LICENSED RESIDENTIAL APPRAISER EXAM
PRACTICE TEST QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025 Q&A | INSTANT
DOWNLOAD PDF
1. What is the primary purpose of an appraisal?
A. To establish a sale price
B. To estimate the value of a property
C. To inspect the structural condition
D. To determine tax assessments
The main objective of an appraisal is to estimate the value of a property as
of a specific date.
2. The principle of substitution states that:
A. An investor will always choose the most expensive property
B. A buyer will not pay more for a property than a comparable substitute
C. Replacement cost equals market value
,D. Land value remains constant
This principle supports that market value is influenced by the availability
and cost of similar properties.
3. Which type of depreciation results from outdated design or layout?
A. Physical depreciation
B. Functional obsolescence
C. External obsolescence
D. Economic depreciation
Functional obsolescence refers to loss in value due to poor design or
outdated features.
4. External obsolescence is typically:
A. Curable
B. Internal
C. Incurable
D. A maintenance issue
External obsolescence originates from off-site factors like zoning or
neighborhood decline and is generally not curable.
5. The income capitalization approach is most appropriate for:
A. Single-family residences
B. Owner-occupied homes
C. Income-producing properties
D. Vacant land
This approach values properties based on their ability to generate income.
, 6. What is the term for a legal description that uses distances and
directions?
A. Metes and bounds
B. Lot and block
C. Rectangular survey
D. Government grid
Metes and bounds is a method of land description using measurements
and compass directions.
7. A comparable property recently sold for $250,000. Your subject has a
fireplace, which the comparable lacks. If a fireplace adds $5,000 in value,
what is the adjusted sale price of the comparable?
A. $250,000
B. $255,000
C. $245,000
D. $260,000
Since the subject is superior, we adjust the comparable up to reflect this
difference.
8. The cost approach is most applicable when valuing:
A. Condos in a dense urban market
B. Income-generating apartments
C. New construction or special-use properties
D. Foreclosures
PRACTICE TEST QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2025 Q&A | INSTANT
DOWNLOAD PDF
1. What is the primary purpose of an appraisal?
A. To establish a sale price
B. To estimate the value of a property
C. To inspect the structural condition
D. To determine tax assessments
The main objective of an appraisal is to estimate the value of a property as
of a specific date.
2. The principle of substitution states that:
A. An investor will always choose the most expensive property
B. A buyer will not pay more for a property than a comparable substitute
C. Replacement cost equals market value
,D. Land value remains constant
This principle supports that market value is influenced by the availability
and cost of similar properties.
3. Which type of depreciation results from outdated design or layout?
A. Physical depreciation
B. Functional obsolescence
C. External obsolescence
D. Economic depreciation
Functional obsolescence refers to loss in value due to poor design or
outdated features.
4. External obsolescence is typically:
A. Curable
B. Internal
C. Incurable
D. A maintenance issue
External obsolescence originates from off-site factors like zoning or
neighborhood decline and is generally not curable.
5. The income capitalization approach is most appropriate for:
A. Single-family residences
B. Owner-occupied homes
C. Income-producing properties
D. Vacant land
This approach values properties based on their ability to generate income.
, 6. What is the term for a legal description that uses distances and
directions?
A. Metes and bounds
B. Lot and block
C. Rectangular survey
D. Government grid
Metes and bounds is a method of land description using measurements
and compass directions.
7. A comparable property recently sold for $250,000. Your subject has a
fireplace, which the comparable lacks. If a fireplace adds $5,000 in value,
what is the adjusted sale price of the comparable?
A. $250,000
B. $255,000
C. $245,000
D. $260,000
Since the subject is superior, we adjust the comparable up to reflect this
difference.
8. The cost approach is most applicable when valuing:
A. Condos in a dense urban market
B. Income-generating apartments
C. New construction or special-use properties
D. Foreclosures
