Basic Appraisal Procedures, 3/e
Hondros Learning™
Final Examination #1
1. Which architectural style is typically a single-floor layout?
a. Bi-level
b. Cape Cod
c. Ranch
d. Split-level
2. What is the indicated value of this income-producing property (rounded)?
Potential Gross Income: $43,575; Capitalization Rate: 10.5%
Vacancy Rate: 4.5%; Operating Expenses: $24,690
a. $157,300
b. $159,400
c. $161,200
d. $163,600
3. Which circumstance might influence a transaction so as NOT to be arm’s length?
a. market conditions are known by seller
b. property has been adequately exposed
c. seller assisted substantially with the buyers costs
d. seller not influenced by haste or duress
4. The existence of which section of the URAR makes it unacceptable to use the form for marketing, estates, or litigation?
a. General Use Provisions
b. Intended Use
c. Scope of Work
d. Statement of Assumptions and Limiting Conditions
5. An appraiser is using the estimated current value of the improvements based on depreciated cost methods as a step in developing an opinion of the land value. Which land valuation technique is the appraiser employing?
a. allocation
b. extraction
c. land residual
d. sales comparison
6. What is the total amount of gross adjustments?
Market conditions +$3,000; Location -$2,000; Physical characteristics; -$1,500
a. $500
b. $2,500
c. $3,000
d. $6,500
7. In which stage of a new home’s construction is the wiring run to the future connection points of receptacles, fixtures, etc.?
a. framing
b. interior
c. pre-construction
d. rough-in
8. Which would most likely be described by lot and block?
a. farm
b. section
c. subdivision
d. township
9. When an opinion of reasonable exposure time has been developed in an assignment,
- the appraiser is basing that opinion on future conditions.
- a corresponding limiting condition must also be expressed.
- its development is due to the property being currently listed.
- that opinion must also be included in the report.
10. When reflected to the subject, the comparable property additionally had a fireplace with a contributory value of $1,500, but lacked a half bath with a contributory value of $2,500. What was the net adjustment to the comparable?
a. -$4,000
b. -$1,000
c. +1,000
d. +$4,000
11. How many cubic yards of concrete will be needed for a patio that will be 20 feet by 30 feet and 6 inches thick?
a. 11.1
b. 16.7
c. 151.2
d. 300.0
12. In which type of value would a real property appraiser also need to be competent in the appraisal of intangible assets if he were the only appraiser in the assignment?
a. going-concern value
b. insurance value
c. investment value
d. value in use
13. Which must be attached to the mortgage industry’s Small Residential Income Property Appraisal Report?
a. current lease agreements for the property
b. Operating Income Statement
c. plot plan showing the site and the improvements
d. three-month’s receipts for all expenses
14. If a property’s current use existed prior to the imposition of zoning to which it no longer conforms, the zoning is considered
a. conditional.
b. grandfathered.
c. pass-through.
d. a variance.
15. Variable expenses include
a. building insurance.
b. mortgage interest.
c. property management fees.
d. real estate taxes.
16. When the appraiser adjusts a comparable sale for financing concessions, the adjusted sale price of the comparable becomes
a. arm's length.
b. cash equivalent.
c. market typical.
d. uninfluenced.
17. What is the purpose of a home inspection?
a. discover physical condition
b. identify every possible imperfection
c. uncover physical encroachments
d. warrant the property against defects
18. If a site is triangular in shape and has 100 feet of frontage and a depth of 150 feet, what is the site area in acreage?
a. 0.1537
b. 0.1722
c. 0.2222
d. 0.2641
19. A local government has a standing regulation that all appraisals performed for the purpose of tax assessment will be developed contrary to certain development requirements of USPAP. This is an example of
- extraordinary assumptions.
- hypothetical conditions.
- jurisdictional exceptions.
- limiting conditions.
20. In the final reconciliation of value, if an approach to value was developed by the appraiser at the request of the client, but the appraiser does not believe development of the approach is necessary, the appraiser should
a. average the results of the client requested approach with the results of other approaches developed.
b. develop the approach, but give its indications no weight in the final value opinion.
c. give the approach specified by the client most consideration.
d. withdraw from the assignment, as developing the approach would violate USPAP.
21. Which of these items is required to accompany the URAR for Fannie Mae, Freddie Mac, and some other lending industry participants?
a. copy of the appraiser’s license certification
b. interior photos of the comparable properties
c. Market Conditions Addendum
d. zoning map of the subject neighborhood
22. The opinion of highest and best use of certain commercial structures is sometimes for conversion for another use. Given conversion for a certain use or uses would be legal, the primary basis for the conversion’s feasibility typically depends upon the
a. age of the structure proposed to be converted.
b. alternative uses preferred by the property owner.
c. associated costs of conversion.
d. parameters established by lending entities.
23. What is the indicated depreciation using the age-life method?
Replacement Cost: $173,000; Effective Age: 15 years; Remaining Economic Life: 60 years
a. $6,920
b. $8,650
c. $34,600
d. $43,250
24. A property is valued at $3,500,000. If it generates an annual gross income of $280,000 and annual expenses total $40,000, what is the gross rent multiplier?
a. 12.5
b. 87.5
c. 125.0
d. 150.0
25. Imperative to the appraiser’s conclusion of highest and best use, the appraiser must consider the
a. current use of the property.
b. encumbrances on the property.
c. intentions of the owner.
d. legally permissible uses.
