Review Questions Course 101 Fundamentals Spring 2024 PDF

2024 Review Spring Course 101 Fundamentals of Real Property Review Questions Course 101 Fundamentals Spring 2024 _(1) Page 1 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 1. Assume the following characteristics for a single-f...

2024 Review Spring Course 101 Fundamentals of Real Property Review Questions Course 101 Fundamentals Spring 2024 _(1) Page 1 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 1. Assume the following characteristics for a single-family residence: Actual value = $175,000; Assessment level = 20%; tax rate = 92.8 mills. Calculate the property tax for the residence. A. $ 324.80 B. $3,248.00 C. $1,624.00 D. $1,299.20 2. If a tax rate is $13.30 per $1000, the decimal equivalent would be ____________. A. 0.01330 B. 1.330 C. 13.30 D. 133.00 3. ____________ divided by the assessed value equals the tax rate. A. market value B. millage C. budget D. assessment level 4. Given the following compute a tax rate using dollars per hundred: Budget $ 6,000,000 Market value 800,000,000 Assessment level 50% Non-property tax revenue 1,000,000 A. $11.25 per hundred B. $ 6.25 per hundred C. $ 1.50 per hundred D. $ 1.25 per hundred Page 2 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 5. The property tax is levied by local government and is referred to as a/an _____________ tax, meaning it is based on value. A. ad valorem B. use tax C. income tax D. value added tax 6. ____________ is the physical land, everything permanently attached to it, _______________ includes the rights inherent in ownership. _________ is defined by exception. A. Personal property – real property – real estate B. real property – real estate – personal property C. real estate – real property – personal property D. none of the above are in the correct order 7. Assessment level times the tax rate equals the _____________________. A. effective tax rate B. nominal tax rate C. taxable value D. net taxable value 8. Which of the following is not a characteristic of cost? A. Materials B. Quality C. Design D. Land 9. ____________ is the point at which the forces of supply and demand meet – the point of balance. A. changes in supply B. changes in demand C. equilibrium D. all of the above Page 3 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 10. A business man is looking at two equally desirable properties in two difference taxing jurisdictions. The information that the buyer has recorded includes the following: District A District B Taxable Value 750,000 Assessed Value 300,000 Tax Rate $4.20 per hundred Tax Rate $4.00 per hundred Assessment Level 50% Assessment Level 40% Which district has the lowest effective tax rate? A. District A B. District B C. They have the same effective tax rate D. Cannot determine the effective tax rate based on the data given 11. An indirect method of measuring depreciation is the: A. Sales comparison method B. Age-life method C. Modified Age-life method D. Observed condition (breakdown) method 12. The difference between the total economic life and remaining economic life is known as: A. Effective age B. Actual age C. Economic age D. Chronological age Page 4 of 21 2024 Review Spring Course 101 Fundamentals of Real Property This data is for question 13. You are appraising a single-family residence and have the following data for the subject and three comparable properties: Item Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale price $360,000 $277,500 $330,000 $310,000 Sale date 10 mo. ago 12 mo. Ago 10 mo. ago Current Baths 2 and 1/2 2 and 1/2 1 and ½ 2 and 1/2 1 and 1/2 Bedrooms 3 4 3 3 3 Den 1 1 None 1 1 Garage stalls 2 2 1 2 1 Market analysis provides the following adjustments: Market conditions (changes over time) 0.5% per month Fourth bedroom $22,000 Full bath 12,000 Den 15,000 Single car garage 18,000 Double car garage 26,500 Round your answers to the nearest $1,000 13. What is the value range for the comparable sales? A. $331,000 -- $356,000 B. $330,000 -- $356,000 C. $330,000 -- $346,000 D. $329,000 -- $352,000 14. Which is a governmental restriction placed on a property that limits the bundle of rights associated with the ownership of real property? A. Taxation B. Police Power C. Eminent Domain D. All of the above Page 5 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 15. A single-family residence located on a busy street rents for $850 per month. Similar residences off of the busy street rent for $900 per month. The GRM for this area is 150. The land to building ratio is 1:4. What is the indicated amount of depreciation? A. $7,500 B. 