Exam Prep Flashcards
1
Q
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.
A
d. They have been proven to cause cancer.
2
Q
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
A
continues
3
Q
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
A
available in the normal course of business.
4
Q
Kim signs a contract agreeing to buy a property
from Bob, but Bob does not actually own the
property. This contract is _______ .
A
void .
5
Q
If Joe leases property that he owns to Susan, what
is held by Susan due to
the lease?
A
Leasehold
6
Q
A non-possessory interest in real property is
also called a(n)
A
Encumberance
7
Q
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.
A
rule* *of* *capture .
8
Q
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?
A
Severalty
9
Q
The Treasury Department is NOT responsible
for ________ _________ markets.
A
secondary mortgage
10
Q
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
___________ _______ .
A
contingency* *clause .
11
Q
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 _______ ______ ______.
A
specific* *dollar* *amount .
12
Q
A property that sold below market value due to
a pending foreclosure is influenced mostly by ______ and ________ .
A
haste and duress .
13
Q
The point in a business cycle when prices fall
and production slows until demand catches up
with supply is most likely a period of _________ .
A
contraction .
14
Q
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
A
b. no marketing
15
Q
How many investors, at a minimum, are required
to form a REIT?
A
100
16
Q
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**
A
Advocacy
17
Q
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?
A
No, an appraiser may not accept an assignment
with unacceptable assignment conditions.
18
Q
The act or process limited to the development and
reporting of an opinion regarding the quality
of another appraiser’s work is an _________ ______ _________ .
A
appraisal review assignment.
Appraisers perform appraisal reviews
which is an opinion of the quality of another appraiser’s
work.
19
Q
The unity of ___________ is always present with tenancy in common.
A
Possession
20
Q
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?
A
Hypothetical condition
21
Q
Which characteristic is common to all freehold
estates?
A
Possessory interest is of an uncertain duration.
22
Q
Township sections are _______ by ______ in
dimension, and _____ acres.
A
Township sections are 1 mile* by *1 mile in
dimensions, and 640 acres.
23
Q
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
A
d. replacing the roof on the structure
24
Q
An appraiser is defined as “one who is
expected to perform valuation services competently
and in a manner that is _________, ________, and
_________ .”
A
- **independent*, impartial, and
- objective*.”**
25
**Tools used by the Fed to implement monetary
policy include ________ rates and _______ requirements.**
**discount / reserve**
26
**The basis for governmental regulation of the
use of private property is**
**Police power**
27
**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.**
28
**A ______ is used for holding and controlling
property on behalf of someone else.**
**Trust**
29
**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.**
30
**If the federal government spends less money
than revenue, which would likely occur?**
* *More funds would be available for real estate
loans. **
31
**What type of lease would provide the lessee
with the least expense and risk?**
**Gross -flat**
32
**The amount to create, produce, or obtain a
property is known as _____ .**
***_cost_* .**
33
**The four unities of property ownership
are: *(Remember the
acronym PITT)***
**P - Possession**
**I - Interest**
**T - Time**
**T - Title**
34
**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.**
35
**Which is NOT one of the four unities of property
ownership?**
a. investment
b. possession
c. time
d. title
**a. investment**
36
**What is the lump-sum remaining principle
balance referred to that is payable when a
mortgage loan is not fully amortized?**
**Balloon balance**
37
**Which statement is FALSE regarding a gross easement?**
## Footnote
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.**
38
**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**
39
**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.**
40
**When someone dies without a will, he is said to
have died __________ .**
**intestate.**
41
**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.**
42
**An ________ use might be determined when a reasonable and probable change in circumstances is forthcoming.**
***_interim_* .**
43
**Government has four powers; what are they? *(remember
P-E-T-E):***
**P - Police power**
**E - Eminent domain**
**T - Taxation**
**E - Escheat.**
44
**A tenant farmer’s crops are referred to
as __________ .**
***_emblements_ .***
45
**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**
46
**A __________ is a compilation or a
group of complimentary land uses.**
***_neighborhood_***
47
\_\_\_\_\_\_\_\_\_\_ **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**
48
**An appraiser determines the appropriate**
**definition of market value to be used in the
assignment during ________ \_\_\_\_\_\_\_\_\_\_ .**
***_problem_** **_identification ._***
49
**It is well known that a murder took place in a
house 40 years ago. This could be an example
of a ________ .**
***_stigmatism_* .**
50
**\_\_\_\_\_\_\_\_\_ _______ is a property made
undesirable to most people by a past event, often a
crime or environmental hazard.**
***_Stigmatized_** **_property_***
51
**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**
52
## Footnote
**The appraisal process begins with problem
identification and concludes with**
**reporting of the appraiser’s conclusions.**
53
## Footnote
**Which is required in order to establish a person
or entity as the appraiser’s client in an
assignment?**
## Footnote
**Engagement of the appraiser’s services**
54
