Property Valuation Comprehensive Resource To Help You Ace Exams Includes Frequently Tested Questions With ELABORATED 100% Correct COMPLETE SOLUTIONS Guaranteed Pass First Attempt!! Current Update!!

Property Valuation Comprehensive Resource To Help You Ace Exams Includes Frequently Tested Questions With ELABORATED 100% Correct COMPLETE SOLUTIONS Guaranteed Pass First Attempt!! Current Update!! 1. A buyer agreed to buy a home for $80,000. They deposited $2,000 into escrow. The loan was approved for 80% of the appraised value and charged the buyer 3% of the loan amount for lender closing costs. What is the additional amount which the buyer will be required to deposit into escrow before closing? a. $1,920 b. $64,000 c. $18,000 d. $15,920 - Correct Answer: d. $15,920 (1) $80,000 x 80% = $64,000 loaned (2) $80,000 - $64,000 = $16,000 down payment from buyer (3) $64,00,000 x 3% = $1,920 closing costs from buyer (4) $16,000 + $1,920 = $17,920 total from buyer (5) $17,920 - $2,000 (initial deposit) = $15,920 additional amount needed. 2. A parcel of land is measured at 250,000 square feet. A corner of that tract is 20 feet wide and 90 feet deep and is owned by the county. The privately owned land sold for $1,750 per acre. What is the total amount pocketed from the sale of the land? a. $248,200 b. $10,000 c. $250,000 d. $9,975 - Correct Answer: d. $9,975 (1) 90 x 20 = 1800 (2) 250,000 - 1,800 = 248,200 (3) 248,200 divided by 43,560 = 5.70 (4) 5.70 x $1,750 = $9,975. Note: an acre equals 43,560 square feet. 3. Bella bought the contents of a candy store for $6,500. She sold the goods for 50% more than what they cost her. She lost 12% of the selling price to uncollectible debt. What is Bella's entire profit for the investment? a. $1,170 b. $2,080 c. $6,500 d. $9,750 - Correct Answer: b. $2,080 (1) 1/2 x $6,500 = $3,250 (2) $6,500 + $3,250 = $9,750 (3) $9,750 x .12 = $1,170 (4) $9,750 - $1,170 = $8,580 (5) $8,580 - $6,500 = $2,080 4. If an appraiser is appraising a restaurant, what is the very best method to use? a. Highest and best use approach b. Income approach C. Depreciation approach - Correct Answer: c. Income approach 5. A piece of real property sold for $750,000 which was 7% more than the original cost. How much was the original cost? a. $750,000 b. $700,934.57 c. $52,500 d. $10,000 - Correct Answer: b. $700,934.57 107% percent of cost = $750,000 (2) $750,000 divided by 1.07 = $700,934.57 6. To arrive at an estimate for John's single family home, a gross rent multiplier was used. The comparable properties rent out for approximately $1,800 per month and recent comparable selling prices are for $450,000. The property is currently renting for $1,900 per month. What would the real estate agent estimate the value of the property to be? a. $1,900 b. $470,000 c. $475,000 d. $450,000 - Correct Answer: c. $475,000 (1) $450,000 comparable selling price divided by $1,800 monthly rent (comparable properties) = 250 gross rent multiplier; (2) 250 gross rent multiplier x $1,900 actual rent = $475,000 approximate value. 7. If there are two buildings built on the same size lot, built during the same time period, and all costs to operate the buildings are the same, what would most likely be the cause of the sizable difference in value between the two properties? a. Physical depreciation of one of the buildings b. Both Functional Obsolescence of one of the properties and Economic obsolescence in the city c. Economic obsolescence in the city d. Functional Obsolescence of one of the properties - Correct Answer: d. Functional Obsolescence of one of the properties 8. Julie was hired by a prospective buyer to appraise a commercial shopping complex that had a few improvements. The challenge that appraisal Julie came across was determining the legal status of the improvements. What would Julie say about them in the appraisal report? a. Take note of the improvements that are grandfathered into the property b. Tell the buyer that they cannot appraise the project due to the issue with the improvements c. There is no need to mention it in the report as it has no purpose d. Estimate the legal significance of any attached improvements that she is not certain about and give an explanation in the appraisal report - Correct Answer: d. Estimate the legal significance of any attached improvements that she is not certain about and give an explanation in the appraisal report 9. When using the land residual technique, the unknown factor and ideal result would be: a. usable square footage b. land value c. the final buildings value d. potential net income - Correct Answer: b. land value 10. An appraiser is appraising a special purpose property. Which method would most likely be used in this situation? a. Land improvement approach b. Comparison approach c. Cost approach d. Market data approach - Correct Answer: c. Cost approach