Changes in the market in a consistent direction that occur over a long-term period.
A. trends
Periodic, irergular up-and-down movements in economic activity that take place over a period of two to six years
B. cycles
Changes in business and economic activity that occur with the year
A. short-term fluctuation
Sequence of four phases: recovery, expansion, stability, and contraction
A. business cycle
Phase at the bottom of the real estate cycle
D. recovery phase
Phase marked by higher demand than supply and increasing prices
A. expansion phase
The study of the allocation of scarce resources
Economics
Economic system in which the allocation decisions are relegated to buyers and sellers
D. market system
A market in which goods and services are easily produced and readily transferable
B. efficient market
Market that cannot meet the requirements for a perfect market
C. imperfect market
An asset that cannot be readily converted to cash.
C. illiquid
Process of identifying and analyzing submarkets within larger markets
A. market segmentation
Geographic, economic, or specialized subdivision of a market
D. submarket
The international reserve currency or U.S. dollars used to purchase oil from OPEC countries
C. Petrol dollars
Currency used by 13 countries in the European Union
Euro
Economic changes occur as:
D. all of the above
In a business cycle, the economy ____ during expansion and ____ during contraction
C. speeds up / slows down
Which statement is incorrect regarding real estate cycles
C. Submarkets do not experience real estate cycles
Increasing demand creates a need for more properties during the ___ phase
A. expansion
The real estate market is a(n) ____ market
B. imperfect
Typical submarkets for resdential properties include
C. perfect
Retail space submarkets include all of the following, except:
C. resorts
Class A, Class B, and Class C refer to:
C. quality for construction
An industrial market can be segmented into which of the following submarkets?
D. all of the above
Sometimes, foreign investment can:
D. do all of the above
What causes an imbalance of trade?
A. U .S consumers buying more goods from countries whose citizens buy less U.S goods
When the U.S. dollars is weak compared to the Euro, it is advantageous for Euro holders to:
C. Buy real estate in the United States, and purchase U.S products.
Which of the following statements is true regarding the availability of financing in the United States?
A. The US has been a world leader int he availability of financing
Ultimately, what is the effect of foreign countries seeking to own properties in the United States?
A. higher real estate prices
Typical submarkets in an agricultureal market would include:
A. quality of construction materials
A regional, city, and neighborhood study of economic, demographic, and other factors to determine supply and demand, market trends, and other factors important to buying, selling, and leasing real property
A. market analysis
Areas where market participants live and work
D. market area
The study to determine if the item in question is marketable
B. market study
A study of the cost-benefit relationship of an economic endeavor
C. feasibility study
Study of population statistics
demography
A point on the scale of possible prices at which a property might be marketed
C. price point
Characteristics, which include property types, sizes, styles, ages, and quality
A. market characteristics
A geographical area delineated by geographical or political boundaries that is comprised of properties that have complementary land uses
A. neighborhood
Uniform or similar value
A. homegeneity
Growth (development), stability, decline, and revitalization
B. Neighborhood life cycle
What is the primary reason for confusion between a feasibility study, marketability study, and market analysis?
A. lack of understanding and miscommunication with the client
Aside from current market conditions, what other factors are taken into accoutn during a real estate market analysis?
D. all of the above
Which study asks the question of whether the cost of undertaking a project will result in a return on investment?
A. feasibility study
In a regional market analysis, which of the following is a factor that helps foster rapid increases in house prices?
B. creative financing offered by lenders
Adam is an appraiser who is analyzing the economic issues affecting a particular region. Which of the following is an economic issue to consider in a regional market analysis?
A. quality and diverification of defense-oritented industries
A factor that influences regional real property values is:
D. all of the above
Physical considerations in a city market analysis include:
D. both flood control and public transportation facilities
In a city market analysis, a basic economy consderation is:
D. sufficient tax base to fund government services
A neighborhood analysis would be most important to which of the following properties
D. condominium development
Which of the following defines a neighborhood?
C. a geographical area delineated by geographical or political boundaries that is comprised of properties that have complementary land uses
What are examples of physical boundaries that determine a neighborhood?
D. all of the above
In chronological order, the changes during the life cycle of a neighborhood include:
C. growth, stability, decline, and revitalization
Donna, an experienced appraiser, is conducting a neighborhood analysis for an appraisal assignment. Which of the following is not a physical issue that Donna would consider int he analysis?
A. per capita income
A governmental influence an appraiser faces when conducting a neighborhood market analysis includes:
C. special assessments
Social factors to consider in a neighborhood analysis include which of the following?