**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**
55
**Appraisal development standards of USPAP require the appraiser to address reconciliation as a ___ - ____ process.**
***_two-part_***
56
**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**
57
**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.**
58
**“\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_” asks if the site is large enough for the proposed structure and all of the necessary site accommodations**
***_Physically_** **_possible_***
59
**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_*.**
60
\_\_\_\_\_\_\_\_\_\_\_ **rights primarily address how the water
can be used by the property owner.**
**Riparian (*R =* *Rivers & streams*)**
61
\_\_\_\_\_\_\_\_\_\_\_ ______ **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_***
62
## Footnote
**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**
63
**The scope of work disclosed in an appraisal
report must include the...**
**...scope of work that was actually performed.**
64
**A _______ \_\_ ________ occurs when one
party to a contract fails to perform with no legal cause.**
***_breach_** **_of_****_contract_***
65
**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.**
66
**If _Joe_ leases property that he owns to Susan, what
type of ownership interest is held by _Joe_ due to
the lease?**
**leased fee**
67
## Footnote
**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**
68
**\_\_\_\_\_\_\_ ___ can present a problem indoors if allowed to
build up to dangerous levels.**
***_Radon_** **_gas_***
69
**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**
70
**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.**
71
**How many square feet are in one acre?**
**43,560 SQ FT**
72
**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.**
73
**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.**
74
**\_\_\_\_\_\_\_\_\_ 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_***
75
**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**
76
**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_* .**
77
**What is a characteristic of a fee simple defeasible *(defeatable)*
estate?**
**Ownership *_could be_* (but are not automatically) forfeited if certain events occur.**
78
**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_* .**
79
**\_\_\_\_\_\_\_ _______ is the constitutional power
of government to enact and enforce laws that protect he
public’s health, safety, morals, and general welfare.**
**Police power**
80
**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:**
81
**The law of diminishing returns is most directly
linked to which economic principle?**
**Contribution**
82
**When a buyer will not pay more for something
than its cost, the buyer is influenced by __________ .**
***_"substitution"_** **.***
83
**Wetlands are protected under what federal
Act?**
**Clean Water Act**
84
**A trend of moving to a new suburban area is
an example of _______ forces.**
***_social_* *.***
85
**In a percentage lease, the amount of rent that
is the base or guaranteed minimum the lessee
will pay is called __________ \_\_\_\_ .**
***_breakpoint_* *_rent_ .***
86
**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_***
87
**In a real estate transaction, the grantor is the**
**\_\_\_\_\_\_\_\_\_ and the grantee is the \_\_\_\_\_\_\_\_.**
**seller / buyer**
88
**An option agreement is supported by ___________ .**
**consideration.**
89
```
**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...”*
90
\_\_\_\_\_\_\_\_\_\_ _________ **is the most common
way to transfer ownership and includes sale, gift,
dedication, and grant.**
***_Voluntary*_ _*alienation_***
91
**A month-to-month lease gives the lessor
\_\_\_\_\_\_\_\_ control when it comes to adjusting the ____ .**
**greater / rent .**
92
**A school building might be an example of a(n)
\_\_\_\_\_\_\_\_\_\_ property.**
***_special-use_***
93
**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_ .***
94
**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'**
95
**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.**
96
**Highest and best use allocates land resources _________ .**
***_efficiently_*** **.**
97
**\_\_\_\_\_\_\_\_\_\_ factors are NOT a force influencing
housing cycles.**
***_Structure_***
98
**When a contract is terminated and each party
returns whatever consideration the other had
provided, it is called _________ .**
**recision.**
99
**An _______ \_\_\_ ______ is any leasehold estate for a fixed time period.**
**The term does not have to be a period of years.**
***_Estate*_ _*for*_ _*years_***
100
**The term describing the conversion of personal
property to real property is**
**annexation**
101
**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.*
102
**When an individual is acting in the role of
an appraiser, the expectation is that the individual will
\_\_\_\_\_\_\_\_ as an ________ .**
***... _perform*_ as an _*appraiser_*.**
103
**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**
104
**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**
105
**The economic principle of \_\_\_\_\_\_\_\_\_\_\_
recognizes that real estate is different from other
products in that it is inherently immobile.**
***_externalities_***
106
**The doctrine of emblements allows a
\_\_\_\_\_\_\_ _________ to re-enter land to harvest the crops he
planted even after tenancy has ended.**
**tenant farmer**
107
**Craig, Jason, and Hugh own real estate as joint
tenants. If Craig and Jason die simultaneously,
Hugh will**
**hold the entire property interest in severalty.**
108
**While appraising a property, Lydia could not
check the furnace to see if it is in good working
order due to the utilities being off at the time
of the inspection. Since the home is relatively
new and the components appear to be in
good condition, Lydia has a reasonable basis
to believe that the furnace is in satisfactory
operating condition, but she is uncertain.
