Res Market Anal and Highest and Best Use Ch 6 Final Quiz Flashcards
1
Q
________ Land is capable of a separate or alternative use.
A
Excess
2
Q
_______________ analysis examines the present worth of a future benefit.
A
Investment
3
Q
_______________ Value is the price a property will sell for, if required to be sold very quickly.
A
Liquidation
4
Q
________________ involves subdividing the larger market into a workable study area.
A
Market identification
5
Q
________________ Value identifies a tenant’s interest in a lease.
A
Leasehold
6
Q
_________________ analysis will relate to the client whether the market considers such a project worthwhile.
A
Feasibility
7
Q
_________________ are the most restrictive of the restrictions in place for the land’s use.
A
Developer’s Covenants
8
Q
_______________________ ownership is specifically for husband and wife.
A
Tenancy by the Entirety
9
Q
“The geographic region from which a majority of demand comes and in which the majority of competition is located” is the definition of _________________.
A
Market Area
10
Q
“A group of complementary land uses; a congruous grouping of inhabitants, buildings, or business enterprises” is the definition of _____________________.
A
Neighborhood
11
Q
“A neighborhood characterized by homogeneous land use, e.g., apartment, commercial, industrial, agricultural” defines ________.
A
District
12
Q
“A prediction of future market conditions based on inferences drawn from general market information, published data, and historical trends in rents and absorption rates and occupancy for similar property types” is the definition of ______________.
A
Inferred Analysis
13
Q
”A prediction of future market conditions based on comparison of a quantified estimate of future demand with a quantified estimate of future supply” is the definition of __________________.
A
Fundamental analysis
14
Q
A ________ ampere service is the minimum standard today for structures that do not have electric heat or central air conditioning.
A
100
15
Q
A _______________ neighborhood is said to be in conformity.
A
Homogenous
16
Q
A _______________ usually produces general marketing information for a geographic area.
A
Market study
17
Q
A broad-based analysis involves the study of the supply and/or demand for a particular type of property or commodity within a particular service area or community. There is not a specific property or location involved in this type of analysis, which is called a ____________ Analysis.
A
Market
18
Q
A change in population density in a market would be considered a(n) ________________ force affecting values.
A
Social
19
Q
A community’s long range plan is called the ____________.
A
Master Plan
20
Q
A community’s total employment is 58,240. The number of total core industry employees is 36,400. If the core industry adds 600 more jobs, how many additional jobs will be generated in the community?
A
360 (58,240 divided by 36,400 = 1.6. 600 times 0.6 = 360)
21
Q
A community’s total employment is 58,240. The number of total core industry employees is 36,400. What is the base core multiplier?
A
1.6 (58,240 divided by 36,400 = 1.6)
22
Q
A community’s total employment is 77,700. The number of total core industry employees is 55,500. For every 10 jobs added in the core industry, how many additional jobs will be generated in the community?
A
4(77,700 divided by 55,500 = 1.4)
23
Q
A community’s total employment is 77,700. The number of total core industry employees is 55,500. If the core industry adds 850 more jobs, how many additional jobs will be generated in the community?
A
340 (77,700 divided by 55,500 = 1.4. 850 times 0.4 = 340)
24
Q
A community’s total employment is 77,700. The number of total core industry employees is 55,500. What is the base core multiplier?
A
1.4 (77,700 divided by 55,500 = 1.4)
25
A comparable property's room count would be considered what type of data?
Specific
26
A corporation or trust that combines the capital of many investors to acquire or provide financing for all forms of real property is called a(n) __________________________.
Real Estate Investment Trust.
27
A loan is $180,000 and the loan-to-value ratio is 90%. What is the Market Value for this property?
$200,000. (100 times 180,000 divided by 90)
28
A market is defined as a place where __________ are exchanged.
Goods and services
29
A Mill Rate is equal to so much per ______________ of value.
1000
30
A municipal building or a church are considered to be _______________.
Special Purpose properties.
31
A neighborhood where the most likely buyer for properties will be investors is an indication that the neighborhood is in the ___________ phase of its life cycle.
Decline
32
A property suffers from functional obsolescence because it has an outdated kitchen. Installation of a modern kitchen would cost $20,000 and would increase the value of the property by $15,000. This functional obsolescence is ______________________.
