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REE 4103 Exam 2 Questions With Revised
Answers
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? - answer✔✔$28,000 to
$32,000
Land can be valued by - answer✔✔Sales comparison, land residual, allocation, and extraction
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? - answer✔✔$7,200 to $9,000
Residential sites are often valued using - answer✔✔A price per square foot
The subdivision development analysis technique is - 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
Price per front foot is - answer✔✔a physical unit of comparison
The land valuation technique that relies on an analysis of ratios of land value to property value is
- answer✔✔allocation
Land is always valued considering - answer✔✔Its highest and best use as though vacant.
To estimate its market value, the land under an improved property is best compared to sales of
vacant land that - answer✔✔Have the same or similar highest and best use
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? - answer✔✔$80,000.00
Physical units of comparison are a substitute for adjusting for: - answer✔✔size
An open market transaction would not be one: - answer✔✔Sold to a relative
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The principle of _____________ states that a buyer will not pay more for a site than for another
equally desirable one: - answer✔✔substitution
Units of comparison - answer✔✔Are items that represent a breakdown of the price based on a
significant variable
Property sale prices - answer✔✔Are negotiated between buyers and sellers
For a property to be considered as a comparable: - answer✔✔It must be a competitive property
It must be an open market transaction
Current listings that have been exposed to the market for a reasonable time - answer✔✔Tell the
appraiser what the subject's market value cannot exceed
Which approach is usually the most applicable for appraising residences? - answer✔✔sales
comparison
Which approach would be best to use when appraising a 15-20 year old house? - answer✔✔sales
comparison
Comparable sales that require no adjustment to the subject are usually sales: - answer✔✔in new
developments with nearly identical properties
Comparative analysis is - answer✔✔A general term used to describe the process by which
qualitative or quantitative techniques are used to derive a value opinion in the sales comparison
approach
Valuation assignment for the subject property is for both the building and land.· A Comparable
Office Bldg owned and sold separately from its site (land), which is subject to a 99-year ground
lease.
· The comparable 80,000 sf bldg sold (separately from the land) for $4,000,000, or $50/sf.·
Assume the annual ground rent is $250,000, which is consistent with the market. Market Land
Capitalization rate is 11%.If no other adjustments were made except for the value of the land,
what would be the final adjusted sales price of this comparable? - answer✔✔$6,272,727.27
In the same market, a 12,000 sf shopping center with similar characteristics sold for $323,000
five years ago, and another 12,000 sf property sold last year for $365,000.What is the average
annual change per unit (sf) for those comparable properties? - answer✔✔$0.87/sf
Comparable sale sold for $150,000 with down payment of $30,000 · Seller financed mortgage
for a 30-year term @ 7% interest compounded monthly.
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· Homes in area are typically held for 30 years
· Market derived interest rate is 9% compounded monthly.(Implicit in this method is the
assumption that the difference between the
market interest rate and the contract rate will remain constant for the entire 30 years)
What is the adjusted sale price after taking into consideration financing terms? -
answer✔✔$129,222.04
Consider a corner vacant lot being appraised and two sales of vacant lots similar to the subject in
most respects except for location. Comparable A, a corner lot with frontage on two streets, was
sold for $12/sf.
Comparable B, an interior lot with frontage on only one street, was sold for $9/sf. What is the
adjustment for Comparable B? - answer✔✔+33%
The published sale price of a small apartment building comparable sale was $147,657. The buyer
had mostly non-reported income and could not qualify for a standard mortgage. He agreed to
purchase the property for $147,657. with the seller talking back a 90% purchase-money
mortgage at 3% compounded monthly for 36 years with a balloon payment in 8 years. The
market interest rate for a property like this at the time of sale was at 7% with no points. What is
the cash equivalent sale price using the calculator yield-to-market technique, assuming the buyer
would keep the financing in place for 8 years. - answer✔✔
Qualitative analysis is based on - answer✔✔"Inferior" or "superior" ratings
A comparable sale included the seller taking back a purchase-money mortgage at 3% under the
market rate for 10 years. The appraisal was based on the cash-equivalent market value. The
adjustment for this factor would be called a - answer✔✔financing terms adjustment
Adjustments for financing terms compensate for - answer✔✔A comparable that sold with
financing terms that were different than the terms defined in the appraisal report
When an appraiser researches the market directly with participants and the data has not been
previously collected, it is called - answer✔✔primary data
The preferred sequence of adjustment is - answer✔✔Property rights, financing, conditions of
sale, expenditures after purchase, market conditions, and physical attributes
The owner of a two-acre commercial site insists that her property has appreciated by at least 5%
per year since she bought it four years ago. As the appraiser, you are asked to factor this into the
appraisal or refute her contention. Research in this market revealed the following sales and
reseals of comparable properties:
Date
