Property classification: Undeveloped (5)

RC-MAU-APO

land that does not produce and is not capable of producing

Examples:

• swamp or wasteland (bog, marsh, lowland brush)
• depleted or abandoned quarries and pits
• rock outcroppings
• borrow pits
• shoreland

Property classification: Agricultural Forest (5m)

RC-MAU-APO

productive forest but needs to be next to 100% AG land, be within AG land from 2004, or be within converted land from 2005 or later that is 50% or more AG

Property classification: Productive Forest (6)

RC-MAU-APO

land producing or is capable (even if no current commercial use) of producing commercial forest products

Examples:

• growing trees for industrial wood
• Obtaining tree products like sap, bark, and/or seeds

Property classification: Other (7)

RC-MAU-APO

land required for improvements on AG land

What property classifications are assessed at full value?

residential, commercial, manufacturing, productive forest, & Other

What property classifications are assessed at 50% of full value

undeveloped & agricultural forest

What property classification is assessed at use-value

Agricultural

Asking price of property owners generally establishes the ______ of value

1. upper limit
2. lower limit
3. market limit
4. normal limit

upper limit

when property owners are listing their sale, we can assume they want the full market value which can be seen as the Upper Limit of the property value

• no such thing as a normal limit
• no such thing as a market limit

Offering price by buyers normally establishes the ______ of value

1. lower limit
2. upper limit
3. market limit
4. normal limit

lower limit

when buyers are first offering a price for the property it will be lowest price they believe the property owners will think the sale is worth. This will be lower than the asking price (upper limit) and can be seen as the Lower Limit for the property value

• upper limit is for the sellers/property owners
• no such thing as a market limit
• no such thing as a normal limit

An agreement which permits one to buy, sell, or lease a property within a stipulated period of time is known as a (an) ______

1. contract
2. option
3. deed
4. mortgage

option

WPAM chapter 9

"With an option contract the property owner gives a prospective purchaser the right to buy a property at a specified price within a given period of time."

Key here is the stipulated period of time

• contract is too general since there are many types
• deed is a written instrument that conveys an interest in real property
• mortgage is a legal document that an owner of a property pledges the property to a creditor as security for the payment of a debt

______ capitalization is a method of converting future net benefits into present value where each future net benefit is discounted at a proper yield rate (present worth factor)

1. direct
2. income
3. yield
4. sales

yield

WPAM chapter 9 & 13

Key here is each future net benefit is discounted at a proper yield rate

Think of matching the words YIELD and combining EACH net benefit, not just a year's worth

• direct means to convert a single year’s net operating income into an estimate of value
• income capitalization = direct capitalization
• no such thing as sales capitalization

The best source for verification or documentation of sales data is ______

1. what you have heard
2. internet or MLS listing information
3. direct interview of the buyer or seller
4. a property record card

direct interview of the buyer or seller

• first option is an obvious bad answer
• internet and MLS listing information pull their information from public records like the RETR, so it's a secondary source of info
• the PRC isn't the best for verifying SALES data but property/parcel information

Comparable sale properties should be visually inspected to enable the assessor to make an accurate analysis of the sales and reflect the dissimilarities existing between the comparable sales and the subject property by means of the ______

1. mortgage equity ratio
2. adjustments
3. tax rates
4. sales equity ratio

adjustments

WPAM chapter 9, Sales Comparison Approach

key here is reflect dissimilarities existing between the comparable sales and the subject property

Straight line capitalization assumes a (an) ______ income stream during the remaining economic life of the improvements

1. increasing
2. stable/straight
3. declining
4. recaptured

declining

Appropriate units of comparison for the valuation of vacant land are all of the following except

1. front foot
2. square foot
3. acre
4. neighborhood

neighborhood

WPAM Chapter 12, Units of Comparison

You can value parcels based on neighborhoods but it is not a Unit of Comparison

The formula for a developing a gross income multiplier is

1. GIM = assessed value/net income
2. GIM = sales price/gross income
3. GIM = gross income/sales price
4. GIM = sales price/net income

GIM = sales price/gross income

WPAM chapter 9, Gross Rent Multiplier

Gross Rent or Gross Income Multiplier (GRM/GIM)

It is asking you to find a formula to figure out how many years of the yearly income fits into the sale price

Appropriate units of comparison for the valuation of apartment houses are

1. apartment unit, apartment room, square ft. of building, gross rent multiplier
2. apartment unit, apartment room, square ft. of building, utility costs
3. apartment unit, apartment room, square ft. of building, land to improvement ratio
4. apartment unit, apartment room, square ft. of building, operating income before taxes

apartment unit, apartment room, square ft. of building, gross rent multiplier

WPAM Chapter 12, Units of Comparison

Analyzing the answer options, you'll notice all the answers are the same except the last item in the list so we just need to find which last list item is the best unit of comparison for valuing apartments

