Residential Sales Comparison and Income Approaches

Graduated payment mortgage:

"A debt secured by real estate in which mortgage payments are matched to projected increases in the borrower's income. The periodic payments start out low and gradually increase."

Adjustable Rate Mortgages (ARMs) are defined as:

"A debt secured by real estate with an interest rate that may move up or down following a specified schedule or in accordance with the movements of a standard or index to which the interest rate is tied."

The secondary mortgage market is defined as:

"A market created by government and private agencies for the purchase and sale of existing mortgages; provides greater liquidity for mortgages. Fannie Mae, Freddie Mac, and Ginnie Mae are the principal operators in the secondary mortgage market."

A Balloon Mortgage is defined as:

"A mortgage that is not fully amortized at maturity and requires a lump sum, or balloon, payment of the outstanding balance"

Discount points are defined as:

"A percentage of the loan amount that a lender charges a borrower for making a loan; may represent a payment for services rendered in issuing a loan or additional interest to the lender payable in advance; also called points"

Reverse Mortgage. They are defined as:

"A type of mortgage where by senior homeowners systematically borrow against the equity in their home, receiving regular (usually monthly) payments from the lender. Borrowed funds and accrued interest come due when the last surviving borrower dies or permanently vacates the premises. Under current HUD guidelines all of the mortgagors must be at least 62 years of age. When the loan is due the estate usually has approximately 12 months to repay the balance of the reverse mortgage or sell the home to pay off the loan amount. All remaining equity is paid to the vacating homeowner or the estate. An FHA insurance program ensures that the vacating homeowner or estate is not liable if the loan balance exceeds the value of the home at the time the loan is due. Also called a reverse-annuity mortgage or home equity conversion mortgage."

Conventional mortgages are defined as:

"Mortgages that are neither insured nor guaranteed by an agency of the government, although they may be privately insured."

"The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses and an addition is made for any other income" is the definition of Operating Expenses Potential Gross Income Effective Gross Income Net Operating Income

"The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses and an addition is made for any other income" is the definition of Effective Gross Income.

Amortization is defined as

"The process of retiring a debt or recovering a capital investment, typically through scheduled, systematic repayment of the principal."

"The total income attributable to real property at full occupancy before vacancy and operating expenses are deducted" is the definition of Cash flow Potential Gross Income Effective Gross Income Net Operating Income

"The total income attributable to real property at full occupancy before vacancy and operating expenses are deducted" is the definition of Potential Gross Income.

What is the future value of an annuity if you deposited $1,500 each year for 7 years into a savings account paying 9% interest per year? $11,384.02 $13,800.65 $14,773.90 $18,635.29

$13,800.65

What's the value today of the right to receive a lump sum of $37,000 in 8 years, discounted at 7%? $15,822.44 $16, 002.87 $21,534.34 $17.935.28

$21,534.34 CLR FIN 8n 7i 37000 CHS FV PV

A purchaser bought a property for $215,000, put 15% down and borrowed the rest at 6.75% interest for 25 years. The lender charged 2.5 points at the closing. How much was paid for the points? $2,150 3,267.50 $4,568.75 $5,723.40

$215,000 X .85= $182,750. $182,750 X .025= $4568.75

If I put $3,500 in the bank at the beginning of every year for 6 years, at 2.0% interest - how much will I have at the end? $20,348.65 $21,830.22 $22,519.99 $24,592.74

$22,519.99. f CLEAR FIN, g BEG, 6n 2i 3500 CHS PMT FV

What is the future value of an annuity if you deposited $2,500 each year for 8 years into a savings account paying 9% interest per year? $24,384.02 $27,571.19 $31,773.90 $33,635.29

$27,571.19

If I put $29,000 in the bank at 1.75% interest for 9 years - how much will I have? $27,567.30 $28,073.45 $28,135.94 $33,900.63

$33,900.63 f CLEAR FIN, 9 n, 1.75 I, 29000 CHS PV, FV

A purchaser bought a property for $215,000, put 15% down and borrowed the rest at 6.75% interest for 25 years. The lender charged 2.5 points at the closing. How much was paid for the points? $2,150 $3,267.50 $4,568.75 $5,723.40

$4,568.75

What is the future value of an annuity if you deposited $3,000 each year for 10 years into a savings account paying 9% interest per year? $35,772.05 $39,583.91 $42,678.23 $45,578.79

$45,578.79

You started with $8,652.91 in your bank account. You made the following withdrawals: $123.65, $1,420.00, and $3,250.75. You made the following deposits: $1,200.00, $250.00, and $149.75. What is your current bank balance? $5,135.68 $5,458.26 $7,116.89 You are overdrawn

