__________ occurs within a property; while _________occurs off the site. information from other Fannie Mae published sources. When determining how much to adjust for a two car garage and the sales comparison approach, which valuation as a primary importance? The first step in the valuation process is: Extraordinary assumption An appraiser counters an underground Storage tank. $175,000 $250,000 $287,500 $295,500. The valuation process is a systematic procedure employed to provide the answer to a(n) _______ question about the value of _________. What is the first step in the sales comparison approach process? How do you transition from QC defense to offense in 2023? "Industrial Designs has been awarded a contract to design a label for a new wine produced by Lake View Winery. statistical, The most common heating systems in residential construction today are Is producing a cost estimate, Eric has estimated the number of two by force, she's a climber, and how many pounds of nails will be necessary. $654,200 X 1.60 = $1,046,720, When appraising a duplex, an appraiser should use __________ area. Quantitative or qualitative techniques, either separately or in combination. allocation tenancy by the entirety, The most common unit of comparison for land in rural areas is price per _______. Condos in your market area sold for a median price of $195,320 twelve months ago and the median price of condos for the current month is $219,540. Remaining Economic Life (REL) AND Remaining Useful Life is the difference between Economic Life and Effective Age. True or false: qualitative analysis is used for elements that cannot be given a numerical value. . $305,000 X .231 = $70,455. That defines yield capitalization - discounting of future cash flows. 3. To make sure that accurate and appropriate comparisons are made. Hypothetical condition 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. That is more than its present value. one unit residences reproduction, A partial estate could be created by the existence of all the following EXCEPT useful, anticipated Once again judgment will be required in making the assessment. index actual age, total physical life The easiest and best support is an analysis of demolitions. $50,000 X 3.2 = $160,000. The term of the non-cancelable lease is 3 years with no renewal or bargain purchase option. A house is rented for $1,050 per month, but lacks air conditioning. Label the optimum as point A. "Data that relates to the four forces that affect real property valuessocial, economic, governmental, and environmental forces" is the definition of. In the example, the appraiser. However, the number of hours assigned to Sarah must not exceed 25 percent of the total number of hours assigned to the two senior designers. Over 25% year-over-year growth in Solar Energy Capacity Installed 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. when it is necessary for credible results. After all, the borrower should be able to sell the property at a reasonable rate as determined by current market conditions at any point during the lifetime of the FHA loan. square foot economic square foot none of the above, Modular homes are constructed to meet __________ code requirements. What is the mode of the GRMs? leasehold interest investment The appraiser estimates the total age, effective age, and remaining life of the improvements. minus depreciation, plus site value, In most residential appraisals, the appraiser values site What is the estimated land value? The duplex produces the highest value ($170,000), Overall Capitalization Rate (RO). Lead Analyst Logan Mohtashami explains. What is the land value? The most common brownfield contaminant is. 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. 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 d. the acquisition cost of the asset. $350,000 X .2 = $70,000 (current building value). 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. This would be an example of a(n). $3,750 estimate land value Determine depreciation percentage by diving effective life by total economic life: 12 / (12 + 38 = 50) = 24%. Besides properties that have recently sold, other value . extraction and allocation. casing, bedrock There are curable items totaling $45,000. 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. Which term best describes her ownership interest in the property? What is its unit cost? Another name for the extraction method of sight valuation is: Which method of sight valuation is based on a typical Ratio of land value to total property value? estimate land value True or false: expense ratio information is easier to obtain on single unit residential properties than commercial properties. Yes, it is a qualitative method. GLA, interior Which type of valuation analysis would typically NOT include a separate site valuation? buildable unit, In the age-life method of estimating depreciation, the ___________ age is divided by the ____________ life. Economic Age-Life Method C The economic age-life method is a quick and easy method to apply and may be used in form reports to give an estimate of the buildings depreciated value. The company estimates that 150 hours will be required to complete the project. The ADU must have basic requirements for living, sleeping, cooking, and bathroom facilities on the same parcel as the primary dwelling. Lease term is for the major part of the remaining economic life of the asset. Physical deterioration and functional obsolescence, external obsolescence The cost index at that time was 138.5. Which would not be a sub step and defining the problem? USPAP says a cost approach must be developed when it is necessary for. Market condition adjustments should always be calculated from the time of the ________ to the ___________. $305,000; Extraction Method. Which site evaluation methods should only be utilized when the subject property is income producing thing by nature? If there is no evidence of any observable links, the appraiser could indicate a value opinion based on the _____ that the take is indeed not leaking. $625,000 - $125,000 = $500,000. entrepreneurial incentive $294,640 $2,350,000 = .125 or 12.5%. 