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1) Which of the following statements is true regarding the process of reconciliation?
a. Every approach is applicable in all assignments.
b. Applying the three appraisal approaches to value to the same property will typically produce the same figure.
c. The most credible reconciliation uses the average of the different values derived from the three approaches.
d. Identical values produced from different approaches are a red flag.

NY Real Property Appraisals

2) Parties intending to use an appraisal report are known as:
a. clients.
b. intentional users.
c. customers.
d. intended users.
3) Which principle states that the more the form, manner, and character of structures are in harmony with one another, the more valuable each of those structures is?
a. Balance
b. Change
c. Conformity
d. Contribution
4) All of the following are approaches to appraising property, EXCEPT the:
a. sales comparison approach.
b. cost approach.
c. investment approach.
d. income approach.
5) Most residential appraisals are completed on a standardized form called the Uniform Residential Appraisal Report and are considered Appraisal Reports.
a. True
b. False
6) When reconciling, the appraiser should always:
a. analyze all relevant data to develop an opinion of final value based on the applicable appraisal approaches.
b. give each appraisal approach equal weight.
c. rely almost exclusively on the appraisal approach most applicable for the subject property.
d. use averaging to determine what the end result should be.
7) A higher value house among less expensive homes will lose value. This illustrates the principle of:
a. progression.
b. contribution.
c. regression.
d. substitution.
8) Appraisers must be review and analyze the verified data. The two types of data are general data and site-specific data.
a. True
b. False
9) Which principle of valuation is the underlying principle of all approaches to value?
a. Substitution
b. Anticipation
c. Competition
d. Contribution
10) Regarding appraisals and CMAs, which of the following statements is TRUE?
a. Valuations are performed only by appraisers.
b. CMAs are different from appraisals in that only brokers can perform CMAs.
c. CMAs and appraisals are types of valuations.
d. CMAs are the same as and appraisals.
11) An appraisal is a process that involves:
a. developing an opinion of value.
b. deriving a value from computer-based algorithms.
c. summarizing the opinions of value from other experts.
d. summarizing the opinion of value from the property owner.
12) __________ is the price a property would bring if freely offered on the open market, with both a willing buyer and a willing seller.
a. Fair market value
b. Listing offer
c. Asking price
d. Offer
13) The price for which a property should sell is its market value. Market value of improved real property has very little to do with:
a. an open market.
b. its exchange value.
c. its objective value.
d. the original cost.
14) The __________ option is the most commonly used report option.
a. Narrative Form
b. Appraisal Report
c. Form
d. Restricted Appraisal Report
15) Why should an appraiser round the final value estimate?
a. Because numbers confuse clients
b. Because exact figures cease to be an estimate
c. To make the estimate easier to read
d. To allow more room for error
16) Which one of the following statements is most CORRECT:
a. When supply is high and demand is high, then value tends to be high.
b. When supply is low and demand is high, then value tends to be high.
c. When supply and demand are in equilibrium, then value tends to be high.
d. When supply is high and demand low, then value tends to be high.
17) CMAs are similar in methodology to:
a. completing a workfile.
b. a summary appraisal report.
c. using the cost approach.
d. using the sales comparison approach.
18) What step in the appraisal process involves determining why an appraisal is necessary in the first place?
a. Reconciling the data
b. Gathering the data
c. Stating the problem
d. Deciding on the approach
19) Appraisers must follow the standards, rules, and guidelines of ______________ when developing and reporting appraisals.
a. FIRREA
b. HELOC
c. Fannie Mae
d. USPAP
20) Appraiser independence is a critical element to protect the client and intended users and to enhance the _____________ that appraisals contain credible opinions of value.
a. Value
b. Public trust
c. Probability
d. Perception
21) A(n) __________ is used for determining an appropriate listing price for a seller’s home.
a. appraiser’s price opinion
b. appraisal report
c. comparative market analysis (CMA)
d. comparative appraisal report (CAR)
22) In order to appraise property, a person must __________________.
a. Be a licensed or certified appraiser
b. Be a licensed appraiser or broker
c. Be County certified
d. Have at least 5 years’ experience
23) Features that add value to a property are called):
a. amenities.
b. objective values.
c. investment values.
d. liquidation values.
