Question 1

Choose the one most appropriate answer for each.
-expenditures necessary to maintain the production of income

Accepted Answer

A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property 
A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property

Question 2

Functional obsolescence results from factors outside the property.

Accepted Answer

A) True 
 B)False

Question 3

Choose the one most appropriate answer for each.
-to convert future income to current value

Accepted Answer

A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property 
A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property

Question 4

An office building is on a lot valued at $50,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 10%. Using the cost approach, what is the value of the property?

Accepted Answer

A)  $50,000 
B)  $152,000 
C)  $160,000 
D)  $185,000 
A)  $50,000 
B)  $152,000 
C)  $160,000 
D)  $185,000

Question 5

When an appraiser has a property to evaluate, which of the following would he need to know first?

Accepted Answer

A)  Comparable properties 
B)  Amount of his fees 
C)  Assessed valuation 
D)  Highest and best use 
A)  Comparable properties 
B)  Amount of his fees 
C)  Assessed valuation 
D)  Highest and best use

Question 6

The best definition of fair market value is the

Accepted Answer

A)  value as determined by a fee appraisal. 
B)  highest price a seller can get for his property. 
C)  tax assessed value. 
D)  price a willing buyer will pay and a willing seller will accept, given a reasonable amount of time to effect the sale. 
A)  value as determined by a fee appraisal. 
B)  highest price a seller can get for his property. 
C)  tax assessed value. 
D)  price a willing buyer will pay and a willing seller will accept, given a reasonable amount of time to effect the sale.

Question 7

Which of the following is NOT one of the three standard approaches to value?

Accepted Answer

A)  Income approach 
B)  Cost approach 
C)  Price approach 
D)  Market approach 
A)  Income approach 
B)  Cost approach 
C)  Price approach 
D)  Market approach

Question 8

An office building is on a lot valued at $40,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 20%. Using the cost approach, what is the value of the property?

Accepted Answer

A)  $40,000 
B)  $120,000 
C)  $160,000 
D)  $152,000 
A)  $40,000 
B)  $120,000 
C)  $160,000 
D)  $152,000

Question 9

The method used to compute a gross rent multiplier is

Accepted Answer

A)  averaging the net operating income of the subject property. 
B)  the sale price of the subject property divided by its original cost. 
C)  the sale price of similar properties divided by their rental income. 
D)  the maximum rent times twelve months. 
A)  averaging the net operating income of the subject property. 
B)  the sale price of the subject property divided by its original cost. 
C)  the sale price of similar properties divided by their rental income. 
D)  the maximum rent times twelve months.

Question 10

The added value resulting from the combination of two or more parcels of land is called

Accepted Answer

A)  replacement value. 
B)  liquidation value. 
C)  plottage value. 
D)  subjective value. 
A)  replacement value. 
B)  liquidation value. 
C)  plottage value. 
D)  subjective value.

Question 11

The conversion of future income into present value is known as hypothecation.

Accepted Answer

A) True 
 B)False

Question 12

Choose the one most appropriate answer for each.
-a method of valuing property based on the prices of recent sales of similar properties

Accepted Answer

A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property 
A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property

Question 13

The operating expense ratio of a building is determined by dividing the total operating expenses by the effective gross income.

Accepted Answer

A) True 
 B)False

Question 14

In using the market approach, the appraiser assumes that the cost to rebuild is related to the present value.

Accepted Answer

A) True 
 B)False

Question 15

Choose the one most appropriate answer for each.
-a market where there are few buyers and many sellers

Accepted Answer

A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property 
A) adjustments 
B) appraisal 
C) buyer's market 
D) capitalize 
E) comparables
F)cost approach
G)curable depreciation
H)depreciation
I)functional obsolescence
J)gross rent multiplier (GRM)
K)highest and best use
L)income approach
M)incurable depreciation
N)market approach
O)net operating income (NOI)
P)operating expenses
Q)physical deterioration
R)reproduction cost
S)scheduled gross income
T)subject property

Question 16

____________________ are made for price changes since each comparable was sold, as well as for differences in physical features, amenities, and financial terms.

Accepted Answer

The answer of ____________________ are made for price changes since...

Question 17

____________________ cost is the cost at today's prices of constructing an exact replica of the subject improvements using the same or very similar materials.

Accepted Answer

The answer of ____________________ cost is the cost at today's...

Question 18

The concept of the market approach to valuation rests on the principle of highest and best use.

Accepted Answer

A) True 
 B)False

Question 19

In valuing a fire station, an appraiser would most likely emphasize the

Accepted Answer

A)  market approach. 
B)  cost approach. 
C)  income approach. 
D)  capitalization approach. 
A)  market approach. 
B)  cost approach. 
C)  income approach. 
D)  capitalization approach.

Question 20

Net operating income on rental property is computed by deducting expenses from

Accepted Answer

A)  net cash flow. 
B)  adjusted gross income. 
C)  net gross income. 
D)  rate of return. 
A)  net cash flow. 
B)  adjusted gross income. 
C)  net gross income. 
D)  rate of return.

Exam 17: Real Estate Appraisal

Choose the one most appropriate answer for each. -expenditures necessary to maintain the production of income

Functional obsolescence results from factors outside the property.

Choose the one most appropriate answer for each. -to convert future income to current value

An office building is on a lot valued at $50,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 10%. Using the cost approach, what is the value of the property?

When an appraiser has a property to evaluate, which of the following would he need to know first?

The best definition of fair market value is the

Which of the following is NOT one of the three standard approaches to value?

An office building is on a lot valued at $40,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 20%. Using the cost approach, what is the value of the property?

The method used to compute a gross rent multiplier is

The added value resulting from the combination of two or more parcels of land is called

The conversion of future income into present value is known as hypothecation.

Choose the one most appropriate answer for each. -a method of valuing property based on the prices of recent sales of similar properties

The operating expense ratio of a building is determined by dividing the total operating expenses by the effective gross income.

In using the market approach, the appraiser assumes that the cost to rebuild is related to the present value.

Choose the one most appropriate answer for each. -a market where there are few buyers and many sellers

____________________ are made for price changes since each comparable was sold, as well as for differences in physical features, amenities, and financial terms.

____________________ cost is the cost at today's prices of constructing an exact replica of the subject improvements using the same or very similar materials.

The concept of the market approach to valuation rests on the principle of highest and best use.

In valuing a fire station, an appraiser would most likely emphasize the

Net operating income on rental property is computed by deducting expenses from

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Sources of Financing

Types of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

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Real Estate and the Economy

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