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It is based on the buildings effective age divided by its economic life. conditions of sale The duplex produces the highest value ($170,000). minus depreciation, plus indexed costs GLA includes _______________ but not _______________. shape . Real property appraisal reports may be written or oral. Fannie Mae does not have any requirements related to the remaining economic life of the property. VA investment Why does an appraiser need as much information as he can get about rental comparables? And appraisal could be done to the property in its "as is" contaminated condition or could be appraised under the _____ that the property is free of contamination. Actual age of property is 11 years. effective gross soft In addition to the requirements outlined in Chapter 60 of the Freddie Mac Multifamily Seller/Servicer Guide . The credibility of assignment results is always measured in the context of the _______________. forced warm air Most residences today require an electrical service that is a minimum of _____ amps. cost Multiple listing services can be utilized for gathering _______________. "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 . What is the depreciated value of the improvements by the age-life method, before including the site value? panelized quality type, definition A college student has two options for meals: eating at the dining hall for $6 per meal, or eating a Cup O Soup for$1.50 per meal. 2. US P a P requires a prior sales history of _____ years for the _____. What is the mode of the GRMs? potential net a. full interest The simplest quickest and least accurate method of estimating costs is the _____ method. "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 _______________. $155,000 as single home site B. Extraction Method. replacement cost Physical deterioration and functional obsolescence, external obsolescence income-producing or suitable for income production 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. Parging is used on which kind of foundation wall? In this case, per HUD, the most important consideration in estimating REL is the estimated time the current improvements are expected to contribute value to the. It has 2,030 square feet of GLA. tenancy by the entirety, The most common unit of comparison for land in rural areas is price per _______. easements 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. income-producing or suitable for income production, The ground rent capitalization method should only be used when appraising a property that is. A _______________ home has a permanent steel chassis, wheels and axles. The appraiser estimates the total age, effective age, and remaining life of the improvements. $85,000 X 2 = $170,000. Comparable houses with air conditioning, rent for $1,100 per month. The range is the difference between the high and the low. Fannie Mae customers! What is the value of the improvements on a modified age-life basis, before including the site value? What is the range of the GRMs? Functional obsolescence, physical deterioration highest and best use analysis, "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 all of the above, Fannie Mae says the appraiser must base his or her analysis and any adjustments to comparable sales on Income can be capitalized into value by dividing by a _____ or multiplying by a _____. expected remaining economic, remaining economic 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. Economic life is the expected period of time during which an asset remains useful to the average owner. depreciated cost, plus site value mortgage rates $375,000 - $70,000 = $305,000 (land value). GRMs are derived by dividing the __________ by the property's ___________ at the time of sale. type, scope Today the _______________ technique of site valuation is used primarily in highest and best use analysis. What is the land value? A property contains 3.2 acres and is worth: A. Time-adjusted internal rate of return - 14%; Cost of capital of Bayan Muna - 16%; The table of present values of P1 received annually for 8 years has these factors: at 14% = 4, at 16% = 4. the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair: R E C O N I L I A T I O N Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting effective age, total economic life It is easy to use and easy to explain to a client. The "summation approach" is another name for the _______________ approach. "The total period a building lasts or is expected to last" is the definition of _________ life. His weekly food budget is $60. a. the total amount to be charged (debited) to expense over an asset's useful life. life estate The current cost index is 201.8. $305,000 Problem 1. (888) 867-7620. 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. modified replacement. Inflation is high, so why arent mortgage rates higher? See how your life expectancy compares to others and what steps you can take to live a longer life. extraction and allocation. What type of property is most likely to be appraised using a gross income multiplier? slope Which cost estimating method is the most detailed and time-consuming to develop? Soil mass produced by the natural resources conservation services are based on: A factory built house constructed in compliance with the standards of the applicable region, state or local building code is a blank home. Which entity produces the most commonly used land appraisal report form? Which would NOT be a sub-step in defining the problem? Who wants to make a 30-year mortgage on a residential property if the physical structure isnt expected to last more than 20 years? Single Family Exterior Only(FNMA 2055), $500. Which site evaluation methods should only be utilized when the subject property is income producing thing by nature? Accordingly, it is appropriate for PPE Corp to record depreciation commensurate with one year of economic life, or $3,000 ($32,000 original cost less $2,000 original estimated salvage divided by the economic life of 10 years) over the remaining year of useful life. published tables of adjustments This 25% figure represents. It sits on a lot worth $65,000. 