11*12*13*14*15
To qualify for a homestead exemption, a property owner generally must reside on the property. have a house on the property. be 55 years old. have children.
reside on the property.
Gross tax is determined subtracting what the state pays from the net tax. adding the net tax to the credits the state pays. subtracting the credits from the assessed value. dividing the assessed value by a percentage determined by the municipality.
adding the net tax to the credits the state pays.
The Department of Local Government Finance assesses property value. determines exemptions. reviews and approves assessed property values. reviews and approves state government budgets.
reviews and approves assessed property values.
Tax bills are calculated based on the assessment of the property, the local tax rates, and exemptions and credits. the assessment of the property. a flat tax amount approved by the local taxing authority. a tax rate approved by the state legislature.
the assessment of the property, the local tax rates, and exemptions and credits.
Using the cost approach, what is the value of a property when the total land valuation is $43,200 and the depreciated building value is $129,400? $29,954 $86,200 $172,600 $129,400
$172,600
How many Federal Reserve District Banks exist? 10 20 12 15
12
What is the gross annual income on a property with a market value of $500,000 and an annual income multiplier of 25? 2,000 20,000 2,500 25,000
20,000
A property valued at $200,000 nets $750 a month. What is the annual rate of return? 3.80% 4.20% 3.50% 4.50%
4.50%
Paul is planning to purchase the convenience store for $450,000. He has been told the annual income on this store is $50,000. What is the annual multiplier? 7 125 50 9
9
The assessed value after all exemptions and adjustments have been taken into account is the gross tax. the tax base. the taxable value. the tax levy.
the taxable value.
For appraisal purposes, land never is used to determine a home's value. falls under locational obsolescence. depreciates in value. contributes to a property's value.
depreciates in value.
Deposits in savings associations are insured by FDIC up to the amount of $100,000.00. $200,000.00. $250,000.00. $300,000.00.
$250,000.00.
What is the NOI on a property valued at $500,000 with a cap rate of 5.2%? $2,600 $26,000 $5,200 $18,000
$26,000
What is the value of a property which has an NOI of $9,000 with a 3% cap rate? $300,000 $270,000 $350,000 $250,000
$300,000
Indiana offers homeowners age 65 and over with an income of $25,000 or less a tax exemption of what percent of the home's value, up to $12,480? 25% 30% 50% 65%
50%
The Constitution of the United States specifically prohibits taxing disabled homeowners. exorbitant taxes on real property. federal taxes on real property. exempting homeowners based on familial status.
federal taxes on real property.
The usual definition of highest and best use is that use that is optimally located. legally permissible. appropriately priced. in demand.
legally permissible.
Tax districts are established by the tax assessor. the department of education. Indiana Supreme Court. local governments.
local governments.
In Indiana, properties are valued using _____________ techniques. market value equalization mass appraisal county appraisal
mass appraisal
What is the GRM if the sale price is $200,400 and the monthly rent is $1200? 108 156 167 138
167
A homeowner's total tax bill is derived by dividing the tax requirement by the tax base. multiplying each district's tax rate times the assessed value of the owner's property, figuring in exemptions and credits. dividing tax dollars needed by the taxable assessed value. averaging the tax rate for each tax district, and multiplying the average tax rate times the assessed value.
multiplying each district's tax rate times the assessed value of the owner's property, figuring in exemptions and credits.
What is the annual rate of return on a property valued at $300,000 which nets $1000 a month? 4% 5% 4.10% 5.30%
4%
Using the Cost Approach, an appraiser must determine depreciation. The types of depreciation include all of the following EXCEPT Physical deterioration Functional deterioration Economic obsolescence Functional obsolescence
Functional deterioration
The International Association of Assessing Officers guidelines state that assessors should conduct a physical review of properties at least every _________ years. 4-6 3-5 1-2 8-12
4-6
_______________ do not receive revenue from property taxes. Cities Towns School districts Legislatures
Legislatures
Using the sales comparison approach, how would an appraiser make two properties equal when the comparable property has one extra bedroom, a fireplace, one less bath, and a pool? Subtract the extra bedroom, fireplace, and the pool from the comparable sold price, and add the extra bathroom to the comparable sold price. Add the extra bedroom to the comparable sold price, and subtract the bathroom, fireplace, and pool from the comparable sold price. Add the extra bedroom, fireplace, and pool to the comparable sold price, and subtract the extra bathroom from the comparable sold price. Subtract the extra bedroom and the bathroom from the comparable sold price, and add the fireplace and pool to the comparable sold price.
