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