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203 True/False questions

  1. opportunity costsomething added or attached to a property that becomes an inherent part of the property, usually passes with the property when the title is transferred

          

  2. appurtenanceamount asked, offered, or paid for a property

          

  3. littoral rightsthe right to undisturbed use and control of designated air space above a specific land area

          

  4. population (universe)a. legal contract that permits but does not require the holder of the option (optionee) to buy, sell, or lease the property for a said period of time
    b. an agreement to make a contract

          

  5. effective datethe date of the value opinion

          

  6. sectioneach equals about one mile square, where each township is divided

          

  7. equitythe cash an individual or entity places into an investment

          

  8. intended userthe client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report

          

  9. transitiona. the interaction of supply and demand
    b. moderate profits attract healthy competition

          

  10. encroachmentlien that binds all assets of individual debtor(their property) to the lien

          

  11. real estatea. physical raw land and all things that are a natural part of the land, including appurtenances
    b. when attached to land, improvements become real estate

          

  12. gov't and legal forcesinvolve control and regulations

          

  13. sufficient diligencean appraiser must

    1. correctly employ recognized methods
    2. not make a substantial error or omission that effects an appraisal
    3. not render appraisal services in a careless manner

          

  14. encumbrancea claim or liability that affect or limits the title to a property

          

  15. lienaka an average

          

  16. net leasea. measures that include direction and distance.
    b. all intermediate points of a parcel of land

          

  17. appraiserhorizontal row of townships

          

  18. surface rightsrights above land (air rights), including...
    1. right to construct buildings in air space
    2. right to control/view solar access
    3. right to lease or sell these rights

          

  19. personal propertya valuation service performed by an individual acting as an appraiser

          

  20. zoning ordinancelocal laws that implement comprehensive plan and provide regulation and control of land and structures within a district

          

  21. hypothetical conditiona. generally presents a "what if" scenario
    b. a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used in for the purpose of analysis

          

  22. principal meridiansrun north and south

          

  23. contractlegally binding agreement between two or more parties that represents their promise to do or not do a particular thing

          

  24. common elementsa financial payment, special benefit, or non-realty item included in the sale contract or rental agreement as an incentive

          

  25. life estatea. agreement granting privilege to use property
    b. not an estate or interest in land
    c. not assignable, cant be sold
    d. personal agreement granted for specific time

          

  26. leasehold estatecharacteristics...
    1. possessory
    2. defined period of time or specified conditions
    3. possessory rights revert back to owner

          

  27. intended usethe use of an appraiser's reported appraisal, appraisal review, or appraisal consulting assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment

          

  28. estate in landthe degree, nature, or extent of interest that a person has in land

          

  29. land contracta. a purchaser of real estate agrees to pay a portion of the purchase price when the contract is signed
    b. primarily protects the seller's interest in unpaid balance

          

  30. landprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  31. surplus landland not needed to serve or support the existing improvement, and may be sold separately

          

  32. rangevertical column of townships

          

  33. surface rights - water rightspertain to properties touching a river or stream (flowing water), with emphasis on use of the flowing water

          

  34. testatecondition of dying with a will

          

  35. ad valorem taxproperty taxation based on the value of a property

          

  36. specific lienlien that is levied or attached to a specific piece of property

          

  37. priceplays a significant role in how investments compete against each other

          

  38. medianmiddle number of a set

          

  39. compound interestinterest earned on the original investment amount and on previously earned interest

          

  40. intestatecondition of dying without leaving a valid will

          

  41. buffer strup (buffer zone)a. the central bank of the U.S. acting to provide the U.S. with a safe, flexible, and stable financial system

          

  42. agents of productionlien that binds all assets of individual debtor(their property) to the lien

          

  43. balanceprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  44. scarcitya contract providing for regular payments of predictable amounts (monthly, quarterly, annually)

          

  45. identification of the problemthe first step of valuation process, which includes six elements

    1. client and any other intended user
    2. intended use
    3. type and definition value (a.k.a. purpose)
    4. effective date
    5. subject of assignment and characteristics
    6. assignment conditions

