REE 3043 UPDATED EXAM SCRIPT QUESTIONS AND
SOLUTIONS GRADED A+
✔✔The process of creating a "market-defining story" includes all of these questions
except : - ✔✔What is the price.
✔✔Features of an office building that may be important to one market segment or
another include: - ✔✔All of these answers are correct. (nature of other tenants. floor
plate size. character and amount of parking. provision for electronics and
communication systems.)
✔✔Data used in the market research cases in Ling/Archer's chapter 7 that are publicly
available over the Internet include all of the following except : - ✔✔data on job location
from the National Transportation Board.
✔✔Which factor contributes to real estate cycles? - ✔✔Business cycles.
✔✔Which tool would a real estate investor use to seek to describe the human
characteristics of consumers that may have bearing on their response to products,
packaging, advertising and public relations efforts? - ✔✔Psychographics.
✔✔In real life, the variables involved in predicting occupancy and rental rate growth
parameters are: - ✔✔difficult to predict.
✔✔Which question is NOT used to write the market-defining story of a property? -
✔✔Where are the shopping districts?
✔✔The presence of real estate cycles presents a major challenge when forecasting real
estate market parameters. If the market value of a residential developer's project
exceeds its construction costs, an increase in the supply of units will occur. As the
market becomes oversupplied, we would expect which of the following to occur? - ✔✔A
decrease in real rental rates.
✔✔The final price after reconciliation of the answers obtained from two or more
approaches is termed the: - ✔✔final estimate of value.
✔✔To reflect a change in market conditions between the date on which a comparable
property sold and the date of appraisal of a subject property, which type of adjustment is
made? - ✔✔Market conditions.
✔✔In the process of appraising a single-family home, an appraiser finds a comparable
property very similar to the subject property; except that the seller of the comparable
property provided financing to the buyer, at below-market mortgage rates of interest,
, resulting in payment savings of $34,000 (in present value terms) to the buyer. The
transaction price for this comparable property was $200,000. The appraiser should
include this comparable's value as: - ✔✔$166,000
✔✔Estimating the market value of real estate is complicated by the unique
characteristics of real estate markets. In contrast to stock markets, real estate markets
are characterized by all of the following EXCEPT: - ✔✔Market prices are revealed
almost instantaneously to prospective buyers.
✔✔Reproduction cost has been estimated at $400,000 for a property with an 80-year
economic life. The current effective age of the property is 20 years. The value of the
land is estimated to be $60,000. What is the estimated market value of the property
using the cost approach to market valuation, assuming no external or functional
obsolescence? - ✔✔$360,000
✔✔An appraiser is seeking information about the sales in a neighborhood based on
similar square feet and year-built data. The appraiser is searching for: - ✔✔Comparable
properties.
✔✔Lenders will not accept a mortgage as security on a property unless a written
estimate of its fair market value has been provided to the lender. This written estimate
of fair market value is called: - ✔✔An appraisal.
✔✔What are the rules that guide the appraisal industry and are maintained by The
Appraisal Foundation? - ✔✔USPAP
✔✔You find two properties that have sold twice within the past two years as follows:
Property
Date of previous sale
Price of previous sale (SP1)
Price today (SP2)
A
18 months ago
$130,000
$139,000
B
22 months ago
$160,000
$169,152
SOLUTIONS GRADED A+
✔✔The process of creating a "market-defining story" includes all of these questions
except : - ✔✔What is the price.
✔✔Features of an office building that may be important to one market segment or
another include: - ✔✔All of these answers are correct. (nature of other tenants. floor
plate size. character and amount of parking. provision for electronics and
communication systems.)
✔✔Data used in the market research cases in Ling/Archer's chapter 7 that are publicly
available over the Internet include all of the following except : - ✔✔data on job location
from the National Transportation Board.
✔✔Which factor contributes to real estate cycles? - ✔✔Business cycles.
✔✔Which tool would a real estate investor use to seek to describe the human
characteristics of consumers that may have bearing on their response to products,
packaging, advertising and public relations efforts? - ✔✔Psychographics.
✔✔In real life, the variables involved in predicting occupancy and rental rate growth
parameters are: - ✔✔difficult to predict.
✔✔Which question is NOT used to write the market-defining story of a property? -
✔✔Where are the shopping districts?
✔✔The presence of real estate cycles presents a major challenge when forecasting real
estate market parameters. If the market value of a residential developer's project
exceeds its construction costs, an increase in the supply of units will occur. As the
market becomes oversupplied, we would expect which of the following to occur? - ✔✔A
decrease in real rental rates.
✔✔The final price after reconciliation of the answers obtained from two or more
approaches is termed the: - ✔✔final estimate of value.
✔✔To reflect a change in market conditions between the date on which a comparable
property sold and the date of appraisal of a subject property, which type of adjustment is
made? - ✔✔Market conditions.
✔✔In the process of appraising a single-family home, an appraiser finds a comparable
property very similar to the subject property; except that the seller of the comparable
property provided financing to the buyer, at below-market mortgage rates of interest,
, resulting in payment savings of $34,000 (in present value terms) to the buyer. The
transaction price for this comparable property was $200,000. The appraiser should
include this comparable's value as: - ✔✔$166,000
✔✔Estimating the market value of real estate is complicated by the unique
characteristics of real estate markets. In contrast to stock markets, real estate markets
are characterized by all of the following EXCEPT: - ✔✔Market prices are revealed
almost instantaneously to prospective buyers.
✔✔Reproduction cost has been estimated at $400,000 for a property with an 80-year
economic life. The current effective age of the property is 20 years. The value of the
land is estimated to be $60,000. What is the estimated market value of the property
using the cost approach to market valuation, assuming no external or functional
obsolescence? - ✔✔$360,000
✔✔An appraiser is seeking information about the sales in a neighborhood based on
similar square feet and year-built data. The appraiser is searching for: - ✔✔Comparable
properties.
✔✔Lenders will not accept a mortgage as security on a property unless a written
estimate of its fair market value has been provided to the lender. This written estimate
of fair market value is called: - ✔✔An appraisal.
✔✔What are the rules that guide the appraisal industry and are maintained by The
Appraisal Foundation? - ✔✔USPAP
✔✔You find two properties that have sold twice within the past two years as follows:
Property
Date of previous sale
Price of previous sale (SP1)
Price today (SP2)
A
18 months ago
$130,000
$139,000
B
22 months ago
$160,000
$169,152
