Highest and Best Use

Question 1

Agents of production:

Answer 1

land
labor
capital
entrepreneurial profit (entrepreneurial coordination)

These are the factors that combine to create value of developed real property

Question 2

Central Business District (CBD)

Answer 2

The center of an urban area, typically zoned for various uses such as retail, office, and residential. Further, in some areas, transportation starts and ends in the CBD since it is the central location for employment.

Question 3

Consumption:

Answer 3

Consumption is a common concept in economics, and gives rise to derived concepts such as consumer debt.

Question 4

Consumer credit:

Answer 4

Consumer debt that has been paid.

Question 5

Consumer debt:

Answer 5

Consumer credit which is outstanding. In macroeconomic terms, it is debt which is used to fund consumption rather than investment.

Question 6

Demand segmentation:

Answer 6

Demand analysis that includes the investigation and identification of the most probable user, including their preferences based on behavioral, motivational, and psychological factors.

Question 7

Demographics:

Answer 7

The study of a population and its characteristics such as age, sex, familial status, occupation, etc.

Question 8

Economics:

Answer 8

The social science that studies the production, distribution, and consumption of goods and services.

Question 9

Efficient market:

Answer 9

Characterized by goods or services that are easily produced and readily transferable, with a large volume of knowledgeable buyers and sellers.

Question 10

General data:

Answer 10

Relates to information appropriate for many properties; includes all of the four forces (social, economic, environmental, and governmental).

Question 11

Growth or expansion

Answer 11

The preliminary stage in a life cycle that refers to increased development of an area.

Question 12

Inefficient market:

Answer 12

A market characterized by an uneven flow of information, with goods and services that are not easily produced or transferable.

Question 13

Information asymmetry:

Answer 13

During the negotiation process, only one party is privy to important information that may affect the outcome of the transaction. Information asymmetry causes inefficient markets, since all the market participants do not have access to the information needed for their decision making processes.

Question 14

Investment and Consumer Goods:

Answer 14

Real estate is purchased with the expectation of attaining a return on investment, with the intention of using it as an investment vehicle and/or a consumer good.

Question 15

Market area delineation concepts:

Answer 15

Define the primary and secondary market areas and include the type of tenants or clientele buildings might attract and their location, as well as time-distance relationship to nearby complementary services such as restaurants, schools, voting districts, etc. as compared to the competition.

Question 16

Market delineation:

Answer 16

Defines the geographic demand for a specific property.

Question 17

Market participant:

Answer 17

Someone involved in a real estate transaction who receives and possibly acts upon all relevant information.

Question 18

Market segmentation:

Answer 18

Defines and subdivides a large homogenous market into segments based on location, demographics, and consumer behavior.

Question 19

Real estate market:

Answer 19

A succession of submarkets with various desires and needs for each market participant that change autonomously of one another based on a group of complementary land uses that may be divided by natural barriers, political boundaries, districts, income levels of inhabitants, or streets.

Question 20

Recession:

Answer 20

The general contraction of the business cycle in economics during a sustained period of time. This occurrence is typically over two consecutive quarters of negative GDP growth.

Question 21

Revitalization, upturn, or recovery:

Answer 21

Occurs in a life cycle after a decline and before the growth cycle occurs again. Revitalization may occur due to rehabilitation and/or renovation as an area undergoes gentrification.

Question 22

Stabilization:

Answer 22

Stability, slowdown, or downturn that follows the growth stage within a life cycle, especially when an area grows at a slower rate.

Question 23

Transaction Costs:

Answer 23

Buying and selling real estate is much more expensive than most types of transactions. These costs include financing, commissions, closing costs, title insurance, moving costs, legal fees, land transfer taxes, deed registration fees, etc.

Question 24

Typically, real estate is divided into six property classifications :

Answer 24

residential
office
industrial
retail
special-purpose
agricultural

Question 25

Real estate cycles typically have four life cycle stages:

Answer 25

expansion contraction recession recovery.

Question 26

The "four great forces" that affect real property value are:

Answer 26

governmental environmental economic social forces

Question 27

governmental forces

Answer 27

Building, housing, and sanitary codes Code enforcement Environmental regulations Fire protection Land use Local development levies (impact fees) Police power School districts Special assessments Taxation Traffic patterns Zoning

Question 28

Environmental forces

Answer 28

Attractiveness of area Climate (temperatures, dust, wind, etc.) Features important to wildlife Hazards of surrounding properties (odor, noise, trash, etc.) Land use patterns (currently and in the possible future) Liabilities (landslides, flooding, etc.) Maintenance of subject and surrounding properties Open space Property size Public utilities (electric, water, gas, sewer, cable, etc.) Subsurface terrain (marsh, rock, clay, sand, etc.) Topography (terrain and vegetation) Transportation (railway, commuter buses, etc.) Type of property Waterways

Question 29

Economic forces

Answer 29

Development trends Employment Income levels for households Occupancy versus rental levels Trends of property values Vacancy rates

Question 30

Social forces:

Answer 30

**Age levels** Community associations **Crime statistics** Cultural groups Educational characteristics **Employment levels and categories** **Family / household configuration** Neighborhood organizations **Population density** Skill levels

Question 31

Anticipation:

Answer 31

An economic theory where value is created by expectations of future benefits such as income, appreciation, tax benefits, etc.

Question 32

Balance:

Answer 32

An economic principle; the condition caused when values are proportional by various factors.

Question 33

Change:

Answer 33

An economic principle that demonstrates new social patterns, technology, employment, transportation, and other factors create new demands for real estate.

Question 34

Competition:

Answer 34

An economic principle stating that individuals and firms strive for a greater share of a market to sell or buy goods and services, each acting independently by offering the most favorable terms.

Question 35

Conformity:

Answer 35

An economic principle which states that property value is maximized when the characteristics of a property are in conformance with market expectations and demands.

Question 36

Contribution:

Answer 36

Contribution holds that the value of a component of a property is based on its contribution to the value of the whole property. This principle is also known as **marginal productivity**.

Question 37

Externalities:

Answer 37

An economic principle pertaining to an item or event which is external to the boundaries of the property. It can have a positive or negative effect on the property. Many of the forces that affect or influence real estate values pertain to governmental, environmental, economic, and social factors.

Question 38

General data:

Answer 38

Relates to information appropriate for many properties which includes all of the four forces (social, economic, environmental, and governmental).

Question 39

Increasing / Decreasing Returns:

Answer 39

An economic principle that states a feature, repair, addition, etc. might increase or decrease real estate value. As such, the laws of increasing or decreasing returns states that beyond a certain point in time, the feature, repair, addition, etc. will either add or decrease value.

Question 40

Market analysis:

Answer 40

The classification and study of current supply and demand conditions in a particular area for a specific type of property. Further, the market analysis develops the supportable basis for determining highest and best use, vacant or improved.

Question 41

Opportunity Cost:

Answer 41

An economic principle; the income lost by not choosing an alternative. *Example: A commercial real estate company invests $2 million to acquire another commercial real estate firm and their office building instead of re-investing the money in an interest-bearing Certificate of Deposit. The opportunity cost of this decision would be the interest income that they did not receive because the $2 million was not reinvested in a CD. If the correct decision was made, the actual income received should exceed the opportunity cost.*

Question 42

Primary Data:

Answer 42

Data that has been compiled for a specific purpose and has not been collated or merged with others. Primary data relates to specific markets in which the property is located and may include specific sales information, surveys of buyers' preferences, absorption statistics for the assignment, and competitive inventory surveys.

Question 43

Residual income:

Answer 43

The amount of money an investor retains after debt is paid. Examples include before-tax cash flow or an equity dividend.

Question 44

Secondary data:

Answer 44

Encompasses publications and other sources of information that were prepared by someone other than the appraiser. Sources of secondary data may include government reports, Chamber of Commerce publications, census reports, rent studies, published sales data services, etc.

Question 45

Specific data:

Answer 45

Relates to information used directly in the analysis of the subject property and while encompassing the comparables used in the valuation process.

Question 46

Substitution:

Answer 46

An economic principle that is the replacement of one thing with another. *In other words, an informed buyer will not pay more for a property than for a similar property or the cost of producing a substitute property with the same utility. As such, the property value is determined by the price for which another equally desirable property can be acquired or produced. If several similar properties are simultaneously available in the market, the one with the lowest price will attract the most interest. This principle applies to each of the three traditional approaches to value utilized within the appraisal process: Sales Comparison Approach Income Approach Cost Approach*

Question 47

Supply analysis:

Answer 47

Entails examining and analyzing the current competitive properties and their characteristics based on economic, financial, location factors as well as site and building size, if appropriate.

Question 48

Supply and Demand:

Answer 48

An economic principle describing how values or prices are related to the number of goods made available [supply] and the number of goods people want [demand].

Question 49

Surplus Productivity:

Answer 49

An economic principle; the net income that remains after the costs of labor, capital, and entrepreneur profit have been paid and which is attributable to the value of the land.

Question 50

Equilibrium Price:

Answer 50

The equilibrium price is where the supply of goods matches demand

Question 51

Absorption:

Answer 51

The total demand for a type of real estate offered on the open market by all economic agents resident in an economy that may be leased or sold during a certain period of time.

Question 52

Asset manager:

Answer 52

Professional management of real estate to meet specified asset goals for the advantage of the investors. Investors may be insurance companies, lenders, pension funds, corporations, or private investors.

Question 53

Capture rate:

Answer 53

A capture rate is defined as the estimated percentage of the total potential market for a specific type of property.

Question 54

Developer:

Answer 54

A person or company who typically purchases a tract of vacant land and develops the real estate with improvements to yield a profit.

Question 55

Development process:

Answer 55

A part of real estate development wherein vacant land is purchased after a design conception, financed, and sold.

Question 56

Economic base analysis:

Answer 56

A survey of the industries and businesses that generate employment and income in a community as well as the rate of population growth and levels of income, both of which are functions of employment. Economic base analysis is used to forecast the level and composition of future economic activity. Specifically, the relationship between basic employment (which brings income into a community) and nonbasic employment (which provides services to workers in the basic employment sector) is studied to predict population, income, or other variables that affect real estate values or land utilization.1

Question 57

Feasibility study:

Answer 57

An analysis or study involving examination of geographic locations for a real estate development project as well as a cost-versus-value analysis.

Question 58

FIRE:

Answer 58

(finance, insurance, real estate): The study of capital and income that characterizes the financial services industries as part of the SIC/NAIS breakdown of types of industry: finance, Insurance, and real estate. The SIC was replaced by the North American (Canada, USA, Mexico) Industry Classification System (NAICS) in 1997.

Question 59

Fundamental capture method:

Answer 59

A method that compares the subject share of the market, adjusts the subject to the competition using quantifiable rating techniques, calculates the subject historical capture rate, and other factors.

Question 60

General merchandise, apparel, furniture, and other (GAFO):

Answer 60

In retailing, general merchandise such as apparel, furniture, etc.

Question 61

Investment analysis:

Answer 61

The study of economic and market trends, earnings calculations, and various other market indicators to determine investment strategies.

Question 62

Marketability analysis:

Answer 62

A marketability analysis or study consists of interviews, comprehensive data, maps, tables, etc. and demonstrates the marketability of a specific property or the possible future of an existing property.

Question 63

Mean:

Answer 63

A calculation derived by adding the sum of data and dividing by the number of items.

Question 64

Measure of dispersion:

Answer 64

Describes the differences within a population in a statistical calculation.

Question 65

Median:

Answer 65

The middle number within a series of numbers arranged by sequence in statistical analysis.

Question 66

Mode:

Answer 66

The number that occurs most frequently within statistical analysis.

Question 67

Normal distribution:

Answer 67

A smooth symmetrical bell-shaped curve. The normal distribution can describe many populations.

Question 68

North American Industry Classification System (NAICS):

Answer 68

The standard used by Federal statistical agencies to classify businesses for collecting, analyzing, and publishing statistical data related to the U.S. business economy.

Question 69

Net absorption:

Answer 69

The square feet leased in a specific geographic area over a fixed time period after calculating the deduction of space vacated in the same area during the same time period.

Question 70

Population growth:

Answer 70

Growth of the population due to new employment in the area, new schools, shopping, or other characteristics consumers find desirable.

Question 71

Population trends:

Answer 71

The number of people in the primary and secondary trade areas from the most recent census information as well as projections from state, regional, and local government agencies.

Question 72

Range:

Answer 72

The difference between the smallest and the largest numbers within the list within statistical analysis.

Question 73

Sample:

Answer 73

In statistics, a sample is a subset of data from a population or universe, as in a representative sample of the population.

Question 74

Standard deviation:

Answer 74

The difference of the observations from the mean in a statistical analysis. According to the principles of statistics, 66% of observations are within one standard deviation from the mean, while 95% are within two standard deviations.

Question 75

Submarket:

Answer 75

A submarket is a specialized sub-section of a market based on the geographic or economic conditions. For example, a submarket is a secondary market compared to the primary market.

Question 76

Market delineation vs Market segmentation

Answer 76

Market delineation defines the geographic demand for a specific property. 2 Market segmentation defines and subdivides a large homogenous market into segments based on location, demographics, and consumer behavior.

Question 77

Analysis:

Answer 77

Experimental tests of the theories by several independent parties are conducted to ensure validity of the first three steps of the scientific method (observation, formulation, prediction).

Question 78

Attitudinal surveys:

Answer 78

Consumers are interviewed based on their opinion or attitudes for a certain characteristic of a property to determine demand.

Question 79

Desire:

Answer 79

The motivation of an individual, group of persons, or business entity involving real estate.

Question 80

Econometrics:

Answer 80

The application of mathematical and statistical techniques to economic data and problems.

Question 81

Formulation:

Answer 81

A theory that explains phenomena in the scientific method.

Question 82

Fundamental analysis:

Answer 82

A fundamental analysis forecasts demand based on specific information within the subject market. For instance, the appraiser utilizes capitalization rates for specific types of properties within the subject market area to forecast the estimated value of the subject. This analysis relies on the appraiser’s problem-specific data searches, interviews, and surveys; also known as primary data.

Question 83

Gravity models:

Answer 83

A model within market delineation that predicts and describes behaviors that imitate gravitational interaction such as public transportation or real estate demand.

Question 84

Inferred Analysis:

Answer 84

The inferred analysis, often referred to as a trend analysis, is a technical analysis utilized to forecast changes in future value by analyzing historical information. An inferred analysis is not specific to a particular property or subject. It compares the subject to general market indicators such as comparable property data, secondary data surveys and forecasts, the subject’s historical performance, local economic analysis, and other factors.

Question 85

Levels of a market analysis:

Answer 85

During the research phase of the market analysis, an appraiser determines the level of analysis appropriate for the appraisal. These levels are the inferred analysis and the fundamental analysis.

Question 86

Macroeconomics:

Answer 86

A branch of economics that deals with the performance, structure, and behavior of a national or regional economy as a whole. Macroeconomics is one of the two most general fields in economics (microeconomics is the other).

Question 87

Microeconomics:

Answer 87

A principle of economics that studies individuals, households, businesses, and states to understand their decisions regarding use of their resources.

Question 88

Nelson technique:

Answer 88

A technique within market delineation that estimates a retail trade area based on location or trade area after an investigation of population, income, and socioeconomic status.

Question 89

Observation:

Answer 89

A description of a group of phenomena in the scientific method.

Question 90

Phenomena:

Answer 90

A fact or occurrence that can be observed.

Question 91

Prediction:

Answer 91

The use of the theory that predicts the existence of other phenomena, or that predicts quantitatively the results of new observations.

Question 92

Psychographics:

Answer 92

The study of consumer behaviors within a market, segmenting by factors such as level of education, income, occupation, familial status, age, sex, race, and others.

Question 93

Scientific method:

Answer 93

A method that attempts to diminish the influence of bias by the appraiser when testing a theory 4 steps: observation, formulation, prediction, and analysis.