$5,458.26

You want to purchase a bond that matures at $100,000 in 10 years with no periodic interest payments. If it is discounted at 3.375% annual yield, how much will you have to invest now to buy the bond? $71,753.78 $76, 002.87 $78,534.34 $81.935.28

$71,753.78 CLR FIN 10n 3.375i 100000 CHS FV PV

Your subject is located in an area where property values have been declining consistently at 0.5% a month for the past ten months. You have located a comparable that is practically identical to your subject. It sold 8 months ago for $200,000. How much should you adjust the price? -$4,000 +$8,000 -$8,000 +$8,000

-8000

What is the sinking fund factor amount if you planned to replace the roof of your investment property (at a cost of $7,500) in 20 years and you expected the funds to grow at the rate of 9% per year? $146.60 $187.90 $198.27 $222,89

.019546 X $7,500 = $146.60

The reciprocal of 4 is .25 .40 40 .44

.25

A property has a first mortgage of $125,000, a second mortgage of $30,000, and a third mortgage of $10,000. It is foreclosed and sold for $140,000. In this situation, the holder of the third mortgage gets $________ and the holder of the second mortgage receives $ _________. 0, $15,000 $15,000, $15,000 $5,000, $30,000 0, $25,000

0, $15,000

A $265,000 mortgage has monthly payments for 25 years, at 5.50% interest. How much are the monthly payments? $1,388.12 $1,438.55 $1,577.99 $1,627.33

1,627.33

Under state licensing statutes licensed or certified residential appraisers are allowed to appraise _______________ residential units. 1 and 2 1 to 3 1 to 4 No set number

1-4

A lot is 445.24 feet by 118.39 feet. How many acres is that? 1.21 1.32 1.44 1.88

1.21

Two-bedroom condos in the city sold for a median price of $180,440 nine months ago and that the median price of those homes for the current month is $206,390. What is the indicated average increase per month? 8% 1.1% 1.4% 1.6%

1.6%

If I put $9,000 in the bank at the beginning of every year for 10 years, at 4.5% interest - how much will I have at the end? $99,497.55 $102,356.78 $105,002.63 $115,570.61

115570.61

An apartment owner needs to build up $30,000 for to replace the boilers in 10 years. He can expect 4.5% interest. How much is needed if he makes semi-annual payments? $ 1,145.89 $ 1,177.76 $ 1,251.04 $ 1,325.78

1177.76

In Form 216, the income and expenses have to be projected for the next ____ months. 6 12 18 24

12

A property sold for $256,000 and sold again 11 months later for $289,000. What was its percent of increase? 8.6% 9.7% 11.4% 12.9%

12.9%

How much is [(782 - 414.5 + 23) + (25 x 3.9)] ÷ 36.4? 11.59 13.41 35.78 125.85

13.41

Sale prices and rent at time of sale: $125,000 - $950; $120,000 - $900; $134,500 - $1000; $145,000 - $1100; $128,000 - $950; $116,000 - $900. What is the median of the GRMs? 131.8 131.5 132.5 132.6

132.6

First mortgage:

A mortgage that has priority over all other mortgage liens on a property."

An apartment complex has a gross annual income of $418,000 and the expense ratio is 38%. How much are the total operating expenses? $158,840 $162,450 $161,915 $165,203

158.840

What's the value today of the right to receive a lump sum of $27,000 in 7 years, discounted at 7%? $15,822.44 $16, 002.87 $16,814.24 $17.935.28

16,814.24

A 30 year mortgage, with an interest rate of 5.9%, has monthly payments of $1,097.30. What was original mortgage amount? $155,000 $174,500 $178,000 $185,000

185000

If a 30 yr mortgage, with an interest rate of 6.2%, has monthly payments of $1,163.69; what was original mortgage amount? $175,000 $184,500 $190,000 $193,000

190,000

A 4-unit property has two units rented at $900 per month, and two units rented at $1,200 per month. The vacancy and collection loss rate is 6%. Total operating expenses are $21,525. What is the PGI? $47,376 $50,400 $55,200 $48,000

2 X $900 = $1,800. 2 X $1,200 = $2,400. $1,800 + $2,400 = $4,200. $4,200 X 12 = $50,400.

A 4-unit property has two units rented at $900 per month, and two units rented at $1,200 per month. The vacancy and collection loss rate is 6%. Total operating expenses are $21,525. What is the NOI? $25,851 $47,376 $22,369 $24,087

