Term
| sales comparison adjustment grid |
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Definition
transaction prie
+/- conditions of sale
+/-financing terms
=normal sale price
+/-market conditions
=market adjusted normal sale price
+/- location
+/- physical characteristics
+/- legal characteristics
+/-use
+/- nonrealty items
=final adjusted cost |
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Term
| in the traditional sales comparison approach the appraiser reconciles the ____ to determine the ____ |
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Definition
| the appraiser reconciles the final adjusted prices to obtain the indicated value |
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Term
| changes in the market conditions result from |
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Definition
increases or decreases in demand
inflation
increases or decreases in supply
(D.all of the above) |
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Term
| the subject property has 4 bedrooms,2 baths and is in good condition. a comparable sale has 3 bedrooms,1.5 baths and is in excellent condition. the comparable sold for 120k. if each bedroom is worth 5k;.5 baths equal 1k; the difference between good and excellent condition is 2k; what is the indicated value of the subject? |
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Definition
item subject com1
tp ? 120k
bed 4k 3k +5k 125k
bath 2 1.5 +1k 126k
cond good excellent -2k =124k |
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Term
| determine the compounded monthly rate of increase assuming a property sold today for $97,500 and 16mo ago for $94,000 |
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Definition
94k-----------------97,500
(3500/94k)/16k= .0023 or .23 percent |
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Term
| determine the value of the pool assuming the following data.the subject is located in pembroke and has a pool. comparable 1 was sold recently for 214k, is located in pembrooke and does not have a pool. comaprable 2 recently sold for 230k, is located in highgrove and has a pool. the highgrove location is estimated to be 12k above that of pembrooke. all other components material to the value of the homes are considered to be identical. |
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Definition
item subject com1 com2
tp ? 214k 230k
loc P P H -12k =218k
pool yes no yes
difference between subject and com1:
218-214= 4k |
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Term
| the cost of a building to construct the building today, replicating it in exact detail, is termed: |
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Definition
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Term
| denotes the cost required to construct a building of equal utility,using modern construction techniques,materials and design. |
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Definition
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Term
| any loss of a building's value due to excess traffic noise is termed |
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Definition
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Term
true or false:
a nonarm's length transaction is one in which the buyer or sellers do not have equal bargaining powers with respect to negotiating the sale price. |
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Definition
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Term
true or false:
curable elements of depreciation are those where cost exceed the value added when they are fixed,or replaced |
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Definition
false:
curable elements of depreciation are thos whose cost of replacement will be no greater than the value added by replacing them.
correct ans: incurable goods |
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Term
| determine the value of a property having an annual potential groos income of 50k,a vacancy rate of 6 percent and an operating expense ration (as a percentage of EGI) of 40 percent, using the direct capitalization approach. ass use the overall capitalization rate, Ro, is 8.75%. |
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Definition
V= I/R
step1:
PGI= 50k
-vr(6%) 3k
EGI= 47k
-oe(40%) 18,800
NOI= 28,200
step2:
V=28,200/R
V=28,200/.0875
=322,286
V |
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Term
| which of the following expenses is not an operating expense? |
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Definition
capital improvement expenditures X
management fees
utility fees
advertising |
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Term
| assume 3(equally) comparable properties sold for the following: 1)300k;2)450k;3)250k. also assume that the property NOI's were: 1)35k;2)48k;3)29k. if the NOI of the subject property is 32k, what is the estimated value of the property using the direct capitalization approach? |
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Definition
V=I/R OR R=I/V NOI AP(V) CAP RATE 1: 35K 300K .1167 2: 48K 450K .1067 3: 24K 250K .1160 Ro= .1131 or 11.31% v=32k/.1131
v=282,900 (*rounded) |
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Term
| assume 3(equally) comaprable properties sold for the following: 1) 6m; 2) 4.5m;3) 5.3m. also assume the property NOI's were: 1) 550k; 2) 400k;3)500k. what is the overall capitalization rate indicated by these data? |
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Definition
| noi ap cap rate 1: 550k 6m .0916 2: 400k 4.5m .0888 3: 500k 5.3m .0943 avg of all 3= .0916 or 9.16 percent |
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Term
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Definition
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Term
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Definition
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Term
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Definition
bank holds title during mortgage
georgia |
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Term
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Definition
the mortgage represents a lien against the property which must be exercised upon default.