          

  46. land trustthe distance, in time and cost, to get to and from certain public buildings

          

  47. option contacta. legal contract that permits but does not require the holder of the option (optionee) to buy, sell, or lease the property for a said period of time
    b. an agreement to make a contract

          

  48. districtlegally binding agreement between two or more parties that represents their promise to do or not do a particular thing

          

  49. riparian rightsthe right to undisturbed use and control of designated air space above a specific land area

          

  50. use valuemonetary relationship between properties and those who buy, sell, or use those properties

          

  51. subsurface rightsrights below land, including
    1. right to use and profit of underground property
    2. extraction of minerals
    3. construction of tunnels, subways , sewers, basements
    4. solid mineral rights
    5. oil and gas rights

          

  52. AOP - laborthe cost of overall development, which includes project coordination and supervision

          

  53. externalitiesa. principle that economies outside a property have a positive effect on its value
    b. two types: positive and negative

          

  54. present value of $1a compound interest factor that indicates how much $1 due in the future is worth today

          

  55. tiera written, legal instrument that conveys an estate or interest in real property to someone else

          

  56. real estate marketa. physical raw land and all things that are a natural part of the land, including appurtenances
    b. when attached to land, improvements become real estate

          

  57. mortgagea loan secured by the collateral of some specified real property, which obliges a borrower to pay

          

  58. highest and best usevalue of a property interest to a particular investor based on their specific requirements

          

  59. voluntary liencreated by law rather than choice. property tax lien is example

          

  60. joint tenancyhaving adequate ability to perform an assignment and produce credible results

          

  61. effective purchasing powerdifference between highest value and lowest value in a data set

          

  62. tenancy by the entirety2 or more people own a property, assumed to be equally divided among the two

          

  63. gentrificationprocess of community change in which middle- and upper- income persons purchase properties in a neighborhood and renovate or rehabilitate them, causing property values to rise and often displacing poorer residents

          

  64. rectangular (gov't survey)focus on changes in demographics, social trends, and attitudes

          

  65. real estate investment trust (REIT)buyers and sellers of a particular real estate and the transactions that occur among them

          

  66. junior liensecond or third mortgage tier lien that comes behind the first mortgage in lien priority

          

  67. point of beginning(POB)right of survivorship; ownership is passed to surviving tenant

          

  68. AOP - entrepreneurial coordinationthe act or process of developing an analysis, recommendation, or opinion to solve a problem, where an opinion of value is a component of the analysis leading to the assignment results

          

  69. metes and boundsa. a clause found in legal instruments and conveyances that creates a new right or interest on behalf of the grantor.
    b. may include mineral rights, rental income, or easements.

          

  70. leased fee interestinterest in each period is calculated based on the original deposit or investment, and it doesn't compound

          

  71. easement appurtenanta. has both dominant and servient estates
    b. passes with title to dominant estate

          

  72. gross leasethe tenant pays all operating expenses

          

  73. adverse possessioninvoluntary transfer of property that where a party makes a property claim by taking possession over a period of years and the owner fails to contest the possession

          

  74. emblementsa. a charge against property in which the property is the security for payment of the debt
    b. types
    1. general lien
    2. specific lien

          

  75. freehold estatecharacteristics...
    1. present or future possession
    2. indeterminate duration
    3. ownership

    types:
    1. fee simple estate
    2. life estate

          

  76. escheatwhen a property owner dies with no heir, it is turned over to the state

          

  77. appraisalthe act or process of developing an opinion of value

          

  78. partial interestsinterest earned on the original investment amount and on previously earned interest

          

  79. quitclaim deedaddresses potential issues a claim might get from a particular party, used to clear a defect in the title.

