When a property's value increases due to the impact of physical, governmental, economic, and social forces at work affecting the subject property, that rise in value is called...
A. Principle of anticipation
B. Correlation
C. Recapture
D. Unearned increme
Unearned increment
The cost approach would be the least reliable method to use in estimating the value of a seventy-year-old building because of...
A. Changes in building codes
B. The problem associated with estimating depreciation
C. Changes in the cost of labor and materi
The problem associated with estimating depreciation
The actual selling price can be described as which of the following?
A. Market price
B. Market value
C. Market cost
D. Appraised value
Market price
In attempting to estimate the market value of a house he is listing, a licensee discovers that the owner paid $310,000 for the house six years ago. What effect will this number have on his estimate?
A. No effect at all
B. It will tend to raise his estimat
No effect at all
After a neighborhood experiences a period of growth, expansion, and rising property values, the next phase of change that it will experience is...
A. Progression
B. Decline
C. Stability
D. Balance
Stability
In appraising, the term "location" is most closely associated with...
A. Orientation
B. Situs
C. Correlation
D. Key lot
Situs
In the capitalization approach, which of the following steps comes first?
A. Estimating operating expenses
B. Selection of an appropriate capitalization rate
C. Determining potential gross income
D. Subtraction of vacancy and collection losses
Determining potential gross income
On an operating statement, the allowance for items that have a useful life of more than one year is called...
A. Accrued depreciation
B. Reserve for replacements
C. A variable operating expense
D. Debt service
Reserve for replacements
Which of the following is used when estimating value by using the gross rent multiplier method?
A. Market rent of subject property
B. Correlation technique
C. Operating expenses of comparable properties
D. Vacancy and collection losses
Market rent of subject property
Karlie Sinclair has paid $300,000 for a new house in a neighborhood of properties that are worth a similar price. Now she is considering some major improvements to both the house and lot which would cost $200,000. Which principle of valuation might sugges
Progression and regression
Using a 12% capitalization rate, an apartment complex is valued at $480,000. What will be the value of the same property if a 10% capitalization rate is used?
A. $576,000
B. $400,000
C. $520,000
D. $440,000
$576,000
A key lot is...
A. The most desirable one in a residential subdivision
B. One located at the end of a cul-de-sac
C. The one in the center of a subdivision
D. Essential for plottage
Essential for plottage
A method of estimating proposed construction costs by adding the cost of all the building's component parts is the...
A. Square foot method
B. Unit in place method
C. Quantity survey method
D. Summation method
Unit in place method
When using the sales comparison approach, the appraiser would utilize data derived from...
A. Acquisition cost to present owner
B. A foreclosure sale
C. Cubic foot method
D. Data from a multiple listing service
Data from a multiple listing service
The gross rent multiplier produces the best results when used to estimate the value of...
A. An office building
B. A warehouse
C. An apartment building
D. A shopping center
An apartment building
When estimating the capitalized value of a property...
A. The lower the capitalization rate, the lower the estimated value
B. The lower the capitalization rate, the higher the estimated value
C. The higher the capitalization rate, the higher the estimate
The lower the capitalization rate, the higher the estimated value
Which of the following would not be considered an operating expense of an apartment building?
A. Manager's salary
B. Utilities
C. Collection losses
D. Repairs and reserve for replacements
Collection losses
When selecting comparable for a comparison approach to market value, it is a good practice to...
A. Choose as many as you can find
B. Place emphasis on the ones that require the fewest adjustments
C. Select only sales that were within a very short distanc
Place emphasis on the ones that require the fewest adjustments
An investor wants to purchase a twenty-unit apartment complex. Ten units rent for $300 per month, five for $325, and five for $350. Vacancy and collection losses are estimated to be 5% of the potential gross income and operating expenses are expected to b
$407,250
In the capitalization approach to establishing value, the selection of the cap rate to use reflects all of the following EXCEPT...
A. An investment return currently sought by investors
B. How much net income the property will produce
C. How long the prope
How soon the property can be resold for profit
Which of the following approaches to value estimation is based upon the calculation of construction costs at current prices of a property that serves the same purpose or function as an original property?
A. Sales comparison
B. Replacement cost
C. Income
D
Replacement cost
Which of the following may be used to figure accrued depreciation?
A. Age-life or straight line method
B. Economic obsolescence method
C. Net operating income method
D. Reserve for replacement method
Age-life or straight line method
In the appraisal of residential property, the cost approach is most reliable in the case of...
A. A new home
B. Older homes
C. Multi-family housing
D. All of the above
A new home
The most difficult depreciation to correct would be...
A. Functional
B. Physical
C. Economic
D. Accelerated
Economic
In the sales comparison approach, the value of a feature present in the subject property but NOT in the comparable would be...
A. Added to the selling price of the comparable property
B. Subtracted from the comparable property's sales price
C. Omitted fro
Added to the selling price of the comparable property