REE 3043 TEST QUESTIONS WITH
UPDATED ANSWERS
Transactional - Conditions of Sale - Answer-Comparable property's sale price must be
adjusted if any general condition represented in the sale was not typical of the market.
Transactional - Financing Terms - Answer-Must be adjusted if it is sold below market or
non market financing
Transactional - Market conditions - Answer-must be adjusted if general market
conditions have resulted in a change since its transaction date, resulting in overall
change in price
Property - Location - Answer-location was materially different from the subject prop
locations
Arm's length - Answer-equal bargaining power. Not your son. just a buyer
Reproduction Cost - Answer-the cost to construct the building today, replicating it in
exact detail
Replacement Cost - Answer-denotes the cost required to construct a building of equal
utility, using modern construction techniques, materials, and design
Curable short lived - Answer-you get your money back. cost of replacement will not be >
value added by replacing them
incurable short lived - Answer-you did not get your money back
Gross Rent Multiplier - Answer-GRM = Sales Price / Monthly Gross Rent
in the traditional sales comparison approach the appraiser reconciles the final adjusted
sales prices to detemine the single indicated value - Answer-true
chagnes in market condition - Answer-increases or decreases in demand
inflation
increases or decreases in supply
the monthly gross rent multiplier is defined as the sale price divided by the property's
monthly gross rent - Answer-true *
The cost approach is most valuable for estimating newer properties - Answer-true *
If the subject is better than the comparable property, the comaprable property would be
adjusted upward - Answer-true *
curable elements of depreciation are those whose cost of replacement will be no greater
than the value added by replacing them - Answer-true*
, the sales comparison approach is applicable to almost all one to 4 family residential
properties and to many large income producing properties - Answer-true
A non arm's length transaction is one in which the buyer or sellers do not have equal
bargaining powers with respect to negotiating the sale price - Answer-true
an adjustedment to the normal sale price due to changes in market conditions results in
a market adjusted normal sale price estimate - Answer-true
effective tax rate - Answer-tax paid / market value
Purely free market solution to zoning problems - Answer-free rider problem - yes
negative ext - yes
inequities in bearing the costs to enforce positive zoning outcomes - yes
zoning restrictions - no
An important limitation to the use of private restrictions for controlling land uses is often:
- Answer-That they may be too costly to enforce
the authority to control and regulate land uses: - Answer-is generally vested in local
jurisdictions
in a Planned Unit Development (PUD) - Answer-building densities may exceed the
maximum allowed in some areas in order to provide larger areas of open space in the
PUD
Land use standards that are based on the extent to which operations impose negative
externalities on the surrounding parcels, such as the impact of traffic, is termed: -
Answer-performance zoning standards
among other things. zoning is intended to - Answer-Both:
1. minimize the risks inherent in property ownership
2. enhance the degree of certainty regarding future development pattern and standards
Inverse Condemnation - Answer-A legal action for just compensation taken by
landowner against government for a claimed partial taking, perhaps due to change in
zoning
The notion of just compensation for a private property taking stems from a phrase in US
constituition - Answer-true
Courts have overturned zoning ordinances that do not provide for low- and moderate-
income housing on the grounds that they are exclusionary - Answer-True
A variance request usually involes a minor change in the rules in an existing zoning,
such as a reduction of a setback limitation - Answer-true
Concurrency only requires that public facilities and services are in place when new
development is completed - not that the developer pay for such - Answer-true
UPDATED ANSWERS
Transactional - Conditions of Sale - Answer-Comparable property's sale price must be
adjusted if any general condition represented in the sale was not typical of the market.
Transactional - Financing Terms - Answer-Must be adjusted if it is sold below market or
non market financing
Transactional - Market conditions - Answer-must be adjusted if general market
conditions have resulted in a change since its transaction date, resulting in overall
change in price
Property - Location - Answer-location was materially different from the subject prop
locations
Arm's length - Answer-equal bargaining power. Not your son. just a buyer
Reproduction Cost - Answer-the cost to construct the building today, replicating it in
exact detail
Replacement Cost - Answer-denotes the cost required to construct a building of equal
utility, using modern construction techniques, materials, and design
Curable short lived - Answer-you get your money back. cost of replacement will not be >
value added by replacing them
incurable short lived - Answer-you did not get your money back
Gross Rent Multiplier - Answer-GRM = Sales Price / Monthly Gross Rent
in the traditional sales comparison approach the appraiser reconciles the final adjusted
sales prices to detemine the single indicated value - Answer-true
chagnes in market condition - Answer-increases or decreases in demand
inflation
increases or decreases in supply
the monthly gross rent multiplier is defined as the sale price divided by the property's
monthly gross rent - Answer-true *
The cost approach is most valuable for estimating newer properties - Answer-true *
If the subject is better than the comparable property, the comaprable property would be
adjusted upward - Answer-true *
curable elements of depreciation are those whose cost of replacement will be no greater
than the value added by replacing them - Answer-true*
, the sales comparison approach is applicable to almost all one to 4 family residential
properties and to many large income producing properties - Answer-true
A non arm's length transaction is one in which the buyer or sellers do not have equal
bargaining powers with respect to negotiating the sale price - Answer-true
an adjustedment to the normal sale price due to changes in market conditions results in
a market adjusted normal sale price estimate - Answer-true
effective tax rate - Answer-tax paid / market value
Purely free market solution to zoning problems - Answer-free rider problem - yes
negative ext - yes
inequities in bearing the costs to enforce positive zoning outcomes - yes
zoning restrictions - no
An important limitation to the use of private restrictions for controlling land uses is often:
- Answer-That they may be too costly to enforce
the authority to control and regulate land uses: - Answer-is generally vested in local
jurisdictions
in a Planned Unit Development (PUD) - Answer-building densities may exceed the
maximum allowed in some areas in order to provide larger areas of open space in the
PUD
Land use standards that are based on the extent to which operations impose negative
externalities on the surrounding parcels, such as the impact of traffic, is termed: -
Answer-performance zoning standards
among other things. zoning is intended to - Answer-Both:
1. minimize the risks inherent in property ownership
2. enhance the degree of certainty regarding future development pattern and standards
Inverse Condemnation - Answer-A legal action for just compensation taken by
landowner against government for a claimed partial taking, perhaps due to change in
zoning
The notion of just compensation for a private property taking stems from a phrase in US
constituition - Answer-true
Courts have overturned zoning ordinances that do not provide for low- and moderate-
income housing on the grounds that they are exclusionary - Answer-True
A variance request usually involes a minor change in the rules in an existing zoning,
such as a reduction of a setback limitation - Answer-true
Concurrency only requires that public facilities and services are in place when new
development is completed - not that the developer pay for such - Answer-true
