Things I Need To Remember

Question 1

Demand is influenced by what 5 things?

P CH I M P

Answer 1

Price
Composition of household
Income
Mortgage availability
Preferences

Question 2

Supply is influenced by availability of what 4 things?

Answer 2

Skilled labor availability
Construction loans availability
Land availability
material availability

Question 3

Government can interfere in property

PETE

Answer 3

Police power
Escheat
Taxation
Eminent domain

Question 4

This approach is used for appraising residential property or vacant land. This approach compares the subject property to similar properties and makes adjustments on the basis of the date of the sale, the location, the physical features and/or amenities

Answer 4

The Sales Comparison Approach (also called Market Data Approach)

Question 5

This approach is used for buildings, which do not have market data because they are unusual properties (i.e. school, post office, library, etc. or a building without income).

Answer 5

The Cost Approach (also called The Summation Approach)

Question 6

This approach is used for income generating properties such as apartments, retail centers, multi-tenant office buildings, etc.

Answer 6

Income Approach

Question 7

P – V = E; E – O = N

Answer 7

The income appraisal approach:

PVEON -
Potential Gross Income,
Vacancy and Collection Losses,

Effective Gross Income,
Operating Expenses,
Net Operating Income

Question 8

the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property. (Comparison shopping- basis for Market Data Approach.)

Answer 8

Substitution

Question 9

means the value of any component that may or may not give value to the whole.

Answer 9

Contribution

Question 10

using all of the tools available the appraiser uses the three appraisal processes?

Answer 10

1. Market Data or Sales Comparison
2. Cost
3. Income Approaches

Question 11

is the amount of value or interest that an owner has in the property over and above the loans attached to the property.

Answer 11

Equity

Question 12

is the use of other people’s money (borrowed) to spread the risk of an investment.

Answer 12

Leverage

Question 13

The Cap Rate measures the amount of risk involved in the transaction; the _______ the Cap Rate, the greater the risk. The higher the Cap Rate, the _______ the sale price should be.

Answer 13

higher; lower

Question 14

Real estate taxes derived from assessed value are called

Answer 14

“Ad Valorem” taxes

Question 15

The constitution of Florida allows up to ________ for the homeowner’s homestead exemption.

Answer 15

$50,000

Question 16

In order to preserve Florida’s farming community, the 1959 legislature passed the __________

Answer 16

Florida Green Belt Law

Question 17

Florida Real Estate License Law requires that an individual who, for another, in Florida , for Compensation* or valuable consideration will need a real estate license if they perform any of the following when dealing with real property

BARE SALAD

Answer 17

Buying

Appraising (under $250,000, non-government related)

Rental Management

Exchanging

Selling

Advertising

Leasing

Auctioning

Discussing and advising on sale or leasing details

Question 18

Characteristics that determine real estate value can be remembered by using the acronym DUSTS.

Answer 18

Demand
Utility
Scarcity
Transferability
Situs

Question 19

How do you find the Gross Rent Multiplier? (GRM)

Answer 19

Sales Price ➗ Monthly Rent = GRM

Question 20

How do you find the Gross Income Multiplier? (GIM)

Answer 20

Sale Price ➗ Total Annual Income = GIM