FIRE 305 Ch. 5-8, FIRE 305 Ch. 1-4, Chapter 11, Chapter 10, Chapter 9, Chapter 8, Chapter 7, Chapter 6, Chapter 5, Chapter 4, Chapter 2, Chapter 3, Chapter 1

Residential lots tend to be smaller in larger population cities. A bid-rent model of rent would predict this because smaller lots tend to reduce:

average commuting time. average commuting cost.

Under the doctrine of constructive notice, if people ___________ a claim it is enforceable. -are aware of -have a written copy of -can learn about -have read or heard about

can learn about

The most common method used in DCF analysis to estimate the value of the subject property at the end of an expected 10-year holding period is to

capitalize NOI in year 11 into an estimated market value in year 10

The most common method used in DCF analysis to estimate the value of the subject property at the end of an expected 10-year holding period is to Multiple choice question. assume the acquisition price will grow at the expected general rate of inflation in the economy over the next 10 years capitalize NOI in year 10 into an estimated market value in year 10 assume the acquisition price will grow at some compound annual rate for 10 years capitalize NOI in year 11 into an estimated market value in year 10

capitalize NOI in year 11 into an estimated market value in year 10

Generally, higher property taxes on a property tend to lower its value, while more resulting community services for the property tend to increase its value. In short, the effects of the property tax are captured or ____ into the value of a property.

capitalized (or built)

A quitclaim deed commonly would be used for

clearing a conflicting claim to title. adding a spouse to a property title.

A VA loan can reduce the cash obligation of the borrower to:

closing costs only

In patterns of urban location, new car dealers, night clubs and the stores in shopping malls represent activities that tend to gather together rather than disperse over the city. This type of location pattern is known as a ____.

clustering

In patterns of urban location, new car dealers, night clubs and the stores in shopping malls represent activities that tend to gather together rather than disperse over the city. This type of location pattern is known as a _____.

clustering

Mortgage loan servicing includes:

collecting and forwarding monthly payments to security investors. managing loan escrow accounts: paying taxes, insurance, etc.. managing delinquencies. managing defaults and foreclosures.

Property rights can be divided into two classes, real and personal. Which of the following is an example of real property? -vehicles -stocks and bonds -patents -commercial building

commercial building

Forms of automatic marital co-ownership include

community property, elective share, dower/curtesy

Although otherwise very similar to the subject property, the back yard of a comparable sale provides a view of a small, clean lake. The sale price of the ____________ needs to be adjusted ________.

comparable, downward

In patterns of urban location, grocery anchored shopping centers, coffee shops, and sandwich shops, all of which tend to spread out evenly over a city, are referred to as ____ activities.

convenience

In patterns of urban location, grocery anchored shopping centers, coffee shops, and sandwich shops, all of which tend to spread out evenly over a city, are referred to as _____ activities.

convenience

Services and products that users seek to obtain from the closest available source are more commonly referred to as: Multiple Choice comparison activities. convenience activities. concentric activities. segmented activities.

convenience activities.

Any standard home loan that is not insured or guaranteed by an agency of the US government is a ____ mortgage loan.

conventional

Private mortgage insurance applies to ____ mortgage loans, and generally is required on mortgages with a loan-to-value ratio exceeding ____ percent of value.

conventional. 80 (or eighty).

The main risk of a reverse mortgage, called mortality risk, is that the accumulating balance on the loan will ____ the value of the ____.

exceed, outweigh, or surpass. house, property, or home.

In the Elysian Forest case, the analyst is able to construct a demographic profile of potential buyers, which enables the analyst to apply what technique to Census data to focus the analysis?

excluding irrelevant data

In the Elysian Forest case, the analyst is able to construct a demographic profile of potential buyers, which enables the analyst to apply what technique to Census data to focus the analysis? Multiple choice question. using analogy constructing proxy variables excluding irrelevant data

excluding irrelevant data

In the case study of Plane Vista Apartments, recognizing the idea of "airport island" is an example of what market research technique?

excluding the irrelevant

Of the several reasons why net benefit analysis and net present value analysis can overstate the value of refinancing, one that applies only to a minority of U.S. households today is:

income tax effects

The national government can have a significant impact on the value of real estate through:

income tax policy

All else the same, higher purchase prices _________ cap rates

increase

All else the same, higher purchase prices _________ cap rates Multiple choice question. increase do not affect decrease

increase

Favorable nonmarket financing concessions provided by the seller to the buyer generally ______ the negotiated sale price of the subject property.

increase

The text argues that successful market analysis and research

is a process

The text argues that successful market analysis and research Multiple choice question. should follow the same formula in any market should come before the subject property is described is a process

is a process

In the FHA Home Equity Conversion Mortgage (HECM) program FHA commits to the lender that if the balance at sale exceeds the value of the house, FHA will pay the difference to the ____.

lender

In the simplest form of a reverse mortgage the ____ makes regular or occasional payments to the ____ and the loan is not paid off until sale of the property.

lender. borrower (or homeowner).

Local offices that may be able to provide data regarding a local economic base include:

local chamber of commerce. local economic development authority. local planning agency.

Local offices that may be able to provide data regarding a local economic base include: Multiple select question. Local social security office local economic development authority local chamber of commerce local planning agency

local economic development authority local chamber of commerce local planning agency

Potential sources of data from public records include Multiple select question. local property tax assessors cities and counties many agencies of the federal government the local board of Realtors

local property tax assessors cities and counties many agencies of the federal government

Potential sources of data from public records include

local property tax assessors. many agencies of the federal government. cities and counties.

Cap rate information is often available from

local research companies. brokerage firms. data providers.

The ______ of real estate markets contribute(s) to segmentation.

localized nature, price differences, immobility

Real estate markets are ______ because ______

localized; competing properties are generally in close proximity

Real estate markets are ______ because ______ -immobile; potential users are widely dispersed -localized; competing properties are generally in close proximity -localized; competing properties are widely dispersed

localized; competing properties are generally in close proximity

The first, and historically the most challenging step in a metes and bounds description is

locating the point of beginning.

Appraisers generally forecast that a property's gross potential income will not be realized because

not all tenants pay rent in a timely fashion. some tenants will vacate space after their lease term expires. some tenants will vacate space before their lease term expires.

Default is failure to meet the requirements of the ____ and, by reference, the ____.

note. mortgage.

The two documents of a mortgage loan are the ____ and the ____.

note. mortgage.

A due-on-sale clause in a mortgage gives the lender the right to require that the borrower ____ ____ the loan if they sell, or in substance, sell the property.

pay off (or back)

Brian just began graduate school at the local university and is looking to rent an apartment. A family friend has decided to lease him a two bedroom, one bathroom cottage through an oral agreement with no definite lease period outlined. Which of the following leasehold estates best describes Brian's situation? -tenancy for years -tenancy at sufferance -periodic tenancy -tenancy by the entirety

periodic tenancy

The fundamental requirement for a land description is to be

permanently unambiguous.

A second mortgage loan created at purchase along with a first mortgage of no more than 80 percent of value, can provide an alternative to mortgage insurance as a way to increase total financing above 80 percent of value. This kind of mortgage is called a ____ mortgage.

piggyback

The two-edged risk from interest rates that mortgage banking encounters - one risk if interest rates fall and another risk if interest rates rise - is called ____ risk.

pipeline

The method of market analysis advocated here reverses the usual logic in a market study: instead of focusing first on the larger world and then narrowing to the property, the approach here starts at the _____ and examines the links to the larger world.

property

Power of sale foreclosure has statutory protections for the borrower, including requirements for:

proper sale procedure. required minimum time before the sale. proper legal notice to the borrower.

The method of market analysis advocated here reverses the usual logic in a market study: instead of focusing first on the larger world and then narrowing to the property, the approach here starts at the ____ and examines the links to the larger world.

property

______ adjustments focus primarily on the physical and locational differences between the subject and comparable properties. Multiple choice question. Market value Property Financing Transactional

property

Required sale price adjustments are divided by USPAP into two major categories including

property adjustments. transactional adjustments.

Which kind of right is older, personal or property?

property rights

Which of the following types of liens is automatically superior to any other lien? -property tax and assessment lien -mortgage lien -lien arising from a court judgment unrelated to ownership of the property -mechanics' lien

property tax and assessment lien

A lien that always exists on every private property is the

property tax lien.

A lien that always exists on every private property is the -mechanics' lien. -property tax lien. -community development district lien. -mortgage lien.

property tax lien.

When the particular information needed in real estate market analysis does not exist one can try to find a variable to represent the missing data; for example, using data on population to represent households. In this case the data on population is serving as a _____ for the households variable.

proxy

The narrowest notion of eminent domain limits its scope to "public use," that is, for _____ facilities only, while the more common and broader view allows eminent domain to be use for "public purpose," meaning any use of clear public _____.

public, benefit

The narrowest notion of eminent domain limits its scope to "public use," that is, for ____ facilities only, while the more common and broader view allows eminent domain to be use for "public purpose," meaning any use of clear public ____.

public. benefit.

While government agencies generally classify any mortgage that finances a home ____ as a purchase money mortgage, real estate brokers limit the term to any mortgage lien given from a ____ to the ____.

purchase. buyer. seller.

Suppose that an income producing property is expected to yield cash flows for the owner of $150,000 in each of the next five years, with cash flows being received at the end of each period. If the opportunity cost of investment is 8% annually and the property can be sold for $1,250,000 at the end of the fifth year, determine the value of the property today. Multiple Choice $304,704.00 $1,449,635.50 $1,481,143.98 $2,000,000.00

pv in finance calc: $1,449,635.50

Considered a "questionable conveyance of title" by most courts, which of the following types of deeds is worded to imply no claim of title, but rather only convey what interest the grantor actually has? (Hint: This type of deed may be used by a developer to convey certain lands of a subdivision to the local government through dedication.) -general warranty deed -special warranty deed -deed of bargain and sale -quitclaim deed

quitclaim deed

The type of deed with no covenants, explicit or implied, is the

quitclaim deed.

The type of deed with no covenants, explicit or implied, is the -limited warranty deed. -general warranty deed. -deed of bargain and sale. -quitclaim deed.

quitclaim deed.

Participants in real estate "user" markets include

renters, owners

The Qualified Mortgage created in the Dodd-Frank Act of 2010 sets an ability-to-____ standard for most home mortgages. Loans meeting the standard receive "safe harbor" protection against legal defenses of the ____ in case of default.

repay. borrower.

The estimated cost to build a structure with equal functionality (utility) as the existing structure using modern methods is generally referred to as the

replacement cost

The estimated cost to build a structure with equal functionality (utility) as the existing structure using modern methods is generally referred to as the Multiple choice question. fair market value reproduction cost substitution cost replacement cost

replacement cost

As the loan-to-value (LTV) of a loan is higher the effective interest cost increases. This can result from multiple factors, including:

required mortgage insurance above 80 percent LTV. Higher interest rate on the first mortgage due to higher risk classification. Higher cost of a "piggyback" second mortgage.

Under the Truth-in-Lending Act, a home mortgage borrower has the right to cancel a mortgage loan within three business days after consummation of the loan, so long as it is not for purchase or construction of a principal residence. This is known as the right to:

rescind

Examples of industry economies of scale that result in clustering include: Multiple select question. research universities motels at an interstate highway exit suburban office parks

research universities suburban office parks

Examples of industry economies of scale that result in clustering include:

research universities. suburban office parks.

In modern times most state laws provide for some right of prepayment at least for ____ first mortgage loans.

residential (or home)

Prepayment penalties are limited to a small percentage of ____ mortgage loans, while they exist for most mortgage loans on ____ real estate.

residential (or home). commercial.

While the borrower is personally liable in almost all ____ mortgage loans, most borrowers are not personally liable for ____ property mortgage loans.

residential (or home). commercial.

The visibility of a property from the street is usually most important for

retail properties

The visibility of a property from the street is usually most important for -warehouse properties -storage facilities -retail properties

retail properties

The accuracy of quantitative valuation techniques depends heavily on

the experience of the appraiser. the quality of the appraiser's cash flow assumptions. the quality of the cap rate or discount rate assumptions employed.

If a buyer purchases a property "subject to" an existing mortgage this means that the buyer did not ____ the ____, and is not personally liable for the loan.

sign. note.

Views diverge on the importance of a down payment in underwriting a home mortgage loan. Underwriters tend to believe that the down payment is a ____ of the buyer's sincerity or intention to meet the obligation. Economists tend to believe that what matters is not the cash a borrower has put into a house, but what the borrower can ____ from it.

signal (indicator, or gauge) recover (get, or gain).

The importance of requiring a down-payment for a mortgage loan is debated. An important argument for it is that making any cash down payment:

signals sincere intent to perform

In general, a mortgage borrower takes on personal liability for a loan upon ____ the note.

signing

A football field, not including the end zones, is ________ -slightly more than one acre -equal to one acre -slightly less than one acre

slightly more than one acre

Federal Home Loan Banks, originally created to provide liquidity to savings and loan associations, now are charged with providing liquidity to any ____ scale mortgage lending institutions.

small

Common entities operating as mortgage brokers include:

small banks or thrifts. individual persons. credit unions.

Examples of physical differences that would require an adjustment to the sale price of the comparable include

the existence of a pool. lot size. structure size.

A contract for deed differs from a "normal" sale of property with seller financing in that ______ by the seller until the installment payments are largely completed.

title is retained

Reproduction cost is defined as the cost

to build an exact replica of the subject property

Generally, a current estimate of land value plus the reproduction or replacement cost of the building will set the ______ value of the property.

upper limit to the

Generally, a current estimate of land value plus the reproduction or replacement cost of the building will set the ______ value of the property. Multiple choice question. upper limit to the average lower limit to the median

upper limit to the

In the case study of Plane Vista Apartments, assuming that the proposed apartments would be much like the successful adjacent existing apartments of the same owner can be thought of as using what market research technique?

use of analogy

Which of these terms is more characteristic of a periodic tenancy than a tenancy for years?

Informal, High risk of misunderstanding

Planned unit development (PUD) allows residential density to range from single family detached to multifamily, and often include supporting commercial development.

True

True or false: A comparable property having a different legal estate than the subject property should generally not be used as a comparable.

True

True or false: A poor architectural design is an example of functional obsolescence.

True

True or false: Although most appraisal assignments involve the valuation of properties with improvement (buildings) on the land, appraisers often must separately value the land.

True

True or false: Better real estate decisions affect the productivity of individuals, firms, and local markets.

True

True or false: DCF valuation is really a combination of DCF and direct capitalization.

True

True or false: Effective gross income is affected by vacant space and by the extent to which current tenants have have lease rates that are below market

True

True or false: In the direct capitalization method, net operating income is divided by the capitalization rate to arrive at an estimated value.

True

True or false: The goal of market analysis is generally to develop an understanding of the factors that affect demand and and supply in a particular market and use that knowledge to forecast how values in that market are likely to change over time.

True

True or false: The use of an effective gross income multiplier is most popular in the valuation of apartment properties.

True

True or false: USPAP addresses the ethical obligations of appraisers and provides the minimum appraisal standards that most be followed by all appraisers

True

A mortgage loan where the borrower is not personally liable is called a nonrecourse loan.

True Reason: A mortgage loan where the borrower is not personally liable is called a nonrecourse loan.

Suppose in a one dimensional city with all economic activity at a single point there are two types of driver households that are identical except that one type makes one commute per day and the other makes two commutes per day. How will these households arrange themselves?

Two-commute drivers will be closest to the CBD.

USPAP standards require that, when using the sales comparison approach, appraisers use how many comparables?

USPAP has no requirement regarding the number of comparable sales

Approaches to managing or mitigating market risk in real estate include:

avoid properties where use or user change might occur. affirm with market analysis that a property's current use is durable. be sure a tenant or user is "locked in" for a long period.

Appraiser are more likely to estimate actual capital expenditures in the period (year) they are expected to be incurred if the appraiser is using ____________ to estimate value. Multiple choice question. a residual valuation model a deferred maintenance model a discounted cash flow model a direct capitalization model

a discounted cash flow model

Appraiser are more likely to estimate actual capital expenditures in the period (year) they are expected to be incurred if the appraiser is using ____________ to estimate value. Multiple choice question. a residual valuation model a discounted cash flow model a direct capitalization model a deferred maintenance model

a discounted cash flow model

performance standards have been implemented for a wide variety of externalities in land use, including

air quality effects from a land use. traffic generation by a land use. storm runoff.

In Chicago, New York and other major cities, there are major buildings constructed over railroads, or former railroads, enabled by the use of: -air rights -cantilever construction -political influence -rights to the subsurface

air rights

Since 1940 new forms of offices, separate from production facilities were enabled by, among other factors: Multiple select question. air-conditioning fluorescent lighting improved communications and data processing the Tax Reform Act of 1986

air-conditioning fluorescent lighting improved communications and data processing

Initially, Qualified Mortgages include mainly::

all conforming conventional loans. those meeting the requirement specified in the Dodd-Frank Act. all FHA and VA loans.

To establish title for real property the most important considerations are

all recorded evidence. actual notice.

Currently, Freddie Mac channels virtually all of it acquired loans into mortgage securities, and purchases the loans from:

all types of lenders

It is especially important in real estate market research to try to exclude irrelevant data because

almost all data available was created for some other purpose, and is too inclusive

Adjustments made to the sale price of comparable properties for expenditures made after purchase are

always positive

Adjustments made to the sale price of comparable properties for expenditures made after purchase are Multiple choice question. always negative usually positive usually negative always positive

always positive

For a mortgage loan the number of months over which a level payment will fully pay off the loan is called the term for ____.

amortization

The repayment of a loan through a series of scheduled balance reductions is called ____.

amortization

Characteristics of an easement appurtenant include that

an easement appurtenant "runs with the land." one parcel receives a benefit at the expense of another other. It involves two adjacent parcels of land.

An example if an easement in gross is

an easement to remove minerals from a parcel.

An example if an easement in gross is -an easement to remove minerals from a parcel. -an easement imposing a building height restriction on an abutting parcel. -a driveway easement across a parcel that benefits an abutting parcel. -a common wall easement.

an easement to remove minerals from a parcel.

If the market value of a residential developer's project falls below its construction costs, builders cease to build. With supply thus curtailed, we would expect which of the following to occur? Multiple Choice a decrease in occupancy rates a decrease in market values an increase in real rental rates an increase in construction costs

an increase in real rental rates

In a "below-line" treatment of expected capital expenditures, capital expenditures

are subtracted from NOI to obtain the subject property's "net cash flow"

Late fees on standard residential first mortgage loans range ____________ of the late amount.

around 4 to 5 percent

A mortgage loan without a due-on-sale clause is called a(n) ____ loan.

assumable

Potential gross income is defined as the total income the property would produce

assuming 100% occupancy and no collection losses

Potential gross income is defined as the total income the property would produce Multiple choice question. tenants paid all operating expenses assuming 100% occupancy and no collection losses if not more than 15% collection losses were expected

assuming 100% occupancy and no collection losses

Examples of secondary or local activities generally include

automotive service stations. movie theaters. elementary school staff and teachers.

Residential lots tend to be smaller in larger population cities. A bid-rent model of rent would predict this because smaller lots tend to reduce: Multiple select question. average land cost per unit average commuting cost average commuting time commuting speed

average commuting cost average commuting time

The Federal Home Loan Bank System, originally banker for savings and loan associations, now extends membership to:

banks. all thrifts. insurance companies. credit unions.

The source from which property tax revenue can be obtained is the value of the total tax ____ less the value of property that is ____ from property taxes.

base. exempt.

In true co-ownership of property, the owners

basically hold the same bundle of rights. cannot meaningfully partition their ownership into separate bundles of rights.

Approaches to managing or mitigating market risk in real estate include: Multiple select question. be sure a tenant or user is "locked in" for a long period avoid properties where use or user change might occur affirm with market analysis that a property's current use is durable buy market viability insurance to protect against a market decline

be sure a tenant or user is "locked in" for a long period avoid properties where use or user change might occur affirm with market analysis that a property's current use is durable

Generally, DCF valuation models are ______ than direct capitalization models to handle the valuation of properties with multiple tenants and leases. Multiple choice question. equally able better able less able

better able

Two apartment markets are considered to be equally risky. If market participants expect more price appreciation in market A than in market B,

cap rates will be lower in market A

The largest participants in the secondary mortgage market are ____ ____ and ____ ____.

Fannie. Mae. Freddie. Mac.

Under the doctrine of constructive notice, if people ___________ a claim it is enforceable.

can learn about

A purchase money mortgage, in general, is any mortgage loan created simultaneous with exchange of ____.

title

Required conditions for successful acquisition of a prescriptive easement include that use must be

"open and notorious." hostile to the owner's interests. continuous.

If the interest rate is 6 percent on a home mortgage loan and the beginning of month balance is $200,000, then the interest payable at the beginning of the next month would be ____.

$1,000

Given the following information, determine the value of having an additional 500 square feet of living space. Assume that the comparable properties are similar in all other attributes besides those listed in the table below. Comparable 1 / Comparable 2 / Comparable 3 / Comparable 4 Time Sold: Today / Today / 1 Year Ago / Today Bathrooms: 1 / 1 / 2 / 2 Size: 3500 sq. ft / 3000 sq. ft. / 3500 sq. ft / 3000 sq. ft. Sale Price: $150,000 / $140,000 / $160,000 / $156,000 Multiple Choice $4,000 $6,000 $10,000 $16,000

$10,000 --> comparable 1 at 150000 - comparable 2 at 140000 = 10000, adjusted for sq ft because rest of comparables are the same

A small office building has the following characteristics: net operating income, $65,000; operating expenses and capital expenditures, $33,000; vacancy and collection losses, $5,000. What is potential gross income assuming an above-line treatment of capital expenditures?

$103,000

The most complete interest ("bundle of rights") in real property is the: -Fee simple absolute -Freehold estate -Tenancy for years -Life estate

Fee simple absolute

Alt-A loans were characterized mainly by high loan-to-value ratio, high interest rate and no ____ of borrower financial circumstances.

documentation

The quitclaim deed

Includes no promises about the interest that the grantor holds. can convey the same property interest as a general warranty deed. conveys whatever interest the grantor holds.

Which of these items most likely is(are) personal property? -An oriental rug -A very large television -Hurricane shutters -Patio furniture -A wall-to-wall carpet, installed.

-An oriental rug -A very large television -Patio furniture

Which of these are natural monopolies? -Water company -Walmart -Electrical utility -Wells Fargo

-Water company -Electrical utility

If the interest charge for the current month for a standard home loan is $1,000.00, and the stated interest rate is 4.0 percent per year, what is the current balance on the loan?

$300,000

What was the sale price of the property if the effective gross income multiplier is 4.25, potential gross income is $125,000, and vacancy and collection losses are estimated at 2% of PGI?

$520,625

if a borrower's house is worth $200,000, the borrower has a first mortgage balance of $100,000, and a HELOC lender will give a home equity line of credit loan such that the total mortgage balance is 80 percent, then the maximum line of credit will be ____.

$60,000

An individual works downtown and pays $600 per month in rent for an apartment located 10 miles from her office. She has calculated that she spends 30 minutes per day driving each way to the office and it costs her $4 per day in gas and lost productivity. Using the framework of the bid-rent model, how much would she be willing to pay for an apartment downtown, assuming a 20 workday month? Multiple Choice $80 $440 $520 $680

$680

A house sold for $650,485 five months ago. A very comparable house sold yesterday for $670,000. The implied (non-compounded) monthly rate of increase in property prices is ______ percent. Multiple choice question. .035 0.52 0.25 0.60

((670000-650485) / 650485) / 5 months = 0.60

Suppose you have a $200,000 home mortgage with a monthly payment of $1,150 and you also have credit card debt of $20,000 with a monthly payment of $300 per month. Interest rates have declined so that your mortgage loan would have a payment of $1,000 if the only change in it were to adopt the market interest rate. Moreover, you can increase your debt to $220,000 and pay off the credit card debt. Your current combined monthly payment is $1,450. To examine the net benefit of refinancing both loans with the $220,000 mortgage, what would be your new payment for the purpose of computing net benefit?

(220,000/200,000) x $1,000

Suppose that you have begun to gather some demographic data in order to project the potential sales of a new development project. The developer hopes to be able to target the following household types who fall in the upper 10% of income brackets: Empty Nesters, Single Parents, and Unrelated Individuals. Utilizing the following population information, determine the core market share that the development project yearns to target with this project: Total Owner Occupant Households: 48,000 Traditional Families in the Upper 10% of Income Brackets: 25,000 Empty Nesters in the Upper 10% of Income Brackets: 5,000 Single Parents in the Upper 10% of Income Brackets: 10,000 Unrelated Individuals in the Upper 10% of Income Brackets: 8,000 Multiple Choice 4.17% 47.92% 52.08% 92.00%

(5000 + 10000 + 8000) / 48000 total = 0.4792 = 47.92%

For which of these legal threats would an owner be covered through title insurance, but generally not through an abstract with attorney's opinion? -A failed legal challenge to title -Local government lowering the maximum residential density on the land -A successful lawsuit claiming title -A fraudulent deed

-A failed legal challenge to title -A successful lawsuit claiming title -A fraudulent deed

Which of these are elements of "land," as used in real property? -Below the surface as far as technology can reach -Above the earth as high as building technology and air traffic space permits -Minerals as far as technology can reach in all directions, even beyond parcel boundaries. -The surface of the earth

-Below the surface as far as technology can reach -Above the earth as high as building technology and air traffic space permits -The surface of the earth

Which of these liens always have the same, equal, senior priority? -CDD lien -Mortgage lien -Assessment lien -Judgment lien -Property tax lien

-CDD lien -Assessment lien -Property tax lien

Which of these property interests are likely to include an implied easement of access? -Coal rights -Oil rights -Right to erect a power line -Right to a view -Timber rights

-Coal rights -Oil rights -Right to erect a power line -Timber rights

Which of the following are true statements in comparing a condominium to a cooperative -Condominiums impose fewer restrictions on owners -Condominiums are useful in fewer situations -Condominiums more concentrated in larger, older cities -Condominiums are more recent in the US

-Condominiums impose fewer restrictions on owners -Condominiums are more recent in the US

Concerning whether property taxes are regressive (higher as a percent of income as income is lower), true statements are: -Homestead exemptions that exempt a fixed amount of otherwise taxable value make property taxes more regressive. -Considering both taxes paid and benefits received, property taxes probably are not regressive. -Property taxes paid can be regressive. -Benefits funded by property taxes likely favor lower income households and are the opposite of regressive.

