Progress Exam 03 Land and Site
Valuation
All of the following methods are acceptable methods of valuing an individual single
family lot which is not generating any rental income EXCEPT: - Answers -Capitalizing
ground rent
The subject site is described: Beginning at a point 500 feet east of the northwest corner
of Section 23, Township 23NR5E of the Third Principal Meridian, then: 200 feet north;
100 feet east; and southwesterly back to the point of beginning. What is the shape?
What is the area? - Answers -1/2bh (1/2 x 200 feet x 100 feet) = 20,000 SF divided by 2,
or 10,000 SF.. But the answers are all in the format of acres, therefore: 10,000
SF/43,560 SF per acre = .23 acres. The lot is triangular and .23 acres.
Which of the following may be used to privately control the use of land? - Answers -
Deed restrictions
Frank is asked by a developer to help determine the value of a vacant site. Frank
determined that the total net income from the improved property will be $55,189. The
local market data suggests a capitalization rate on the building of 8.25%. The developer
has proposed to build a 2,280 square foot building, which will cost $420,000 to build.
What is the income attributable to the land? - Answers -$420,000 x 8.25% = $34,650.
$55,189 - $34,650 = $20,539
The cost to construct the subject residence is $150.25/SF. The effective date is March
10. The effective age is 10 years; the actual age is 25 years. The subject residence has
experienced recent remodeling. The gross living area of the house is 2,125 SF. The
remaining economic life is 65 years. The land to building value ratio in the subject
neighborhood is 25%. Given the above data, which of the following ranges best
represents the subject's land value? - Answers -The cost approach formula is: C - D +
V(L) = V(O). Therefore: the cost is 2,125 SF @ $150.25/SF or $319,281.25. The age-
life method of calculating depreciation uses effective age rather than actual age:
effective age/economic life = % depreciation. Therefore, depreciation is 10/75 = .133.
$319,281.25 x .133 = $42,570.83 (total depreciation). The value of the building =
$319,281.25 - $42,570.83 = $276, 710.42. The L:B Value Ratio is 25%. Therefore, land
is 25% of the total value, and the building is 75% of the total value. The value of the
building is $276,710.42, which is 75% of the overall value. 276,710.42/.75 =
$368,947.22. Subtracting the building value yields $92,236.80, which falls into the range
$90,000 - $95,000.
Three small land parcels each have an estimated value of $10,000. If the parcels were
combined through assemblage, the new larger parcel would be worth $45,000. The
, additional $15,000 in value that is created when the parcels are combined is best
described as: - Answers -plottage.
An appraiser may use ________ to estimate the value of a finished lot. - Answers -
appropriate comparables from existing subdivisions
Paired sales analysis is typically used in which site valuation method? - Answers -Sales
comparison
All of the following are units of comparison used to estimate the value of a site
EXCEPT: - Answers -value per cubic foot.
Which appraisal method estimates site value by deducting the depreciated value of
improvements from the property's sales price? - Answers -Extraction
When land value is estimated by deducting the depreciated cost of improvements on a
property from the total sale price of the property, this is known as - Answers -extraction.
A brick Georgian located on a 50' x 150' lot in a residential subdivision is being
appraised. The house is adjacent to electric power lines. Houses adjacent to these
power lines sell for 20% less than houses that are not adjacent. Similar houses adjacent
to power lines rent for $950/month. Houses not adjacent to power lines rent for
$1250/month. The ratio of land value represents 25% of the property values; the
monthly gross rent multiplier is 125. What is the value of the subject lot rounded to the
nearest thousand? - Answers -$30,000
Estimated gross rents for a development project are determined to be $74,580 and the
expenses will be 26% to estimate the NOI. The local market data suggests a
capitalization rate on the building of 7.50%. The developer has proposed to build a
2,500 square foot building, which will cost $425,000 to build. What is the income
attributable to the land? - Answers -$23,314
In evaluating a variety of proposed uses for a site valuation analysis, how should an
appraiser determine whether a certain proposed use is maximally productive? -
Answers -Determine which use promises the greatest residual return to the land
Which of the following is not one of the six recognized methods for land and site
valuation? - Answers -Building residual
How should an appraiser value a property with excess land? - Answers -The excess
land should be identified by the appraiser and valued separately.