Therefore, Lydia bases her conclusion on a(n) ______________ \_\_\_\_\_\_\_\_\_\_\_\_ .**
***_extraordinary_ _assumption_* .**
109
**A transaction with no atypical conditions is
best described as _____ \_\_\_\_\_\_\_ .**
***_arm's_* *_length_ .***
110
**Air rights of land ownership are limited by the
federal government relating to the**
**prevention of interference with air traffic.**
111
**What information is NOT required to be in an
appraisal workfile?**
**A copy of the bill sent to the client**
112
**A _________ \_\_\_\_\_\_\_\_ is something that
the appraiser knows to be false, but he is considering
it as being true for the purpose of his analysis and
obtaining credible results.**
***_hypothetical_** **_condition_***
113
**Which is NOT a source of equity used as capital
for acquisition of investment real estate?**
a. joint ventures
b. mortgages
c. partnerships
d. pensions funds
**b. mortgages**
114
**Which clause includes the words “to have and
to hold”?**
**Habendum**
115
**Which is an advantage of the secondary mortgage market?**
* *a**. Lenders can sell existing lower interest rate loans to free-up money.
* *b**. The lender is only lending funds from their institutions deposits.
* *c**. Secondary market loans are only for home equity loans, so there is less risk.
* *d**. There are no national requirements for the secondary market.
**a. Lenders can sell existing lower interest rate loans to free-up money.**
116
**Existing inventory of houses and planned
new construction are elements of what type of
analysis?**
**Competitive Supply Analysis**
117
## Footnote
**Carol and Leslie enter into a contract stating that Carol will pay Leslie $650 per month for the next 20 years. Carol will live in the house and pay all expenses including property taxes, insurance, and maintenance costs. Leslie will continue to hold the title until the property is paid off by Carol. What kind of contract do they have?**
**Installment Sales Contract *(also, Land Contract)***
118
**Which is a characteristic of a tenancy at will that is NOT common to other types of leasehold estates?**
a. It automatically terminates at the death of either the landlord or tenant.
b. The landlord must use force to regain possession of the property.
c. Leases are fully assignable.
d. The tenant is a holdover without the landlord’s permission.
**a. It automatically terminates at the death of either the landlord or tenant.**
119
**A contract clearly states that $5,000 would be kept by the seller, should the buyer breach the contract. The $5,000 is considered _________ \_\_\_\_\_\_\_\_ .**