-Considering both taxes paid and benefits received, property taxes probably are not regressive. -Property taxes paid can be regressive. -Benefits funded by property taxes likely favor lower income households and are the opposite of regressive.

Covenant in a general warrantee deed include: -Covenant of good quality -Covenant of no fraud -Covenant of seizin -Covenant of quiet enjoyment -Covenant against encumbrances

-Covenant of seizin -Covenant of quiet enjoyment -Covenant against encumbrances

Which of the conveyances of a real property interest listed below probably would be detected only by actual notice? -Marital ownership claim by a former spouse of the owner -Easement by estoppel -Mortgage -Prescriptive easement

-Easement by estoppel -Prescriptive easement

Which two of these personal rights sometimes conflicts with property rights in a shopping mall? -No unreasonable search or seizure -Freedom of expression -Protection of life, liberty and property -Freedom of assembly -No taking of property without just compensation

-Freedom of expression -Freedom of assembly

Which of these terms is more characteristic of a periodic tenancy than a tenancy for years? -High risk of misunderstanding -Commonly used for large commercial leases -Must be in writing to be enforceable -Informal

-High risk of misunderstanding -Informal

An example of incomplete construction information potentially contributing to market failure is -Inability to examine plumbing under a concrete slab -Inability to examine roof nails for wind resistance once a roof is complete -toxicity of some chemicals commonly applied to lawns -the tendency of sidewalks and driveways to crack

-Inability to examine plumbing under a concrete slab -Inability to examine roof nails for wind resistance once a roof is complete

The quitclaim deed -is mainly a quick way of conveying title. -Includes no promises about the interest that the grantor holds.. -conveys whatever interest the grantor holds. -can convey the same property interest as a general warranty deed.

-Includes no promises about the interest that the grantor holds.. -conveys whatever interest the grantor holds. -can convey the same property interest as a general warranty deed.

Which of these are among the rules used by courts to determine fixtures? -Tenure of the article (length of time installed) -Value of the article -Intention of the parties -Manner of attachment -Character of the article and manner of adaptation -Relation of the parties

-Intention of the parties -Manner of attachment -Character of the article and manner of adaptation -Relation of the parties

Ownership by tenancy in common, compared to a corporation, -Is real property rather than personal property. -often arises as a default form of co-ownership. -is an artificial "person" under US constitutional law

-Is real property rather than personal property. -often arises as a default form of co-ownership.

Characteristics of a tenancy for years include which of these? -It can be virtually any length, up to many decades. -Either party can terminate with a notice of one year. -It is limited to single tenant properties. -It must be conveyed in writing (to be enforceable) if longer than a year.

-It can be virtually any length, up to many decades. -It must be conveyed in writing (to be enforceable) if longer than a year.

Some challenges to the expansion of land use planning include: -It favors housing too much -It challenges traditional U.S. notions of democracy -It requires a large and expensive staff -There are conflicting ideas of best practice

-It challenges traditional U.S. notions of democracy -There are conflicting ideas of best practice

Characteristics of an easement appurtenant include that -the easement appurtenant generally is limited to 30 years. -It involves two adjacent parcels of land. -one parcel receives a benefit at the expense of another other. -an easement appurtenant "runs with the land."

-It involves two adjacent parcels of land. -one parcel receives a benefit at the expense of another other. -an easement appurtenant "runs with the land."

The dominant rules in identifying fixtures are "intention of the parties" and "relation of the parties." Which statement(s) exemplify one of these rules? -Removal of a counter-top kitchen stove "damages" the kitchen. Therefore, it is a fixture. -Items installed by a tenant are personal property of the tenant until they are abandoned. -Storm windows custom fitted to a house are not usable elsewhere. Therefore they are fixtures. -Furnishings created in a store for a retail tenant belong to the tenant until they are abandoned.

-Items installed by a tenant are personal property of the tenant until they are abandoned. -Furnishings created in a store for a retail tenant belong to the tenant until they are abandoned.

Which of these tenancies has "right of survivorship," such that the death of one co-owner results in the decedent's ownership interest being passed to the surviving owner(s)? -Joint tenancy -Tenancy by the entirety -Condominium -Tenancy in common

-Joint tenancy -Tenancy by the entirety

Which of these items is(are) real property? -Sofas and beds in a home -Land -An oval area rug -A kitchen stove in a home -Minerals yet to be extracted -Air space just above the ground

-Land -Minerals yet to be extracted -Air space just above the ground

For a deed, identify the requirements of the grantor. -Citizen of the property country -Legally competent -Of legal majority age -Signature required

-Legally competent -Of legal majority age -Signature required

Which of these events can affect the chain of title for real estate? -Marriages -Deeds -five-year lease -Foreclosures -Estate settlements

-Marriages -Deeds -Foreclosures -Estate settlements

Which of these liens has priority strictly according to time of creation? -Mechanics' liens -CDD lien -assessment lien -Mortgage liens

-Mechanics' liens -Mortgage liens

Which statements are correct concerning the impact of fixtures on real estate transactions? -Misunderstandings about potential fixtures can be costly, time consuming and disruptive. -The potential for fixtures arises in most real estate transactions. -In misunderstandings about potential fixtures, the buyer is always considered correct. -Fixtures automatically convey as part of real property unless explicitly excepted.

-Misunderstandings about potential fixtures can be costly, time consuming and disruptive. -The potential for fixtures arises in most real estate transactions.

From what two sources do personal rights in the United States most directly derive? -Other amendments to the U.S. Constitution. -The Magna Carta -The Bill of Rights to the U.S. Constitution -The Old Testament of the Bible -The code of Hammurabi

-Other amendments to the U.S. Constitution. -The Bill of Rights to the U.S. Constitution

Which of these items is (are) likely to be a fixture? -Drapes purchased and installed by a renter -Pews that are custom designed for a house of worship -A refrigerator in a single-family home -Standard wall-to-wall carpeting

-Pews that are custom designed for a house of worship -Standard wall-to-wall carpeting

Which two of these best demonstrate personal rights rather than property rights? -Right to drill for oil on your property. -Right to remove trees from your property. -Right to rent out your home. -Right to post election campaign signs on your lawn. -Right to invite a group into your home. -Right to give away your car.

-Right to post election campaign signs on your lawn. -Right to invite a group into your home.

Which of these are required elements of a deed? -Correct format -Signature of the grantor -Words of conveyance -Acknowledgment -Signature of the grantee

-Signature of the grantor -Words of conveyance -Acknowledgment

Under the Statute of Frauds which of these must be in writing to be enforceable? -Ten-year lease -Mortgage -Monthly rental agreement -Property management contract

-Ten-year lease -Mortgage

Which of the following contribute to the complexity of real estate transactions? -The high price of real estate -The contiguous nature of all real estate parcels -The complex bundle of rights associated with real estate ownership

-The contiguous nature of all real estate parcels -The complex bundle of rights associated with real estate ownership

Which of these statements is (are) true regarding fixtures? -The problem of fixtures arises infrequently, but can be important. -The problem of fixtures is limited to properties with new buildings. -The dominant rule for determining what is a fixture is called "intention of the parties." -Altogether, there are 4 traditional rules for determining whether something is a fixture. -Fixtures are personal property that has become real property.

-The dominant rule for determining what is a fixture is called "intention of the parties." -Altogether, there are 4 traditional rules for determining whether something is a fixture. -Fixtures are personal property that has become real property.

Which are true representations of the history of Time-share in the United States? -The industry is now dominated by some of the largest hospitality companies -Important improvements in the industry came, in part, from stronger regulation -The industry started in the US and then spread to Europe and elsewhere -The industry in the US dates back to the 1920s -Its early US history was one of misrepresentation and failure to perform

-The industry is now dominated by some of the largest hospitality companies -Important improvements in the industry came, in part, from stronger regulation -Its early US history was one of misrepresentation and failure to perform

Characteristics of a periodic tenancy include which of these? -The time required for notice of termination is governed by state law. -The rental payment period can be any length, including over one year. -it can be by an oral agreement. -It continue until either landlord or tenant gives proper notice of termination. -It is mainly used for multi tenant properties.

-The time required for notice of termination is governed by state law. -it can be by an oral agreement. -It continue until either landlord or tenant gives proper notice of termination.

True statements about special assessments include: -They are used to fund public improvements affecting a limited set of properties. -The assessments often are proportional to front footage of the lots involved. -The use of assessments has declined in popularity relative to property taxes. -Common applications are for sidewalks, street improvements, sewer extensions, etc.

-They are used to fund public improvements affecting a limited set of properties. -The assessments often are proportional to front footage of the lots involved. -Common applications are for sidewalks, street improvements, sewer extensions, etc.

Ways that restrictive covenants can demise (end) include: -Time limit by state law -Changing public policy -Suit by property owner against former owner -Appeal by property owner to local government -Neglected enforcement -Change of neighborhood character

-Time limit by state law -Changing public policy -Neglected enforcement -Change of neighborhood character

In a single family home transaction, which three of these articles are most likely to be a fixture? -Free-standing bird bath -Refrigerator -Vinyl floor covering -Custom drapes -Attached basketball goal

-Vinyl floor covering -Custom drapes -Attached basketball goal

Questions that arise in clarifying rights to water include -Who most needs to have access to the water? -Who has the right to use groundwater? -Who has the right to use the surface of a body of water? -Who has the right to use the water itself? -Who controls use of land under a body of water? -Who owns the land under a body of water?

-Who has the right to use groundwater? -Who has the right to use the surface of a body of water? -Who has the right to use the water itself? -Who controls use of land under a body of water? -Who owns the land under a body of water?

Characteristics of indirect co-ownership include that -co-owners hold the business entity shares as real property. -a business entity is the actual owner of the property. -co-owners hold shares in the business entity that actually owns the property.

-a business entity is the actual owner of the property. -co-owners hold shares in the business entity that actually owns the property.

Components that typically are in a community comprehensive plan include -a map of various land uses within the community -allocation of land to various uses -plans for schools and other public facilities -sources of revenue to fund the plan

-a map of various land uses within the community -allocation of land to various uses -plans for schools and other public facilities

Ways in which restrictive covenants are created include -a declaration placed in public records at any time by a property owner. -a declaration placed in public records by local government. -a restrictive clause placed in a deed conveying a single property. -a declaration of covenants placed in public records when a new subdivision is created.

-a restrictive clause placed in a deed conveying a single property. -a declaration of covenants placed in public records when a new subdivision is created.

Which of these arrangements could be either an easement or a license? -ability to hunt on a parcel of land. -ability to restrict building on a parcel of land for 100 years. -ability to drive on a parcel of land. -ability to harvest trees on a parcel of land.

-ability to hunt on a parcel of land. -ability to drive on a parcel of land. -ability to harvest trees on a parcel of land.

To establish title for real property the most important considerations are -actual notice. -only recorded deeds to the property. -property tax records of the property. -all recorded evidence.

-actual notice. -all recorded evidence.

A quitclaim deed commonly would be used for -adding a spouse to a property title. -clearing a conflicting claim to title. -conveying a marketable title. -conveying property to a lender as security for a loan.

-adding a spouse to a property title. -clearing a conflicting claim to title.

Two conveyances of real property that likely would be revealed only by actual notice are -adverse possession. -an implied easement of access. -an easement in gross related to oil rights. -conveyance through probate.

-adverse possession. -an implied easement of access.

Differences between an easement and a license include that -an easement survives sale of the property involved while license does not. -an easement is for a definite period of time while license is not. -an easement survives death of the grantor while license does not. -an easement can involve multiple parcels while a license cannot. -an easement is a right while a license is permission.

-an easement survives sale of the property involved while license does not. -an easement survives death of the grantor while license does not. -an easement is a right while a license is permission.

Land descriptions are a special concern with real property, as compared to personal property because: -There is little agreement on what land descriptions are acceptable. -any error harms at least one owner or another. -because land is a continuous surface, descriptions must define boundaries. -land descriptions must endure longer than descriptions for personal property. -land can be extremely costly, and errors in description can be very costly.

-any error harms at least one owner or another. -because land is a continuous surface, descriptions must define boundaries. -land descriptions must endure longer than descriptions for personal property. -land can be extremely costly, and errors in description can be very costly.

Restrictive covenant for a subdivision can be enforced by -any lender whose loan is secured by a parcel in the subdivision. -any owner of property adjacent to the subdivision. -any renter in the subdivision. -any law enforcement office having jurisdiction over the subdivision. -any owner of a parcel in the subdivision.

-any lender whose loan is secured by a parcel in the subdivision. -any renter in the subdivision. -any owner of a parcel in the subdivision.

In true co-ownership of property, the owners -always have equal shares. -basically hold the same bundle of rights. -cannot meaningfully partition their ownership into separate bundles of rights. -hold their interests through an intervening ownership entity.

-basically hold the same bundle of rights. -cannot meaningfully partition their ownership into separate bundles of rights.

Covenants in a deed are important because they -bind the grantor to legal promises about title. -assure that the grantee will receive title. -ensures that the property is encumbered liens and easement. -enable the grantee to sue for damages for misrepresentations about title.

-bind the grantor to legal promises about title. -enable the grantee to sue for damages for misrepresentations about title.

Three types of traditional land use controls are: -building codes -zoning -performance standards -subdivision regulations -impact fees

-building codes -zoning -subdivision regulations

The term "real estate" -can be used to describe the bundle of rights associated with ownership of the physical assets -can be used to identify land and buildings -should not be used to describe the business activities related to the physical assets

-can be used to describe the bundle of rights associated with ownership of the physical assets -can be used to identify land and buildings

An example of conflicting notions of best practice in urban planning is -septic tanks vs community sewers -grid street patterns vs cul-de-sac streets -individual wells vs community water supply -uniform residential densities vs mixed residential densities

-grid street patterns vs cul-de-sac streets -uniform residential densities vs mixed residential densities

Marketable title laws -Reduce the importance of actual notice. -can cause restrictions or easements in deeds from before the root of title to disappear. -define a "root of title," as the last conveyance of the property that is at least a certain number of years old. -generally restrict required title search to the years following root of title. -are being eliminated by states because they add risk to title search

-can cause restrictions or easements in deeds from before the root of title to disappear. -define a "root of title," as the last conveyance of the property that is at least a certain number of years old. -generally restrict required title search to the years following root of title.

Characteristics of building codes include -continue to change with changing technology -generally are regional rather than strictly local -they specify materials but say nothing about design -address safety, health and sanitation -are less important in the coastal south of the US than elsewhere

-continue to change with changing technology -generally are regional rather than strictly local -address safety, health and sanitation

Required conditions for successful acquisition of property through adverse possession are that possession must be -continuous. -actual use. -hostile to the owner's interest. -"open and notorious." -with full knowledge of the owner.

-continuous. -actual use. -hostile to the owner's interest. -"open and notorious."

Required conditions for successful acquisition of a prescriptive easement include that use must be -continuous. -hostile to the owner's interests. -advertised in a local newspaper. -"open and notorious."

-continuous. -hostile to the owner's interests. -"open and notorious."

A cooperative differs from a condominium in that -cooperative owners have a leasehold rather than ownership of their unit. -a cooperative has no common facilities while condominium does. -cooperative owners own shares in a corporation rather than actual real property. -cooperative owners are liable for the obligations of all owners where condominium owners are not.

-cooperative owners have a leasehold rather than ownership of their unit. -cooperative owners own shares in a corporation rather than actual real property. -cooperative owners are liable for the obligations of all owners where condominium owners are not.

Aspects of subdivision regulations include requirements for -coordination of streets with surrounding subdivisions -the type of uses allowed in the subdivision -adequate provision of water and sewers -adequate quality of streets

-coordination of streets with surrounding subdivisions -adequate provision of water and sewers -adequate quality of streets

Counter-arguments to zoning as a solution to real estate market failure include that zoning -creates inefficiency by separating residential from commercial activities -is expensive for government to implement and administer -contributes to excessively low density of land use -creates boring landscapes

-creates inefficiency by separating residential from commercial activities -contributes to excessively low density of land use

Characteristics of dower/curtesy include that -dower is the provision for a surviving wife and curtesy is the provision for a surviving husband. -it creates a life estate for the surviving spouse. -it includes all real estate ever owned by the decedent spouse during the marriage. -it includes personal property owned by the decedent spouse at the time of death.

-dower is the provision for a surviving wife and curtesy is the provision for a surviving husband. -it creates a life estate for the surviving spouse. -it includes all real estate ever owned by the decedent spouse during the marriage.

Forms of automatic marital co-ownership include -joint tenancy -dower/curtesy -elective share -community property

-dower/curtesy -elective share -community property

Accurate characteristics of land description by plat lot and block number include: -each lot and block is defined in detail (by metes and bounds) in a recorded map. -associates with the recorded map usually is a list of restrictive covenants. -the description map normally shows the location of multiple kinds of easements or public right-of-ways. -the description depends on a starting reference to a baseline and principal meridian. -any urban property can be described by this method.

-each lot and block is defined in detail (by metes and bounds) in a recorded map. -associates with the recorded map usually is a list of restrictive covenants. -the description map normally shows the location of multiple kinds of easements or public right-of-ways.

In contrast to ownership of property by a corporation, in tenancy in common -each owner can separately mortgage or sell their portion of the property. -all co-owners are mutually liable for any liens on the property. -co-ownership shares must be equal. -all ownership interests must be created in the same transaction. -every owner holds the same actual real property interest rather than shares in an owner entity.

-each owner can separately mortgage or sell their portion of the property. -all co-owners are mutually liable for any liens on the property. -every owner holds the same actual real property interest rather than shares in an owner entity.

Important methods for maintaining quality and fairness in administration of the property tax include -appeals by owners of high value properties -education programs offered by organizations of property tax officials. -Interventions by legislators prompted by real estate oriented supporters. -requirements for standard valuation procedures imposed by state oversight offices.

-education programs offered by organizations of property tax officials. -requirements for standard valuation procedures imposed by state oversight offices.

A "bundle of rights" in property is some combination of -right of refusal -exclusive possession -right of acquisition -right of disposition -use and enjoyment

-exclusive possession -right of disposition -use and enjoyment

Features of the "revolution in land use controls" included a shift -from the view that land is private property to the notion that it belongs strictly to the community -from a perception of unlimited space and environment to a concept of "spaceship earth" -from rural land use controls to urban land use controls -from little interest in land use controls to broadly requiring land use controls

-from a perception of unlimited space and environment to a concept of "spaceship earth" -from little interest in land use controls to broadly requiring land use controls

Entities of indirect ownership by multiple owners include the -general partnership -limited partnership -corporation -tenancy by the entirety -tenancy in common

-general partnership -limited partnership -corporation

Types of property that commonly are exempt from property taxes include -hospitals -private entertainment facilities -other property of religious organizations -places of worship -schools and universities

-hospitals -other property of religious organizations -places of worship -schools and universities

Required conditions for successful acquisition of a prescriptive easement include that use must be -hostile to the owner's interests. -"open and notorious." -continuous. -advertised in a local newspaper.

-hostile to the owner's interests. -"open and notorious." -continuous.

Modern alternatives (generally adopted after 1970) to traditional land use controls include -condemnation -impact fees -planned unit development -performance standards -form-based zoning

-impact fees -planned unit development -performance standards -form-based zoning

The governing association of a condominium can do which of the following to its owners? -impose liens -Evict them and sell their unit -Set and enforce rules -levy assessments -Restrict who buys their unit

-impose liens -levy assessments -Restrict who buys their unit

Accurate statements about metes and bounds land descriptions include: -in the direction N 39 degrees 15 minutes W, N indicates to start by finding north. -it is the most common form of description for modern urban property. -each compass degree is divided into 60 minutes. -it is the newest form of land description. -in the direction N 39 degrees 15 minutes W, W refers to the direction of rotation from north

-in the direction N 39 degrees 15 minutes W, N indicates to start by finding north. -each compass degree is divided into 60 minutes. -in the direction N 39 degrees 15 minutes W, W refers to the direction of rotation from north

Examples of market failure due to incomplete information about construction quality include -inability to examine plumbing under a concrete slab floor -deteriorating paint -non-visible electrical systems once walls are closed in -gradual deterioration of roof shingles

-inability to examine plumbing under a concrete slab floor -non-visible electrical systems once walls are closed in

Proposed changes in a zoning ordinance must -finally be submitted to community referendum -always be reviewed by a state level official -initially be presented to a planning or zoning commission -go before the elected officials for final judgment or ratification

-initially be presented to a planning or zoning commission -go before the elected officials for final judgment or ratification

Characteristics of a lien include that -in case of multiple liens on a property they share claims to the property in proportion to value of the obligations. -it can only be exercised if the related obligation is defaulted. -it pledges property as security for an obligation. -it can lead to sale of the pledged property at public auction.

-it can only be exercised if the related obligation is defaulted. -it pledges property as security for an obligation. -it can lead to sale of the pledged property at public auction.

Characteristics of time-share or interval ownership include that -it may amount to a condominium interest, a leasehold, or a license. -it commonly is divided into weekly units. -owners typically have a specific unit at a specific week of the year in a specific property. -it is mostly associated with resort properties.

-it may amount to a condominium interest, a leasehold, or a license. -it is mostly associated with resort properties. -it commonly is divided into weekly units.

True statements about the legality of zoning include -zoning classifications and other features must be uniform across localities within a given state -it must be at the county level where counties exist -it was upheld as a use of police power by the USSC in Euclid v. Ambler Realty, 1922 -It must be based on a comprehensive plan -it must provide for a range of housing types and income levels

-it was upheld as a use of police power by the USSC in Euclid v. Ambler Realty, 1922 -It must be based on a comprehensive plan -it must provide for a range of housing types and income levels

Toxic substances that have posed problems to property owners in the last two decades include: -leaking underground storage tanks -water-based paint -mold -radon -asbestos

-leaking underground storage tanks -mold -radon -asbestos

Standard features of traditional zoning include -emission standards -minimum lot dimensions -provision for special use districts -noise standards -bulk limits for buildings

-minimum lot dimensions -provision for special use districts -bulk limits for buildings

It is common for a developer of a residential subdivision to create restrictive covenants for the purpose of enhancing quality and value of the lots. Which statements are true about such restrictive covenants? they are enforceable by: -mortgage lenders for the lots -owners of property adjacent to the subdivision -renters in the subdivision -Local government officials -purchasers of the lots

-mortgage lenders for the lots -renters in the subdivision -purchasers of the lots

Features of elective share include: -The surviving spouse receives a life estate in the decedent's real property -has been adopted in about 15 states -must be explicitly chosen with a certain time after death of the spouse -covers both real and personal property -commonly give the surviving spouse a 30% share

-must be explicitly chosen with a certain time after death of the spouse -covers both real and personal property -commonly give the surviving spouse a 30% share

In contrast to traditional landlord-tenant law, three points that modern residential landlord-tenant law addresses include -obligations for maintenance. -requirements for notice of termination. -requirement that many leases be in writing. -right of entry by the landlord. -handling of deposits.

-obligations for maintenance. -right of entry by the landlord. -handling of deposits.

Tangible assets include: -office furniture -cars -land -stock options

-office furniture -cars -land

Given the following information, calculate the overall capitalization rate. Sale price: $950,000 Potential Gross Income: $250,000 Vacancy and Collection Losses: $50,000 Operating Expenses: $50,000 Multiple Choice 15.8% 21.1% 26.3% 36.8%

15.8%

Building codes -change only in response to changing technology -originally were prompted primarily by the threat of fire -began to be adopted by US communities around 1900 -were the earliest form of police power regulation of land use -were recognized as necessary in rural areas first

-originally were prompted primarily by the threat of fire -began to be adopted by US communities around 1900 -were the earliest form of police power regulation of land use

The ______ of real estate markets contribute(s) to segmentation. -price differences -importance -localized nature -immobility

-price differences -localized nature -immobility

An important process for any investor in property that could possibly contain toxic substances is a Phase 1 Environmental Value Assessment. This procedure examines -property history -subsurface evidence through sample drilling -the property surface, itself -air samples -water samples

-property history -the property surface, itself -air samples -water samples

"Investment-grade" properties are typically -purchased by institutional investors -occupied by their owners rather than other users -leased to immobile investors -valued at more than $10 million

-purchased by institutional investors -valued at more than $10 million

Reasons that the conveyance of real estate is uniquely complicated include that -real estate interests are complex -real estate must be described on a continuous surface -real estate rights are long enduring -real estate is very valuable -real estate is highly regulated

-real estate interests are complex -real estate must be described on a continuous surface -real estate rights are long enduring

The conveyance of real estate is uniquely complicated because -real estate records tend to disappear. -real property interests have a long history. -government regulation of real estate can change. -real property interests are complex. -real estate must be described on a continuous surface.

-real property interests have a long history. -real property interests are complex. -real estate must be described on a continuous surface.

Participants in real estate "user" markets include -renters -owners -investors -lenders

-renters -owners

Form-based zoning -is only relevant to residential land use -is really just a minor change from conventional zoning -replaces zoning of land use with zoning of development configuration or character -is the most recent alternative to conventional zoning

-replaces zoning of land use with zoning of development configuration or character -is the most recent alternative to conventional zoning

Zoning has been called a poor solution to land use market failure because it -allows too much variation in structures and their uses -may be unconstitutional -restricts the supply of lower priced housing -forces supporting business services away from the neighborhoods they serve

-restricts the supply of lower priced housing -forces supporting business services away from the neighborhoods they serve

A site plan review board will -review site plans for apartments or other commercial or industrial sites -review proposed subdivisions -follow a rigorously formal, judicial-like procedure with each review -prohibit citizen input in the procedure -make recommendations to the elected officials

-review site plans for apartments or other commercial or industrial sites -review proposed subdivisions -make recommendations to the elected officials

Area elements of the government rectangular survey include: -sections are square miles explicitly surveyed and numbered within each township. -sections are numbered within their township starting in the northeast corner and zig-zagging along rows to the southeast corner. -townships, bounded by range lines and tier lines, are 6 miles by 6 miles square -townships are identified by range (north or south) from the baseline and tier (east or west) from the principal meridian.

-sections are square miles explicitly surveyed and numbered within each township. -sections are numbered within their township starting in the northeast corner and zig-zagging along rows to the southeast corner. -townships, bounded by range lines and tier lines, are 6 miles by 6 miles square

Intangible assets include: -stock investments -automobiles -leases -bond investments

-stock investments -leases -bond investments

Participants in capital markets include -stock investors -potential tenants in office properties -bond investors -mortgage investors

-stock investors -bond investors -mortgage investors

In real property definitions, estates include -tenancy for years. -rural estate. -periodic tenancy. -fee simple conditional. -life estate. -commercial estate. -fee simple absolute.

