26 Questions
Which of the following is NOT a physical characteristic of land?
Scarcity
What does the economic characteristic 'S' in SPAP stand for?
Scarcity
What is another term for land in real estate?
Property
Which agent of production refers to the direct and indirect costs and wages associated with workers?
Labor
What is the term used to describe the process of orchestrating land, labor, and capital to produce an item?
Entrepreneurship
Which agent of production is the cost of borrowing money and relates to the availability of credit?
Capital
Which of the following is NOT one of the four elements that create value for real estate?
Utility
What does the term 'real property' include?
Land and all improvements
Which of the following is NOT a social force influencing value?
Availability of money and credit
What is the permanence of investment in relation to land improvements?
The long-term and relatively stable return on investments
Which of the following is NOT considered a governmental or political force affecting real estate?
Soil fertility
Which of the following is a physical or environmental force affecting real estate?
Climate
Market value is defined as
The estimated amount for which an asset or liability should exchange on the valuation date
The market value transaction is presumed to be between
Unrelated parties
According to the principle of contribution, the value of a component of a property is determined by
Its contribution to the whole property
According to the principle of externalities, which of the following factors can influence the value of a property?
All of the above
According to the principle of surplus productivity, which of the following is considered the investor's return on the use of the land?
Surplus productivity
What are the four standard tests for highest and best use?
Physically possible, legally permissible, financially feasible, and maximally productive
According to the Principle of Anticipation, value is created by
the expected future benefits of a property
The Principle of Competition states that
profits tend to spur competition
According to the Principle of Balance, land will be at its highest value when
the four factors of production are in balance
The Principle of Conformity states that maximum value is realized when
properties are homogenous and compatible
Which principle states that a prudent buyer will pay no more for a property than the cost of a substitute or comparable property that will provide equivalent usefulness?
Principle of Substitution
Which principle states that in a specific location, as the more desirable lots are being bought, with consistent demand, the remaining similarly desirable lots will increase in value more than the price the first lots were sold?
Principle of Supply and Demand
Which principle states that the property's market value is based on the investor's expectation of a future benefit?
Principle of Anticipation
Which principle states that each party in a transaction is motivated to undertake the transaction, but neither is forced or unduly coerced to complete it?
Principle of Competition
Quiz: Understanding Highest and Best Use in Property Appraisal Test your knowledge on the concept of highest and best use in property appraisal. Learn about the factors that determine the maximum property value and the importance of considering both probable and legal uses. Explore scenarios where the most probable use may not be the highest and best use.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
