Continuing edu final study

If a property has a potential gross income of $50,000, a vacancy and collection loss of 10%, and taxes are another 10%, what's the effective gross income?

$45,000

Which of the following formulas represents the breakeven ratio?

(Operating expenses + debt service) ÷ effective gross income

What is the average gross leasable square feet for a super-regional shopping center?

1.2 million

In addition to the two anchor tenants, how many tenants does a community shopping center normally have?

15 to 40

What rating scale do appraisers use to indicate the quality of workmanship, materials, and finish of the subject property and comparable properties?

A range from Q1 for exceptionally high quality to Q6 for the most basic quality

building specifications

A written narrative of the building plan

Alexi is using the economic age-life method to measure depreciation. By what other name is this method known?

Age-life

All commercial leases should contain the conditions under which the lease can be terminated; the names and signatures of all parties; and ______.

Any additional information based on negotiations and specific situations

For which of these properties would gross income multiplier be calculated?

Apartment building with 50 units

If Vlad the appraiser runs into a valuation issue that he's not sure how to address, which group will be most likely to provide guidance for him?

Appraisal Practices Board

Another name for a coupon bond, which is rarely issued anymore, is the _____bond.

Bearer

Who's the mortgagor in a mortgage?

Borrower

What is the primary difference between regional and super-regional malls?

Both size and number of offerings

What is BTU, which is a measure of how much heat is required to raise the temperature of one pound of water by one degree Fahrenheit, short for?

British thermal unit

is used when land values are available or can easily be determined, but the cost or depreciation on a building is difficult to estimate?

Building residual technique

A commercial property with 20 tenants has a potential gross income of $1,575,000. Total operating expenses for the property are $800,000. Vacancy and collection losses are determined to be 15%. How will the appraiser find this property's effective gross income?

By deducting 15% of potential gross income from $1,575,000.

Eminent domain is the governments' power to take private land for public use. What is it called when the government actually seizes someone's property?

Condemnation

Under a land trust, the owner directs a ______ to hold title to the real estate.

Corporate fiduciary

Your tenant, Tom, has called to complain about a broken water heater. You hire someone to replace it. What type of maintenance are you performing?

Corrective

Which window style is typical of Tudor and English cottage-style homes?

Diamond-shaped

Economic, tax, and market changes are types of _______ risk.

Dynamic

Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?

Easement by prescription

In which area of the U.S. will you find the greatest number of mutual savings banks?

East

Sara, a local tenant, just signed a lease with a property manager from a community shopping center. Assuming she has an average length lease, how long is the term?

Five years

What's the intended use of the Uniform Residential Appraisal Report?

For the lender/client to evaluate the subject property for a mortgage finance transaction

What are constructed on top of footings?

Foundation walls

The appraiser's operating statement states that the accrual basis method of accounting is used. What does this mean?

Income is recorded when earned, and expenses are recorded when incurred.

What's the definition of "potential gross income"?

Income that a property could bring if fully leased

Government regulation of a property that deprives the landowner of the economic value of the property without compensation from the government is called ______.

Inverse condemnation

Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?

It's owned as an estate in severalty.

Curable physical deterioration

Items of deferred maintenance, such as peeling paint or leaky faucets. Things that can easily or cheeply be repaired.

Jane is selling her home to Micah. What must occur for Jane to effect a transfer of title to Micah?

Jane must deliver the deed to Micah.

Because real estate offers __________, investors can sometimes make a 100% return on their investment.

Leveraging opportunities

The ______ category of appraiser licensure requires a minimum of 1,000 hours of applicable experience.

Licensed residential real property appraiser

In this type of partnership, non-general partners are limited in their authority.

Limited partnership

Marcy wants to collect economic data about businesses and local growth and decline. Where can she go to find this data?

Local chamber of commerce

Which type of legal description do courts prefer?

Lot and block

When an appraiser is adjusting for differences in a sales comparison approach to value, why is a market timing adjusted before a feature, such as a formal dining room?

Market timing relates to the property, whereas features relate to one line item.

Which organization manages and charters credit unions?

NCUA

Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately?

Net

Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

Partition

If a borrower fails to keep homeowners insurance on the collateral property, which of the following are actions the lender can take?

Place lender-acquired insurance on the property and bill the borrower

The use of one investment to finance another is called ___________.

Pyramiding

When an investment property is sold, three taxes that apply are transfer tax, capital gains, and ______.

Recaptured depreciation

Which of the following commercial properties are commonly referred to as malls?

Regional shopping centers

Which corporate structure avoids double taxation?

Subchapter S

Richard recently inherited a substantial sum of money. He decided to invest the bulk of it in real estate because he can deduct certain costs from his profits. What's Richard's primary goal for this investment?

Tax shelter

Whether an appraiser is appraising a condo, a co-op, a time share, or a unit in a PUD, which of the following must always be considered?

The fees property owners are charged by the association

What source must an appraiser use to verify sales data?

The principals to the transaction

What is financial risk?

The risk that is directly related to leverage

FIRREA

The umbrella organization that's authorized by Congress to develop and oversee the standards and requirements real estate appraisers must follow is called The Appraisal Foundation

Sara is appraising a downtown condo, which means she needs to consider the location of the unit in the complex, the fees charged by the association, and __________, among other things.

The upkeep of the common areas

what sets the standards for the appraisal report?

USPAP

Lenders can submit electronic appraisal reports, such as the Uniform Residential Appraisal Report through what tool on the Fannie Mae website?

Uniform Collateral Data Portal

What system uses a central exhaust fan and ducts to move stale air out of a building?

Ventilation

What do investors need to determine before they can calculate their taxable income?

What their net operating income is

Can police power ever be used in a way that restricts citizens' freedom?

Yes, if it's for the public good

Discounted cash flow analysis is a form of what?

Yield capitalization

USPAP

certified appraisers conduct must follow standards and processes described here

Appraisal Qualifications Board

group that is responsible for developing the minimum federal licensing and certification requirements for real property appraisers?

The Appraisal Foundation (TAF)

has Congressional authority to develop and enforce appraisal standards and appraiser qualifications

Introduction of aprasil report

include the subject property's history, and its recent sales and listings

What is a Resister?

part of an electrical heating system

Economic life

period of time during which a structure can be used for its originally intended purpose

Consideration is one element of a valid contract. In a lease, what will a lessee give as consideration?

rent

Reconciliation step in aprisal report

step in the appraisal process must be completed before the final appraisal value can be reported

What dictates a leasehold estate's value

the relationship between scheduled rent and the market rent

External obsolescence

this type of depreciation is nearly always considered incurable

Mortgage REITs

type of REITs specialize in owning certain building types, such as apartments or office buildings

Yield capitalization

used to value complex commercial properties like office complexes, shopping centers, or other investments that may take years to stabilize