Q&A Hero

Real Estate

Q: A lease in which the rent is based on the amount of gross sales of the business operated by the tenant is called aa. Net lease b. Percentage leasec. Gross rental agreement d. None of these
Q: Contract rent a. Is always less than market rent b. Is always more than market rent c. Can be equal to, more, or less than market rent d. None of these
Q: In the appraisal of income property, common operating expense categories are represented by all but which one of the following?a. Variable b. Fixedc. Allowable depreciation d. Replacement reserves
Q: Income capitalization often applies the formulaa. Value = Factor Rate b. Value = Income Ratec. Value = Rate Income d. Value = Income Factor
Q: The income approach is generally relied upon when a. Income is the primary benefit of ownership b. Property is acquired for different reasons c. Intangible benefits are sought by buyers d. None of these
Q: Of the following, which does not suggest functional obsolescence? a. A conforming house in poor condition b. An illegal structure c. A misplaced improvement d. An over-improvement
Q: A 40 year old building with an effective age of 20 years has a total economic life of 50 years. How much is the value loss?a. 50% b. 40%c. 80% d. 4/7
Q: Economic obsolescence is generally found to bea. Curable b. Incurablec. Less than typical d. The same for all properties
Q: Accrued depreciation is considered curable if the cost to cure is no greater than thea. Expected increase in value b. Replacement costc. Reproduction cost d. Actual installation cost
Q: In the cost approach, a depreciation allowance could be based on effective age. What is another method?a. Physical upkeep b. Loss in value from agec. Analysis of renovation feasibility d. A dollar adjustment for renovation/remodeling
Q: Of the following, which does not represent a method for estimating accrued depreciation for appraisal purposes?a. Age-life or straight-line b. Sum of the digitsc. Cost to cure d. Capitalized rental loss
Q: A change in zoning may cause a loss in value froma. Economic obsolescence b. Physical deteriorationc. Change in reproduction cost d. Neighborhood obsolescence
Q: Depreciation is defined for appraisal purposes asa. Accruals for recapture b. Accumulated reservec. Loss in value d. Allowable deduction from value
Q: Your cost manual suggests an $80 per square foot cost for good quality homes like the one you are appraising. Your 1,800 square foot home has, in addition to the standard features shown in the manual, a second fireplace costing $2,400 and a built-in vacuum system costing $2000. However, the subject house lacks the extra 1/2 bathroom shown in the manual (extra cost of $3,000). What is your estimated cost?a. $149,600 b. $145,400c. $144,600 d. $151,400
Q: In the cost approach, indirect costs include all of the following excepta. Insurance b. Taxes and interestc. Yard improvements d. Administration and management
Q: Direct cost elements of construction includea. Labor costs b. Material and equipment costsc. Subcontracts d. All of the above
Q: Increasing the floor area of a structure usually has the effect of a. Increasing the square foot cost b. Decreasing the square foot cost c. Reducing the utility d. None of the above
Q: The most widely used method of estimating cost is thea. Unit-in-place method b. Comparative square foot methodc. Quantity survey method d. Index method
Q: The cost approach is useful in appraisals to a. Estimate the value of new property b. Appraise properties not usually rented or sold c. Check against other value approaches d. All of the above
Q: In contrast to reproduction cost, replacement cost refers to a. The cost of constructing a building that will serve the same purpose as the one being appraised b. The cost of constructing an exact replica building c. The cost of reproducing the subject building d. None of these
Q: Cost estimates used in appraisal relate toa. Typical costs b. Wholesale costsc. Actual costs to owner d. Cost of materials plus labor
Q: If land value is estimated from an analysis of the number of units that can be built under the present zoning, which type of unit of comparison is used?a. Physical b. Economicc. Total property d. None of the above
Q: If streets and common areas require 5 acres, approximately how many 5,000 square-foot lots can be developed on a raw 10 acre site?a. 40-45 b. 10c. 80-90d. 100
Q: The main physical unit(s) of comparison in the analysis of vacant land are a. Price per square foot, front foot, or acre b. Terms of sale, time, location, and physical characteristics c. Price, topography, view d. Price per room
Q: Many city, county, state and federal agencies have salaried appraisers on their staffs.
Q: It is considered unethical for an appraiser to accept an appraisal assignment on a contingent fee basis.
Q: The ethics provision of USPAP requires keeping an exact replica of all written appraisals.