Question 94

Six-Step Process:

Answer 94

A process used within most market/marketability analyses; steps include: productivity analysis market definition demand analysis supply analysis comparison of supply and demand development of subject capture estimate

Question 95

Spotting Technique:

Answer 95

A market analysis based on drive times, customer segments, and household incomes. This widely used technique for market delineation is used for many purposes including residential, retail, hotel/motel, and industrial analysis for customer loyalty programs, transportation models, proposed development, etc.

Question 96

The four criteria that the highest and best use must meet are

Answer 96

- legal permissibility - physical possibility - financial feasibility - maximum productivity

Question 97

Standards Rule 1-3 (a & b) states, “when necessary for credible assignment results in developing a market value opinion, an appraiser must

Answer 97

identify and analyze the effect on use and value of existing land use regulations, reasonably probable modifications of such land use regulations, economic supply and demand, and the physical adaptability of the real estate, and market area trends.” The Comment to SR 1-3 (a) states, “An appraiser must avoid making an unsupported assumption or premise about market area trends, effective age, and remaining life.”

Question 98

Six-step process for market analysis

Answer 98

1. Define the product 2. Market delineation 3. Demand analysis 4. Supply analysis 5. Analyze interaction of supply and demand 6. Forecast subject capture rate

Question 99

PGI

Answer 99

Potential Gross Income (with hypothetical 100% occupancy)

Question 100

V&C

Answer 100

Vacancy & Collection Loss (% deducted from Potential Gross Income to get Effective Gross Income)

Question 101

EGI

Answer 101

Effective Gross Income

Question 102

NOI

Answer 102

Net Operating Income (Effective Operating Income - Expenses = NOI)

Question 103

GRM

Answer 103

Gross Rent Multiplier GRM*Annual Income = Market Value

Question 104

**If a knowledgeable buyer purchased a property from a seller who is significantly less knowledgeable, this is an example of:** - Market delineation - Information asymmetry - Conflict of interest - Illegal conduct

Answer 104

**Information asymmetry**

Question 105

**What type of analysis defines the geographic demand for a specific property?** - Information asymmetry - Market segmentation - Market delineation - Consumption

Answer 105

**Market delineation**

Question 106

**What is the term for the process that defines and subdivides a large homogenous market based on location, demographics, and consumer behavior?** - Stabilization - Market participants - Market segmentation - Information asymmetry

Answer 106

**Market segmentation**

Question 107

**Barry owes $8,000 on his credit card, and he carries this balance from month to month. This is considered to be:** - Demand - Consumer credit - Consumer debt - Economics

Answer 107

**Consumer debt**

Question 108

**How does the real estate cycle affect the income of real property?** - When the economy is in recession, property owners raise rents to compensate - During a recovery, rental rates decline - When vacancy rates increase, rental rates decrease - When vacancy rates increase, rental rates also increase

Answer 108

**When vacancy rates increase, rental rates decrease**

Question 109

**Buyers and sellers of real estate always make rational decisions.** - TRUE - FALSE - -

Answer 109

**FALSE**

Question 110

**Because of the high price of real estate:** - Property values always go up - Recessions usually last five years or more - Real property is a better investment than personal property - Most purchasers must use debt financing

Answer 110

**Most purchasers must use debt financing**

Question 111

**A buyer and a seller are engaging in a real estate transaction. The seller is more knowledgeable about the property and the market than the buyer. This is an example of:** - Market delineation - Effective demand - Information asymmetry - Revitalization, upturn, or recovery

Answer 111

**Information asymmetry**

Question 112

**What entity is considered the authority on determining when the U.S. economy is in a recession?** - National Bureau of Economic Research - Department of Housing and Urban Development - Department of Health and Human Services - National Association of REALTORS®

Answer 112

**National Bureau of Economic Research**

Question 113

**At which stage in the real estate cycle does competition among sellers increase, resulting in a decrease in profits?** - Contraction - Recovery - Recession - Expansion

Answer 113

**Contraction**

Question 114

**What is a major cause of inefficient markets, especially relating to real estate?** - Consumption - Market area delineation concepts - Consumer debt - Information asymmetry

Answer 114

**Information asymmetry**

Question 115

**The study of a population and its characteristics such as age, sex, familial status, occupation, etc. is known as:** - Demand segmentation - Demographics - Consumption - Market delineation

Answer 115

**Demographics**

Question 116

**How many consecutive quarters must the U.S. economy contract for it to be considered a recession?** - One - Two - Three - Four

Answer 116

**Two**

Question 117

**What could be an early indicator of a declining market?** - Three consecutive quarters of economic contraction - Rising vacancy rates - A forecast from the NBER - A review of one year’s worth of property value declines

Answer 117

**Rising vacancy rates**

Question 118

**What type of corporation invests in real estate, pays no corporate taxes, and distributes 90% of the income to investors?** - Limited Partnership - Real Estate Investment Trust - Market Area Delineation Corporation - Agents of Production

Answer 118

**Real Estate Investment Trust**

Question 119

**At which stage of the real estate cycle does the federal government often lower interest rates to maintain construction levels?** - Expansion - Contraction - Recession - Recovery

Answer 119

**Recession**

Question 120

**The four stages of the real estate cycle are typically:** - Expansion, recession, recovery, renewal - Growth, decline, revitalization, gentrification - Growth, stability, expansion, decline - Expansion, contraction, recession, recovery

Answer 120

**Expansion, contraction, recession, recovery**

Question 121

**Which of these is NOT a stage in the real estate cycle?** - Contraction - Gentrification - Recession - Expansion

Answer 121

**Gentrification**

Question 122

**The real estate transfer process is complicated by:** - There is a limited pool of buyers for the property at any given time - Time-consuming negotiations - The necessity and availability of financing - All of these

Answer 122

**All of these**

Question 123

**Data that relates directly to the subject property is identified as:** - Specific data - Demographic data - Primary data - All of these

Answer 123

**Specific data**

Question 124

**Which of these would NOT be considered specific data?** - County tax assessment - Zoning classification - Market area boundaries - Comparable sales and listings

Answer 124

**Market area boundaries**

Question 125

**How might developers differentiate their properties in order to make them more readily marketable?** - Make them as homogenous as possible - Offer various features and amenities - Hire a full-time marketing professional - Build one model type repeatedly until it is perfected

Answer 125

**Offer various features and amenities**

Question 126

**Before researching the market, an appraiser must** - Inspect the property - Prepare a preliminary market analysis report - Interview market participants - Identify the subject’s market area

Answer 126

**Identify the subject’s market area**

Question 127

**An appraiser is asked to appraise a large regional mall. How might the appraiser delineate the market for the property?** - Stay within state lines - Focus on regions with similar economic characteristics - Use the limits of the township or county in which the subject is located - It is not possible to delineate the market for a property of this type

Answer 127

**Focus on regions with similar economic characteristics**

Question 128

**Which statement is TRUE regarding the process of developing a parcel of real property?** - Financing is usually a secondary consideration - Because of the large dollar amounts involved, these are not simple transactions - It takes a relatively short time to improve a parcel of real estate - The development process includes construction only; it does not include the additional time spent on feasibility studies and obtaining permits from government agencies

Answer 128

**Because of the large dollar amounts involved, these are not simple transactions**

Question 129

**Market segmentation defines and subdivides a large homogenous market into segments based on** - Location - Demographics - Consumer behavior - All of these

Answer 129

**All of these**

Question 130

**The four great forces that affect property values include:** - Political - External - Governmental - All of these

Answer 130

**Governmental**

Question 131

**A true market segment meets all of the following criteria EXCEPT:** - Reached by a market intervention - Can be combined with other related segments - Homogenous or consistent within the segment - Responds similarly to market stimulus

Answer 131

**Can be combined with other related segments**

Question 132

**What model can be used to explain growth patterns around major employment centers?** - Central Business District - Concentric Ring Growth Pattern - Transition Zone - Five-Year Urban Planning

Answer 132

**Concentric Ring Growth Pattern**

Question 133

**A vacant property is zoned for apartments. Because it is situated adjacent to an operating sanitary landfill, the property has remained undeveloped for many years. This is an example of a/an _____________ force affecting real estate.** - Environmental - Economic - Governmental - Social

Answer 133

**Environmental**

Question 134

**When segmenting markets for office space, what does the designation “CBD” mean?** - Commercial business designation - Commercial building delineation - Cannot be determined - Central business district

Answer 134

**Central business district**

Question 135

**A local municipality issues a moratorium on building permits because of concerns that local sewage systems are draining into a local waterway. This is an example of a/an _____________ force affecting real estate.** - Environmental - Economic - Governmental - Social

Answer 135

**Governmental**

Question 136

**A developer is constructing a high-end luxury apartment building. While the building is under construction, the major employer in the area consolidates its operations and moves most of its executives out of state. When the building opens, occupancy reaches 40% and remains at that level. This would be an example of _____________ forces that affect real estate.** - Environmental - Social - Governmental - Economic

Answer 136

**Economic**

Question 137

**Which of these is an efficient market?** - Real estate market - Stock market - They are both efficient markets - None of the above

Answer 137

**Stock market**

Question 138

**Which statement is FALSE regarding the process of developing a parcel of real property?** - Because of the large dollar amounts involved, these are not simple transactions - The development process may include feasibility studies and obtaining permits from government agencies - Financing is usually a secondary consideration - It takes a relatively long time to improve a parcel of real estate

Answer 138

**Financing is usually a secondary consideration**

Question 139

**Buyers and sellers of real property are usually equally knowledgeable about the subject property and local market conditions.** - TRUE - FALSE - -

Answer 139

**FALSE**

Question 140

**In a market analysis, an appraiser examines trends and:** - Television infomercials - Motivations of market participants - Capitalization rates for similar properties in other cities - Sales within the previous 10-year period

Answer 140

**Motivations of market participants**

Question 141

**Which of these is NOT one of the four agents of production?** - Entrepreneurial coordination - Materials - Capital - Labor

Answer 141

**Materials**

Question 142

**The four agents of production DO NOT include:** - Labor - Value - Land - Capital

Answer 142

**Value**

Question 143

**What is the term for the process that defines and subdivides a large homogenous market based on location, demographics, and consumer behavior?** - Stabilization - Information asymmetry - Market segmentation - Market participants

Answer 143

**Market segmentation**

Question 144

**What is the loss of income by not choosing an alternative called?** - Externality - Contribution to value - Law of Diminishing Return - Opportunity Cost

Answer 144

**Opportunity Cost**

Question 145

**A _________ includes supply and demand analysis along with the collection of market data, analyses, and recommendations.** - Economic principles analysis - Consumer survey - Market analysis - None of these

Answer 145

**Market analysis**

Question 146

**A building owner installs a new “green” roof on the structure at a cost of $300,000. The value of the building increases by only $200,000 as a result of the new roof. This demonstrates:** - Opportunity cost - Externalities - Substitution - Contribution

Answer 146

**Contribution**

Question 147

**A developer constructs a new home in the middle of a manufacturing area, surrounded by industrial buildings. The sale price of the new home is 20% less than the developer’s cost to construct. What economic principle is best demonstrated in this example?** - Conformity - Anticipation - Substitution - Opportunity cost

Answer 147

**Conformity**

Question 148

**Which phrase best describes equilibrium price?** - The market price that is set by interaction of supply and demand - The dollar value that is representative of the highest and best use of the property - The price that is set temporarily by government intervention in a market - Property values have peaked and have now begun to decline

Answer 148

**The market price that is set by interaction of supply and demand**

Question 149

**The principle which holds that the net income attributable to the land after the costs of labor, capital, and entrepreneurial profit have been paid is:** - Supply and demand - Surplus productivity - Contribution - Externalities

Answer 149

**Surplus productivity**

Question 150

**The neighborhood life cycle and the business cycle are examples of which valuation principle?** - Anticipation - Balance - Contribution - Change

Answer 150

**Change**

Question 151

**When do improvements add the most value to a property?** - When the property is used for its highest and best use - When the property sells for the highest price in the neighborhood - When the most expensive materials are used in construction - All of these

Answer 151

**When the property is used for its highest and best use**

Question 152

**What is achieved when numerous factors exert proportional influence on value?** - Contribution - Change - Balance - Externalities

Answer 152

**Balance**

Question 153

**Appraisal theory holds that after the costs of labor, capital, and entrepreneurial coordination are paid, any excess income is attributable to ______________.** - The government - The land - The developer - The buyer

Answer 153

**The land**

Question 154

**The present worth of revenue or other benefits expected in the future is referred to as:** - Balance - Change - Competition - Anticipation

Answer 154

**Anticipation**

Question 155

**Which valuation principle requires appraisers to analyze trends?** - Externalities - Change - Balance - Contribution

Answer 155

**Change**

Question 156

**Which principle applies equally to residential and commercial properties?** - Exchange - Replacement - Substitution - Swap

Answer 156

**Substitution**

Question 157

**The principle of anticipation applies only in the appraisal of income-producing properties.** - TRUE - FALSE - -

Answer 157

**FALSE**

Question 158

**In a competitive market, ________ will function to equalize the quantity demanded by consumers and the quantity supplied by producers.** - Supply - Price - Value - Economies of scale

Answer 158

**Price**

Question 159

**The principle of ___________ states that a prudent purchaser will pay no more for a property than he or she would pay for a similar or comparable property.** - Substitution - Externalities - Change - Conformity

Answer 159

**Substitution**

Question 160

**Which economic principle states that factors located outside the boundaries of a property can have a positive or negative effect on value?** - Law of diminishing returns - Contribution - Externalities - Supply and demand

Answer 160

**Externalities**

Question 161

**An apartment building owner wishes to construct a new garage building for his tenants, at a cost of $80,000. The principle of contribution holds that the value of this new garage is:** - Based on its contributing value to the total property - Based on its actual cost to construct - Based on what its cost should have been, as documented in a nationally-published cost manual - Something less than its cost

Answer 161

**Based on its contributing value to the total property**

Question 162

**In Mapletown, there are only three homebuilders who control the entire market for new home construction. This is an example of:** - Monopoly - Oligopoly - Supply and demand imbalance - Communism

Answer 162

**Oligopoly**

Question 163

**Which of these is NOT an important indicator of supply?** - New and proposed construction - Recent population trends - Vacancy rates and available inventory - Availability of land and materials

Answer 163

**Recent population trends**

Question 164

**If an appraiser takes information on a sale from the MLS, and personally verifies it with a party to the transaction, it becomes:** - Primary data - Secondary data - Comparable data - Demographic data

Answer 164

**Primary data**

Question 165

**What does GIS software do?** - Creates or manages geographic data - Tracks population and demographic trends - Helps an appraiser estimate vacancy rates - Verifies sales data for use in the sales comparison approach

Answer 165

**Creates or manages geographic data**

Question 166

**How can secondary data become primary data?** - When it is obtained from a government Website - When the appraiser performs additional research or verification - When the appraiser subscribes to a data service - It is not possible to produce primary data from a secondary source

Answer 166

**When the appraiser performs additional research or verification**

Question 167

**Data that was prepared by someone other than the appraiser would be considered _______________ data.** - General - Primary - Secondary - Unreliable

Answer 167

**Secondary**

Question 168

**What type of GIS application is classified into three functionality categories: GIS Viewer, GIS Editor, and GIS Analyst?** - WebMap servers - Spatial Database Management Systems - Server GIS - Desktop GIS

Answer 168

**Desktop GIS**

Question 169

**Demographic information from a local chamber of commerce publication would be considered _____________ data.** - Physical - Primary - Secondary - Unreliable

Answer 169

**Secondary**

Question 170

**Where is the best place to obtain information regarding current building permits for apartment buildings in a market area?** - Local government officials - U.S. Census Bureau - Driving around the neighborhood, looking for building permits - GIS mapping

Answer 170

**Local government officials**

Question 171

**What type of data relates to many properties within a market area?** - General data - Specific data - Property data - None of these

Answer 171

**General data**

Question 172

**A particular GIS program has a representation of buildings as rectangles, with two attached fields that detail the building owner and the year built. This would be considered a ____________ representation.** - Layered - Raster - Vector - Three-dimensional

Answer 172

**Vector**

Question 173

**____________ are typically used to represent variables that are continuous over space, such as terrain elevations or land cover.** - Layers - Rasters - Vectors - Polygons