24) Which stage of the neighborhood life cycle indicates possible functional obsolescence and loss in value?
a. Decline
b. Growth
c. Revitalization
d. Stability
25) An appraiser usually estimates the value of a property by using three major approaches. To obtain a final estimate of value the appraiser _______ the three indications of value.
a. amortizes
b. averages
c. finalizes
d. reconciles
26) ____________ is the desire to purchase a commodity.
a. Interest
b. Preference
c. Yearning
d. Demand
27) The goal of a comparative market analysis is to determine an appropriate _________________.
a. Sales price
b. Listing price
c. Assessed value
d. Rental price
28) When should an appraiser use reconciliation in the appraisal process?
a. In every instance
b. Only when two or more approaches to value are used
c. Only when there is conflicting information
d. When he or she is having difficulty expressing a property value
29) Chad bought a cabin in the mountains for $45,000. He repaired the furnace, redecorated the interior, and repainted the exterior. All of this work totaled just over $7,000. When he tried to resell it, the best offer he got for his cabin was $48,500. Which principle of valuation does this scenario exemplify?
a. Competition
b. Competition
c. Change
d. Contribution
30) Which principle of valuation states that the market value of a property is affected by the cost of obtaining an equally desirable and valuable property?
a. Competition
b. Conformity
c. Substitution
d. Supply and demand
31) _________ is the ability of a property to satisfy a need or desire, such as shelter, income, or amenities.
a. Desire
b. Demand
c. Utility
d. Usefulness
32) The __________ Report option is the briefest presentation of an appraisal and contains the least detail.
a. Narrative
b. Appraisal
c. Form
d. Restricted Appraisal
33) A licensed real estate broker or sales agent cannot perform an appraisal, unless:
a. he or she is receiving a commission for an opinion of value.
b. he or she is given the authority by an employing broker.
c. he or she is requested to perform the appraisal by the owner of the property.
d. he or she is a licensed or certified appraiser.
34) A narrative style report contains a high level of detail, is presented in descriptive paragraphs rather than in a form or letter and may be 10 to 100 pages or more in length.
a. True
b. False
35) An appraiser is a person who is expected to perform valuation services __________ and in a manner that is independent, impartial, and objective.
a. Completely
b. Competitively
c. Competently
d. Expeditiously
36) Which of the following is the first step in the appraisal process?
a. Reconcile the data
b. Gather the data
c. State the problem
d. Decide on the approach
37) Appraisers report appraisal results using one of two reporting options. The type of report that is the briefest presentation of an appraisal and contains the least detail is the:
a. Functional Utility Report.
b. Sales Comparison Report.
c. Restricted Appraisal Report.
d. Controlled Assessment Report.
38) Richard purchased adjacent lots in a suburban area where the typical house is a 3 bedroom/2 bath under 2,000 square feet. Richard intends to combine the lots and build a 7 bedroom/6 bath Spanish style mansion. Which principle of valuation is Richard disregarding?
a. Principle of progression
b. Principle of anticipation
c. Principle of conformity
d. Principle of contribution
39) When reviewing the approaches chosen for an assignment, an appraiser considers the validity and reliability of each approach.
a. True
b. False
40) Identifying the client, the definition of value, and the effective date are all included in which step of the appraisal process?
a. Identify the assignment
b. Determine the scope of work
c. Define the problem
d. Reconciliation
41) There are ______ factors that influence real property values.
a. Three
b. Four
c. Five
d. Six
42) A survey of recently expired listings gives you a picture of the prices at which those properties _____________.
a. Should sell
b. Are worth
c. Should continue to be marketed for
d. Did not sell
43) Which of the following scenarios will cause real estate prices to rise?
a. Supply and demand are equal
b. Supply is greater than demand
c. Demand is greater than supply
d. Demand is not an issue
44) Given the choice of two like properties with similar utility and amenities, a buyer will naturally gravitate to the less expensive one. This illustrates the principle of:
a. anticipation.
b. balance.
c. surplus productivity.
d. substitution.
45) Which of the following statements describes the reconciliation process?
a. A mathematical process that uses a strict set of rules
b. An arbitrary process that makes no use of factual data or statistics
c. Uses factual data and statistics, but is ultimately not a mathematical process
d. The widening of a range of value estimates
46) Regarding appraisal and appraisal reporting, which of the following is TRUE?
a. An Appraisal Report requires more work than a Restricted Appraisal Report.
b. Restricted Appraisal Reports require the most work out of all appraisals.
c. Appraisal reports dictate the amount of detail conveyed to the client but have no bearing on the amount of work put into an appraisal.
d. URAR form reports involve extensive work.