6,000 C. 5,625 D. None of the above 16. You have recently reviewed the values in a neighborhood and are satisfied that the values are properly reflecting the value of each component. One parcel reflects a Land value of $ 50,000 and an Improvement value of $150,000. Two streets over a parcel has been verified with a market value of $400,000 split with a Land value of $100,000 and the remainder of the value on the Improvement. Your subject property has market value of $300,000. What would the land value for the subject property? A. $100,000 B. $ 60,000 C. $ 75,000 D. none of the above 17. What element of the market place is likely to contribute to a change in demand? A. consumer expectations B. cost of production C. number of sellers D. price of other goods 18. What element of the market place is likely to contribute to a change in supply? A. consumers income B. entrepreneur expectations C. price of related commodities D. consumer taste and preference Page 6 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 19. A parcel identifier links ownership records, tax maps, and assessment records. Thus, the identifier must be: A. unique B. permanent C. uniform D. all of the above 20. You are appraising a site that is 70’ x 120’ with level ground, and an average view, located south of Route 66. Sale 1 sold recently for $ 50,000, is 80’ x 120’, has hilly ground, a fair view and is located north of Route 66. Sale 2 sold 4 months ago for $64,500, is 60’ x 120’, has level ground, a good view, and is located south of Route 66. Lots located south of Route 66 are considered 10% more desirable than lots located north of Route 66. A good view is worth 15% more and a fair view is worth 15% less. Level ground is worth 10% more than hilly ground. Lot sizes that vary more than 1000 square feet require a 10% adjustment. Lot values have been increasing at a rate of.5% per month. The indicated value of the subject lot would be: A. $60,000 B. 61,275 C. 65,000 D. 62,500 21. When making adjustments to comparable sales, using percentage adjustments in the direct sales comparison approach, the sequence of adjustments the appraiser must follow is: A. market conditions, financing, location, physical characteristics B. location, market conditions, financing, physical characteristics C. financing, market conditions, location, physical characteristics D. physical characteristics, location, market conditions, financing Page 7 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 22. In order for a property to have value it must have utility, scarcity, and desirability. The economic forces that determine scarcity are: A. supply & demand B. anticipation & change C. increasing & decreasing returns D. progression & regression 23. The underlying principle in the adjustment process in the Sales Comparison Approach is the principle of _______________. A. Substitution B. Contribution C. Complementary use D. Change 24. You are analyzing re-sales to determine a time adjustment. You have found a sale that sold 18 months ago for $200,000 and sold again 8 months ago for $220,000. monthly adjustment for time would be A. 1% B..09% C. 10% D..83% Questions 25 and 26 are based on the following information. The direct costs for a single-family residence containing 1,500 square feet are $80.00 per square foot. Indirect costs, including profit and overhead are 20% of direct costs. The land value is well supported at $50,000. The improvements are 10 years old and have depreciated.5% per year. 25. What is the cost new of the improvement? A. $120,000 B. 144,000 C. 194,000 D. None of the above 26. What is the indicated value of the property based on the cost approach? A. $136,800 B. 194,000 C. 186,800 D. None of the above Page 8 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 27. Which of the following is a method that can be used to determine the adjustments in the sales comparison approach? A. Paired sales analysis B. Multiple regression analysis C. Depreciated cost D. All of the above The following information is provided for questions 28 and 29 You are appraising an older residential property. The replacement cost new of a 25 year old improvement is $368,000 and as the property has had some maintenance you estimate that the effective age is 20 years with a remaining economic life of 60 years. You know that the replacement cost new of the physical curable items is $8,800 and the total depreciation of the physical curable items is $10,000. The land value is $75,000. The total depreciation of the physical short lived items is $17,200 and the replacement cost new of these items is $60,000. 