186 (thousands) X $6.45 = $1,199.70. "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. A house cost $395,000 to build new. In closing, I feel it is important for appraisers to understand how clients are using the information provided in reports. $235,000 2,030 = $115.76. split-level What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? A deed could provide all of the following information about a property EXCEPT, buildable unit Price per Buildable Unit. Estimated net annual cash inflows for each of the 8 years - P81,000. Saudi Arabia Saudi Arabia,[c] officially the Kingdom of Saudi Arabia (KSA),[d] is a country on the Arabian Peninsula in Western Asia. Name of the licensed appraiser, if applicable. replacement, Today the _______________ technique of site valuation is used primarily in highest and best use analysis. $192,000 + $60,000 - $252,000. (For best result, pose your search like a question. Each appraisal report must contain two dates, the _____ and in the _____. An estimate of remaining economic life is required by. qualitative Disposal value after 8 years - Zero. In highest and best use of analysis, which criterion is applied last? $1,186.20 The first step in the valuation process is: An appraiser counters an underground Storage tank. Is the building's _____ life. Drilled wells need to use __________ until the drilling enters ___________. The cost approach is most applicable in situations where the site value is not well supported. Which of these elements in the adjustment process does not apply primarily to commercial or income producing properties? Subdivide it; 8 X 70,000 = $560,000. $1,046,720, $1,046,720 percolation In a market value appraisal, every comparable sale should have been sold in an _______________ transaction, with no undue _______________. If the property does not warrant a long-term What is the indicated adjustment for change in market conditions, per month? Which cost estimating method is the most detailed and time-consuming to develop? Hence: . direct USPAP says a cost approach must be developed when it is necessary for. Physical deterioration and functional obsolescence, external obsolescence. $305,000 X .231 = $70,455. 201.8 133.6 = 1.51. 1 greenfield determine the scope of work, Depreciation is defined as "a loss in property value from _________. " By the capitalized value method, how much is the depreciation attributable to the lack of air conditioning? 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. reverse capitalization Quick Start; Products. Zoning allows it to be subdivided into 8 lots and it is estimated that each lot could sell for $50,000. brownfield, "The amount an entrepreneur expects to receive for his or her contribution to a project" is the definition of It is common in appraisal reports to include a map that shows the location of the _______________. "Data that relates to the four forces that affect real property valuessocial, economic, governmental, and environmental forces" is the definition of. condominium effective gross income The REL is the remaining expected economically productive life span of the structure. reproduction, A partial estate could be created by the existence of all the following EXCEPT Economic life can never be longer than the physical life, but may be and frequently is shorter. The appraiser estimates that $61,000 of income is attributable to the building. land residual What is the highest and best use? the URARForm can be used to report the appraisal of all of the following property types except: A deed could provide all of the following information about a property except: All of the following could be sources of specific data except: The blank method has good application and evaluating land in rural areas and an older, urban areas. $197,450 2,448 = $80.66, "The type of data and the extent of research and analyses" is the definition of. Which would not be a sub step and defining the problem? A single parcel is valued at $450,000. True or false? An appraisal Report must contain sufficient information to allow _____ to understand the scope of work. