real estate appraisal test 3 questions with correct answers

real estate appraisal test 3 questions with
correct answers
basic |principle |of |cost |approach |- |CORRECT |ANSWER✔✔-substitution



cost |approach |formula |- |CORRECT |ANSWER✔✔-reproduction/replacement |cost

<depreciation>

+ |site |value

= |property |value



when |is |cost |approach |used? |- |CORRECT |ANSWER✔✔--insurable |value



-historical |properties



-when |income |or |sales |comparison |approach |is |not |possible |(when |no |income |figures |
available |and |few |if |any |comparable |sales)



issues |with |cost |approach |- |CORRECT |ANSWER✔✔--Existing |use |may |not |be |highest |and |best |
use



-Builder's |cost |variations |across |the |country



-Fluctuations |in |the |market |prices |



-Sellers |versus |Buyers |markets

,reproduction |cost |- |CORRECT |ANSWER✔✔--Dollar |amount |required |to |construct |an |exact |
duplicate |of |a |building |at |prices |current |as |of |the |date |of |the |appraisal. |



-the |cost |approach |relies |on |estimating |the |reproduction |cost |for |a |new |building |using |current
|standards |of |materials, |manual |skills, |and |construction |technology. |




- |Ideal |for |newer |properties |



- |Challenging |for |older |or |historical |properties



Exact |Duplicate |to |reproduce |this |property



What |does |it |cost |to |build |it |brand |new



replacement |cost |- |CORRECT |ANSWER✔✔--The |current |construction |cost |of |a |building |with |
the |same |utility |as |the |subject |structure |or |the |the |cost |for |a |functionally |identical |
replacement. |



-The |appraiser |is |actually |estimating |the |reproduction |cost |but |it |is |the |replacement |cost |of |a |
theoretical |building |that |contains |the |same |number, |type |and |size |of |rooms |as |the |building |
being |appraised |and |that |can |be |used |in |the |same |way. |



- |Difficult |due |to |the |replication |of |architectural |details, |labor |and |materials |and |could |not |be |
economically |be |reproduced |today. |



-Not |an |exact |duplicate |but |serves |the |main |purpose |it |was |designed |originally |



Historic |property |built |in |early |1900s |difficult |to |reproduce |but |we |can |replace |but |not |
reproduce |efficiently

, 4 |factors |must |be |in |place |for |value |and |cost |to |be |the |same: |- |CORRECT |ANSWER✔✔-The |
improvement |must |be |new



The |improvement |must |represent |the |highest |and |best |use



The |improvement |is |not |affected |by |functional |or |locational |obsolescence



The |expected |return |from |the |improvement |justifies |its |cost.



4 |basic |methods- |reproduction |- |CORRECT |ANSWER✔✔-1) |square |foot |method



2) |index |method



3) |unit-in-place |method



4) |quantity |survey |method



square |foot |method |- |CORRECT |ANSWER✔✔-The |cost |per |square |foot |of |a |recently |built |
comparable |structure |is |multiplied |by |the |number |of |square |feet |in |the |subject |building



index |method |- |CORRECT |ANSWER✔✔-A |factor |representing |the |percentage |increase |of |
construction |costs |up |to |the |date |of |value |is |applied |to |the |original |cost |of |the |subject |
building.



unit |in |place |method |- |CORRECT |ANSWER✔✔-The |sum |of |the |cost |the |components |is |the |cost
|of |the |new |structure. |The |cost |per |unit |of |measure |of |each |component |part |of |the |subject |


property |is |multiplied |by |the |number |of |units |of |that |component |part |in |the |subject |property.