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The income apporach to value is most important in the appraisal of
An office building
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In an old retail building, the following would most likely be a cause of incurable functional obsolescence?
Closely spaced internal support columns
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The following are characteristics of value
- Scarcity
- Transferability
- Utiltiy
Obsolescense is not
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The expression "more buildings are torn down thatn fall down" refers to
Functional and external depreciation
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An appraiser is responsible for
Estimating Value
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The term depreciation refers to the
Loss of value in real estate from any cause.
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When appriasing real estate, the first consideration of the appraiser should be the
Highest and best use of the property
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The following would be classified as external depreciation
Poorly maintained properties in the neighborhood
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The income approach as used by an appraiser make use of the following
Capitalization
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In the valuation of a large apartment complex, the most wetigh would be given to the
Income approach to value
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In the cost apporach to value, the appraiser makes use of
estimated replacement cost of the building
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The sales comparison apporach to value would be most inportant when estimating the value
an existing residence
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In the income apporach, the appraiser make use of
The capitalization rate.
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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.
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Using which approcach would require the value of the land to be calculated seperately from the value of the improvements?
The cost apporach!
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Reconsiliations is best described as
Analyzing the results obtained from the three apporaches to value
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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%
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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
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The gross rent muliplier is used as a guidleine for estimating value based on the
Relationship of the sales prices to the rental income.
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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
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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.
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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
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When appraising a commercial property, the appraiser is MOST concerned
Income generated by the property
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It is necesssary to calculate a dollar value for depreciation when using which of the following?
The cost approach
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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
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The period over which improvement to the property will contirbute to it's value is known as its
Economic life
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The following is considered specific data
Dimensions of the subject property
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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
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The market price of real estate is generally the
Sales Price
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Reconciliation is an appriasal term used to describe
The appraiser's analysis and comparison of the results of each appraisal approach
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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
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A house with outmoded plumbing is suffering from
Functional Obsolence
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By today's standards, a four-bedroom house with one bathroom wold be considered
Functially obsolete
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In the cost approach, an appraiser uses which of the following
An estimate of the building's replacement cost
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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.
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