Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter 12 Quiz
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Question #1
Depreciation can be:
A.
curable.
B.
curable, incurable, and loss in value due to any cause.
C.
incurable.
D.
loss in value due to any cause.
Question #2
The market data method (comparative approach) is best used for:
A.
condominiums.
B.
houses, condominiums, and vacant land.
C.
vacant land.
D.
houses.
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.
income approach.
C.
cost approach.
D.
none of the answers are correct.
Question #4
Which of the following is NOT a type of depreciation?
A.
Economic
B.
Physical
C.
Political
D.
Functional
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.
physical deterioration.
C.
economic obsolescence.
D.
functional obsolescence.
Question #7
Another term for the income approach is:
A.
appropriation method.
B.
capitalization approach.
C.
correlation approach.
D.
replacement approach.
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 Value
D.
Principle of Location
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.
Cost approach
B.
Correlation approach
C.
Capitalization approach
D.
Comparative 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.
Peeling paint
B.
Rundown neighborhood
C.
Eccentric design
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 mortgage company employees
B.
None of the answers are correct
C.
They don’t charge a fee
D.
They are self-employed
Question #15
The capitalization rate is a:
A.
none of the answers are correct.
B.
return “of” investment.
C.
return “on” and “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.
Cost 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.
D.
interest rates and 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.
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 and Payments on loan principal
C.
Interest payments
D.
Payments on loan principal
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