Texas Real Estate Appraisal-SAE Course
Which of the following best describes vacancy and collection losses?
A percentage of potential gross income based on the market, the property, and the appraiser's judgment
What is a bound?
A physical feature that defines the boundaries of the land
Bekah put down $50,000 toward the purchase price, financed the rest, and now has a cash flow of $10,000 after repairs and debt service. What's her ROI?
20%
An appraisal is being done for an investment property. The total value of the building and land is $200,000, and the value of the building alone is $150,000. The building cap rate is 12% and the land cap rate is 8%. The property earns an annual NOI of $40,000. What's the land value?
50,000
How large is a section used in the rectangular government survey system?
640 acres
Before a builder can obtain a permit, two items must be submitted to the building department. What are these items?
A blueprint and building specifications
Which type of REITs specialize in owning certain building types, such as apartments or office buildings?
Equity REITs
If an appraiser using the sales comparison approach adjusts for a change in market value of 5% due to average property depreciation, what type of adjustment is the appraiser making?
Percentage adjustment
When adjusting for differences between the comparable and subject properties, which type of adjustments should an appraiser make first?
Percentage adjustments
As a landowner, Myron has the right to draw and use water from a well that is located on his property. What is the name of this right?
Percolating
What can proper drainage do for a building site?
Protect the foundation
Which term means "for another's life"?
Pur autre vie
When an appraiser is not from the area and provides a too low appraisal, on what principle might you be able to challenge the appraisal?
Geographical incompetence
A manufactured home is required to have a ______ affixed to the exterior of each section.
HUD code tag
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
A lender requests an appraisal of a property under foreclosure. What type of value is the lender most likely to be interested in?
Liquidation value
Which of the following is a true statement about building codes?
Local codes address situations not addressed at the federal or state level.
Which of the following about police power and public land use controls is a true statement?
Local governments and their planning boards control budgeting, site-plan review, and building codes.
Edwin is appraising a newer building using the cost approach method. Because it will be fairly easy for him to conduct a cost analysis with similar structures of the same or nearly the same age, Edwin is going to calculate his construction cost-new estimate using _______.
Reproduction costs
To determine property value with the cost approach, the appraiser subtracts the accrued depreciation from the ______ and then adds the site value.
Reproduction/replacement cost
What is the formula used with the cost approach to appraisal?
Reproduction/replacement cost - accrued depreciation + site value = property value
Besides the summary and analysis of the sales comparison approach, what else is reported in the sales comparison section of the URAR below the sales comparison grid?
Research and analysis of any prior sales of the subject and comparable properties
When reconstructing an operating statement, what's the term for the amount an appraiser records to cover the cost of capital improvements to the property, such as roof replacement?
Reserves for replacement
The ______ method of appraisal compares sales data of comparable properties and adjusts for differences in order to arrive at a market value.
Sales comparison
When Saundra Neill signed a property management agreement with Awesome Altus Properties, Inc., she made sure the agreement stated explicitly that Awesome Altus owned each property she would be managing. In which section of the agreement would she find this verification?
Owner's covenants
Which type of framing involves a single system of wall studs run from the foundation through the first and second floors to the ceiling support?
Balloon
Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
Barbie owns two-thirds, and Midge owns one-third.-Joint tenancy includes the right of survivorship, so Ken's interest will pass to the other tenants. But because Midge bought in later than the others, she isn't considered a joint tenant. Ken's share will therefore pass entirely to Barbie.
The ______ can be used to calculate the occupancy rate and rent required to make a profit on an income property.
Break-even ratio
The ______ can be used to calculate the occupancy rate and rent required to make a profit on an income property.
Break-even ratio-The break-even ratio shows the relationship between expenses and income. The result shows the occupancy rate required to begin making a profit at the given rental rates.
What is BTU, which is a measure of how much heat is required to raise the temperature of one pound of water by one degree Fahrenheit, short for?
British thermal unit
Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?
