Chapter 15 income capitalization approach - single unit properties

Question 1

If you are in a market area in which there are rent controls, then

Answer 1

the GRM approach should NOT be utilized

Question 2

The region or area over which something is found, is distributed, or occurs.

Answer 2

range

Question 3

A measure of central tendency. The sum of values for a variable in a sample or population divided by the number of items in the sample or population. The arithmetic average

Answer 3

Mean

Question 4

A measure of central tendency identified as the middle value in an ordered array of numerical values, e.g., 7 is the median of (1, 4, 6, 6, 7, 9, 11, 22, 41). If the ordered array contains an even number of values, then the median is the mean of the two values on either side of the middle

Answer 4

median

Question 5

A measure of central tendency consisting of the numerical value or categorical characteristic that occurs most frequently in a sample or population. For example, the mode of the data set (2, 4, 5, 6, 6, 7, 7, 8, 8, 8, 8, 10, 12) is 8, and the mode of (poor, poor, below average, average, average, average, average, good, good, excellent) is average.

Answer 5

mode

Question 6

In every statistical distribution there is always a \_\_\_\_\_\_\_\_\_ but there may not be a \_\_\_\_\_\_\_\_\_\_\_\_.
Mean, median
Median, mode
Mode, mean
Mean, range

Answer 6

median, mode

Question 7

"A measure of central tendency identified as the middle value in an ordered array of numerical values" is the definition of
Mean
Median
Mode
Range

Answer 7

median

Question 8

Which measure of central tendency is least affected by extreme values?
Mean
Median
Mode
They are all equally affected by extreme values

Answer 8

median

Question 9

Fannie Mae has created a form for reporting an opinion of Market Rent as part of an appraisal assignment. This form, numbered as form

Answer 9

1007, is titled Single Family Comparable Rent Schedule

Question 10

When using the Fannie Mae 1007 form, an appraiser is expected to \_\_\_\_\_\_\_\_ any utilities that may be included in the comparable property rental amounts.
subtract
add in
ignore
verify with the utility company

Answer 10

subtract

Question 11

The Fannie Mae 1007 form is used to
identify needed repairs and a cost to cure
describe items of depreciation in the subject property
estimate the Market Rent of the subject property
estimate the market value of the subject property

Answer 11

estimate the market rent of the subject property

Question 12

In order to entice a prospective tenant to sign a lease, an apartment building owner offers one month of free rent. This would be considered
an illegal kickback
a rent concession
a violation of fair housing laws
an adjustment for market conditions

Answer 12

a rent concession

Question 13

What is the mean of the following GRMs? 105.0, 104.0, 103.2, 106.0, 110.4, 107.2, 104.0, 106.0, 105.5, 102.0

105. 9
106. 1
107. 3
108. 4

Answer 13

105.3

Question 14

When using the Fannie Mae 1007 form, an appraiser is expected to \_\_\_\_\_\_\_\_\_\_ any utilities that may be included in the comparable property rental amounts.
subtract
add in
ignore
verify with the utility company

Answer 14

subtract

Question 15

With regard to the Income Approach, the principal difference between the old 1993 URAR form and the current 2005 URAR form is that
the old form featured a grid where comparable rental properties could be listed and adjusted
on the current form, filling out the Income Approach section is mandatory
the current form provides more space for the appraiser to support the Market Rent and GRM figures
the current form has no income approach section

Answer 15

the current form provides more space for the appraiser to support the Market Rent and GRM figures

Question 16

If you are in a market area in which there are rent controls:
Make sure you use the GRM approach
Don’t use the GRM approach
Use the GRM approach and make adjustments for rent control
Use the GRM approach with Market Rents

Answer 16

don’t use the GRM approach

Question 17

"The region or area over which something is found, is distributed, or occurs” is the definition of
Spread
Dispersion
Deviation
Range

Answer 17

range

Question 18

Which is true of the mode?
It is least affected by extremes.
There may not be a mode.
there is always a mode.
It is most affected by extremes.

Answer 18

there may not be a mode

Question 19

The comparable sales utilized in a GRM approach should be \_\_\_\_\_\_\_\_\_\_\_\_, in all aspects, as the comparable sales utilized in the Sales Comparison Approach.
Better than
Not as important
At least as good
Less comparable

Answer 19

at least as good

Question 20

"A measure of central tendency; the value of the middle item in an uneven number of items arranged or arrayed according to size or the arithmetic average of the two central items in an even number of items similarly arranged” is the definition of
Average
Mean
Median
Mode

Answer 20

median