RE Appraisal Exam 3 UArk

The income approach is most generally used when

income is the primary benefit of ownership

Income capitalization often applies the formula:

Value = income / rate

Common operating expenses are categorized as

fixed, variable, replacement reserves

Contract rent could be what ?

higher, lower, or equal to market rent

Effective gross income is defined as

potential gross income - vacancy/collection less

Which of the following should be considered when picking the gross income multiplier? Location, size/type of units, expense ratio?

all of the above

Under one kind of lease, the tenant pays a minimum rent. Any amount over the minimum rent is called?

overage rent

If the annual gross income multiplier is 8 and the monthly rent is $5000, what is the indicative value of the subject property?

$5000 x 12 months x 8 = 480,000

In the income approach, net income is defined by

EGI - operating expenses

discounted cash flow is an example of

yield capitalization

weighted average formula

use adjusted sale price x the weight and round to the nearest thousand

What are the commonly recognized methods for capital recovery?

straight line, sinking fund, annuity

in an appraisal process the reconciliation process includes all the except

considering an average

The applicability of any approach is dependent upon

all of the above

URAR is a

form report used by lenders

USPAP requires

who inspected the property and any extraordinary assumptions

In a small income property which of the following should be classified as intangible

opportunity to apply skills

How much is on deposit in a savings account if you earn $300 in dividends with a 5% rate?

300/.05=6000

What is the PGI of a fourplex with $450 market rent?

$450 x 4 x 12= 21,600

What is the probable value with a gross income of 80,000 and a GIM of 8.5?

80,000 x 8.5 = 680,000

When deriving GIM from recent sales, which should be used if no rent control is in effect?

market rent

in REF, recapture is earmarked for?

original investment - payoff on principal

which income capitalization technique is simplest and most reliable?

direct capitalization

Cash flow is defined as:

net income - debt service

an appraiser's opinion of highest and best use is required when ?

in every appraisal assignment in all market value appraisals

the reconciliation helps the appraiser do what?

arrive at a conclusion of value

It is recommended that the appraiser should?

perform a general review of the completed work

the appraiser should check for consistent use, this procedure is part of the:

technical review

the reconciliation process weighs the:

all of the above

whether an appraisal report or restricted report is used is dependent on all of the following except?

the date of value

USPAP has been

all of the above

as used in an appraisal all costs estimates relate to?

typical cost on date of value

age like method of accrued depreciation suggests that

annual loss proportion to total life expectancy

of the four methods of estimating costs, which is the most used by appraisers?

comparative square foot method

contrast to reproduction cost, replacement cost refers to

the cost of a building that will serve the same purpose as the one being appraised

per USPAP, an appraiser must save their work files for a minimum of?

5 years

in a ___ project, each is exclusively owned but the land underneath is owned in common with the others

condominium

the owner's interest in a leased property

lease fee