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REAL ESTATE APPRAISAL PRACTICE EXAM QUESTIONS AND ANSWERS
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REAL ESTATE APPRAISAL PRACTICE EXAM QUESTIONS AND ANSWERS
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REAL ESTATE APPRAISAL PRACTICE EXAMQUESTIONS AND ANSWERS
Demographic considerations in real estate appraisals would include:
a) The sale prices of residential properties
b) The soil types on the subject property
c) The income level of the property owners
d) The age of the residences in a market - Answers -c) The income level of the property
owners
When demand for housing increases, the supply: - Answers -Increases slowly
The subject is located in a market where the population is stable but the average
number of persons per household has increased from 2.35 to 2.77. What does this
imply about the apartment market in the subject's area? - Answers -There should be
less demand for apartments
Office space supply is most affected by:
a) population changes in the subject's area
b) changes in retail buying habits
c) the conversion or new construction of office buildings
d) increases in the regulation of retail (shopping center) construction - Answers -c) the
conversion or new construction of office buildings
The economic base of a community is - Answers -The economic activity of a community
that enables it to attract income from outside its borders.
What type of analysis is concerned with the characteristics of a property type, such as
the office market? - Answers -Market analysis
Gentrification is - Answers -A process by which older homes in a neighborhood are
remodeled and different residents replace the lower-income residents.
A trade area is - Answers -A geographic area from which a retail center draws its
customers
A residential appraiser was preparing a form appraisal report. The form asked for an
indication of whether supply and demand were in balance, oversupplied, or
undersupplied. The appraiser decided that the best technique for supporting an answer
,to this question was a supply & demand analysis with an annual absorption rate divided
into the current inventory. This technique - Answers -Is an inferential market analysis
Retail space demand is affected by - Answers -Increases or decreases in disposable
income
The subject real estate is improved with a two-bedroom residence. Identifying the
bedroom count as an attribute that affects the subject residential property value would
be part of the - Answers -property productivity analysis
An example of disaggregation in real estate markets would be - Answers -Reclassifying
several submarkets into one larger market
In the sale of residential properties, the amount of property taxes is - Answers -
Important because the ability to qualify for a mortgage loan includes principal, interest,
taxes, & insurance (PITI); lenders compare the buyers' income amounts with the
required payment, including taxes and insurance
Items that are designed and built to be permanent and intended to be included & sold
with real property are - Answers -Real estate
Real estate is - Answers -The physical land and appurtenances affixed to the land
Real property is - Answers -All interests, benefits, and rights inherit in the ownership of
real estate
In a highest and best-use analysis in an oversupplied market, it is likely that the
___________ is/are more significant than in a balanced market.
a) physically possible uses
b) current use of the property
c) timing of the use
d) brokerage fees - Answers -c) timing of the use
When an appraiser completes a secondary market residential form (such as a Fannie
Mae form), the highest and best use as though vacant is - Answers -not included
because the form instructions state that the form is only to be used when the highest
and best use is to leave the residence on the site; if the highest and best use is to
remove the residence from the site, these types of forms should not be used.
The subject was financed with a mortgage loan that started out with a payment that was
less than enough to satisfy the interest charges on the loan. At the beginning of the third
year and for the next two years, the paymetn went up to a level at which it was only
enough to pay the interest on the loan. The payment was increased at the beginning of
Year 5 to a level that would amortize the loan within 26 years. Three different payments
, were paid, but the interest rate was always 6%. This is called a - Answers -Graduated
payment mortgage
The subject is a 1.25-acre site located at the corner of Main and South in Smallburg.
The site is perfect for a new drugstore, gas station, or bank branch, but has no curb cuts
on either busy street. The city refused to give curb cuts within 150 feet of the
intersection to accommodate better traffic flow. Access is from the rear via the parking
lot of another site. This lack of direct access from the busy street will - Answers -
Decrease demand for the site because some users will only buy a property with direct
access
The subject is a 10-acre industrial site in the suburbs of Bigville. The most significant
positive government influence on the property value would be: - Answers -A decrease in
employment expenses (cost of employees)
The subject is a 0.25-acre site with 100 feet of frontage on the Atlantic Ocean. This site
is located on a small island in a bay. There is only enough frontage for 35 such lots on
this island. The zoning requires 100 feet of ocean frontage to build. Sites with ocean
frontage sell for 500% more than similar land without frontage on the ocean. This
frontage limitation will cause: - Answers -Prices to be very high for the lots that are
buildable if there is demand for oceanfront lots in this area.
High interest rates cause - Answers -People to buy less on credit
The subject real estate is improved with a two-bedroom home that is located in a market
where demand for that design is high. There is also a good market for one-bedroom
homes. The market for four-bedroom homes is weak and over-supplied. In this market,
85% of buyers pay cash for real estate. The other 15% commonly finance less than half
of the price. An important factor for these buyers would be: - Answers -The level of
taxation on real estate
The subject real estate is located next to a busy thoroughfare with one lane in each
direction. The local government is planning to expand the road to four lanes and will
need a 21-ft by 100-ft. area off the front of the property. To initially establish "just
compensation," the local government usually - Answers -Appraises the property before
the taking and again after the taking (with the same effective date) and makes an offer
based on the difference between the two values.
Zoning - Answers -Controls land use
The most common definition of market value in the United States includes the following
specification: - Answers -The assumption of a sale of the subject on the effective date of
appraisal.
An appraiser was recently asked to appraise a hotel. The comparable sales used in this
analysis were all sales of the entire operation. The income used in the calculation was
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