Subtract the extra bedroom, fireplace, and the pool from the comparable sold price, and add the extra bathroom to the comparable sold price.
Who determines the tax rate? The tax assessor Tax officials The state government The appraiser
Tax officials
Which of the following is NOT an assumption of market value? The seller can provide marketable title. Market value refers to a specific date. The terms are cash or its equivalent. The buyer can afford the property.
The buyer can afford the property.
The right of a property owner to redeem his or her property after a tax sale is called A legal right of rescission An equitable right to acquire title A right of homestead exclusion A statutory right of redemption
A statutory right of redemption
What is a tax deed? A conveyance instrument for a property that is sold to enforce a tax lien A document recorded in title records showing that property taxes have been paid A notice to a homeowner that a tax lien has been entered against the property A document that gives a municipal authority the power to collect an individual tax bill
A conveyance instrument for a property that is sold to enforce a tax lien
_______________ may be established to pay for the cost of a specific improvement or service that benefits that area. A special assessment Assessing units An exemption A special tax district
A special tax district
Which of the following can legally levy real property taxes? The Internal Revenue Service A utility company A tax district A court of law
A tax district
Which of the following types of construction projects is most likely to prompt a reassessment? Installing a fence around the property Remodeling a kitchen Adding a garage Removing a wall from between two rooms
Adding a garage
The Fair Credit Reporting Act, or Title VI of the Consumer Credit Protection Act of 1968, requires that lenders keep all credit information confidential. obtain authorization from a consumer in order to seek the customer's credit information. reveal the sources of the credit information to the consumer. All of the above.
All of the above.
Once the county assessor has developed the property's assessed value and the county auditor has applied deductions, exemptions, and other adjustments, what are these values known as? Certified gross values Certified net assessed values Tax levies Special assessments
Certified net assessed values
Which BEST describes the principle that a home maintains its highest value by being in a neighborhood with similar-type housing? Competition Highest and best use Regression and progression Conformity
Conformity
_________ is how much cash it takes to build and improve property. Value Price Financing Cost
Cost
How does an appraiser estimate the price a typical investor would pay for the income produced by commercial and investment properties? Divide the NOI by the cap rate Divide the NOI by the value Multiply the value times the cap rate Multiply the value times the NOI
Divide the NOI by the cap rate
What does a tax certificate do? Certifies to tax collectors that a property owner has paid all ad valorem taxes on the property for the calendar year Entitles its holder to apply for a tax deed after a certain period Exempts its holder from paying taxes on the particular property referenced by the certificate Waives a property owner's rights of redemption in a foreclosure
Entitles its holder to apply for a tax deed after a certain period
The law enacted to keep credit information confidential is known as the Fair Credit Reporting Act. Community Reinvestment Act. RESPA ECOA
Fair Credit Reporting Act.
In 1988, two categories of protected classes were added to those protected classes already covered under the Fair Housing Act for a total of seven federally protected classes. Which of the following classes were added? Race and National Origin Handicapped and Race Familial Status and Handicapped Age and Familial Status
Familial Status and Handicapped
Which agency was created by the Frank-Dodd act to identify and address systemic risks posed by large, complex companies, products, and activities before they threaten the stability of the economy? Consumer Financial Protection Bureau Federal Reserve System HUD Financial Stability Oversight Council
Financial Stability Oversight Council
The enforcement of the Fair Housing Act is a responsibility of FHLMC HUD FTC FCC.
HUD
Paul is planning to purchase a convenience store and would like to determine the annual income from the property. How would he do that? He would multiply the annual multiplier times the market value of the property. He would divide the market value of the property by the annual multiplier. He would divide the market value of the property by the annual multiplier and then divide by 12. He would subtract the annual multiplier from the market value.
He would divide the market value of the property by the annual multiplier.
