Study msft
Which give the greatest present worth of the payments?
($10,000 paid today) $5,000 paid today and $5,000 paid in one year $10,000 paid in one year They are all worth the same
Legal description
A means by which land is specifically and definitely located is known as a:
$192,760
A particular improvement being appraised is known to have cost $122,000 in 1976. Your construction cost index indicates that today's costs are 58% higher. What is the indicated reproduction cost today?
An income stream capitalized at 7 percent will indicate a higher value than the same income stream capitalized at ____ percent.
8
((Its value is tied to a specific location)), The benefits are derived over a short period of time, Among property types there is a great degree of standardization, All the above
A basic characteristic of real property is:
Generally, for property tax purposes, the rights to be appraised are the fee simple absolute rights that remain after considering the existing liens, leases or easements to the property.
False
If valid information can be obtained for all approaches, the value decision should be based on the average of the three indicators.
False
In the government survey system of description writing, one-fourth of a section contains 460 acres.
False
It is typical for a taxable possessory interest to exist in government owned personal property.
False
Marcia leases tiedown space at a private airfield. She has a taxable possessory interest in the land.
False
Market conditions adjustments (time adjustments) can be made by comparing current sales of two dissimilar properties.
False
Massive lay-offs in a local industry are likely to cause a reduction of both the demand and the supply of housing.
False
Price per square foot is an appropriate unit of comparison when appraising retail shop sites where display area is of greatest importance.
False
Property tax laws prevent an appraiser from giving greater weight to the sales comparison Approach than to other approaches.
False
Representative costs for a type of property are the average of all construction producers in a particular market area.
False
Restrictive building codes may limit a purchase price but not the assessor's estimate of fair market value.
False
Satisfactory application of the appraisal process requires utilization of each of the three approaches to value.
False
The Appraisal Process allows the appraiser to make a tentative estimate of value while collecting supporting information.
False
The Revenue and Taxation Code and the Property Tax Rules describe value-in-exchange and value-in-use as being the same.
False
The Revenue and Taxation Code permits an owner-occupied single family residence that is zoned only for that use to be valued on the basis of a more productive use.
False
The Sales Comparison Approach is based on the principle of contribution.
False
The State Constitution specifically describes the conditions of a fair market value transaction.
False
The appraisal process can be used only for real property.
False
The appraisal unit for rural property may include parcels of different owners.
False
The appraiser's concept of depreciation is essentially the same as the accountant's concept of depreciation.
False
The creation of an easement is beneficial to the dominant tenement and the servient tenement.
False
The documentary transfer tax on a financed sale with $10,000 down and an assumed $40,000 first trust deed would be $55?
False
The effects of depreciation are of concern to the appraiser only in the sales comparison and cost approach.
False
The most complete ownership of a parcel of real estate is called underlying fee.
False
The principle of substitution is relevant only to the cost approach.
False
The replacement cost of an older object can be measured by adjusting its historical cost to reflect the cost today of an exact replica.
False
The validity of the cost approach is dependent upon the quality of the construction of the object.
False
When property consists of more than one component, purchasers commonly emphasize the value contribution of each component.
False
Grape vines are exempt from property taxation until four years after the season in which they were planted in orchard form.
False - 3 years
(The fee-simple rights), Not subject to government limitations, Only those held by the owner of record, All the above
Generally the rights to be appraised for property tax purposes are:
Property was not on the open market, Buyer was uninformed, ((Sale is old)), The transaction resulted in cash to the seller
It is proper to adjust a sale price as an indicator of value when the:
Which of the following statements is incorrect in regard to a life estate?
It may be leased, It may be sold, It may be mortgaged, (It is inheritable)
A prospective use that represents the "Highest and Best Use" of the land must be:
Legally permitted, Physically possible, Reasonably probably, (All the above)
The term "shall" in the R&T code indicates.
Must follow
$725,500
The RCN of the Miramar Hotel is $3,000,000. You determine that land values in the area are estimated to be $10.00/sq.ft. The subject lot size is 22,550 sq.ft. If the property sold for $2,500,000, what is the indicated accrued depreciation?
Dominant Estate
Owner A gives owner B an easement across A's land to shorten the distance B has to travel to reach land he owns. The land B owns has benefited by this easement and is known as the:
$1,120,000
An apartment has a scheduled gross of $140,000 per year. Vacancy and collection loss is 5%. Other expenses will amount to $47,000 per year. Using a gross rent multiplier of 8 will result in an appraisal of:
An outmoded kitchen
An example of functional obsolescence is:
Expected increase in value
An item of accrued depreciation is curable is the cost to cure is not greater than the:
Replacement cost is conceptually closer to the principle of substitution than the reproduction cost.
