Real Estate Appraisal- Unit 12 Flashcards

Real Estate Appraisal- Unit 12 Flashcards Age/Life methodMethod that uses a ratio of the building's age to its expected life.What is the biggest weakness of the cost to cure method of estimating depreciation?It does not allow for partially depreciated items.A house in a middle-income neighborhood is under-valued by $20,000 due to extreme deferred maintenance. The cost to paint, re-floor, replace the broken windows, repair the fixtures, and patch the roof is approximately $15,000. This

scenario describes:

curable physical deterioration Physical deteriorationPhysical wear and tear, disintegration, decay or rot, or physical damage of any kind caused by the elements.A property valued at $300,000 contains a single-car garage in a neighborhood that predominately contains two-car garages. The typical house value in the neighborhood is $310,000. A contractor estimates the cost of converting the single car garage into a two-car at $15,000. This is an

example of:

incurable functional obsolescence Short-lived itemsItems that are expected to be replaced or repaired on a consistent basis throughout the life of the structure Which of the following is not a market extraction technique for estimating depreciation?Abstraction SuperadequaciesFeatures that are too large or of a higher quality than needed for a property and have a negative effect on property values.Curable DepreciationLoss in value that is economically feasible to correct; it adds value equal to or greater than the cost of curing the item External obsolescenceAlmost always considered to be incurable, conditions affecting a property that are external to that property A house located in an area where the recommended insulation is R-19 has insulation rated at R-42. This home suffers from superadequacy Accrued depreciationLoss in value to a property due to any cause as of the effective date of the appraisal.A duplex is 30 years old, has a remaining economic life of 95 years and an effective age of 20 years. The current cost to reproduce the improvements is $450,000. How much depreciation should be charged against this structure?

$95,000

Functional obsolescenceDeficiencies, superadequacies, or undesirable features found in a building.

A barn was built 40 years ago; however, it has been abandoned and looks 20 years older than it actually is.What is its effective age?60 A strip mall was built with the expectation that it would be economically viable for 99 years. Currently, it is 40 years old. The property management company and tenants have exceptionally managed and maintained it, and local architectural tastes have not changed. An appraiser concludes that the property has an effective age of 25 years. What is the strip mall's remaining economic life?59 years When constructed, an office building was projected to last 80 years. It is currently 24 years old. Using the square foot method, an appraiser concludes that the building new would cost $500,000. Using the age/life method, estimate the office building's current value

$350,000

What is the best way to depreciate the value of land?None of the above-Cost to cure-Age/life method-Breakdown method Which of the following is almost always incurable?External obsolescence Economic LifeTime in which the property's improvements contribute to property value.An office building was renting space for $25 per square foot per month but the recent installation of a nearby dump has forced the price down by $4. If the building has 28,000 square feet of rentable space, how much income is being lost each year due to external obsolescence?

$1,344,000

A furnace would qualify as a(n):long-lived item.

The difference between the improvements' market value

and the cost to build them new is called:

accrued depreciation.Effective ageEffective age describes the age of a structure based on its condition and usefulness.A house's value suffers because of its proximity to an

airport. An appraiser would identify this as:

incurable