IAAO 101 Exam Questions with Correct and Verified Answers

IAAO 101 Exam Questions with Correct and Verified Answers ad valorem - Correct Answer According to Value" "The basic responsibilities of an Appraiser to all taxable property. - Correct Answer 1. Discovery 2. Listing 3. Valuation" "Principle of Anticipation * - Correct Answer Present worth of future benefits" "Principle of Change * - Correct Answer The tendency of social and economic forces affecting supply and demand to alter over time" "Principle of Contribution * - Correct Answer The basis for applying the adjustments in the sales comparison approach" "The taxable location of personal property is referred to as its' - Correct Answer Situs" "_________ divided by the assessed value equals the tax rate. - Correct Answer Budget" "_________ is the physical land and everything permanently attached to it. - Correct Answer Real Estate" "Property tax is an _________. - Correct Answer ad valorem tax" "How do you calculate the Assessment Ratio of a property? - Correct Answer Assessed Value ÷ Market Value" "How do you calculate the Tax rate (%) ? - Correct Answer Budgeted Revenue (Minus any other revenue sources) ÷ Total Assessed Value of all property" "How do you calculate the Property Tax bill? - Correct Answer Tax rate X Assessed value of Property" "Fractional Assessment - Correct Answer An assessed value not statutorily at 100% of market value" "The six basic rights associated with property are: - Correct Answer SLUGER 1. Sell 2. Lease 3. Use 4. Give away 5. Enter or Leave 6. Refuse to do any of the above" "The four factors that influence/effect land values are: - Correct Answer PEGS 1. Physical (Environmental) 2. Economic 3. Governmental 4. Social" "The type of value usually estimated by an Appraiser is the - Correct Answer Market Value" "The effective tax rate reflects the ratio between what - Correct Answer The current tax bill and the property value" "Assessment level times the tax rate equals - Correct Answer The effective tax rate" "_________ consists of movable items not permanently affixed to, or part of the real estate - Correct Answer Personal Property" "The four Governmental restrictions on property ownership: - Correct Answer TEPE 1. Taxation 2. Eminent domain 3. Police power 4. Escheat" "Private encumbrances: - Correct Answer 1. Co-Owners 2. Condominium/Subdivision restrictions 3. Covenants 4. Mortgages 5. Easements 6. Liens and Judgements 7. Leases" "Value in use - Correct Answer Is the value of a property for a specific use" "Value in exchange - Correct Answer Is the amount an informed buyer would offer in exchange for a property under given market conditions" "Principle of Substitution * - Correct Answer Market value of a property tends to be set by the cost of acquiring an equally desirable and valuable property" "Principle of Surplus Productivity * - Correct Answer Net income remaining after the cost of labor, management, and capital has been paid" "Supply - Correct Answer The amount of goods that producers are willing to sell at a given price during a specificed period" "Demand - Correct Answer The amount of a commodity that consumers buy at a given price during a specified period" "The four major determinants of supply are as follows: - Correct Answer 1. The cost of production 2. The price of other goods 3. Entrepreneurs' expectations 4. The number of sellers in the market" "The five factors that influence demand are: - Correct Answer 1. Consumer taste and preferences 2. Consumer income 3. Price of related commodities 4. Consumer expectations 5. The price of the commodity" "Square feet in 1 acre - Correct Answer 43,560 square foot" "Stratification - Correct Answer Sorting data in homogeneous groups with the primary sort being by market area (economic area)" "The order of adjustments in the direct sales comparison method are as follows: - Correct Answer 1. Financing 2. Market Conditions (Time of sale) 3. Location and Physical Characteristics" "Assemblage - Correct Answer is the merging of adjacent properties into one common ownership. The unit value does not change" "Plottage - Correct Answer Is the combining of two or more sites creating a site that has greater utility and an increased unit value" "Cost manual desired features are as follows: - Correct Answer 1. Be applicable to most structure types 2. Be based on actual costs 3. Include indirect costs 4. Be easy to update 5. Be easy to use 6. Be flexible 7. Contain guidelines for estimating depreciation 8. Be supported by appropriate forms 9. Be supported by training program 10. Be suitable for computerization" "The five methods of measuring depreciation are as follows: - Correct Answer 1. Sales Comparison (Market extraction) [Indirect] 2. Capitalization of Income [Indirect] 3. Economic Age-Life [Direct] 4. Modified Economic Age-Life [Direct] 5. Observed Condition (Breakdown) [Direct]" "Gross Income Multiplier (GIM) - Correct Answer Formula: Sale Price ÷ Annual Gross Income = GIM" "Gross Rent Multiplier (GRM) - Correct Answer Formula: Sale Price ÷ Gross Monthly Rent (Income) = GRM" "The six methods of land valuation are as follows: - Correct Answer 1. Sales Comparison 2. Allocation 3. Abstraction 4. Anticipated use or Development 5. Capitalization of Ground Rent 6. Land Residual Capitalization" "Cadastral Map - Correct Answer A complete set of maps showing boundaries, parcel size, sales information, and other relevant features." "Metes and Bounds - Correct Answer The practice of measuring the direction of property lines with compass bearings and the distance with measuring chains or tapes in order to obtain a property description" "Examples of basic Units of Comparison - Correct Answer Front foot, square foot and acre" "Parcel Identifier - Correct Answer The property account number, linking ownership records, tax maps, and assessment records" "The six desirable characteristics recommended for a parcel identification system are as follows: - Correct Answer 1. Uniqueness 2. Permanence 3. Simplicity 4. Ease of maintenance 5. Flexibility 6. Reference to geographic location" "Township Sections are numbered in what order? - Correct Answer Serpentine Method" "A Township is divided into how many square mile sections? - Correct Answer 36" "How many acres are in a single township section? - Correct Answer 640" "The five attributes of land are as follows: - Correct Answer 1. Permanent 2. Unique 3. Finite supply 4. Functional 5. Stationary" "The two methods to adjust for Market conditions (time adjustment) are as follows: - Correct Answer 1. Resale 2. Paired Sales" "Resale/Paired Sale formula - Correct Answer Sale #1 (Recent Sale) - Sale #2 (Older Sale) = Increase/Decrease amount ÷ Sale #2 (Older Sale) = % Inc/Dec ÷ Time period between Sale #1 & Sale #2 = Inc/Dec per Month" "Allocation Method - Correct Answer This method may be helpful when no sales of vacant land sales are available for comparison. Formula: Sales Price ÷ Land Value = Number of Parts" "Abstraction Method - Correct Answer This method involves subtracting the depreciated replacement cost of improvements from the sale price of an improved property to get the land value. Formula: Sale Price - Depreciated Value of Improvements = Land Value" "Direct Sales Comparison Method - Correct Answer The method of land valuation that compares the property being appraised to comparable vacant parcels that have recently sold" "Site - Correct Answer Land that has been developed to the extent that it is ready to be built upon" "Comparative Unit Method - Correct Answer This method is the easiest, fastest, and most widely used method of cost estimation. Formula: Costs ÷ Appropriate (Sq ft of floor or cubic feet) = cost per unit"