In computing the square footage of a single-family home, an appraiser measures the external dimensions of the gross living area, which includes all of these EXCEPT
gross living area (GLA) for single-family homes by measuring EXTERIROR ABOVE-grade finished areas only.
In computing the square footage of a single-family home, an appraiser measures the external dimensions of the gross living area, which includes all of these EXCEPT
A)
a finished basement
Incorrect Answer
unselected Option A is a finished basement is incorrect
B)
a laundry room.
Incorrect Answer
unselected Option B is a laundry room. is incorrect
C)
an extra bedroom.
Incorrect Answer
unselected Option C is an extra bedroom. is incorrect
D)
a patio.
Correct Answer
D
garage, porch, patio, OR BASEMENT ALSO EXCLUDED.
A certified appraiser is required for which of these real estate transactions?
Comparable market analysis (CMA)
B)
Federally related financial transaction
C)
To determine list price
D)
Broker price opinion (BPO)
Federally related financial transaction
A certified appraiser is not required to perform a BPO or a CMA, which are often done by real estate licensees to help a seller determine list price.
A formal estimate of a property’s market value, based on established methods and using a licensed professional, is performed by
A)
a real estate broker.
B)
a real estate counselor.
C)
a home inspector.
D)
a real estate appraiser.
d
The general rule of thumb when an agent or an appraiser measures a building to compute the gross living area (GLA) is
A)
the area above and below the ground is used.
I
B)
only the exterior area is used.
C)
only the area above the ground is used.
D)
only the area below the ground is used.
C)
it is talking about which areas count, not where to put the tape.
On exam logic, read that as: “Only above‑grade living area counts in the total.”
“Exterior areas are not used to compute GLA,”
the intent is: exterior spaces (like patios, decks, porches) are not part of GLA — not that exterior wall measurements are forbidden.
In the income approach, all of these are considered when calculating net operating income (NOI) EXCEPT
A)
real estate taxes.
B)
management fees.
C)
debt service.
D)
utilities.
c
Debt service (mortgage payments of principal and interest)
An appraiser has been employed to estimate the market value of a parcel of vacant land. The resulting appraisal report would NOT include reference to
A)
the physical dimensions of the parcel.
B)
the most probable price the parcel will bring.
C)
the highest and best use of the parcel.
D)
the listed price of the parcel.
d
An appraiser using the gross rent multiplier (GRM) would consider which of following?
A)
Market value and potential rent income
B)
Rental income and market price
C)
Market price of comparables and adjustments to the subject
D)
Capitalization and net operating income (NOI)
C)
The GRM times the rental income will determine the properties market value or anticipated sales price.
Title XI of the Financial Instructions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) regulates
A)
home inspection companies.
B)
real estate licensees.
C)
appraisers.
D)
attorneys.
c
In the cost approach to value, the appraiser makes use of
A)
the estimated replacement cost of the building.
B)
the sales prices of similar buildings in the area.
C)
the owner’s original cost of the building.
D)
the assessed value of the building.
a
The purpose of an appraisal is to
A)
set the market price of a property.
B)
set the amount of earnest money the seller should accept from a purchaser.
C)
determine the projected income of a property.
D)
estimate the market value of a property.
d
They do not determine the market price, which is the price for which the property actually sells, which may be higher or lower than the appraised value or estimated market value.
From the reproduction or replacement cost of a building, the appraiser deducts depreciation, which represents
A)
the costs to modernize the building.
B)
the remaining economic life of the building.
C)
the loss of value due to any cause.
D)
the remodeling costs to increase rentals.
c
All of these factors would be important in comparing properties under the sales comparison approach to value EXCEPT
A)
differences in original cost.
B)
differences in appearance and condition.
C)
differences in size of the improvements and land.
D)
differences in dates of sale.
Original cost (what the seller paid years ago or built it for) is irrelevant to what buyers will pay now—it’s a cost approach factor, not market comps.
b
A comparative market analysis (CMA) or a broker’s price opinion (BPO) would be acceptable for all of these EXCEPT
A)
setting the selling price of a home.
B)
determining conventional loan value.
C)
using to determine what to offer for a property.
D)
setting the estimated rent values.
b
Reconciliation is an appraisal term used to describe
A)
the appraiser’s analysis and weighing of the findings of all three appraisal approaches.
B)
the method used to determine the most appropriate capitalization rate for a property.
C)
an average of real estate values for properties similar to the subject property.
D)
the appraiser’s determination of a property’s highest value.
a
An appraisal differs from a comparative market analysis (CMA) conducted by a broker in that an appraisal is based on an analysis of properties
A)
within a broader geographic area.
B)
that have actually sold.
C)
currently on the market.
D)
whose listings have expired.
b
To find the value of a property, if the net operating income (NOI) and the capitalization rate are known, an appraiser using the income approach to value would
A)
multiply the NOI by the capitalization rate.
B)
multiply the effective gross income (EGI) by the capitalization rate.
C)
divide the NOI by the capitalization rate.
D)
divide the capitalization rate by the NOI.
d
A homeowner constructs an eight-bedroom brick house with a tennis court, a greenhouse, and an indoor pool in a neighborhood of modest two-bedroom and three-bedroom frame houses on narrow lots. The value of this house is MOST likely to be affected by what principle?
A)
Substitution
B)
Contribution
C)
Progression
D)
Regression
d
Larger lavish homes in a modest neighborhood will be drawn down in value by the modest, less lavish homes. Under progression, the value of a modest home would be higher if it were located among larger, fancier homes. The principle of substitution states that value is determined by what the buyer can find to buy that is similar or equal to the property under consideration. The principle of contribution is used to determine the value of adding improvement to the property.
A smaller home is surrounded by larger, more expensive homes. The value of the smaller home will MOST likely
A)
be anticipated to increase for the first five years.
B)
decrease because of the larger surrounding properties.
C)
increase because of the larger, more expensive properties.
D)
not be affected by surrounding properties.
c
Which approach to value would require the value of the land to be calculated separately from the value of the improvements?
A)
None of the approaches
B)
Sales comparison approach
C)
Cost approach
D) income approach
c
The income approach as used by an appraiser makes use of which of these?
capitalization
Depreciation
Appreciation
Equalization
Capitalization
The owners of the smaller model of houses in the neighborhood may find that the values of their homes are affected by what principle?
Regression
progression
Competition
increasing returns
progression