Answer 173

**Rasters**

Question 174

**An appraiser’s field notes that were taken during the physical inspection of the subject property would be considered ___________ data.** - Physical - Secondary - General - Specific

Answer 174

**Specific**

Question 175

**What type of GIS application is often used for field data collection?** - Mobile GIS - Spatial Database Management Systems - Server GIS - Desktop GIS

Answer 175

**Mobile GIS**

Question 176

**In analyzing local household trends, an appraiser notes that 60% of households are persons living alone, and per capita income is below the local and state averages. What would be the most appropriate residential development project for this area?** - Detached single-family homes with three bedrooms - Luxury condominiums - Apartment complex with predominantly one-bedroom units - Loft apartments of 2,000 square feet or larger

Answer 176

**Apartment complex with predominantly one-bedroom units**

Question 177

**In developing opinions and conclusions about the marketability of a property, an appraiser typically uses:** - Primary data only - Secondary data only - Both primary and secondary data - None of the above

Answer 177

**Both primary and secondary data**

Question 178

**Field notes and building measurements that the appraiser took during the physical inspection of the subject property would be considered ___________ data.** - Physical - Primary - Secondary - General

Answer 178

**Primary**

Question 179

**In analyzing local household trends, an appraiser notes that 60% of households are persons living alone, and per capita income is significantly higher than state and local averages. What would be the most appropriate residential development project for this area?** - Detached single-family homes with four bedrooms - Smaller, high-quality condominiums - Apartment complex with mostly efficiency units - Three-story townhouses of 3,000 square feet or larger

Answer 179

**Smaller, high-quality condominiums**

Question 180

**The principle of substitution does not apply to non-owner occupied commercial properties.** - TRUE - FALSE - -

Answer 180

**FALSE**

Question 181

**Applications for GIS software include:** - Evaluation of places for location of new stores - Verification of comparable sales - Forecasting economic recessions - Ensuring that real estate sale transactions are processed more smoothly

Answer 181

**Evaluation of places for location of new stores**

Question 182

**What is achieved when numerous factors exert proportional influence on value? *(exert = apply or bring to bear (a force, influence, or quality)*** - Contribution - Change - Balance - Externalities

Answer 182

**Balance**

Question 183

**What type of data directly relates to the subject property?** - Income data - General data - Specific data - Secondary data

Answer 183

**Specific data**

Question 184

**Demand-wise, which is generally a better investment?** - A good quality property in a poor location - A poor quality property in a good location - Neither – the lack of quality will cancel out the location difference - None of the above

Answer 184

**A poor quality property in a good location**

Question 185

**An appraiser’s analysis indicates that 125,000 square feet of office space will be leased in a market in the next year; however during that same period, 50,000 square feet of currently occupied office space will become vacant. What would this analysis indicate?** - a net absorption of 175,000 square feet - a net absorption of 75,000 square feet - a net absorption of 125,000 square feet - a real estate market in recession

Answer 185

**a net absorption of 75,000 square feet**

Question 186

**In reference to categorizing business and office space, the acronym FIRE stands for:** - Finance, Insurance, and Real Estate - Financial Incentives for Real Estate - A destructive natural force that can quickly decimate a building - Financial Institution Risk Equity

Answer 186

**Finance, Insurance, and Real Estate**

Question 187

**In the valuation of a local convenience store near a residential subdivision, the _________ would be the most significant factor in the valuation.** - Local economy - National economy - Price of gasoline - Local and national economies would be of equal importance

Answer 187

**Local economy**

Question 188

**In the valuation of a regional electrical power co-generation plant, the _________ would be the most significant factor in the valuation.** - Local economy - National economy - Cost of labor - Local and national economies would be of equal importance

Answer 188

**National economy**

Question 189

**What method compares the subject share of the market, adjusts the subject to the competition using quantifiable rating techniques, calculates the subject historical capture rate, and other factors?** - Quantitative inventory analysis - Fundamental capture method - Quantity survey method - Contingent valuation method

Answer 189

**Fundamental capture method**

Question 190

**What is the federal government source for employment data?** - Bureau of Labor and Industry - Department of Health and Human Services - Bureau of Labor Statistics - Bureau of Employment and Jobs

Answer 190

**Bureau of Labor Statistics**

Question 191

**When considering a property for sale, investors will compare the property to other available properties, while owner/occupants will not consider other available competing properties.** - TRUE - FALSE - -

Answer 191

**FALSE**

Question 192

**A demand analysis might include all of these activities, EXCEPT:** - Understanding alternative uses - Identifying market participants - Identifying seller motivations - Forecasting future occupancy and rental rates

Answer 192

**Identifying seller motivations**

Question 193

**An appraiser’s analysis indicates that 550,000 square feet of retail space will be leased in a market in the next year. However, during that same period 75,000 square feet of currently occupied retail space will become vacant. What would this analysis indicate?** - A net absorption of 550,000 square feet - A net absorption of 625,000 square feet - A net absorption of 475,000 square feet - A distressed market

Answer 193

**A net absorption of 475,000 square feet**

Question 194

**Measures of demand that are often used in the appraisal process include:** - Cost source references - Availability study - Capital appreciation rate - Absorption rate

Answer 194

**Absorption rate**

Question 195

**One measure of demand that is often used in the appraisal process is:** - Availability study - Capital appreciation rate - Capture rate - Zoning analysis

Answer 195

**Capture rate**

Question 196

**If a property lacks market acceptance, how can the demand for the property be increased?** - Nothing can be done to increase demand - Wait until the market accepts the property - Decrease the price - Market the property only to the purchasers who will accept it

Answer 196

**Decrease the price**

Question 197

**The ability to determine household income, affordability of housing, and purchasing power is very important when considering the development or redevelopment of an area with:** - Commercial properties - Residential properties - Both of these - Neither of these

Answer 197

**Both of these**

Question 198

**When using the U.S. Bureau of Labor Statistics as a source for employment and wage estimates, an appraiser should be aware that ____________ are not included in the estimates.** - Self-employed persons - Minimum-wage workers - Finance, Insurance, and Real Estate workers - Underemployed persons

Answer 198

**Self-employed persons**

Question 199

**A demand analysis might typically include all of these activities, EXCEPT:** - Forecasting revisions to building codes - Forecasting future occupancy and rental rates - Identifying market participants - Determining the financial return for a property

Answer 199

**Forecasting revisions to building codes**

Question 200

**An analysis to determine the best possible location for a condominium development, which includes a cost versus value analysis, would be called a:** - Feasibility study - Market survey - Property inspection - Consultant report

Answer 200

**Feasibility study**

Question 201

**An appraiser’s analysis indicates that 250,000 square feet of retail space will be leased in a market in the next year, but during that same period 25,000 square feet of currently occupied retail space will become vacant. What concept does this analysis demonstrate?** - Police power - Recession - Net absorption - Zero net growth

Answer 201

**Net absorption**

Question 202

**In the town of Woodlake, 60,000 square feet of Class A office space is leased per year. The Cedars, a Class A office building, just opened with 48,000 square feet of space to lease. It is projecting a 20% capture rate. How long will it take this building to reach 100% occupancy?** - 1.25 years - 5 years - 4 years - 4 months

Answer 202

**4 years**

Question 203

**Why is the absorption rate useful in an appraisal?** - It demonstrates the principle of anticipation - It helps determine supply and demand trends - None of these - It supports the appraiser’s estimate of accrued depreciation

Answer 203

**It helps determine supply and demand trends**

Question 204

**The _______________ is the rate at which properties for sale have been sold or rented within a specific market area.** - Capture rate - Absorption rate - Capitalization rate - List-to-sale ratio

Answer 204

**Absorption rate**

Question 205

**Market analysis should relate and focus the ___________ to the value of the subject property.** - Current use - Definition of value - National, regional, and local information - Comparable sales

Answer 205

**National, regional, and local information**

Question 206

**Over the last year in Highland Falls, there have been 84 sales of single-family homes. Currently, there are 168 homes on the market. How long will it take the market to absorb this inventory?** - 2 months - 12 months - 24 months - 48 months

Answer 206

**24 months**

Question 207

**What is the term used to describe the estimated percentage of the total potential market that is sold or leased by one entity or development?** - Absorption rate - Expected growth rate - Future demand - Capture rate

Answer 207

**Capture rate**

Question 208

**Market delineation defines the _____________ demand for a specific property.** - Geographic - Economic - Optimum - Expected

Answer 208

**Geographic**

Question 209

**The appraiser must not only assess the level of demand at the time of the appraisal, but also:** - Forecast future demand - Forecast the value of the property for a five-year holding period - Consider the possibility that the property will be foreclosed - Assess historic demand for at least the previous three years

Answer 209

**Forecast future demand**

Question 210

**In the Oakdale market area, there were 80 new condominium units sold last year. Treetop Gardens development, with 40 units available, sold 22 units. What is the capture rate for Treetop Gardens?** - 0.55 - 0.5 - 0.275 - 0.22

Answer 210

**.275**

Question 211

**Market segmentation defines and subdivides a large homogenous market into segments, such as:** - Office - Residential - Lodging - All of these

Answer 211

**All of these**

Question 212

**Within the market delineation process, the appraiser identifies:** - The type and definition of value to be used in the appraisal - The approaches to value to be used in the appraisal - Competing and complementary properties - All of these

Answer 212

**Competing and complementary properties**

Question 213

**An appraiser is studying absorption rates for retail space in a market. She notes that over the last several years, more space is becoming vacant than is being leased. What is this phenomenon called?** - Negative capture - Negative net absorption - Upside-down absorption - Zero sum absorption

Answer 213

**Negative net absorption**

Question 214

**In the town of Woodlake, 60,000 square feet of Class A office space is leased per year. The Pines, an older Class A office building, has 36,000 square feet of space for lease. It is projecting a 10% capture rate. How long will it take this building to reach 100% occupancy?** - 6 years - 3 years - 5 years - 10 years

Answer 214

**6 years**

Question 215

**In market analysis, what should the economic and demographic trends ideally support?** - The appraiser’s highest and best use conclusion - The property’s current use - The cost source - The definition of value used in the assignment

Answer 215

**The appraiser’s highest and best use conclusion**

Question 216

**Market segmentation defines and subdivides a large homogenous market into segments, such as:** - All of these - Lodging - Residential - Office

Answer 216

**All of these**

Question 217

**Berry Developers leased 25,000 square feet in their new 80,000 square foot retail complex last year. In the local market area, 200,000 square feet of retail space was leased. What is the capture rate for Berry Developers?** - 0.125 - 0.4 - 0.3125 - 0.08

Answer 217

**.125**

Question 218

**The results of the market analysis may cause a developer to:** - Lower the asking price - Redesign the project - Ensure the subject property offers standard features and amenities that are accepted in the market - Any of these

Answer 218

**Any of these**

Question 219

**If there are 50 condominium units for sale in a market area, and units are selling at a rate of five per month:** - There is a 10-month supply of inventory currently on the market - There is a 10-year supply of inventory currently on the market - All of the current listings are overpriced - A quick sale value should be provided in the appraisal

Answer 219

**There is a 10-month supply of inventory currently on the market**

Question 220

**There are several ways in which an appraiser can estimate demand.** - TRUE - FALSE - -

Answer 220

**TRUE**

Question 221

**If 200 new homes are sold in Newtown in a single year, and XYZ Homes sold 50 of them, what is XYZ’s capture rate?** - 0.5 - 0.25 - 0.04 - Cannot determine from the information provided

Answer 221

**.25**

Question 222

**In calculating a capture rate, what must an appraiser consider if the subject property is superior to its competition?** - It should have a lower asking price to attract more buyers - It should be redesigned to be more like its competition - The calculation should be based on the assumption that the subject property offers only standard features and amenities - It will “steal” occupants from existing facilities

Answer 222

**It will “steal” occupants from existing facilities**

Question 223

**NCREIF is the:** - Nationwide Council for Reform, Enforcement, Independence, and Freedom - National Committee for Real Estate Information Funding - National Council of Real Estate Investment Fiduciaries - National Committee on Real Estate Investment Fraud

Answer 223

**National Council of Real Estate Investment Fiduciaries**

Question 224

**Census information can help an appraiser formulate a highest and best use analysis.** - TRUE - FALSE - -

Answer 224

**TRUE**

Question 225

**According to NCREIF, which of these is NOT required to be considered in developing demand analysis for multi-family residential properties?** - Demographics by income, age, family size - Employment and labor force trends - Consumer purchasing habits and debt - Population growth/decline

Answer 225

**Consumer purchasing habits and debt**

Question 226

**Census data should be analyzed according to standard methodology.** - TRUE - FALSE - -

Answer 226

**FALSE**

Question 227

**Appraisers of what types of properties can use census information in their analyses?** - Restaurants - Multi-family properties - Self-storage facilities - All of these

Answer 227

**All of these**

Question 228

**How often is a complete U.S. Census conducted?** - Every year - Every four years - Every ten years - At odd intervals, as mandated by Congress

Answer 228

**Every ten years**

Question 229

**According to NCREIF, development of demand analysis for industrial properties:** - Is not required if the property is owner occupied - Is not necessary unless the appraiser’s client demands it - Is the same as office demand analysis - Is the same as residential demand analysis

Answer 229

**Is the same as office demand analysis**

Question 230

**To make accurate predictions based on census data, real estate professionals should:** - Use the data as raw and unfiltered - Take local and economic impacts into consideration - Make sure the predictions agree with the client’s projections - Go back at least 20 years when developing trends

Answer 230

**Take local and economic impacts into consideration**

Question 231

**According to NCREIF, what is the purpose of demand analysis?** - Develop historical relationships as a basis for forecasting future demand - Use current demand to determine what the supply should have been at a given retrospective point in time - Develop current trends that correlate to historical relationships between price and value - All of these

Answer 231

**Develop historical relationships as a basis for forecasting future demand**

Question 232

**How can census data be used in appraising restaurant properties?** - Determine whether sales will support the rent - Determine which nights of the week will be busiest - Determine capitalization rates for properties in large metropolitan areas - None of these

Answer 232

**Determine whether sales will support the rent**

Question 233

**According to NCREIF, additional knowledge leads to a better appraisal product, and also to:** - Increased income - A greater market share - Less liability - All of these

Answer 233

**Less liability**

Question 234

**Members of NCREIF include:** - Investment managers - CPAs - Consultants - All of these

Answer 234

**All of these**

Question 235

**According to NCREIF, which is NOT a step in demand analysis?** - Determine major market demand factors - Define the unit of demand for the property type - Base local demand projections solely on U.S. macroeconomic factors - Present historic and projected demand data

Answer 235

**Base local demand projections solely on U.S. macroeconomic factors**

Question 236

**When analyzing an apartment building, an appraiser notes that it is located in a busy urban location, near a bus line. This is an example of _______ data.** - Meaningless - Quantitative - Qualitative - Confirmed

Answer 236

**Qualitative**

Question 237

**What two measures are typically used in descriptive statistics?** - Pie charts and doughnut charts - Standard deviation and variance - Mean and median - Central tendency and dispersion

Answer 237

**Central tendency and dispersion**

Question 238

**What is the study of methods and tools for collecting data and mathematical models to describe and interpret data?** - Descriptive Statistics - Inferential Statistics - Measures of dispersion - Stacked column charts

Answer 238

**Descriptive Statistics**

Question 239

**A ____________ is a subset of the population.** - Sample - Conclusion - Anomaly - Standard deviation

Answer 239

**Sample**

Question 240

**When analyzing an industrial building, an appraiser notes that it has 25,000 square feet. This is an example of _______ data.** - Qualitative - Quantitative - Unverified - Inferential

Answer 240

**Quantitative**

Question 241

**What helps appraisers understand and apply accurate analysis in the evaluation of real estate?** - Government information - Prior appraisal reports on the subject property - Statistical techniques - Measures of dispersion

