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31 Multiple choice questions

  1. Income approach for an appraisal would be most widely used
    a. on a newly opened subdivision
    b. on commercial and investment property rented by tenants
    c. on property heavily mortgage
    d. on property heavily insured e. none of the above
  2. The rate of return earned by an investor which does not include allowance for capital recovery is __________________.
  3. _____________________ refers to the use an object is put to, the services it renders and wants it satisfies.
  4. ______________________ is a loss in value of a property because of external factors or events.
  5. The following are determinants of value in appraisals of realty, except:

    a. contribution
    b. demand
    c. purchasing value
    d. scarcity
    e. utility
  6. The income approach to value is an application of the principle of:
  7. A person who determines the land value is called a real estate ___________________.
  8. Added value inherent on a lot bounded by two streets.
    a. Cooperate interest
    b. Plottage value
    c. Social value
    d. Joint venture
    e. Corner influence
  9. 10. An appraisal technique in which comparative estimates are made between prices paid in actual transactions and the current listings IS ______________________.
  10. The ratio that expresses the relation between gross income and sales price of a property is ___________________.
  11. The principle holds that when two or more commodities with substantially the same utility are available, the one with the lowest price receives the greatest demands and widest distribution
  12. Several houses valued at P1,000,000.00 and P2,000,000.00 were built in an area where an existing house valued at P3,000,000.00 is located. As a result, the value of the latter decreased. The real estate principle of value that applies to this situation is called the principle of _______________________.
  13. In the cost approach to value, physical deterioration is estimated by the formula:

    a) Economic life divided by chronological age
    b) Chronological life divided by economic life
    c) Economic life divided by effective age
    d) Effective age divided by economic life
  14. The difference between contract price and loanable amount is ____________________.
  15. In the economic sense, ______________ refers to the displacement of the present residents with people of lower economic status or different cultural or social background.
  16. To be considered comparable to the subject property, a comparable property must have been sold
    a. with a conventional mortgage
    b. for all cash
    c. without any form of secondary financing
    d. for credit
    e. in an arm's length transaction
  17. The use of borrowed funds to increase purchasing power is ideally to increase the

    profitability of an investment is ___________________.
  18. The principle of value which states that the value of a property tends to be enhanced when there is reasonable homogeneity in use:
  19. Using the 4-3-2-1 rule (depth rule), a 5 hectare belonging to different owners was sold for P10,000,000.00, what is the share of lot owners owning the first quarter abutting the road? ___________________________.
  20. Which of the following is not essential in the determination of Fair Market Value?

    a. Knowledgeable and prudent seller & buyer
    b. Reasonable exposure of the property in the open market
    c. Assessed Value indicated in the Tax Declaration
    d. Willing seller and willing buyer.
  21. The selling price of a real estate is usually based on its:

    a. Specutative value
    b. Exchange value
    c. Intrinsic value
    d. Market value
    e. None of the above
  22. Which of the following is never considered as a factor in the valuation of a house and lot?

    a. Modification in zoning regulations
    b. Topography of the lot
    c. Conviction of the previous owner on charges of moral turpitude
    d. Functional obsolescence
  23. The study or current supply and demand conditions in a particular area for a specific type of property is ________________.
  24. 21. Three of the following factors create value in real estate. Which one does not create value?

    a. Demand
    b. Utility
    c. Infiltration
    d. Scarcity
  25. ___________ exist when there are more properties for sale in a particular area than there are buyers.
  26. In the computation of depreciation of real properties, the method that is widely used by practitioners is the
  27. ____________________ refers to that use which will yield the maximum return at a given time.
  28. A building is depreciated at 2.5% per year on a straight line basis. What is the estimated useful life of the building? _________
  29. The right of an owner-lessor to receive the contract rent and reversion of the property at the end of the lease is called
  30. The increase in value of real estate without any expense of the owner is:
  31. An appraisal principle which holds that the value of property tends to be enhanced by association with superior properties is: