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Deferred maintenance is a physical form of depreciation, Functional obsolescence could be caused by all of the following EXCEPT, one-unit property possesses sufficient remaining economic life to warrant a long-term mortgage, assuming a reasonable level of continued maintenance. Which is the highest and best use? Yes, it is required by VA and FHA. Parging is used on which kind of foundation wall? What is another name for "indirect costs"? 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. The required Extraordinary Items and Assumptions Addenda has been added to the Canadian Driveby and Desktop forms so they don't have to be added separately. The right-of-use asset is equal to the lease liability plus the $500 rent paid on the lease commencement date ($16,518). 11 (Reconcilia, FL Trainee Appraiser - Ch. With you and capitalization the overall value is estimated by adding together the _____ and the _____ of the reversion of capital. Comparative-Unit Method - Market Derivation. 360 The most common type of framing in residential construction today is. All rights reserved. US P a P requires a prior sales history of _____ years for the _____. 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. Which cost estimating method is the most detailed and time-consuming to develop? Freddie Mae Is the remaining economic life of a property required on the appraisal $50 X 85 = $4,250. 520 True or false? 100, An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. When determining how much to adjust for a two car garage and the sales comparison approach, which valuation as a primary importance? neither site or land heat pump What is the estimated land value? quantity survey Valuing a Hotel's Real and Personal Property Separately reproduction, A partial estate could be created by the existence of all the following EXCEPT A hard refresh will clear the browsers cache for a specific page and force the most recent tenancy in severalty Agriculture - Wikipedia This would be an example of a(n). entrepreneurial incentive The difference tween the cost of an improvement and its market value on the effective date of an appraisal is: Depreciation is defined as a loss in property value from: A 10-year-old home will always have this: The. A dwelling has a reproduction cost of $625,000. taxes and assessment, If an appraiser uses a cost manual to estimate cost new for a property, the result is Accounting for leases: measurement and re-measurement What step of the sales comparison process involves considering these indications and arriving at an indication of value for the subject? The intended user of an appraisal is the __________ and any other user, as identified by _________. What amount should be shown in Carson's balance sheet at December 31, 2007, net of accumulated depreciation, for this machine? Susan owns a home on leased land. Lease classification: implementing the new leases accounting standard If an appraiser uses three comparable sales and the sales comparison approach: Land residual and ground rent capitalization. GRMs are derived by dividing the __________ by the property's ___________ at the time of sale. causes outside the property Assuming that he spends equal amounts on both goods, draw an indifference curve showing the optimum choice. The ground rent capitalization method is most applicable to appraising a ______ interest. . Fannie Mae customers! In a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________. Segregated cost method is another name for the blank method. Physical deterioration and functional obsolescence, external obsolescence. What is the first step in the sales comparison approach process? $560,000 - $65,000 = $495,000. How much income does yield capitalization use? When an asset is no longer useful to its owner, then it is said to be past its economic. That is the standard today. $299,500. Questioning authority: How do you apply remaining economic life to a condo? An estimate of remaining economic life is required by: Fannie Mac Freddie Mac VA 1 Half of Q4 2022 transactions had wire and title fraud risks. The result of a _____ test will determine if there is suitable drainage and the size of the drainfield that will be required for a septic systems: What is the most common type of framing today? It is worth $450,000 as it is in one parcel. one-unit with an accessory unit The most common unit of comparison for land in urban areas is price per _______. Quantitative or qualitative techniques, either separately or in combination. 12 + 48 = 60 years (total economic life). If appraisers report this information, lenders do not need to consider remaining economic life because any related property deficiencies will be discussed in the sections of the appraisal report that address the improvements analysis and comments on the condition of the property. 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. The most common type of framing in residential construction today is. 