Unit 16 Real Estate Appraisal test
quiz with correct answers
A homeowner constructs a five-bedroom brick house with an indoor pool in a neighborhood of modest two-bedroom and three-bedroom frame houses on narrow lots. The
value of this house is MOST likely to be affected by what principle?
A)
Assemblage
B)
Regression
C)
Progression
D)
Change - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of mod est less
lavish homes; regression is the opposite of progression.
A homeowner constructs an eight-bedroom brick house with a tennis court, a greenhouse, and an indoor pool in a neighborhood of modest two-bedroom and three-
bedroom frame houses on narrow lots. The value of this house is MOST likely to be affected by what principle?
A)
Regression
B)
Change
C)
Assemblage
D)
Progression - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of
modest, less-lavish homes. Regression is the opposite of progression.
A loss in value as the result of the market's response to an item, rather than a deterioration of the item's physical condition, is
A)
deferred maintenance.
B)
functional obsolescence.
C)
external obsolescence.
D)
environmental destruction. - CORRECT ANSWER-The answer is functional obsolescence. The design features that were most desirable in the 1970s may make a home
seem outmoded, and undesirable features may not be economical to correct.
A salesperson or appraiser trying to determine the market value of a property would be seeking the
A)
assessed value minus current value.
B)
probable price the property will bring.
C)
subjective value using the cost approach.
D)
utility value after income has been determined. - CORRECT ANSWER-The answer is probable price the property will bring. Market value is the value that would be paid in
an arm's-length transaction between knowledgeable parties.
A six-bedroom home with a tennis court in a neighborhood where there are no other similar-sized homes and no homes with tennis courts would MOST likely be subject
to what principle?
A)
Assemblage
B)
Change
C)
Progression
D)
Regression - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of modest,
less lavish homes; regression is the opposite of progression.
A successful assemblage of properties may increase the value of the combined parcel in a demonstration of the princ iple of
A)
increasing and diminishing returns.
B)
supply and demand.
C)
, competition.
D)
plottage. - CORRECT ANSWER-The answer is plottage. The consolidation of adjacent lots into a single larger parcel produces a greater total land value th an the sum of
the two sites valued separately.
All of the following are characteristics that contribute to value EXCEPT
A)
obsolescence.
B)
utility.
C)
scarcity.
D)
transferability. - CORRECT ANSWER-The answer is obsolescence. To have value, there must be monetary worth. Obsolescence is not a desirable trait and therefore, is
part of the lack of desirability of the property.
All of the following can result in a loss of value resulting from depreciation EXCEPT
A)
treatment of amount invested in real estate for tax purposes.
B)
land value.
C)
a negative condition that affects real property.
D)
lack of maintenance of structures. - CORRECT ANSWER-The answer is land value. Land is not considered a depreciating asset.
All of the following factors would be important in comparing properties under the sales comparison approach to value EXCEPT
A)
differences in financing terms.
B)
differences in appearance and condition.
C)
differences in original cost.
D)
differences in dates of sale. - CORRECT ANSWER-The answer is differences in original cost. None of the approaches to appraisal considers the original (historical) cost
of a property. The other three factors would be relevant to the sales comparison—sometimes called the market data—approach. Original cost, however, is used in
computations of book-value depreciation.
An appraisal is
A)
an opinion of value based on supportable evidence and approved methods.
B)
an idea of the price a buyer would be willing to pay for a property based on current market conditions.
C)
the actual value based on supportable evidence and approved methods.
D)
the best "educated guess" based on market research. - CORRECT ANSWER-The answer is an opinion of value based on supportable evidence and approved methods.
An appraisal is an estimate or opinion of value based on supportable evidence and approved methods.
An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional conduct is subject to supervision
and regulation by the state as mandated by the
A)
Equal Credit Opportunity Act (ECOA).
B)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
C)
Fair Housing Act.
D)
regulations established by the Department of Housing and Urban Development. - CORRECT ANSWER-The answer is Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA). An appraisal used in connection with a federally related transaction m ust be performed by a competent individual whose professional
conduct is subject to supervision and regulation by the state as mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional conduct is subject to supe rvision
and regulation by the state as mandated by the
A)
Fair Housing Act.
B)
Equal Credit Opportunity Act (ECOA).
C)
regulations established by the Department of Housing and Urban Development.
D)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). - CORRECT ANSWER-The answer is Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA). An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional
conduct is subject to supervision and regulation by the state as mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
An appraiser is responsible for
A)
finding value.
B)
computing value.
C)
forming an opinion of value.
D)
determining a definitive value. - CORRECT ANSWER-The answer is forming an opinion of value. The appraiser does not make or determine a definitive value. After the
appraiser completes the analysis of the market and property and considers all the relevant data, an opinion of value can be p rovided.
An appraiser who is estimating operating expenses is using what method of valuation?