28. What is the amount of depreciation for the physical incurable long-lived items? A. $85,200 B. 87,300 C. 74,800 D. 121,440 29. What is the total amount of physical depreciation for the property? A. $102,000 B. 125,900 C. 112,400 D. 104,000 30. Which type of cost is typically used by the assessor? A. Historic B. Reproduction C. Replacement D. None of the above Page 9 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 31. An indirect method of measuring depreciation is the: A. Sales comparison method B. Age-life method C. Modified Age-life method D. Observed condition (breakdown) method 32. A two-story residence has only one bath, which is located on the second floor. If a second bath had been included on the first floor when originally constructed, RCN would be $11,500. The cost to install the second bath today would be $13,500. What is the amount of obsolescence? A. $2,000 B. 2,400 C. 600 D. None of the above 33. The electrical outlets in the kitchen of a single-family residence are inadequate. The cost to cure the existing outlets is $3,600. The depreciation for the outlets is 50 percent. The cost to remove the old outlets and install adequate outlets is $4,800. There is not any salvage value in the old outlets. If the outlets were installed new, the cost would have been $4,000. By installing adequate outlets, the increase in market value of the property will more than offset the cost of the new outlets. What is the amount of depreciation attributable to the electrical outlets in the kitchen? A. $3,000 B. 2,600 C. 600 D. None of the above 34. There are several ways to express a tax rate: dollars per hundred, mills, dollars per thousand. Express the tax rate of 140.5 mills as a decimal. A. 1.405 B. 0.1405 C. 0.01405 D. 0.001405 Page 10 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 35. A township in the rectangular survey system contains _______sections, with each section containing ________ acres. The numbering of a section starts in the ______________________ corner. A. 30 – 640 Northwest B. 36 – 640 Northeast C. 36 – 640 Northwest D. 30 – 640 Northwest 36. The NE 1/4 NW 1/4 SE 1/4 SW 1/4 contains __________acres. A. 5 B. 10 C. 2.5 D. None of the above 37. Which approach to value is premised on the principle of substitution? A. Cost approach B. Sales Comparison approach C. Income approach D. All of the above 38. The jurisdiction in which you are working passed a budget of $1,500,000 before talking the licensing department. The licensing department knows that they will receive $50,000 in the coming year. The level of assessment in the jurisdiction is 50% and the market value of the real property it $40,000,000. What is the anticipated tax rate expressed in dollars per hundred? A. $5.00 per hundred B.$7.25 per hundred C.$250 per hundred D.$3.50 per hundred. 39. Which method of estimating market value compares the property being appraised to comparable properties that have recently sold? A. Capitalization B. Abstraction C. Direct sales comparison D. Anticipated Use Page 11 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 40. Which of the following cannot be adapted in the sales comparison approach to value? A. Financing B. Location C. Market conditions D. Non-arm’s length 41. The underlying principle in the adjustment process in the Sales Comparison Approach is the principle of _______________. A. Substitution B. Contribution C. Complementary use D. Change 42. A land to building ratio of 1:4 means land represents what percent of the total value A. 10% B. 40% C. 20% D. 25% 43. Which sale is most comparable to the subject lot? Subject Sale 1 Sale 2 Sale 3 Sale Price $60,000 $72,000 $84,000 + 20% + 10% Time Adjustment 12,000 7,200 None Time Adj. Sale Price $72,000 $79,200 $84,000 Location Average Equal + 10,000 Equal Street Interior + 12,000 Equal Equal Topography Average + 6,000 Equal + 6,000 Net Adjustments + 18,000 + 10,000 + 6,000 Adjusted Sale Price $90,000 $89,200 $90,000 A. Sale 1 C. Sale 3 B. Sale 2 D. None are comparable Page 12 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 44. A residence has an RCN of $200,000. Items classified as Curable Physical Deterioration have an RCN of $10,000 and the cost to cure of $12,000. Incurable Physical Deterioration (short-lived items) have an RCN of $40,000 and a depreciation amount of $18,000. The actual age for the residence is 6 years and the total useful life is 60 years. What is the total amount of physical depreciation? A. $60,000 B. $70,000 C. $140,000 D. $45,000 45. A residence is located in a predominately commercial area. An analysis of similar