A developer asked Dan to help determine the investment value of a vacant site that was
just purchased for $354,000, on which the developer would like to build an office
building. Dan determines that the income attributable to the land is $16,673. What is the
indicated land capitalization rate? - Answers -4.71%
Valuation
All of the following methods are acceptable methods of valuing an individual single
family lot which is not generating any rental income EXCEPT: - Answers -Capitalizing
ground rent
The subject site is described: Beginning at a point 500 feet east of the northwest corner
of Section 23, Township 23NR5E of the Third Principal Meridian, then: 200 feet north;
100 feet east; and southwesterly back to the point of beginning. What is the shape?
What is the area? - Answers -1/2bh (1/2 x 200 feet x 100 feet) = 20,000 SF divided by 2,
or 10,000 SF.. But the answers are all in the format of acres, therefore: 10,000
SF/43,560 SF per acre = .23 acres. The lot is triangular and .23 acres.
Which of the following may be used to privately control the use of land? - Answers -
Deed restrictions
Frank is asked by a developer to help determine the value of a vacant site. Frank
determined that the total net income from the improved property will be $55,189. The
local market data suggests a capitalization rate on the building of 8.25%. The developer
has proposed to build a 2,280 square foot building, which will cost $420,000 to build.
What is the income attributable to the land? - Answers -$420,000 x 8.25% = $34,650.
$55,189 - $34,650 = $20,539
The cost to construct the subject residence is $150.25/SF. The effective date is March
10. The effective age is 10 years; the actual age is 25 years. The subject residence has
experienced recent remodeling. The gross living area of the house is 2,125 SF. The
remaining economic life is 65 years. The land to building value ratio in the subject
neighborhood is 25%. Given the above data, which of the following ranges best
represents the subject's land value? - Answers -The cost approach formula is: C - D +
V(L) = V(O). Therefore: the cost is 2,125 SF @ $150.25/SF or $319,281.25. The age-
life method of calculating depreciation uses effective age rather than actual age:
effective age/economic life = % depreciation. Therefore, depreciation is 10/75 = .133.
$319,281.25 x .133 = $42,570.83 (total depreciation). The value of the building =
$319,281.25 - $42,570.83 = $276, 710.42. The L:B Value Ratio is 25%. Therefore, land
is 25% of the total value, and the building is 75% of the total value. The value of the
building is $276,710.42, which is 75% of the overall value. 276,710.42/.75 =
$368,947.22. Subtracting the building value yields $92,236.80, which falls into the range
$90,000 - $95,000.
Three small land parcels each have an estimated value of $10,000. If the parcels were
combined through assemblage, the new larger parcel would be worth $45,000. The
, additional $15,000 in value that is created when the parcels are combined is best
described as: - Answers -plottage.
An appraiser may use ________ to estimate the value of a finished lot. - Answers -
appropriate comparables from existing subdivisions
Paired sales analysis is typically used in which site valuation method? - Answers -Sales
comparison
All of the following are units of comparison used to estimate the value of a site
EXCEPT: - Answers -value per cubic foot.
Which appraisal method estimates site value by deducting the depreciated value of
improvements from the property's sales price? - Answers -Extraction
When land value is estimated by deducting the depreciated cost of improvements on a
property from the total sale price of the property, this is known as - Answers -extraction.
A brick Georgian located on a 50' x 150' lot in a residential subdivision is being
appraised. The house is adjacent to electric power lines. Houses adjacent to these
power lines sell for 20% less than houses that are not adjacent. Similar houses adjacent
to power lines rent for $950/month. Houses not adjacent to power lines rent for
$1250/month. The ratio of land value represents 25% of the property values; the
monthly gross rent multiplier is 125. What is the value of the subject lot rounded to the
nearest thousand? - Answers -$30,000
Estimated gross rents for a development project are determined to be $74,580 and the
expenses will be 26% to estimate the NOI. The local market data suggests a
capitalization rate on the building of 7.50%. The developer has proposed to build a
2,500 square foot building, which will cost $425,000 to build. What is the income
attributable to the land? - Answers -$23,314
In evaluating a variety of proposed uses for a site valuation analysis, how should an
appraiser determine whether a certain proposed use is maximally productive? -
Answers -Determine which use promises the greatest residual return to the land
Which of the following is not one of the six recognized methods for land and site
valuation? - Answers -Building residual
How should an appraiser value a property with excess land? - Answers -The excess
land should be identified by the appraiser and valued separately.
A developer asked Dan to help determine the investment value of a vacant site that was
just purchased for $354,000, on which the developer would like to build an office
building. Dan determines that the income attributable to the land is $16,673. What is the
indicated land capitalization rate? - Answers -4.71%