          

  80. math - rangedifference between highest value and lowest value in a data set

          

  81. testamentary trustestablished by will of property owner after their death

          

  82. exchange valuecondition of dying without leaving a valid will

          

  83. AOP - capitalequipment (machinery and tools) and buildings and infrastructure that can produce other goods

          

  84. easementthe right to use another's land for a stated purpose

          

  85. discountingconversion of benefits received in the future to present value

          

  86. cash flowa. tells us where money flows over time
    b. money deposited is negative, money withdraw is positive

          

  87. fixturesarticle that was once personal property but has been attached to the land or building and has become part of the real estate

          

  88. going-concernfocus on changes in demographics, social trends, and attitudes

          

  89. riskplays a significant role in how investments compete against each other

          

  90. range linesprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  91. boundsa. terminal points that can be landmarks or monuments.
    b. courses or angular direction between each point

          

  92. variablemathematical object that changes

          

  93. legally nonconforming2 or more people own a property, assumed to be equally divided among the two

          

  94. remaindermana future interest held by someone other than the grantor entitling a remainderman to an estate after a prior estate or interest has expired

          

  95. life cycle of a neighborhood4 stages:

    1. growth
    2. stability
    3. decline
    4. revitilization

          

  96. changeprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  97. air rightsthe right to undisturbed use and control of designated air space above a specific land area

          

  98. seller-paid points (discount points)net income that remains after the costs of various agents of production have been paid

          

  99. arrayin terms of finding the mode, the numbers must first be arranged in ascending or descending order

          

  100. fee simple defeasiblea. most complete form of ownership
    b. unlimied duration
    3. only government can possess

          

  101. meana. where the interaction of supply and demand takes place
    b. gathering of people for the buying and selling of things

          

  102. trade fixturesarticle that was once personal property but has been attached to the land or building and has become part of the real estate

          

  103. appraisal reviewthe act or process of developing and communicating an opinion about another appraiser's work

          

  104. competencyhaving adequate ability to perform an assignment and produce credible results

          

  105. planned unit development(PUD)...

          

  106. deed restrictiona. the interaction of supply and demand
    b. moderate profits attract healthy competition

          

  107. marketa. where the interaction of supply and demand takes place
    b. gathering of people for the buying and selling of things

          

  108. debtthe money an individual or entity has borrowed

          

  109. licenseresult of the cause and effect relationship among forces that influence real property value

          

  110. utilitythe cash an individual or entity places into an investment

          

  111. neighborhoodpurchaser's wish for an item to satisfy their needs or their wants beyond essential things

          

  112. valuation servicesprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  113. market equilibriumgenerally, liens follow priority order based on when they were created

          

  114. reservationprocess by which gov't takes away privately held land for public use

          

  115. capital marketlien that binds all assets of individual debtor(their property) to the lien

          

  116. money marketa. where the interaction of supply and demand takes place
    b. gathering of people for the buying and selling of things

          

  117. metescombination of all elements that constitute proof of ownership

          

  118. ownership in severaltysole ownership by individual or entity where owner has no restrictions on how the property is sold to another party

          

  119. inflationerosion of the purchasing power of currency characterized by price escalation and an increase in the volume of money

          

  120. spot zoninga. exception to general zoning regulations
    b. permits specific, small parcels of land to be zoned for use not permitted to surrounding area

          

  121. condemnationprocess by which gov't takes away privately held land for public use

          

  122. improvementany permanent structure on real property, or any work on the property which increases its value

          

  123. AOP - landcost of acquiring raw land begins process of adding value to real estate

          

  124. highest and best use as though vacantbuyers and sellers of a particular real estate and the transactions that occur among them

          

  125. annuitythe cash an individual or entity places into an investment

          

  126. fair valuea loan secured by the collateral of some specified real property, which obliges a borrower to pay

          

  127. syndicationprivate or public partnership that pools funds for acquiring and developing real estate projects

          

  128. highest and best use as though improved4 stages:

    1. growth
    2. stability
    3. decline
    4. revitilization

          

  129. remainder interesta future interest held by someone other than the grantor entitling a remainderman to an estate after a prior estate or interest has expired

          

  130. contributionconcept that value of a particular component is measured in terms of the amount it adds to the value of the whole property or how much it would decrease the value if it did not exist

          

  131. liquiditythe cash an individual or entity places into an investment

          

  132. most probable pricemarket value is expressed as this, these three words must be present in the definition of market value

          

  133. general liena. a clause found in legal instruments and conveyances that creates a new right or interest on behalf of the grantor.
    b. may include mineral rights, rental income, or easements.