26. When an appraiser determines that rapid revitalization is occurring within a neighborhood, he should also analyze if the current or former residents have been, or are being, displaced in order to conclude whether or not this process within the life cycle is taking place.
- decline
- gentrification
- regression
- stability
27. Guidelines established by jurisdictions for minimum standards of construction methods and materials are known as
a. ADA requirements.
b. building codes.
c. permit standards.
d. zoning codes.
28. Which reporting option permitted by USPAP requires a minimum level of stating the conclusions in an appraisal report?
a. Abbreviated Form
b. Appraisal Report
c. Narrative
d. Restricted Appraisal Report
29. Forming conclusions regarding value from the various indications produced in the sales comparison approach analysis always requires the appraiser to employ
a. another method for support.
b. arithmetic averages.
c. logic and reasoning.
d. subjective decisions.
30. What is the depreciated improvement value?
1,600 Sq. Ft.; Replacement Cost: $62.00 per sq. ft.
Effective Age: 15 years; Remaining Economic Life: 45 years
a. $66,100
b. $74,400
c. $79,400
d. $99,200
31. Which BEST describes crops planted on a large land tract by a tenant, which are considered personal property?
a. emblements
b. fructus naturales
c. subsurface rights
d. trade fixtures
32. Mortgage industry reporting form 2055 is being used in an appraisal assignment. According to the obligations integral to the form, the appraiser must complete all the following during the development process EXCEPT
a. analyze data from reliable public and/or private sources.
b. conduct an interior inspection.
c. inspect each of the comparable sales from the street.
d. report the analysis, opinions, and conclusions in the appraisal report.
33. Employ the allocation method to estimate the value of a subject site using information gathered from the subject's market.
Subject Improved Value: $330,000; Comparable Land Sale: $50,000
Comparable Improved Sale: $400,000
a. $27,225
b. $37,500
c. $41,250
d. $50,000
34. Identify the functional obsolescence.
a. broken A/C unit
b. clogged drain
c. inoperable faucet
d. no heating source
35. If a property’s effective gross income is $14,351.40 and vacancy is calculated at 6.2%, what is the potential gross income?
a. $15,200.00
b. $15,241.19
c. $15,267.45
d. $15,300.00
36. A comparable property now has a fireplace, which the subject has, that was added after the comparable’s sales transaction. Analysis indicates a $2,000 contribution for a fireplace. What adjustment is warranted in the sales comparison approach?
a. downward to the comparable
b. downward to the subject
c. no adjustment is necessary
d. upward to the comparable
37. In which situation would an appraiser identify a dominant tenant, but no dominant tenement?
- easement in gross
- gentrification
- non-conforming use
- pass-through zoning
38. How many acres are in a parcel described as the S½ of SW¼ of NE¼ of a section?
a. 10
b. 20
c. 40
d. 80
39. The term “purpose of the appraisal” is most related to the
a. fee to be charged to the service.
b. limiting conditions applicable to an assignment.
c. reporting method chosen by an appraiser.
d. type of value in an assignment.
40. An area consisting of one particular land use is known as a
a. block.
b. district.
c. neighborhood.
- region.
41. Which roof framing type will accommodate a vaulted ceiling?
a. joist and rafters
b. post and beam
c. sloped joist
d. truss roof
42. Which is an element of defining the problem in an appraisal assignment?
a. highest and best use
b. market analysis
c. reconciliation
d. relevant property characteristics
43. Superstructure is synonymous with
a. features of a building exceeding market standards.
b. portions of a building that are above grade.
c. structures that are equipped with high levels of technology.
d. superior quality materials and workmanship.
44. A vacant land parcel described as the NE ¼ of Section 17 is selling for $1,200 per acre. What is the sales price of the parcel?
a. $48,000
b. $96,000
c. $192,000
d. $768,000
45. The subject has a physical site size of 5,000 sq. ft. (50' x 100') and the zoning is restricted to one-story homes. Setback requirements require any structure to be 25' back from the curb. Can a house that is 4,500 sq. ft. be built on the site without a variance?
a. No, as the resulting site area is less than 4,500 sq. ft.
b. No, the structure, as described, is greater than 5,000 sq. ft.
c. Yes, as long as it is one story.
d. Yes, since 4,500 sq. ft. is less than 5,000 sq. ft.
46. If an appraiser has a reasonable basis to believe that a property condition is true, but he is not entirely certain, use of a(n) ______might be appropriate.
a. extraordinary assumption
b. hypothetical condition
c. jurisdictional exception
d. limiting condition
47. If a developer purchased a lot that measures 348’ x 1,000’ and the sales price was $5,000 per acre, how much did the developer pay?
a. $34,800
b. $37,395
c. $38,360
d. $39,945
48. If in an appraisal report, the stated effective date is prior to the date of the report, what type of opinion is being expressed?
- appraisal review
- hypothetical
c. prospective
- retrospective
49. The subject of an appraisal is a two-story dwelling with an exterior dimension of 22’ x 66’ and a full basement. Half of the basement is finished. What is the gross living area?
a. 1,452 square feet
b. 2,904 square feet
c. 3,630 square feet
d. 4,356 square feet
50. A general purpose building contains 36,000 cubic feet. The outside dimension of the building is 50' x 60'. In feet, what is the height of the building?
a. 10
b. 12
c. 16
d. 24