A house is rented for $1,050 per month, but lacks air conditioning. That is an instance where the cost approach has good applicability. direct indirect reproduction replacement direct Since both the lease payments required during the lease and the purchase option price are fixed, Lessee Corp can combine these cash flows with its estimate of the property's fair value to determine that the interest rate Lessee Corp incurs during the lease is 9. . contract, closing date, contract, effective date of the appraisal, The cost estimating method most commonly used by residential appraisers is the ____________ method. When using the sales comparison method and valuing aside, adjustments should be made for differences that are _____. From HUDs viewpoint, maybe not. definition, age, A building was constructed in July 2000 for $654,200. The company will use the straight-line method to report the amortization of the software. A deed could provide which of the following information about a property? net rent multiplier Statistical analysis will be of little use. comparative-unit How many hours should each graphic designer be assigned to the project? It is 12 years old and has an estimated remaining economic life of 38 years. 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. Condos in your market area sold for a median price of $195,320 twelve months ago and the median price of condos for the current month is $219,540. Short lived items Cost is $20,000 and depreciation on the short lived items has been identified . In short, it is a quick and easy way to estimate straight-line physical depreciation. Fannie Mae does not have any requirements related to the remaining economic life of the property. If the subject is considered typical for the area and trends indicate that properties with deferred maintenance are renovated, it is reasonable to consider that the current improvements and property type will be useful for many years to come. Paired Data Analysis. 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 _________. Which type of depreciation occurs off the site? Contract, effective date of the appraisal. Appraisal fees are examples of _______________ costs. This 25% figure represents. Appraisers are cautioned to identify the exact _______________ of market value, and its _______________, applicable in each appraisal completed for the purpose of market value. The other three are common adjustments, but quality adjustments would be made to improvements - not land. Drilled wells need to use __________ until the drilling enters ___________. It is 12 years old and has an estimated remaining economic life of 38 years. An appraiser uses five comparable sales, and gets a differing indication about you from each one. 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 land capitalization rate is 8%. Yes, it is required by VA and FHA. direct costs What is your net adjustment? There is no mode as each number appears just once, expected remaining economic, remaining economic. Hot Water Heat. A dwelling has a reproduction cost of $625,000. cost new, plus site value, Appraisal fees are examples of _______________ costs. The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. quality 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. The cost approach formula states that reproduction or replacement cost new _______________, _______________ equals property 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? Example (remaining life): service level/capacitylife - 3 breaks, estimated 2 years to next break (no more than 4 breaks in 5 years) . Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window), Click to email a link to a friend (Opens in new window), Click to share on SMS (Opens in new window), 2006-2023 HW Media, LLC. Quick Start; Products. A house is rented for $1,050 per month, but lacks air conditioning. tenancy in common quality The Fannie Mae Single Family Comparable Rent Schedule is designated as Form, "A condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis" is the definition of. highest and best use, Market condition adjustments should always be calculated from the time of the ________ to the ___________. $294,640 $2,350,000 = .125 or 12.5%. The cost approach formula states that ______________, minus depreciation, _______________, equals property value. Today the blank technique of sight valuation is used primarily in highest and best use analysis. For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more. Yes, it is required by VA and FHA. $305,000 The appropriate gross rent multiplier is 85. What is the percentage of change in market conditions? Fill, grading and permits are examples of improvements that create a. Modular homes are constructed to meet __________ code requirements. Is producing a cost estimate, Eric has estimated the number of two by force, she's a climber, and how many pounds of nails will be necessary. brownfield, "The amount an entrepreneur expects to receive for his or her contribution to a project" is the definition of All of the following are required exhibits for a Fannie Mae appraisal report except: Fannie Mae says the appraiser must base his or her analysis and any adjustments to comparable sales on: Expenditures made immediately after purchase. Condemnation occurs when a municipality exercises, An estimate of remaining economic life is required by. cost Lead Analyst Logan Mohtashami explains. $305,000 - $70,455 = $234,545. Estimated useful life = % remaining physical life = 1.0 - % physical life consumed . square foot casing, bedrock life estate contradiction, Which type of valuation analysis would typically NOT include a separate site valuation? Percolation tests are done to test the drainage capacity of soils. Which cost estimating method is the most detailed and time-consuming to develop? definition of value An appraisal with an effective date at some point in the future is called a(n) ___________ appraisal. 201.8 133.6 = 1.51. It has 2,030 square feet of GLA. overvalued, When measuring a condominium you should calculate ____ using _______ measurements. Conversely, if an entity leases a forklift, with an economic life of five years, for a term of four years and option for an additional four year term, the entity might conclude that it was unlikely to exercise the option due to the remaining life of the asset. 