2 X $900 = $1,800. 2 X $1,200 = $2,400. $1,800 + $2,400 = $4,200. $4,200 X 12 = $50,400. $50,400 X .06 = $3,024. $50,400 - $3,024 = $47,376. $47,376 - $21,525 = $25,851

What is the future value of $20,000 if you deposited it today in a savings account paying 9% interest per year, and left it, without making any other deposits, for 12 years? $48,891.32 $53,266.54 $56,253.30 $64,567.89

2.812665 X 20,000 = $56,253.30

Your subject is located in an area where property values have been rising consistently at 1.5% a month for the past twelve months. You have located a comparable that is practically identical to your subject. It sold seven months ago for $200,000. How much should you adjust the price? $17,500 $21,000 $22,500 $24,000

21000

A $72,800 mortgage, with 7.4% interest, has a monthly payment of $559.28. How many years was the original term of the loan? 20 22 25 29

22

If I put $3,500 in the bank at the beginning of every year for 6 years, at 2.0% interest - how much will I have at the end? $20,348.65 $21,830.22 $22,519.99 $24,592.74

22,519.99

What is the future value of $10,000 if you deposited it today in a savings account paying 9% interest per year, and left it, without making any other deposits, for 10 years? 18,891.32 21,266.54 23,673.64 24,567.89

23,673.64

A $92,800 mortgage, with 6.4% interest, has a monthly payment of $631.39. How many years was the original term of the loan? 20 24 25 27

24

a $167500 mortgage, with 6.8% interest, has a monthly payment of $1,162.67. How many years was the original term of theloan?

25. on calculator: 6.8 Gi, 167500 PV, 1162.67 CHS PMT, n, 12 divide= 25

An owner sells her house for $269,500. The sales commission is 5% and she agrees to pay 1.5% towards the buyer's closing costs. How much does she receive? $248,356.50 $251,982.50 $253,625.75 $261,425.25

251,982.5

A lot is 1,456.5 feet by 782.5 feet. How many acres is that? 12.21 16.32 21.44 26.16

26.16

a property recently sold for $265,000 and land value was estimated to be $50,000. The cost new of the improvements today would be $362,000. The property is 22 years old. What is the present depreciated cost of the improvements?

265000 - 50000= 215000.

a property recently sold for 265000 and land value was estimated to be 50,000. The cost new of the improvements today would be 362000. the property is 22 yrs old. what is the annual % of depreciation?

265000-50000=215000 diveded by 362000=.59 1-.59=.41 depreciated. 41 divided by 22=1.9% per year

The income approach is required by Fannie Mae for __________ properties, but not for ___________ properties. 1 unit, 3 unit 3 unit, 1 unit Owner-occupied, Investment 5 unit, 3 unit

3 unit, 1 unit

At a 9% annual "discount" rate, what is the present worth of $20,000 if you will not receive it for another 13 years? $5,555.62 $6,282.90 $6,523.58 $10,420.62

326179 X $20,000 = $6,523.58

If I put $29,000 in the bank at 1.75% interest for 9 years - how much will I have? $27,567.30 $28,073.45 $28,135.94 $33,900.63

33,900.63

You buy a new SUV for $38,750. You get a 10% rebate but pay 6% state sales tax and 1.5% county sales tax. What is the net amount you have to pay? $33,608.14 $35,298.72 $36,456.99 $37,490.63

37490.63

How much do I have to put aside each year, at 5% interest, to accumulate $9,000 to replace a boiler in 15 years? $388.24 $397.22 $555.89 $614.78

397.22

A fourplex has 2 units rented at $1,200 per month, one at $1,350, and one at $1,400. What is its gross income? $5,150 $55,500 $61,800 $72,400

61,800

A motel has a gross annual income of $458,000 and its total operating expenses are $201,500. What is its expense ratio? 28% 32% 44% 54%

44%

In the sales comparison reconciliation, how many sales should we have before we consider using a statistical analysis? 3 4 Any number is fine 6 or more

6 or more

Your apartment building has 18 units rented at $950 per month, 26 units rented at $1,100 and 8 units rented at $1,250 per month. How much is the total annual rent? $345,700 $668,400 $682,450 $880,200

668,400

If I invest $50,000 at 4.5% interest, how much will be available when I retire in 8 years? $55,248.90 $64,284.07 $71,105.03 $78,101.46

71105.03

An 8 unit property sold for $550,000. Its contract rent for each unit was $1,000 per month and its market rent was $1,050 per month. What was the market GIM? 4.8 5.2 5.5 65.5

8 X $1,050 = $8,400. $8,400 X 12 = $100,800. $550,000 ÷ $100,800 = 5.5.

Guaranteed mortgages

A mortgage in which a party other than the borrower assures payment in the event of default, e.g., a VA-guaranteed mortgage.

