Residential Sales Comparison & Income
Approaches UPDATED ACTUAL Exam
Questions and CORRECT Answers
Anticipation - CORRECT ANSWER - An economic theory that say value is created by the
expectation of future benefits, such as profit, pleasure, tax shelter, production, income, etc.
Anticipation is the foundation for the income approach
Appraiser's Peers - CORRECT ANSWER - Other appraisers with expertise and
competency in a similar type of assignment
Assumptions - CORRECT ANSWER - That which is taken to be true
Balance - CORRECT ANSWER - A condition that exists in the real estate market when
there are slightly more homes available than buyers
Buyer's Market - CORRECT ANSWER - A situation in the real estate market in which
buyers have a large selection of properties from which to chose
Change - CORRECT ANSWER - A principle affecting value in real estate that says all
factors that influence real estate - physical, economic, governmental and social - are constantly
changing and this property value itself is subject to constant change
Characteristics of Value - CORRECT ANSWER - Also known as D-U-S-T. The
characteristics of value are Demand, Utility, Scarcity, and Transferablility
Client - CORRECT ANSWER - The party who engages an appraiser in a specific
assignment
Competition - CORRECT ANSWER - Two or more parties, properties, etc., trying to
obtain the same thing
, Conformity - CORRECT ANSWER - The theory that says a particular property achieves
its max value when it is surrounded by properties that are similar in style, function and utility.
Contributory Value - CORRECT ANSWER - The theory that a particular item or feature of
a property is worth only what it actually contributes in value to that parcel of real estate
Credible - CORRECT ANSWER - Worthy of belief
Date of Report - CORRECT ANSWER - An indication of the perspective from which the
appraiser is examining the market
Effective Date - CORRECT ANSWER - Establishes the context for the value opinion
Extraordinary Assumption - CORRECT ANSWER - An assumption, directly related to a
specific assignment, as of the effective date of the assignment results, which if found to be false,
could alter the appraisers opinions or conclusions
General Data - CORRECT ANSWER - info that cover the forces that affect property
values, but are not directly related to a particular piece of property. It covers P-E-G-S and can be
local or national.
Highest & Best Use - CORRECT ANSWER - The most profitable, legally permitted,
economically feasible, and physically possible use of a piece of property
Hypothetical Conditions - CORRECT ANSWER - A condition, related to a specific
assignment, which is contrary to what is known by the appraiser to exist on the effective date of
the assignment results, but is used for the purpose of analysis
Approaches UPDATED ACTUAL Exam
Questions and CORRECT Answers
Anticipation - CORRECT ANSWER - An economic theory that say value is created by the
expectation of future benefits, such as profit, pleasure, tax shelter, production, income, etc.
Anticipation is the foundation for the income approach
Appraiser's Peers - CORRECT ANSWER - Other appraisers with expertise and
competency in a similar type of assignment
Assumptions - CORRECT ANSWER - That which is taken to be true
Balance - CORRECT ANSWER - A condition that exists in the real estate market when
there are slightly more homes available than buyers
Buyer's Market - CORRECT ANSWER - A situation in the real estate market in which
buyers have a large selection of properties from which to chose
Change - CORRECT ANSWER - A principle affecting value in real estate that says all
factors that influence real estate - physical, economic, governmental and social - are constantly
changing and this property value itself is subject to constant change
Characteristics of Value - CORRECT ANSWER - Also known as D-U-S-T. The
characteristics of value are Demand, Utility, Scarcity, and Transferablility
Client - CORRECT ANSWER - The party who engages an appraiser in a specific
assignment
Competition - CORRECT ANSWER - Two or more parties, properties, etc., trying to
obtain the same thing
, Conformity - CORRECT ANSWER - The theory that says a particular property achieves
its max value when it is surrounded by properties that are similar in style, function and utility.
Contributory Value - CORRECT ANSWER - The theory that a particular item or feature of
a property is worth only what it actually contributes in value to that parcel of real estate
Credible - CORRECT ANSWER - Worthy of belief
Date of Report - CORRECT ANSWER - An indication of the perspective from which the
appraiser is examining the market
Effective Date - CORRECT ANSWER - Establishes the context for the value opinion
Extraordinary Assumption - CORRECT ANSWER - An assumption, directly related to a
specific assignment, as of the effective date of the assignment results, which if found to be false,
could alter the appraisers opinions or conclusions
General Data - CORRECT ANSWER - info that cover the forces that affect property
values, but are not directly related to a particular piece of property. It covers P-E-G-S and can be
local or national.
Highest & Best Use - CORRECT ANSWER - The most profitable, legally permitted,
economically feasible, and physically possible use of a piece of property
Hypothetical Conditions - CORRECT ANSWER - A condition, related to a specific
assignment, which is contrary to what is known by the appraiser to exist on the effective date of
the assignment results, but is used for the purpose of analysis
