Lesson 1 Bus330

Question 1

first principles of value

Answer 1

problem identification, property content, legal considerations, highest and best use, research, economic analysis,

Question 2

professional competencies

Answer 2

analytical thinking, conceptual thinking, decisiveness, focus on quality and details, client service orientation

Question 3

real estate

Answer 3

physical assets, like land and buildings

Question 4

real property

Answer 4

the legal rights that attach to land, real property cannot be touched, but can be appraised and sold

Question 5

real property example

Answer 5

lease or easement

Question 6

bundle of rights

Answer 6

the packaging of all the rights of ownership attributable to a property

Question 7

key characteristics of improved land

Answer 7

unique, immobile, durable, of finite supply, and usefulness

Question 8

characteristics of real property

Answer 8

immobility, durability of improved land, indivisibility of services, divisibility of owership

Question 9

immobility

Answer 9

transactions in one market area have little impact on transactions in another area but not isolated from national economic conditions, or legislative changes

Question 10

industrial areas grow around

Answer 10

waterfront or railways

Question 11

value of land is directly related to its

Answer 11

use

Question 12

economic factors

Answer 12

interest rates, taxes, foreign investment, and political changes

Question 13

production of all goods and services including real estate, depends upon the combined effects of four economic ingredients: known ad the agents of production

Answer 13

land
labour
capital
entrepreneurial profit

Question 14

factors of value

Answer 14

supply: utility and scarcity,
demand: desire, effective purchasing power

Question 15

market determines what the value is

Answer 15

worth

Question 16

principles impacting real property value

Answer 16

anticipation and change
supply and demand
substitution, balance, surplus productivity, contribution, conformity, externalities

Question 17

appraisal is largely about attempting to see a property through the eyes of

Answer 17

market participants

Question 18

anticipation and change

Answer 18

present worth of future benefits
real estate markets change constantly

Question 19

substitution

Answer 19

this principle stats that a buyer will not pay more for a property than for another that is equally desirable

basis for the three traditional approaches to value

Question 20

approaches to value and principle of substitution

Answer 20

direct comparison
cost
income

Question 21

principle of balance

Answer 21

previous sale may satisfy demand at that price level and prices may begin to drop or stabilize

Question 22

surplus productivity

Answer 22

land value is based on the difference between market value and the cost to create a given real estate property

Question 23

contribution

Answer 23

knowledge of the market determines how much certain items contribute to the value of the property. a kitchen remodel could cost 50K and could reflect 75K or 25K in the market

Question 24

conformity

Answer 24

values are maximized when a property characteristics conform to market demand

Question 25

externalities

Answer 25

good and bad

Question 26

highest and best use

Answer 26

land meets its economic potential, if the building burned down, would the same on be constructed

Question 27

land value opinon

Answer 27

property value as a combined value of land and improvements as this is how real estate market participants tend to view market value

Question 28

application of the approaches to value

Answer 28

apply 1 approach

Question 29

DCA

Answer 29

no more or less than the sale prices of similar properties

most common for vacant land, simple commercial

good reliable sales data exists

expired listings determine price ceilings

Question 30

income approach

Answer 30

determine applicable rents, vacancy rates, collection losses, operating expenses, and capitalization or yield rates

Question 31

cost approach

Answer 31

purchaser should be willing to pay no more for a new property than the cost of buying a similar parcel of land and constructing a new building.

useful for really new or old, or unique buildings