What is the range of following GRMs? 105.0, 104.0, 103.2, 106.0, 110.4, 107.2, 104.0, 106.0, 105.5, 102.0 9 8.4 7.2 11

8.4

At a 9% annual "discount" rate, what is the present worth of a 20 year mortgage note that gives you annual payments of $3,500? $18,302.84 $23,591.26 $28,816.90 $31,949.91

9.128546 X $3,500 = $31,949.91

Sale prices and rent at time of sale: $125,000 - $950; $120,000 - $900; $134,500 - $1000; $145,000 - $1100; $128,000 - $950; $116,000 - $900. What is the median rent? $900 $950 $1,000 $1,100

950

Insured mortgages:

A mortgage in which a party other than the borrower assures payment on default by the mortgagor in return for the payment of a premium, e.g., FHA-insured mortgages, private mortgage insurance (PMI)."

Standards Rule 1-1(c) of USPAP says an appraiser must "not render appraisal services in __________________ manner..." An illegal A careless or negligent An inappropriate Unsupported

A careless or negligent

Fixed rate mortgage

A conventional mortgage with an interest rate that does not vary over the life of the loan."

Junior liens:

A lien placed on a property after a previous lien has been made and recorded; a lien made subordinate to another by agreement; e.g., second and third mortgages; also called second lien or third lien."

Adjustments to comparable sales should be made when there is _________________ difference between a sale and the subject property. A noticeable At least a 5% A positive or negative A significant, measurable

A significant, measurable

A value can be developed through the income capitalization approach by either Dividing an income by a factor or multiplying it by a rate Dividing an income by a rate or dividing it by a multiplier Dividing an income by a rate or multiplying it by a multiplier Multiplying an income by a rate or subtracting a factor

A value can be developed through the income capitalization approach by either dividing an income by a rate or multiplying it by a multiplier.

Which would not be a part of the review process of your reconciliation? Was the scope of work adequate, given the intended use and intended users? Were the steps logical? Do you have enough rental comparables to be able to accurately estimate the market rent of the subject? Were our data sources and methods of collection and verification adequate?

All are correct except answer 3 - that is part of the analysis of the quantity of data.Were our data sources and methods of collection and verification adequate?

When choosing comparables, the appraiser analyzes Location, amenities, market conditions Sales or financing concessions Motivations of sellers and buyers, property rights All of the above

All of the above

When choosing comparables, the appraiser analyzes: Location, amenities Sales or financing concessions Motivations of sellers and buyers, property rights All of the above

All of the above

Which of these is not a reason why we should expect differences in the adjusted sales process of comparable sales? The real estate market is imperfect. We cannot always have access to 100% of the information we need. All of these are possible reasons. It is rare to find perfectly informed buyers and sellers, acting unemotionally.

All of these are possible reasons.

An ARM is Another term for a balloon mortgage An adjustable rate mortgage An amortized rebate mortgage A mortgage with graduated payments

An adjustable rate mortgage

A transaction could be verified with all of the following parties EXCEPT Buyer Another appraiser Seller Listing broker

Another appraiser

In actual appraisal practice, Form 216 is most commonly prepared by the: Underwriter Borrower Real estate agent Appraiser

Appraiser

How many comparable sales are needed to derive a reliable GRM? One Two Three At least 5 or 6

At least 5 or 6 might be a reliable minimum - more is better.

"Total income from a property before deducting any expenses, customarily stated on an annual basis" is the definition of Cash flow Effective gross income Net operating income Gross income

Gross Income

"The principle that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium" is the definition of the principle of Anticipation Supply and Demand Change Balance

Balance

The appraisal principle that real property value is created and sustained when the characteristics of a property conform to the demands of its market is the definition of the principle of

Balance

The principles of progression and regression are illustrations of what happens when the principle of ______________ is violated. Conformity Balance Change Substitution

Balance

A mortgage that is not fully amortized at maturity and requires a lump sum payment of the outstanding balance at the end is called a ____________ mortgage. Leveraged Deferred Balloon Unequal rate

Balloon

Which of the following is not good procedure when making a reconciliation of sales data? Be persuasive Be succinct Be direct Be verbose

Be verbose

In the current SRIPAR (Mar 05) unit indicators are developed from ___________ figures. Gross only Adjusted only Both gross and adjusted Neither