True
Replacement cost is the cost as of the date of appraisal of providing a new object that will provide the same utility as the subject.
True
Replacement cost per square foot factors provided in AH 531 include contractors profit and overhead
True
Reproduction cost and replacement cost of an older object are likely to differ.
True
Reproduction cost is the cost at the time of appraisal of providing a new object that is a replica of the subject.
True
Some physical deterioration can be cured.
True
Contractual arrangements can divide the interests between the buyer and the seller of the property.
Ture
The "appraisal unit" we value is the one that people in the market typically buy and sell.
Ture
The rationale of the principle of substitution is that people tend to be guided in the amount they will pay for an item by the cost of acquiring an equally desirable substitute.
Ture
Prices should be averaged to arrive at market value, The highest price is the only one meeting the definition of value, (Both prices may be within the band of value), None of the above
Two identical properties have recently sold, one for $60,000 and the other for $55,000. Both sales appear to meet the conditions of a market value sale. The proper conclusion for you to draw is that:
You must know the current __________________ value in order to do a land residual technique.
building (improvements)
Excess land is land that is:
Valuable and possesses significant utility
((building value)), Land value, Net operating income, Land and building capitalization rates
What information is not needed to apply the building residual technique?
$71.50
What would be the documentary transfer tax on an all each sale of $65,000
Conformity (Substitution) Highest and best use Increasing returns
Which economic principle is indicated by the statement, potential buyers of property consider prices paid for similar properties?
Physical deterioration, Functional Obsolescence caused by some deficiency, Functional obsolescence caused by excursiveness or over adequacy, ((Economic Obsolescence))
Which of the following categories of depreciation cannot be cured by the property owner:
(($0.55 per $500 of cash contribution (new money)), $1.10 per $1,000 of sales price, 2% of the value of the property, 11% of the first trust deed
Which of the following describes the manner in which the real property transfer tax in California is determined:
Manufactured homes purchased new after July 1, 1980 are subject to assessment for property taxes
Which of the following is a true statement concerning the assessability of manufactured homes?
Real estate is immobile, The nature of the real estate market is different, Benefits of real estate are yielded over a longer period of time, ((all the above))
The reactions of people in the market toward real estate are different from many other commodities because:
Jake builds a cabin on land owned by the Balzac Corporation, Jake builds a cabin on land he purchased from the U.S. Department of Interior, ((Jake builds a cabin on land he leased from the U.S. Forest Service)), All of the above
Which of the following is an example of a taxable possessory interest?
((Properties used exclusively for religious worship)), Business inventories, Household personal property of a homeowner, All the above
Which of the following is exempt from property taxes only when an exemption is filed?
To appraise older tract homes
Which of the following is not a typical purpose of the cost approach?
Zoning is one example of a government restriction
Which of the following is true?
Undeveloped land
Which of the following land uses is generally not considered income property?
Adjust each comparable sale by dollar amount derived from sales for size difference
Which of the following procedures would be most valid in the market approach when comparing houses with abnormal size differences:
Change in Zoning
Which of the following would you consider to be external obsolescence?
Interest on construction financing
Which of these is considered an indirect cost?
The price could be more or less than the market value depending on the motivations of the buyer and seller and details of the transaction.
Which statement is true about the relationship between the market value of a property and its sales price at the time the property sold?
Listing should indicate an upper limit of value, Offers should indicate a lower limit of value, Neither of the above is correct, (Both a and b are correct)
While actual sales are preferred in the market approach, listings and offers may help bracket the value. In this respect:
Value in real estate market should be described as ______________________________________________________________________.
a range rather than a precise point
The absence of any of the conditions stipulated in a definition of market value does not necessarily mean the __________________________________________.
sale is not indicative of market value
When may a cash equivalency adjustment to the sale price be necessary?
when the seller carries the second at a non market rate & a boat is included in the sale
Price guides are appropriate for the appraisal of farm machinery.
True
Price per acre is an appropriate unit of comparison for agricultural properties.
True
Today's worth of an income stream is likely to be worth _______ than the total of the payments in the income stream.
less
Age perceived by the market
"Effective" age most nearly means:
The price paid for a property that did not sell quickly in a _____________________ should be examined to see if it is representative of market value.
"seller's market"
A particular improvement being appraised is known to have cost $122,000 in 1976. Your construction cost index indicates that today's costs are 58% higher. What is the indicated reproduction cost today?
$192,760
How much documentary stamps are indicated by a sale price of $555,125?
