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REE 4103 EXAM QUESTIONS with Correct Answers| Verified
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REE 4103 EXAM QUESTIONS with Correct Answers| Verified
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REE 4103 EXAM QUESTIONS with CorrectAnswers| Verified
When does an appraiser need to describe the source of information and verification of lease
terms? - ANSWER Scope of work
Free rent for a specified period of time that does not appear in a lease agreement is called? -
ANSWER Rent concessions
Any required adjustments in the division of expenses in comparable properties should -
ANSWER Reflect the same lease terms and divisions of expenses as the subject property
If a renewable lease option were found to be favorable to a tenant an appraiser: - ANSWER
Should note that in the appraisal report, and the appraiser may be justified, concluding that
the tenant would exercise the option to renew
A lease clause that limits the expenses of the landlord is termed a: - ANSWER Expense Clause
(Expense Stop)
If a tenants sales do not reach a certain level, they may cancel their lease if they have what type
of clause? - ANSWER Kick-out or escape clause
, Stabilized Net Operating Income should recognize the tenant improvements made to a
property that are appropriate for the market. - ANSWER True
A tenant who has an Exclusive Use Clause with a landlord, where the landlord later allows a
competing tenant in the same shopping center may - ANSWER Exercise the clause in a lawsuit
General payroll expenses - ANSWER operating expenses (variable expenses)
The definition of market value assumes financing terms - ANSWER Compatible with those
found in the market
All the following are excluded from the reconstructed operating statement except - ANSWER
Excluded: Mortgage loan interest payments, Book depreciation, Business tax, Capital
costs/improvements
Included: Management charges, Fixed -- taxes & insurance, Variable - management & utilities
& maintenance, Replacement Allowance - exterior paint & kitchen/bathroom equipment &
carpeting/roof, Advertising expenses
All of the following lease provisions are advantageous to the lessee except - ANSWER
Escalation Clause
Consider a property with potential gross income of $[x], effective gross income of $[y], and
operating expenses of $[z]. What is the net operating income? - ANSWER Consider a property
with potential gross income of $25,000, effective gross income of $22,500, and operating
expenses of $10,000. What is the net operating income? 12,500
Effective Gross Income - op. ex. = NOI
Potential gross income includes - ANSWER Scheduled Rent
What is the value of a property with a net operating income of $[x], and a capitalization rate
of [y]? - ANSWER Let's say your comparable sold for $250,000. You've determined that the
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