Both gross and adjusted

A value can be developed through the income capitalization approach by either Dividing by a factor or multiplying by a rate Dividing by a rate or dividing by a multiplier Dividing by a rate or multiplying by a multiplier Multiplying by a rate or subtracting a factor

Dividing by a rate or multiplying by a multiplier

Qualitative analysis is used for elements that Defy description Are too far apart Can't be ranked Cannot be given a numerical value

Cannot be given a numerical value

"Any rate used to convert income into value" is the definition of Discount rate Capitalization rate Compounding Multiplier

Capitalization rate

Long-term market cycles are Based on the prevailing interest rate Very volatile and therefore irrelevant Caused by national or international conditions Of little interest to an appraiser

Caused by national or international conditions

All of these topics should be part of your reconciliation process, except for Chain of title Appropriateness Consistency Accuracy

Chain of title

"The result of the cause and effect relationship among the forces that influence real property value" is the definition of the principle of Anticipation Supply and Demand Change Balance

Change

In the Six Functions of a Dollar table, column ___ is also called the annuity column. 1 2 4 5

Column 2 is also called the Annuity Column.

In the Six Functions of a Dollar table, column ___ is also called the Discount Factor column. 1 2 3 4

Column 4 is also called the Discount Factor column.

The process by which a value indication is derived in the Sales Comparison Approach is called Comparative analysis Quantitative analysis Qualitative analysis Highest and best use analysis

Comparative analysis

"The continuous and systematic additions to a principal sum over a series of successive time periods so that previously earned interest earns interest" is the definition of Investment value Compound interest Simple interest Interest per period

Compound interest

Compounding is used so solve for ___________ values, whereas discounting solves for ___________ values. Present, future Future, present Future, concurrent Present, past

Compounding solves for future values, whereas discounting solves for present values.

"An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the motivations of either the buyer or a seller in a transaction, e.g., when the comparable transaction is not an arm's-length sale" is the definition of Market conditions Duress Conditions of sale Property rights conveyed

Conditions of sale

"An organization that acts as a single legal entity in performing certain activities, usually business for profit; also includes charitable, educational, and religious organizations" is the definition of Corporation Cooperative Syndicate Partnership

Corporation

Ranking of the comparable sales in order of _________ makes a logical and persuasive argument. Time of sale Sale price Desirability Functionality

Desirability

Which would not be a part of the review process of your reconciliation? Was the scope of work adequate, given the intended use and intended users? Were the steps logical? Do you have enough rental comparables to be able to accurately estimate the market rent of the subject? Were our data sources and methods of collection and verification adequate?

Do you have enough rental comparables to be able to accurately estimate the market rent of the subject?

"The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses" is the definition of Gross income Effective gross income Potential gross income Scheduled gross income

Effective gross income

"The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses" is the definition of Gross income Potential gross income Effective gross income Net operating income

Effective gross income

Syndications are: Private partnerships only Public partnerships only Either private or public partnerships Corporations

Either Private or Public Partnerships.

"Trespassing on the domain of another" is the definition of Adverse possession Easement Encroachment Conservation easement

Encroachment

Which of the following is an insured loan?

FHA

Which of these does NOT originate mortgage loans? Fannie Mae Savings and loan Commercial bank Credit Union

Fannie Mae

The primary participants in the secondary mortgage market are FHA and VA Fannie Mae and FHA Freddie Mac, Ginnie Mae and HUD Fannie Mae, Freddie Mac, and Ginnie Mae

Fannie Mae, Freddie Mac, and Ginnie Mae

A mortgage with equal payments for each period over the length of the loan is called a __________ loan. Standardized Equal rate Graduated payment Fixed rate

Fixed Rate

Replacement reserves might be established for all of the following items EXCEPT Roof covering Boilers Water heaters Foundations

Foundations

Compounding solves for ___________ values, whereas discounting solves for ___________ values. Present, future Future, present Future, concurrent Present, past

Future, present

Mortgages with payments that start out low and gradually increase are called _____________ loans. Balloon payment Graduated payment Escalator Adjustable rate

Graduated Payments

What is the present value today of a $186,000 mortgage bearing 5.2% interest and which provides for interest only payments annually with all principal due and payable at the end of 9 years, if the buyer of the mortgage requires a 12% yield. $97,175.94 129,261.23 $92,983.21 $118,608.30

HP12C keystrokes: CLR FIN 186,000 x .052 = $9,672 annual interest payment. Then enter [9n] (number of annual interest payments), [12i] (required yield to buyer of mortgage), [9672 PMT] (amount of annual interest payment), [186000 FV] final payment of principal in 9 years) then press [PV] to find the present value. Result = $118,608.30 present value.

