Multiple-choice questions related to real estate.
1. What concept is illustrated if the additional easement area is acquired?
a. Going-concern value
b. Investment value
c. Plottage value
d. Market value
2. What is the market value of Lot A?
a. $220,000
b. $372,500
c. $525,000
d. Cannot be determined from the information given
3. Value indications from all three approaches are as shown.
|
Income Approach
|
$25,200,000
|
|
Sales Comparison Approach
|
$20,000,000
|
|
Cost Approach
|
$22,120,000
|
The sales Comparison and Cost Approaches were given equal weight, but the Income Approach was more important than both of the others combined. Before rounding, which of the value conclusions below is consistent with this information?
a. $22,440,000
b. $23,000,000
c. $23,130,000
d. $23,250,000
4. The city has recently expanded its mixed use zoning classification further into the prime downtown office zones. The specific uses and permitted densitles allowed in the three primary zoning classifications in the downtown area are shown below. (Note that development in this market is controlled by the Floor Area Ratio, a factor that expresses the amount of gross floor area permitted as a multiple of the site area.) Both residential and office uses are permitted in all zones.
|
Zoning
|
C4
|
MU/C3
|
MU/C2
|
|
Floor Area Ratio (FAR) Maximum FAR permitted
|
10.00 FAR
|
9.50 FAR
|
8.00 FAR
|
|
Minimum Residential FAR requirement
|
0 FAR
|
3.50 FAR
|
4.50 FAR
|
|
Maximum Commercial FAR Permitted
|
10.00 FAR
|
6.00 FAR
|
3.50 FAR
|
Recent sales in the area, representative of general price levels for the downtown core, are:
|
Sale
|
A
|
B
|
C
|
|
Date
|
Current
|
Current
|
Current
|
|
Zoning
|
C4
|
MU/C3
|
MU/C2
|
|
Area
|
15,000 sf
|
20,000 sf
|
14,000 sf
|
|
Price
|
$13,500,000
|
$15,000,000
|
$8,190,000
|
What is the indicated value of the residential density (expressed on a Price per Far basis) in this market?
a. $60.00
b. $73.13
c. $78.95
d. $90.00
5. The subject property is a new gas station and convenience mart on a ¾ acre site. Three small frame houses were razed to create the current site. A sale verified for comparison is also ¾ of an acre and is one block away. This site sold one month ago for $375,000. The comparable sale was once improved with a gas station that was razed two years ago. In the early 1980's, the original underground newer tanks were found to be leaking and were replaced with modern tanks that did not leak. The newer tanks were removed two years ago, but no soil remediation was performed . The buyer was aware of this history prior to consummating the sale. The cost to remove the tanks today is $40,000. What is the value of the subject site?
a. Less than $335,000
b. $335,000
c. $375,000
d. Greater than $375,000