Valuation Appraisal practice test: free Real Estate Salesperson questions

Sample Practice Questions for Valuation Appraisal

1. Question 1Ref: National Outline — Valuation & Appraisal, 13.75%

   An appraiser is preparing a report on a single-family home and selects three comparable sales from the same neighborhood within the past six months. Which valuation method is the appraiser primarily using?

   ACost approachBSales comparison approachCIncome capitalization approachDGross rent multiplier method
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   Correct Answer
   B. Sales comparison approach

   The sales comparison approach estimates value by comparing the subject property to recently sold comparable properties. This is the most common approach for residential properties. The cost approach estimates replacement cost, the income approach is used for income-producing properties, and GRM is a variant of the income approach.

2. Question 2Ref: National Outline — Valuation & Appraisal, 13.75%

   An appraiser determines that a property's land value is $250,000 and the replacement cost of the improvements is $180,000 with accrued depreciation of $30,000. What is the estimated value using the cost approach?

   A$400,000B$430,000C$460,000D$480,000
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   Correct Answer
   A. $400,000

   The keyed answer is "$400,000". Cost approach: land value plus replacement cost minus depreciation. $250,000 + $180,000 − $30,000 = $400,000. The other answers result from adding rather than subtracting depreciation or omitting a step.

3. Question 3Ref: National Outline — Valuation & Appraisal, 13.75%

   A broker prepares a comparative market analysis and adjusts the comparable's sale price upward by $5,000 because the comparable has a two-car garage while the subject has only one. This adjustment reflects:

   AA market condition adjustmentBA physical characteristic adjustmentCA financing concession adjustmentDA time adjustment
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   Correct Answer
   B. A physical characteristic adjustment

   Adjusting for differences in physical features such as garage size is a physical characteristic adjustment. Market condition adjustments address changes in the overall market over time, financing concessions address differences in sale terms, and time adjustments account for market movement between sale date and valuation date.