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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
Which of the following is a market transaction where appraisals are used.
Property tax assessments
Eminent domain litigation
Purchase/Sale Financing
Divorce litigation - ANSWER Purchase/Sale Financing
An appraiser __________.
Determines value
Measures price
Determines price
Measures and develops an opinion of value - ANSWER Measures and develops an opinion of
value
Which of the following is the best example of using an appraisal in litigation?
Develope feasibility of construction or renovation project.
Estimating damages created by violations of environmental laws.
Developing an opinion of fair value for financial reporting.
To establish a basis for real property exchange. - ANSWER Estimating damages created
by violations of environmental laws
In appraisal, appraisers appraise...?
,Real estate and fixtures
Real property interests
Real estate
Real estate and personal property - ANSWER Real property interests
The legal definition of real estate includes all of the following except:
Land
Buildings
Trees
Lease benefits. - ANSWER lease benefits
Which of the following is the best example of using appraisals in investment counseling?
Developing an opinion of the market value of a property in contract disputes.
Devleoping an opinion of market value of real property offered as collateral for proposed
mortgage loan.
To establish a basis for real property exchange.
Developing an opinion of fair value for financial reporting. - ANSWER Developing an opinion
of fair value for financial reporting.
The tenant of a small, freestanding retail building is a baker who has installed ovens for
baking bread. The ovens are large and heavy and the back wall of the building had to be
removed for the ovens to be installed. The appraiser is performing a refinancing appraisal of
the real estate only. Should the ovens be included in the appraisal?
The appraiser would generally include the ovens in the appraisal as part of he real estate,
since it would be difficult to remove them.
The appraiser would generally not include the ovens because they add no value in
most markets.
The appraiser generally would not include the ovens because they are trade fixtures.
,The appraiser would generally include the ovens in the appraisal because they are worth a lot
of money and will add a lot to the property value. - ANSWER The appraiser generally would
not include the ovens because they are trade fixtures.
Private ownership of real property rights is subject to certain restrictions, known as the four
powers of government. Which of the following is not one of the four powers of government
that restrict real property rights?
Eminent domain
Escheat
Taxation
Deed restrictions - ANSWER Deed Restrictions
Land can be used for all of the following purposes except: - ANSWER Climate
T/F Markets reflect the attitudes and actions of people in response to social and economic
forces and the constraints of law and legal encumbrances. - ANSWER True
T/F The economic concept of land as a source of wealth and an object of value is central
to appraisal theory. - ANSWER True
T/F Because land ownership can be limited, ownership rights are the subject of law. The value
of these rights is the focus of real property appraisal. - ANSWER True
T/F As the nature and extent of land use controls change, so do the nature and extent of private
land ownership. Consequently, real estate appraisers must be familiar with the regulations and
restrictions that apply to land use in general, but do not need to analyze how these regulations
affect a specific property. - ANSWER False
T/F The utility of land and the highest and best use to which land can be put are
significantly affected by the physical and locational characteristics of the land and other
related considerations, broadly referred to as geography. - ANSWER True
, T/F In economics, land is regarded as one of the four agents of production, along with
labor, capital, and entrepreneurial coordination. - ANSWER True
Land use decisions are influenced the least by which of the following factors:
Climate, Economic and population trends, Topography, America's Got Talent -
ANSWER America's Got Talent
T/ F Professional appraisal standards require the appraiser to identify which interest is to
be valued in an assignment, but the interest valued need not reflect what currently exists -
ANSWER True
All of the following are attributes of land except: - ANSWER The supply of land is infinite
T/F The extent of rights available to private ownership is legally limited due to
governmental controls. - ANSWER True
A large residential lot is an ideal location for industrial development, but the zoning imposed by the
local government ensures that the lot will continue to be used for residential development. The
power of the local government to zone property is through its: - ANSWER Police power
Legal matters of particular concern to appraisers include all of the following except: - ANSWER
Property size
The concepts of land are - ANSWER Legal, geographic and environmental, economic, and social
The overproduction of new homes - ANSWER Causes oversupply and lower prices
Entrepreneurial Profit is - ANSWER The developer's profit in addition to the return of
his/her equity investment
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