109.2 - 84.5 = 24.7. anticipated, economic life, expected remaining economic, remaining economic, Developers often value land on a basis of price per Separate site valuations would likely be required in the following situations except for: "The total period a building lasts or is expected to last" is the definition of _________ life. $375,000 - $70,000 = $305,000 (land value). land residual ANSI Most residences today require an electrical service that is a minimum of _____ amps. 50 When appraising a duplex, an appraiser should use __________ area. wood A hard refresh will clear the browsers cache for a specific page and force the most recent Which time deterioration is considered to be curable? reliable Is the building's _____ life. What is its value by the cost approach? a guesstimate, The last step in the valuation process is The method that estimates land value based on a percentage of the total property value is the _______________ method. Add them all up and the net adjustment is the difference between the total positive and negative adjustments - in this case +$10,000. The cost to cure deferred maintenance items is $670. definition of value An appraisal could be performed under the presumption that the tank is not leaking and the property is not contaminated. size The appraiser estimates that $61,000 of income is attributable to the building. You estimate the value of the site at $95,000 and the cost of the site improvements at $10,000. Many factors can affect the useful life of an asset, both physical and economic. GRMs are derived by dividing the __________ by the property's ___________ at the time of sale. there are curable items totaling $45,000. Written by Bill Waltenbaugh, as originally published in The Reverse Review. ground rent capitalization and subdivision development $560,000 - $65,000 = $495,000. 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. risk rate Keyways are employed in which type of foundation walls? It changes due to market conditions and the building's overall maintenance. cost contract, effective date of the appraisal The most common unit of comparison for land in urban areas is price per _______. Multiply the Cost of the Long-Lived Items by the depreciation percentage: $191,760 X 24% = $46,000. __________ refers to uncontrollable sleeping that occurs for short periods while a person is awake. 180 -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. Susan owns a home on leased land. 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 most complex method of site valuation is the _______________ method. Fannie Mae does not have any requirements related to the remaining economic life of the property. $380,000 X .40 = $152,000 (building value). A square contains enough shingles to cover 100 square feet. not suitable for construction of a new building, income-producing or suitable for income production, Appraisers are cautioned to identify the exact _______________ of market value, and its _______________, applicable in each appraisal completed for the purpose of market value. The method that treats the land value as a percentage of the total value is the __________ method. The current cost index is 201.8. That is what builders are concerned about - how many building lots can I get, Developers often value land on a basis of price per. What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? The range is the difference between the high and the low. 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 Segregated cost method is another name for the _________ method. Physical deterioration and functional obsolescence, external obsolescence. expected Example (remaining life): service level/capacitylife - 3 breaks, estimated 2 years to next break (no more than 4 breaks in 5 years) . bundle of rights cost/benefit a. the total amount to be charged (debited) to expense over an asset's useful life. $98,000 Gross Rent Multiplier Analysis. US P a P requires a prior sales history of _____ years for the _____. How much income does yield capitalization use? gross rent multiplier. Remaining Economic Life Change Date February 22, 2019 This Chapter has been revised in its entirety. effective, The most complex method of site valuation is the _______________ method. ), Selling, Securitizing, and Delivering Loans, Research Rocket has a plan to drastically cut costs. The first step in the valuation process is topography. Which is the highest and best use? Real estate property- 935 Bianca Court- current assessed value for year 2021= $379,000. What is the depreciated value of the improvements by the age-life method, before including the site value? highest and best use analysis temporary improvements, "The type of data and the extent of research and analyses" is the definition of Each of these is a variable expense EXCEPT. A comparable new house just sold for $340,000. conditions of sale causes within the property forced warm air. Documentation necessary to support an appraiser's analysis, opinions, and conclusion is the appraisers: What appraisal term is defined as the type and extent of research and analyses and an assignment? Architectural and engineering fees are examples of _____________ costs. Once bedrock is reached, the sides of drilled hole in the rock serves as a casing, to prevent collapse. Modified Age-Life Method. contradiction, Which type of valuation analysis would typically NOT include a separate site valuation? Hence: . 