$611.05
A basic assumptions of the "Income Approach" is that: ____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
(1) value is a function of income (2) value depends upon the quality and quantity of the income stream (3) future income is less valuable than present income
Controls that arise from the government's police power include all except which one of the following?
(Deed restrictions), Zoning regulations, Subdivision requirements, Building and safety regulations
Of the four essential elements of value, which of the following must be coupled with purchasing power?
(Demand), Wantedness, Scarcity, Utility
What term is used to describe the value to a typical buyer?
(Market value), Investment value, Sale value, Use value
What is the maximum ad valorem tax rate?
1%
All property is taxable and shall be assessed at _________ of market value.
100%
The property Taxation provisions the California Revenue and Taxation Code provides " Except as provided in this par, every assessor shall assess all property subject to general property taxation at ______________________________________."
100% of its full cash value
Given a sale of $750,000 and gross income of $66,000 what is the indicated GRM?
11.36
The full cash value base may reflect from year to year the inflationary rate not to exceed _____________ for any given year.
2 percent
How large is the lot with the following legal description? SW 1/4, SE 1/4, S 1/2, Sec. 8 T. 3N., R2, M.D.B. & M.
20 acres
25 An appraisal is:
25 An estimate of value
28 The value of a property tends to be set by the cost of acquiring an equally desirable property. This a statement of the principle of:
28 Substitution
$1,400
A commercial lot 50 feet wide and 150 feet deep just sold for $70,000 cash. The sales price per front foot comes to:
Outdated plumbing fixtures
A curable item of depreciation is:
Topography
A description of the surface features of a parcel of land such as elevation or drainage is known as its:
1939, 1952, (1965), 1970
A house built in 1939, remodeled in 1970, and incorporating all significant features of houses build in 1965 would probably have an effective year of:
$109,950
A house has a living area of 1,900 square feet. An attached garage has a total area of 420 square feet. The building has an expected life of 50 years and an effective age of five years. The lot is worth $15,000. If it costs $40 to reproduce the living area and $25 to reproduce the garage on a square foot basis, what is the indicated value of the property?
160.0
A house is rented unfurnished for $500 per month. Using the gross rent multiplier method, the appraiser estimated the value for the property to be $80,000. What monthly gross rent multiplier did he use?
$2.75
A lot measuring 130 feet by 200 feet recently sold for $71,500. What was the selling price per square foot?
8 acres
A parcel of land 440 feet by 792 feet contain how many acres?
Legally permitted, Physically possible, Reasonably probably, (All the above)
A prospective use that represents the "Highest and Best Use" of the land must be:
An unincorporated town located in a rural area, ((A geographical area that contains 36 square miles)), A geographical area that contains one square mile, A six mile wide strip that runs parallel to the prime meridian.
A township is:
$35,000
A vacant lot measures 200 feet by 381 feet. What is its estimated worth if the land is valued at $20,000 per acre?
6
A warehouse has a market value of $3,000,000. It generates an annual gross income of $500,000. Annual operating expenses are also $350,000. What is the gross income multiplier?
Eminent domain, Amenities, ((Functional obsolescence)), Aversion
Access to the second bedroom of a house may be gained only through the first bedroom. This is an example of:
An appraisal is:
An estimate of value
The interaction of supply and demand factors in real estate markets:
Adjust demand to supply, (Creates value and sets price), Causes demand to decrease as the supply dwindles, Is highly predictable, Allowing the appraiser to predict the future housing needs with near certainty.
Functional obsolescence, Poor smog controls, Poor urban planning, ((External Obsolescence))
After freeway construction, the volume of business on a street decreased by 50%. This can be considered as:
Always assumed to be the market value, (Market value when similar properties are selling for this amount), Never the market value, The market value only when the lender also agrees.
An agreement between the buyer and the seller on the asking price of a property is:
$3,625,520
An office building has a leasable area of 45,000 square feet. It's current reproduction cost is $65 per square foot. The building is on one acre of land. Comparable land cost $17 per square foot. The building has suffered $40,000 depreciation. What is the total value of the property using the cost approach?
In considering the highest and best use of a parcel of land to be improved with an office building, the appraiser determines the optimal land and building increments for the parcel. Which of the following economic principles does this illustrate:
Anticipation, (Balance), Contribution, Substitution
Maximum value results where properties in a neighborhood are relatively similar. Select the principle which most applies.
Anticipation, Highest and best use, (Conformity), Change
Which appraisal principle states that economic factors outside the property may have a positive or negative effect on the property's value?
Anticipation, Substitution, Contribution, (Externalities)
What term is used for a transaction in which all parties to the transaction are dealing from equal bargaining positions?