florida |
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Term
| typically, a mortgage is best described as |
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Definition
| a contractual pledge for real estate to serve as collateral for a loan |
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Term
| a clause which grants the holder of the note the rights to all remaining paymenys on the loan should the borrower default |
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Definition
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Term
| an acceleration clause that is enforceable upon the sale of the property |
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Definition
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Term
| a clause that allows lenders to adjust the interest rate charged with respect to some stated index |
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Definition
| interest escalation and adjustment clause |
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Term
| a clause that imposes a penalty on borrowers for making early payments of principal on the amount borrowed |
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Definition
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Term
| a clause which requires borrowers to make payments of their hazard insurance premium along with their periodic payments of principal and interest |
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Definition
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Term
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Definition
the govt encourages the development of mortgage securities
wall street investment banks participate in the commercial mkt
equity financing sources include life insurance companies
D. all of the above |
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Term
| mortgage documents containing notes with specific language about the borrower's promise to repay loans establish what is termed |
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Definition
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Term
| the public equity quadrant of real estate markets includes the following major participants |
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Definition
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Term
t/f
in lien theory states instruments contain power of sale clauses that allow foreclosure without going to court |
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Definition
| in (nonjudicial) title theory states instruments may contain a power of sale clause |
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Term
t\f
in title theory states, lenders technically receive title to property in mortgage contracts |
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Definition
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Term
t/f
construction loans generally have higher interest rates than permanent loans, due to their increase risk characteristics |
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Definition
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Term
| fannie mae and freddie mac own... |
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Definition
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Term
| primary factors evaluated in deciding between a 30 yr FPM and a 15 yr FPM |
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Definition
cost
affordability
liquidity |
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Term
| a major purchaser of residential mortgage loans in the secondary market is |
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Definition
| the federal national mortgage association |
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Term
| when a mortgage is used as collateral for the issuance of a mbs, the underlying mortgage is said to be |
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Definition
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Term
| the required monthly payment on a 125k loan at 7.25 percent, amortized monthly for 20 yrs is: |
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Definition
987.97
n=240;i=7.25;pmt=?;pv=125k;fv=0;period=12 |
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Term
| the total interest paid on a 95k loan, at 8 percent annual interest, amortized monthly over 15 yrs and held for the complete term is |
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Definition
68,417
n=180;i=8;pv=95;pmt=?;fv=0;period=12
907.87*180=163,416-95k=68,417 |
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Term
| determine the appropriate contract rates for years 2,3 and 4 on and arm(2/6). assume that the arm does not include a teaser rate in the first year and the index rates in years 1,2,3 and 4 are 5.25,4.25,7,7. the initial contract rate(year 1) is 7.5. |
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Definition
year index market contract
1 5.25 7.5 7.5 diff of 2.25
2 4.25 6.5 6.5
3 7 9.25 8.5*can only go up by 2
4 7 9.25 9.25 |
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Term
| mortgage insurance is typically required on new fha loans when the loan amount is greater than: |
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Definition
| it is required on all fha loans |
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Term
t/r
the truth in lending act is a federal law that requires lenders to provide information on all the costs associated with closing a residential loan |
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Definition
false.
it is the real estate settlement and procedures act (respa) that requires such |
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Term
t/f
jumbo loans carry a lower contract interest rate than standard conventional loans due to the economies of scale inherent in writing larger loans |
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Definition
false.
jumbo loans are not as liquid as standard conventional loans; hence, they generally cary a higher interest rate |
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Term
| the margin on an adjustable rate mortgage can be determined by subtracting the initial contract interest rate from the market rate |
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Definition
false.
the margin on an ARM can be determined by subtracting the index from the initial contract interest rate. |
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Term
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Definition
| serves as an intermediary between the borrower and the lender |
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Term
| a loan type which guarantees loan losses up to 100 percent of a property's value is: |
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Definition
| a veteran's administration mortgage loan |
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Term
| the primary guarantor of pass-through mbs issued by approved issuers is: |
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Definition
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Term
| to obtain a conventional loan ,the monthly PITI plus any monthly financial obligations, such as auto and credit card loans, must typically be less than___ percent of the borrower's monthly gross income |
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Definition
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Term
| typically the PITI to monthly income ratio on an fha loan is not as difficult for borrowers to qualify for when compared to the typical piti to monthly income ratio required on a conventional mortgage. |
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Definition
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