A)
Cost
B)
Income
C)
Gross rent multiplier
quiz with correct answers
A homeowner constructs a five-bedroom brick house with an indoor pool in a neighborhood of modest two-bedroom and three-bedroom frame houses on narrow lots. The
value of this house is MOST likely to be affected by what principle?
A)
Assemblage
B)
Regression
C)
Progression
D)
Change - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of mod est less
lavish homes; regression is the opposite of progression.
A homeowner constructs an eight-bedroom brick house with a tennis court, a greenhouse, and an indoor pool in a neighborhood of modest two-bedroom and three-
bedroom frame houses on narrow lots. The value of this house is MOST likely to be affected by what principle?
A)
Regression
B)
Change
C)
Assemblage
D)
Progression - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of
modest, less-lavish homes. Regression is the opposite of progression.
A loss in value as the result of the market's response to an item, rather than a deterioration of the item's physical condition, is
A)
deferred maintenance.
B)
functional obsolescence.
C)
external obsolescence.
D)
environmental destruction. - CORRECT ANSWER-The answer is functional obsolescence. The design features that were most desirable in the 1970s may make a home
seem outmoded, and undesirable features may not be economical to correct.
A salesperson or appraiser trying to determine the market value of a property would be seeking the
A)
assessed value minus current value.
B)
probable price the property will bring.
C)
subjective value using the cost approach.
D)
utility value after income has been determined. - CORRECT ANSWER-The answer is probable price the property will bring. Market value is the value that would be paid in
an arm's-length transaction between knowledgeable parties.
A six-bedroom home with a tennis court in a neighborhood where there are no other similar-sized homes and no homes with tennis courts would MOST likely be subject
to what principle?
A)
Assemblage
B)
Change
C)
Progression
D)
Regression - CORRECT ANSWER-The answer is regression. The value of larger lavish homes in a modest neighborhood will be drawn down by the presence of modest,
less lavish homes; regression is the opposite of progression.
A successful assemblage of properties may increase the value of the combined parcel in a demonstration of the princ iple of
A)
increasing and diminishing returns.
B)
supply and demand.
C)
, competition.
D)
plottage. - CORRECT ANSWER-The answer is plottage. The consolidation of adjacent lots into a single larger parcel produces a greater total land value th an the sum of
the two sites valued separately.
All of the following are characteristics that contribute to value EXCEPT
A)
obsolescence.
B)
utility.
C)
scarcity.
D)
transferability. - CORRECT ANSWER-The answer is obsolescence. To have value, there must be monetary worth. Obsolescence is not a desirable trait and therefore, is
part of the lack of desirability of the property.
All of the following can result in a loss of value resulting from depreciation EXCEPT
A)
treatment of amount invested in real estate for tax purposes.
B)
land value.
C)
a negative condition that affects real property.
D)
lack of maintenance of structures. - CORRECT ANSWER-The answer is land value. Land is not considered a depreciating asset.
All of the following factors would be important in comparing properties under the sales comparison approach to value EXCEPT
A)
differences in financing terms.
B)
differences in appearance and condition.
C)
differences in original cost.
D)
differences in dates of sale. - CORRECT ANSWER-The answer is differences in original cost. None of the approaches to appraisal considers the original (historical) cost
of a property. The other three factors would be relevant to the sales comparison—sometimes called the market data—approach. Original cost, however, is used in
computations of book-value depreciation.
An appraisal is
A)
an opinion of value based on supportable evidence and approved methods.
B)
an idea of the price a buyer would be willing to pay for a property based on current market conditions.
C)
the actual value based on supportable evidence and approved methods.
D)
the best "educated guess" based on market research. - CORRECT ANSWER-The answer is an opinion of value based on supportable evidence and approved methods.
An appraisal is an estimate or opinion of value based on supportable evidence and approved methods.
An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional conduct is subject to supervision
and regulation by the state as mandated by the
A)
Equal Credit Opportunity Act (ECOA).
B)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
C)
Fair Housing Act.
D)
regulations established by the Department of Housing and Urban Development. - CORRECT ANSWER-The answer is Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA). An appraisal used in connection with a federally related transaction m ust be performed by a competent individual whose professional
conduct is subject to supervision and regulation by the state as mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional conduct is subject to supe rvision
and regulation by the state as mandated by the
A)
Fair Housing Act.
B)
Equal Credit Opportunity Act (ECOA).
C)
regulations established by the Department of Housing and Urban Development.
D)
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA). - CORRECT ANSWER-The answer is Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA). An appraisal used in connection with a federally related transaction must be performed by a competent individual whose professional
conduct is subject to supervision and regulation by the state as mandated by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA).
An appraiser is responsible for
A)
finding value.
B)
computing value.
C)
forming an opinion of value.
D)
determining a definitive value. - CORRECT ANSWER-The answer is forming an opinion of value. The appraiser does not make or determine a definitive value. After the
appraiser completes the analysis of the market and property and considers all the relevant data, an opinion of value can be p rovided.
An appraiser who is estimating operating expenses is using what method of valuation?
A)
Cost
B)
Income
C)
Gross rent multiplier