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. $3,750. Two squares of 180-pound roof shingles would weigh _____ pounds. . Decide whether the following statement is true or false makes sense. $825 X .417 = $344.03. net operating 50 The firms three graphic designers available for assignment to this project are Lisa, a senior designer and team leader; David, a senior designer; and Sarah, a junior designer. unit-in-place An appraiser must not allow the intended use of an assignment or a client's objectives to cause the assignment results to be __________. Ask Poli features exclusive Q&As and moreplus official Selling & Servicing Guide content. consumption specific data only A home sells in January for $240,000 and sells again in November for $252,000. $125,000 List three prohibited nonaudit services that are considered management responsibilities. log home Price per room is a common unit of comparison when appraising The simplest quickest and least accurate method of estimating costs is the _____ method. 180 actual 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. 4. tenancy by the entirety, The most common unit of comparison for land in rural areas is price per _______. contract, effective date of the appraisal. biased It is 10 years old and has an effective age of 12. concrete block anticipation expected remaining economic, remaining economic Ranking analysis is a form of __________ analysis. It has an effective age of 20 years and a total expected economic life of 65 years. type, scope There is no mode as each number appears just once, expected remaining economic, remaining economic. The subject is a 15 year old duplex that would cost $240,000 to build new today. 109.2 - 84.5 = 24.7. both general and specific data Maybe equal to, greater then, or less than. True or false: qualitative analysis is used for elements that cannot be given a numerical value. $85,000 X 2 = $170,000. The net operating income was verified as $294,640. Which sounds are identified by FEMA a special flood hazard areas? Claudia Bienias Gilbertson, Debra Gentene, Mark W Lehman, Statistical Techniques in Business and Economics, Douglas A. Lind, Samuel A. Wathen, William G. Marchal, Alexander Holmes, Barbara Illowsky, Susan Dean, David R. Anderson, Dennis J. Sweeney, James J Cochran, Jeffrey D. Camm, Thomas A. Williams. Its remaining economic life is estimated to be 48 years. And upon comparative analysis, and appraiser may employ: The quantitative adjustments are usually performed first. Comparable houses with air conditioning rent for $1,100 per month. Which time deterioration is considered to be curable? Economic Age/Life | Everything Appraisal The storage facility is near Hamford's main factory and will be remodeled by CTF to meet its requirements. It sits on a lot worth $65,000. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? Economic Life: Definition, Determining Factors, Vs. Depreciation __________ occurs within a property; while _________occurs off the site. To estimate physical deterioration, an appraiser can compare the estimated remaining economic life of the hotel's FF&E to its total economic life. unit in a PUD. It is 12 years old and has an estimated remaining economic life of 38 years. owner of record Subdivide it; 8 X 70,000 = $560,000. The reproduction cost of the building was $380,000 and it was 60% depreciated. 8,000 square foot residence Fannie Mae does not have any requirements related to the remaining economic life of the property. $85,000 per unit as a site for a duplex and C. $60,000 per acre as a retail site. Fannie Mae says that has it adjustments for sales or financing concessions are: Converting an estimate of a single years expected income into an indication of value is: Any rate used to convert and come into value is the definition of: If an apartment building is operating at only 50% occupancy, this should mean that _____ expenses would be lower. 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 ______________. The most complex method of site valuation is the _______________ method. panelized 11 x09 capital budgeting - MODULE 9 CAPITAL BUDGETING - StuDocu Who wants to make a 30-year mortgage on a residential property if the physical structure isnt expected to last more than 20 years? gross living Once again judgment will be required in making the assessment. An estimate of remaining economic life is required by Fannie Mac Freddie Mac VA all of the above. If a comparable property sells with atypical financing, we may have to make an adjustment for ___________. Site by, The new, must-have technology thats tackling lendings greatest challenges. effective age, remaining economic life $350,000 - $45,000 = $305,000. hot water lot, Multiple listing services can be utilized for gathering _______________. A comparable new house just sold for $340,000. An appraiser estimated the replacement cost new of a building at What are the three general types of depreciation? "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. Center, Apps Over 25% year-over-year growth in Solar Energy Capacity Installed From HUDs viewpoint, maybe not. Determining the Useful Life of Assets and 5 Ways to Extend it - Limble CMMS The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. Want