-tenancy for years. -periodic tenancy. -fee simple conditional. -life estate. -fee simple absolute.

Characteristics of an easement in gross include that -the easement in gross is limited strictly to business purposes. -the easement can be conveyed separately from any parcel affected. -only servient (diminished) parcels are involved. -a single easement can affect many parcels.

-the easement can be conveyed separately from any parcel affected. -only servient (diminished) parcels are involved. -a single easement can affect many parcels.

Events that triggered the "revolution in land use controls" included -the environmental movement -publication of Rachel Carson's Silent Spring -the Love Canal disaster -the truce that ended the Korean War

-the environmental movement -publication of Rachel Carson's Silent Spring -the Love Canal disaster

Public land use planning may have a weak foundation because -the notions of "best practice" are unsettled and changing -the need for urban planning has declined in the last half century -there are too few persons interested in and trained for urban planning -it has a relatively very short history and base of experience

-the notions of "best practice" are unsettled and changing -it has a relatively very short history and base of experience

Three conditions for a zoning variance are -elected officials must concur with the variance -the variance must not change the character of the neighborhood -the owner must show true hardship -the condition must be unique to the particular lot -neighbors must concur with the variance

-the variance must not change the character of the neighborhood -the owner must show true hardship -the condition must be unique to the particular lot

Fannie Mae became a quasi-private, self-supporting, stock issuing company in ____.

1968

The priority of liens is important because -there seldom is sufficient value at foreclosure to satisfy multiple liens. -a superior lien gets complete satisfaction before other liens. -in default, liens get satisfaction strictly by priority. -there typically is sufficient value to satisfy all liens, but delays harm lower lien holders.

-there seldom is sufficient value at foreclosure to satisfy multiple liens. -a superior lien gets complete satisfaction before other liens. -in default, liens get satisfaction strictly by priority.

performance standards have been implemented for a wide variety of externalities in land use, including -traffic generation by a land use -tax revenue effect of a land use -storm runoff -social impact of a land use -air quality effects from a land use

-traffic generation by a land use -storm runoff -air quality effects from a land use

Characteristics that stock and bond investment share with real estate investments include -transferability to other owners -potential appreciation in the value of the investment -immobility -potential periodic income

-transferability to other owners -potential appreciation in the value of the investment -potential periodic income

common examples of partial exemptions for property taxes include exemptions for -veterans -historic property -apartments -disabled persons -widows

-veterans -historic property -disabled persons -widows

Issues that arise in determining rights to minerals, oil and gas include -whether the mineral rights are held by a corporation or by an individual. -whether oil and gas are treated as simply a form of minerals or as flowing substances. -whether ownership of minerals involves ownership of the space containing them.

-whether oil and gas are treated as simply a form of minerals or as flowing substances. -whether ownership of minerals involves ownership of the space containing them.

A house sold for $650,485 five months ago. A very comparable house sold yesterday for $670,000. The implied (non-compounded) monthly rate of increase in property prices is ______ percent.

0.60

Put in sequence the steps Alex followed in the case study of Plane Vista Apartments. Answer the five market defining questions. Map out recently built apartments Determine to focus on job locations and devise an indicator of job locations in Orlando and map it. Devise projections of job growth on "airport island." Project apartment demand growth on "airport island." Recognize the insular character of the Plane Vista area, "airport island."

1. Answer the five market defining questions. 2. Map out recently built apartments 3. Determine to focus on job locations and devise an indicator of job locations in Orlando and map it. 4. Recognize the insular character of the Plane Vista area, "airport island." 5. Devise projections of job growth on "airport island." 6. Project apartment demand growth on "airport island."

Put in sequence the steps Alex followed in the case study of Plane Vista Apartments.

1. Answer the five market defining questions. 2. Map out recently built apartments. 3. Determine to focus on job locations and devise an indicator of job locations in Orlando and map it. 4. Recognize the insular character of the Plane Vista area, "airport island." 5. Devise projections of job growth on "airport island." 6. Project apartment demand growth on "airport island."

Rank the priority of these liens on a property from first to last. -Property tax lien -Mortgage lien created at purchase of the property -Second mortgage lien created at purchase of the property -Judgment lien arising a year after purchase of the property

1. Property tax lien 2. Mortgage lien created at purchase of the property 3. Second mortgage lien created at purchase of the property 4. Judgment lien arising a year after purchase of the property

Rank the priority of these liens on a property from first to last.

1. Property tax lien 2. Mortgage lien created at purchase of the property 3. Second mortgage property created at purchase of the property 4. Judgement lien arising a year after purchase of the property

In the Elysian Forest case, what sequence of steps does the market analyst use to find initial results concerning market prospects?

1. Use market defining questions to formulate a demographic profile of likely buyers. 2. Apply proxy variables and exclusion procedure to Census data to get share of all buyers suitable for Elysian Forest. 3. Use local historic market data to project total home sales in upcoming years. 4. Multiply total projected sales by the percentage of Elysian Forest "eligible" buyers to estimate Elysian Forest maximum prospects. 5. Multiply the total "eligible" buyers for Elysian Forest by an expected sales capture rate to get final estimate of sales.

In the Palm Grove office complex case, what sequence of steps does the market analyst use to reach an initial conclusion? Work through the five market defining questions. Search for data on actual office firms in University City. Examine data in the County Business Patterns for University City. Use County Business Patterns to find office firms suitable for occupancy at Palm Grove. Add up the existing office firms in University City for whom the building is suited.

1. Work through the five market defining questions. 2. Search for data on actual office firms in University City. 3. Examine data in the County Business Patterns for University City. 4. Use County Business Patterns to find office firms suitable for occupancy at Palm Grove. 5. Add up the existing office firms in University City for whom the building is suited.

In selecting from alternative responses to default that are short of foreclosure, the probable order of choices in terms of severity, from mildest to most severe would be:

1. counseling and financial reorganization 2. reduction or postponement of mortgage payments 3. short sale 5. deed in lieu of foreclosure

Order the steps below for the process of real estate market analysis.

1. create a preliminary market story 2. collect relevant date to test the story 3. evaluate results and refine story as needed 4. collect additional relevant data 5. draw conclusions and make a decision

Order the steps below for the process of real estate market analysis. create a preliminary market story collect relevant date to test the story evaluate results and refine story as needed collect additional relevant data draw conclusions and make a decision

1. create a preliminary market story 2. collect relevant date to test the story 3. evaluate results and refine story as needed 4. collect additional relevant data 5. draw conclusions and make a decision

Ling and Archer offer Net Benefit Analysis, a "short cut" approach to refinance analysis. If the result is positive, refinancing may be beneficial. If it is negative, refinancing is not beneficial. What is the order of the steps involved?

1. determine your current loan payment and how many more months you expect to make the payment 2. recompute your loan payment as if it were at the current market interest rate available to you (change only the interest rate on your loan) 3. find the resulting reduction in your payment and multiply the difference by the number of months you expect to retain the loan 4. compute the costs of refinancing 5. find the difference between the sum of payment reductions and the cost of refinancing

The order of steps from first to last in creating a chain of title are: -locating all recorded documents relevant to the property. -evaluating each relevant document for possible conveyance of title. -reconstructing the sequence of fee holders down to the present owner. -identifying any possible flaws in the sequence of ownership transmission.

1. locating all recorded documents relevant to the property. 2. evaluating each relevant document for possible conveyance of title. 3. reconstructing the sequence of fee holders down to the present owner. 4. identifying any possible flaws in the sequence of ownership transmission.

While property tax rates can vary across geographic regions, ad valorem taxes are typically levied at rates between: -1.0 to 4.0 percent. -5.0 to 9.0 percent. -10.0 to 15.0 percent. -16.0 to 20.0 percent.

1.0 to 4.0 percent

Community property exists in __________ states, while dower/curtesy exists in ______. -15, 10 -10, 25 -25, 10 -10, 15

10, 15

If a default goes into a residential borrower's recored it is likely to lower their credit score by at least ____ points.

100

Department of Veterans Affairs (VA) loans can be up to ____ percent of value for qualified veterans.

100 (or 100%)

Three highly similar and competitive income-producing properties within two blocks of the subject property have sold this month. All three offer essentially the same amenities and services as the subject property. The sale prices and estimated first-year NOI for each of the comparable properties are as follows: Comparable / Sale Price / NOI1 A: $500,000 $55,000 B: $420,000 $50,400 C: $475,000 $53,400 Using the information provided, calculate the overall capitalization rate by direct market extraction assuming each property is equally comparable to the subject. Multiple Choice 11.0% 11.2% 11.4% 12.0%

11.4%

Value estimates using direct capitalization are based on a ratio or multiple of expected NOI over the next _____ months.

12

Value estimates using direct capitalization are based on a ratio or multiple of expected NOI over the next ____ months.

12 (or twelve)

Given the following information, calculate the appropriate going-in cap rate using mortgage-equity rate analysis. Mortgage financing = 75% Typical debt financing cap rate: 10% Sale price: $1,950,000 Before Tax Cash Flow (BTCF): $390,000 Multiple Choice 9.6% 10% 12.5% 13.6%

12.5%

A late fee commonly is charged on a home mortgage loan at a rate of 4 to 5 percent of the overdue payment if the payment is delayed more than ____ days after it is due.

15

Under 2017 U.S. income tax law, it has been estimated that ________ percent of all homeowner households will receive income tax deductions for the home mortgage interest that they pay.

15

To determine a property's annual tax liability in dollars, it is useful to first convert the millage rate to an annual percentage. If the millage rate is 25 mills, determine the property tax rate in percentage form. -0.025% -0.25% -2.50% -25.00%

2.50

At their peak, private mortgage conduits accounted for _________ percent of all home outstanding mortgages.

20

If the appropriate cap rate for valuation is 5%, then the subject property should sell for ____ times estimated NOI.

20

If the appropriate cap rate for valuation is 5%, then the subject property should sell for _____ times estimated NOI.

20

Real Estate is the source of nearly _____ percent of local government property tax revenue.

20%

In 1989, the top 20 mortgage lenders accounted for about ______ percent of all home loan originations, but in 2011 accounted for approximately ______ percent.

20. 85.

As reported by the Federal Reserve Board, owner-occupied housing represents approximately _____ % of the net worth of a typical U.S. household.

21

Real estate generates over ____ percent of U.S. gross domestic product.

25

Private mortgage insurance commonly protects the lender against the first ____ to ____ percent of losses on a mortgage loan due to default.

25 (or twenty-five). 35 (or thirty-five).

Real estate generates over _____ percent of U.S. gross domestic product.

25%

Real estate, excluding primary residences, accounts for approximately _____ percent of the world's total economic wealth.

25%

Generally, how many approaches to estimating market value are considered by the appraiser for use in a formal appraisal?

3

Generally, how many approaches to estimating market value are considered by the appraiser for use in a formal appraisal? Multiple choice question. 2 1 3

3

If all three approaches to value are used by the appraiser, the appraiser must reconcile ____ indicated values.

3

Under RESPA as modified in 2013, the completed Closing Disclosure form must be available for inspection to a mortgage loan applicant ____ business days before the closing date.

3 (or three)

A defaulted borrower who is seeking to obtain a new home mortgage may have to wait as long as:

3 years for an FHA loan. 7 years for a loan going to Fannie Mae or Freddie Mac. 2 years for a VA loan.

Given the following information, compute the property tax rate for the community in percentage terms: Total budget expenditures: $108 million Total non-property tax income: $50 million Total assessed value of all properties: $2 billion Total exemptions: $550 million -2.5% -4.0% -10.0% -12.0%

4.0% = Tax rate = (budgeted expenditures - income from sources other than property tax) / (total assessed value of all properties - value of property exemptions) (108000000-50000000)/(2000000000-550000000) = 0.04 = 4.0%

The right of a lender to pursue a deficiency judgment when a home mortgage loan is sold at foreclosure auction for less than the mortgage balance exists in some _________ states.

40

The south one-half of the southeast one-fourth of the northwest one fourth of the northwest one-fourth of a certain section would contain ____ acres?

5

The south one-half of the southeast one-fourth of the northwest one fourth of the northwest one-fourth of a certain section would contain _____ acres?

5

With the widespread default on home mortgages after 2007, it has been asked: what happened to underwriting? The answer seems to be that normal underwriting standards were widely abandoned. A major study found that as much as ____ percent of subprime borrowers failed to document income or assets.

50

Elective share has been adopted in about _______ of states in the United States.

50 percent

Suppose a developer is interested in building a new townhome community. Through his market research, the developer has determined that the target market makes up 10% (core market share) of the households that currently reside in the metropolitan area. If an analysis of data from the MLS indicates that there should be approximately 500 residential sales in this area over the next year, what is the projected number of units the developer could expect to sell in year 1 if he is able to capture 50% of the market potential? Multiple Choice 500 units 250 units 50 units 25 units

500 sales x 0.10 target market = 50 --> 50 target market sales x 0.50 potential = 25 units

Under the Equal Credit Opportunity Act (ECOA) which of these practices probably would be prohibited? Asking a woman applicant:

About child bearing plans

Suppose that you were interested in building a new townhome community on the east side of University City that will be marketed exclusively to senior citizens above the age of 62. In your analysis of local demographics, you discover that the target market makes up only 10% (core market share) of the households that currently live in this city. If market experts believe that a total of 500 townhome (or similar condominium) units will be purchased in all of University City within the next year, what is the projected number of units the developer could expect to sell in year 1 if he is able to capture 40% of the market potential? Multiple Choice 500 units 50 units 20 units 10 units

500 x 0.10 = 50 50 x 0.40 = 20 answer: 20 units

Developed land represents about _____% of all land in the continental U.S

6

Developed land represents about _____% of all land in the continental U.S -21 -2 -6 -19

6%

For a typical (average) household, equity in their home(s) is equal to about ___% of the value of their home(s) and about ____% of their net worth.

60, 15

For a typical (average) household, equity in their home(s) is equal to about ___% of the value of their home(s) and about ____% of their net worth. -40, 15 -60, 15 -50, 25 -70, 20

60, 15

A square mile contains _____ acres, and each acre contains _____ square feet.

640, 43,560

A square mile contains ____ acres, and each acre contains ____ square feet.

640. 43,560.

Because it is the quickest form of bankruptcy proceeding, and still preserves the mortgage lien of the lender, lenders prefer, if bankruptcy is to happen, that it be a Chapter ____ proceeding.

7 (or seven)

If a default goes into a residential borrower's record, it remains for ____ years.

7 (or seven)

Based on the following information, determine the location quotient for Amusement City and whether this city has a competitive advantage in the amusement industry: Employment in Amusements and Recreation in Amusement City: 54,446 Total Employment in Amusement City: 578,477 Employment in Amusements and Recreation (nationally): 1,381,377 Total Employment (nationally): 106,201,232. Multiple Choice 0.14; No, the city does not have a competitive advantage in this industry. 7.24; No, the city does not have a competitive advantage in the industry 0.14; Yes, the city has a competitive advantage in this industry 7.24; Yes, the city has a competitive advantage in this industry

7.24; Yes, the city has a competitive advantage in this industry

Real Estate is the source of nearly _____ percent of local government property tax revenue.

70

Cancellation of PMI may be allowed after the loan balance is below ____ percent of current market value, and, by law, must be terminated when the loan balance is below ____ of original value.

80 (or eighty). 78 (or seventy-eight).

Assessed value typically is ______ percent of market value, reflecting such factors as cost of selling a property.

85 - 90

If a property's expected annual net income is $89,100 and its current market value is $1,060,000, the property's capitalization rate is:

89100 / 1060000 = 0.084 = 8.4%

Default generally becomes considered substantiative when payments have been missed for ____ days. Then the ultimate response of the lender is likely to be ____.

90 (or ninety). foreclosure.

The cap rate abstracted from the market is 0.066. The subject's estimated net operating income is $60,000. What is the value of the property by direct capitalization? (Round answer to nearest dollar amount.)

909,091

Given the following information, calculate the net sale proceeds. Sale price: $974,000, Selling Expenses: $40,000; Remaining Mortgage Balance: $630,000; Net sale proceeds: $____

934,000

Given the following information, calculate the net sale proceeds. Sale price: $974,000, Selling Expenses: $40,000; Remaining Mortgage Balance: $630,000; Net sale proceeds: $_____

974000 - 40000 = 934,000

The "story" approach to real estate market analysis is intended to produce a specific advantage relative to the conventional global-to-specific-property approach. That advantage is:

A clearer understanding of what is relevant from the larger world

The "story" approach to real estate market analysis is intended to produce a specific advantage relative to the conventional global-to-specific-property approach. That advantage is: Multiple choice question. A unique approach that has marketing value A faster and more timely research task A clearer understanding of what is relevant from the larger world A much cheaper and more efficient research agenda

A clearer understanding of what is relevant from the larger world

The most prominent feature of effective market research in real estate is that it is:

A dialog between the researcher and client

The most prominent feature of effective market research in real estate is that it is: Multiple choice question. A strong, clear statement on the market situation A well formalized report A dialog between the researcher and client A heavily documented report

A dialog between the researcher and client

Factors in the population that compel interest in reverse mortgages include:

A large percentage of elderly homeowners own a house outright, but have low income. The population of elderly homeowners is growing. Most elderly homeowners want to stay in their home as long as possible.

Which of the following are not considered representative sales; thus generally unusable as a comparable sale for a market value estimate? Multiple select question. A sale forced by a local property tax jurisdiction An arms-length transaction following the listing of the property with a local Realtor A voluntary sale in lieu of foreclosure A sale to a family member

A sale forced by a local property tax jurisdiction A voluntary sale in lieu of foreclosure A sale to a family member

An example of a "holdout" monopolist is:

A small remaining percent of condominium owners demand higher prices from a developer who wants to tear down and rebuild the property

An example of a "holdout" monopolist is: -Walmart buys up a group of parcels by paying a generous premium above market prices -A water company owns all the water distribution lines in a city -A small remaining percent of condominium owners demand higher prices from a developer who wants to tear down and rebuild the property -A city refuses the request of owners for it to purchase a group of parcels affected by a new city land fill

A small remaining percent of condominium owners demand higher prices from a developer who wants to tear down and rebuild the property

An example of market failure due to externalities is:

A water bottling plant consumes so much well water that it lowers the water table on neighboring land

An example of market failure due to externalities is: -A person considering a house in Florida wonders whether its roof is properly secured for hurricane winds, but isn't able to determine the answer -A landowner who has land needed for a city sewer line asks an outrageous price for it -An electric company having an existing system of distribution lines that prevents competitors raises its prices faster than its costs rise -A water bottling plant consumes so much well water that it lowers the water table on neighboring land

A water bottling plant consumes so much well water that it lowers the water table on neighboring land

In using transaction data to determine the current value of the subject property, it is important to recognize that general market conditions may have changed since a particular transaction occurred. Property A sold 18 months ago for $235,000 and Property B sold 12 months ago for $215,000. If the two properties are priced today at $239,500 and $222,300, respectively, what is the average monthly rate of increase that can be used to adjust comparable prices for changes in market conditions? Multiple Choice 0.09% 0.17% 0.19% 0.32%

A: (239500 - 235000) / 235000 = 0.0191 / 18 mo = 0.00106111 --> B: (222300 - 215000) / 215000 = 0.0339 / 12 mo = 0.002825 --> average: (0.00106111 + 0.002825) / 2 = 0.001943 = 0.19%

Probably the best known provision of the Truth-in-Lending Act of 1968 is the required computation of ____ (enter the acronym).

APR

The rules for making adjustments to the sale prices of comparable properties include which of the following?

Adjust the sale price of the comparable toward the subject property. make transactional adjustments in the proper order. Use market-related adjustments.

In a one dimensional city with all economic activity at a single point (CBD), if there are two types of workers, drivers and walkers, and both types have the same hourly earnings, how will the two types become arranged in the city?

All walkers will be closer to the center of the city

In a one dimensional city with all economic activity at a single point (CBD), if there are two types of workers, drivers and walkers, and both types have the same hourly earnings, how will the two types become arranged in the city? Multiple choice question. All drivers will be closer to the center of the city Walkers and drivers will be randomly mixed All walkers will be closer to the center of the city

All walkers will be closer to the center of the city

Joint tenancy

An ancient form of co-tenancy that enabled land holdings to remain intact

Community property

An automatic 50 percent share in all property acquired "out of the fruits of the marriage."

Important programs and contributions of FHA include:

An important emerging program of FHA is the home equity conversion mortgage (HECM) program for elder homeowners. The FHA influence was so great in the middle of the 20th century that it influenced housing and subdivision standards across the U.S.. FHA insurance made possible the first long-term level-payment home loan.

The organization with independent authority over the generally accepted standards of appraisal is the

Appraisal Foundation

A property owner who owes 8 mills in school taxes, 10 mills in city taxes, and 5 mills in county taxes and who qualifies for a $50,000 homestead exemption would owe how much tax on a property assessed at $180,000?

Assessed Value$180,000 Less: Homestead Exemption$(50,000) Taxable Value$130,000 Taxing Authority Levies Millage Rate to Taxes Levied 0.008x130000=$1,040 0.01000x130000=$1,300 0.00500x130000=$650 Total: $2,990

Given the following information, calculate the total annual tax liability of the homeowner: Market value of property: $537,500 Assessed value of property: 60 % of the market value Exemptions: $2,500 School District Millage Rate: 29.25 mills County and Township Millage Rate: 5.75 mills -$7,437.50 -$11,200.00 -$11,287.50 -$188,125.00

Assessed=0.6*537500=322500, minus exemptions=2500, equals=320000, mills: 0.02925x320000=9360, 0.00575x320000=1840, tax liability=9360+1840=11200 answer = $11,200.00

In market analysis the goal is to estimate certain "market parameters" and attempt to evaluate the confidence level or certainty of the estimates. For an apartment project, for example, these parameters would include:

Attainable rental rates. likely occupancy level/vacancy rate. Likely growth in rental rates.

Which two of these modes of title conveyance are most prone to unresolved title conflicts?

Bankruptcy. Foreclosure.

Which of the following are true? Multiple choice question. Cap rates are not affected by changes in returns on corporate bonds Cap rates determine market values Cap rates are affected by required rates of return and expected growth rates

Cap rates are affected by required rates of return and expected growth rates

Most appraisers adhere to an "above-line" treatment of capital expenditures. This implies which of the following? Multiple Choice Capital expenditures are subtracted in the calculation of net operating income. Capital expenditures are subtracted from net operating income to obtain a net cash flow measure. Capital expenditures are added to net operating income. Capital expenditures are excluded from all calculations because they are difficult to estimate.

Capital expenditures are subtracted in the calculation of net operating income.

Real estate values derive from the interaction of three different sectors in the economy. Which of the following sectors serves to allocate financial resources among households and firms requiring funds?

Capital market

Which of the following are used in the direct capitalization approach to estimating a property's market value?

Capitalization rate. Projected net operating income.

Match the bankruptcy title to the description.

Chapter 7 - traditional bankruptcy where the debtor's unincumbered assets are divided among unsecured creditors in proportion to each creditor's claim. Chapter 11 - Court supervised workout of a troubled business. Creditors must accept a workout plan from the debtor and court. Chapter 13 - Court supervised workout of a troubled household. Creditors must accept a workout plan from the debtor and court.

Lenders prefer Chapter 7 bankruptcy over both Chapter 11 and Chapter 13. A major reason is:

Chapter 7 is much faster, avoiding delays in recovery of funds and neglect of the property

For a deed, identify the requirements of a grantee.

Clearly identifiable

In a one dimensional city with all economic activity at a single point (CBD) if there are two types of households/workers with different total costs of commuting per mile, where will the slope of the rent curve be steepest?

Closest to the CBD

In a one dimensional city with all economic activity at a single point (CBD) if there are two types of households/workers with different total costs of commuting per mile, where will the slope of the rent curve be steepest? Multiple choice question. It will be the same everywhere Insufficient information to answer Farthest from the CBD Closest to the CBD

Closest to the CBD

The arrival of the Great Recession brought an unprecedented increase in home mortgage defaults despite years of efforts to create more sophisticated underwriting methods and standards. This can be attributed to:

Collapse in enforcement of the new methods and standards

Which residential mortgage lender tends to require a demand clause in certain common types of home mortgage loans?

Commercial bank

An automatic marital property interest that gives each spouse a 50 percent interest is: -Elective share -Tenancy by the entirety -Community property -Dower/curtesy

Community property

Freddie Mac has always focused primarily on the purchase of ____ fixed rate home loans.

Conventional

Covenant in a general warrantee deed include:

Covenant of quiet enjoyment. Covenant of seizin. Covenant against encumbrances.

For home mortgage lending, important results of the Dodd-Frank of 2010 include

Creating the standard of "Qualified Mortgages". Integrating all consumer protection regulation concerning home mortgages under a single agency. Creating the CFPB (Consumer Financial Protection Bureau).

Factors that have contributed to the transformation of cities into multi-nuclei forms since the 1930s include: Multiple select question. Creation of circumferential highway systems Arrival of modern, horizontal retail technology Creation of the department store Evolution of modern electronic communication Growth of assembly line production Creation of modern land use regulation

Creation of circumferential highway systems Arrival of modern, horizontal retail technology Evolution of modern electronic communication Growth of assembly line production

Factors that have contributed to the transformation of cities into multi-nuclei forms since the 1930s include:

Creation of circumferential highway systems. Arrival of modern, horizontal retail technology. Evolution of modern electronic communication. Growth of assembly line production.

Reasons that the Hoyt sector model of urban form ceased to describe cities well after the 1920s include:

Decline of heavy manufacturing. Rise of the automobile in place of rail.

Reasons that the Hoyt sector model of urban form ceased to describe cities well after the 1920s include: Multiple select question. Rise of air travel. Decline of heavy manufacturing. Preference of managers living in suburbia to have their work closer. Efforts of the U.S. Congress to decentralized manufacturing. Rise of the automobile in place of rail.

Decline of heavy manufacturing. Rise of the automobile in place of rail.

In a title search examining public records, which of these is most likely to be discovered? -Implied easement -Easement by necessity -Easement by estoppel -Dedication

Dedication

Under the Statute of Frauds, which of these must be in writing to be enforceable?

