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BUSI 330 Project 1
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Exam of 17 pages for the course BUSI 330 Project 1 at BUSI 330 Project 1 (BUSI 330 Project 1)
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1Caashia Karringten
BUSI 330
Project 1
Part A
1. In my own personal experience I have found myself justifying value for clothing
or food. With regards to clothing, this winter I purchased a winter coat. I
normally prefer to purchase something for quality over expense. Normally,
quality tends to be higher in price. Therefore, this winter I justified the value of
my new winter coat because I know it was going to come into use for the
upcoming season and I have the desire for a garment that will last. On the other
hand, I assign value to good food. I would rather pay a higher price to eat at a
nice restaurant or buy locally sourced organic foods because I value my health. In
these examples, it is apparent that ‘utility’ and ‘desire are the factors that
influenced my decision to buy the winter coat or that free range organic chicken
from the butcher. Both of these are fulfilling my desires and were useful in the
benefits I will receive in the future: warm in winter, and healthy as I age.
2. Heritage controls are prevalent in the City of Stonnington council. These planning
schemes prohibit home owners from altering property without permission from
council. The house with a heritage overlay may affect value because it is
imposing a limitation on the land and the house that sits on it. Due to the heritage
overlay prohibiting demolition without permits, it is possible for the property to
not achieve its highest and best use and conform to the surrounding properties,
deemed appropriate in the neighborhood. The landowner must make an
application to council to carry out works or renovations, for example. This may
not be ideal when the owner is looking to sell, as buyers may not find the heritage
overlay on the house attractive. Permission from council may take more time than
expected, which may deter a buyer from purchasing the property. Also, the
chance of more dense development is not possible, and it limits the possibility of
the zoning on that land to increase. (Protecting Our Heritage, n.d.).
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3. Dear Client,
Thank you for spending the time to write back to me with regards to my valuation
for your home refinancing. I regret to inform you that I am unable to conclude a
value that is 10% higher than its market value for the following reasons. As a
member of the Appraisal Institute of Canada (AIC), I am bound by the ethical
standards of Canadian Uniform Standards of Professional Appraisal Practice
(CUSPAP). CUSPAP has several guidelines, which I am expected to abide by.
CUSPAP includes but is not limited to ‘Ethics Standards, Reporting Standards,
Real Property Appraisal Standard, and Mass Appraisal Standard.’ Therefore, my
valuation on your home must not be misleading by any means. I am liable for any
misrepresentation of your property. If I was to value it at 10% higher than market
rate this would be considered an inflated appraisal and this could potentially be
deemed as ‘property flipping’, which is a form of mortgage fraud. I understand
this may not be the news you had hoped to hear, however, please understand that
it is my duty to be objective in my appraisal and act upon ethical terms. Please
feel free to email me if you have any further questions.
Kind regards,
Caashia Karringten
4. In Richmond, Victoria, Australia the positive externality that exists in this inner
city suburb is public transport. Richmond is located less than 3km from the CBD.
Richmond tram and train lines are in close proximity which gives the opportunity
to its local residents to travel to and from the city conveniently. The tram lines run
across major roads in Richmond. For example, the home I live in is one block
adjacent to the tram line that takes many people to the city in less than twenty
minutes. This close proximity to the tram line can increase the value of the land.
The house I reside in is not on the main road, but it is close enough to access these
, 3
transport systems. These tram lines also inhibit intrusive traffic in the area and
create good retail business performance.
5. Whilst I was working as a real estate agent I would conduct appraisals for the
vendor. To begin, we always discuss the motive for the sale with the vendor and
we evaluate the issues with the property such as legalities surrounding the title or
any physical problems with the property that we can suggest to the vendor to fix
before it goes on market. Property content was relevant during these situations.
We would have to look at the property’s size, for example, how many bedrooms
it had. We also had to take into account its location. The way the property faced
was also common. If it was North facing that would increase its value as it would
have more sunlight coming into the property. Also, the quality of fixtures inside
the property; if it was newly renovated or if it needed to be renovated. The
physical location of the property was also considered, whether it was close to
public transport, the area’s socio-economic influence and the geographical
situation of the property; whether it was on a main road or off the beaten track in
a more quiet place. After we have viewed the property and spoken with the
vendor we do our own research and find comparable properties that will help
assess the value of the property we are intending to sell.
6. a) The principle of contribution would relate to the existing improvements due
to its potential for redevelopment. A contribution of redevelopment subject to
zoning would increase the value of the land, as opposed to what is currently
existing on the land.
b) The present use of the land is affecting the highest and best use because it is
currently a single family residential property claimed to be sitting on a site that is
zoned for residential townhouses which is its future use. However, the future use
is limited upon time in this case in relation to its highest and best use. Its legal use
was identified by the Department of Fisheries and Oceans and Provincial Fish and
Wildlife branch in agreement to the plans subject to the covenant area, which
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