Barney Fletcher Practice Exam 1
Questions & Answers (Graded A)
Which would NOT be used in the capitalization approach?
A. gross income
B. operating expenses
C. reproduction cost
D. allowance for vacancy - ANSWER C. reproduction cost
A property had a land value of $40,000, a 2,000 square feet structure with a rebuilding
cost of $70 per square foot, depreciation of $5,000 due to functional obsolescence and
$1,500 due to physical depreciation. What would be the estimate of value for this
property using the cost approach?
A. $133,500
B. $140,000
C. $173,500
D. $180,000 - ANSWER C. $173,500
2,000 sf x $70 = $140,000. $140,000 - $5,000 - $1,500 = $133,500. $133,500 +
$40,000 = $173,500
A well maintained home in an area of run down homes would be an example of:
A. physical depreciation
B. functional obsolescence
C. external obsolescence
D. reproduction cost - ANSWER C. external obsolescence
An appraiser who was considering the effective age of a property with the chronological
age would usually accept each of the following statements EXCEPT:
A. the effective age may be less than the chronological age
B. improvement with new materials could decrease the effective age
C. modernizing or maintaining the building could decrease the effective age
D. the effective age is usually greater than the chronological age - ANSWER D. the
effective age is usually greater than the chronological age
Which is NOT true about a mechanic's lien?
A. it can be filed for the value of the cost of the improvement
B. it must be filed within a specified time period
, C. it would have to be enforced by the court
D. its priority rights are determined by the date of recording - ANSWER D. its priority
rights are determined by the date of recording
A property was assessed at 25% of market value. The rate was $5 per $1,000. If the
homeowner actually paid $150, what was the total value of the property?
A. $30,000
B. $82,500
C. $120,000
D. $133,000 - ANSWER C. $120,000
$150 divided by .5% = $30,000. $30,000 divided by 25% = a total value of $120,000
A property had several different encumbrances recorded against it. Which of the
following factors would indicate which would be paid off first?
A. date of acknowledgement
B. amount of the lien
C. whether it was a voluntary or involuntary lien
D. type of lien - ANSWER D. type of lien
A person increased the monthly mortgage payments to a lender with all the increases in
payments being applied to the principal loan balance. Which of the following terms best
describes this type of payment plan?
A. partially amortized with a balloon
B. growing equity mortgage
C. straight note
D. term loan - ANSWER B. growing equity mortgage
A buyer put 20% down on the purchase of a house. The lender required the buyer to
pay two discount points in order to obtain a loan. The buyer paid $1,000 for the discount
points. What was the purchase price of the house?
A. $50,000
B. $62,500
C. $75,000
D. $87,000 - ANSWER B. $62,500
$1,000 divided by 2% = $50,000. The buyer putting down 20% means the loan must
have been at 80% of the purchase price. $50,000 divided by 80% = $62,500
A cooperative would take title to property under which of the following categories?
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