Exam Prep Flashcards
What statement about electromagnetic fields is FALSE?
a. They are created by moving electrical currents.
b. They can affect other charged objects.
c. They can be produced by high-tension power lines.
d. They have been proven to cause cancer.
d. They have been proven to cause cancer.
With an easement in gross, if the owner
of the property burdened by the easement transfers the
servient property, the easement __________ to be binding
upon the next owner
continues
Appraisers must analyze agreements of sale,
options, and listings of the subject property
current as of the effective date of an appraisal,
in a market value assignment, if it is
available in the normal course of business.
Kim signs a contract agreeing to buy a property
from Bob, but Bob does not actually own the
property. This contract is _______ .
void .
If Joe leases property that he owns to Susan, what
is held by Susan due to
the lease?
Leasehold
A non-possessory interest in real property is
also called a(n)
Encumberance
The _____ __ ________ states that whoever
drills a well on his land owns all the oil or gas the well
produces, even though it may have migrated from under
a neighbor’s land.
rule* *of* *capture .
John and Suzanne, a married couple, form a
corporation in which to hold title of their real
estate assets with no provision for survivorship.
How is title to the property being held?
Severalty
The Treasury Department is NOT responsible
for ________ _________ markets.
secondary mortgage
Lyle contracts to buy Julia’s house, but only if
he can sell his house. This type of provision
written into a sales contract is called a
___________ _______ .
contingency* *clause .
The annual increase lease operates
similarly to a step-up lease with one major exception—
rather than a percentage increase, the periodic increase
specified in the lease is a _______ ______ ______.
specific* *dollar* *amount .
A property that sold below market value due to
a pending foreclosure is influenced mostly by ______ and ________ .
haste and duress .
The point in a business cycle when prices fall
and production slows until demand catches up
with supply is most likely a period of _________ .
contraction .
Which is NOT a condition of a typical arm’s
length transaction?
a. no atypical concessions
b. no marketing
c. no relationship of the parties to the transaction
d. no unusual terms
b. no marketing
How many investors, at a minimum, are required
to form a REIT?
100
Within the definition of an appraiser, which is
NOT one of the expectations of an appraiser’s
performance?
- *a. advocacy
b. impartiality
c. independence
d. objectivity**
Advocacy
Josh received an appraisal request from a
lender-client who told him to immediately call
if the value on the property is less than the
amount stipulated by the lender, as he doesn’t
intend to pay for an appraisal that won’t
benefit his position. Will acceptance of this
assignment be in compliance with USPAP?
No, an appraiser may not accept an assignment
with unacceptable assignment conditions.
The act or process limited to the development and
reporting of an opinion regarding the quality
of another appraiser’s work is an _________ ______ _________ .
appraisal review assignment.
Appraisers perform appraisal reviews
which is an opinion of the quality of another appraiser’s
work.
The unity of ___________ is always present with tenancy in common.
Possession
If a property is known by the appraiser, on
the effective date of the appraisal, to have an
inoperative mechanical system component, but
the appraiser is considering the component
as if it were operating properly on that date
for the purpose of his analysis, what is the
appraiser basing his opinions and conclusions on?
Hypothetical condition
Which characteristic is common to all freehold
estates?
Possessory interest is of an uncertain duration.
Township sections are _______ by ______ in
dimension, and _____ acres.
Township sections are 1 mile* by *1 mile in
dimensions, and 640 acres.
In a triple-net lease scenario, which is NOT a
typical expense of the lessee?
a. fire insurance on the building
b. property taxes
c. repairing a leaky faucet
d. replacing the roof on the structure
d. replacing the roof on the structure
An appraiser is defined as “one who is
expected to perform valuation services competently
and in a manner that is _________, ________, and
_________ .”
- **independent*, impartial, and
- objective*.”**
Tools used by the Fed to implement monetary
policy include ________ rates and _______ requirements.
discount / reserve
The basis for governmental regulation of the
use of private property is
Police power
The primary intent of marital property rights is
to protect the rights of a surviving spouse when
the surviving spouse is not specified in the
property title.
A ______ is used for holding and controlling
property on behalf of someone else.
Trust
According to the rule of capture, a property owner
is permitted to drain oil or gas from under his
own property or from under a neighboring
property.
If the federal government spends less money
than revenue, which would likely occur?
- *More funds would be available for real estate
loans. **
What type of lease would provide the lessee
with the least expense and risk?
Gross -flat
The amount to create, produce, or obtain a
property is known as _____ .
cost .
The four unities of property ownership
are: (Remember the
acronym PITT)
P - Possession
I - Interest
T - Time
T - Title
A cost for an improvement that is divided
among several property owners on a street and
billed by a jurisdiction would be an example of
special assessment.
Which is NOT one of the four unities of property
ownership?
a. investment
b. possession
c. time
d. title
a. investment
What is the lump-sum remaining principle
balance referred to that is payable when a
mortgage loan is not fully amortized?
