SU # 38__Issues Affecting Market Value Flashcards
Of the following market conditions or trends, which is NOT important as an influence on market value?
Number of properties on the market.
Trends in average time on the market.
Number of competing agents in the market area.
Trends in sale prices in different price ranges.
Number of competing agents in the market area.
What a property actually sells for is its:
Market value.
Appraised value.
Market price.
Book value.
Market price.
Real estate value in general is:
The present monetary worth of benefits arising from the ownership of real estate.
The past monetary worth of benefits arising from the ownership of real estate.
The future monetary worth of benefits arising from the ownership of real estate.
Its cost value.
The present monetary worth of benefits arising from the ownership of real estate.
Highest and best use of a property is that use which _________.
is physically and financially feasible, legal, and the most productive.
is legal, feasible, and deemed the most appropriate by zoning authorities.
entails the largest building that zoning ordinances will allow developers to erect.
conforms to other properties in the area.
is physically and financially feasible, legal, and the most productive.
Which of the following is a local market influence on market value?
Inflation.
Municipal infrastructure.
Money supply.
Federal tax laws.
Municipal infrastructure.
The concept of market value is best described as
the price a buyer will pay for a property, assuming other similar properties are within the same price range.
the price an informed, unhurried seller will charge for a property, assuming a reasonable period of exposure with other competing properties.
the price a buyer and seller agree upon for a property assuming stable interest rates, appreciation rates, and prices of other similar properties.
the price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a cash price and the property’s reasonable exposure to the market.
the price a buyer will pay for a property, assuming other similar properties are within the same price range.
One reason real estate agents need to understand influences on market value is so they can
perform proper appraisals.
obtain the highest market value possible for their listings.
foresee how current conditions may affect their transactions.
inform buyers that they will have to pay market price.
foresee how current conditions may affect their transactions.
A person paid $150,000 for a house with the intention of renting it out for $1,000 per month. The economic principle that led the person to pay this price based on the property’s ability to generate this future income is known as:
Anticipation.
Substitution.
Supply and demand.
Utility.
Anticipation.
Which of the following situations illustrates the principle of contribution?
A homebuyer makes a down payment of 20% instead of the 10% the lender requires.
A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.
The appraised value of a house goes up by $20,000 over a two-year period because of the prices recently paid for other houses in the neighborhood.
Because of a decline in mortgage interest rates, a homeowner in a certain market is able to list her house at a higher price.
A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.
A property owner buys an adjacent parcel and combines it with the original parcel to create a property with a higher value than the total of the two separate property values. The operative principle of value in this situation is called:
Highest and best use.
Assemblage.
Progression.
Subdivision.
Assemblage.
A phase that is NOT part of the usual real estate market cycle is
oversupply.
under-supply.
supply-demand equilibrium.
price-demand independence.
price-demand independence.
How readily or easily title or rights to real estate can be transferred affects the property’s:
Reconciliation value.
Transferability value.
Anticipation value.
Utility value.
Transferability value.
Price is best described as
a. what suppliers charge for goods and services.
b. the amount of money consumers are willing to pay for a product or service.
c. the amount of money a buyer and seller agree to exchange to complete a transaction.
d. a control placed on prices by the federal government.
c. the amount of money a buyer and seller agree to exchange to complete a transaction.
Four principal determinants of value underlying the price for a product are
a. durability, quality, scarcity, and materials.
b. desire, utility, scarcity, and purchasing power.
c. popularity, utility, quality, and discount.
d. desire, costs, convenience, and time.
b. desire, utility, scarcity, and purchasing power.
A town has a rapidly growing population, but there are no longer any vacant lots around the lake to build more houses. In this case, it is likely that the price of existing homes on the lake
a. will stabilize, since the population must stabilize.
b. will increase.
c. will decline, since no further building can take place.
d. will not show any predictable movement
b. will increase.