          

  134. involuntary liencreated by law rather than choice. property tax lien is example

          

  135. lien priorityprinciple that real property value is created and sustained when the characteristics of a property conform to the demands of its market

          

  136. earnest moneya good faith deposit made by a purchaser as a consideration component of a binding contract

          

  137. concessionsprinciple of conformity that states that the value of a superior property is adversely affected by association with an inferior property of the same type

          

  138. fee simple absolutea. most complete form of ownership
    b. unlimied duration
    3. only government can possess

          

  139. assessed valuevalue of a property according to tax rolls in ad valorem taxation

          

  140. insurable valuea. presumes the transfer of property rights
    b. rights conveyed are not identified in market value definition, appraiser must identify ownership rights in the appraisal

          

  141. regressionprinciple of conformity that states that the value of a superior property is adversely affected by association with an inferior property of the same type

          

  142. arm's length transactiona valuation service performed by an individual acting as an appraiser

          

  143. township linesa. lines that run east and west at 6-mile intercals north and south of a baseline
    b. form north and south bounds of townships

          

  144. general warranty deeda. the central bank of the U.S. acting to provide the U.S. with a safe, flexible, and stable financial system

          

  145. superfund lawa. land areas that are not divided into quarters of a quarter due to size or location
    b. usually lie along n. and w. borders of township and edges of rivers

          

  146. zoning varianceused to authorize property for modification outside normal zoning for property

          

  147. ethical practiceappraiser's obligation to

    1. protect public trust
    2. develop work that is meaningful and not misleading
    3. when acting as appraiser, must perform ethical and competent assignments

          

  148. titleamount asked, offered, or paid for a property

          

  149. anticipationperception that value is created by expectation of benefits to be derived in the future

          

  150. valuea. a charge against property in which the property is the security for payment of the debt
    b. types
    1. general lien
    2. specific lien

          

  151. consistent useconcept that land can't be valued on the basis of one use while the improvements are valued on the basis of another

          

  152. costa. real estate is transferred to another person to manage for benefit of a third party
    b. players are trustor, trustee, and beneficiary
    c. types of trusts
    1. living
    2. testamentary
    3. land

          

  153. appraisal consultingthe act or process of developing an analysis, recommendation, or opinion to solve a problem, where an opinion of value is a component of the analysis leading to the assignment results

          

  154. competitionconcept that value of a particular component is measured in terms of the amount it adds to the value of the whole property or how much it would decrease the value if it did not exist

          

  155. surplus productivitynet income that remains after the costs of various agents of production have been paid

          

  156. deeda written, legal instrument that conveys an estate or interest in real property to someone else

          

  157. police powerthe market value of all tangible and in-tangible assets of an established and operating business

          

  158. supply and demandthe price of a real property varies directly, but not necessarily proportionately, with demand and inversely, but not nec. proportionately, with supply

          

  159. modemost frequently occurring number

          

  160. co-ownershipa. property is held by two or more people and has four types...
    1. tenancy in common
    2. join tenancy
    3. tenancy by the entirety
    4. community property

          

  161. sales contractwritten document signed by a byer and seller who agree to the transfer of ownership interests in real estate

          

  162. social forcesprinciple that real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium

          

  163. simple interestinterest in each period is calculated based on the original deposit or investment, and it doesn't compound

          

  164. interim usethe client and any other party as identified, by name or type, as users of the appraisal, appraisal review, or appraisal consulting report

          

  165. cash equivalencyan analytical process in which the sale price of a transaction with nonmarket financing is converted into a price expressed in cash terms

          

  166. cooperative ownershipa. a cooperation that owns the real estate and offers shares to prospective tenants
    b. operating expenses, mortgage payments, insurance and taxes are paid by coop budget

          

  167. substitutionconcept that value of a particular component is measured in terms of the amount it adds to the value of the whole property or how much it would decrease the value if it did not exist

