Real Estate - National Valuation

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

$1,620,000

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

$142,750

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

$2,887.50

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

$438,000

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

$69,750.00

The definition of depreciation is 1 - A loss in value. 2 - Mortgages and foreclosures. 3 - Loss from scarcity of a product. 4 - A gain from cost.

1 - A loss in value.

The primary intent of zoning ordinances is to: 1 - Assure the health, safety and welfare of the community. 2 - Demonstrate the police power of the state. 3 - Limit the amount and types of business in a given area. 4 - Protect residential neighborhoods from commercial encroachment.

1 - Assure the health, safety and welfare of the community.

Which aspect of depreciation is almost always incurable? 1 - Economic obsolescence 2 - Physical deterioration 3 - Internal obsolescence 4 - Functional obsolescence

1 - Economic obsolescence

A tire company has a manufacturing plant located in an area that has just been re-zoned for residential usage. The company is allowed to continue operating the plant under the new zoning classification. However, if the plant is destroyed by fire, the tire company: 1 - May not construct another plant in the neighborhood without first applying for a zoning variance. 2 - May not construct another plant in the neighborhood under any circumstances. 3 - May construct another plant if it obtains the consent of the residents living in the neighborhood. 4 - May construct another plant without the resident's consent as long as the homeowners' association approves it.

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

An appraiser deducts $5,000 for a property that has defective wiring. This defect is curable obsolescence, provided that 1 - The repair costs $4,000 to complete. 2 - The repair costs $6,000 to complete. 3 - The defect can be repaired at all. 4 - This defect is inherently incurable due to external obsolescence.

1 - The repair costs $4,000 to complete.

Which of the following is an accurate statement? 1 - To derive net operating income, deduct the annual operating expenses from Annual Gross Income to derive net operating income. 2 - To derive the GRM, net income is used. 3 - To derive the capitalization rate, the value is divided by income. 4 - The GRM and cap rate are equally desirable to an investor in determining a price to offer.

1 - To derive net operating income, deduct the annual operating expenses from Annual Gross Income to derive net operating income.

What is the principal mechanism for implementing a master plan? 1 - Zoning 2 - Referendum 3 - Public election 4 - Property management

1 - Zoning

Functional and economic obsolescence are aspects of 1 - depreciation. 2 - effective age. 3 - land value. 4 - ability to generate income.

1 - depreciation.

An apartment building contains twenty units. Each unit rents for $900 per month. The vacancy rate is 5%. Annual expenses are $17,500 for maintenance, $7,200 insurance, $7,500 taxes, $6,400 utilities, $7,500 mortgage debt and 10% of the gross effective income for the management fee. What was the investor's rate of return for the property if she paid $1,170,000 for the property? 7.6% 8.9% 12.46% 22.05%

12.46%

The primary survey line running east and west in the rectangular survey system is the: 1 - Township line. 2 - Base line. 3 - Range line. 4 - Principal meridian.

2 - Base line.

For which of these properties would an appraiser most likely choose to use the cost method of appraisal? 1 - Apartment building 2 - Church 3 - Land 4 - Single-family home

2 - Church

One business attracts another business of similar type and together they may make more money than they would have singularly. This is an example of what principle of value? 1 - Contribution 2 - Competition 3 - Progression 4 - Assemblage

2 - Competition

Which of the following approaches to value figures the land separately from the value of the improvements? 1 - Market data. 2 - Cost approach. 3 - Income approach. 4 - Functional obsolescence.

2 - Cost approach.

The depreciation most difficult to remedy would be: 1 - Physical. 2 - Economic. 3 - Functional. 4 - Premise.

2 - Economic.

Which of these controls would be used to prevent a neighboring lot owner from violating the recorded deed restrictions in a subdivision? 1 - Zoning. 2 - Injunction. 3 - Police power. 4 - Condemnation.

2 - Injunction.

What is a unique characteristic of a special assessment tax? 1 - More valuable properties which stand to benefit will pay proportionately more taxes. 2 - It applies only to properties which will benefit from the public improvement. 3 - The equalization board discounts levies for properties not affected by the public improvement. 4 - It creates an involuntary junior lien on the property.

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

Public land use controls in the form of building ordinances are an exercise in the form of: 1 - Eminent domain. 2 - Police power. 3 - Interstate land sales. 4 - Deed restrictions

2 - Police power.

Functional obsolescence is due to: 1 - Normal wear and tear. 2 - Poor design or floor plan. 3 - Poor location. 4 - An adjacent, adverse property use

2 - Poor design or floor plan.

A CMA is performed when: 1 - Accessing property. 2 - Pricing property. 3 - Taxing property. 4 - Condemning property.

2 - Pricing property.

What are ad valorem taxes based on? 1 - The replacement value of property 2 - The assessed value of property 3 - The millage value of property 4 - The broker's estimate of value

2 - The assessed value of property

What is the purpose of a homestead tax exemption? 1 - To exempt qualified property owners from ad valorem taxation 2 - To offer some amount of tax relief on an owner's principal residence 3 - To encourage multiple property investment 4 - To exempt owners of principal residences who rent their properties

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

A permitted deviation from the standards of a building ordinance is called: 1 - Unlawful non-conforming use. 2 - Variance. 3 - Legal nonconforming use. 4 - Testimonial

2 - Variance.