Deed

Under the Statute of Frauds, which of these must be in writing to be enforceable? -Deed -Contract to buy a car -Contract for moving services -Monthly lease

Deed

Which of these events can affect the chain of title for real estate?

Deeds. Marriages. Foreclosures. Estate settlements.

In a deed the habendum clause:

Defines the interest being conveyed

In a deed the habendum clause: -Imposes any restrictions sought by the grantor -Promises that the grantor has title -Names the grantee -Defines the interest being conveyed

Defines the interest being conveyed

______ is the process of converting future values into present values.

Discounting

Almost all loans created by mortgage banking find their way into mortgage securities. Conforming conventional loans will end up in securities of ____ ____ or ____ ____.

Fannie. Mae. Freddie. Mac.

The denominator of the two "ability-to-pay ratios, gross income, is very complex, and sensitive to interpretations of what is allowable. This led the Congress to enact a law to prevent bias in determining allowable income. That law, by initials is ____.

ECOA

All of the environmental laws enacted by the United States are administered by one agency, which makes the agency extremely important to land owners. This is the (three letter acronym) ____.

EPA

All of the environmental laws enacted by the United States are administered by one agency, which makes the agency extremely important to land owners. This is the (three letter acronym) _____.

EPA

Which of the conveyances of a real property interest listed below probably would be detected only by actual notice?

Easement by estoppel. Prescriptive easement.

When the term for maturity is less than the term for amortization then the final payment is:

Equal to the regular payment plus an unpaid balance

By far, the most important home equity conversion or reverse mortgage program is that of ____.

FHA

Ginnie Mae securities are for pools of ____ and ____ home mortgages, plus a very small amount of US Rural Housing Services home loans.

FHA (or FHA-insured). VA (or VA-guaranteed).

Valid statements about FHA insurance include:

FHA accepts more tolerant qualifying ratios and credit score than for conventional mortgages. FHA insures loans up to 96.5 percent of value. FHA targets first-time home buyers and other moderate income households.

In modern home mortgage underwriting, the credit score most widely used is the ____ from the Fair Isaac Company. A score above ____ is generally regarded as high, while a score below ____ is generally regarded as risky.

FICO. 660. 620.

True or false: A location adjustment is not required when the comparable property has a superior location than the subject.

False

True or false: Federal income taxes are a property operating expense.

False

True or false: If a real estate development turns out to suffer from a failure of market demand, the developer normally can find ways of correcting or escaping the problem.

False

True or false: Rental rates for office properties in downtown Boston significantly affect office rental rates in downtown Atlanta.

False

True or false: The accurate valuation of income producing properties is primarily a number crunching exercise.

False

True or false: The activities of federal, state, and local governments have little need for the services of real estate professionals.

False

True or false: The effect of technological change upon urban form historically has followed quickly after the change has been introduced.

False

True or false: The fact that the last sale of a house was made by the seller to avoid an almost certain default and foreclosure likely had no effect on the sale price.

False

True or false: The required adjustment for difference in legal estates is typically a relatively simple adjustment.

False

Among modes of conveying real property that are involuntary, but involve a deed, which is most likely to be flawed, resulting either in litigation or failure of conveyance?

Foreclosure

Among modes of conveying real property that are involuntary, but involve a deed, which is most likely to be flawed, resulting either in litigation or failure of conveyance? -Probate -Bankruptcy -Divorce -Condemnation -Foreclosure

Foreclosure

Which of these modes of title conveyance is most likely to cause conflicts or "clouds" to title? -Foreclosure -Condemnation -Patent -Probate -Divorce settlement

Foreclosure

By the definition of real property, which of these is most likely to be included? -Mobile home with axles -Free standing garage -Office on a construction site -Movable storage shed

Free standing garage

Which of these possible zoning categories would exemplify the idea of form-based zoning? -Free standing offices -single family residential -Mixed use -Free standing, single occupant structures

Free standing, single occupant structures

Which of these terms best characterizes the meaning of personal rights?

Freedom

Match the rights to the freedom examples.

Freedom to lock your car = Right of use and enjoyment Freedom to decorate your house as you choose = Right of use and enjoyment Ability to demolish and replace a structure on your land = Right of disposition Ability to grow and sell crops on your land = Right of exclusive possession Freedom to sell your property when and for how much you choose = Right of disposition

Many state and local housing authorities are able to fund low and moderate income housing with below-market interest rate loans. They can do this because they are allowed to:

Fund the loans with tax-exempt bonds

The first modern mortgage security was the ____ ____ MBS.

Ginnie. Mae.

Which of these strategies of market analysis is confirmed in the case of Palm Grove office complex?

Give careful thought to the market defining questions at the outset. Make full use of existing, available data first.

Curtesy

Gives a surviving husband a one-third life estate in the real property ever held by a decedent wife during the marriage.

Elective share

Gives a surviving spouse some automatic ownership of both real and personal property held by a spouse at the time of death.

Dower

Gives a widow an automatic one-third life estate in real property ever owned by a decedent husband during the marriage.

A utility company goes through proper legal procedure to acquire a portion of your property for a transmission line. However, it pays you only a small fraction of what the property it acquired is worth, and the city where your property is located refuses to intervene. What fundamental characteristic of rights does this violate? -Rights are enduring. -Rights are non-revocable. -Government is obligated to protect your rights. -There is no issue of rights here. -Rights are limited to citizens.

Government is obligated to protect your rights.

Which of these factors would encourage a tenant to seek a tenancy for years rather than a periodic tenancy?

Greater possible disruption from moving, Greater need for the specific location

The predominant approaches to housing assistance by the U.S. government have been through:

Guarantees against mortgage default. Insurance against mortgage default. Allowing state and local governments to issue tax-free housing finance bonds.

What are the two values considered during a highest and best use (HABU) analysis? Multiple select question. HABU as though newly constructed HABU as though site is vacant HABU as improved

HABU as though site is vacant HABU as improved

Which clause in a deed defines or limits the interest being conveyed?

Habendum

Which clause in a deed defines or limits the interest being conveyed? -Habendum -Words of conveyance -Exceptions and reservations -Delivery

Habendum

When analyzing the operating expenses of a small office building, which of the following is a relatively fixed operating expense?

Hazard and fire insurance premium

When estimating the net operating income of a property, which of the following expenditures would be included? Multiple select question. Hazard and fire insurance premiums Property taxes mortgage payments federal income tax payments

Hazard and fire insurance premiums Property taxes

It is often necessary to value the site independent of the improvements to the site. Which of the following approach requires a separate site valuation? Multiple select question. Highest and best use analysis Comparable sales analysis Cost approach

Highest and best use analysis Cost approach

It is often necessary to value the site independent of the improvements to the site. Which of the following approach requires a separate site valuation?

Highest and best use analysis. Cost approach.

Improving the housing finance system has these positive effects on society:

Home owners can sell their home more easily. Home owners can gain greater financial liquidity and diversification. Households can become home owners sooner in life.

A guide rule for determining whether refinancing a home loan is beneficial should account for which of the following "dimensions"?

How long you will keep the loan. Amount of interest rate "spread". Cost of refinancing.

A Phase I Environmental Value Assessment indicating a property is clean is legal protection to a buyer/investor:

If coupled with written assurance from the owner/developer

A Phase I Environmental Value Assessment indicating a property is clean is legal protection to a buyer/investor: -If signed by a qualified environmental consultant -Never -If coupled with written assurance from the owner/developer -Under any conditions

If coupled with written assurance from the owner/developer

Which of these statements best characterizes the doctrine of constructive notice?

If it is possible to know about a claim it is enforceable.

Which of these statements best characterizes the doctrine of constructive notice? -If people are given legal notice of a claim it is enforceable. -If it is possible to know about a claim it is enforceable. -If people know about a claim it is enforceable. -If people are explicitly advised of a claim it is enforceable.

If it is possible to know about a claim it is enforceable.

A buyer acquires a property with existing mortgage debt either "subject to" the debt or by assuming the debt. In which case can default result in foreclosure?

In both cases

An example of incomplete construction information potentially contributing to market failure is

Inability to examine plumbing under a concrete slab. Inability to examine roof nails for wind resistance once a roof is complete.

The fundamental problem with the option ARM loan, as most commonly used, was that it created a rapid increase in the:

loan balance

The common precedent that a refrigerator in a single family home is considered personal property while the same refrigerator in an an apartment building is a fixture represents what rule for determining fixtures? -Intention of the parties -Manner of attachment -Relation of the parties -Manner of adaptation

Intention of the parties

What is the relation between capitalization rates and estimated property values?

Inverse

Which of these statements is (are) correct about conventional mortgage loans?

Is the oldest form of home mortgage loan. Is the most common type of home mortgage loan. In recent years has been created in three different qualities.

Which of these statements about survey research for real estate market analysis are correct?

It has been especially useful for product design. The most valuable information often comes from what respondents do not like. Surveys sometimes can identify products missing from a local market.

Which of these statements about survey research for real estate market analysis are correct? Multiple select question. It has been especially useful for product design. The most valuable information often comes from what respondents do not like. Surveys sometimes can identify products missing from a local market. Where possible, a survey should be conducted for real estate market research instead of using existing data.

It has been especially useful for product design. The most valuable information often comes from what respondents do not like. Surveys sometimes can identify products missing from a local market.

Real estate appraisers generally distinguish among the concepts of market value, investment value, and transaction value. Which of the following statements best describes the concept of market value? Multiple Choice It is an estimate of the most probable selling price of a property in a competitive market. It is the value a particular investor places on a property. It is the price we observe when a property is sold. It is the maximum amount that a seller would be willing to accept.

It is an estimate of the most probable selling price of a property in a competitive market.

Characteristics of a tenancy for years include which of these?

It must be conveyed in writing (to be enforceable) if longer than a year. It can be virtually any length, up to many decades.

Which of these typically is true about a time-share interest? -Information about its resale value is readily available. -It is easily marketed and sold. -It usually is a good financial investment. -Its value depends on the quality of the company offering it.

Its value depends on the quality of the company offering it.

Which of these tenancies has "right of survivorship," such that the death of one co-owner results in the decedent's ownership interest being passed to the surviving owner(s)?

Joint tenancy, Tenancy by the entirety

Consider a bid-rent model of urban land rents with two employment centers, A and B, and thus two competing bid-rent curves. If employment at B increases while employment at A is constant, what happens to land use at the edge of the B employment region? Multiple select question. Land is bid away from workers at A Rent increases The bid-rent curve to A is flattened The bid-rent curve for B is flattened

Land is bid away from workers at A Rent increases

The most recent kind of lender to engage significantly in home mortgage lending is the:

Large online mortgage lender

In which of these freehold estates has the right of disposition been separated from the other rights?

Life estate

In which of these freehold estates has the right of disposition been separated from the other rights? -Fee simple conditional -Life estate -Tenancy for years -Fee simple absolute

Life estate

Which of the following items might be included in the "reserve for replacement" line item in a reconstructed operating statement? Multiple select question. Lobby furniture in an office building Apartment appliances Light bulbs Carpeting

Lobby furniture in an office building Apartment appliances Carpeting

______ government generally has the largest influence on local real estate markets.

Local

Fannie Mae has become a major issuer of ____.

MBS

Which of the following steps in the evaluation of an appraisal is the most important?

Make sure the comparables used are appropriate

Which of the following steps in the evaluation of an appraisal is the most important? Multiple choice question. Make sure all dollar adjustments are applied first Make sure the calculation of adjustments to comparable sale prices are reasonable Make sure the comparables used are appropriate

Make sure the comparables used are appropriate

Tenancy by the entirety

Marital co-ownership that, at the death on one spouse, enables the surviving spouse to be sole owner of joint property

Which of these liens has priority strictly according to time of creation?

Mechanics' liens, Mortgage liens

Against which of these risks is a property owner protected by title insurance?

Missing signature on a prior deed

Against which of these risks is a property owner protected by title insurance? -Missing signature on a prior deed -Damaging effects of mineral extraction -Eminent domain -Changing waterfront boundaries -Zoning changes

Missing signature on a prior deed

Which of these statements is (are) correct about the amortization of a standard, level payment home mortgage loan?

More than half the monthly payment is interest for about half the loan term. The principal reduction increases each month.

In the United States today, the general pattern for right of prepayment for home mortgage loans is as follows:

Most first mortgage home loans allow prepayment without penalty

Generally, which of the following is the most difficult to obtain and substantiate when abstracting a cap rate from a comparable sale?

Net operating income

Generally, which of the following is the most difficult to obtain and substantiate when abstracting a cap rate from a comparable sale? Multiple choice question. Name of the seller Name of the buyer Net operating income Sale price

Net operating income

Which kind of deed makes it certain that the grantee actually receives the interest intended to be conveyed?

No deed can provide such certainty

Which kind of deed makes it certain that the grantee actually receives the interest intended to be conveyed? -No deed can provide such certainty -Deed of bargain and sale -Special warranty deed -General warranty deed

No deed can provide such certainty

Failure to pay property taxes eventually leads to foreclosure sale for all types of property except:

No exceptions for taxable properties

Failure to pay property taxes eventually leads to foreclosure sale for all types of property except: -Homestead residences -Property leased to the government -No exceptions for taxable properties -Property leased to a religious organization

No exceptions for taxable properties

Fundamental characteristics of rights include which three of these?

Obligation of government to uphold or protect them. They are non-revocable. They are enduring or permanent.

For a deed, identify the requirements of the grantor.

Of legal majority age. Signature required. Legally competent.

Th attraction of the interest-only mortgage that brought it back into home finance in the pre-Great Recession years was that it:

Offered a relatively low payment

The primary difference between the two main forms of "evidence of title," abstract and attorney's opinion vs title insurance commitment, is:

Only one compensates for any legal costs or loss from attack on title

Capacity - ability to pay - has long been judged by two ratios. The simplest and most widely used is the housing expense ratio ("front-end" ratio), which, using the customary initials is ____ divided by ____.

PITI. GMI.

For judging "capacity" - ability to pay - the more complex of the two traditional ratios has long been the debt-to-income ratio ("back-end" ratio). Using the customary initials, the numerator of the ratio is ____ +____ .

PITI. LTO.

Which of these items most likely is(are) personal property?

Patio furniture, A very large television, An oriental rug

Among the investors that MBS have attracted to greater mortgage investment are:

Pension funds. mutual funds. life insurance companies. foreign institutional investors.

Which of these items is (are) likely to be a fixture?

Pews that are custom designed for a house of worship, Standard wall-to-wall carpeting

Which of these types of property generally is exempt from property taxation?

Private school

Which of these types of property generally is exempt from property taxation? -Unprofitable hotel -Office leased to local government -Office building leased to a church -Private school

Private school

Which of the following are used in the direct capitalization approach to estimating a property's market value? Multiple select question. Projected net operating income Expected sale price at the end of the expected holding period Capitalization rate Estimated accrued depreciation

Projected net operating income Capitalization rate

______ adjustments focus primarily on the physical and locational differences between the subject and comparable properties.

Property

Which of the following should be accounted for in the calculation of net operating income?

Property maintenance. Rental income. Vacancies.

Which of these liens always have the same, equal, senior priority?

Property tax lien, CDD lien, Assessment lien

Concerning whether property taxes are regressive (higher as a percent of income as income is lower), true statements are:

Property taxes paid can be regressive. Considering both taxes paid and benefits received, property taxes probably are not regressive. Benefits funded by property taxes likely favor lower income households and are the opposite of regressive.

When estimating the net operating income of a property, which of the following expenditures would be included?

Property taxes. Hazard and fire insurance premiums.

Which of these land uses can be (and commonly is) based on an easement in gross?

Railroad, Irrigation ditch, Power line

True statements about special assessments include:

The assessments often are proportional to front footage of the lots involved. They are used to fund public improvements affecting a limited set of properties. Common applications are for sidewalks, street improvements, sewer extensions, etc.

An example of negative externalities is: -The effect on nearby house values of a high quality elementary school -The effect on nearby house values of a successful public park -The effect on surrounding properties of outstanding architecture -Reflective glass or roof material deflects light and heat onto adjacent properties

Reflective glass or roof material deflects light and heat onto adjacent properties

Consider a bid-rent model of urban land rents with two employment centers, A and B, and thus two competing bid-rent curves. If employment at B increases while employment at A is constant, what happens to land use at the edge of the B employment region?

Rent increases. Land is bid away from workers at A.

Which of the following should be accounted for in the calculation of net operating income? Multiple select question. Rental income Vacancies Property maintenance Mortgage interest paid

Rental income Vacancies Property maintenance

Which of the following statements best describes a "step-up" lease? Multiple choice question. Rental rates increase at predetermined rates at predetermined times Tenants pay an increasing share of building-level operating expenses over time Rental rates increase based on the rate of general inflation in the economy

Rental rates increase at predetermined rates at predetermined times

The property being appraised currently has no vacancy. What would you likely conclude if the typical vacancy rate for comparable properties in the market is 10%? Multiple choice question. Advertising for the subject property is superior Rents at the subject property are too low Management of the subject is superior Rents are too high

Rents at the subject property are too low

In which of these real estate market analysis problems is geographic information system (GIS) analysis of households likely to be the most valuable?

Retail "convenience good" markets (Ex. grocery stores)

In which of these real estate market analysis problems is geographic information system (GIS) analysis of households likely to be the most valuable? Multiple choice question. Student oriented apartment properties Retail "convenience good" markets (Ex. grocery stores) Large "build-to-suit" warehouses (such as for Amazon) Military oriented apartment markets

Retail "convenience good" markets (Ex. grocery stores)

A person who owns a residence as a life estate fails to have which of the basic rights that are elements of property?

Right of disposition

A person who owns a residence as a life estate fails to have which of the basic rights that are elements of property? -Right of use and enjoyment -Right of disposition -Right of exclusion -Right of conversion

Right of disposition

Ability to demolish and replace a structure on your land

Right of disposition

Freedom to sell your property when and for how much you choose

Right of disposition

Freedom to lock your car

Right of exclusive possession

Ability to grow and sell crops on your land

Right of use and enjoyment

Freedom to decorate your house as you choose

Right of use and enjoyment

If you own a condominium where there is a restriction on the color or character of window treatments (drapes or blinds) what aspect of property rights is being curtailed?

Right of use and enjoyment

If you own a condominium where there is a restriction on the color or character of window treatments (drapes or blinds) what aspect of property rights is being curtailed? -Right of disposition -Right of exclusive possession -Right of use and enjoyment

Right of use and enjoyment

Which two of these best demonstrate personal rights rather than property rights?

Right to post election campaign signs on your lawn. Right to invite a group into your home.

A vacant lot has existed in an old neighborhood as far back as anyone can remember. Over time the sequence of owners of an adjacent house have fenced it in and used it for a garden. Suddenly another adjacent owner on the opposite side of the lot finds a survey indicating that the lot was purchased by their great great grandfather nearly a century ago. By what aspect of rights must this claim be taken seriously?

Rights are enduring.

You own a single family home with a rather narrow space between you and your neighbor's house. Your neighbor, who has complained about the narrow space, simply erects a privacy fence partially on your property without your permission. What fundamental characteristic of rights does this violate, if any? -Rights are non-revocable. -Rights are enduring. -There is no issue of rights here. -Rights are protected by government. -Rights are limited to citizens.

Rights are non-revocable.

You own a single family home with a rather narrow space between your's and your neighbor's house. Your neighbor, who has complained about the narrow space, simply erects a privacy fence partially on your property without your permission. What fundamental characteristic of rights does this violate, if any?

Rights are non-revocable.

Which of the following is most likely to be classified as a capital expenditure?

Roof replacement

Which of the following is most likely to be classified as a capital expenditure? Multiple choice question. Property management expenses Local property taxes Mortgage payments Roof replacement

Roof replacement

Which of the following contribute to the complexity of real estate transactions?

The complex bundle of rights associated with real estate ownership, The contiguous nature of all real estate parcels

Tenancy in common

The default form of co-tenancy, virtually like individual ownership

If you know the value of one share of common stock in Simon Property Group (SPG), you know the value of all SPG shares because Multiple select question. SPG shares trade in a liquid private market SPG shares trade in a liquid public market the share price is continuously revealed throughout the trading day one share is a prefect substitute for another

SPG shares trade in a liquid public market the share price is continuously revealed throughout the trading day one share is a prefect substitute for another

Which of these is a natural monopoly?

Sewer lines

Ways to improve ones capacity to conduct real estate market analysis for a particular site include:

Spend extended time at the site and observe how the surrounding world interacts with it. Stand on the site and observe all that surrounds it. develop the habit of observing real estate success and failure in general.

A law requiring any contract conveying a real property interest to be in writing in order to be enforceable is a modern application of the: -Statute of Frauds. -doctrine of constructive notice. -habendum clause. -actual notice.

Statute of Frauds

Which of these easements would be an easement appurtenant?

Sunlight easement requiring setback of adjacent buildings, Driveway right-of-way across an adjacent parcel

Under the Statute of Frauds which of these must be in writing to be enforceable?

Ten-year lease. Mortgage.

A ten year commercial lease conveys what real property interest?

Tenancy for years

Which of these ownership entities is a form of true co-ownership?

Tenancy in common

Which of these ownership entities is a form of true co-ownership? -Limited partnership -Trust -General partnership -Tenancy in common

Tenancy in common

Match the following statements to tenancy in common, joint tenancy, or tenancy by the entirety.

Tenancy in common = The default form of co-tenancy, virtually like individual ownership Joint tenancy = An ancient form of co-tenancy that enabled land holdings to remain intact Tenancy by the entirety = Marital co-ownership that, at the death on one spouse, enables the surviving spouse to be sole owner of joint property

Before innovations (brought by FHA), the typical home loan had which of these features:

Term of just a few years. 50-60 percent loan-to-value. Large "balloon" payment at maturity.

Valid aspects of housing assistance programs include:

The Veterans Administration guarantees home loans for qualified veterans. The Federal Housing Administration insures home loans for qualified borrowers. The USDA Rural Housing Services makes direct home loans to qualified rural households. state and local housing agencies make low interest loans to qualified households.

Which is the clearest example of a positive externality? -The effect on a neighborhood from good lawn maintenance -Excess demand for parking generated by a health club -Trash generated from food trucks -Sounds created by a dance club

The effect on a neighborhood from good lawn maintenance

Which of the following statements about market value are true?

The fair market value is the most probable selling price. The specific bundle of rights associated with the property's ownership affects fair market value.

Housing assistance programs in the United States since World War II have been predominantly through:

The home mortgage lending system

The primary means of satisfying the doctrine of constructive notice is by recording

The primary means of satisfying the doctrine of constructive notice is by recording

Adjustments for physical characteristics are intended to capture the dimensions in which a comparable property differs physically from the subject property. If the only physical difference between the subject property and the comparable is that the comparable does not have a fireplace, which of the following adjustments should take place? Multiple Choice The transaction price of the comparable property should be adjusted downward. The transaction price of the comparable property should be adjusted upward. The transaction price of the subject property should be adjusted downward. The transaction price of the subject property should be adjusted upward.

The transaction price of the comparable property should be adjusted upward.

Property tax ID numbers and street addresses can never be sufficient as real property descriptions because:

They are a point rather than a boundary description

Property tax ID numbers and street addresses can never be sufficient as real property descriptions because: -They are a point rather than a boundary description -Streets and roads may change -They may repeat from one community to another -They frequently have errors

They are a point rather than a boundary description

The idea of "chain of title" is:

To confirm the complete sequence of title conveyances

____ adjustments focus on the terms of the deal and the motivation or bargaining ability of the participants.

Transactional

A distinctive feature of real estate is the complexity of property and transactions.

True

USPAP standards require that, when using the sales comparison approach, appraisers use how many comparables? Multiple choice question. USPAP has no requirement regarding the number of comparable sales always three As many comparables as necessary but no more than three

USPAP has no requirement regarding the number of comparable sales

The rules for making adjustments to the sale prices of comparable properties include which of the following? Multiple select question. Use market-related adjustments make transactional adjustments in the proper order always use dollar adjustments Adjust the sale price of the comparable toward the subject property

Use market-related adjustments make transactional adjustments in the proper order Adjust the sale price of the comparable toward the subject property

The cap rate abstracted from the market is 0.066. The subject's estimated net operating income is $60,000. What is the value of the property by direct capitalization? (Round answer to nearest dollar amount.) Multiple choice question. 522,000 1,006,000 1,250,000 909,091

Value / Rate = 60000 / 0.066 = 909,091

Which of these factors influencing where households and firms locate within a city is ignored in a bid-rent model?

Variation in types of housing

Which of these factors influencing where households and firms locate within a city is ignored in a bid-rent model? Multiple choice question. Speed of commuting Number of households in the city Variation in types of housing Household income

Variation in types of housing

A national law that has imposed permitting requirements on millions of acres of land, has been brought to the United States Supreme Court, and that continues to stir great controversy, is the Clean ____ Act.

Water

A national law that has imposed permitting requirements on millions of acres of land, has been brought to the United States Supreme Court, and that continues to stir great controversy, is the Clean _____ Act.

Water

The concentric circle model of urban form contradicted the bid-rent model of urban land value by describing a city where wealthier households tended to live farther from the CBD. Economists have explained this as follows:

Wealthier households valued larger lots more than commute savings. It was too costly to convert older houses to modern, larger ones.

The concentric circle model of urban form contradicted the bid-rent model of urban land value by describing a city where wealthier households tended to live farther from the CBD. Economists have explained this as follows: Multiple select question. Wealthier households valued access to rural areas more than access to the CBD. Suburban schools were better. Wealthier households valued larger lots more than commute savings. It was too costly to convert older houses to modern, larger ones.

Wealthier households valued larger lots more than commute savings. It was too costly to convert older houses to modern, larger ones.

For the case of Palm Grove office complex, what market defining questions are useful in beginning the market analysis? Multiple select question. What do customers care about? Who is the competition? Who are the customers? How much increase will occur in the future in prospective tenants? Where are the customers located? What is the product?

What do customers care about? Who is the competition? Who are the customers? Where are the customers located? What is the product?

Steps in creating a market defining story include asking these questions:

What is the real estate product involved? Who and where is the target market? Who are the competitors? What aspects of the product do customers care about?

Steps in creating a market defining story include asking these questions: Multiple select question. What is the real estate product involved? Who are the competitors? how should the product be marketed? Who and where is the target market? What aspects of the product do customers care about?

What is the real estate product involved? Who are the competitors? Who and where is the target market? What aspects of the product do customers care about?

For the case of Palm Grove office complex, what market defining questions are useful in beginning the market analysis?

