hisher investment in real property is an example of the

Principles of Pricing Flashcards An investors expectation of receiving a financial return on his/her investment in real property is an example of the principal of anticipation Who can make an appraisal of real property in the state of GA?licensed appraisers only Which of the following answers shown is a violation of law in GA when done by a real estate licensee?1. making an appraisal of real property2. referring to a pricing opinion as an appraisal3. calling an opinion as to price an estimate of value4. appraising property with an appraisal license 1, 2, & 3 The principal which states that the maximum value of a parcel of property is attained when the property is used in a manner that is consistent with surrounding property is known as the principal of conformity The fact that one parcel of land is never an exact replacement for another reflects the fact that land is non-homogeneous The impact on value of the way a property is used is reflected in the principal of highest and best use The actual amount that a parcel of property sells for is themarket price The number of houses for sale have declined and as a result, the prices of houses have gone up. This represents the principal of supply and demand Profits have been good in the rental of apartments, so more investors begin to build apartment buildings. This is an example of the principal of competition The price which an informed buyer and seller agree on neither is unduly pressured and the property has been on the market for a reasonable time is called the market value The fact that when a substantial profit is being made in a business others will enter the same type of business represents what principal?competition the purpose of valuation is to determine the value of property The fact that a buyer will buy with the expectation of receiving future benefits is called the principal of anticipation A situation in which there are not enough buyers to meet the supply represents a buyers market The fact that the ability to buy and sell land affects its value is the basis for the element of value called transferability The fact that someone desires a property and has purchasing power to buy it is the basis for the element of value called demand

Most valuations are normally made to determine market value The fact that real estate has a certain appeal as a permanent investment reflects the fact that land is indestructible A house that costs $125,000 to build is worth less in a neighborhood of $75,000 homes. This represents regression The fact that the amount of land available affects its value is the basis for the element of value called scarcity The market value of a parcel of property must always equalno other value Adding an expensive swimming pool to a home in a neighborhood in which the other home has a pool would be an example of the principal of diminishing marginal returns The increase in value when two or more adjacent properties are combined into one parcel is called plottage The fact that land has a number of important uses is the basis for the element of value called utility The single most important principal of value in the purchasing of real property is that of substitution The fact that the real estate market is largely a local one reflects the fact that land is immovable The principal that the price that a property will sell for is affected by similar properties of equal desirability is called the principal of substitution The fact that the value of property is affected by the availability of property for sale, and the desire and ability of buyers to purchase is known as the principal of supply and demand The fact that the cost of improving property may not produce a corresponding increase in value represents the principal of diminishing marginal returns Combining two or more adjacent properties into one parcel is called assemblage The present worth of all rights to current and future benefits of ownership is the ______ of property value Two identical homes are built by a builder in different neighborhood, one with houses selling for $120,000 and one with houses selling for $140,000. The house in the higher priced neighborhood sells for $20,000 more than the other one. This is an example of the principal of conformity A parcel of property with a house on it is located at a major intersection, it would be worth even more if converted to commercial property. This is an example of the principal of highest and best use A situation in which there are not enough sellers to meet the demand represents a sellers market The S in DUST stands forscarcity The word used to remember the basic elements of value isDUST

The D in DUST stands fordemand If 4-bedroom traditional homes in a neighborhood were selling for $100,000 and a buyer offered to pay $100,000 for a 4-bedroom traditional home in that neighborhood, he/she would be operating on the principal of substitution The U in DUST stands forutility An impartial estimate or opinion of value is calledvaluation A house that costs $75,000 to build is worth more in a neighborhood of $125,000 homes. this represents progression The T in DUST stands fortransferability