Anticipation, Third party market, (Open market), Secondary Market
The cost of constructing a building that will be one of the like utility as the one being appraised
As contrasted with the term "reproduction cost," refers to:
The process of bringing together the values indicated by each approach so that the appraiser can form an opinion about the value of the subject property.
As it is used in appraising, the term "reconciliation" means
The principal of increasing and decreasing returns says that maximum value results from adding to the agents of production.
As long as you can afford to do it, To meet the competition, Until they are in balance, (As long as the total net return increases.
When is "base year" value established?
As of 1975 lien date, for a completed new construction, a change of ownership
A study of the supply and demand conditions in a specific area is referred to as:
Assemblage, Projection analysis, Economic base, (Market analysis)
What principle states that value is sustained when the economic and or environmental elements are equilibrium?
Balance
The grantor is the:
Buyer, (Seller), Renter, Lender
Under Article XIIIA of the California Constitution similar properties.
Can have different assessed values.
Which best describes the term "Utility"?
Capacity of good to satisfy the wants and needs of people
______________________ refers to any method of converting an income stream into an indicated market value.
Capitalization
Which is not a way of defining a neighborhood boundary for appraisal purposes?
Census tracts
An appraisal may be necessary to establish a value for:
Condemnation, Taxation, Lending purposes, (All the above)
Type of basic frame, wall, floor and roof construction
Construction classification refers to the:
Value is the present worth of future benefits, according to the principle of
Contribution, Highest and best use, (Anticipation), Surplus productivity
Which is not one of the four conditions for highest and best use?
Cost effective
When a very expensive home is built in a neighborhood of small modest homes, the result will most likely be:
Decrease the value of the more expensive home
If the demand for homes remains constant ant the supply:
Decreases, the value will increase
For property tax purposes, only the rights to the use of the property are appraised.
False
Owner A gives owner B an easement across A's land to shorten the distance B has to travel to reach land he owns. The land B owns has benefited by this easement and is known as the:
Dominant estate
Functional obsolescence occurs when the parts no longer function.
False
Which of the following rights of government is based on police power?
Eminent domain, Taxation, Escheat, (Zoning)
When title to property reverts to the state because the owner left no will or heirs, it is because of the government's right of:
Escheat
"Escheat" refers to the legal obligation of a owner to develop property according to prevailing zoning ordinances.
False
A price per unit derived from one type of agricultural land can be applied to other types of agricultural land.
False
A product is fully produced by the time it reaches the wholesale level.
False
A sales price represents a consensus of the market participants decision as to the value of a specific property.
False
A sales price that is not a good indicator of fair market value of the sold property can nonetheless be a good indicator
False
A township consists of 48 sections.
False
A well enforced zoning ordinance and a private deed restriction have the same effect upon the assessor's value estimate.
False
Adjustments to the historic cost are unnecessary when inflation has caused the value of a structure to increase.
False
All property is to be valued at its fair market value with no exceptions.
False
An appraiser using an offer in the comparative sales approach to value might expect that the offer would be on the high side of the value range.
False
An increase in the demand for specific housing will likely cause a quick increase in the available supply.
False
Appraisers determine the value of property.
False
Appraisers interpret actions of people
False
Appraisers perceive depreciation as the equal annual charge, based upon the sales price, necessary to recapture the investment in the structure.
False
Appraisers should consider the building as a unit separate from the land when making residential appraisals.
False
Cost is a direct measure of the benefits to be derived from a new property.
False
Demand refers to the number of units available at a particular price.
False
The greatest possible degree of ownership in real property is:
Fee Simple
What is the most complete form of ownership allowed by law.
Fee simple estate
Dairy farm
For which of the following types of property is "price per acre" the term most often used as a unit of comparison for estimating the land value?
Which can cause a difference between the reproduction cost and the replacement cost of an item.
Functional obsolescence
80 acres
How many acres are in the S 1/2 of the SW 1/4 of section 12?
50 acres
How many acres are there in the parcel of land described: "The SW 1/4 of the SE 1/4 of the NW 1/4 and the SW 1/4 of the NW 1/4 of Section 20"
The primary reason an appraiser analyzes a neighborhood is to:
Identify and evaluate factors that may influence property values
Appraisers study real estate markets in order to
Identify changing price trends, Evaluate market reaction to property differences, Evaluate the strength of various economic forces, (All the above)
$250,000
If a documentary transfer tax of $275.00 is paid, what is the indicated price of the sale assuming cash to a new loan?
$108,000
If the appropriate monthly gross rent multiplier is 180 and the monthly rental is $600, what is the indicated value of the subject property?