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 Contractors are overhead and profit is an example of _____ costs. topography. indirect costs What is the median of the GRMs? There are eight numbers, so the median lies between the two middle numbers in the array (108.9 and 109.8). This is an example of _____ adjustment. one unit residences deed restrictions. First array them in order. United Nations, What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? cash equivalency, "Expenditures or allowances for items other than labor and materials that are necessary for construction, but are not typically part of the construction contract" is the definition of An estimate of remaining economic life is required by. market condemnation appraisals possesses sufficient remaining economic life to warrant a long-term mortgage, assuming a reasonable level of continued maintenance. A comparable new house just sold for $340,000. heat pumps An estimate of remaining economic life is required by . risk rate Two squares of 180-pound roof shingles would weigh _____ pounds. . Which of these is not one of the traditional coat estimating methods? What is another name for "indirect costs"? If you still have Technical Support questions, Estimated Remaining Economic Life of this property is . effective age, total economic life market data, "The total period a building lasts or is expected to last" is the definition of _________ life. You examine a construction contract to build a 2,448 square foot house and the total cost is $197,450. cubic yard A VA. 25 Q . What is the mode of the GRMs? Hence: . What is the highest and best use? Draw the budget constraint showing the trade-off between dining hall meals and Cups O Soup. A one-and-a-half-story house is commonly known as a, Capitalization of Income Loss. $60,000 X 2.4 = $144,000. The appraiser should compare its estimate of the improvements' remaining economic life with the What is its unit cost? replacement It is in good condition and you estimate the effective age to be 10 years. However, related property deficiencies must be discussed in the sections of the appraisal report that address the improvements analysis and comments on the condition of the property. none of the above, Modular homes are constructed to meet __________ code requirements. Comparative-Unit Method - Market Derivation. There are curable items totaling $45,000. financing casing, bedrock tenancy in severalty modified replacement. wood net operating income, "The estimated cost to construct, at current prices as of the effective appraisal date, an exact duplicate or replica of the building being appraised, using the same materials" is the definition of _______________ cost. split-entry, "Real property for which the expansion, redevelopment, or reuse of the real estate may be complicated by the presence of environmental contamination that needs to be remediated to appropriate regulatory standards " is the definition of electric radiant, "The actual or anticipated net income that remains after all operating expenses are deducted from effective gross income but before mortgage debt service and book depreciation are deducted" is the definition of $98,000 Which would not be a sub-step in defining the problem? The term of the non-cancelable lease is 3 years with no renewal or bargain purchase option. The number of years that have a lab since the building was constructed is it's: Effective age is the same as chronological age. 109.2 - 84.5 = 24.7. report the final opinion of value Do you think the total benefits outweigh the total costs, or vice versa? Estimated net annual cash inflows for each of the 8 years - P81,000. If they cost manual us use the result is _____ cost. Each appraisal report must contain two dates, the _____ and in the _____. There are three methods that appraisers can use to estimate depreciation. depreciated When the property being appraised is a one-family property that will be used as an investment property, Fannie Mae requires that the appraiser must prepare a ______________. Ranking analysis is a form of __________ analysis. A house has a total cost new of $212,340. DU Journeys' incremental borrowing rate is 8%. The method that estimates land value based on a percentage of the total property value is the _______________ method. Subdivide it; 8 X 70,000 = $560,000. tenancy by the entirety, The most common unit of comparison for land in rural areas is price per _______. If the property does not warrant a long-term $625,000 - $125,000 = $500,000. replacement cost $1,118,800 8,000 square foot residence 10 $50 X 85 = $4,250. As such, a structure that is sound and in good physical condition with many years of physical life remaining may reach the end of its economic life if its remaining years of physical usefulness are not profitable. full interest income-producing or suitable for income production, The ground rent capitalization method should only be used when appraising a property that is. If the condo unit is income producing (rental), the remaining economical life can be determined or estimated by using the income capitalization approach and/or form 216 (operating income statement) replacement reserve schedule (which provides an estimate of replacement cost and remaining economic life or useful life using the straight-line yield capitalization If they are cured, it will reduce the effective age to 15 years. While humans started gathering grains at least 105,000 years ago, nascent farmers only . 1. And upon comparative analysis, and appraiser may employ: The quantitative adjustments are usually performed first. "The total period a building lasts or is expected to last" is the definition of _________ life. would cost $65,000. suitable for a single-family homesite Princess Victoria, the fourth daughter of the King, has undergone an operation for appendictis. In a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________. An estimate of remaining economic life is required by: Fannie Mac Freddie Mac VA 15 65 = .231 or 23.1%. 