National Valuation

A 20-unit apartment building rented for $750 per unit, per month. The annual Gross Income Multiplier was 9. What is the value of the property? $135,000 $1,350,000 $1,800,000 $1,620,000

$1,620,000 750 x 20 = 15,000 15,000 x 12 = 180,000 180,000 x 9 = 1,620,000

A school district's tax rate is 10 mills. The school district's required revenue from taxes is $1,000,000. What is the tax base of the area? $1,000 $1,000,000 $10,000,000 $100,000,000

$100,000,000 .10 x 1,000,000 = 100,000 100,000 x 1,000 = 100,000,000

A building has a potential gross rental income of $145,000 with vending receipts of $5,000 and a vacancy rate of 5%. The annual expenses of the building are $15,000 in taxes, insurance $4,000, maintenance $10,000, utilities $6,000, repairs $3,500, legal fees $1,500, management fees @ 4% of Effective Gross Income. What is the Effective Gross Income of the property? $135,000 $142,750 $145,000 $162,000

$142,750 145,000 x .05 = 7,250 145,000 - 7,250 = 137,750 137,750 + 5,000 = 142,750

A property valued at $340,000 has a Gross Rent Multiplier of 148. What is this property's monthly income? $2,297 $4,352 $3,627 $4,298

$2,297 340,000/148 = 2,297.297 = 2,297

A new home sold for $350,000. The tax rate is $.825 per hundred or fraction thereof. How much will the annual taxes be on this property? $287.00 $287.50 $2,887.00 $2,887.50

$2,887.50 350,000/100 = 3,500 3,500 x .825 = 2,887.50

A scale drawing shows a room to be 3 inches by 4 ½ inches. Carpet is $15 per square yard is to be installed in the room. If the scale is 1 inch to 4 feet, how much would it cost to install the carpet? $120 $202 $360 $3,240

$360 3" = 12' 4.5" = 18' 12 x 18 = 216 216/9 = 24 24 x 15 = 360

A property's land-to-improvements value ratio is 20% - 80%. The property was purchased 10 years ago, and depreciation has averaged $1,200 per year on the 3,000 SF house. If the improvements were built @ $120 / SF what is the current value of the property using the cost approach? $360,000 $420,000 $438,000 $450,000

$438,000 120 X 3,000 = 360,000 360,000/.8 = 450,000 450,000 - 360,000 = 90,000 (land value) 1,200 x 10 = 12,000 360,000 - 12,000 = 348,000 (building value) 348,000 + 90,000 = 438,000

An office building has a Potential Gross Income of $12,600 per year. The vacancy rate is 5% and the annual expenses are $3,600. What is the market value if the capitalization rate is 12%? $15,120.00 $69,750.00 $99,750.00 $105,000.00

$69,750.00 12,600 x .05 = 630 12,600 - 630 = 11,970 11,970 - 3,600 = 8,370 8,370/.12 = 69,750

An income producing property rents for $1,000 per month and the GRM is 84. What is the estimated market value of the property? $325,000 $55,600 $84,000 $1,008,000

$84,000 84 x 1,000 = 84,000

An apartment building contains twenty units. Each unit rents for $900 per month. The vacancy rate is 5%. Annual expenses are $17,500 for maintenance, $7,200 insurance, $7,500 taxes, $6,400 utilities, $7,500 mortgage debt and 10% of the gross effective income for the management fee. What was the investor's rate of return for the property if she paid $1,170,000 for the property? 7.6% 8.9% 12.48% 22.05%

12.48% 900 x 20 = 18,000 18,000 x 12 = 216,000 216,000 x .05 = 10,800 216,000 - 10,800 = 205,200 205,200 x .10 = 20,520 205,200 - 17,500 - 7,200 - 7,500 - 6,400 - 20,520 = 146,080 146,080/1,170,000 = 0.1248 = 12.48% *DO NOT INCLUDE MORTGAGE DEBT

A home recently sold for $360,000 with an monthly rental income of $3,000. Find the Gross Rent Multiplier for the property. 15 120 25 30

120 360,000/3,000 = 120

An acre contains: 3840 square feet. 6490 square feet. 34,875 square feet. 43,560 square feet.

43,560 square feet.

A property valued at $150,000 earns $750 per month. What is the annual percent of return? 6% 7.50% 9% 12%

6% 750 x 12 = 9,000 9,000/150,000 = 0.06 = 6%

Which of the following is an example of economic obsolescence? Four bedrooms and one bath in a house. Lack of insulation in an apartment building. A house abutting a closed factory. Lack of paint on a barn.

