Real estate Appraisal questions

When using the market data approach, which is TRUE?

Adjustments are made to the comparables to reflect differences between the subject property and the comparable properties on the days they sold.

The rule on making adjustments in the sales comparison approach to value

Always adjust the comparable to the subject

A defensible opinion or estimate of value of real property as of a certain date is known as a(n)

An appraisal is a defensible opinion or estimate of value of real property as of a certain date.

An increase in the value of property, either due to positive improvements in the area or elimination of negative factors, is called

Appreciation key word appreciation refers to an increase in the value of property (either due to positive improvements in the area, or elimination of negative factors).

Situs can best be defined as

Area of preference

The Process of converting expected future net income into value is called

Capitalization

The period of time in which a building produces income attributable to the structure itself is its

Economic life

Which type of income is calculated by subtracting a figure for vacancy and collection losses from the gross income?

Effective gross income is gross income minus a figure for vacancy and collections.

Which type of income is calculated by subtracting a figure for vacancy and collection losses from the gross income?

Effective gross income is gross income minus a figure for vacancy and collections. EGI is used.

Which type of income is used to determine a property's gross rent multiplier?

Gross income

In the income approach to the value of a single family residence, the number which reflects the ratio between the sales price and its monthly unfurnished rental value is called the

Gross rent multiplier

The income approach on a single-family rental property would use which technique?

Gross rent multiplier (GRM)

Which approach to appraisal is best for apartment buildings?

Income

Income capitalization is most likely to be used when the subject property is a

Income capitalization is used on large income-producing properties. The formula is: Net Income / Rate of Return = Value.

A home with a basement wall that is failing is best described as suffering

Major structural problems usually cannot be fixed at any cost that makes economic sense; this is incurable physical deterioration.

The sale price is always

Market Price

Which income is calculated by subtracting vacancy and collection losses and expenses from gross income?

Net income is the income after expenses and is used in the capitalization method. Effective gross income is gross income minus a figure for vacancy and collections.

Which income is calculated by subtracting vacancy and collection losses and expenses from gross income?

Net income is the income after expenses and is used in the capitalization method. Its net income.

The sales Comparison approach is especially applicable in appraising

Single family residences

Demand, utility, scarcity, and value (think D U S T) are the features of value.

Something is guaranteed to have value if

A method of appraisal based on "replacement cost - depreciation + land value" is known as the

The Cost approach

The income cap technique uses

The income cap technique uses annual net income. Annual gross income is the total income. Net income is income minus expenses.

The income cap technique uses

annual net income

An expensive home in a development of less expensive homes suffers from

economic obsolescence

Which type of income is calculated by subtracting a figure for vacancy and collection losses from the gross income?

effective gross income

Reproduction is

is the cost to build an exact replica it relates to the structure

The income approach on a single-family rental property would use which technique?

its the Gross rent multiplier (GRM) is best used on smaller income-producing properties. Comparable's rent divided by comparable's value = gross rent multiplier. If all that is known about the subject is how much rent it brings, one can take the gross rent multiplier and multiply it by the subject rent and it should give the value.

Which income is calculated by subtracting vacancy and collection losses and expenses from gross income?

net income

Replacement is

relates to the propertys use

Which is typically used on a market value appraisal?

replacement cost, obtained by estimating the depreciated cost of improvements with similar utility to the subject