The decision to convert a two-family residential home into a commercial office, housing a real estate firm, and an insurance company is an example of what appraisal principle? Plottage increments Highest and best use Anticipation Regression and progression
Highest and best use
Which of the following statements is true? If the Fed is buying securities, more money is being pulled out of the economy. If the Fed is selling securities, money is being pulled out of the economy. If the Fed is selling securities, money is being released into the economy. If the Fed is buying securities, less money is being released into the economy.
If the Fed is selling securities, money is being pulled out of the economy.
What is the purpose of an equalization factor in ad valorem taxation? It modifies a local tax rate to bring it into conformity with statutory tax rates. It changes the assessed value of an individual property to make it reflect the assessed values of other properties in the same neighborhood. It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher level jurisdiction. It adjusts the amount of the homestead exemption in a certain area to make it proportionally equivalent to the average homestead exemption in other areas.
It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher level jurisdiction.
What is a unique characteristic of a special assessment tax? It only applies to properties which will benefit from the public improvement. The equalization board discounts levies for properties not affected by the public improvement. More valuable properties which stand to benefit will pay proportionately more taxes. It creates an involuntary junior lien on the property.
It only applies to properties which will benefit from the public improvement.
Loss of value to a home in a neighborhood that is deteriorating is caused by what? Functional obsolescence Physical deterioration Curable obsolescence Locational obsolescence
Locational obsolescence
Which of the following is not a responsibility of HUD? Overseeing the Fannie Mae and Freddie Mac operations Managing the Office of Thrift Supervision Managing Ginnie Mae Meeting housing needs of Native Americans
Managing the Office of Thrift Supervision
___________ is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Investment value Liquidation value Market value Tax value
Market value
Gathering facts about a neighborhood to determine the appeal to the buyer is included in which step in the appraisal process? Neighborhood Cycle Site Analysis Analyze and Interpret Neighborhood Analysis
Neighborhood Analysis
All of the following are techniques used in valuing the land component EXCEPT extraction. allocation. subdivision development analysis. Neighborhood analysis.
Neighborhood analysis.
Which type of structure would not be included as part of TIFed property? New hotel New convenience store New house New apartment building
New house
What is one indication of how long the seller's home might take to sell? Number of bedrooms Home's square footage Number of days comparables have been on the market Appraiser's value
Number of days comparables have been on the market
The Financial Institutions Reform, Recovery and Enforcement Act disbanded the Federal Home Loan Bank Board and replace it with the Federal Savings and Loan Insurance Corporation. Federal Home Loan Authority. Office of Financial Oversight. Office of Thrift Supervision.
Office of Thrift Supervision.
_______________ is the increased value resulting from the combining of adjacent lots into one larger lot. Assemblage Plottage value Contribution Anticipation
Plottage value
Which of the following is NOT a responsibility of the Department of Housing and Urban Development? Process loan applications Manage the Ginnie Mae mortgage-backed securities guarantee program Promote home ownership Manage Section 8 certificates
Process loan applications
What type of property is automatically exempt from real property taxation? Properties owned by veterans Properties owned by churches Properties owned by families with children Properties owned by disabled persons
Properties owned by churches
Local taxing authorities find taxing land to be beneficial. Which of the following is NOT one of those benefits? Property tax revenue is predictable. Property taxes are hard to conceal from taxing authorities. Property taxes raise more revenue than income and sales taxes. In most cases, land has some measure of productivity and the government shares in that.
Property taxes raise more revenue than income and sales taxes.
The cap rate is made up of which two parts? Return on investment and Risk Interest Rate Risk Interest Rate and Grief Allowance Grief Allowance and Recapture Rate Recapture Rate and Risk Interest Rate
Recapture Rate and Risk Interest Rate
What is the final step in the appraisal process? Estimate the value of the property Reconcile estimated values Estimate land value Record necessary data
Reconcile estimated values
What is the role of the DLGF in related to property taxation? Assessment of property value Assigning property assessors Review and approve value assessments and taxing entities' budgets Determining tax rates and levies
Review and approve value assessments and taxing entities' budgets
What is the formula for finding the GRM? Monthly rent X sale price Monthly rent / sale price Sale price X interest rate Sale price / monthly rent
Sale price / monthly rent
Which of the following is NOT part of the Analyze and Interpret step in appraisals? Site cycle Site analysis Neighborhood cycle Neighborhood analysis
Site cycle
Which tax must specifically benefit the property? Ad valorem tax Property tax Special Assessment tax Voluntary tax lien
Special Assessment tax
Which principle is the market data approach based on? Conformity Change Anticipation Substitution
Substitution
What happens when taxing districts place caps on the absolute millage rate. The state must make up the shortage. Taxing bodies are forced to limit their budget requirements. The DLGF must increase the tax base. More exemptions will be made available.
