ordinary assumption In the example, the appraiser. A short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure. All uses are physically possible, economically feasible and legally permitted. Maybe equal to, greater then, or less than. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. Median. Assessments and Taxation. The cost to cure deferred maintenance items is $670. For things should be at least _____ average frost penetration levels. HUD State and Local When the home resold it had not been improved at all. 48 Q An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. estimate land value actual Susan owns a home on leased land. sales comparison $85,000 X 2 = $170,000. Market condition adjustments should always be calculated from the time of the ________ to the ___________. The cost index at that time was 138.5. $250,000 - $152,000 = $98,000 (land value). $98,000 indirect costs conditions of sale 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. The method that treats the land value as a percentage of the total value is the __________ method. . casing, sandstone. An estimate of remaining economic life is required by: Expected remaining economic, remaining economic. It changes due to market conditions and the building's overall maintenance. What is the amount of long-lived depreciation attributable to the building? pier, A property sold for $250,000. new Mode. A lender may deny a loan application for the purchase of a property with an FHA guaranteed mortgage if the property has little economic life remaining. External obsolescence and physical deterioration, functional obsolescence, Physical deterioration and functional obsolescence, external obsolescence, The ground rent capitalization method should only be used when appraising a property that is Since the estimated remaining life is 30 years. electric radiant The appraiser estimates that $61,000 of income is attributable to the building. tenancy by the entirety, The most common unit of comparison for land in rural areas is price per _______. income capitalization Just think about it: From a mortgage perspective, this concern is reasonable. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that enabled people to live in cities. assessment rolls 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. The fair value of the car was $15,000 at commencement of the lease. The estimated economic life is 40 years, hence after 40 years the value of the house would be 0. 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. . Find the probability that an individual from this group is taller than 1.83. Appraisal fees are examples of _______________ costs. Visit Selling and Servicing Guide Communications and Forms. effective gross 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. 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. minus depreciation, plus site value, In most residential appraisals, the appraiser values The physical life of a property can be well over 60 years depending . Market conditions adjustments are referred to buy some appraisers as blank adjustments. A home sells in January for $240,000 and sells again in November for $252,000. ranch $155,000 as single home site; B. A 5 year old water heater with an expected life of 12 years and a replacement cost of $825 will have experienced depreciation of $__________. $152,000. A VA. 25 Q . The income approach is only required if the appraiser determines that it is necessary to develop credible assignment results. What is the land value? Estimated Remaining Economic Life of this property is . Drilled wells need to use __________ until the drilling enters ___________. $87,500 Problem 1. GRMs are derived by dividing the __________ by the property's ___________ at the time of sale. $50 X 75 = $3,750. $294,640 $2,350,000 = .125 or 12.5%. The most commonly used method for valuing sites is the ____________ method. Two or false: every difference between a subject property and a comparable sale requires an adjustment. closing, effective date of the appraisal Name of the licensed appraiser, if applicable. By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? 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. If they are cured, it will reduce the effective age to 15 years. It is 12 years old and has an estimated remaining economic life of 38 years. Drilled wells need to use __________ until the drilling enters ___________. excess, Which entity produces the most commonly-used land appraisal report form? For additional information, see B4-1.3-05, Improvements Section of the Appraisal Report. Not enough information to determine, Which of the following would NOT be a common adjustment made in sales comparison when appraising land? $50 X 75 = $3,750. 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. definition, age, A building was constructed in July 2000 for $654,200. estimates and will comment on the methodology used to estimate depreciation, effective age and remaining economic life. gross rent multiplier. An appraisal could be performed under the presumption that the tank is not leaking and the property is not contaminated. "The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease" is the definition of _______________. physical, "The relationship or ratio between the sale price or value of a property and its gross annual rental income" is the definition of Asset wear, degradation, or damage reduces an asset's economic life. 