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UNIT 6 : BOBRA TAHAN HOWARD HARRIS NATIONAL INTERACTIVE STUDY GROUP 1

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Page 1: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

UNIT 6:

BOBRA TAHAN

HOWARD HARRIS

NATIONAL INTERACTIVE STUDY GROUP

1

Page 2: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Study Group Information

Please refer to your dashboard for the following:

Link to calendar of discussion topics

Links to discussion questions

Use this button on the Learning Management System tab to access your dashboard:

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Page 3: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Setting up the room3

Page 4: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Setting up the room4

Page 5: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Contact Information

Bobra Tahan and Howard Harris both have access to this account:

[email protected]

Please include the STATE where you will be taking your exam anytime you reach out to us so we can

find the best resources for you.

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Page 6: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Unit 6:

TOPICS TO BE DISCUSSED:

Your Questions

Appraisal

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Page 7: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

COST-PRICE-VALUE

COST= HISTORY

PRICE= WHAT YOU ARE WILLING TO PAY

VALUE= WHAT SOMETHING IS WORTH

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Page 8: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

DATE OF AN APPRAISAL

APPRAISAL= DEFENDIBLE OPINION

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PAST PRESENT FUTURE

5 YEARS AGO TODAY 2 YEAR PROJECT

Page 9: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

In addition to being licensed an appraiser may have additional designations, such as MAI or SRA.

True

False

MAI=Member of Appraisal Institute

SRA=Senior Residential Appraisal

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Page 10: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

An appraisal would be required for all of the following EXCEPT:

A. A conventional loan with a 60% LTV

B. An FHA loan

C. A home equity line of credit

D. A seller carry back loan

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Page 11: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

The most probable price a property will bring at sale is the:

A. Market price

B. Assessed value

C. Market value

D. Ad valorem price

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Page 12: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

During a recent recession property values went down and building stopped. In Anytown the rents and sales prices have now increased rapidly in the last year. The best appraisal principle to explain what is occurring would be:

A. Contribution

B. Progression

C. Supply and demand

D. Highest and best use

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Page 13: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

The essential elements of value are:

A. PITT

B. DUST

C. PETE

D. ECOA

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Page 14: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

SALES COMPARISON-MARKET APPROACH

1. Property evaluating – “subject”

2. Similar properties recently sold – “comparables”

3. Adjustments made to comparables

4. Comp better “–”, comp worse “+”

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Page 15: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

Subject Property

3 bedrooms2 bathrooms

Comp 14 bedrooms3 bathrooms

Comp 22 bedrooms2 bathrooms

EXAMPLE19

$

$

Page 16: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

The best approach to value a single family two story home is the:

A. Cost approach

B. Income approach

C. Sales comparison approach

D. Price per square foot

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Page 17: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

– Depreciation

Cost NewReproduction

COST APPROACH

Replacement

Physical Obsolescence

Functional Obsolescence

Economic Obsolescence

+ Land Value

= VALUE

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Page 18: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

The best approach to value a church is the:

A. Cost approach

B. Income approach

C. Sales comparison approach

D. Contributory value approach

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Page 19: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

INCOME APPROACH

Can be used for any property that generates income.

Appraiser determines

Rate is the capitalization rate or rate of return the investor wants.

You should be able to do this formula in all its derivations I=RXV OR R= I÷V OR V= I÷R

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I

R V

Page 20: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

FINDING NET OPERATING INCOME

Potential gross income (PGI)a)Contract rent

b)Market rent

- Vacancy and collection losses (percent of potential gross)

Effective gross income (EGI)

- Operating expenses (do not include debt service)

Net operating income (NOI)

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Page 21: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

INCOME APPROACH EXAMPLE

RATE INCOME VALUE

12% $10,000 $83,000

10% $10,000 $100,000

8% $10,000 $125,000

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Page 22: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

The best approach to value for an office or apartment building is the:

A. Cost approach

B. Income approach

C. Sales comparison approach

D. Price per square foot

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Page 23: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION

A big house surrounded by smaller houses will suffer from:

A. Progression

B. Regression

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Page 24: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION24

A small house surrounded by larger houses may increase in value due to

A. Progression

B. Regression

Page 25: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION25

A highest and best use description would appear in both the CMA and appraisal.

True

False

Page 26: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

QUESTION26

The principle of substitution underlies all approaches to value.

True

False

Page 27: NATIONAL INTERACTIVE STUDY GROUP…Contact Information Bobra Tahan and Howard Harris both have access to this account: nationalleadinstructor@kaplan.com Please include the STATE where

CONTACT INFORMATION27

Any questions I missed or that you still have?

Remember if you think of something after class you can reach both Bobra Tahan and Howard Harris at:

[email protected]