Answer 241

**Statistical techniques**

Question 242

**What kind of data is measured?** - Quantitative data - Class data - Qualitative data - Division data

Answer 242

**Quantitative data**

Question 243

**In a traditional pie chart, the sum of the observations should add up to:** - 3.6 - 1 - 1.8 - 0.6667

Answer 243

**1**

Question 244

**When choosing a trendline, the best fitting line will have an R-squared value that is closest to:** - 0 - 1 - 100 - The mean value of the dataset

Answer 244

**1**

Question 245

**How might an appraiser explain the extent to which individual data values have departed from the mean?** - Measures of central tendency - Median - Mode - Measures of dispersion

Answer 245

**Measures of dispersion**

Question 246

**What kind of data is observed, but not measured?** - Quantitative data - Quantifiable data - Qualitative data - Systematic data

Answer 246

**Qualitative data**

Question 247

**What are the two categories of statistics?** - Numerical and graphical - Charts and graphs - Descriptive and inferential - Mean and median

Answer 247

**Descriptive and inferential**

Question 248

**Measures of central tendency include all of the following EXCEPT:** - Median - Variance - Mode - Mean

Answer 248

**Variance**

Question 249

**What tool on the Census Bureau’s Website provides three different tables and thematic map functions?** - American Analyst - American Fact Finder - National Community Survey - Census QuickTool

Answer 249

**American Fact Finder**

Question 250

**In reference to categorizing business and office space, the acronym FIRE stands for:** - Financial Institution Risk Equity - A destructive natural force that can quickly decimate a building - Financial Incentives for Real Estate - Finance, Insurance, and Real Estate

Answer 250

**Finance, Insurance, and Real Estate**

Question 251

**What is the federal government source for employment data?** - Bureau of Labor and Industry - Bureau of Employment and Jobs - Bureau of Labor Statistics - Department of Health and Human Services

Answer 251

**Bureau of Labor Statistics**

Question 252

**In market analysis, what should the economic and demographic trends ideally support?** - The appraiser’s highest and best use conclusion - The property’s current use - The definition of value used in the assignment - The cost source

Answer 252

**The appraiser’s highest and best use conclusion**

Question 253

**What two measures are typically used in descriptive statistics?** - Central tendency and dispersion - Mean and median - Standard deviation and variance - Pie charts and doughnut charts

Answer 253

**Central tendency and dispersion**

Question 254

**In the Oakdale market area, there were 80 new condominium units sold last year. The Leaf Estates development sold 15 units. What is the capture rate for Leaf Estates?** - 0.95 - 0.53 - 0.1875 - 0.053

Answer 254

**.1875**

Question 255

**Calculate the mean of this set of gross rent multipliers: 77, 88, 72, 69, 77, 91.** - 77 - 79 - 480 - Cannot determine from the information provided

Answer 255

**79**

Question 256

**In the local market, there have been 18 sales of building lots within the last year. Lakeview Estates just opened up with 120 lots for sale. Assuming this is the only subdivision selling lots in the area, how long will it take for the lots at Lakeview Estates to sell out?** - 15 years - 6.7 years - 1.5 years - 7 months

Answer 256

**6.7 years**

Question 257

**According to NCREIF, what is an example of “hidden” space?** - Sublet space - Space that is not listed in the MLS - Space that is not visible or accessible from a major highway - All of these

Answer 257

**Sublet space**

Question 258

**Salty Dog Developers sold 12 homes in Palmdale and 28 homes in Mapletown last year. The total number of new homes sold in Mapletown last year was 124. What is Salty Dog’s capture rate in the Mapletown market?** - 0.226 - 0.322 - 0.429 - 0.443

Answer 258

**.226**

Question 259

**A demand analysis might typically include all of these activities, EXCEPT:** - Forecasting revisions to building codes - Determining the financial return for a property - Identifying market participants - Forecasting future occupancy and rental rates

Answer 259

**Forecasting revisions to building codes**

Question 260

**The relationship of supply and demand is a determining factor when assessing:** - The cost of a new HVAC system - How quickly a zoning change request can be granted - The feasibility of new construction - The traffic count on a local highway

Answer 260

**The feasibility of new construction**

Question 261

**The results of the market analysis may cause a developer to:** - Lower the asking price - Any of these - Ensure the subject property offers standard features and amenities that are accepted in the market - Redesign the project

Answer 261

**Any of these**

Question 262

**According to NCREIF, in completing a supply analysis, the total office space inventory is described by:** - Quality only - Quantity only - Both quality and quantity - Internationally accepted rating criteria

Answer 262

**Both quality and quantity**

Question 263

**According to NCREIF, what is the purpose of demand analysis?** - Develop historical relationships as a basis for forecasting future demand - All of these - Develop current trends that correlate to historical relationships between price and value - Use current demand to determine what the supply should have been at a given retrospective point in time

Answer 263

**Develop historical relationships as a basis for forecasting future demand**

Question 264

**Consideration of rumors can be important in the valuation of real property.** - TRUE - FALSE - -

Answer 264

**TRUE**

Question 265

**** - - - -

Answer 265

****

Question 266

**An appraiser’s research indicates that 200 condominium units will be sold in the subject’s market within the next year. This number refers to:** - Absorption - Inventory - Economies of scale - Market share

Answer 266

**Absorption**

Question 267

**One measure of demand that is often used in the appraisal process is:** - Zoning analysis - Capture rate - Availability study - Capital appreciation rate

Answer 267

**Capture rate**

Question 268

**What is the mode of this set of gross rent multipliers: 77, 88, 72, 69, 77, 91?** - 77 - 79 - 91 - There is no mode

Answer 268

**77**

Question 269

**Which level of market analysis would be the most detailed?** - Level A - Level B - Level C - Level D

Answer 269

**Level D**

Question 270

**Which type of analysis is not specific to a particular subject property?** - Inferred analysis - Fundamental analysis - Level D analysis - None of the above

Answer 270

**Inferred analysis**

Question 271

**An urban land use study would likely be an example of which level of market analysis?** - Level A analysis - Level B analysis - Level C analysis - Level D analysis

Answer 271

**Level D analysis**

Question 272

**Which of the following might be a consideration of a market analysis?** - Are the developer’s goals clearly and properly advocated? - Does the market analysis effectively rebut or ignore community objections? - Is the market analysis too optimistic without potential forewarning? - What government office issues the permits for this development?

Answer 272

**Is the market analysis too optimistic without potential forewarning?**

Question 273

**Which type of analysis is also known as trend analysis?** - Fundamental analysis - Inferred analysis - Level D analysis - None of the above

Answer 273

**Inferred analysis**

Question 274

**Who is most likely to utilize a market analysis to determine if the location is appropriate for the project according to the needs of the community?** - Builders - Community groups - Government agencies - Architects

Answer 274

**Builders**

Question 275

**Which of the following is a consideration (are considerations) of a market analysis?** - Are the developer’s goals clearly defined and satisfied? - Is the analysis thorough, detailed, and objective? - Is the market analysis too optimistic without potential forewarning? - All of the above

Answer 275

**All of the above**

Question 276

**__________ typically require a market analysis to determine if a project will be financially successful.** - Builders - Local government officials - Investors - Architects

Answer 276

**Investors**

Question 277

**Which level of market analysis is focused on demonstrating demand for the property type based on trends in the area and general development patterns?** - Level A analysis - Level B analysis - Level C analysis - Level D analysis

Answer 277

**Level B analysis**

Question 278

**Why is a market analysis essential to an appraisal?** - It is the most suitable way to establish appropriate expense ratios and capitalization rate for the income approach. - It gives the appraiser an opportunity to demonstrate his or her expertise in analyzing data. - It incorporates primary and secondary data which is used in determining highest and best use. - All of the above

Answer 278

**It incorporates primary and secondary data which is used in determining highest and best use.**

Question 279

**A Level A market analysis would be considered:** - Fundamental analysis - Inferred analysis - Neither of these - Both 1 and 2

Answer 279

**Inferred analysis**

Question 280

**__________ typically require a market analysis to determine public acceptability and/or the financial impact upon the community.** - Builders - Local government officials - Investors - Architects

Answer 280

**Local government officials**

Question 281

**There is no substitute for the developer’s instinct when considering a real estate development project.** - TRUE - FALSE - -

Answer 281

**FALSE**

Question 282

**A market analysis might be used for all of the following purposes EXCEPT:** - Planning at the municipal level - Estimating the cost of new construction - Planning construction design that complements the area - Civic involvement with compassion to local concerns

Answer 282

**Estimating the cost of new construction**

Question 283

**Which type of analysis forecasts demand based on specific information, and may include the appraiser using capitalization rates to forecast the value of the subject?** - Fundamental analysis - Inferred analysis - Level A analysis - None of the above

Answer 283

**Fundamental analysis**

Question 284

**__________ utilize a market analysis to understand the target market’s preferences for specific amenities.** - Lenders - Architects - Equity partners - All of these

Answer 284

**Architects**

Question 285

**__________ use a market analysis to determine public acceptability and the financial impact upon the community.** - Lenders - Local governments - Buyers - Architects

Answer 285

**Local governments**

Question 286

**When preparing a report of a market study, an appraiser should:** - Provide as brief a report as possible, so as to minimize expense to the client - Not consider proposed construction competition, unless the competing buildings are expected to be completed within one year - Provide a location map showing the subject property and its competitors - Avoid direct mention of competitors by name

Answer 286

**Provide a location map showing the subject property and its competitors**

Question 287

**In developing a highest and best use conclusion, one way to avoid bias is to:** - Use only primary data in developing a highest and best use opinion - Employ standard procedures such as the scientific method - Develop the opinion of value first, then go back and consider highest and best use - Accept the client’s opinion of highest and best use

Answer 287

**Employ standard procedures such as the scientific method**

Question 288

**Common mistakes in a market analysis include:** - Disregarding data - Inaccurate data - Predestined conclusion - All of the above

Answer 288

**All of the above**

Question 289

**The steps in the scientific method are:** - Sales comparison, cost, income - Cost new, depreciation, site value, final value - Observation, compilation, development, reporting - Observation, formulation, prediction, analysis

Answer 289

**Observation, formulation, prediction, analysis**

Question 290

**Examining and analyzing current competitive properties and their characteristics, as well as proposed or potential future development, is part of which step in the Six-Step Process?** - Define the Product - Forecast Subject Capture - Supply Analysis - Demand Analysis

Answer 290

**Supply Analysis**

Question 291

**How many steps are in the scientific method?** - Three - Four - Six - Twelve

Answer 291

**Four**

Question 292

**Which step in the scientific method involves experimental tests to ensure validity of the first three steps?** - Formulation - Prediction - Observation - Analysis

Answer 292

**Analysis**

Question 293

**How might an appraiser guard against inaccurate data being used in a market analysis?** - Avoid using secondary data; use only data that the appraiser personally gathered - Verify data, to the extent it is possible - Pay for data, instead of using data that is available for free - All of the above

Answer 293

**Verify data, to the extent it is possible**

Question 294

**What is the first step in the Six-Step Process?** - Define the product - Verify data - Market Delineation - Demand analysis

Answer 294

**Define the product**

Question 295

**Which technique estimates a retail trade area after an investigation of population, income, and socioeconomic status?** - Nelson technique - Ellwood tables - Market demarcation - Paired sale technique

Answer 295

**Nelson technique**

Question 296

**Why is the scientific method useful in the appraisal process?** - Because appraisal is proven science - Because it attempts to diminish bias - Because no other process has been proven to work - All of the above

Answer 296

**Because it attempts to diminish bias**

Question 297

**Which step in the scientific method relates most closely to the research and analyses in an appraisal assignment?** - Formulation - Prediction - Observation - Market delineation

Answer 297

**Prediction**

Question 298

**Which branch of economics studies individuals, households, and businesses to understand their decisions regarding use of resources?** - Gravity modeling - Microeconomics - Macroeconomics - Econometrics

Answer 298

**Microeconomics**

Question 299

**There are two types of market studies: market condition studies and market performance studies.** - TRUE - FALSE - -

Answer 299

**FALSE**

Question 300

**A Level A market analysis would be considered:** - Fundamental analysis - Inferred analysis - Neither of these - Both a and b

Answer 300

**Inferred analysis**

Question 301

**A ________________ studies supply and demand for a specific property in a specific market.** - Neighborhood analysis - Market analysis - Demographic analysis - Property analysis

Answer 301

**Market analysis**

Question 302

**What type of market condition study often begins with a vast macroeconomic market analysis and then reduces the analysis to the individual submarket?** - Investment analysis - Economic base analysis - Marketability analysis - Market feasibility study

Answer 302

**Marketability analysis**

Question 303

**What is the primary focus in an Economic Base Analysis?** - Local economics - National economics - International economics - None of the above

Answer 303

**Local economics**

Question 304

**In a feasibility analysis, what is concluded if the cost of a proposed project (including entrepreneurial profit) exceeds value?** - The project should be developed without a profit incentive - The project should be delayed until costs come down - The project is not financially feasible - The analyst should adjust the value upward

Answer 304

**The project is not financially feasible**

Question 305

**A(an) __________ is when consumers are interviewed about their preferences regarding certain characteristics in order to determine demand for a property.** - Preference record - Attitudinal survey - Property characteristic analysis - Analysis of preference

Answer 305

**Attitudinal survey**

Question 306

**An Economic Base Analysis divides employment into two categories. What are they?** - Simple and Complex - Blue Collar and White Collar - Full-time and Part-time - Basic and Non-basic

Answer 306

**Basic and Non-basic**

Question 307

**Who would be most likely to utilize a market analysis to determine if the location is appropriate for the project according to the needs of the community?** - Builders - Community groups - Government agencies - Architects

Answer 307

**Builders**

Question 308

**Which step in the scientific method relates to problem identification?** - Formulation - Analysis - Observation - Market delineation

Answer 308

**Observation**

Question 309

**What type of market condition study analyzes supply and demand for a specific property type in a particular market, which helps determine the highest and best use of the property?** - Market economic analysis - Market analysis - Market feasibility study - Investment analysis

Answer 309

**Market analysis**

Question 310

**Which of these is NOT a type of study specific to a decision?** - Feasibility Analysis - Economic Base Analysis - Investment Analysis - None of the above

Answer 310

**Economic Base Analysis**

Question 311

**__________ typically require a market analysis to determine if a project will be financially successful.** - Builders - Architects - Investors - Local government officials

Answer 311

**Investors**

Question 312

**____________ is the study of consumer behaviors within a market, segmenting by factors such as level of education, income, occupation, familial status, age, sex, race, etc.** - Supply segmentation - Macroeconomics - Psychographics - Econometrics

Answer 312

**Psychographics**

Question 313

**Which level of market analysis would be the least detailed?** - Level A - Level B - Level C - Level D

Answer 313

**Level A**

Question 314

**Which type of market analysis studies a specific macroeconomic market area and the supply and demand factors for a specific property type, while dividing employment into two categories: basic and nonbasic?** - Feasibility Analysis - Economic Base Analysis - Investment Analysis - Modified Demand Analysis

Answer 314

**Economic Base Analysis**

Question 315

**__________ utilize a market analysis to determine if the location is appropriate for the project according to the needs of the community.** - Community groups - Lenders - Developers - Architects

Answer 315

**Developers**

Question 316

**Which of the following is a consideration of a market analysis?** - Are the developer’s goals clearly and properly advocated? - Does the market analysis effectively rebut or ignore community objections? - Is the market analysis too optimistic without potential forewarning? - What governmental office would issue the permit for this type of development?