47) What is the principle that expresses that value is created by the expectation of future benefits?
a. Anticipation
b. Balance
c. Change
d. Surplus productivity
48) The final steps in the appraisal process are reconciliation and reporting.
a. True
b. False
49) Which of the following causes real estate prices to decrease?
a. Supply and demand are the same
b. Supply is greater than demand
c. Demand is greater than supply
d. Demand is not an issue
50) Which of the following is not a minimum requirement for the content of an Appraisal Report?
a. Illegal departures from the standards
b. Intended use of the appraisal
c. Real property interest appraised
d. Assumptions, hypothetical conditions, and limiting conditions that affected the analyses, opinions, and conclusions
51) Which of the following best illustrates an undesirable floor plan feature?
a. Living room is connected with the entryway
b. Kitchen and family room are located to one side
c. Bedroom is located directly off the kitchen
d. Garage is adjacent to the kitchen
52) A property may be more desirable than another property due to its interior designed for:
a. psychological utility.
b. social utility.
c. functional utility.
d. physical utility.
53) In the sales comparison approach, any aspect of a real estate transaction or any characteristic of the property that may affect the property’s sales price is a(n):
a. principle of competition.
b. element of comparison.
c. element of correlation.
d. principle of progression.
54) All of the following are pertinent sales data to confirm, EXCEPT:
a. terms of sale.
b. demographics of buyers.
c. extenuating circumstances.
d. description of improvements.
55) When a person buys a property at one price and quickly sells it to another at an inflated price, usually within a short period. That is known as _____________.
a. Price gouging
b. Flipping
c. Sale-resale
d. An illegal practice
56) There are ____ steps in the sales comparison approach.
a. 3
b. 4
c. 5
d. 6
57) The __________ approach is predicated on using sales of similar properties to arrive at an estimate of value.
a. replacement
b. reproduction
c. sales comparison
d. cost
58) When using the sales comparison approach, an appraiser will utilize __________ that are similar to the subject property.
a. interim uses
b. general plans
c. comparables
d. previous appraisal reports
59) Which of the following is a disadvantage of the sales comparison approach?
a. Easy to understand how adjusted comparables can represent a current value for the subject
b. Best determinate for frequently sold property types
c. Simple to use
d. Not as useful with insufficient or inaccurate data
60) All of these are counted as “rooms” in a house, EXCEPT for ____________.
a. Utility rooms
b. Bedrooms
c. Kitchens
d. Family rooms
61) What must an appraiser do if there is market resistance to a property because its improvements are not compatible with the neighborhood?
a. Address the impact to the value and marketability of the subject property
b. Ignore the impact to the value and marketability of the subject property
c. Look for comparable properties outside of the neighborhood
d. Look for comparable properties in another city
62) two sections make up the exterior of a home?
a. Above grade and below grade
b. Living levels and roof
c. Structural and mechanical
d. Superstructure and substructure.
63) What principle states that the maximum value of a property is set by the cost of acquiring an equally desirable and valuable substitute property?
a. Principle of addition
b. Principle of contribution
c. Principle of substitution
d. Principle of anticipation
64) Edward is a real estate appraiser who is using the sales comparison approach to find the value for a single-family home. In order to do this, he looks for suitable comparable properties in order to arrive at an accurate assessment of value. Edward should consider all the elements of comparison, EXCEPT:
a. having owners with the same occupation or similar field.
b. the property rights conveyed.
c. financing terms.
d. similar physical characteristics.
65) The __________ approach is one of the three classic approaches to value, involving comparison of the subject property to similar properties that have recently sold.
a. income
b. sales comparison
c. site valuation
d. economic
66) What is necessary in order for the sales comparison approach to be useful?
a. Recent, reliable transactions
b. Reliable cash flow
c. Upgraded comparables
d. Vacant land
67) All of the following are common undesirable factors in an improvement analysis, EXCEPT:
a. unappealing mixture of exterior architectural styles.
b. an architectural style that does not fit the site.
c. an architectural style that is homogenous with other styles within the neighborhood.
d. an architectural style that is incompatible with other styles in the neighborhood.
68) All of the following are advantages of the sales comparison approach, EXCEPT:
a. finding enough recently sold similar properties to get comparable values.
b. being easily applied for the sale of single-family homes.
c. being the most easily understood method of valuation.
d. being most commonly used by real estate agents.
69) The sales comparison approach has a systematic procedure. Which of the following is the first step?
a. Verify data
b. Collect market data
c. Select market data
d. Apply adjustments
70) The tenant’s interest in the leased property during the term of the lease is called the _______________.
a. Leased fee estate
b. Leasehold estate
c. Fee simple estate
d. Entitlement
71) The area to be searched is dependent upon:
a. sales activity and the type of development surrounding the property.
b. sales activity and the architectural style prevalent in the area.
c. the development surrounding the property and architectural style.
d. the development surrounding the property and its demographics.
