FIN 353 - EXAM 2

The standard of measurement for a single family detached residence is the gross

Living area

Ideally, a house should be positioned on its lot so that the main living areas face

South

The MOST common type of frame construction for one and two story houses is

platform.

Vertical framing members are called

Studs

Footings are part of

the substructure

The skeleton members of a building to which the interior and exterior walls are attached are called its

Framing

The interface between the roof and chimney is called

Flashing

Electrical towers create

electromagnetic fields

The efficiency of insulation is measured by its

R value

The power of an electrical line is measured in

Amperage

Circuit breakers

protect the electrical lines from overload

Plumbing fixtures are

Real property

As of what year did the federal government ban the use of lead

based paint in housing? -
1978

When earth touches wood, a major problem could be

Termites

Gross living area (GLA) is measured

using exterior dimensions

The sales comparison approach relies on the principle of

Substitution

Another name for the sales comparison approach is

The market data approach

The transaction price of a property is its

sales price

MOST residential appraisals are based on

fee simple ownership

The appraisal process requires that the appraiser collect, record, and verify

data on the region, city, and neighborhood.

Ideally, the appraiser of a residential property will collect data on comparable property sales that occurred no earlier than

6 months prior to the date of appraisal

When choosing comparable sales for the sales comparison approach, property characteristics that should be identical or very similar to those of the subject property include

all of these

One method of compensating for sales that involved different terms of financing is use of

the cash equivalency technique

To be considered comparable to the subject property, a comparable must have been sold

in an arm's-length transaction

All sales data must be verified by

one of the principals to the transaction

To be considered comparable sales, properties should be

all of these.

The value of adjustments to the sales prices of comparable properties is set by

The market

What is the range of UAD condition entries?

C1 to C6

An area with set geographic boundaries and similar property uses is called

a neighborhood.

The combination of two or more adjacent parcels is known as

assemblage.

The increase in value that can occur when parcels are combined is called

Plottage

The agency that creates federal flood hazard maps is

FEMA

A transaction in which neither the seller nor the buyer is acting under duress is called

arm's-length.

The first step in the appraisal process is

Stating the problem

The level of business activity in a community is known as its

Economic base

Another term for developer's profit is

entrepreneurial profit.

A church in a residential area is an example of

a nonconforming use.

Zoning is an exercise of a government's

police power.

All improvement costs, less depreciation, are subtracted from sales price to derive land value in the process called

Extraction

Private deed restrictions often are enforced through

a homeowners' association.

A land

to-building (L:B) ratio is used in which site valuation technique?-
Allocation

If the L:B ratio is 1:3, the percentage of land value to overall value is

25%

A parcel of land has a L:B ratio of 1:4. If overall property values average $200,000 in the neighborhood, the land value of the parcel under consideration is

$40,000

If a property's total value is $350,000, and the building value is $275,000, the land value is

$75,000

A building's current construction cost is $200,000 and it has depreciated 10%. If the total property value is $220,000, the land value is

$40,000

If the highest and best use of a parcel of land is its development potential, the method most often used to value it is

the subdivision development method.

A condemnation appraisal might be required when the government exercises its right of

Eminent domain

Site value is determined separately in.

the cost approach

Highest and best use is

the maximally productive use of the land.

Land and building must be valued at the same highest and best use according to the theory of

consistent use.

If land is rented, the rent might be analyzed to render an opinion of value in

the ground rent capitalization method

The amount of profit attributed to the land development function is

entrepreneurial profit.

The cost of improvements identical in design and material to those of the subject property is called the subject's

reproduction cost

The cost of improvements identical in utility to those of the subject is called

Replacement cost

In using the cost approach to appraising, the estimated construction cost of improvements usually will be based on

the cost of new improvements at current prices

The index method of estimating construction cost is based on

the original cost of improvements

If a commercial structure is rectangular with sides of 65 feet and 135 feet and the current local cost to build a similar structure is $45 per square foot, what is the estimated construction cost of the structure using the square

foot method? -
$394,875

A nationally based construction cost manual is acceptable for appraisal purposes if it

contains regional cost multipliers.

In a residential appraisal utilizing the URAR form, gross living area is derived by

finding the area of the whole house based on outside measurements, then subtracting the area of nonliving spaces.

The cost of supervising workers on a construction site is considered

a direct cost

The term entrepreneurial profit refers to

the developer's profit

The amount of entrepreneurial profit

reflects the success of the project.

An indirect cost also is known as

a soft cost

A direct cost also is known as

a hard cost

An example of an indirect cost is a property's

Appraisal fee

An example of a direct cost is a property's

Foundation

Which cost estimation method must take current costs into account?

All of these

Which cost estimation method must take geographic differences into account?

All of these

Gross living area includes heated, finished space measured using

exterior dimensions.

The original cost of a house was $50,000. The original index is 1.50 and the current index is 3.00. The current estimated cost of the house, using the index method, is

$100,000

The MOST accurate cost estimation method is

the quantity survey method

The LEAST accurate cost estimation method is

the index method

The total difference between a building's cost new and its market value is called

accrued depreciation

Any loss of value from causes outside the property itself is called

external obsolescence

A bedroom that can be entered solely through another bedroom is an example of

functional obsolescence

The number of years of useful life left to a building from the date of appraisal is the building's

remaining economic life

Physical or design features that exceed current requirements are called

a superadequacy.

A method of computing accrued depreciation in which the cost of a building is depreciated at a fixed annual percentage rate is called

the age-life method

Which method of estimating depreciation is the easiest to apply?

Age-life method

The chronological age of a house is 47 years. The appraiser renders an opinion of the structure's effective age of 25 years and remaining economic life of 75 years. What is the percentage of accrued depreciation?

25%

The name of the method used to calculate depreciation in question 8 is

age-life

In question 8, the replacement cost of the house is estimated at $500,000. What is the current estimated value of the structure?

$375,000

In the cost approach, depreciation is a factor in

the value of the structure

When does building cost equal value?

When depreciation is zero

that is, the building is new

...

When depreciation is greater than the value added by curing it, the depreciation is

Incurable

When depreciation is less than the value added by curing it, the depreciation is

Curable

The market rent of a house with four bedrooms is $2,000 per month. The market rent of a house with three bedrooms is $1,750 per month. The gross rent multiplier in the subject neighborhood is 100, indicating the value of a fourth bedroom is

$25,000

The technique used in question 15 is called

the rent loss method

The amount of functional obsolescence in question 15 is

$25,000

The form of depreciation that is always incurable is

external obsolescence

Which of the following components MOST likely suffers from incurable deterioration?

Studs and joists

A weakness of the age

life method is that it is -
more subjective than other methods