Chapter 14 Quiz Flashcards
Market price is closest to the
A. Price asked by the seller in the open market
B. Price offered by a buyer in the open market
C. Market value
D. Amount of money given in exchange for the property (value in exchange)
D. Amount of money given in exchange for the property (value in exchange)
The increase in value created by joining ownership of several smaller parcels of land into one large single ownership is called
A. Par value increase
B. Over improvement
C. Plottage increment
D. Physical inflation
C. Plottage increment
After the appraiser has used all three appraisal approaches to estimate value, what process is used to arrive at a final estimate of value?
A. Data evaluation
B. Summation
C. Reconciliation
D. Averaging
C. Reconciliation
An appraiser is preparing an appraisal for the lender. The subject property is older and has a pool. The comparable property is newer and has no pool. How would the agent make the necessary CMA adjustments?
A. Sale price of seller’s property up for age and pool
B. Sale price of seller’s property down for age and pool
C. Comparable property up for age and down for pool
D. Comparable property down for age and up for pool
D. Comparable property down for age and up for pool
Under the principle of substitution,
A. Property cannot be worth more than the cost of acquiring an equally desirable replacement property
B. There should be a reasonable degree of uniformity in property values
C. Excess profits tend to encourage ruinous competition
D. A good structure substituted for a bad structure will not cure the ills of the surrounding neighborhood
A. Property cannot be worth more than the cost of acquiring an equally desirable replacement property
Mr. Williams owned his home for 15 years. It originally had an estimated life of 40 years. He has maintained his home in excellent condition. He decided to sell his house. It was appraised to be only 6 years old. The appraiser’s determination exemplifies the concept of
A. Physical age
B. Effective age
C. Chronological age
D. Depreciation table
B. Effective age
On which of the following properties would you most likely use the income approach to appraising?
A. Residential
B. Condominium
C. Office building
D. Vacant land
C. Office building
What is the purpose of a date in an appraisal report?
A. It is required by law
B. It defines the market conditions under which the appraisal was made
C. It helps identify the report
D. It serves no important purpose
B. It defines the market conditions under which the appraisal was made
By definition, what does an appraiser give in the course of his work?
A. A valuation
B. An estimate
C. A reaction
D. A guarantee
B. An estimate
The principle of ____________ affirms that value is created by expected benefits to be derived in the future.
A. Anticipation
B. Conformity
C. Progression
D. Substitution
A. Anticipation
In the cost approach, when figuring depreciation, which does NOT qualify as a depreciation item?
A. Roof
B. Air conditioner
C. Land
D. Fixtures
C. Land
Poor layout of rooms would be included as an element of depreciation called
A. Economic obsolescence
B. Functional obsolescence
C. Political obsolescence
D. Social obsolescence
B. Functional obsolescence
The period of time that an improvement contributes value to the land is considered to be its
A. Economic life
B. Highest and best use
C. Effective age
D. Salvage value
A. Economic life
In checking for conformity of a home in a particular neighborhood, an appraiser would NOT consider
A. Size
B. Style of architecture
C. List price
D. Amenities
C. List price
Appraiser qualifications are required by
A. Federal reserve
B. HUD
C. Sherman Antitrust Act
D. FIRREA
D. FIRREA