72) Once the appraiser has collected, analyzed, and verified sales data, the next step is to:
a. make adjustments to comparables.
b. create the appraisal report.
c. reconcile the data.
d. form an opinion of value.
73) Which of the following is NOT a question to ask before collecting market data?
a. What are the characteristics of the subject property?
b. What area should be searched for sales?
c. What period should be investigated for sales?
d. What is the cost of the property?
74) The __________ is an appraisal method in which the property being appraised is compared to sales of similar properties in order to arrive at a value for the subject property.
a. income approach
b. sales comparison approach
c. cost approach
d. market approach
75) Which of the following is an advantage of the sales comparison approach?
a. It is a terrible indicator of value for infrequently sold properties and properties that are unique.
b. It is not as useful with insufficient or inaccurate data.
c. It is easy to understand how adjusted comparables can represent a current value for the subject.
d. Its reliance on historical data can be a limitation, because while information might be easy to gather, it may be outdated or completely erroneous.
76) Which of the following is not one of the major categories of adjustment for all comparable sales?
a. Time
b. Location
c. Physical characteristics
d. Economic considerations
77) When analyzing comparables, what will an appraiser do to “equalize” each comparable sale to the subject property?
a. Apply adjustments
b. Form an opinion of value
c. Determine conditions of sale
d. Calculate economic rent
78) What is the next step after selecting the most appropriate comparable properties?
a. Verifying the information
b. Reconciling the information
c. Creating the appraisal report
d. Adjusting the comparables
79) Value is created by the expectation of future benefits, is the principle of ______________.
a. Balance
b. Substitution
c. Compounding
d. Anticipation
80) The goal of the sales comparison approach is to select the market sales that are ______________ to the subject property.
a. Physically closest
b. Most similar in size
c. Most similar in utility
d. Most homogeneous
81) The sales comparison approach to appraisal would be least reliable:
a. in a market that is not active.
b. when the comparables are similar in age.
c. when the comparables are in the same price range.
d. when the comparables are located in the same neighborhood.
82) An example of primary verification would be to ____________________.
a. Interview assessors
b. Use MLS data
c. Examine title data
d. Talk to someone who was involved in the transaction
83) What approach is the one most easily and commonly used by real estate licensees?
a. Sales comparison approach
b. Cost approach
c. Income approach
d. Capitalization approach
84) A(n) __________ is any aspect of a real estate transaction or any characteristic of the property that may affect the property’s sales price.
a. element of comparison
b. reconciliation
c. adjustment guideline
d. data source
85) The sales comparison approach is rarely used when appraising:
a. residential properties.
b. special-use properties.
c. high-end properties.
d. condominiums.
86) How do appraisers rate the condition of the improvements?
a. Using the Uniform Appraisal Dataset (UAD) from C6 to C1.
b. Using the Uniform Appraisal Dataset (UAD) from C6 to C2.
c. Using the Uniform Appraisal Dataset (UAD) from C6 to C3.
d. Using the Uniform Appraisal Dataset (UAD) from C6 to C4.
87) When appraisers inspect the subject property, typically they inspect the interior and exterior of the residence.
a. True
b. False
88) The buyer, seller, and broker associated with the sale or purchase make up the:
a. subscription data.
b. public record of information.
c. parties to the transaction.
d. appraiser’s workfiles.
89) What two sections make up the exterior of a home?
a. Above grade and below grade
b. Living levels and roof
c. Structural and mechanical
d. Superstructure and substructure.
90) What determines the condition and usefulness of a building?
a. Actual age in years
b. Age of the neighborhood
c. Effective age
d. Income potential
91) The formula used to calculate the gross rent multiplier is:
a. GRM = market value / gross rent.
b. GRM = gross rent / sales value.
c. GRM = assessed value / gross rent.
d. GRM = contract rent / assessed value.
92) To calculate a gross rent multiplier accurately, the appraiser needs ________ from comparable properties.
a. Annual rent and the selling price
b. Operating expenses and the capitalization rate
c. Original cost and the debt service
d. Net income and selling price
93) _______________ obsolescence is incurable in virtually all cases.
a. Functional
b. External
c. Internal
d. Economic
94) The __________ is a method of appraising property based on the property’s anticipated future income.
a. income approach
b. sales comparison approach
c. cost approach
d. market approach
95) Which of the following statements regarding the income approach is NOT true?
a. The income approach to value is solely independent of a property’s income, real or potential.
b. The income approach can convert potential income into a current value.
c. The income approach is the best indicator of value for income producing properties.
d. The income approach will require current market data for rentals of like properties as well as a careful analysis of the operating statements.