Encroachment
Derrick was thrilled to find out that the land he purchased includes several small caves. He's been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?
Enjoyment
Which type of cost included in the quantity survey method relates to the cost associated with the developer's function?
Entrepreneurial profit
When property values remain at the same level and are at their highest monetary value, the neighborhood is in what stage of the neighborhood life cycle?
Equilibrium
Roberto has a mortgage on his investment property, but allows the property to fall into disrepair while his focus is on other properties he owns. Which of these is a possible consequence of this action?
The lender can place Roberto's loan in default.
Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______.
Trustor
Ethical standards for appraisers are spelled out in the ______.
USPAP
How are adjustments made in the analysis used in the sales comparison approach?
by adding or subtracting a dollar value or percentage from the sales price of the comparable property
When it comes to the income approach to value for residential rental properties, what's the definition of a gross rent multiplier?
The ratio of a comparable's sale price to its monthly gross income
What number is used first if the appraiser is using the sales comparison method to value a site?
The recent selling prices of comparable properties
When the sales comparison method is used for appraising a site, if the comparable property has positive characteristics that the subject property does not, which of the following is true?
The sales price of the comparable property is decreased.
Which of the following statements applies to reproduction cost?
The same materials and technique that went into constructing the subject property must be used as part of the analysis.
Your clients are interested in purchasing a piece of land that has several acres of wetlands. Because of this, ______.
The site comes with added regulatory baggage and potential costs
What's a percent?
part of 100
Which types of stores are usually the magnet stores for a community shopping center?
Which types of stores are usually the magnet stores for a community shopping center?
Roger is interested in converting his office building into office condominiums. He's had the building renovated, and filed the appropriate paperwork. What else does Roger need to do as part of the conversion process?
financial
A ______ is a ratio that compares two quantities.
Rate
Linda is a licensee who represents a seller in a residential transaction. Her client doesn't understand why an appraisal is needed. "Isn't the value of the property whatever the buyer is paying for it?" the client asks. Which of these would be the best answer for Linda to give her client?
"The appraisal tells the lender if the property is valued sufficiently to serve as security for the buyer's loan, in case of foreclosure."
A commercial income property being appraised has a potential gross income of $2 million. The effective gross income is $1,640,000, reflecting an 18% vacancy and loss rate. After constructing the operating statement, the appraiser arrives at a figure of $1,305,000 for total expenses. Which calculation represents the NOI for this property?
$1,640,000 - $1,305,000 = $335,000
Tim wants to find the median value of the homes that he sold last year. The sales prices of those homes were: $135,000; $185,000; $200,000; $215,000; $216,000; $223,000; $223,000; $235,000; and $242,000. What is the median of this data set?
$216,000
What do you get if you convert 1/5 to a decimal?
0.2
A three-unit income-producing property has a sales price of $600,000. Monthly gross rent is estimated at $6,000. What's the gross rent multiplier?
100x
Compared to homes built before 2004, ENERGY STAR®-qualified homes are rated how much more energy efficient?.
15%
Houses should be built a minimum of ______ feet away from existing, mature trees.
20
What does the principle of substitution say?
A buyer won't pay more for a property if a similar property is available at a lower price.
For which property would a lender be most likely to offer an appraisal waiver?
A condominium-Only single-unit properties qualify for appraisal waivers, and properties valued at $1 million or greater will require a traditional appraisal.
For which of the following purchase-related appraisals must the Appraiser Independence Requirements be followed?
A conventional loan on a four-unit residential property
What's an income shelter?
A deductible allowance from net income
Although you've told her that the value of a modular home is basically the same as a site-built one and that the quality may even be better, Sandy absolutely refuses to buy a modular home. What tell-tale sign of a modular home should you look for during showings?
A label installed in the cabinet underneath the kitchen sink
When stating the problem, which of the following does the appraiser need to identify the subject property?
A legal description and mailing address
What is gross rent multiplier?
A method to analyze the potential value of smaller residential investment properties
What is a section?
