SALES COMPARISON APPROACH MCKISSOCK
CLASS QUESTIONS AND ANSWERS 2025
What,is,created,in,the,mind,of,an,individual,or,market,participant?,-,ANSWER,Value
What,is,the,motivation,of,an,individual,,group,of,persons,,or,business,entity,involving,the,purcha
se,of,an,item?,-,ANSWER,Desire
As,the,term,applies,to,appraisal,,transferability,refers,to,the,number,of,goods,and,services,that,c
an,be,purchased,with,a,unit,of,currency.,(T/F),-,ANSWER,True
What,does,not,include,physical,mobility,,but,rather,the,control,and,possession,of,all,the,rights,of
,ownership?,-,ANSWER,Purchasing,Power
As,it,refers,to,real,property,appraisal,,what,word,is,best,used,to,describe,"value"?,-
,ANSWER,Opinion
Value,is,a,fact,,or,an,estimate,of,fact.,(T/F),-,ANSWER,False
USPAP,cautions,appraisers,to,use,the,definition,of,market,value,that,is,specified,in,the,DEFINITIO
NS,section,of,USPAP.,(T/F),-,ANSWER,False
Which,statement,is,TRUE,regarding,appraisers,and,value?,-
,ANSWER,Market,value,is,only,one,type,of,value;,appraisers,estimate,other,types,of,value,as,well
.
It,is,important,for,appraisers,to,consider,the,specific,definition,of,value,that,is,appropriate,for,th
e,appraisal,assignment,being,undertaken.,(T/F),-,ANSWER,True
The,rights,and,benefits,inherent,in,the,ownership,of,a,parcel,of,land,would,be,defined,as:,-
,ANSWER,Real,Property,-
,It,is,commonly,understood,that,real,estate,is,the,land,and,everything,permanently,attached,the
,reto,,while,real,property,consists,of,the,rights,and,benefits,inherent,in,ownership.,(Chapter,1,-
,The,Importance,of,Value)
USPAP,cautions,appraisers,to,use,the,definition,of,market,value,that,is,specified,in,the,DEFINITIO
NS,section,of,USPAP.,(T/F),-,ANSWER,False,-
,In,its,DEFINITIONS,section,,USPAP,does,not,set,forth,a,specific,definition,of,market,value;,instea
d,it,provides,a,somewhat,generic,overview,of,the,concept.,Instead,of,providing,a,specific,market
,value,definition,,USPAP,cautions,appraisers,to,identify,the,exact,definition,of,value,and,its,autho
rity,,in,every,market,value,appraisal.,(Chapter,1,-,USPAP,and,Value,Definition)
If,an,appraiser,is,valuing,real,property,by,sales,comparison,,whose,actions,is,he,or,she,LEAST,likel
y,to,consider?,-,ANSWER,Government,Agencies
Which,phrase,is,an,example,of,economic,equilibrium?,-
,ANSWER,The,quantity,demanded,is,equal,to,the,quantity,supplied.
What,is,the,loss,of,income,that,results,from,not,choosing,an,alternative?,-
,ANSWER,Opportunity,Cost
Which,principle,equally,applies,to,residential,and,commercial,properties?,-
,ANSWER,Substitution
The,principle,of,substitution,does,not,apply,to,non-owner-
occupied,commercial,properties.,(T/F),-,ANSWER,False
What,adds,the,most,value,to,land,and,the,improvements?,-
,ANSWER,When,the,property,is,used,for,its,highest,and,best,use
Which,methods,are,most,appropriate,to,the,sales,comparison,approach?,-
,ANSWER,Economics,and,Statistics
,Why,is,the,real,estate,market,considered,inefficient?,-
,ANSWER,The,real,estate,market,is,complex.,-,
Because,of,the,lack,of,readily,available,information,during,many,of,the,various,levels,of,a,transac
tion.,-,
It,takes,a,relatively,long,time,to,improve,a,parcel,of,real,estate.
The,growth,rate,is,higher,in,Community,A,than,Community,B,,because,Community,A,has,public,
water,and,sewage,available.,As,a,result,,property,values,are,higher,in,Community,A.,This,is,an,ex
ample,of,what,force,affecting,the,market?,-,ANSWER,Environmental,-
,Environmental,or,physical,factors,include,transportation,,open,space,,availability,of,public,utiliti
es,,among,other,factors.,(Chapter,1,-,The,Four,Great,Forces)
Market,segmentation,separates,the,market,for,different,types,of,properties,such,as:,-
,ANSWER,Lodging
Residential,or,multi-family
Commercial,or,office
Which,market,is,inefficient?,-,ANSWER,Real,estate,market
A,large,,old,,dilapidated,commercial,building,sits,in,an,economically,depressed,section,of,the,city
.,There,are,no,market,participants,who,have,the,financial,capability,to,renovate,and,use,such,a,l
arge,building.,This,is,an,example,of,what,force?,-,ANSWER,Economic
Dave,is,completing,a,market,value,appraisal,on,a,property,that,is,currently,improved,with,an,offi
ce,building.,Which,statement,will,most,likely,be,TRUE,regarding,his,highest,and,best,use,analysis
?,-,ANSWER,He,will,have,to,develop,two,highest,and,best,use,opinions.
Annette,is,appraising,a,five-
acre,vacant,parcel,of,land,,in,an,area,where,there,is,no,zoning.,As,a,residential,home,site,,the,pr
operty,is,worth,$225,000.,For,commercial,purposes,,it,is,worth,$1.25,per,square,foot.,For,indust
rial,purposes,,it,is,worth,$50,000,per,acre.,What,is,the,highest,and,best,use,of,the,property?,-
,ANSWER,Commercial
, When,considering,legal,permissibility,and,current,land,use,regulations,,an,appraiser,must,also,c
onsider,__________.,-,ANSWER,Reasonably,probable,modifications,of,land,use,regulations
Which,statement,is,FALSE,regarding,highest,and,best,use,analysis?,-
,ANSWER,It,does,not,help,in,selecting,comparable,sales.
Carole,is,appraising,a,vacant,land,parcel,which,can,be,used,for,residential,,commercial,,or,indust
rial,use.,What,is,the,highest,and,best,use,of,the,property?,-
,ANSWER,Cannot,determine,from,the,information,provided
The,criteria,for,highest,and,best,use,include,all,of,the,following,EXCEPT:,-
,ANSWER,No,undue,stimulus
Harry,is,preparing,a,real,property,appraisal,report,for,his,client.,Which,USPAP,Standard,must,he,f
ollow,when,preparing,this,report?,-,ANSWER,STANDARD,2
A,property,is,improved,with,a,building,and,is,valued,at,$425,000.,It,would,cost,$50,000,to,raze,a
nd,remove,the,building,,and,the,value,of,the,vacant,site,would,be,$500,000.,Under,this,scenario,
,razing,and,removing,the,building,would,be,considered,____________.,-
,ANSWER,Financially,Feasible,-
,Razing,and,removing,the,building,would,be,considered,financially,feasible,,because,it,produces,
a,positive,return.,This,is,not,necessarily,the,highest,and,best,use,,though,,because,there,may,be,
other,alternative,uses,which,would,produce,a,greater,return.,(Chapter,1,-,As,Improved)
What,is,the,appraisal,or,valuation,process?,-
,ANSWER,A,sequence,of,steps,used,by,the,appraiser,to,develop,a,value,conclusion
A,_________,includes,supply,and,demand,analysis,along,with,the,collection,of,market,data,,anal
yses,,and,recommendations.,-,ANSWER,market,analysis