96) The cost approach recognizes there are two major components in real estate___________________.
a. Real property and personal property
b. Tangible and intangible assets
c. Taxable and non-taxable
d. Land and improvements
97) The __________ method assumes that there is a typical ratio between the land value of a property and the value of its improvements.
a. Land residual
b. Extraction
c. Ground rent capitalization
d. Allocation
98) The estimated period during which the structure will profitably produce income is its ___________ life.
a. Actual
b. Economic
c. Profitable
d. Productive
99) In appraisal, depreciation means:
a. decrease in value.
b. increase in value.
c. plottage increment.
d. stabilization of value.
100) Donna is hired to appraise a residential fourplex in a suburban neighborhood. Three of the four units are rented and the fourth one is being renovated. Which appraisal approach should Donna use?
a. Sales comparison approach
b. Cost depreciation approach
c. Income approach
d. Depreciation approach
101) ______________ cost is the cost of replacing the improvement with one that is the exact replica, having the same quality of workmanship, design, and layout.
a. Replacement
b. Duplication
c. Property residual
d. Reproduction
102) Tammy is a real estate appraiser who is estimating the income of a rental property for a client who is a real estate investor. Tammy is looking at the income remaining after the operating expenses are deducted from the effective gross income. What income is Tammy looking at?
a. The effective operating income
b. The net operating income
c. The gross operating income
d. The effective gross income
103) When using the income approach, the appraiser should verify all of the following, EXCEPT:
a. the market rents are mathematically accurate
b. the reconstructed operating statement is accurate
c. the gross income estimate is mathematically accurate
d. the comparable sales are incomparable to the subject property
104) Using the principle of substitution, a person will not pay more for a substitute if he or she can get the subject property for less. That is why the cost approach:
a. always sets the lowest limit of value for a property.
b. tends to set the upper limit of value for a property.
c. never is used to value residential property.
d. can only be used by Certified General Appraisers.
105) What does depreciation mean in appraisal?
a. increase in value.
b. stabilization of value.
c. decrease in value.
d. plottage increment.
106) To calculate a gross rent multiplier accurately, what does the appraiser need from comparable properties?
a. Net income and selling price
b. Original cost and the debt service
c. Annual rent and the selling price
d. Operating expenses and the capitalization rate
107) Sidewalks, curbs, drainage structures, retaining walls, grading, streets, and utility hook-ups, are called ______________.
a. Site improvements
b. Personal property
c. Tangible assets
d. Accessories
108) Which of the following is an advantage of the cost approach?
a. Very precise for newer buildings
b. The older the building becomes, the more difficult it is to calculate its accrued depreciation accurately
c. More complicated approach
d. Tends to identify the upper levels of the value range for a property
109) A 12-year-old building in excellent condition is given an age of 6 years by an appraiser. This would be known as its:
a. actual age.
b. real life.
c. effective age.
d. physical life.
110) In the direct capitalization approach to appraisal, the most difficult step to determine is:
a. gross income.
b. effective net income.
c. net income.
d. the capitalization rate
111) Which of these principles influence land value?
a. Supply and demand
b. Change
c. Balance
d. All of them
112) In appraising a unique or one-of-a-kind property, such as a church, fire station, or hospital; the ___________ approach would probably be the most appropriate approach.
a. Income
b. Sales comparison
c. Cost
d. Gross rent multiplier
113) When using the cost approach, an appraiser needs to know the:
a. cost to reproduce.
b. value of the land.
c. square footage.
d. All choices are correct.
114) Occasionally, in unusual property circumstances, the _______ approach is the only one an appraiser can use.
a. Sales comparison
b. Cost
c. Income
d. Paired-sales
115) The effective annual gross income of a property is the difference between the annual gross income and:
a. vacancy factor and rent collection losses.
b. allowable expenses and depreciation.
c. capitalization rate.
d. administrative expenses and capital improvements.
116) The __________ estimates the value of the land as if vacant and adds that to the depreciated cost of new improvements to determine an estimate of value for the entire property.
a. income approach
b. sales comparison approach
c. cost approach
d. market approach
117) Which of the following appraisal report options is the most commonly used report option?
a. Narrative Report
b. Appraisal Report
c. Verbal Report
d. Restricted Appraisal Report
118) The reconciliation process:
a. is a mathematical process which uses a strict set of rules.
b. uses factual data and statistics, but is ultimately not a mathematical process.
c. is the narrowing of a range of value estimates.
d. is entirely arbitrary, and makes no use of factual data or statistics.
119) What is the focus of most real estate appraisal assignments?
a. A specified property’s market value
b. A specified property’s liquidation value
c. The amount a seller should request when listing a house
d. The property taxes an assessor should pay

120) The process of refining the range or set of values into a single, supportable value opinion is called:
a. reporting.
b. reconciliation.
c. refining.
d. recognition.
