Chapter 7.1 Quiz (14% Of The Exam)

31 Questions | Total Attempts: 35

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Chapter 7.1 Quiz (14% Of The Exam)

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Questions and Answers
  • 1. 
    After the appraiser has collected all the data and applied the appropriate appraisal method(s), what is the next step in the appraisal process? 
    • A. 

      Simply average out the value estimates

    • B. 

      Reconcile or correlate the values found in the different approaches

    • C. 

      Assign appropriate value to individual estimates

    • D. 

      Give an opinion of value

  • 2. 
    When an appraiser uses the market data approach to appraisal, she would be most interested in the date: 
    • A. 

      The price was agreed upon

    • B. 

      Escrow was opened

    • C. 

      Recordings occurred

    • D. 

      Escrow closed

  • 3. 
    Which type of appraisal report has the following headings: Introduction, Site and Improvement Analysis, Supporting Data, Opinion of Value? 
    • A. 

      Letter report

    • B. 

      Form report

    • C. 

      Narrative report

    • D. 

      Oral report

  • 4. 
    What appraisal license is required to appraise a strip mall valued at $500,000? 
    • A. 

      Certified general real estate appraiser

    • B. 

      Certified residential real estate license

    • C. 

      Residential license

    • D. 

      Trainee license

  • 5. 
    When the highest and best use of a property is expected to change, the current use is called: 
    • A. 

      The temporary use

    • B. 

      The interim use

    • C. 

      The transitional use

    • D. 

      The possible use

  • 6. 
    When homes in an area represent the highest and best use of the land and are similar in architectural design, this would best exemplify which of the following principles of appraisal? 
    • A. 

      Change

    • B. 

      Conformity

    • C. 

      Contribution

    • D. 

      Progression and regression

  • 7. 
    An owner of a 40-unit apartment house is considering installing a swimming pool. He seeks a professional opinion from an appraiser. The appraiser would base his opinion upon which principle of appraisal? 
    • A. 

      Contribution

    • B. 

      Regression

    • C. 

      Substitution

    • D. 

      Integration

  • 8. 
    The value of the best property in a neighborhood is adversely affected by a substandard property nearby. This can be described as the principle of: 
    • A. 

      Balance

    • B. 

      Regression

    • C. 

      Contribution

    • D. 

      Progression

  • 9. 
    Market value is the price a willing buyer will pay and a willing seller will accept with both being fully informed, and the property being exposed to the market for a reasonable period of time. Market value is best expressed as: 
    • A. 

      Present value of future income

    • B. 

      Cost to reproduce improvements new

    • C. 

      Value of a property is in the eye of the beholder

    • D. 

      Objective value

  • 10. 
    The "improved value" of land is: 
    • A. 

      The current market value of the land and improvements combined

    • B. 

      The present value of income to be received from the use of the land in the future

    • C. 

      The replacement cost of the improvements minus the depriciation

    • D. 

      The difference between the contract rent and the economic rent

  • 11. 
    When comparing the value of property and the price of property, changes in financing terms will affect: 
    • A. 

      Value only

    • B. 

      Price, not value

    • C. 

      Only properties that have been sold

    • D. 

      Both value and prices

  • 12. 
    All of the following are essential elements of value, except: 
    • A. 

      Utility

    • B. 

      Expectation

    • C. 

      Scarcity

    • D. 

      Transferability

  • 13. 
    When developers select land for a residential subdivision they consider topography. Many developers believe that: 
    • A. 

      Subdivisions which are built on rolling hills are less attractive aesthetically than those located on flat land

    • B. 

      Some limited irregularity in topography is generally desirable for residential subdivisions

    • C. 

      Flat land is more aesthetically desirable than rolling hils

    • D. 

      None of the above

  • 14. 
    The position of a building on a lot in relationship to exposure to the rays of the sun, prevailing wind, view, privacy from the street, etc., is known as: 
    • A. 

      Elevation

    • B. 

      Plottage

    • C. 

      Orientation

    • D. 

      Assemblage

  • 15. 
    The market data approach to appraisal is based upon which of the following? 
    • A. 

      Principle of regression

    • B. 

      Principle of anticipation

    • C. 

      Principle of contribution

    • D. 

      Principle of substitution

  • 16. 
    In the market data approach to appraisal, any differences between the comparables and the subject property are handled in which of the following ways? 
    • A. 

      Subject property is adjusted to the standards set by the comparables

    • B. 

      The subject property values are averaged to form a price range

    • C. 

      The comparables are adjusted to a market average

    • D. 

      The comparables are adjusted to the characteristics of the subject property

  • 17. 
    When a residential neighborhood is comprised mostly of owner occupied residential properties it tends to: 
    • A. 

      Stabilize values

    • B. 

      Attract commercial shopping centers to the neighborhood

    • C. 

      Deteriorate faster than areas with many rental properties

    • D. 

      Lower property values

  • 18. 
    The best appraisal method used by an appraiser to establish the value of a "specific purpose property" would be which of the following: 
    • A. 

      The market data approach

    • B. 

      The cost approach

    • C. 

      The capitalization or income approach

    • D. 

      The gross multiplier approach

  • 19. 
    The fastest and easiest method of estimating the replacement cost of improvements is the: 
    • A. 

      Reproduction cost

    • B. 

      Unit-in-place cost method

    • C. 

      Quantity survey method

    • D. 

      Comparative method

  • 20. 
    What type of depreciation is most difficult to correct? 
    • A. 

      Internal obsolescence

    • B. 

      Economic obsolescence

    • C. 

      Physical obsolescence

    • D. 

      Wear and tear

  • 21. 
    A developer wanted to subdivide land into residential lots. The city planning commission decided to increase the front yard setback requirement by 10 feet. The resulting loss in buildable space caused a loss in value of the lots. The loss in value was the result of: 
    • A. 

      Physical obsolescence

    • B. 

      Functional obsolescence

    • C. 

      Economic obsolescence

    • D. 

      Physical deterioration

  • 22. 
    The flight pattern at a nearby airport was changed so that planes pass directly over a residential neighborhood. The resulting loss in value to these properties was the result of: 
    • A. 

      Economic obsolescence

    • B. 

      Physical deterioration

    • C. 

      Functional obsolescence

    • D. 

      Physical obsolescence

  • 23. 
    Which of the following would be an example of functional obsolescence? 
    • A. 

      New zoning laws

    • B. 

      Incompatible land use in the neighborhood

    • C. 

      Deteriorated driveway

    • D. 

      A one-car garage

  • 24. 
    All of the following factors contribute to obsolescence, except: 
    • A. 

      Wear and tear from years of use

    • B. 

      Obsolete equipment

    • C. 

      Changes in locational demand

    • D. 

      Misplaced improvements in the neighborhood

  • 25. 
    Determining the appropriate capitalization rate is the most difficult step in the capitalization approach to appraisal. In order to calculate capitalization rate, the appraiser can utilize which of the following methods: 
    • A. 

      Market comparison

    • B. 

      Band of investment

    • C. 

      Summation

    • D. 

      Any of the above

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