Answer 316

**Is the market analysis too optimistic without potential forewarning?**

Question 317

**Which of these is NOT a type of market condition study?** - Economic Base Analysis - Market Analysis - Marketability Analysis - Feasibility Analysis

Answer 317

**Feasibility Analysis**

Question 318

**Which branch of economics deals with performance, structure, and behavior of the national or regional economy as a whole?** - Psychographics - Econometrics - Microeconomics - Macroeconomics

Answer 318

**Macroeconomics**

Question 319

**Which of the following is NOT a type of market condition study?** - Market Analysis - Economic Base Analysis - Investment Analysis - Marketability Analysis

Answer 319

**Investment Analysis**

Question 320

**An appraiser is performing a market analysis to determine if a new office building is needed in an area. The appraiser plots existing office buildings, delineates where workers live, and the current drive times to existing office buildings. This is an example of ____________.** - Supply segmentation - Phenomena - Spotting technique - Econometrics

Answer 320

**Spotting technique**

Question 321

**A 25,000 square foot vacant land property is worth $80,000 as a single-family homesite. It can support up to four residential units, and as such, the land value would be $20,000 per buildable unit. It would be worth $3.50 per square foot for industrial use. What is the highest and best use of the property?** - Single-family residential site - Four-unit site - Industrial site - Either single-family use or four-unit; they both produce the same value

Answer 321

**Industrial site**

Question 322

**When analyzing physical possibility, what should an appraiser consider?** - Zoning - Deed restrictions - Topography - All of the above

Answer 322

**Topography**

Question 323

**Highest and best use is a key factor in:** - Estimating land value in the cost approach - Selecting land sale comparables - Both a and b - Neither a nor b

Answer 323

**Both a and b**

Question 324

**A one-acre vacant land property is worth $50,000 as a single-family homesite. It can support up to four residential units, and as such, the land value would be $12,000 per buildable unit. It would be worth $1 per square foot for industrial use. What is the highest and best use of the property?** - Single-family residential site - Cannot determine from the information provided - Industrial site - Four-unit site

Answer 324

**Single-family residential site**

Question 325

**When analyzing legal permissibility, what should an appraiser consider?** - Utilities available - Deed restrictions - Property shape - All of the above

Answer 325

**Deed restrictions**

Question 326

**The definition of highest and best use requires that the use be maximally productive. What does this mean?** - There is no probability of a change in future use. - The use produces a positive cash flow. - The use produces the maximum land value. - The improvement is the largest building that can legally be built on the site.

Answer 326

**The use produces the maximum land value.**

Question 327

**What two types of highest and best use are developed in market value appraisal assignments?** - “As is” and subject to - Hypothetical condition and extraordinary assumption - As vacant and as improved - As legal and as illegal

Answer 327

**As vacant and as improved**

Question 328

**When developing an opinion of highest and best use, an appraiser should give consideration to any possible adaptations or modifications to the property that might increase its value.** - FALSE - TRUE - -

Answer 328

**TRUE**

Question 329

**Which of these is NOT one of the four test constraints of highest and best use?** - Maximally productive - Legally permissible - Aesthetically pleasing - Financially feasible

Answer 329

**Aesthetically pleasing**

Question 330

**The definition of highest and best use requires that the use be financially feasible. What does this mean?** - There is low-interest mortgage financing available. - The improvement can be built without borrowing money. - The use produces a positive cash flow. - There is no probability of a change in future use.

Answer 330

**The use produces a positive cash flow.**

Question 331

**A highest and best use opinion is required in ____________ appraisals.** - All - Market value - Mortgage lending - None of the above

Answer 331

**Market value**

Question 332

**An appraiser is developing an opinion of highest and best use on a single-family home that was converted to multi-family use, which is located in an industrial area. After applying all four test constraints, what should the appraiser expect?** - The highest and best use would be as a single-family home. - The highest and best use is continuation of the current use, multi-family. - The highest and best use would be for industrial use. - A single highest and best use will be indicated.

Answer 332

**A single highest and best use will be indicated.**

Question 333

**It is possible that a property may have two different highest and best uses – one as vacant, and another as improved.** - TRUE - FALSE - -

Answer 333

**TRUE**

Question 334

**An appraiser is analyzing a parcel of vacant land, which has a variety of uses that are physically possible, legally permissible, and financially feasible. For residential use, its value is $75,000. For commercial use, its value is $85,000. For multi-family use, its value is $80,000. What is the maximally productive use?** - Commercial - Residential - Multi-family - Cannot determine from the information provided

Answer 334

**Commercial**

Question 335

**A convincing highest and best use conclusion is necessary for:** - All appraisals, regardless of value type or intended use - A credible opinion of market value - A meaningful demographic analysis - Commercial appraisals, but not residential appraisals

Answer 335

**A credible opinion of market value**

Question 336

**Knowledge of the property’s ______________ is essential to an appraisal.** - Functionality - Physical characteristics - Compatibility with its surroundings - All of the above

Answer 336

**All of the above**

Question 337

**Highest and best use incorporates which economic principles?** - Substitution - Supply and demand - Conformity - All of the above

Answer 337

**All of the above**

Question 338

**When analyzing legal permissibility, what should an appraiser consider?** - Covenants, conditions, and restrictions - Soil type - Topography - All of the above

Answer 338

**Covenants, conditions, and restrictions**

Question 339

**In analyzing the highest and best use of a vacant land property located in an area where there is a significant oversupply of similar properties:** - The appraiser should use an estimated exposure time of 3-6 months - The property may have no legally permissible uses - It is possible that the highest and best use of the property is to remain vacant - All of the above

Answer 339

**It is possible that the highest and best use of the property is to remain vacant**

Question 340

**The four test constraints of highest and best use include all of the following EXCEPT:** - Legally permissible - Socially acceptable - Physically possible - Financially feasible

Answer 340

**Socially acceptable**

Question 341

**When analyzing a property that is a non-conforming use, an appraiser should consider:** - The effect of the non-conforming use on the highest and best use - Whether the improvements can be rebuilt if destroyed - Whether the non-conforming status is extinguished if the property becomes vacant - All of the above

Answer 341

**All of the above**

Question 342

**What principle requires the land and improvements to be valued based on the same use?** - Conformity - Contribution - Substitution - Consistent use

Answer 342

**Consistent use**

Question 343

**A non-conforming single-family residence located in a commercially-zoned area would be considered an:** - Over-improvement - Under-improvement - Illegal use - None of the above

Answer 343

**Under-improvement**

Question 344

**An opinion of highest and best use needs to answer all of these questions EXCEPT:** - When is the use likely to take place? - Why is this highest and best use analysis necessary? - Who is the likely user? - What is the use?

Answer 344

**Why is this highest and best use analysis necessary?**

Question 345

**Which would be an IMPROPER order for applying the four test constraints for highest and best use?** - Physically possible, financially feasible, maximally productive, legally permissible - Physically possible, legally permissible, financially feasible, maximally productive - Legally permissible, physically possible, financially feasible, maximally productive - None of the above

Answer 345

**Physically possible, financially feasible, maximally productive, legally permissible**

Question 346

**What is The Appraisal Foundation?** - A non-profit educational organization - A federal government agency - A state government agency - A professional organization representing appraisers

Answer 346

**A non-profit educational organization**

Question 347

**Which entity develops, interprets, and amends USPAP?** - The Appraisal Subcommittee (ASC) - The Appraiser Qualifications Board (AQB) - The Appraisal Standards Board (ASB) - Individual state enforcement

Answer 347

**The Appraisal Standards Board (ASB)**

Question 348

**In deciding which highest and best use test constraint to apply first, an appraiser may find it helpful to:** - Consult USPAP - Start at the end of the process and work backwards - Apply the more restrictive constraint first - Any of the above

Answer 348

**Apply the more restrictive constraint first**

Question 349

**Which statement is TRUE regarding valuation of land and improvements?** - Improvements are valued based on their contributing value to the land. - Land is valued based on its contributing value to the improvements. - Land and improvements should never be valued separately. - None of the above.

Answer 349

**Improvements are valued based on their contributing value to the land.**

Question 350

**A property adjacent to a residential subdivision is used as a farm, because public sewage is not available. The local municipality announces that public sewage will be available to the property within 3-4 years. The property’s current use as a farm would be considered a(n) ___________.** - Ultimate highest and best use - Illegal use - Interim use - Non-conforming use

Answer 350

**Interim use**

Question 351

**The question as to who is the most likely buyer of a property is:** - Important because the report is required to identify the seller and the buyer - Unimportant as it relates to the property’s value - A non-issue in highest and best use analysis - Important because owner/occupant buyers usually pay more for properties than investors

Answer 351

**Important because owner/occupant buyers usually pay more for properties than investors**

Question 352

**When analyzing highest and best use, USPAP requires an appraiser to:** - Follow a standardized step-by-step methodology - Consider reasonably probable modifications of land use regulations - Employ the four test constraints - All of the above

Answer 352

**Consider reasonably probable modifications of land use regulations**

Question 353

**What is the typical result when an improvement does not represent the highest and best use of the land as vacant?** - The land suffers functional obsolescence - The improvement should be razed - The improvement suffers functional obsolescence - The improvement suffers external obsolescence

Answer 353

**The improvement suffers functional obsolescence**

Question 354

**In an appraisal report, the data and information in the highest and best use section stands alone; it need not be consistent with data that appears elsewhere in the report.** - TRUE - FALSE - -

Answer 354

**FALSE**

Question 355

**When analyzing highest and best use of a property, USPAP requires an appraiser to:** - All of the above - Avoid unsupported assumptions about effective age - Consider the physical adaptability of the real estate - Identify existing land use regulations

Answer 355

**All of the above**

Question 356

**What is a use that was legally established and maintained, and is permitted to continue even though it no longer conforms to its zoning classification?** - Interim use - Illegal use - Inconsistent use - Legal non-conforming use

Answer 356

**Legal non-conforming use**

Question 357

**The use to which a property is put until the time it achieves its eventual highest and best use is ___________.** - Prior use - Permanent use - Non-conforming use - Interim use

Answer 357

**Interim use**

Question 358

**A non-conforming use may be an:** - Over-improvement - Under-improvement - Either 1 or 2 - Neither 1 nor 2

Answer 358

**Either 1 or 2**

Question 359

**Unless it is otherwise noted, when is it generally assumed that the highest and best use of the property will take place?** - Within one year of the effective date - Now or in the immediate future - The date the property is sold - January 1 of the upcoming year

Answer 359

**Now or in the immediate future**

Question 360

**In an appraisal, why is it important to identify the likely motivation of a purchaser?** - So the buyer can be identified as an intended user of the report - Owners/occupants typically pay more than investor purchasers - So that community groups can be alerted if industrial polluters want to purchase properties in their neighborhood - It is not important to identify motivations of buyers

Answer 360

**Owners/occupants typically pay more than investor purchasers**

Question 361

**Usually, the regulating municipality will permit a non-conforming use to continue, but will limit the owner’s ability to expand the use or to rebuild the structure if it is damaged or destroyed.** - TRUE - FALSE - -

Answer 361

**TRUE**

Question 362

**What is the typical result when an improvement does not represent the highest and best use of the land as vacant?** - The land suffers functional obsolescence - The improvement suffers external obsolescence - The improvement suffers functional obsolescence - The improvement should be razed

Answer 362

**The improvement suffers functional obsolescence**

Question 363

**A manufacturing company can purchase a site in an industrial park for $75,000. It plans to construct a 20,000 square foot industrial building at a cost of $600,000. When the building is completed, the value of the total property will be $650,000. Which statement is true regarding the highest and best use of this property?** - Construction of this building is not financially feasible. - Construction of this building is financially feasible. - Financial feasibility does not matter because the building is not income- producing. - Highest and best use does not require financial feasibility.

Answer 363

**Construction of this building is not financially feasible.**

Question 364

**When analyzing legal permissibility, which of the following should an appraiser consider?** - Utilities available - Deed restrictions - Property shape - All of the above

Answer 364

**Deed restrictions**

Question 365

**The definition of highest and best use requires that the use be appropriately supported. What does this mean?** - Current zoning permits the use. - The topography of the property is suitable for such a use. - The appraiser has a sufficient workfile. - There is sufficient demand to ensure financial feasibility.

Answer 365

**There is sufficient demand to ensure financial feasibility.**

Question 366

**A commercial restaurant building was constructed in 1965. It has been continuously used as a restaurant ever since. In 1972, the local municipality changed the property’s zoning to residential, but allowed the restaurant use to continue. What term best describes this situation?** - Expired use - Interim use - Legal non-conforming use - Illegal use

Answer 366

**Legal non-conforming use**

Question 367

**The definition of highest and best use requires that the use be maximally productive. What does "maximally productive" mean?** - The use produces the most income to the land. - The local zoning department has approved the use. - The use does not produce a negative cash flow. - None of the above.

Answer 367

**The use produces the most income to the land.**

Question 368

**The definition of highest and best use requires that the use be maximally productive. What does this mean?** - The improvement is the largest building that can legally be built on the site. - There is no probability of a change in future use. - The use produces a positive cash flow. - The use produces the maximum land value.

Answer 368

**The use produces the maximum land value.**

Question 369

**If a building does not represent the highest and best use of the land as vacant:** - The building may suffer functional obsolescence - The building may have no contributory value to the land - The building may have a negative value - Any of the above

Answer 369

**Any of the above**

Question 370

**A one-acre vacant land property is worth $50,000 as a single-family homesite. It can support up to four residential units, and as such, the land value would be $12,000 per buildable unit. It would be worth $1 per square foot for industrial use. What is the highest and best use of the property?** - Single-family residential site - Four-unit site - Industrial site - Cannot determine from the information provided

Answer 370

**Single-family residential site**

Question 371

**An appraiser is analyzing an improved property, and is considering that the building may be at the end of its economic life. In determining highest and best use, what should the appraiser consider?** - The actual age of the building - The cost to raze the building - Whether the building is vacant or occupied - The cost to create an exact replica of the building on the site

Answer 371

**The cost to raze the building**

Question 372

**What principle requires the land and improvements to be valued based on the same use?** - Conformity - Contribution - Consistent use - Substitution

Answer 372

**Consistent use**

Question 373

**If you have a USPAP-related highest and best use question, which Standards Rule should you consult?** - 1-1 - 1-2 - 1-3 - 1-4

Answer 373

**1-3**

Question 374

**A non-conforming use may be an:** - A. Over-improvement - B. Under-improvement - Either A. or B. - Neither A. nor B.

Answer 374

**Either A. or B.**

Question 375

**When analyzing highest and best use of a property, USPAP requires an appraiser to:** - Identify existing land use regulations - Consider the physical adaptability of the real estate - Avoid unsupported assumptions about effective age - All of the above

Answer 375

**All of the above**

Question 376

**When developing an opinion of highest and best use, an appraiser should not give consideration to any possible adaptations or modifications to the property that might increase its value.** - TRUE - FALSE - -

Answer 376

**FALSE**

Question 377

**If you have a USPAP-related highest and best use question, which Standards Rule should you consult?** - 1-1 - 1-2 - 1-3 - 1-4

Answer 377

**1-3**

Question 378

**When an appraiser is appraising a property where there is a reasonable probability that the current zoning can be modified, ___________ may be necessary to analyze the highest and best use of the property.** - A hypothetical condition - An extraordinary assumption - An escape clause - Consideration of the principle of contribution

Answer 378

**An extraordinary assumption**

Question 379

**An improved property is rented for $2,000 per month. Through research, the appraiser is able to determine that $1,200 of the income is attributable to the building. The remainder ($800 per month) is attributable to the:** - Entrepreneurial profit - Labor - Land - Developer

Answer 379

**Land**

Question 380

**When an appraiser is considering reasonably probable modifications to land use regulations, what is he or she essentially asking?** - Why does the zoning only allow this use? - Can the zoning be changed? - If the property is used illegally, what is the likelihood that the owner will be cited or fined? - Can the appraiser use a hypothetical condition in valuing the property?