In the current SRIPAR (Mar 05) you must reconcile a minimum of _______ value indicators. 3 4 6 7

In the new SRIPAR (Mar 05) you must reconcile 7 unit indicators.

Another name for a land contract is a(n) Deed of trust Leasehold contract Installment sale contract Wrap-around contract

Installment sale contract

Income and value are _______ and move in the same direction. Independent Interdependent Self sufficient Opposites

Interdependent

Which of the following would NOT be classified as a long term trend for market cycles? Population trends Interest rates Income levels Migration patterns

Interest rates

Which type of ownership includes a right of survivorship? Joint tenancy only Tenancy in common only Tenancy in common and joint tenancy Joint tenancy and tenancy by the entirety

Joint tenancy and tenancy by the entirety

"Liens placed on a property after a previous lien has been made and recorded; a lien made subordinate to another by agreement" are called __________ liens. Substandard Aftermarket Subprime Junior

Junior

The COMPETENCY RULE of USPAP says an appraiser must have "the _______________________ to complete the assignment competently."

Knowledge and experience

The landlords right is the _____

Leased Fee interest

an owndership interest held by a landlord with the rights of use and occupancy conveyed by lease to others is the definition of________

Leasehold interest.

Lenders use _____________ income when underwriting loans for 2 to 4 unit residential properties. Operating Potential Gross Effective Gross Taxable

Lenders use operating income when underwriting loans for 2 to 4 unit residential properties.

When we do a reconciliation of the sales comparison approach, what is the proper procedure? Let the data fall wherever it does. Make sure the adjusted values are all the same. Keep the adjusted values within 5% of each other. Average the results.

Let the data fall where it may. Then interpret it and figure out why the results differ.

When we do a reconciliation of the sales comparison approach, what is the proper procedure? Let the data fall wherever it does. Make sure the adjusted values are all the same. Keep the adjusted values within 5% of each other. Average the results.

Let the data fall wherever it does.

"The rental income that a property would most probably command in the open market" is part of the definition of ____________ rent. Contract Actual Scheduled Market

Market

In the sales comparison approach, which of these factors should be adjusted for before the others? Location Size Market conditions Quality

Market Conditions

The Sales Comparison Approach was previously known as the:

Market Data Approach

The sequence of adjustments is determined by the _______ and through analysis of the _______. Lender, data Appraiser, problem Market, data Market, situation

Market,Data

Which measure of central tendency is most affected by extreme values? Mean Median Mode They are all equally affected by extreme values

Mean

"A measure of central tendency identified as the middle value in an ordered array of numerical values" is the definition of Mean Median Mode Range

Median

"The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted" is the definition of Gross Income Potential Gross Income Effective Gross Income Net Operating Income

Net Operating Income

the actual or anticipated net income that remains after all operating expenses are deducted from effective gross income, but before mortgage debt service and book depreciation are deducted is the definition of

Net operating income

An estate in severalty involves ____________ owner(s). Only one More than one At least two Corporate

Only one

The main difference between gross and net income is Income taxes Operating expenses Reserves for replacement Profit

Operating expenses

Compounding and discounting are ___________. Opposites Equal Complementary Not related

Opposites

Compounding and discounting are ___________. Opposites Equal Synonymous Not related

Opposites

The principle of conformity; the ideal situation where a property conforms to what the market wants.

principle of conformity

The period over which improvements to real property contribute to property value is the definition of_______life

Physical

Which would NOT be considered a management expense? Plumbing repairs Collecting rent Advertising Preparing leases

Plumbing

Potential gross income plus other income minus ___________ equals ______________. operating expenses, net operating income allowance for vacancies, effective gross income reserves allowance, effective gross income allowance for vacancies, net operating income

Potential gross income plus other income minus allowance for vacancies equals effective gross income.

Which of the following is NOT a common unit of comparison when appraising 2-4 unit properties? Price per SF of GLA Price per room Price per SF of GBA Price per bedroom

Price per SF of GLA

The principle of competition can be between Purchasers only Tenants only Purchasers and tenants Purchasers and tenants as well as between sellers and landlords

Purchasers and tenants as well as between sellers and landlords

"The difference between the smallest and largest sample observation in a statistical distribution" is the definition of Spread Dispersion Deviation Range

Range

Ranking of the comparable sales in order of _________ makes a logical and persuasive argument. Time of sale Sale price Desirability Functionality

Ranking of the comparable sales in order of desirability makes a logical and persuasive argument. Which are the best and most similar sales?

