A remedy in court compelling the vendor to execute a deed in pursuance of a valid written contract is known as
specific performance.
An oral lease for two years is not enforceable due to the
Statute of Frauds.
A contract could be rescinded due to
fraud.
mistake.
any of these.
misrepresentation.
any of these.
It is said that a valid contract must have legality of object. Which of the following best describes legality of object?
All parties are of legal age and agree upon the legal consideration to be paid.
An agreement between competent parties that is legally
The contract must not be for an illegal purpose or against public policy.
An agreement between competent parties based upon legal consideration creating legally enforceable duties and obligations" is a definition of
contract.
Real estate values are inflating rapidly. Despite having already signed a written contract of sale, Smith, the seller, refuses to complete the sale to Jones. The remedy Jones may choose is
suit for specific performance.
Which of the following is NOT an essential element of a valid real estate contract?
Consideration
Cash downpayment
Competent parties
Offer and acceptance
Cash downpayment
A contract created to pursue an illegal objective is
void.
Which of the following is the best description of a contract?
An agreement between competent parties, giving each the right to cancel the contract provided legal notice is given.
An agreement whereby all parties to the agreement have contractual ability.
An agreement between competent parties and based upon legal consideration that creates legally enforceable duties and obligations.
A contract created by actions rather than oral or written words is called a(n)
implied contract.
If an offer to purchase is not accepted in its entirety, it will still bind the
I. offeror.
II. offeree.
Neither I nor II.
Which of the parties to a contract for the sale of land has the right to sue for specific performance when the other party defaults?
I. Buyer.
II. Seller.
I and II.
A voidable contract is a contract which is
I. legally insufficient and not recognized by law.
II. not binding on either party.
Neither I nor II.
Which one of the following statements concerning the assignment of contracts is correct?
I. Listing agreements are assignable without the principal's consent.
II. Unless prohibited in the contract, a land sales contract may be assigned by the buyer.
II only.
II. Unless prohibited in the contract, a land sales contract may be assigned by the buyer.
Which of the following statements about counteroffers is TRUE?
I. A counteroffer is a rejection of the first offer and a new offer.
II. A slight change made by the seller, such as moving the day of closing from one day to the next, would create a countero
I and II.
The term waiver, as used in a legal contract, is best defined as
estoppel.
the mutual exchange of privileges.
detrimental justification.
to voluntarily give up or surrender a right.
to voluntarily give up or surrender a right.
If a seller accepted an offer but changed the date of possession, and initialed that change,
None of these.
the buyer would be bound by the contract and unable to withdraw his offer.
the offer would become a counteroffer, and if the buyer did not accept,
it would become a counteroffer, subject to acceptance by the buyer.
A valid real estate sales contract must
I. contain an accurate description of the property.
II. be signed by both buyer and seller.
III. be between competent parties.
I, II and III.
Time is of the essence" is a concept of real estate law concerning
delivery of title.
performance.
conditions of record.
leases.
performance.
A person must have the legal capacity to enter into a contract. Which of the following statements concerning legal capacity is true?
I. A minor's contract to sell land is valid unless he disaffirms the contract.
II. An illiterate person can be bound by a
I and II.
A lease made with a lessor who is under legal age of majority (who is a minor), is
I. voidable by lessee.
II. voidable by lessor.
II only.
II. voidable by lessor.
All contracts for the sale of real property must
I. be in writing.
II. be acknowledged.
III. have an earnest money deposit.
I only.
I. be in writing.
A private corporation wants to sell its real property. Who is entitled to sign the employment contract?
The president of the corporation
The president and chairman of the board of directors
Any officer of the corporation
A person authorized by the board o
A person authorized by the board of directors
When a buyer assumes an existing Federal Dept. of Veterans' Affairs loan and the veteran is released from all liability, the contract has gone through a process called
"subordination."
"novation."
"satisfaction."
"relief.
novation.
