Course Review - Practice Test

Question 1

Fannie Mae, Freddy Mac, Ginny Mae, and Farmer Mac are part of the secondary mortgage market.
True
False

Answer 1

True

Question 2

A corporation offers shares of stock to prospective tenants in the real estate that it owns. This is cooperative ownership.
True
False

Answer 2

True

Question 3

The right of possession, transfer, lease, and use are components in the total range of ownership interests known as the bundle of rights.
True
False

Answer 3

True

Question 4

The Rectangular (government) survey system is based on township lines, base lines, range and tier.
True
False

Answer 4

True

Question 5

The principle of contribution states that value is created and sustained when market forces are in equilibrium.
True
False

Answer 5

False

Question 6

A general lien that binds all of the assets of a debtor, including real property, is called a judgment.
True
False

Answer 6

True

Question 7

A deed used to convey any interest to the grantee without any warranty of title is a quitclaim deed.
True
False

Answer 7

True

Question 8

Cash equivalency in a market value appraisal accounts for excessive seller concessions by making adjustments to the comparable sales used in the appraisal.
True
False

Answer 8

True

Question 9

Fee simple and life estates come under the general category of freehold estates.
True
False

Answer 9

True

Question 10

The components of a valid contract are that it be voluntary, include legally competent parties, have legal consideration, and a legal act.
True
False

Answer 10

True

Question 11

The first two tests for highest and best use are physically possible and legally permissible.
True
False

Answer 11

True

Question 12

The principle of anticipation is based on the perception that value is created by the expectation of benefits to be derived in the future.
True
False

Answer 12

True

Question 13

A quit claim deed conveys any interest of the grantor, without any guarantees.
True
False

Answer 13

True

Question 14

All easements are encumbrances.
True
False

Answer 14

True

Question 15

The total range of property rights, which includes the right of possession, the right to transfer, to lease, to sell, to develop, are known as a partial estate.
True
False

Answer 15

False

Question 16

In developing an opinion of the highest and best use of a property, financial supported and maximum productivity are the first two criterion considered.
True
False

Answer 16

False

Question 17

Seller concessions such as mortgage interest buy downs or gift inducements included in the sales price must be considered and converted to cash or terms equivalent to cash.
True
False

Answer 17

True

Question 18

An economic concept based on exchange, such as value, is a fact.
True
False

Answer 18

False

Question 19

Value is an opinion, not a fact.
True
False

Answer 19

True

Question 20

Price is a fact.
True
False

Answer 20

True

Question 21

In a condominium, a corporation holds title to the real estate.
True
False

Answer 21

False

Question 22

Fee simple and life estates are included under the general category of freehold estates.
True
False

Answer 22

True

Question 23

Surface rights include land, water, and anything attached to the land either naturally or by human hands.
True
False

Answer 23

True

Question 24

A district is a group of complementary land uses.
True
False

Answer 24

False

Question 25

A neighborhood is a group of homogenous property types. True False

Answer 25

False

Question 26

An example of governmental forces would be asbestos contained in a commercial building. True False

Answer 26

False

Question 27

In a gross lease, the tenant pays all operating expenses. True False

Answer 27

False

Question 28

All states except Texas, Arizona, and Nevada have laws that require real estate to be owned by either a corporation or partnership. True False

Answer 28

False

Question 29

An easement in gross is an encumbrance. True False

Answer 29

True

Question 30

A scope of work decision includes intended use, intended users, effective date, and type and definition of value. True False

Answer 30

False Note: That is the Identification of the Problem, step 1. Scope of work (step 2) involves the type of data and extent of research and analysis used.

