chapter 21
In appraising an historically significant residence built in the Victorian era using the cost approach, an appraiser will probably appraise it on the basis of its replacement cost. reproduction cost. restoration cost. reconstruction cost
B
QUESTION 10 The principle that holds that maximum value is realized when a reasonable degree of homogeneity is present in a neighborhood is known as the principle of harmony. conformity. similarity. homogeneity.
B
Which of the following results from factors outside the property? Hypothecation. Economic obsolescence. Physical deterioration. Functional obsolescence.
B
Which of the following would have the highest appraised value using the Income approach? Office Building with a Net Operating Income of $410,000 using a cap rate of 9% Apartment with a Net Operating Income of $400,000 using a cap rate of 10% Shopping center with a Net Operating Income of $350,000 using a cap rate of 7% Warehouse with a Net Operating Income of $390,000 using a cap rate of 8%
C
Seller motivation is considered most in the competitive market analysis. gross rent multiplier method. income approach. cost approach.
A
The conversion of future income into present value is known as capitalization. appreciation. hypothecation. amortization.
A
Vacant land would best be appraised using: the sales comparison approach. the gross rent multiplier. the cost approach. the income approach.
A
Which of the following approaches is most likely to provide a rough estimate of the value of a rental property? Gross rent multiplier. Income approach. Market comparison approach. Cost approach.
A
After all adjustments are made to a comparable property, its comparative value for appraisal purposes is known as its amended market price. revised market price. indicated market value. adjusted market price.
D
Landscaping is not given value in an appraisal.
F
The competitive market analysis is the appraisal done by real estate licensees.
F
The reproduction cost method is more practical than the replacement cost method of determining value.
F
The three approaches to establishing value of a property are the market approach, the sales comparison approach and the cost approach.
F
When comparing previous sales, adjustments are made to the subject property in order to determine its market value.
F
Using the market approach to value in appraising a property, which statement would be true? The comparable with the least adjustments is given the most weight. Adjustments are made to the Subject Property The Gross Rent Multiplier (GRM) would be used. The appraiser will use a numeric average of the adjusted comparables.
NOT C AND D
Appraisal standards that are used for the valuation process are established by the Uniform Standards of Professional Appraisal Practice.
T
Economic obsolescence is defined as loss of value due to external forces or events.
T
Operating expense is subtracted form effective gross income to obtain the net operating cost.
T
The cost approach takes into account the land value, the cost of rebuilding the structure less depreciation.
T
The gross rent multiplier is a calculated number used income producing properties that provides a way to compare market values.
T