***_liquidated*_ _*damages_* .**
120
**Why would an appraiser be interested in
expenses being paid by the landlord when
reviewing a lease agreement?**
**This will indicate _operating_ _expenses_ for estimating
net operating income *(neccessary for the Income Approach)*.**
121
**The largest and most expensive house in the
neighborhood could likely be experiencing
regression through which economic principle?**
**Conformity**
122
## Footnote
**Analysis indicates that 170 residential lots are
needed for sale in the next four years based on
projected demographics. There are currently
80 residential lots available with another 28
soon to be completed. If 50% of the demand will
come in year one and 30% of the demand will
come in year two, how many lots are projected
to be needed to satisfy demand in year three?**
170 x (1.0 - .50 - .30) =
170 x .20 =
**34 lots**
123
**Phillip is leasing an office suite from National
Office Properties, Inc., the property owner, via
a net/net lease. In this arrangement, the lessor
has conveyed a _________ \_\_\_\_\_\_\_\_ ________ .**
***_temporary*_ _*possessory*_ _*interest_***
124
**Where applicable, a particular jurisdiction’s
statute of frauds requires contracts conveying
real estate to be _________ .**
**written.**
125
**The four agents of production are: *(C-E-L-L)*.**
**C - Capital**
**E - Entrepreneurship**
**L - Land**
**L - Labor**
126
**The Comprehensive Environmental Response,
Compensation, and Liability Act primarily
addresses**
**abandoned waste sites.**
127
**The federal government influences the money
supply through ______ and ________ policy .**
***_fiscal_* and *_monetary_***
128
## Footnote
**During the course of a market analysis, an
appraiser notes that a particular area which
has been predominately residential properties,
is rapidly undergoing a complete change of use
to commercial due to the widening of a street
and increasingly higher traffic counts. What is
the appraiser observing?**
**Transition**
129
**If the client is using an appraisal to determine
what a property would be worth in a less than
typical marketing period, the appropriate type
of value would likely be ________ \_\_\_\_\_\_ .**
***_liquidation*_ _*value_ .***
130
**A ___ \_\_\_\_\_\_\_ __________ estate is a type of
real property ownership that may be defeated or undone
if certain events occur or certain conditions are not met.**
***_fee*_ _*simple*_ _*defeasible_* .**
131
**At what point in the assignment must other
intended users be identified by the client?**
**At the time of the assignment**
132
\_\_\_\_\_\_\_\_\_\_ **is when the grantor(s) signs the deed in front
of witnesses.**
**Attestation**
133
**When a party signs a document before a notary
public stating it was signed voluntarily, it is an ___________ .**
***_acknowledgment_*** .
134
**A contract written for the exchange of illegal
substances would be void because "\_\_\_\_\_\_\_ __ \_\_\_\_\_\_\_ ".**
***_legality_* *_of*_ _*object_* .**
135
**The county is taking part of Bill’s land for a
new park. What is this process called?**
**Condemnation**
136
## Footnote
**What is the description for the following illustration?**
**SE 1/4 of the NE 1/4 of the SW 1/4**
137
**In general, conforming conventional mortgage
loans represent less ____ \_\_ ____ to the lender.**
***_risk_ _of_ _loss_***
138
## Footnote
**An appraiser must disclose the lack
of competency to the client ______ \_\_ ________ the
assignment.**
**... *_prior*_ _*to*_ _*accepting_* the**
**assignment.**
139
**When housing prices fall due to the relocation
of a major employer, it is an example of a(n)
\_\_\_\_\_\_\_\_\_\_ force influencing value.**
**Economic**
140
**Which is NOT one of the four agents of production?**
a. capital
b. gross profit
c. labor
d. land
**b. gross profit**
141
**If one party to a contract fails to perform his
contractual obligations without a legal excuse,
it is a(n) ________ \_\_ ________ .**
***_breach*_ _*of*_ _*contract_* .**
142
**Fructus industriales represent plants
\_\_\_\_\_\_\_\_ and __________ by people (“fruits of industry”),
such as crops or orchards.**
**... *_planted*_ and _*cultivated_* by people ...**
143
**The scope of work in an assignment must include
the research and analysis necessary to produce
\_\_\_\_\_\_\_\_\_\_\_\_ results.**
***credible***
144
**An appraiser primarily considers general data
concerning the overall conditions of the real estate marketplace when performing a _______ \_\_\_\_\_\_\_\_ .**
***_market_* *_analysis_* *.***
145
\_\_\_\_\_\_\_\_ **is the uniting of two or more
separate properties by transferring ownership of all to
one person.**
***_Merger_***
146
**If a property is legally described using the terms
“rod” or “pole,” what is the distance being
referenced?**
**16.5 feet**
147
**Jack appraised a residential dwelling located
across the street from a factory that he
determined is negatively affecting the value of
the subject property. Jack applied a location
adjustment in his sales comparison approach.