Balloon balance
Which statement is FALSE regarding a gross easement?
a. A dominant tenant’s rights can be assigned but do not automatically run with the land.
b. If the servient property is transferred, the easement terminates.
c. It always has both a dominant tenant and a servient tenant.
d. There is no dominant tenement.
b. If the servient property is transferred, the easement terminates.
Craig holds a life estate in a property owned by his stepfather, Charles. Craig may occupy the property for as long as his mother, Charles’ wife, is alive. When Craig’s mother dies, possession of the property goes back to Charles. What type
of arrangement is illustrated?
life estate pur autre vie
Christopher is leasing property from Patricia
via an annual increase lease. What is characteristic of an annual increase lease?
Rent increases are a predetermined dollar
amount at specified periodic intervals.
When someone dies without a will, he is said to
have died __________ .
intestate.
Which is a true statement regarding tenancy in common?
a. Only one of the four unities is always present.
b. The ownership includes right of survivorship.
c. Ownership interests cannot be unequal.
d. There may be one or more co-owners.
a. Only one of the four unities is always present.
An ________ use might be determined when a reasonable and probable change in circumstances is forthcoming.
interim .
Government has four powers; what are they? (remember
P-E-T-E):
P - Police power
E - Eminent domain
T - Taxation
E - Escheat.
A tenant farmer’s crops are referred to
as __________ .
emblements .
Which of the following is likely to contribute the most value?
a. adding a fence where fences are prohibited
b. adding 500 square feet to a 1,200 square feet house,
where 1,200 square feet is the predominant square footage
c. adding a second bath to a three-bedroom
house, where three bedrooms, two baths is the norm
d. changing granite countertops to laminate
c. adding a second bath to a three-bedroom
house, where three bedrooms, two baths is the norm
A __________ is a compilation or a
group of complimentary land uses.
neighborhood
__________ is when, for example,
a developer dedicates land for streets within a new
subdivision or someone dedicates land for a park to a
municipality.
Dedication
An appraiser determines the appropriate
definition of market value to be used in the
assignment during ________ __________ .
problem** **identification .
It is well known that a murder took place in a
house 40 years ago. This could be an example
of a ________ .
stigmatism .
_________ _______ is a property made
undesirable to most people by a past event, often a
crime or environmental hazard.
Stigmatized** **property
Which is an example of the governmental force
of revenue generating laws?
a. cost of credit
b. earnings levels
c. permissibility of zoning
d. specific tax policies
d. specific tax policies
The appraisal process begins with problem
identification and concludes with
reporting of the appraiser’s conclusions.
Which is required in order to establish a person
or entity as the appraiser’s client in an
assignment?
Engagement of the appraiser’s services
If a tax assessor estimated the market value of
a property to be $340,000, what are the annual
real property taxes if the assessment ratio is
35% and mills are 51.7?
$340,000 x 35% = $119,000
$119,000 x .0517 (51.7 mills) =
$6,152.30
Appraisal development standards of USPAP require the appraiser to address reconciliation as a ___ - ____ process.
two-part
Which would most likely be considered real
property?
- *a. area rug
b. built-in window seat
c. lawn furniture
d. sleeper sofa**
b. built-in window seat
For a landowner possessing riparian rights,
which is typically an accompanying right?
a. Building a dam to stop or divert the water flow.
b. Releasing sewage in reasonable amounts into the
water flow.
c. Taking water from the property to irrigate nonriparian
property the riparian owner also owns.
d. Using water in reasonable amounts to irrigate
crops on the riparian property.
d. Using water in reasonable amounts to irrigate
crops on the riparian property.
“_________ ________” asks if the site is large enough for the proposed structure and all of the necessary site accommodations
Physically** **possible
When a new law imposes a zoning
designation on a neighborhood, current landowners are
permitted to continue using their land the same way
they always have under ___ - ________ _____ .
non*-*conforming* *use.
___________ rights primarily address how the water
can be used by the property owner.
Riparian (R = Rivers & streams)
___________ ______ are involuntary, specific
liens claimed by someone who performed work on,
or supplied materials for, real property—construction,
remodeling, repairs, or demolition—and has not been
paid.
Mechanic’s**liens
A neighborhood is undergoing much
rehabilitation and property improvement. The
movement is not part of any public movement
or initiative but rather from a general trend
toward people desiring to live there. What
phase of the neighborhood life cycle is being evidenced?
Gentrification
The scope of work disclosed in an appraisal
report must include the…
…scope of work that was actually performed.
A _______ __ ________ occurs when one
party to a contract fails to perform with no legal cause.
breach** **ofcontract**
All are essential elements for a valid deed EXCEPT:
a. competent grantor.
b. delivery and acceptance.
c. grantee’s signature.
d. legal description.
c. grantee’s signature.
If Joe leases property that he owns to Susan, what
type of ownership interest is held by Joe due to
the lease?
leased fee
The highest and best use for a parcel of land that
is improved with an old building has changed,
and it has been determined the improvements
should be razed. The building has many ornate
stained glass windows and extensive black
walnut wood trim. What value type would be
an appropriate in this assignment?
