Real Estate Appraisal Fundamentals
(SAE) test with correct answers
$319,584 (Net operating income $36K x 8.694 (annuity factor, 30 years @ 11%) = 312,984 (present worth of net income (150,000x.044)=$6600 - CORRECT ANSWER-If
land value at the expiration of the lease is determined to be $150K and the building is assumed to be worthless at the time, what is the val ue of the leased fee interest?
$36,600 - CORRECT ANSWER-what is the expected (market) rent for the subject property?
$382,600 - CORRECT ANSWER-What is the total value of the leased fee and leasehold interest?
$394,875 - CORRECT ANSWER-if a commercial structure is rectangular with 65 ft x 135 ft @ $45 a SQ FT using the SQ FT method
1073 - CORRECT ANSWER-Fannie Mar form ______ is used to appraise a unit in a condominium project
ABATEMENT - CORRECT ANSWER-Stopping or reducing of amount or value as when assessments for ad valorem taxation are a baited after the initial assessment has
been made
Absentee landlord - CORRECT ANSWER-And owner of an interest in income producing property who does not reside on the premises and who may rely on a property
manager to oversee the investment
Absolute fee simple title - CORRECT ANSWER-A title that is unqualified fee simple is the best title that can be obtained
Absorption analysis - CORRECT ANSWER-A study of the number of units of residential or non-residential property that can be sold or leased over a given period of time
in a defined location
Abstraction - CORRECT ANSWER-Method of finding land value in which all improvement costs are deducted from sales price also called extraction method
accretion - CORRECT ANSWER-Land to build up resulting from the deposit by natural action of sand or soil washed up from a little river lake or sea
Accrual basis - CORRECT ANSWER-In accounting a system of allocating revenue and expense items on the basis of when the revenue is earned or the expense
incurred not on the basis of when the cash is received or paid out
Acquisition appraisal - CORRECT ANSWER-A market value appraisal of property condemned or otherwise acquired for public use to establish the compensation to be
paid to the owner
Acre - CORRECT ANSWER-43,560 ft.²
Ad valorem - CORRECT ANSWER-According to value generally used to referred to real estate taxes that are based on assessed property value
Adverse land-use - CORRECT ANSWER-A land use that has a detrimental effect on the market value of nearby properties
Age life method of depreciation - CORRECT ANSWER-A method of computing occurred depreciation in which the cost of a building is depreciated at a fixed annual
percentage rate also called straight-line method
Aggregate - CORRECT ANSWER-In statistics the sum of all individuals called variates
Air Rights - CORRECT ANSWER-The right to use the open space above the physical surface of the land generally allowing the surface to be used for some oth er
purpose
Allocation method - CORRECT ANSWER-The allocation of the appraise total value of the property between land and building the allocation may be accomplished either
on a ratio basis or by subtracting a figure representing building value from the total appraised value of the property
Allowance for vacancy and collection losses - CORRECT ANSWER-The percentage of potential gross income that will be lost due to vacant units collection losses or both
Amortized mortgage - CORRECT ANSWER-A mortgage loan in which the principal and interest are payable and periodic installments during the term of the loan so that
the completion of all payments there is a zero balance
Annuity method - CORRECT ANSWER-A method of capitalization that treats and come from real property as a fixed regular return on investment for the annuity method
to be applied the less he must be reliable and the lease must be long-term
Appraisal - CORRECT ANSWER-An estimate of quantity quality or value of the process through which conclusions of property value are obtained
Appraisal management company's (AMC) - CORRECT ANSWER-Any corporation partnership sole proprietor ship subsidiary unit or other business entity that administers
networks of independent contract appraisers to perform real estate appraisal services for clients
Appraisal Practices Board (APB) - CORRECT ANSWER-Created by the appraisal foundation to issue a voluntary guidance to appraisers on emerging valuation issues in
the marketplace
(SAE) test with correct answers
$319,584 (Net operating income $36K x 8.694 (annuity factor, 30 years @ 11%) = 312,984 (present worth of net income (150,000x.044)=$6600 - CORRECT ANSWER-If
land value at the expiration of the lease is determined to be $150K and the building is assumed to be worthless at the time, what is the val ue of the leased fee interest?
$36,600 - CORRECT ANSWER-what is the expected (market) rent for the subject property?
$382,600 - CORRECT ANSWER-What is the total value of the leased fee and leasehold interest?
$394,875 - CORRECT ANSWER-if a commercial structure is rectangular with 65 ft x 135 ft @ $45 a SQ FT using the SQ FT method
1073 - CORRECT ANSWER-Fannie Mar form ______ is used to appraise a unit in a condominium project
ABATEMENT - CORRECT ANSWER-Stopping or reducing of amount or value as when assessments for ad valorem taxation are a baited after the initial assessment has
been made
Absentee landlord - CORRECT ANSWER-And owner of an interest in income producing property who does not reside on the premises and who may rely on a property
manager to oversee the investment
Absolute fee simple title - CORRECT ANSWER-A title that is unqualified fee simple is the best title that can be obtained
Absorption analysis - CORRECT ANSWER-A study of the number of units of residential or non-residential property that can be sold or leased over a given period of time
in a defined location
Abstraction - CORRECT ANSWER-Method of finding land value in which all improvement costs are deducted from sales price also called extraction method
accretion - CORRECT ANSWER-Land to build up resulting from the deposit by natural action of sand or soil washed up from a little river lake or sea
Accrual basis - CORRECT ANSWER-In accounting a system of allocating revenue and expense items on the basis of when the revenue is earned or the expense
incurred not on the basis of when the cash is received or paid out
Acquisition appraisal - CORRECT ANSWER-A market value appraisal of property condemned or otherwise acquired for public use to establish the compensation to be
paid to the owner
Acre - CORRECT ANSWER-43,560 ft.²
Ad valorem - CORRECT ANSWER-According to value generally used to referred to real estate taxes that are based on assessed property value
Adverse land-use - CORRECT ANSWER-A land use that has a detrimental effect on the market value of nearby properties
Age life method of depreciation - CORRECT ANSWER-A method of computing occurred depreciation in which the cost of a building is depreciated at a fixed annual
percentage rate also called straight-line method
Aggregate - CORRECT ANSWER-In statistics the sum of all individuals called variates
Air Rights - CORRECT ANSWER-The right to use the open space above the physical surface of the land generally allowing the surface to be used for some oth er
purpose
Allocation method - CORRECT ANSWER-The allocation of the appraise total value of the property between land and building the allocation may be accomplished either
on a ratio basis or by subtracting a figure representing building value from the total appraised value of the property
Allowance for vacancy and collection losses - CORRECT ANSWER-The percentage of potential gross income that will be lost due to vacant units collection losses or both
Amortized mortgage - CORRECT ANSWER-A mortgage loan in which the principal and interest are payable and periodic installments during the term of the loan so that
the completion of all payments there is a zero balance
Annuity method - CORRECT ANSWER-A method of capitalization that treats and come from real property as a fixed regular return on investment for the annuity method
to be applied the less he must be reliable and the lease must be long-term
Appraisal - CORRECT ANSWER-An estimate of quantity quality or value of the process through which conclusions of property value are obtained
Appraisal management company's (AMC) - CORRECT ANSWER-Any corporation partnership sole proprietor ship subsidiary unit or other business entity that administers
networks of independent contract appraisers to perform real estate appraisal services for clients
Appraisal Practices Board (APB) - CORRECT ANSWER-Created by the appraisal foundation to issue a voluntary guidance to appraisers on emerging valuation issues in
the marketplace
