Deck 7: Single-Family Housing: Pricing, Investment, and Tax Considerations

Question 1

One of the following is not tax deductible for homeowners:

A) points in mortgage loans
B) mortgage interest
C) property taxes
D) maintenance expenses

Answer 1

maintenance expenses

Question 2

Use of construction costs is very important in the sales comparison approach to valuation.

Answer 2

False

Question 3

When using the cost approach to valuation,current market data for land values must be obtained.

Answer 3

True

Question 4

When the value of public goods exceeds their cost,the effect on house prices is called the "capitalization effect"

Question 5

Which of the following would NOT result in an increase in housing demand?

A) population growth
B) employment growth
C) higher interest rates
D) higher household income

Question 6

Estimating the land value for an improved property cannot be accomplished using the sales comparison method of valuation.

Question 7

When considering the federal income tax treatment for housing,the following is tax deductible:

A) loan amortization
B) interest on mortgage loans
C) insurance
D) none of the above

Question 8

The appraisal function is purely objective;an appraiser's judgment is not part of the decision process.

Question 9

An appraisal usually contains three approaches to valuation.Which of the following is NOT one of those approaches.

A) The Market Approach
B) The Ratio Approach
C) The Cost Approach
D) The Income Approach

Question 10

A housing bubble occurs when there is a big increase in the supply of homes.

Question 11

The subject of an appraisal has only two bedrooms,but one of the comparables used in the appraisal has three.If the adjustment for a third bedroom is $5,000,the adjustment would be:

A) a$5,000 increase to the comparable's selling price
B) a$5,000 decrease to the comparable's selling price.
C) a$5,000 increase to the subject's selling price.
D) a$5,000 decrease to the subject's selling price.

Question 12

Federal income tax policy has generally been thought to:

A) discourage homeownership
B) encourage renting
C) increase interest rates
D) encourage homeownership

Question 13

It is possible for two identical houses located in different school districts to sell for different prices.

Question 14

Residential appraisers use only the sales comparison approach to determine value of the homes they appraise.

Question 15

When a homeowner improves some aspect of his property far in excess of comparable properties in the neighborhood,he is said to have:

A) under-improved the property
B) over-improved the property
C) reached the point of increasing returns
D) exceeded the breakeven point

Question 16

Mortgage interest and property taxes are deductible for federal income tax purposes for homeowners.

Question 17

The appraised value of a property usually represents:

A) theactual value of the property.
B) theactual selling price of the property.
C) theactual opinion of an appraiser
D) theactually replacement value of the property

Question 18

The influence on property values brought about by a net benefit related to the value of public goods less their cost is referred to as:

A) a capital gain
B) a capital loss
C) thecapitalization - effect
D) thedepreciation effect

Question 19

Population increases are usually associated with increases in demand and house price appreciation

Question 20

When calculating taxes,the difference between the acquisition cost and selling price of a house is called:

A) ordinary income
B) amortization
C) capital gain
D) deferred income

Question 21

Housing futures contracts allow investors to speculate on changes in home prices without actually owning a home.

Question 22

A location quotient is the ratio of total employment to base employment.