Ch 1 : Characteristics Of Property And Value
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Influences on real estate value and the legal considerations in appraisal
- 1.
Property is best defined as:
- A.
Real estate
- B.
Real property
- C.
Personal property
- D.
Anything capable of being owned and gained lawfully
Correct Answer
D. Anything capable of being owned and gained lawfullyExplanation
The correct answer is "anything capable of being owned and gained lawfully." This definition encompasses all types of property, including real estate, real property, and personal property. It emphasizes that property is not limited to physical objects, but can also include intangible assets such as intellectual property. Additionally, the mention of being owned and gained lawfully highlights the legal aspect of property ownership, indicating that ownership rights must be acquired through legal means.Rate this question:
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- 2.
Which of these is considered real property?
- A.
Cut timber
- B.
Airspace
- C.
Trade fixtures
- D.
Jewelry
Correct Answer
B. AirspaceExplanation
Airspace is considered real property because it refers to the physical space above a piece of land, including the airspace necessary for the use and enjoyment of the land. It is a valuable asset that can be owned, leased, or sold separately from the land itself. This includes the right to build structures, install utilities, and control the use of the airspace. Cut timber, trade fixtures, and jewelry are not considered real property as they are either personal property or temporary attachments to real property.Rate this question:
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- 3.
Which of the following is not one of the tests of a fixture?
- A.
Method of attachment
- B.
Time of attachment
- C.
Adaptability of the item
- D.
Relationship of the parties
Correct Answer
B. Time of attachmentExplanation
The question is asking for the test of a fixture that is not included in the given options. The tests of a fixture typically include the method of attachment, adaptability of the item, and relationship of the parties involved. However, the time of attachment is not considered as one of the tests of a fixture.Rate this question:
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- 4.
Tenant Bob installs a ceiling fan. Bob informs landlord Pat that he will re-install the old fixture when he moves. Of the five tests of a fixture, this is an example of:
- A.
Intention
- B.
Attachment
- C.
Relationship
- D.
Adaptation
Correct Answer
A. IntentionExplanation
The scenario described in the question highlights the intention of the tenant, Bob, to reinstall the old fixture when he moves out. This demonstrates that Bob has the intention of removing the current fixture and replacing it with the old one, which is one of the tests of a fixture.Rate this question:
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- 5.
In legal terms, _______________ is a general term for various legal rights, which attach to certain types of information, ideas, or other intangibles.
- A.
Intellectual property
- B.
Industrial property
- C.
Chattel fixtures
- D.
Personal property
Correct Answer
A. Intellectual propertyExplanation
Intellectual property is a broad term that encompasses the legal rights associated with intangible assets such as information, ideas, and creative works. It includes copyrights, trademarks, patents, and trade secrets. These rights protect the exclusive ownership and control of these intangible assets, allowing the creators or owners to benefit financially from their creations and prevent others from using or copying them without permission. Industrial property refers specifically to intellectual property rights related to industrial inventions and designs. Chattel fixtures and personal property are not directly related to the concept of legal rights for intangible assets.Rate this question:
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- 6.
The primary difference between condemnation through exercise of the power of eminent domain and condemnation through the exercise of police power is:
- A.
There is no compensation necessary in the exercise of eminent domain.
- B.
There is no payment involved in condemnation under police power.
- C.
One is a power of the public body, and the other is not.
- D.
There is no difference.
Correct Answer
B. There is no payment involved in condemnation under police power.Explanation
The correct answer is "there is no payment involved in condemnation under police power." This is because condemnation through the exercise of eminent domain involves the government taking private property for public use, but the property owner is entitled to fair compensation. On the other hand, condemnation under police power allows the government to regulate or restrict property rights without providing compensation to the owner.Rate this question:
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- 7.
In most cases, when there is a conflict between a public (governmental) restriction on a property and a private deed restriction, which one must be adhered to?
- A.
The public or governmental restriction
- B.
The private deed restrictions
- C.
The one that is most restrictive
- D.
The one that is least restrictive
Correct Answer
C. The one that is most restrictiveExplanation
When there is a conflict between a public (governmental) restriction on a property and a private deed restriction, the one that must be adhered to is the one that is most restrictive. This means that if the public restriction imposes more limitations or regulations than the private deed restriction, the public restriction takes precedence and must be followed. This is because the government has the authority to enact laws and regulations that serve the public interest and can override private agreements or restrictions.Rate this question:
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- 8.
Privately owned real property in most states is subject to real estate taxation. Exempt properties may include:
- A.
Churches.
- B.
Schools.
- C.
Non-profit organizations.
- D.
All of the above.
Correct Answer
D. All of the above.Explanation
Privately owned real property in most states is subject to real estate taxation. This means that individuals or organizations who own real property, such as churches, schools, and non-profit organizations, are usually required to pay taxes on their properties. Therefore, all of the options mentioned (churches, schools, and non-profit organizations) are exempt from real estate taxation.Rate this question:
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- 9.
