MN Real Estate Express Course 3: Final Exam Possible Questions And Answers 1005 Accurately Solved.

A value opinion must be appropriately supported with - correct answer general and specific data Items of personal property are also called - correct answer chattel What is described as air, water, land and everything affixed to the land? - correct answer real estate The two types of cost used in appraising are - correct answer replacement cost and reproduction cost What are man-made structures attached to the land called? - correct answer improvements What is a portion of land delineated by boundaries called? - correct answer parcel The property being appraised must be what? - correct answer Adequately and accurately described Assemblage is the process of - correct answer putting together parcels from multiple owners in order to create a larger parcel of land. What is commonly known as a set of rights to an item enjoyed by the owner? - correct answer A bundle of rights What is Mortgage Value? - correct answer The value of the property as collateral for a loan For an appraiser, the exact definition of Market Value depends on - correct answer the intended use What assumption comes with Liquidation Value? - correct answer Owners were forced to sell more quickly than they otherwise would have in order to raise much-needed capital. Market Value is - correct answer the highest price a buyer would pay that a seller would agree to. In addition to estimating Market Value, appraisals are also made to estimate what? - correct answer Liquidation Value and Assessed Value How is Capitalized Value determined? - correct answer Capitalized Value is the result of applying capitalization rates to property income in the Income Capitalization Approach to value. What two factors are included in Leased Fee Value? - correct answer Rental payments over the lease term plus the estimated reversionary value of the property at the time of the lease expiration What are the three unique physical characteristics of land? - correct answer Immobility, Indestructibility, and Heterogeneity What term describes ownership of anything that is not real estate and the rights associated with owning the item? - correct answer personal property What term describes the study of population trends and statistics? - correct answer Demography What describes the ease with which title to a property can be moved from one person or entity to another? - correct answer Transferability What is an example of an unstable economic base? - correct answer Seasonal tourism What is the term given to periods of growth that are followed by periods of stagnation or decline? - correct answer National business cycles What creates interest in a demand for new mechanical systems, recycled materials, insulation and construction methods and special water consumption devices? - correct answer What are the stages in the supply and demand cycle? - correct answer Growth, stability, and decline What term describes the capacity of an item to satisfy some want, need or desire? - correct answer Utility What are the two types of inflation? - correct answer Demand and cost inflation What type of inflation is caused by a seller's market? - correct answer Demand inflation Property that does NOT conform to code requirements - correct answer loses value. What term describes a society's beliefs, values, ethics, customs, shared meanings, rules, rituals, norms and traditions? - correct answer Culture The appraisal process is what type of procedure? - correct answer An ordered procedure What happens when an appraiser simply averages the values reached by using different approaches of value to arrive at the final value estimate? - correct answer It gives equal weight to all the approaches. What approach depends on obtaining income and expense data from the subject property and also comparable properties? - correct answer The Income Approach What is not a value approach an appraiser will use to derive indications of value? - correct answer Systematic Comparison What appraisal approach is not considered reliable for valuing older structures? - correct answer The Cost Approach Which of the following statements best defines the capitalization rate of a property? - correct answer The rate of return considered to be a reasonable yield on investment given the risk What is an acceptable form for an appraiser's report? - correct answer Narrative, form, and oral reports Which comparison is usually the most reliable method for estimating land value? - correct answer Sales After determining three separate estimates, the appraiser must reconcile the various estimates to create a statement of the property's - correct answer final value estimate. Specific data pertains to - correct answer the appraised property. What evaluation process is an ordered, specific set of steps that must also follow an established, predetermined path to arrive at an accurate value estimate? - correct answer The appraisal process One appraisal method will be more reliable than another depending on the - correct answer Property type What type of cost refers to the cost associated with buying a replacement copy of the item? - correct answer Replacement cost The first step in the valuation process is what? - correct answer Define the problem Which best describes the process of allocation? - correct answer A ratio of land value to total value derived from comparable properties and applied to the subject Criteria for determining highest and best land use - correct answer Legally permissible, physically possible, maximally productive & financially feasible In what situation can the Sales Comparison Appraisal approach not be effectively utilized? - correct answer If no other comparable sales have occurred recently The majority of today's single-family appraisals are made on the - correct answer Uniform Residential Appraisal Report (URAR). The final step in the appraisal process is to - correct answer prepare a report. Real estate markets are - correct answer cyclical When production agents are unstable, - correct answer productivity deminishes What are the four production agents? - correct answer Labor, capital, coordination and land What type of real estate market is interested in buying, improving, and selling property? - correct answer development market Competition is - correct answer a direct result of the supply and demand Principle. The type of real estate product, the potential benefits it can provide, and the participants likely to focus on them define - correct answer market segments. Parties striving to develop, offer or obtain a commodity or service, and products competing to capture the attention of consumers refers to the economic Principle of - correct answer Competition. Why are appraisal reports always dated? - correct answer Because the real estate market is always changing When demand for properties exceeds supply, - correct answer a condition of scarcity exists. Without something to justify a higher valuation, the maximum value of a property probably will not exceed the highest sales price of a(n) ____________ in the same market area. - correct answer comparable property What process does an appraiser use to determine the Highest and Best Use for a property? - correct answer Market analysis What is not a social force that would be a factor in a neighborhood analysis? - correct answer Special assessments The appraiser should avoid reliance on what? - correct answer The ethnic characteristics of the residents Appraisals are conducted to levy real estate taxes on a property based on that property's value. Another name for this tax is what? - correct answer Ad valorem No amount of improvements can change where a property is located because property is - correct answer immobile and constant. What process describes a neighborhood containing poorly-maintained homes alongside some well-maintained homes? - correct answer Decline and revitalization Providing for the future uses of undeveloped areas, as well as providing protection to preserve the existing neighborhood's character and integrity falls under - correct answer government planning. The appraiser must also consider the expenses involved in access to public utilities which includes gas, electric and - correct answer cable television connection. What term refers to both the land and its improvements? - correct answer Site Neighborhoods that are located in flood plains have - correct answer decreased values. According to proper appraisal terminology, improvements on the site would NOT include - correct answer sidewalks What aspect of a neighborhood's residents tends to set a value range for that neighborhood? - correct answer income levels Under FHA Minimum Property Standards, water from wells is considered adequate if - correct answer it delivers a sustained flow of five gallons per minute, and it meets the standard chemical and bacteriological requirements established by local health authorities. Which of the following is a common home type? - correct answer Queen Anne Which house styles are known for being symmetrical and stately, in imitation of the more elaborate Georgian style built in England in the 1700s? - correct answer Georgian Colonial Which style of house usually has an attached garage? - correct answer Ranch What is the attaching metal called in roof installation? - correct answer Flashing Conventional wood framing consists of what? - correct answer Many individual pieces What must the floor framing plan specify? - correct answer The sizes and spacing of joists, girders and columns used to support the floor Although in "normal" conditions, footings are placed a minimum of 12 inches below grade, in the northern U.S., what is the typical frost penetration depth? - correct answer 48 Small-diameter pipes that carry water into the system and evenly distribute water throughout the house are called which of the following? - correct answer supply pipes Decks are made of a variety of materials, the most popular being which of the following softwood lumbers? - correct answer cedar