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? In a federally related transaction, a licensed residential appraiser is permitted to appraise non-complex 1-4 unit residential properties with a transaction value of less than ________ and complex 1-4 unit residential properties with a transaction value less than _________. 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. $192,000 + $60,000 - $252,000. define the problem The cost index at that time was 133.6. If an appraiser uses three comparable sales and the sales comparison approach: Land residual and ground rent capitalization. personal property The land capitalization rate is 8%. If you still have Technical Support questions, retrospective If they are cured, it will reduce the effective age to 15 years. Allocation Method. Share this answer Remaining Economic Life Fannie Mae does not have any requirements related to the remaining economic life of the property. An estimate of remaining economic life is required by. An entrepreneur is taking on a development project, and by his calculations, he expects to receive a 25% return on his investment in the project. $4,750 ground rent capitalization An estimate of remaining economic life is required by A VA. The first step in the valuation process is: An appraiser counters an underground Storage tank. front foot Add them up and divide by 7 = 96.3. SUBJECT SECTION New Construction: For new construction, when property taxes have not yet been assessed on the For site condos reported on the 1004 form, only the 'Opinion of Site Value' and 'Estimated Remaining Economic Life' are required. Condemnation occurs when a municipality exercises, An estimate of remaining economic life is required by. definition, age, A building was constructed in July 2000 for $654,200. real Yes, it is required by VA and FHA. Government Auditing Standards identify nonaudit services that can potentially impair auditor independence. The remaining economic life of the car is 3 years, and it is expected to have no residual value at the end of the lease term. For things should be at least _____ average frost penetration levels. The most complex method of site valuation is the _______________ method, In most residential appraisals, the appraiser values. Here is a definition and an example of how to calculate depreciation using the Economic Age/Life Method.. . full interest Fill, grading and permits are examples of improvements that create a. Modular homes are constructed to meet __________ code requirements. deed restrictions. "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. It is 12 years old and has an estimated remaining economic life of 38 years. Two or false: every difference between a subject property and a comparable sale requires an adjustment. Statistical analysis will be of little use. If a property is assessed at $186,000 and the rate per thousand is $6.45, how much are total property taxes? There are eight numbers, so the median lies between the two middle numbers in the array (108.9 and 109.8). . Superfund site replacement, A _______________ home is built in accordance with the HUD Code. 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. $625,000 X .20 = $125,000 depreciation. Its remaining economic life is estimated to be 48 years. And modern construction, the most common sub flooring material is: The main support beams for home are called: The most common roofing material currently use in the new construction in the US is: Roof slope is expressed as _____ over _____. That is the standard today. Half of Q4 2022 transactions had wire and title fraud risks. potential net 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? Special purpose properties rarely sell in the market and are not normally income producing. yield capitalization It is bordered by the Red Sea to the west; Jordan, Iraq, and Kuwait to the north; the . (108.8 + 109.8) 2 = 109.3. The appropriate gross rent multiplier is 75. actual site $155,000 as single home site; B. An estimate of remaining economic life as required by: The most complex method of sight valuation is the blank method. FY22. The number of years that have a lab since the building was constructed is it's: Effective age is the same as chronological age. A method of valuing property by discounting the anticipated income stream at an appropriate rate, plus discounting the value of the reversion is: How much income does direct capitalization use? report the final opinion of value It is worth $450,000 as it is in one parcel. $375,000 - $70,000 = $305,000 (land value), Continental Drift Station Lab - Flashcards -, Basic Appraisal Principles Exam Practice #3. Two squares of 180-pound roof shingles would weigh _____ pounds. c. the estimated market value of the asset at the end of its useful life. In the sales comparison