Where are the customers located? Who are the customers? What do customers care about? What is the product? Who is the competition?

In constructing a market-defining "story," it is helpful to answer a series of fundamental questions around which analysis can be built. Which of the following questions is designed to identify the target market? Multiple Choice What is the real estate product under consideration? Who are the customers? What aspects of the product do the customers care about? Who are the competitors?

Who are the customers?

In the Elysian Forest case, the analyst is able to formulate a demographic profile of potential buyers primarily by asking which two market defining questions? Multiple select question. What do the customers care about? Where are the customers? Who are the customers? What is the product? What is the competition?

Who are the customers? What is the product?

Questions that arise in clarifying rights to water include

Who has the right to use the surface of a body of water? Who has the right to use groundwater? Who has the right to use the water itself? Who owns the land under a body of water? Who controls use of land under a body of water?

For the case study of Plane Vista Apartments, which market defining questions are most used to focus the analysis?

Who is the customer? What is the product? Where is the customer?

For the case study of Plane Vista Apartments, which market defining questions are most used to focus the analysis? Multiple select question. Who is the customer? What is the product? Where is the customer? What is the paying capacity of customers? What is the industry preferences?

Who is the customer? What is the product? Where is the customer?

For those interesting in mineral or petroleum extraction, which aspect of water rights are especially important in the United States? -Who controls use of land under the water. -Who owns the land under a body of water. -Who has right to use the water surface. -Who has right to use the water itself (remove, degrade, etc.)

Who owns the land under a body of water.

Which of these are required elements of a deed?

Words of conveyance. Acknowledgment. Signature of the grantor.

A mortgage prepayment penalty calculated to equal the amount of interest income the lender loses due to prepayment is frequently used in commercial property mortgages, and is called a:

Yield maintenance penalty

Characteristics of indirect co-ownership include that

a business entity is the actual owner of the property. co-owners hold shares in the business entity that actually owns the property.

A good comparable property is a property that the typical buyer would consider Multiple choice question. a close substitute for the subject superior to the subject inferior to the subject

a close substitute for the subject

For real property the best definition of title is

a collection of documents and other evidence pointing to some person(s) or entity as holding the fee, or titled, interest.

For real property the best definition of title is -a collection of documents and other evidence pointing to some person(s) or entity has holding a valid certificate of title. -the ownership claim of a person holding a certificate of title. -a collection of documents and other evidence pointing to some person(s) or entity as holding the fee, or titled, interest. -the claim of whoever holds the last deed related to a property.

a collection of documents and other evidence pointing to some person(s) or entity as holding the fee, or titled, interest.

The concept of market value in formal appraisal practice includes Multiple select question. a competitive market a good buy for an investor most probable selling price buyer and seller acting prudently

a competitive market most probable selling price buyer and seller acting prudently

Common interest rates that have been used as the index rate in an adjustable mortgage rate include:

a cost-of-funds rate for depository lenders. a LIBOR interest rate. a commercial bank prime rate. one-year constant maturity Treasury rate.

The Real Estate Settlement Procedures Act (as modified by the Dodd-Frank Act of 2013) requires for virtually every standard home loan:

a document explaining the Closing Disclosure and fees. a standard closing statement: Closing Disclosure. a good-faith estimate of closing costs: Loan Estimate. Prohibition of "kickbacks".

The current market interest rate on fixed rate, long-term mortgage for single-family homes is 4%. To help sell her home, the seller of a comparable sale provided long-term, fixed rate financing to the buyer at an interest rate of 3%. (that is, the seller was also the lender). This would required __________ adjustment to the sale price of the comparable

a downward

The current market interest rate on fixed rate, long-term mortgage for single-family homes is 4%. To help sell her home, the seller of a comparable sale provided long-term, fixed rate financing to the buyer at an interest rate of 3%. (that is, the seller was also the lender). This would required __________ adjustment to the sale price of the comparable Multiple choice question. a downward an upward no

a downward

An ownership interest in a property that is considered a complete interest without regard to any leases is

a fee simple interest

An ownership interest in a property that is considered a complete interest without regard to any leases is Multiple choice question. a leased fee interest a fee simple interest a compound interest a partial interest

a fee simple interest

Components that typically are in a community comprehensive plan include

a map of various land uses within the community. allocation of land to various uses. plans for schools and other public facilities.

An adjustment for differences in economic characteristics is not usually required when valuing Multiple choice question. a personal residence an income-producing property a leased-fee interest

a personal residence

Assume the appraiser believes that all of the appliances in a small apartment complex will have to be replaced at the end of five years. The appraiser determines that $5,000 will have to be put aside each year in an interest bearing account (at 3%) in order to have enough funds available at the end of five years to replace the appliances. If this $5,000 is included in the estimation of net operating income, it is typically referred to as Multiple choice question. an annual operating expense an addition to net operating income a reserve for CAPX

a reserve for CAPX

Variations of the I-O mortgage include:

a standard I-O but with lender's promise to fund pay off in 5-7 years with a fully amortizing loan. a loan that is I-O for 15 years and then converts to fully amortizing level payment for the remaining term.

Typically, reconciliation of final adjusted sale prices of the comparable properties involves the use of

a weighted average

Typically, reconciliation of final adjusted sale prices of the comparable properties involves the use of Multiple choice question. a market value range a median an equally-weighted average a weighted average

a weighted average

The Dodd-Frank Act, in creating new standards for home mortgages adopted as a central standard ____ to ____.

ability. repay.

Clauses of a mortgage that commonly are also restated in the note include:

acceleration clause. due-on-sale clause.

A better location can also be defined as better ___.

access

In real estate markets, a better location can also be referred as one with better _____

access

Characteristics of building codes include

address safety, health and sanitation. generally are regional rather than strictly local. continue to change with changing technology.

Aspects of subdivision regulations include requirements for

adequate quality of streets. coordination of streets with surrounding subdivisions. adequate provision of water and sewers.

Both the buyer and seller of a home that recently sold knew the house needed a new roof. The buyer replaced the roof immediately after purchasing the home. An appraiser using this sale as a comparable should

adjust the comparable sale price upward by the cost of the new roof

Both the buyer and seller of a home that recently sold knew the house needed a new roof. The buyer replaced the roof immediately after purchasing the home. An appraiser using this sale as a comparable should Multiple choice question. adjust the comparable sale price upward by the cost of the new roof not use the sale as a comparable even if it is highly similar in physical characteristics to the subject property adjust the comparable sale price downward by the cost of the new roof

adjust the comparable sale price upward by the cost of the new roof

The interest rate on a home equity line of credit normally is ____, based on the prime rate as published in the Wall Street Journal.

adjustable

Elements unique to an adjustable mortgage interest rate, rather than a fixed rate, can include

adjustment period. change date. caps. index rate. margin.

An owner of land may involuntarily and unknowingly give up the rights to land. When a fee simple interest is conveyed to a new owner without a deed and without the consent or knowledge of the original owner, this is said to be conveyed by: -prescription. -adverse possession. -accretion. -reliction.

adverse possesion

Two conveyances of real property that likely would be revealed only by actual notice are

adverse possession. an implied easement of access.

In mortgage lending to marginal borrowers during the years preceding the Great Recession three kinds of accommodative loans were "affordable housing" loans, Alt-A and subprime. The most cautious and systematic underwriting among these types was for:

affordable housing loans

In the years preceding the Great Recession, there were three types of accommodative home loans programs for borrowers unable to qualify for standard home loans. The type that showed the least evidence of failure was:

affordable housing loans

In the largest of cities the presence of multiple industries tends to create special resources, both private and governmental, used by all of the industries, resulting in efficiency or cost advantages benefiting all the industries. This phenomenon is called ____ economies.

agglomeration

In evaluating the market prospects of a kind of property new to an area, it often is very informative to examine the experience of the proposed type property in similar contexts elsewhere. This is using ____ to conduct market analysis.

analogy

In evaluating the market prospects of a kind of property new to an area, it often is very informative to examine the experience of the proposed type property in similar contexts elsewhere. This is using _____ to conduct market analysis.

analogy

When you are evaluating the prospects for a project that is new in your setting and therefore has no actual relevant market performance data, it is most helpful to use which of the following techniques as the basis for your analysis? Multiple Choice analogy fabrication cooperation recommendation

analogy

The primary means of satisfying the doctrine of constructive notice is by recording -any document related to a real estate sale -any document that might be disputed. -any document conveying a real property interest. -all documents in a real estate transaction.

any document conveying a real property interest.

Home owner associations and condominium associations can invoke a lien for owner assessments. By state law or by provision in the owner documents such a lien often is automatically subordinated to:

any first mortgage lien

Restrictive covenant for a subdivision can be enforced by

any owner of a parcel in the subdivision. any renter in the subdivision. any lender whose loan is secured by a parcel in the subdivision.

The Dodd-Frank Act sets out a standard of "ability-to-repay" for home mortgages. This standard is required of ______ lender underwriting ______ home mortgage loan(s).

any; any

The typical lease structure of ______ properties makes income multipliers a more appropriate valuation method than the lease structure of other property types.

apartment

The typical lease structure of ______ properties makes income multipliers a more appropriate valuation method than the lease structure of other property types. Multiple choice question. retail industrial apartment office

apartment

In a market characterized by rising market rental rates, contract rental rates are generally "marked-to-market" (i.e., increased) by the owner when an existing lease expires. In general, leases are more frequently marked-to-market in Multiple choice question. industrial properties apartment properties office properties retail properties

apartment properties

In the past, an example of real estate market success in the midst of wide-spread real estate market failure was:

apartments during the Great Recession

In the past, an example of real estate market success in the midst of wide-spread real estate market failure was: Multiple choice question. the Pruitt-Igoe housing project in St Louis in the 1960s apartments during the Great Recession prominent office buildings during the mid-1970s non-grocery local retail during the Great Recession

apartments during the Great Recession

Mortgage loan underwriters traditionally use a(n) ____ to confirm the value of the securing property. More recently this frequently has been replaced by ____ ____ models.

appraisal. automated. valuation.

Location adjustments to comparable sale prices

are almost always required

Location adjustments to comparable sale prices Multiple choice question. are almost always required are infrequently required require only limited knowledge of the local market

are almost always required

The largest of cities can provide lower risk to real estate investors resulting from Multiple select question. better available market information better chance of retenanting struggling real estate better transportation access a larger array of industries generating real estate demand. lower land prices as compared to smaller cities

better available market information better chance of retenanting struggling real estate better transportation access a larger array of industries generating real estate demand.

Intangible assets include:

bond investments, leases, stock investments,

Some factors that affect the premium charged for PMI include:

borrower's credit record. length of loan term. loan-to-value ratio. use of property (owner occupied, rental, second home).

The original candidates for subprime loans included:

borrowers seeking 100 percent financing. borrowers who could not document their income. borrowers with a poor credit rating.

The central economic characteristic of a city's base activities is that they:

bring in income from the larger world

The central economic characteristic of a city's base activities is that they: Multiple choice question. bring in income from the larger world bring recognition and interest from the larger world are industrial give the city influence in the larger world

bring in income from the larger world

Problems that led to serious difficulties in mortgage brokerage included:

broker fees were biased toward least desirable loans for the borrower. broker compensation is purely "front end" for a service that has lasting consequences. broker qualification requirements and monitoring were extremely deficient.

Mortgage ____ is a business of simply bringing a mortgage borrower and a mortgage lender together and collecting a fee for that service.

brokerage (brokering, or broker)

The amount of revenue that a jurisdiction must raise from property taxes is the difference between its total ____ and its revenues from ____ sources.

budget. other (or nontax).

Real estate consists of the physical structures and infrastructure that accompany the land. All of the following are examples of an improvement to the land EXCEPT: -walkways. -building. -sewer system. -streets.

building

Three types of traditional land use controls are:

building codes. zoning. subdivision regulations.

Three forms of traditional land use controls are ____ ____ , ____ , and ____ regulations.

building codes. zoning. subdivision.

Three forms of traditional land use controls are _____ _____, _____, and _____ regulations.

building regulations, zoning, subdivision

Standard features of traditional zoning include

bulk limits for buildings. minimum lot dimensions. provision for special use districts.

Factors before the 1930s that contributed to a concentric ring pattern of urban form included Multiple select question. environmental problems from manufacturing were minimal business and production depended almost completely on face-to-face communication transportation was radial, focused on the CBD planners and developers believed in the bid-rent model of urban organization

business and production depended almost completely on face-to-face communication transportation was radial, focused on the CBD

Factors before the 1930s that contributed to a concentric ring pattern of urban form included

business and production depended almost completely on face-to-face communication. transportation was radial, focused on the CBD.

Covenants in a deed assure that the grantor

can be sued for failing to deliver good title.

Covenants in a deed assure that the grantor -can be sued for failing to deliver good title. -will take the property back in case of title problems. -will inform the grantor of any doubt about good title. -will deliver good title.

can be sued for failing to deliver good title.

The term "real estate"

can be used to describe the bundle of rights associated with ownership of the physical assets, can be used to identify land and buildings

If an important characteristics of the comparable property is superior to the subject property, the sale price of the __________ property must be adjusted _______. Multiple choice question. comparable, upward subject, downward comparable, downward subject, upward

comparable, downward

A comparable property sold 5 months ago. Sales prices in the market have increased over those five months. The sale price of the ___________ must be adjusted ___________.

comparable, upward

The sale of the comparable property included a clause that stated that legal title to the property would revert back to the seller in 20 years. If this comparable is used by the appraiser, the sale price of the __________ would have to be adjusted _________

comparable, upward

The sale of the comparable property included a clause that stated that legal title to the property would revert back to the seller in 20 years. If this comparable is used by the appraiser, the sale price of the __________ would have to be adjusted _________ Multiple choice question. subject, downward comparable, upward comparable, downward

comparable, upward

Repeat-sale analysis is the process of

comparing the sale prices of properties that have sold twice

Repeat-sale analysis is the process of Multiple choice question. comparing the sale prices of properties that have sold twice comparing the subject to the differences in the comparables comparing similar items from all comparable sales

comparing the sale prices of properties that have sold twice

If a refinance decision involves replacing multiple loans with an increased first mortgage loan the solution involves:

compute the "old" payment as the sum of all the payments to be replaced. for each old loan, compute the reduction in payment with the new interest rate, keeping all other terms as they were. compute the difference between all old payments and all revised payments and proceed as with a single loan replacement.

A city's economic base can be viewed in terms of a multiplier process, in which the money that is brought in through export activities is then respent within the city. Which of the following economic activities is the least likely to be considered a high-impact or high-multiplier economic base activity? Multiple Choice tourism retirement computer assembly specialized medical services

computer assembly

An aggressive planning concept to control the location of development, limits development until a minimum standard of public services and infrastructure is in place, provided by the land developers. This is referred as a ______ requirement.

concurrency

An aggressive planning concept to control the location of development, limits development until a minimum standard of public services and infrastructure is in place, provided by the land developers. This is referred as a ______ requirement. -shared -controlling -concurrency -matching

concurrency

The legal procedure through which eminent domain is exercised is called ____.

condemnation

The legal procedure through which eminent domain is exercised is called _____.

condemnation

Agencies and private companies that pool and securitize mortgages are sometimes called ____:

conduits

A conventional home mortgage that meets all of the requirements to be purchased by Fannie Mae or Freddie Mac is called a ____ conventional mortgage.

conforming

The maximum guarantee on a VA loan is one fourth of the loan limit for ____ conventional loans, those acceptable for purchase by Fannie Mae or Freddie Mac. In effect, this sets the maximum VA loan amount equal to the conforming conventional maximum.

conforming

In 2008, loan losses and loss reserves eroded the capital of Fannie Mae and Freddie Mac to the point that they were placed under ____ of the U.S. Government.

conservatorship

Required conditions for successful acquisition of property through adverse possession are that possession must be

continuous. actual use. hostile to the owner's interest. "open and notorious."

A deed is a special form of ____ to convey a the exact property interest.

contract

A deed is a special form of _____ to convey a the exact property interest.

contract

Generally, if the property is subject to long-term leases to financially reliable tenants at rates above or below market, the estimation of potential gross income (PGI) will include the rent of these leases.

contract

The goal of the numerous required adjustments to comparable sale prices is to

convert each comparable sale into a closer approximation of the subject

The goal of the numerous required adjustments to comparable sale prices is to Multiple choice question. convert the subject into a closer approximation of the comparable sale decrease the time required to complete the appraisal assignment convert each comparable sale into a closer approximation of the subject

convert each comparable sale into a closer approximation of the subject

The growth of many large US cities has resulted from their success in evolving a sequence of ____ activities through their history.

core

According to the data presented in the text, the largest asset class in terms of estimated market value is:

corporate equities (stocks)

According to the data presented in the text, the largest asset class in terms of estimated market value is: -corporate equities (stocks) -U.S. Treasury securities -real estate (including housing) -mortgage debt

corporate equities (stocks)

Entities of indirect ownership by multiple owners include the

corporation, general partnership, limited partnership

When selecting a proxy variable to represent market data that is not readily available, researchers should select a data series that is highly __________ with the variable of interest. Multiple Choice correlated clustered irrelevant segmented

correlated

Which of the following approaches for calculating the market value of a property involves estimating the dollar value associated with replacing the property new, as well as determining the loss in value due to physical, functional, and external obsolescence? Multiple Choice income approach sales comparison approach cost approach investment approach

cost approach

Conventional approaches to estimating the market value of real estate include the Multiple select question. cost approach sales comparison approach USPAP approach income approach

cost approach sales comparison approach income approach

Conventional approaches to estimating the market value of real estate include the

cost approach. income approach. sales comparison approach.

Reasons why both Net Benefit and Net Present Value analysis of refinancing tend to overstate actual benefits include:

cost of personal time and hassle. risk that rates could decline further. income tax effects.

Modern electronic underwriting for home mortgages has displaced traditional "three Cs" underwriting due to several advantages. These include:

cost, because it is purely electronic. speed, because it is purely electronic. more accurate than the average underwriter.

An important difference between states requiring judicial foreclosure and states allowing power of sale is that the latter do not require a ____ - administered public auction.

court

The covenant in a deed that promises the grantor actually holds title is the

covenant of seizin.

A mortgage note usually adds to its clauses all the ____ of the mortgage.

covenants

A mortgage note usually incorporates all of the _________ of the mortgage.

covenants

Features of elective share include:

covers both real and personal property, commonly give the surviving spouse a 30% share, must be explicitly chosen with a certain time after death of the spouse

In the case study of Plane Vista Apartments, constructing the map of employment in Orlando involved which market research technique?

creating proxy variables

In the case study of Plane Vista Apartments, constructing the map of employment in Orlando involved which market research technique? Multiple choice question. creating proxy variables excluding the irrelevant use of analogy

creating proxy variables

In the Elysian Forest case, the analyst is unable to find Census tables that show the interaction of all the demographic features deemed important. The analyst applies what technique to the Census data to approximate the critical distinctions needed?

creation of proxy variables

Under the Dodd-Frank "ability-to-repay" standard, which of these must a lender consider in underwriting a home mortgage loan?

credit history

Market parameters for a rental market that are likely the focus of a market analysis include

current and future occupancy rate. projected rental rate growth.

Market parameters for a property sales market that are the likely focus of a market analysis include:

current and projected sales rate. projected prices.

A household's equity in their home is defined as the:

current market value of the home minus outstanding mortgage debt

In determining whether an object is a fixture, a major rule used by courts in recent times is "intention of the parties." This rule considers: -the intention of the current owner -customary practice -the intention of the buyer -persuasiveness of the two parties

customary practice

Cap rate information is often available from Multiple select question. local government entities data providers local research companies brokerage firms

data providers local research companies brokerage firms

The income producing ability of properties generally Multiple choice question. declines over time remains constant over time increases over time

declines over time

As the cap rate increases, the price (value) to NOI ratio

decreases

As the cap rate increases, the price (value) to NOI ratio Multiple choice question. increases decreases is unaffected

decreases

A titled interest (rather than an easement) in real property can be conveyed intentionally, but without a deed, through

dedication.

The primary document used to convey permanent interests in real property is a

deed

The primary document used to convey permanent interests in real property is a -sales contract -deed -mortgage -lease

deed

In some states, including California, a ____ of ____ is used instead of a mortgage.

deed. trust.

In some states, including California, a of ____ is ____ used instead of a mortgage.

deed. trust.

In considering the acquisition of real property, it is important to remember that certain factors may limit ownership rights. Which of the following is an example of a situation in which ownership rights can be fully removed from the property? -land use controls -leasehold interests -home owner association (HOA) bylaws -defaulted lien

defaulted lien

In case of default, funds not recovered by a lender through foreclosure can be pursued through a ____ judgment.

deficiency

Market value is determined by

demand and supply conditions

Market value is determined by Multiple choice question. the methodology used to estimate market value demand and supply conditions the assumptions used in the DCF valuation model

demand and supply conditions

The goal of psychographics is to classify consumers by attitudes, interests, opinions and values using their observable ____ characteristics.

demographic

The goal of psychographics is to classify consumers by attitudes, interests, opinions and values using their observable _____ characteristics.

demographic

The dominating role of banks in home mortgage lending in 2017 was enabled by important changes in the 1980s and 1990s, including steady ____ of banks through that period, permitting extensive bank ____ and unprecedented business freedom.

deregulation. consolidation.

One of the most useful survey research has been applied to real estate markets at the project ____ level.

design

One of the most useful survey research has been applied to real estate markets at the project _____ level.

design

Ways to improve ones capacity to conduct real estate market analysis for a particular site include: Multiple select question. develop the habit of observing real estate success and failure in general. Spend extended time at the site and observe how the surrounding world interacts with it. Study public records of the site, including property tax records. Stand on the site and observe all that surrounds it.

develop the habit of observing real estate success and failure in general. Spend extended time at the site and observe how the surrounding world interacts with it. Stand on the site and observe all that surrounds it.

The main models or approaches to valuing real estate using income capitalization include Multiple select question. holding period analysis discounted cash flow direct capitalization rate of return analysis

discounted cash flow direct capitalization

The main models or approaches to valuing real estate using income capitalization include

discounted cash flow. direct capitalization.

The process of converting expected future cash flows into present value is called ______.

discounting

The process of converting expected future cash flows into present value is called ______. -compounding -investing -discounting

discounting

______ is the process of converting future values into present values. Multiple choice question. Discounting Compounding Annualizing

discounting

GIS (geographical information systems) can strengthen real estate market research in numerous ways, including: Multiple select question. display demographics, transactions and other data with great efficiency. enable spatial "gap" analysis for untapped locational opportunities generate superior maps for communication. reduce the need for data from surveys or field research.

display demographics, transactions and other data with great efficiency. enable spatial "gap" analysis for untapped locational opportunities generate superior maps for communication.

Easements vary greatly in the extent of ______ that they impose on the encumbered land.

disruption

Easements vary greatly in the extent of ______ that they impose on the encumbered land. -duration -legal standing -disruption

disruption

In contrast to property taxes, which are based on property value, special assessments are based more on equally _____ the total cost of improvements.

distributing

To abstract the cap rate from the sale of a comparable property, the appraiser

divides the NOI of the comparable property by the sale price of the comparable property

To abstract the cap rate from the sale of a comparable property, the appraiser Multiple choice question. divides the sale price of the comparable property by the NOI of the comparable property obtains the cap rate used for valuation from other local appraisers divides the NOI of the comparable property by the sale price of the comparable property

divides the NOI of the comparable property by the sale price of the comparable property

"Trigger" events that may precipitate home mortgage default under the right conditions can include:

divorce. abrupt payment increase. unemployment. death in the household. health failure.

An ancient common law concept

dower/curtesy

Conveys only life estates

dower/curtesy

Limited to real property only

dower/curtesy

If a comparable property sale included some valuable personal property, the sale price of the comparable is usually adjusted ______ by the ______ of the personal property Multiple choice question. downward, original cost upward, current market value upward, original cost downward, current market value

downward, current market value

Accurate characteristics of land description by plat lot and block number include:

each lot and block is defined in detail (by metes and bounds) in a recorded map. the description map normally shows the location of multiple kinds of easements or public right-of-ways. associates with the recorded map usually is a list of restrictive covenants.

In contrast to ownership of property by a corporation, in tenancy in common

each owner can separately mortgage or sell their portion of the property. every owner holds the same actual real property interest rather than shares in an owner entity. all co-owners are mutually liable for any liens on the property.

All of the following are modes of conveying real property involuntarily without a deed EXCEPT: -title by adverse possession. -easement by estoppel. -action of water. -easement by prescription.

easement by estoppel

Easements where no deed is involved include:

easement by prior use. easement by estoppel. easement of necessity.

Jeff owns 150 acres between a highway and a public beach. The state would like to build a road directly from the highway to the beach across a number of beach front properties including Jeff's. The space for this road would be considered a(n): -implied easement. -easement in gross. -negative easement appurtenant. -positive easement appurtenant.

easement in gross

Since an easement is a non-possessory interest, it is important to understand the right of disposition that is associated with it. In which of the following types of easements is the right of disposition claimed as part of the easement? -implied easement -easement in gross -negative easement appurtenant -positive easement appurtenant

easement in gross

When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible for property to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path of access, which of the following types of easements will automatically be created to make the land useful? -easement by prior use -easement of necessity -easement by estoppel -dedication

easement of necessity

Attractions of the property tax for local governments include that it is

easy to collect or enforce. steady or reliable.

to understand the potential of a city for the future it is important to be aware of the city's ____ ____.

economic base

A city's potential for growth or its susceptibility to decline is determined by a set of economic activities that the city provides for the world beyond its boundaries. Economists refer to this set of activities as a city's: Multiple Choice linkages. economic base. local economic activities. economies of scale.

economic base.

