Chapter 1

Question 1

These are considered to be the “4 Forces” that affect real estate values:

1 ________
2________
3________
4________

Answer 1

1. Geographic and Environmental
2. Government and Legal
3. Economic
4. Social

Question 2

Geographic and Environmental

The utility and the highest and best use of a parcel of land are greatly affected by:

1. ______
2. ______

Answer 2

1. The physical characteristics

2. The locational characteristics

Question 3

Each parcel of land is ______

Answer 3

unique

Question 4

Government and Legal

Land use is regulated through _______.

Answer 4

Laws

Question 5

The law focuses on

Answer 5

the rights and obligations associated with various interests in the land

Question 6

The ____ of the rights and obligations of the stakeholders is the focus of real estate appraisal.

Answer 6

VALUE

Question 7

Government and Legal

In Canada – the law provides that the holders of the land actually have _____ _______ (permission from the government to hold land) rather than _____ ______.

Answer 7

“Land Tenure”

“absolute ownership”

Question 8

What is Fee Simple Ownership?

Answer 8

The construct that land holders actually have Land Tenure or permission from the government to hold land.

Question 9

Land is subject to the rights of ___________.

Answer 9

The government.

Question 10

Land includes

Answer 10

everything under and over it. Natural elements such as trees to man made ones such as buildings.

Question 11

Economic Concept

Land (and its products) have economic value when:

Answer 11

1. Can be converted to useful goods or services
2. Are in demand
3. Are limited in supply

Question 12

Social Concept

Regulations and protection of the social aspect of land are put in place by the government through:

Answer 12

Land- use controls

Question 13

Social Concept

1) As a resource
2) As a commodity

Answer 13

1) Land may be protected for the good of society

2) Land is regulated so individual rights are not violated

Question 14

Define REAL ESTATE

Answer 14

Physical entities that are immobile and tangible.

We can see and touch them.

Land or improvements

Question 15

Examples of REAL ESTATE:
Natural improvements

Man Made Improvements

Answer 15

Trees, minerals, mountains.

Buildings, landscaping, power grid towers

Question 16

Define REAL PROPERTY

Answer 16

THE LEGAL SIDE

The attachment of interests, benefits, and rights TO REAL ESTATE which are intangible. Can’t see or touch.

Question 17

What is an “Estate in the land”?

Answer 17

An interest in real estate.

It describes the degree, nature, or extent of interest a person has in the land.

Question 18

What is “Bundle of Rights”?

Answer 18

A collection of individual INTERESTS and RIGHTS pertaining to specific REAL PROPERTY.

These individual interests and rights can be separated, and treated individually and ultimately traded in the market place.

You can use it, trade it, sell it, lease it, enter it, give it away.

The government maintains the right to define the limitations and restrictions of the above discussed rights

Question 19

What’s the difference between REAL ESTATE, REAL PROPERTY and PERSONAL PROPERTY?

Answer 19

Real estate is tangible. It cannot be appraised nor sold.

Real property is the rights attached to the real estate. It can be appraised and sol.

Personal property is tangible, but not attached to real estate.

Question 20

Personal property is

Answer 20

specific, portable and tangible objects.

Not attached to the land.

Question 21

Examples of Personal Property

Answer 21

Furnishing, free standing appliances, decorations, artwork.

Question 22

How are Chattels and Fixtures different?

Answer 22

Chattels are easily removable and thus do not add value to the real estate.

Fixtures are permanently affixed to the land. They add value to the real estate.

Question 23

When does a chattel become a fixture?

Answer 23

1. Look at degree of fixation.

2. Consider if the item is for the betterment of the PROPERTY or PERSON.

Question 24

Appraisal Practice

Appraisal Institute of Canada - AIC Designations

CRA?

Answer 24

Canadian Residential Appraiser

Single Family Residential

Question 25

Appraisal Practice

AIC Designations

AACI?

Answer 25

Accredited Appraiser Canadian Institute

All properties.

Question 26

Appraisal Practice

3 Type of appraisal services are:

Answer 26

1) Appraisal (opinion)
2) Appraisal review (checking)
3) Appraisal consulting (opinion that supports a larger assignment)

Question 27

Appraisal Practice

Appraisal Reporting Outputs

Answer 27

1) Narrative
2) Short narrative
3) Form
4) Oral

Question 28

Appraisal Practice

Difference between the PURPOSE and INTENDED USE of and appraisal?

Answer 28

1. Stated reason for the appraisal

2. How the information from the appraisal will be used.

Question 29

Common Understanding of land:
1\_\_\_\_\_
2\_\_\_\_
3\_\_\_\_
4\_\_\_\_
5\_\_\_\_

Answer 29

1. Each parcel of land is unique
2. Land is immobile
3. Land is durable
4. Supply of land is finite (you can alter it)
5. Land is useful to people