Answer 380

**Can the zoning be changed?**

Question 381

**A thorough description of the subject site should contain:** - Legal description, street address, map number - Information on the uses surrounding the subject - Traffic volume and flow information - All of the above

Answer 381

**All of the above**

Question 382

**A thorough description of the subject site is:** - Not important - Essential to an appraisal report - Necessary to the extent that the client requires it - Optional at the appraiser’s discretion

Answer 382

**Essential to an appraisal report**

Question 383

**Data in the site description section of the appraisal report should be:** - Obtained only through a personal physical site inspection - Based on U.S. census data - Consistent with other data in the report - Sufficient that anyone can understand it

Answer 383

**Consistent with other data in the report**

Question 384

**When reporting an extraordinary assumption, the appraiser must state the use of the extraordinary assumption and ____________.** - Quantify its effect on property value - State that its use might have affected the assignment results - Nothing else - State the value of the property using a hypothetical condition

Answer 384

**State that its use might have affected the assignment results**

Question 385

**What is the appraiser’s opinion of site value based on?** - The highest value that can be supported with market data - Allocation - The property’s highest and best use - The scope of work of the appraisal

Answer 385

**The property’s highest and best use**

Question 386

**USPAP requires an appraiser to consider land use regulations as well as:** - Use of Internet resources - The use of the property that is planned by the developer - The consultation by an attorney regarding land use regulations - Reasonably probable modifications of land use regulations

Answer 386

**Reasonably probable modifications of land use regulations**

Question 387

**What happens to the value conclusion if an appraiser’s highest and best use analysis is inaccurate?** - It is not affected - It is not credible or appropriate - It is higher than it should be - It is lower than it should be

Answer 387

**It is not credible or appropriate**

Question 388

**What is the difference in the test constraints between analyzing the highest and best use of an improved property and a vacant site?** - Legal permissibility is not as important when analyzing a vacant site - Financial feasibility is not an important consideration when analyzing an improved property - The analysis of an improved property has only three test constraints - There is no difference; the process is essentially the same

Answer 388

**There is no difference; the process is essentially the same**

Question 389

**When appraising a piece of industrial property, an appraiser believes a property’s topography affects the types of buildings that can be placed on it. Which highest and best use test constraint is exemplified in this situation?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 389

**Physically possible**

Question 390

**An appraiser is analyzing an improved property and discovers that its existing use is “grandfathered.” Which highest and best use test constraint is being considered?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 390

**Legally permissible**

Question 391

**An appraiser is inspecting a parcel of commercially-zoned property in a rural location. The owner tells the appraiser that the property is perfect for a franchise fast-food operation. The appraiser notes that none of the surrounding uses is used for fast-food; in fact, most of the surrounding commercial properties are vacant. The few properties that are improved have small home occupations and craft stores. Which highest and best use test constraint is exemplified in this situation?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 391

**Financially feasible**

Question 392

**Deed restrictions or covenants are sometimes only found by:** - Developers - Attorneys - Local zoning officers - U.S. Department of HUD

Answer 392

**Attorneys**

Question 393

**A question regarding availability of utilities would be applicable to which highest and best use test constraint?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 393

**Physically possible**

Question 394

**An appraiser is analyzing a parcel of land in a community which has no zoning ordinance, and very little land-use regulation. The appraiser determines that for residential purposes, the site is worth $50,000. As a multi-family building site, it is worth $60,000. As a retail commercial site, it is worth $65,000. Which highest and best use test criteria is exemplified in this situation?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 394

**Maximally productive**

Question 395

**When appraising a piece of commercial property, an appraiser is considering the quality of the road leading to the property. Which highest and best use test constraint is exemplified in this situation?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 395

**Physically possible**

Question 396

**Deed restrictions or covenants are often established by:** - Government agencies - Local zoning officers - Attorneys - Developers

Answer 396

**Developers**

Question 397

**An appraiser is considering the subject property’s deed restrictions when analyzing its highest and best use. Which highest and best use test constraint is being considered?** - Physically possible - Legally permissible - Financially feasible - Maximally productive

Answer 397

**Legally permissible**

Question 398

**If no soil borings have been done, how might an appraiser obtain information regarding the suitability to support construction on a property?** - Observe the development on neighboring parcels - Consult soil maps from the Department of Agriculture - Either 1 or 2 - Neither 1 nor 2

Answer 398

**Either 1 or 2**

Question 399

**According to the article Land Valuation in the Raw, what are the two parts of the valuation process?** - Inspecting the property, valuing the property - Highest and best use analysis, applying the appropriate valuation technique - Property inspection, highest and best use analysis - Applying the appropriate valuation technique, defending the selection of the valuation technique

Answer 399

**Highest and best use analysis, applying the appropriate valuation technique**

Question 400

**A parcel of raw land is being analyzed. A housing advocate believes the best use is as a low-income housing project, while a commercial developer believes a strip shopping center is the best use. What principle does this demonstrate?** - If there is not one clear-cut highest and best use, then the property is suitable for a mixed use development - A property has only one value, no matter what its use - Highest and best use is often a matter of perspective - There is no such thing as highest and best use

Answer 400

**Highest and best use is often a matter of perspective**

Question 401

**Which statement is TRUE regarding use of a discount rate when appraising raw land?** - The discount rate should be reflective of a very high degree of risk. - The discount rate should be lower for land than for a building lease, because buildings depreciate and land does not. - The carrying costs of land do not affect the discount rate, because these costs are fixed and predictable. - All of the above.

Answer 401

**The discount rate should be reflective of a very high degree of risk.**

Question 402

**Part of a property has been identified as a wetland. Development of this property will require filling in part of the wetland area. Which entity would issue a permit for this activity?** - State Department of Transportation - Army Corps of Engineers - U.S. Department of Housing and Urban Development (HUD) - Department of Wetlands Permitting

Answer 402

**Army Corps of Engineers**

Question 403

**When analyzing a property’s highest and best use, a valuation professional should ignore the conclusions of development proposals by architects or land planners, and provide an objective analysis.** - TRUE - FALSE - -

Answer 403

**TRUE**

Question 404

**A big-box retailer is considering a commercially-zoned property as a potential site for a new store. The property’s width is not sufficient for the retailer to place one of its prototypical buildings. What is the retailer most likely to do?** - Dismiss the property outright as a potential site - Redesign its building to fit on the site - Ignore setback requirements and build its building very close to the property line so that it fits - Buy the property anyway, and sell it later at a profit

Answer 404

**Dismiss the property outright as a potential site**

Question 405

**What is the best way for an appraiser to determine if there is potential environmental contamination on a property?** - Ask the owner - Excavate and test the soil - A phase one environmental report - Consult aerial maps

Answer 405

**A phase one environmental report**

Question 406

**What source might a valuation professional use to obtain comparable sales data for raw land parcels?** - Commercial databases - Local assessors - County registrar of deeds - Any of these

Answer 406

**Any of these**

Question 407

**When analyzing a property’s highest and best use, a valuation professional should rely on the highest and best use conclusions of architects or land planners.** - TRUE - FALSE - -

Answer 407

**FALSE**

Question 408

**of 4A parcel of raw land is being analyzed. A housing advocate believes the best use is as a low-income housing project, while a commercial developer believes a strip shopping center is the best use. What principle does this demonstrate?** - If there is not one clear-cut highest and best use, then the property is suitable for a mixed use development - A property has only one value, no matter what its use - Highest and best use is often a matter of perspective - There is no such thing as highest and best use

Answer 408

**Highest and best use is often a matter of perspective**

Question 409

**According to the article Land Valuation in the Raw, what are the two parts of the valuation process?** - Applying the appropriate valuation technique, defending the selection of the valuation technique - Property inspection, highest and best use analysis - Highest and best use analysis, applying the appropriate valuation technique - Inspecting the property, valuing the property

Answer 409

**Highest and best use analysis, applying the appropriate valuation technique**

Question 410

**An improved property is rented for $2,000 per month. Through research, the appraiser is able to determine that $1,200 of the income is attributable to the building. The remainder ($800 per month) is attributable to the:** - Developer - Land - Labor - Entrepreneurial profit

Answer 410

**Land**

Question 411

**When reporting the results of highest and best use analysis in an appraisal report:** - There is a USPAP approved format that should be followed - The level of information in the report is based on the appraisal fee - There is no generally-accepted format to be used - The format which appears on the URAR form (Fannie Mae 1004) should be used for 1-4 family residential properties

Answer 411

**There is no generally-accepted format to be used**

Question 412

**If no soil borings have been done, how might an appraiser obtain information regarding the suitability to support construction on a property?** - Observe the development on neighboring parcels - Consult soil maps from the Department of Agriculture - Either 1 or 2 - Neither 1 nor 3

Answer 412

**Either 1 or 2**

Question 413

**A thorough description of the subject site is:** - Optional at the appraiser’s discretion - Necessary to the extent that the client requires it - Essential to an appraisal report - Not important

Answer 413

**Essential to an appraisal report**

Question 414

**A highest and best use can be:** - Current use - Prospective use based on future utility - Either 1 or 2 - Neither 1 nor 2

Answer 414

**Either 1 or 2**

Question 415

**When an appraiser is considering reasonably probable modifications to land use regulations, what is he or she essentially asking?** - Why does the zoning only allow this use? - Can the appraiser use a hypothetical condition in valuing the property? - If the property is used illegally, what is the likelihood that the owner will be cited or fined? - Can the zoning be changed?

Answer 415

**Can the zoning be changed?**

Question 416

**What can cause a property to become a legal non-conforming use?** - Zoning changes - Code ordinance changes - Partial taking under eminent domain - Any of the above

Answer 416

**Any of the above**

Question 417

**When a property’s use no longer conforms to newer land use regulations, but is permitted to continue, this is referred to as:** - Value in use - Legal non-conforming use - Legal conforming continuation use - Illegal use

Answer 417

**Legal non-conforming use**

Question 418

**An appraiser is responsible under USPAP to:** - Complete a highest and best use analysis in every real property appraisal assignment - Consider reasonably probable modifications of zoning - Appraise a property under its current use and zoning - Include a copy of the zoning map in the appraisal report

Answer 418

**Consider reasonably probable modifications of zoning**

Question 419

**Which term is a synonym for legal non-conforming use?** - Illegal use - Single use - Interim use - Grandfathered use

Answer 419

**Grandfathered use**

Question 420

**Despite their non-conformity with the neighborhood, in most cases, single use properties conform to zoning.** - TRUE - FALSE - -

Answer 420

**TRUE**

Question 421

**A convenience store conforms to zoning, but is located in a rural residential area. What term best describes this use?** - Illegal use - Legal non-conforming use - Interim use - Single use

Answer 421

**Single use**

Question 422

**A property is a legal non-conforming use as a retail store. The local municipality states that if the property is sold, it is no longer permitted to be used as a store, and must be converted to residential use. What question would an appraiser need to consider in appraising this property?** - Should the owner sell the property? - What would the legal fees be if the seller sued the municipality? - Who is the most likely buyer? - Why would the municipality do this to the seller?

Answer 422

**Who is the most likely buyer?**

Question 423

**A medical office building conforms to zoning; however, it is located in the middle of a single-family residential neighborhood. This would be considered a(an):** - Legal non-conforming use - Single use - Grandfathered use - Illegal use

Answer 423

**Single use**

Question 424

**Legal non-conforming uses often have a highest and best use as vacant that is different from the highest and best use as improved.** - TRUE - FALSE - -

Answer 424

**TRUE**

Question 425

**If valued under its present use, a legal non-conforming use will have a value that is _________ than its value under the current zoning.** - Higher - Lower - Higher or lower - None of the above

Answer 425

**Higher or lower**

Question 426

**Who is vital in determining the financial feasibility of a property?** - The zoning board - The property owner - The appraiser - Any of the above

Answer 426

**The appraiser**

Question 427

**An appraiser cannot change the authority of a local jurisdiction to impose a zoning ordinance or to allow a rezoning.** - TRUE - FALSE - -

Answer 427

**TRUE**

Question 428

**Local authorities base their zoning decisions on** - The needs of the community - The best interests of the property owner - Their own personal preferences and biases - Any of the above

Answer 428

**Any of the above**

Question 429

**A vacant, 2-acre residentially zoned property is worth $45,000 as a residential site. If it could be rezoned to commercial, it would be worth $25,000 per acre. The cost of the rezoning will be $8,000 to $10,000. Would the rezoning be financially feasible?** - Cannot tell from the information provided - No - Yes -

Answer 429

**No**

Question 430

**What can be manipulated and used as a “barrier to entry” for entities who wish to enter the market to purchase real property?** - Legal permissibility - Physical possibility - Financial feasibility - Highest and best use

Answer 430

**Legal permissibility**

Question 431

**According to author and educator Joseph Rabianski, what term should replace “probability of rezoning” in appraisal literature?** - “Non-probability of rezoning” - “Zoning compatibility analysis” - “Rezoning justification analysis” - “Financial feasibility”

Answer 431

**“Rezoning justification analysis”**

Question 432

**How does a zoning ordinance serve the public interest?** - It makes all land uses equal in value. - It automatically makes all uses illegal unless they are approved by the zoning board. - It provides the public with evidence that the zoning board is doing its job. - It eliminates incompatible land uses.

Answer 432

**It eliminates incompatible land uses.**

Question 433

**A vacant, 2-acre residentially zoned property is worth $45,000 as a residential site. If it could be rezoned to commercial, it would be worth $35,000 per acre. The cost of the rezoning will be $8,000 to $10,000. Would the rezoning be financially feasible?** - Yes - No - Cannot tell from the information provided -

Answer 433

**Yes**

Question 434

**Why can it be important to report the value of the property both under its current zoning and under a prospective future zoning change?** - It provides the zoning board with evidence as to why the zoning should be changed. - Two values are required in every appraisal assignment, as per USPAP. - It gives the owner important information that can be used in the decision to seek rezoning. - None of the above

Answer 434

**It gives the owner important information that can be used in the decision to seek rezoning.**

Question 435

**What is the “probability of rezoning”?** - An expert’s judgment - A fact - A legal opinion rendered by a judge - Nothing more than a guess

Answer 435

**An expert’s judgment**

Question 436

**A property owner makes a special request to the local municipality to allow him to expand his commercial enterprise. The municipality grants his request; however, the request applies only to the current owner for the specific purpose requested. What is this called?** - Legal non-conforming use - Illegal use - Variance - Down-zoning

Answer 436

**Variance**

Question 437

**Which principle holds that it is not appropriate to value land based on one use while valuing improvements on the basis of another use?** - Substitution - Consistent use - Externalities - Highest and best use

Answer 437

**Consistent use**

Question 438

**An old apartment building will cost $80,000 to demolish. The salvage value of the building components is $25,000. The value of the vacant site is $350,000. What is the net cost of razing and removing the building?** - 25000 - 55000 - 65000 - 80000

Answer 438

**55000**

Question 439

**Why is salvage value becoming more important for appraisers?** - It is cheaper to reuse hazardous materials than to put them in a landfill - It is increasingly rare that buildings are demolished - Salvaging parts of old buildings is usually not financially feasible - The increased use of recycled materials in buildings

Answer 439

**The increased use of recycled materials in buildings**

Question 440

**What happens when a real property improvement reaches the end of its economic life?** - It no longer contributes value to the site - It falls down - It is condemned by the local municipality - None of the above

Answer 440

**It no longer contributes value to the site**

Question 441

**Which of these statements is FALSE about a property’s optimum use?** - The right proportion of improvement to land is implied. - There may be more than one optimum use at a given time. - The optimum use benefits the surrounding land. - The optimum use provides social benefits to the community.

