Podcast
Questions and Answers
What is the primary reason for having a property appraised?
What is the primary reason for having a property appraised?
- To determine market value (correct)
- To assess its historical significance
- To evaluate legal ownership
- To determine its aesthetic value
Which type of obsolescence typically causes greater losses in property value?
Which type of obsolescence typically causes greater losses in property value?
- Aesthetic obsolescence
- Physical deterioration
- Functional obsolescence
- Economic obsolescence (correct)
What does the concept of 'plottage' refer to in real estate?
What does the concept of 'plottage' refer to in real estate?
- The average price per square foot
- The increase in value from combining properties (correct)
- The value determined by location
- The cost of maintenance on a property
Which appraisal method does NOT involve assessing the land?
Which appraisal method does NOT involve assessing the land?
Which factor causes the greatest loss of property value?
Which factor causes the greatest loss of property value?
To which appraisal method does the principle of substitution apply?
To which appraisal method does the principle of substitution apply?
What appraisal method should be used to determine the value of a restaurant building?
What appraisal method should be used to determine the value of a restaurant building?
What would not be included in an appraisal using the cost approach?
What would not be included in an appraisal using the cost approach?
To an appraiser, a trend is defined as:
To an appraiser, a trend is defined as:
Which of the following is least likely to concern an appraiser?
Which of the following is least likely to concern an appraiser?
Which approach to value requires separate site valuation?
Which approach to value requires separate site valuation?
Which of the following would not be a cause of economic obsolescence?
Which of the following would not be a cause of economic obsolescence?
Where would the property value be stated in a narrative appraisal report?
Where would the property value be stated in a narrative appraisal report?
What is not typically included as a factor in the appraisal process overall?
What is not typically included as a factor in the appraisal process overall?
Which of the following best describes economic obsolescence?
Which of the following best describes economic obsolescence?
Flashcards
Economic Obsolescence
Economic Obsolescence
The change in value of a property based on factors outside of the property itself.
Physical Depreciation
Physical Depreciation
The decrease in value caused by wear and tear or damage to a property.
Income Approach
Income Approach
The process of estimating the value of a property based on the income it generates.
Plottage
Plottage
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Depreciation
Depreciation
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Principle of Substitution
Principle of Substitution
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Obsolescence
Obsolescence
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Sales Comparison Approach
Sales Comparison Approach
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Cost Approach
Cost Approach
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Trend in Appraisals
Trend in Appraisals
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Capitalization Rate
Capitalization Rate
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Accrued Depreciation Measurement
Accrued Depreciation Measurement
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Regression and Progression
Regression and Progression
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Contribution
Contribution
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Income Capitalization Approach
Income Capitalization Approach
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Statement of Value (Appraisal Report)
Statement of Value (Appraisal Report)
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Separate Site Valuation
Separate Site Valuation
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External Influences on Property Value
External Influences on Property Value
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Study Notes
Chapter 11 Quiz - Real Estate Appraisal
- Effective Gross Income: Calculated by subtracting vacancies from potential gross rental income.
- Functional and Economic Obsolescence: Cause more significant property value loss than physical deterioration.
- Substitution: Applies to all three appraisal methods.
- Income Approach: Used to appraise commercial properties like restaurants.
- Indirect Depreciation Methods: Considered more accurate for estimating depreciation, drawing from market information.
- Appraisal Purpose vs. Use: Appraisal purpose is typically market value determination; use is the reason for the appraisal.
- Management Expenses: Easily overlooked income property expenses.
- Capitalization Rate: Used in the income approach, not the cost approach.
- Appraisal Trends: Appraisers should consider related changes and cause-and-effect chains.
- Gross Multiplier Method: Does not involve land appraisal, using comparable sale prices and rental income.
- Physical Depreciation: Example: malfunctioning air-conditioning system.
- Economic (External) Obsolescence: Problems external to the property (not physical).
- Narrative Appraisal Report: Typically starts with purpose and final value estimate.
- Plottage: Value increase when combining adjacent properties under one ownership.
- Contribution: Some improvements add more value than their cost, others cost more than their contribution to value.
- Social and Economic Factors: Examples include trends, regulations, and environmental factors, which impact value of a property.
- Comparable Properties: Used for valuation estimates based on their sale prices and rental income.
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