Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Proration the allocation or distribution of an annual expense across smaller chunks of
time.
Appraisal the value of a property, based on factors determined by the opinion of a
certified appraiser.
General Data information about the area surrounding a property; this could include the
city, region, and neighborhood in which the property is situated.
Specific Data information regarding the property itself.
Limited appraisal a simpler, abbreviated version of a regular appraisal.
Market Value the price for which a property will sell if offered openly under normal
conditions. This refers to the economic principle; it's the price that a buyer and seller would
probably accept.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Appraised Value refers to the value given by a licensed appraiser during the mortgage
origination process. Appraisers are chosen by lenders but paid for by the home-buyer.
Assessed Value refers to the value placed on a property by a governmental unit for use in
levying annual real estate taxes.
Loan-to-value Ratio (LTV) the limit on the value of a loan, usually a certain percentage of
the home's appraised value or sales price, whichever is lower.
Principle of Anticipation the present value of a property is affected by the anticipated
income or utility that property will give its property owner.
Principle of Contribution A property's overall value is made up of the combined value of
each of its parts.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Principle of Substitution the value of something is affected by the cost of getting a similar
(substitute) item elsewhere.
Principle of Change the condition of a property, the desirability of its location, and the
market in which it exists can always change.
Principle of Conformity values are highest when the hoes in a neighborhood look roughly
the same.
Principle of Regression lower-value properties surrounding a subject property can drag
down the value of the property.
Principle of Progression higher-value properties surrounding a subject property can bump
up the value of the property.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Principles of Supply and Demand when supply is low and demand is high, prices increase.
When supply is plentiful and demand is low, prices drop.
Sales Comparison Approach determining value by comparing the subject property to
similar properties ("comps") that have sold recently. It's most commonly used for single family
residences.
Cost Approach determining value by considering how much the same property would cost
to build brand new at current prices (replacement cost), then adjusting for depreciation.
Income Approach determining value by considering how much income the property could
generate when used as rental property.
Functional obsolescence loss of value because a property's function or appearance has
gone out of style or has been replaced by a more appealing version.
Key Terms Questions With Solutions 100%
Correct
Proration the allocation or distribution of an annual expense across smaller chunks of
time.
Appraisal the value of a property, based on factors determined by the opinion of a
certified appraiser.
General Data information about the area surrounding a property; this could include the
city, region, and neighborhood in which the property is situated.
Specific Data information regarding the property itself.
Limited appraisal a simpler, abbreviated version of a regular appraisal.
Market Value the price for which a property will sell if offered openly under normal
conditions. This refers to the economic principle; it's the price that a buyer and seller would
probably accept.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Appraised Value refers to the value given by a licensed appraiser during the mortgage
origination process. Appraisers are chosen by lenders but paid for by the home-buyer.
Assessed Value refers to the value placed on a property by a governmental unit for use in
levying annual real estate taxes.
Loan-to-value Ratio (LTV) the limit on the value of a loan, usually a certain percentage of
the home's appraised value or sales price, whichever is lower.
Principle of Anticipation the present value of a property is affected by the anticipated
income or utility that property will give its property owner.
Principle of Contribution A property's overall value is made up of the combined value of
each of its parts.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Principle of Substitution the value of something is affected by the cost of getting a similar
(substitute) item elsewhere.
Principle of Change the condition of a property, the desirability of its location, and the
market in which it exists can always change.
Principle of Conformity values are highest when the hoes in a neighborhood look roughly
the same.
Principle of Regression lower-value properties surrounding a subject property can drag
down the value of the property.
Principle of Progression higher-value properties surrounding a subject property can bump
up the value of the property.
, Aceable Agent Principles of Real Estate 2
Key Terms Questions With Solutions 100%
Correct
Principles of Supply and Demand when supply is low and demand is high, prices increase.
When supply is plentiful and demand is low, prices drop.
Sales Comparison Approach determining value by comparing the subject property to
similar properties ("comps") that have sold recently. It's most commonly used for single family
residences.
Cost Approach determining value by considering how much the same property would cost
to build brand new at current prices (replacement cost), then adjusting for depreciation.
Income Approach determining value by considering how much income the property could
generate when used as rental property.
Functional obsolescence loss of value because a property's function or appearance has
gone out of style or has been replaced by a more appealing version.