A house is constructed in a neighborhood that is substantially larger than the existing houses. Based on the value principle of ___________________, the larger house's value will therefore be adversely affected. 1 - anticipation 2 - conformity 3 - inadequacy 4 - competition

2 - conformity

Which of the following is an example of economic obsolescence? 1 - Four bedrooms and one bath in a house. 2 - Lack of insulation in an apartment building. 3 - A house abutting a closed factory. 4 - Lack of paint on a barn.

3 - A house abutting a closed factory.

Which principle of value holds that a property can increase or decrease in value in expectation of something in the future? 1 - Conformity 2 - Highest and best use 3 - Anticipation 4 - Contribution

3 - Anticipation

Which principle of value holds that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from the whole? 1 - Substitution 2 - Conformity 3 - Contribution 4 - Progression

3 - Contribution

To find the value of a property using the income approach to value, if the net operating income and capitalization rate were known, the appraiser would: 1 - Multiply the net operating income by the capitalization rate. 2 - Multiply the effective gross income by the capitalization rate. 3 - Divide the net operating income by the capitalization rate. 4 - Divide the capitalization rate by the net operating income.

3 - Divide the net operating income by the capitalization rate.

Commercial income producing property is best appraised using which method? 1 - Market data approach. 2 - Cost approach. 3 - Income approach. 4 - Sales comparison approach.

3 - Income approach

How is a homeowner's total tax bill derived? 1 - Divide the tax requirement by the tax base. 2 - Divide tax dollars needed by the taxable assessed value. 3 - Multiply each district's tax rate times the taxable value of the owner's property. 4 - Average the tax rate for each tax district, and then multiply the average tax rate times the assessed value.

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

A property owner in a recently zoned area was permitted to continue to use his property in a manner that did not comply with the zoning requirements. This use is described as which of the following? 1 - Exclusive-use zoning. 2 - Deviation. 3 - Nonconforming use. 4 - Private control of land use

3 - Nonconforming use

A developer put two lots together and sold them as one large lot. The increase in value is referred to as: 1 - Appreciation. 2 - Contribution. 3 - Plottage. 4 - Partition.

3 - Plottage.

A $175,000 house was built next to a $75,000 house. Which of the following principles of value would apply? 1 - Substitution. 2 - Competition. 3 - Progression and Regression. 4 - Anticipation.

3 - Progression and Regression.

One way for an appraiser to account for a property's deterioration is to 1 - Increase the chronological age of the property. 2 - Decrease the chronological age of the property. 3 - Raise the effective age of the property. 4 - Decrease the effective age of the property.

3 - Raise the effective age of the property.

The concept of economic life is best characterized as 1 - The actual age of a structure or structural component. 2 - The effective age of a structure or structural component. 3 - The anticipated period of time an improvement will last for depreciation purposes. 4 - The anticipated physical life of an improvement as a function of its durability.

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

What is the fundamental purpose of a building permit? 1 - To restrict the number of new development projects 2 - To establish the basis for an inspection 3 - To ensure that improvements comply with codes 4 - To promote certificates of occupancy

3 - To ensure that improvements comply with codes

An appraiser, using the cost approach method would do which of the following? 1 - Make an adjustment if the economic conditions have changed between the date of sale and the date of the appraisal. 2 - Use comparable properties as the basis for the decision. 3 - Use replacement cost minus depreciation. 4 - Use the ability of the property to produce income as the basis of the decision

3 - Use replacement cost minus depreciation.

The tax base in a jurisdiction is derived by subtracting exemptions from 1 - sales values. 2 - the tax rate. 3 - assessed values. 4 - residual values.

3 - assessed values.

The capitalization rate is best described as: 1 - the value of the property in relation to the gross income the property produces. 2 - an investment property's fixed cash flow on an annual basis. 3 - the relationship between net operating income and estimated value or cost. 4 - a fixed rate of return for the investor of a commercial property.

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

The metes and bounds method of surveying is based primarily upon: 1 - Survey lines that run east and west. 2 - Survey lines that run north and south. 3 - A map of the subdivision. 4 - A point of beginning.

4 - A point of beginning.

The best definition of an appraisal is: 1 - A means of determining depreciation. 2 - A method to keep values current with reproduction cost. 3 - A statement of facts that may not be necessarily true. 4 - An estimate of value.

4 - An estimate of value.

A development company owned property that the city wanted so it could extend the runways at the municipal airport. If the company refuses to negotiate with the city, then the city may acquire the property by: 1 - Escheat. 2 - Accretion. 3 - Confiscation. 4 - Eminent domain.

4 - Eminent domain.

Which method of determining cost adds estimates of material and labor costs to indirect costs to arrive at the total cost of a structure? 1 - Chapter in place 2 - Square foot cost 3 - Reproduction cost 4 - Quantity survey

4 - Quantity survey

An improvement to a local restaurant does not comply with the zoning ordinances because it was constructed prior to the adoption of the zoning laws, and its use is one that clearly differs from current zoning. This is known as 1 - an illegal nonconforming use. 2 - a variance. 3 - a special exception. 4 - a legal nonconforming use.

4 - a legal nonconforming use.

The premise of the sales comparison approach rests on the principle of: 1 - Conformity. 2 - Competition. 3 - Highest and best use. 4- Substitution.

4- Substitution.

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

43,560 Square feet