appraisal final exam

appraisal final exam Appraisal standards require, in a market value assignment, for the appraiser to analyze a current agreement of sale if - ANS required for credible assignment results. Once an appraiser accepts an appraisal assignment the appraiser must - ANS properly identify the problem to be solved in the assignment. An appraisal is a value - ANS opinion Appraisal practice is a valuation service provided by - ANS only those individuals who are acting as an appraiser. Paramount, within USPAP, is an appraiser's obligation to promote and preserve - ANS public trust in appraisal practice Which is an obligation of the COMPETENCY RULE of USPAP? - ANS disclose the lack of competency to the client prior to accepting the assignment The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) recognizes which as the current industry standards for appraisals? - ANS USPAP The act or process limited to the development and reporting of an opinion regarding the quality of another appraiser's work is an - ANS appraisal review assignment Within the definition of an appraiser, which is NOT one of the expectations of an appraiser's performance? - ANS advocacy The appraisal process begins with the problem identification and concludes with - ANS reporting the appraiser's conclusions Which is required in order to establish a person or entity as the appraiser's client in an assignment? - ANS engagement of the appraiser's services At what point in the assignment must other intended users be identified by the client? - ANS at the time of the assignment The scope of work in an assignment must include the research and analysis necessary to produce ______________ results. - ANS credible When an individual offers both appraisal and real estate brokerage services, which statement is TRUE in circumstances when he is acting as a real estate broker? - ANS He can perform in that capacity provided he does not misrepresent his role He can perform in that capacity provided he does not misrepresent his role - ANS annexation If a site is 152' x 169', it contains how many acres? - ANS .59 If a property is legally described using the terms "rod" or "pole," what is the distance being referenced? - ANS 16.5 feet How many linear feet are along one side of the NE 1/4 of a township section? - ANS 2640 Which would most likely be considered real property? - ANS built-in window seat Which would be a natural attachment that would be classified as fructus industriales? - ANS wheat Which concept elaborates on tenant crops? - ANS doctrine of emblements Air rights of land ownership are limited by the federal government relating to the - ANS prevention of interference with air traffic Water rights dealing primarily with the shoreline of a non-flowing body of water are known as - ANS littoral rights For a landowner possessing riparian rights, which is typically an accompanying right? - ANS Using water in reasonable amounts to irrigate crops on the riparian property According to the rule of capture, a property owner - ANS is permitted to drain oil or gas from under his own property or from under a neighboring property Which is NOT a physical characteristic of real property? - ANS transferability If Joe leases property to Susan, what type of ownership interest is held by Joe due to the lease? - ANS leased fee Craig holds a life estate in a property owned by his stepfather, Charles. Craig may occupy the property for as long as his mother, Charles' wife, is alive. When Craig's mother dies, possession of the property goes back to Charles. What type of arrangement is illustrated? - ANS life estate pur autre vie Which is a characteristic of a fee simple defeasible estate? - ANS Ownership could be forfeited if certain events occur. If Stephanie conveyed the fee simple estate subject to a condition subsequent to Larry, Stephanie has - ANS power of termination to re-enter and possibly begin proceedings to recover the real estate. If Jerry conveys property subject to a life estate to Samuel, who will gain title in fee simple when the party holding the life estate passes away, Samuel is known as the - ANS remainderman Which characteristic is common to all freehold estates? - ANS Possessory interest is of an uncertain duration. Surrender is the action of - ANS terminating a lease by mutual consent Which is a characteristic of a tenancy at will that is NOT common to other types of leasehold estates? - ANS It automatically terminates at the death of either the landlord or tenant Felicia has entered into an agreement with her mother allowing her mother to occupy a property owned by Felicia for a specified duration of six months. What type of estate was created? - ANS estate for years Christine has a one-year lease with the property owner, William. When the lease expires Christine continues to pay rent to William at the beginning of each month. What type of arrangement was created when William accepted rent in this manner. - ANS periodic tenancy John and Suzanne, a married couple, form a corporation in which to hold title of their real estate assets with no provisions for survivorship. How is title to the property being held? - ANS severalty If Paula has the right to use and enjoy a timeshare, which is owned in fee by a hotel corporation, Paula has - ANS a non-fee ownership of the timeshare In co-ownership, reference to an undivided interest emphasizes that the - ANS property is not physically divided according to co-owners. Which is NOT one of the four unities of property ownership? - ANS investment Which is a true statement regarding tenancy in common? - ANS Only one of the four unities is always present. Joseph owns property with his wife, Cassandra, in joint tenancy. Joseph's will specifies that his undivided interest in the property will go to his children, who are Cassandra's stepchildren. Which is a true statement? - ANS Survivorship will override Joesph's will. The primary intent of marital property rights is to protect the rights of a surviving spouse when - ANS the surviving spouse is not specified in the property title. Fred has conveyed his property to a trust. His attorney will hold the asset on behalf of Fred's