REE 4103 EXAM 2 BLISS QUESTIONS
WITH VERIFIED ANSWERS
Functional ObsolescenceSuppose the subject is a three-story officebuilding that has no
elevator in a market that demands an elevator. The cost of the elevator if installed new
when built was $75,000, but the cost to install it today is $210,000. Similar properties
with the same problem in this market generally sell for $200,000 less than properties
with elevators. The improvement is 14 years old, and the physical depreciation would be
2% per year.What is the present value of the loss associated with not having an
elevator?
$200,000
$210,000
$75,000
None of the above or not enough information. - Answer-$200,000
Depreciation Bldg with a total cost of $700,000. It is 35 years old. Total useful life
expectancy of 100 years. The cost of deferred maintenance is $10,000. Short-lived
components include the boiler, roof cover, and floor covering. The cost to replace the
boiler is $40,000, the cost to replace the roof covering is $60,000, and the cost to
replace the floor finish is $20,000. There are no other short-lived items.What is the cost
new of all short-lived items.
$120,000
$60,000
$40,000 - Answer-$120,000
Cost Approach:Residence:2,000 square feet $100/sf cost to buildBasement:1,000
square feet $50/sf cost to buildGarage:750 square feet $75/sf cost to buildScreened
porch:400 square feet $25/sf cost to buidShort-lived items:HVAC $10,000 new effective
age of 5 years life expectancy of 25 yearsPlumbing Fixtures $20,000 new effective age
of 5 years life expectancy of 30 yearsLighting Fixtures $15,000 new effective age of 5
years life expectancy of 30 yearsRoof covering $12,000 new effective age of 5 years life
expectancy of 25 yearsCarpet/Vinyl $7,000 new effective age of 5 years life expectancy
of 15 yearsNo Deferred MaintenanceLong-lived items - effective age of 5 years life
expectancy of 70 yearsFunctional obsolescence - $5,000 in depreciation resulting from
bad floor planExternal obsolescence - None.Market Value of Land = $75,000The cost
new to construct the basement is:
$200,000
$50,000
$23,000
None of the above or no - Answer-$50,000
Depreciation Bldg with a total cost of $700,000. It is 35 years old. Total useful life
expectancy of 100 years. The cost of deferred maintenance is $10,000. Short-lived
components include the boiler, roof cover, and floor covering. The cost to replace the
boiler is $40,000, the cost to replace the roof covering is $60,000, and the cost to
replace the floor finish is $20,000. There are no other short-lived items.What is the
dollar amount of depreciation associated with deferred maintenance?
,$10,000
$60,000
$40,000
None of the above. - Answer-$10,000
To estimate its market value, the land under an improved property is best compared to
sales of vacant land that
Have the same or similar highest and best use
Have the same type of building on them (after the sale)
Show the maximum value for the subject property
Show the minimum value for the subject property - Answer-Have the same or similar
highest and best use
Price per front foot is
a physical unit of comparison
not as accurate as price per acre
rarely used in residential site analysis
an accurate guide to site marketability - Answer-a physical unit of comparison
You are asked to appraise a vacant building lot. The neighborhood is about 75% built
up. Most lots in the area are from 55 to 65 feet wide; the lot under appraisal is 60 feet.
Comparable sales indicate that lots are selling at $120 to $150 per front foot. What is a
good estimate of the price range for this lot?
$9,000 - $11,000
$7,200 to $9,000
$5,400 to $6,750
$6,600 to $11,250 - Answer-$7,200 to $9,000
Residential sites are often valued using
A price per square foot
A price per animal unit month
A price per room
A price per cubic meter - Answer-A price per square foot
The subdivision development analysis technique is
More accurate than a well-prepared sales comparison analysis
Less accurate than the allocation method
Is very applicable when the main criteria of value is the number of lots that can be
developed out of a parcel of land
, Is not an accepted technique for the valuation of land - Answer-Is very applicable when
the main criteria of value is the number of lots that can be developed out of a parcel of
land
Land can be valued by
Sales comparison, allocation, extraction, and abstraction
Sales comparison, land residual, ground rent capitalization, and determination
Sales comparison, land residual, allocation, and extraction
Highest and best use, sales comparison, and asset management - Answer-Sales
comparison, land residual, allocation, and extraction
In the subject property's neighborhood, improved properties are selling for prices in a
range of $140,000 to $160,000. Research reveals a typical land value-to-total property
value ratio of 20%. What is the range of value for a similar site in this neighborhood?
$14,000 to $16,000
$16,000 to $20,000
$22,000 to $25,000
$28,000 to $32,000 - Answer-$28,000 to $32,000
Land is always valued considering
Its highest and best use as improved.
Its highest and best use as though vacant.
The improvements thereon
The likelihood of conversion to commercial zoning - Answer-Its highest and best use as
though vacant.
The land valuation technique that relies on an analysis of ratios of land value to property
value is
Allocation
Extraction
Interpolation
Land residual - Answer-Allocation
If the site represents 40% of the total value in a particular neighborhood, how much land
value would be allocated from a $200,000 sale of a single family home?
$120,000.00
$8,000.00
$80,000.00
$200,000.00 - Answer-$80,000.00
Units of comparison
