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The chapter details elements of value (DUST), influences on value (PEGS), and how market conditions such as demand, utility, scarcity, transferability, and social or government factors affect property pricing.",{"@graph":14,"@context":73},[15,34,56],{"@type":16,"itemListElement":17},"BreadcrumbList",[18,23,27,31],{"item":19,"name":20,"@type":21,"position":22},"https://docshare.wps.com","Home","ListItem",1,{"item":24,"name":25,"@type":21,"position":26},"https://docshare.wps.com/document/","Document",2,{"item":28,"name":29,"@type":21,"position":30},"https://docshare.wps.com/document/exam/","Exam",3,{"item":32,"name":10,"@type":21,"position":33},"https://docshare.wps.com/document/ftprepch3-chapter-3-property-valuation-and-financial-analysis/402141/",4,{"url":32,"name":10,"@type":35,"image":36,"author":41,"headline":10,"publisher":44,"fileFormat":47,"inLanguage":8,"description":12,"dateModified":48,"datePublished":49,"encodingFormat":47,"isAccessibleForFree":50,"interactionStatistic":51},"DigitalDocument",{"url":37,"@type":38,"width":39,"height":40},"https://docshare.wps.com/thumbnails/ftprepch3-chapter-3-property-valuation-and-financial-analysis/402141.png","ImageObject",300,407,{"name":42,"@type":43},"Guten tag","Person",{"url":19,"name":45,"@type":46},"DocShare","Organization","application/pdf","2026-10-28","2026-09-27",true,{"@type":52,"interactionType":53,"userInteractionCount":55},"InteractionCounter",{"@type":54},"ViewAction",9,{"@type":57,"mainEntity":58},"FAQPage",[59,65,69],{"name":60,"@type":61,"acceptedAnswer":62},"How are multiple-choice questions answered on the exam?","Question",{"text":63,"@type":64},"Select A, B, C, or D for each multiple-choice question. 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Multiple choice questions are answered by selecting A, B, C, or D. You may use pen or pencil.  \nChapter 3: Property valuation and financial analysis  \n1.  \n2.  \n3.  \n4.  \n5.  \n6.  \n7.  \n8.  \n9.  \n10.  \n11.  \n12.  \n13.  \n14.  \n15.  \n16.  \n17.  \n18.  \n19.  \n20.  \n21.  \n22.  \n23.  \n24.  \n25.  \nA o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \nB  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no  \nC o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \nD o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \n26.  \n27.  \n28.  \n29.  \n30.  \n31.  \n32.  \n33.  \n34.  \n35.  \n36.  \n37.  \n38.  \n39.  \n40.  \n41.  \n42.  \n43.  \n44.  \n45.  \n46.  \n47.  \n48.  \n49.  \n50.  \nA o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \nB o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \nC o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \nD o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \no o  \n51.  \n52.  \n53.  \n54.  \n55.  \n56.  \n57.  \n58.  \nA  \no o  \no o  \no o  \no o  \nB o  \no o  \no o  \no o  \no  \nC o  \no o  \no o  \no o  \no  \nD o  \no o  \no o  \no o  \no  \nChapter 3: Property valuation and financial analysis 49  \n\n|  |\n| --- |\n| Chapter 3: Property valuation and financial analysis |\n|  |\n\nKey Concepts  \nCritical real estate concepts equaling approximately 14% of the state licensing exam.  \n• Value • Financial Analysis  \n• Methods of estimating value  \nKey Terms  \nFundamental real estate vocabulary likely to appear on the state exam with reference to the quiz questions illustrating its application. See the Real estate glossary on page 331 for the full definitions.  \nappraisal (q. 45-48)  \nbroker price opinion (BPO)(q. 49)  \ncapitalization approach (q. 51) capitalization rate (cap rate)(q. 1, 7, 29)  \ncomparable sales (comps)(q. 52)  \ncost approach (q. 17, 41, 42, 44) depreciation (q. 38, 39) economic life (q. 6, 37) economic obsolescence (q. 22, 50)  \neffective age (q. 53)  \nelements of value (q. 8, 36) ethics (q. 35)  \nfair market value (FMV) (q. 54) financial analysis (q. 30) functional obsolescence (q. 21, 23, 25)  \ngross rent multiplier (GRM)(q. 3, 9, 28)  \nhighest and best use (q. 32, 33) income approach (q. 26, 27) influences on value (q. 34) loan-to-value ratio (LTV)(q. 55)  \nmarket comparison (q. 10, 14)  \nnarrative report (q. 15, 24) opportunity cost (q. 40) physical life (q. 56)  \nprinciples of value (q. 2, 4, 5, 19, 20, 31)  \nreconciliation (q. 18) replacement cost (q. 16, 43) return on investment (ROI)(q. 57)  \nsite valuation (q. 13) value (q. 11, 12)  \n50 Unlocking the DRE Salesperson and Broker Exam, Sixth Edition  \n􀁒Note: This section is designed to give you a broad understanding of the basic principles which relate to the subject matter of this chapter. However, it is not exhaustive. For further reading on this concept, seeyour Real Estate Finance licensing course materials.  \nJUST THE FACTS  \nValue  \nValue is defined as the worth of something to someone at a given time. In real estate, you can then apply modifiers to the basic word, therefore creating fair market value (FMV), which is the most commonly sought value conclusion. FMV refers to the price a reasonable, unpressured buyer and seller would agree to for property on the open market, both having reasonable knowledge of the relevant facts.  \nThere are several other variations on the root principle of value, such as:  \n• investment value;  \n• insurance value; and  \n• value in use.  \nValue is impacted by numerous factors, known as the elements of value. The elements of value are:  \n• Demand, the number of buyers for the property;  \n• Utility, the property’s possible uses;  \n• Scarcity, the availability of similar properties; and  \n• Transfera","cbCaivTAEHdH2kX9","https://ap.wps.com/l/cbCaivTAEHdH2kX9","pdf",303400,15,"English","# Chapter 3: Property valuation and financial analysis\n## Answer sheet instructions and exam format\n## Key Concepts: Value, value variations, and core valuation principles\n## Key Terms: Appraisal vocabulary and definitions\n## Just the Facts: Elements of value (DUST) and influences on value (PEGS)","[{\"question\":\"How are multiple-choice questions answered on the exam?\",\"answer\":\"Select A, B, C, or D for each multiple-choice question. You may use pen or pencil.\"},{\"question\":\"What is fair market value (FMV) in real estate valuation?\",\"answer\":\"FMV is the price a reasonable, unpressured buyer and seller would agree to for property on the open market, with both having reasonable knowledge of the relevant facts.\"},{\"question\":\"Which acronyms summarize the major valuation factors?\",\"answer\":\"Elements of value are summarized by DUST (Demand, Utility, Scarcity, Transferability), and major influences on value are summarized by PEGS (Physical, Economic, Government, Social).\"}]","FTPrepCH3 - Chapter 3 - Property valuation and financial analysis | PDF",1790527548,38]