However, the client asked that the factory not
be discussed in the appraisal report. Since Jack
addressed the condition with an adjustment,
has he complied with USPAP?**
**No, omitting the discussion could produce a
misleading report.**
148
**Christine has a one-year lease with the property owner, William. When the lease expires Christine continues to pay rent to William at the beginning of each month. What type of arrangement was created when William accepted rent in this manner?**
**periodic tenancy**
149
**Sick building syndrome is a result of poor ___ \_\_\_\_\_\_\_ .**
***_air_* *_quality_* *.***
150
**Going concern value is most accurately described as a valuation of the _______ and ________ assets.**
***_tangible_*** ***_and_*** ***_i_******_ntangible_*** ***.***
151
**The fact that real estate is ________ can either lead
to positive externalities or negative externalities.**
***_immobile_***
152
\_\_\_\_\_\_\_\_\_ **tenancy is a leasehold estate for a
duration of time, not a specific date.**
**Periodic**
153
## Footnote
**Which would be a natural attachment that would
be classified as fructus industriales?**
* *a. grass
b. ornamental tree
c. perennial flowers
d. wheat**
**d. wheat**
154
**How many acres are in a parcel described as the S
1/2 of the Ne 1/4 of a section?**
**80 acres**
***(640 / (4\*2)) = 80***
155
**How many linear feet are along one side
of the NE 1/4 of a township section?**
**Recall that each 1/4 of a section contains HALF the length of one side. Each side of a section is 5,280 LF, so we need HALF of one side (as only one "quarter" is mentioned).**
**5,280 LF / 2 = 2640 LF**
156
\_\_\_\_\_\_\_\_\_\_\_\_\_ **is the ability to freely buy,
sell, encumber, or dispose of property in any way the
owner sees fit.**
**Transferability**
157
**\_\_\_\_\_\_\_\_ means to be worthy of belief.**
***Credible***
158
**The scope of work must include the
\_\_\_\_\_\_\_\_\_ and ________ necessary to produce credible
results.**
**... *_research*_ and _*analyses_ ...***
159
\_\_\_\_\_\_ _______ **value is the value in use of
all property, which includes real property and personal
property such as trade fixtures, inventory (all tangible
assets), and the intangible assets of an established,
operating business with an indefinite life.**
***_Going_*** ***_concern_*** ***.***
160
## Footnote
* *Which concept elaborates on tenant crops?
a. appropriative rights
b. bundle of rights
c. doctrine of emblements
d. rule of capture**
**c. doctrine of emblements**
161
**In an appraisal report, sufficient information
regarding the scope of work includes disclosure
of research and analyses performed and might
also include disclosure of...**
**...research and analyses not performed.**
162
**What are the broad forces that influence real estate values?**
***(P-E-G-S)***
**P - Physical**
**E - Economic**
**G - Governmental**
**S - Social**
163
**\_\_\_\_\_\_\_\_ rights primarily address how the shoreline of the body of
water can be used by the property owner.**
**Littoral**
164
**Disclosure of the scope of work might also
include reasoning why certain _______ \_\_\_ _______ was
not performed.**
***_research_****_and_******_analysis_***
165
**The state’s housing finance authority has just
issued a low-interest, first-time homebuyer
mortgage program. Sales are spurred as a
result of this _________ \_\_\_\_\_ .**
***_governmental_** **_force._***
166
## Footnote
**An appraiser performs market analysis
on a _______ level and addresses the conditions in the
marketplace for the market area in which the property is
located, and they also perform on a _______ level for the
particular property being analyzed when compared with
all other properties against which it competes.**
**general / specific**
167
**An appraiser identifies the definition of market
value to be used in an assignment during
problem identification and must additionally...**
* *...cite the source of the definition in the appraisal
report. **
168
**When liens are paid off out of the proceeds of a
foreclosure sale,****a lien for real property taxes always has
\_\_\_\_\_\_\_\_ priority.**
**highest**
169
**If a site is 152’ x 169’, it contains how many
acres?**
(152' x 169') / 43,560
25,688 / 43,560
**.59 acres**
170
**\_\_\_\_\_\_\_\_ ____ is the portion over and
above what is necessary for the highest and best use of
the subject property and does not have a stand-alone
highest and best use.**
***_Surplus_** **_land_***
171
## Footnote
**For reconciliation, in addition to reconciling the quality and quantity of data available within the approaches used, USPAP also requires an appraiser to reconcile the _________ and _________ of the approaches, methods, and techniques used to arrive at the value conclusion.**
***_applicability_* and *_relevance_***
172
**When an individual offers both appraisal and
real estate brokerage services, what is true
when he is acting as a real estate broker?**
**He/she can perform in that capacity provided he
does not misrepresent his role.**