121) The __________ is an appraisal method that estimates the present worth of future benefits from ownership of a property in order to determine that property’s value.
a. income approach
b. predictive approach
c. historical approach
d. speculative approach
122) When researching market data, the appraiser is concerned with all of the following, EXCEPT:
a. characteristics of the subject property.
b. area of search.
c. time period for sales.
d. the cost of the property.
123) What is the commonality of location, climate, topography, and the size and shape of the property?
a. Economic factors that influence value
b. Physical factors that influence value
c. Political factors that influence value
d. Social factors that influence value
124) The cost approach typically is used when appraising all of the following, EXCEPT:
a. church buildings.
b. special use properties.
c. unique homes.
d. tract homes with several comparable properties.
125) Which of the following statements describes an appraisal?
a. A person who values property in a competent, objective, and impartial manner
b. A biased estimation of value
c. An act or process of developing an opinion of value
d. A written statement depicting the appraiser’s opinion
126) When used on single-family or smaller multiple-family residential income properties, the __________ is most often employed in the real estate industry.
a. gross rent multiplier (GRM)
b. income approach
c. small property approach
d. leasehold method
127) Adjustments to the comparables must be made in a specific sequence if the adjustments are entirely percentage adjustments. Which adjustment should be made first?
a. Financing and sales concessions
b. Location
c. Physical
d. Rights conveyed
128) The main principle behind the income approach is the principle of:
a. anticipation.
b. supply and demand.
c. substitution.
d. contribution.
129) Both report types can be presented in all of the following ways, except:
a. as a form report.
b. verbally.
c. in a narrative style.
d. in a documentary.
130) In regard to selecting comparables which of the following statements is NOT TRUE?
a. It may be necessary to consider comparables in other neighborhoods.
b. Appraisers are permitted to select comparables only from the neighborhood of the subject.
c. Depending on the property type, an appraiser may need to look in different areas for a comparable.
d. The distance an appraiser will have to go for comparable information will vary from assignment to assignment.
131) Which of the following is NOT part of the systematic procedure in the sales comparison approach?
a. Collect market data
b. Verify data
c. Reconcile adjusted data
d. Create financial models with data
132) Crystal is a real estate appraiser who is determining the value of a vacant land parcel by looking at its highest and best use. Crystal knows that highest and best use is the use that meets four tests with respect to suitable alternative uses. Which of the following is NOT one of the four tests of highest and best use?
a. Vastly underutilized
b. Physically possible
c. Economically feasible
d. Maximally productive
133) The income approach is most useful when appraising properties when:
a. a property’s ability to produce income is considered by potential buyers.
b. potential buyers plan to use the property as a primary residence.
c. a property is under construction.
d. the appraiser prefers the results produced by using the income approach.
134) Which of the following is an advantage of using the cost approach?
a. The older the building becomes, the more difficult it is to calculate its accrued depreciation accurately.
b. This approach is a more complicated approach.
c. The cost approach lends itself to multiple errors because of the sheer number of calculations.
d. It is the best indicator of value when the building is specialized or there is a lack of comparable properties.
135) What are used to explain the differences of prices paid for real estate?
a. Subscription data
b. Elements of comparison
c. Adjustment data
d. Physical characteristics
136) The reconciliation process is used to identify which approach to value provides the:
a. weakest and least reliable indication of value.
b. strongest and most reliable indication of value.
c. perfect indication of value.
d. most comparable indication of value.
137) Baker is looking to for an unbiased opinion that gives him an estimate of his property value. Baker needs a(n):
a. appraisal.
b. comparative market analysis.
c. broker price opinion.
d. survey.
138) __________ is a loss in value that is economically feasible to correct.
a. Curable depreciation
b. Incurable functional obsolescence
c. External obsolescence
d. Short-lived economic obsolescence
139) An appraiser must be aware of popular room layouts and floor plans and know why they are desirable. Which of the following is a desirable feature in a floor plan?
a. Family room is next to the master bedroom.
b. Kitchen has direct access to the garage.
c. Entry is directly into the living room.
d. Bedrooms are next to the kitchen.
140) Which type of depreciation is almost always incurable because it is physically impossible to cure or too expensive to be worth curing?
a. Functional obsolescence
b. External obsolescence
c. Deferred maintenance
d. Physical deterioration
141) An appraiser valuating a property looks at the __________, rather than the contract rent, in order to discover the fair income of the property.
a. appraised rent
b. economic rent
c. express agreement
d. vacancy factor
142) Real estate agents need to know how to prepare a comparative market analysis (CMA) for their sellers or buyers. Preparing a CMA is similar in many ways to:
a. calculating accrued depreciation.
b. determining a gross rent multiplier.
c. completing the adjustment grid in the sales comparison approach.
d. using the square foot method to calculate construction costs.