A lease for less than one year
is unenforceable.
must be in writing.
may be oral, but must be reduced to writing within 30 days.
may be oral.
may be oral.
Using threats to force a person to enter into a contract involuntarily is known as
risk.
fraud.
duress.
negligence.
duress.
To be enforceable, a contract for the sale of real property must
I. sufficiently describe the property.
II. be in writing.
III. be recorded.
I and II.
I. sufficiently describe the property.
II. be in writing.
What is the meaning of novation?
Ratification
Rescission
Substitution of a new contract between same or different parties
Estoppel
Substitution of a new contract between same or different parties
A contract is generally void if it
I. was entered into with a minor.
II. requires an illegal act for performance.
II only.
II. requires an illegal act for performance.
The consideration necessary for a valid contract could be
I. a promissory note.
II. personal property, such as a boat.
I and II.
I. a promissory note.
II. personal property, such as a boat.
A contractual provision making the sale of a home subject to the buyer qualifying for a particular kind of loan is called a
novation.
courtesy.
contingency.
covenant.
contingency.
Where no time period for acceptance by the offeree is stipulated in an offer, the offer will
lapse in 24 hours.
not lapse; it must be revoked by the offeror.
lapse after a reasonable time.
lapse in 48 hours.
lapse after a reasonable time.
The buyer, even though he has signed the purchase and sale (earnest money) agreement, can withdraw his offer to purchase until the acceptance is
mailed.
delivered to the offeror's residence or place of business.
communicated.
signed by the selling broker.
communicated.
A provision in an offer to purchase that requires the completion of a certain act before the contract is binding is known as a
restriction.
contingency.
covenant.
mandamus.
contingency.
Wells agreed to buy Peterson's real property for $145,000, signed an earnest money (purchase and sale) agreement and deposited $5,000 earnest money with Broker Logan. Peterson was unable to provide marketable title, so Wells demanded return of his earnest
return the entire amount to Wells.
An option is
not valid if the given consideration is less than $10.
valid without consideration.
valid if consideration is given even if it is less than $10.
valid if the consideration is exactly $10 but is not given.
valid if consideration is given even if it is less than $10.
An option
may be exercised within 30 days after the expiration date.
should recite in detail the terms of the purchase in the event it is exercised.
is enforceable without actual consideration.
may always be assigned by the optionee.
should recite in detail the terms of the purchase in the event it is exercised.
If a note is taken as earnest money, it is in the seller's best interest to have the note payable
on the seller's acceptance.
on the first banking day after the day that the buyer takes possession.
within 72 hours of closing.
at closing.
on the seller's acceptance.
A purchaser who gives a broker five days to secure an acceptance of his offer
must deposit earnest money at least equal to 5% of the offer.
can withdraw before the five days have passed, if he has not been notified of acceptance by the seller.
must await
can withdraw before the five days have passed, if he has not been notified of acceptance by the seller.
A contract in which a landowner gives a developer, for a stated consideration, the right to buy a parcel of land within a specified time for a fixed price may properly be described as a(n)
bilateral contract for sale.
covenant of title.
contingent contrac
option.
An option is an agreement
I. granting exclusive right to buy, sell, or lease property at a given price within a stated period of time.
II. between competent parties upon legal consideration, creating legally enforceable duties and obligations.
I and II.
Unless the sales agreement stipulates to the contrary, the risk of loss or damage to property before legal title or possession is transferred to the purchaser falls on the
seller.
purchaser's title insurance.
purchaser.
seller's insurance company.
seller.
When an earnest money (purchase and sale) agreement has been signed by the purchaser and given to the seller's broker with an earnest money check
the earnest money must be returned to the purchaser if he withdraws the offer after the seller signs the agre
the transaction is considered an offer until the seller accepts the agreement and the acceptance is communicated to the buyer.
A prospective buyer, on June 10, 2010, gave a deposit to a broker and signed the usual form of an offer to purchase property. The deposit form included the statement, "This offer is for 5 days." On June 11, 2010, and before the offer had been accepted by
must return the deposit to the buyer as demanded.
