stratification in mass appraisal modeling is: a. Cluster analysis b. Global model with location adjustments c. Location Value Response Surface Analysis (LVRSA) d. Geographic stratification

d. Geographic stratification Geographic Stratification • County or jurisdiction subdivided into: Market Areas – broad geographic areas subject to the same economic influences Sub Areas or Neighborhoods – usually clusters of similar subdivisions • Boundaries should be drawn to correspond with physical or political boundaries. Note: This is the most common approach in mass appraisal to stratification

The structure of a net income model would be: a. MV = GI x GIM b. MV = NOI x OAR c. MV = GI ÷ GIM d. MV = NOI ÷ OAR

d. MV = NOI ÷ OAR

The structure of a gross income model would be: a. MV = GI x GIM b. MV = NOI x OAR c. MV = GI ÷ GIM d. MV = NOI ÷ OAR

a. MV = GI x GIM

In the income approach, modeling of income and expense can be helpful in valuation. If we were developing an overall expense model, the __________ variable would be the overall expense ratio and the ____________ variables should be property characteristics important for determining expense ratios. a. Multiplicative ‐ additive b. Additive ‐ multiplicative c. Independent ‐ dependent d. Dependent ‐ independent

d. Dependent ‐ independent

Real Est App Flashcards

Flash Cards Course 300 (61 cards)