method, quantitative adjustments are based on dollars, while qualitative adjustments are based on percentages. type, scope $50 X 75 = $3,750. "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 The Remaining Economic Life is the estimated number of years that an improvement will continue to contribute to property value. Cost Index Trending. "The tenant's possessory interest created by a lease" is the definition of _______________. cost new, minus land value lot, Multiple listing services can be utilized for gathering _______________. partial interest, An appraiser must not allow the intended use of an assignment or a client's objectives to cause the assignment results to be __________. Footings should be ________ as wide as the ____________. Under USPAP, when is an appraiser required to develop the cost approach in a real property appraisal? $240,000 X .20 = $48,000 depreciation. 201.8 133.6 = 1.51. Given this information, one needs to consider whether or not a property with obvious deferred maintenance needs to have a low REL. What was the cost per square foot? $125,000 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. "The estimated period over which existing improvements are expected to contribute economically to a property; an estimate of the number of years remaining in the economic life of a structure or structural components as of the effective date of the appraisal; used in the economic age-life method of estimating depreciation." Effective However, appraisers are not required to report this information. determine the scope of work, Which would NOT be a form of concurrent ownership? An estimate of remaining economic life is required by Fannie Mac Freddie Mac VA all of the above VA Remaining Economic Life. The cost approach is most applicable in situations where the site value is not well supported. Real property appraisal reports may be written or oral. split-entry, "Real property for which the expansion, redevelopment, or reuse of the real estate may be complicated by the presence of environmental contamination that needs to be remediated to appropriate regulatory standards " is the definition of sales comparison soft Multiple listing services can be utilized for gathering _______________. The URAR form can be used to report the appraisal of which of the following property types? It was rented for $1,100 per month but the market rent was $1,200. All uses are physically possible, economically feasible and legally permitted. neither site or land In a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________. personal opinions square foot The _______________ method has good application in valuing land in rural areas and in older, urban areas. type, definition front foot Do you think the total benefits outweigh the total costs, or vice versa? contribution $197,450 2,448 = $80.66, "The type of data and the extent of research and analyses" is the definition of. land residual and ground rent capitalization $75,000 per unit as a site for a duplex; or C. $50,000 per acre as a retail site. $235,000 2,030 = $115.76. Example 1. An appraiser observes that an underground tank is leaking. 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. 8. highest and best use, Market condition adjustments should always be calculated from the time of the ________ to the ___________. A dwelling has a reproduction cost of $625,000. 10 yield capitalization 100, An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. 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. leased fee estate, The URAR sales comparison grid requires you to enter in the _________ age of the subject property and comparables. identification of the property rights What is the GRM indicated by this sale? feel free to email. Having Issues with Seeing this Page Correctly? one-unit with an accessory unit quality Problem 1. $197,450 2,448 = $80.66. Name of the licensed appraiser, if applicable. $1,100 - $1,050 = $50 rent loss. A single parcel is valued at $450,000. 12 60 = .20 or 20% depreciation. possesses sufficient remaining economic life to warrant a long-term mortgage, assuming a reasonable level of continued maintenance. While humans started gathering grains at least 105,000 years ago, nascent farmers only . Since the estimated remaining life is 30 years. owner of record $1,100 - $1,050 = $50 rent loss. deed restrictions United Nations, What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? & Insights, Pricing & 4Q21. Which was the earliest form of electrical wiring? Note: This field only appears for older cases with an . cost approach property tax rates, When describing roofing shingles, a "square" contains __________ square feet. Which of the following would NOT be general data? heat pump Prepare a bank reconciliation to calculate the correct ending balance . When valuing real property, the value of the whole ____ the sum of the Estates or the parts. Once we have the effective age, we can calculate the remaining economic life of the home. It is common in appraisal reports to include a map that shows the location of the _______________. land residual and subdivision development Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. if they are cured, it will reduce the effective age to 15 years. life estate taxable income It is 12 years old and has an estimated remaining economic life of 38 years. A property sold for $2,350,000. His weekly food budget is $60. Multiple listing services can be utilized for gathering _______________.