Exam paper for (last assessment)Advanced Diploma Property Evaluation and Management /Bridging Programme in Financ

University of Johannesburg

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Exam paper for first semester (Last Assessment

University of Johannesburg Institutional Repository

Property valuation and management A/Fixed property A

  Department of Finance and Investment Management  Property Valuation and Management A / Fixed Property A ADPVM01/BPIF008/S3BPIQ8  LAST ASSESSMENT   June 2016   Time: 2 hours Marks: 100  Assessor: Mr A Kruger  Moderators: Mr LJ Aldum    INSTRUCTIONS:  This paper consists of 5 pages.   Answer ALL questions in the answer book provided.  Silent, non-programmable calculators may be used, unless otherwise instructed.  Where applicable, show all calculations clearly.  Answers with Tippex and in pencil will not be marked.  Scratch out all open spaces and empty pages.  All the best.  Question  Topic  Marks  Time 1 2 3 4  Objective test questions – various topics Market and Marketability Analysis Land and Site Analysis Improvement Analysis  25 30 20 25  30 minutes 36 minutes 24 minutes 30 minutes     100  120 minutes PROGRAMME:   Advanced Diploma Property Valuation and Management / Bridging Programme in Finance   Page 2 of 5 MODULE:          Property Valuation and Management A / Fixed Property A (ADPVM01/BPIF008/S3BPIQ8) (LAO – JUNE 2016)  QUESTION 1         [25 marks]  REQUIRED:  Select the correct option by crossing () the appropriate letter on the answer sheet in the answer script.   1)  Stocks are? a.  A punishment for bad valuers b.  A lending instrument c.  A low-risk, high-yield investment d.  An ownership interest in a company (i.e., shares)  2) A land contract, also known as a conditional sales contract or instalment sales contract,  is? a. A sale of real property where the seller finances the sale and transfers the rights in realty b. A sale of real estate with the seller financing the sale but retaining the deed until the loan is paid off c.  A purchase agreement with many conditions on it d.  A sales contract with a mortgage loan  3)  A district is? a.  An area within a neighbourhood where all the properties are vacant b.  A type of neighbourhood that is characterized by homogeneous land use c.  Delineation of zoning classifications d.  An area where city attorneys reside  4)  A mortgage is a? a.  Document that makes a borrower promise to repay the money b.  Document that gives the interest rate and terms of a loan c.  Pledge of collateral for a real estate loan d.  Pledge of collateral for a car loan  5)  A neighbourhood is? a.  A residential suburb b.  An area with similar zoning and density c.  A group of complementary land uses d.  An area with homes of the same price  6)  Economic influences include all of the following except? a.  Occupant income levels b.  Crime levels c.  Property rent levels d.  Property value levels  7)  Market area life cycles include? a.  Growth, stability, decline, and revitalization b.  Growth, stability, decline, and gentrification c.  Growth, stability, appreciation, and decline d.  Growth, level off, appreciation, and decline  PROGRAMME:   Advanced Diploma Property Valuation and Management / Bridging Programme in Finance   Page 3 of 5 MODULE:          Property Valuation and Management A / Fixed Property A (ADPVM01/BPIF008/S3BPIQ8) (LAO – JUNE 2016)  8)  Neighbourhood social influences include all of the following except? a.  Population density b.  Occupant skill levels c.  Occupant age levels d.  Vacancy rates  9)  A trade area is? a.  An area where property owners trade rather than sell the properties b.  A geographic area from which a retail centre will draw its customers c.  An area where the owners-inhabitants are generally employed d.  An area where an office building owner will trade tenants with other office building owners  10)  Governmental influences include all of the following except? a.  Tax burdens b.  Special assessments c.  Zoning, building, and housing codes d.  Changes in property use  11)  Linkages are? a.  The devices used to change a property from one use to another b.  A geographic area from which a retail centre will draw its customers c.  An area where the owners-inhabitants are generally employed d.  The tools necessary to market real estate  12)  Highest and best use? a.  Is specified by the client b. Must be considered in all valuations c.  Includes two parts when the property is improved, the highest and best use as though  vacant and the highest and best use as improved d.  Assumes demand for the property within the existing or proposed use  13)  The three approaches to value are? a.  