REE 4103 EXAM 1 BOTTS QUESTIONS & ANSWERS
What is appraisal? - Answer -The act or process of developing an opinion of value of
an asset
What is USPAP? - Answer -Uniform Standards of Professional Appraisal Practice
What is real estate? - Answer -An identified parcel or tract of land, including
imporvements, if any. The physical land and appurtenances affixed to the land
What is real property? - Answer -The interests, benefits, and rights inherent in the
ownership of real estate (land, buildings, fixtures)
What is the total range of private owneership interests in real property called? - Answer
-Bundle of rights
The complete bundle of rights includes what? - Answer -The right to sell an interest, the
right to lease an interest, the right to occupy the property, the right to mortgage an
interest, and the right to give an interest away
If leases are in place interests are called what? - Answer -A leased fee
Taxation - Answer -The right of government to raise revenue through assessments on
valuable goods, products and rights
Eminent Domain - Answer -The right of government to take private property for public
use upon the payment of just compensation
Police power - Answer -The inherent power of government to regulate property in order
to protect public health, safety, and general welfare
Escheat - Answer -The right of government that gives the state titular ownership of a
property when its owner dies without a will or any ascertainable heirs.
What are the four powers of government? - Answer -Taxation, eminent domain, police
power and escheat
Examples of personal property - Answer -furniture and furnishings, refrigerators and
freestanding shelves
Land - Answer -Includes not only the ground, or soil, but everything that is attached to
the earth, whether by course of nature, as are trees and herbage, or by the hand of
man, as are houses and other buildings.
, What are the four agents of production? - Answer -Land, labor, capital and
entrepreneurial coordination
Which agent does an entreprenuer generally consider first? - Answer -Land
Labor - Answer -the physical and intellectual contribution of workers to the production
process
Entrepreneurial Coordination - Answer -No prudent developer will undertake to
construct and market a property without anticipating receipt of a profit in addition to the
return of the equity investment
What are the four interdependent economic factors that create value? - Answer -Utility,
scarcity, desire and effective purchasing power
Utility - Answer -The ability of a product to satisfy a human want, need, or desire.
Scarcity - Answer -Present or anticipated supply of an item relative to the demand for it
Desire - Answer -The wish of the purchaser for an item to satisfy human needs
Effective purchasing power - Answer -The ability of an individual or group to participate
in a market
Price - Answer -The amount a particular purchaser agrees to pay and a particular seller
agrees to accept
Cost - Answer -Used in relation to production, not exchange
Value - Answer -An economic concept, the monetary worth of property, goods or
services to buyers and sellers
Value is created by the what of benefits to be derived in the future? - Answer -
Anticipation
What is the desire and ability to purchase or lease goods and services? - Answer -
Demand
*The principle of substitution states what? - Answer -That when several similar or
commensurate commodities, goods or services are available, the one with the lowest
price attracts the greatest demand and the wildest distribution
The principle of balance - Answer -Real property value is created and sustained when
contrasting, opposing or interacting elements are in a state of equilibrium (fertilization of
farmland)
What is appraisal? - Answer -The act or process of developing an opinion of value of
an asset
What is USPAP? - Answer -Uniform Standards of Professional Appraisal Practice
What is real estate? - Answer -An identified parcel or tract of land, including
imporvements, if any. The physical land and appurtenances affixed to the land
What is real property? - Answer -The interests, benefits, and rights inherent in the
ownership of real estate (land, buildings, fixtures)
What is the total range of private owneership interests in real property called? - Answer
-Bundle of rights
The complete bundle of rights includes what? - Answer -The right to sell an interest, the
right to lease an interest, the right to occupy the property, the right to mortgage an
interest, and the right to give an interest away
If leases are in place interests are called what? - Answer -A leased fee
Taxation - Answer -The right of government to raise revenue through assessments on
valuable goods, products and rights
Eminent Domain - Answer -The right of government to take private property for public
use upon the payment of just compensation
Police power - Answer -The inherent power of government to regulate property in order
to protect public health, safety, and general welfare
Escheat - Answer -The right of government that gives the state titular ownership of a
property when its owner dies without a will or any ascertainable heirs.
What are the four powers of government? - Answer -Taxation, eminent domain, police
power and escheat
Examples of personal property - Answer -furniture and furnishings, refrigerators and
freestanding shelves
Land - Answer -Includes not only the ground, or soil, but everything that is attached to
the earth, whether by course of nature, as are trees and herbage, or by the hand of
man, as are houses and other buildings.
, What are the four agents of production? - Answer -Land, labor, capital and
entrepreneurial coordination
Which agent does an entreprenuer generally consider first? - Answer -Land
Labor - Answer -the physical and intellectual contribution of workers to the production
process
Entrepreneurial Coordination - Answer -No prudent developer will undertake to
construct and market a property without anticipating receipt of a profit in addition to the
return of the equity investment
What are the four interdependent economic factors that create value? - Answer -Utility,
scarcity, desire and effective purchasing power
Utility - Answer -The ability of a product to satisfy a human want, need, or desire.
Scarcity - Answer -Present or anticipated supply of an item relative to the demand for it
Desire - Answer -The wish of the purchaser for an item to satisfy human needs
Effective purchasing power - Answer -The ability of an individual or group to participate
in a market
Price - Answer -The amount a particular purchaser agrees to pay and a particular seller
agrees to accept
Cost - Answer -Used in relation to production, not exchange
Value - Answer -An economic concept, the monetary worth of property, goods or
services to buyers and sellers
Value is created by the what of benefits to be derived in the future? - Answer -
Anticipation
What is the desire and ability to purchase or lease goods and services? - Answer -
Demand
*The principle of substitution states what? - Answer -That when several similar or
commensurate commodities, goods or services are available, the one with the lowest
price attracts the greatest demand and the wildest distribution
The principle of balance - Answer -Real property value is created and sustained when
contrasting, opposing or interacting elements are in a state of equilibrium (fertilization of
farmland)