Where do you find the liquidated damages clause?
Earnest money receipt
Closing documents
Employment contract
Listing contract
Earnest money receipt
When a purchaser offers to buy real property, the
I. earnest money check should be made payable to the licensee writing up the offer.
II. purchaser may terminate the offer and have the earnest money refunded even though the seller has orally approved the
II only.
II. purchaser may terminate the offer and have the earnest money refunded even though the seller has orally approved the offer.
To create a valid contract, the acceptance of a written offer to purchase real property must be
I. in writing.
II. within the time period specified in the offer.
I and II.
If personal property is used as a downpayment on the purchase of real property, you usually state on the earnest money receipt
I. that the bill of sale will be given.
II. the dollar value thereof.
III. the dimensions of the house.
IV. the address of the r
I and II.
I. that the bill of sale will be given.
II. the dollar value thereof.
Adams signed an exclusive right-to-sell listing for his residence for a term of 6 months with Broker Meyers. The price was set at $30,000; the commission was to be 6%. During the listing period, the house was destroyed by a fire. Under these circumstances
Meyers is not entitled to a commission and the listing is terminated.
An owner signed a listing with a broker where it was understood that if the property were sold through the efforts of any other broker, or the owner, the listing broker would not be entitled to a commission. This kind of listing contract is called a(n)
ex
open listing.
Frank listed his property with Broker Scott. The listing agreement authorized Scott to act as sole agent of Frank and entitled Scott to a commission regardless of who sold the property. This is an example of
an open listing.
multiple listing.
an exclusive
an exclusive right-to-sell listing.
Brooks gave Broker Johnson an exclusive agency listing. Brooks' friend, Martin, a real estate broker in another city, finds a buyer and Brooks pays Martin the commission. Which of the following is TRUE regarding this situation?
Broker Johnson and Broker M
Brooks also owes Broker Johnson a commission.
Judy Brown listed her property with Broker David Rowell. The listing contract stipulated that Brown would receive $62,000, with all proceeds over that amount to be given to Rowell for his commission. This type of listing is referred to as a(n) "_____ list
net
Mr. and Mrs. Thomas Martin want to sell their house. They want a broker to show the property, but they would like to be able to sell the house themselves without the obligation of paying a broker a commission. What form of listing would allow them to use
Open listing
A broker's listing contract in the form of a letter addressed by the owner to the broker provides that the broker will be paid a commission if within 30 days the real estate is sold for $30,000 "by you, by me, or by anyone else." This
creates an exclusive
creates an exclusive right to sell listing.
Which of the following statements about brokerage is correct?
Under no circumstances may a broker recover a commission if the sale was consummated after the listing expires.
The amount of a broker's commission for the sale of a home is limited by law.
All
An exclusive agency listing permits the owner to sell without being liable for a commission.
Which of the following is NOT a strict legal term for a type of employment contract or listing?
Multiple listing
Exclusive right-to-sell listing
Open listing
Exclusive agency listing
Multiple listing
A listing which allows an owner to list concurrently with more than one broker is
an open listing.
illegal.
a net listing.
an exclusive agency.
an open listing.
Which entity requires disclosure of known information on lead-based paint and lead-based paint hazards before the sale or lease of most housing built before 1978?
Equal Opportunity Commission
Oregon Dept. of Labor
U.S. Dept. of Housing and Urban Developme
U.S. Dept. of Housing and Urban Development (HUD)
It is a common procedure to record which of the following documents?
I. Listing agreement.
II. Trust deed.
III. Land sale contract or memorandum of the land sale contract.
II and III
II. Trust deed.
III. Land sale contract or memorandum of the land sale contract.
A listing agreement between the owner of real property and a real estate broker
creates a fiduciary relationship.
is an employment contract, employing the broker to secure a buyer.
does all of these.
should contain all the responsibilities of both the bro
does all of these.