173
**Which is NOT a physical characteristic of real property?**
a. immobility
b. indestructibility
c. transferability
d. uniqueness
**c. transferability**
174
**Which is an obligation of the COMPETENCY
RULE of USPAP?**
a. decline all assignments for which the appraiser does
not initially possess competency
b. disclose the lack of competency to the client
prior to accepting the assignment
c. keep the lack of knowledge and experience
confidential in the appraisal report
d. refer the assignment to an appraiser who possesses
competency
**b. disclose the lack of competency to the client
_prior to accepting_ the assignment**
175
**What established power to the government for
taking private property with the payment of
just compensation?**
**Fifth Amendment of the U.S. Constitution**
176
\_\_\_\_\_\_\_\_\_\_ _________ **burden one parcel
of land for the benefit of another parcel of land.**
***_Appetenant_ _easements_***
177
**In co-ownership, reference to an undivided
interest emphasizes that the**
**property is not physically divided according to
co-owners.**
178
**The various complimentary land uses present
in an area are being examined as part of a
larger market. What component of a market
area is being analyzed?**
**Neighborhood**
179
**If Jerry conveys property subject to a life estate to
Samuel, who will gain title in fee simple when
the party holding the life estate passes away,
Samuel is known as the**
**remainderman .**
180
**A client’s assertion that he/she does not
intend to pay if the appraisal that does not meet his
objectives is an __________ assignment condition.**
***_unacceptable_***
181
**\_\_\_\_\_\_\_ _____ is what the property sold for.**
**Market price**
182
**Sam offers to sell his house to Brenda for
$200,000, if Brenda will pay $45,000 in cash
and give Sam a 15-year mortgage for the
balance at 11% interest. Brenda responds, “I
accept your offer, provided that I have to pay
only $40,000 down.” This is a**
**counteroffer.**
183
**\_\_\_\_\_\_\_\_\_ 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_***
184
**Which economic principle suggests that value is
created through expectation of future benefits?**
**Anticipation**
185
**When properties are listed at a certain price in the neighborhood that price tends to set the
limits of value for other properties around it,
according to the concept of ____________ .**
***_competition_* *.***
186
**Ben’s property has an easement in gross that
allows Ben to hunt on his neighbor’s land.
When the neighbor sells his land to Ben, the
easement terminates through**
**merger.**
187
**Water rights dealing primarily with the shoreline
of a non-flowing body of water are known as ________ \_\_\_\_\_\_\_ .**
***_littoral*_ _*rights_*.**
188
**The Federal Reserve System has how many
regional Federal Reserve Banks?**
**12**
189
\_\_\_\_\_\_\_\_\_ **is the action of terminating a lease by mutual consent.**
**Surrender**
190
## Footnote
**The appraisal process begins with \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_ and follows the process through reporting
of the appraiser’s ________ and \_\_\_\_\_\_\_\_\_.**
* *... *_problem_*
* _identification*_ and ... _*opinions*_ and _*conclusions_***.
191
**USPAP defines the client as: “the party or
parties who _______ an appraiser (by ________ or
\_\_\_\_\_\_\_\_ ) in a specific assignment.”**
## Footnote
**... *_engage*_ an appraiser (by _*employment_* or**
***_contract_* ) in a specific assignment.”**
192
**Which is NOT a power of government?**
a. deed restrictions
b. eminent domain
c. escheat
d. police power
**a. deed restrictions**
193
**Externalities can be a positive or negative
influence on value primarily due to the
property characteristic of _________ .**
***_immobility_** **.***
194
**A __________ lease means the lessor pays for
building repairs, and the lessee pays for real estate taxes,
insurance, and maintenance.**
***_triple-net_***
195
**The amount a commercial bank must keep on
deposit is known as**
**reserve requirements.**
196
* *The U.S. Treasury is responsible for \_\_\_\_\_\_\_\_
policy. **
***_fiscal_***
197
**Ownership in ________ is ownership by
one person or entity. Entities can hold ownership in
severalty which include corporations and Real Estate
Investment trusts (REITs)**
**severalty**
198
**If semi-annual taxes for a property are $1,260,
what is the assessed value of the property if the
tax rate is 48 mills?**
($1,260 x 2) / .048 *(48 mills)*
$2,520 / .048 =
**$52,500**
199
**The economic principle of supply and demand implies that for all products, goods, and services, when _______ exceeds \_\_\_\_\_\_\_\_, prices will fall and when _______ exceeds \_\_\_\_\_\_, prices rise**
**...when supply exceeds demand, prices will fall and when demand exceeds supply, prices will rise**
200
**\_\_\_\_\_\_\_\_\_ occurs when the value of inferior properties is affected positively by other properties around it. _________ occurs when value of a particular property is affected negatively die to being affiliated with inferior properties.**
**Progression / Regression**
201
