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, condominiums, and vacant land.
B.
vacant land.
C.
houses.
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.
cost approach.
C.
none of the answers are correct.
D.
income approach.
Question #4
Which of the following is NOT a type of depreciation?
A.
Functional
B.
Physical
C.
Economic
D.
Political
Question #5
Which appraisal method measures the present worth of future benefits?
A.
Market data approach
B.
Income approach
C.
Cost Approach
D.
Market data approach and Cost Approach
Question #6
Loss of value due to outmoded style or non-usable space is called:
A.
income obsolescence.
B.
functional obsolescence.
C.
economic obsolescence.
D.
physical deterioration.
Question #7
Another term for the income approach is:
A.
correlation approach.
B.
capitalization approach.
C.
appropriation method.
D.
replacement approach.
Question #8
What principle does the "market data approach" use to compare similar properties?
A.
Principle of Substitution
B.
Principle of Location
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.
single-family dwellings.
D.
new construction.
Question #10
Which of the following is NOT one of the three methods to determine the value of real property?
A.
Capitalization approach
B.
Cost approach
C.
Correlation approach
D.
Comparative 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.
gross rent multiplier.
D.
mortgage calculator.
Question #12
Which of the following is an example of economic obsolescence?
A.
Rundown neighborhood
B.
Wear and tear on the load bearing members
C.
Eccentric design
D.
Peeling paint
Question #13
Which type of depreciation is always incurable, meaning nothing can be done?
A.
Economic obsolescence
B.
Physical deterioration and Functional obsolescence
C.
Functional obsolescence
D.
Physical deterioration
Question #14
Which of the following is TRUE concerning fee appraisers?
A.
None of the answers are correct
B.
They are mortgage company employees
C.
They are self-employed
D.
They don’t charge a fee
Question #15
The capitalization rate is a:
A.
none of the answers are correct.
B.
return “on” and “of” investment.
C.
return “on” investment.
D.
return “of” investment.
Question #16
Which appraisal method uses the principle of substitution?
A.
Cost approach
B.
Income approach
C.
Cost and Income approach
D.
Market data approach
Question #17
In the income approach, the Net Income divided by the Capitalization Rate equals:
A.
expenses.
B.
market value.
C.
interest rates and expenses.
D.
interest rates.
Question #18
What is NOT an example of functional obsolescence?
A.
Out-dated kitchen
B.
One-car garage
C.
Hole in the roof
D.
Massive cornices
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.
Payments on loan principal
C.
Property taxes
D.
Interest payments and Payments on loan principal
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