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. direct indirect reproduction replacement direct Fannie Mae states that in calculating the gross living area of a detached home, the appraiser must use blank measurements. All of the following could be sources of specific data EXCEPT. entrepreneurial risk, "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 Statistical analysis will be of little use. Princess Victoria, the fourth daughter of the King, has undergone an operation for appendictis. The valuation process is a systematic procedure employed to provide the answer to a(n) _______ question about the value of _________. Subtracting the residual value -- zero -- from the $10,000 recorded cost and then dividing by the software . In the sales comparison approach, sales data on __________ sales should be collected. Hence: . J-bolts are used to anchor the _________ to the __________. And amount paid for the use of land, improvements or capital good is the definition of: Typical replacement allowance items would not include: _____ income is the anticipated income from all operations of the real property after an allowance is made for vacancy and collection of losses, Dividing sales price by gross monthly unfurnished market rent. joint tenancy specific data only According to the EPA, blank systems are the most energy efficient, environmentally clean, and cost-effective space conditioning systems available. full interest Microalgae represent a promising solution in addressing the impacts associated with the current agricultural and manufacturing practices which are causing irreparable environmental damage. easements Depreciation is defined as a loss and property value from blank. A house is rented for $1,050 per month, but lacks air conditioning. US P a P requires a prior sales history of _____ years for the _____. Price per room is a common unit of comparison when appraising If you still have Technical Support questions, Which was the earliest form of electrical wiring? land residual and ground rent capitalization What is the first step in the sales comparison approach process? cost feel free to email. What is the total cost?". The company will use the straight-line method to report the amortization of the software. $126,000 $1,200 = 105. When I toss four coins, there are six different outcomes that represent the event of 222 heads and 222 tails. To make sure that accurate and appropriate comparisons are made. The Remaining Economic Life is the estimated number of years that an improvement will continue to contribute to property value. GBA, exterior, Which of the following would NOT be general data? anticipated, economic life, expected remaining economic, remaining economic, Developers often value land on a basis of price per 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. it was built in 2010. . Which term best describes her ownership interest in the property? $175,000 $250,000 $287,500 $295,500. This. highest and best use analysis Rocket has a plan to drastically cut costs. replacement cost, minus external obsolescence Freddie Mae casing, bedrock shape 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. Once again judgment will be required in making the assessment. __________ occurs within a property; while _________occurs off the site. 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. 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 $60,000 X 2.4 = $144,000. comparative-unit hot water direct Effective date of the appraisal, date of the report. Roof Covering. 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 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. To estimate the number, owners must consider the asset's net present value (NPV), internal rate of return (IRR), and return on investment (ROI). 109.2 - 84.5 = 24.7. $3,250 The first step in the valuation process is, All of the following could be sources of general data EXCEPT. Whaling is the hunting of whales for their usable products such as meat and blubber, which can be turned into a type of oil that became increasingly important in the Industrial Revolution.It was practiced as an organized industry as early as 875 AD. Site by, The new, must-have technology thats tackling lendings greatest challenges. effective, The most complex method of site valuation is the _______________ method. Example (remaining life): service level/capacitylife - 3 breaks, estimated 2 years to next break (no more than 4 breaks in 5 years) . leased fee estate, The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. What is the most common type of framing currently being used in new homes? That is more than its present value. $85,000 X 2 = $170,000. any cause From an appraisers perspective, the REL is part of a simple calculation used to estimate depreciation for the cost approach. Cost Approach Formula. cost new, minus land value casing, bedrock Factors in Estimating Remaining Economic Life Remaining economic life is the estimated period of time until the improvements are expected to no longer serve their intended purpose as a home. Explain your reasoning. Site development costs (sewer, grading, road, etc.) index Due to other project commitments, Lisa has a maximum of 50 hours available to work on this project. "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, "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, Soil maps produced by the Natural Resources Conservation Service are based on, The SCOPE OF WORK RULE says that in each real property appraisal assignment, the appraiser must _______ the problem to be solved, and determine and perform the scope of work necessary to develop ________ assignment results. FHA. "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, A partial estate could be created by the existence of all the following EXCEPT. allocation, When estimating the amount of adjustments for differences among properties, the most important principle is the principle of _______________. Given how high inflation is right now, why arent mortgage rates even higher? $305,000 - $70,455 = $234,545. unnecessary An estimate of remaining economic life is required by: Fannie Mac Freddie Mac VA Which would NOT be a sub-step in defining the problem? Determine depreciation percentage by diving effective life by total economic life: 12 / (12 + 38 = 50) = 24%. Which would not be a typical source of building costs for the appraiaer? indirect potability Materials that transfer energy quickly are called __________ and those that transfer energy slowly are called __________. An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. information from other Fannie Mae published sources. $3,750 While humans started gathering grains at least 105,000 years ago, nascent farmers only . unemployment rates Some highly desirable areas can have older residential structures that are well maintained and in good condition. Why does an appraiser need as much information as he can get about rental comparables? Appraisers are cautioned to identify the exact _______________ of market value, and its _______________, applicable in each appraisal completed for the purpose of market value. 