• utility costs can vary so much so it's not a good measure
• land to improvement ratio is also called the Allocation Method is a method for valuing land not property so it's not a good measure
• operating income before taxes can vary so much so it's not a good measure

Adjustments in the comparable sales approach are always made to the ______

1. sale (comparable property)
2. subject property
3. square footage
4. number of baths

sale (comparable property)

WPAM chapter 12, Adjustment Process

"By modifying the sale prices of comparable properties to reflect the characteristics of the subject, the assessor can estimate the value of the subject property."

The ______ rate is another name for the return ______ the investment

1. discount, on
2. recapture, on
3. effective, on
4. capitalization, of

discount, on

WPAN chapter 11, Income Approach

"The capitalization rate is composed of three different rates:
1. Discount rate (return on investment)
2. Recapture rate (return of investment)
3. Effective tax rate (expressed as a percentage of market value)"

The adjustment process involves the application of the ______ of an item (or factor) to the total property

1. replacement cost
2. present worth of one
3. assessed value
4. contributory value

contributory value

WPAM chapter 12, Adjustment Process

"The principle of contribution is the underlying principle in the adjustment process. The assessor must determine what a particular feature contributes to the value of the property as a whole, i.e., how much more or less would a purchaser typically pay for a property with or without a certain characteristic."

Elements for which adjustments can be made are

1. time, location, physical condition, size, components, and soil productivity
2. location, physical condition, size, landscaping, and material type
3. time, location, classification, and zoning
4. location, physical condition, components, size, and income potential

time, location, physical condition, size, components, and soil productivity

WPAM chapter 12, Adjustment Process

"Characteristics for which adjustments are typically made include time of sale, location, and physical factors."

Key here is knowing TIME is the most important adjustment, if the answer doesn't include Time as one of the options then it is automatically wrong. From there you can see physical factors is only in the first option making it the best answer

The correlating of the value indications of the various sales into a single indicator of value is known as ______

1. use value
2. equalization
3. reconciliation
4. equated value

reconciliation

Key here is into a single indicator

this connects most with the word reconciliation

When plus or minus adjustments are expressed in terms of percentages, the adjustment for ______ should be made prior to any other adjustments

1. age
2. time
3. location
4. size

time

WPAM chapter 12, Adjustment Process

"In general, sales are first adjusted for time to reflect the sale price as of the appraisal date. All other adjustments are made to the time adjusted sale price."

Capitalization may be described as

1. valuing income generated by a business on a property
2. conversion of future income stream to present worth
3. measuring gross economic income of a property
4. none of the above

conversion of future income stream to present worth

An improved property is valued at $50,000. The building-land ratio is 4:1. By allocation, what is the estimated land value?

1. $7,500
2. $20,000
3. $5,000
4. $10,000

$10,000

You are given the building to land ratio which says the land is valued at 1/4 of the building.

Land Value = Property Value * Land Ratio

50,000 x 0.25 = $12,500

We can assume because it's an estimated value we can go to the closest answer which is 10,000

What are the four government rights to a property?

Taxation, Escheat, police power, Eminent Domain

Who appoints the real property lister?

County board or administrator

Who is responsible for the discovery of property and omitted?

The assessor

When is the last day the personal property forms can be delivered back to the assessor?

March 1

How far back can the assessor assess omitted property?

2 years

How far back can the assessor go to pick up assessment errors?

1 year

What is the three main function of the assessment process?

Discovery, Listing, valuation

What must be listed if the parcel is greater than one tract?

The number of acres in each tract

Who can order an Assessors plat?

The local governing body

Who may end up paying for the Assessors plat?

The affected land owners

The authority to levy taxes is granted to all taxing districts by:

The State Legislature

The requirement of uniformity of taxation is a mandate from:

The State Constitution

The state legislature is solely responsible for:

Establishing the criteria for exemptions

The local tax rate is determined by dividing:

the Levy by the total assessed value of the district

All real property shall be assessed as of:

The close of business Jan 1 of each year

State law (sec. 70.32(2)(c)1d, Wis. Stats.), defines agricultural forest as land that is capable of producing commercial
forest products. How long must the roll be kept for?

20 years (from 2004)

The only evidence that may properly be used by the board of review is:

Evidence given orally under oath at the board of review hearing

As assessment quality improves, the:

Property tax collections remain the same

How many classes of real property are there?

eight

How is non-agricultural real estate to be valued:

Based on market value by sale

Explain the difference between market value and true cash value?