Market analysis, market consensus of opinion, and market research b.  Sales extraction, cost replication, and income multiplication c.  Sales comparison, cost, and income capitalization d.  Graphic analysis, linear regression, and statistical analysis  14) The date of the value opinion is? a.  The first date the valuer was on site b.  The last date the valuer was on site (i.e., inspection date) c.  The date stipulated by the client d.  The date the valuer received the order  15)  The valuation technique in which the income a property earns is considered is? a.  The income capitalization approach b.  The sales comparison approach c.  The cost approach d.  None of the above      PROGRAMME:   Advanced Diploma Property Valuation and Management / Bridging Programme in Finance   Page 4 of 5 MODULE:          Property Valuation and Management A / Fixed Property A (ADPVM01/BPIF008/S3BPIQ8) (LAO – JUNE 2016)  16)  Land valuation techniques include? a.  Subdivision development, depreciated cost, consensus b.  Sales comparison approach, consensus, extraction c.  Sales comparison approach, allocation, extraction d.  Assessment multipliers, assessor’s opinions, multiple regression multipliers  17)  The valuation technique in which land and building are valued separately? a.  The income capitalization approach b.  The sales comparison approach c.  Linear regression d.  The cost approach  18)  Land value can be estimated using all the following techniques except? a.  The sales comparison method b.  The cost method c.  The income method d.  The allocation method  19)  In the valuation process, defining the value estimated is included in the? a.  Definition of the problem section b.  Preliminary analysis and data selection and collection c.  Highest and best use analysis d.  Land value opinion  20)  A valuation is made as of a specified date to? a.  Establish the due date of the fee b.  Prove that the valuer inspected the property c.  Satisfy the requirements of the client d.  Indicate the date when the buyer agreed to purchase the property  21)  Data requirements for a valuation assignment are set by the? a.  Client b.  Valuer c.  Competition Nature of the problem d.  Type of property  22)  Unit of comparison ratios? a.  Allow valuer’s to not make adjustments for size differences b.  Allow for meaningful comparisons of seemingly poor data c.  Usually assimilate the market thinking and behaviour of typical buyers d.  All of the above  23)  One reason to estimate the highest and best use “as though vacant” and “as improved”  is? a.  To increase the size of the report, which increases the fee? b.  It necessitates a land value estimate for analytical purposes c.  To allow estimating physical depreciation d.  To recognize when the improvements should be razed       PROGRAMME:   Advanced Diploma Property Valuation and Management / Bridging Programme in Finance   Page 5 of 5 MODULE:          Property Valuation and Management A / Fixed Property A (ADPVM01/BPIF008/S3BPIQ8) (LAO – JUNE 2016)  24)  Competitive supply sources for housing include? a.  Rental units b.  Houses for sale c.  Houses that will be for sale d.  All of the above  25)  Which is the final step of the valuation process? a.  Final reconciliation and estimate the single value estimate b.  Final reconciliation and determine range or single estimate c.  Complete a report with the defined value d.  Application of the three approaches to value    QUESTION 2 [30 marks]  In a marketability study, the valuer investigates how a particular property will be absorbed, sold, or leased under current or anticipated market conditions. To achieve this, the marketability study must answer a number of questions. Identify and discuss the questions that need to be answered in a marketability study illustrate your answer by referring to the residential property you used in your practical assignment.     QUESTION 3 [20 marks]  Use the property you valued in the practical assignment to discuss how the general conditions of title, applicable to a specific site, influence the value of the site.     QUESTION 4 [25 marks]  Describe and explain the building elements, of the property used in the practical assignment, which should be included in the inspection of the exterior of the improvements.    TOTAL               100 MARKS          

Property Valuation and Management A/ Fixed Property A

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Property Valuation and Management A/ Fixed Property A

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University of Johannesburg Institutional Repository

University of Johannesburg Institutional Repository

University of Johannesburg Institutional Repository