Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter 12 Quiz
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Question #1
Depreciation can be:
A.
incurable.
B.
loss in value due to any cause.
C.
curable.
D.
curable, incurable, and loss in value due to any cause.
Question #2
The market data method (comparative approach) is best used for:
A.
houses.
B.
condominiums.
C.
houses, condominiums, and vacant land.
D.
vacant land.
Question #3
The approach that takes the current selling prices of similar properties and adjusts these prices for any differences is called the:
A.
cost approach.
B.
income approach.
C.
none of the answers are correct.
D.
comparative approach.
Question #4
Which of the following is NOT a type of depreciation?
A.
Functional
B.
Economic
C.
Physical
D.
Political
Question #5
Which appraisal method measures the present worth of future benefits?
A.
Cost Approach
B.
Market data approach
C.
Market data approach and Cost Approach
D.
Income approach
Question #6
Loss of value due to outmoded style or non-usable space is called:
A.
income obsolescence.
B.
physical deterioration.
C.
functional obsolescence.
D.
economic obsolescence.
Question #7
Another term for the income approach is:
A.
correlation approach.
B.
appropriation method.
C.
capitalization approach.
D.
replacement approach.
Question #8
What principle does the "market data approach" use to compare similar properties?
A.
Principle of Substitution
B.
Principle of Conformity.
C.
Principle of Value
D.
Principle of Location
Question #9
The replacement cost approach to appraisal is best used for:
A.
new construction.
B.
raw land.
C.
apartments.
D.
single-family dwellings.
Question #10
Which of the following is NOT one of the three methods to determine the value of real property?
A.
Correlation approach
B.
Comparative approach
C.
Capitalization approach
D.
Cost approach
Question #11
A quick way to convert gross income into the approximate value is to use a:
A.
mortgage calculator and gross comparable multiplier.
B.
gross comparable multiplier.
C.
gross rent multiplier.
D.
mortgage calculator.
Question #12
Which of the following is an example of economic obsolescence?
A.
Eccentric design
B.
Rundown neighborhood
C.
Peeling paint
D.
Wear and tear on the load bearing members
Question #13
Which type of depreciation is always incurable, meaning nothing can be done?
A.
Physical deterioration and Functional obsolescence
B.
Economic obsolescence
C.
Functional obsolescence
D.
Physical deterioration
Question #14
Which of the following is TRUE concerning fee appraisers?
A.
They are self-employed
B.
None of the answers are correct
C.
They don’t charge a fee
D.
They are mortgage company employees
Question #15
The capitalization rate is a:
A.
return “on” and “of” investment.
B.
return “of” investment.
C.
return “on” investment.
D.
none of the answers are correct.
Question #16
Which appraisal method uses the principle of substitution?
A.
Market data approach
B.
Cost and Income approach
C.
Income approach
D.
Cost approach
Question #17
In the income approach, the Net Income divided by the Capitalization Rate equals:
A.
market value.
B.
interest rates.
C.
interest rates and expenses.
D.
expenses.
Question #18
What is NOT an example of functional obsolescence?
A.
One-car garage
B.
Hole in the roof
C.
Massive cornices
D.
Out-dated kitchen
Question #19
Because they are “asking prices” in most cases, listings:
A.
are lower than market value.
B.
set a ceiling on market value.
C.
are always grossly inflated.
D.
none of the above.
Question #20
Which of the following would be considered operating expenses to be subtracted from the gross income of a property when determining its value through the income capitalization approach?
A.
Payments on loan principal
B.
Interest payments and Payments on loan principal
C.
Property taxes
D.
Interest payments
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