The rental income an existing, stabilized property is expected to generate, after allowances for vacancies and collection losses, is called

effective gross income

The rental income an existing, stabilized property is expected to generate, after allowances for vacancies and collection losses, is called Multiple choice question. net operating income gross potential income gross operating income effective gross income

effective gross income

Given the following information, calculate the effective gross income. Property: 4 office units Contract rents per unit: $2500 per month Vacancy and collection losses: 15% Operating Expenses: $42,000 Capital Expenditures: 10% Multiple Choice $100,000 $102,000 $120,000 $135,000

effective gross income = potential gross income - vacancy & collection --> potential gross income = 2500 x 4 = 10000 x 12 months = 120000 --> vacancy = 120000 x 0.15 = 18000 --> effective gross = 120000 - 18000 = $102,000

Dividing the sale price of a comparable property by its annual effective gross income results in a(n) ______ which can be used to estimate the value of a subject property.

effective gross income multiplier

______ government generally has the largest influence on local real estate markets. -Federal -State -Local

local

Dividing the sale price of a comparable property by its annual effective gross income results in a(n) ______ which can be used to estimate the value of a subject property. Multiple choice question. value ratio gross rate of return effective gross income multiplier capitalization rate

effective gross income multiplier

Potential gross income is equal to

effective gross income plus vacancy and collection losses

Potential gross income is equal to Multiple choice question. effective gross income minus vacancy and collection losses operating expenses plus vacancy and collection losses net operating income plus operating expenses effective gross income plus vacancy and collection losses

effective gross income plus vacancy and collection losses

Given the following information, calculate the effective tax rate expressed in mills: Market value of property: $280,000 Assessed value of property: 50 % of the market value Exemptions: $2,000 Annual tax liability: $4,685.10 =1.69 mills -3.35 mills -16.73 mills -33.95 mills

effective tax rate = tax liability / MV or sale price = 4685.10/280000 = 0.0167325 = 16.73mills

The central idea of industry economies of scale and clustering is that by locating in proximity firms in the same industry achieve mutual ____.

efficiencies

The central idea of industry economies of scale and clustering is that by locating in proximity firms in the same industry achieve mutual _____.

efficiencies

Commercial property debt accounted for ______ percent of all mortgage debt in the US in 2015.

eighteen

The planning or zoning commission is appointed as an advisory board by the

elected governing body

The planning or zoning commission is appointed as an advisory board by the -elected governing body -local court -community referendum -state government officials

elected governing body

A modern statutorial creation

elective share

Includes both real and personal property

elective share

Provides for a fee simple interest

elective share

Overall impacts on home mortgage lending that are attributable to Fannie Mae and Freddie Mac include:

elimination of mortgage interest rate differentials across regions of the US. lower average home mortgage interest rate for conforming conventional home loans. elimination of sudden mortgage market disruptions when interest rates rise.

Covenants in a deed are important because they

enable the grantee to sue for damages for misrepresentations about title. bind the grantor to legal promises about title.

The projected amount of income that is "loss to lease" in a given year

equals what rental income would be if the property were fully leased at market rental rates, minus actual rental income

In foreclosure the defaulted borrower has the right to redeem the property up to the time of sale at public auction by paying off the defaulted loan and paying foreclosure expenses of the lender. This is the right called ____ ____ ____.

equity of redemption

In addition to requirements concerning use of the Loan Estimate and the Closing Disclosure, RESPA sets limits on required ____ deposits.

escrow

Important steps in laying the foundation for a modern home mortgage secondary market, starting in 1968, included:

establishment of Fannie Mae as a quasi-private purchaser of FHA and VA loans. creation of GNMA as a US Government guarantor of FHA/VA mortgage securities. creation of Freddie Mac as a purchaser of conforming conventional loans.

The use of a discounted cash flow valuation model requires the appraiser to Multiple select question. estimate NOI over the typical holding period determine the expected holding period of the typical investor select the capitalization rate used to value the NOI

estimate NOI over the typical holding period determine the expected holding period of the typical investor

According to the text, the main difficulty is using the cost approach to valuation is

estimating the dollar amount of accrued depreciation

According to the text, the main difficulty is using the cost approach to valuation is Multiple choice question. obtaining replacement cost estimates estimating the dollar amount of accrued depreciation convincing clients of its applicability estimating land value

estimating the dollar amount of accrued depreciation

For a mortgage loan the number of months until the final payment is the term to ____.

maturity

In the case study of Plane Vista Apartments, recognizing the idea of "airport island" is an example of what market research technique? Multiple choice question. finding proxy variables use of analogy excluding the irrelevant

excluding the irrelevant

For the market analysis of Palm Grove, which of these techniques proved useful in the initial analysis?

exclusion

Zoning ordinances that tend to exclude lower income groups by large lot size, or that do not adequately provide low- and moderate-income housing are referred to as: -special uses. -nonconforming uses. -conforming uses. -exclusionary uses.

exclusionary uses

To derive taxable value of a property from assessed value, subtract any applicable _____.

exemptions

If it is correctly estimated, the effective gross income multiplier reflects Multiple select question. utility expenses expected future vacancy current vacancy expected rental growth

expected future vacancy current vacancy expected rental growth

Reliable sources of construction cost estimates include: Multiple select question. other appraisers experienced builders local land use planners construction cost estimating firms

experienced builders construction cost estimating firms

Many cities have been born at a site of resource ____.

extraction

Many cities have been born at a site of resource _____.

extraction

Mortgage bankers make commitments to potential borrowers at a fixed interest rate. If market rates fall, the potential borrowers will tend to abandon the commitment for a better rate elsewhere. This risk is known as ____ risk.

fallout

True or false: A location adjustment is not required when the comparable property has a superior location than the subject.

false

True or false: Careers in real estate are limited primarily to brokerage and leasing.

false

True or false: Federal income taxes are a property operating expense.

false

True or false: If a real estate development turns out to suffer from a failure of market demand, the developer normally can find ways of correcting or escaping the problem.

false

True or false: The accurate valuation of income producing properties is primarily a number crunching exercise.

false

True or false: The activities of federal, state, and local governments have little need for the services of real estate professionals.

false

True or false: The appropriate discount rate for valuation of the subject property can usually be found on a publicly accessible website.

false

True or false: The effect of technological change upon urban form historically has followed quickly after the change has been introduced.

false

True or false: The fact that the last sale of a house was made by the seller to avoid an almost certain default and foreclosure likely had no effect on the sale price.

false

True or false: The income capitalization approach is the most important method for appraising single-family residences.

false

True or false: The required adjustment for difference in legal estates is typically a relatively simple adjustment.

false

True or false: The selling price always reflects the true market value of a property.

false

True or false: developers normally regard the site plan review process as a friendly and predictable procedure.

false

Common types of prepayment penalties for mortgage loans include:

fee equal to a percentage of the remaining balance. yield maintenance penalty. defeasance requirement.

The old notion that a person's home is their castle comes closest to which real property interest? -Life estate -Freehold estate -tenancy for years -Fee simple absolute

fee simple absolute

Characteristics of Qualified Mortgages include:

fees no greater than 3 percent. term no longer than 30 years, ARM loans must be underwritten to highest rate in first five years. fully amortizing, with level payments.

The final number derived by the appraiser from all relevant approaches to value is known as the Multiple choice question. final estimate of value adjusted sale price depreciated value indicated value

final estimate of value

Operating expenses that are incurred yearly with relatively little change are referred to as

fixed expenses

Operating expenses that are incurred yearly with relatively little change are referred to as Multiple choice question. variable expenses indirect expenses direct expenses fixed expenses

fixed expenses

Features of the hybrid mortgage loan include a(n) ____ rate for the first few years, followed by a(n) ____ rate for the remainder of the loan term. At all times the regular payment is sufficient to fully ____ the loan by the end of the term.

fixed. adjustable. amortize, payoff, or repay.

Since 1940 new forms of offices, separate from production facilities were enabled by, among other factors:

fluorescent lighting. improved communications and data processing. air-conditioning.

Since 1920 in manufacturing the arrival of motor vehicles and better communications, along with a shift away from heavy manufacturing, gave rise to production no longer tied to rail heads, ports or natural resources. These new activities were called ____ industries.

footloose

Failure to pay property taxes ultimately can lead to ____ and sale of the property at public auction.

foreclosure

Failure to pay property taxes ultimately can lead to _____ and sale of the property at public auction.

foreclosure

Which of these terms best characterizes the meaning of personal rights? -Influence -Opportunity -Wealth -Status -Freedom

freedom

The manager of a shopping mall ejecting a religious group handing out free snacks and pamphlets in the mall could represent a conflict of property rights with: -freedom of expression by the group -taking the group's property without compensation -property rights of customers -rights of customers to associate

freedom of expression by the group

Generally, when estimating market value, appraisers prefer to obtain the cap rate used to value the subject property

from comparable sale transactions

Generally, when estimating market value, appraisers prefer to obtain the cap rate used to value the subject property Multiple choice question. from survey results from consulting firms from comparable sale transactions

from comparable sale transactions

Features of the "revolution in land use controls" included a shift

from little interest in land use controls to broadly requiring land use controls. from a perception of unlimited space and environment to a concept of "spaceship earth".

The option ARM typically allowed the borrower to select among several choices of payments, including;

fully amortizing payment. minimum payment resulting is significant negative amortization. interest only payment.

DCF analysis requires the appraiser to estimate Multiple select question. future cash flows from annual operations the appropriate cap rate to value the expected cash flows the holding period expected by the typical market participant the net cash generated by the sale of the property at the end of the expected holding period

future cash flows from annual operations the holding period expected by the typical market participant the net cash generated by the sale of the property at the end of the expected holding period

DCF valuation models Multiple choice question. generally are better able to account for differences in lease terms and features than direct capitalization models generally require fewer assumptions than direct capitalization models are less frequently used by investors

generally are better able to account for differences in lease terms and features than direct capitalization models

Marketable title laws

generally restrict required title search to the years following root of title. define a "root of title," as the last conveyance of the property that is at least a certain number of years old. can cause restrictions or easements in deeds from before the root of title to disappear.

GIS (geographical information systems) can strengthen real estate market research in numerous ways, including:

generate superior maps for communication. enable spatial "gap" analysis for untapped locational opportunities display demographics, transactions and other data with great efficiency.

Initially used to survey the Old Northwest Territory (Ohio, Indiana, Illinois, and Michigan) in 1789, which of the following methods of land description relies on townships and section numbers as essential units of identification? -metes and bounds -subdivision plat lot and block number -government rectangular survey

government rectangular survey

If the property is expected to increase in value over the next year, the internal rate of return will be ______ the capitalization rate

greater than

Present values are ______ future values.

greater than

Present values are ______ future values. Multiple choice question. less than equal to greater than

greater than

The going-out (terminal) cap rate for a stabilized property is typically ______ the going-in cap rate. Multiple choice question. greater than less than equal to

greater than

A general guide to the amount of debt financing on a home is that you should use debt financing up to the point where the interest cost of more debt financing is ____ than the return the additional equity funds released can earn in other uses.

greater, higher, more, or larger

The central question in the refinancing decision is whether the value of future reductions in loan payments is ____ than the cost of refinancing.

greater, more, larger, or higher

Which of the following clauses contained in a deed defines or limits the type of interest being conveyed? -recital of consideration -words of conveyance -covenant -habendum clause

habendum clause

The creation of a new secondary activity in a city, such as a new supermarket Multiple select question. has little or no effect on total employment in a city permanently increases construction employment increases export employment through its effect on real estate activity likely diminishes or displaces less competitive similar stores

has little or no effect on total employment in a city likely diminishes or displaces less competitive similar stores

The general warranty deed is considered the highest quality deed because it -is the only deed that can convey title. -has the most covenants. -is the only deed that always conveys good title. -affirms that the grantor is financially sound.

has the most covenants.

You recently purchased a home that included a new, (very) large TV that incorporated all the latest technology and also included a large number of high quality speakers. If an appraiser uses your sale as a comparable sale in a appraisal assignment, the sale price of your home will likely Multiple choice question. not require an adjustment have to be adjusted downward have to be adjusted upward

have to be adjusted downward

As locational rent is higher the density (height) of buildings tends to increase. This is because:

higher rent is incentive to build more rentable space on a site, even with higher construction cost

As locational rent is higher the density (height) of buildings tends to increase. This is because: Multiple choice question. the higher cost of higher buildings causes the rental rate to be higher builders tend to be excessively optimistic construction costs per square foot declines as building height is greater higher rent is incentive to build more rentable space on a site, even with higher construction cost

higher rent is incentive to build more rentable space on a site, even with higher construction cost

When a loan is paid off early it can change the effective interest cost of the loan because any upfront expenses are effectively spread over a shorter time span, causing them to equate to a ____ interest charge increment. So the earlier the prepayment, the ____ the resulting effective interest cost.

higher, larger, or greater. higher, larger, or greater.

In condemnation proceedings for eminent domain the amount of compensation to the owner must be based on _____ and _____ use of the property at the time it is condemned.

highest, best

In condemnation proceedings for eminent domain the amount of compensation to the owner must be based on ____ and ____ use of the property at the time it is condemned.

highest. best.

Equity investors can choose to participate indirectly in real estate markets by purchasing shares in publicly traded real estate companies. In doing so, investors benefit from all of the following EXCEPT: -low transaction costs. -risk sharing amongst investors. -highly segmented markets. -decrease if current property values equal the cost of construction.

highly segmented markets.

While a demand clause is rare in fixed-term standard ____ mortgage loans it is common in "home equity" credit line loans from a ____ bank.

home (or residential). commercial.

The largest partial exemption for property taxes is the ____ exemption.

homestead

The largest partial exemption for property taxes is the _____ exemption.

homestead

According to the Federal Reserve Bank, ______ represents the largest percentage of the net worth portfolio of a typical U.S. household.

housing

According to the Federal Reserve Bank, ______ represents the largest percentage of the net worth portfolio of a typical U.S. household. -housing -stocks -corporate and foreign bonds -U.S. Treasury securities

housing

In reflecting on the "subprime meltdown" following 2007, it has been argued that virtually every investor, builder, lender, securitizer, and institution involved was depending on one "bet," namely, that:

housing prices would never fall

Unless the characteristics of the comparable property are ______ to the subject property, adjustments must be made to the sale price of the comparable property.

identical

Unless the characteristics of the comparable property are ______ to the subject property, adjustments must be made to the sale price of the comparable property. Multiple choice question. similar identical nearly identical

identical

The formal appraisal process involves eight steps, the first of which is to Multiple choice question. determine value of the land identify the appraisal problem collect data and describe property perform data analysis

identify the appraisal problem

The appraiser would only forecast renal income that is "loss to lease" Multiple choice question. if market rental rates for some of the space in the property are above the contract rental rates being paid by tenants if some of the space in the property is excepted to be vacant if market rental rates for some of the space in the property are below the contract rental rates being paid by tenants

if market rental rates for some of the space in the property are above the contract rental rates being paid by tenants

Valuation of real estate is complicated by the Multiple select question. immobility of real estate lack of perfect substitutes high purchase price of real estate lack of observable transactions

immobility of real estate lack of perfect substitutes lack of observable transactions

Accurate statements about metes and bounds land descriptions include:

in the direction N 39 degrees 15 minutes W, N indicates to start by finding north. each compass degree is divided into 60 minutes. in the direction N 39 degrees 15 minutes W, W refers to the direction of rotation from north

Examples of market failure due to incomplete information about construction quality include

inability to examine plumbing under a concrete slab floor. non-visible electrical systems once walls are closed in.

What was the sale price of the property if the effective gross income multiplier is 4.25, potential gross income is $125,000, and vacancy and collection losses are estimated at 2% of PGI? Multiple choice question. $520,625 $541,875 $531,250

income - vacancy & losses = effective gross income --> 125000 - (125000 x 0.02) = 122500 --> effective gross income x multiplier = sale price --> 122500 x 4.25 = $520,625

Favorable nonmarket financing concessions provided by the seller to the buyer generally ______ the negotiated sale price of the subject property. Multiple choice question. increase decrease have no effect on

increase

Based on your understanding of the supply and demand dynamics of user/space markets, an increase in demand for leasable space would, all else equal, cause which of the following effects? -decrease equilibrium rental rates and decrease property value -decrease equilibrium rental rates and increase property value -increase equilibrium rental rates and decrease property value -increase equilibrium rental rates and increase property value

increase equilibrium rental rates and increase property value

The required number of comparable sales Multiple select question. is always greater than three increases as the reliability of comparable sale information decreases decreases if those comparables already selected are very similar to the subject property

increases as the reliability of comparable sale information decreases decreases if those comparables already selected are very similar to the subject property

The required number of comparable sales

increases as the reliability of comparable sale information decreases. decreases if those comparables already selected are very similar to the subject property.

The final number produced by the direct capitalization approach is the Multiple choice question. adjusted sale price indicated value final estimate of value

indicated value

At the conclusion of the traditional sales comparison approach to valuation, the appraiser evaluates and reconciles the final adjusted sale prices into a single value for the subject property. This single value is commonly referred to as: Multiple Choice indicated value. investment value. transaction value. replacement value.

indicated value.

The growth of a particular industry within a local area can create specialized resources for that industry leading to a production cost advantage in that locality. This advantage is known as ____ economies of scale.

industry

The growth of a particular industry within a local area can create specialized resources for that industry leading to a production cost advantage in that locality. This advantage is known as _____ economies of scale.

industry

A fishing company was formed in Juneau, Alaska. Over the next decade, a canning plant, a processing plant, and a boat repair facility also opened in Juneau. This is an example of: Multiple Choice industry economies of scale. agglomeration economies. location quotient. linkages.

industry economies of scale.

Most research oriented universities have many different colleges, each with separate administrations, students, curricula, and facilities. However, the university continues to exist as a total unit because of: Multiple Choice industry economies of scale. locational monopoly. economic inefficiencies. negative externalities.

industry economies of scale.

The growth of the motion picture industry in Los Angeles, the petrochemical industry in Houston, the software industry in "Silicon Valley," are all examples of how the growth of an industry within a city can create cost advantages for future growth. Economists refer to this phenomenon as: Multiple Choice industry economies of scale. agglomeration economies. locational monopoly. economic inefficiencies.

industry economies of scale.

Proposed changes in a zoning ordinance must

initially be presented to a planning or zoning commission. go before the elected officials for final judgment or ratification.

Historically, a compelling location for cities has been at the ____ of different transportation modes.

intersection

Historically, a compelling location for cities has been at the _____ of different transportation modes.

intersection

Since 1940 retail facilities became more horizontal, compelled by changes including

introduction of fluorescent lighting. air-conditioning. shift to self-service retailing.

What is the relation between capitalization rates and estimated property values? Multiple choice question. Reverse Inverse Direct

inverse

If government activity or government restrictions reduce the value of a private property sufficiently, it is possible for the property owner to sue the government to force the government to acquire the property through eminent domain. This process is known as _____ _____.

inverse condemnation

The value of a property to a particular individual or entity is known as Multiple choice question. transaction value insurable value investment value market value

investment value

The value a particular investor places on a property is more commonly referred to as the property's: Multiple Choice book value. market value. investment value. transaction value.

investment value.

Consistently the investment target of pension funds, publicly traded real estate companies, and real estate funds, large commercial properties valued well over $10 million are often referred to as: -segmented property. -investment-grade property. -speculative-grade property. -immobile property.

investment-grade property.

With direct capitalization, it is assumed that estimation of cash flows for an existing property beyond the next twelve months is performed by the Multiple choice question. appraiser investors who purchased the comparable properties typical market participant

investors who purchased the comparable properties

Effective real estate market research is often a matter of excluding the ____.

irrelevant

Effective real estate market research is often a matter of excluding the _____.

irrelevant

The income approach to valuation Multiple choice question. is based on the concept of present value depends on an accurate estimate of economic depreciation cannot be used for personal residences

is based on the concept of present value

Net operating income for an existing property Multiple select question. is considered the fundamental determinant of market value measures the actual net cash flow the investors expect to receive in that year includes the anticipated effects of income taxes measures the overall income-producing value of the property

is considered the fundamental determinant of market value measures the overall income-producing value of the property

Consider a bid-rent model of urban land rents with two employment centers, A and B, and thus two competing bid-rent curves. Then whether each lot is occupied by a worker at A or a worker at B, depends on which bid-rent curve at that location:

is highest

Consider a bid-rent model of urban land rents with two employment centers, A and B, and thus two competing bid-rent curves. Then whether each lot is occupied by a worker at A or a worker at B, depends on which bid-rent curve at that location: Multiple choice question. is highest is flattest is lowest is steepest

is highest

"Income capitalization"

is the process of converting a forecast of net operating income into an estimate of current market value

"Income capitalization" Multiple choice question. is the process of converting a forecast of net operating income into an estimate of future market value is the process of converting a forecast of net operating income into an estimate of current market value is the process of converting net operating income in the last year of rental operations into an estimate of current market value

is the process of converting a forecast of net operating income into an estimate of current market value

The description of land by subdivision plat lot and block number

is the simplest form of description for most property owners to interpret.

The description of land by subdivision plat lot and block number -rarely has useful information for a property buyer other than the parcel boundaries. -cannot be use outside of cities. -is applicable to all urban property. -is the simplest form of description for most property owners to interpret.

is the simplest form of description for most property owners to interpret.

In case of default, accepting a deed in lieu of foreclosure can be preferable to foreclosure for the lender because:

it can be less disruptive to a business property. it creates less public attention. it is quicker.

Characteristics of time-share or interval ownership include that

it commonly is divided into weekly units. it is mostly associated with resort properties. it may amount to a condominium interest, a leasehold, or a license.

A cap rate does not measure the expected total return because Multiple select question. it does not capture cash flows beyond the first year of operations it does not capture expected appreciation in the value of the property it is a multiple rather than a ratio

it does not capture cash flows beyond the first year of operations it does not capture expected appreciation in the value of the property

A cap rate does not measure the expected total return because

it does not capture cash flows beyond the first year of operations. it does not capture expected appreciation in the value of the property.

Characteristics of dower/curtesy include that

it includes all real estate ever owned by the decedent spouse during the marriage. it creates a life estate for the surviving spouse. dower is the provision for a surviving wife and curtesy is the provision for a surviving husband.

Direct capitalization does not require the appraiser to estimate NOI for the subject property beyond the next 12 months because Multiple choice question. price-to-income ratios are assumed to remain constant over time it is assumed the buyers and sellers of the comparable properties had already done so expected NOI beyond the next 12 months is assumed not to affect market value

it is assumed the buyers and sellers of the comparable properties had already done so

Features of a standard "pass-through" mortgage backed security include:

it is based on a pool of similar mortgages. each investor receives a pro-rata share of each dollar of interest, scheduled amortization and prepayment that flows into the pool. guarantees protect the investor from losses due to default.

True features of dower/curtesy are:

it is of common law, English heritage

True features of dower/curtesy are: -it prevails in about 25 states of the US -it is regarded as the fairest form among spousal property claims -it is of common law, English heritage -additional states have adopted it in modern times

it is of common law, English heritage

The highest and best use of a property must be Multiple select question. legally permissible physically possible unchanging over long periods of time financially feasible

legally permissible physically possible financially feasible

In order for the sale price of a property to be considered a good comparable for the subject, Multiple select question. it must have been an arms-length transaction it must be within five miles of the subject property it must be a property that typical buyers would consider a substitute it must have sold within the last three years

it must have been an arms-length transaction it must be a property that typical buyers would consider a substitute

A planned unit development (PUD) is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT: Multiple Choice it encompasses a blend of detached single family, attached single family, townhouses and apartments. it typically has larger individual lots with extensive side-yards on the property. it typically includes a variety of common areas. it typically includes a variety of recreational facilities.

it typically has larger individual lots with extensive side-yards on the property.

Supply factors that affect a city's long-term potential for growth include

its quality of life and environment. quality and character of its labor force. Its leadership.

A conventional mortgage loan that meets all the requirements of Fannie Mae and Freddie Mac except that it is too large is called a ____ conventional mortgage.

jumbo

In condemnation, the amount of compensation that restores the property owner to a financial position equivalent to that existing before the property was taken is called ____ compensation.

just

In condemnation, the amount of compensation that restores the property owner to a financial position equivalent to that existing before the property was taken is called _____ compensation.

just

Ways to mitigate the risk of market cycles include:

keep the lead time for a new project as short as possible. avoid projects at the outer edge of the market. monitor general business cycles carefully. monitor the relevant real estate "pipeline" carefully.

Valuation of real estate is complicated by the

lack of observable transactions. immobility of real estate. lack of perfect substitutes.

Which of the following would be considered a tangible asset? -land -lease agreement -mortgage -listed REIT

land

When most people are describing "real estate," they are describing -land and buildings -the industry and people involved in buying and selling real estate -the bundle of rights associated with the ownership of land and buildings

land and buildings

In recent decades a "revolution" has occurred in residential leasehold law. This happened in recognition that the modern urban residential landlord is providing "residential shelter services" rather than simply the use of -land for farming. -buildings. -secure space.

land for farming

Real property, by definition includes rights in _____ and its _____ _____.

land, permanent, structures

Issuers of private residential mortgage securities since 2000 have included:

large banks. investment banking houses. large finance companies.

A type of land use that has often been viewed as a threat to destabilize a single family, owner oriented neighborhood is

large numbers of student rental households in the neighborhood

A type of land use that has often been viewed as a threat to destabilize a single family, owner oriented neighborhood is -large numbers of households with children in the neighborhood -any type of renter household in the neighborhood -large numbers of senior households in the neighborhood -large numbers of student rental households in the neighborhood

large numbers of student rental households in the neighborhood

Fannie Mae and/or Freddie Mac pioneered the development of several advances in home mortgage lending, including:

large reduction sin the time for the loan application process. automated underwriting. automated valuation models.

Based on your understanding of the effect of agglomeration economies in real estate, you would expect institutional investors to most favor real estate investments in which of the following areas? Multiple Choice small urban markets large urban markets small rural markets large rural markets

large urban markets

Commercial banks before the 1990s had three main kinds of real estate lending business:

large-scale construction lending. "warehouse" lending to mortgage bankers. incidental mortgage lending to their business customers.

Characteristics of real estate market cycles include:

lead time for commercial properties is 2 years and more. general business cycles further contribute to real estate market cycles. local cycles tend to have higher amplitude than national cycles. longer construction lead times contribute to greater amplitude cycles.

Characteristics of real estate market cycles include: Multiple select question. lead time for commercial properties is 2 years and more. local cycles tend to have higher amplitude than national cycles. general business cycles further contribute to real estate market cycles. apartment and industrial markets tend to be more cyclical than hospitality and offices. longer construction lead times contribute to greater amplitude cycles.

lead time for commercial properties is 2 years and more. local cycles tend to have higher amplitude than national cycles. general business cycles further contribute to real estate market cycles. longer construction lead times contribute to greater amplitude cycles.

Toxic substances that have posed problems to property owners in the last two decades include:

leaking underground storage tanks. radon. mold. asbestos.