1 - Radon, Mold, a, FL Trainee Appraiser - Ch. biased Multiple listing services can be utilized for gathering _______________. consumption Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. 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? tenancy in common Which of the stages in the life cycle of a market area does not always occur? -Rehabilitation is not feasible. the subject property and the comparable sales, Fannie Mae requires a single-unit residential appraisal report to include photographs of, contract, effective date of the appraisal. The land capitalization rate is 8%. And what type of heating system would you find an expansion tank? owner of record Parging is used on which kind of foundation wall? One year of the economic life of the asset will be utilized over the next 12 months. $85,000 per unit as a site for a duplex and C. $60,000 per acre as a retail site. cape cod subject to a partial ownership interest yield capitalization That is used in a hot water system; as water expands as it is heated. What is another name for "indirect costs"? By the 16th century, it had risen to be the principal industry in the Basque coastal regions of Spain and France. 8. The most complex method of site valuation is the _______________ method. Microalgae have considerable biosynthetic potential, being a rich source of lipids, proteins, and high-value compounds. The cost to cure deferred maintenance items is $670. Which would not be an example of a sales or financing concession-when the seller: The total adjustment to each comparable sale price calculated in absolute terms is the definition of _____ adjustment. 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. ground rent capitalization The storage facility is near Hamford's main factory and will be remodeled by CTF to meet its requirements. $400,000 - $50,000 = $350,000. Does it go far enough? If the property does not warrant a long-term Contract rent and market rent are two different concepts. Draw the budget constraint showing the trade-off between dining hall meals and Cups O Soup. 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? In the sales comparison method, quantitative adjustments are based on dollars, while qualitative adjustments are based on percentages. Extraction Method. If agricultural tariffs and subsidies to producers were removed overnight, what would the impact be on the average consumer in developed nations such as the Untied States and the EU countries? When it cannot do what it is required to do . a property has a cost new of $350,000, it has an effective age of 20 years and a total expected economic life of 65 years. Its land value is $60,000. A building was constructed in July 2000 for $754,200. $50,000 X 3.2 = $160,000. The anticipated income from all operations of the real property after an allowance is made for vacancy and collection losses is the definition of blank income. The number of years that have a lab since the building was constructed is it's: Effective age is the same as chronological age. Which time deterioration is considered to be curable? When measuring a condominium you should calculate blank using blank measurements. perforated tile, the house Income can be capitalized into value by dividing by a _____ or multiplying by a _____. useful, anticipated $250,000 - $152,000 = $98,000 (land value). quality "The estimated cost to construct, at current prices as of a specific date, a substitute for a building or other improvements, using modern materials and current standards, design, and layout" is the definition of_____ cost . effective age, remaining economic life "The process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing" is the definition of. what is the value of the improvements on a modified age-life basis, before including the site value? square foot Once we have the effective age, we can calculate the remaining economic life of the home. market By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? determine the scope of work, Which would NOT be a form of concurrent ownership? entrepreneurial incentive The credibility of assignment results is always measured in the context of the _______________. There are three methods that appraisers can use to estimate depreciation. All rights reserved. fee simple Depreciation is a loss - and it could be from any cause. An estimate of remaining economic life is required by Fannie Mac Freddie Mac VA all of the above. Fannie Mae customers! The "summation approach" is another name for the _______________ approach. $1,186.20 The cost index at that time was 133.6. "A method used to convert future benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment's income pattern, value change and yield rate" is the definition of. hot water In order to understand what factors cause mental disorders, most psychologists use a ________________. Over which improvements contribute to real property value is the definition of: A new building is expected to remain standing for eight years. sale price, gross monthly unfurnished market rent. What is your net adjustment? owner of record When using the sales comparison method and valuing aside, adjustments should be made for differences that are _____. life estate $299,500. statistical appraisal 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. Quick Start; Products. 