The cte shop study set unit 15 & 16

If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?

20%

Which economic principle says that value is created and maintained when the characteristics of a property fit in with its surroundings?

Conformity

A CMA or a BPO is an example of

An informal estimate of market value

Marcy's offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

The lender

Which of the following statements regarding automated valuation models is true?

Trulia, Zillow, and RealtyTrac use AVMs to return values.

What entity sets the standards for the appraisal report?

USPAP

Which of the following can be defined as what a property is worth?

Value

A comparative market analysis (CMA)

is an unbiased estimate or opinion of the market value of real property by a real estate licensee who isn't a licensed or certified appraiser.

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

$147,000

Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?

$345,103

Who or what is a licensee's sphere of influence?

A list of contacts, both personal and professional, who already know and trust the licensee

The broker's price opinion (BPO)

An opinion of real estate value commissioned by a bank or an attorney and provided by a broker.

Ernesto conducts appraisals, but must work under the supervision of a certified appraiser. Which of the following best describes Ernesto's appraiser status?

Appraiser trainee

Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate?

Area preference

Which type of valuation is used by government tax assessment offices?

Assessed value

Which type of value is used to calculate property taxes?

Assessed value

Who typically performs an appraisal?

Certified appraiser

In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

Comparables

Which economic principle is related to supply and demand?

Competition

______ is the principle that the more similar properties there are on the market, the lower the price will be driven.

Competition

Which economic principle pertains to how a change in a property affects its value as a whole?

Contribution

Which approach to value measures the cost to produce a property, including land acquisition and construction costs?

Cost approach

With the cost approach to value, what is the replacement cost?

Cost to build a functionally equivalent improvement

With the cost approach to value, what is the reproduction cost?

Cost to build an exact replica of the subject, with the same materials and deficiencies

Related to depreciation, what are the two types of physical deterioration?

Curable and incurable

Sally and Jake haven't found any homes they can afford in their desired neighborhood. In fact, there are hardly any available at all. Those that go on the market usually end up in bidding wars, and sell for about twice the price of similar homes in neighborhoods 15 minutes away. What is the state of the market in Sally and Jake's desired neighborhood?

Demand exceeds supply

Which type of appraisal report makes use of pre-printed documents?

Form report

Rico is an appraiser who is performing a valuation on a property. What's another term for what Rico is doing?

Formal appraisal

An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?

Gross income multiplier

Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?

Identify the data that is needed.

Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

Immobility

Applying a capitalization rate to the net operating income is one way to determine a property's ______ value.

Investment

What does a CMA determine?

Market price range

What's the price at which a willing buyer and a willing seller would strike a deal given normal market conditions?

Market value

The best way to start comparative market analysis data collection is to use properties that sold within which timeframe?

No later than three to six months ago

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

Pending

Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here?

Progression

A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?

Regression

What type of appraisal report contains minimal detail, and may be prepared for a specific client for an explicit, limited purpose?

Restricted appraisal report

The market for real estate in Chad's area has experienced a sudden increase in demand, and there aren't enough homes to go around. It seems like a bidding war ensues for every available property. What's the condition of the real estate market in Chad's area?

Seller's market

Changes in the national market may have little (or significantly delayed) impact on local markets. This is because the real estate market is ______.

Slow to respond

Tom owns a construction company in a small southern town. Although national housing statistics have changed dramatically, his business hasn't increased or decreased at all. Which characteristic of the real estate market is described here?

Slow to respond

Janiece bought a home in the suburbs. Although the cost of living in the U.S. has risen sharply, her home value has appreciated only modestly. This is because the real estate market is ______.

Slow to respond to market conditions

In the real estate market, when supply exceeds demand, it means what?

There are more homes than buyers and prices will be lower.

Jan is a real estate licensee gathering information to help her seller determine a good listing price. How could expired listings help her in this process?

They illustrate the price at which the property won't sell.

Which one of the following is a true statement?

Topography determines how the land can be used and where utilities and dwellings can be located.

Which physical characteristic of land addresses the concept that land isn't interchangeable and one piece of land isn't exactly like another?

Uniqueness

What's the capitalization formula used in the income approach?

Value = net operating income divided by cap rate

Which of the following terms is a term used to describe the value of a property as it is currently being used by the owner?

Value in use

Which of the following terms means the price a property is worth to its owner as currently enjoyed?

Value in use

When does a stagnant real estate market occur?

When both supply and demand are low

When does a seller's market occur?

When supply is low and demand is high