Basic Appraisal Procedures Chapter 12 - Comprehensive Review Quiz Questions and Answers

Basic Appraisal Procedures Chapter 12 - Comprehensive Review Quiz Questions and Answers A property has a cost new of $350,000. It has an effective age of 20 years and a total expected economic life of 65 years. There are curable items totaling $45,000. If they are cured, it will reduce the effective age to 15 years. What is the value of the improvements on a modified age-life basis, before including the site value? $234,545 $350,000 - $45,000 = $305,000. 15 ÷ 65 = .231 or 23.1%. $305,000 X .231 = $70,455. $305,000 - $70,455 = $234,545. The subject is a 15 year old duplex that would cost $240,000 to build new today. It is in good condition and you estimate the effective age to be 10 years. Your estimate of total economic life is 50 years. Its land value is $60,000. What is its value by the cost approach? $252,000 Cost Approach Using Age- Life Method. 10 ÷ 50 = .20 or 20% depreciation. $240,000 X .20 = $48,000 depreciation. $240,000 - $48,000 = $192,000. $192,000 + $60,000 - $252,000 A house cost $395,000 to build new. It is 5 years old and has sustained a total of 10% depreciation. It sits on a lot worth $65,000. What is its indicated value by the cost approach? $420,500 Cost Approach Formula. $395,000 - $39,500 (10%) + $65,000 = $420,500. A comparable sale of a new house just sold for $640,000. You estimate the value of the site at $120,000 and the cost of the site improvements at $18,000. It has 2,940 square feet of GLA. What is its unit cost? $170.75 Comparative-Unit Method - Market Derivation. $640,000 - $120,000 - $18,000 = $502,000. $502,000 ÷ 2,940 = $170.75. Footings need to be _______________ below average frost penetration levels. at least 12 inches Foundation System. They need to be at least 12 inches below to prevent heaving as the frost melts. A single unit residence sold for $126,000. It was rented for $1,100 per month but the market rent was $1,200. What is the GRM indicated by this sale? 105.0 $126,000 ÷ $1,200 = 105.0 A building was constructed in July 2000 for $654,200. The cost index at that time was 138.5. The current cost index is 221.8. What is the indicated reproduction cost of the building today? $1,046,720 221.8 ÷ 138.5 = 1.60. $654,200 X 1.60 = $1,046,720 An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 75%. What is the land value? $287,500 Example 1. $350,000 X .25 = $87,500 (remaining building value). $375,000 - $87,500 = $287,500 (land value). An expansion tank is part of a ___________ heating system. hot water Drilled wells need to use __________ until the drilling enters ___________. casing, bedrock The intended user of an appraisal is the __________ and any other user, as identified by _________. client, name or type When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. What is the mode of the GRMs? There is no mode A property has a cost new of $350,000. It has an effective age of 20 years and a total expected economic life of 65 years. There are curable items totaling $45,000. If they are cured, it will reduce the effective age to 15 years. What is the value of the improvements on a modified age-life basis, before including the site value? $234,545 An appraiser encounters an underground storage tank and there are no signs of leakage or failure. An appraisal could be performed under the presumption that the tank is not leaking and the property is not contaminated. This would be an example of a(n) extraordinary assumption The last step in the valuation process is report the final opinion of value When appraising a 2-4 unit residential property, an appraiser would measure and use _______________ area. Gross building "The relationship or ratio between the sale price or value of a property and its periodic gross rental income" is the definition of Gross rent multiplier Extensive research on current construction trends and figures is conducted by NAHB When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. What is the mean of the GRMs? 96.3 A house cost $395,000 to build new. It is 5 years old and has sustained a total of 10% depreciation. It sits on a lot worth $65,000. What is its indicated value by the cost approach? $420,500 The subject is a 15 year old duplex that would cost $240,000 to build new today. It is in good condition and you estimate the effective age to be 10 years. Your estimate of total economic life is 50 years. Its land value is $60,000. What is its value by the cost approach? $252,000 What unit of measurement is typically used for single-family homes? Gross living area The cost approach formula states that ______________, minus depreciation, _______________, equals property value. Cost new, plus site value Two squares of 180-pound roof shingles would weigh _____ pounds. 360 If an appraiser uses a cost manual to estimate cost new for a property, the result is Replacement cost