A one-square-mile square formed in the use of the rectangular government survey system
What rating scale do appraisers use to indicate the quality of workmanship, materials, and finish of the subject property and comparable properties?
A range from Q1 for exceptionally high quality to Q6 for the most basic quality
What would you expect to find in the quality of construction field for a comparable property in the URAR sales comparison grid?
A rating from the Q1‒Q6 scale
The Simpsons are buying a five-acre lot that was part of a much larger tract of acreage. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?
A survey
When modifying office buildings to meet accessibility requirements, owners should focus on these four areas: accessible approach and entrance, ______, access to restrooms, and any other necessary measures, such as access to public amenities.
Access to goods and services
Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?
Adaptability of item to land's use and agreement of the parties
In what part of a narrative appraisal report would you expect to find a glossary of terms, a flood hazard map, and qualifications of appraiser and company profile?
Addendum
Which of the following is a true statement about adjustments when using the sales comparison approach?
Adjustments are made to the comparables, and not to the subject property.
In the fourth step of the market extraction method, an appraiser divides the overall depreciation rate by the ______ to determine an annual depreciation rate.
Age of the comparable property's improvements
Alexi is using the economic age-life method to measure depreciation. By what other name is this method known?
Age-life
Which of the four methods used to measure depreciation is the easiest?
Age-life
The direct capitalization method would be a good choice of appraisal method in which of the following situations?
An apartment building that has consistent income and expenses year after year.
What is a base line, as used in the rectangular government survey system?
An east-west line used as a reference point
Which method of yield capitalization simplifies the discounting process through the use of published financial tables?
Annuity capitalization
The value principle of ______ is the basis of the income approach to appraisal.
Anticipation
At what point during ownership may a property owner place a restriction on a deed?
Any time
Which of the following groups is responsible for developing the minimum federal licensing and certification requirements for real property appraisers?
Appraisal Qualifications Board
The Appraiser Qualifications Board has set a minimum of 75 hours of appraiser education for which category of appraisers?
Appraiser trainee
Which of the following is a true statement about how adjustments are made in the sales comparison approach?
Appraisers adjust upward when a comparable is missing a feature found in the subject property.
Which of the following actions toward an appraiser would be considered improper?
Asking an appraiser to remove information about adverse property conditions from an appraisal report
In older houses built before 1950, which type of electrical system would frequently be found?
BXA BX wiring system includes bundles of insulated wires sheathed in a sturdy metallic "armor" and is one of the earliest types of electrical cable developed for both residential and commercial use.
What's the best advice when challenging an appraisal?
Be specific and concise about why the value opinion is different in your mind.
When the land value is known, but the building value is unknown, the ______ technique can be used.
Building residual
When using residual income techniques with a known land value, which technique is used to determine the value of the building(s)?
Building residual
Which of the following is used when land values are available or can easily be determined, but the cost or depreciation on a building is difficult to estimate?
Building residual technique
Edgar is an appraiser who is currently reviewing the contents of the garage of a home that has been put on the market. Which of the following will he mark as a fixture in his report?
Built-in workbench
How is the adjusted sales price calculated for a comparable property using the sales comparison approach?
By adding or subtracting the sum of the adjustments made on a comparable property
How should the proximity of a comparable property be indicated in the sales comparison grid of the URAR?
By distance in miles and direction relative to the subject property
How does an appraiser determine site value when using the cost approach method?
By using the sales comparison method
Which of the following can be constructed on site but are usually manufactured elsewhere and installed at the home later?
Cabinets
When investors put money into an investment property, they expect to get back the principal they put in plus interest or profit. What is the name for the return of principal?
Capital recapture
With which of the methods used to measure depreciation must the appraiser use comparable properties with and without the same defect to help determine the rental value difference caused solely by the defect?
Capitalized value
Carmen is a builder. Which of the following is true about construction codes as they apply to her next project?
Carmen must adhere to all federal, state, and local building codes, which are enforced at the local level.
