Real Estate

Q: After all adjustments are made to a comparable property, its comparative value for appraisal purposes is known as its a. adjusted market price. b. indicated market value. c. amended market value. d. revised market price.

Q: Adjustments for advantageous financing would be made in the a. market comparison approach to appraisal. b. cost approach to appraisal. c. income approach to appraisal. d. revised market price.

Q: To apply the market data approach, a real estate appraiser must collect all the following data on each comparable sale EXCEPT a. date of sale. b. marketability of title. c. financing terms. d. sale price.

Q: Which of the following is NOT one of the three standard approaches to value? a. Income approach b. Cost approach c. Price approach d. Market approach

Q: The American Institute of Real Estate Appraisers issues the a. GRI designation. b. MAI designation. c. CPM designation. d. MIA designation.

Q: The added value resulting from the combination of two or more parcels of land is called a. replacement value. b. liquidation value. c. plottage value. d. subjective value.

Q: That a dollar should be invested only when it will return more than a dollar's worth of benefits is called the principle of a. conformity. b. supply and demand. c. contribution. d. highest and best use.

Q: When an appraiser has a property to evaluate, which of the following would he need to know first? a. Comparable properties b. Amount of his fees c. Assessed valuation d. Highest and best use

Q: The operating expense ratio is a. operating expenses divided by effective gross income. b. operating expenses divided by scheduled gross income. c. operating expenses plus scheduled gross income divided by effective gross income. d. reserves plus collection loss divided by effective gross income.

Q: Which of the following operating expense ratios indicate one dollar of total operating expenses for every two dollars of effective gross income? a. 33.3% b. 50% c. 200% d. 25%

Q: An office building is on a lot valued at $50,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 10%. Using the cost approach, what is the value of the property? a. $50,000 b. $152,000 c. $160,000 d. $185,000

Q: An apartment building sells for $600,000 and has a gross rent multiplier of 6.0. how much annual rent does the building produce? a. $60,000 b. $100,000 c. $10,000 d. $36,000

Q: The method used to compute a gross rent multiplier is a. averaging the net operating income of the subject property. b. the sale price of the subject property divided by its original cost. c. the sale price of similar properties divided by their rental income. d. the maximum rent times twelve months.

Q: An office building is on a lot valued at $40,000. It would cost $150,000 to replace the building structure today, but the improvements have depreciated 20%. Using the cost approach, what is the value of the property? a. $40,000 b. $120,000 c. $160,000 d. $152,000

Q: Net operating income on rental property is computed by deducting expenses from a. net cash flow. b. adjusted gross income. c. net gross income. d. rate of return.

Q: When real property loses value due to social or economic changes, this loss is called a. obsolescence. b. depreciation. c. chattel loss. d. recapture.

Q: Depreciation resulting from the closing of a large business in a small town is classed as a. functional obsolescence. b. physical deterioration. c. economic obsolescence. d. political obsolescence..

Q: Which of the following in an old commercial building would most likely be a cause of incurable obsolescence? a. Lack of computer wiring b. Widely spaced support walls c. Lack of intercom system d. Unattractive dcor

Q: Depreciation resulting from outmoded design is classed as a. functional obsolescence. b. physical deterioration. c. economic obsolescence. d. social obsolescence.

Q: Which appraisal method would be most useful in appraising an unusual building which has a very limited and specific use? a. Cost approach b. Net income c. Capitalization d. Market comparison

Q: In valuing a fire station, an appraiser would most likely emphasize the a. market approach. b. cost approach. c. income approach. d. capitalization approach.

Q: The amount of money required to duplicate a property as of a certain date is called a. reproduction cost. b. depreciation cost. c. duplication approach. d. capital improvement.

Q: A residential lot purchased 3 years ago for $10,000 has doubled in value. The house on the lot cost $40,000 and it increased $20,000 in value. If the house and lot are sold at market value today, how much profit will be realized? a. $30,000 b. $40,000 c. 33 1/3% d. 100%

Q: In making an appraisal by the market comparison approach, an appraiser should a. consider the physical and economic features of the subject property. b. consider the yield of the subject's property with competitive rates of return. c. make adjustments to the value of the subject property with competitive rates of return. d. utilize comparable listings withdrawn from the market.

Q: If an appraiser felt some comparable sales were better indicators of value than other comparables, he would assign more weight to them in the a. adjusted sales price. b. correlation process. c. 4-3-2-1- rule. d. replacement cost approach.

Q: The best definition of fair market value is the a. value as determined by a fee appraisal. b. highest price a seller can get for his property. c. tax assessed value. d. price a willing buyer will pay and a willing seller will accept, given a reasonable amount of time to effect the sale.

Q: The definition of fair market value requires, among other things, that the a. property is exposed to the open market for a reasonable time. b. seller can convey a fee simple title. c. buyer is qualified for reasonable financing. d. sale was free of high-pressure listing and sales agents.