Taxing bodies are forced to limit their budget requirements.
If a comparable currently on the market is distressed, what will that affect? The appraisal The GRM The CMA The annual income multiplier
The CMA
Which appraisal approach is used on buildings which do not have market data because they are unusual properties (school, post office, library, etc. or a building without income)? the Market Data Approach. The Income Capitalization Approach The Cost Approach The Comparable Sales Approach
The Cost Approach
Which appraisal approach looks at functional obsolescence? The Comparable Sales Approach The Cost Approach The Income Approach The Market Data Approach
The Cost Approach
What legislature was enacted as a result of the financial crisis in 2008? Taxpayers Relief Act The Dodd-Frank Act Community Reinvestment Act Truth-in-Lending Act
The Dodd-Frank Act
Which of the following groups was created in 1913? The Federal Reserve System HUD Office of Thrift Supervision Federal Deposit Insurance Corporation
The Federal Reserve System
When an appraiser uses the phrase 'effective age,' he is referring to what? The number of years since improvements were made The age of the property based on its condition The estimated total life of an improvement The number of years during which the property will yield a worthwhile return on investment
The age of the property based on its condition
An appraiser finds a property in the same location which has sold and wants to use it as a comparable sale. This property has fewer bedrooms, one more bath, and no garage. What will the appraiser need to do to make the properties equal? Find a different property because he/she cannot make properties equal when they are so different. The appraiser will need to add the difference in bedrooms to the comparable sold price, subtract a bathroom from the comparable sold price, and add a garage to the comparable sold price. The appraiser will need to subtract the extra bedrooms from the comparable sold price, add a bathroom to the comparable sold price, and subtract the garage from the comparable sold price. The appraiser will need to add the extra bedrooms to the comparable sold price, add the bathroom to the comparable sold price, and add a garage to the comparable sold price.
The appraiser will need to add the difference in bedrooms to the comparable sold price, subtract a bathroom from the comparable sold price, and add a garage to the comparable sold price.
What are ad valorem taxes based on? The replacement value of property The assessed value of property The millage value of property The broker's estimate of value
The assessed value of property
What is a tax levy? The cap on the amount of property tax dollars a local government is allowed by law to collect The sum of all the taxes a local taxing jurisdiction collects in a tax year A notice to a homeowner that a tax lien has been entered against the property The number of dollars per thousand dollars of assessed value that a real property owner must pay in property taxes
The cap on the amount of property tax dollars a local government is allowed by law to collect
Who has the burden of proof for an assessment change when a homeowner appeals an assessment? The assessor The tax appraiser The homeowner The appeals board
The homeowner
What is the Federal Reserve's "discount rate"? The interest rate banks that use Federal Reserve money must charge customers The interest rate used by members of the Federal Reserve system for favored customers The interest rate the Fed charges its member banks The rate the Federal Reserve uses to calculate the future value of the money supply
The interest rate the Fed charges its member banks
Define recapture rate? The amount of money recaptured from defaulting tenants The rate of interest earned on the money invested The return of the money invested plus interest The return of the money invested
The return of the money invested
What is the role of local tax districts? To levy income, sales, and property taxes to meet their budget requirements To manage their budgeted portion of real estate tax revenues levied and distributed by the state To impose property taxes for specific municipal services To place tax liens on its facilities
To impose property taxes for specific municipal services
Where does a property owner file an assessment complaint? The mayor's office in the city or town where the property is located The local taxing authority in the city or town where the property is located The state legislature With the assessor in the city or town where the property is located
With the assessor in the city or town where the property is located
The Department of Local Government Finance works in a way that is similar to a bank. a property appraiser. any government entity. a taxation appeals board.
a bank.
