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