MTRES - Montana Real Estate Salesperson

Question 21: Before listing, a Hamilton seller wonders whether remodeling the dated kitchen will raise the home's value by more than the remodel costs, while adding an indoor sport court almost certainly would not. Which principle of value measures a component's effect on the whole?

Contribution

Substitution

Anticipation

Plottage

Question 22: A well-kept Billings house loses value after a busy freight rail yard and a noisy processing plant open just beyond its back fence, conditions the owner cannot fix. This loss caused by off-site forces is best classified as which type of depreciation?

Functional obsolescence

Physical deterioration

Curable obsolescence

External obsolescence

Question 23: A four-bedroom Kalispell home has only one cramped bathroom and a windowless bedroom that can be reached only by passing through another bedroom, features buyers now reject. This loss in value from outdated design is best classified as which type of depreciation?

Physical deterioration

Functional obsolescence

External obsolescence

Curable deterioration

Question 24: A modest older cottage sits on a Columbia Falls block that has gradually filled with large, luxurious, well-kept homes, and the appraiser finds the cottage's value is pulled upward by its impressive surroundings. Which principle of value best accounts for this positive influence?

Progression

Regression

Conformity

Contribution

Question 25: Rather than copying an old building feature for feature, an appraiser estimates the cost of constructing a building with equivalent usefulness using today's materials, methods, and design standards while leaving out obsolete elements. Which construction cost estimate does this describe?

Reproduction cost

Accrued depreciation

Reconciled cost

Replacement cost

Question 26: A scenic ranch parcel in the Paradise Valley is genuinely useful and much desired, yet a clouded chain of title and several unresolved liens make conveying ownership to a new buyer nearly impossible. Which characteristic of value is directly undermined by these obstacles?

Utility

Demand

Transferability

Scarcity

Question 27: When listing what gives real property value, an appraiser points to a parcel's capacity to satisfy an owner's needs and to serve the functions for which the property is intended. Which characteristic of value is described by this usefulness?

Scarcity

Demand

Transferability

Utility

Question 28: When appraising an ordinary owner-occupied house in a Billings subdivision, an instructor notes that one of the three approaches to value is generally given the greatest weight because plentiful sales capture benefits buyers cannot easily measure otherwise. Which approach is that?

The sales comparison approach

The cost approach

The income approach

The assessed value method

Question 29: Buildable lakefront lots on Flathead Lake are extremely limited while many buyers compete for them, and an appraiser notes this short relative supply is one reason such parcels command premium prices. Which characteristic of value does this limited availability represent?

Utility

Scarcity

Transferability

Demand

Question 30: A lakefront cabin being appraised has a private boat dock, but the most similar recently sold cabin has no dock at all, a feature present in the subject but missing from the comparable. How should the appraiser treat the comparable's price?

Subtract value from the comparable

Lower the subject's estimated value

Add value to the comparable

Ignore the missing dock

Question 31: Each year a county official assigns a dollar figure to a Helena home for the purpose of calculating the property taxes its owner owes, a figure that often differs from what the home would fetch on the open market. What is this figure called?

Market value

Assessed value

Replacement value

Insured value

Question 32: Each year a county official assigns a dollar figure to a parcel of real estate for the specific purpose of calculating the owner's property tax bill. This government-assigned value, used chiefly for taxation, is best known as which of the following?

Assessed value

Market value

Replacement cost

Equity value

Question 33: Over several years of holding a lakefront property near Flathead Lake, an owner watches its market value climb steadily higher than what she originally paid, even though she has made no improvements. This increase in a property's value over time is called what?

Depreciation

Amortization

Deterioration

Appreciation

Question 34: An investor who buys a small rental building in Bozeman wants a single measure that expresses the income the property generates in relation to the money she put in, so she can compare it to other opportunities. This performance measure is called what?

Loan-to-value ratio

Gross living area

Return on investment

Adjusted cost basis

Question 35: When a Miles City property changes hands, the government imposes a tax on the conveyance and the recorder charges a fee to file the deed. Who ultimately bears each of these charges is determined primarily by which of the following?

Federal law in every state

The lender's underwriting guidelines

The multiple listing service rules

Local custom and the parties' agreement

Question 36: An investor notes that as a borrower makes regular payments reducing the principal owed on a property, and as the property itself appreciates over time, one particular ownership figure steadily increases. Which figure grows through both loan paydown and appreciation?

The owner's equity

The mortgage balance

The property tax rate

The gross rent multiplier

Question 37: A Helena homeowner has been paying down her mortgage for years while her property's market value has climbed. When she describes the portion of the home's value she actually owns free of the loan balance, which term best captures that ownership interest?

Gross income

Equity

Assessed value

Depreciation

Question 38: When a lender quotes a borrower's total monthly housing payment on a Great Falls home, that figure bundles together four recurring components represented by the shorthand PITI. Which set of items does this common escrowed payment combine into one monthly amount?

