REE 3043 Final Exam Review UPDATED
Exam Questions and CORRECT Answers
Which appraisal approach would be most accurate in the valuation of a ten-year old single family
dwelling? - CORRECT ANSWER - Sales comparison approach
Which valuation approach would be most accurate in the valuation of a school, museum or
library? - CORRECT ANSWER - Cost approach
In the _______, appraisers estimate market value by estimating the income that the property is
expected to generate, then converting the income stream into a present value estimate. -
CORRECT ANSWER - Income approach
In the cost approach to value, which factor of depreciation is NOT used? - CORRECT
ANSWER - Tax depreciation
The last step of the valuation process, report of defined value, includes which of the following? -
CORRECT ANSWER - Conveying the value estimate to the client
Which of the following NOT true? - CORRECT ANSWER - The appraisal is most
accurate on the day of the closing.
The sales price of a comparable sale must be adjusted _________ to account for the lack of a
fireplace, when the subject property has a built-in fireplace. - CORRECT ANSWER -
Upward
At what point in the appraisal process should an appraiser determine the legal bundle of property
rights (type of estate) to be appraised? - CORRECT ANSWER - Step 1: definition of the
problem
Which of the following statements about property value is not true? - CORRECT
ANSWER - Price and market value are identical
,The value of future benefits or future utility is the basis of the principle of - CORRECT
ANSWER - anticipation
What term is the result of a property's inability to generate income due to factors outside the
property? - CORRECT ANSWER - Economic obsolescence
Which approach would probably be most accurate in the valuation of a shopping center? -
CORRECT ANSWER - Income approach
The income approach - CORRECT ANSWER - is based upon the concept of present value.
In which of the following scenarios can the value of a real estate improvement be negative? -
CORRECT ANSWER - When the value of the land if vacant exceeds the value of the land
as improved
In the __________, appraisers estimate market value by estimating the income that the property
is expected to generate, then converting the income stream into a
present value estimate. - CORRECT ANSWER - income approach
Which of the following is NOT true? - CORRECT ANSWER - The appraisal is most
accurate on the day of the closing
The stabilized income which a property is expected to generate after allowances for vacancies
and bad debt is called the - CORRECT ANSWER - effective gross income.
The value that real estate appraisers generally estimate is market value, which is synonymous
with - CORRECT ANSWER - most probable selling price.
Market value, is the value of a property to a typical investor, and ___________ is the value of a
property to a particular investor. - CORRECT ANSWER - Investment value
, Which of the following is considered representative, thus, usable as a comparable sale for a
market-value estimate? - CORRECT ANSWER - A house sold under normal market
conditions
The sales comparison approach is - CORRECT ANSWER - Very dependent upon how the
appraiser makes adjustments between the comparable and the subject property
In the _____, appraisers estimate value by adding the value of the site as though it was vacant to
the cost of producing the improvements new (less depreciation). - CORRECT ANSWER -
Cost approach
Which of the following statements is true regarding the sales comparison approach? - CORRECT
ANSWER - Adjustments are made to the sales prices of the comparable properties to make
them representative of the subject property's characteristics.
Which of the following is NOT true? - CORRECT ANSWER - On older buildings, the
cost approach deducts tax depreciation.
The value that real estate appraisers generally estimate is the market value, which is - CORRECT
ANSWER - Most probable selling price.
Which of the following is NOT a step in the income approach to value? - CORRECT
ANSWER - Computation of the accrued depreciation
Which approach would probably be most accurate in the valuation of a Church? - CORRECT
ANSWER - Cost approach
In the income approach, which of the following is capitalized to obtain an estimate of value? -
CORRECT ANSWER - Net operating income.
Exam Questions and CORRECT Answers
Which appraisal approach would be most accurate in the valuation of a ten-year old single family
dwelling? - CORRECT ANSWER - Sales comparison approach
Which valuation approach would be most accurate in the valuation of a school, museum or
library? - CORRECT ANSWER - Cost approach
In the _______, appraisers estimate market value by estimating the income that the property is
expected to generate, then converting the income stream into a present value estimate. -
CORRECT ANSWER - Income approach
In the cost approach to value, which factor of depreciation is NOT used? - CORRECT
ANSWER - Tax depreciation
The last step of the valuation process, report of defined value, includes which of the following? -
CORRECT ANSWER - Conveying the value estimate to the client
Which of the following NOT true? - CORRECT ANSWER - The appraisal is most
accurate on the day of the closing.
The sales price of a comparable sale must be adjusted _________ to account for the lack of a
fireplace, when the subject property has a built-in fireplace. - CORRECT ANSWER -
Upward
At what point in the appraisal process should an appraiser determine the legal bundle of property
rights (type of estate) to be appraised? - CORRECT ANSWER - Step 1: definition of the
problem
Which of the following statements about property value is not true? - CORRECT
ANSWER - Price and market value are identical
,The value of future benefits or future utility is the basis of the principle of - CORRECT
ANSWER - anticipation
What term is the result of a property's inability to generate income due to factors outside the
property? - CORRECT ANSWER - Economic obsolescence
Which approach would probably be most accurate in the valuation of a shopping center? -
CORRECT ANSWER - Income approach
The income approach - CORRECT ANSWER - is based upon the concept of present value.
In which of the following scenarios can the value of a real estate improvement be negative? -
CORRECT ANSWER - When the value of the land if vacant exceeds the value of the land
as improved
In the __________, appraisers estimate market value by estimating the income that the property
is expected to generate, then converting the income stream into a
present value estimate. - CORRECT ANSWER - income approach
Which of the following is NOT true? - CORRECT ANSWER - The appraisal is most
accurate on the day of the closing
The stabilized income which a property is expected to generate after allowances for vacancies
and bad debt is called the - CORRECT ANSWER - effective gross income.
The value that real estate appraisers generally estimate is market value, which is synonymous
with - CORRECT ANSWER - most probable selling price.
Market value, is the value of a property to a typical investor, and ___________ is the value of a
property to a particular investor. - CORRECT ANSWER - Investment value
, Which of the following is considered representative, thus, usable as a comparable sale for a
market-value estimate? - CORRECT ANSWER - A house sold under normal market
conditions
The sales comparison approach is - CORRECT ANSWER - Very dependent upon how the
appraiser makes adjustments between the comparable and the subject property
In the _____, appraisers estimate value by adding the value of the site as though it was vacant to
the cost of producing the improvements new (less depreciation). - CORRECT ANSWER -
Cost approach
Which of the following statements is true regarding the sales comparison approach? - CORRECT
ANSWER - Adjustments are made to the sales prices of the comparable properties to make
them representative of the subject property's characteristics.
Which of the following is NOT true? - CORRECT ANSWER - On older buildings, the
cost approach deducts tax depreciation.
The value that real estate appraisers generally estimate is the market value, which is - CORRECT
ANSWER - Most probable selling price.
Which of the following is NOT a step in the income approach to value? - CORRECT
ANSWER - Computation of the accrued depreciation
Which approach would probably be most accurate in the valuation of a Church? - CORRECT
ANSWER - Cost approach
In the income approach, which of the following is capitalized to obtain an estimate of value? -
CORRECT ANSWER - Net operating income.
