4. To accomplish this, HUD suggests the appraiser consider: -How the property fits into its surroundings -Trends in the neighborhood -The physical condition of the property. "The tenant's possessory interest created by a lease" is the definition of _______________. $560,000 - $65,000 = $495,000. $305,000; Extraction Method. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to live in cities. In the example, the appraiser. depreciated cost Which would NOT be an appropriate legal description of a subject property? post and joist, "An element of comparison in the sales comparison approach; comparable properties can be adjusted for differences in the motivations of either the buyer or a seller in a transaction" is the definition of log home Keyways are employed in which type of foundation walls? Disposal value after 8 years - Zero. casing, bedrock $1,098,253 universal appraisal In highest and best use of analysis, which criterion is applied last? $155,000 as single home site; B. identification of the property rights $1,118,800 effective date of value Economic life of equipment - 8 years. the subject property and the comparable sales, Fannie Mae requires a single-unit residential appraisal report to include photographs of, contract, effective date of the appraisal. To estimate the number, owners must consider the asset's net present value (NPV), internal rate of return (IRR), and return on investment (ROI). square foot If agricultural tariffs and subsidies to producers were removed overnight, what would the impact be on the average consumer in developed nations such as the Untied States and the EU countries? cost In closing, I feel it is important for appraisers to understand how clients are using the information provided in reports. Estimated net annual cash inflows for each of the 8 years - P81,000. A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O Soup for$1.50 per meal. The method that treats the land value as a percentage of the total value is the __________ method. "Industrial Designs has been awarded a contract to design a label for a new wine produced by Lake View Winery. reverse capitalization Economic Age-Life Method C The economic age-life method is a quick and easy method to apply and may be used in form reports to give an estimate of the buildings depreciated value. entrepreneurial profit, Building permits and worker's compensation are examples of __________costs. You examine a construction contract to build a 2,448 square foot house and the total cost is $197,450. For the most part, this confusion centers on the misunderstanding that REL is reflective of the number of years a physical structure is expected to last. Single Family Exterior Only(FNMA 2055), $500. hypothetical condition $192,000 + $60,000 - $252,000. One year of the economic life of the asset will be utilized over the next 12 months. The net operating income was verified as $294,640. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. effective, The most complex method of site valuation is the _______________ method. $98,000 contradiction, Which type of valuation analysis would typically NOT include a separate site valuation? What is the land value? $87,500 When an asset is no longer useful to its owner, then it is said to be past its economic. Lessee Corp is required to pay $500 per month for three years, so the total lease payments are $18,000 ($500 36 months). GBA, interior What type of property is most likely to be appraised using a gross income multiplier? $395,000 - $39,500 (10%) + $65,000 = $420,500. When measuring a condominium you should calculate ____ using _______ measurements. In the age-life method of estimating depreciation, the blank age is divided by the blank life. the URARForm can be used to report the appraisal of all of the following property types except: A deed could provide all of the following information about a property except: All of the following could be sources of specific data except: The blank method has good application and evaluating land in rural areas and an older, urban areas. one unit residences $825 X .417 = $344.03. wood quantitative tenancy in severalty personal property An estimate of remaining economic life is required by A VA. The HUD handbook states that the useful life of a building has come to an end when: -The building can no longer produce annual income or services sufficient to offset maintenance expense, insurance and taxes to produce returns on the value of the land. Multiply the Cost of the Long-Lived Items by the depreciation percentage: $191,760 X 24% = $46,000. An appraiser who states that the Effective Age of a Q4 house is 12 years is asserting that depreciation is 20% and the market is paying 80% of replacement cost. Draw the budget constraint showing the trade-off between dining hall meals and Cups O Soup. An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. The difference between the cost of a value on the effective date of the appraisal is: The amount on your expects to receive or his or her contribution to a project is: Feesimple ownership is not subject to the governmental powers of police power and escheat. An estimate of remaining economic life is required by Fannie Mac Freddie Mac VA all of the above VA Remaining Economic Life. useful, anticipated Label the optimum as point A. indirect costs A property contains 2.4 acres and is worth: A. Footings should be ________ as wide as the ____________. unit in a PUD. What are the three general types of depreciation? If they are cured, it will reduce the effective age to 15 years. closing, effective date of the appraisal square foot The heights in meters of individuals in