Which of the following is the highest federal level of licensure an appraiser can attain?
Certified General Real Property Appraiser
The _______ category of appraiser licensure requires a minimum of 1,500 hours of applicable experience.
Certified residential real property appraiser
What does the metes and bounds system use to develop a property's legal description?
Compass headings and directions
Which two terms are synonymous and are defined as the amount of rent actually being charged, as stipulated in a lease?
Contract rent, scheduled rent
Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?
Contribution
Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. "No," his attorney explains. "It's not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction.
Control
When working with commercial properties, the appraiser develops an estimate of market rent by ______ and comparing rents across the subject and comparable properties.
Converting rental income to annual dollars per square foot
______ basically answers the question, "How much could my money have earned if I had put it into a different investment?"
Cost of capital
To determine the estimated reproduction cost of a subject building using the square-foot method, the appraiser takes the square footage of the subject building's living area and multiples it by the ______.
Cost per square foot of a recently constructed comparable structure
To determine the total reproduction cost of a subject building using the unit-in-place method, an appraiser multiplies the ______ by the number of units of that component part in the subject building and then adds them together.
Cost per unit of measure of each component part of the subject property's structure
Amelia goes to New Orleans for Mardi Gras every year, and she wants the home she's buying to make her feel like she lives there all year long, right down to the detailed iron railings. Which style of home should you show her?
Creole
Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"
Demand
In the second step of the appraisal process, the appraiser identifies the data needed. What's another term used to describe this step?
Determine the scope of work
The ______ method converts a single year's expected income (or an annual average) into a market value.
Direct Capitalization
Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.
Disposition
How is the gross adjustment percentage calculated in the sales comparison approach?
Dividing the total dollar adjustment by the comparable's sale price.
Which two terms are synonymous and are defined as the amount of rent typical for properties that are comparable to the subject property?
Economic rent, market rent
Kiki is looking at a small apartment complex and trying to determine its age. What's Kiki measuring?
Effective age
To measure depreciation using the age-life method, the appraiser divides which of these by the total economic life?
Effective age
Which measure of time, with regard to depreciation, is the age a structure appears to be?
Effective age
When following the Uniform Standards of Professional Appraisal Practice process for real estate appraisal, an appraiser will _________ after determining the subject property's highest and best use.
Estimate value of the land
Which line item in the Cost Approach section in the URAR form is only used if the appraisal is being completed for property that is being purchased through a HUD or VA loan?
Estimated Remaining Economic Life
Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests?
Exclusion
When there is a very low loan‐to‐value ratio, or when the financial strength of the borrower is unquestioned, clients often opt for which of the following reports?
Exterior‐Only Inspection Residential Appraisal Report (Form 2055)
With ______, the property owner has no control over the issue.
External obsolescence-Because the property owner can't fix undesirable or hazardous influences that exist outside the property, external obsolescence is considered incurable.
What does the Financial Institutions Reform, Recovery, and Enforcement Act require?
Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state.
Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?
Fee simple determinable
The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?
Fee simple determinable
Which type of an estate doesn't end automatically when the stated event or condition occurs?
Fee simple subject to a condition subsequent
Which of the following factors of highest and best use is concerned with whether the value of the use is worth the cost?
Financial feasibility
The statistical mode is determined by which of these methods?
Find the value in the data set that occurs most often
When property values increase in a newly developed area, the neighborhood is in what stage of its life cycle?
Growth
If a site has improper drainage, what might happen?
Flooding can occur.
The income approach to valuation is used ______.
For some single-family houses and two- to four-family units
Gabrielle has just upgraded her oil-burning furnace. Her new furnace takes cool air from outside and passes it through the heat source using a fan or blower. What type of furnace has she upgraded to?
Forced air
Which type of appraisal report makes use of pre-printed documents?
Form report
What could discolored soil, soft spots, or mounds on the land indicate?
Former waste disposal site
What are constructed on top of footings?
