Texas Principles of Real Estate 2 - Chapter 2

Incurable

.............. depreciation cannot be fixed at an economically feasible cost? Incurable Curable Economic Viable

Economic obsolescence

A loss in value due to factors away from the subject property but adversely affecting the value of the subject property is known as...? Principle of conformity Principle of change Physical obsolescence Economic obsolescence

Reconciliation

A single value is derived from the three appraisal methods of determining value during the ............ process? Pro-forma Verification Highest and best use Reconciliation

Assessed value

A tax assessor produces which of the following types of value...? Assessed value Market value Book value Investment value

Uniform Residential Appraisal Report

A typical residential appraisal report is issued on a...? HUD-1 Form National Appraisal Form Uniform Residential Appraisal Report Estimated Home Value Appraisal Report

Appraisal

An estimate of the value of property resulting from an analysis of facts about the property is known as a/an...? Appraisal Assessment Pro-forma Listing Estimate

Income approach

An investor is in the process of purchasing an office building. The bank providing the mortgage for the property requires an appraisal to be done. Which of the following appraisal methods will the appraiser most likely use to determine the value of the office building...? Cost approach Income approach Sales comparison approach Market data approach

Sales comparison approach

David is in the process of buying his first house. David's lender requires an appraisal to be done on the property. Which of the following appraisal methods will most likely be used to determine the value of David's house...? Income approach Cost approach Sales comparison approach Assessed approach

300 hours

How many hours of appraisal education is required to become a general certified real estate appraiser...? 75 hours 150 hours 200 hours 300 hours

75 hours

How many hours of appraisal education is required to become an appraiser trainee...? 75 hours 150 hours 180 hours 260 hours

2,500 hours

How many hours of experience is required to become a certified residential real estate appraiser...? 2,000 hours 2,500 hours 3,000 hours 3,500 hours

No experience is needed

How much experience is needed to become a real estate appraiser trainee...? No experience is needed At least 6 months working under a licensed appraiser At least 1 year working under a licensed appraiser At least 2 years working under a licensed appraiser

Appraiser

One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes is referred to as a/an...? Appraiser Attorney Real estate broker All of the above

T (True)

Real estate appraisers used to appraise a property cannot be selected by the real estate brokers involved in the transaction...? T (True) F (False)

Utility

The capacity to satisfy human needs and desires is referred to as...? Scarcity Utility Value Demand

Reproduction cost

The cost of replacing the subject improvement with one that is the exact replica, having the same quality of workmanship, design and layout, or cost to duplicate an asset is known as...? Reproduction cost Replacement cost Substitution cost Conforming cost

Effective Demand

The desire for possession or ownership backed by the financial means to satisfy that need is referred to as...? Effective Demand Net Demand Value Demand Market Demand

Market Value

The highest price in terms of money which a property will bring in a competitive and open market and under all conditions required for a fair sale is referred to as...? Assessed Value Market Value Investment Value Insured Value

Net operating income

The income approach determines value by applying a capitalization rate to the...? Net operating income Gross income Effective gross income After tax profit

Depreciation

The loss of value of a property brought about by age, physical deterioration or functional or economic obsolescence is referred to as...? Depreciation Deflation Discount Capital expenditure

Market value

The most common objective of an appraisal is to develop an opinion of...? Assessed value Market value Insured value Investment value

Value

The present worth of future benefits arising out of ownership to typical users/investors is known as...? Cost Return Value Interest

Market price

The price paid regardless of pressures, motives or intelligence is referred to as the...? Market price Insured price Investment price Assessed price

Market data approach

The sales comparison approach is also referred to as the...? Market data approach Cost approach Assessed approach Income approach

Scarcity

The supply of property in relation to effective demand is known as...? Utility Demand Scarcity Value

Cost approach

This appraisal method consists of an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land...? Income approach Market data approach Cost approach Sales comparison approach

Sales comparison approach

This appraisal method consists of comparing similar type properties, which have recently sold, to the subject property...? Cost approach Sales comparison approach Income approach Assessed approach

Principle of substitution

This principle affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property...? Principle of substitution Principle of conformity Principle of Externalities Principle of Anticipation

All of the above

When using sales data to compare to the subject property, appraisers should use sales that are...? Current Comparable Close All of the above

Cost approach

Which of the following appraisal methods will most likely be used to determine the value of a church...? Income approach Market data approach Cost approach Sales comparison approach

Income approach

Which of the following appraisal methods will most likely be used to determine the value of a commercial building...? Income approach Cost approach Market data approach Sales comparison approach

All of the above

Which of the following externalities can have a negative effect on home values...? Proximity to a landfill Proximity to a power plant Proximity to a noisy highway All of the above

Determine the highest and best use

After the needed data has been obtained and verified, what is the next step in the appraisal process...? Determine the highest and best use State the problem Reconciliation Issue the appraisal report

Physical deterioration

The loss in value brought about by wear and tear, disintegration, and use and actions of the elements is known as...? Economic obsolescence Functional obsolescence Physical deterioration Capital expenditure

Highest and best use

The most probable use to which a property is suited that results in its highest value or highest returns to the land is known as...? Investment use Highest and best use Assessed use Insured use

Transferability

The relative ease with which ownership rights are transferred from one person to another is known as...? Demand Scarcity Substitution Transferability

Determine the value of the land as if it were vacant

What is the first step an appraiser takes when valuing a property using the cost approach...? Add the depreciated value of the improvements to the value of the land Estimate the amount of accrued depreciation Determine the current cost of the improvements Determine the value of the land as if it were vacant

State the problem

What is the first step in the appraisal process...? Gather the needed data State the problem Verify the data Determine the highest and best use

List the data needed

What is the second step in the appraisal process...? State the problem Determine the highest and best use List the data needed Reconciliation

Appraiser trainee

Which of the following is the lowest real estate appraiser classification...? Appraiser trainee State licensed real estate appraiser Certified residential appraiser Certified general real estate appraiser