Question 31

A statistical mean is the most frequently occurring number in an array. True False

Answer 31

False

Question 32

The price of money is expressed as a capitalization rate. True False

Answer 32

False

Question 33

The word price means the most probable amount that a willing buyer would pay a willing seller. True False

Answer 33

False

Question 34

The right of the government to take private property for public use upon payment of just compensation is called eminent domain. True False

Answer 34

True

Question 35

The right of the government to control construction and development is called police power. True False

Answer 35

True

Question 36

If you die intestate and without heirs, the state will acquire your property through escheat. True False

Answer 36

True

Question 37

A township contains 640 sections. True False

Answer 37

False

Question 38

A township is six miles by six miles. True False

Answer 38

True

Question 39

A section is one mile square. True False

Answer 39

True

Question 40

An acre contains 43,660 Square Feet. True False

Answer 40

False

Question 41

In order to satisfy the competency requirement of USPAP, an appraiser must be familiar with the market, geographic area, the analytical technique used, and the specific property type. True False

Answer 41

True

Question 42

The stages in the life cycle of a neighborhood include, growth, stability, decline, and implosion. True False

Answer 42

False

Question 43

When middle-and upper-class purchase and renovate in a declining neighborhood, it is called urbanization. True False

Answer 43

False

Question 44

The principle of consistent use states that land can not be valued for one use, and the improvements for another. True False

Answer 44

True

Question 45

The amount that a particular purchaser agrees to pay and a particular seller agrees to accept is called market value. True False

Answer 45

False

Question 46

The principle of contribution states that the value of a component is equal to its cost. True False

Answer 46

False

Question 47

An interim use is one that the city permits between zoning changes. True False

Answer 47

False

Question 48

A trust is an ownership interest held by a person called a fiduciary for the benefit of a third party. True False

Answer 48

True

Question 49

The interests, benefits and rights inherent in the ownership of physical real estate is called real property. True False

Answer 49

True

Question 50

The Competency Rule does not require competency at the outset of an assignment, but does by the completion of the assignment. True False

Answer 50

True

Question 51

Debt and equity are the two primary sources of capital for real estate markets. True False

Answer 51

True

Question 52

The four agents of production are land, labor, capital and entrepreneurial coordination. True False

Answer 52

True

Question 53

A license is an encumbrance on property rights. True False

Answer 53

False

Question 54

A quantitative analysis involves a mathematical process, while a qualitative analysis does not. True False

Answer 54

True

Question 55

Building size, acreage, parking spaces, and rentable area all examples of quantitative data. True False

Answer 55

True

Question 56

A balloon payment is the down payment made at the beginning of the loan True False

Answer 56

False

Question 57

A balloon mortgage is a partially amortized mortgage with a lump sum payment at the end. True False

Answer 57

True

Question 58

Appraisers and brokers set prices. True False

Answer 58

False

Question 59

Supply and demand set prices. True False

Answer 59

True

Question 60

Short-term buyers and sellers trade in the capital markets. True False

Answer 60

False

Question 61

An appraisal is an opinion of price. True False

Answer 61

False

Question 62

A VA loan is a good example of a guaranteed mortgage. True False

Answer 62

True

Question 63

An FHA loan is a good example of an insured mortgage. True False

Answer 63

True

Question 64

An appraisal is the act or process of developing an opinion of value. True False

Answer 64

True

Question 65

An appraisal that has an effective date of value in the past is called a prospective appraisal. True False

Answer 65

False

Question 66

A lien is an encumbrance that is a financial claim against a property that can affect the transfer of title True False

Answer 66

True

Question 67

An easement appurtenant is attached to, and passes with the dominant estate. True False

Answer 67

True

Question 68

An appraiser is one expected to perform valuation services competently, and in a manner that is independent, impartial, and objective. True False

Answer 68

True

Question 69

The four factors of value include utility, scarcity, desire and effective purchasing power. True False

Answer 69

True

Question 70

Joint tenancy involves the right of survivorship. True False

Answer 70

True

Question 71

Zoning is an example of police power. True False

Answer 71

True

Question 72

Appraisal consulting involves an opinion of value as a component of the analysis. True False

Answer 72

True

Question 73

A retrospective appraisal has an effective date in the past, and a prospective appraisal has an effective date in the future. True False

Answer 73

True

Question 74

Real estate is the physical land and appurtenances, while real property is the rights inherent to the physical land and appurtenances. True False

Answer 74

True

Question 75

The NW ¼ of the NW ¼ of the NW ¼ of Section 24,Township 13N, Range 52E, contains 10 acres. True False

Answer 75

True

Question 76

A corporation offers shares of stock to prospective tenants in the real estate that it owns. This is cooperative ownership. True False

Answer 76

True