1- appraisal is
the act or process of developing an opinion of value
real estate is
the physical land and appurtenances affixed to the land
real property includes
all interests, benefits, the rights inherent in the ownership of real estate
the manner in which a client employs the information contained in the appraisal report is called
the intended use
real property consists of
rights in realty
appraisals are always used
to solve problems that involve real estate valuation
items that are built to be permanent and intended to be included with real property are
real estate
an appraisar
measures and develops an opinion of value
easements are another division of property rights, they usually give a party the right
to access the property to perform a specific service
a deed should be recorded because
recording gives public notice of the transaction and sets the priority
zoning and environmental protection regulations are examples of
police power
2- the supply of land is
finite
an example of a governmental force that affects real estate value would be
changes in local building codes
zoning and environmental protection regulations are examples of
police power
which of the following is not a way to hold title or deed to real estate?
tenancy at will
3- when real property is sold by one person to another, the amount of money used to compensate the seller is called
the price of the real property
the city planning department has indicated that a vacant residential lot located in the flood zone cannot be given a building permit, this site
has lost nearly all utility
demand for real estate may be affected by
increasing population and employment
the availability of mortgage financing
increases in purchasing power
the four agents of production are
land, labor, capital, and entrepreneurship
the supply of one-unit residential properties is most affected by
an increase in the number of homes built
externalities are
factors outside the property that can affect the property value
when demand for housing increases, the supply
increases slowly
the overproduction of new homes
causes oversupply and lower prices
the statement "property values are created and sustained when the characteristics of the property conform to the demand of its market" refers to
conformity
4- the three approaches to value are
sales comparison, cost, and income capitalization
highest and best use
includes two parts when the property is improved: the highest and best use as though vacant and the highest and best use as improved
land valuation techniques include
sales comparison approach, allocation, and extration
the valuation technique in which land and building are valued separately is
the cost approach
the valuation technique in which the income a property earns is considered
the income capitalization approach
land value can be estimated using all of the following techniques except
the cost method
5- the date of the value opinion is
the date stipulated by the client
an appraisal is made as of a specified date to
satisfy the requirements of the client
date requirements for an appraisal assignment are determined by the
nature of the problem
the value to be estimated is determined by the
client's problem
an appraiser states the following in an appraisal report: "this appraisal assumes that there are no negative subsurface conditions that will impact the market's reaction to this property, such as subsidence or the existence of toxic waste or soft substrat
ordinary assumption
6- the value of a property to a particular user is known as
use value
market value is
the amount of money a property should sell for on an open market
investment value is
the value of a property to a specific buyer with specific investment criteria
market value can be described as
the present worth of future benefits
investment value is best measured by
the present worth of anticipated future benefits to a specific investor
market value is
an estimate of a price that would have been negotiated for a sale today
the local government levies taxes based on a defined value of real estate, a local government official develops an opinion of the value according to state regulations, the local government official is developing the
assessed value
7- life estate
represent the full bundle of rights limited by the life of a person
air rights are
the right to use and control space above a specific parcel of land (as defined on the surface)
a real property interest held by a lessee and conveying the right of use and occupancy for a stated term under certain conditions is called the
leasehold estate
which of the following is not a way to hold title to realty
tenancy at will
the highest and fullest estate in land is the
fee simple
ownership of real property by two or more parties with an undivided interest is called
tenancy in common
a leased fee interest is
the ownership interest of the landlord when a lease is in effect
8- the scope of work in an appraisal report is acceptable
if it meets or exceeds the expectations of parties who are regularly intended users for similar assignments and what the appraiser's peers' actions would be in performing the same or a similar assignment
the scope of work decision
is an ongoing process that can change as the appraisal process proceeds
the scope of work of an appraisal
may or may not include an inspection of the subject or comparable sales
scope of work
defines the extent of research and analyses of the appraisal process
9- improvement cost date can be obtained from
builders
Marshall & Swift and other cost services
sales of new home
demand for housing is affected when
a new factory opens and several hundred new employees are hired
competitive supply sources for housing include
rental units
houses for sale
houses that will be for sale
macro-level data is
items of information on value influences that derive from social, economic, governmental, and environmental forces and originate the property being appraised
in the sale of residential properties, the amount of property takes is
important because the ability to qualify for a mortgage loan includes principal, interest, taxes, and insurance (PITI); lenders compare the buyers' income amounts with the required payment, including takes and insurance
for appraisal purposes, a household is best described as
all persons, related or unrelated, who occupy one housing unit
10- market area life cycles include
growth, stability, decline, and revitalization
a land contract, also known as a conditional sales contract or an installment sales contract, is
a sale of real estate with the seller financing the sale but retaining the deed until the loan is paid off
a mortgage is a
pledge of collateral for a real estate loan
11- neighborhood social influences include all of the following except
vacancy rates
economic influences include all of the following except
crime levels
governmental influences include all of the following except
changes in property use
the four forces that influence real estate values are
social, economic, governmental, and environmental
12- a site is
land that is improved so that it is ready to be used for a specific purpose
which of the following statements is correct?