A rate is the ____________ of a multiplier. Negative Variant Reciprocal Co-dependent

Reciprocal

The final step in the Sales Comparison Approach procedure is Verify the information Select relevant units of comparison Reconcile the value indications Research the market

Reconcile the value indications

"The process of reducing a range of value indications into an appropriate conclusion for that analysis, e.g., the derivation of a value indication from the adjusted prices of two or more comparable sales in the sales comparison" is the definition of Remediation Sales Analysis Intermediation Reconciliation

Reconciliation

"The criteria that enable an appraiser to form a meaningful, defensible conclusion about the final value opinion. Value indications are tested for the appropriateness of the approaches and adjustments applied, the accuracy of the data, and the quantity of evidence analyzed" is the definition of Statistical analysis Micro analysis Reconciliation criteria Reconciled data

Reconciliation criteria

- A type of mortgage designed for retirees and other fixed-income home owners who owe little or nothing on their homes is called a _________________ mortgage. Senior Graduated annuity Equity deferred Reverse annuity

Reverse Annuity

Replacement reserves might e established for all fo the follwoing except

Roof Structure

What does SRIPAR stand for? Small Residential Income Property Appraisal Report Subsidized Residential Income Property Appraisal Report Supervised Rented Income Property Annual Report Small Reconciled Income Property Analysis Report

SRIPAR stands for Small Residential Income Property Appraisal Report.

Which of these unit indicators was a new addition to the March 2005 version of the SRIPAR? Sale price per square foot of GBA Sale price per unit Sale price per room Sale price per bedroom

Sale price per bedroom was a new addition to the Mar 05 version of the SRIPAR.

Which would NOT typically be a cause of duress that could result in a transaction that would not be considered arms-length? Sale to a relative Sale to a corporation Sale with an unknowledgeable buyer or seller Sale prior to an impending foreclosure

Sale to a corporation

Adjustments for quality, condition and energy efficiency can be made in the _________ of the SRIPAR. Sales comparison grid Cost comparison grid Income comparison grid Reconciliation section

Sales comparison grid

Most _______________were chartered primarily to provide residential mortgages for the local areas. Payday lenders Savings and loans Commercial banks Credit unions

Savings and loans

"The income due under existing leases" is the definition of Contract rent Scheduled rent Market rent Gross income

Scheduled rent

Changes in a market cycle may be cyclical, one-time-only, ___________ and ____________. Recurring, exponential Repeating, inverse Seasonal, exponential Seasonal, geometric

Seasonal & Exponential

An estate that is restricted to husband and wife only is called Joint tenancy Tenancy in severalty Tenancy by the entirety Tenancy in common

Tenancy by the entirety

Comparative analysis may employ quantitative analysis and qualitative analysis Separately only Together only Separately or together Only in the appraisal of non-residential properties

Separately or together

"The order in which quantitative adjustments are applied to the sale prices of comparable properties" is the definition of Ranking Ordinal analysis Sales grid Sequence of adjustments

Sequence of adjustments

What is the worth today of a $214,000 mortgage that will give me annual interest payments of 6.8% for 12 more years, discounted at 6.8%? $214,000.00 $99,215.78 $102,983.21 $109,374.56

Since the annual payments are interest only there will be no principal reduction so the future value is the same as the original balance. With your 12C, enter: $214,000 X .068 = $14,552.00 annual interest payment. Then enter: 214000 CHS FV, 12n, 6.8i 14,552 CHS PMT PV Answer is $214,000.00.

Stanley gives his mother, Pearl, a life estate to occupy Stanley's home as long as Pearl's sister Myrtle remains alive, after which possession of the property will revert back to Stanley. Who is the remainderman in this situation? Stanley Pearl Myrtle There is no remainderman

Stanley

Of the three appraisal approaches, the Sales Comparison Approach relies most heavily on the economic principle of Mathematics Substitution Equalization Fairness

Substitution

The reconciliation is like a lawyer's __________ to the jury. Plea Summation Appeal Opening Statement

Summation

In residential properties, anticipated future benefits are amenities. They may include all of the following EXCEPT The security of having a roof over your head The prestige of owning a nice home in a good neighborhood Tax benefits The privacy entailed in owning a home of your own

Tax benefits

Total annual income resulting from real property at full occupancy is commonly referred to as Potential Gross Income Effective Gross Income Net Operating Income Gross Income

That is Potential Gross Income - the most we could get if every unit were rented every day of the year at market rent.

