Chapter 12

Chapter 12
1. One of three valuation techniques taught to real estate appraisers requiring an estimate of the market value of the land combined with an estimate of the reproduction cost new of all improvements adjusted by estimated depreciation is known as
a. Income approach
b. Cost approach
c. Investment approach
d. Sales comparison approach

Answer is D- Sales comparison approach

2. The most common listing or brokerage agency relationship. It grants the broker the right to collect a commission if the property is sold during the listing period no matter who actually brings the buyer to the transaction is known as
A. Exclusive right to sell
B. Exclusive-Agency
C. Net Listing
D. Open Listing

Answer is A. Exclusive right to sell

3. The process of converting an income stream into a lump sum estimate of present value is known as
A. Depreciation
B. Capitalization
C. Confirmation
D. Gross Rent Multiplier

Answer is B- Capitalization

1. An analogous term for the prescriptive appraisal process, that systematic process that appraisers are taught to follow when valuing real estate is known as heuristics.
Answer: False- Known as Normative appraisal process

2. A specific value an income-producing asset has to a particular investor or potential investor is known as anchoring.
Answer: False- known as investment value

3. The problem solving heuristic characterized by giving greatest weight to the most recently encountered evidence for example when considering a series of comparable sales is known as recency.
Answer: True

4. The broker who has entered into an agency agreement to market and sell property on behalf it is owner is known as the selling broker.
Answer: False- Known as listing broker

5. Value in use originates from the worth or utility that a property has for a particular individual who uses it.
Answer: True