143) __________ are parties who intend to use an appraisal.
a. Clients
b. Intentional users
c. Customers
d. Intended users
144) The principle of __________ states that the maximum value of a property is set by the cost of acquiring an equally desirable and valuable substitute property.
a. substitution
b. competition
c. appraisal
d. anticipation
145) Of the following adjustments—market conditions, physical characteristics, financing and sales concessions, and location adjustments—which usually is made immediately after the adjustment for property rights conveyed?
a. Physical characteristics
b. Location adjustments
c. Market conditions
d. Financing and sales concessions
146) In the sales comparison approach, what provides the most straightforward and direct manner for the appraiser to use to develop a credible opinion of value?
a. Analysis of income
b. Analysis of architecture
c. Analysis of sales
d. Average purchase price
147) An appraiser researches a subject property and takes note of the increased growth of the neighborhood surrounding the property. He also cites the economic growth that the area is experiencing. Which of the four principles of valuation addresses this observation?
a. Principle of change
b. Principle of alteration
c. Principle of neighborhoods
d. Principle of substitution
148) When an appraiser is performing a room count, he or she includes all of the following, EXCEPT the:
a. family room.
b. bathrooms.
c. living room.
d. den.
149) Adjustments are applied to:
a. the comparable properties.
b. the subject property.
c. the property being appraised.
d. both the subject and the comparables.
150) __________ is the difference between the improvement’s market value and the cost to build it new.
a. Deferred maintenance
b. Future depreciation
c. Accrued depreciation
d. Internal obsolescence
151) In which of the following situations will the sales comparison approach probably not be used? The comparison approach is LEAST APPLICABLE when:
a. there are a sufficient number of comps.
b. appraising property types that are bought and sold regularly.
c. appraising single-family homes.
d. appraising special-use properties, such as a library.
152) Which appraisal report is the briefest presentation of an appraisal and contains the least detail?
a. Narrative style report
b. Appraisal report
c. Form style report
d. Restricted Appraisal report
153) Which of the following lists the steps for the sales comparison approach in order?
a. Collect data, verify data, apply adjustments, reconcile values
b. Collect data, analyze data, reconcile values, apply adjustments
c. Analyze data, verify data, reconcile values, apply adjustments
d. Analyze data, apply adjustments, verify data, reconcile values
154) All of the following are sources of property data for an appraiser, EXCEPT:
a. the Internet.
b. a visitor’s observation.
c. government publications.
d. the MLS.
155) Three of the following are typical applications for the cost approach. Which one probably would NOT use the cost approach?
a. Post office, library, hospital.
b. 30-year-old tract home.
c. Brand new office complex.
d. Frank Lloyd Wright-inspired mansion.
156) A(n) __________ is a comparison analysis that real estate brokers use to help determine an appropriate listing price for the seller’s house.
a. comparative market analysis
b. value statement
c. comparable sale
d. appraisal report
157) The sales comparison approach can be used in which of the situations below?
a. When appraising single-family residences, multi-residential properties, and vacant land only
b. When appraising residential and income property
c. Any property where sufficient comparable data is available
d. When appraising special-purpose buildings, residential property, and qualified-income properties
158) The difference between demand and effective demand is that:
a. demand is the desire or ability to purchase a commodity; effective demand is the desire and ability.
b. demand is the desire and ability to purchase a commodity; effective demand is the desire or ability.
c. there can be no demand without effective demand.
d. there is no difference.
159) What is a disadvantage of using the sales comparison approach?
a. Easy to understand how adjusted comparables can represent a current value for the subject
b. Best determinate for frequently sold property types
c. Simple to use
d. Not as useful with insufficient or inaccurate data
160) When reviewing the approaches chosen for an assignment, appraisers consider all of the following, EXCEPT:
a. the reliability of each approach.
b. the validity of each approach.
c. the quantity and quality of data for each approach that is used.
d. the inaccuracy of data for each approach that is used.
161) The cost approach recognizes that there are two major components in real estate. They are:
a. cost and value.
b. land and improvements.
c. supply and demand.
d. income and expenses.
162) A real estate sales associate is attending a seminar regarding the current status of the real estate market. During the seminar, a real estate appraiser repeatedly brings up the concept of market value. Which statement below best exemplifies market value?
a. It is the same as market price.
b. It is similar to cost.
c. It is the price for which the property should sell.
d. It is always the same as cost and market price.