residences outside of this location indicates a typical rent of $600 per month. The location for this residence limits the rent to $550 per month. Market analysis further reveals that similar residences typically sell for 120 times the monthly rent. The land-to-building ratio in this neighborhood is 1:4. The External Obsolescence would be: A. $7.200 B. $6,500 C. $4,800 D. $ 800 46. What is the percentage depreciation of a 35-year old improvement that has a total economic life of 60 years and a remaining economic life of 36 years? A. 60% B. 40% C. 36% D. 24% 47. When a property’s highest and best use can reasonably be expected to change in the near future, the highest and best use would be referred to as (an): A. Current Use B. Interim Use C. Secondary Use D. Permanent Use Page 13 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 48. What unit of comparison would be most appropriate to use where pedestrian access is an important consideration? A. Front Foot B. Units Buildable C. Square Foot D. Acre 49. You are valuing a 70’ X 110’ lot in an older neighborhood. The Improvement was torn down. There are no land sales in this neighborhood but analysis of a similar neighborhood provides the following: Sale A Land $36,000 Improvement $169,000 Size 75’ X 110’ Sale B Land $40,000 Improvement $156,000 Size 75’ X 110’ What is the value of the subject lot? A. $31,650 B. $34,650 C. $40,000 D. $42,000 50. Which of the following is a desirable feature in a cost manual? A. Application to only single purpose buildings B. Based on actual costs C. Only works with hand calculations D. Shows comparable sales 51. The easiest and most used method of estimating cost is: A. Comparative Unit B. Factored Historic C. Quantity Survey D. Unit in place 52. Depreciation can be measured by direct and indirect methods. The direct methods of measuring depreciation are: A. Sales comparison and age life method B. Sales comparison and modified age life method C. Sales comparison and capitalization of income method D. Age life and observed condition method Page 14 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 53. The concept of _________________is based on the premise that value is derived from a specific use of the property. A. Value in exchange B. Value in use C. Value in common D. None of the above 54. In the appraisal data collection requires the assessor to collect and analysis: A. General data B. Specific data C. Comparable data D. All of the above 55. In the formula for the sales comparison approach, the term Sc represents: A. Sale price of the subject property B. Sales price of the comparable properties C. Sales comparison approach D. Sale price of the characteristics 56. Describe the designated sections: N W +E S A B Parcel A: A a. NE ¼ of the NW ¼ b. NW ¼ of the SW ¼ B c. SW ¼ of the NW ¼ d. S ½ of the NW ¼ Parcel B: 57. A speculator wan a. SE ½ of the NW ½ of the NE ¼ A. 5 b. N ½ of the NW ¼ of the NW ¼ B. 1, c. S ½ of the NE ¼ d. S ½ of the NE ¼ of the NE ¼ Page 15 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 57. The direct costs for a single family 1500 square foot residence are $90 per square foot. Indirect costs including profit and overhead are 15% of direct costs. The land value is well supported at $45,000. The improvements are 10 years old and have depreciated at a rate of 1% a year. What is the cost new of the improvement and what is the indicated value of the property? A. $155,250 RCN improvement - $200,250 property value B. $155,250 RCN improvement - $184,725 property value C. $103,500 RCN improvement - $200,250 property value D. $103,500 RCN improvement - $184,725 property value 58. The land valuation method that replicates the actions of developers and subdividers is known as A. Sales comparison method B. Allocation method C. Abstraction method D. Anticipated use method 59. The total budget of your jurisdiction is $10,000,000. In developing the jurisdictional tax rate, you find that licenses generate $2,000,000 in revenue. The market value for the jurisdiction is set at $1,000,000,000 and the assessment level is 50%. What is the jurisdiction’s tax rate expressed in dollars per hundred? A. $0.80 B. $1.00 C. $1.60 D. $2.00 60. What are the basic responsibilities of an assessor? A. Discover, map, list B. Map, list, value C. Discover, list, value D. Discover, map, value Page 16 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 61. The highest and best use analysis criteria is considered in the following order: A. Physically possible, legally permissible, financially feasible, and maximally productive B. Legally