General Appraiser Site Valuation and
Cost Approach Practice Test with 500
Questions and Correct Verified Answers
Latest 206-2027 (New!)
SECTION 1: PRINCIPLES AND TERMINOLOGY (Questions 1-
20)
1. The premise that a buyer will not pay more for a given land parcel than the
price of acquiring an equally desirable substitute relates to which principle?
A) Anticipation
B) Contribution
C) Supply and Demand
D) Substitution
Correct Answer: D
Rationale: The principle of substitution states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute . This is the
foundation for the sales comparison approach to land valuation. Anticipation (A) relates
to the expectation of future benefits. Contribution (B) relates to the value a specific
component adds. Supply and Demand (C) relates to market interaction.
2. The premise that real property value is created and sustained when the
characteristics of a property conform to the demands of its market relates to
which principle?
,A) Anticipation
B) Change
C) Substitution
D) Conformity
Correct Answer: D
Rationale: The principle of conformity states that real property value is created and
sustained when the characteristics of a property conform to the demands of its market .
Properties that deviate significantly from neighborhood norms may suffer value loss.
Anticipation (A) relates to future benefits. Change (B) relates to market dynamics.
Substitution (C) relates to equivalent alternatives.
3. What term describes the result of a legal process by which one obtains
permission to develop land and/or construct improvements on a site?
A) Easement
B) Encroachment
C) Zoning
D) Entitlement
Correct Answer: D
Rationale: Entitlement is the legal process by which one obtains permission to develop
the land and/or construct building improvements on the site . Easement (A) is a right to
use another's land. Encroachment (B) is unauthorized intrusion. Zoning (C) is a land use
regulation.
4. When two or more sites are combined to create one with greater utility, the
resulting value increase is called:
A) Excess Value
B) Plottage
C) Contributory Value
D) Maximum Productivity
,Correct Answer: B
Rationale: Plottage is the value increment created when two or more sites are
combined to create a single site with greater utility than the sum of the individual
parcels . The combining of parcels is called assemblage. Excess Value (A) relates to
surplus land. Contributory Value (C) relates to a component's contribution to the whole.
5. The combining of two or more parcels into one ownership or use is called:
A) Excess Land
B) Usable Land
C) Acreage
D) Assemblage
Correct Answer: D
Rationale: Assemblage is the combining of two or more parcels into one ownership or
use . The resulting value increase is called plottage. Excess Land (A) is land that cannot
be developed. Usable Land (B) is developable land. Acreage (C) simply refers to land
area.
6. Which of the following tend to impede site development and negatively affect
value?
A) Reasonable zoning ordinances
B) Overly restrictive zoning ordinances
C) Appropriate land use regulations
D) Balanced tax assessments
Correct Answer: B
Rationale: Overly restrictive zoning ordinances can impede site development and
negatively affect property value by limiting the highest and best use of the site .
Reasonable regulations provide order without unduly restricting development. Tax
assessments that are excessive can also negatively affect value.
, 7. What type of land does NOT have an independent highest and best use?
A) Vacant land
B) Excess land
C) Surplus land
D) Developable land
Correct Answer: C
Rationale: Surplus land does not have an independent highest and best use. It is land
that is not needed to support the existing improvement but is not large enough to have
a separate highest and best use . Excess land (B) does have an independent highest and
best use. Vacant land (A) and Developable land (D) both have independent highest and
best uses.
8. Drainage improvements are examples of:
A) On-Site Improvements
B) Off-Site Improvements
C) Excess Costs
D) Comparison Improvements
Correct Answer: A
Rationale: Drainage improvements are examples of on-site improvements . On-site
improvements are located on the subject property. Off-site improvements (B) are
located outside the property (e.g., streets, sewer lines). Excess Costs (C) refer to costs
that do not add equivalent value.
9. Streets and sewer lines are examples of:
A) On-Site Improvements
B) Off-Site Improvements
Cost Approach Practice Test with 500
Questions and Correct Verified Answers
Latest 206-2027 (New!)
SECTION 1: PRINCIPLES AND TERMINOLOGY (Questions 1-
20)
1. The premise that a buyer will not pay more for a given land parcel than the
price of acquiring an equally desirable substitute relates to which principle?
A) Anticipation
B) Contribution
C) Supply and Demand
D) Substitution
Correct Answer: D
Rationale: The principle of substitution states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute . This is the
foundation for the sales comparison approach to land valuation. Anticipation (A) relates
to the expectation of future benefits. Contribution (B) relates to the value a specific
component adds. Supply and Demand (C) relates to market interaction.
2. The premise that real property value is created and sustained when the
characteristics of a property conform to the demands of its market relates to
which principle?
,A) Anticipation
B) Change
C) Substitution
D) Conformity
Correct Answer: D
Rationale: The principle of conformity states that real property value is created and
sustained when the characteristics of a property conform to the demands of its market .
Properties that deviate significantly from neighborhood norms may suffer value loss.
Anticipation (A) relates to future benefits. Change (B) relates to market dynamics.
Substitution (C) relates to equivalent alternatives.
3. What term describes the result of a legal process by which one obtains
permission to develop land and/or construct improvements on a site?
A) Easement
B) Encroachment
C) Zoning
D) Entitlement
Correct Answer: D
Rationale: Entitlement is the legal process by which one obtains permission to develop
the land and/or construct building improvements on the site . Easement (A) is a right to
use another's land. Encroachment (B) is unauthorized intrusion. Zoning (C) is a land use
regulation.
4. When two or more sites are combined to create one with greater utility, the
resulting value increase is called:
A) Excess Value
B) Plottage
C) Contributory Value
D) Maximum Productivity
,Correct Answer: B
Rationale: Plottage is the value increment created when two or more sites are
combined to create a single site with greater utility than the sum of the individual
parcels . The combining of parcels is called assemblage. Excess Value (A) relates to
surplus land. Contributory Value (C) relates to a component's contribution to the whole.
5. The combining of two or more parcels into one ownership or use is called:
A) Excess Land
B) Usable Land
C) Acreage
D) Assemblage
Correct Answer: D
Rationale: Assemblage is the combining of two or more parcels into one ownership or
use . The resulting value increase is called plottage. Excess Land (A) is land that cannot
be developed. Usable Land (B) is developable land. Acreage (C) simply refers to land
area.
6. Which of the following tend to impede site development and negatively affect
value?
A) Reasonable zoning ordinances
B) Overly restrictive zoning ordinances
C) Appropriate land use regulations
D) Balanced tax assessments
Correct Answer: B
Rationale: Overly restrictive zoning ordinances can impede site development and
negatively affect property value by limiting the highest and best use of the site .
Reasonable regulations provide order without unduly restricting development. Tax
assessments that are excessive can also negatively affect value.
, 7. What type of land does NOT have an independent highest and best use?
A) Vacant land
B) Excess land
C) Surplus land
D) Developable land
Correct Answer: C
Rationale: Surplus land does not have an independent highest and best use. It is land
that is not needed to support the existing improvement but is not large enough to have
a separate highest and best use . Excess land (B) does have an independent highest and
best use. Vacant land (A) and Developable land (D) both have independent highest and
best uses.
8. Drainage improvements are examples of:
A) On-Site Improvements
B) Off-Site Improvements
C) Excess Costs
D) Comparison Improvements
Correct Answer: A
Rationale: Drainage improvements are examples of on-site improvements . On-site
improvements are located on the subject property. Off-site improvements (B) are
located outside the property (e.g., streets, sewer lines). Excess Costs (C) refer to costs
that do not add equivalent value.
9. Streets and sewer lines are examples of:
A) On-Site Improvements
B) Off-Site Improvements