A house abutting a closed factory.

The definition of depreciation is A loss in value. Mortgages and foreclosures. Loss from scarcity of a product. A gain from cost.

A loss in value.

The metes and bounds method of surveying is based primarily upon: Survey lines that run east and west. Survey lines that run north and south. A map of the subdivision. A point of beginning.

A point of beginning.

The best definition of an appraisal is: A means of determining depreciation. A method to keep values current with reproduction cost. A statement of facts that may not be necessarily true. An estimate of value.

An estimate of value.

Which principle of value holds that a property can increase or decrease in value in expectation of something in the future? Conformity Highest and best use Anticipation Contribution

Anticipation

The primary intent of zoning ordinances is to: Assure the health, safety and welfare of the community. Demonstrate the police power of the state. Limit the amount and types of business in a given area. Protect residential neighborhoods from commercial encroachment.

Assure the health, safety and welfare of the community.

The primary survey line running east and west in the rectangular survey system is the: Township line. Base line. Range line. Principal meridian.

Base line.

For which of these properties would an appraiser most likely choose to use the cost method of appraisal? Apartment building Church Land Single-family home

Church

One business attracts another business of similar type and together they may make more money than they would have singularly. This is an example of what principle of value? Contribution Competition Progression Assemblage

Competition

Which principle of value holds that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from the whole? Substitution Conformity Contribution Progression

Contribution

Which of the following approaches to value figures the land separately from the value of the improvements? Market Data. Cost Approach. Income Approach. Functional obsolescence.

Cost Approach.

To find the value of a property using the Income Approach to value, if the Net Operating Income and capitalization rate were known, the appraiser would: Multiply the Net Operating Income by the capitalization rate. Multiply the Effective Gross Income by the capitalization rate. Divide the Net Operating Income by the capitalization rate. Divide the capitalization rate by the Net Operating Income.

Divide the Net Operating Income by the capitalization rate.

Which aspect of depreciation is almost always incurable? Economic obsolescence Physical deterioration Internal obsolescence Functional obsolescence

Economic obsolescence

The depreciation most difficult to remedy would be: Physical. Economic. Functional. Premise.

Economic.

A development company owned property that the city wanted so it could extend the runways at the municipal airport. If the company refuses to negotiate with the city, then the city may acquire the property by: Escheat. Accretion. Confiscation. Eminent domain.

Eminent domain.

An investor's return on an income property appraisal is based on which of the following? Potential Rental IncomeI Potential Income less vacancy Gross Income Gross Income less expenses

Gross Income less expenses

Commercial income producing property is best appraised using which method? Market Data Approach. Cost Approach. Income Approach. Sales Comparison Approach.

Income Approach.

Which of these controls would be used to prevent a neighboring lot owner from violating the recorded deed restrictions in a subdivision? Zoning. Injunction. Police power. Condemnation.

Injunction.

What is a unique characteristic of a special assessment tax? More valuable properties which stand to benefit will pay proportionately more taxes. It applies only to properties which will benefit from the public improvement. The equalization board discounts levies for properties not affected by the public improvement. It creates an involuntary junior lien on the property.

It applies only to properties which will benefit from the public improvement.

A tire company has a manufacturing plant located in an area that has just been re-zoned for residential usage. The company is allowed to continue operating the plant under the new zoning classification. However, if the plant is destroyed by fire, the tire company: May not construct another plant in the neighborhood without first applying for a zoning variance. May not construct another plant in the neighborhood under any circumstances. May construct another plant if it obtains the consent of the residents living in the neighborhood. May construct another plant without the resident's consent as long as the homeowners' association approves it.

May not construct another plant in the neighborhood without first applying for a zoning variance.

How is a homeowner's total tax bill derived? Divide the tax requirement by the tax base. Divide tax dollars needed by the taxable assessed value. Multiply each district's tax rate times the taxable value of the owner's property. Average the tax rate for each tax district, and then multiply the average tax rate times the assessed value.

Multiply each district's tax rate times the taxable value of the owner's property.

Beginning at the SE corner of the intersection of Olive & 270, thence south 350 feet, thence west 350 feet, thence north 400 feet, thence east 400 feet. Is this a good legal description? No, this is not a good legal description because it does not begin and end at the point of beginning. No, legal descriptions cannot be determined in this manner. Yes, this is a good legal description of a parcel of land. Yes, it is not necessary for a legal description to begin and end at the point of beginning.