permissible, physically possible, financially feasible, and maximally productive C. Legally permissible, financially feasible, physically possible, and maximally productive D. None are in the correct order 62. The land valuation method most helpful when sales of vacant land are unavailable in the neighborhood in which you are working is ________. A. Sales comparison B. Abstraction C. Allocation D. Anticipated use 63. Which type of depreciation is generally considered NOT CURABLE? A. Physical B. Functional obsolescence C. External obsolescence D. Modernization 64. Market Value is never constant. That is why an appraisal is only valid for the date of the appraisal. The principal that most accurately explains this is ________________. A. Substitution B. Contribution C. Balance D. Change Page 17 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 65. The present worth of future benefits is the principal of ______________. A. Surplus productivity B. Anticipation C. Balance D. Highest and best use 66. A major premise of the sales comparison approach is __________. A. Market value of the subject property adjusted by the cost approach is the assessed value B. Market value of a subject property is related to the value of comparable properties C. The sale price could be more or less than the market value depending on the motivation of the buyers and sellers and the details of the transaction. D. None of the above. 67. The cost of producing an exact replica of a building using the same or very similar materials, design, and workmanship is known as ______________. A. Historic Cost B. Replacement Cost C. Reproduction Cost D. Subject Property Cost 68. When the cost to correct a functional deficiency exceeds the value that will be returned the deficiency is called ________________. A. Incurable external obsolescence B. Curable external obsolescence C. Curable functional obsolescence D. Incurable functional obsolescence 69. Which method compares properties sold to a subject property? A. Abstraction B. Direct sales comparison C. Allocation D. Anticipated use Page 18 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 70. You are working in a new jurisdiction and are reviewing the records. The jurisdiction is uniform property types and neither the zoning or the market differentiates in the value, size and shape of lots. The best unit of comparison would be, ________ value. A. Site B. Front foot C. Square foot D. Acre 71. The adjustment process in the sales comparison approach relies on the principle of ____. A. Anticipation B. Balance C. Contribution D. Change 72. You are required to determine the value of the following subject property. Upon inspection you find that the residence has 5 bedrooms, 6 bathrooms, 4 fireplaces, and a home theatre. There are 3 properties in the neighborhood that have sold recently. Sale 1. Sales Price $468,000, 6 bedrooms, 5 bathrooms, 2 fireplaces and a home theatre Sale 2. Sales Price $478,000, 5 bedrooms, 6 bathrooms, 4 fireplaces, and a home theatre Sale 3. Sales Price $459,000 5 bedrooms, 6 bathrooms 3 fireplaces and no theatre. Reviewing other sales, you determine that certain features should be valued as follows: Bedrooms $8,000 Fireplaces $3,000 Baths $10,000 Home Theatre $12,000 The value of the subject property is A. $475,000 B. $468,000 C. $500,000 D. $480,000 Page 19 of 21 2024 Review Spring Course 101 Fundamentals of Real Property 73. Which of the following is a method that can be used to determine the adjustments in the sales comparison approach? A. Paired sales analysis B. Multiple regression analysis C. Depreciated cost D. All of the above 74. What is one of the most important criteria in selecting a comparable? A. The sale occurred within the past three months B. The characteristics of the comparable are similar to the subject C. The subject can be adjusted to the comparable D. The comparable was a cash sale 75. What is an element of the market place that is likely to contribute to a change in supply? A. Consumer taste and preferences B. Depreciated cost C. Entrepreneur expectations D. None of the above Page 20 of 21 2024 Review Spring Course 101 Fundamentals of Real Property How do you measure the following: Curable Physical Depreciation Short Lived Items for Physical Depreciation Long Lived Physical Depreciation Curable Functional Depreciation – deficiency Curable Functional Depreciation – modernization Curable Functional Depreciation – Superadequacies Incurable Functional Depreciation External Obsolescence Write the words for each anacronym. MV = LV + IV EA + REL = TEL RCN V = Sc +/- adj Page 21 of 21