BASIC APPRAISAL PROCEDURES
MCKISSOCK EXAM WITH COMPLETE
QUESTIONS AND CORRECT ANSWERS
ground rent capitalization method - Answer-estimating land value applied by capitalizing
ground rent at a market-derived rate
Uniform appraisal dataset - Answer-standardized reporting requirements used in
residential mortgage lending appraisal reports
manufactured home - Answer-factory built house manufactured under the Fed
Manufactured home Construction and safety standards act of 1976
modular home - Answer-factory built in compliance with a building code other than the
hud code
gross living area - Answer-Total area of finished, above-grade residential space;
calculated by measuring the outside perimeter of the structure and includes only
finished, habitable, above-grade living space
gross building area - Answer-total floor area of a building excluding unenclosed areas
measured from the exterior of the walls of the above grade area
substitution - Answer-appraisal principle that states when several similar or
commensurate commodities good or service are available the cheapest one will be
demanded
cost formula - Answer-reproduction cost new-accrued depreciation+site value=property
value
cost approach - Answer-set of procedures through which a value indication is derived
for the fee simple estate by estimating the current cost to construct a reproduction of the
existing structure
fee simple interests - Answer-absolute ownership unencumbered by any other estate
subject only to the limitations imposed by the govern. powers of taxation eminent
domain police power and escheat.
reproduction cost - Answer-cost to construct at current prices as of the effective date of
the appraisal an exact duplicate of the building being appraised
, Replacement Cost - Answer-cost to construct, at current prices as of the effective
appraisal date, a building with utility equivalent to the building being appraised
entrepreneurial incentive - Answer-amount an entrepreneur expects to receive for his or
her contribution to a project
Depreciation - Answer-appraising, a loss in property value from any cause
USPAP standards 1-1a - Answer-be aware of and crrectly employ those recognized
methods and techniques that are ncessary to the appraisal
standards 1-4b - Answer-1. develop an opinion of site value
2. analyze comp. cost
3. analyze vs new and old cost
standards rule 1-2h - Answer-determine scope of work necessary to produce credible
assignment results in accordance with SOW rule
direct cost - Answer-expenditures for the labor and materials used in the construction of
improvements
indirect costs - Answer-expenditures items other than labor and materials that are
necessary for construction but not typically in the contract
entrepreneurial profit - Answer-figure that represents the amount an entrepreneur
receives for his risk; what they actually get
Physical deterioration - Answer-wear and tear that begins when a building is completed
and placed into service
Functional obsolescence - Answer-The impairment of functional capacity of
improvements according to market tastes and standards
External Obsolescence - Answer-type of depreciation; a diminution in value caused by
negative external influences and generally incurable on the part of the owner, landlord,
or tenant
economic life - Answer-period over which improvements to real estate contribute to
value
useful life - Answer-time over which a structure or a component of a property may
reasonably by expected to perform the function as designed
physical life - Answer-estimate of how old a building will be when it is worn out
MCKISSOCK EXAM WITH COMPLETE
QUESTIONS AND CORRECT ANSWERS
ground rent capitalization method - Answer-estimating land value applied by capitalizing
ground rent at a market-derived rate
Uniform appraisal dataset - Answer-standardized reporting requirements used in
residential mortgage lending appraisal reports
manufactured home - Answer-factory built house manufactured under the Fed
Manufactured home Construction and safety standards act of 1976
modular home - Answer-factory built in compliance with a building code other than the
hud code
gross living area - Answer-Total area of finished, above-grade residential space;
calculated by measuring the outside perimeter of the structure and includes only
finished, habitable, above-grade living space
gross building area - Answer-total floor area of a building excluding unenclosed areas
measured from the exterior of the walls of the above grade area
substitution - Answer-appraisal principle that states when several similar or
commensurate commodities good or service are available the cheapest one will be
demanded
cost formula - Answer-reproduction cost new-accrued depreciation+site value=property
value
cost approach - Answer-set of procedures through which a value indication is derived
for the fee simple estate by estimating the current cost to construct a reproduction of the
existing structure
fee simple interests - Answer-absolute ownership unencumbered by any other estate
subject only to the limitations imposed by the govern. powers of taxation eminent
domain police power and escheat.
reproduction cost - Answer-cost to construct at current prices as of the effective date of
the appraisal an exact duplicate of the building being appraised
, Replacement Cost - Answer-cost to construct, at current prices as of the effective
appraisal date, a building with utility equivalent to the building being appraised
entrepreneurial incentive - Answer-amount an entrepreneur expects to receive for his or
her contribution to a project
Depreciation - Answer-appraising, a loss in property value from any cause
USPAP standards 1-1a - Answer-be aware of and crrectly employ those recognized
methods and techniques that are ncessary to the appraisal
standards 1-4b - Answer-1. develop an opinion of site value
2. analyze comp. cost
3. analyze vs new and old cost
standards rule 1-2h - Answer-determine scope of work necessary to produce credible
assignment results in accordance with SOW rule
direct cost - Answer-expenditures for the labor and materials used in the construction of
improvements
indirect costs - Answer-expenditures items other than labor and materials that are
necessary for construction but not typically in the contract
entrepreneurial profit - Answer-figure that represents the amount an entrepreneur
receives for his risk; what they actually get
Physical deterioration - Answer-wear and tear that begins when a building is completed
and placed into service
Functional obsolescence - Answer-The impairment of functional capacity of
improvements according to market tastes and standards
External Obsolescence - Answer-type of depreciation; a diminution in value caused by
negative external influences and generally incurable on the part of the owner, landlord,
or tenant
economic life - Answer-period over which improvements to real estate contribute to
value
useful life - Answer-time over which a structure or a component of a property may
reasonably by expected to perform the function as designed
physical life - Answer-estimate of how old a building will be when it is worn out
