Exam (elaborations)
REE 4103 Chapter 2_3 (1).
REE 4103 Chapter 2_3 (1).
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REE 4103 Chapter 2/3what is the result of the cause and effect relationship among the forces that influence
real property value
Anticipation
Utility
Balance
Change - ANS-change
The amount a particular purchaser agrees to pay and a particular seller agrees to
accept in a transaction is the:
Price
Cost
Value
Assessment - ANS-Price
____________________ is fundamental to the dynamics of supply and demand in a
free-enterprise, profit-maximizing economic system:
Monopolies
Price controls
Price-fixing
Competition - ANS-Competition
Two homes in the same addition have the same size, location, amenities, and features.
One is priced at $100,000, and the other is priced at $110,000. Which of the following
statements is the most accurate?
The lower-priced home will get fewer showings.
The lower-priced home will attract more demand
The lower-priced home will require a longer marketing time.
The lower-priced home will always sell for more than the full list price. - ANS-The
lower-priced home will attract more demand
In real estate economic _____________ is achieved when the combination of land and
improvements is optimal - i.e., when no marginal benefit or utility is achieved by adding
another unit of capital..
Completion
Return
Diminished returns
Balance - ANS-Balance
, Theory that when several similar or commensurate commodities, goods, or services are
available, the one with the lowest price attracts the greatest demand and widest
distribution.:
Balance
Demand
Substitution
Externalities - ANS-Substitution
The overproduction of new homes
Causes prices to increase
Causes increases in demand
Causes oversupply and lower prices
Causes the market to move toward a state of equilibrium - ANS-Causes oversupply
and lower prices
Which of the following theories state that value is created and sustained when the type
of property is in sync with its surroundings
Balance
Externalities
Demand
Contribution - ANS-Balance
An appraiser gathers market data from a neighborhood where new, high-rise apartment
buildings are replacing older, small, multifamily residences. The appraiser uses this data
to reflect the value of small, multifamily residences in a stable neighborhood. The
appraisal is rejected by a local bank on the grounds that it is unreliable. (Appraiser took
info from transitional neighborhood to get stable neighborhood value estimate). What
principle(s) of value was violated?
Anticipation
Substitution and anticipation
Substitution
Supply and demand - ANS-Substitution and anticipation
In residential rental property value is created by anticipation of:
Good quality schools
The value of the income in the future and the future sale of the property
Market appreciation
Benefits of possession and future sale of the property - ANS-The value of the income in
the future and the future sale of the property
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