**\_\_\_\_\_\_\_\_ ___ \_\_\_\_\_ ____ is the most reasonably probable legal use of a property, as vacant land or as improved, that is physically possible, adequately supported, financially feasible, and results in the greatest value.**
***_Highest_** **_and_** **_Best_** **_Use_***
202
**\_\_\_\_\_\_\_\_ _________ means the puprpose or objective of a contract must be lawful at the time the contract is made.**
***_Lawful_** **_Objective_***
203
**To transfer land through a will is to _______ it.**
***_devise_***
204
**When someone dies without a will, he is said to die "intestate". In these instances, property passes through _______ .**
***_descent_* .**
205
**Lines called Principal Meridians run ______ and ______ . Intersecting lines called Baselines run ______ and ______ .**
**North and South / East and West**
206
**\_\_\_\_\_\_\_\_ is the gradual addition to dry land by the forces of nature. The land added through accretion is known as ________ .**
**Accretion / Alluvion**
207
**\_\_\_\_\_\_\_\_\_ is when a body of water gradually recedes, exposing land that was previously underwater.**
**Reliction**
208
**\_\_\_\_\_\_\_\_\_\_ is the acquisition of title to land by its addition to real estate already owned through human actions or natural processes.**
**Accession**
209
\_\_\_\_\_\_\_\_ **are ecosystems where the land is permeated with water and are commonly referred to as swamps, bogs, and marshes.**
**Wetlands**
210
**\_\_\_\_\_\_\_\_ ________ hazards are those concerns that exist outside the boundaries of a property which can have a significant imact on its value.**
***_External_ _environmental_***
211
**CCR stands for...**
**C- Covenants**
**C - Conditions**
**R - Restrictions**
212
\_\_\_\_\_\_\_\_ ________ \_\_\_\_\_\_ **represents the ability to participate in the market and have the means to acquire the property.**
**Effective Purchasing Power**
213
\_\_\_\_\_\_\_ ______ **is both the desire and the ability to pay for a property, service or good.**
**Effective Demand**
214
**The point of balance where supply and demand meet is the point of _______ \_\_\_\_\_\_\_\_ .**
**Market Equilibrium**
215
**\_\_\_\_\_\_\_\_\_ cost is the cost due to passing opportunities or making an incorrect choice.**
**Opportunity**
216
**What are the four tests of Highest and Best Use"?**
## Footnote
**L - Legally permitted**
**P - Physically possible**
**E - Economically feasible**
**M- Maximally productive use**
217
**Value constantly fluctuates due to the principle of
\_\_\_\_\_\_\_ .**
***_change_* .**
218
**Property uses that compliment each other are
evidence of the theory of _______ .**
***_conformity_* .**
219
**True or false: to an investor, the greater the
expectation of benefits from a property, the less
valuable it is to the investor.**
**False**
220
**True or false: surplus productivity is realized after
various agents of productivity have been satisfied.**
**True**
221
**Contribution, whether more or less than cost,
is measured by the law of _________ and
\_\_\_\_\_\_\_\_\_ returns.**
**increasing / decreasing**
222
**\_\_\_\_\_\_\_\_\_ Value is the value of a property sold in a less than typical marketing period or with less-than-typical market exposure.**
**Liquidation**
223
\_\_\_\_\_\_\_\_ **value is the value of the useful components of a property that could be removed and salvaged before demolition *(razing)*.**
**Salvage**
224
\_\_\_\_\_\_\_\_\_\_ **value is the amount that a property to a specific investor or type of investor based on their individual, or specified, investment goals or requirements.**
**Investment**
225
\_\_\_\_\_\_\_\_\_ **value is the value of property to the owner, or other specified party, as it is presently being utilized, or of a specific use, without necessarily considering *highest and best use* or present market value**
**Use (or *Value in use*)**
226
\_\_\_\_\_\_\_\_\_ **value is a percentage or ratio of the tax assessor's appraised value.**
**Assessed**
227
\_\_\_\_\_\_ **value is the amount of money a lender will loan on a particular property. This is expressed as \_\_\_\_\_-to-value ratio.**
**Loan / loan**
228
**Characteristics related to the environment surrounding the property that can either contribute or detract from value are referred to as __________ forces.**
***_geographic_***
229
**For an improved property, highest and best use analyzes whether the current improvements should be _______ , _______ , or left _______ .**
***_fazed*_, _*converted*_, or left "_*as-is_*".**
230
**Zoning is one consideration of _______ permissible.**
***_legally_***
231
**The nation's largest, privately owned, investor in residential mortgages.**
**Federal National Mortgage Association**
**FNMA**
**"Fannie Mae"**
232
\_\_\_\_\_\_\_\_ **occurs when the purchasing power of money is diminished due to prices rising and an increased volume of money**
**Inflation**
233
