779. If an appraiser is appraising a special purpose property he would probably use the:

1. 779. If an appraiser is appraising a special purpose property he would probably use the: • Market data approach; • Cost approach; • Income approach; • Land residual approach.

2. 779. If an appraiser is appraising a special purpose property he would probably use the: • Market data approach; • Cost approach; • Income approach; • Land residual approach. Cost approach – Special purpose properties

3. 445. Which of the following approaches to value estimate tends to set the upper limits of value: • Market comparison; • Replacement; • Income; • Comparable sales.

4. 445. Which of the following approaches to value estimate tends to set the upper limits of value: • Market comparison; • Replacement; • Income; • Comparable sales. Upper limits of value – Cost (Replacement) Approach

5. 724. When an appraiser contrasts the phrase reproduction cost and the phrase replacement cost, replacement would be more closely associated with which of the following concepts? • The cost to replace a building with another building which would use the land to its highest and best use; • The original cost to replace a building; • The present cost to replace the building with an exact replica; • The present cost to replace the building with another building having the same utility.

6. 724. When an appraiser contrasts the phrase reproduction cost and the phrase replacement cost, replacement would be more closely associated with which of the following concepts? • The cost to replace a building with another building which would use the land to its highest and best use; • The original cost to replace a building; • The present cost to replace the building with an exact replica; • The present cost to replace the building with another building having the same utility. Replacement – Same utility

7. 446. In the appraisal of residential property the cost approach is most appropriate in the case of: • New property; • Middle-aged property; • Old property; • Multi-family property.

8. 446. In the appraisal of residential property the cost approach is most appropriate in the case of: • New property; • Middle-aged property; • Old property; • Multi-family property. Cost approach – New property – New, not old

9. 447. Usefulness of the cost approach would be limited when: • An appraiser is appraising a new structure appropriate to its site and use; • There exists an unusually inactive real estate market; • Appraising for proposed construction; • Appraising an old structure with many functional deficiencies.

10. 447. Usefulness of the cost approach would be limited when: • An appraiser is appraising a new structure appropriate to its site and use; • There exists an unusually inactive real estate market; • Appraising for proposed construction; • Appraising an old structure with many functional deficiencies. Cost approach – New property – New, not old

11. 449. The quantity survey method; unit-in-place method; and the square or cubic foot methods in real estate appraisal most directly relate to: • The cost approach; • The income approach; • The sales comparison approach; • All the above.

12. 449. The quantity survey method; unit-in-place method; and the square or cubic foot methods in real estate appraisal most directly relate to: • The cost approach; • The income approach; • The sales comparison approach; • All the above. Cost of construction – Quantity survey, unit-in-place, square foot (These relate to the cost approach)

13. 450. If an appraiser were appraising a residence built in 1910, which of the following would be used: • Cost of living index of 1910; • Original cost of materials in 1910; • Cost of living index which increased from 95 to 128; • Today's cost of reproduction less depreciation.

14. 450. If an appraiser were appraising a residence built in 1910, which of the following would be used: • Cost of living index of 1910; • Original cost of materials in 1910; • Cost of living index which increased from 95 to 128; • Today's cost of reproduction less depreciation. 1910 house – Current cost of reproduction

15. 748. “Capitalization” is a process used to: • Find the interest rate; • Convert income into value; • Establish the market value; • Determine the net income.

16. 748. “Capitalization” is a process used to: • Find the interest rate; • Convert income into value; • Establish the market value; • Determine the net income. Capitalization approach – Converts income into value

17. 453. In arriving at an effective gross income figure, an appraiser of income property makes a deduction for: • Real property taxes; • Repairs; • Vacancy; • Depreciation.

18. 453. In arriving at an effective gross income figure, an appraiser of income property makes a deduction for: • Real property taxes; • Repairs; • Vacancy; • Depreciation. Effective Gross Income – Deduct for vacancy

19. 455. Which of the following is not a proper charge in determining net income for capitalization purposes: • Vacancy and collection losses; • Maintenance expenses; • Management agent's fees; • Mortgage interest.

20. 455. Which of the following is not a proper charge in determining net income for capitalization purposes: • Vacancy and collection losses; • Maintenance expenses; • Management agent's fees; • Mortgage interest. Net income – Do not deduct interest

21. 654. Which of the following approaches to value would be most concerned with the present worth of the future potential benefits of the property: • Market data; • Income; • Summation; • Cost.

22. 654. Which of the following approaches to value would be most concerned with the present worth of the future potential benefits of the property: • Market data; • Income; • Summation; • Cost. Capitalization (Income) Approach – Present worth – Of future benefits

23. 725. In the capitalization method of appraising, the most difficult step is to: • Establish the gross income; • Establish the effective gross income; • Establish the net income; • Select a capitalization rate.

24. 725. In the capitalization method of appraising, the most difficult step is to: • Establish the gross income; • Establish the effective gross income; • Establish the net income; • Select a capitalization rate. Capitalization rate – Most difficult part

25. 756. When an appraiser wants to determine a capitalization rate, he may do so by the: • Band of investment method; • Summation method; • Market data (comparison) method; • Any of the above.

26. 756. When an appraiser wants to determine a capitalization rate, he may do so by the: • Band of investment method; • Summation method; • Market data (comparison) method; • Any of the above. Capitalization rate – Summation, comparison, band of investment

27. 898. When appraising a building which could be used either as a hardware store or as a post office, how would the appraiser adjust the capitalization rate: • The post office would demand a higher capitalization rate; • The post office would demand a lower capitalization rate; • The same capitalization rate would be used for both potential tenants; • The two rates could not be compared on the basis of use.