Q: When the appraiser has decided to use the market approach, which of the following conditions would disqualify a sale as a fair market value transaction? a. Low down payment followed by below-average interest rates on the balance due b. Seller who was not in a hurry to sell c. VA sale d. Neighbor's house sold for a higher amount

Q: The most commonly used methods of real estate appraisal are a. market approach, income, and cost. b. income, reproduction, and cost. c. residual, cost, and market data. d. comparison, income, and capitalization.

Q: A lease where the tenant pays a fixed rent and the landlord pays all property taxes is a ____________________ lease.

Q: ____________________ management consists of duties that can be accomplished without being on the premises.

Q: When a property owner offers a premium to entice a prospective tenant to move in, this is known as a rent ____________________.

Q: A ____________________ eviction is one whereby a landlord evicts a tenant because of a complaint made by the tenant.

Q: The rent that a property can command in the competitive open market is called the ____________________ rent.

Q: The amount of rent that the tenant must pay the landlord for the use of the premises is called the ____________________ rent.

Q: To ____________________ means to transfer only a portion of the rights under a lease.

Q: A(n) ____________________ is the total transfer of the lessee's rights to another person.

Q: A lease wherein the owner receives a percentage of the tenant's gross receipts as rent is called a ____________________ lease.

Q: Office and industrial leases of five or more years often include an escalator or ____________________ clause.

Q: A written lease agreement is still legal even though it fails to include the terms of the lease.

Q: A lease for a definite period of time, which terminates when that time has expired, is a periodic estate.

Q: The designation of "certified property manager" means an IREM graduate property manager.

Q: The Certified Property Manager (CPM) designation is available from the Organization of Property Managers.

Q: A broker leasing property for a seller for a fee is a trustee.

Q: Typical duties of a licensed real estate property manager includescreening tenants, maintaining deposit accounts and routine maintenance.

Q: If a renter complains to public health officials about conditions on the premises which violate codes, the landlord may legally react by giving the tenant an eviction notice.

Q: The owner has rented a home to a tenant for many years. Lately, however, the owner has failed to keep the premises in decent repair. The tenant has left in dismay and sued for damages. The tenant would most probably claim that the owner's failure constituted constructive eviction.

Q: When a tenant is behind on his rent, the law permits the landlord to remove the tenant's belongings until the rent is paid.

Q: Upon termination of a rental contract, ownership reverts to the lessor.

Q: A lease cannot be assigned.

Q: The rent of a small store includes a flat amount per month plus a portion of the gross sales each month. The lease is a percentage lease.

Q: A lease contract that calls for rent increases that keep abreast with changes in property taxes and utility costscontains a participation clause.

Q: Under a net lease, the tenant pays a rate based on the net mortgage payment.

Q: If commercial space is rented out for $.07 per square foot per month the annual rent on a space 80"x 150" would be $9,400.

Q: The lessee's right to quiet enjoyment allows the landlord no right of entry.

Q: A current leasehold is an encumbrance on real property and must be honored by the buyer of the leased property.

Q: A tenant is living in a house that is for sale. The owner has told the tenant that he can stay there until the house sells. Most likely, they have entered into an estate at will.

Q: A right of possession for a fixed term that allows for automatic renewals for additional terms is called a periodic tenancy.

Q: A lease conveys the right of possession and use to the landlord.

Q: With regard to renting one vacant apartment, advertising money is usually most effectively spent on a. radio ads. b. television ads. c. newspaper. d. billboards.

Q: A 100-unit apartment building would typically require how many full-time management personnel? a. 1 b. 2 c. 4 d. 6

Q: A residential apartment tenant would be expected to pay the landlord for a. normal wear and tear. b. damage to the apartment caused by the tenant. c. any change in the apartment. d. sun-faded carpet.

Q: If a shopping center building collapsed and several of the tenants' stores could not be reopened, the effect on the tenants' leases would be a. actual eviction. b. an act of God eviction. c. a sandwich lease. d. constructive eviction.

Q: A tenant who operates a coffee shop rented a property under a lease which stated there would be no alcohol served. The tenant subsequently began serving liquor. The landlord would most likely seek a. artistic license. b. eviction. c. condemnation. d. injunctive relief.

Q: A valid, written lease will automatically be terminated by a. death of the lessor. b. sale of the leased premises. c. court eviction of the tenant. d. imprisonment of tenant.

Q: A lessee is in possession of a valid lease when a buyer agrees to assume a veteran's loan and close a sale subject to the lease. The earnest money contract is signed before the lease is due to expire. The lease can a. be terminated immediately. b. be changed by the new buyer. c. not be terminated by the buyer. d. be terminated at close of escrow.

Q: When a valid, enforceable lease is terminated before expiration by means of a mutual agreement, but no penalties are required between the lessor and the lessee, the situation would be referred to as a. surrender. b. rescission. c. release. d. satisfaction.

Q: A lease takes on value when a. economic rent exceeds contract rent. b. contract rent exceeds economic rent. c. contract rent equals economic rent. d. contract rent is less than economic rent.

Q: The total transfer of a tenant's rights to another person is called a. an option. b. a sublet. c. a waiver. d. an assignment.

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