Assessors are usually not allowed to do "spot" assessments of individual parcels unless a property has not been assessed for a statutory number of years. zoning has changed since the last assessment. a new owner has taken possession since the last assessment. a material change in the property has been reported.
a material change in the property has been reported.
A taxpayer may redeem a foreclosed property after a tax sale if there is an in rem proceeding. a homestead exemption. an equitable right of redemption. a statutory right of redemption.
a statutory right of redemption.
After a period of time specified by law, the holder of the tax certificate on a property may then apply for an exemption. a tax deed. a homestead credit. release of lien.
a tax deed.
When a county or city government draws a boundary around an area where new commercial development will take place, this is called a special tax district. creating a tax district. a tax increment finance district. a commercial district.
a tax increment finance district.
A government entity with the authority to levy property tax is the DLGF. the county assessor. a taxing unit. the property appraiser.
a taxing unit.
When a typical ratio of land value to total value is derived from comparable properties and applied to the subject, this is called allocation. extraction. land residual. direct sales comparison.
allocation.
Property owners may object to the ___________ but not to the tax rate. assessed value tax exemption tax credit gross tax
assessed value
An appraiser is usually paid a fee based on a percentage of the appraised value. based on the amount of time and effort expended. agreed upon after the appraisal is completed. set by the National Appraisal Association for the type of property.
based on the amount of time and effort expended.
Assessed value is determined according to fair market value. by the improvements completed on the land. by the county assessors. by a complex formula using credits and discounts.
by the county assessors.
A property investment should yield a return of the original purchase price within 10 years. by the time the building reaches the end of its functional life. by the time the mortgage is paid in full. by the time the building reaches the end of its economic life.
by the time the building reaches the end of its economic life.
To create a CMA, all of the following must be considered EXCEPT comparable homes close to the same age. comparable homes close to the same square footage. comparable homes with the same number of bedrooms, baths, and garages. comparable homes with sold data less than one year old.
comparable homes close to the same square footage.
The appraisal principle of value based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the value is called progression. conformity. the law of supply and demand. highest and best use.
conformity.
The first step in an appraisal is sold properties comparisons. define the problem. neighborhood analysis. data gathering.
define the problem.
Estimate annual potential gross income, subtract appropriate allowance for vacancy to arrive at effective gross income, and deduct operating expenses are the first three steps involved in determining value using the Income Approach. determining value using the Summation Approach. determining value using the Cost Approach. determining value using the Market Data Approach.
determining value using the Income Approach.
In calculating the tax base of an area, exemptions are added to assessed values. exemptions are subtracted from assessed values. the tax levy is added to the budget shortfall. the millage rate is multiplied by the tax levy.
exemptions are subtracted from assessed values.
The Sales Comparison Approach is used for appraising buildings which do not have market data because they are unusual properties (school, post office, library, etc. or a building without income). when estimating quantity and quality of all materials (such as lumber, brick, and plaster) and the labor on a unit cost basis. by appraisers who need to value commercial and investment properties. for appraising residential property or vacant land.
for appraising residential property or vacant land.
Property taxes are not levied on agricultural properties. industrial properties. commercial properties. government owned properties.
government owned properties.
In Indiana, the percentage applied to the gross tax after property tax replacement credits are subtracted is called gross tax. net tax. homestead exemption. homestead credit.
homestead credit.
A legal proceeding against a thing to collect property taxes is called a tax lien. tax deed. foreclosure. in rem.
in rem.
The income approach is also referred to as the income capitalization approach sale price approach budget approach fixed cost approach
income capitalization approach
A person investing in real estate will be focused on one primary goal: finding tenants. increasing annual income multiplier. finding tax loopholes. increasing net worth with as little income tax penalty as possible.
increasing net worth with as little income tax penalty as possible.
The role of the FDIC is to insure deposits up to $250,000 per account. insure loans issued by secondary market organizations. insure loans issue by federally related deposit institutions. insure deposits up to $100,000 per account.
insure deposits up to $250,000 per account.