An ownership interest in a property with existing leases is known as a

leased fee estate

An ownership interest in a property with existing leases is known as a Multiple choice question. leased fee estate partial estate fee simple estate

leased fee estate

The hybrid mortgage is interesting as a solution to a long-standing conflict between home mortgage borrowers and depository lenders. The ____ wants interest rates and payments to adjust as frequently as possible while the ____ wants as much payment predictability as possible.

lender. borrower.

Private mortgage insurance protects only a ____ and only against losses due to ____.

lender. default.

Form reports are generally requested by Multiple choice question. lenders making loans on single-family homes buyers sellers

lenders making loans on single-family homes

The most important effect on housing when interest rates rise is to make housing:

less affordable

Advantages from a lender's perspective with power of sale rather than judicial foreclosure include:

less costly. faster.

The net sale proceeds (NSP) at the end of the assumed holding period is equal to the expected sale price

less selling expenses

The net sale proceeds (NSP) at the end of the assumed holding period is equal to the expected sale price Multiple choice question. less selling expenses and deferred maintenance less selling expenses less selling expenses and the remaining mortgage balance

less selling expenses

The seller of a comparable property purchased a new home just days after the sale of the comparable was completed. The seller needed cash from the sale of the comparable to purchase the new home. An appraiser using the comparable sale might need to be concerned that seller agreed to sell the comparable for ________ its market value, which would require _________ adjustment to the sale price of the comparable.

less than, an upward

The seller of a comparable property purchased a new home just days after the sale of the comparable was completed. The seller needed cash from the sale of the comparable to purchase the new home. An appraiser using the comparable sale might need to be concerned that seller agreed to sell the comparable for ________ its market value, which would require _________ adjustment to the sale price of the comparable. Multiple choice question. more than, an upward less than, a downward less than, an upward more than, a downward

less than, an upward

The governing association of a condominium can do which of the following to its owners?

levy assessments, Set and enforce rules, impose liens

A major risk to the lender in foreclosure is that the process will overlook or fail to properly treat someone with a ____ on the property.

lien (or claim)

In which of these freehold estates has the right of disposition been separated from the other rights? -Tenancy for years -Fee simple absolute -Fee simple conditional -Life estate

life estate

The creation of a new secondary activity in a city, such as a new supermarket

likely diminishes or displaces less competitive similar stores. has little or no effect on total employment in a city.

In market analysis the goal is to estimate certain "market parameters" and attempt to evaluate the confidence level or certainty of the estimates. For an apartment project, for example, these parameters would include: Multiple select question. likely occupancy level/vacancy rate Likely growth in rental rates Attainable rental rates Value of the property Investment return on the property

likely occupancy level/vacancy rate Likely growth in rental rates Attainable rental rates

The locational needs of a particular type of land use are referred to as its ____.

linkages

The locational needs of a particular type of land use are referred to as its _____.

linkages

In analyzing the market potential for a specific property one must consider: Multiple select question. linkages market segmentation lease terms for the tenant(s) non-locational requirement for the property

linkages market segmentation non-locational requirement for the property

In analyzing the market potential for a specific property one must consider:

linkages. non-locational requirement for the property. market segmentation.

Loans eligible for purchase by Fannie Mae and Freddie Mac are much more ____, resulting in a lower contract ____, and more ____ terms ____ across lenders and regions.

liquid. interest. rate. uniform (or equal).

The first, and historically the most challenging step in a metes and bounds description is -locating the point of beginning. -conducting accurate ground measures of distance. -finding true North. -accurately recording the measures.

locating the point of beginning.

A ____ ____ compares the local concentration of employment in a certain industry to the typical concentration of employment in that industry.

location quotient

A _____ _____ compares the local concentration of employment in a certain industry to the typical concentration of employment in that industry.

location quotient

Each parcel of real estate has its own "LVS," which stands for ___ ___ ___.

location value signature

Each parcel of real estate has its own "LVS," which stands for ____ ____ ___.

location value signature

The attributes (characteristics) of housing most difficult to value are

locational attributes

The attributes (characteristics) of housing most difficult to value are -the physical attributes of the structure -locational attributes -the physical attributes of the land

locational attributes

The fatal vulnerability of thrift institutions was the mismatch created by funding ____-term mortgage assets with ____-term deposit liabilities.

long. short.

Home equity credit lines can offer homeowners several advantages over other consumer loans, including:

longer term. lower interest rate. tax deductible interest.

In private senior-subordinate mortgage securities, the subordinate securities absorb all default ____, thus protecting the senior securities.

losses

State and local housing finance agencies predominantly provide housing finance assistance to:

low and moderate income households. First-time home buyers.

Investors in real estate can choose to hold properties directly in the private market or indirectly through publicly traded real estate securities. The market for buying, selling, and leasing real estate can be characterized by all of the following EXCEPT: -localized markets. -highly segmented markets. -privately negotiated contracts. -low transaction costs.

low transaction costs

The mortgage banking cycle involves a balancing of tasks, including:

maintaining sufficient quality in new loans to prevent excessive delinquencies and defaults. creating enough new loans to offset amortization and repayments.

The Appraisal Foundation

maintains the USPAP

The Appraisal Foundation Multiple choice question. maintains the USPAP wrote the original USPAP insures the USPAP are updated annually

maintains the USPAP

ECOA, the Equal Credit Opportunity Act of 1974, prohibits discrimination in home mortgage lending on the basis of numerous criteria, including:

marital status and familial status. disability. national origin. age. sex. race. religion.

Estimating the market value of real estate is complicated by the unique characteristics of real estate markets. In contrast to stock markets, real estate markets are characterized by all of the following EXCEPT: Multiple Choice no two assets are considered perfect substitutes for one another. market prices are revealed almost instantaneously to prospective buyers. transactions occur infrequently. the physical location of the asset being sold plays an important role in the pricing process.

market prices are revealed almost instantaneously to prospective buyers.

The rent that space in a property has the potential to generate in typical market conditions is called Multiple choice question. market rent contract rent historic rent potential rent

market rent

An ad valorem tax is levied at rates between 1.0 and 4.0 percent of a property's ____ ____.

market value

An ad valorem tax is levied at rates between 1.0 and 4.0 percent of a property's _____ _____.

market value

Following the completion of a contract for construction or other improvements to a property, a contractor has the right to establish a lien on a property as protection against the case that a property owner defaults on the construction contract. This lien is more commonly referred to as a(n): -property tax lien. -mortgage lien. -assessment lien. -mechanics' lien.

mechanics' lien

By 2015, U.S. home mortgage finance is characterized by:

megabanks. securitization. mortgage banking. the secondary mortgage market.

Conflicting views of best practice in urban planning include the choice between separation of residential from non-residential and ____ ____.

mixed use

Conflicting views of best practice in urban planning include the choice between separation of residential from non-residential and _____ _____.

mixed use

In the first half of the 20th century the need for efficient systems for home financing grew strongly, compelled by the growing need in urban society for household:

mobility

Among the most recent environmental hazards encountered in real estate is:

mold

Among the most recent environmental hazards encountered in real estate is: -fiberglass -mold -lead-based paint -asbestos

mold

Ways to mitigate the risk of market cycles include: Multiple select question. monitor the relevant real estate "pipeline" carefully. avoid projects at the outer edge of the market. keep the lead time for a new project as short as possible. monitor general business cycles carefully. keep your project secret as long as possible.

monitor the relevant real estate "pipeline" carefully. avoid projects at the outer edge of the market. keep the lead time for a new project as short as possible. monitor general business cycles carefully.

Which of the following expenditures does not affect the calculation of net operating income?

monthly mortgage payments

Which of the following expenditures does not affect the calculation of net operating income? Multiple choice question. minor property repairs lawn maintenance utility expenses monthly mortgage payments

monthly mortgage payments

In today's complex and confusing home mortgage world, some possible guides to shopping for a loan are these:

mortgage brokers and mortgage bankers are commission compensated and motivated to provide strong service. the shorter the lending chain, the lower should be the cost. shop! banks have an affinity for ARM loans and might be expected to make the best ARM offers.

Originators of mortgage loans include:

mortgage brokers. savings and loan associations and credit unions. mortgage banking companies. commercial banks.

The borrower in a mortgage loan, because they convey the mortgage lien to the lender is called the ____, while the lender who receives the lien is the ____.

mortgagor. mortgagee.

The concept of market value in formal appraisal practice includes

most probable selling price. buyer and seller acting prudently. a competitive market.

The value that real estate appraisers generally estimate is market value, which is synonymous to

most probably selling price

The value that real estate appraisers generally estimate is market value, which is synonymous to Multiple choice question. reproduction cost investment value most probably selling price value in use

most probably selling price

When using discounted cash flow analysis, an appraiser will prepare a multi-year cash flow forecast, which is often referred to as a

multi-year pro forma

When using discounted cash flow analysis, an appraiser will prepare a multi-year cash flow forecast, which is often referred to as a Multiple choice question. multi-year pro forma narrative appraisal report reconstructed operating statement

multi-year pro forma

A main reason that a simple bid-rent model cannot fully describe urban locational patterns is that it is based on a single linkage (commuting for one worker) while in reality every household and firm has ____ linkages, or demands for ____.

multiple (or many). access.

"MLS" stands for ____ ____ ____.

multiple listing service

"MLS" stands for _____ _____ _____

multiple listing service

A main reason that a simple bid-rent model cannot fully describe urban locational patterns is that it is based on a single linkage (commuting for one worker) while in reality every household and firm has _____ linkages, or demands for _____.

multiple, access

Base activities bring money into a city, which then recirculates within the city, creating a ____ effect.

multiplier

Base activities bring money into a city, which then recirculates within the city, creating a _____ effect.

multiplier

To the extent the comparable property is physically lacking in some respect to the subject, the sale price of the comparable

must be adjusted upward

To the extent the comparable property is physically lacking in some respect to the subject, the sale price of the comparable Multiple choice question. must be adjusted upward must be higher than the value of the subject property must be adjusted downward

must be adjusted upward

In zoning a non-conforming use

must have existed before the zoning was enacted. cannot change in use or structure. cannot be discontinued more than a limited time.

The ____________ appraisal report is the longest and most formal report writing format

narrative

Two conditions that generally appear to be required before a "trigger event" causes home mortgage default are;

negative equity. value of housing services falling below the monthly cost.

A home owner's bundle of rights is ______ affected if a local utility company has the right to access telephone poles in the owner's back yard. -not -negatively -positively

negatively

The most complete approach to the refinancing question is to view it as a question of ____ ____ ____.

net present value

When using direct capitalization, ______ income is capitalized to obtain an estimate of value.

net operating

When using direct capitalization, ______ income is capitalized to obtain an estimate of value. Multiple choice question. net investment gross operating net operating effective gross operating

net operating

Which of the following items is considered the fundamental determinant of market value? Multiple choice question. Net operating income Effective gross income Potential gross income

net operating income

Which of the following measures is considered the fundamental determinate of market value for income-producing properties? Multiple Choice net operating income potential gross income operating expenses capital expenditures

net operating income

To obtain a cap rate from the sale of a comparable property, the appraiser must obtain the comparable property's Multiple select question. net operating income at time of sale sale price sale price minus selling expenses net operating income in the year prior to the sale

net operating income at time of sale sale price

Under traditional common law, a mortgage borrower had ____ right of prepayment unless it was explicitly stated in the note.

no

Different methods of amortization of a mortgage loan include:

non-amortizing, in which the regular payments are interest only and the full balance is paid off in the last payment. fully amortizing, in which the loan exactly pays off with the last regular payment. partially amortizing, in which a final, larger balance payoff is required in the last payment.

Direct home mortgage lending resurged to about 25 percent of home loans in 2015, reflecting lending by banks for ____ conventional loans, with some 40 percent being ____ loans.

nonconforming (jumbo, or non-conforming). ARM (or adjustable).

When a zoning ordinance is revised, some existing land uses then fall outside the new zoning classification. These land uses are referred to as: -special uses. -nonconforming uses. -conforming uses. -exclusionary uses.

nonconforming uses

Reasons a deficiency judgment seldom is pursued include:

nonresidential loans usually are nonrecourse loans. some states do not always permit deficiency judgments. a defaulting borrower usually has few, if any, financial resources.

The sale of a single-family, detached home that is currently rented to a music studio should not be used as a comparable property if the subject property is a single-family, detached home Multiple choice question. rented to a law firm occupied by the owner rented to a provider of music lessons

occupied by the owner

Whereas almost all employment was in the CBD in 1900, today even the most centralized private economic function, _____ employment, typically has less than 20 percent in the CBD.

office

Whereas almost all employment was in the CBD in 1900, today even the most centralized private economic function, ____ employment, typically has less than 20 percent in the CBD.

offices (or office)

Ownership by tenancy in common, compared to a corporation,

often arises as a default form of co-ownership. Is real property rather than personal property.

The priority of a condominium association lien

often depends on state law.

The priority of a condominium association lien -often depends on state law. -is alway lowest among private liens. -is alway highest among private liens. -depends strictly on when the obligation (assessment) is due.

often depends on state law.

The ________ the subject property the _______ difficult it is to estimate reproduction cost.

older, more

The ________ the subject property the _______ difficult it is to estimate reproduction cost. Multiple choice question. more unique, less older, more older, less

older, more

Although there are multiple approaches to estimating market value, there is only _____ true market value.

one

Numerous "affordable housing" loan programs were created in the mid-1990s. The dominant strategy for such programs was to alter the "three Cs" of traditional underwriting by relaxing ____ of the three standards while maintaining all else at conventional norms.

one (or 1)

Use the following data to compute the property tax rate for an example taxing authority: Budget: $1,000,000 Nontax revenue: $100,000 Total tax base: $100,000,000 Exempt property: $10,000,000 Answer: _____ percent, or _____ mills.

one percent, ten mills

Most subprime loans were:

option ARM. 2-28 hybrid. interest only.

The premium on PMI is some combination of a lump sum payment at loan ____ or ____ installments.

origination. monthly.

Other names for the cap rate used in direct capitalization include Multiple select question. overall capitalization rate valuation rate discount rate going-in cap rate

overall capitalization rate going-in cap rate

Other names for the cap rate used in direct capitalization include

overall capitalization rate. going-in cap rate.

Capitalization rates used to estimate the current market value of the subject property are sometimes referred to as the ______ cap rate.

overall. going-in.

In case of default on a mortgage payment, if the lender could not declare the entire loan due and payable, the lender could foreclose only on the amount ____, which would never be worth the cost of foreclosure.

overdue (or defaulted)

Foreclosure is a legal process of terminating the ____ of the borrower and all ____ inferior to the mortgage.

ownership. liens.

Co-ownership can occur in a variety of ways, with significant variation in how the bundle of rights is jointly held. All of the following entities are forms of direct co-ownership EXCEPT: -tenancy in common. -tenancy by the entirety. -condominium. -partnership.

partnership

While several kinds of real property conveyances result from events beyond the control of the grantor, the majority of conveyances are voluntary through a deed. Which of the following is an example of a voluntary conveyance of real property with a deed? -patent -probate -condemnation -implied easement

patent

When there are differences in the indicated value from each approach, the appraiser should Multiple choice question. place more weight on the approach that is the best indicator of value for the subject property type place more weight on the approach that generates the highest value estimate use the average of the values generated by the various approaches

place more weight on the approach that is the best indicator of value for the subject property type

Modern alternatives (generally adopted after 1970) to traditional land use controls include

planned unit development. form-based zoning. performance standards. impact fees.

The power of state and local governments in the United States to regulate in the interest of the health, safety and welfare of citizens in general is known as:

police powers

The success of land owners in the U.S. in using inverse condemnation to obtain relief from severe regulation that devalues their property is: -Very irregular -generally good -poor but recently improved -poor and declining

poor but recently improved

The text argues that the most significant errors in appraisal reports typically result from

poor selection of comparables

The text argues that the most significant errors in appraisal reports typically result from Multiple choice question. errors in calculating transactional adjustments poor selection of comparables errors in calculating property adjustments

poor selection of comparables

While banks are ____ mortgage lenders, originating mortgages that are held and funded with deposits, mortgage ____ is a process of originating mortgages strictly to be sold as quickly as possible.

portfolio. banking.

In the presence of miscellaneous income, effective gross income is equal to

potential gross income, plus miscellaneous income, minus vacancy and collection losses

In the presence of miscellaneous income, effective gross income is equal to Multiple choice question. potential gross income, plus miscellaneous income, minus vacancy and collection losses potential gross income, minus miscellaneous income, minus vacancy and collection losses potential gross income, plus miscellaneous income, plus vacancy and collection losses

potential gross income, plus miscellaneous income, minus vacancy and collection losses

Characteristics that stock and bond investment share with real estate investments include

potential periodic income, potential appreciation in the value of the investment, transferability to other owners

Subprime and Alt-A loans were mostly distinguished not so much by their loan design but by lending ____ and borrower ____.

practices. circumstances.

Subprime lending was the subject of controversy from early on in its history. Defenders argued that a high loan-to-value subprime loan was better for many borrowers than accumulating large amounts of credit card debt or personal loans. But critics focused on a high incidence of ____ lending due to absence of adequate regulation.

predatory

APR, while valuable in comparing the costs of mortgage loans has one main limitation: APR assumes the loan is never ____, while this actually happens to almost every home loan during the early part of its term.

prepaid

A demand clause in a mortgage loan gives the lender the right, at any time they deem necessary, to demand ____ of the loan.

prepayment (or payoff)

Reasons for using debt financing in real estate include to:

preserve cash for use in one's primary business. enable the purchase of a home. enable greater diversification by purchase of more assets. lever the purchase of investment property for higher returns.

The loan origination market - where loans are created - is called the ____ mortgage market.

primary

Two polar classes of conventional mortgage loans are ____ and ____.

prime. subprime.

The basic grid of the government rectangular survey system of land description includes:

principal meridian running north and south. baseline running east and west.

In the failure of home mortgage underwriting preceding the Great Recession, a major factor that disrupted established underwriting practice was the explosive growth of mortgages created and channeled to ________.

private securities

Eminent domain is the right of government to acquire _____ property, without the owner's _____, for public use, in exchange for _____ _____.

private, consent, just compensation

The FHA provides insurance against losses due to default on mortgages made by ____ lenders, with the insurance premium paid by the ____.

private. borrower.

Eminent domain is the right of government to acquire ____ property, without the owner's ____, for public use, in exchange for ____ ____.

private. consent. just compensation.

An event that enabled the long maturity and high loan-to-value ratio of modern prime conventional mortgages was the creation after World War II of ____ ____ ____.

private. mortgage. insurance.

Rather than a form or formula, real estate market research is a ____.

process

Rather than a form or formula, real estate market research is a _____.

process

Typically, higher expected growth rates in rental income Multiple choice question. produce lower effective gross income multipliers do not directly affect effective gross income multipliers produce higher effective gross income multipliers

produce higher effective gross income multipliers

The central guide on how much debt a homeowner should place on their house is whether the borrowing cost of additional debt exceeds the:

productivity or usefulness of the funds obtained

Market parameters for a property sales market that are the likely focus of a market analysis include: Multiple select question. projected prices current and projected sales rate occupancy rates interest rates on mortgages

projected prices current and projected sales rate

Market parameters for a rental market that are likely the focus of a market analysis include Multiple select question. sales rates projected rental rate growth current and future occupancy rate prices of properties

projected rental rate growth current and future occupancy rate

Steps to creating a comprehensive plan typically include

projecting demand for natural resources. projecting demand for public services. projecting population growth.

Capital expenditures generally

prolong the economic life of the structure

Capital expenditures generally Multiple choice question. prolong the economic life of the structure have no impact on the value of the property occur at regular intervals

prolong the economic life of the structure

Cash flows beyond first year of rental operations and changes in the value of the stock can significantly affect the total ____ of ____ over the life of an stock.

rate return

Cash flows beyond first year of rental operations and changes in the value of the stock can significantly affect the total of over the life of an stock.

rate, return

Land and its permanent structures are _____ property

real

Reasons that the conveyance of real estate is uniquely complicated include that

real estate rights are long enduring. real estate interests are complex. real estate must be described on a continuous surface.

Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is: -real property -home mortgage -equity ERITs -mortgage backed securities

real property

The conveyance of real estate is uniquely complicated because

real property interests have a long history. real estate must be described on a continuous surface. real property interests are complex.

Fill in the blanks to complete the sentence. A risk that a lender faces in agreeing to change the schedule of payments for a defaulting borrower is that courts may view the change as a new, replacement mortgage, with priority below any other existing lien. This risk is known as ____ of the mortgage.

recasting

As the final step in arriving at the indicated value of the subject property based on the sales comparison approach, the appraiser must

reconcile the final adjusted sale prices of the comparable properties

As the final step in arriving at the indicated value of the subject property based on the sales comparison approach, the appraiser must Multiple choice question. reconcile the final adjusted sale prices of the comparable properties calculate the final adjusted sale prices of the comparable properties estimate the value of the land separately write a final report

reconcile the final adjusted sale prices of the comparable properties

To complete the sales comparison approach, the appraiser ______ the adjusted sale prices of the comparable properties to obtain a single indicated value for the subject. Multiple choice question. reconciles equally weights averages

reconciles

A major focus of the Home Mortgage Disclosure Act (HMDA) was to prohibit home mortgage lenders from the practice called:

redlining

All else equal, a rise in the general level of interest rates -increases property values but does not typically affect construction -reduces property values and therefore tends to increase construction -reduces property values and therefore tends to slow construction

reduces property values and therefore tends to slow construction

A central characteristic of most subprime and Alt-A loans was that at some point the borrower would be forced by the threat of a large payment increase to ____ in order to postpone the increase.

refinance

With the option ARM, the minimum payment eventually reset to a fully amortizing level to pay off the now enlarged loan. The threat of the payment increase often forced the borrower to count on appreciation of the house and seek ____ to start the cycle over.

refinancing

Creation of the CFPB (Consumer Financial Protection Bureau) was a significant departure in national consumer protection in that CFPB was empowered to oversee and enforce:

regulation of unfair or deceptive practices. national consumer protection laws. national anti-discrimination laws in consumer finance.

Which of these is an estate? -Restrictive covenant -Remainder interest -Easement -Lien

remainder interest

Examples of export or base activities include: Multiple select question. local government employment retirement income a large state university a drive-in medical clinic an aircraft factory

retirement income a large state university an aircraft factory

Examples of export or base activities include:

retirement income. a large state university. an aircraft factory.

Capitalization rates used to value the subject property are influenced by Multiple select question. returns available on alternative investments past price appreciation of the subject the risk of subject property expected appreciation rates of the property

returns available on alternative investments the risk of subject property expected appreciation rates of the property

In large measure, rather than using impact fees as a means of correcting externalities, local governments have tended to use the fees purely as a source of _____.

revenue

The distinctive feature of a joint tenancy is the: -right of survivorship. -right of community property. -right of separate property. -right of cooperation.

right of survivorship

In a one dimensional city with all economic activity at a single point (the CBD) if more households/workers arrive, the edge of settlement is pushed outward; so rent levels _____ and the slope of the rent curve is ______.

rise, unchanged

In a one dimensional city with all economic activity at a single point (the CBD) if more households/workers arrive, the edge of settlement is pushed outward; so rent levels _____ and the slope of the rent curve is ______. Multiple choice question. fall, flatter rise, unchanged fall, unchanged rise, steeper

rise, unchanged

The enactment of the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) in 1989 instituted for the first time ____ - based capital standards for depository institutions, contributing further to the disappearance of thrifts.

risk

If a market analysis process ultimately gives an indeterminate result, this is a strong indication that the prospective investment is very ____.

risky

If a market analysis process ultimately gives an indeterminate result, this is a strong indication that the prospective investment is very _____.

risky

Which of these is most likely to be regarded as a capital expenditure rather than an operating expense? Multiple Choice property taxes trash removal insurance payments roof replacement

roof replacement

Police power is the power of any government to regulate in the interest of the general health, _____, and _____ of the citizens.

safety, welfare

Police power is the power of any government to regulate in the interest of the general health, ____ , and ____ of the citizens.

safety. welfare.

To obtain a cap rate from the sale of a comparable property, the appraiser must obtain the comparable property's

sale price. net operating income at time of sale.

The approach typically given the most weight in the appraisal of single-family, detached homes is the

sales comparison approach

The approach typically given the most weight in the appraisal of single-family, detached homes is the Multiple choice question. cost approach sales comparison approach income approach

sales comparison approach

The most reliable approach to estimating land values is usually the

sales comparison approach

The most reliable approach to estimating land values is usually the Multiple choice question. sales comparison approach income approach cost approach

sales comparison approach

While there are several conventional approaches used to estimate the market value of real estate, which of the following is typically considered the most reliable approach? Multiple Choice income approach sales comparison approach cost approach investment approach

sales comparison approach

It is important to record documents conveying a real property interest because recording

satisfies the doctrine of constructive notice.

It is important to record documents conveying a real property interest because recording -assures that the document cannot be altered. -satisfies the doctrine of constructive notice. -assures that all parties of the transaction can get to the document. -assures that the document will not disappear.

satisfies the doctrine of constructive notice.

Freddie Mac was originally created to provide a secondary mortgage market for:

savings and loan associations

Common sources of a home equity loan can include:

savings institutions. credit unions. commercial banks.

Types of property that commonly are exempt from property taxes include

schools and universities. places of worship. hospitals. other property of religious organizations.

In the township third north and second west from the intersection of the principal meridian and base line, the section in the southwest corner would be described as

section 31, range 2W, tier 3N

In the township third north and second west from the intersection of the principal meridian and base line, the section in the southwest corner would be described as -section 36, range 2W, tier 3N -section 31, range 2W, tier 3N -section 31, tier 2W, range 3N -section 36, tier 2W, range 3N

section 31, range 2W, tier 3N

Area elements of the government rectangular survey include:

sections are numbered within their township starting in the northeast corner and zig-zaging along rows to the southeast corner. sections are square miles explicitly surveyed and numbered within each township. townships, bounded by range lines and tier lines, are 6 miles by 6 miles square

Which of the following models of urban form is characterized by radial corridors or wedges representing the pattern of residential land use in relation to the location of the central business district (CBD)? Multiple Choice bid-rent model concentric circle model sector model multi-nuclei model

sector model

Psychographics are a highly sophisticated, statistical means of identifying market ____.

segmentation

Psychographics are a highly sophisticated, statistical means of identifying market _____.

segmentation

The differences between market subgroups in their preferences, needs, and priorities commonly is referred to as market ____.

segmentation

The differences between market subgroups in their preferences, needs, and priorities commonly is referred to as market _____.

segmentation

All else equal, properties with riskier expected future cash flows Multiple choice question. sell at higher cap rates sell at lower cap rates have lower expected (internal) rates of return

sell at higher cap rates

Problems or risks with a contract for deed include:

seller may encumber the property with liens after the sale. no assurance that clear title can be delivered. absence of standards of practice in such transactions.

