Chp. 20 Quiz - Valuation and Pricing Properties

Question 1

Salvage value refers to the nominal value of a property that has reached the end of its

Answer 1

economic life.

Question 2

Under the _________ heading of the Comparative Market Analysis Form is a row to add all the pertinent information about the seller’s property.

Answer 2

Subject

Question 3

What is the last step in completing a CMA?

Answer 3

To estimate a reasonable and realistic selling price for the seller’s property

Question 4

What the market recognizes as “the change in value an improvement makes to a property” is called what?

Answer 4

Contribution

Question 5

What is the first step in the cost valuation approach?

Answer 5

Approximate land value as if it were vacant

Question 6

A CMA would not include

Answer 6

Recently rented homes.

Question 7

Under the what heading of the Comparative Market Analysis Form are the entries of similar homes that are currently listed?

Answer 7

Comparables

Question 8

A property owner buys an adjacent parcel and combines it with the original parcel to create a property with a higher value than the total of the two separate property values. The operative principle of value in this situation is called?

Answer 8

Assemblage

Question 9

A licensee should keep in mind that the information on pending sales is not as reliable as on sold homes because

Answer 9

the price the licensee sees is only the listing price, not the sales price, and the sale is not final.

Question 10

The licensee should give the seller ____________ and then the seller can set the price to whatever he or she feels comfortable with.

Answer 10

a listing range

Question 11

Which of the following is not a condition for highest and best use?

Answer 11

Minimally productive

Question 12

The income capitalization approach, or income approach, is more specifically used for appraising

Answer 12

income or rental properties.

Question 13

Indirect costs do NOT include

Answer 13

Labor.

Question 14

The value of a property as estimated by a taxing authority as the basis for ad valorem taxation is which type of real estate value?

Answer 14

Assessed value

Question 15

A property’s market price is

Answer 15

The highest price a buyer will pay and the lowest price the seller will accept.

Question 16

Which of the following problems would be an example of incurable depreciation?

Answer 16

Non-air conditioned office complex

Question 17

A taxing authority determines the

Answer 17

Assessed value.

Question 18

When a buyer will not pay more for a home than he or she would pay for another equally desirable home, this is called the principle of

Answer 18

Substitution.

Question 19

The value of a property that has reached the end of its economic life is called the

Answer 19

Salvage value.