AGB 212 ACTUAL FINALS ANSWERS AND
QUESTIONS SET A+
✔✔What are the 3 sources of sales data in the direct sale comparison approach? -
✔✔Brokers, Deed Recordings, MIS, comps
✔✔Replacement Cost - ✔✔Current cost to replace the structure with one of similar
utility
✔✔Reproduction Cost - ✔✔Current cost to replace the structure with an exact replica
✔✔3 components of cost used by the appraisers? - ✔✔direct cost, indirect cost and
entrepreneurial profit
✔✔4 cost estimating methods - ✔✔quantity survey, unit in place, comparative unit, and
cost per sqft
✔✔Identify and describe 3 forms of depreciation - ✔✔1. Physical wear and tear- dent,
stain, old, chipping
2. Functional obsolescence- design not current, functional problem, change in market, #
of rooms, poor design 3. External obsolescence- outside property, nuisances,
economical obsolescence
✔✔2 methods of estimating depreciation are most commonly used by appraisers -
✔✔economic age life and market abstraction- (contributory value: compare RCN to the
current value of structure=depreciation)
✔✔identify the data analysis technique for determining or estimating an adjustment in
the direct sale comparison approach - ✔✔paired sales or matched pairs
✔✔In the sale comparison process, appraisers adjust the _______ to be like the
_______ . - ✔✔comparable, subject
, ✔✔how to find allocated land type value - ✔✔use puritan sale
✔✔Income Approach steps - ✔✔Potential gross income - VC loss = Effective gross
income - operating expenses - tax = NOI -----> OAR
✔✔OAR convert to Market Estimate - ✔✔NOI/Cap Rate = Market value
✔✔cap rate effects on market value - ✔✔cap rate decreases = market value increases
✔✔interest rates and cap rates - ✔✔interest rates decrease = cap rates decrease
✔✔condemnation - ✔✔right of the city to buy your property and use eminent domain
✔✔is a comparable with eminent domain acceptable? - ✔✔not good, because not
motivated, no market time and its the highest price
✔✔is a comparable that has been foreclosed acceptable? - ✔✔not good, because seller
very motivated to sell and may be willing to take any price offered
✔✔Why is it better to own a small house in a neighborhood of large houses than a large
house in a neighborhood of small houses? - ✔✔progression, higher market value based
on comparables
✔✔difference between actual age and effective age? - ✔✔actual age = chronological
effective age = functional age
✔✔how can a property be valued at $200,000 if the land alone is valued at $210,000? -
✔✔the cost to cure is $10,000
✔✔What is a puritan sale and how is it used in an appraisal? - ✔✔land with only one
land type, used to calculate the value of properties with more than one land type
✔✔Besides size and location, what can account for the differences in value of two
properties? - ✔✔view, terrain, access, water supply, utilities, structures, soils
✔✔If a 10-year old improvement has a RCN of $220,000, and a similar improvement
has an indicated depreciation of 20%, what is the contribution of the improvement? -
✔✔$176,000
✔✔What is a conservation easement? - ✔✔restriction on property
✔✔How should you adjust comps value? - ✔✔don't average comps, base off the best
comp and most similar to the subject property
QUESTIONS SET A+
✔✔What are the 3 sources of sales data in the direct sale comparison approach? -
✔✔Brokers, Deed Recordings, MIS, comps
✔✔Replacement Cost - ✔✔Current cost to replace the structure with one of similar
utility
✔✔Reproduction Cost - ✔✔Current cost to replace the structure with an exact replica
✔✔3 components of cost used by the appraisers? - ✔✔direct cost, indirect cost and
entrepreneurial profit
✔✔4 cost estimating methods - ✔✔quantity survey, unit in place, comparative unit, and
cost per sqft
✔✔Identify and describe 3 forms of depreciation - ✔✔1. Physical wear and tear- dent,
stain, old, chipping
2. Functional obsolescence- design not current, functional problem, change in market, #
of rooms, poor design 3. External obsolescence- outside property, nuisances,
economical obsolescence
✔✔2 methods of estimating depreciation are most commonly used by appraisers -
✔✔economic age life and market abstraction- (contributory value: compare RCN to the
current value of structure=depreciation)
✔✔identify the data analysis technique for determining or estimating an adjustment in
the direct sale comparison approach - ✔✔paired sales or matched pairs
✔✔In the sale comparison process, appraisers adjust the _______ to be like the
_______ . - ✔✔comparable, subject
, ✔✔how to find allocated land type value - ✔✔use puritan sale
✔✔Income Approach steps - ✔✔Potential gross income - VC loss = Effective gross
income - operating expenses - tax = NOI -----> OAR
✔✔OAR convert to Market Estimate - ✔✔NOI/Cap Rate = Market value
✔✔cap rate effects on market value - ✔✔cap rate decreases = market value increases
✔✔interest rates and cap rates - ✔✔interest rates decrease = cap rates decrease
✔✔condemnation - ✔✔right of the city to buy your property and use eminent domain
✔✔is a comparable with eminent domain acceptable? - ✔✔not good, because not
motivated, no market time and its the highest price
✔✔is a comparable that has been foreclosed acceptable? - ✔✔not good, because seller
very motivated to sell and may be willing to take any price offered
✔✔Why is it better to own a small house in a neighborhood of large houses than a large
house in a neighborhood of small houses? - ✔✔progression, higher market value based
on comparables
✔✔difference between actual age and effective age? - ✔✔actual age = chronological
effective age = functional age
✔✔how can a property be valued at $200,000 if the land alone is valued at $210,000? -
✔✔the cost to cure is $10,000
✔✔What is a puritan sale and how is it used in an appraisal? - ✔✔land with only one
land type, used to calculate the value of properties with more than one land type
✔✔Besides size and location, what can account for the differences in value of two
properties? - ✔✔view, terrain, access, water supply, utilities, structures, soils
✔✔If a 10-year old improvement has a RCN of $220,000, and a similar improvement
has an indicated depreciation of 20%, what is the contribution of the improvement? -
✔✔$176,000
✔✔What is a conservation easement? - ✔✔restriction on property
✔✔How should you adjust comps value? - ✔✔don't average comps, base off the best
comp and most similar to the subject property
