BUSI 330 APPRAISAL PRACTICE
EXAM QUESTIONS WITH
CORRECT ANSWERS
When conducting your highest and best use study you will;
1) Only consider the land value and assume the house has no value
2) decide which use is the most appropriate and value the property on that basis only
3) Value each alternative separately and state them in your report
4) ask the client what they propose to do and then value the property on that basis -
Answer- Answer 3) Value each alternative separately and state them in your report
Martha is researching a small retail business that was developed 25 years ago. She has
researched area wide market data and has focused on historical data rather than
attempting to make future projections. what type of analysis has she undertaken?
1) Deferred analysis
2) Fundamental analysis
3) trend analysis
4) demographic analysis - Answer- Answer 3) trend analysis
The concept of the highest and best use of land as though vacant is based on the
premise that:
1) One site cannot be substituted for another
2) The basic characteristic of a site can be changed
3) Any existing improvement can be demolished
4) Vacant land produces maximum income - Answer- Answer 3) Any existing
improvement can be demolished
the course textbook outlines a six step process for the market analysis of single family
subdivisons. Which of the following describes the process in step two "market
delineation"?
1) Existing competitive properties within the subjects identified market area are
analyzed
2) Characteristics of likely buyers such as income and age are analyzed
3) Legal, physical, and locational attributes of the subjects units are analyzed
4) Supply of the property type under investigation is anticipated - Answer- Answer 2)
Characteristics of likely buyers such as income and age are analyzed
,Josh is an appraiser who is analyzing the ideal improvement of his clients investment.
He should make sure;
1) The ideal improvement takes maximum advantages of the sites potential given
market demand
2) The ideal improvement should meet current market standards and fit the character of
the market areas
3) The ideal improvement should use materials that are appropriately priced
4) That all of the above constraints are taken into account - Answer- Answer 4) That all
of the above constraints are taken into account
The principle of _______ holds that the value of a property tends to equal the cost of
acquiring an equally desirable substitute property
1) Supply and demand
2) Substitution
3) Balance
4) Externalities - Answer- Answer 2) Substitution
_____ is a qualitative technique used to study comparable sales
1) graphic analysis
2) grouped data analysis
3) Statistical analysis
4) Relative comparison analysis - Answer- Answer 4) Relative comparison analysis
Fred is an apprentice appriaser and has been asked to undertake a quantitative
analysis in support of adjustments as part of a new assignment to estimate the market
value of an apartment building. Which of the following would Fred NOT consider
applying
1) Trend analysis
2) Paired data analysis
3) Secondary data analysis
4) Scenario analysis - Answer- Answer 1) Trend analysis
A condition of sale adjustment is MOST likely in which of the following situations?
1) The sale involved excess land
2) An arms length sale
3) Purchase made for its plottage value
4) A market value sale - Answer- Answer 3) purchase made for its plottage value
A monthly market condition adjustment of 1% (simple interest) is indicated by which of
the following?
, 1) May 1, 20x8 sale at 200k and resale of the same property june 1, 20x8 for 204k
2) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 252k
3) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 248k
4) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 250k -
Answer- Answer 4) indicates a 1% monthly market increase: [($250,000/$200,000) -
1]/25 months = +1% per month. The other three options all indicate 2% per month.
Which of the following is NOT a typical unit of comparison for vacant land?
1) Price per square foot
2) Price per square foot of gross building area
3) Price per front foot
4) Price per acre - Answer- Answer 2) price per square foot of gross building area
Philip has been asked to appraise the site of a potential apartment building containing
25,000 square feet, the land is zoned r-4 which permits a density of 40 units to the acre.
a 25,000 square foot site zoned r-6 two blocks away sold recently between two
unrelated parties at market value. r-6 is also a residential zoning and it permits 60 unnits
to the acre, how would philip treat the r-6 sale in consdering whether or not to use it as
a comparable for the subjects property appraisal?
1) Philip would rehect this sale as it has a much greater permitted density for
development
2) Philip would use this sale to develop a sale price per actual square foot of land as a
indicator of subjects value
3) Philip would use this sale to develop a sale price per developable unit as an indicator
of the subjects value
4) since the sites are the same size, philip would value the subject property based on
the unadjusted sale price of - Answer- Answer 3) Philip would use this sale to develop a
sale price per developable unit as an indicator of the subjects value
Edna has been researching a property transaction where a neighbourhood shopping
centre sold from ABC company to a subsidiary of itself to transfer tax obligations. Based
only upon this information, how would edna categorize this transaction?