sites can be created, but land is fixed in amount
an example of a rectangular survey legal description is
Part of the Northwest Quarter of Section 25, Township 17N, Range 3E
which of the following statements about zoning is correct?
zoning controls land use
an acre of land includes
43,560 square feet
flood maps are published by
The Federal Emergency Management Agency
13- gross leasable area is
commonly used in retail centers
gross living area is
commonly used in residential properties
superstructure refers to
the area of a building above grade
short-lived items do not include
structural steel
HVAC is an acronym for
heating, ventilation, and air-conditioning
functional inutility is
an impairment of the functional capacity of a property or building
14- extreme values in a date set have the greatest effect on
the mean
a statistic that describes a characteristic of a population is a
parameter
which of the following is not a measure of central tenancy?
variance
under which of the following circumstances is the mean most amenable to statistical inference?
when the sample date includes values at each extreme
which of the following is not an illustration of the distribution of a data set?
bell curve
15- which of the following had the most efficient market?
one-unit residences
the residential real estate market is much more efficient than the nonresidential real estate market in most cities because
there are more buyers and sellers and the MLS system organizes data
market analysis is included in appraisals
to shop support for the estimated highest and best use and the existence of a market
retail space demand is affected by
changes in employment opportunities
changes in traffic patterns
increases or decreases in disposable income
the economic base is
the economic activity that enables a community to attract income from outside its borders
16- highest and best use analysis is required in
market value appraisals
highest and best use analysis requires an estimate of the use as though vacant and as improved to
estimate the value of the improvements
ensure that appraisers recognize that the property could be worth more without the buildings than with them
estimate any functional obsolescence caused by inappropriate improvements
highest and best use of the site as though vacant
is required in all market value appraisals of real property
may require a change in zoning classification, if possible
assumes the site is vacant or could be made vacant by demolishing the improvements
which of the following is not a criterion for highest and best use?
the maximum size improvement
the test of legal permissibility includes all of the following requirements except
compliance with supply and demand criteria
a legally nonconforming use is
a use that was legally established and maintained but no longer conforms to existing zoning
to be considered the highest and best use, a use must be
physically possible, legally permissible, financially feasible, and maximally productive
17- a site is different than land because
a sit is improved land that is ready to be build upon
land is always valued at
its highest and best use as though vacant
sites can be valued by
extraction, allocation, and sales comparison
in sales comparison analysis, comparable sales are adjusted
to the subject property
when estimating the market value of a site, the appraisal should include
there is no set number of comparable site sales transactions
if market value is sought, the sales comparison approach to site valuation is based primarily on an analysis of the market behavior of
buyers
adjustments to the prices of comparable sites are measured by
the amount a typical buyer will pay more or less for the item
18- an opinion of market value via the sales comparison approach is through the eyes of
well-informed purchasers
a major requirement and limitation of the sales comparison approach is that it requires
an active market of competitive properties
property sale prices
are negotiated between buyers and sellers
if the appraisal assignment requires and estimate of market value
the sales comparison approach is usually applicable
in the application of the sales comparison approach in a market value appraisal
closed sales, pending sales, current listings, options to purchase, and refusals can be used as indications of market value
current listings that have been exposed to the market for a reasonable time
tell the appraiser what the subject's market value cannot exceed
units of comparison
are items that represent a breakdown of the price based on a significant variable
which approach is usually the most applicable for appraising residences?
sales comparison
21- the principle of _________________ is the basis of the income capitalization approach
anticipation
value can be estimated in the income capitalization approach by
dividing the net operating income by the overall capitalization rate
suppose a lease contract called for a rent of $10 per square foot, however, similar space in the market rented for $15 per square foot, the amount specified in the lease is known as the ____________rent
contract
in a gross lease, who pays the utility costs?
the landlord
market rent is
an amount of rental income a property would command in the open market
27- reproduction cost is defined as the cost of
building the improvements exactly as they would appear if they were new on the effective date of appraisal
replacement cost is defined as the cost of
building the improvements with a structure of like utility but new as of the effective date of valuation
indirect construction costs do not include
builder's overhead
site improvements may be valued at
depreciated reproduction cost
the cost approach is based on the
theory of substitutuion
the cost approach is
most applicable when the subject improvements represent the highest and best use of the site as though vacant and are relatively new