Principles of Real Estate 2 Champions School of Real Estate test Accurately Answered 2024/2025

Principles of Real Estate 2 Champions School of Real Estate test Correctly Answered 2024 appraisal - Answer -appraisers opinion of value principal of contribution - Answer -the value if the property is equal to the sum if the contributory value of each of its component parts. loan to value ratio - Answer -percentage of value or sales price that a lender is willing to finance. desk review - Answer -goes through items as they analyze the appraisal report for completeness and acceptable conclusions field review - Answer -independent 3rd party appraiser will be contracted to review the appraisal report then verify the accuracy limited appraisal - Answer -exterior only/ drive by inspection (low risk loans) subject property - Answer -property being appraised highest and best use - Answer -gives greatest return in money or amenities principle of change - Answer -forces acting on the parcel of land are always affecting the value of the land. principle of anticipation - Answer -purchase price is affected by the expectation of of future appeal and benefits. principle of substitution - Answer -value of a commodity is influenced by the cost of acquiring a substitute or a comparable item. principle of conformity - Answer -maximized value when homogeneity in neighborhood principle of increasing and decreasing returns - Answer -value added to improvement exceeds the cost of improvement. principle of supply and demand - Answer -supply is short, prices go up. high supply, low demand, prices go down principle of regression - Answer -presence of lower priced properties in the area will cause a decline in the value of a subject property principle of competition - Answer -completion causes prices to increasemarket value - Answer -most reasonable price a property should bring in a competitive open market. ad valorem - Answer -according to value depreciation - Answer -loss in value due to any cause assessed value - Answer -for tax purposes- determined by tax authority- not reliable estimate of market value chronological age - Answer -physical number of years sales comparison approach "market data approach" - Answer -compares subject property charectoristcs with those of comparable properties which have recently sold functional obsolescence - Answer -loss in value by factors outside sales comparison - Answer -price a wiling seller will sell for & price willing buyer will buy. cost approach to value - Answer -estimate of value based on current construction costs. less depreciation, plus land value. effective age - Answer -age of structure based off observed physical condition determined by the degree of maintenance and repair uspap - Answer -uniform standards of appraisal practice- established by appraisal foundation urar - Answer -uniform residential appraisal report aka fannie mae form 1004, Freddie mac form 70. principle of progression - Answer -value of subject property is increased by value of surrounding properties net adjustment - Answer -absolute adjustments made to the comparable, considering those that are +/- gross adjustments - Answer -sum of all adjustments. gross rent multiplier - Answer -grm= sales price/ monthly rent net income - Answer -gross income- expenses ivr(income, return on investment, value) - Answer -if similar properties in the market are selling at prices that yield and investor a return of x% potential rate of return(income, return on investment, value) - Answer -r=I/v certain rate of return (income, return on investment, value) - Answer -I=v*r pud- planned unit development - Answer -subdivision that includes locally owned commodities and common facilitiesmortgagor - Answer -the borrower mortgagee - Answer -the lender promissory note (real estate lien note) - Answer -unconditional promise to pay mortgage - Answer -document that pledges the property as security for repayment of the note. foreclosure - Answer -legal procedure where secured property is sold to pay unpaid note. REO- real estate owned - Answer -foreclosed property title theory - Answer -mortgage is a transfer of owner ship lien theory - Answer -borrower retains ownership, but is subject to the lein primary mortgage market - Answer -borrowers and lenders come to negotiate. bonds - Answer -fixed income investment- money mortgage companies use to make loans warehouse line of credit - Answer -mortgage notes repaid by sale of notes through the secondary market mortgage banker - Answer -source of residential loans mortgage broker - Answer -source of commercial loans correspondent lender - Answer -hybrid of commercial and residential loans underwriting - Answer -evaluating borrowers loan application to determine