$120,000
If the site value is indicated to be $80,000 of the total value in a particular neighborhood, how much improvement value would be allocated from a $200,000 sale of a single family home?
Adding estimated depreciated cost new of the improvements to the estimated site value
In the cost approach, value is estimated by:
160 acres
In the rectangular survey system a legal description describing, one quarter of a section contaings
The costs of the most efficient builders in the area, Costs dictated by local representatives of the Carpenters' Union, ((The costs of typical builders who are doing the bulk of the work in the area)), A statistical sample of construction costs in the area
In the replacement cost approach, representative costs should reflect:
(Is properly included as part of the cost approach), Should not be included in the cost approach, Is an expense to the contractor which should be ignored, Is an expense item of the income approach
In valuing an improvement, the interest which a contractor must pay to borrow construction money:
Improvement is new or in its early life
In which case is it best to use the cost approach?
Income multiplied by a ________________________ equals value
Income multiplier
Decreasing the square foot cost
Increasing the floor area of a structure has the usual effect of:
What is the definition of "plottage"?
Increment of value added due to parcel combination
The lien date is
Jan 1
What type of ownership has definite rights of survivorship?
Joint Tenancy
The boundary of a neighborhood might logically be set at
Jurisdictional boundaries, Well-defined physical barriers, A sharp change in economic benefits, (All the above)
__________________________________ agreements is an exception to the property tax laws requiring the appraisal of all property at its fair market value.
Land subject to open-space
Vacant land sales, Capitalization of ground rents, Land residual capitalization technique, ((All the above))
Land value can be estimated by:
Should have the same value, Must have different values, ((May have different value)), None of the above
Land values of parcels which are the same size and are side by side:
Which of the following is not an agent of production?
Land, (Taxes), Capital, Entrepreneurship
When appraising property the appraiser must appraise the appraisal unit which is:
Land, Improvements, (Commonly bought and sold in the open market), Properties under the same ownership that are contiguous
Appraise the new building; reappraise the land ((Appraise the new building; do not reappraise the land)) Do not appraise the new building; reappraise the land Do not appraise the new building; do not reappraise the land
Lannie and Carol bought a home-site several years ago. It remained vacant until this year when they built and occupied their new home. How should the assessor treat the property?
The proximity of a parcel of land to a supporting land use is referred to as:
Location quotient, (Linkage), Highest and best use, Land efficiency
A description of the surface features of a parcel of land such as elevation or drainage is knows as its:
Location, Plottage, (Topography), Restrictive covenant
Of the following conditions, which is most likely to cause the price to be different from the value?
Location, Supply and demand, Availability of financing, (Uninformed parties)
Which is not one of the four agents of production?
Manufacturing
When valuing an income producing property for tax purposes the rent used is:
Market Rent
Market value is measured in terms of?
Money
When should property be reappraised?
Newly constructed, Change of Ownership, Decline in Value, (All the above)
Misplaced improvements
Of the following property defects, which is least likely to be curable?
Appraisal of vacant land, Allocation for tax purposes, Use in the cost approach, (All the above)
Of the following, which is a good reason for a separate estimate of site value?
((Value is a function of income)), Expense for management in a large building is more, The market approach should agree with the Income Approach, None of the above.
One of the basic assumptions of the Income Approach is that:
The process of a local government in exercising its power of eminent domain is known as:
Police power, (Condemnation), Escheat, Urban renewal
The legal right of government to acquire private property for a public use or purpose with just compensation is known as:
Police power, (Eminent domain), Condemnation, Escheat
Which of the following would be considered functional obsolescence?
Poor architectural design
Functional Obsolescence
Poor room arrangement is an example of:
An appraisal is?
Process of estimated value of a specific property at a stated time and place, an estimate of value, the process of estimating value
A home which cost $150,000 is surrounded by homes priced substantially higher. Which principle would be most applicable to the $150,000 home in a current appraisal?
Progression
When can you have a possessory interest in personal property?
Property acquired by or for the California Pollution Control Authority.
Only if the property experiences a change in ownership, new construction or become less valuable than the base year value.
Property tax laws permit the preparation of current market value appraisals under which of the following circumstances?
____________________________________________________ can be part of the same appraisal unit.
Real property and personal property
Appraisal, of replacing the existing improvement with one of like utility
Replacement cost, as used in the field of appraisal, may be defined as the cost, as of the date of:
Cul-del-sac
Residential lots are often described by reference to their relation to streets and surrounding lots. Which of the following has the least thru-traffic?