Incurable
33
A property suffers from functional obsolescence because it lacks air conditioning. Installation of air conditioning would cost $15,000 and would increase the value of the property by $20,000. This functional obsolescence is _________________.
Curable
34
A property’s present value is directly related to the perceived benefits to be received in the future. This is the Principle of _______________.
Anticipation
35
A property’s value is directly related to the ___________ for that type of property.
Demand
36
A residential property is currently zoned for residential use, but its highest and best use is expected to change to Light industrial use within the next 2-4 years. The subject property's current use is considered ___________________.
Interim Use.
37
A restaurant was established in 1998. The local municipality rezoned the property in 2005 to permit only residential uses. The restaurant use is permitted to continue its operations. What is this called?
Legally nonconforming use.
38
A single family residence is situated on a 1 acre site, in an area where ½ acre sites are common. The home is in the center of the property, and it is not possible to subdivide off a ½ acre site. This is an example of _____________ land.
Surplus
39
A single-family homesite is worth $50,000. The owner plans to build a 3,000 square foot home on it, at a cost of $400,000. When it is completed, the property will be worth $425,000. What is the problem here?
It is not financially feasible.
40
A single-family residence is located in a commercially-zoned area. Residential sale prices in the area range from $90-100 per square foot. The residence could be converted to offices at a cost of $40 per square foot. Office space in this area is selling at $110-120 per square foot. What is the highest and best use of this property?
Continue use as a single-family home.
41
A two-story home measures 28 feet by 48 feet on the exterior. There is an open two-story foyer area which measures 11 feet by 14 feet. What is GLA of this home?
2534 (28 times 48 times 2 stories = 2,688. 11 times 14 = 154. 2,688 minus 154 = 2,534 GLA)
42
All of these are external factors that could affect the value of a property
Zoning changes, Quality of a school system, Police protection and crime rates
43
An analysis that introduces _______________ for the study of the supply and demand for a particular property type or commodity is typically the analysis process that most appraisers perform for their assignments.
Market segmentation
44
An announcement of the expansion of an industrial plant that is the region's major employer would likely result in ___________________ .
Increasing property values
45
An Apartment building has rents of $800, $835, $850, $850, and $875 per month. What is the Mean of the rents?
$842 (800 plus 835 plus 850 plus 850 plus 875 = 4,210 divided by 5 = 4,210)
46
An exterior inspection of a single story residential property indicates a GLA of 1,600 square feet. An interior inspection reveals an entry foyer of 410 square feet and a 10 foot by 12 foot unfinished storage area not accessible from the interior of the house. The GLA of the home is_____________.
1,480 (10 times 12 = 120, 1600 minus 120 = 1,480)
47
An investor considers building an investment property and the total cost would be $550,000. The investor expects a 15% return on his investment. For this project to be financially feasible, it would have to be worth at least __________ upon completion.
632500 (550,000 plus 15%)
48
An opinion of value can be directly related to the ________________ of the rights of ownership for the individual property.
Presence or absence
49
Another name for a market segment is a ____________________.
Submarket
50
Another name for Assessed Value is ______________ Value.
Ad Valorem
51
Another name for Mean is ________________.
Average
52
Another name for Renewal Period is _____________ Period.
Revitalization
53
Another name for Sole Ownership is _________________.
Ownership in Severalty
54
Appraisers must determine the appropriate level of analysis required for the assignment. This is known as ______________.
Scope of work
55
Appraisers must develop an opinion of the property's highest and best use, first as though the land ___________, and then as the land is _____________improved.
Were vacant, actually
56
Appraisersforum.com is an online __________ for appraisers.
Discussion board
57
Building code enforcement falls under the category of ________________.
Police Power
58
Changes in the demand for differing housing styles or housing locations can be the cause of _____________ obsolescence.
Functional or external
59
Competition in the market place is encouraged by ______________.
Profit
60
Competition is good for the market --
Up to a certain point.
61
Data that are readily available from public sources such as the local chamber of commerce, the community city hall, or the area public library is known as __________ data.
Secondary
62
Data that describe the local market area or neighborhood of the subject property are called ___________ data.
