Practice Exam

This exam has 100 questions, and I've laid it out to group similar subjects together. I group them for ease of reviewing the material in any one chapter. However, different subjects probably will be randomly distributed throughout the actual exam. And don't forget that a number of state-specific questions on the actual exam will deal with particular laws and practices unique to your state. Review the items marked with the State-Specific icon throughout this book, and study both the materials...

Displaying the fair housing poster

The Department of Housing and Urban Development (HUD), which is responsible for the Federal Fair Housing Act, has created a fair housing poster that must be prominently displayed in all real estate offices. Failure to display the sign can be considered noncompliance with fair housing law and will be used as evidence of discrimination whenever a complaint is brought against the real estate office. HUD also requires that its fair housing logo or other such appropriate wording be used in all real...

Estimating depreciation

Now you've arrived at the second step in applying the cost approach to estimating the value of a piece of property. Depreciation is the loss in value to any structure due to a variety of factors, such as wear and tear, age, and poor location, each of which I discuss in this section. I generally view depreciation as the difference in value between the perfect new structure cost that you estimate and the actual value of the structure that's being appraised. jjjW The term accrued depreciation...

Youre so square more or less The rectangular survey system

The rectangular survey system, often referred to as the government survey system, is based on a system of lines that form rectangles and squares throughout the U.S. The first sets of lines respectively are called principal meridians, which run north and south, and baselines, which run east and west. The principal meridians and baselines are based respectively on lines of longitude and latitude. Just in case you were out the same day I was in high school, longitude and latitude are imaginary...

Increasing and decreasing returns

Increasing and decreasing (sometimes called diminishing) returns relate to adding improvements to a piece of real estate. Increasing returns come in when an improvement adds more value to the real estate than its cost. A dollar spent gives you more than a dollar back. Decreasing returns occur when an improvement gives back less value than its cost. The principle of increasing and decreasing returns is based on the principle of contribution, which I discuss in the earlier Contribution section....

Going back and forth with offer and acceptance

Because real estate deals often are the result of a process of negotiation, you need to understand a few of the concepts of the offer and acceptance process. Generally this process of negotiation follows the pattern of the seller listing the house for sale, the buyer making an offer to buy the house, the seller coming back with a counteroffer for the buyer, the buyer making a counteroffer to the seller's counteroffer, and acceptance by the seller with as many counteroffers proposed between...