75+ Most Common Real Estate Exam Questions and Answers

Construction onto the property of another, like a wall fence, building, is known as what? Encroachment (think of somebody stepping over a line from their side to yours. an encroachment is the physical intrusion of a structure or improvement on the land of another. *ex: fence or driveway or tree over the property line) Which method would an appraiser be most likely to use when appraising a newly build (1-year old) apartment with no rental history? - income approach - cost approach - capitalization approach - market approach Cost approach (great when there is nothing to compare it to. the most appropriate approach for a newly built income property with no income history. can't use this approach on older homes because you have to factor in depreciation) When an appraiser is appraising a property he usually considers all of the following except: - the assessed value - the property rights to be valued - a definition of value - the property identification The assessed value (this is used for tax purposes, not by appraisers) Which of the following loans would be most likely to qualify for FHA insurance? - a loan to purchase a farm - a loan to buy a small business - a loan to purchase 1-4 units of residential rental property - a loan to buy farm equipment a loan to purchase 1-4 units of residential rental property (FHA loans are for residential property) Inverse Condemnation describes a situation in which a person takes action against the government for taking private property but failing to pay compensation as required by the 5th amendment