Exam (elaborations)
REE 4103 Chapter 2_3.
REE 4103 Chapter 2_3.
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REE 4103 Chapter 2/3________ is/are created by the anticipation of benefits to be derived in the future.
Real Estate
Fixtures
Value
Supply - ANS-Value
____________________ 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
A buyer invests in a small strip mall because she believes the property will net $25,000
per year. This is an example of
Substitution
Competition
Anticipation
Change - ANS-Anticipation
A good's capacity to satisfy human desires or needs is known as
Creative demand
Functional obsolescence
Utility
Effective demand - ANS-Utility
A new two-family home is constructed in a neighborhood of new, three-family homes on
a lot that could support a three-family home. Market research and the application of the
sales comparison approach to value indicate an appraised value significantly lower than
the sum of the land and building costs. What principle of value was violated?
Externalities
Balance
Anticipation
substitution - ANS-Balance
A one-unit home owner who builds a new and unique structure will commonly find that
Properties that do not conform to the popular designs will sell for more.
, The structures' uniqueness will cause the market to like it and pay more for it.
Generally, fewer people desire unique structures.
The market will pay as much for this property as any other because of its unique
nature. - ANS-Generally, fewer people desire unique structures.
A park that has just been built in your neighborhood would generally be considered a
....?
Positive Contribution
Negative Contribution
Negative Externality
Positive Externality - ANS-Positive Externality
A purchaser's wish for an item to satisfy human needs or individual wants beyond
essential life-support needs.
Scarcity
Utility
Desire
Effective purchasing power - ANS-Desire
All of the following are factors of value except:
Effective marketing power
Desire
Scarcity
Utility - ANS-Effective marketing power
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
Demand for real estate is least affected by which of the following?
Increasing population and employment
Availability of labor
Increases in purchasing power
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