Appraisal 1st 100 Questions

1. There are valuation scenario in which it may be permissible for an appraiser’s conclusion to be different given the same property and with the same effective date. Which of the following intended use scenarios should NOT be expected to have a significant difference in the value conclusion?

2. When an appraiser identifies the purpose of a real property appraisal, what objective is being sought in the assignment?

3. An appraiser is analyzing a multi-family apartment complex for lending purposes. While collecting dta for the appraisal, what informaitno listed below would the appraiser identify as general data?

4. An appraiser is analyzing the market value of a commercial building that has a lease ending in nine months. For what time period is the appraiser’s opinion of market value valid?

5. IN the appraiser’s data collection process that involves a market value assignment, which of the following is an example of general data?

6. In a market value assignment, which criteria of highest and best use would an appraiser generally NOT analyze as one of the four primary tests?

7. An appraiser has been hired to provide a valuation of property that is known to have a contamination issue. To quantify that damage to the property, the appraiser will provide a value opinion as though the property is not contaminated for comparison purposes. What assignment condition should the appraiser use for the specific value opinion?

8. In which step of the valuation process does n appraiser analyze the ideal improvement for the appraised property?

9. When an appraiser identities an effective date of value, for what period of time is the value opinion valid?

10. As the clint may be an individual, group or entity, which of the following best represent how an appraiser identities the client in an appraisal assignment? The client is the party or parties?

11. An appraiser has been hired to provide a valuation of property that is known to have a contamination issue. To quantify that damage to the property, the appraiser will provide a value opinion as though the property is not contaminated for comparison purposes. What assignment condition should the appraiser use for the specific value opinion?

12. Which of the following best defines the valuation process that appraisers use to perform appraisal assignments?

13. There are valuation scenario in which it may be permissible for an appraiser’s conclusion to be different given the same property and with the same effective date. Which of the following intended use scenarios should NOT be expected to have a significant difference in the value conclusion?

14. A potential client is on the phone with an appraiser discussing issues about the valuation of a property that client owns. In this initial contact with the client, what step of the valuation process is the appraiser’s focal point?

15. In the highest and best use analysis, when an appraiser is evaluating the land as though vacant, what is one of the four criteria the appraiser will evaluate?

16. Which of the following statements is true regarding the terms “land and “site”?

17. What is the first step in the cost approach?

18. How is reversion in an investment property defined?

19. Which of the following best describes the term, “capitalization”?

20. Which of the following descriptions provides a simple explanation of the process used in direct capitalization?

21. Which of the following is true of an equity capitalization rate?

22. What is the amount left after debt service has been deducted from net operating income called?

23. The income capitalization approach is generally not applicable to which of the following property types?

24. Which of the following describes the term, “pre-tax cash flow”?

25. Which of the following best describes the term, “capitalization”?

26. What does GRM refer to in the appraiser’s analysis of a residential income property?

27. Which term best describes an interest (yield) rate used to convert future payments into present value?

28. What is the amount left after debt service has been deducted from net operation income called?

29. What are the two primary methods of income capitalization that are differentiated by the duration of their income streams?

30. Which of the following descriptions provides a simple explanation of the process used in direct capitalization?

31. The principal of anticipation affirms that value is based on?

32. Which of the following is not an element of comparison?

33. Which approach to value requires a separate valuation of the site?

34. The land residual technique is primarily used on which of the following?

35. The three approaches to value are the cost approach, the sale comparison approach, and the income capitalization approach. Which of the following is a true statement regarding the application of these approaches to value?

36. When would the extraction method of land valuation be most applicable?

37. Which of the following statements about land valuation is true?

38. Which of the following descriptions provides a simple explanation of the process used in direct capitalization?

39. Which of the following is true of an equity capitalization rate?

40. What is the amount left after debt service has been deducted from net operation income called?

41. The income capitalization approach is generally not applicable to which of the following property types?

42. Which of the following describes the term, “pre-tax cash flow”?

43. Which of the following is another term for yield capitalization?

44. Which of the following best describes the term, “capitalization”?

45. What does GRM refer to in the appraiser’s analysis of a residential income property?

Which of the following describes the term, “Pre-tax cash flow”?

47. Which of the following is true of an equity capitalization rate?

48. How is reversion in an investment property defined?

49. What is the amount left after debt service has been deducted from net operating income called?

50. Which of the following is the correct manner in which a GRM (gross rent multiplier) would be calculated?

51. What is a discount rate used for?

52. The principle of anticipation affirms that value is based on

53. What of the following best describes the term capitalization?

54. Which of the following do you need to now in order to solve for an operating expense ratio?

55. If the overall rate is 8%, what is its corresponding factor?

56. A gross income multiplier (GIM) is generally used to value what type of property?

57. What is the capitalization rate for a property that has a net operating income of $45,000 and that just sold for $500,000?

