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AZ Real Estate (ASREB) 5/2017 > B5 > Flashcards

Flashcards in B5 Deck (17)
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1

Which of the following is not used in the market approach of appraising?

Terms of sale
Date of sale
Amenities
Functional depreciation

Functional depreciation

Terms of sale, amenities, and date of sale are all significant in the market approach.

2

You own an office building, which produces an 8 and a 1/4% annual return. The property taxes were just increased $10,000 / year. What effect did this tax increase have on the property value?

Decreased by $82,500
Cannot be determined from this information
Decreased by $121,212
Increased by $121,212

Decreased by $121,212


QUESTION RATIONALE
- 10,000 / 8.25% = - 121,212. Since the property taxes are an expense and increased 10,000 the net income went down.

3

Which of the following would not apply to the income approach of appraising?

Risk
Property depreciation
Scheduled gross income
Vacancy and loss of credit

Property Depreciation

4

By definition what does an appraiser give in the course of his work?

A valuation
An estimate
A reaction
All of these

An estimate

5

What appraisal approach would be used when appraising an older home?

Highest and best use
Income
Cost
Market

Market

6

How would a substantial increase in interest rates as the only economic change affect the value of a rental property?

The value would increase
The depreciation would change
The value would decline
The value would stabilize

The value would decline

7

Physical deterioration of a building that is curable would be referred to as:

Regression
Deferred maintenance
Functional depreciation
Economic depreciation

Deferred maintenance

8

Which of the following structures would not use the cost approach?

Commercial
New residential
Used residential
Warehouse

Used Residential

QUESTION RATIONALE
Used residential would be inappropriate for a cost approach (assuming comparative properties are available).

9

The increase in value created by joining ownership of several smaller parcels of land into one large single ownership is called:

Plottage increment
Over improvement
Par value increase
physical inflation

Plottage increment

10

When calculating net operating income you would take into account all of the following items EXCEPT:

Utilities
CAP rate
Loss of credit
Property taxes

CAP rate

QUESTION RATIONALE
CAP rate may be determined only AFTER the calucation of net income.

11

Using the market data approach, the subject property has a fireplace, which you estimate to add $1,000 in value. Comp #1 does not have a fireplace, but does have a pool, which you estimate to add $2,000 in value. Which way do you adjust the purchase price?

Down $3,000
Up $1,000
Down $1,000
Up $3,000

Down $1000

12

Which of the following does not relate to appraising?

Deterioration and obsolescence
Establishing value
Market data and cost approaches
Assemblage

Establishing Value

13

The type of depreciation that would always be considered incurable is:

Market
Physical
Economic
Functional

Economic

14

Which of the following would NOT be an operating expense in the income method of appraising?

Principal and interest payments
Utilities
Management Fee
Property taxes

Principal and interest payments


QUESTION RATIONALE
Principal and interest payments (debt services) are not included in operating expenses

15

Which of the following items would not be a consideration, when appraising rental property?

Utility cost
Supply and demand
Tax rate
Highest and best use

Tax Rate

16

The cost approach would be used:

Office building
An old home not at its highest and best use
A new home at its highest and best use
Shopping center

A new home at its highest and best use

17

Which of the three appraisal approaches takes into account depreciation?

Cost
Income
Highest and best use
Market

Cost