Points, interest, title, and inspection

Principal, income, taxes, and interest

Principal, interest, taxes, and insurance

Premiums, interest, transfer, and insurance

Question 39: A salesperson preparing to help a Billings homeowner set an asking price gathers recent sold prices of similar nearby homes, adjusts for differences, and studies current competition. This informal study a licensee prepares to estimate value is known as which of the following?

A comparative market analysis

A formal appraisal

A property tax assessment

A home inspection

Question 40: When a lender evaluates a loan request on a Kalispell property, it compares the amount being borrowed against the appraised value or price of the home, expressing the relationship between debt and value as a single ratio. This comparison is known by which name?

The debt-to-income ratio

The capitalization rate

The gross rent multiplier

The loan-to-value ratio

MTRES Montana Real Estate Salesperson - Set 3 - Part 2

Question 21: Before listing, a Hamilton seller wonders whether remodeling the dated kitchen will raise the home's value by more than the remodel costs, while adding an indoor sport court almost certainly would not. Which principle of value measures a component's effect on the whole?

Question 22: A well-kept Billings house loses value after a busy freight rail yard and a noisy processing plant open just beyond its back fence, conditions the owner cannot fix. This loss caused by off-site forces is best classified as which type of depreciation?

Question 23: A four-bedroom Kalispell home has only one cramped bathroom and a windowless bedroom that can be reached only by passing through another bedroom, features buyers now reject. This loss in value from outdated design is best classified as which type of depreciation?

Question 24: A modest older cottage sits on a Columbia Falls block that has gradually filled with large, luxurious, well-kept homes, and the appraiser finds the cottage's value is pulled upward by its impressive surroundings. Which principle of value best accounts for this positive influence?

Question 25: Rather than copying an old building feature for feature, an appraiser estimates the cost of constructing a building with equivalent usefulness using today's materials, methods, and design standards while leaving out obsolete elements. Which construction cost estimate does this describe?

Question 26: A scenic ranch parcel in the Paradise Valley is genuinely useful and much desired, yet a clouded chain of title and several unresolved liens make conveying ownership to a new buyer nearly impossible. Which characteristic of value is directly undermined by these obstacles?

Question 27: When listing what gives real property value, an appraiser points to a parcel's capacity to satisfy an owner's needs and to serve the functions for which the property is intended. Which characteristic of value is described by this usefulness?

Question 28: When appraising an ordinary owner-occupied house in a Billings subdivision, an instructor notes that one of the three approaches to value is generally given the greatest weight because plentiful sales capture benefits buyers cannot easily measure otherwise. Which approach is that?

Question 29: Buildable lakefront lots on Flathead Lake are extremely limited while many buyers compete for them, and an appraiser notes this short relative supply is one reason such parcels command premium prices. Which characteristic of value does this limited availability represent?

Question 30: A lakefront cabin being appraised has a private boat dock, but the most similar recently sold cabin has no dock at all, a feature present in the subject but missing from the comparable. How should the appraiser treat the comparable's price?

Question 31: Each year a county official assigns a dollar figure to a Helena home for the purpose of calculating the property taxes its owner owes, a figure that often differs from what the home would fetch on the open market. What is this figure called?

Question 32: Each year a county official assigns a dollar figure to a parcel of real estate for the specific purpose of calculating the owner's property tax bill. This government-assigned value, used chiefly for taxation, is best known as which of the following?

Question 33: Over several years of holding a lakefront property near Flathead Lake, an owner watches its market value climb steadily higher than what she originally paid, even though she has made no improvements. This increase in a property's value over time is called what?

Question 34: An investor who buys a small rental building in Bozeman wants a single measure that expresses the income the property generates in relation to the money she put in, so she can compare it to other opportunities. This performance measure is called what?

Question 35: When a Miles City property changes hands, the government imposes a tax on the conveyance and the recorder charges a fee to file the deed. Who ultimately bears each of these charges is determined primarily by which of the following?

Question 36: An investor notes that as a borrower makes regular payments reducing the principal owed on a property, and as the property itself appreciates over time, one particular ownership figure steadily increases. Which figure grows through both loan paydown and appreciation?

Question 37: A Helena homeowner has been paying down her mortgage for years while her property's market value has climbed. When she describes the portion of the home's value she actually owns free of the loan balance, which term best captures that ownership interest?

Question 38: When a lender quotes a borrower's total monthly housing payment on a Great Falls home, that figure bundles together four recurring components represented by the shorthand PITI. Which set of items does this common escrowed payment combine into one monthly amount?

Question 39: A salesperson preparing to help a Billings homeowner set an asking price gathers recent sold prices of similar nearby homes, adjusts for differences, and studies current competition. This informal study a licensee prepares to estimate value is known as which of the following?

Question 40: When a lender evaluates a loan request on a Kalispell property, it compares the amount being borrowed against the appraised value or price of the home, expressing the relationship between debt and value as a single ratio. This comparison is known by which name?

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