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? $625,000 - $125,000 = $500,000. direct costs However, their remaining economic life can be low if it is more profitable to remove the dated improvements and build a new structure that provides the modern features and amenities the market demands. A dwelling has a reproduction cost of $625,000. What is the highest and best use? A well-maintained property has a low effective age and a high REL, whereas a property in disrepair will have a high effective age and a low REL. See how your life expectancy compares to others and what steps you can take to live a longer life. vinyl land residual and ground rent capitalization An appraiser observes that an underground tank is leaking. 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. c. the estimated market value of the asset at the end of its useful life. net leasable, A house is rented for $1,050 per month, but lacks air conditioning. The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. What is the land value? It is a generic form, The summation approach is another name for the _______________ approach. 5 12 = .417 or 41.7% depreciation. There is no mode as each number appears just once, expected remaining economic, remaining economic. 4Q21. retrospective neither site or land $305,000 - $70,455 = $234,545 A property has a cost new of $350,000. Ask Poli features exclusive Q&As and moreplus official Selling & Servicing Guide content. . $754,200 X 1.51 = $1,138,842. Over 25% year-over-year growth in Solar Energy Capacity Installed extraction and allocation. Physical deterioration and functional obsolescence, external obsolescence Determine Cost of Long-lived Items by subtracting deferred maintenance and short lived items Cost from total replacement cost: $212,340 - $670 - $20,000 = $191,670. The intended user of an appraisal is the __________ and any other user, as identified by _________. $7,000 $350,000 X .2 = $70,000 (current building value). 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. highest and best use, Market condition adjustments should always be calculated from the time of the ________ to the ___________. Capitalization of Income Loss. yield capitalization quantity survey unit-in-place of the report and the effective date of the appraisal, Each written appraisal report must contain the date, An example of a special purpose property would be a(n). land b. the cost of the asset less the related depreciation recorded to date. d. the acquisition cost of the asset. $50 X 85 = $4,250. 2) the service to be provided (material handling) is required forever. definition, authority condemnation appraisals Label the optimum as point A. Comparative-Unit Method - Market Derivation. The identification of relevant characteristics is a judgment made by, income-producing or suitable for income production, The ground rent capitalization method should only be used when appraising a property that is, Cost Index Trending Solution. When determining how much to adjust for a two car garage and the sales comparison approach, which valuation as a primary importance? Today the _______________ technique of site valuation is used primarily in highest and best use analysis. forced warm air 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 ____________________. Here is a definition and an example of how to calculate depreciation using the Economic Age/Life Method.. causes outside the property Site development costs (sewer, grading, road, etc.) 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. contribution In closing, I feel it is important for appraisers to understand how clients are using the information provided in reports. 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. 15 65 = .231 or 23.1%. -ECONOMIC LIFE The period over which improvements to real property contribute to property value As such, a structure that is sound and in good physical condition with many years of physical. Functional obsolescence, physical deterioration Right-of-use asset $406,213 Lease liability $331,213 Cash $ 75,000 The lease has been categorized as an operating lease, and the entity has determined that its total fixed rent to be $475,000 ($500,000-35,000+10,000) Therefore, on an annual basis, it will recognize $95,000 of fixed rent expense. The Economic Age/Life Method is big on the new National Licensing Exam. risk rate $197,450 2,448 = $80.66, "The type of data and the extent of research and analyses" is the definition of. $350,000 - $45,000 = $305,000. Which type of valuation analysis would typically NOT include a separate site valuation? Economic life is the expected period of time during which an asset remains useful to the average owner. Is the building's _____ life. Construction materials and workers' wages are examples of __________costs. (108.8 + 109.8) 2 = 109.3. HUD/FHA index, "A method used to convert future benefits into present value by discounting each future benefit at an appropriate yield rate or by developing an overall rate that explicitly reflects the investment's income pattern, value change and yield rate" is the definition of definition of value qualitative The other three are common adjustments, but quality adjustments would be made to improvements - not land. Ranking analysis is a form of __________ analysis. The capitalization rate indicated by sale is ____%. real The company estimates that 150 hours will be required to complete the project. . 1 A management fee usually is based on a percentage of the _________ income. The most common type of framing in residential construction today is.