Residences constructed prior to 1940, (Residences whose maintenance is typical of others of the same age), Residences located in non-urban areas, Wood frame structures
Residential percent good tables provide the most reliable adjustments to replacement cost estimates of which of the following:
Which is not an acceptable method of land valuation?
Sales comparison, (building residual), allocation, land residual.
Withhold the value decision until making an analysis of the separate value indicators
Satisfactory application of the appraisal process permits the appraiser to:
The four elements which create value are:
Scarcity, Demand, Utility, Capacity for private ownership
Which of the following is a correct statement concerning fixtures?
Subject to base year value.
The Petersons found a home they like very much but decided not to buy it after learning the price. Their reasoning was probably based on the principal of:
Substitution
What term is used to explain the appraisal principle that states that the value of a property is influenced by its being in harmony with the surrounding properties?
Substitution, (Conformity), Anticipation, Contribution
Which of the following principles best describes the effect of an international airport on the value of a nearby residential subdivision?
Substitution, Highest and best use, (Externalities), Conformity
The limitation on fee simple absolute property rights are:
Taxation, Eminent domain, police power, escheat
All property is taxable unless otherwise provided
The California Constitution provides that:
Due to functional obsolescence, Due to physical deterioration, ((Due to Economic Obsolescence)), All the above
The analysis of an apartment neighborhood indicates that income expectations have been adversely affected by closing a large industrial plant. This is an example of depreciation:
36 square miles
The area of a township is:
Depreciation is difficult to estimate
The cost approach is generally unreliable in the appraisal of older buildings because
New Improvements
The cost approach is more reliable when appraising:
All property except real estate
The definition of personal property as defined in the Revenue and Taxation Code:
The houses in a neighborhood under study were all built about 20 years ago. Most are owner-occupied and well maintained. In all likelihood, the neighborhood is in
The development phase, (The stable phase), Decline phase Rehabilitation phase
(May affect the selling price), Will not affect the market value for property tax purposes, May meet the requirements of an economic rent, All the above
The existing lease on a property:
Gross income
The maximum earnings of a property based on economic rent is:
Appraisal process
The orderly plan of action advocated in the appraisal of real property is known as which of the following?
Principle of conformity, Market approach, (Principle of substitution), Presumption of market value.
The presumption that the market value of a property will conform to the sales price of close substitutes is based upon the:
A reliable indicator of value of similar properties, A reliable indicator of value of the sold properties only, (An unreliable indicator of value of similar properties and the sold property), An unreliable indicator of value only of the sold property
The price paid for a property sold under conditions of duress most likely will represent:
When making an appraisal for property tax purposes the appraiser is to appraise the property at:
The price that was actually paid for the property, (Market value), The cost of the property, The use value of the property
An apartment building, A commercial structure, A single family residence, ((All the above))
The principle of anticipation can be applied to
The comparative sales approach, The cost approach, The income approach, (All the above)
The principle of substitution can be applied to
All properties will be replaced, Utility is available in all property, ((Replacement cost new sets the upper limit of value)), Properties are seldom replaceable
The principle of substitution encompasses the idea that:
Primary consideration to the most reliable approach
The process of reconciliation involves:
Linkage
The proximity of a parcel of land to a supporting land use is refereed to as:
Type of construction, (Estimate of depreciation), Manner in which the neighborhood is maintained, Ratio of land to building value
The reliability of the cost approach is directly related to the:
Square foot method
The replacement cost method most commonly used is:
The bundle of rights includes
The right to occupy, exclude others, or to sell, The right to borrow against, The right to convey by inheritance, (All the above)
The incremental value that results when two sites are combined
The term "plottage" refers to:
((Appraisal of the unit of property commonly traded in the market)) Separate appraisal of the units of land, improvements, and personal property Appraisal of all assessable property within the same ownership unit Appraisal of property that comprises one assessment parcel
The term "unit appraisal" refers to:
Metes and bounds; subdivision; rectangular survey
The three methods of legal description for real estate are:
External Obsolescence
The type of depreciation that is considered to be nearly always incurable is:
The "fee simple" ownership
The typical appraisal assignment is to appraise:
Which statement is true about the relationship between the market value of a property and its sales price at the time the property sold?
They are the same at that point in time, The price will always exceed market value, The market value will always exceed the price, (The price could be more or less than the market value depending on the motivations of the buyer and seller and details of the transaction.)
Price per square foot of building area adjustments are proper when size is the only significant difference between a subject and the sold property.
True
Prospective purchasers can use the cost of a new structure to help determine the worth of the property.
True
"Highest and best use" is one for which a demand now exists or will exist in the near future.
