Chapter 21 Quiz

  1. The income apporach to value is most important in the appraisal of
    An office building
  2. In an old retail building, the following would most likely be a cause of incurable functional obsolescence?
    Closely spaced internal support columns
  3. The following are characteristics of value
    • Scarcity
    • Transferability
    • Utiltiy

    Obsolescense is not
  4. The expression "more buildings are torn down thatn fall down" refers to
    Functional and external depreciation
  5. An appraiser is responsible for
    Estimating Value
  6. The term depreciation refers to the
    Loss of value in real estate from any cause.
  7. When appriasing real estate, the first consideration of the appraiser should be the
    Highest and best use of the property
  8. The following would be classified as external depreciation
    Poorly maintained properties in the neighborhood
  9. The income approach as used by an appraiser make use of the following
  10. In the valuation of a large apartment complex, the most wetigh would be given to the
    Income approach to value
  11. In the cost apporach to value, the appraiser makes use of
    estimated replacement cost of the building
  12. The sales comparison apporach to value would be most inportant when estimating the value
    an existing residence
  13. In the income apporach, the appraiser make use of
    The capitalization rate.
  14. An appraiser who is using the sales comparison apporach to value woulduse all of the following comparable properties
    • A similar home that wsa sold over 6 months ago
    • A similar home that was sold recently but is located in another similar neighborhood.
    • A similar home that was sold recently but is located on a much larger lot
    • NOT a similar home that was sold by the owners who were undergoing a foreclosure.
  15. Using which approcach would require the value of the land to be calculated seperately from the value of the improvements?
    The cost apporach!
  16. Reconsiliations is best described as
    Analyzing the results obtained from the three apporaches to value
  17. A building is valued at $215,000 and contains four apartments that rent for $470 each per month.  The woner estimates that the net operating inclome is 65% of the gross rental receipts.  What is the capitalization rate?
    • 6.8%
    • $470 per unit/month x 4=1880x12=22,560
    • 22,560 x 65%=14,664=Net operating Income NOI
    • NOI÷cap rate = value  14, 664 ÷ $215,000=6.8%
  18. The steps in the appraisal process include all of the following
    • Gathering specific data on the subject property
    • Gathering genera; date for the area of subject property.
    • Applying the three approaches to value to the collected data.
    • NOT Considering the seller estimate of the property's value
  19. The gross rent muliplier is used as a guidleine for estimating value based on the
    Relationship of the sales prices to the rental income.
  20. Defined as a loss in value from any cause, depreciation is generally divided into three catagories.  The loss of value due to normal wear and tear on a property is called
    Physical Deteriration
  21. To find the calue of a property using the inclome approach to value, if the net operating income and the CAP rate are known, the appraiser would
    Divide the net operationg income by the CAP rate.
  22. An appriaser has been employed to estimate the market value of a parcel of vacant land.  The resulting appraisal would include reference to all of the following
    • The highest and best use of the parcel
    • THe most probable price the parcel will bring
    • The physical dimensions of the parcel
    • NOT the listed price of the parcel
  23. When appraising a commercial property, the appraiser is MOST concerned
    Income generated by the property
  24. It is necesssary to calculate a dollar value for depreciation when using which of the following?
    The cost approach
  25. In the appriasal of an office building, whick of the following would be classified as external depreciation?
    A law requirinf rhw building to be retrofitted with fire sprinklers
  26. The period over which improvement to the property will contirbute to it's value is known as its
    Economic life
  27. The following is considered specific data
    Dimensions of the subject property
  28. When estimating the cvalue of the propert using the cost approach, the following would be cinsidered by the appraiser
    • Estimated loss attributable to an outdated heating system
    • Qaulitiy of materials and workmanship in the origional structure
    • Excessive amount of traffic noice outside the property.
    • NOT the loss of value due to uncollected delinquent rent
  29. The market price of real estate is generally the
    Sales Price
  30. Reconciliation is an appriasal term used to describe
    The appraiser's analysis and comparison of the results of each appraisal approach
  31. 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 apporach to value would the appraiser most rely on?
    The income approach
  32. A house with outmoded plumbing is suffering from
    Functional Obsolence
  33. By today's standards, a four-bedroom house with one bathroom wold be considered
    Functially obsolete
  34. In the cost approach, an appraiser uses which of the following
    An estimate of the building's replacement cost
  35. In the income apporach, which of the following is considered when calculating the next operating income
    • Real Estate Taxes
    • Managment fees
    • Utilities
    • Not Debt service.
Card Set
Chapter 21 Quiz
Chapter21 Quiz