Assignment 2 Flashcards
A contractor has constructed a large expensive home in a run-down neighbourhood and is unable to sell it for its cost. What principle does this represent?
Principle of conformity
Which of the following is an example of an environmental force impacting real property?
1) The stock of available properties
2) Primary transportation systems
3) Rent control laws
4) Industrial expansion
Primary transportation systems
Which of the following is NOT an accepted part of the reconciliation process?
1) Consider all relevant data and reliability of the approach
2) Average the values from the approaches used
3) Explain the variations between the approaches used in the appraisal
4) Account for any inconsistencies between the approaches
Average the values from the approaches used
Which of the following statements regarding data sampling is TRUE?
1) Sampling is not valid in appraisal, as specific data is mandatory
2) It is useful in identifying individual buyer motivations, but less helpful for identifying market attitudes.
3) As a market representation, it is more accurate and reliable than complete data
4) It is less expensive and more readily obtained than complete data.
It is less expensive and more readily obtained than complete data
The net income remaining after the costs of labour, capital, and coordination have been paid for is ___ and sets the value of the ____.
Surplus productivity, land
Which of the following statements best describes a building scheme?
1) A privilege acquired by a landowner for the benefit of his or her landover the land of another
2) right to enter on the land of another person and to take some profit of the soil such as minerals, oil, stones, and trees
3) A group of restrictive covenants attaching to two or more lots within a particular development.
4) A landowner owns or has rights in the airspace above his or her property to the extent that the landowner can make effective use of it.
A group of restrictive covenants attaching to two or more lots within a particular development
A developer who has been redeveloping parking lots sites in the downtown core is ready to bring his recently completed multi-use retail/office development on the market and asks you for an appraisal. He intends to sell the retail and lease the upper office units. Which approaches are you MOST likely to use?
Direct comparison, cost, and income approach
The assessment ratio is:
the ratio of assessed value to market value
Which of the following is MOST likely to increase the demand for residential real estate?
1) The federal government introduces more restrictive underwriting policies for first-time residential home buyers.
2) The federal government cancels the program that allows tax-free withdrawals from an RRSP to purchase a residential home
3) The federal government halts additional immigration for the next five years
4) Interest rates are decreasing and are expected to continue to decrease.
Interest rates are decreasing and are expected to continue to decrease
Research is specified as one of the First Principles of Value. This helps ensure a disciplined approach to an appraisal assignment. Which of the following statements regarding data collection and analysis is TRUE?
1) The main benefit of general data is to bulk up the narrative report to meet the client’s scope of work expectations
2) Insufficient data collection may lead to professional practice complaints, so quantity of data is most vital
3) The analysis in the three approaches to value is primarily based on general data
4) Market data grids and adjustment grids help in organizing data into useful, measurable categories
Market data grids and adjustment grids help in organizing data into useful, measurable categories
John has renovated his home and has spend $50,000 updating his kitchen and flooring. However,he has been advised by an appraiser that this improvement has only added $40,000 to the market value of his property. Which principle impacting value does this demonstrate?
Contribution
Which of the following is the BEST example of the principle of balance?
1) Murray has been the owner of Motel 99 for 22 years. His motel was full most nights, until last year when clifford built another motel three kilometres away. Since then, Murray has lost about 1/3 of his business. This appears to be the market’s equilibrium state.
2) A developer involved in a hotel development is considering the owner’s suggestion to include five pools in the design. Similar hotels have four or less pools. The developer believes it is uneconomical to include a fifth pool because the cost to build the pool will exceed the value added to the customers.
3) Susan has been shopping for shoes all day and is now planning on making her decision as to which shoes she should buy. She has found two pairs of shoes that she finds equally desirable and will buy the pair of shoes that has a lower price.
4) Dave has just landscaped his back yard. He figures that new age spiritualism will soon be making a big comeback and so he has designed his garden based on ancient pagan principles. He anticipates a large increase in property value in future that will justify this extra expense today.
2)A developer involved in a hotel development is considering the owner’s suggestion to include five pools in the design. Similar hotels have four or less pools. The developer believes it is uneconomical to include a fifth pool because the cost to build the pool will exceed the value added to the customers.
Over the years, you have reviewed a lot of reports from junior appraisers at your firm, and heard a lot of explanations for the limited work completed. Which one is MOST likely to be a valid statement of a scope of work limitation.
1) “I noticed the First Principles of Value do not specify a requirement to verify third party information, so I omitted this step to save time”.
2) “The shopping centre owner didn’t say what type of report was wanted, so I assumed the drive-by report was sufficient”.
3) “I did not inspect the barns, as the client stated she was only interested in the value of the house”.
4) “Examination of market information was unnecessary as the value indicated by the three comparables was self-evident”.
3) “I did not inspect the barns, as the client stated she was only interested in the value of the house”.
Which of the following is NOT a characteristic of highest and best use analysis?
1) Determines the final opinion of value
2) Helps the appraiser interpret the market forces that affect the subject property
3) Identifies the use or uses on which the final opinion is based
4) Helps the appraiser identify comparable properties
1) Determines the final opinion of value
Which of the following is a public limitation on the bundle of rights?
1) Zoning
2) Mortgage
3) Sell the property
4) Lease
1) Zoning
