Mckissock Basic Appraisal Principles Set I II Chapters 12-16 with complete verified solutions.

12| Taxes -if you have an income producing property, opoerty taxes will likely be apart of your operating expense. - Different types of taxes that affect your property value include country, town, state, sales, or income tax. 12| Business Taxes - state or local taxes has an impact on business. - corporations, companies, economic developments, and councils always take this into consideration. Brainpower Read More Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:00 / 0:00 Full screen 12| Utilities - in some rural areas local gov't offers no public utilties like: water or sewer - a well must be drilled and a septic system installed - for commercial properties or industrial properties utilities are lifelines 12| Transportation - is a major factor in the desirability and value in a residential property as well as commercial, and industrial property. - is it near a railway, county or state highway, dirt road, paved road or is there any public transit nearby? - do most people drive or take public transit, for example gas prices. - retail properties need to be near or on a well-traveled or arterial highway or the exit of one 12| Education Ask key questions : What about the local public school systems? Is there any elementary school nearby? Travel time? Quality of education? School ratings and academic achievements? Is there overcrowding and expansion? 12| Cultural - for people who have the time and money to spend on entertainment - museums, art galleries, theaters, libraries and galleries - ideal relocation for baby boomers, and empty nesters 12| Parks & Recreation - examples include Hot Springs & Arkadelphia, Little Rock 12| Police, Fire, and Public Safety - Crime rates? - Reputation of local police department - Is it safe? Where is the closest fire hydrant? * Must be aware of fire & building codes, electrical codes, and national security, terrorists attacks, and natural disasters 12| Economic Forces - national economy - consumer price index - interest rates - availability of financing - wage rates - types of employment - unemployment rates - cost of construction - rental rates - rental vacancies - expense levels 12| Economic Force Questions To Ask - is the economy expanding? - is the stock market going up? What's happening with the national debt? - What is the state of the U.S. dollar as supposed to the rest of the world currency? 12| CPI aka "Consumer Price Index" - measures prices pressures of inflation - tracks the cost of living in various areas around the country 12| Interest Rates - when they are low it encourages mortgae borrowing - when they are up, it locks people out of the market and slows down the demand for home purchases 12| Availability of Financing - usury laws - loan to value ratio - higher down payments reduce the pool of potential buyers - google stated doc, low doc, or no doc loans or liar loans 12| Wage Rates - the more you make, the more you can afford. - NAR rates in 2017 vs. NAR 2020 12| Types of Employment - primary employment, heavy industry or manufacturing - basic industries are major employers in an area - service industries are those who produce services rather than goods 12| Cost of Construction is 3 factors : land costs, material costs, labor costs. 12| Rental Rates - also associated w/ rental vacancies and expense levels - applies primarily to commercial properties - these types of properties are based on their income and expenses - when appraising any type of income producing property, the value is primarily a function of the amount of net income, a property is able to produce. 12| Expense Levels - utilties - taxes - insurance - maintenance & supplies - employees 12| Social Influences - population trends - population migration - ages - family formations - lifestyle changes 12| Environmental Influences I & II - shopping - schools - employment - houses of worship - cultural facilities - recreational facilitates - educational facilitates - restaurants - police protection - fire protection - climate - topography - soil conditions - nature improvements in the area 13| Value - the monetary relationship between properties and those who buy, sell, or use those properties. - expresses an economic concept; value must always be qualified for market value, liquidation value, or investment value. - is the present worth of the future benefits that occrue real property ownership; it is strictly opinion, and based on the beliefs on the buyers and sellers. 13| Market Value - the most common type of value sought by real property appraisers - is the major focus of most real property appraisal assignments - a type of value stated as an opinion that presumes the transfer of a property. 13| Requirements in the Appraisal Report - identification of the property rights to be appraised - statement of the effective date of the value opinion - describing precise financial terms of the appraisal - find if they are below or above market interest rates and/or contain unusual conditions or incentives 13| Arm's Length Transaction - a transaction between unrelated parties who are each acting in their own best interest; they don't have any prior relationships influencing their actions or any personal statements. - calm, rational, and no ulterior motives