A broker has earned his commission even if the
I. otherwise qualified buyer decides, for good reason, not to buy.
II. buyer cannot obtain the financing specified in the earnest money agreement.
Neither I nor II
A broker in court to collect a commission on an exclusive right-to-sell listing must allege and prove which of the following?
I. He had an agency relationship with the seller.
II. He was licensed.
III. He introduced the buyer and seller.
I and II
I. He had an agency relationship with the seller.
II. He was licensed.
An organization of real estate brokers that exists for the purpose of exchanging listing information is known as a
"listing exchange."
"listing cartel."
"listing information pool."
"multiple listing service.
multiple listing service.
Under the Residential Lead-Based Paint Hazard Reduction Act of 1992, prior to the sale or lease of most housing built before 1978, the owner must
not rent to families with minors.
test for the presence of lead-based paint.
give buyers or renters a pamphle
give buyers or renters a pamphlet titled Protect Your Family From Lead in Your Home.
As an agent for the seller, a principal real estate broker is usually authorized to do all of the following EXCEPT
advertise the listed property.
cooperate with other brokers to effect a sale.
place a "for sale" sign on the listed property.
bind the clien
bind the client under a sales contract.
Tammy Miller signs an offer to purchase the home of David Smith. The seller's broker is still entitled to a commission even though the deal falls through because
I. Smith cannot clear his title.
II. Miller refuses to go through with the deal.
III. Miller
I and IV
I. Smith cannot clear his title.
IV. Smith cannot deliver possession within a reasonable time.
Broker Reed had an open listing on a house. To collect a commission, he would have to prove which of the following?
He had a current real estate license.
He was the procuring cause of the sale.
He had a ready, willing and able buyer.
All of these
All of these
On October 26, 2002, Gary Walsh signed an offer to purchase a house owned by Paul Spencer for $93,500. The house was listed for $96,500. Spencer owned the house free and clear of any encumbrance. Walsh deposited $9,000 earnest money in the form of a check
$93,500
Robert and Tammy Lowell, who own a house at 1843 River Drive in Silverton, Oregon, decided to list their property. The property is encumbered by a trust deed, which had a balance of $36,928.71 after the most recent payment was made on November 1, 2002. Th
$36,928.71
Which of the following statements about listing agreements for residential properties is incorrect?
A legible copy of the signed listing must be given to the principal.
All contracts of employment must contain a definite termination date.
The listing agre
The listing agreement is a contract for sale of real estate.
A listing is a contract between the property owner and the
I. licensee taking the listing.
II. principal broker of the licensee who took the listing.
II. principal broker of the licensee who took the listing.
Robert and Tammy Lowell, who own a house at 1843 River Drive in Silverton, Oregon, decided to list their property for $105,000 and pay Port Properties a 7% commission on the sale. On the Real Estate Employment Agreement which of the following figures shou
7%
Robert and Tammy Lowell, who own a house at 1843 River Drive in Silverton, Oregon, decided to sell their property. They contacted Tom Gardiner, a broker for Port Properties, on November 11, 2002 to discuss the sale. Gardiner met with the Lowells on Novemb
November 12, 2002
The Statute of Frauds requires that contracts for the transfer of an interest in land be
in writing to be enforceable.
in an outline form.
reviewed by the county recorder.
all of these.
in writing to be enforceable.
Robert and Tammy Lowell, who own a house at 1843 River Drive in Silverton, Oregon, decided to sell their property. They contacted Tom Gardiner, a broker for Port Properties, on November 11, 2002 to discuss the sale. Gardiner met with the Lowells November
November 15, 2002
An exclusive agency listing
I. prohibits the owner from selling through his own efforts without obligation to pay the agent a commission.
II. need not contain a definite termination date.
Neither I nor II
Under the Statute of Frauds, no action may be brought on any contract for the sale of land unless the contract is
I. in writing.
II. signed by the person to be held to the contract.
III. signed by the real estate broker.
I and II
I. in writing.
II. signed by the person to be held to the contract.
The purchaser of a new condominium unit has how many days to cancel the purchase agreement?
