APPRAISAL CHP3 Flashcards
The real estate market is said to be in balance when there are more
a. buyers than houses for sale
b. buyers than sellers
c. houses for sale than buyers
d. houses than apartments
c. houses for sale than buyers
The influence of the cost of money on real estate is
a. irrelevant because interest rates are not important to real estate
b. less than other big ticket items because mortgages have adjustable rates
c. more than other big ticket items because mortgages are long term
d. negligible because people are not always rational
c. more than other big ticket items because mortgages are long term
The physical forces affecting real estate contribute to its value because
a. economies of scale will help those who buy more
b. people can just move to a new area anytime they want
c. a popular area will always remain popular and desired
d. there is a limited supply that cannot be moved, destroyed, or created
d. there is a limited supply that cannot be moved, destroyed, or created
How do the gov’t programs administered by the FHA and VA affect the real estate market
a. they build additional low income housing
b. they make fewer houses available for the general public
c. they provide insurance or make loan guarantees to lenders
d. they service only lenders
c. they provide insurance or make loan guarantees to lenders
Uniqueness and scarcity help the value of real estate because
a. it’s impossible to find exactly what you want in a house
b. no two properties are exactly the same
c. real estate is difficult to find
d. real estate is unlimited.
b. no two properties are exactly the same
ABC Company just opened in a new suburb of Pittsburgh. Potential workers are hoping to move into the area but there are limited houses for sale and no new construction underway. What type of market has been created?
a. a balanced market
b. a buyer’s market
c. a seller’s market
d. a trader’s market
c. a seller’s market
A new company that moves to an area helps the local real estate market by helping maintain a healthy
a. balance
b. economic base
c. economy of scale
d. environment
b. economic base
A nice, well-kept house located in the heart of an all-residential area, surrounded by other well-kept houses of similar style and value, is an example of
a. conformity
b. highest and best use
c. both conformity and highest and best use
d. neither conformity nor highest and best use
c. both conformity and highest and best use
A run-down house in a good neighborhood
a. benefits from the principle of progression
b. benefits from the principle of regression
c. is hurt by the principle of progression
d. is hurt by the principle of regression
a. benefits from the principle of progression
When the value of an additional feature is worth more than the actual cost of the item, this is an example of the law of
a. decreasing returns
b. diminishing returns
c. increasing returns
d. progressive returns
c. increasing returns
Maximum value for a property can be achieved only when
a. demand, utility, scarcity, transferability, and purchase ability are present
b. the market is in balance
c. supply outweighs demand
d. there is a buyer’s market
a. demand, utility, scarcity, transferability, and purchase ability are present
Market value is the
a. dollars needed to rebuild the property
b. price determined by Freddie Mac, Fannie Mae, and/or USPAP
c. price a property actually sold for
d. theoretical price that real estate is most likely to bring in a typical transaction
d. theoretical price that real estate is most likely to bring in a typical transaction
Which is NOT part of an arm’s length transaction?
a. buyer and seller are acting in their own best interest
b. buyer and seller are not related
c. buyer and seller are reasonably informed about the property and its uses
d. buyer and seller have agreed upon payment terms for a land contract
d. buyer and seller have agreed upon payment terms for a land contract
