Urban Exam - Appraisal

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A building is depreciated at 2.5% per year on a straight line basis.
40 years
What is the estimated useful life of the building?
In the economic sense, ______________ refers to the displace-
Infiltration ment of the present residents with people of lower economic status
or different cultural or social background.
A person who determines the land value is called a real estate
APPRAISER
__________________
The rate of return earned by an investor which does not include
INTEREST RATE
allowance for capital recovery is __________________.
5. In the cost approach to value, physical deterioration is estimated
by the formula:

EFFECTIVE AGE DIVIDED BY ECONOMIC LIFE (a. Economic life divided by chronological age
b. Chronological life divided by economic life
c. Economic life divided by effective age
d. Effective age divided by economic life)
Using the 4-3-2-1 rule (depth rule), a 5 hectare belonging to
different owners was sold for P10,000,000, what is the share of
P4,000,000
lot
owners owning the first quarter abutting the road? ____________
The following are determinants of value in appraisals of realty,
except:

(a. contribution
CONTRIBUTION
b. demand
c. purchasing value
d. scarcity
e. utility)
The principle of value which states that the value of a property
Principle of conformity tends to be enhanced when there is reasonable homogeneity in
use:
The use of borrowed funds to increase purchasing power is ideally
Leverage
to increase the profitability of an investment
An appraisal technique in which comparative estimates are made
MARKET APPROACH
between prices paid in actual transactions and the current listings
The right of an owner-lessor to receive the contract rent and
Lease fee estate
reversion of the property at the end of the lease
The ratio that expresses the relation between gross income and
GROSS INCOME MULTIPLIER
sales price of a property
Income approach for an appraisal would be most widely used

(a. on a newly opened subdivision

On commercial and investment property rented by tenants b. on commercial and investment property rented by tenants
c. on property heavily mortgage
d. on property heavily insured
e. none of the above)
Anticipation The income approach to value is an application of the principle of:
The principle holds that when two or more commodities with
PRINCIPLE OF COMPETITION substantially the same utility are available, the one with the lowest
price receives the greatest demands and widest distribution
In the computation of depreciation of real properties, the method
STRAIGHT LINE METHOD
that is widely used by practitioners is the
An appraisal principle which holds that the value of property tends
Principle of Progression
to be enhanced by association with superior properties is:
Market Analysis
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 Urban Exam - Appraisal
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The study or current supply and demand conditions in a particular
area for a specific type of property is ________________.
Several houses valued at P1,000,000 and P2,000,000 were built in
an area where an existing house valued at P3,000,000 is located.
REGRESSION As a result, the value of the latter decreased. The real estate
principle of value that applies to this situation is called the principle
of _______________________.
Gross Income Multiplier An investor is intending to buy a property, which has an annual
= 17,800,000 / P2,500,000 income of P3,600,000. In his market study he found out that a
= *7.12* comparable property with an annual gross income of P2,500,000
was recently sold for P17,800,000.
Buying Price Based on the Gross Income Multiplier indicated by the compa-
= 7.12 x P3,600,000.00 rable property, at how much should the investor buy the subject
= *P25,632,000* property?
Three of the following factors create value in real estate. Which
one does not create value?

Infiltration (a. Demand

b. Utility
c. Infiltration
d. Scarcity)
Which of the following is never considered as a factor in the
valuation of a house and lot?

Conviction of the previous owner on charges of moral turpitude (a. Modification in zoning regulations
b. Topography of the lot
c. Conviction of the previous owner on charges of moral turpitude
d. Functional obsolescence)
The selling price of a real estate is usually based on its:

(a. Speculative value

Market Value b. Exchange value
c. Intrinsic value
d. Market value
e. None of the above)
The increase in value of real estate without any expense of the
UNEARNED INCREMENT
owner is:
refers to that use which will yield the maximum return at a given
Highest and best use
time
To be considered comparable to the subject property, a compara-
ble property must have been sold

(a. with a conventional mortgage

In an arm's length transaction
b. for all cash
c. without any form of secondary financing
d. for credit
e. in an arm's length transaction)
Added value inherent on a lot bounded by two streets.
Corner influence a. Cooperate interest b. Plottage value c. Social value d. Joint
venture e. Corner influence
Buyer's Equity The difference between contract price and loanable amount
refers to the use an object is put to, the services it renders and
Value in use
wants it satisfies
Which of the following is not essential in the determination of Fair
Market Value?
ASSESSED VALUE INDICATED IN THE TAX DECLARATION
(a. Knowledgeable and prudent seller & buyer
b. Reasonable exposure of the property in the open market
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c. Assessed Value indicated in the Tax Declaration
d. Willing seller and willing buyer)

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