Real Estate Appraisal Tq's Armbrust

Front 1

What is the cost approach based on?

Back 1

Its based on the concept of substitution.

Front 2

Highest and best use is a concept related to ____?

Back 2

Getting the highest sales price

Front 3

What is inverse condemnation?

Back 3

It's an action taken by a property owner when it appears that the taker of the land does not intended to bring eminent domain proceedings. The property is condemned because it use and value have been diminish due to the adjacent property's public use.

Front 4

When completing a CMA what would be the best way to determine an adjustment value for central air conditioning?

Back 4

The cost difference between one comp with and one comp without the AC unit.

Front 5

In a new subdivision every garage must be attached and cannot be smaller than 20X20. This is an example of?

Back 5

A covenant, this is an example of a restrictive covenant.

Front 6

Under and existing ordinance no signs may be placed on a building that extends more than 3 feet above the highest point of the roof. An owner wants to erect a 9 ft high revolving sign on the roof of his store. In order to legally do this the owner must get a _________________.

Back 6

Variance- a permanent exception to the ordinance. EX) Ikea sign in Greenwood Village.

Front 7

For the past 30 years, the Bakers have operated a neighborhood grocery store. Last week the city council passed a zoning ordinance that prohibits packaged food sales in the area that the Bakers grocery store is located. The store is now an example of_______________.

Back 7

Nonconforming use. Generally applies to properties that conformed with zoning before they were changed. They run with the land and transfer from one owner to the next.

Front 8

In which of the following properties would you most likely forgo using the cost approach method of valuation.

1). Special Purpose Property

2). Unique Property

3). New Residential Construction

4). Historical Houses

Back 8

Historical Houses because the cost approach is used to appraise newer homes with very little depreciation or special use buildings.

Front 9

What is the cost approach formula?

Back 9

Building cost new MINUS

Building Depreciation PLUS

Site Value EQUALS

Property Value

Front 10

What's another term used for the comparison method?

Back 10

The square foot method.

Front 11

What's the difference between replacement cost and an reproduction cost?

Back 11

Replacement cost is the cost of constructing a replacement with similar structures. Reproduction cost is the cost to construct a duplicate of the property (an exact replica).

Front 12

What method of determining reproduction or replacement cost is based on the average cost-per-square foot of recently built similar structures ?

Back 12

The square foot method or the comparison method.

Front 13

What are the 3 forms of depreciation?

Back 13

1). Physical deterioration ( normal wear and tear)

2). Functional Obsolescence-outmoded items

3). External Obsolescence- incurable because it is caused by an external problem.

Front 14

What is the income approach to value based on?

Back 14

Its based on the present value of the rights to future income.

Front 15

If you see and IRV question which approach to appraisal value could you assume they are using?

Back 15

The Income Approach

Front 16

What is the income Approach Formula?

Back 16

Potential Gross Income

- vacancies and collection losses

+ Operating Income

_______________________________

Effective Gross Income

Then take the EGI minus Expenses and

Divide by

Net Operating Income

Front 17

When using the income method to value expenses do not include the following....

Back 17

Debit services ( principal and interest)

Depreciation (a non-cash expense)

Capital Expenditures/capital improvements

The owners personal income tax liability

Front 18

Is mortgage payment debit included in the Net Operating Income calculation?

Back 18

No it is one of the debt service expenses that should not be included in the calculation.

Front 19

What relationship does the cap rate express when using the income approach to value?

Back 19

It compares the annual net operating income of recently-sold similar properties to the selling price of those properties . If cap rate goes up then value goes down.

Front 20

How do you calculate the cap rate when using the income approach to value?

Back 20

You take the annual net operating income and divide it by the sales price.

Front 21

How do you use the cap rate to obtain an estimated value?

Back 21

You apply the cap rate to the Subject Properties annual net income to obtain estimated value for a property.

Front 22

When do you use the gross rent multiplier?

Back 22

When using the income approach to value on rentals and duplexes up to 4 units.

Front 23

What is the gross rent multiplier based on?

Back 23

Its based on the gross monthly rent of recently sold properties.

Front 24

What is the formula for the Gross Rent Multiplier?

Back 24

The sales price divided by the gross monthly rent of recently sold similar properties.

Front 25

What land use objective is achieve by using bulk zoning ?

Back 25

Its used to control density and overcrowding.

Front 26

What land use objective achieved by aesthetic zoning?

Back 26

To specify certain types of architecture ( ex. Belmar- all the buildings use same material and same style).

Front 27

What land use objective is achieved by Incentive Zoning?

Back 27

To ensure that certain types of use are incorporated into developments. ( ex. Wal-Mart).

Front 28

In Colorado who regulates sub divisions?

Back 28

The Division of real estate.

Front 29

What's the difference between general and specific data?

Back 29

General Data- economic, national, regional,city and neighborhood data about factors not located on the property.

Specific Data- Data on the subject land and the improvements ( data acquired by the appraiser).

Front 30

What are the public land controls of private land?

Back 30

P.E.T.E. are the public land controls ( Police Power, Eminent Domain, Taxation, Escheat)

D.E.L.L. are the private controls on land ( Deed restrictions, easements, Leases, Liens).

Front 31

What is another name for the comprehensive plan?

Back 31

The master plan

Front 32

What are the 2 primary purposes of the master plan?

Back 32

1). develop to ensure that social and economic needs are balanced against environmental and aesthetic concerns.

2). Provides the municipality with goal and objectives for future developments.

Front 33

What are the goals identified in the Comprehensive plan?

Back 33

Plans for the future use of the following:

Land use

Housing needs

Movement of people and goods

Community facilities and utilities

Front 34

What are zoning ordinances?

Back 34

They regulate the use of land and structures within designated zones ( PETE).

Front 35

what are zoning objectives?

Back 35

Generally divide land uses into:

residential

agricultural

commercial

Industrial

multiple use ( ex. PUDS)- TQ

Front 36

What is density zoning?

Back 36

They restrict the average maximum number of houses per acre.

Front 37

Examples of restrictive covenants in a sub-division?

Back 37

1). type of building allowed on a property
2). the use to which the land may be put

3). Type of construction

4). Height, setbacks, sq. footage

Front 38

If a restriction conflicts with a zoning ordinance which one will take precedence over the other?

Back 38

The one that is the most restrictive will take precedence.

Front 39

How are private land restrictions enforced?

Back 39

Through injunctions

Front 40

If a family is planning on adding addition to their home what kind of permit must they obtain before they start the addition?

Back 40

A occupancy permit from the municipality.

Front 41

In a new subdivision streets, curbs and sidewalks are typically provided by the ______________.

Back 41

Developer

Front 42

In a new subdivision who requires the streets, curbs and sidewalks?

Back 42

The municipality

Front 43

The gross rent multiplier is used as a guideline for estimating value based on ?

Back 43

The relationship of the sales price to the rental income.