Appraisal Methods, Real Estate Exam Flashcards

Appraisal Methods, Real Estate Exam Flashcards Appraiser Irvine employed the land residual technique. The

unknown factor and desired results would be:

Land value Agent Brown is appraising real property by estimating the quantity, quality and durability of its net income expectancy.

This procedure in the appraisal process is called:

Capitalization of income

"Capitalization" is a process used to:Convert income into value

An appraiser is appraising a two-year-old, single-family, owner-occupied home in a good neighborhood. If he is trying to determine the sales price, which of the following

would normally be given the greatest weight:

Carefully comparing the property with similar properties that have sold recently in the neighborhood A final estimate of the value of any single-family residence

is:

Limited by the replacement cost of the building, plus the value of the land The gross rent multiplier is arrived at by dividing:Sales price by gross monthly rental In the capitalization method of appraising, the most difficult

step is to:

Select a capitalization rate An appraiser would most likely use a "depth table" when

confronted with a valuation problem involving:

A commercial property Whenever possible, an appraiser would estimate the value

of land on the basis of:

The selling prices of comparable sites If an appraiser determines the value of a property by considering the income that it produces and the percentage return which can reasonably be expected to be earned on

the investment, he is using a process which is called:

Capitalization The process of expressing anticipated future benefits of ownership in dollars and discounting them to a present worth at a rate which is attracting purchase capital to

similar investments is called:

Capitalization In regard to the capitalization rate:As it increases, value of property decreases(capitalization process, V= I divided by R)

Capitalization:Establishes the value of an asset by dividing the annual net

income by the desirable rate of return.Of the following approaches to value used by appraisers, which is the one most readily adaptable for use by real

estate licensees:

The market approach Which of the following techniques would an appraiser mainly rely on to appraise a lot on which the buyer intends

to build a single-family residence:

Market approach In appraising, which method places the greatest emphasis on the present worth of future benefits to be received by

the owner:

Income

The method which is used most often to value land or sites

is:

The comparative method When gross income is changed into value in one operation, which of the following describes this occurrence?Rent multiplier When using the market data method of appraising for a

single-family residence, the unit of comparison is the:

Entire property When an appraiser wants to determine a capitalization rate,

he may do so by the:

Any of the above (band of investment method; summation method; market data/comparison method) Which of the following approaches to value estimate tends

to set the upper limits of value:

Replacement If an appraiser was appraising a restaurant building, he

would probably use the:

Income approach The quantity survey method, unit-in-place method, and the square foot/cubic foot methods in real estate appraisal

most directly relate to:

The cost approach The income approach would not be used when appraising:Residences in new subdivisions When appraising property using the capitalization approach, as you determine the net income, which of the

following would you use:

Vacancy allowance The maximum potential income which any income-producing property is capable of generating is

known as:

Gross scheduled income In income producing property valued by the capitalization approach, if the property taxes increase and all else

remains equal, the property value will:

Decreased more then the amount of the annual tax increase When using the market data approach in the appraisal process, many adjustments are often made, and any

differences in the:

Comparables are adjusted to the characteristics of the subject property Rental schedules for various units of space are realistically

established on what basis:

Market comparison To arrive at a capitalization rate in the appraisal of an income- producing property, no provision should be made

for which of the following:

Federal taxes An appraiser is using the market data approach comparing the prices of comparable properties to the subject property.If the comparable properties have a feature that is not present in the subject property, the value of that feature will

be:

Subtracted from the sales price of the comparables The primary purpose that an appraiser would use a site

analysis is to determine the:

Highest and best use The value of an apartment building is being determined by the income approach. Under which of the following circumstances would the appraiser make a deduction from

effective gross income for the cost of management:

All of the above (The owner manages the property; one of the tenants manages the property and is excused from making rent payments for his unit; one of the tenants who lives in a nearby building owned by the owner manages both properties, free of cost to the owner)

If an appraiser is appraising a special purpose property he

would probably use the:

Cost approach The capitalization rate to be used in the income approach to the appraisal of real property provides for a return on, and a return of, the investment in the improvements. A

return of the investment is provided for by means of:

Depreciation methods In appraising real property, a separate valuation for the site

is considered least important:

In applying gross rent multipliers An appraiser usually uses which of the following

approaches in estimating the value of unimproved property:

Comparison In the appraisal of residential property, the cost approach is

most appropriate in the case of:

New property Usefulness of the cost approach would be limited when:Appraising an old structure with many functional deficiencies The hardest and yet the most important part of the market

data method of appraising is:

Adjusting for the differences between the comparable properties and the subject property The affectedness of the market data approach of appraising would it be limited most by which of the following?Economic conditions that rapidly change When an appraiser contrasts the phrase "reproduction cost" and the phrase "replacement cost", replacement would be more closely associated with which of the following concepts?The present cost to replace the building with another building having the same utility In using the capitalization process, which of the following

cannot be deducted to determine the net income?:

Mortgage interest When a licensee is appraising an improved parcel of property using the market dated method, that person must

make adjustments to the estimates of value because:

Any two properties are rarely similar concerning everything