Term
| What is non conforming grandfathered use? |
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Definition
| A grandfathered use means that the use is nonconforming to the current zoning. However it is permitted and thus it is a legal use |
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Term
| Which land valuation procedure requires a cost estimate of the improvements for each of the comp sales? |
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Definition
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Term
| Assemblage is the process of combining two or more sites in order to produce greater utility. The increment of value created from assemblage is called? |
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Definition
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Term
| An appraiser made the following dollar adjustments to a comp sale of vacant land : 5000, -2000, and -6000. What is the gross adjustment for the site comp? |
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Definition
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Term
| Components into which a property may be divided for purposes of comparison are called: ? |
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Definition
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Term
| What is the preferred method of site valuation when adequate data is available? |
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Definition
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Term
| A method of estimating land or site value in which the depreciated cost of the improvements is deducted from total sale price to arrive at estimated sale price for land |
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Definition
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Term
| This method of estimating land value uses a Ratio of land value to total property value |
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Definition
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Term
| Common units of comparison are??? |
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Definition
| Acre, sq foot. Front foot. Lot or plot. Buildable unit |
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Term
| True or false: intended use is an element of comparison? |
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Definition
| False! Intended use is NOT an element of comparison |
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Term
| The increment of value created when two or more sites are combined to produce greater utility |
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Definition
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Term
| The process of combining 2 or more sites to produce greater utility |
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Definition
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Term
| This element of comparison is also known as Time Adjustment |
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Definition
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Term
| True or false: land can be depreciated in value |
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Definition
| FALSE! Only improvements depreciate |
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Term
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Definition
Ground rent capitalization
Land residuals
Allocation
Development analysis
Extraction
Sales comparison |
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Term
| When does an appraiser need land value? |
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Definition
1. Vacant land
2 highest and best use
3 cost approach
4 income capitalization approach
5 property taxation
6 insurance
7 condemnation |
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Term
| T or F? When using the cost approach, the appraiser values the site separately as if vacant |
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Definition
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Term
| What identifies a manufactured home? |
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Definition
1 The housing must be legally classified as real estate (not pp)
2 towing hitch, wheels and axels must be removed-must be site house bldg
3 attached to perm foundation |
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Term
| In the market place, a commercial broker might refer to a property as a class a building. This ratif refers to ? |
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Definition
| Competitive ranking for leasing purposes |
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Term
| In the cost approach an appraiser may categorize high interest rates as what type of depreciation accruing to the property? |
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Definition
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Term
| T or f? When comp sales have the same property rights as the subject, no adjustments are needed |
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Definition
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Term
| T or F? The first step in the valuation process is to identify the clients PROBLEM? |
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Definition
| TRUE - the first step in valuation process is to identify the problem |
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Term
| a systematic procedure used in the valuation of real propert |
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Definition
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Term
| The party or parties who ENGAGE, by employment or contract, an appraiser in a specific assignment |
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Definition
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Term
| The client and any other party AS IDENTIFIED, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report BY THE APPRAISER on the basis of communication with the client at the time of the assignment. |
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Definition
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Term
| Why is it so important to identify the client? |
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Definition
| so that confidential information porvided by the client is treated properly. |
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Term
| First two steps of the valuation process? |
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Definition
1. identify the client and intended users
2. identify the intended use. |
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Term
| T or F? Identifying the PURPOSE is the same as identifying the TYPE AND DEFINITION OF VALUE to be developed? |
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Definition
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Term
| The objective of an assignment |
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Definition
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Term
| This effective date is contemporaneous with the date of the report |
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Definition
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Term
| Appraisals witha n effective date in the past are commonly used fro estates, casualty loss, property tax appeal, and marriage dissolution |
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Definition
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Term
| Appraisals as of a future date that are needed in assignments for proposed or renovated improvements |
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Definition
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Term
| Why is having an effective date so important? |
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Definition
| bc forces of influenced value are subject to change |
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Term
| This is a condition that is contrary to what exists but is supposed for the purpose of analysis |
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Definition
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Term
| Example: A site has been confirmed to be contaminated: yet the owner wants it appraised as though it was not contaminated. |
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Definition
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Term
| A property that has a proposed construction on a vacant site may qualifty for this assignment condition: |
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Definition
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Term
| assumption made based on uncertain information |
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Definition
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Term
| The type and extent of research and analysis in an assignment |
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Definition
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Term
| T or F: Comps are decided based on the opinion of the appraiser? |
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Definition
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Term
| A tax appeal assignment will commonly involve a __________ effective date |
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Definition
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Term
| Intended use affects both appraisal ______________ and reporting |
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Definition
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Term
| In ____________________ analysis, the appraiser analyzes the ideal improvement for the property |
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Definition
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Term
| the relevant characteristics of a property are part of __________ the property |
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Definition
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Term
| T/F Scope of work is the type and extent of research and analysis in an assignment |
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Definition
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Term
| T/F Identifying characteristics of the subject property is specific data rather than general data |
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Definition
