Ch. 37 Quiz

Which of the following is a local market influence on market value? Inflation. Municipal infrastructure. Money supply. Federal tax laws.

Municipal infrastructure.

What a property actually sells for is its: Market value. Appraised value. Market price. Book value.

Market price.

Which of the following situations illustrates the principle of contribution? A homebuyer makes a down payment of 20% instead of the 10% the lender requires. A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000. The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood. Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.

A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.

A person paid $150,000 for a house with the intention of renting it out for $1,000 per month. The economic principle that led the person to pay this price based on the property's ability to generate this future income is known as: Anticipation. Substitution. Supply and demand. Utility.

Anticipation; This is the economic principle of anticipation. Or, the belief that an action today can add future value or income.

A property owner buys an adjacent parcel and combines it with the original parcel to create a property with a higher value than the total of the two separate property values. The operative principle of value in this situation is called: Highest and best use. Assemblage. Progression. Subdivision.

Assemblage.

Of the following market conditions or trends, which is NOT important as an influence on market value? Number of properties on the market. Trends in average time on the market. Number of competing agents in the market area. Trends in sale prices in different price ranges.

Number of competing agents in the market area.

Real estate value in general is: The present monetary worth of benefits arising from the ownership of real estate. The past monetary worth of benefits arising from the ownership of real estate. The future monetary worth of benefits arising from the ownership of real estate. Its cost value.

The present monetary worth of benefits arising from the ownership of real estate.; Real estate value can be determined by the present monetary worth of benefits arising from property benefits.

How readily or easily title or rights to real estate can be transferred affects the property's: Reconciliation value. Transferability value. Anticipation value. Utility value.

Transferability value.

One reason real estate agents need to understand influences on market value is so they can perform proper appraisals. obtain the highest market value possible for their listings. foresee how current conditions may affect their transactions. inform buyers that they will have to pay market price.

foresee how current conditions may affect their transactions.

Highest and best use of a property is that use which _________. is physically and financially feasible, legal, and the most productive. is legal, feasible, and deemed the most appropriate by zoning authorities. conforms to other properties in the area. entails the largest building that zoning ordinances will allow developers to erect.

is physically and financially feasible, legal, and the most productive.

A phase that is NOT part of the usual real estate market cycle is oversupply. undersupply. supply-demand equilibrium. price-demand independence.

price-demand independence.

The concept of market value is best described as the price a buyer will pay for a property, assuming other similar properties are within the same price range. the price an informed, unhurried seller will charge for a property, assuming a reasonable period of exposure with other competing properties. the price a buyer and seller agree upon for a property assuming stable interest rates, appreciation rates, and prices of other similar properties. the price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a cash price and the property's reasonable exposure to the market.

the price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a cash price and the property's reasonable exposure to the market.; Market value is the middle ground or compromise region where a buyer and seller can mutually agree for a sales price.