Q: The American Society of Appraisers (ASA) offers designations in personal property appraisal as well as real property appraisal and others.
Q: The Society of Real Estate Appraisers and the American Institute of Real Estate Appraisers merged to become the Appraisal Institute.
Q: The licensed appraiser is eligible to appraise all residential and residential-income properties for all intended uses.
Q: Qualifications for state license and/or certification include both appraisal-related course work, and experience in appraisal or appraisal assistance.
Q: Generally, state and federal laws require all appraisers to be licensed or certified.
Q: To be qualified to work in the field, an appraiser should be knowledgeable about real estate operations and markets.
Q: Most appraisers have a specialized degree in real estate.
Q: Eminent domain appraisals involve essentially the same general purpose as other appraisals; the estimate of market value.
Q: In mortgaged property, the market value of the lender's real property ownership interest can be less than the remaining balance on the loan.
Q: The benefits that belong to the leased fee interest include the lease income and the rights to the reversion.
Q: A gross lease requires the tenant to pay all operating expenses.
Q: The value of the lessee's interest in real property can be measured by capitalizing the difference between the contract and market rents.
Q: The landlord's interest in investment property is called the leasehold estate.
Q: According to HUD, mobile homes constructed after 1976 are properly classified as manufactured homes.
Q: A condominium unit may be described as the ownership of an airspace combined with a joint ownership of the land and the common areas.
Q: Planned unit developments usually involve common areas and homeowners' associations.
Q: The owners of row houses and townhouses usually own the individual lot where the unit is located.
Q: A single-family appraisal report should include a sales history of the subject property, with details of any known sales transaction that occurred within the three years prior to the date of value.
Q: Agencies of FIRREA are exempt from USPAP.
Q: Letter reports are well adapted to the Restricted Use Appraisal Report.
Q: The narrative appraisal report is the most formal format.
Q: When properly prepared, the Uniform Residential Appraisal Report is acceptable for federally-related appraisals.
Q: The appraiser may exclude any irrelevant value approach without mentioning it in so many words.
Q: An appraisal may be reported with either a Self-Contained, Summary, or Restricted Use appraisal report.
Q: Under FIRREA, not every appraisal for a federally related transaction must comply with USPAP.
Q: All state licensed and certified appraisers must conform to USPAP regardless of the appraisal assignment.
Q: The form and general content of appraisal reports should be agreed on in advance between the appraiser and the client.
Q: Rounding the final answer to a large number of significant digits adds professionalism to the appraisal.
Q: The final value conclusion should be an average of the three approaches to value.
Q: The sales comparison approach is considered the most direct of the three approaches.
Q: The value conclusion should fall within the range of value indications from the approaches applied.
Q: If large adjustments were required in any approach, the value indicated by that approach should be totally ignored.
Q: The quantity of data collected is not a factor in reviewing the results of a particular value approach.
Q: If the data reviewed for one value approach is marginally reliable, the resulting value is still given equal weight.
Q: Appraising the appraisal means to evaluate each value approach, the data used, and the range of indicated value.
Q: Reconciliation is defined as estimating value.
Q: Before reconciliation begins, the appraiser should review the overall appraisal process.
Q: The future worth of one factor is used to calculate how much income is necessary to justify a given value.
Q: A discount factor is used to adjust for the time value of money.
Q: The equity residual technique analyzes the cash flow, rather than the net operating income from an investment.
Q: Direct capitalization is usually the most reliable technique of income capitalization.
Q: When the net income is divided by the sales price to derive a capitalization rate, the band of investment method is being used.
Q: The overall capitalization rate theoretically allows for a return on the investment, without any recapture.
Q: In appraisal, the interest rate means the same thing as yield rate.
Q: Reversionary returns from an investment do not include equity build-up from loan pay-off.
Q: Positive leverage results from an equity investment in a property that is earning a greater return than the cost of the loan money.
Q: Income capitalization converts income to its value equivalent.
Q: Rent for the manager's unit should be included in the rent forecast.
Q: Expenses that are not classified as either variable or fixed should be omitted.
Q: Operating expenses should include all owner-related expenses.
Q: A step-up lease is a lease on a walk-up apartment.
Q: Market rent can be defined as the potential gross rent in an open market.
Q: Gross income multipliers normally increase with a decrease in the operating expense ratio.
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