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10 Cards in this Set
- Front
- Back
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Maria, a single mother of three, has been saving to buy the family's first home. Her budget is limited, but there is a home she can easily afford on the market. Unfortunately, there have been zoning changes in the area, and a twenty-four hour convenience store is located across the street. Is this deterioration curable or incurable? |
Incurable |
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Mrs. Jenkins has lived in her little 1940s cottage for forty years. Her home is immaculately maintained; it has a beautiful, well-manicured garden, and is just as lovely inside as outside. Unfortunately, the same cannot be said for the rest of her neighborhood. Other neighbors have let their properties go downhill. There is absolutely no curb appeal to any of the other homes in her neighborhood. Mrs. Jenkins' neighborhood is definitely in decline. Which type/types of depreciation applies/apply? |
Economic, Environmental, or External Obsolescence |
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Shanta, a property manager of a retail center, is using the Income Capitalization Approach in trying to project future earnings for the partners who own the center. She first estimates the annual potential gross income, subtracts an appropriate allowance for vacancy and collection losses to arrive at a gross income, deducts operating expenses (including debt service and mortgage payments). This gives her the Net Operating Income. She then applies a capitalization rate to the net income to determine the value. Did she use the correct steps? |
No, when Shanta was deducting operating expenses, she included debt service and mortgage payments when they shouldn't have been included. |
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The cost approach to value may be derived by: |
Total Land Valuation + Depreciated Value of Building = Value of Property Cost Approach |
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Judy and Xavier are planning a very large addition to their home. The kitchen will be doubled in size with a new hearth room, and a large new master suite will complete the renovation. They live in a neighborhood of houses in the $500,000 range. This addition will change the appraisal value of their home substantially. Which principle of value applies? |
Contribution |
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A local school has been destroyed by fire. Nothing has been salvaged and the school will have to completely rebuilt. What are the three methods of determining the cost of rebuilding? |
Square Foot Cost; Unit in Place; and Quantity Survey Method |
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Which of the following equations is the correct application of the capitalization rate? |
Net Operating Income divided by Capitalization Rate = Value |
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Which of the following is not a level of licensing for real estate appraisers? |
Certified Specialized Real Estate Appraiser |
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An appraiser is appraising a property that was built 65 years ago. The home has wonderful architectural charm, hardwood floors, and beautiful original molding, but it also has tiny bathrooms, and the closet space is nonexistent. Which type/types of depreciation applies/apply? |
Functional Obsolescence |
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Jose has heard rumors that a zoning change will be taking place involving a piece of undeveloped sale property. Jose buys the property in hope the zoning change will take place, making the property much more valuable on the market. Which principle of value applies? |
Anticipation |