12 + 48 = 60 years (total economic life). The capitalization rate indicated by sale is ____%, The ________ approach is particularly applicable in the appraisal of special purpose properties, In the age-life method of estimating depreciation, the ___________ age is divided by the ____________ life, Fannie Mae says the cost approach ____________________. Problem 1. That is used in a hot water system; as water expands as it is heated. By extraction, what is the value of the land? unit-in-place Which is the highest and best use? A parcel is valued at $450,000 as a single unit. quantity survey An estimate of remaining economic life is required by A VA. What step of the sales comparison process involves considering these indications and arriving at an indication of value for the subject? define the problem Lease term is for the major part of the remaining economic life of the asset. It is based on the buildings effective age divided by its economic life. "The tenant's possessory interest created by a lease" is the definition of _______________. estimate land value Parging is used on which kind of foundation wall? (For best result, pose your search like a question. quantity survey 19 - Florida Requi, General Appraiser Site Valuation and Cost App, General Appraiser Market Analysis Highest and, Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams. The first step in the valuation process is, All of the following could be sources of general data EXCEPT. What is the GRM indicated by this sale? It is 12 years old and has an estimated remaining economic life of 38 years. $305,000 X .231 = $70,455. leased fee estate, The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. Half of Q4 2022 transactions had wire and title fraud risks. ground rent capitalization $155,000 as single home site B. Items of information on value influences that derive from social, governmental, and environmental forces and originate outside the property being appraised is the definition of: An appraisal with an affective date at some point in the future is called a or an blank appraisal. The cost to cure deferred maintenance items is $670. Modified Age-Life Method. 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. Fannie Maes appraisal report forms are designed to meet the needs of several different user groups; consequently, the report forms address the remaining economic life for the property being appraised. Access to Appraisal Reports VA staff, lenders, agents, servicers, and other requesters with VA issued ID numbers that are associated with the loan number will be able to retrieve the appraisal from E-Appraisal for review, issuance of the Notice of Value (NOV), or other functions. b. the cost of the asset less the related depreciation recorded to date. 10-9 A graduate of an engineering economy course has complied the following set of estimated costs and salvage values for a proposed machine with a first cost of $15,000; however, he has forgotten how to find the most economic life. definition, authority Written by Bill Waltenbaugh, as originally published in The Reverse Review. cost new, minus land value square foot determine the scope of work, Depreciation is defined as "a loss in property value from _________. " Assessments and Taxation. It is an ordinance for an appraiser to research and understand what when doing an appraisal? Roof Covering. Any rate used to convert income and the value is the definition of _____ rate. It has an effective age of 20 years and a total expected economic life of 65 years. effective date of value leasehold interest $75,000 per unit as a site for a duplex; or C. $50,000 per acre as a retail site. front foot $155,000 as single home site; B. Materials that transfer energy quickly are called __________ and those that transfer energy slowly are called __________. What are the three general types of depreciation? Which would NOT be an appropriate legal description of a subject property? determine the scope of work, Which would NOT be a form of concurrent ownership? Footings should be ________ as wide as the ____________. From HUDs prospective, the REL needs to be reflective of the number of years the property is expected to remain competitive in the market. Theres never any lack of confusion when it comes to the topic of estimating Remaining Economic Life (REL). A home sells in January for $240,000 and sells again in November for $252,000. Market conditions adjustment to comparable sale should always be calculated from the time of the _____ to the _____. modular The storage facility is near Hamford's main factory and will be remodeled by CTF to meet its requirements. $85,000 per unit as a site for a duplex and C. $60,000 per acre as a retail site. fee simple estate And appraisal could be done to the property in its "as is" contaminated condition or could be appraised under the _____ that the property is free of contamination. Appraisers often have no work file support for the ratio they use. By extraction, what is the value of the land? 5% 10 months = .5% per month. Not enough information to determine, Which of the following would NOT be a common adjustment made in sales comparison when appraising land? Label the optimum as point A. new "The relationship or ratio between the sale price or value of a property and its periodic gross rental income" is the definition of, An appraiser encounters an underground storage tank and there are no signs of leakage or failure. log home The first step in the valuation process is: An appraiser counters an underground Storage tank. Each of these is a variable expense EXCEPT. $50,000 A property contains 3.2 acres and is worth: A. 221.8 138.5 = 1.60. 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. $340,000 - $95,000 - $10,000 = $235,000. An appraiser is using both quantitative and qualitative adjustments and their sales comparison approach. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $70,000. 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 Does it go far enough? When an asset is no longer useful to its owner, then it is said to be past its economic. economic life, long-lived The duplex produces the highest value ($170,000), Overall Capitalization Rate (RO). A _______________ home is built in accordance with the HUD Code. 12 60 = .20 or 20% depreciation. Architectural and engineering fees are examples of _____________ costs. The reproduction cost of the building was $380,000 and it was 60% depreciated. In your sales comparison grid, you made adjustments of +$5,000, +$3,500, -$2,500, + $8,000, and -$4,000. Effective date of the appraisal, date of the report. Deferred maintenance is a physical form of depreciation, Functional obsolescence could be caused by all of the following EXCEPT, one-unit property The power of data with Mike Simonsen at Gathering of Eagles, Eric Lapin on how consumer-controlled data can change lending, Clear Capital launches UDC to support appraisal modernization. "The anticipated income from all operations of the real estate after an allowance is made for vacancy and collection losses and an addition is made for any other income" is the definition of ____________ income. reproduction, A partial estate could be created by the existence of all the following EXCEPT Selected GAAP and Non-GAAP measures: Sales . The easiest and best support is an analysis of demolitions.

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