children, who will receive net proceeds from the property. What participant in the trust is Fred's attorney? - ANS trustee How many investors, at a minimum, are required to form a REIT? - ANS 100 Craig, Jason, and Hugh own real estate as joint tenants. If Craig and Jason die simultaneously, Hugh will - ANS hold the entire property interest in severalty. The basis for governmental regulation of the use of private property is - ANS police power If semi-annual taxes for a property are $1,260, what is the assessed value of the property if the tax rate is 48 mills? - ANS $52,500 Which statement is FALSE regarding a gross easement? - ANS If the servient property is transferred, the easement terminates. A non-possessory interest in real property is also called a(n) - ANS encumbrance Which is an involuntary, specific lien? - ANS mechanic's lease When liens are paid off out of the proceeds of a foreclosure sale, - ANS a lien for real property taxes always has highest priority. Which would most likely result in a general lien? - ANS IRS lien A section of the neighborhood has recently been rezoned for residential use only. Zachary's store is located in this section. Because the property was used as a store prior to the zoning, he will be allowed to continue to use his property as a store. This is known as - ANS nonconforming lease An easement allows the present and any future owner of "Lot D" to drive across a neighbor's property "Lot S" to reach her own property. This is an example of a/n - ANS appurtenant easement Ben's property has an easement in gross that allows Ben to hunt on his neighbor's land. When the neighbor sells his land to Ben, the easement terminates through - ANS merger If a tax assessor estimated the market value of a property to be $340,000, what are the annual real property taxes if the assessment ratio is 35% and mills are 51.7? - ANS $6,152.30 Which is NOT a power of government? - ANS deed restrictions A cost for an improvement that is divided among several property owners on a street and billed by a jurisdiction would be an example of - ANS special assessment The county is taking part of Bill's land for a new park. What is this process called? - ANS condemnation Which established power to the government for taking private property with the payment of just compensation? - ANS Fifth Amendment of the U.S. Constitution If the client is using an appraisal to determine what a property would be worth in a less than typical marketing period, the appropriate type of value would likely be - ANS liquidation value. The highest and best use for a parcel of land that is improved with an old building has changed, and it has been determined the improvements should be razed. The building has many ornate stained glass windows and extensive black walnut wood trim. What value type would be an appropriate in this assignment? - ANS salvage Which is NOT a condition of a typical arm's length transaction? - ANS no marketing Market price is what the - ANS property sold for An appraiser identifies the definition of market value to be used in an assignment during problem identification and must additionally - ANS cite the source of the definition in the appraisal report. A property that sold below market value due to a pending foreclosure is influenced mostly by - ANS haste and duress A transaction with no atypical conditions is best described as - ANS arm's length The amount to create, produce, or obtain a property is known as - ANS cost An appraiser is appraising a structure built and used as a special use property. Since the value opinion is to reflect the property's special use for the particular owner, the appropriate type of value is - ANS value in use Going concern value is most accurately described as a valuation of the - ANS tangible and intangible assets Radon gas - ANS can present a problem indoors if allowed to build up to dangerous levels. Which is an example of linkages? - ANS estimated driving time from populated areas to major interstate highways What statement about electromagnetic fields is FALSE? - ANS They have been proven to cause cancer. It is well known that a murder took place in a house 40 years ago. This could be an example of - ANS a stigmatism. A trend of moving to a new suburban area is an example of - ANS social forces. The state's housing finance authority has just issued a low-interest, first-time homebuyer mortgage program. Sales are spurred as a result of this - ANS governmental force. Which is an example of the governmental force of revenue generating laws? - ANS specific tax policies Wetlands are protected under what federal Act? - ANS clear water act Sick building syndrome is a result of - ANS poor air quality The Comprehensive Environmental Response, Compensation, and Liability Act primarily addresses - ANS abandoned waste sites. Highest and best use - ANS allocates land resources efficiently. Externalities can be a positive or negative influence on value primarily due to the property characteristic of - ANS immobility. An interim use might be determined when - ANS a reasonable and probable change in circumstances is forthcoming Regarding "physically possible," which would NOT be considered? - ANS building materials A school building might be an example of a ___________property. - ANS special-use When the highest and best use of the property is "vacant," the current improvements are - ANS taking away from the vacant site value by more than the cost to raze the improvements. When a buyer will not pay more for something than its cost, the buyer is influenced by - ANS substitution Which is NOT one of the four agents of production? - ANS gross profit The law of diminishing returns is most directly linked to which economic principle? - ANS contribution When properties are listed at a certain price in the neighborhood that price tends to set the limits of value for other properties around it, according to the concept of - ANS competition Which economic principle suggests that value is created through expectation of future benefits? - ANS anticipation Which of the following is likely to contribute the most value? - ANS adding a second bath to a three-bedroom