58. What is the value of a property that has an appropriate capitalization rate (R) of 12.5%, an operating expense ratio of 40%, and effective gross income of $10,000?

59. Which of the following rates would be used when seeking the value of the property (both land and improvements) based on a single year of net operating income?

60. Which of the following would you need to solve for income (I)?

61. If the overall rate is 8%, what is its corresponding factor?

62. A comparable four-unit residence just sold for $300,000. It was rented at the time of sale for (or has a market rent of) $1,000 per unit per month. What is the GRM?

63. A comparable one-unit residence just sold for $300,000. It was rented at the time of sale for (or had a market rent of) $3,000 per month. What is the GRM?

64. A gross income multiplier (GIM) is generally used to value what type of property?

65. What is the capitalization rate (R) for a property that has a net operating income of $45,000 and that just sold for $500,000?

66. What is the value of a property that has an appropriate capitalization rate (R) of 12.5%, an operating expense ratio of 40%, and effect gross income of $10,000?

67. What of the following rates would be used when seeking the value of the property (both land and improvements) based on a single year of net operating income?

68. What is the capitalization rate (R) for a property that has a net operating income of $40,000 and a net income multiplier (NIM) of 12.5?

69. A multi-unit apartment building has a net operating income of $505,000 and an operating expense ratio (OER) of 43.56%. The vacancy is estimated at 4% in the market. What is the net income ratio (NIR)?

70. A property has a net operating income of $355,500. The fixed expense are $110,200 and variable expenses are $125,000. What is the effective gross income (EGI)?

71. A warehouse has a net operating income of $135,000 and net income ratio (NIR) of 60%. The vacancy is estimated at 4% in the market. What is the operating expense ratio (OER)?

72. A property has a net operating income of $150,000. The fixed expenses are $50,000 and variable expenses are $75,000. What is the effective gross income (EGI)?

73. Which of the following best describes a net lease?

74. What is the total income attributable to real property at full occupancy before vacancy and operating expense are deducted?

75. A property has an effect gross income of $60,420. Vacancy and collection loss are estimated at 5% in the market, and operating expenses total $19,156. What is the net operating income (NOI)?

76. What is the most probable rent that the property should bring?

77. Which type of lease may adjust due to changes in market rent, and may be facilitated through the use of an appraisal or arbitration?

78. Using the following date, what is the value?

Potential gross income (PGI) = $455,000 Vacancy = 10% Operating expense ratio (OER) = 45% Overall capitalization rate = 9.5%

79. Which of the following is NOT one of the six major components of a building?

80. Which of the following is considered a type of framing?

81. An appraiser is not a building inspector. The appraiser does which of the following?

82. A wood stud home in which each floor is framed and erected separately is referred to as what type of construction?

83. An appraiser observes a bathroom with a sink, a bathroom with shower, and toilet. What would this be called?

84. What is the predominant type of frame construction used after World War II?

85. If an appraiser observes missing flashing, what construction system is the appraiser viewing?

86. During an exterior inspection, an appraiser observes a foundation that is exposed to the environment, what type of foundation is this?

87. Which of the following is NOT considered an interior framing finish?

88. An appraiser observes a bathroom with a sink and toilet only. What would this be called?

89. The annual debt service on a property is $25,000 and the pre-tax cash flow is $50,000. If the mortgage capitalization rate is 8.5% and the overall rate is 10%, what is the indicated value of the property?

90. Which of the following expenses that maybe be found on a property owner’s financial statements, should be excluded from the appraiser’s reconstructed operating statement?

91. Using the following date, what is the value? Potential gross income (PGI) = $175,000 Vacancy = 5% Operating expense ratio (OER) = 35% Overall capitalization rate = 8.5%

92. Which of the following expense that may be found on a property owner’s financial statements, should be exclude in the appraiser’s reconstructed operating statement?

93. Using the following information, what is the effective gross income multiplier (EGIM)? PGI = $275,000 Sales price = $2,750,000 Vacancy = 10%

94. What is the monthly debt service on a commercial warehouse with a mortgage amount of $450,000 and a mortgage capitalization rate of 6.75%?

95. Using the following information, what is the effective gross income multiplier? PGI = $125,000 Value = $750,000 Vacancy = 10% Operating expense ratio = 35%

96. Using the following data, what is the pretax cash flow (PTCF)? Potential gross income (PGI) = $300,000 Operating expense ratio (OER) = 45% Vacancy = 10% Debt service (annual mortgage payment) = $125,500

97. An appraiser asking a local building contract for cost data. The contractor gives his best estimate to build an exact replica of the property being appraised. What could this data be called?

98. Which of the following best describes gross living area (GLA) in single-unit residences?

99. The cost approach might be the only approach available to an appraiser when appraising?

100. The second step of the cost approach is to estimate direct (hard) and (soft) costs as of