Answer 441

**There may be more than one optimum use at a given time.**

Question 442

**Special-purpose properties would include all of the following EXCEPT:** - Duplex - Church - School - Theater

Answer 442

**Duplex**

Question 443

**A property owner tears down a metal pole building and sells it to a scrap dealer who pays him $10,000. What is this $10,000 considered?** - Value in use - Cost to cure - Demolition cost - Salvage value

Answer 443

**Salvage value**

Question 444

**An appraiser is valuing a one-acre site, which is improved with a building that is in very poor condition and not financially feasible to repair. The appraiser estimates that the value of the vacant site is $250,000. It will cost $25,000 to demolish and remove the building. What is the “as is” value of the property?** - 250000 - 275000 - 225000 - 25000

Answer 444

**225000**

Question 445

**A farm is no longer financially feasible to operate. The property owner rents the property to recreational campers, with the long-term goal of developing the land as a residential subdivision when public sewage becomes available in the next 3-4 years. What would the property’s eventual use as a residential subdivision be considered?** - Interim use - Legal non-conforming use - Ultimate highest and best use - Illegal use

Answer 445

**Ultimate highest and best use**

Question 446

**A farm is no longer financially feasible to operate. The property owner rents the property to recreational campers, with the long-term goal of developing the land as a residential subdivision when public sewage becomes available in the next 3-4 years. What would the property’s current use as a campsite be considered?** - Optimal use - Interim use - Legal non-conforming use - Optimum use

Answer 446

**Interim use**

Question 447

**An interim use is typically of ________ duration, often _________.** - Long-term, 5-10 years - Longer, 5 years - Short, 5 years or less - Indefinite, cannot be determined

Answer 447

**Short, 5 years or less**

Question 448

**A parcel of land is zoned for either restaurant or retail use. Constructing a $450,000 restaurant building on the site would result in a property value of $725,000. Constructing a $750,000 retail strip center would result in a property value of $1,000,000. What is the highest and best use of this property?** - the restaurant building because it produces the highest land value - the retail strip center, because it produces the highest total property value - both uses are equally productive - the lot should remain vacant because neither of these options is financially feasible

Answer 448

**the restaurant building because it produces the highest land value**

Question 449

**An appraiser is valuing a single-family home situated on a commercial site. The appraiser values the home using comparable sales of single-family residences in residential areas, and then makes a $50,000 adjustment to each sale for the value difference between the subject’s commercial site and the comparable’s residential site. Is this appropriate?** - Yes, as long as it is explained properly - No, because the land and improvements are valued for different uses - This would be a matter of state law or regulation -

Answer 449

**No, because the land and improvements are valued for different uses**

Question 450

**When an existing improvement no longer adds value to a property, an appraiser may need to consider_____________ when valuing the property.** - Obtaining a variance - Ground rent - Demolition cost - All of the above

Answer 450

**Demolition cost**

Question 451

**It is common that buildings in average condition are razed just because the owner or developer desires a more productive or intensive use.** - TRUE - FALSE - -

Answer 451

**TRUE**

Question 452

**Why might an existing improvement no longer contribute value to a site?** - Condition - Age - Obsolescence - Any of the above

Answer 452

**Any of the above**

Question 453

**A property owner has a variance which allows her to operate a small commercial enterprise in a residential zone. A buyer wishes to purchase her property, and makes an offer. The buyer is specifically interested in continuing the commercial enterprise. Which statement is MOST LIKELY correct regarding this situation?** - The buyer will have to apply for his or her own variance. - The variance will automatically transfer from the seller to the buyer. - The current use is an illegal use. - If the variance has been in effect for more than five years continuously, it becomes permanent.

Answer 453

**The buyer will have to apply for his or her own variance.**

Question 454

**Which of these would be MOST important when determining the optimum use of a property?** - Current use - Owner’s financial means - Property’s tax assessment - Market value definition

Answer 454

**Market value definition**

Question 455

**When a building no longer contributes value to the site, it has reached the end of its __________.** - Economic life - Physical life - Structural integrity - External life

Answer 455

**Economic life**

Question 456

**An old school building will cost $55,000 to demolish. The salvage value of the building components is $20,000. The value of the vacant commercial site is $440,000. What is the “as is” value of the property?** - 35000 - 405000 - 365000 - 440000

Answer 456

**405000**

Question 457

**An old apartment building will cost $80,000 to demolish. The salvage value of the building components is $25,000. The value of the vacant site is $350,000. What is the ”as is” value of the property?** - 270000 - 245000 - 295000 - 350000

Answer 457

**295000**

Question 458

**If it is not physically possible to develop a property:** - The property has no value - The highest and best use may be for the property to remain vacant - The property may have value but it has no highest and best use - It is not suitable for a conservation easement

Answer 458

**The highest and best use may be for the property to remain vacant**

Question 459

**An owner of a large acreage tract wants the property to remain an undeveloped habitat for wildlife, in perpetuity. How might he or she best accomplish this?** - Sell the property to the state - Place a conservation easement on the property - Carefully screen buyers, and sell only to a like-minded person - All of the above

Answer 459

**Place a conservation easement on the property**

Question 460

**The value of a property based on its value for public good is referred to as:** - Political value - Public interest value - Going-concern value - Interim use value

Answer 460

**Public interest value**

Question 461

**A property owner agrees to place an easement on her property which limits her right to future development of the property. What is this?** - Conservation easement - Perpetual encroachment easement - Legal non-conforming use easement - Interim use

Answer 461

**Conservation easement**

Question 462

**A parcel of land is purchased by a local municipality for hiking trails and wildlife habitat. This is an example of what type of value?** - Local municipality value - Going-concern value - Interim use value - Public interest value

Answer 462

**Public interest value**

Question 463

**Benefits to the property owner for placing a conservation easement on the property include:** - Income tax deduction - Reduction in property taxes - Both 1and 2 - Neither 1 nor 2

Answer 463

**Both 1and 2**

Question 464

**Going-concern value is often used in appraising what type of property?** - Hotels - Restaurants - Bowling alleys - All of these

Answer 464

**All of these**

Question 465

**What type of value includes personal property, trade fixtures, and business value along with the real property?** - Public interest value - Going-concern value - Salvage value - Liquidation value

Answer 465

**Going-concern value**

Question 466

**If the improvements do not represent the highest and best use of the property, the appraiser should value the property under its current use.** - TRUE - FALSE - -

Answer 466

**FALSE**

Question 467

**A parcel of land is purchased by a local municipality for hiking trails and wildlife habitat. This is an example of what type of value?** - Local municipality value - Going-concern value - Public interest value - Interim use value

Answer 467

**Public interest value**

Question 468

**An old school building will cost $55,000 to demolish. The salvage value of the building components is $20,000. The value of the vacant commercial site is $440,000. What is the net cost to raze and remove the building?** - 35000 - 405000 - 20000 - 55000

Answer 468

**35000**

Question 469

**Benefits to the property owner for placing a conservation easement on the property include:** - Income tax deduction - Reduction in property taxes - Both a and b - Neither a nor b

Answer 469

**Both a and b**

Question 470

**A property is a legal non-conforming use as a retail store. The local municipality states that if the property is sold, it is no longer permitted to be used as a store, and must be converted to residential use. What question would an appraiser need to consider in appraising this property?** - Should the owner sell the property? - What would the legal fees be if the seller sued the municipality? - Why would the municipality do this to the seller? - Who is the most likely buyer?

Answer 470

**Who is the most likely buyer?**

Question 471

**Which of these improved properties is LEAST likely to require a going-concern value as a component of an appraisal?** - Single-family home - Hotel - Restaurant - Bowling alley

Answer 471

**Single-family home**

Question 472

**An old apartment building will cost $80,000 to demolish. The salvage value of the building components is $25,000. The value of the vacant site is $350,000. What is the net cost of razing and removing the building?** - 25000 - 55000 - 80000 - 65000

Answer 472

**55000**

Question 473

**If valued under its present use, a legal non-conforming use will have a value that is _________ than its value under the current zoning.** - Higher - Lower - Higher or lower -

Answer 473

**Higher or lower**

Question 474

**A farm is no longer financially feasible to operate. The property owner rents the property to recreational campers, with the long-term goal of developing the land as a residential subdivision when public sewage becomes available in the next 3-4 years. What would the property’s eventual use as a residential subdivision be considered?** - Illegal use - Ultimate highest and best use - Legal non-conforming use - Interim use

Answer 474

**Ultimate highest and best use**

Question 475

**An appraiser is valuing a one-acre site, which is improved with a building that is in very poor condition and not financially feasible to repair. The appraiser estimates that the value of the vacant site is $250,000. It will cost $25,000 to demolish and remove the building. What is the “as is” value of the property?** - 250000 - 25000 - 225000 - 275000

Answer 475

**225000**

Question 476

**Even if the subject property is not subject to an interim use, an appraiser should be aware of:** - The possibility of interim uses of the comparable sales - The fact that all uses are short-term - The possibility that a natural disaster could change the highest and best use of the subject tomorrow - All of these

Answer 476

**The possibility of interim uses of the comparable sales**

Question 477

**Which term is a synonym for legal non-conforming use?** - Grandfathered use - Interim use - Single use - Illegal use

Answer 477

**Grandfathered use**

Question 478

**In most markets, multi-family investors are more likely to:** - Purchase an existing building - Construct a new building - Convert an existing single-family home - Purchase a commercial property

Answer 478

**Purchase an existing building**

Question 479

**What factor is most important in valuing an apartment building?** - Neither 1 nor 2 - Both 1 and 2 - The quantity of the income - The quality of the income

Answer 479

**Both 1 and 2**

Question 480

**What is the principal factor considered by an investor purchasing a multi-family property?** - The location - The net income - Both 1 and 2 - Neither 1 nor 2

Answer 480

**The net income**

Question 481

**The value of a multi-family property is influenced by two factors – the tenant’s desire to pay rent, and:** - The owner’s desire to keep the property - The amount of rent that the tenant will pay - The kind of tenant that will rent the property - The prospects of conversion to an alternative use

Answer 481

**The owner’s desire to keep the property**

Question 482

**Any factor or amenity that increases net income to the owner without sacrificing tenant satisfaction will:** - Decrease the operating expense ratio - Lower the capitalization rate - Increase the property’s value - Decrease the property’s value

Answer 482

**Increase the property’s value**

Question 483

**An appraiser is valuing a six-unit property, and is having trouble obtaining and verifying expense data. Why is market-based income and expense data often more difficult to obtain on a smaller income property?** - Smaller properties are often managed by large companies, who do not like to give out information - Smaller properties are more often managed by the owner, and management quality may be lacking - Larger properties are most often valued by income multipliers, which do not require detailed data on expenses - All of these are contributing factors

Answer 483

**Smaller properties are more often managed by the owner, and management quality may be lacking**

Question 484

**The value of a multi-family property is influenced by two factors – the owner’s desire to keep the property, and:** - The prospects of conversion to an alternative use - The owner’s willingness to update the property - The tenant’s desire to pay rent - The tenant’s desire to move

Answer 484

**The tenant’s desire to pay rent**

Question 485

**When appraising small income properties that are managed by the owner, the income and expenses are often more of a reflection of the quality of the property than the quality of the management.** - TRUE - FALSE - -

Answer 485

**FALSE**

Question 486

**What type of market participant would be most likely to construct a new multi-family apartment building?** - Investor - Developer - Tenant - Any of these

Answer 486

**Developer**

Question 487

**Besides income, other factors considered by investors purchasing multi-family properties include:** - Equity build-up - Tax benefits - Appreciation - All of the above

Answer 487

**All of the above**

Question 488

**The "green" building movement places a premium on the use of _________________ building materials.** - Second hand - All natural - Recycled - Salvaged

Answer 488

**Recycled**

Question 489

**A capture rate applies to property that is _____________.** - Sold or leased - Valued - Sold - Leased

Answer 489

**Sold or leased**

Question 490

**Local governments might use a market analysis to determine public ______________.** - Budget planning - Park needs - infrastructure needs - Acceptability

Answer 490

**Acceptability**

Question 491

**The “F” in the acronym FIRE stands for ____________.** - Finance - Force - Freehold - Feasabiilty

Answer 491

**Finance**

Question 492

**Demand factor ratio (i.e. space per employee) are part of the market analysis of __________ properties.** - Industrial - Office - Apartment - Retail

Answer 492

**Office**

Question 493

**Calculate the Median of this set of gross rent multipliers: 92, 88, 77, 81, 83, 93, 89.** - 81 - 83 - 88 - 89

Answer 493

**88**

Question 494

**A Level __ market analysis would be considered Inferred analysis.** - B - D - A - C

Answer 494

**A**

Question 495

**Author Joseph Rabianski, advocates replacing “probability of rezoning” with “___________________."** - Rezoning justification analysis - Non-probability of rezoning - Zoning compatibility analysis - Financial feasibility

Answer 495

**Rezoning justification analysis**

Question 496

**Information from government agencies might include all of the following EXCEPT___________ .** - Population data - Demographic data - The property deed - Number of Building permits

Answer 496

**The property deed**

Question 497

**One who offers professional management of real estate to meet specified asset goals for the advantage of the investors is called a(n) ______________.** - Asset manager - Property manager - Advisor - Advocate

Answer 497

**Asset manager**

Question 498

**Which of these would be considered specific data?** - Zoning classification - Area population trends - County Unemployment rates - Average family size

Answer 498

**Zoning classification**

Question 499

**_____________ data relates to information appropriate for many properties.** - Specific - Common - Specified - General

Answer 499

**General**

Question 500

**A developer is planning a new subdivision and has to pay Impact Fees to the local municipality. This is an example of a(n) _____________ force affecting real estate.** - Governmental - Physical - Social - External

Answer 500

**Governmental**

Question 501

**A survey of the industries and businesses that generate employment and income in a community as well as the rate of population growth and levels of income is defined as ____________________.** - Market analysis - Marketability analysis - Econometrics - Economic base analysis

Answer 501

**Economic base analysis**

Question 502

**Low-rise office buildings rise from one to _________ stories.** - Two - Three - Four - Five

Answer 502

**Three**

Question 503

**What methodology does USPAP recommend for developing highest and best use?** - Six-Step Method - Four-Step Method - Four great forces - It does not recommend or require any particular methodology

Answer 503

**It does not recommend or require any particular methodology**

Question 504

**A use is appropriately supported when there is sufficient demand to ensure _____________________.** - Financial feasibility - Physically possibility - Legal permissibility - Responsible use

Answer 504

**Financial feasibility**

Question 505

**An appraiser is analyzing the average-days-on-market in the subject market area to see if they have increased or decreased. Which highest and best use test constraint is being considered?** - Physically possible - Legally permissible - Maximally productive - Financially Feasible

Answer 505

**Financially Feasible**

Question 506

**When real estate inventory exceeds demand, marketing times _______________.** - Increase - Decresae - Stabilize - Demand does not affect marketing time

Answer 506

**Increase**

Question 507

**All of these are questions that could be asked to help determine demand EXCEPT___________________________________?** - How much space in the competitive market area is "on the drawing board"? - Are there any events of regional or national significance that are expected to alter demand for space (interest rates, energy, etc.)? - How much space is currently being absorbed in the competitive market area? - Is absorption critically linked to some local industry?

