Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter 12 Quiz

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Question #1
Depreciation can be:
A.   curable.
B.   incurable.
C.   curable, incurable, and loss in value due to any cause.
D.   loss in value due to any cause.
Question #2
The market data method (comparative approach) is best used for:
A.   houses.
B.   houses, condominiums, and vacant land.
C.   vacant land.
D.   condominiums.
Question #3
The approach that takes the current selling prices of similar properties and adjusts these prices for any differences is called the:
A.   comparative approach.
B.   none of the answers are correct.
C.   cost approach.
D.   income approach.
Question #4
Which of the following is NOT a type of depreciation?
A.   Economic
B.   Political
C.   Functional
D.   Physical
Question #5
Which appraisal method measures the present worth of future benefits?
A.   Market data approach and Cost Approach
B.   Cost Approach
C.   Market data approach
D.   Income approach
Question #6
Loss of value due to outmoded style or non-usable space is called:
A.   physical deterioration.
B.   functional obsolescence.
C.   income obsolescence.
D.   economic obsolescence.
Question #7
Another term for the income approach is:
A.   replacement approach.
B.   capitalization approach.
C.   correlation approach.
D.   appropriation method.
Question #8
What principle does the "market data approach" use to compare similar properties?
A.   Principle of Location
B.   Principle of Substitution
C.   Principle of Conformity.
D.   Principle of Value
Question #9
The replacement cost approach to appraisal is best used for:
A.   apartments.
B.   raw land.
C.   new construction.
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.   Comparative approach
B.   Correlation approach
C.   Cost approach
D.   Capitalization approach
Question #11
A quick way to convert gross income into the approximate value is to use a:
A.   gross comparable multiplier.
B.   mortgage calculator and gross comparable multiplier.
C.   mortgage calculator.
D.   gross rent multiplier.
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.   Economic obsolescence
B.   Physical deterioration and Functional obsolescence
C.   Physical deterioration
D.   Functional obsolescence
Question #14
Which of the following is TRUE concerning fee appraisers?
A.   They don’t charge a fee
B.   None of the answers are correct
C.   They are self-employed
D.   They are mortgage company employees
Question #15
The capitalization rate is a:
A.   return “on” investment.
B.   none of the answers are correct.
C.   return “on” and “of” investment.
D.   return “of” investment.
Question #16
Which appraisal method uses the principle of substitution?
A.   Cost approach
B.   Market data approach
C.   Cost and Income approach
D.   Income approach
Question #17
In the income approach, the Net Income divided by the Capitalization Rate equals:
A.   interest rates.
B.   interest rates and expenses.
C.   expenses.
D.   market value.
Question #18
What is NOT an example of functional obsolescence?
A.   Out-dated kitchen
B.   Massive cornices
C.   Hole in the roof
D.   One-car garage
Question #19
Because they are “asking prices” in most cases, listings:
A.   set a ceiling on market value.
B.   are always grossly inflated.
C.   are lower than market value.
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.   Interest payments
B.   Property taxes
C.   Payments on loan principal
D.   Interest payments and Payments on loan principal

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