MCKISSOCK APPRAISAL PROCEDURES 2025/2026
QUESTIONS WITH ANSWERS MARKED A+
✔✔substitution - ✔✔appraisal principle that states when several similar or
commensurate commodities good or service are available the cheapest one will be
demanded
✔✔cost formula - ✔✔reproduction cost new-accrued depreciation+site value=property
value
✔✔cost approach - ✔✔set of procedures through which a value indication is derived for
the fee simple estate by estimating the current cost to construct a reproduction of the
existing structure
✔✔fee simple interests - ✔✔absolute ownership unencumbered by any other estate
subject only to the limitations imposed by the govern. powers of taxation eminent
domain police power and escheat.
✔✔reproduction cost - ✔✔cost to construct at current prices as of the effective date of
the appraisal an exact duplicate of the building being appraised
✔✔Replacement Cost - ✔✔cost to construct, at current prices as of the effective
appraisal date, a building with utility equivalent to the building being appraised
✔✔entrepreneurial incentive - ✔✔amount an entrepreneur expects to receive for his or
her contribution to a project
✔✔Depreciation - ✔✔appraising, a loss in property value from any cause
✔✔USPAP standards 1-1a - ✔✔be aware of and crrectly employ those recognized
methods and techniques that are ncessary to the appraisal
✔✔standards 1-4b - ✔✔1. develop an opinion of site value
2. analyze comp. cost
3. analyze vs new and old cost
✔✔standards rule 1-2h - ✔✔determine scope of work necessary to produce credible
assignment results in accordance with SOW rule
✔✔direct cost - ✔✔expenditures for the labor and materials used in the construction of
improvements
✔✔indirect costs - ✔✔expenditures items other than labor and materials that are
necessary for construction but not typically in the contract
, ✔✔entrepreneurial profit - ✔✔figure that represents the amount an entrepreneur
receives for his risk; what they actually get
✔✔Physical deterioration - ✔✔wear and tear that begins when a building is completed
and placed into service
✔✔Functional obsolescence - ✔✔The impairment of functional capacity of
improvements according to market tastes and standards
✔✔External Obsolescence - ✔✔type of depreciation; a diminution in value caused by
negative external influences and generally incurable on the part of the owner, landlord,
or tenant
✔✔economic life - ✔✔period over which improvements to real estate contribute to value
✔✔useful life - ✔✔time over which a structure or a component of a property may
reasonably by expected to perform the function as designed
✔✔physical life - ✔✔estimate of how old a building will be when it is worn out
✔✔Remaining economic life - ✔✔eriod over which existing improvements are expected
to contribute economically to a property
✔✔depreciation(age life) - ✔✔(effective age/total economic life)*total cost
✔✔Curable depreciation - ✔✔Items of physical deterioration or functional obsolescence
that are economically feasible to cure
✔✔Sales Comparison Approach - ✔✔The process of estimating the value of a property
by examining and comparing actual sales of comparable properties.
✔✔neighborhood - ✔✔group of complementary land uses; a congruous grouping of
inhabitants, buildings, or business enterprises
✔✔district - ✔✔neighborhood characterized by homogeneous land use, e.g., apartment,
commercial, industrial, agricultura
✔✔market area - ✔✔the area surrounding a service from which customers are attracted
where demand comes from
✔✔paired date analysis - ✔✔quantitative technique used to identify and measure
adjustments to the sale prices or rents of comparable properties
QUESTIONS WITH ANSWERS MARKED A+
✔✔substitution - ✔✔appraisal principle that states when several similar or
commensurate commodities good or service are available the cheapest one will be
demanded
✔✔cost formula - ✔✔reproduction cost new-accrued depreciation+site value=property
value
✔✔cost approach - ✔✔set of procedures through which a value indication is derived for
the fee simple estate by estimating the current cost to construct a reproduction of the
existing structure
✔✔fee simple interests - ✔✔absolute ownership unencumbered by any other estate
subject only to the limitations imposed by the govern. powers of taxation eminent
domain police power and escheat.
✔✔reproduction cost - ✔✔cost to construct at current prices as of the effective date of
the appraisal an exact duplicate of the building being appraised
✔✔Replacement Cost - ✔✔cost to construct, at current prices as of the effective
appraisal date, a building with utility equivalent to the building being appraised
✔✔entrepreneurial incentive - ✔✔amount an entrepreneur expects to receive for his or
her contribution to a project
✔✔Depreciation - ✔✔appraising, a loss in property value from any cause
✔✔USPAP standards 1-1a - ✔✔be aware of and crrectly employ those recognized
methods and techniques that are ncessary to the appraisal
✔✔standards 1-4b - ✔✔1. develop an opinion of site value
2. analyze comp. cost
3. analyze vs new and old cost
✔✔standards rule 1-2h - ✔✔determine scope of work necessary to produce credible
assignment results in accordance with SOW rule
✔✔direct cost - ✔✔expenditures for the labor and materials used in the construction of
improvements
✔✔indirect costs - ✔✔expenditures items other than labor and materials that are
necessary for construction but not typically in the contract
, ✔✔entrepreneurial profit - ✔✔figure that represents the amount an entrepreneur
receives for his risk; what they actually get
✔✔Physical deterioration - ✔✔wear and tear that begins when a building is completed
and placed into service
✔✔Functional obsolescence - ✔✔The impairment of functional capacity of
improvements according to market tastes and standards
✔✔External Obsolescence - ✔✔type of depreciation; a diminution in value caused by
negative external influences and generally incurable on the part of the owner, landlord,
or tenant
✔✔economic life - ✔✔period over which improvements to real estate contribute to value
✔✔useful life - ✔✔time over which a structure or a component of a property may
reasonably by expected to perform the function as designed
✔✔physical life - ✔✔estimate of how old a building will be when it is worn out
✔✔Remaining economic life - ✔✔eriod over which existing improvements are expected
to contribute economically to a property
✔✔depreciation(age life) - ✔✔(effective age/total economic life)*total cost
✔✔Curable depreciation - ✔✔Items of physical deterioration or functional obsolescence
that are economically feasible to cure
✔✔Sales Comparison Approach - ✔✔The process of estimating the value of a property
by examining and comparing actual sales of comparable properties.
✔✔neighborhood - ✔✔group of complementary land uses; a congruous grouping of
inhabitants, buildings, or business enterprises
✔✔district - ✔✔neighborhood characterized by homogeneous land use, e.g., apartment,
commercial, industrial, agricultura
✔✔market area - ✔✔the area surrounding a service from which customers are attracted
where demand comes from
✔✔paired date analysis - ✔✔quantitative technique used to identify and measure
adjustments to the sale prices or rents of comparable properties
