Section 16 TF Quiz

Question 1

According to Florida Statutes 475, real estate licensees may perform appraisal for a commission as long as the appraisal follows USPAP standards, are not being performed for a federally related transaction, and the licensee is not referring to him or herself as an actual certified appraiser.

Answer 1

A. True
[A] B. False

Question Feedback
[Section 16B, Slide 28]; According to Florida Statutes 475, real estate licensees may perform appraisal for compensation as long as the appraisal follows USPAP standards, are not being performed for a federally related transaction, and the licensee is not referring to him or herself as an actual certified appraiser. Must be a flat fee, not a percentage of the value.

Question 2

When figuring operating expenses to calculate net operating income, you can include the cost of the mortgage as an expense.

Answer 2

A. True
[A] B. False

Question Feedback
[Section 16D, Slide 42]; Operating expenses include fixed expenses, variable expenses, and reserves for replacements of building components. Not included in operating expenses are Depreciation, Costs of mortgage, and Income taxes.

Question 3

In real estate, the definition of highest and best use is always based on how the property is currently being used.

Answer 3

A. True
[A] B. False

Question Feedback
[Section 16C, Slide 18]; The definition of highest and best use involves four tests. It is 1. the most probable use of land or improved property that is legally possible, 2. physically possible, 3. financially feasible (and appropriately supportable) from the market, and 4. which results in maximum profitability.

Question 4

Rather than ordering a full appraisal, lenders may utilize an Automated Valuation Model which is a computer program that provides a quick synopsis of value.

Answer 4

[A] A. True
B. False

Question Feedback
[Section 16D, Slide 103]

Question 5

The Concept of Substitution means that a buyer will be willing to pay more for a property that has lower quality features substituted with higher quality features.

Answer 5

A. True
[A] B. False

Question Feedback
[Section 16C, Slide 11]; The Concept of Substitution means that a prudent buyer or investor will pay no more for a property than the cost of acquiring, through purchase or construction, an equally desirable alternative property.

Question 6

Liquidation value is when property is sold piece by piece rather than as a whole unit.

Answer 6

A. True
[A] B. False

Question Feedback
[Section 16B, Slide 49]; Salvage value is when the property is sold piece by piece rather than as a whole unit. Liquidation value is when money is needed quickly, a property can be sold at a value less than it would be within a normal timeframe.

Question 7

Cost is how much money is required to produce the item. Price is the amount actually paid for an item. And value is how much something is worth to the average buyer and seller at the time value is being determined.

Answer 7

[A] A. True
B. False

Question Feedback
[Section 16B, Slides 43-45]

Question 8

Appraisers commonly use the Comparative Market Analysis to determine value.

Answer 8

A, True
[A] B. False

Question Feedback
[Section 16C, Slide 42]; Appraisers commonly use the Cost Deprecation Approach, the Comparable Sales Approach, or the Income Approach within an appraisal to determine value. Whereas real estate licensees commonly use the Comparative Market Analysis (CMA) to determine value.

Question 9

Progression is the value of an inferior property being enhanced by association with superior properties whereas regression is the value of a superior property that is adversely affected by association with inferior properties

Answer 9

[A] A. True
B. False

Question Feedback
[Section 16C, Slide 32]

Question 10

The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) is a provision under Title XI that mandates states to license and certify appraisers.

Answer 10

[A] A. True
B. False

Question Feedback
[Section 16A, Slide 34]