RESIDENTIAL SALES COMPARISON EVALUATION TEST
2026/2027 QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Another name for a land contract is a(n)
Deed of trust
Leasehold contract
Installment sale contract
Wrap-around contract - ✔✔Installment sale contract
✔✔Cash equivalency adjustments are typically made when:
A property was purchased for all cash
A property was in poor condition at the time of sale
Steep inflation has impacted property values
A transaction involved non-market financing - ✔✔a transaction involved non market
financing
✔✔A purchaser bought a property for $215,000, put 15% down and borrowed the rest
at 6.75% interest for 25 years. The lender charged 2.5 points at the closing. How much
was paid for the points?
$2,150
$3,267.50
$4,568.75
$5,723.40 - ✔✔$4,568.75
✔✔A property has a first mortgage of $125,000, a second mortgage of $30,000, and a
third mortgage of $10,000. It is foreclosed and sold for $140,000. In this situation, the
holder of the third mortgage gets $________ and the holder of the second mortgage
receives $ _________.
0, $15,000
$15,000, $15,000
$5,000, $30,000
0, $25,000 - ✔✔0, $15,000
✔✔Which of these does NOT originate mortgage loans?
Fannie Mae
Savings and loan
Commercial bank
Credit Union - ✔✔Fannie Mae
,✔✔A mortgage that is not fully amortized at maturity and requires a lump sum payment
of the outstanding balance at the end is called a ____________ mortgage.
Leveraged
Deferred
Balloon
Unequal rate - ✔✔Balloon
✔✔The primary participants in the secondary mortgage market are
FHA and VA
Fannie Mae and FHA
Freddie Mac, Ginnie Mae and HUD
Fannie Mae, Freddie Mac, and Ginnie Mae - ✔✔Fannie Mae, Freddie Mac, and Ginnie
Mae
✔✔Your subject is located in an area where property values have been declining
consistently at 0.5% a month for the past ten months. You have located a comparable
that is practically identical to your subject. It sold 8 months ago for $200,000. How much
should you adjust the price?
-$4,000
+$8,000
-$8,000
+$8,000 - ✔✔-8000
✔✔Which would NOT typically be a cause of duress that could result in a transaction
that would not be considered arms-length?
Sale to a relative
Sale to a corporation
Sale with an unknowledgeable buyer or seller
Sale prior to an impending foreclosure - ✔✔Sale to a corporation
✔✔"An element of comparison in the sales comparison approach; comparable
properties can be adjusted for differences in the motivations of either the buyer or a
seller in a transaction, e.g., when the comparable transaction is not an arm's-length
sale" is the definition of
Market conditions
Duress
Conditions of sale
Property rights conveyed - ✔✔Conditions of sale
, ✔✔Two-bedroom condos in the city sold for a median price of $180,440 nine months
ago and that the median price of those homes for the current month is $206,390. What
is the indicated average increase per month?
8%
1.1%
1.4%
1.6% - ✔✔1.6%
✔✔Long-term market cycles are
Based on the prevailing interest rate
Very volatile and therefore irrelevant
Caused by national or international conditions
Of little interest to an appraiser - ✔✔Caused by national or international conditions
✔✔Changes in a market cycle may be cyclical, one-time-only, ___________ and
____________.
Recurring, exponential
Repeating, inverse
Seasonal, exponential
Seasonal, geometric - ✔✔Seasonal & Exponential
✔✔In the sales comparison approach, which of these factors should be adjusted for
before the others?
Location
Size
Market conditions
Quality - ✔✔Market Conditions
✔✔Which of the following would NOT be classified as a long term trend for market
cycles?
Population trends
Interest rates
Income levels
Migration patterns - ✔✔Interest rates
✔✔The real estate market tends to be
Lagging at the end of short-term economic cycles
An early responder to short-term economic cycles
Sluggish to recover from short-term economic cycles
2026/2027 QUESTIONS AND SOLUTIONS GUARANTEE A+
✔✔Another name for a land contract is a(n)
Deed of trust
Leasehold contract
Installment sale contract
Wrap-around contract - ✔✔Installment sale contract
✔✔Cash equivalency adjustments are typically made when:
A property was purchased for all cash
A property was in poor condition at the time of sale
Steep inflation has impacted property values
A transaction involved non-market financing - ✔✔a transaction involved non market
financing
✔✔A purchaser bought a property for $215,000, put 15% down and borrowed the rest
at 6.75% interest for 25 years. The lender charged 2.5 points at the closing. How much
was paid for the points?
$2,150
$3,267.50
$4,568.75
$5,723.40 - ✔✔$4,568.75
✔✔A property has a first mortgage of $125,000, a second mortgage of $30,000, and a
third mortgage of $10,000. It is foreclosed and sold for $140,000. In this situation, the
holder of the third mortgage gets $________ and the holder of the second mortgage
receives $ _________.
0, $15,000
$15,000, $15,000
$5,000, $30,000
0, $25,000 - ✔✔0, $15,000
✔✔Which of these does NOT originate mortgage loans?
Fannie Mae
Savings and loan
Commercial bank
Credit Union - ✔✔Fannie Mae
,✔✔A mortgage that is not fully amortized at maturity and requires a lump sum payment
of the outstanding balance at the end is called a ____________ mortgage.
Leveraged
Deferred
Balloon
Unequal rate - ✔✔Balloon
✔✔The primary participants in the secondary mortgage market are
FHA and VA
Fannie Mae and FHA
Freddie Mac, Ginnie Mae and HUD
Fannie Mae, Freddie Mac, and Ginnie Mae - ✔✔Fannie Mae, Freddie Mac, and Ginnie
Mae
✔✔Your subject is located in an area where property values have been declining
consistently at 0.5% a month for the past ten months. You have located a comparable
that is practically identical to your subject. It sold 8 months ago for $200,000. How much
should you adjust the price?
-$4,000
+$8,000
-$8,000
+$8,000 - ✔✔-8000
✔✔Which would NOT typically be a cause of duress that could result in a transaction
that would not be considered arms-length?
Sale to a relative
Sale to a corporation
Sale with an unknowledgeable buyer or seller
Sale prior to an impending foreclosure - ✔✔Sale to a corporation
✔✔"An element of comparison in the sales comparison approach; comparable
properties can be adjusted for differences in the motivations of either the buyer or a
seller in a transaction, e.g., when the comparable transaction is not an arm's-length
sale" is the definition of
Market conditions
Duress
Conditions of sale
Property rights conveyed - ✔✔Conditions of sale
, ✔✔Two-bedroom condos in the city sold for a median price of $180,440 nine months
ago and that the median price of those homes for the current month is $206,390. What
is the indicated average increase per month?
8%
1.1%
1.4%
1.6% - ✔✔1.6%
✔✔Long-term market cycles are
Based on the prevailing interest rate
Very volatile and therefore irrelevant
Caused by national or international conditions
Of little interest to an appraiser - ✔✔Caused by national or international conditions
✔✔Changes in a market cycle may be cyclical, one-time-only, ___________ and
____________.
Recurring, exponential
Repeating, inverse
Seasonal, exponential
Seasonal, geometric - ✔✔Seasonal & Exponential
✔✔In the sales comparison approach, which of these factors should be adjusted for
before the others?
Location
Size
Market conditions
Quality - ✔✔Market Conditions
✔✔Which of the following would NOT be classified as a long term trend for market
cycles?
Population trends
Interest rates
Income levels
Migration patterns - ✔✔Interest rates
✔✔The real estate market tends to be
Lagging at the end of short-term economic cycles
An early responder to short-term economic cycles
Sluggish to recover from short-term economic cycles
