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Texas Principles of Real Estate II questions with actual answers.
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Texas Principles of Real Estate II questions with actual answers.
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Texas Principles of Real Estate IIquestions with actual answers.
Mixed Numbers ANS -A number containing both a whole number and a fraction (examples: 1⅓; 9⅞)
Improper Fractions ANS -a fraction with its numerator equal to or greater than its denominator
Commission Calculation ANS -Sales price X rate of commission = total commission
Solving for the Commission Rate ANS -Commission Rate = Commission ÷ Price
Solving for the Property's Price ANS -Price = Commission ÷ Commission Rate
Profit ANS -Profit (or Loss) = Selling price - Original cost
Profit Percentage ANS -Percentage of profit = Profit ÷ Original cost
Profit Margin ANS -Profit margin = Profit ÷ Selling price
Interest ANS -the price paid for the use of borrowed money
3 types of interest calculations ANS -Simple interest, add-on interest, and compound interest
Simple interest ANS -Interest = principal x rate x time
Add-on interest ANS -loan amount x contracted interest rate x number of payments
Add-on interest APR ANS -APR = 2 x number of payment periods in one year x total financing charges ÷
(principal, or amount borrowed x (number of scheduled payments +1)
,Compound interest ANS -interest which is computed on the principal amount plus the accrued interest.
Compound Interest Formula ANS -Compound amount = Initial deposit (1 + Interest rate)n
Points ANS -a one-time service charge to the borrower for making the loan
Two types of points ANS -origination fee and discount points
Loan-to-Value Ratio (LTV) ANS -expresses the relationship between a property's purchase price and its
loan amount.
Loan-to-Value formula ANS -LTV ratio = (Loan amount ÷ Value)
Area of a rectangle ANS -Area = length x width
Area of a square ANS -Area = side x side
Area of a triangle ANS -Area = ½ base x height
Perimeter ANS -a lot or other shape is the sum of the length of all its sides.
Acre ANS -A measure of land equal to 43,560 square feet.
Hectare ANS -is equal to 10,000 square meters or approximately 2.47 acres.
To convert acres to hectares ANS -divide the total acres by 2.47
,Appraisal ANS -is an unbiased estimate of the nature, quality, value or utility of an interest in or aspect
of identified real estate and related personalty as of a certain date.
Specific data ANS -This is information and details about the subject property, as well as data (used for
comparison) about comparable properties' costs, income and expenses, sales and other relevant
information
General data ANS -This is information about the property's location - its country, region, city, and, most
importantly, its neighborhood
Steps in Appraisal Process ANS -1. Define problem and scope of work
2. Collect, record, and verify the required data
3. Determine the property's highest and best use
4. Estimate the land value
5. Use ALL THREE approaches to estimate value
6. Reconcile the estimated values to determine the final value estimate
7. Communicate the final value estimate
Highest and Best Use ANS -Legally permissible
Physically possible
Financially feasible
Maximally productive
Describe the difference between specific and general data ANS -Specific data is information and details
about the subject property and the comparables.
General data is information about the property's location - its country, region, city, and neighborhood.
Direct sales comparison ANS -sales of comparable vacant parcels are analyzed and adjusted to indicate a
value for the subject land
, Allocation ANS -a typical ratio of land value to total value is derived from comparable properties and
applied to the subject
Extraction ANS -land value is estimated by deducting the depreciated cost of improvements on a
property from the total sale price of the property.
Subdivision development analysis ANS -costs and profit are deducted from estimated gross sale prices of
subdivided and finished lots, and net sales proceeds are discounted to present value
Land residual ANS -net operating income attributable to the land is capitalized at market rates to obtain
land value
Ground rent capitalization ANS -ground rent of subject is capitalized at market rates
In the cost approach to value ANS -the appraiser estimates a property's value by adding the land value
to the depreciated value of any improvements to the property
The income approach ANS -(sometimes called the "income capitalization approach") is used by
appraisers who need to value commercial and investment properties
In the sales comparison approach ANS -an appraiser examines the price (or price per unit area) of similar
properties recently sold or currently being sold in the marketplace to come up with comparable value
assessments
In the reconciliation step ANS -the appraiser looks at each approach to value and all the data used to
determine
Communicating the Appraisal ANS -1. Short- or Long-Form Narrative Reports
2. Reports
3. Letter or Oral Reports
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