Valuation & Appraisal
This is a quiz that asks different random questions that are designed to test your knowledge on how well you know valuation and appraisal terms. It might not be as easy as you think but just try it out to see how you will do.
- 1."The whole is worth more than the sum of its parts" refers to
- A.
Progression
- B.
Assemblage
- C.
Land residual
- D.
Depreciation
- 2.A buyer who looked at seven very similar homes in a three year old subdivision made an offer on the home with the lowest list price. the buyer was utilizing the principal of
- A.
Supply and demand
- B.
Substitution
- C.
Conformity
- D.
Change
- 3.A competitive market analysis is prepared by a real estate agent to estimate the likely sales price of a property. This analysis is based on the:
- A.
Sales Comparison Method
- B.
Gross rent multipier
- C.
Cost approach
- D.
Income approach
- 4.A good definition of market value would be the
- A.
Price paid by the owner
- B.
Present worth of future benefits
- C.
Assessed valuation
- D.
Price offered by a prospective buyer
- 5.A new, expensive home in a mixed area of commercial property and older, less expensive homes could have a market value less than the cost of the new home because of:
- A.
External obsolesence
- B.
The gross multiplier effect
- C.
Progression
- D.
Physical deterioration
- 6.A property being appraised had 2,400 square feet, but a comparable used by the appraiser had only 2,250 square feet. The appraiser should
- A.
Disregard the comparable because of dissimilar size
- B.
Use the comparable but ignore the slight size difference
- C.
Adjust the sale price of the comparable upward because of size difference
- D.
Adjust the sale price of the comparable downward because of the size difference
- 7.A property being appraised has a two car garage, while a comparable has a three car garage. In making adjustments, the apppraiser would
- A.
Raise the value of the comparable
- B.
Lower the value of the home being appraised
- C.
Lower the value of the comparable
- D.
Raise the value of the home being appraised
- 8.A property has a net income of $30,000. One appraiser decides to use a 12 percent capitalization rate, while a second appraiser uses a 10 percent rate. Use of the higher rate results in:
- A.
A 2 percent increase in appraised value
- B.
A $50,000 increase in appraised value
- C.
A $50,000 decrease in appraised value
- D.
No change in appraised value
- 9.A property owner would have the greatest difficulty in correcting depreciation caused by
- A.
Chronological age
- B.
The built in nature of the structure
- C.
Forces outside the property boundaries
- D.
Wear and tear due to use
- 10.A seller agreed to sell a home with no down payment and the below market rate seller financing. The favorable financing could be expected to affect the
- A.
Price but not the value of the property
- B.
Value of the property but not the price
- C.
Utility of the property
- D.
Depreciation method
- 11.A separate value for the land is needed for the
- A.
Income approach
- B.
Gross rent multiplier method
- C.
Cost approach
- D.
Market comparison approach
- 12.A value regarded as bein a stubjective value would be
- A.
Market value
- B.
Assessed value
- C.
Use value
- D.
Book value
- 13.According to the principle of conformity, the highest value is maintained by having a residence
- A.
Adjoining a shopping area
- B.
Next to a church
- C.
Across from a school
- D.
In a center of a residential development
- 14.According to the principle of integration and disintegration
- A.
The value of a property will eventually decline
- B.
Property value is best maintained in homogeneous areas
- C.
Extraordinary rofits will disappear with competition
- D.
The maximum value would be based on cost of a comparable property
- 15.After determining the value of the improvements of an existing structure, the appraiser deducted this amount from the market value to determine the value attributed to the land. This appraisal method is known as
- A.
Surplus productivity
- B.
The abstractive method
- C.
The development method
- D.
The land residual method
- 16.An appraisal of property is the
- A.
Supported estimate of value
- B.
Utility value
- C.
Selling price
- D.
Cost plus improvements less depreciation
- 17.An appraiser counting the number of electrical outlets in a structure is using the
- A.
Market comparison method
- B.
Income approach
- C.
Cost approach
- D.
Gross rent multiplier method
- 18.An appraiser in using the expression a "willing, informed buyer and a willing informed seller," is referencing
- A.
Progression
- B.
Supply and demand
- C.
The principle of highest and best use
- D.
Market value
- 19.An appraiser sets a replacement cost of a structure at $120,000 and appraises the land value separately at $80,000. the appraiser places an economic life on the structure at 50 years and states that it has an effective age of 10 years. Using the cost approach, the appraiser would appraise this property at
- A.
$140,000
- B.
$160,000
- C.
$176,000
- D.
$200,000
- 20.An appraiser wanted to know the capitalization rate applicble for a recent sale. The net income was reported at $21,000 and the property sold for $300,000. What capitalization rate applied to this sale?
- A.
6%
- B.
7%
- C.
8%
- D.
9%
- 21.An appraiser would need to determine accrued depreciation when using the:
- A.
Gross rent multiplier method
- B.
Cost approach
- C.
Income approach
- D.
Sales comparison approach
- 22.An example of external obsolesence would be
- A.
Numerous pillars supporting the ceiling in a store
- B.
Roof leaks, making the premises unrentable
- C.
An older building with very small rooms
- D.
Vacant and abandoned structures in the area
- 23.An investor making extraordinary profits from the first mini warehouse in the area would be concerned with the principal of
- A.
Substitution
- B.
Competition
- C.
Surplus productivity
- D.
Conformity
- 24.Demand is not effective in determining the value of real property unless it is combined with
- A.
Scarcity
- B.
A use
- C.
Purchasing power
- D.
Access
- 25.Each unit in a fourplex rents for $225 per month. With the sales price of $81,000, the annual gross rent multiplier is
- A.
7.5
- B.
30
- C.
90
- D.
360
Questions: 99 | Attempts: 5065 | Last updated: Nov 19, 2020
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