Chapter 13

True or False? Cost and value are the same.

False

"In economics, the attribution of value to goods or services based on how much can be obtained for them in exchange for other goods and services" is the definition of -value in exchange -value in use -contributory value -investment value

value in exchange

What type of value is based on a specific use, which may or may not be the property's highest and best use? -assessed value -value in exchange -value in use -book value

value in use

When is an appraiser required to develop an opinion of reasonable exposure time in an appraisal? -when reasonable exposure time is a component of the definition of value being used -only in appraisals for federal land acquisitions -when liquidation value is being developed -none of the above

when reasonable exposure time is a component of the definition of value being used

Once stated, price is ________. -an opinion -a fact -value -synonymous with cost

a fact

The market value definition says that __________ is allowed for exposure in the open market. -90 days -6 months -a reasonable time -a restricted time

a reasonable time

Which of these property types would NOT typically be appraised based for the market value of the going concern? -hotel -restaurant -retail sales property -single-family home

single-family home

"The amount asked, offered, or paid for a property" is the definition of -value -cost -price -worth

price

A comparable property was offered on the market for 8 months at $429,000, with no offers. It was reduced to $419,000 and was on the market for another 6 months. It was reduced again to $359,000 and it sold for $355,000 in 3 months. What is the reasonable exposure time indicated by this property? -3 months -6 months -14 months -17 months

3 months

A comparable property was offered on the market for 12 months at $229,000, with no offers. It was reduced to $219,000 and was on the market for another 10 months. It was reduced again to $159,000 and it sold for $156,000 in 4 months. What is the reasonable exposure time indicated by this property? -4 months -14 months -22 months -26 months

4 months

_________ is related to production. -Cost -Price -Value -Demand

Cost

Which of the following statements is FALSE? -Price is a fact. -Price and value are always the same. -Price and value could be the same in some situations. -Price could be higher than value.

Price and value are always the same.

True or False? Market value must be as of a specific point in time.

True

________ may be more prevalent when appraising industrial properties. -Value in exchange -Assessed value -Public interest value -Value in use

Value in use

USPAP says appraisers can use _________ in developing an opinion of reasonable exposure time. -interviews with market participants -information gathered through sales verification -statistical information about days on market -all of these

all of these

A transaction between unrelated parties who are each acting in his or her own best interest is the definition of -arm's-length transaction -typical financing -market value -exchange value

arm's-length transaction

The value of a property according to the tax rolls in ad valorem taxation is the definition of ___________ value. -insurable -ad valorem -book -assessed

assessed

An artificial amount that is constructed using accounting procedures is called ________ value. -intangible -tangible -book -investment

book

The most common market value definitions specify payment in terms of ____________ or in terms of financial arrangements comparable thereto. -promissory notes -good and valuable consideration -pounds sterling -cash in U.S. dollars

cash in U.S. dollars

"The total dollar expenditure to develop an improvement" is the definition of -price -value -production cost -cost

cost

It would take $275,000 to produce a single-family home on the owner's lot. This $275,000 figure represents the home's -cost -value -price -all of these

cost

"The estimated length of time the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal" is the definition of ___________ time. -marketing -exposure -market -hypothetical

exposure

When is an appraiser required under USPAP to develop an opinion of reasonable exposure time in an appraisal? -if reasonable exposure time is a component of the value definition being developed -in all appraisals, regardless of intended use -only in mortgage lending appraisals -only in appraisals prepared for federal land acquisitions

if reasonable exposure time is a component of the value definition being developed

A value that cannot be imputed to any part of the physical property is called ___________ value. -intransient -intangible -invisible -impartial

intangible

A property owner has a long-term lease on the property with a tenant who is paying $12 per square foot, but the market rental rate for this space is $8 per square foot. This is an example of -intangible value -salvage value -an easement -public interest value

intangible value

What type of value requires an appraiser to consider the expectations of a particular investor or class of investors? -book value -salvage value -insurable value -investment value

investment value

An appraisal for insurable value on a single-family home usually does not include the -windows and doors -land -plumbing fixtures -interior walls

land

A bank acquires a property at foreclosure, and they need to sell it very quickly. They ask an appraiser to provide them a value opinion based on a restricted marketing time, and considering they are under extreme compulsion to sell. What type of value is this client asking for? -investment value -going concern value -book value -liquidation value

liquidation value

The most common type of value sought by appraisers is -liquidation value -value in use -market value -going concern value

market value

Which type of value begins with "the most probable price that a property should sell for..." -assessed value -value in use -insurable value -market value

market value

"The market value of an established and operating business including the real property, personal property, financial assets, and the intangible assets of the business" is the definition of: -market value of the intangible assets -book value -market value of the going concern -insurable value

market value of the going concern

What type of value is based on the market value of an established, operating business, as if sold in the aggregate? -book value -investment value -salvage value -market value of the going concern

market value of the going concern

Market value is "the __________ price which the specified property interest _________ sell for....." -highest, should -most reasonable, must -most probable, should -lowest, should

most probable, should

"The amount a particular purchaser agrees to pay and a particular seller agrees to accept under the circumstances surrounding their transaction" is the definition of -value -market value -price -cost

price

A property owner purchases a lot for $100,000 and pays $400,000 to have a home constructed on it. When it is completed, the owner sells the home for $560,000. The appraiser for the buyer's mortgage company appraises the home at $525,000. The sales contract for $560,000 represents the __________ of the property. -cost -value -price -none of these answers

price

A property owner purchases a lot for $200,000 and pays $800,000 to have a home constructed on it. When it is completed, the owner sells the home for $960,000. The appraiser for the buyer's mortgage company values the home at $910,000. The sales contract for $960,000 represents the __________ of the property. -cost -value -price -intangible value

price

USPAP says "When reasonable exposure time is a component for the definition of value being developed, the appraiser must also develop an opinion of ___________ time linked to the value opinion." -value -marketing -reasonable exposure -hypothetical

reasonable exposure

Exposure time is a _____________ developed by the appraiser. -prediction -statement of fact -personal opinion -retrospective opinion

retrospective opinion

"The price expected for a whole property, e.g., a house, or a part of a property, e.g., a plumbing fixture, that is removed from the premises usually for use elsewhere" is the definition of ____________ value. -scrap -replacement -marginal -salvage

salvage

"The monetary relationship between properties and those who buy, sell, or use those properties" is the definition of -value -cost -price -money

value

A property owner purchases a lot for $100,000 and pays $400,000 to have a home constructed on it. When it is completed, the owner sells the home for $560,000. The appraiser for the buyer's mortgage company appraises the home at $525,000. The appraiser's opinion of $525,000 represents the _________ of the property. -cost -value -price -all of these

value