B. family size
The use, from among reasonable an dadequately supported alternative uses, that is physically possible, legally permitted, economically feasible, and maximally productive
B. highest and best use
An analysis of a proposed subject or property with emphasis on the attainable income, probably expenses, and most advantageous use and design.
B. feasibility study
A type of valuable technique in which the net income remaining to the land (after income attributable to the building has been deducted) is capitalized into an estimate of value for the land.
A. land residual analysis
The principle, which states that the value of property is affected by the potential future benefits.
D. Principle of anticipation
Properties with a use that predates existing zoning regulations
B. Legally non-conforming
The right of the government to take private property from an owner for the public god by paying fair market value
B. eminent domain
The highest and best use that can be attained until the time is right for the actual permanent change
D. interum use
The process of combining two or more small sites to form a larger one
A. assemblage
Surplus land beyond that which is needed to support the property's highest and best use
C. excess land
The contours and features on a parcel of land
B. topography
The power of the state to enact laws within constitutional limits to promote the order, safety, health, morals, and general welfare of siciety
A. police power
A legal clause that allows a prior use to continue despire subsequent changes in zoning
grandfather clause
A special exception to the building code
C. variance
Restrictions placed on land with the main purpose of providing minimum standards to protect the environment, and the lives of occupants and the general public
C. building codes
The division of land into lots for the purpose of sale, lease, or financing
subdivision
An interest in real property that is held by someone who is not the owner
D. encumbrance
The encumbrance that creates a legal obligation to pay (financial encumbrance)
a. easement
b. lien
c. plottage
d. grading
The right to enter or use someone else's land for a specified purpose
a. easement
b. interim use
c. grading
d. variance
Basic rules establishing the rights and obligations of owners (and their successors in interest) of real property within a subdivision or other trait of land
a. grading
b. plottage
c. judgment
d. deed restriction
By definition, highest and best use is:
D. all of the above
What is the primary difference that distinguishes a feasibility study from highest and best use?
A. a feasibility tests whether a project is worth the effort
Rose owns a small supermarket located on property that has recently been zoned for residential use from commercial use. Regardless of this change, Rose's supermarket still complies with zoning regulations due to its:
D. legally non-conforming use
While valuing a property, appraiser Andy noticed than an area still dominated by dairy farms is now becoming home to a number of growing condominium development. In this case, the highest and best use would be:
A. the interim use
If government wants to exercise its power of eminent domain, it must first compensate the owner by paying:
A. fair market value
Arnold is a real estate developer who is looking for land that is suitable for building tract homes. He comes across a parcel of land overlooking an incredible view, but is too small to accommodate the number of tract homes he is planning to build. Which of the four tests does this fail?
D. physically possible
A corner lot would not be ideal for a:
D. single-family home
Which of the four tests of highest and best use determines whether a property's use is allowed by law?
A. legally permitted
Zoning laws and an example of:
B. public restrictions
A property owner is attempting to develop a parcel of land, but local zoning regulations prevent this from occurring. What can the property owner do to continue the development project?
C. ask local government for a variance
Subdivision laws help to regulate:
D. all of the above
An appraiser should check the property records to see if the property is encumbered by the basic rules establishing the rights and owners of real property within a subdivision or other tract of land. These private restrictions are called:
A. deed restrictions
In order to determine if the highest and best use of a property is financially feasible, the appraise must examine:
B. supply and demand trends
What costs are associated with achieving a property's maximally productive use?
D. all of the above
When completing an appraisal assignment, what should an appraiser include in the report?
D. all of the above
The profit realized from the value of a home less the cost to build it including the cost of the land and all permits
B. entrepreneurial profit
The analysis of a real-life problem, which defines the problem and discusses applicable solutions
D. case study
A fitness trail with natural and manufactured obstacles or stations to promote better health
B. shared facilities
A careful, precise analysis or examination of the facts
critical thinking
The analysis of a real life problem, designed usually for training purposes, is called a(n):
A. case study
The careful, precise analysis or examination of the facts is known as:
D. critical thinking
Which of the following questions should not be asked by te appraiser to properly analyze the marketplace of a subject property?
D. what ethnicities make up the neighborhood?
Which of the following is a valud source of information for credible market analysis?
D. all of the above
Good business practices of an appraisal professional should include all of the following; except:
D. accepting an assignment for which the appraiser has no experience or knowledge
After a subject property has been correctly identified and categorized, an appraiser will look for ____ properties to develop the appraisal
A. comparable
The amount of rents paid can be determined by all of the following methods, except:
A. the county assessor's office
One of the most critical items to be considered its determining the highest and best use is:
B. entrepreneurial profit
Typically, which assignment is the least difficult to complete?
C. rental survey
Which of the following is not a typical assignment?
D. going concern value of a business in a shopping center
