Chapter 21 Value Flashcards
Which of the following factors will affect the value of land?
(1) Immobility
(2) Diversification
(3) Externalities
(4) Both (1) and (3)
4
When a property possesses latent value:
(1) higher value may result through a change of use.
(2) the existing property should undergo renovation for continued similar use.
(3) the buyer should have it rezoned.
(4) it should not be offered for sale.
1
A potential buyer is aware of the asking price for a particular house listed for sale. Which of the following statements is normally TRUE?
(1) The probable sale price will be equal to or above the floor price.
(2) The probable sale price will be equal to or above the seller’s “value to owner”.
(3) The ceiling price will be equal to or below the asking price.
(4) All of the above three statements are normally true.
4
Which one of the following factors is MOST likely to affect the value of residential real property in the short run?
(1) shifts in age composition of the population
(2) a change in mortgage interest rates
(3) a shift in the balance of trade between countries
(4) the supply and cost of raw materials and energy
2
Which one of the following factors is MOST likely to affect the value of residential real property in the short run?
(1) shifts in age composition of the population
(2) a change in mortgage interest rates
(3) a shift in the balance of trade between countries
(4) the supply and cost of raw materials and energy
2
Which one of the following does NOT form part of the definition of market value?
(1) Value is a price that is reasonably expected to prevail.
(2) Value is based on the personal opinion of the value to the owner.
(3) Value is determined at a particular point in time.
(4) The buyer and seller must be bargaining at arm’s length.
2
With respect to the valuation of real property, value to the owner is most often required to be estimated in the context of:
(1) churches and heritage buildings.
(2) investment analysis.
(3) a stable, unchanged market.
(4) mortgage lending practice.
2
Marissa Campbell owns a forty-five year old apartment building on a street in Vancouver. All six suites are rented out at below market rents and the current leases are not up for renewal for another two years. The apartment building is situated in a block in which all of the other apartment buildings have been torn down and replaced with office buildings. In addition, the apartment is situated on land zoned for commercial purposes.
Which of the following statements is true about the state of Marissa’s investment?
A. Marissa’s apartment is “ripe for re-development”.
B. The tenants’ rents will now increase.
C. Marissa’s apartment possesses latent value.
D. Marissa’s apartment is currently at highest and best use.
(1) Only A is true.
(2) C and D are true.
(3) A and C are true.
(4) A and B are true.
3
Value in exchange is:
(1) commonly referred to as value to the owner.
(2) the sale price.
(3) the owner’s minimum price, called the floor price.
(4) a range of mutual profit.
2
All other things being equal, a selling price less than the market value of a property is most likely to be obtained in a sale when:
(1) real estate prices are increasing very quickly.
(2) the seller is not in a hurry to sell.
(3) the buyer is in a hurry to buy.
(4) the property has been exposed to the market for more than two months.
1
Which of the following are determinants for the value of a property?
A. listed (asking) price
B. rights of ownership
C. physical property
(1) A only
(2) C only
(3) A and B
(4) B and C
4
When a property possesses latent value, it is implied that:
(1) the property is not currently employed in its highest and best use.
(2) the current rent earned on the property is below market rent.
(3) the property is unprofitable in its current use.
(4) the property will need to be sold below replacement cost.
1
which of the following is a key determinant of the value of a property?
- vendor financing
- cash-equivalent price
- listing (asking) price
- rights of ownership
4
