Module 9 Quiz Flashcards
Market value is expressed as of a specified date. Which of the following best represents the date of an appraiser’s value opinion?
A) appraisal date
B) effective date
C) valuation date
D) date of estimate
B) effective date
The Johnsons were motivated sellers and had their home listed for sale at $189,000 in an active market. They received several full price offers within a week but were disappointed when the offer they accepted fell through due to the buyer’s sudden job layoff. Assuming the home is quickly placed back on the market at its prior listing price, what can the Johnsons reasonably expect?
A) Since the first sale fell through at $189,000, they will have to drop their price substantially to find another buyer.
B) They can expect to find another buyer within a reasonable period of time for an amount that is at or near the listed price of $189,000.
C) They should expect that it will take an extended period of time to find another buyer at $189,000.
D) They can expect to find another buyer at the listed price of $189,000, but only if they make concessions such as assisting in the buyer’s financing
expense.
B) They can expect to find another buyer within a reasonable period of time for an amount that is at or near the listed price of $189,000.
Market value can be described as:
A) the price a person paid for real property.
B) whatever someone will pay for something.
C) the present worth of future benefits.
D) the cost of the land plus the cost of the building.
C) the present worth of future benefits.
Jerry wants to list his home for sale and has hired an appraiser to help him establish an asking price. The appraiser completed his analysis of the property’s market value but has not yet written the appraisal report. Jerry is in a hurry and is on the phone pressuring the appraiser to give him a number now and deliver the report later. Assuming the appraiser agrees
to give Jerry his conclusion over the phone, what would be the best way for the appraiser to phrase the conclusion of $215,500?
A) My estimate of your home’s worth is $215,500.
B) The list price of your home should be $215,500.
C) My analysis of your property resulted in a market value opinion of $215,500.
D) The market value of your home has been determined to be $215,500.
C) My analysis of your property resulted in a market value opinion of $215,500.
Value estimate is the preferred way to state your conclusion of market value.
True
False
Fale
A buyer agreed to purchase a vacation home for $200,000. The seller included the furnishings ($10,000 value) and agreed to pay 2 points. If the lender agrees to lend 80% of the sale price, what is the dollar amount of
the points?
A) $320
B) $3,200
C) $3,360
D) $3,040
B) $3,200
Note: $200,000 X .80 = $160,000 X .02 = $3,200.
Market value is
A) equal to replacement cost.
B) an estimate of a price that would have been negotiated for a sale today.
C) equal to market price.
D) a measure of value in use.
B) an estimate of a price that would have been negotiated for a sale today.
A cash equivalent price means
A) the price reflects what a seller would accept as if he or she received cash at the closing.
B)the price includes the seller paying no more than 5 points (5%).
C) it is assumed that the buyer did not have to get a mortgage.
D) the rights in realty can only be fee simple.
A) the price reflects what a seller would accept as if he or she received cash at the closing.
Two attorneys are partners in a law firm. One of them learns through the office grapevine that his partner listed his lakeside cabin within the last month. The lawyer contacts a real estate agent and puts in an offer on his
partner’s cabin and eventually the sale closes. Why would a lender frown upon an appraiser using this transaction as a comparable sale in an appraisal of a similar cabin in the area?
A) No reasonable lender would object to an appraiser using this transaction as a comparable sale.
B) The lakeside cabin clearly had insufficient exposure time on the market.
D) The two attorneys’ business relationship prevents this from being an arm’s length transaction.
E) The owner of the cabin clearly experienced undue pressure to sell to his firm’s partner.
D) The two attorneys’ business relationship prevents this from being an arm’s length transaction.
Why is a buyer willing to pay more for a property if the seller agrees to pay a specific amount of mortgage discount points to their lender at the closing? Select the best response.
A) Buyers in these situations are often naïve regarding how the real estate market works.
B) Lenders require that the seller pays all mortgage discount points.
C) The points paid by the seller lowers the buyer’s monthly mortgage payment so that the buyer may qualify for the purchase of the property.
D) The premium paid by the buyer is kickback compensation to the seller and the lender.
C) The points paid by the seller lowers the buyer’s monthly mortgage payment so that the buyer may qualify for the purchase of the property.
