Real Estate Appraisal - Chapter 8: Highest and Best Use and Site Valuation

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Real Estate Appraisal - Chapter 8: Highest and Best Use and Site Valuation
2013-01-12 20:44:42
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Real Estate Appraisal - Chapter 8: Highest and Best Use and Site Valuation
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  1. What is the primary factor that determines a property's value?

    a. Its highest and best use

    b. The cost of its improvements

    c. Its proximity to the beach

    d. Its zoning
    (a) The highest and best use of a property, more than anything else, is what determines its value. Page 222
  2. A property is at its highest and best use when it is:

    a. at its most legally permitted state

    b. most profitable while being possible both physically and legally

    c. physically feasible

    d. vacant
    (b) Highest and best use is defined as the use, from among reasonably probable and adequately supported alternatively uses, that meets these four factors, physically possible, legally permitted, financially feasible, and maximally productive. "Most profitable" implies both financial feasibility and maximal productivity. Page 222
  3. Which of the following tests of highest and best use would a business operating in a residential neighborhood most likely violate?

    a. Economically feasible

    b. Physically possible

    c. Legally permitted

    d. Maximally productive
    (c) Legally-permitted uses are normally defined by current zoning and other land use regulations. An area zoned for residential use would not typically permit a business use. Page 225
  4. Converting a gas station into an orange grove is not:

    a. economically feasible

    b. physically possible

    c. legally permitted

    d. maximally productive
    (b) Gas station sites are contaminated and therefore cultivating any type of crop is physically impossible without expensive soil cleaning. Page 229
  5. The most common type of lot is a:

    a. cul-de-sac

    b. corner lot

    c. interior lot

    d. flag lot
    (c) An interior lot is surrounded by other lots, with frontage on the street. It is the most common type of hot and may or may not be desirable, depending on other factors. Page 233
  6. Jeremy drives to the subject property and discovers that it is vacant except that there are major utility hook-ups installed. On his report, Jeremy would identify the subject as a:

    a. parcel

    b. tract

    c. site

    d. lot
    (c) A site is piece of land that either has been built on already or is ready to build on. Page 230
  7. Roy purchases two adjoining lots. His appraisal estimates that the value of the lots combined into a single lot will almost double the total value of lots if kept separate. This added value is known as:

    a. yield

    b. assemblage

    c. plottage

    d. none of the above
    (c) Assemblage is the process of combining two or more small sites into a larger one. The added value that results from this process is called plottage value. Page 232
  8. Which of the following is not classified as an off-site improvement?

    a. Retaining wall

    b. Access

    c. Zoning

    d. Utilities
    (a) A retaining wall is an on-site improvement. While aspects of the other choices may exist on-site, their origins are off-site, and therefore they are classified as off-site improvements. Page 235
  9. Heavy traffic in front of a property may adversly affect:

    a. noise and air pollution

    b. ingress

    c. egress

    d. all of the above
    (d) Ingress (access to the property) or egress (exit from he property) as well as noise and air pollution mos likely will be negatively affected by heavy traffic volume. Page 238
  10. A church in the middle of an area zoned for single-family residences is an example of:

    a. a legally nonconforming use

    b. a variance

    c. an interim use

    d. non-economic highest and best use
    (a) Most zoning ordinances allow the local zoning authority to issue conditional use permits or variances, which permit certain uses that are not otherwise allowed in a certain zoning district, but which are beneficial to the community. Page 226