In foreclosure, the priority of a lien is very important since all liens tend to default at once, and the ____ lien gets total satisfaction before the next lien gets anything.

senior, first, 1st, or superior

The main attraction of performance standards is that they can address the problematic effects (externalities) of a land use more flexibly and efficiently than the approach of conventional zoning, which is _____ of land uses.

separation

The main attraction of performance standards is that they can address the problematic effects (externalities) of a land use more flexibly and efficiently than the approach of conventional zoning, which is ____ of land uses.

seperation (or segregation)

When identifying an easement appurtenant, the parcel of land that is constrained or diminished by the easement is referred to as the: -dominant parcel. -servient parcel. -licensed parcel. -gross parcel.

servient parcel

In true direct co-ownership the owners

share the same bundle of rights

When an owner disposes of an indirect co-ownership interest in real estate, the owner will be conveying to the new owner

shares in a business entity

When an owner disposes of an indirect co-ownership interest in real estate, the owner will be conveying to the new owner -a freehold interest in real estate -the physical real estate -shares in a business entity -title to real estate

shares in a business entity

In contrast to property taxes, which are based on property value, special assessments are based more on equally ____ the total cost of improvements.

sharing (or distributing)

The absence of an efficient secondary mortgage market before 1968 had numerous consequences, including:

sharp variation by region in the level of interest rates. higher mortgage interest rates. fewer home loans. vulnerability of local mortgage lenders to "shut-downs" when interest rates increased.

When interest rates became very volatile in the 1970s the main home mortgage lenders, S&Ls and banks, faced a devastating maturity mismatch problem due to ____ term liabilities and ____ term home mortgage assets. They could reduce this problem by changing their mortgage loans to ____ ____ mortgages.

short. long. adjustable. rate.

The purpose of marketable title laws is to:

shorten the time span of title search

The purpose of marketable title laws is to: -shorten the time span of title search -eliminate old easements and restrictive covenants -limit the life span of recorded documents -root out faulty documents from the records

shorten the time span of title search

Appraisers generally forecast that a property's gross potential income will not be realized because Multiple select question. they expect the owner to occupy some of the space some tenants will vacate space before their lease term expires not all tenants pay rent in a timely fashion some tenants will vacate space after their lease term expires

some tenants will vacate space before their lease term expires not all tenants pay rent in a timely fashion some tenants will vacate space after their lease term expires

An easement is the right to use another's land for a _____ and _____ purpose.

specific, limited

Two refinance "rules of thumb" commonly offered in the media are a spread rule and a payback rule. Between these two rules, the ____ rule is particularly deficient, amounting to an attempt to use a single dimension answer for a multi dimension problem.

spread

The long-term fixed-rate level-payment home mortgage works best in an environment of ____ and ____ interest rates.

stable. low.

The licensing of real estate professionals is usually done at the ______ level.

state

The licensing of real estate professionals is usually done at the ______ level. -state -county -federal -city

state

In a one dimensional city with all economic activity at a single point (the CBD), an increase in hourly earnings per worker will cause the slope of the rent "curve" to be ______.

steeper

Participants in capital markets include

stock investors, bond investors, mortgage investors

Market analysis is an opinion, based on selected facts and a notion or model of how the particular market works. The analysis amounts to creating a ____.

story

Market analysis is an opinion, based on selected facts and a notion or model of how the particular market works. The analysis amounts to creating a _____.

story

Most often used in the description of urban property, which of the following methods of land description contains information regarding the location of various easements and may even contain a list of restrictive covenants? -metes and bounds -subdivision plat lot and block number -government rectangular survey -tax parcel number

subdivision plat lot and block number

Private home mortgage conduits grew rapidly in the period from 2002 to 2007, and then almost disappeared, reflecting that they were driven at that time mainly by ____ loans.

subprime

The Home Ownership and Equity Protection Act (HOEPA) was enacted out of concern for abuse and predatory practices in _________ mortgage lending.

subprime

The Home Ownership and Equity Protection Act (HOEPA) was enacted out of concern for abusive and predatory practices in ____ mortgage lending.

subprime

The economic principle of ______ implies that the value of the subject property is determined by the sale prices of comparable properties.

substitution

The economic principle of ______ implies that the value of the subject property is determined by the sale prices of comparable properties. Multiple choice question. supply and demand scarcity substitution

substitution

In an "above-line" treatment of estimated capital expenditures, such expenditures are

subtracted from effective gross income in the calculation of net operating income

In an "above-line" treatment of estimated capital expenditures, such expenditures are Multiple choice question. subtracted from net operating income to obtain the estimated net cash flow added to net operating income subtracted from effective gross income in the calculation of net operating income

subtracted from effective gross income in the calculation of net operating income

To calculate effective gross income in the presence of miscellaneous income, vacancy and collection losses are

subtracted from potential gross income

To calculate effective gross income in the presence of miscellaneous income, vacancy and collection losses are Multiple choice question. added to potential gross income ignored in the calculation of effective gross income subtracted from potential gross income

subtracted from potential gross income

Effective gross income for the subject property is calculated by Multiple choice question. subtracting historical vacancies from potential gross income subtracting estimated vacancies and collection losses from potential gross income adding estimated vacancies to potential gross income

subtracting estimated vacancies and collection losses from potential gross income

Most appraisals of single-family homes are

summary reports

Most appraisals of single-family homes are Multiple choice question. narrative reports restricted reports summary reports

summary reports

Major events that explain an abrupt change in urban form between 1925 and 1945 from a CBD oriented city to a multi-nuclei city are: Multiple select question. sweeping spread of motor vehicles conversion to horizontally oriented factories improved telephones improved elevators due to better electronics

sweeping spread of motor vehicles conversion to horizontally oriented factories improved telephones

Major events that explain an abrupt change in urban form between 1925 and 1945 from a CBD oriented city to a multi-nuclei city are:

sweeping spread of motor vehicles. improved telephones. conversion to horizontally oriented factories.

Major events that explain an abrupt change in urban form between 1925 and 1945 from a CBD oriented city to a multi-nuclei city are: Multiple select question.

sweeping spread of motor vehicles. improved telephones. conversion to horizontally oriented factories.

To find the property tax amount for a property multiply the taxable value by the total ____ ____.

tax (or millage) rate

To find the property tax amount for a property multiply the taxable value by the total _____ _____.

tax rate

In recent decades the "public purpose" concept of eminent domain is claimed to have allowed misuse: encouraging local governments to use eminent domain to replace older private land uses with new ones simply to generate higher _____ _____.

tax revenue

In recent decades the "public purpose" concept of eminent domain is claimed to have allowed misuse: encouraging local governments to use eminent domain to replace older private land uses with new ones simply to generate higher ____ ____.

tax revenues

An initial arbitrarily reduced interest rate on an adjustable rate mortgage usually is called a ____ rate.

teaser

Failure to meet some condition required by a mortgage while still maintaining timely payments is referred to as ____ default.

technical

Multifamily debt (apartments) comprised just under ______ percent of all mortgage debt in the US in 2015.

ten

Which of the following types of estates involves the weakest bundle of rights? -fee simple absolute -legal life estate -ordinary life estate -tenancy at will

tenancy at will

A ten year commercial lease conveys what real property interest? -Periodic tenancy -Conditional fee -Tenancy for years -Fee simple absolute

tenancy for years

The most versatile form of direct coownership is

tenancy in common

The most versatile form of direct coownership is -tenancy by the entirety -tenancy in common -general partnership -joint tenancy

tenancy in common

Condominium combines individual ownership with -general partnership. -tenancy by the entirety. -tenancy in common. -joint tenancy.

tenancy in common.

The note defines the exact ____ and ____ of a loan.

terms. conditions.

At the death of a property owner, property will convey either in accordance with a will or without a will. When a will dictates the distribution of the decedent's real property, this mode of conveyance is more commonly referred to as: -testate. -intestate. -probate. -descent.

testate

Your "interest" in real property refers to

the "bundle of rights" you hold.

Your "interest" in real property refers to -the "bundle of rights" you hold. -the value of your property. -your motivation to acquire the property. -your expected length of ownership of the property.

the "bundle of rights" you hold.

Of the reasons why net benefit analysis and net present value analysis may overstate the value of refinancing a home mortgage loan, which is likely to be most common among average homeowners?

the "hassle" (time and discomfort) involved

The index rate in an adjustable mortgage interest rate is

the "moving part" of the rate. required to be regularly reported. beyond the control of the borrower.

Each required transactional and property adjustment is made to

the adjusted sale price of the comparable after the prior adjustment

Each required transactional and property adjustment is made to Multiple choice question. the adjusted sale price of the comparable after the prior adjustment the adjusted value of the subject property the sale price of the comparable property prior to any adjustments

the adjusted sale price of the comparable after the prior adjustment

Late fees are assessed as a percentage of:

the amount of principal and interest over-due

Attractions of the hybrid mortgage include:

the borrower has fixed payments during the early, most budget-sensitive years. the lender faces much lower interest rate risk than with a fixed rate loan. the borrower can expect a rate lower than a standard fixed rate since the fixed term is shorter.

An example of market failure due to incomplete information is:

the buyer of a house doesn't know that the electrical wiring is aluminum, and prone to cracking - a fire hazard.

An example of market failure due to incomplete information is: -the buyer of a house doesn't know that the electrical wiring is aluminum, and prone to cracking - a fire hazard. -a cable company that prevents competition by owning the local delivery network decides it can raise its prices sharply. -many households with children move to a popular elementary school district, thereby over populating the school. -an industrial plant that produces very pungent fumes locates next to a residential area.

the buyer of a house doesn't know that the electrical wiring is aluminum, and prone to cracking - a fire hazard.

The investment returns investors require on available investment opportunities are primarily determined in:

the capital markets

The investment returns investors require on available investment opportunities are primarily determined in: -the capital markets -property markets -user markets

the capital markets

The base multiplier effect in a city is larger as

the city is larger

The base multiplier effect in a city is larger as Multiple choice question. the city is larger the base activities "import" more of their production the base activities are less labor intensive the city is closer to similar size or larger cities

the city is larger

The nature and specific characteristics of a condominium are defined in

the condominium declaration. the by-laws.

Most appraisal assignments entail estimating

the current market value of a property

Most appraisal assignments entail estimating Multiple choice question. the current market value of a property the cost to construct the property the future market value of a property

the current market value of a property

Housing equity is defined as

the current market value of the homes minus the current value of any outstanding mortgage debt

Housing equity is defined as -the current market value of the homes minus the current value of any outstanding mortgage debt -the market value of the home when purchased minus the value of any outstanding mortgage debt when purchased -the market value of the home when purchased minus the current value of any outstanding mortgage debt

the current market value of the homes minus the current value of any outstanding mortgage debt

Characteristics of an easement in gross include that

the easement can be conveyed separately from any parcel affected. a single easement can affect many parcels. only servient (diminished) parcels are involved.

The most complete guides for mortgage refinancing decisions in use today account not only for interest rate spread, cost of financing and time you will keep the new mortgage, but also:

the effect of time value

Which of the following should be included in the identification of the appraisal problem?

the effective date of the valuation. the type of value to be estimated. the intended use of the appraisal.

Events that triggered the "revolution in land use controls" included

the environmental movement. the Love Canal disaster. publication of Rachel Carson's Silent Spring.

Examples of physical differences that would require an adjustment to the sale price of the comparable include Multiple select question. the existence of a pool time of sale lot size structure size

the existence of a pool lot size structure size

The reason a second mortgage lender is at more risk than a first mortgage lender is that in default

the first mortgage lender gets full satisfaction before the second mortgage lender get any.

The reason a second mortgage lender is at more risk than a first mortgage lender is that in default -the second mortgage lender gets satisfaction, but must wait. -the second mortgage is always smaller, and satisfaction of liens is partly by size. -the first mortgage lender gets full satisfaction before the second mortgage lender get any.

the first mortgage lender gets full satisfaction before the second mortgage lender get any.

Characteristics of an interest-only mortgage include:

the full balance must be paid off at maturity. the regular payment is significantly lower than with the level payment mortgage. the interest rate can be fixed or adjustable. payments are strictly interest.

When building a "reconstructed operating statement," the appraiser's starting point is Multiple choice question. the current owner's expectations of future rents and expenses the historical experience of comparable properties the historical experience of the subject property based on data provided by the current owner

the historical experience of the subject property based on data provided by the current owner

DCF analysis requires the appraiser to estimate

the holding period expected by the typical market participant. future cash flows from annual operations. the net cash generated by the sale of the property at the end of the expected holding period.

Caps for an adjustable rate loan can limit the change in

the interest rate over the lifetime of the loan. the interest rate from one period to the next. the payment from one period to the next.

A major reason for subdivision regulations is that usually the responsibility for maintaining streets and sewers eventually falls to

the local government

A major reason for subdivision regulations is that usually the responsibility for maintaining streets and sewers eventually falls to -the development lender -the homeowners -the local government -the original developer

the local government

The general warranty deed imposes the highest financial responsibility of any deed for the grantor to have good title. This is because the deed has

the maximum number of covenants.

The general warranty deed imposes the highest financial responsibility of any deed for the grantor to have good title. This is because the deed has -the fewest covenants. -the maximum number of covenants. -acknowledgment or witnesses. -covenants plus posted performance bond.

the maximum number of covenants.

While predicting real estate cycles is difficult, a key indicator used to evaluate where a property is within the cycle is: Multiple Choice the level of household income. the form of land use. the size of the property. the number of building permits issued.

the number of building permits issued.

Perceived threats to destabilize a single family, owner oriented neighborhood have included

the presence of apartments or commercial activity in the neighborhood

Perceived threats to destabilize a single family, owner oriented neighborhood have included -too many children living in the houses of a neighborhood -too many senior households in a neighborhood -the presence of apartments or commercial activity in the neighborhood -too many high income households in a neighborhood

the presence of apartments or commercial activity in the neighborhood

Capitalization rates are primarily determined by participants in

the property market

An important process for any investor in property that could possibly contain toxic substances is a Phase 1 Environmental Value Assessment. This procedure examines

the property surface, itself. property history. air samples. water samples.

The accuracy of quantitative valuation techniques depends heavily on Multiple select question. the quality of the cap rate or discount rate assumptions employed the calculator skills of the appraiser the quality of the appraiser's cash flow assumptions the experience of the appraiser

the quality of the cap rate or discount rate assumptions employed the quality of the appraiser's cash flow assumptions the experience of the appraiser

An example of an easement appurtenant would be

the right of one parcel to restrict building height on an adjacent parcel.

An example of an easement appurtenant would be -the right to erect and maintain a sign on another's property. -a railroad right of way across many parcels. -the right to erect a cell tower on another's property. -the right of one parcel to restrict building height on an adjacent parcel.

the right of one parcel to restrict building height on an adjacent parcel.

Capitalization rates used to value the subject property are influenced by

the risk of subject property. expected appreciation rates of the property. returns available on alternative investments.

The average price-earnings multiples or ratios used to value the subject property come from

the sale prices of comparable properties

The average price-earnings multiples or ratios used to value the subject property come from Multiple choice question. the sales of publicly-traded stocks the sale prices of comparable properties the average multiple of the subject property in the last year

the sale prices of comparable properties

The sector model of urban form, based on data from 50 years up to 1928, likely reflected Multiple select question. the same influences that shaped the concentric ring model the dominance of radial rail commuter lines in intra urban travel the effect of strong planning laws at the time the influence of government housing programs at the time

the same influences that shaped the concentric ring model the dominance of radial rail commuter lines in intra urban travel

The sector model of urban form, based on data from 50 years up to 1928, likely reflected

the same influences that shaped the concentric ring model. the dominance of radial rail commuter lines in intra urban travel.

If you know the value of one share of common stock in Simon Property Group (SPG), you know the value of all SPG shares because

the share price is continuously revealed throughout the trading day. SPG shares trade in a liquid public market. one share is a prefect substitute for another.

Which of the following should be included in the identification of the appraisal problem? Multiple select question. the type of value to be estimated the data that will be used to perform the appraisal the effective date of the valuation the intended use of the appraisal

the type of value to be estimated the effective date of the valuation the intended use of the appraisal

The appraiser should base her estimate of future net operating cash flows for the subject property on what Multiple choice question. the typical market participant is expecting she is expecting to happen the most pessimistic market participant is expecting the most optimistic market participant is expecting

the typical market participant is expecting

Homeowners generally do not default by choice on a home mortgage loan, even when the value of the house is below the mortgage balance. Reasons for this can include:

the value of living in the house exceeds the monthly cost. relocation costs, both financial and non-financial. resulting household disruption. resulting damage to one's credit.

In the Palm Grove Office Complex example, the project was destined to be an ill-fated venture from its inception for all of the following reasons EXCEPT: Multiple Choice the zoning laws of University City ultimately prevented the project's developers from starting the construction process. University City was not well-suited for large office space geared toward firms with greater than 25 employees. Palm Grove Office Complex lacked the visual exposure, convenient access, and parking that its competitors held significant comparative advantages in. the structures were primarily designed as general-purpose office space, which excluded potential occupants such as laboratories or medical offices.

the zoning laws of University City ultimately prevented the project's developers from starting the construction process.

In ______, each approach to market value will produce identical estimates of value.

theory

In ______, each approach to market value will produce identical estimates of value. Multiple choice question. some applications theory practice

theory

A comparable sale price should be adjusted for the terms of sale when

there was favorable seller-provided financing

From the appraiser's point of view, replacement cost estimates are preferred over reproduction cost estimates because Multiple select question. they are less time consuming to obtain they are more detailed it is often impossible to build an exact replica of the subject property

they are less time consuming to obtain it is often impossible to build an exact replica of the subject property

From the appraiser's point of view, replacement cost estimates are preferred over reproduction cost estimates because

they are less time consuming to obtain. it is often impossible to build an exact replica of the subject property.

Real property is defined as:

things permanently affixed to the land or structure

Real property is defined as: -things permanently affixed to the land or structure -things easily removed from the land or structure -all residences with a physical address

things permanently affixed to the land or structure

Property tax rates typically are stated not in percent but in mills, which are dollars per _____ dollars of value.

thousand

While there is no specific number of comparables that is required for every appraisal assignment, how many comparable sales are considered adequate as long as the properties are very similar to the subject property? Multiple Choice one three five ten

three

As late as the 1970s 60 percent of all home mortgages were held by ____, and 15 percent were held by local ____.

thrifts. banks.

Reproduction cost is defined as the cost Multiple choice question. to construct a building of equal utility to the subject property to build an exact replica of the comparable property to construct a building of equal utility to the comparable property to build an exact replica of the subject property

to build an exact replica of the subject property

A public planning movement that explicitly advocates a cul-de-sac hierarchy of development, an automobile oriented society, and separated land use is more commonly referred to as: -urban sprawl. -urban service area. -traditional residential planning. -new urbanism.

traditional residential planning

_____ adjustments focus on the terms of the deal and the motivation or bargaining ability of the participants.

transactional

Required sale price adjustments are divided by USPAP into two major categories including Multiple select question. transactional adjustments financing adjustments property adjustments market adjustments

transactional adjustments property adjustments

Planned unit development (PUD) allows residential density to range from single family detached to multifamily, and often include supporting commercial development. -True -False

true

The primary means that economists advocate to "internalize" externalities is by charging compensating fees. -True -False

true

True or false. A distinctive feature of real estate is the complexity of property and transactions.

true

True or false. The ability to move materials and goods within cities was most changed over the 20th century by advances in the truck.

true

True or false: A poor architectural design is an example of functional obsolescence.

true

True or false: Although most appraisal assignments involve the valuation of properties with improvement (buildings) on the land, appraisers often must separately value the land.

true

True or false: DCF valuation is really a combination of DCF and direct capitalization.

true

True or false: Discount rates typically are determined by examining data on comparable property sales, evaluating the required returns on alternative investments of similar risk, talking to market participants, and reviewing investor survey information.

true

True or false: Effective gross income is affected by vacant space and by the extent to which current tenants have have lease rates that are below market

true

True or false: Replacement cost estimates are typically easier to obtain than reproduction cost estimates

true

True or false: Step 6 involves applying the three approaches to valuation.

true

True or false: The final value number produced by reconciliation of the resulting estimates from two or more approaches to value is termed the final estimate of value.

true

True or false: The goal of market analysis is generally to develop an understanding of the factors that affect demand and and supply in a particular market and use that knowledge to forecast how values in that market are likely to change over time.

true

True or false: The use of an effective gross income multiplier is most popular in the valuation of apartment properties.

true

True or false: USPAP addresses the ethical obligations of appraisers and provides the minimum appraisal standards that most be followed by all appraisers

true

A deed of trust and a mortgage are generally equivalent, except that the deed of trust is held for the lender by a third party, the ____, who acts in case of default, or returns the deed of trust to the borrower when the loan is paid off.

trustee

By 2011, five large banks accounted for ______ of all home loan originations.

two-thirds

An example of conflicting notions of best practice in urban planning is

uniform residential densities vs mixed residential densities. grid street patterns vs cul-de-sac streets.

New construction of a particular type of real estate generally does not occur

unless current property values exceed construction costs

New construction of a particular type of real estate generally does not occur -unless current property values exceed construction costs -until interest rates are low enough -until occupancy levels are stagnant over time

unless current property values exceed construction costs

A fundamental problem in comparing the cost of mortgage loans is that cost is a combination of upfront expenses and annual interest. To solve this problem, APR converts ____ ____ into ____ ____.

upfront. expenses (or charges). annual. interest.

In the case study of Plane Vista Apartments, assuming that the proposed apartments would be much like the successful adjacent existing apartments of the same owner can be thought of as using what market research technique? Multiple choice question. creating proxy variables excluding the irrelevant use of analogy

use of analogy

The property tax is a form of ad _____ tax that is the primary source of revenue for almost all forms of local government in the United States.

valorem

Suppose that you are attempting to value an income producing property using the direct capitalization approach. Using data from comparable properties, you have determined the overall capitalization rate to be 7.5%. If the projected first year net operating income (NOI) for the subject property is $135,500, what is the indicated value of the subject using direct capitalization? Multiple Choice $144,985.00 $150,555.56 $1,806,666.67 $9,033,333.33

value = income / rate = 135500 / 0.075 = $1,806,666.67

Suppose that you are attempting to value an income producing property using the direct capitalization approach. Using data from comparable properties, you have determined the overall capitalization rate to be 11.44%. If the projected first year net operating income (NOI) for the subject property is $44,500, what is the indicated value of the subject using direct capitalization? Multiple Choice $49,590.80 $50,225.73 $388,986.00 $509,080.00

value = income / rate = 44500 / 0.1144 = $388,986.00

On the question of whether a down payment is a necessary part of home mortgage lending, the strictly rational view is that:

value is the amount one can recover at sale and the initial down payment is irrelevant

"Investment-grade" properties are typically

valued at more than $10 million, purchased by institutional investors

Cap rates Multiple select question. vary inversely with expected appreciation in the value of the subject property vary positively with expected returns on competing investment alternatives vary positively with expected appreciation in the value of the subject property vary inversely with returns on competing investments

vary inversely with expected appreciation in the value of the subject property vary positively with expected returns on competing investment alternatives

Zoning was determined by the United States Supreme Court to be a legitimate use of police powers to regulate land use in the interest of health, safety and welfare in: -Berman v. Parker, 1954 -village of Euclid v. Ambler Realty, 1926 -Pennsylvania Coal Co. v. Mahon, 1022 -Kelo v. City of New London, 2005

village of Euclid v. Ambler Realty, 1926

Each approach to valuation has its strengths and weaknesses. In arriving at a final opinion of value, the appraiser should

weight the strengths and weaknesses of each approach, as well as the reliability of the data collected for each approach

Each approach to valuation has its strengths and weaknesses. In arriving at a final opinion of value, the appraiser should Multiple choice question. weight the strengths and weaknesses of each approach, as well as the reliability of the data collected for each approach emphasize the approach that has the most available data choose the approach currently most popular with lenders take a simple average of the market values indicated by the three approaches

weight the strengths and weaknesses of each approach, as well as the reliability of the data collected for each approach

The final estimate of market value is usually a ______ average of the indicated values from the different approaches.

weighted

The final estimate of market value is usually a ______ average of the indicated values from the different approaches. Multiple choice question. weighted simple moving

weighted

Building codes

were the earliest form of police power regulation of land use. originally were prompted primarily by the threat of fire. began to be adopted by US communities around 1900.

The contract for deed can be a useful means of financing a property sale

when either the buyer or the property are substandard to a mortgage lender. when the purchase is too "speculative" to qualify for standard mortgage financing.

ECOA, the Equal Credit Opportunity Act of 1974 prohibits consideration in home mortgage lending of:

whether income is from part-time or full-time work. information about a spouse who is not part of the loan application. child bearing plans of a woman applicant. whether income is from public assistance.

Issues that arise in determining rights to minerals, oil and gas include

whether ownership of minerals involves ownership of the space containing them. whether oil and gas are treated as simply a form of minerals or as flowing substances.

In recent years, bottling companies in Florida and elsewhere have made people conscious of a fundamental issue in water rights, namely: -who has the right to use water -who controls use of the land adjacent to a body of water -Who controls the land under a body of water -who has the right to the surface of a body of water

who has the right to use water

common examples of partial exemptions for property taxes include exemptions for

widows. historic property. disabled persons. veterans.

Tenants of specialized properties generally seek to sign leases Multiple choice question. with lease terms that vary with the success of their business with shorter lease terms with longer lease terms

with longer lease terms

The economic base of a city is the set of economic activities that a city provides to the

world beyond its boundaries

The economic base of a city is the set of economic activities that a city provides to the Multiple choice question. residents of the city financial markets world beyond its boundaries government

world beyond its boundaries

To assist in formulating a market defining story for real estate market analysis it can be helpful to _____ the initial story.

write

To assist in formulating a market defining story for real estate market analysis it can be helpful to ____ the initial story.

write (or construct)

Whether you should conduct refinancing analysis on a before tax basis or after tax basis depends on two considerations in US income tax law. You should use before tax analysis if:

you use a standard deduction rather than itemizing deductions you itemize deductions, but your total deductions, including interest, are little more than the standard deduction.