Basic Appraisal Principles Final Exam Questions and Answers Graded A+

Basic Appraisal Principles Final Exam Questions and Answers Graded A+ In a particular market, there is a demand for 500 houses per year, and there are currently 1,500 houses for sale. What does this most likely indicate? there is a three-year supply of homes currently for sale "A business arrangement in which two or more persons jointly own a business and share in its profits and losses" is the definition of partnertransferable development rightsship Property Owner A has the right to develop his property into 10 lots. He sells this right to nearby Property Owner B who wishes to develop his property into additional lots. This is an example of transferable development rights What is the mean of the following set of gross rent multipliers? (95, 93, 120, 94, 93, 129) 104 Short term money instruments are traded on the money market Which entity is responsible for making periodic changes to USPAP? Appraisal Standards Board The real property market is generally classified as a(n) __________ market. imperfect The appraisal standards and qualification criteria that are published by The Appraisal Foundation achieve legal authority by adoption, citation or implementation by government agencies with the power to regulate or administrate Eric pays $35,000 to have an inground swimming pool constructed in his back yard. When he sells the property, he only receives $10,000 more for his property than what similar property sold for without a pool. This is an example of the principle of contribution "The ownership interest held by the lessor, which includes the right to receive the contract rent specified in the lease plus the reversionary right when the lease expires" is the definition of leased fee interest When appraising an income producing property, you have the following GRMs indicated from comparable sales (122, 159, 132, 126, 122, 173, 152, 126). What is the mode of the GRMs? 122, 126 (bi-modal) The current number of appraisal education hours required for Certified General Appraiser applicants is ______ hours. 300 The ________ is responsible for establishing criteria for individuals to become real property appraisers. Appraiser Qualifications Board The federal financial institutions regulatory agencies directly involved in fair lending include all of the following EXCEPT ASB A homeowner fears the construction of a factory nearby will decrease the value of her property. This illustrates the principle of externalities Under the current qualification criteria, an applicant for Appraiser Trainee must have completed ___ creditable hours of experience. 0 What is the mode of the following set of gross rent multipliers? (95, 93, 120, 94, 93, 129) 93 What is the purpose of a state's statute of frauds? requires certain documents to be in writing A property has a first mortgage of $100,000, a second mortgage of $20,000, and a third mortgage of $10,000. It is foreclosed and sold for $125,000. The holder of the third mortgage gets ________ and the holder of the second mortgage receives _________. $5,000, $20,000 "A firm agreement to perform an act, refrain from acting or make a payment or delivery" is the definition of promise A problem with the real property market is that the amount of ________ is slow to change. supply Unfortunately, with real property, the ______ side of the equation is relatively fixed and slow to change whereas the ______ side of the equation can change quickly. supply, demand What is the median of these numbers: 17, 12, 54, 36, 71, 28, 31, 55? 33.5 USPAP includes performance standards for the appraisal of real property, personal property, and business/intangible property Your property, which consists of a house and lot, is valued at $244,000. You want to insure it for 80% of value and the annual insurance premium will cost $5.75 per thousand. How much will your insurance cost per month? $93.53 A lot contains .56 acres. It sells for $35,000. How much did it sell for per square foot? $1.43 You purchased a house for $120,000, three years ago. Property values increased 3% the first year, 5%, the second year, and 7% the third year. How much is your house worth now? $138,865 Mary Jones has a property with no road frontage. She has an access right of way across the property of her neighbor Bob Smith for ingress, egress, and regress. Who has the dominant tenement in this situation? Mary Jones Which statement about price, cost, and value is TRUE? Price and value can be the same in some situations. The median price of homes sold in your county nine months ago was $217,400. Prices have been increasing at the rate of 8% per year. What is the median price of homes today? $230,444 As part of the overall requirement for continuing education, certified and licensed appraisers must complete the 7-Hour National USPAP Update Course or its equivalent ________ calendar year(s). every 2 Electronic Data Interchange for transmitting appraisal reports became popular in the late 1990s When appraising an income producing property, you have the following GRMs indicated from comparable sales (122, 159, 132, 126, 122, 173, 152, 126). What is the median of the GRMs? 129 "A development right that cannot be used by the landowner, or that the owner chooses not to use, but can be sold to landowners in another location" are called _____________ rights. transferable development The Conduct Section of the ETHICS RULE states, in part, that an appraiser must perform assignments with Impartiality, objectivity, and