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REE 4103 EXAM 2 QUESTIONS with Correct Answers| Verified
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REE 4103 EXAM 2 QUESTIONS withCorrect Answers| Verified
In residential rental property value is created by anticipation of: - ANSWER The value of the
income in the future and the future sale of the property
A good's capacity to satisfy human desires or needs is known as - ANSWER Utility
In a high-demand market, the cost of building a new property will increase substantially until
- ANSWER The supply increases because new builders get into the market
Theory that when several similar or commensurate commodities, goods, or services are
available, the one with the lowest price attracts the greatest demand and widest distribution
- ANSWER Substitution
When real property is sold by one person to another, the amount of money used
to compensate the seller is called - ANSWER The price of the real property
The result of the cause and effect relationship among the forces that influence real
property value. - ANSWER Change
The ability of a product to satisfy a human want, need, or desire is - ANSWER Utility
The statement "property values are created and sustained when the characteristics of
a property conform to the demand of its market" refers to - ANSWER Conformity
,Which of the following principles best describes the effect of an international airport on the
value of a nearby residential subdivision? - ANSWER Externalities
The city planning department has indicated that a vacant residential lot located in a flood
zone cannot be given a building permit. This site - ANSWER Has lost nearly all utility
________________ is fundamental to the dynamics of supply and demand in a free-enterprise,
profit-maximizing economic system - ANSWER Competition
A park that has just been built in your neighborhood would generally be considered a
________________ - ANSWER Positive Externality
In appraisal the term _________ is used to refer to production/construction - ANSWER Cost
A new two-family home is constructed in a neighborhood of new, three-family homes on a
lot that could support a three-family home. Market research and the application of the sales
comparison approach to value indicate an appraised value significantly lower than the sum of
the land and building costs. What principle of value was violated? - ANSWER Balance
_______________ is/are created by the anticipation of benefits to be derived in the future -
ANSWER Value
An appraiser gathers market data from a neighborhood where new, high-rise apartment
buildings are replacing older, small, multifamily residences. The appraiser uses this data to
reflect the value of small, multifamily residences in a stable neighborhood. The appraisal is
rejected by a local bank on the grounds that it is unreliable. (Appraiser took info from
transitional neighborhood to get stable neighborhood value estimate). What principle(s)
of value was violated? - ANSWER Substitution and anticipation
The supply of one-unit residential properties is most affected by - ANSWER An increase in the
number of apartments built
,A one-unit home owner who builds a new and unique structure will commonly find that -
ANSWER Generally, fewer people desire unique structures
Demand for real estate is least affected by which of the following? - ANSWER Availability of
labor
A finished real estate product is created by combining - ANSWER Land, labor, capital,
and entrepreneurial coordination
The amount of a type of real estate desired for purchase or rent at various prices in a given
market for a given period of time is the ______________ - ANSWER Demand
In real estate economic _____________ is achieved when the combination of land and
improvement - ANSWER Balance
A purchaser's wish for an item to satisfy human needs or individual wants beyond essential
life-support needs - ANSWER Desire
The present or anticipated undersupply of an item relative to the demand for it is - ANSWER
Scarcity
Value is estimated as the current cost of reproducing or replacing the improvements
(including an appropriate entrepreneurial incentive or profit), minus the loss in value from
deprecation, plus land value in which approach to value? - ANSWER Cost approach
The valuation process includes all of the following major steps except - ANSWER
Environmental testing
T/F The appraiser's estimate of value may be presented as a single point estimate of value or
as a range within which the value may fall - ANSWER True
, Value is indicated by a property's earning power, based on the capitalization of income -
ANSWER Income approach
A systematic procedure an appraiser follows to provide answers to a client's questions
about real property value - ANSWER Valuation process
In the valuation process, identification of the problem includes which of the following? -
ANSWER Establish the intended use
Value is indicated by recent sales of comparable properties i nthe market in which approach
to value? - ANSWER Sales comparison approach
Cost New of the Improvements
- Depreciation of the Improvements
= Depreciated value of the improvements
+ Land Value
= Indication of Value using the ________? - ANSWER Cost approach
The three (3) general approaches to value in real estate apprasial are? - ANSWER Cost,
Sales, and Income approaches
T/F Scope Creep generally refers to a shift in the focus or parameters of a given project or role,
often resulting in more work at little or no additional compensation for the provider of the
service. It does not generally refer to a creepy appraiser using a scope to look into strangers'
windows. - ANSWER True
In the valuation process, data analysis includes all of the following except - ANSWER
Establishing the relevant characteristics of the property
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