True
A building that is an over-improvement for the area suffers from obsolescence because of the principle of regression.
True
A loss in value caused by a zoning change that permits a nearby incompatible use can be called external obsolescence.
True
A major purpose of the Appraisal Process is to promote thoroughness, accuracy and uniformity.
True
A potential new and profitable use that investors ignore cannot be considered as the land's "highest and best use."
True
A price per square foot unit of comparison can be derived by dividing a sale price by the number of square feet.
True
A purchase price may not reflect the value of all interests or rights to the sold property.
True
A vacant residential lot owned by a developer is less valuable than a lot owned by its "ultimate consumer."
True
All of the costs of production have been incurred when an item reaches the consumer level.
True
Although cost and value describe different phenomena, the "cost" of an object can equal its "value"
True
An appraisal is a reasoned opinion of value based on and supported by factual information.
True
An assumption of the "Cash Equivalent Concept" is that sellers who must accept a risky promise to pay, will demand a higher price.
True
An assumption of the "Cash Equivalent Concept" is that sellers who must pay "points" for the buyers financing will demand a higher price.
True
An inventor's concern about the age of a property is reflected in the price he pays.
True
Data for each approach should be processed independently when possible.
True
Depreciation is a loss in value due to any cause.
True
Depreciation represents the value inferiority of an object as compared to new but similar object.
True
Effective age is the age an object represents itself to be.
True
External obsolescence is another name for economic obsolescence.
True
For property tax purposes, appraisers are normally concerned with the value of fee simple absolute rights, limited somewhat by the powers of government.
True
For property tax purposes, we normally value the total bundle of rights.
True
Fruit and nut trees are exempt from property taxation until four years after the season in which they were planted in orchard form.
True
Functional obsolescence is a likely cause of a difference between replacement cost and reproduction cost.
True
Growing crops are exempt from property taxation.
True
Historic cost of a new structure should indicate its value if there is no obsolescence and all necessary costs are included.
True
Historic cost refers to the actual cost of an object at its time of construction.
True
Historic costs should be analyzed to insure that all costs necessary to place the object in the hands of the original user were incurred and reported.
True
If the object is new and suffers no obsolescence, historic cost, replacement cost and reproduction cost should be the same.
True
In a strict legal sense, the word "property" refers to the rights or interests a person has in a determinate thing.
True
In addition to federal surveys, Spanish grants, and city lots, land may also be legally described for tax purposes by assessor's maps.
True
In the cost approach, appraiser can use effective age as a guide to the proper percent good factor.
True
Market conditions adjustments (time adjustments) can be made by comparing a current sale with an older sale of a similar property.
True
One purpose of the Appraisal Process is to provide a framework for the comparison of the appraisal subject with similar properties that have recently sold.
True
Percent good and percent depreciated are complementary.
True
Percent good represents the amount of benefits remaining, as compared to the benefits that would be received from a new structure.
True
Taxable possessory interests are subject to base year valuations.
True
The Sales Comparison Approach is more realistic than the cost approach when valuing "older" property.
True
The assessor's obligation to value the fee simple absolute rights originates from the State Constitution.
True
The buyer of a residential lot plans to live in the house he will construct. This buyer represents the final trade level.
True
The cause of external obsolescence is likely to affect more than one property.
True
The historic cost can measure the replacement cost of an older object when adjusted to present day cost levels.
True
The principle of conformity suggests that a non-conforming property will suffer from obsolescence to some degree.
True
The principle of conformity suggests that value is created and sustained when all properties in a neighborhood conform to market perceptions.
True
The principle of regression and the principle of progression suggest that the value of a non-conforming property will gravitate towards the value of the conforming properties.
True
The principle of substitution suggests that competition exists among properties.
True
The rational of the Sales Comparison Approach is that buyers and sellers are guided by prices paid for similar properties.
True
The reliability of the cost approach is dependent upon the ability of the appraiser to estimate the accrued depreciation.
True
The sales price indicated by a documentary transfer tax of $88 would be between $79,501 and $80,000?
True
The unit to be appraised is the combination of components of that type of property that is commonly bought and sold as a unit in the market place.
True
The value contribution of exempt items included in a sale may be of importance in determining the value of the appraisal unit.
True
The value of otherwise similar residential lots can vary because they are located in different neighborhoods.
True
The value of real property is usually tied to economic and environmental influences of the neighborhood in which it is located.
True
There is a different market (trade level) for a product at each stage of production.
True
Utility is added to a product as it moves from one stage of production to the next.
True
When making an estimate of replacement cost, the appraiser is interested only in the cost that would be experienced by the typical builder of that type of structure.
