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WorksheetsReal Estate Principles Unit 11 multiple choice 2
Total questions: 25
Worksheet time: 13mins
The “present and future anticipated enjoyment or profit from the ownership of property”, is one definition of
Economic function
Economic necessity
Effective public demand
Value
Market value of improved real property is least affected by
An open market
Its exchange value
Its object value
The original cost of materials
Which four elements must be present for a property to have market value?
Demand, depreciation, scarcity, and utility
Cost, demand, transferability, and utility
Cost, feasibility, scarcity, and utility
Demand, scarcity, transferability, and utility
The ultimate test of functional utility is
Design
Marketability
Utility
Maintenance costs
The term unneeded increment, most nearly means
An increase in value due to population increase
A decrease in value due to social forces rather than personal effort
A decrease of property taxes
Depreciation
The commonality of blighted areas, inflation, and the business climate is that they are _ forces and influence value
Economic
Physical
Political
Social
Which of the following appraisal approaches is based primarily on the principle of substitution?
Cost approach
Summation approach
Sales comparison approach
Income capitalization approach
In a well-planned residential community, which of the following contributes most of the maintenance of value?
Conformity to proper land-use objectives
Deed restrictions
Variances to permit the highest and best use of every parcel of land
Prevention of major thoroughfare construction through the community
More than anything else, what determines the value of a property?
Listing price
Purchase price
Highest and best use
Closest comparable properties
In the sales comparison approach to appraisal what is the most important as well as the most difficult step?
Collection of data on comparable properties
Analysis of data noncomparable properties
Adjustment of data to reflect differences between the subject and comparable properties
Establishing the correct unit of comparison
The sales comparison approach to appraisal would be least reliable
In an inactive market
In a neighborhood where land uses are rapidly changing
When the comparables are in the same price range
When the comparables are located in another neighborhood
An appraiser is using the sales comparison approach. A comparable property has an amenity that is not present in the subject property. The appraiser would therefore
Add the value of the amenity to the subject property’s neighborhood
Subtract the value of the amenity from the comparable property’s value
Realize it does not matter, because no two properties are exactly alike
List the value of the amenity separately
Functional obsolescence would not include
Eccentric design
Items of surplus utility
Lack of air-conditioning
Proximity to nuisances
The major cause of loss of value of real property is usually due to
Deterioration
Passage of physical life
Obsolescence
Lack of maintenance
A building that is an improper improvement to its site is an example of
Curable physical obsolescence
Incurable physical obsolescence
Curable functional obsolescence
Incurable functional obsolescence
A 12-year-old building that has been maintained. An excellent condition is given an age of six years by an appraiser. This would be known as its
Actual life
Economic life
Effective age
Physical life
When comparing the economic and physical life of a building, the economic life is usually
Equal
Longer
Shorter
Shorter or longer, depending on the maintenance
Economic rent is best defined as the rent
Required to produce a suitable return for the owner
Generated by the property in a theoretically, perfectly informed market
Agreed to buy a lessor and lessee under the terms of a written lease
Received for comparable space in the competitive open market
The capitalization approach is based primarily on the appraisal concepts of
Change
Competition
Anticipation
Retribution
The effective annual gross income of a property is the difference between the annual gross income, and
Vacancy, factor, and rent collection losses
Allowable expenses and depreciation
Capitalization rate
Administrative expenses and capital improvements
When calculating the NOI, which of the following is not deducted from gross income?
Maintenance expenses
Management fees
Mortgage interest
Vacancy losses
To accurately calculate a gross rent multiplier, the appraiser needs _ from comparable properties
Net income and selling price
Original cost and the annual income
Annual rent and the selling price
Net income, and the capitalization rate
Usually an appraiser estimates the value of a property by using all three major approaches. To obtain a final estimate of value the appraiser _ the three indications of value
Amortizes
Averages
Finalizes
Reconciles
When is the appraisal report valid?
The date date the appraiser inspects the property
The date the appraiser accepts the appraisal assignment
The date the appraiser signs the appraisal report
The date the intended user receives the appraisal report
A person with a trainee license
May appraise small residential properties with no supervision
Must work under the supervision of a certified appraiser licensee
Must work under the supervision of an appraiser with a residential license
Does not need supervision, but must work for an appraisal management company