1) A good sale comparable
2) A non arms lengths transaction
3) An arms length transaction
4) A distress sale - Answer- Answer 2) A non arms lengths transaction
An opinion of market value via the direct comparison approach is through the eyes of:
1) Well informed purchasers
2) Well informed sellers
3) Well informed brokers
4) uninformed buyers - Answer- Answer 1) Well informed purchasers
EXAM QUESTIONS WITH
CORRECT ANSWERS
When conducting your highest and best use study you will;
1) Only consider the land value and assume the house has no value
2) decide which use is the most appropriate and value the property on that basis only
3) Value each alternative separately and state them in your report
4) ask the client what they propose to do and then value the property on that basis -
Answer- Answer 3) Value each alternative separately and state them in your report
Martha is researching a small retail business that was developed 25 years ago. She has
researched area wide market data and has focused on historical data rather than
attempting to make future projections. what type of analysis has she undertaken?
1) Deferred analysis
2) Fundamental analysis
3) trend analysis
4) demographic analysis - Answer- Answer 3) trend analysis
The concept of the highest and best use of land as though vacant is based on the
premise that:
1) One site cannot be substituted for another
2) The basic characteristic of a site can be changed
3) Any existing improvement can be demolished
4) Vacant land produces maximum income - Answer- Answer 3) Any existing
improvement can be demolished
the course textbook outlines a six step process for the market analysis of single family
subdivisons. Which of the following describes the process in step two "market
delineation"?
1) Existing competitive properties within the subjects identified market area are
analyzed
2) Characteristics of likely buyers such as income and age are analyzed
3) Legal, physical, and locational attributes of the subjects units are analyzed
4) Supply of the property type under investigation is anticipated - Answer- Answer 2)
Characteristics of likely buyers such as income and age are analyzed
,Josh is an appraiser who is analyzing the ideal improvement of his clients investment.
He should make sure;
1) The ideal improvement takes maximum advantages of the sites potential given
market demand
2) The ideal improvement should meet current market standards and fit the character of
the market areas
3) The ideal improvement should use materials that are appropriately priced
4) That all of the above constraints are taken into account - Answer- Answer 4) That all
of the above constraints are taken into account
The principle of _______ holds that the value of a property tends to equal the cost of
acquiring an equally desirable substitute property
1) Supply and demand
2) Substitution
3) Balance
4) Externalities - Answer- Answer 2) Substitution
_____ is a qualitative technique used to study comparable sales
1) graphic analysis
2) grouped data analysis
3) Statistical analysis
4) Relative comparison analysis - Answer- Answer 4) Relative comparison analysis
Fred is an apprentice appriaser and has been asked to undertake a quantitative
analysis in support of adjustments as part of a new assignment to estimate the market
value of an apartment building. Which of the following would Fred NOT consider
applying
1) Trend analysis
2) Paired data analysis
3) Secondary data analysis
4) Scenario analysis - Answer- Answer 1) Trend analysis
A condition of sale adjustment is MOST likely in which of the following situations?
1) The sale involved excess land
2) An arms length sale
3) Purchase made for its plottage value
4) A market value sale - Answer- Answer 3) purchase made for its plottage value
A monthly market condition adjustment of 1% (simple interest) is indicated by which of
the following?
, 1) May 1, 20x8 sale at 200k and resale of the same property june 1, 20x8 for 204k
2) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 252k
3) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 248k
4) May 1, 20x6 sale at 200k and resale of the same property june 1, 20x7 for 250k -
Answer- Answer 4) indicates a 1% monthly market increase: [($250,000/$200,000) -
1]/25 months = +1% per month. The other three options all indicate 2% per month.
Which of the following is NOT a typical unit of comparison for vacant land?
1) Price per square foot
2) Price per square foot of gross building area
3) Price per front foot
4) Price per acre - Answer- Answer 2) price per square foot of gross building area
Philip has been asked to appraise the site of a potential apartment building containing
25,000 square feet, the land is zoned r-4 which permits a density of 40 units to the acre.
a 25,000 square foot site zoned r-6 two blocks away sold recently between two
unrelated parties at market value. r-6 is also a residential zoning and it permits 60 unnits
to the acre, how would philip treat the r-6 sale in consdering whether or not to use it as
a comparable for the subjects property appraisal?
1) Philip would rehect this sale as it has a much greater permitted density for
development
2) Philip would use this sale to develop a sale price per actual square foot of land as a
indicator of subjects value
3) Philip would use this sale to develop a sale price per developable unit as an indicator
of the subjects value
4) since the sites are the same size, philip would value the subject property based on
the unadjusted sale price of - Answer- Answer 3) Philip would use this sale to develop a
sale price per developable unit as an indicator of the subjects value
Edna has been researching a property transaction where a neighbourhood shopping
centre sold from ABC company to a subsidiary of itself to transfer tax obligations. Based
only upon this information, how would edna categorize this transaction?
1) A good sale comparable
2) A non arms lengths transaction
3) An arms length transaction
4) A distress sale - Answer- Answer 2) A non arms lengths transaction
An opinion of market value via the direct comparison approach is through the eyes of:
1) Well informed purchasers
2) Well informed sellers
3) Well informed brokers
4) uninformed buyers - Answer- Answer 1) Well informed purchasers