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 80%. Lessee Corp is required to pay $500 per month for three years, so the total lease payments are $18,000 ($500 36 months). Segregated cost method is another name for the _________ method. It is 12 years old and has an estimated remaining economic life of 38 years. In the sales comparison method, quantitative adjustments are based on dollars, while qualitative adjustments are based on percentages. Modified Age-Life Method. $625,000 X .20 = $125,000 depreciation. Two or false: every difference between a subject property and a comparable sale requires an adjustment. ranch subject property assessment Which type of home is built to meet the HUD code? When an asset is no longer useful to its owner, then it is said to be past its economic. That is the most complex and involves discounted cash flow analysis. The method that estimates land value based on a percentage of the total property value is the _______________ method. Certain classes of assets, like machinery, come with an expiration date. 5% 10 months = .5% per month. What cost estimating method has he employed? An estimate of remaining economic life is required by . $305,000 X .231 = $70,455. Footings need to be _______________ below average frost penetration levels. workflow diagram, If a property is assessed at $134,000 and the rate per thousand is $9.55, how much are total property taxes? retail stores, Basic Appraisal Procedures Ch. If you still have Technical Support questions, __________ occurs within a property; while _________occurs off the site. entrepreneurial incentive- expected profit. It is worth $450,000 as it is in one parcel. A ___________ home has a permanent steel chassis, wheels and axles. square foot Those are the correct limits. The _______________ method has good application in valuing land in rural areas and in older, urban areas. "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. The Estimated Remaining Economic Life will automatically be calculated based on the Effective Age of the property in all FHA and VA reports. $380,000 X .40 = $152,000 (building value). credible $3,250 It is common and appraisal reports to include a map that shows the location of the: Map stats is a feature of which agency federal website? capital Market condition adjustments should always be calculated from the time of the ________ to the ___________. . 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. forced warm air. $350,000 - $45,000 = $305,000. 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. When determining how much to adjust for a two car garage and the sales comparison approach, which valuation as a primary importance? A _______________ home is built in accordance with the HUD Code. stick-built Yes, it is required by VA and FHA. physical causes The method that treats the land value as a percentage of the total value is the __________ method. The cost approach formula states that reproduction or replacement cost new _______________, _______________ equals property value. The cost approach formula states that ______________, minus depreciation, _______________, equals property value. bundle of rights Do you think the total benefits outweigh the total costs, or vice versa? depreciated cost unit in a PUD. improvements only, A short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure. plus depreciation, plus site value A 5 year old water heater with an expected life of 12 years and a replacement cost of $825 will have experienced depreciation of $__________. one-unit with an accessory unit any cause direct costs How much income does yield capitalization use? leasehold interest What would be the impact on the average farmer? In your sales comparison grid, you made adjustments of +$5,000, +$3,500, -$2,500, + $8,000, and -$4,000. Real estate property- 935 Bianca Court- current assessed value for year 2021= $379,000. To accomplish this, HUD suggests the appraiser consider: -How the property fits into its surroundings -Trends in the neighborhood -The physical condition of the property. sales comparison When I toss four coins, there are six different outcomes that represent the event of 222 heads and 222 tails. Which site valuation methods should only be utilized when the subject property is income-producing by nature? gross rent multiplier. 8,000 square foot residence To estimate physical deterioration, an appraiser can compare the estimated remaining economic life of the hotel's FF&E to its total economic life. potability land residual and ground rent capitalization The net operating income was verified as $294,640. $126,000 $1,200 = 105. Drilled wells need to use __________ until the drilling enters ___________. The Remaining Economic Life is the estimated number of years that an improvement will continue to contribute to property value. taxes and assessment, If an appraiser uses a cost manual to estimate cost new for a property, the result is "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. In the sales comparison approach, sales data on __________ sales should be collected. what is the value of the improvements on a modified age-life basis, before including the site value? Overall Capitalization Rate (RO). subdivision development. $340,000 - $95,000 - $10,000 = $235,000. Segregated cost method is another name for the blank method. cost PRESS RELASE _ Nexans steered for growth Steady EBITDA performance and net income turnaround unlocking value creation Outperformance in ROCE and free cash flow, 10-year low Net Debt, setting strong financial footingNexans transformation anchored In full-year 2020, amidst the global pandemic: Resilient standard sales1 of 5,713 million euros, down by -8.6% organically2Steady EBITDA3 of 347 . The Age-life Method- This method is the simplest and most common method of estimating depreciation. information from other Fannie Mae published sources. If a cost manual is used, the result is _____________ cost. A property has a cost new of $350,000. "Items of information on value influences that derive from social, economic, governmental, and environmental forces and originate outside the property being appraised" is