General
63
Data that is collected by the appraiser from the market place is known as _____________ data.
Primary
64
Data which pertain to the subject and comparable properties and also describe individual property values are called ___________ data.
Specific
65
Deed restrictions are an example of __________ restrictions on land use.
Private
66
Determination of the highest and best use of the property needs to be _________________________ .
As of an effective date
67
Eminent domain is the right of the government to take private property, for public good, with __________________.
Just compensation
68
Fannie Mae will only purchase or securitize a mortgage that represents the highest and best use ______________________.
Of the site as improved
69
Foundations are placed on top of __________ and serve to support the house.
Footings
70
Generally, which changes more slowly in a real estate market?
Supply
71
If the four agents of production are out of balance a property is __________________________.
Over-improved or under-improved
72
If the individual property is one classified as a high-value property, the appraiser will identify the limited market for this type of property on the basis of the _____________ within the defined market area.
Disposable income availability
73
If there is an oversupply of homes available in a market to satisfy demand, this is known as _________________.
A buyer’s market.
74
In a Buyer's market, an appraiser is likely to find____________.
Increasing marketing times
75
In a Buyer's market, an appraiser is most likely to find____________________.
A large number of properties available
76
In a market area, there were 132 single-family sales last year, and there are currently 77 properties on the market. How long will it take to sell this existing inventory?
7 months (132 divided by 12 = 11 properties per month, 77 properties divided by 11 = 7)
77
In a market area, there were 192 single-family sales last year, and there are currently 72 properties on the market. What is the monthly absorption rate?
16 per month. (192 divided by 12 months = 16)
78
In a market area, there were 256 single-family sales last year, and there were 64 expired listings that did not sell. What is the expiration ratio for this area?
0.2 (256 plus 64 = 320, 64 times 100 divided by 320 = 20%)
79
In a neighborhood, there were 180 single-family sales last year, and there were 60 expired listings that did not sell. What is the expiration ratio for this area?
25% (180 plus 60 = 240, 60 times 100 divided by 240 = 25%)
80
In Fannie Mae’s definition of value it says that it assumes a reasonable time is allowed for __________________________.
Exposure to the open market
81
Indirect costs of construction Labor include
Permits, Construction Finance costs, Marketing costs
82
Indirect costs of construction Labor include all of the following EXCEPT ________________.
Wages
83
Inflationary conditions and the cost of money would be considered to be ________________ forces.
Economic
84
Insurance value usually is based on _______________ cost.
Replacement
85
Investment Value is based on an investor’s expected _______________ .
Rate of return
86
Layout and floor plans can be the cause of which kind of obsolescence?
Functional
87
Legally nonconforming use is "a use that was lawfully established and maintained, but no longer conforms to the use regulations of the _______________ in the zone where it is located."
Current zoning
88
Loan Value is usually a percentage of the _______________
Appraised value or Market Value
89
Many communities offer ________________ to rehabilitate a declining neighborhood.
Incentives
90
Market value is generally considered equivalent to ___________________.
Value in Exchange
91
Market visualization of the real estate life cycles will ultimately determine the ____________ for these individual properties.
Typical buyers
92
Markets come in all sizes but, whatever the size, there is ______________ of a product or a service.
A free exchange
93
Most of the custom constructed high-value properties are built to exacting specifications for their owners. Therefore, the appraiser needs to analyze the _____________ of the high-value property.
Utility
94
Office properties would generally include:
Single story, Low-Rise, High-rise
95
Only those uses which produce a ____________ are considered for the final test of maximum productivity.
Positive return
96
Part of the definition of Highest and Best Use is that it is “Financially _____________________…”
Feasible
97
Part of the definition of Highest and Best Use is that it is “Legally _______________________…”
Permissible
98
Part of the definition of Highest and Best Use is that it is “Physically _______________…”
Possible
99
Part of the definition of Highest and Best Use is that it is the use that “results in the __________ value.”
Highest
100
Part of the definition of Market Value is that it is “the ____________ price that a property should bring….”
Most probable
101
Part of the definition of Market Value is that it is the “price that a property should bring in a(n) ________________ market.”
