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48 Cards in this Set
- Front
- Back
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Highest and best use analysis is required in... |
Market Value Appraisals |
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Highest and best use analysis requires an estimate of the use as though vacant and as improved to (3)
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Estimate the value of the improvements Ensure that appraisers recognize that the property could be worth more without the buildings than with them Estimate any functional obsolescence caused by inappropriate improvements |
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Highest and best use of the site as though vacant..(3)
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Is required in all market value appraisals of real property May require a change in zoning classification, if possible Assumes the site is vacant or could be made vacant by demolishing the improvements |
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What is NOT a criterion for highest and best use?
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The maximum size improvement |
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The test of legal permissibility includes all of the following except..
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Compliance with supply and demand criteria |
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Common interim uses include...
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Surface parking lots |
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The concept of consistent use requires an improvement to be valued based on a use that is consistent with the site's highest and best use. In other words, this means that...
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The improvement value must be adjusted down if the land's highest and best use is different than the improved highest and best use |
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A property includes a one-unit residence on the southeast corner of a five-acre parcel with 467 feet of frontage each on two roads. The house alone (without land) would be worth $100,000. It was never platted, and there are no deed restrictions. The local zoning ordinance only requires two acres with 200 feet of road frontage. The market for houses with up to five acres is good. Excess land, not required by zoning, sells for only $3000 per acre. A build able pad in this market is worth $30000. The site is far enough from the northern property line to allow an almost perfect split of the parcel in half. What is the highest and best use of the site as though vacant and as improved?
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Highest and best use as though vacant = Two parcels with +/- 2.5 acres each. Highest and Best use as improved = Leave the house and sell off the other site |
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When a property's highest and best use is likely to change in the near future, the prevailing highest and best use is called an...
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Interim use |
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Land values are never penalized to the functional problems in existing buildings because...
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Buildings can be removed or altered. |
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A legally nonconforming use is...
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A use that was legally established and maintained but no longer conforms to existing zoning |
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The land value of a 5-acre parcel in a prestigious residential area is estimated at $50,000 per acre based on comparable sales right in the area. Improved comparable sales with homes like the subject property show that this property should be worth $225,000 if sold as a house. The demolition cost is $5000. The value of the land is...
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250000 |
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The land value of a 5-acre parcel in a prestigious residential area is estimated at $50,000 per acre based on comparable sales right in the area. Improved comparable sales with homes like the subject property show that this property should be worth $225,000 if sold as a house. The demolition cost is $5000. The market value of the fee simple rights for this parcel is... |
245000 |
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The land value of a 5-acre parcel in a prestigious residential area is estimated at $50,000 per acre based on comparable sales right in the area. Improved comparable sales with homes like the subject property show that this property should be worth $225,000 if sold as a house. The demolition cost is $5000. The market value of the improvement is... |
-5000 |
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If asked to appraise a municipal library, an appraiser...
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Must estimate an alternative use and then find com parables of buildings that are similar to the alternative use. |
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An improved residential property has the following characteristics:
The land if it were vacant is valued at 85k The value of the property as it is improved (with the house) is 75k The cost of removing the house will be 5000 What is the market value of the rights to this property? |
The property value is $80,000 |
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To be considered the highest and best use, a use must be..
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Physically possible, legally permissible, financially feasible, and maximally productive |
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An opinion of market value via the sales comparison approach is through the eyes of... |
Well-informed Purchasers
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A major requirement and limitation of the sales comparison approach is that it requires...
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An active market of competitive properties |
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Property sales prices...
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Are negotiated between buyers and sellers |
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If the appraisal assignment requires an estimate of market value...
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The sales comparison approach is usually applicable |
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In the application of the sales comparison approach in a market value appraisal...
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Closed sales, pending sales, current listings, options to purchase, and refusals can be used as indications of market value |
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Current listings that have been exposed to the market for a reasonable time...
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Tell the appraiser what the subject's market value cannot exceed |
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Units of comparison...
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Are items that represent a breakdown of the price based on a significant variable |
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Which approach is usually the most applicable for appraising residences?