independence The four components of the Appraiser Qualification Criteria are: qualifying education, examination, experience, continuing education Which of the below is a requirement of a valid real estate contract? all of the above USPAP defines _________ as the amount asked, offered, or paid for a property. price "The act of transferring an interest in property or some right (such as contract benefits) to another" is the definition of assignment "The study of the cost-benefit relationship of an economic endeavor" is the definition of feasibility analysis Your property, which consists of a house on a lot, is valued at $186,000. You want to insure it for 80% of value. Insurance will cost $6.00 per thousand per year. How much will your insurance cost per month? $74.40 A client asks an appraiser to omit the client's identity from the appraisal report. What can the appraiser do? omit the client's identity from the report but identify the client in the workfile The primary purpose of USPAP is to protect public trust Which is the fullest and most complete type of estate? fee simple "A mortgage in which the interest rate may move up or down, following a specified schedule or in accordance with the movements of a standard or index to which it is tied" is the definition of a(n) ______________ mortgage. adjustable rate Transportation would be an example of a(n) __________ force affecting property values. governmental "In appraisal, the concept that a higher-priced property will be worth less in a lower-priced neighborhood than it would in a neighborhood of comparable properties" is the definition of the principle of regression "A right or interest in property" is a(n) estate "A value that cannot be imputed to any part of the physical property, e.g., the excess value attributable to a favorable lease or mortgage, the value attributable to goodwill" is the definition of ____________ value. intangible What is the median of these numbers: 19, 11, 64, 36, 81, 22, 35, 95? 35.5 The general rule of contracting with minors is that a contract with a minor is voidable at the minor's option "The geographic region from which a majority of demand comes and which the majority of the competition is located" is the definition of market area When estimating the value of a fireplace in a single-family home, the most important principle is the principle of contribution Normally the first step in highest and best use analysis is to research the uses that are legally permissible The _______ maintains a national registry of state certified and licensed appraisers who are eligible to perform appraisals in federally related transactions. Appraisal Subcommittee A lot measures 178 feet by 464 feet. It sold for $80,000. What did it sell for per acre? HINT: Round the acreage amount to two decimal places. $42,105 You apply for a mortgage and the lender will allow you to spend up to 30% of your annual income for housing costs. These housing costs will include your mortgage, property taxes, and insurance. Your income is $1,635 every two weeks. If you apply for the loan, how much can your maximum monthly payment be? $1,062.75 You bought a property for $650,000, 2 years ago. Values increased in that area by 8% the first year and 6% the second year. How much is your property worth today? $744,120 "The sum of values for a variable in a sample or population divided by the number of items in the sample or population" is the definition of mean Which of the following is a characteristic of an effective market? all of the above Who is responsible for appointing members to the ASB and AQB? the Board of Trustees The federal financial institutions regulatory agencies directly involved in fair lending include all of the following EXCEPT Freddie Mac "The right held by the lessee to use and occupy real estate for a stated term and under the conditions specified in the lease" is the definition of leasehold estate Modern definitions of the word "appraisal" have replaced the word _______ with ________. estimate, opinion A rectangular property measures 320 feet by 574.45 feet, and it sold for $263,750. How much did it sell for per acre? $62,500 Under the current qualifying education criteria, there are college-level course requirements for __________ classifications. both Certified Residential and Certified General The strongest form of deed is the __________ deed. warranty "The rate at which vacant space in a property or a group of properties for sale or lease has been or is expected to be successfully sold or leased over a specified period of time" is the definition of a(n) __________ rate. absorption An appraiser pays a fee for the procurement of an assignment. Where in the appraisal report does this payment have to be disclosed? in the certification and transmittal letter where conclusions are stated All of the following would typically be considered to be personal property EXCEPT wall to wall carpeting The Management Section of the ETHICS RULE states, in part, "An appraiser must __________ that he or she paid a fee or commission, or gave a thing of value in connection with the procurement of an assignment." disclose "A gathering of people for the buying and selling of things" is the definition of market Which of the following would be private restrictions on property rights? deed restriction and mechanic's lien The ______ publishes "other communications" in the form of Advisory Opinions and USPAP FAQs. ASB All of the following could lead to a non-arm's-length transaction EXCEPT knowledgeable buyer and seller