For an appraiser, value is:
- A.
Always a fact, never an opinion.
- B.
Not a fact, it is a qualified opinion.
- C.
Based on fact and is an unbiased opinion.
- D.
Neither a fact nor an opinion.
Correct Answer
B. Not a fact, it is a qualified opinion.Explanation
An appraiser's value is not a fact, but rather a qualified opinion. Appraisers use their expertise, knowledge, and analysis of relevant data to determine the value of a property or asset. While they rely on factual information such as market trends, comparable sales, and property characteristics, the final value is still subjective and based on the appraiser's judgment. Different appraisers may arrive at slightly different values, highlighting the subjective nature of the appraisal process. Therefore, the value assigned by an appraiser is considered a qualified opinion rather than an absolute fact.Rate this question:
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- 10.
Price is the amount asked, offered, or paid for a property. Once stated, price:
- A.
Must be disclosed publicly.
- B.
Is relevant only to the buyer and seller.
- C.
It a fact, whether it is publicly disclosed or retained in private.
- D.
Is not related to value.
Correct Answer
C. It a fact, whether it is publicly disclosed or retained in private.Explanation
The correct answer is "it is a fact, whether it is publicly disclosed or retained in private." This means that the price of a property is a factual piece of information, regardless of whether it is made known to the public or kept private. The price remains the same and does not change based on its disclosure or non-disclosure.Rate this question:
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- 11.
The value of real property is best measured by:
- A.
Demand, depreciation, scarcity, and utility.
- B.
Cost, demand, transferability, and utility.
- C.
Cost, feasibility, utility, and scarcity.
- D.
Demand, utility, scarcity, and transferability.
Correct Answer
D. Demand, utility, scarcity, and transferability.Explanation
This answer is correct because it includes all the factors that are commonly used to measure the value of real property. Demand refers to the level of interest or desire for the property, utility refers to its usefulness or functionality, scarcity refers to the limited availability of similar properties, and transferability refers to the ease with which ownership rights can be transferred. These four factors are widely recognized as important considerations in determining the value of real property.Rate this question:
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- 12.
The ultimate test of functional utility is:
- A.
Design.
- B.
Marketability.
- C.
Utility.
- D.
Maintenance costs.
Correct Answer
B. Marketability.Explanation
The ultimate test of functional utility is marketability. While design, utility, and maintenance costs are important factors in determining the functionality of a product, marketability is the ultimate test because it assesses whether the product can be successfully sold and accepted by consumers in the market. A product may have a great design, high utility, and low maintenance costs, but if it is not marketable, it will not be successful in the market. Marketability encompasses factors such as demand, competition, pricing, and consumer preferences, which ultimately determine the success or failure of a product in the market.Rate this question:
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- 13.
According to the USPAP, the most probably price that a property should bring in a competitive and open market under all conditions requisite to a fair sale is known as:
- A.
Market value.
- B.
Marketability.
- C.
Market price.
- D.
Market stability.
Correct Answer
A. Market value.Explanation
According to the USPAP (Uniform Standards of Professional Appraisal Practice), the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale is known as market value. This term represents the estimated worth of a property based on factors such as its location, condition, and current market conditions. It is the value that a knowledgeable buyer would be willing to pay and a knowledgeable seller would be willing to accept in an arm's length transaction. Marketability refers to the ease of selling a property, market price refers to the actual price at which a property is sold, and market stability refers to the consistency of market conditions.Rate this question:
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- 14.
A sale that is characterized as an arm's-length transaction is a sale:
- A.
Between related parties.
- B.
In which all involved parties act in their own self-interest.
- C.
In which either the buyer or seller is acting under duress.
- D.
That includes creative financing or sales concessions.
Correct Answer
B. In which all involved parties act in their own self-interest.Explanation
An arm's-length transaction refers to a sale where the parties involved act independently and in their own self-interest. This means that they make decisions based on what is most beneficial for themselves, without any external influence or pressure. It implies that there are no special relationships or conflicts of interest between the buyer and seller, ensuring a fair and unbiased transaction. Therefore, the correct answer is "in which all involved parties act in their own self-interest."Rate this question:
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- 15.
As used in appraisal agreements, investment value is not market value, but is value to a(n):
- A.
Individual.
- B.
Appraiser.
- C.
Assessor.
- D.
Broker.
Correct Answer
A. Individual.Explanation
In appraisal agreements, investment value refers to the value of a property to an individual. It is distinct from market value, which is the value of a property in the open market. Investment value takes into account the specific needs and preferences of a particular individual, such as their financial goals and risk tolerance. Therefore, the correct answer is individual.Rate this question:
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May 16, 2023Quiz Edited by
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Sep 23, 2010Quiz Created by
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