**\_\_\_\_\_ inflation affects new home prices as builders pass on increased costs of labor and building materials. _______ inflation primarily affects existing home prices as too many market participants seek to live in an area with a limited supply of housing.**
**Cost / Demand**
234
**A _______ \_\_\_\_\_\_\_\_ system is one in which individual people and businesses are free to make their own decisions about production and distribution.**
**Market Economic System**
235
**Nonprofit, federally chartered (but privately owned) institution that functions as buyer and seller of residential mortgages.**
**Federal Home Loan Mortgage Corporation**
**FHLMC**
**"Freddie Mac"**
236
**\_\_\_\_\_\_\_\_ mortgage markets are made up of private investors and government agencies that buy and sell real estate mortgages.**
**\_\_\_\_\_\_\_\_\_ mortgage markets consist of lenders who make mortgage loans directly to borrowers.**
**Secondary / Primary**
237
**The availability of funds in the primary mortgage market depends heavily on the existence of ________ \_\_\_\_\_\_\_\_ _______ and the flow of mortgage funds.**
**secondary mortgage markets**
238
**A mortgage is a pledge of real property in which the borrower, called the ________ , pledges their property to the lender, called the \_\_\_\_\_\_\_\_, as collateral for the debt.**
**mortgagor / mortgagee**
239
**\_\_\_\_\_\_\_\_\_ is when the principal and interest of a loan is repaid in installments**
**Amortization**
240
**Highest and Best Use cannot be _________ .**
***_speculative_* .**
241
**A _________ loan is any loan not insured or guaranteed by a government agency.**
***_conventional_***
242
**A ________ \_\_\_\_\_\_\_ mortgage is given by a buyer to a seller, who is acting as the lender to secure part or all of the money borrowed to purchase propoerty.**
***_purchase_** **_money_***
243
**A ________ \_\_\_\_ is a specified geographic area or location for a specific type of property.**
***_market_****_area_***
244
**A _________ is a compilation or a group of complimentary land uses. A _______ is an area consisting of one particular land use, such as a multi-family residential, commercial, industrial, etc.**
**neighborhood / district**
245
**General market analysis is also referred to as a _______ study, and the property-specific analysis is referred to as a _________ study (or analysis).**
**market / marketability**
246
**\_\_\_\_\_\_\_\_\_ is when the land use is changing.**
**Transition**
247
**What are the 4 phases neighborhoods go through in their life cycles?**
**G - Growth**
**S - Stability**
**D - Decline**
**R - Revitalization**
248
**What are the four phases of business cycles?**
**E - Expansion**
**P - Peak**
**C - Contraction**
**T - Trough**
249
**An _________ \_\_\_\_ _______ examines the present business and employment in an area to determine the likelihood of continued stability, growth, or decline.**
**economic base analysis**
250
**Real estate cycles typically _____ \_\_\_\_\_\_\_ business cyles because they are reactionary to elements of business climate.**
***trail behind***
251
**Properties available in the marketplace that a buyer would accept as ready substitutes for the *subject property* are known as ________ \_\_\_\_\_\_ .**
***competitive supply***
252
\_\_\_\_\_\_\_\_\_ **analysis is a supply and demand study of the number of property units that will be sold (or rented) in the marketplace during a certain period of time.**
**Absorption**
253
\_\_\_\_\_\_\_\_\_\_ **analysis is a means of determining the current position of a property in relation to the marketplace. The appraiser must establish the potential of the property as it exists before looking at what future conditions might affect its value.**
**Productivity**
254
**Amenities are ________ or ________ aspects of property.**
**tangible / intangible**
255
**A _________ study is a study of the cost-benefit relationship of an economic endeavor.**
**feasibility**
256
**What are the 4 tools used by the Fed to implement monetary policy *(D-O-R-M)***
**D - Discount Rate**
**O - Open market operations**
**R - Reserve requirements**
**M - Moral suasion**
257
**\_\_\_\_\_\_\_\_ _______ \_\_\_\_\_\_\_ is insurance offered by private companies to insure a lender against default on a loan by a borrower in some cases -usually with less than a 20% down payment**
**Private mortgage insurance (PMI)**
***Most secondary mortgage lenders require PMI for residential loans with less than 20% down payment.***
258
**A supply analysis that identifies properties by type, features and use, which are likely to compete with the subject property, is know as ________ \_\_\_\_\_\_\_\_\_ .**
**Market Disaggregation**
259
**A process that involves identifying and categorizing the various sub-markets that exist within a larger market and focusing on participants in the demand side of the market is called ________ \_\_\_\_\_\_\_\_\_ .**
**Market Segmentation**
260
**Communicating a ________ or _______ report is a violation of professional ethics.**
**misleading or fraudulent**