163) Which of the following is the maximum income a property could generate?
a. Potential gross income
b. Effective gross income
c. Net operating income
d. Sales comparison income
164) Of the following, which lists the steps for the sales comparison approach in order?
a. Collect data, verify data, apply adjustments, reconcile values
b. Collect data, analyze data, reconcile values, apply adjustments
c. Analyze data, verify data, reconcile values, apply adjustments
d. Analyze data, apply adjustments, verify data, reconcile values
165) Which of the following is not one of the property types for use in the sales comparison approach?
a. Single-family residences
b. Condominiums
c. Mall plazas
d. Vacant land
166) __________ is the amount of money requested or paid for a property.
a. Value
b. Price
c. Cost
d. Appraisal
167) Many valuation principles interact to determine the final value of a piece of real estate. Which principle of value is almost universally recognized as being the first step in how market prices are determined? The principle of:
a. conformity.
b. substitution.
c. anticipation.
d. supply and demand
168) Which step of the appraisal process includes identifying the client, the definition of value, and the effective date?
a. Identify the assignment
b. Determine the scope of work
c. Define the problem
d. Reconciliation
169) Which of the following determines the effective age of a property?
a. Actual age in years
b. Income potential
c. Age of the neighborhood
d. Condition and usefulness of the property
170) In which situation can the sales comparison approach be used?
a. When appraising single-family residences, multi-residential properties, and vacant land only
b. When appraising residential and income property
c. Any property where sufficient comparable data is available
d. When appraising special-purpose buildings, residential property, and qualified-income properties
171) What is the overruling principle behind the sales comparison approach?
a. Anticipation
b. Substitution
c. Multiplication
d. Supplication
172) The appraiser should do which of the following when reconciling?
a. Always give each appraisal approach equal weight
b. Use averaging to determine what the end result should be
c. Rely almost exclusively on the appraisal approach most applicable for the subject property
d. Analyze all relevant data to determine a final value based on the applicable appraisal approaches
173) The sales comparison approach is most applicable when:
a. appraising occupied land.
b. there is a sufficient number of comparable sales.
c. appraising properties in an inactive market area.
d. appraising large multi-family residences.
174) Appraisers use three approaches to value when arriving at an opinion of value. Which is NOT an approach to appraising property?
a. Cost approach
b. Income approach
c. Investment approach
d. Sales comparison approach
175) An appraiser’s inspection of the subject property has two main parts. They are the:
a. house and the lot.
b. drive-by and walk-through.
c. exterior and the interior.
d. elevation sheets and mechanical systems.
176) The income approach is generally not applicable to:
a. single-family residences.
b. apartment buildings.
c. stores.
d. offices.
177) If a property’s net operating income is $92,250 and the estimated cap rate is 9%, what is the value of the property?
a. $100,553
b. $1,025,000
c. $1,206,630
d. $1,300,500
178) The four elements that create value are:
a. transferability, utility, scarcity, and discount.
b. demand, utility, substitution, and transferability.
c. demand, uniformity, scarcity, and transferability.
d. transferability, demand, scarcity, and utility.
179) Regarding the cost approach, which statement is NOT true?
a. The cost approach is very precise for old buildings.
b. The cost approach is the best indicator of value when the building is specialized or there is a lack of comparable properties.
c. The cost approach to value probably has more limitations than benefits.
d. The cost approach is best suited as a very valuable support approach to the other two major approaches, unless special circumstances dictate otherwise.
180) A dollar or percentage amount that is added to or subtracted from the sales price of a comparable property is a(n):
a. adjustment.
b. addition.
c. subtraction.
d. collation.
181) Diane is a real estate appraiser who is ready to start the appraisal process to determine the value of a condominium. This will be her first time appraising residential property after appraising commercial property since she started her career. What is her first step in the appraisal process for determining the value of the condominium?
a. State the problem
b. Reconcile the data
c. Collect the data
d. Write the appraisal report
182) When using the cost approach in the assignment, the appraiser should verify all of the following, EXCEPT:
a. the sites used to determine the subject’s site value are comparable to the subject.
b. any adjustments made to comparable sites are logical and accurate.
c. reproduction or replacement cost is correctly identified.
d. the market rents are mathematically accurate.
183) A real estate sales associate is working with clients to determine the listing price to sell their home. The sales associate is preparing a comparative market analysis using comparable properties within the area. A CMA usually includes all of the following data, EXCEPT:
a. mortgage rates.
b. current listings.
c. expired listings.
d. recently sold homes.

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