Five business days, unless the unit is not completely built
Three business days, provided the sale is on a land sales contract
Five business days, unless he waives
Five business days, unless he waives the right
The right of rescission applies to
the sale of a condominium unit conducted by public auction.
neither answer.
both answers.
the sale of a condominium unit used or intended to be used solely for commercial or industrial purposes.
neither answer.
A declarant is required to expressly warrant against defects in plumbing, electrical, mechanical and other components of newly constructed units and common elements for how long?
Five years
90 days
One year
Three years
One year
After the Real Estate Commissioner's public report on a subdivision is issued
all of these.
a prospective buyer must be given a copy of the report and sign a receipt for it before buying the property.
the subdivider must wait at least 10 days after receiv
a prospective buyer must be given a copy of the report and sign a receipt for it before buying the property.
Under the Oregon Subdivision and Series Partition Control Law, the buyer can rescind his purchase of a lot for which a public report has been issued within what period of time after the purchase?
Three calendar days
Three business days
Five business days
Three business days
All of the following are true of the public report EXCEPT
The seller must take a receipt for it from the buyer.
A copy of the public report must be visibly displayed at all times in the office of the subdivider.
The seller must keep a receipt from the buy
A copy of the public report must be visibly displayed at all times in the office of the subdivider.
A public report, when it is required, must be given to the purchaser of a lot prior to
viewing the property.
execution of the binding sales agreement.
closing.
negotiation of the sale.
execution of the binding sales agreement.
The Oregon Subdivision Control Law applies to the sale of
commercial property.
residential lots.
apartments.
parcels larger than 160 acres.
residential lots.
A purchaser of a lot from a developer has a right of rescission if
the lot is unimproved.
a home was built on the lot within the 12 months.
the purchaser is the first user of the home built by the developer.
the purchaser has contracted with the seller to
the lot is unimproved.
The major purpose of the Land Conservation and Development Commission is to
establish wildlife sanctuaries.
administer the sale of federal land within the state.
pass zoning laws for counties and local governments which supersede existing zoning laws.
eva
evaluate local comprehensive plans to ensure compliance with statewide goals and guidelines.
A purchaser under a land sales contract in Oregon may redeem his property from strict foreclosure within
30 days from the date of the sale.
the time period set by the court.
10 days from the date of the sale.
the 1-year statutory period.
the time period set by the court.
The vendor in a land sales contract in Oregon
I. retains legal title as security for payment of the purchase price.
II. lacks recourse to foreclosure if the buyer defaults.
I. retains legal title as security for payment of the purchase price.
A trust deed is satisfied on the public records
by recordation of a deed.
when final payment has been made by the grantor.
when a reconveyance deed is recorded.
by posting a guarantor's bond.
when a reconveyance deed is recorded.
An Oregon Department of Veterans' Affairs loan right may be restored to the veteran under which of the following situations?
I. Loss of the property by fire or flood.
II. Condemnation.
I and II
An Oregon veteran may borrow money from the Oregon Department of Veterans' Affairs to
acquire rental property.
construct investment property.
refinance a conventional loan.
acquire a residence.
acquire a residence.
The trustee in a trust deed executed in Oregon receives
I. full legal title to the real property described in the deed.
II. the "power to sell" in the event the grantor of the trust deed defaults.
II. the "power to sell" in the event the grantor of the trust deed defaults.
A mortgage differs from a trust deed in which of the following particulars?
I. Possession
II. Amortization
III. Number of parties
III. Number of parties
A mortgage on real estate must be
I. recorded to be valid.
II. in writing to be valid.
III. signed by the lender.
II. in writing to be valid.
Harris sold land to Henderson under a land sale contract which was not recorded. Harris then mortgaged the property and that mortgage was recorded. In the event of foreclosure on the mortgage, who has the best legal claim to the property?