Salvage
_______ ___ can present a problem indoors if allowed to
build up to dangerous levels.
Radon** **gas
Felicia has entered into an agreement with her mother allowing her mother to
occupy a property owned by Felicia for a specified duration of six months.
What type of estate was created?
Estate for years
A section of the neighborhood has recently been rezoned for residential use only. Zachary’s store is located in this section. Because the property was used as a store prior to the zoning, he will be allowed to continue to use his property as a store. This is known as a
non-conforming use.
How many square feet are in one acre?
43,560 SQ FT
When the highest and best use of the property is
“vacant,” the current improvements are…
… taking away from the vacant site value by more
than the cost to raze the improvements.
Joseph owns property with his wife, Cassandra, in joint tenancy. Joseph’s will specifies that his undivided interest in the property will go to his children, who are Cassandra’s stepchildren. What will happen if Joseph dies before Casandra?
Survivorship will override Joseph’s will, and full possessory interest will transsfer to Casandra.
_________ refer to the time-distance relationship to services between properties and services that people in the market rely on, such as schools, employment, and shopping.
Linkages
Fred has conveyed his property to a trust. His
attorney will hold the asset on behalf of Fred’s
children, who will receive net proceeds from
the property. What participant in the trust is
Fred’s attorney?
Trustee
An easement allows the present and any future
owner of “Lot D” to drive across a neighbor’s
property “Lot S” to reach her own property.
This is an example of a(n) _________ _________ .
appurtenant* *easement .
What is a characteristic of a fee simple defeasible (defeatable)
estate?
Ownership could be (but are not automatically) forfeited if certain events occur.
When a new person takes the place of one of
the parties to a contract, and the withdrawing
party is relieved of all liability, it is called _________ .
novation .
_______ _______ is the constitutional power
of government to enact and enforce laws that protect he
public’s health, safety, morals, and general welfare.
Police power
A parcel is described as the SW 1/4 of the SW 1/4
of the NE 1/4 of a section. Draw the illustration:
The law of diminishing returns is most directly
linked to which economic principle?
Contribution
When a buyer will not pay more for something
than its cost, the buyer is influenced by __________ .
“substitution”** **.
Wetlands are protected under what federal
Act?
Clean Water Act
A trend of moving to a new suburban area is
an example of _______ forces.
social .
In a percentage lease, the amount of rent that
is the base or guaranteed minimum the lessee
will pay is called __________ ____ .
breakpoint rent .
An extraordinary assumption is used in a
specific assignment when the appraiser has a _________ _______ to believe what he is considering is true, but it is uncertain.
reasonable basis
In a real estate transaction, the grantor is the
_________ and the grantee is the ________.
seller / buyer
An option agreement is supported by ___________ .
consideration.
**The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) recognizes which as the current industry standards for appraisals?**
USPAP
Within the definition for the FIRREA, it
states that “…recognizes USPAP as the current industry
standard for appraisals…”
__________ _________ is the most common
way to transfer ownership and includes sale, gift,
dedication, and grant.
Voluntary* *alienation
A month-to-month lease gives the lessor
________ control when it comes to adjusting the ____ .
greater / rent .
A school building might be an example of a(n)
__________ property.
special-use
An appraiser is appraising a structure built
and used as a special use property. Since the
value opinion is to reflect the property’s special
use for the particular owner, the appropriate
type of value is ______ __ ___ .
value in use .
What are the dimensions of a property described as
the SW 1/4 of the NW 1/4 of the NW 1/4 of a section?
Each “1/4” equals HALF the linear feet of one side of a section (5,280’)
(3) quarters given in the problem, so…
(5280’ / (2 * 2 * 2)) = (5,280’ / 8) = 660’
Answer: 660’ x 660’
If Stephanie conveyed the fee simple estate subject
to a condition subsequent to Larry, Stephanie
has
power of termination to re-enter and possibly
begin proceedings to recover the real estate.
Highest and best use allocates land resources _________ .
efficiently .
__________ factors are NOT a force influencing
housing cycles.
Structure
When a contract is terminated and each party
returns whatever consideration the other had
provided, it is called _________ .
recision.
An _______ ___ ______ is any leasehold estate for a fixed time period.
The term does not have to be a period of years.
Estate* *for* *years
The term describing the conversion of personal
property to real property is
annexation
Paramount, within USPAP, is an appraiser’s obligation to promote and preserve
________ ______ in __________ practice.
…public trust in appraisal practice.
There are standards of practice in
appraising and within these standards there is an
obligation of promoting and preserving public trust in
appraisal practice.
When an individual is acting in the role of
an appraiser, the expectation is that the individual will
________ as an ________ .
… perform* as an *appraiser.
Tax credits, such as those created through
the American Recovery and Reinvestment
Act of 2009, are an example of which force
influencing the value of real property?
Governmental
A study is being performed that will examine
the benefit of a proposed real estate project
in relation to the project’s cost. What type of
analysis is being performed?
Feasibility Study
What is the description for the following illustration?
SE 1/4 of the NE 1/4 of the SW 1/4