No, this is not a good legal description because it does not begin and end at the point of beginning.

A property owner in a recently zoned area was permitted to continue to use his property in a manner that did not comply with the zoning requirements. This use is described as which of the following? Exclusive-use zoning. Deviation. Nonconforming use. Private control of land use.

Nonconforming use.

A developer put two lots together and sold them as one large lot. The increase in value is referred to as: Appreciation. Contribution. Plottage. Partition.

Plottage.

Public land use controls in the form of building ordinances are an exercise in the form of: Eminent domain. Police power. Interstate land sales. Deed restrictions.

Police power.

Functional obsolescence is due to: Normal wear and tear. Poor design or floor plan. Poor location. An adjacent, adverse property use.

Poor design or floor plan.

A CMA is performed when: Accessing property. Pricing property. Taxing property. Condemning property.

Pricing property.

A $175,000 house was built next to a $75,000 house. Which of the following principles of value would apply? Substitution. Competition. Progression and Regression. Anticipation.

Progression and Regression.

Which method of determining cost adds estimates of material and labor costs to indirect costs to arrive at the total cost of a structure? Chapter in place Square foot cost Reproduction cost Quantity Survey

Quantity Survey

One way for an appraiser to account for a property's deterioration is to Increase the chronological age of the property. Decrease the chronological age of the property. Raise the effective age of the property. Decrease the effective age of the property.

Raise the effective age of the property.

Which of the following are not forms of public land use control? Police power and eminent domain. Taxation and zoning. Subdivision regulations. Restrictive covenants.

Restrictive covenants.

The Monroe family elects to purchase a property on Elm Street that is virtually identical to the property on Maple Street due to the fact that the Maple Street property had a similar price. This is an example of which value principle? Anticipation Supply and demand Substitution Conformity

Substitution

The premise of the Sales Comparison Approach rests on the principle of: Conformity. Competition. Highest and best use. Substitution.

Substitution.

The right to exert public land use control is primarily authorized by which of the following? A grantor's written and recorded deed provisions. A municipality's self-legislated police power The 14th Amendment to the Constitution The constitution of individual states.

The 14th Amendment to the Constitution

The concept of economic life is best characterized as The actual age of a structure or structural component. The effective age of a structure or structural component. The anticipated period of time an improvement will last for depreciation purposes. The anticipated physical life of an improvement as a function of its durability.

The anticipated period of time an improvement will last for depreciation purposes.

What are ad valorem taxes based on? The replacement value of property The assessed value of property The millage value of property The broker's estimate of value

The assessed value of property

Which of the following best defines reproduction cost? The cost to cure deterioration. The cost to replace an improvement with original materials The cost to replace an improvement with similar materials The cost to replace a destroyed property

The cost to replace an improvement with original materials

Which land description method employs a subdivision plat map? The lot and block system The Rectangular Survey System The metes and bounds system The government survey system

The lot and block system

An appraiser deducts $5,000 for a property that has defective wiring. This defect is curable obsolescence, provided that The repair costs $4,000 to complete. The repair costs $6,000 to complete. The defect can be repaired at all. This defect is inherently incurable due to external obsolescence.

The repair costs $4,000 to complete.

Which of the following is an accurate statement? To derive Net Operating Income, deduct the annual operating expenses from Annual Gross Income to derive Net Operating Income. To derive the GRM, net income is used. To derive the capitalization rate, the value is divided by income. The GRM and cap rate are equally desirable to an investor in determining a price to offer.

To derive Net Operating Income, deduct the annual operating expenses from Annual Gross Income to derive Net Operating Income.

What is the fundamental purpose of a building permit? To restrict the number of new development projects To establish the basis for an inspection To ensure that improvements comply with codes To promote certificates of occupancy

To ensure that improvements comply with codes

What is the purpose of a homestead tax exemption? To exempt qualified property owners from ad valorem taxation To offer some amount of tax relief on an owner's principal residence To encourage multiple property investment To exempt owners of principal residences who rent their properties

To offer some amount of tax relief on an owner's principal residence

An appraiser, using the Cost Approach method would do which of the following? Make an adjustment if the economic conditions have changed between the date of sale and the date of the appraisal. Use comparable properties as the basis for the decision. Use replacement cost minus depreciation. Use the ability of the property to produce income as the basis of the decision.

Use replacement cost minus depreciation.

A permitted deviation from the standards of a building ordinance is called: Unlawful non-conforming use. Variance. Legal nonconforming use. Testimonial.