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Term
| T/F The client and the intended user are never the same |
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Definition
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Term
| T/F a prospective appraisal has an effective date contemporaneous with the date of the report |
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Definition
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Term
| T/F Developing an opinion of insurable value can be identified as the purpose of an appraisal assignment |
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Definition
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Term
| improved parcel that does not require further land development or subdivision |
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Definition
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Term
| Six procedures for analyzing land or site value |
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Definition
GLADES
g: ground rent capitalization
l: land residual technique
a: allocation
d: development analysis
e: extraction
s: sales comparison |
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Term
| Most common and preferred method of land valuation |
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Definition
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Term
| The appraiser forms an opinion of the value by subtracting the contributory value (depreciated cost) of the improvements from the sale price |
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Definition
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Term
| the appraiser analyzes improved property sales and allocates prices paid between the land and total property, usually on a RATIO basis |
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Definition
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Term
| The appraiser is required to separate the rent between teh land and the improvements in this land value procedure |
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Definition
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Term
| This approach to value reflecgts market thinking by recognizing that participants in the marketplace relate value to cost |
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Definition
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Term
| non realty components of value are an element of comparison considered within the sales comp approach |
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Definition
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Term
| extraction is a land valuation procedure that can be used when a comp sold property has improvements on the site |
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Definition
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Term
| the final step in the valuation process is the reconciliation of the value indications |
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Definition
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Term
| an appraiser must use all three approaches in every assignement |
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Definition
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Term
| the first step in the cost approach is to value the land |
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Definition
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Term
| purpose defines the intended use of the appraisal |
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Definition
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Term
| The conversion of income to value |
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Definition
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Term
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Definition
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Term
|
Definition
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Term
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Definition
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Term
|
Definition
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Term
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Definition
| Gross Rent Multiplier (a factor) |
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Term
| Value = Montly rent * GRM |
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Definition
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Term
|
Definition
| gross rent per month* gross rent multiplier = value |
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Term
| the total potential income attributable to real property at full occcupancy before vacancy and operating expenses are deducted. |
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Definition
| potential gross income (PGI) |
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Term
| the anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses |
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Definition
| effective gross income (EGI) |
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Term
| the actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and income taxes are deducted |
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Definition
| Net Operating Income (Io) |
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Term
| The portion of net operating income that remains after total mortgage debt service is paid but before ordinary income tax on operations is deducted |
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Definition
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Term
| ptcf but after tax liabilities have been deducted |
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Definition
| after tax cash flow (atcf) |
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Term
| a lump sum benefit that an investor receives or expects to receive at the termination of an investment |
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Definition
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Term
| net income/total investment =? |
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Definition
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Term
| an interest rate used to convert future payments or receipts into present value |
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Definition
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Term
| the probability that foreseen events will occur |
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Definition
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Term
| what does the purpose of an appraisal assignment define? |
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Definition
| the type and definition of value used in the assignment |
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Term
| a value opinion of a proposed office building based on a current effective date would generally require what kind of assignment condition |
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Definition
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Term
| the ratio of annual debt service to the principle amt of the mortgage loan is called the |
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Definition
| mortgage capitalization rate (Rm) |
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Term
| what are the three traditional approaches to value? |
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Definition
| cost, sales comp, income cap |
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Term
| the two bases used to set up leases |
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Definition
1. gross lease
2. net lease |
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Term
| IN this lease, the landlord pays all of the operating expenses |
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Definition
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Term
| In this type of lease, the tenant pays all of the operating expenses |
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Definition
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Term
| a lease, typically LONG TERM, that provides for periodic rent adjustments based on the change in an economic index |
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Definition
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Term
| T or F: the vacancy and collection loss figure is commonly estimated as a percent of potential gross income |
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Definition
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Term
| total rent possible if the property is 100 percent full |
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Definition
| PGI: Potential Gross Income |
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Term
| T or F: taxes and insurance are prime examples of fixed expenses |
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Definition
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Term
| What are the six major components of a building that appraisers should observe for valuation conditions? |
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Definition
1. Foundation
2. Framing
3. Roofing
4. Plumbing
5. Electric Wiring
6. HVAC |
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Term
| This type of foundation is open to the environment ? |
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Definition
Pier Foundations
(people stand on wood not slab of foundation, most open than any other foundation) |
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Term
| This type of slab is all poured at the same time |
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Definition
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Term
| T or F: the primary concern when observing floors and walls is to check for water related damage? |
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Definition
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Term
| The most common type of wall construction |
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Definition
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Term
| This type of framing was more prevalent in housing built prior to the world war 2 |
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Definition
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Term