to know what the data says about how long you'll live? define the problem income-producing or suitable for income production Early ductless heating systems were called, "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, "Details about the property being appraised, comparable sale and rental properties, and relevant local market characteristics" is the definition of, 8 X $50,000 = $400,000. For appraisals prepared using the UAD, quality of construction for the subject and comparables is rated using: The Fannie Mae URAR form is designed to report an appraisal of: An appraisal of which of these types of properties would not be reported using the Fannie Mae URAR form? entrepreneurial incentive- expected profit. VA GBA, exterior, Which of the following would NOT be general data? By extraction, what is the value of the land? Here is a definition and an example of how to calculate depreciation using the Economic Age/Life Method.. What would be the impact on the average farmer? platform frame 10 201.8 133.6 = 1.51. The Age-life Method- This method is the simplest and most common method of estimating depreciation. The appropriate gross rent multiplier is 75. Execution, Learning How do you transition from QC defense to offense in 2023? The order in which quantitative adjustments are applied to the sale price of comparable properties is the: What adjusting a comparable sale for financing terms in an FHA appraisal, FHA instructs the appraiser to adjust: According to the requirements of that uniform appraisal data set, and appraiser is required to write a location as: An appraiser uses a sale that sold is the result of the owners bankruptcy, and the appraiser adjust the sale because it is not an arms length transaction. What is its indicated value by the cost approach? Which of the following would NOT be a common adjustment made in sales comparison when appraising land? A method used to convert future benefits and a present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investments income pattern, value change and you'll be right is the definition of: The basic formula for income capitalization states that value equals _____ divided by a _____. determine the scope of work, Which would NOT be a form of concurrent ownership? 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 required data Which would not be a sub-step in defining the problem? When measuring a condominium you should calculate ____ using _______ measurements. entrepreneurial incentive site improvements type, definition The second phase of the neighborhood lifecycle is: True or false: an appraiser can adjust the comparable sale to account for differences and the motivation of the buyer or seller in the transaction. First array them in order. Most residences today require an electrical service that is a minimum of _____ amps. What is the depreciated value of the improvements by the age-life method, before including the site value? However, to fully understand REL and how users like HUD employ this information, we also need to consider the following: -PHYSICAL LIFE The total period a building lasts or is expected to last -ECONOMIC LIFE The period over which improvements to real property contribute to property value. Which type of depreciation occurs off the site? Which of these elements in the adjustment process does not apply primarily to commercial or income producing properties? split-level actual and effective, An example of a special purpose property would be a(n) joint tenancy effective, The most complex method of site valuation is the _______________ method. What is its value by the cost approach? A municipality assesses property at 100% of value. $2,042. What is your net adjustment? feel free to email. PDF Common Issues and Best Practices - Freddie Mac 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. retrospective 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. Which of the following would NOT be general data? To make sure that accurate and appropriate comparisons are made. depreciated cost, plus site value It is easy to use and easy to explain to a client. Mode. cost approach The cost approach formula states that ______________, minus depreciation, _______________, equals property value. $12,000 $240,000 = .05 or 5%. quality A management fee usually is based on a percentage of the _________ income. A house is rented for $1,050 per month, but lacks air conditioning. a. Drilled wells need to use __________ until the drilling enters ___________. "A method of estimating land value in which the depreciated cost of the improvements on an improved property is calculated and deducted from the total sale price to arrive at an estimated sale price for the land" is the definition of the ___________ method of site valuation. ), Selling, Securitizing, and Delivering Loans, Research 12 + 38 = 50 years total economic life. The first step in the valuation process is: Extraordinary assumption An appraiser counters an underground Storage tank. workflow diagram, If a property is assessed at $134,000 and the rate per thousand is $9.55, how much are total property taxes?