RE ch 16

A notable weakness of the sales comparison approach to value is that Select one: a. there may be no recent sale price data in the market b. the approach is not based on the principle of substitution c. the approach is only accurate with unique, special purpose properties d. sale prices cannot be compared, since all real estate is different

A

As a component of real estate value, the principle of substitution suggests that Select one: a.if two similar properties are for sale, a buyer will purchase the cheaper of the two b. if one of two adjacent homes are more valuable, the price of the other home will tend to rise c. if too many properties are built in a market, the prices will tend to go down d. people will readily move to another home if it is of equal value

A

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

A

Land value is obtained separately when using which approach to estimating value? Select one: a. Cost approach b. Multiplier approach c. Market approach d. Income approach

A

Market value is best determined by determining: Select one: a. what a willing seller and an informed willing buyer would agree as a price b. asking price c. cost on construction d. amount of income the property can generate

A

The cost depreciation approach of estimating value has two elements, they are Select one: a. The land value plus the value of the improvements on the land b. The land value and area improvements c. Comparable improvements plus land value d. None of these

A

The four characteristics of value are: Select one: a. demand, utility, scarcity, transferability b. supply, demand, scarcity, transferability c. price, demand, scarcity, utility d. demand, utility, transferability, price

A

The methods used by an appraiser to estimate the accrued depreciation are Select one: a. total economic life, economic age-life, effective age b. age depreciation, total economic life, effective life c. cost recovery, age depreciation, effective life d. physical depreciation, total economic life, capitalization

A

A home is located in a neighborhood where homeowners on the block have failed to maintain their properties. This is an example of Select one: a. curable external obsolescence b. incurable external obsolescence c. functional obsolescence d. physical deterioration

B

The best use of land is that use which produces the greatest net return to the owner. This is the: Select one: a. principle of change b. principle of highest and best use c. principle of conformity d. principle of substitution

B

The cost of constructing a functional equivalent of a subject property is known as Select one: a. reproduction cost b. replacement cost c. restitution cost d. reconstruction cost

B

The value of a property tends to coincide with the value indicated by the actions of informed buyers in the market for comparable properties. The cost of producing, through new construction, an equally desirable substitute property usually sets the upper limit of value. The compensation to which an owner is entitled when deprived of the use of his property is based on that value indicated by the actions of informed buyers in the market for comparable properties. These three statements are versions of which one of the following principles: Select one: a. highest and best use b. substitution c. change d. supply and demand

B

What is the net operating income of a building if the operating expenses are $8,350, the effective gross income is $26,750, and the mortgage payment is $11,100? Select one: a. $11,100 b. $18,400 c. $7,300 d. $6,900

B

Which of the following in not an element of value? Select one: a. utility b. conformity c. scarcity d. transferability

B

Which of the following is used for tax purposes? Select one: a. investment value b. assessed value c. liquidation value d. insurable value

B

Which principle holds that maximum value is realized when land uses are compatible and a reasonable degree of architectural harmony is present? Select one: a. principle of change b. principle of conformity c. principle of substitution d. none of these

B

A building is valued at $185,000 when NOI is capitalized at a rate of 8%. NOI is 40% of effective gross income. Calculate the effective gross income.: Select one: a. $32,000 b. $24,667 c. $37,000 d. $14,800

C

A post office of historic value and unique construction is BEST appraised by which approach to estimating value? Select one: a. Income approach b. Comparability approach c. Cost approach d. Market approach

C

An office building produces an effective gross income of $96,400. Building operating expenses total $36,600, and the monthly mortgage payment is $2,240. What is the building's net operating income? Select one: a. $57,560 b. $32,920 c. $59,800 d. $69,520

C

If a building's net operating income is $ 1,000 a month and an appraiser uses a rate of return of 10 percent, what is the estimated value of the building using the income capitalization approach? Select one: a. $ 100,000 b. $ 1,000,000 c. $ 120,000 d. $ 1,200,000

C

The principal that the value of an inferior property is enhanced by its association with a superior property of the same type is called Select one: a. plottage b. regression c. progression d. proximity

C

There are three mathematical methods that appraisers can employ to estimate the value of a subject property they are Select one: a. sales comparison, cost appreciation, income capitalization b. depreciation, capitalization, sales comparison c. sales comparison, cost depreciation, income capitalization d. reconciliation, sales comparison, income capitalization

C

When a large factory is built near a residential area it is an example of Select one: a. proximity obsolescence b. commercial obsolescence c. external obsolescence d. functional obsolescence

C

When one recognizes that no one would pay more for a property than the amount necessary to acquire an acceptable substitute it is called Select one: a. the principal of conformity b. the principal of comparison c. the principal of substitution d. the principal of recognition

C

When properties are accumulated through purchases by a single entity to produce a larger development it is called Select one: a. accumulation b. completing c. assemblage d. urbanizing

C

A comparable sold for $ 110,000 five months ago. You estimate that real estate values have been rising at 1 percent per month during that period of time. How much is an identical house worth today? Select one: a. $ 5,500 b. $ 116,600 c. $ 104,500 d. $ 115,500

D

A man wants to buy a warehouse and convert it into a movie theatre. What types of value is the man most likely to want? Select one: a. Assessed and market. b. Investment and assessed. c. Market and value in use. d. Investment and market.

D

A rental house produces $875 per month in gross income. The house costs $113,750. What is the monthly gross rent multiplier?: Select one: a. 375 b. 0.00769 c. 10.83 d. 130

D

Putting together two or more parcels to form a large parcel under one ownership is called: Select one: a. aggregating b. compounding c. turn over d. assemblage

D

The MOST suitable appraisal method for a vacant lot in a choice subdivision is the: Select one: a. income capitalization approach. b. comparative market analysis. c. cost-depreciation approach. d. sales comparison approach.

D

The rent on a house is $ 500 per month. The gross rent multiplier is 180. What is the estimated value of the house? Select one: a. $ 270,000 b. $ 1,080,000 c. $ 36,000 d. $ 90,000

D

What is the correct sequence to arrive at an estimate of value using the income capitalization approach?: Select one: a. Determine potential gross income, find net operating income, determine effective gross income, find operating expenses b. Determine effective gross income, find operating expenses, determine potential gross income, find net operating income c. Determine effective gross income, find net operating income, find operating expenses, determine potential gross income d. Determine potential gross income, determine effective gross income, find operating expenses, find net operating income

D

When asked to give an opinion to the price of an unimproved lot for purpose of building a single-family residence, which of the following would be used? Select one: a. capitalization of income approach b. cost approach c. replacement approach d. comparative analysis approach

D

Which factor is used in determining gross rent multipliers (GRMs)? Select one: a. Capitalization rate b. Net operating income c. Net income d. Gross monthly income

D

Which is not an element of value? Select one: a. demand b. transferability c. scarcity d. plottage

D