The mortgage hol
The mortgage holder.
When property secured by a trust deed is foreclosed by advertisement and sale, the
I. trustee may make a bid on the property on his own behalf.
II. lender may make a bid on the property.
III. trustee executes a trustee's deed to the purchaser.
II. lender may make a bid on the property.
III. trustee executes a trustee's deed to the purchaser.
The vendor in a land sales contract in Oregon
I. retains equitable title as security for payment of the purchase price.
II. has only one legal remedy if the buyer defaults.
Neither I nor II
A mortgage lien can be released by
I. foreclosure.
II. sale of the property to the mortgagee.
I and II
A reconveyance deed is signed by the
grantee.
beneficiary.
trustee.
grantor.
trustee.
Payments on a note secured by a trust deed are made to the
trustor.
trustee.
mortgagor.
beneficiary.
beneficiary.
The person who furnishes the funds for a loan secured by a trust deed is known as the
grantor.
beneficiary.
trustor.
trustee.
beneficiary.
Property which is subject to a trust deed in Oregon may be
I. sold before the trust deed is paid off.
II. further encumbered with a second trust deed or mortgage.
I and II
Bryan Schroeder owns real property encumbered by a trust deed. Since he wishes to convey title to the property to George Wand,
Wand must assume and agree to pay the trust deed.
Schroeder must get permission from the beneficiary for this transfer.
Schroede
Schroeder must use a deed to convey title to Wand.
A mortgage of real property in Oregon
I. creates a lien or encumbrance.
II. operates as an instrument to convey title.
I. creates a lien or encumbrance.
Since Oregon is a "lien theory" state, it follows that a
I. mortgage of real property operates as a conveyance of title.
II. mortgage lien is enforced by a statutory foreclosure suit.
II. mortgage lien is enforced by a statutory foreclosure suit.
In conventional financing, the trustee of a trust deed
I. receives legal title.
II. can be a beneficiary.
Neither I nor II
Which of the following is true concerning the foreclosure of a trust deed by advertisement and sale in Oregon?
I. The trustee himself may place a bid on the property at the sale.
II. The property is sold at auction.
II. The property is sold at auction.
Foreclosure is a procedure designed to
I. enable a lender to acquire the value of the pledged collateral.
II. terminate a borrower's interest in the mortgaged property.
I and II
In exercising the power of sale clause in a trust deed, at least 120 days must elapse after recordation of a Notice of Default and Election to sell before the
trustee can hold the sale.
statutory year of redemption begins.
grantor will be required to reli
trustee can hold the sale.
If title to real property remains in the seller's name after it has been sold on a monthly payment plan, the buyer would have purchased it under
FHA financing.
an option.
a guaranteed loan.
a land sales contract.
a land sales contract.
Smith owns an older home on a corner lot. A professional appraiser advised him that considerably more income could be obtained if the house were torn down and a different improvement placed upon the lot. This illustrates the principle of
highest and best
highest and best use.
Certain economic principles are of considerable importance in the valuation of real estate. The principle that "no prudent man would pay more for a product than for which he could buy a reasonable duplicate, allowing for no undue delay" is known as the
pr
principle of substitution.
Ms. Barlow has an interest in her property over and above her mortgage debt. Her interest is called
an escrow.
an equality.
equity.
a surplus.
equity.
A well done appraisal, including consideration of all available data, and completed by an appraiser of much experience and good judgment, is best defined as
a "scientifically determined value."
the "market value."
"legal value."
an "opinion.
an "opinion.
When an appraiser uses the capitalization method of evaluating property, he will take into account
I. future income.
II. accrued depreciation.
I. future income.
There are three main causes of depreciation. Which one of these finds its origin in social sources which is the basis for the old axiom known in social circles, that "more houses are torn down than fall down"?
Economic obsolescence
Functional obsolescence
Economic obsolescence
Capitalization" is a process used to
I. determine the value of most residential property.
II. convert income into value.
II. convert income into value.
Economic obsolescence involves which of the following?