house, where three bedrooms, two baths is the norm The largest and most expensive house in the neighborhood could likely be experiencing regression through which economic principle? - ANS conformity When might a residual physical segment of a land parcel be considered surplus site? - ANS when it cannot be legally sold separately from the subject property Which is included within the test of "legally permissible"? - ANS allowable to zoning The federal government influences the money supply through - ANS fiscal and monetary policy. What is the lump-sum remaining principle balance referred to that is payable when a mortgage loan is not fully amortized? - ANS balloon balance In general, conforming conventional mortgage loans represent - ANS less risk of loss to the lender. Which is an advantage of the secondary mortgage market? - ANS Lenders can sell existing lower interest rate loans to free-up money. The Treasury Department is NOT responsible for - ANS secondary mortgage markets. The Federal Reserve System has how many regional Federal Reserve Banks? - ANS 12 Tools used by the Fed to implement monetary policy include - ANS discount rates and reserve requirements. The U.S. Treasury is responsible for __________policy. - ANS fiscal The amount a commercial bank must keep on deposit is known as - ANS reserve requirements If the federal government spends less money than revenue, which would likely occur? - ANS More funds would be available for real estate loans. Tax credits, such as those created through the American Recovery and Reinvestment Act of 2009, are an example of which force influencing the value of real property? - ANS governmental Which is NOT a source of equity used as capital for acquisition of investment real estate? - ANS mortgages __________factors are NOT a force influencing housing cycles. - ANS structure A study is being performed that will examine the benefit of a proposed real estate project in relation to the project's cost. What type of analysis is being performed? - ANS feasibility study When housing prices fall due to the relocation of a major employer, it is an example of a _________________force influencing value. - ANS economic A neighborhood is undergoing much rehabilitation and property improvement. The movement is not part of any public movement or initiative but rather from a general trend toward people desiring to live there. What phase of the neighborhood life cycle is being evidenced? - ANS gentrification The point in a business cycle when prices fall and production slows until demand catches up with supply is most likely a period of - ANS contraction During the course of a market analysis, an appraiser notes that a particular area which has been predominately residential properties, is rapidly undergoing a complete change of use to commercial due to the widening of a street and increasingly higher traffic counts. What is the appraiser observing? - ANS transition The various complimentary land uses present in an area are being examined as part of a larger market. What component of a market area is being analyzed? - ANS neighborhood An appraiser primarily considers general data concerning the overall conditions of the real estate marketplace when performing a - ANS market analysis Existing inventory of houses and planned new construction are elements of what type of analysis? - ANS competitive supply analysis Analysis indicates that 170 residential lots are needed for sale in the next four years based on projected demographics. There are currently 80 residential lots available with another 28 soon to be completed. If 50% of the demand will come in year one and 30% of the demand will come in year two, how many lots are projected to be needed to satisfy demand in year three? - ANS 34 Jack appraised a residential dwelling located across the street from a factory that he determined is negatively affecting the value of the subject property. Jack applied a location adjustment in his sales comparison approach. However, the client asked that the factory not be discussed in the appraisal report. Since Jack addressed the condition with an adjustment, has he complied with USPAP? - ANS No, omitting the discussion could produce a misleading report. An appraiser determines the appropriate definition of market value to be used in the assignment during - ANS problem identification If a property is known by the appraiser, on the effective date of the appraisal, to have an inoperative mechanical system component, but the appraiser is considering the component as if it were operating properly on that date for the purpose of his analysis, what is the appraiser basing his opinions and conclusions on? - ANS hypothetical condition Josh received an appraisal request from a lender-client who told him to immediately call if the value on the property is less than the amount stipulated by the lender, as he doesn't intend to pay for an appraisal that won't benefit his position. Will acceptance of this assignment be in compliance with USPAP? - ANS No, an appraiser may not accept an assignment with unacceptable assignment conditions. What information is NOT required to be in an appraisal workfile? - ANS copy of the bill sent to the client The scope of work disclosed in an appraisal report must include the - ANS scope of work that was actually performed. Appraisers must analyze agreements of sale, options, and listings of the subject property current as of the effective date of an appraisal, in a market value assignment, if it is - ANS available in the normal course of business. While appraising a property, Lydia could not check the furnace to see if it is in good working order due to the utilities being off at the time of the inspection. Since the home is relatively new and the components appear to be in good condition, Lydia has a reasonable basis to believe that the furnace is in satisfactory operating condition, but she is uncertain. Therefore, Lydia bases her conclusion on a - ANS extraordinary assumption. For reconciliation, in addition to reconciling the quality and quantity of data available within the approaches used, USPAP also requires an appraiser to ___________ the