Foundation walls
Personal property includes which of the following?
Free-standing TV
When yield capitalization is used, what is a discount rate is applied to?
Future income
What phrase describes the amount that today's dollars grows to over time?
Future value
Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, which of the following will come into play?
GRM
Which roof style features a shallow slope over a steep slope, and is typically seen in barns?
Gambrel
Maxwell is a tenant. His lease has a fixed rent in which the landlord pays all taxes, insurance, and maintenance expenses. What type of lease does he have?
Gross
Bart, an appraiser, calls Celia, a listing agent, to ask her about a home she just sold. Why would Bart likely do this?
He needs to know the terms of the sale so he can better use the sale as a comparable on another appraisal.
How would Mark, an appraiser using the sales comparison approach to value, reconcile the adjusted sales prices of comparable properties to indicate the value of the subject property?
He would choose the adjusted sales price of the property most like the subject property.
What's another term for the International Codes® established by the International Code Council?
I-Codes
The second step of the appraisal process that a qualified appraiser will use is to _______.
Identify data needed
Which of the following is true regarding the purchase of a condominium?
If the prospective buyer has the financial means to buy the condominium, neither the association nor the residents can block the purchase.
Where are underground storage tanks primarily found?
In older homes and former industrial sites
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______.
In writing, and in accordance with uniform standards
Which line item in the Cost Approach section in the URAR form is used to capture the appraiser's opinion of value for the property?
Indicated Value By Cost Approach
Capitalization is the process of converting ______.
Income to value
An appraiser determining the value of a lease interest would see a tenant who is in financial trouble as a risk, and would likely ______ used in the value calculations as a result.
Increase the interest rate
Axel is using the cost service index method to find the reproduction cost of a structure. By what other name is this method known?
Index
With which of the four methods used to find the reproduction cost of a structure does the appraiser apply a factor to the subject building's original cost that represents the costs of construction up to the appraisal date?
Index
Which type of cost included in the quantity survey method has to do with the cost of having to pay for such things as permits, surveys, and the builder's overhead and profit
Indirect costs-The costs involved in non-construction-related, but still necessary, expenses—including permits, surveys, the builder's overhead and profit, and payroll taxes—are known as indirect costs.
Which of these should tenants keep in mind regarding trade fixtures?
Installation and removal should not cause damage to the property.
Which one of the following expenses listed on the appraiser's operating statement is classified as a fixed expense?
Insurance
What does the I in the acronym MARIA stand for, when determining whether an item is a fixture?
Intention in placing item on land
What type of value may consumers be interested in if they are looking for the potential rate of return?
Investment Value
A set of tables that appraisers use to calculate an annuity's present value for a number of years at various interest rates are known as ______ annuity tables.
Inwood
Which of the following statements about an easement appurtenant is TRUE?
It's a permanent right that runs with the land.
Jaime, an appraiser, is unable to use either the sales comparison approach or the income capitalization approach to determine a property's value. Given the situation, which of the following statements is true?
Jaime must use the cost approach.
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have?
Joint tenancy
Which type of ownership requires unities of time, title, interest, and possession?
Joint tenancy
What's the term for a horizontal wood-framing member used in floor and ceiling framing?
Joist
Jillian is appraising a piece of property for an investor client. She knows the value of the buildings, but not the value of the land. Which appraisal technique should Jillian use?
Land Residual-When the value of the buildings is known, the land residual technique can be used to determine the land value and the amount of residual income the land earns.
What do the letters in LEED certification represent?
Leadership in Energy and Environmental Design
In addition to physical possibility, financial feasibility, and maximum profitability, which one of the following is a considerations when determining highest and best use?
Legal permissibility
Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.
License
Which of the following statements about a license is true?
Licenses may be revoked by the owner at any time, unless a termination date has been specified by contractual agreement
In any given property, where will you most likely find the highest radon levels?
Lowest level
Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?
