Champions Principles of Real Estate 2
Champions Principles of Real Estate 2
(Texas) Study Guide Exam Containing 91
Questions with Definitive Solutions
Newly Updated.
appraisal - Answer: value of a property maybe affected by social, economic, govt
and environmental influences
1|Page
, Champions Principles of Real Estate 2
Loan-to-Value Ratio (LTV) - Answer: The percentage of value or sales price that a
lender is willing to finance.
limited appraisal report - Answer: exterior only/drive by inspection. deemed as
low risk loan
highest and best use of property - Answer: legal use that gives the greatest return
Principal of Contribution - Answer: cost does not equal value
Residential Mortgage Loan Originators (RMLO) - Answer: Must be certified license
holders and is mandated by the SAFE ACT (TX dept of savings and mortgage
lending)
Principle of Anticipation - Answer: purchase price is affected by the expectation of
future appeal and benefits
Principal of Substitution - Answer: value of a commodity is influenced by the cost
of acquiring substitute or comparable item
Principal of progression - Answer: value of properties around yours goes up; so
does yours
Principal of Regression - Answer: The Value of more expensive home placed in a
neighborhood of less expensive homes will drop in value
2|Page
Champions Principles of Real Estate 2
(Texas) Study Guide Exam Containing 91
Questions with Definitive Solutions
Newly Updated.
appraisal - Answer: value of a property maybe affected by social, economic, govt
and environmental influences
1|Page
, Champions Principles of Real Estate 2
Loan-to-Value Ratio (LTV) - Answer: The percentage of value or sales price that a
lender is willing to finance.
limited appraisal report - Answer: exterior only/drive by inspection. deemed as
low risk loan
highest and best use of property - Answer: legal use that gives the greatest return
Principal of Contribution - Answer: cost does not equal value
Residential Mortgage Loan Originators (RMLO) - Answer: Must be certified license
holders and is mandated by the SAFE ACT (TX dept of savings and mortgage
lending)
Principle of Anticipation - Answer: purchase price is affected by the expectation of
future appeal and benefits
Principal of Substitution - Answer: value of a commodity is influenced by the cost
of acquiring substitute or comparable item
Principal of progression - Answer: value of properties around yours goes up; so
does yours
Principal of Regression - Answer: The Value of more expensive home placed in a
neighborhood of less expensive homes will drop in value
2|Page
