Chapter 13 Consuming Activity

by Mario Jauregui

True or False

Mortgage payments are structured to pay down the debt over time and automatically build up equity.

T

True or False

With an interest-only mortgage there is no periodic amortization and the loan is paid off at maturity with a single payment called a balloon payment.

T

Multiple Choice

A mortgage product designed to meet the needs of elderly homeowners by providing an annuity or line of credit secured by a mortgage to be paid off when the house is sold or refinanced or the estate probated.

(A) Negative Amortization

(B) Revers Annuity Mortgage (RAM)

(C) Adjustable Rate Mortgage

(D) None of the Above

B

Multiple Choice

This is a variable rate payment that is not specifically designed to help the young first time home owner, it was designed to help the lender cope with purchasing power losses due to inflation.

(A) Annual Percentage Rate (APR)

(B) Adjustable Rate Mortgage (ARM)

(C) Negative Amortization

(D) Non of the above

B

True or False

Origination fees are charged to cover the lender’s costs of processing the application of the loan.

T

True or False

Negative amortization happens when the principal of the loan is reduced over time.

F: The principal of the loan actually increases due to the periodic payments being less for the period and the shortfall is then added to the principal

Multiple Choice

Lender’s true yield once points and other fees are considered. It is the lender’s IRR assuming the borrower holds the loan to maturity.

(A) Points

(B) Investment Value

(C) Graduated Payment Mortgage ( GPM)

(D) Annual Percentage Rate (APR)

D

True or False

Points are loan charges to lessen the lender’s effective rate of return. Also known as discount points.

F: These charges actually BOOST the lender’s effective rate of return

Chapter 12 Professional Activity

by Mario Jauregui 

True or False

Depreciation is when a decrease in value suffered by a property because of a diminished ability to serve the needs of its users and potential users typically due to age or functional disutility.

T

True or False

Income approach is one of the 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.

F: Cost Approach fits the description above.

Multiple Choice

The process of converting an income stream into a lump sum estimate of present value.

(A) Dual Agency

(B) Descriptive Appraisal Process

(C) Most Probable Sales Price

(D) Capitalization

D

Multiple Choice

Who is part of the developer’s team?

(A) Architects

(B) Engineers

(C) Contractors

(D) All of the Above

(E) Non of the above

D

True or False

A descriptive appraisal process is the process that an appraiser actually follows when valuing real property.

T

True or False

Value Estimate via Income Approach = Estimated Gross Monthly Rent x GRM

T

Multiple Choice

An analogous term for the prescriptive appraisal process, that systematic process that appraisers are taught to follow when valuing real estate is a   ________________.

(A) Normative Process

(B) Investment Value

(C) Market Value

(D) Non of the Above

A

True or False

Heuristics is the subconscious mental shortcuts employed by human problem solvers needing to minimize cognitive efforts.

T

Chapter 11 Government Activity

by Mario Jauregui

True or False

Ad valorem value is the assessor’s estimate of a property’s market value for taxation purposes.

T

True or False

Tax Rate = Tax Digest Less Total Exemptions ÷ Budget Amount for Fiscal Year Less Anticipated Fee Collection

F: Tax Rate = Budget Amount for Fiscal Year Less Anticipated Fee Collection ÷ Tax Digest Less Total Exemptions

Multiple Choice

An appeal to a court for zoning relief by a property owner after administrative, legislative, or both types of relief have been denied.

(A) Zoning Variance

(B) Special Use Permit

(C) Administrative Change

(D) Judicial Change

D

Multiple Choice

An ___________________ is a relatively minor exception to zoning for a specific parcel of land.

(A) Legal Nonconforming Use

(B) Conformity

(C) Administrative Change

(D) Zoning

(E) Non of the above

C: Administrative Change

True or False

A conformity is a valuation principle that recognizes that property values are sustained or enhanced when a property conforms to its surrounding.

