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IAAO 101 - REVIEW QUESTIONS QUESTIONS AND ANSWERS 2024
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IAAO 101 - REVIEW QUESTIONS QUESTIONS AND ANSWERS 2024
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IAAO 101 - REVIEW QUESTIONSAn item classified as a short-lived item has a cost new of $5,000. Its actual age is 5
years, and its total useful life is 20 years. The dollar amount of depreciation would
be ________. - ANSWERS-$1,250
A two-story residence has only one bath, which is located on the second floor. If a
second bath had been included on the first floor when the residence was
originally constructed, RCN would be $11,500. The cost to install (cure) the
second bath today would be $13,500.
The amount of functional obsolescence would be _______. - ANSWERS-$2,000
A residence is located on a street that has become a very busy thoroughfare. It
rents for $800 per month. Residences not located on the busy street rent for $825
per month. The GRM for this area is 150, and the land-to-building ratio is 1:4.
The indicated amount of external obsolescence is ______. - ANSWERS-$3,000
A residence has an RCN of $200,000. Items classified as curable physical
deterioration have an RCN of $10,000 and a cost to cure of $12,000. Incurable
physical deterioration (short-lived items) have an RCN of $40,000 and a
depreciation amount of $18,000. The actual age for the residence is 6 years, and
the total useful life is 60 years.
,The total amount of physical deterioration for the residence would be ________. -
ANSWERS-$45,000
If the cost to cure a functional deficiency within a residence exceeds the increase
in value added to the property, it is called _______ functional obsolescence. -
ANSWERS-incurable
The Principle of ___________ holds that the value of a property tends to be set by
the price that would be paid to acquire a property of similar utility and desirability
within a reasonable amount of time. - ANSWERS-Substitution
The Prince of _____________ is the underlying principle in the adjustment
process in the sales comparison approach. - ANSWERS-Contribution
A major principle in the sales comparison approach holds that the relationship
between a property and its environment must be in ________ for a property to
reflect its optimum market value. - ANSWERS-balance
A major advantage to the sales comparison approach is that it reflects the actions
of ________ and _________ in the market. - ANSWERS-buyers
sellers
A unit of comparison that would be applicable to single-family residential
property is the ____________________________ or __________________. -
ANSWERS-price per square foot of gross living area
, total property price
A unit of comparison that would be applicable to agricultural farmland or larger
rural residential tracts would be the ______________. - ANSWERS-price per acre
In the selection of comparable properties in the sales comparison approach, list
four comparability items that should be considered. - ANSWERS-Financing
Current market conditions (date of sale)
Similar in location
Similar in size, age, condition
Similar in design type
Similar in construction type
Affected by the same four forces that influence value
Similar physical attributes
List the order of adjustments in the sales comparison approach. - ANSWERS-
Financing
Market conditions (time of sale)
Location and other physical characteristics
Which method of determining adjustments in the sales comparison approach
cannot be used to determine market conditions (changes in value over time)? -
ANSWERS-Depreciated cost
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