No difference, they are the same

When does the assessor sign the affidavit/roll?

On or before the first Monday in may prior to the BOR

If the affidavit/roll is unsigned?

Still valid not a nullity, burden on municipality

What constitutes a quorum?

A majority constitutes a quorum except that 2 members may hold a hearing of evidence required. If two were at the hearing than another member must review the transcript and then the 3 will decide.

Time and place of BOR meeting:

Shall meet annually at any time during a 30 day period beginning the second Monday in May. At least 15 days before the first session the clerk of the BOR must publish a first class notice and place a notice in at least 3 public places and place a notice on the door of the town hall, village hall or council chambers at city hall of the time and place of the first meeting.

What if the BOR has to adjourn?

If an adjournment be had for more than one day, a written notice shall be posted on the outer door of the place of said meeting, stating to what time said meeting adjourned.

True or False: Metes and bounds descriptions are always tied to a known point

True

True or False: Metes and bounds must be read from the beginning and followed through while the rectangular survey descriptions are read backwards:

True

What is Metes and Bounds?

A means of describing land by starting from a known point and following the outside boundaries of the parcel

True or False: The income approach derives an expression of present worth by converting future benefits into a market value.

True

1. Mansard
2. Hip
3. Gambrel
4. Gable

Hip

Angled/sloping sides that meet at a hip (edge)

1. Mansard
2. Hip
3. Gambrel
4. Gable

Gambrel

2 different angles of slopes (smaller angle & bigger angle) that meet at top hip (edge)

1. Mansard
2. Hip
3. Gambrel
4. Gable

Mansard

4 sloped sides with steep angles meeting at a flat top (hip with a flat top)

gives extra room in the house and translate to increase in value

bad paint job or leaky roof

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

physical deterioration, short life, curable

roof framing

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

physical deterioration, long life, curable

inharmonious land use or population changes

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

economical obsolescence, N/A, uncurable

old-fashioned plumbing fixtures

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

functional obsolescence, N/A, curable

bad floor plan/layout

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

functional obsolescence, N/A, incurable

foundation or bearing walls need replacing/are faulty

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

physical deterioration, long-life, incurable

all kitchen appliances are old/worn and will cost more than added value

1. physical, functional, or economical?
2. short or long life?
3. curable or uncurable?

physical deterioration, short life, incurable

what class of depreciation does Condition (CDU) connect with?

1. physical deterioration
2. functional obsolescence
3. economic obsolescence

physical deterioration

what class of depreciation does Desirability (CDU) connect with?

1. physical deterioration
2. functional obsolescence
3. economic obsolescence

economic obsolescence

what class of depreciation does Usefulness (CDU) connect with?

1. physical deterioration
2. functional obsolescence
3. economic obsolescence

functional obsolescence

If a property's depreciation is at 60%, what is the Percent Good?

1. 60%
2. 100%
3. 40%
4. 120%

40%

Percent good is the other half of depreciation, 60 and 40 come together to make a whole

gable

shed/single pitch

what's the difference between live load and dead load?

dead load is the weight of the building and all permanent objects while the live load includes the weight of occupants and anything removable with the building weight

what action does plottage describe?

1. splitting apart land into smaller pieces
2. plotting out boundaries of a property
3. combining 2 lots into 1 to have a greater singular value

combining 2 lots into 1 to have a greater singular value

process of creating/improving land from flooded areas

reclamation

What are the 5 rights a property owner must have to claim Fee Simple Ownership Interest?

(S, L&O, M, G, all or nothing)

• right to sell
• right to lease and occupy
• right to mortgage
• right to give away
• right to do none or all these things

Which government limitation goes with this definition?

power to take property title if owner dies without an heir

Escheat

Which government limitation goes with this definition?

power to take property for public use with owner being compensated

Eminent Domain

Which government limitation goes with this definition?

right to regulate use of property

Police Power

Which government limitation goes with this definition?

power to tax property

Taxation

one-story house that usually has an attached garage and a large picture window facing the street. The shape of the house is either rectangular or an "L" or "U" shape. The houses have low-pitched roofs and extended eaves (edge of roof)

Ranch

a one-story house with a full basement at half grade. The partially excavated basement typically has daylight windows in the lower level. The two levels are split by a foyer at grade level

Bi-level (raised ranch)

living areas staggered on two or more levels, separated by one half grade. There are typically two or more short sets of stairs running up or down and have a split roof design