T

True or False

Property Tax Savings from Exemption = Exemption Amount + Tax Rate

F: Property Tax Savings From Exemption = Exemption Amount x Tax Rate

Multiple Choice

Assessment offices offer times during the year in which property owners can make an  ________________.

(A) Mass Valuation

(B) Assessment Appeal

(C) Ad Valorem Value

(D) All of the Above

B

True or False

An assessment ratio is the ratio of assessed value to the ad valorem market value estimate, generally 40% to 100% of the ad valorem estimate.

T

Gonzalo Manriquez

Fin 180

Student Created Objective Questions

CH 11

1. The most important aspect of our society’s development, and global competitiveness is?

     a) roads

     b) utilities

     c) education

     d) law enforcement

2. Assessment offices often use _____ to conduct valuations, which are not necessarily accurate estimates of current market values.

     a) Ad valorem value

     b) Taxable value

     c) Assessment ratio

     d) Mass Valuation

3. The final steps in property tax administration include,

     a) Billing and collection

     b) Special Assessment

     c) Overview of the process

     d) Exemptions

4. In addition to roads and utilities, government responsibility has expanded to education.

     a) T

     b) F

5. Assessors rarely have time or resources to conduct evaluations using all three traditional approaches to value.

     a) T

     b) F

6. The homestead exemption may be available to temporary and permanent residents. 

     a) T

     b) F

7. Property tax due, is equal to Taxable value times Millage rate.

     a) T

     b) F

8. Zoning is one of the most powerful rights a municipality has to implement in the comprehensive plan.

     a) T

     b) F

Answers: 1) c, 2) d, 3) a, 4) T, 5) T, 6) F, 7) T, 8) T

Invest in Downtown Fresno

How the High Speed Rail will Affect Downtown Fresno

               

                For years now, there has been an ongoing battle between the High-Speed Rail (HSR) authority and its opponents, criticizing the business plan. If the project does eventually go through, the first section will be completed by 2022 and there will be a station right in Downtown Fresno. The question is; should you invest into Downtown Fresno now and capitalize from this opportunity?

                The HSR expects a ridership of 88-117 million people by the year 2030. With Fresno being at the center of California and the center of the High Speed Rail track, a lot of that traffic will go through Fresno.  With a possible spike in tourism and increase in foot traffic in the millions a year, the businesses downtown will be thriving. Downtown Fresno is an area mostly forgotten by most Fresnans today, but that may change when a HSR station is at the center of it creating a hub that will draw everyone towards it.

                Developers are already looking into capitalizing on this opportunity. Big name developers like GranVille Homes have already made moves into Downtown Fresno. Granville, along with a few more developers already started building residential housing in the area. Iron Bird Lofts, Vagabond Lofts, Pacific Southwest, Grande, etc. are just some of the residential loft spaces available to rent. All the residential areas being developed now in Downtown Fresno are catered towards the young and single, or couples with no children market.

                Office space is another area that is being heavily developed in Downtown Fresno. An area in the Downtown Revitalization Movement is to bring businesses downtown. There are over half a dozen different venues that offers office space for rent; Pacific Southwest, The Grande, Bizworks, OfficeBay, etc. These businesses maybe locating downtown to capitalize on the HSR or from other reasons, but there is a movement happening already.

                Residential and commercial areas are being heavily developed in Downtown Fresno with the hopes of the HSR creating a huge spike in land value. It’s still all speculative and too early to say, but the movement is gaining momentum. Get on the bandwagon, or should I say “High Speed Rail,” before it’s too late.

               

http://www.huffingtonpost.com/2012/04/12/california-high-speed-rail-authority_n_1422401.html

http://www.cahighspeedrail.ca.gov/assets/0/152/159/41bf717b-675d-4466-9202-4ae90f7c94d3.pdf

http://www.cahighspeedrail.ca.gov/assets/0/152/302/e1018874-5937-4fdb-bf99-5d53d0d21d63.pdf