| waterproof material used to prevent water leakage |
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Definition
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Term
| The common types of roof designs include: |
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Definition
| flat, gable, saltbox, hip, gambrel, mansard, and shed |
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Term
| shower tubs, dishwashers, shower spigots, and waterheaters are all great examples of ? |
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Definition
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Term
| T or f: engineered trusses are sometimes used in lieu of hand framing a roofing support system |
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Definition
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Term
| foundation walls are generally built on ...? |
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Definition
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Term
| Four reasons why appraisers must be proficient in cost analysis |
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Definition
1. can be proxy for value
2. it allows to appraise individual component costs
3. cross check for adjustments
4. competent analysis |
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Term
| T or F: you would not want to use the cost approach to appraise properties with older improvements or are not the h and b use of the site |
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Definition
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Term
| the first step of the cost approach is ? |
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Definition
| 1. estimate the land value of the site as though vacant (separately) and available to be put to its highest and best use |
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Term
| this is the only apporach that requires land to be valued separately from building |
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Definition
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Term
| the estimated cost to construct, at current prices, as of the effective date, an exact duplicate or replica of the building being appraised |
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Definition
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Term
| the estimated cost to construct, at current prices as of the effective appraisal date, a substitute for the building being appraised, using modern design, materials and layouts |
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Definition
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Term
| T or F: the second step of the cost approach is to estimate the direct and indirect costs of improvement |
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Definition
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Term
| labor, materials, contractors profit and building permits are all included in _____ costs? |
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Definition
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Term
| architectural and engineering fees, appraisal and legal fees are _____ costs? |
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Definition
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Term
| ______ is the difference between the cost of development and the value of property after completion |
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Definition
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Term
| a market derived figure that represents the amount an entrepreneur EXPECTS to receive |
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Definition
| entrepreneurial incentive |
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Term
| the most commonly used cost estimating method |
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Definition
| comparative unit method (ex: cost per sq foot) |
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Term
| using this cost estimating method, the total building cost is estimated by adding together the unit costs for various building components as installed |
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Definition
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Term
| the most comprehensive, time consuming, detailed form of cost estimating methods |
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Definition
| Quantity survey method ( the quantity and quality of all materials used and all categories of required labor are estimated) |
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Term
| what are three identified types of accrued depreciation applicable to property improvement |
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Definition
external obsolescence
functional obsolescence
physical deterioration |
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Term
| a buyer will not pay more for a property than the cost to construct one of equal desirability and utility without undue delay. what principle does this illustrate? |
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Definition
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Term
| what type of property is the gla generally based on interior dimensions |
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Definition
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Term
| architectural fees are ...? |
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Definition
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Term
| what areas are included in gross living area? |
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Definition
| finished and habitable floor areas above grade (ie no basements or attics) |
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Term
| because of the unique attributes of the cost approach, it is ideally suited for ? |
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Definition
| estimating insurable value |
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Term
| condon has estimated the cost of excavation, the floor, the wall and the roof components and the packaged cost for the electrical heating and plumbing. what cost method is condon using? |
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Definition
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Term
| an earth sheltered dwelling would likely be placed into which of the following categories of housing design? |
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Definition
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Term
| relatively minor items that could be feasibly corrected today |
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Definition
| Curable Physical Deterioration |
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Term
| the period over which improvements to real property contribute to property value |
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Definition
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Term
| this is the estimated period during which improvements continue to contribute to property value |
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Definition
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Term
| number of years since construction |
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Definition
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Term
| age of property that is based on the amount of observed deterioration and obsolescence it has sustained which may be different from its choronlogical age |
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Definition
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Term
| this is also known as deferred maintenance |
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Definition
| curable physical deterioration |
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Term
| components that have an expected useful life that is shorter than that of the entire structure. ex) roof, boiler, carpeting, appliances |
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Definition
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Term
| building components that are expected to have the same useful life as the entire structure ex) rafters, framing studs, and foundation walls |
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Definition
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Term
| when the cost of replacing the outmoded or unacceptable component must be the same as or less than the anticipated increase in value |
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Definition
| curable functional obsolescence |
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Term
| in the marketplace, a commercial broker might refer to a property as a "class A" building. this rating refers to: |
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Definition
| competitive ranking for leasing purposes |
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Term
| in the cost approach, an appraiser may categorize high interest rates as what type of depreciation accruing to the property |
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Definition
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|
Term
| when does an appraiser need land value? |
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Definition
1. vacant land
2. h and b use as though vacant
3. cost approach
4. income cap approach |
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Term
| the part of the valuation process that uses experienced judgement and results in a value opinion |
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Definition
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Term
| an appraiser used cost related indicatiors to derive an adjustment, which is considered what type of adjustment technique? |
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Definition
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Term
| comp sales are adjusted to the subject as the base, except financing which is adjusted to what? |
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Definition
| cash equivalency based on the market |
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Term
| comparing two similar properties and making adjustments so it is comparable is called |
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Definition
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