chapter008 - CHAPTER 8 Valuation Using the Sale Comparison...

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CHAPTER 8 Valuation Using the Sale Comparison and Cost Approaches Test Problems 1. The final price for each comparable property reached after all adjustments have been made is termed the: b. Final Adjusted Sale Price. 2. The final price from each appraisal approach is termed the: d. Indicated Value. 3. The final price after reconciliation of the answers obtained from two or more approaches is termed the a. Final Estimate of Value. 4. A new house in good condition that has a poor floor plan would suffer from which type of accrued depreciation? d. Incurable functional obsolescence 5. To reflect a change in market conditions between the date on which a comparable property sold and the date of appraisal of a subject property, which type of adjustment is made? b. Market conditions. 6. In appraising a single-family home, you find a comparable property very similar to the subject property. One important difference, however, concerns the financing. The comparable property sold one month ago for $120,000 and was financed with an 80 percent, 30-year mortgage at 5.0 percent interest. Current market financing terms are 80 percent, 30-year mortgage at 7 percent interest. The monthly payments on the market financing would be $638.69, while the monthly payments on the special 5.0 percent financing are $515.35. Assume the borrower's opportunity cost rate is 7 percent. The approximate present value of the present savings on the non-market financing is ______, and this amount should be _______ to the transaction price of the comparable. The present value of the payment savings is $18,538.94.
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chapter008 - CHAPTER 8 Valuation Using the Sale Comparison...

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