Chapter 12 Questions

Chapter 12 Questions
By Michael McMinassian

1.     Depreciation in context to the appraiser is the a decrease in value suffered by a property because of diminished ability to serve the needs of its users.

2.     The Capitalization is the process of converting an income stream into a lump sum estimate of present value.

3.     Anchoring is a problem solving method that you make to tell an appraiser early about a reference point of the property value.

4.     A dual agency is when an agency exists when a broker represents both the buyer and the seller of a transaction.

5.     A buyer’s broker is a real estate broker representing the seller in a agent principle fiduciary capacity.

6.     The ___________is a value ratio calculated from historic sales as the sales price divided by monthly generated rent and is similar to the gross income multiplier.

a.     Gross Rent Multiplier

b.     Net Operating Income

c.      Adverse Rent Multiplier

d.     Capitalization Rate

7.     These approach is justified in paying more for a property than the cost of buying a similar site and constructing replacement improvements.

a.     Cost Approach

b.     Sales comparison Approach

c.      Income Approach

d.     Depreciation Approach

8.     This means the value is derived from the attractiveness of a property to others who would be willing to trade other assets such as money, to obtain the rights to it.

a.     Value in exchange

b.     Value in use

c.      Value by sense

d.     Value

Key
1.T
2.T
3.T
4.T
5.F
6.A
7.A
8.A