Answer 507

**How much space in the competitive market area is "on the drawing board"?**

Question 508

**Which term is a synonym for grandfathered use?** - Conditional use - Legal non-conforming use - Illegal use - Single Use

Answer 508

**Legal non-conforming use**

Question 509

**Calculate the Mean of this set of Gross Rent Multipliers: 92, 88, 77, 81, 83, 93, 89.** - 84.7 - 85.3 - 86.1 - 85.9

Answer 509

**86.1**

Question 510

**There is not one generally-accepted format or level of detail for a highest and best use section in an appraisal report. The level of information in the appraisal report is based on the needs of _______________.** - Clients - Intended users - Clients and intended users - Lenders

Answer 510

**Clients and intended users**

Question 511

**Salty Dog Developers sold 15 homes in Palmdale and 32 homes in Mapletown last year. The total number of new homes sold in Mapletown last year was 120. What is Salty Dog’s capture rate in the Mapletown market?** - 0.27 - 0.25 - 0.19 - 0.14

Answer 511

**.27**

Question 512

**A description of a group of phenomena in the scientific method is a(n) _____________.** - Observation - Statistic - Sample - Data point

Answer 512

**Observation**

Question 513

**In a __________ analysis the appraiser utilizes capitalization rates for specific property types within the subject market area to forecast the estimated value of the subject.** - Inferred - Feasibility - Statistical - Fundamental

Answer 513

**Fundamental**

Question 514

**A Level __ market analysis would be The least detailed.** - A - B - C - D

Answer 514

**A**

Question 515

**_____________ is based on the desires of potential purchasers for that property.** - Supply - Competition - Demand - Price

Answer 515

**Demand**

Question 516

**Going-concern value includes _______________ along with the real property.** - Personal property - Trade fixtures - Business value - All of the above

Answer 516

**All of the above**

Question 517

**An appraiser is analyzing a parcel of land in a community which has no zoning ordinance. The appraiser determines that for residential purposes, the site is worth $70,000. As a multi-family building site, it is worth $60,000. As a retail commercial site, it is worth $80,000. Which highest and best use test criteria is exemplified in this situation?** - Financially Feasible - Maximally Productive - Legally permissible - Physically possible

Answer 517

**Maximally Productive**

Question 518

**The square feet leased in a specific geographic area over a fixed time period after calculating the deduction of space vacated in the same area during the same time period is called the _______________________.** - Net Absorption - Gross absorption - Effective demand - Vacancy ratio

Answer 518

**Net Absorption**

Question 519

**_________ GIS are often used for field data collection.** - Mobile - Sonic - Solar - 3-D

Answer 519

**Mobile**

Question 520

**The standard used by Federal statistical agencies to classify businesses for collecting, analyzing, and publishing statistical data related to the U.S. business economy is the ______________.** - FDIC - NAICS - USBLS - FSID

Answer 520

**NAICS**

Question 521

**_____________ statistics is the study of methods and tools for collecting data and mathematical models to describe and interpret data.** - Modeling - Quantitative - Qualitative - Descriptive

Answer 521

**Descriptive**

Question 522

**__________________ real estate professionals in particular can benefit from the Census information.** - Commercial - Residential - Land - Condominium

Answer 522

**Commercial**

Question 523

**The downtown area of a city is called the ________________.** - Urban Center - Metropolis - Hub - Central Business District

Answer 523

**Central Business District**

Question 524

**__________ is the quantity of a property type available at a certain price.** - Supply - Demand - Effective Inventory - Competitive inventory

Answer 524

**Supply**

Question 525

**The main advantage of primary data is ______________.** - Convenience - Public acceptance - Reliability - Availability

Answer 525

**Reliability**

Question 526

**When plotting supply and demand graphs, ___________ is the Independent variable.** - Supply - Demand - Price - Growth rate

Answer 526

**Price**

Question 527

**_________________ is the market price that is set by the interaction of supply and demand.** - Transaction price - Default price - Opportunity cost - Equilibrium price

Answer 527

**Equilibrium price**

Question 528

**Climate and wetlands are examples of ___________ forces affecting real estate.** - Environmental - Economic - Governmental - Social

Answer 528

**Environmental**

Question 529

**_____________ Value is a type of value for a property, not based on economic value, but on the value for the public good.** - Public Interest - Social - Philanthropic - Common

Answer 529

**Public Interest**

Question 530

**In every market value appraisal assignment, an opinion of the highest and best use of a property _____________.** - Is optional - Is desirable - Must be completed - Depends on the intended use

Answer 530

**Must be completed**

Question 531

**A Dry cleaning establishment was constructed in 1965. There was no zoning at that time. It has been continuously used as a dry cleaners ever since. In 1978, the local municipality adopted a zoning ordinance that determined the property’s zoning to be residential, but allowed the drying cleaning use to continue. What term best describes this situation?** - Interim - Conditional use - Non-conforming Use. - Pre-existing

Answer 531

**Non-conforming Use.**

Question 532

**Over the last year in Highland Falls, there have been 96 sales of single-family homes. Currently, there are 120 homes on the market. How long will it take the market to absorb this inventory?** - 6 months - 10 months - 12 months - 15 months

Answer 532

**15 months**

Question 533

**Investors typically require a market analysis to determine if a project will be _______________.** - Politically correct - Financially successful - Socially acceptable - Physically possible

Answer 533

**Financially successful**

Question 534

**____________________ separates the market into different types of properties, such as residential, residential multi-family, or office.** - Market delineation - Clustering - Market segmentation - Bracketing

Answer 534

**Market segmentation**

Question 535

**An appraiser is investigating whether there is a Flood plain on or near the site. Which highest and best use test constraint is being considered?** - Legally permissible - Maximally Productive - Physically Possible - Financially feasible

Answer 535

**Physically Possible**

Question 536

**The ______________ is vital in determining the financial feasibility of a property.** - The property owner - Appraiser - The zoning board - All of the above

Answer 536

**Appraiser**

Question 537

**A _________ distribution uses both qualitative and quantitative data placed in a table that summarizes groups of data and observations divided into specific classes and the number of occurrences in each class.** - Staged - Frequency - Combination - Tiered

Answer 537

**Frequency**

Question 538

**_______________ value can be used to offset demolition costs.** - Salvage - Replacement - Recycled - Reuse

Answer 538

**Salvage**

Question 539

**A day care center conforms to zoning, but is located in a rural residential area. What term best describes this use?** - Single use property - Illegal use - Non-conforming use - Legal non-conforming use

Answer 539

**Single use property**

Question 540

**An appraiser is reviewing the property requirements and the required setbacks. Which highest and best use test constraint is being considered?** - Legally permissible - Physically possible - Financially feasible - Maximally productive

Answer 540

**Legally permissible**

Question 541

**A ____________ is a single sample in a group.** - Variant - Statistic - Phenomena - Variable

Answer 541

**Variable**

Question 542

**Age levels of occupants and crime statistics are examples of ___________ forces affecting real estate.** - Environmental - Social - Governmental - Economic

Answer 542

**Social**

Question 543

**Depending upon the strength of the data, and the intended use of the appraisal, the highest and best use conclusion can be __________________________.** - Primary or secondary - General or Specific - General or secondary - Specific or ordinary

Answer 543

**General or Specific**

Question 544

**Which is NOT one of the four great forces that affect property values?** - Governmental - Environmental - External - Economic

Answer 544

**External**

Question 545

**What part of USPAP addresses the four test constraints of highest and best use?** - STANDARD 2 - STANDARD 1 - COMPETENCY RULE - It does not even mention the four test constraints of highest and best use.

Answer 545

**It does not even mention the four test constraints of highest and best use.**

Question 546

**Highest and best use is “Among all reasonable, alternative uses, the use that yields the highest __________ value.”** - Present improvement - Future land - Present land - Present land and improvement

Answer 546

**Present land**

Question 547

**An economic principle that demonstrates new social patterns, technology, employment, transportation, and other factors create new demands for real estate is the principle of ____________.** - Contribution - Change - Balance - Externalities

Answer 547

**Change**

Question 548

**_______________ studies individuals, households, and businesses to understand their decisions regarding use of resources.** - Gravity Modeling - Microeconomics - Macroeconomics - Econometrics

Answer 548

**Microeconomics**

Question 549

**The foundation of the field of statistics is _____________.** - Sampling - Modeling - Data - Analytics

Answer 549

**Data**

Question 550

**In the town of Woodlake, 80,000 square feet of Class A office space is leased per year. The Pines, an older Class A office building, has 36,000 square feet of space for lease. It is projecting a 10% capture rate. How long will it take this building to reach 100% occupancy?** - 3.7 years - 4.5 years - 5.8 years - 6.2 years

Answer 550

**4.5 years**

Question 551

**USPAP requires an appraiser to consider land use regulations as well as ________________ modifications of land use regulations.** - Probable - Interim - Pending - Reasonably probable

Answer 551

**Reasonably probable**

Question 552

**The ________________________ is the section of the valuation process that provides the data required to test the four criteria for highest and best use.** - Six-Step Process - Legal permissibility - Site section - Data analysis

Answer 552

**Six-Step Process**

Question 553

**_______________ deals with performance, structure, and behavior of the national or regional economy as a whole.** - Microeconomics - Econometrics - Psychographics - Macroeconomics

Answer 553

**Macroeconomics**

Question 554

**Part of the definition of Highest and Best Use says that it is the use “that is __________ permissible ……”** - Physically - Legally - Rationally - Economically

Answer 554

**Legally**

Question 555

**There are 2,800 new jobs in finance, insurance, and real estate projected over the next five years. 70% of these jobs are in offices. The average office worker requires 150 square feet of office space. How many new office workers are projected during the next five years in this employment classification?** - 1250 - 1960 - 2800 - 3500

Answer 555

**1960**

Question 556

**When real estate inventory exceeds demand, prices __________.** - Increase - Decline - Stabilize - Prices do not depend on demand

Answer 556

**Decline**

Question 557

**Most charts and graphs in this course were prepared using _________.** - PowerPoint - Charts Plus - Excel - Access

Answer 557

**Excel**

Question 558

**The most common measure of central tendency is the _________.** - Range - Median - Deviation - Mean

Answer 558

**Mean**

Question 559

**A subset of a population is a(n) _________.** - Segment - Parameter - Sample - Element

Answer 559

**Sample**

Question 560

**_____________ statistics are the systems and techniques for making probability-based decisions and accurate predictions based on incomplete (sample) data.** - Descriptive - Inferential - Qualitative - Ordinal

Answer 560

**Inferential**

Question 561

**_______________ analysis uses technical statistics to forecast changes in future value by analyzing historical macroeconomic information.** - Fundemental - Inferred - Descriptive - Feasibility

Answer 561

**Inferred**

Question 562

**A careful analysis of the greatest ___________ determines the basis for the highest and best use of the land that will yield the highest present value.** - Percentage - Net return - Gross return - Compatibility

Answer 562

**Net return**

Question 563

**The highest and best use of the land, as vacant, determines the land value in the ________________.** - Sales Comparison Approach - Residual Approaches - Cost Approach. - GRM Approach

Answer 563

**Cost Approach.**

Question 564

**Key attributes that affect the demand for a property are all of these EXCEPT ________________ .** - Location - Economic growth - New and proposed construction - The cost of a substitute

Answer 564

**New and proposed construction**

Question 565

**______________ developed probability theories which predict future probabilities from past events.** - Thomas Paine - Thomas Bayes - Thomas Edison - Thomas Jefferson

Answer 565

**Thomas Bayes**

Question 566

**A _______________ relates to a specific product type or development project within a defined market area based on the four factors that create value.** - Marketability analysis - Comprehensive analysis - Feasibility analysis - Market analysis

Answer 566

**Marketability analysis**

Question 567

**Economic base analysis includes _________ employment and ______________ employment.** - Primary, secondary - Gross, net - General, specific - Basic, nonbasic

Answer 567

**Basic, nonbasic**

Question 568

**The estimate of demolition costs may be obtained from _________________.** - Local contractors - Demolition professionals - Published cost manuals. - All of the above

Answer 568

**All of the above**

Question 569

**A fact or occurrence that can be observed is defined as _______________.** - A sample - A sighting - Datum - Phenomena

Answer 569

**Phenomena**

Question 570

**In most cases, a potential buyer of the property who wishes to continue the current use under a variance would need to ____________________.** - Do nothing; The variance will automatically transfer from the seller to the buyer. - Make his or her own application for a variance - Pay a transfer fee - Do nothing, if the variance has been in effect for for at least one year

Answer 570

**Make his or her own application for a variance**

Question 571

**The two different types of measurements typically used in descriptive statistics are measures of ___________ and measures of ____________.** - Quality, quantity - Cohesion, adhesion - Central tendency, dispersion - Congruity, disparity

Answer 571

**Central tendency, dispersion**

Question 572

**The value which occurs most frequently within a data set is the ___________.** - Mode - Mean - Median - Average

Answer 572

**Mode**

Question 573

**An appraiser is investigating to find out what is the absorption rate for competitive properties. Which highest and best use test constraint is being considered?** - Physically possible - Legally permissible - Financially Feasible - Maximally productive

Answer 573

**Financially Feasible**

Question 574

**You went to the Assessor’s office and obtained the assessed value of a subject property. What kind of data is that?** - Physical - Primary - Secondary - General

Answer 574

**Primary**

Question 575

**The application of mathematical and statistical techniques to economic data and problems is ___________.** - Physcographics - Econometrics - Spotting process - Economic base analysis

Answer 575

**Econometrics**

Question 576

**A single-family residence located in an area that was later rezoned to commercial would be considered an ___________________.** - Over-improvement - Interim improvement - Under-improvement - Pending improvement

Answer 576

**Under-improvement**

Question 577

**The best way to measure how well a trend line fits the data is through the use of its _______________ .** - Dispersion - Average Deviation - Total variance - R Squared Value

Answer 577

**R Squared Value**

Question 578

**The general contraction of the business cycle in economics during a sustained period of time is a(n)_____________ .** - Slowdown - Recession - Market correction - Downslope

Answer 578

**Recession**

Question 579

**A _______________ analysis often addresses the time required to absorb a particular real estate product in the marketplace at a certain price or rent level.** - Marketability - Feasibility - Functional - Absorption

Answer 579

**Marketability**

Question 580

**______________ data relates to information used directly in the analysis of the subject property and while examining the comparables used in the valuation process.** - Income - General - Specific - Secondary

Answer 580

**Specific**

Question 581

**You build a swimming pool in your back yard at a cost of $30,000 and it only adds $15,000 to the value of your property. This demonstrates the Principle of ______________.** - Contribution - Increasing and Decreasing Returns - Surplus Productivity - Marginal Productivity

Answer 581

**Contribution**

Question 582

**An economic principle which states that property value is maximized when the characteristics of a property are in conformance with market expectations and demands is the Principle of _______________.** - Balance - Conformity - Change - Contribution

Answer 582

**Conformity**

Question 583

**Real estate markets are _____________ in nature.** - Balanced - Predictable - Cyclical - Repetitive

Answer 583

**Cyclical**

Question 584

**Part of the definition of Highest and Best Use says that it is the use “that is ____________ feasible……”** - Physically - Optimally - Logically - Financially

Answer 584

**Financially**

Question 585

**Market _____________ identifies specific boundaries in which the subject property is located, along with the comparable sales, rentals, and land sales.** - Aggregation - Segmentation - Modeling - Delineation

Answer 585

**Delineation**

Question 586

**The desire for a specific good or service is _______________.** - Entrepreneurial coordination - Demand - Supply - Labor

Answer 586

**Demand**

Question 587

**Part of the definition of Highest and Best Use says that it is the “reasonably probable and ________ use……”** - Possible - Legal - Likely - Consistent

Answer 587

**Legal**

Question 588

**The _______________________ provides yearly estimates of demographic, housing, social, and economic characteristics for all population groups of at least 65,000 people.** - American Fact Finder - American Community Survey - BLS

Answer 588

**American Community Survey**

Question 589

**Which is not a type of office building?** - Multi-tenant - High rise - Government - Class D

Answer 589

**Class D**

Question 590

**The Principle of Consistent Use says that the land and improvements need to be valued based on ___________ .** - Compatibility - The same use - Similar uses - A future use

Answer 590

**The same use**

Question 591

**When real estate demand exceeds the existing inventory, Marketing times _____________.** - Increase - Decrease - Stabilize - Demand does not affect marketing time

Answer 591

**Decrease**

Question 592

**A survey of the industries and businesses that generate employment and income in a community as well as the rate of population growth and levels of income is defined as ____________________.** - Market analysis - Marketability analysis - Econometrics - Economic base analysis

Answer 592

**Economic base analysis**

Question 593

**Which of these is a characteristic of a market segment?** - Heterogeneous - Indistinct from other segments - Consistent within the segment - Responds differently to a market stimulus

Answer 593

**Consistent within the segment**

Question 594

**A _______________ analysis often addresses the time required to absorb a particular real estate product in the marketplace at a certain price or rent level.** - Marketability - Feasibility - Functional - Absorption

Answer 594

**Marketability**

Question 595

**The subject property is not appraised within the Level __ analysis, but is one of many properties within the general market area affected by supply and demand factors.** - C - B - D - A

Answer 595

**A**

Question 596

**Part of the definition of Highest and Best Use says that it is the use “that is ______________ supported……”** - Credibly - Economically - Appropriately - Physically

Answer 596

**Appropriately**

Question 597

**An extraordinary assumption is used to assume otherwise uncertain information as ________________.** - Fact - Possible - Value - Reasonably certain

Answer 597

**Fact**

Question 598

**_______________ studies individuals, households, and businesses to understand their decisions regarding use of resources.** - Gravity Modeling - Microeconomics - Macroeconomics - Econometrics

Answer 598

**Microeconomics**

Question 599

**If the data is describing a characteristic within a population, it is a _______________. (Chapter 3, Data Analysis)** - Statistic - Sample - Parameter - Variant

Answer 599

**Parameter**