          

  168. rate or returnsecond or third mortgage tier lien that comes behind the first mortgage in lien priority

          

  169. desirea. total dollar expenditure to develop an improvement
    b. a fact

          

  170. progressionprinciple of conformity that states that value of an inferior property is enhanced by association with better properties of the same type

          

  171. trusta. real estate is transferred to another person to manage for benefit of a third party
    b. players are trustor, trustee, and beneficiary
    c. types of trusts
    1. living
    2. testamentary
    3. land

          

  172. Federal Reservecharacteristics...
    1. present or future possession
    2. indeterminate duration
    3. ownership

    types:
    1. fee simple estate
    2. life estate

          

  173. increasing and decreasing returnssuccessive increments of one or more agents of production added to other agents will enhance income at an increasing rate until a max return is reached. then, income will decrease until increment of value becomes less than added agents of production

          

  174. purpose of an appraisalthe objective of an assignment, to develop an opinion defined value of any real property interest

          

  175. investment valuecondition of dying without leaving a valid will

          

  176. government lotsa. land areas that are not divided into quarters of a quarter due to size or location
    b. usually lie along n. and w. borders of township and edges of rivers

          

  177. exposure timea loan secured by the collateral of some specified real property, which obliges a borrower to pay

          

  178. lot and block (recorded plat)system that refers to parcels' lot and block numbers, which appear on recorded maps and plats of subdivided land

          

  179. economic forcespertain to circumstances and trends that affect supply and demand

          

  180. baselinesthe right to use another's land for a stated purpose

          

  181. appraisal practicea valuation service performed by an individual acting as an appraiser

          

  182. extraordinary assumptiona. principle that economies outside a property have a positive effect on its value
    b. two types: positive and negative

          

  183. townshipa. area between two township lines and two range lines
    b. contains 36 sections of 640 acres each

          

  184. time value of moneya good faith deposit made by a purchaser as a consideration component of a binding contract

          

  185. living trusta. real estate is transferred to another person to manage for benefit of a third party
    b. players are trustor, trustee, and beneficiary
    c. types of trusts
    1. living
    2. testamentary
    3. land

          

  186. real propertya. where the interaction of supply and demand takes place
    b. gathering of people for the buying and selling of things

          

  187. condo ownershiptotal range of ownership interests in real property. the most complete form of ownership.

    include:

    1. possession
    2. transfer
    3. lease
    4. mortgage
    5. improve

          

  188. easement in grossa. benefits a legal person or entity and not a particular tract of land
    b. has a servient but no dominant estate

          

  189. marketing timecreated by agreement while property owner is alive

          

  190. special assessmentdivided or undivided rights in real estate that represent less than the whole interest

          

  191. bundle of rightstotal range of ownership interests in real property. the most complete form of ownership.

    include:

    1. possession
    2. transfer
    3. lease
    4. mortgage
    5. improve

          

  192. environmental and geographic forcesinvolve the environmental surroundings, both natural and man-made

          

  193. suprasurface rightstotal range of ownership interests in real property. the most complete form of ownership.

    include:

    1. possession
    2. transfer
    3. lease
    4. mortgage
    5. improve

          

  194. sinking fund factorthe compound interest factor that indicates the amount per period that will grow, with compound interest, to $1

          

  195. market areapurchaser's wish for an item to satisfy their needs or their wants beyond essential things

          

  196. value in usevalue of a property assuming a specific use, which may or may not be the property's highest and best use on the effective date of the appraisal.

          

  197. excess landland not needed to serve or support the existing improvement, and may be sold separately

          

  198. public trust...

          

  199. conformityprinciple that real property value is created and sustained when the characteristics of a property conform to the demands of its market

          

  200. linkagesplays a significant role in how investments compete against each other

          

  201. scope of workland not currently needed to support the existing improvement but can't be separated from the property and sold off

          

  202. four forces that influence valuevalue of a property interest to a particular investor based on their specific requirements

          

  203. tenancy in common2 or more people own a property, assumed to be equally divided among the two