Lucas and Tom-Joint tenants are allowed to sell their interests, so Tom became a property owner when Ivan sold his interest. However, joint tenancy is not inheritable but instead includes the right of survivorship. Trace's and Chad's interests passed to Lucas and Tom.
What will you find in building specifications?
Major systems, construction details, and landscaping
In a trust, the trustee is the person who ______.
Makes sure the terms of the trust are carried out
A wall that runs through the center of a home and is thicker than normal would indicate which type of construction?
Manufactured
Abel is using the sales comparison method to measure depreciation. By what other name is this method known?
Market extraction
With which of the four methods used to measure depreciation does the appraiser use comparable properties' sales prices to figure out the value of a depreciated item?
Market extraction
When real estate licensee Bridget reviews data for the square footage of all single-family homes in Castle Place, she analyzes it using a ______ because it provides a single number that represents all of the houses in the sample.
Measure of central tendency
Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?
Metes and bounds
The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?
Method of annexation-refers to how and whether the item is attached to the property. This is the M in MARIA.
What's the lowest pressure at which plumbing will still function?
Minimum pressure
The Appraisal Subcommittee ______.
Monitors state regulatory agencies and the Appraisal Foundation
Which of the following is true about a lender-enabled appraisal waiver?
Most transactions won't qualify for an appraisal waiver.
When licensees focus all their efforts on one segment of the real estate market with the intention of minimizing, and perhaps even eliminating, the competition, this is known as ______.
Niche marketing
Iris is using the breakdown method to measure depreciation. By what other name is this method known?
Observed Condition-The observed condition method is also known as the breakdown method. This is because the appraiser analyzes each component of the structure in terms of the three categories of depreciation.
To determine the estimated reproduction cost of a subject building using the index method, the appraiser takes the index factor and multiples it by the ______.
Original construction cost
Where can the Universal Appraisal Dataset and the Uniform Collateral Data Portal be found?
On the Fannie Mae website
Which two operating statement ratios will equal one when added together?
Operating expense ratio and net income ratio
The statistical median is determined by which of these methods?
Order the values in the data set sequentially and find the value that falls in the center
Beneficiary interest in land that's part of a land trust is considered ______.
Personal property
Lester is interested in a two-bedroom unit in a cooperative. A residence in a cooperative, unlike a condominium, is legally considered ______.
Personal property
Rhonda's looking at a structure and trying to determine how much longer the building can be expected to remain standing. What's Rhonda measuring?
Physical life
Which measure of time, with regard to depreciation, is the amount of time during which a structure is expected to remain standing?
Physical life
Which of the following could indicate an underground storage tank is present?
Pipe or vent sticking out of the ground
What material is screwed directly to wall studs in order to create the partitioning between rooms?
Plasterboard
Which of the following is a key consideration and starting reference for a metes and bounds description?
Point of beginning
The government's authority at all levels to ensure the health, safety and welfare of its citizens, which includes the control of public land use is the definition of ______.
Police power
Which of the following describes the amount of income a property can produce if it's fully occupied and earning market rent?
Potential gross income-Appraisers use potential gross income as the basis for determining an opinion of value for some types of income property.
A(n) ______ fraction is where the numerator is less than the denominator.
Proper
Which of the following properties would require the fewest adjustments in comparison with a two-story, split-level subject property that has been well-maintained with limited depreciation due to normal wear and tear and was built 10 years ago?
Property D is a one-and-a-half-story home built 15 years ago.
Which of the following is a true statement regarding property taxes and investments?
Property taxes for investment properties are fully deductible as a business expense.
Which of the four methods used to find a structure's reproduction cost is considered the most comprehensive and accurate?
Quantity survey
Which of the four methods used to find the reproduction cost of a structure requires the appraiser to know every facet of building construction?
Quantity survey
What rating is given to insulation to describe its effectiveness?
R-Value
When property values start increasing as renewal occurs in the neighborhood, what stage of the neighborhood life cycle is occurring?
