Chapter 15 Flashcards

Chapter 15 Flashcards In which market are there many potential buyers but few properties available?

Select one: a. demand b. buyer's C. seller's d. low-priced

The correct answer is: seller's

The truly distinguishing characteristic of real estate as compared with other assets is

Select one: a. large size b. uniqueness c. high price d. fixed

location The correct answer is: fixed location

For real property to be depreciated, it MUST: Select one: a. be in good condition b. be owned in fee simple c. have improvements d. be free and clear The

correct answer is: have improvements

Which of the following terms most generally appears in an accredited definition of highest and best use?

Select one: O a. ground rent O b. economic rent OC. net

return d. contract rent The correct answer is: net return

The physical characteristic of real estate that subjects it to

the influence of its surroundings is termed:

Select one: O a. fixity of location b. fixture in place c.

fixative used O d. fixation The correct answer is: fixity of

location In residential real estate, the vacancy rate should be

acceptable when it is about:

Select one: O a. 4-5% b. 5-9% C. 10% d. 5-7% The correct

answer is: 5-7%

If the demand for houses remains constant and the supply:O a. increases, the value will increase b. remains the same, the value will increase C. remains the same, the value will decrease Od. diminishes, the value will increase

The correct answer is: diminishes, the value will Increase

The primary physical distinguishing characteristic of land isSelect one: a. homogeneity b. high cost c. immobility d.

slow depreciation The correct answer is: immobility

What are the three unique physical characteristics of land?Select one: a. Fixed, unchangeable, homogeneous b.Immobile, indestructible, nonhomogeneous C.Three-dimensional, buildable, marketable d. Natural,

measurable, inorganic The correct answer is: Immobile,

indestructible, nonhomogeneous An abundance of skilled labor could:Select one: a. lower both costs to build and supply. O b.increase costs to build and lower supply. c. increase both costs to build and supply. O d. lower costs to build and

increase supply. The correct answer is: lower costs to build

and increase supply.Which of the following is wrong about the influence of governmental controls?

Select one: a. The government has the power to regulate

building size and property uses. b. The use of zoning affects property values positively. c. The use of zoning has no effect on the property value. d. All of these. The correct

answer is: The use of zoning has no effect on the property

value.The taxes and assessments on real property in a particular

area:

Select one: O a. affects its value. O b. does not affect its

value. O c. encourage its purchase, when tax rates are

high. O d. none of these The correct answer is: affects its

value.

Which of the following is an important governmental influence on neighborhood values?

Select one: a. zoning b. income level C. owner occupancy

d. flood plain mapping The correct answer is: zoning

Four principal determinants of value underlying the price for a product are

Select one: Oa. durability, quality, scarcity, and materials O

• desire, utility, scarcity, and purchasing power C.

popularity, utility, quality, and discount O d. desire, costs,

convenience, and time The correct answer is: desire, utility,

scarcity, and purchasing power Economic characteristics of real estate include: a. durability of land O immobility of real estate C.uniqueness of real estate d. situsD . Situs Land is an asset:Select one: O a. that is very liquid. O b. that is indestructible. OC. that depreciates over time. d. none of

these. The correct answer is: that is indestructible.

To renovate a property,a must be obtained from the city.Select one: a. Building permit. b. Red herring. Oc.

Occupancy plan. O d. Both a and b. The correct answer is:

Building permit.When the supply of apartment units increases relative to

demand, rents:

Select one: O a. Increase b. remain stable C. decrease d.

become noncompetitive The correct answer is: decrease

Which of the following is correct about building permits ?Select one: a. Further zoning enforcement is achieved through periodic inspections. b. To receive a permit, the project doesn't need to comply with all ordinances and codes. c. Both a and b. d. Neither a nor b. The correct

answer is: Further zoning enforcement is achieved through

periodic inspections.If supply decreases relative to demand, it indicates that

prices:

Select one: a, will increase. b. will decline. C. will result in

equilibrium have exceeded supply The correct answer is:

will increase.The primary form of government influence is: Select one: a, federal influence on interest rates b. local control and permitting of new development O c. both a and

b O d. neither a nor b The correct answer is: both a and b

Price is best described asSelect one: a. what suppliers charge for goods and

services O b. the amount of money consumers are willing to pay for a product or service O c. the amount of money a buyer and seller agree to exchange to complete a transaction O d. a control placed on prices by the federal

government The correct answer is: the amount of money a

buyer and seller agree to exchange to complete a transaction When homes are designed to please fads rather than solid

architectural standards, properties might:

Select one: a. become victim to loss of value from

functional obsolescence. b. gain more value from functional obsolescence. c. be illegal properties. none of these. The

correct answer is: become victim to loss of value from

functional obsolescence.One of the sole characteristics of real estate is:a. land is homogeneous. b. land is non-homogeneous. c.land is non-restrictive. d. none of these. The correct answer

is: land is non-homogeneous.

Which of the following is included in the legal concept of land?

Select one: a. The surface of the earth and all natural

things permanently attached to the earth b. Only the surface of the earth that is delineated by boundaries C. The surface of the earth except for lakes and streams d.Everything above, on and below the surface of the earth

The correct answer is: Everything above, on and below the

surface of the earth Property insurance covers:Select one: a. everything on the land. b. only the improvements on the land. c. building and land assessed value. d. fixtures and leaseholds only. The correct answer

is: only the improvements on the land.

Real estate investment tends to be:Select one: O a. short term. O b. medium term. O c. long

term. O d. less risky. The correct answer is: long term.

By tracking a price trend one can conclude supply and

demand trends whereby:

Select one: a. if price decreases, demand is declining in

relation to supply. b. if price increases, demand is increasing in relation to supply. c. both a and b. d. neither a

nor b. The correct answer is: both a and b.

Which variable influences supply?Select one: a. Availability of labor b. Price of real estate c.Mortgage credit availability d. Income of consumers The

correct answer is: Availability of labor

The number of new building permits:Select one: a. has no indication as to the health of the property market. b. indicates whether the market is heading up or down. c. indicates a strong economy. d. both b and c.

The correct answer is: both b and c.

Urban land derives its value primarily from its Select one: a. location b. size c. natural beauty d.

concentration of population The correct answer is: location

A refined older home on a well-landscaped corner is appraised and the appraiser recommended that the building be razed. This would be for which of the following

reasons:

Select one: a. principle of substitution O b. contribution O c.

highest and best use of land O d. regression The correct

answer is: highest and best use of land

The control of rent by governmental action, which in effect can increase the demand by renters for rental space.

Select one: O a. reduces rent prices. b. increases rent

prices. c. decrease the demand. d. none of these. The

correct answer is: reduces rent prices.

Before breaking ground, a must be obtained from the city.Select one: a. Construction loan. b. Red herring. c.Occupancy plan. O d. Building permit. The correct answer

is: Building permit.

Which of the following is the best definition of real estate?Select one: a. Land and personal property b. Unimproved land c. Land and everything permanently attached to it d.An ownership interest in land and improvements