a certain group are normally distributed with mean 1.73 and standard deviation 0.05. Another name for the extraction method of sight valuation is: Which method of sight valuation is based on a typical Ratio of land value to total property value? The remaining economic life is used in the Age-life Method of estimating depreciation. J-bolts are used to anchor the _________ to the __________. "A method used to convert future benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment's income pattern, value change and yield rate" is the definition of. In a federally related transaction, a licensed residential appraiser is permitted to appraise non-complex 1-4 unit residential properties with a transaction value of less than ________ and complex 1-4 unit residential properties with a transaction value less than _________. Remaining Economic Life You calculate the following gross rent multipliers for comparable properties: 121.2, 105.3, 111.2, 150.1, 108.3, 105.3, 109.8, 108.8. United Nations, What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? A method of valuing property by discounting the anticipated income stream at an appropriate rate, plus discounting the value of the reversion is: How much income does direct capitalization use? His weekly food budget is $60. Physical deterioration, functional obsolescence Roof Covering. expected remaining economic, remaining economic mass appraisal, An appraisal with an effective date at some point in the future is called a(n) ___________ appraisal. True or false: adjustments in the sales comparison approach for economic characteristics are typically only made for commercial our income producing properties. When developing an appraisal, you calculate the following GRMs for comparable properties: 94.3, 90.1, 95.6, 109.2, 84.5, 100.7, 99.9. Extraction Method. Appraisal regulatory agencies state that one of the problems with the allocation method is: The extraction method of sight valuation typically has good applicability an older urban areas. school building, The results of a _________ test will determine if there is suitable drainage and the size of the drain field that will be required for a septic system. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Those are the correct limits. A municipality assesses property at 100% of value. The party or parties who engage, by employment or contract, and appraiser in a specific assignment is the: When completing an appraisal assignment, comparable sales information that the appraiser gathers would be considered: Information on employment and unemployment trends in the area would be considered: You check the FEMA flood map, and the subject property is located in zone C. Is this a special flood hazard area? A comparable new house just sold for $340,000. . External obsolescence and physical deterioration, functional obsolescence, Physical deterioration and functional obsolescence, external obsolescence, The ground rent capitalization method should only be used when appraising a property that is reproduction, A partial estate could be created by the existence of all the following EXCEPT In most residential appraisals, the appraiser values, sale price, gross monthly unfurnished market rent. define the problem True or false? Does it go far enough? Real property appraisal reports may be written or oral. net leasable, A house is rented for $1,050 per month, but lacks air conditioning. $350,000 X .2 = $70,000 (current building value). It is 12 years old and has an estimated remaining economic life of 38 years. biased However, this method does not consider individual short-term items like the Qualitative Methods. The duplex produces the highest value ($170,000), Overall Capitalization Rate (RO). The ground rent capitalization method is most applicable to appraising a ______ interest. What was the cost per square foot? An estimate of remaining economic life is required by Fannie Mac Freddie Mac VA all of the above. highest and best use analysis, "Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat" is the definition of buildable unit, In the age-life method of estimating depreciation, the ___________ age is divided by the ____________ life. The Economic Age/Life Method (also called the straight-line method) is the most common depreciation technique employed by residential appraisers. Having Issues with Seeing this Page Correctly? What is the range of the GRMs? Cost Approach Using Age- Life Method. What is its value by the cost approach? comparative-unit What is the mode of the GRMs? owner of record A house cost $395,000 to build new. 10 any of the above, A one-and-a-half-story house is commonly known as a The company estimates that 150 hours will be required to complete the project. $50,000 (108.8 + 109.8) 2 = 109.3. The land capitalization rate is 8%. The current cost index is 221.8. $350,000 - $45,000 = $305,000. When the home resold it had not been improved at all. Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? heat pumps $380,000 X .40 = $152,000 (building value). $375,000 - $70,000 = $305,000 (land value). The appraisers research indicates that site values in the subject area are typically 20% of property values. The total remaining economic life of a home is calculated by subtracting the effective age of the home from its total economic life. define the problem condominium SUBJECT SECTION New Construction: For new construction, when property taxes have not yet been assessed on the For site condos reported on the 1004 form, only the 'Opinion of Site Value' and 'Estimated Remaining Economic Life' are required. All of the following could be sources of specific data EXCEPT.