I. Street layout and access
II. Zoning
III. Effects of the elements and weather
I. Street layout and access
II. Zoning
A factor by which one multiplies the property's total rental income as an estimate of its value is the
I. gross income multiplier.
II. land residual process.
I. gross income multiplier.
A property owner has a lot valued at $10,000. He purchases the adjacent lot, which is identical, for $10,000. Now the combined property is appraised at $30,000. This is an example of
plottage.
capitalization.
depth table.
residual.
plottage.
A "real estate appraisal" is an estimate of value
based upon replacement costs.
based upon analysis of facts as of a specific date.
derived from average tax assessments covering the past five years.
derived from income data covering at least the preceding
based upon analysis of facts as of a specific date.
In terms of basic physical characteristics, land may properly be described as
nonhomogeneous.
having all of these characteristics, immobile, indestructible, and nonhomogeneous.
indestructible.
immobile.
having all of these characteristics, immobile, indestructible, and nonhomogeneous.
In a real estate analysis one should be more interested in
effective age of the improvements.
chronological age of the improvements.
remaining physical life of the improvements
future economic life of the improvements.
future economic life of the improvements.
The period over which a property may be profitably utilized is called its "_____ life."
income
profit
amortized
economic
economic
When a property has suffered a reduction in value due to dry rot and termite damage, appraisers will refer to such reduction as
residual loss.
physical deterioration.
economic obsolescence.
functional obsolescence.
physical deterioration.
Which of the following statements is(are) TRUE?
I. Functional obsolescence is the result of factors within the property.
II. Economic obsolescence is caused by factors outside the property.
I and II
In a properly developed community, values are upheld by
minimum use of land.
blocking freeway access.
conformity to land use objectives.
lack of deed restrictions.
conformity to land use objectives.
Which of the following best describes the function of a real estate appraiser?
Estimates the safe loan value
Determines price
Estimates value
Determines value
Estimates value
Loss of value due to deferred maintenance is called
physical depreciation.
functional obsolescence.
economic depreciation.
inherent obsolescence.
physical depreciation.
When a lump sum expenditure is required for overdue repairs, it is usually identified as
functional obsolescence.
building residual.
physical obsolescence.
deferred maintenance.
deferred maintenance.
The addition to total property value produced by an additional property component is considered to have resulted from the
principle of anticipation.
principle of contribution.
highest and best use.
principle of substitution.
principle of contribution.
Which is(are) TRUE about loss in value due to obsolescence?
I. Extra-large load-bearing columns in a 30-year old commercial building would represent incurable functional obsolescence.
II. An unattractive storefront window would represent curable functiona
I and II
The market value of a property is the highest price in terms of money which a property will bring in a competitive and open market. Among other conditions, which of the following must exist for a property to be considered sold at market value?
I. Buyer an
I. Buyer and seller were typically motivated.
III. Both parties were well informed and acted in their own best interest.
Of the following, the dollar valuation which normally is the highest is
I. mortgage loan value.
II. residual value.
III. market value.
III. market value.
In appraising a 15-year-old, single-family, owner-occupied building in a good neighborhood for the purpose of estimating a basis for sales price, which of the following factors would be given the greatest weight?
Calculations based on the amount of the mo
Current prices paid for similar homes in the same neighborhood.
Which of the following statements is correct?
Typically, economic rent lags behind contract rent.
Contract rent is the actual rent received.
Economic rent refers to the income shown on the income statement prepared for net income taxes.
Economic rent refe
Contract rent is the actual rent received.
To realize the maximum value of property, a reasonable degree of sociological and economic homogeneity is necessary, but it should not become monotonously uniform. In real estate, this concept is called the principle of
"conformity."
"correlation."
"progr
conformity.