28. 898. When appraising a building which could be used either as a hardware store or as a post office, how would the appraiser adjust the capitalization rate: • The post office would demand a higher capitalization rate; • The post office would demand a lower capitalization rate; • The same capitalization rate would be used for both potential tenants; • The two rates could not be compared on the basis of use. Capitalization rate – Post Office – Lower rate

29. 774. If an appraiser was appraising a restaurant building, he would probably use which of the following appraisal methods? • Market data approach; • Cost approach; • Income approach; • All of the above.

30. 774. If an appraiser was appraising a restaurant building, he would probably use which of the following appraisal methods? • Market data approach; • Cost approach; • Income approach; • All of the above. Capitalization (Income) Approach – Restaurant

31. 459. The gross rent multiplier is arrived at by dividing: • Gross monthly rental by market value; • Gross monthly rental by selling price; • Sales price by gross monthly rental; • Value arrived at by gross monthly rental.

32. 459. The gross rent multiplier is arrived at by dividing: • Gross monthly rental by market value; • Gross monthly rental by selling price; • Sales price by gross monthly rental; • Value arrived at by gross monthly rental. Gross multiplier – Sale price divided by gross rent

33. 457. In estimating the value of Ryan's single-family dwelling, Appraiser Jones uses the same monthly gross rent multiplier that has been computed for comparable properties in the same neighborhood. The comparable properties each have a rent amount of $600 monthly and recent selling prices of approximately $78,000. Ryan's property is currently renting for $690 per month. Jones, therefore, would estimate the value of Ryan’s property to be: • $80,000; • $89,700; • $85,800; • $110,400.

34. 457. In estimating the value of Ryan's single-family dwelling, Appraiser Jones uses the same monthly gross rent multiplier that has been computed for comparable properties in the same neighborhood. The comparable properties each have a rent amount of $600 monthly and recent selling prices of approximately $78,000. Ryan's property is currently renting for $690 per month. Jones, therefore, would estimate the value of Ryan’s property to be: • $80,000; • $89,700; • $85,800; • $110,400. Gross multiplier – $89,700

35. 889. If the monthly gross income of a property is $2,400, and a gross rent multiplier of 10.72 is used, the estimated value of the property is: • $308,736; • $25,728; • $25,839; • $22,338.

36. 889. If the monthly gross income of a property is $2,400, and a gross rent multiplier of 10.72 is used, the estimated value of the property is: • $308,736; • $25,728; • $25,839; • $22,338. Gross multiplier – $308,736

37. 772. An appraiser would define depreciation as: • Realized recapture; • Loss in value from any cause; • Wear and tear of the improvements; • A loss in land value.

38. 772. An appraiser would define depreciation as: • Realized recapture; • Loss in value from any cause; • Wear and tear of the improvements; • A loss in land value. Depreciation – Loss in value from any cause

39. 461. When it was appraised, a single-family home was 15 years old. The average life of such buildings is 40 years. Because of excellent maintenance, an appraiser decides the age of the structure is 6 years. This is an example of the concept of: • Actual age; • Physical age; • Effective age; • Chronological age.

40. 461. When it was appraised, a single-family home was 15 years old. The average life of such buildings is 40 years. Because of excellent maintenance, an appraiser decides the age of the structure is 6 years. This is an example of the concept of: • Actual age; • Physical age; • Effective age; • Chronological age. Effective age – 15 years old – 6 years

41. 462. The time period during which a building earns sufficient income to justify its continued operation is a definition of: • Productive life; • Earning period; • Investment period; • Economic life.

42. 462. The time period during which a building earns sufficient income to justify its continued operation is a definition of: • Productive life; • Earning period; • Investment period; • Economic life. Economic life – Sufficient income

43. 465. Of the following factors, that which would not contribute to obsolescence is: • Wear and tear from use; • Out-of-date equipment; • Change of locational demand; • Misplacement of improvement.

44. 465. Of the following factors, that which would not contribute to obsolescence is: • Wear and tear from use; • Out-of-date equipment; • Change of locational demand; • Misplacement of improvement. Obsolescence – Not wear and tear

45. 633. Functional obsolescence might be attributed to each of the following except: • No air conditioning in a commercial building in a warm climate; • The proximity of obnoxious nuisances; • Outmoded or outlandish design; • Improvements which have lost their usefulness.

46. 633. Functional obsolescence might be attributed to each of the following except: • No air conditioning in a commercial building in a warm climate; • The proximity of obnoxious nuisances; • Outmoded or outlandish design; • Improvements which have lost their usefulness. Functional obsolescence – Not nearby nuisances

47. 864. In appraising a single-family residence, which of the following would be classified as a cause of functional obsolescence: • New zoning laws; • Inharmonious land uses; • A deteriorated driveway; • A one-car garage.

48. 864. In appraising a single-family residence, which of the following would be classified as a cause of functional obsolescence: • New zoning laws; • Inharmonious land uses; • A deteriorated driveway; • A one-car garage. Functional obsolescence – one-car garage

49. 698. A substantial difference in value between two properties that were built concurrently on adjoining lots of equally valuable land with construction and maintenance costs the same, would most likely be caused by: • Physical depreciation of one of the properties; • Economic obsolescence in the neighborhood; • Nonconforming uses opposite the properties; • Functional obsolescence within one of the properties.

50. 698. A substantial difference in value between two properties that were built concurrently on adjoining lots of equally valuable land with construction and maintenance costs the same, would most likely be caused by: • Physical depreciation of one of the properties; • Economic obsolescence in the neighborhood; • Nonconforming uses opposite the properties; • Functional obsolescence within one of the properties. Same building costs, Different values – Functional Obsolescence