Open and competitive
102
Place these types of siding in historical order; from oldest to newest:
Wood, aluminum, vinyl, composite
103
Prior to initiating the market analysis process, the appraiser must first decide ________________.
Who the typical buyer would be
104
Rent controls and building codes are examples of ______________________ forces that affect value.
Governmental
105
Research into the number of actual sales that have occurred in the neighborhood during the previous 12 month period what kind of data?
Primary
106
Some assignments require personal verification of comparable sales with a party to the transaction. These might include _____ ____ _____.
Buyer, Seller, Agent
107
Some of the more prominent economic principles and theories are __________________________________.
Related to and overlap each other
108
Standardized facilities, services, and amenities can enhance the benefits of home ownership. This illustrates the Principle of
Conformity
109
Statistical analysis of data is a mechanical means to ascertain estimates using formulas specifically designed for the compilation of ___________________.
Large amounts of data
110
Supply _____________ demand.
Always chases
111
The _________ Standard is a standardized system for measuring residential properties.
ANSI
112
The __________ equates to a rate of return for the initial investment.
Cash flow
113
The ________________ Cycle of a neighborhood is characterized by demand and supply trending toward equilibrium.
Stability
114
The ability of market participants to purchase a property is called _________________________________.
Effective purchasing power
115
The ability to sell or transfer the property freely in the marketplace is known as ___________________.
Transferability
116
The appraiser must decide how much of the market - called the ____________ - he or she is concerned with for the particular assignment.
Segment
117
The appraiser must perform the necessary market analysis to obtain enough information to ___________________________.
Make the highest and best use determination for the subject property.
118
The appraiser uses _____________ data to identify trends in the marketplace.
General
119
The client and/or the intended users can visualize the analysis process as well as follow the thought process that was used by the appraiser by viewing _________________.
Charts and graphs
120
The Consistent-Use Theory says the _______________ must all be valued considering the same highest and best use of the property
Land and the buildings
121
The cost of a given amenity does not guarantee the ___________ of that particular item.
Value
122
The cost of foregoing one type of investment for another is the Principle of __________________.
Opportunity Costs
123
The development of a vacant land area is _____________ the highest and best use of the land.
Not always
124
The effective age is based on the ______________ of the structure in relation to the market place.
Condition and utility
125
The elements of nature can affect value. This is called a(n) _____________ force.
Environmental
126
The Growth Cycle of a neighborhood is characterized by ___________.
Strong demand
127
The highest and best form of ownership one can have in real estate is ________________.
Fee simple
128
The information extracted and used in the assignment will be compared to various verifiable data sources to ensure its ______________.
Credibility
129
The legally and physically possible use which will yield the highest probable return on value in the reasonably foreseeable future, is the_______________ Use.
Highest and Best
130
The length of time that a given structure will prove beneficial and contribute to the overall value of the property is its __________ life.
Economic
131
The market is ___________ in a balanced situation.
Never truly
132
The market is too nebulous to analyze as a whole, so the appraiser must segment the market into ______________ in order to look for trends.
Components
133
The market value of a property is $300,000 and the loan-to-value ratio is 80%. What is the loan value for this property?
$240,000. (80 times 300,000 divided by 100)
134
The market value of a property is $350,000 and the loan value is $262,500. What is the loan-to-value ratio?
0.75 (262,500 times 100 divided by 350,000 = 75%)
135
The owner of a unit in a cooperative owns _______________.
Stock in the corporation
136
The principle of ______________ works in conjunction with the four agents of production and the amount of income a property can produce.
Surplus Productivity
137
The principle of anticipation is very often associated with the ______________ Approach.
Income
138
The principle of balance is most closely related to the following principle: _______________.
Supply and Demand
139
The Principle of Substitution holds that an ___________ buyer will not spend more for a property than the cost of acquiring a suitable substitute property. Principle of Substitution.
Informed
140
The principle of Surplus Productivity states that after paying The costs of _____________________________ , any residual income is attributed to the land.
The first three agents of production
141
The purchaser's motivation to purchase the item in question to satisfy a need is called _____________.
Desire
142
The relationship between the supply and the demand for a site's particular highest and best use is a part of the analysis of ___________________ .