"The process of reducing a range of value indications into an appropriate conclusion for that analysis, e.g., the derivation of a value indication from the adjusted prices of two or more comparable sales in the sales comparison" is the definition of Remediation Sales Analysis Intermediation Reconciliation

That is the definition of reconciliation

In actual practice, the Operating Income Statement (Form 216) is typically prepared by: The underwriter Fannie Mae The listing real estate agent The appraiser

The appraiser

In the sales comparison formula presented, we always start with The subject The comparable Either subject or comparable Neither the subject nor comparable

The comparable

What is the form number for the Fannie Mae SRIPAR form? 1120 1025 1125 1020

The form number for the SRIPAR Fannie Mae is 1025.

Licensed Residential Appraisers are qualified to appraise non-complex 1-4 residential units with a transaction value of less than ____________ and complex 1-4 unit residential units with a transaction value less than _____________. $500,000, $250,000 $1,000,000, $500,000 No Limits $1,000,000, $250,000

The limits are $1,000,000 and $250,000.

Which measure of central tendency is most affected by extreme values? Mean Median Mode They are all equally affected by extreme values

The mean is most affected by extremes.

Which measure of central tendency is least affected by extreme values? Mean Median Range They are all equally affected by extreme values

The median is least affected by extremes.

The most common definition of market value defines it as "the __________ price that a property __________ bring..." Average, should Highest, will Most probable, should Typical, will

The most common definition of market value defines it as "the most probable price that a property should bring..."

The reciprocal of .20 is 2.5 5.0 5.5 20

The reciprocal of a number is 1 divided by the number.1.0 ÷ .20 = 5.0

Which of the following are NOT classified as negative easements? Conservation easements Drainage easements Historic preservation easements Transferable Development Rights

Transferable Development rights

Which of the following is a guaranteed loan? VA FHA Conventional ARM

VA

Potential gross income - _________________ = effective gross income. Operating expenses Vacancies and credit loss Expense ratio Replacement allowance

Vacancies and credit loss

The "shift" keys on the HP 12C are _____________ colored. Blue only Blue and gold Gold only Red, white, and blue

We have two shift keys - blue and gold.

How much should I pay today for a contract that will give me a lump sum of $175,000 in 5 years, discounted at 6%? $118,026.47 $130,770.18 $133,093.21 $142,840.62

With your 12C, enter: 5n, 6i, $175,000 CHS FV, PV Answer is $130,770.18

When is the Sales Comparison Approach NOT the best way to estimate value? When there are many similar properties nearby When the market is very strong When the property is highly unusual When the property is in a subdivision

When the property is highly unusual

At a 9% annual "discount" rate, what is the present worth of $25,000 if you will not receive it for another 12 years? $5,555.62 $6,782.90 $8,888.38 $10,420.62

With your 12C, enter: 12n, 9i, $25,000 CHS FV, PV Answer is $8,888.38

Where do you address the strengths and weaknesses of each approach of the SRIPAR form? In the income approach section In the sales comparison grid In the URAR portion In the reconciliation section

You address the strengths and weaknesses of each approach of the SRIPAR form in the reconciliation section.

When calculating a GRM, appraisers should use ____________ rent. Gross annual Gross monthly unfurnished Gross month furnished Net monthly

You should gross monthly unfurnished rent. If there are furnishings, an adjustment should be made first.

Cash equivalency adjustments are typically made when: A property was purchased for all cash A property was in poor condition at the time of sale Steep inflation has impacted property values A transaction involved non-market financing

a transaction involved non market financing

The real estate market tends to be Lagging at the end of short-term economic cycles An early responder to short-term economic cycles Sluggish to recover from short-term economic cycles Unrelated to short-term economic cycles

an early responder to short term economic cycles

The real estate market tends to be Lagging at the end of short-term economic cycles An early responder to short-term economic cycles Sluggish to recover from short-term economic cycles Unrelated to short-term economic cycles

an early responder to short term economics

adjustments in the sales comparison appraoch can be made as

dollar amounts or percentage amounts

The Fannie Mae 1007 form is used to identify needed repairs and a cost to cure describe items of depreciation in the subject property estimate the market rent of the subject property estimate the market value of the subject property

estimate the market rent of the subject property

at a 9% annual discount rate, what is the present worth of a 250000 lump sum if you will not receive it for another 12 years?

on calculator: 12n, 9i, 25000 chs fv, pv =8,888.37

The first step in the Sales comparison approach procedure is to

research the market

the appriasla principle that states that when severalsimilar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution is the deinition of th eprinciple of

substitution

When all else is equal, the lower price wins

the principle of substitution