Certain classes of property owner and types of property are exempted or immune from real property taxation in many areas. The protected categories usually include recreational properties. properties owned by a government agency. properties that comply with Fair Housing laws. properties occupied by single-parent families.
properties owned by a government agency.
ECOA's role in mortgage financing is to standardize closing documents and disclosures to buyers and sellers. protect the public from discriminatory lending. disclose accurate loans costs to consumers. prevent discrimination in residential purchase transactions.
protect the public from discriminatory lending.
RESPA's central thrust in mortgage financing legislation is to eliminate discrimination in extending mortgage credit to applicants. make credit available and impartially to all credit-worthy applicants. protect the public from excessive or hidden closing costs. establish uniform usury rates among mortgage lenders.
protect the public from excessive or hidden closing costs.
The return of the money invested in investment property is called risk interest rate. reconciled investment rate. recapture rate. capitalization rate.
recapture rate.
The return on the money invested is called profit. recapture rate. return on investment. risk interest rate.
risk interest rate.
As part of the assessment process, taxing entities sometimes use an equalization process to adjust millage rates within the district to ensure fairness. ensure that property owners have nearly equal tax bills. modify the tax rate from one neighborhood to the next. smooth out wide discrepancies of assessed values within the district.
smooth out wide discrepancies of assessed values within the district
Assessed values minus exemptions equals tax rate. tax base. tax levy. gross tax.
tax base.
The total of the appraised or assessed values of all real property within the area's boundaries, excluding partially or totally exempt properties, is the tax rate. tax base. tax levy. net tax.
tax base.
The _______________ determines how much of a tax levy the tax base will receive. Department of Local Government Finance property appraiser property tax replacement credit tax rate
tax rate
Total tax levy divided by the tax base equals gross tax. tax rate. net tax. Certified net value.
tax rate.
The Office of Thrift Supervision was created by the Federal Deposit Insurance Corporation. the Federal Home Loan Bank Board. the Financial Institutions Reform, Recovery, and Enforcement Act. the Federal Savings and Loan Insurance Corporation.
the Financial Institutions Reform, Recovery, and Enforcement Act.
The Consumer Financial Protection Bureau was created by the Truth-in-Lending Act. the Community Reinvestment Act. the Frank-Dodd Act. the Taxpayers Relief Act.
the Frank-Dodd Act.
The appraisal approach that compares the subject property to similar properties and makes adjustments on the basis of the date of the sale, the location, the physical features and/or amenities is the Market Data Approach. the Summation Approach. the Income Capitalization Approach. the External Obsolescence Approach
the Market Data Approach.
The appraisal approach that compares the subject property to similar properties and makes adjustments on the basis of the date of the sale, the location, the physical features and/or amenities is the Market Data Approach. the Summation Approach. the Income Capitalization Approach. the External Obsolescence Approach.
the Market Data Approach.
A special assessment creates a voluntary tax lien if all taxpayers in a taxing district have voted for it. the affected property owners have requested the improvement. a taxing entity initiates the assessment. the improvement to be funded is for the general good.
the affected property owners have requested the improvement.
Market value is defined by all EXCEPT the assumption that the buyer and seller are sufficiently informed. the allowance of a reasonable time for market exposure. the relation to the price for which the property should sell in the open market. the consideration of the price for which the property was last sold.
the consideration of the price for which the property was last sold.
The level of assessment is the percentage of market value at which properties are taxed. the percentage determined by the municipality by which the property is assessed. the percentage of full or market value at which properties are assessed. the adjusted value after a percentage determined by a municipality has been subtracted.
the percentage of full or market value at which properties are assessed.
Indiana taxing administrators discovered that people were more likely to comply with the property tax if there were penalties invoked on late payments. they were threatened with a lien. a tax replacement credit were applied. the tax did not have to be paid in one lump sum.
the tax did not have to be paid in one lump sum.
The purpose of a homestead tax exemption is to exempt qualified property owners from ad valorem taxation. to offer some amount of tax relief on an owner's principal residence. to encourage multiple property investment. to exempt owners of principal residences who rent their properties.
to offer some amount of tax relief on an owner's principal residence.