True
When reaching a value conclusion, the appraiser should lean towards the approach that people in the market for that type of property would most likely use.
True
((Interim use)), Temporary use, Secondary use, Current use
When a property's highest and best use can reasonably be expected to change in the near future, the prevailing highest and best use is referred to as a (an):
Outside measurements including wall thickness
When measuring for the living or floor area, the appraiser uses:
Sales Comparison Approach
When the improvement is new and represents highest and best use, the upper limit of real property value is usually found by the:
The Sales Comparison Approach
Which approach to value is considered to be the most direct?
Which of the following are private rather than public limitations to real property rights?
Zoning, Health and safety laws, Right to tax, (Deed Restrictions)
The Property Taxation provisions in the California Revenue and Taxation code states that _____________________________________________________________.
all property in California is subject to taxation under the Code.
The term "plottage" refers to:
an increment of value that results when two or more sites are combined under single ownership
Value is the present worth of all of the _______________________________________________________________.
anticipated future net benefits
Investors use ____________________________ to convert income streams into value.
capitalization rates
In the __________________________, the land and the building comprise one appraisal unit.
cost approach
An item _____________________________________________________ in order to have value.
does not have to be functionally useful
In processing the income stream to value a property, the expenses to be deducted are:
expenses a typical owner would likely experience.
Market rent can be properly described as ______________________
economic rent
When the "current full value" of property is less than its "base year full value indexed to the current lien date," the "current full value" shall be
enrolled as the current taxable value.
A sale price that differs significantly from prices paid for similar properties should be suspect as ________________________.
evidence of value
Property owned by the United Sates Government is ___________________.
exempt
Property tax rules and regulations specifically describe the conditions of a _____________________________________________.
fair market value transaction
Adjustment to sale prices should be made in what order?
financing, time, physical comparability
The investor places greater emphasis on the benefits anticipated in the ________________________ than in those anticipated in later years.
immediate future
The _________________ approach may be used for the appraisal of types of equipment that are commonly leased.
income
When using the rectangular survey system the starting point for the description would be?
initial reference point or landmark
The "Historic Cost" of a new structure can measure:
its value, its replacement cost, its reproduction cost, (all the above)
The appraisal unit for rural property may include _________________________________________________________.
more than one parcel
The appraisal unit for rural property may include parcels that are ___________________________.
non-contiguous
The Standard of value sought by California assessors is ____________________________________________________ a property has for a specific use.
not gauged by the profitableness
Value and price are?
not necessarily the same
It is _________________________ to adjust the sale price of a property when a second deed of trust is held by a third party.
not necessary
Double taxation is _______________________ by the Property Taxation provisions in Division 1 of the California Revenue and Taxation Code (Section 102)
not permitted
Market rent is the amount _____________________________________________________________________________________________________________
of rental income that could be expected from a property is available for rent on the open market.
For a sale to be comparable to the subject property the location should be:
one that is competing neighborhood and that a buyer would consider
Demand in a real estate market should be described in general terms rather than by a ___________________________.
precise number
For property tax purposes value is defined as?
present worth of future benefits
Interaction of supply and demand determines?
price and quantity traded
With Certain exceptions, Real Property shall be re-appraised if
purchased, newly constructed, or a change in ownership occurs after the original base year.
Value is essentially a ________________________________.
ratio of exchange
An appraiser, when valuing income-producing property, should collect and analyzes _____________________________________________.
sales prices of similar properties
Land and improvements are to be assessed
separately
Appraisers the sales prices of machinery obtained at auctions.
should not consider
When appraising a retail store, the appraiser's gross income estimate ______________________________ income generated from the sale of merchandise.
should not include
An agreement on the asking price between buyer and seller indicates the value of the property when:
similar properties are selling for that amount
Prices of homes are determined by the interaction of ____________________________.
supply and demand
Some economists define value as ____________________________________________________________________________________.
the ability of one commodity to command other commodities in exchange
Depreciation is curable if:
the cost to correct is less than the value added
Remaining economic life of an improvement is:
the estimated period that the improvements will generate benefits.
The basic concept of the income approach is that there is a relationship between ___________________________________________________________________________________________________.
the income a property can produce and its value
The "Income Approach" should be used when people purchase that type of property for ____________________________.
the income it yields
If the number of available houses remains the same and the number of potential buyers increases, ________________________________________________________________________________.
the price of houses will likely increase
Value-in-use is best described by?
the worth of a property based on future benefits and anticipated by its woner
The four prerequisites to value are?
utility, scarcity, capacity for private ownership, and demand
Typically when population increases in an area the demand for housing
will increase