PRINCIPLES AND PRACTICES CHP 16 Flashcards
An appraisal
A. is a prediction of future worth.
B. guarantees the value of a piece of real estate.
C. is an opinion of value.
D. establishes the selling price of a property.
C. is an opinion of value.
After an appraiser develops all three approaches to value, what is the next step in the appraisal process?
A. analyze the data
B. determine highest and best use
C. prepare the appraisal report
D. reconcile the approaches
D. reconcile the approaches
What is the abbreviation for the accepted standards of ethics and appraisal practice?
Α. ΒΡΟ
В. СМА
C. URAR
D. USPAP
D. USPAP
An appraiser needs to be state-certified to perform which of the following appraisals?
A. appraisal for a loan insured by the FHA
B. appraisal for a loan issued by a federally insured lender
C. appraisal of a residence valued at $200,000
D. appraisal of an office building valued at $500,000
A. appraisal for a loan insured by the FHA
Which is the best example of real estate put to its highest and best use?
A. a flat, paved parking lot in downtown Chicago
B. a house in a residential subdivision
C. an old house on a major highway surrounded by commercial buildings
D. a vacant lot
B. a house in a residential subdivision
The amount that one particular person paid for a property is its
A. cost.
B. market value.
C. price.
D. value.
C. price.
Which is NOT a value characteristic that must be present and perceived by the user and other potential users of the property?
A. demand
B. immobility
C. scarcity
D. transferability
B. immobility
To comply with a court’s judgment to pay back child support, Harry is forced to sell his cabin as quickly as possible, accepting far less than the property’s market value. This is an example of value.
A. assessed
B. insurable
C. investment
D. liquidation
D. liquidation
Which CANNOT define a neighborhood’s boundaries?
A. physical boundaries
B. ethnicity of residents
C. income level of residents
D. upkeep and maintenance
B. ethnicity of residents
An investor buys two adjacent parcels of land for $20,000 each. An appraisal shows that the combined parcel is now worth $50,000. The increase in value is an example of
A. assemblage.
B. frontage.
C. plottage.
D. subdividing.
C. plottage.
A nice, well-kept house located in the heart of an all-residential area, surrounded by other well-kept houses of similar style and value, is an example of
A. conformity.
B. contribution.
C. regression.
D. substitution.
A. conformity.
Sam bought an empty lot on a quiet street of small, 40-year-old ranch homes. On the lot, he built a luxurious two-story, 4,500-square-foot home. A few years later when he put the home on the market, its value will likely be held down by the other homes in the neighborhood. This is an example of
A. anticipation.
B. balance.
C. progression.
D. regression.
D. regression.
If a homeowner decides to install an in-ground pool in the backyard, they may not be able to recoup the cost of the pool when selling the house. What principle applies to this scenario?
A. anticipation
B. conformity
C. contribution
D. substitution
C. contribution
The principle of substitution says that an informed buyer would pay for the property than they would pay to obtain a similar one with the same benefits and utility.
A. considerably less
B. less
C. more
D. no more
D. no more
A small ranch house is located on a large lot in a mixed-use neighborhood. In the city’s updated master plan, the area is set to be rezoned as commercial. What will most likely happen to that property’s value?
A. It will decrease as residents are opposed to commercial development nearby.
B. It will increase in anticipation of the change in use.
C. It will have no effect since the house should be grandfathered in.
D. It will have no effect until the zoning change actually occurs.
B. It will increase in anticipation of the change in use.