The final step by the appraiser in establishing his final estimate of value is to reconcile the three indications of value obtained through the cost, income and market data approaches. The final estimate of value is obtained by
I. averaging the three indi
Neither I nor II
An appraiser was hired to prepare a feasibility study for adding a swimming pool to a 24-unit apartment building. What basic principle of appraising would be used?
Competition
Substitution
Regression
Contribution
Contribution
What is effective age?
None of these
The remaining economic life
The actual age
The remaining useful life
None of these
The income approach would be most widely used for appraisals of
commercial and investment properties rented to tenants.
newly opened subdivisions.
heavily mortgaged properties.
heavily insured properties.
commercial and investment properties rented to tenants.
When using the cost method of appraising, the upper limit of value is quite well determined by which of the following?
Determine the reproduction cost new, with no deduction for depreciation, plus land value.
Determine the reproduction cost new, minus ded
Determine the reproduction cost new, with no deduction for depreciation, plus land value.
For which one of the following properties would an appraiser be justified in relying on the cost method to determine market value?
A newly-constructed church of contemporary design
A farm located just outside of town
A vacant lot which possesses latent va
A newly-constructed church of contemporary design
A post office of unique design and construction is best appraised by which of the following approaches?
Market data
Income
Cost
Land residual
Cost
In which of the following approaches to value is it necessary to determine a dollar value for existing depreciation when figuring building value?
Income approach
Cost approach
Market data approach
All of these
Cost approach
Richard is using the market approach to appraise a home. The analysis of the comparables should include all of the following data EXCEPT the
location of the property.
original cost.
date of the sale.
financing terms.
original cost.
In the market data approach to value, the
I. price of the land on each comparable sale is calculated separately.
II. comparable sales are adjusted for differences between themselves and the subject property.
II. comparable sales are adjusted for differences between themselves and the subject property.
There are three approaches to the valuation of real property and if possible all three should be used in arriving at a final estimate of value. Depending on the type of property being appraised, however, one approach will have more weight and should affor
single-family dwellings.
An appraiser using the replacement cost approach on an older residential property would use all the following EXCEPT
cost of improvements new.
capitalization.
land value.
depreciation.
capitalization.
An appraisal to place a value on a 3-year old home for fire insurance purposes would give most emphasis to the
income approach.
market approach.
weighted average of the cost, market and income approaches.
cost approach.
cost approach.
Improved commercial real property that is seldom sold is best appraised by the _____ approach.
I. cost
II. income
III. market data
I. cost
II. income
The approach that appraisers most commonly use for estimating costs is the _____ method.
index
quantity survey
unit-in-place
comparative cost
comparative cost
The market data appraisal approach would be best used for
neither establishing the price for new homes in a subdivision nor vacant land valuation.
establishing the price for new homes in a subdivision and vacant land valuation.
vacant land valuation.
esta
vacant land valuation.
To appraise a special use building an appraiser would most likely use the
comparison approach.
cost approach.
capitalization approach.
market data approach.
cost approach.
Two appraisers were asked to appraise an apartment property. Both arrived at the same net income but the first appraiser used a capitalization rate of 6% while the second appraiser used a capitalization rate of 8%. The reason that one appraiser would choo
a higher risk.
The cost of constructing a new building, having utility equivalent to the property under appraisal but built with modern materials according to current standards, design and layout is an appropriate definition of
I. reproduction cost.
II. replacement cost
II. replacement cost.
The capitalization rate for improvements is the
interest rate only.
interest rate plus recapture rate.
overall rate.
recapture rate only.
interest rate plus recapture rate.
In a real estate appraiser's approach to value, he would be most concerned with "the present worth of future potential benefits" in relation to the _____ approach.
cost
income
market
summation
income
The value of a piece of land
I. is an estimate of the present worth of future benefits.
II. includes a measure of past expenditures.
I. is an estimate of the present worth of future benefits.
When comparing the income method to the cost method of appraising the
income method provides the upper limits of value.
cost method provides the lower limits of value.
income method provides the higher value on income property.
reproduction cost method pr
reproduction cost method provides the upper limits of value.