approaches, methods, and techniques used to arrive at the value conclusion. - ANS reconcile the applicability and relevance In appraisal report, sufficient information regarding the scope of work includes disclosure of research and analyses performed and might also include disclosure of - ANS research and analyses not performed. A deed for real property is - ANS evidence of title. Equitable title in real property is - ANS created by a valid land contract. Fred has entered into an agreement to purchase a home from Robert, who co-owns the home with his brother. The contract is signed by both Fred and Robert, but has not been signed by Robert's brother. What best describes the contract? - ANS void John is the vendor in a real estate transaction. He will continue to hold title in the property and will transfer it at a future date. John is a party to what type of arrangement? - ANS land contract Property owners would like to sell their property on an installment sales contract and not pay off their existing loan. However, their mortgage contains a clause that permits the lender to call the outstanding balance due and payable if the property is sold. This clause is the - ANS alienation clause Recording a deed gives - ANS constructive notice Which is a form of property ownership transfer through voluntary alienation? - ANS dedication An attorney has drafted a lease agreement in which the lessee will pay for real estate taxes, insurance, and property maintenance. What structure of lease has the attorney produced? - ANS net/net/net If a property owner has died with a will that instructs the manner in which the decedent's real property should be distributed, the property will transfer to the heirs by - ANS probate If Christopher has agreed to apply for financing in a transaction within 3 days, but is called out of town and does not apply for 4 days, the seller may still need to fulfill her contractual obligations and prepare to close. In this scenario, what may be cited in terms of Christopher's performance of the contract? - ANS substantial breach Immediately, upon acceptance of a contract, but before the parties have completed their contractual obligations, what is the status of the agreement? - ANS executory Which scenario represents a new agreement replacing an earlier agreement, in some cases indicating new parties to the agreement and replacing the original parties? - ANS novation Which statement regarding a land contract is TRUE? - ANS Vendee has equitable title. Which warranty element in a warranty deed assures the grantee that the grantor currently holds title to the property consistent with the interest being conveyed? - ANS covenant of seizen In a real estate transaction, the grantor is the ______________ and the grantee is the ____________. - ANS seller/buyer Lyle contracts to buy Julia's house, but only if he can sell his house. This type of provision written into a sales contract is called - ANS a contingency clause. Carol and Leslie enter into a contract stating that Carol will pay Leslie $650 per month for the next 20 years. Carol will live in the house and pay all expenses including property taxes, insurance, and maintenance costs. Leslie will continue to hold the title until the property is paid off by Carol. What kind of contract do they have? - ANS installment sales contract A contract clearly states that $5,000 would be kept by the seller, should the buyer breach the contract. The $5,000 is considered - ANS liquidated damages. A contract written for the exchange of illegal substances would be void because - ANS legality of object. When a new person takes the place of one of the parties to a contract, and the withdrawing party is relieved of all liability, it is called - ANS novation Sam offers to sell his house to Brenda for $200,000, if Brenda will pay $45,000 in cash and give Sam a 15-year mortgage for the balance at 11% interest. Brenda responds, "I accept your offer, provided that I have to pay only $40,000 down." This is a - ANS counteroffer All are the essential elements for a valid deed EXCEPT - ANS grantees signature Which clause includes the words "to have and to hold"? - ANS habendum When a party signs a document before a notary public stating it was signed voluntarily, it is an - ANS acknowledgment Which is an example of voluntary alienation? - ANS dedication When someone dies without a will, he is said to have died - ANS intestate If one party to a contract fails to perform his contractual obligations without a legal excuse, it is a(n) - ANS breach of contract Where applicable, a particular jurisdiction's statute of frauds requires contracts conveying real estate to be - ANS written Kim signs a contract agreeing to buy a property from Bob, but Bob does not actually own the property. This contract is - ANS void When a contract is terminated and each party returns whatever consideration the other had provided, it is called - ANS recission An option agreement is - ANS supported by consideration. Which type of lease would provide the lessee with the least expense and risk? - ANS gross-flat A month-to-month lease gives the lessor - ANS greater control when it comes to adjusting the rent. In a percentage lease, the amount of rent that is the base or guaranteed minimum the lessee will pay is called - ANS breakpoint rent. Christopher is leasing property from Patricia via an annual increase lease. Which is a characteristic of an annual increase lease? - ANS Rent increases are a predetermined dollar amount at specified periodic intervals. In a triple-net lease scenario, which is NOT a typical expense of the lessee? - ANS replacing the roof on the structure Phillip is leasing an office suite from National Office Properties, Inc. the property owner, via a net/net lease. In this arrangement, the lessor has - ANS conveyed a temporary possessory interest. Which is an advantage to the lessee in a percentage lease? - ANS Owner of the leased facility is motivated to promote and maintain the property. Why would an appraiser be interested in expenses being paid by the landlord when reviewing a lease agreement? - ANS indicates operating expenses for estimating net operating income