Financial Feasibility
143
The right of eminent domain may be exercised by
State government agencies, Public service companies, Local government
144
The special design of the particular structure, such as a church, may contribute to a ________________.
Value in Use
145
The status of the ____________________ of the community will determine the market for the foreseeable future.
Major employment centers
146
The structure's ___________________ are included in the GLA.
Finished areas above grade
147
The two types of data that are used in market analysis are _________________.
General and Specific data.
148
There were 36 sales in a subdivision in the last year, and there are currently 12 properties on the market. What is the monthly absorption rate?
3 (36 divided by 12 months = 3)
149
There were 36 sales in a subdivision in the last year, and there are currently 15 properties on the market. How long will it take the market to absorb this existing inventory?
5 months (36 divided by 12 months = 3, 15 divided by 3 = 5)
150
To measure the trends of the market area, the appraiser must ask questions about ______________________.
Balance, Supply, Demand
151
To provide an estimate of the length of time it took to sell properties during the period of analysis, we can look at _______________.
Absorption rates.
152
USPAP says that ______________ is a fact, or an estimate of fact.
Cost
153
USPAP says that “appraisers are cautioned to identify the exact definition of market value and ____________________”
Its authority.
154
What type of value is actually an accounting term?
Book value.
155
What type of value typically does not include the value for the land?
Insurance Value.
156
When appraisers survey the market during a feasibility analysis, they rely primarily on ______________.
General data
157
When appraising a property for __________ , an appraiser must determine the Highest and Best Use.
Market
158
When demand is higher than supply, the value of a product _____________.
Increases
159
When improvements are added, such as roads, water and sewer; then _________ becomes _____________.
Land, a site
160
When supply and demand are out of balance, the market tends to move______________ .
Towards equilibrium
161
When supply and demand for a product or a specific type of property are in harmony, or when the principal agents of production are properly in sync, it is said that a(n) __________ situation exists.
Balanced
162
When testing for legal permissibility, the first thing which should come to the appraiser's mind is the _____________.
Zoning ordinance
163
When the intended use of the appraisal is for a mortgage finance transaction, the assignment normally involves an opinion of _______________ Value.
Market
164
When the land value is subtracted from the sales price, the _______________________ is identified.
Depreciated value of the improvement
165
When there is too much of a good thing, that means no one will ultimately profit. This illustrates the Principle of ______________.
Competition
166
Which are inherent characteristics of land?
Immobility, Indestructability, Heterogeneity
167
Which are the four agents of production?
Land, Labor, Capital, Coordination
168
Which are types of framing?
Balloon, Post and Beam, Platform
169
Which are types of roofs?
Mansard, Hip, Gable
170
Which highest and best use criterion would require an appraiser to consider CC&Rs? .
Legally permissible
171
Which highest and best use criterion would require an appraiser to consider Setbacks and Site Size restrictions?
Legally Permissible.
172
Which highest and best use criterion would require an appraiser to consider the current zoning compliance?
Legally permissible
173
Which highest and best use criterion would require an appraiser to consider the soil composition of the site?
Physically possible.
174
Which highest and best use criterion would require an appraiser to consider the topography of the site?
Physically possible
175
Which highest and best use criterion would require an appraiser to consider whether the site is in a flood zone?
Physically possible.
176
Which is NOT a type of framing?
Mansard
177
Which of these agencies agree in principle with the ANSI Standards?
Fannie Mae, FHA, VA
178
Which of these designations would indicate that a property is in a Special Flood Hazard area?
A
179
Which of these is NOT one of the ingredients of a Highest and best Use?
Consistent Use
180
Which of these would be considered general data?
Employment statistics
181
Which of these would be considered specific data?
Subject’s site area
182
Which principle works in conjunction with the principle of change, but quantifies the rate and character of the change involved?
Inclining and Declining Periods.
183
Which statements are true regarding market identification?
Market identification is best accomplished by breaking it into segments. Defining the market segment is the first step in the market analysis process. The market may be subdivided more than once in order to arrive at an appropriate segmentation.
184
Who will decide if the individual improvement is in conformance with the neighborhood or not?
The appraiser.
185
Who will ultimately determine what a given amenity will contribute to the overall property value? ________________.
Market participants (buyers and sellers)
