Principles of Real Estate Chp.6-Test Flashcards

Principles of Real Estate Chp.6-Test Flashcards Divide the income a property generates by a rate of returnA certified appraiser is one who has received certification by its susceptibility to swings in the local economy When vacancies are declining in a real estate market, it is common for the market to experience The price for any product is a function of four fundamental determinants of value. These are desire, utility, scarcity, and purchasing power weighing the applicability of the approaches and considering the quality of data supporting each approach.One of the strengths of the cost approach is that it In- and out-migrations of major employers A moratorium on new construction is an example of If commercial real estate rental prices are falling in a market, it is likely that the market is over-supplied.incurable economic obsolescenceThe city of Stevensville has declared a moratorium on new construction. If demand is increasing, what will be the likely effect on real estate prices in the area?When the market for an item has achieved market equilibrium, which of the following statements is true?The price for any product is a function of four fundamental determinants of value. These are the market is over-suppliedA home is located in a neighborhood where homeowners on the block have failed to maintain their properties. This is an example of weights the comparablesAs a component of real estate value, the principle of substitution states that Prices riseOne distinguishing feature of real estate as an economic product is is physically and financially feasible, legal, and the most productive In the sales comparison approach, an adjustment is warranted if have been increasingWhich of the following situations illustrates the principle of contribution?is very accurate for a property with new improvements that represent the highest and best use Highest and best use of a property is that use which rising pricesWhich of the following statements properly describes how to apply the income capitalization approach to appraisal?desire, utility, scarcity, and purchasing power A property is being appraised by the cost approach. The appraiser estimates that the land is worth $30,000 and the replacement cost of the improvements is $95,000. Total depreciation from all causes is $10,000. What is the indicated value of the property?150What is "vacancy" in real estate market economics?replacement costIn the final step of an appraisal, the appraiser reconciles the value estimates derived by the various appraisal approaches by

weighing the applicability of the approaches and considering the quality of data supporting each approach.In the final step of an appraisal, the appraiser reconciles the value estimates derived by the various appraisal approaches by depreciationIf there is a significant undersupply of homes in a market, construction will tend to increase. This is an example of $115,000.00When the market for an item has achieved market equilibrium, which of the following statements is true?if two similar properties are for sale, a buyer will purchase the cheaper of the two A construction boom in a market is an indication that prices the state in which the appraiser operates When a property owner combines two adjacent properties to create a single property with a higher value than the sum of the values of the two separate properties, the applicable principle of value is called assemblageIn the cost approach, after estimating the value of the land and the cost of the improvements, the appraiser A homeowner adds a third bathroom to a house and thereby increases the appraised value by $10,000.What is the difference between market value and market price, if any?Vacancy rises and prices fallAn apartment building that sold for $450,000 had monthly gross rent receipts of $3,000. What is its monthly gross rent multiplier?the market tending toward equilibriumIf commercial real estate rental prices are falling in a market, it is likely that Market value is an estimate; market price is the price at which a property sold.There is a lot of new construction going on in the town of Florence. Which of the following would most likely be the immediate effect on the real estate market?the seller offers below-market seller financing Of the following potential influences on a local real estate market, which one would be considered local, rather than regional, national, or global?estimates depreciation, subtracts depreciation from cost, and adds back the land value.To complete the sales comparison approach, the appraiser Supply and demand are equal, and price and value are equal What is the difference between market value and market price, if any?Supply and demand are equal, and price and value are equal In appraisal, loss of value in a property from any cause is referred to as A property is being appraised by the cost approach. The appraiser estimates that the land is worth $30,000 and the replacement cost of the improvements is $95,000. Total depreciation from all causes is $10,000. What is the indicated value of the property?

$115,000.00

Market value is an estimate; market price is the price at which a property sold.The price for any product is a function of four fundamental determinants of value. These are The total existing space of a certain type that is unoccupied at a given time The cost of constructing a functional equivalent of a subject property is known as