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REM 700- Valuation exam 2024/2025 with 100% correct answers $18.99
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REM 700- Valuation exam 2024/2025 with 100% correct answers
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  • REM 700- Valuation

Macroeconomic Effects on Real Estate correct answers- Income levels and distribution amongst households -Property ownership -Rental trends and vacancy rates -New development/redevelopment -Vacant land -Past and future trends in these areas -Inflation and Interest rate -Foreign investment -U...

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  • October 25, 2024
  • 24
  • 2024/2025
  • Exam (elaborations)
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  • REM 700- Valuation
  • REM 700- Valuation

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REM 700- Valuation

Macroeconomic Effects on Real Estate correct answers- Income levels and distribution amongst
households

-Property ownership

-Rental trends and vacancy rates

-New development/redevelopment

-Vacant land

-Past and future trends in these areas

-Inflation and Interest rate

-Foreign investment

-Unemployment and foreclosures



impact of High Unemployment on Real Estate correct answers-Demand for office space may decrease as
companies

downsize

-Consumer spending decreases, which may impact retailers

-Foreclosure increase

~Affects both the demand for renting, and the supply, as some foreclosed homes may be introduced into
the

market as rental property



rate of inflation correct answersincrease in the average level of prices or the

decrease in the value of the money



Consumer Price Index (CPI) correct answers- traces the change in prices for a selected group of
commodities over a specified period

- The two most commonly used indices are:

•CPI for Commercial Rents Services

,•CPI for Wholesale Services



New Rental Rate correct answersNew Rental Rate = (Old Rental Rate ÷ Old CPI) × New CPI



Other Influences on Real Estate Value correct answers- Social Forces

- Governmental Controls and Regulations

- Environmental Conditions

- Technology



Principles of Land Economics correct answersThe study of geographic, environmental, legal, economics
and social aspects of land, which is the primary units of productions



Agents of Production correct answers-Land

-Labor

-Capital

-Entrepreneurship



Factors of value correct answers-Utility (Desirability): the ability to satisfy human wants, needs or desires



-Scarcity: the perceived supply relative to the demand for the item. Scarcity coupled with utility yields
value



-Transferability (Effective Purchasing Power): ability to freely buy, sell, encumber, or dispose of property
in anyway that the owner sees fit



- Anticipation: perception of future benefit



- Demand and Supply: interaction

of forces that creates value is reflected

in the principal of supply and demand

, 18

Physical Characteristics of Real Estate correct answers- Uniqueness: Each piece of land, each

building is a different piece of real estate



- Immobility: It cant be moved from one

place to another



- Indestructibility: It cant be destroyed



Valuation correct answers- Estimation or calculation of a property's worth. It is often the result of the
process of appraisal.



In the context of income producing real estate, there are three types of value correct answers1.Market
value: price the asset would obtain in the

open, combative market



2.Investment value: value of the property according to the specific requirements of the investor



3.Replacement value: eflects the cost at current prices to replace or restore a building to its pre-existing
condition and appearance



What can lead to increased market value? correct answers•Improved market condition

•Short supply

•Inflation

•Change in tax law

•Increased NOI through cost control and rent

increase



What influences investment value? correct answers•Owner's financial strength

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