the definition of. The manufactured home construction and safety standards is also known as the: Ranking analysis is a _____ method for estimating site value. anticipation If a property is assessed at $186,000 and the rate per thousand is $6.45, how much are total property taxes? The relationship or ratio between the sale price or value of a property and it's periodic gross rental income is the definition of: Modular homes are constructed to meet blank requirements. (108.8 + 109.8) 2 = 109.3. $152,000. Site by, The new, must-have technology thats tackling lendings greatest challenges. direct indirect reproduction replacement direct GLA, interior An appraiser uses five comparable sales, and gets a differing indication about you from each one. Capitalization of Income Loss. The first step in the valuation process is Which would not be a sub-step in defining the problem? cost/benefit yield rate, The cost approach formula states that reproduction or replacement cost new _______________, _______________ equals property value. -Rehabilitation is not feasible. What is the median of the GRMs? 201.8 133.6 = 1.51. $3,750. "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. log home What is the first step in the sales comparison approach process? GBA, exterior, Which of the following would NOT be general data? To make sure that accurate and appropriate comparisons are made. cape cod 109.2 - 84.5 = 24.7. The reproduction cost of the improvements today would be $350,000 and the total depreciation is estimated to be 75%. A short-lived item is a building component with an ___________ life that is shorter than the ___________ life of the entire structure. A square contains enough shingles to cover 100 square feet. 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 index capacity life, physical life, economic life). define the problem Market conditions adjustments are referred to buy some appraisers as blank adjustments. 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. A single unit residence sold for $126,000. There is no mode as each number appears just once, expected remaining economic, remaining economic. vacant lots 8. A dwelling has a reproduction cost of $625,000. direct The current cost index is 221.8. $305,000 - $70,455 = $234,545. Share this answer Remaining Economic Life Fannie Mae does not have any requirements related to the remaining economic life of the property. & Insights, Pricing & United Nations, What type of framing became popular in the 1800s with the advent of the steam-powered sawmill? $250,000 - $152,000 = $98,000 (land value). risk rate determine the scope of work, Which would NOT be a form of concurrent ownership? The total remaining economic life of a home is calculated by subtracting the effective age of the home from its total economic life. Which type of depreciation occurs off the site? 1. __________ occurs within a property; while _________occurs off the site. general data only The cost to cure deferred maintenance items is $670. The Remaining Economic Life of an improvement is the total economic life minus its effective age. The ground rent capitalization method is most applicable to appraising a ______ interest. Princess Victoria, the fourth daughter of the King, has undergone an operation for appendictis. wood $294,640 $2,350,000 = .125 or 12.5%. Get answers to your Selling Guide & policy questions with Fannie Mae's AI-powered search tool. The REL is the difference between the estimated total economic life and the estimated effective age. Physical deterioration, functional obsolescence A short-lived Item is a building component with an _____ that is shorter than the _____ life of the entire structure. HUD property tax rates, When describing roofing shingles, a "square" contains __________ square feet. $560,000 - $65,000 = $495,000. 12 60 = .20 or 20% depreciation. 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 remaining economic life is used in the Age-life Method of estimating depreciation. The other three are common adjustments, but quality adjustments would be made to improvements - not land. net leasable, A house is rented for $1,050 per month, but lacks air conditioning. 48 Q An old gas station on a good corner location in a desirable older neighborhood recently sold for $375,000. What is another name for "indirect costs"? 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. any of the above, A one-and-a-half-story house is commonly known as a DU Journeys' incremental borrowing rate is 8%. Add them up and divide by 7 = 96.3. Comparable houses with air conditioning, rent for $1,100 per month. When it cannot do what it is required to do . vinyl $50 X 75 = $3,750. assessment rolls This type of data is different for each appraisal assignment. 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 _____ cost. An estimate of remaining economic life as required by: The most complex method of sight valuation is the blank method. temporary improvements, "The type of data and the extent of research and analyses" is the definition of grayfield log frame both general and specific data 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 Each of these is a variable expense EXCEPT. 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? Its land value is $60,000. Hot Water Heat. Contractors are overhead and profit is an example of _____ costs. Agriculture encompasses crop and livestock production, aquaculture, fisheries and forestry for food and non-food products.