The criteria for estimating the highest and best use of land include all the following
except
a. Most or maximally productive
b. Physically possible and legally permissible
c. Economically feasible
d. The typical use
The best test of functional utility in a structure is its
a. Usefulness/attractiveness to buyers (users)
b. Appeal to the owners (sellers)
c. Pure style
d. Floor plan
Which of the following is true?
a. The bundle of rights is indivisible
b. Zoning is one example of a government restriction
c. Deed restrictions are examples of government controls placed on real estate
d. Property ownership rights are absolute
Discounted cash flow is an example of
a. Yield capitalization
b. Ratio capitalization
c. Neither of the above
d. Both of the above
The price per square foot (or other unit of comparison) in the sales comparison
approach usually
a. Declines as the number of units increase
b. Increases as the number of units increase
c. Remains constant
d. None of the above
An appraisal is being made of a good quality, 25-year old, three bedroom home. The
appraiser locates three comparables that have similar square footage, numbers of rooms,
and construction quality. After viewing and rating the comparables, a summary is made
as follows:
Dollar Adjustments Indicated by Market Study
Problem:
Relying upon the comparables and the adjustments indicated, which of the following
would be the best value conclusion for the subject property?
a. $300,000
b. $260,000
c. $275,000
d. $400,000
Legal and physical problems should be noted in the site inspection. Which of the
following is most likely to constitute a physical problem?
a. A non-conforming use
b. An encroachment
c. Soil instability
d. A violation of a deed restriction
Contract rent
a. Is always less than market rent
b. Is always more than market rent
c. Can be equal to, more, or less than market rent
d. None of these
Of the lot types listed here, which has the least sideyard privacy?
a. Cul-de-sac
b. Key
c. T-Intersection
d. Inside or interior
Construction quality is usually rated as either
a. Excellent, good, or average
b. Good, average, fair, or poor
c. Superior or inferior
d. None of the above
Neighborhood quality is generally rated by comparing the characteristics of the subject
neighborhood with those of
a. Nearby neighborhoods
b. Inferior and superior neighborhoods
c. Neighborhoods with competitive properties
d. None of the above
The statement of limiting conditions is intended to
a. Clarify the assumptions made by the appraiser
b. Limit the appraiser’s legal liability
c. Define the rights of disclosure
d. All of the above
For sales to be considered valid comparables, they should be
a. Competitive properties
b. Qualified as open-market
c. Close in time of sale to the date of value
d. All of the above
In the cost approach, a depreciation allowance could be based on effective age. What is
another method?
a. Physical upkeep
b. Loss in value from age
c. Analysis of renovation feasibility
d. A dollar adjustment for renovation/remodeling
The gross area of a site is just as important as the useful area.
Investment properties are most often appraised by placing the emphasis on
a. Income approach
b. Sales Comparison approach
c. Cost approach
d. None of the above
Besides the date and terms of sale, useful transaction data to gather in the sales
comparison approach include
a. The legal description of the property
b. Names of buyer and seller
c. Whether the sale included personal property
d. All of the above
The four components of real property include
a. Land, buildings, furnishings and fixtures
b. Land, improvements, personal property and rights
c. Land, permanently affixed objects, appurtenant rights, and that which is
immovable by law
d. None of the above
Which of the following can be considered political forces that affect value?
a. Federal loan regulations
b. Local zoning laws
c. Public education
d. All of the above
Which of these procedures would be recommended when adjusting the sales of
six-room houses with large size differences?
a. Apply the average square foot price derived from sales
b. Use the median price per room
c. Adjust each sale by the cost of the size difference
d. Graph the sales to explore the effect of size upon selling price
Physical features important to a site’s utility include all the following except
a. Property taxes
b. Size, shape, and topography
c. Lot type and orientation
d. On-site and off-site improvements
Economic obsolescence is generally found to be
a. Curable
b. Incurable
c. Less than typical
d. The same for all properties
In which type of housing would you be least likely to find a homeowners’ association?
a. Conventional detached homes
b. Town houses
c. Planned unit developments
d. Condominiums
Depreciation is defined for appraisal purposes as
a. Accruals for recapture
b. Accumulated reserve
c. Loss in value
d. Allowable deduction from value
The terms real estate and real property are used to describe
a. The physical land
b. The rights to the use
c. Both of the above and buildings
d. Neither of the above of the land
The highest and best use must be
a. Physically and legally possible
b. Economically feasible
c. Most or maximally productive
d. All of the above
Required data about a comparable sale should include
a. Sale transaction data
b. Physical characteristics
c. Legal characteristics
d. All of the above
Title to property generally reverts to the state when the owner leaves no will or heirs.
This illustrates the government’s right of
a. Police power
b. Escheat
c. Taxation
d. Eminent domain
Disposable income is often studied as a good indicator of demand for real estate. It is
defined as
a. Income after personal taxes
b. Gross National Product
c. Money spent on recreation
d. Income spent on housing
In a general sense, the term value means:
a. The average utility of an object
b. A good buy
c. The relative worth of something
d. The worth, usefulness, or utility of an object to someone for some purpose
The type of basic frame, wall, floor, and roof construction all relate to what is known as
the
a. Type of occupancy
b. Type of design
c. Construction classification
d. Construction quality
Income and commercial properties are most often appraised by emphasizing the income
approach to value.
The type of appraisal report used, (Self-Contained, Summary, or Restricted Use) should
be decided upon in advance between the appraiser and the client.
A 5% savings account that has just paid a $500 annual dividend is worth about $25,000.
Formal appraisals rely on supporting data, but no judgment or intuition is needed.
A valid contract must have parties, a subject, consideration, agreement, and mutual
obligation.
A non-conforming use could represent a legal problem to be noted in an appraisal.
Direct capitalization is usually the most reliable technique of income capitalization.
USPAP requires that any listing or sale of the subject property around the date of value
be considered in the appraisal.
The narrative appraisal report is the most formal format.
Colonial styling includes several types of early American architectural styles.
In mortgaged property, the market value of the lender’s real property ownership interest
can be less than the remaining balance on the loan.
Sidewalks and curbs are considered to be off-site improvements.
The appraiser may exclude any irrelevant value approach without mentioning it in so
many words.
Plottage value is always created when adjacent parcels are combined into one
ownership.
Gross income multipliers normally increase with a decrease in the operating expense
ratio.
Disposable income is the amount of family income available after paying rent or other
housing costs.
An opinion of highest and best use is required for all land appraisals made for the
purpose of estimating market value.
Even though listings and offers may be available, they are of no significant use to an
appraiser.
Qualifications for state license and/or certification include both appraisal-related course
work, and experience in appraisal or appraisal assistance.
Deed restrictions are examples of public restrictions on the use of land.