Valuation & Appraisal

55 Questions | Total Attempts: 1069

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Appraisal Quizzes & Trivia

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.


Questions and Answers
  • 1. 
    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

  • 2. 
    In appraising a home for a lender who wishes to make a purchase loan, the appraiser would be concerned with:
    • A. 

      The amount of the loan requested

    • B. 

      Unpaid special assessments

    • C. 

      The price the seller has agreed to pay

    • D. 

      Economic changes in the arena

  • 3. 
    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

  • 4. 
    An appraisal of property is the
    • A. 

      Supported estimate of value

    • B. 

      Utility value

    • C. 

      Selling price

    • D. 

      Cost plus improvements less depreciation

  • 5. 
    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

  • 6. 
    In appraising property an appraiser would depreciate
    • A. 

      Fences

    • B. 

      Agricultural land

    • C. 

      Land under a structure

    • D. 

      A vacant lot

  • 7. 
    Which of the following actions by an appraiser would be unethical?
    • A. 

      Refusal to make an appraisal that the appraiser feels is beyond his or her expertise

    • B. 

      Appraising a property in which the appraiser has disclosed interest

    • C. 

      Accepting an appraisal where the fee will be a percentage of the value derived

    • D. 

      Requesting payment in advance

  • 8. 
    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

  • 9. 
    Which appraisal method would tend to set the upper limit of value on a new structure?
    • A. 

      Gross multiplier

    • B. 

      Income approach

    • C. 

      Cost approach

    • D. 

      Sales comparison approach

  • 10. 
    The advisability of including a tennis court with a planned apartment building may be determined by the principle of
    • A. 

      Contribution

    • B. 

      Progression

    • C. 

      Substitution

    • D. 

      Change

  • 11. 
    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

  • 12. 
    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

  • 13. 
    Which of the following reports would be the most comprehensive appraisal report?
    • A. 

      Short form report

    • B. 

      Narrative report

    • C. 

      Uniform residential appraisal report

    • D. 

      Certified appraisal report

  • 14. 
    A value regarded as bein a stubjective value would be
    • A. 

      Market value

    • B. 

      Assessed value

    • C. 

      Use value

    • D. 

      Book value

  • 15. 
    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

  • 16. 
    The reason the gross rent multiplier is an inaccurate measurement of value is that it fails to consider:
    • A. 

      Depreciation

    • B. 

      Unusual expenses

    • C. 

      Location

    • D. 

      Amenity values

  • 17. 
    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

  • 18. 
    Several $150,000 homes were built in an area where the existing homes had been valued at $400,000 to $500,000.  The effect was that the value of the existing homes declined. Which real estate principle applies to this situation?
    • A. 

      Regression

    • B. 

      Competition

    • C. 

      Substitution

    • D. 

      Integration and disintegration

  • 19. 
    With an annual net income of $40,000 and a capitalization rate of 8 percent, the value of the property using the income approach would be
    • A. 

      $400,000

    • B. 

      $440 ,000

    • C. 

      $500,000

    • D. 

      $520,000

  • 20. 
    The time period during which a structure shows income that is attributable to the structure itself is known as its
    • A. 

      Economic life

    • B. 

      Effective age

    • C. 

      Period for depreciation

    • D. 

      Period of profitability

  • 21. 
    The last lot in a subdivision sold for almost twice the price paid for the first lot sold.  This is an example of the principle of
    • A. 

      Regression

    • B. 

      Diminishing returns

    • C. 

      Supply and demand

    • D. 

      Conformity

  • 22. 
    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

  • 23. 
    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

  • 24. 
    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

  • 25. 
    The highest and best use is the use that provides the greatest
    • A. 

      Benefit to the community

    • B. 

      Gross

    • C. 

      Value

    • D. 

      Capitalization rate

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