Chapters 1-4

Question 1

What is Real Property?

Answer 1

All interest, Benefits and RIGHTS inherent in the ownership of physical real estate

Question 2

Define Real Estate

Answer 2

An identified parcel or tract of land including any improvements

Question 3

What are the 6 items in the “Bundle of Rights”?

Answer 3

G.L.U.E.S.E.

Give Property Away
Lease
Use
Enter Property
Sell
Exercise all or none of the above

Question 4

Define Fee Simple

Answer 4

Occupied by the Owner -Most Complete Form of Ownership

Question 5

Define Lease Fee:

Answer 5

Owner- Lease to Tenant

Question 6

Define Leasehold:

Answer 6

Tenant- Tenant’s position - a tenant can create value with a beneficial lease

Question 7

4 Powers of Governement

Answer 7

P.E.E.T.

1- Police Power
2-Eminent Domain
3-Escheat
4-Taxation

Question 8

What is Eminent Domain?

Answer 8

Condemnation - Government takes property for good of the community

Question 9

Give 2 examples of police power:

Answer 9

Zoning

Building Codes

Question 10

What is Escheat?

Answer 10

Gov. take property with death of owner with no heirs

Question 11

What is Real Property?

Answer 11

Land and building (and attachments)

Question 12

What is Personal Property? Give Example

Answer 12

Moveable items (Not considered RE)

• Fridge
• Trampoline
• Portable Book Shelves

Question 13

Give an example of an intangible asset:

Answer 13

Business Enterprise, copyright, trademark, IP

Question 14

Is a Fixture Real Property or Personal Property?

Answer 14

Real Property

Question 15

What is a Fixture? Give examples

Answer 15

Fixture: Any object permanently attached to a property by way of bolts, screws, nails, glue, cement etc. Ex: Chandeliers, ceiling fans, window

Question 16

4 Tests of Fixture:

Answer 16

1- Manner of Attachment
2-Adaptation- Character of item and adaptation to the RE
3-Intent - Intent of party who attached item
4-Mutual Agreement- Agreement of both Parties

Question 17

What is a trade fixture? Is it real or personal property?

Answer 17

Personal Property

Chattel - Example Jewelry cabinets commercial lease

Question 18

Name 5 types of RE assets:

Answer 18

1- Residential
2-Commercial
3- Agricultural
4-Industrial
5-Special Purpose

Question 19

Name 5 types of Value:

Answer 19

Market Value 
Use Value - for specific user or purpose
Investment Value - for spec. investor based on returns
Assessed Value- Taxable value
Business Value- Intangible assets

Question 20

The “act” or process of developing an opinion of value

Answer 20

Appraisal

Question 21

4 Concepts of Land

Answer 21

1- Geographic and Environmental
2-Legal
3-Economic
4-Social

Question 22

Geographic and Environmental Concept of Land states that land is:

Answer 22

Unique
Immobile
Durable
Finite
Useful
Influenced by: climate, trends, etc.

Question 23

Legal concept of land includes:

Answer 23

• Pyramid “to the sky and depths”
• Easements
• Access Regulations
• Water and Mineral
• Zoning and Other Restrictions
• Recording and Conveying Titles

Question 24

Economic Concept of Land States that:

Answer 24

Land is valuable, source of wealth, and has value

Question 25

The social concept of land includes:

Answer 25

How is land used? | -Zoning - govt. has right to decide use.

Question 26

Private Concurrent Legal Entities

Answer 26

Forms of Real Property Ownership

Question 27

Four Agents of Production:

Answer 27

Land- The cost of acquiring the land Labor- The physical and intellectual contribution Capital- Equipment, buildings and infrastructure Entrepreneurial Coordination- Profit above the return of equity

Question 28

Utility Scarcity Desire Effective Purchasing Power Bonus: What do these create?

Answer 28

Factors of Value Bonus: Create Demand

Question 29

Define Utility:

Answer 29

Ability of a product to satisfy a human want, need or desire.

Question 30

Define Scarcity:

Answer 30

Supply relative to demand

Question 31

Define Desire:

Answer 31

Wish to satisfy human needs

Question 32

Define Effective Purchasing Power:

Answer 32

Ability of participate in the market

Question 33

What is the difference between Price, Cost, and Value?

Answer 33

Price: Amount being paid in exchange Cost: Total dollar expenditure for an improvement (direct or indirect) Value: Monetary worth of a property to buyers and sellers at given time. Present worth of future benefit

Question 34

Fundamental Appraisal Concepts

Answer 34

``` Anticipation Change Supply & Demand Competition Substitution Opportunity Cost Balance Contribution Surplus Productivity Conformity Externalities ```

Question 35

What is USPAP?

Answer 35

USPAP: Uniform Standards of Professional Appraisal Practice

Question 36

Are Appraisers advocates or a disinterested third party?

Answer 36

Disinterested third party

Question 37

What are the 8 Steps in Valuation?

Answer 37

``` 1- Identification of the problem 2-Scope of Work Determination 3-Data Collection and Property Description 4-Data Analysis 5-Land Value Opinion 6-Application of the Approaches to Value 7-Reconciliation of Value Indications and Final Opinion of Value 8-Report of Defined Value ```

Question 38

How to Identify Problem in Valuation?

Answer 38

Identify: Client, Use of Appraisal, Purpose, Date of Valuation, Property Characteristics

Question 39

How to Determine Scope of Work in Valuation?

Answer 39

What are you asked to do? | Required detail?

Question 40

What Data Used in Valuation?

Answer 40

Market Area Data Subject Property Data Comparable Property Data

Question 41

How to complete Data Analysis in Valuation?

Answer 41

Market Analysis | Highest and best use Analysis

Question 42

What is Value Land Opinion in Valuation?

Answer 42

Separated land value from total property value

Question 43

3 Application of Approaches to Value

Answer 43

Cost Approach Sales Comparison Approach Income Capitalization Approach

Question 44

What is Reconciliation and Conclusions in relation to Valuation?

Answer 44

Reconciliation, Explain data analysed, methods used, and reasoning behind value conclusion. Give each valuation method consideration and weight each approach accordingly