Split-level

A one story with attic or a one and one-half story house with dormers, extra gables, or shed dormers, generally built after the 1920's. It is characterized by a steep roof slope and dormers which project from the roof and have windows on their fronts

Cape cod

one-story house, often with finished attic area, popular in the early 20th century, and generally built from 1905 to 1930. This style has one or more low-pitched overhanging gables, and is characterized by exposed beams, projecting brackets, and use of natural materials. Porches usually extend across the front and are supported by wide columns. Windows are generally casement or double
hung

bungalow

small, plain single family house. It is usually one story built with minimum construction standards resulting in narrow boxy exterior appearance with little or no ornamentation & low pitch roof

cottage

constructed of mixed natural materials (wood, stone, and brick) with lowpitched roofs, wide eaves, and exposed brackets. Most homes of this style have porches with thick round or tapered square columns. The style is generally symmetrical with double hung windows and multi-gables or hipped roofs

craftsman

low pitched roofs, generally gabled and enclosed, often with hip or flat roofs. Boxy and low-proportioned with strong horizontal lines and oversized eaves

Prairie

built between 1900 and 1950 that is typically built at a quality grade less than C. It has a simple design that often includes only a single bathroom and has small bedrooms. It often includes an unfinished attic and an unfinished basement

basic single story

multi-story style with large front porches or wraparound decks and have gable roofs that may cover the porch. They are minimally ornamental and have large windows to bring in light. The exterior is faced with horizontal siding and the homes often have a simple rectangular floor plan with side wings

farmhouse

from the 19th century, asymmetrical, two + stories with steep roof pitches which may include turrets and dormers. Large porches are embellished with decorative
railings and posts

victorian

rectangular shaped two-story home. Each floor is two rooms deep, and has approximately the same square footage. The roof structure has a medium slope, with limited attic space that is not intended for living area

colonial

modern style, single or multi-story and may be of split level construction. Houses typically incorporate tall, irregularly shaped windows, open planning and angular exterior lines. Roofs may be flat, shed, gable or various combinations thereof

contemporary

single story, high ceilings, and moderate to steep pitched hip or multi-gabled roof. Windows are large and abundant, permitting extensive natural light. Prominent garages with 3-4 stalls are common.

modern single story

Prominent 3-4 stall garages, and a mix of exterior wall coverings are common in this style. Features include tall entrance ways, abundant large windows, and high ceilings

modern multi-story

A large, luxury home built using the highest quality materials of brick or cut stone. These homes commonly have three or more baths, two or more fireplaces, and expansive entries with elaborate open stairways. These largescale homes are typically 4,000 to 12,000 square feet per story, and are often located in prestigious neighborhoods

executive mansion

A form of fee ownership of whole units or separate portions of multi-unit buildings by statute, which provides the mechanics and facilities for formal filing and recording of a divided interest in real property, where the division is vertical as well as horizontal. Fee ownership of units in a multi- unit property and joint ownership of the common areas.

condo

Any two-unit residence not qualifying as a townhouse, built after the mid-20th century

duplex

A building containing multiple self-contained living units

apartment

Recapture rate formula

annual amount recaptured / amount of original investment

how to calculate remaining economic life of property

economic life - effective age

Economic life: 50 years

Effective age: 20 years

50-20 = 30

how to calculate depreciation ratio & apply it

effective age / economic life then multiplied against the Cost New

Economic life: 50 years

Effective age: 20 years

Cost New: 100,000

20 / 50 = 0.40 --> 40%

100,000 x 0.4 = 40,000

The house has depreciated by 40,000 so we would subtract that

What type of expenses should and should not be included when calculating income approach's net income?

Good: management, repairs, utilities, insurance

Bad: mortgage interest or debt service, depreciation, capital expenses

how many hours of CE are needed for recertification?

30

What day does the municipalities assessment need to be complete (other than 1st and 2nd class cities)?

1. 1st Monday of April
2. 4th Monday of April
3. 1st Monday of May
4. 2nd Monday of June

1st Monday of April

When should the assessment roll be delivered to the clerk?

1. 1st Monday of April
2. 4th Monday of April
3. 1st Monday of May
4. 2nd Monday of June

1st Monday of May

When does the BOR meet?

1. 1st Monday of April
2. 4th Monday of April
3. 1st Monday of May
4. 2nd Monday of June

4th Monday of April starts up a 45 day period BUT cannot be sooner than 7 days after open book

When is the MAR report due to DOR?

1. 1st Monday of April
2. 4th Monday of April
3. 1st Monday of May
4. 2nd Monday of June

2nd Monday of June

how many acres in 1 square mile?

60

how many miles is one township on each side?

6