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Sales comparison |
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A site is different than land because... |
A site is improved land that is ready to be built upon. |
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Land is always valued at...
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Its highest and best use as though vacant |
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Sites can be valued by...
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Extraction, Allocation, and Sales Comparison |
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In sales comparison analysis, comparable sales are adjusted...
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To the subject property |
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When estimating the market value of a site, the appraisal should include...
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There is no set number of comparable site sales transactions |
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If market value is sought, the sales comparison approach to site valuation is based primarily on an analysis of the market behavior of...
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Buyers |
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Adjustments to the prices of comparable sites are measured by...
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The amount a typical buyer will pay more or less for the item. |
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In the valuation of a land by sales comparison, the order of adjustment should begin with...
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Property rights transferred |
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A comparable site sold six months ago for $4000. It was 10% superior to the subject site with respect to frontage and shape. The market conditions adjustment is 10% per year. The adjusted sale price of the comparable site (rounded to the nearest $100) is...
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$4400 |
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A new and improved non-residential property just sold for $235000. Direct construction costs were $126000, and indirect costs were 15% of direct costs. Builder's overhead and profit were 25% of total costs. What is the land value by extraction (rounded to the nearest $5000)?
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$55000 |
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The valuation of land with a highest and best use as an industrial subdivision can be estimated using...
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The subdivision development method |
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The sales comparison approach requires how many comparisons? |
No set minimum number |
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The subject property is a small commercial building in a small town. It contains 4000 square feet of gross building area and was constructed 10 years ago. It has an unfinished basement. The seller has agreed to provide a special financing package worth $4000. Examination of the market has revealed several sales of competitive properties. It appears that prices in the market are increasing at about 5% per year on a straight line basis.
Comparable 1 has 2800 square feet of building area. It also has a basement. It was sold approximately one year ago for $275000 at financing terms that are typical of the market. Comparable 2 has 3000 square feet of building area without a basement. It sold one year ago for $280000 at terms generally available in the market. Comparable 3 has 3000 square feet of building area. It also has a basement. It sold one week ago for $300000 at financing terms typical of the market. What should be the respective magnitude and sign of the adjustments to Comparables 1,2, and 3 for financing? |
0,0,0 |
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The subject property is a small commercial building in a small town. It contains 4000 square feet of gross building area and was constructed 10 years ago. It has an unfinished basement. The seller has agreed to provide a special financing package worth $4000. Examination of the market has revealed several sales of competitive properties. It appears that prices in the market are increasing at about 5% per year on a straight line basis.Comparable 1 has 2800 square feet of building area. It also has a basement. It was sold approximately one year ago for $275000 at financing terms that are typical of the market.Comparable 2 has 3000 square feet of building area without a basement. It sold one year ago for $280000 at terms generally available in the market.Comparable 3 has 3000 square feet of building area. It also has a basement. It sold one week ago for $300000 at financing terms typical of the market.
What should be the respective magnitude and signs of the adjustments to Comparables 1,2, and 3 for the basement? |
0, +6000, 0 |
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Elements of comparison are... |
The characteristics that cause the prices paid for real estate to vary.
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Adjustments are made...
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To the comparables to make them like the subject |
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Adjustments for financing terms reflect...
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The differences in sale prices of properties that sold for cash or market rate financing and the ones that sold with special financing that favors the buyer |
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A conditions of sale adjustment reflects... |
The difference between the motivations of the seller and buyer on the date of sale of a comparable and the typical motivations of buyers and sellers as described in the definition of value |
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Graphic analysis is an example of...
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A quantitative adjustment technique |
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Expenditures made immediately after purchase..
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Reflect anything that buyers knew they would have to correct and probably factored the cost into the price paid |
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Comparative analysis...
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A general term used to describe the process by which qualitative or quantitative techniques are used to derive a value opinion in the sales comparison approach |
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A technique for extracting adjustments directly from the sale prices of com parables based on the contribution of a single feature is called... |
Paired data analysis |
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Adjustments for real property rights conveyed reflects...
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The differences in the rights in realty transferred between the subject and comparables |
