REE 4103 EXAM 1 QUESTIONS WITH COMPLETE SOLUTIONS
A house built in 1965 and appraised in 1994 should have - Answer-a chronological (actual) age of 29 years
A house has floor coverings that are four years old. Decorators in this area indicate that carpets of similar quality last about 10 years b...
A house built in 1965 and appraised in 1994 should have - Answer-a chronological
(actual) age of 29 years
A house has floor coverings that are four years old. Decorators in this area indicate that
carpets of similar quality last about 10 years but typically go out of style after only six.
What is the value of carpets with a reproduction cost of $5,000 - Answer-(4/6) x $5,000
= $3,333.33
A property sold for $125,000 in a cash sale. It was 12 years old and had a site value of
$30,000. The reproduction cost of the building improvements was $102,350. What is the
amount of depreciation overall - Answer-
Sale Price: $125,000 - Answer-
Less Land Value: - 30,000 - Answer-
= 95,000 depreciated value of improvements - Answer-
- Answer-
102,350 cost new of improvements - Answer-
- 95,000 depreciated value of improvements - Answer-
= $7,350 total depreciation in dollars - Answer-
$7,350 / $102,350 = - Answer-7.18%
- Answer-
- Answer-
A property sold recently for $87,000. The site value is $14,000. The building has an
effective age estimate of 21 years, and the estimated replacement cost is $95,000.
What is the indicated average annual depreciation rate - Answer-
87,000 - Answer-
- 14,000 - Answer-
, = 73,000 depreciated value of improvements - Answer-
95,000 - Answer-
- 73,000 - Answer-
= 22,000 total depreciation in dollars - Answer-
22,,000 = 23.16% - Answer-
23.16% / 21 years = - Answer-1.10% average annual depreciation rate
- Answer-
A residential property that is adjacent to an active and very noisy railroad corridor
probably suffers from - Answer-external obsolescence
A very expensive feature that is not recognized in the market at its physically
depreciated cost because it is too nice has - Answer-superadequacy
Accrued depreciation can be defined in appraisal terms as - Answer-a total loss of value
from all causes
All of the following are accepted classifications of accrued depreciation for appraisal
purposes EXCEPT - Answer-
An example of a superadequacy is - Answer-an extra 50 feet of roof that you don't need
An example of a superadequacy is - Answer-an oversized walk in closet (something that
isn't typcal of other houses in the market)
An improvements remaining economic life is - Answer-
Curable functional obsolescence is - Answer-the result of either a deficiency or an
excess
Curable physical deterioration is - Answer-items (deferred maintenance) that a prudent
purchaser would anticipate correcting immediately upon acquisition of the property
Curable physical deterioration refers - Answer-to items (called "deferred maintenance")
that a prudent purchaser would anticipate correcting immediately upon acquisition of the
property
Economic life refers to - Answer-the period over which improvements to real estate
contribute to the value of the property
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