McKissock Liberty University -Basic Appraisal Procedures Chapter 12 - Comprehensive Review Quiz with verified answers

Basic Appraisal Procedures Chapter 12 - Comprehensive Review QuizA property has a cost new of $350,000. It has an effective age of 20 years and a total expected economic life of 65 years. There are curable items totaling $45,000. If they are cured, it will reduce the effective age to 15 years. What is the value of the improvements on a modified age-life basis, before including the site value? - correct answer $234,545 $350,000 - $45,000 = $305,000. 15 ÷ 65 = .231 or 23.1%. $305,000 X .231 = $70,455. $305,000 - $70,455 = $234,545. The subject is a 15 year old duplex that would cost $240,000 to build new today. It is in good condition and you estimate the effective age to be 10 years. Your estimate of total economic life is 50 years. Its land value is $60,000. What is its value by the cost approach? - correct answer $252,000 Cost Approach Using Age- Life Method. 10 ÷ 50 = .20 or 20% depreciation. $240,000 X .20 = $48,000 depreciation. $240,000 - $48,000 = $192,000. $192,000 + $60,000 - $252,000 A house cost $395,000 to build new. It is 5 years old and has sustained a total of 10% depreciation. It sits on a lot worth $65,000. What is its indicated value by the cost approach? - correct answer $420,500 Cost Approach Formula. $395,000 - $39,500 (10%) + $65,000 = $420,500. A comparable sale of a new house just sold for $640,000. You estimate the value of the site at $120,000 and the cost of the site improvements at $18,000. It has 2,940 square feet of GLA. What is its unit cost? - correct answer $170.75 Comparative-Unit Method - Market Derivation. $640,000 - $120,000 - $18,000 = $502,000. $502,000 ÷ 2,940 = $170.75. Footings need to be _______________ below average frost penetration levels. - correct answer at least 12 inches