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Mock Exam
Real Estate Economics and Finance

1) Condition when demand is huge and prices of real estate increase
a) Buyers Market
b) Sellers Market
2) Market condition where the demand for real estate is low and prices are low.
a) Buyers Market
b) Sellers Market
3) A narrow gap between listing price and selling price is an indicator of a
a) Weak market
b) Strong market
c) Stable market
d) None of the above

Which concept of applicable to each case

a. Heterogenuous
b. Unique
c. High Transaction Cost
d. Immovable
e. High Investment
f. Durable
g. Value
h. Cost
i. Price
j. Highest and Best Use (HABU)
k. Principle of Substitution
l. Principle of Regression
m. Principle of Progression
n. Principle of Conformity
4) There are no two real estate properties that are exactly the same even if they are located in the
same area.
5) Properties which are located in areas near SM tend to increase in value
6) Properties which remain to be used as a residence in a highly commercial area.
7) Real estate are different from each other in terms of its location, exisiting development, value
8) A 300 square meter corner lot in a mixed used subdivision was converted by the owner into a 3
storey commercial area with a convenience store on the ground floor.
9) The amount of money exchanges for a good or service, in our case. for a piece of real estate.
10) It is the combination of factors of production spent to produce an improvement or
development which may or may not equal to value.

11) _________ is the utility or attribute of a property to satisfy human want. It is created by scarcity,
utility, demand and purchasing power
12) The owner of a 240 square meter property along Roxas Ave. is not yet selling her property for
the time being awaiting the completion of the construction of the ADDU 14 storey building.
13) A buyer is in need of a 2,000 sqm truck display area along Mc Arthur highway in Matina with 40
meters frontage. The real estate broker offered him a property along Quimpo Blvd that is
readily available with 35 meters frontage and an area of 2,300 sqm. What principle is the real
estate broker applying in this case?
14) A property owner built a 2 storey house with 1,000 sqm floor area on a 800 square meter lot
inside Gravahan along Bangkerohan River. The property has been up in the market for 3 years
now at 7 Million but there are no takers.
15) The informal settlers in an interior lot somewhere in Matina were given a chance by the lot
owner to buy the area they are occupying. Lot price is 500 pesos/ square meter and payable at
100 pesos per month for the next 12.5 years provided they will the ones to process and pay for
the taxes. The settlers did not agree saying they cannot afford the processing fees.

Problem Solving
Price of foreclosed property= P 1,000,000
Downpayment = 10%
Loan Amount =
Amortization Factor (5 years, 10%interest rate) = 0.021247045

1. How much is the loan amount
A P 900,000
B P 90,000
C P 950,000
D none of the above

2. How much is the monthly loan payment needed
A P 19,122.3405 / month
B P 21,247.045/ month
C P 2,124.7045 /month
D none of the above

3. If the property is earning Php 25,00 per month would it be wise to purchase and assume
that the property will be self liquidating.
A Yes
B No
C maybe
D I dont know