Variance.

What is the principal mechanism for implementing a master plan? Zoning Referendum Public election Property management

Zoning

An improvement to a local restaurant does not comply with the zoning ordinances because it was constructed prior to the adoption of the zoning laws, and its use is one that clearly differs from current zoning. This is known as an illegal nonconforming use. a variance. a special exception. a legal nonconforming use.

a legal nonconforming use.

The essential criteria for an acceptable legal description is that it accurately locates the parcel in the opinion of a court. Always starts at the POB and ends at the POB. contains the current post office address of the parcel. is written by a surveyor.

accurately locates the parcel in the opinion of a court.

The tax base in a jurisdiction is derived by subtracting exemptions from sales values. the tax rate. assessed values. residual values.

assessed values.

Burger King locates a franchise across the street from a McDonalds. At play here is the principle of anticipation. competition. conformity. assemblage.

competition.

A house is constructed in a neighborhood that is substantially larger than the existing houses. Based on the value principle of ___________________, the larger house's value will therefore be adversely affected. anticipation conformity inadequacy competition

conformity

Public land-use regulations may regulate all of the following except setback lines. minimum lot size. construction costs. building heights.

construction costs.

A property's roof is twenty years old and has not been replaced. This condition would most likely be considered to be an example of curable physical deterioration. curable functional obsolescence. external obsolescence. incurable depreciation.

curable physical deterioration.

If a comparable has one more bedroom than the subject, an adjustment is made by adding value to the subject. deducting value from the subject. adding value to the comparable. deducting value from the comparable.

deducting value from the comparable.

Public land use controls include all of the following except subdivision regulations. deed restrictions. environmental protection laws. city master plan.

deed restrictions.

The first step in the appraisal process is to compare similar sold properties. define the problem. analyze the neighborhood. gather data.

define the problem.

Functional and economic obsolescence are aspects of depreciation. effective age. land value. ability to generate income.

depreciation.

A millage rate is derived by dividing the tax requirement by the tax base. multiplying the tax base times the tax requirement. adding an inflation factor to the prior year's tax rate. dividing the tax base by the tax requirement.

dividing the tax requirement by the tax base.

What is the critical characteristic of a metes and bounds description? conform to the standards set for the plat of survey. it quantifies linear and area measurements. it describes the complete, closed perimeter of the parcel's boundaries. it contains a point of beginning, or POB.

it contains a point of beginning, or POB.

Prior to preparing the report, the last step in the appraisal process involves estimating the land value. reconciling the comparables. completing the income approach. reconciling the values derived from the three approaches.

reconciling the values derived from the three approaches.

If a manufacturing plant that employs 20% of the local labor force closes, the likely effect on the area's real estate values will reflect the principle of supply and demand. transferability. substitution. highest and best use.

supply and demand.

Economic life is best defined as the length of time during which an improvement will contribute to the value of a property. the age of a non-income producing improvement. the depreciation period for the land component of a property. the period during which the land and improvements are depreciated for tax purposes

the length of time during which an improvement will contribute to the value of a property.

An appraiser is looking for the growth, stability, change and decline of an area. The appraiser is dealing with the neighborhood cycle. site analysis. economic obsolescence. the community cycle.

the neighborhood cycle.

A nonconforming use may be deemed illegal if the property is sold or abandoned. the use occurred prior to the zoning change which made it illegal. the owner obtains a variance. a conditional use permit expires.

the property is sold or abandoned.

The capitalization rate is best described as: the value of the property in relation to the gross income the property produces. an investment property's fixed cash flow on an annual basis. the relationship between net operating income and estimated value or cost. a fixed rate of return for the investor of a commercial property.

the relationship between net operating income and estimated value or cost.

The ad valorem tax base of a municipal jurisdiction is equal to the jurisdiction's annual budget times the tax rate. the total of all assessed values of properties minus exemptions. the total amount of ad valorem taxes required by the budget. the municipality's budget multiplied times the millage rate.

the total of all assessed values of properties minus exemptions.

The purpose of a homestead tax exemption is to exempt qualified property owners from ad valorem taxation. to offer an amount of tax relief on an owner's principal residence to encourage multiple property investment. to exempt owners of principal residences who rent their properties.

to offer an amount of tax relief on an owner's principal residence

The purpose of a building permit is to override a deed restriction. to regulate the volume of a market's building activity. to regulate minimum construction standards. to establish an enabling act.

to regulate minimum construction standards.