Rejuvenation
Which measure of time, with regard to depreciation, is the period of time beginning from the date of the appraisal and extending for as long as the property can remain useful for its original purpose?
Remaining economic life-This is the definition of remaining economic life. In terms of an appraisal, a property's remaining economic life is the most important of the four measures of time.
Interest earned on an investment is also known as ______.
Return on investment
Robin has a buyer client in a transaction where the contracted purchase price is $350,000. Then the appraisal comes in at $310,000. Which of the following would be the best action for Robin to take?
Review the appraisal report for accuracy.
Items that fall into the incurable physical deterioration category can be broken down into long-lived or short-lived. Which of the following is an example of a short-lived item?
Roof
In which field of the sales comparison grid would you find an indication of an arm's length sale?
Sale or financing concessions
How many years of income does yield capitalization analyze?
Several
Monique is frustrated. The lender is requiring her to use the cost approach to determine her opinion of value, but the property is too old for her to estimate reproduction cost. What options does Monique have?
She can estimate construction cost-new using replacement cost instead.
Mary is driving through a neighborhood where she's considering moving. She loves these homes because their exterior is a combination of stone and stucco. What part of the wall is she looking at?
Siding
Which of the following statements is true regarding the financing of a cooperative purchase?
Some lenders refuse to offer loans for cooperative purchases.
Which of these is both a house type and a house style?
Split level
To determine the estimated reproduction cost of a subject building using the square-foot method, the appraiser takes the ______ and multiples it by the cost per square foot of a recently constructed comparable structure.
Square footage of the subject building's living area
Based on accepted national standards, how should square footage be reported in residential buildings?
Square footage should be reported to the nearest whole square foot.
Based on accepted national standards, how should square footage be reported in residential buildings?
Square footage should be reported to the nearest whole square foot.-Measurements are rounded to the nearest inch or 10th of an inch; square footage is reported as the nearest whole square foot.
When recording neighborhood growth in the Neighborhood section on the Uniform Residential Appraisal Report, an appraiser will select what status if a neighborhood is fully developed?
Stable
A ______ system uses a boiler to produce steam to heat a home.
Steam
What type of heating system uses a boiler to produce steam, which is transferred to rooms through a pipe?
Steam system
These windows fit on either the inside or outside of the main window. What are they?
Storm
Which of these is a vertical component used in wall framing?
Stud
This equation, "Value of land = Anticipated sales of finished lots - development costs," is a simplified version of one used with the ______ method of land valuation.
Subdivision
Information shown in this area of the URAR contains the property address, taxes, borrower, seller, and occupant.
Subject
The legal description for Sara's property appears to include part of her neighbor's yard. Which of the following could help to verify her property's boundaries?
Survey
Which of the following is needed in order for the sales comparison approach to yield reliable results?
Sufficient sales data about recently sold comparable properties
Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
Tenancy in common-This is a form of shared ownership, but only tenancy in common provides for inheritability—the other forms share the rights of survivorship (the existing tenants assume the deceased's share of the property).
What is an example of a triple net lease?
Tenant pays all property taxes, maintenance, and insurance costs.
Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
Termination of co-ownership by partition
Which organization issues the LEED certification?
The U.S. Green Building Council
Appraiser Chuck writes "s01/15;Unk" in the "date of sale" field in the sales comparison grid of the URAR. What does this indicate?
The comp was settled in January 2015 and the contract date is unknown.
Appraiser Chuck writes "s01/15;Unk" in the "date of sale" field in the sales comparison grid of the URAR. What does this indicate?
The comp was settled in January 2015 and the contract date is unknown.-The letter "s" followed by a date indicates the date of a settled sale. If the contract date is known, it can be indicated after a semi-colon and the letter "c." If unknown, this can be indicated by the abbreviation "Unk" after the semicolon.
Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?
The condo owners
For most residential properties, the highest and best use of the property is relatively obvious. What is it?
The current use
Which of the following best defines capitalization rate?
The expected rate of return on investment
Whether an appraiser is appraising a condo, a co-op, a time share, or a unit in a PUD, which of the following must always be considered?
The fees property owners are charged by the association
You are viewing a home with a buyer client. When you open one of the bedroom closets, you find a piece of paper with some information stuck to the inside of the door. What have you most likely discovered?
The home is a manufactured home and this is the data plate.
Which of the following would be considered a specific factor that influences the value of real estate?
The improvements that are present
Why does a property owned by four people as joint tenants have the potential to be appraised lower than the same property owned by one person as an estate in severalty?
The joint tenants could each sell their individual portions of the property, making it less marketable.
What technique is used when a building value is known, but the land value is unknown?
The land residual technique
Which of the following is true about the GRM method?
The method can't be used alone as an indication of value for residential property.
What is the URAR?
The most widely used appraisal reporting document
How is the grid that's used in the rectangular government survey system laid out?
The numbers start in the northeastern corner and follow a zigzag pattern.
Where's the load carried when a roof truss system is in place?
The outer walls-The truss carries the load to the outer walls, allowing for greater flexibility when placing the inner walls.
Rental property owners are exempt from fair housing laws if which of the following conditions is met?
The owner doesn't own more than four single-family homes.
Which of the following statements about a property owner placing a restriction on a deed is true?
The owner may place a time limit on the restriction.
The capitalization process uses a capitalization rate, which is based on what?
The performance of comparable properties
When using the sales comparison approach to value, what might it mean if there's a large total adjustment needed for a comparable property?
The property may not be a reliable comparable for the subject property.
What dictates a leasehold estate's value?
The relationship between scheduled rent and the market rent
When looking at a rectangular government survey system map, where would Section 36 be located?
The southeastern-most section of the township
Appraisers typically use ______ approaches to value.
Three
The sixth step in an appraiser's process for finding the value of a property describes _______ possible approaches to valuation.
Three
In yield capitalization, what's the purpose of the discount rate?
To convert future income to a present value
What's the intended use of the Uniform Residential Appraisal Report?
To evaluate the subject property for a mortgage finance transaction
What's the purpose of the Appraiser Independence Requirements?
To protect against fraudulent home valuations
Lenders can submit electronic appraisal reports, such as the Uniform Residential Appraisal Report through what tool on the Fannie Mae website?
Uniform Collateral Data Portal
Which of the four methods used to find the reproduction cost of a structure is considered the second most accurate method?
Unit-in-place
Which of the four methods used to find the reproduction cost of a structure is considered the second most accurate method?
Unit-in-place-Because the unit-in-place method provides a much more detailed breakdown of the type of structure, it's more accurate than either the square-foot or index method. However, the most accurate method is the quantity survey method.
Which of the following terms means the price a property is worth to its owner as currently enjoyed?
Value in use
Can police power ever be used in a way that restricts citizens' freedom?
Yes, if it's for the public good.
When ______ capitalization is used, future income estimates are calculated, then a discount rate is applied.
Yield
Discounted cash flow analysis is a form of what?
Yield capitalization
Price levels are an indicator of _______.
demand
The ______ method of land valuation converts the amount of yearly income a site will produce into a value using a capitalization rate.
ground rent capitalization
Compared with condominiums, the monthly fees for a cooperative owner are typically ______.
higher
A steel chassis, tongue, axles, and wheels are telltale signs of what type of home?
manufactured
Roger is interested in converting his office building into office condominiums. He's had the building renovated, and filed the appropriate paperwork. What else does Roger need to do as part of the conversion process?
promote the sale of condominiunm offices
Which of the four methods used to find the reproduction cost of a structure is most often used by appraisers?
square foot
n which form of co-ownership is a person's ownership inheritable?
tenancy in common
The umbrella organization that's authorized by Congress to develop and oversee the standards and requirements real estate appraisers must follow is called ______.
the appraisal foundation
What is financial risk?
the risk that is directly related to leverage
