CHAPTER 19/20 REE4103 QUESTIONS
WITH CORRECT ANSWERS 2025
QualitativeDanalysisDisDbasedDonD-DcorrectDanswer-"Inferior"DorD"superior"Dratings
ADmarketDconditionsDadjustmentDisDappliedDinDsomeDsituationsDbecauseD-DcorrectDanswer-
TheDmarketDhasDchangedDsinceDtheDcomparableDpropertyDsold
AdjustmentsDforDfinancingDtermsDcompensateDforD-DcorrectDanswer-
ADcomparableDthatDsoldDwithDfinancingDtermsDthatDwereDdifferentDthanDtheDtermsDdefinedDinDtheDappraisa
lDreport
AdjustmentsDforDtheDpropertyDrightsDconveyed,Dfinancing,DconditionsDofDsale,DandDtheDdateDofDsaleDareDoft
enDmadeDtoDtheD_______________DofDtheDcomparableDproperty.D-DcorrectDanswer-ActualDsaleDprice
TheDpreferredDsequenceDofDadjustmentDisD-DcorrectDanswer-
PropertyDrights,Dfinancing,DconditionsDofDsale,DexpendituresDafterDpurchase,DmarketDconditions,DandDphysi
calDattributes
YouDareDanalyzingDaDsaleDinDwhichDtheDmathematicalDcalculationDofDcashDequivalencyDcallsDforDaD$10,000Dd
ownwardDadjustment.DHowever,DbyDuseDofDseveralDpairedDdataDsets,DyouDfindDthatDtheDmarketDonlyDrecog
nizesDaD$4,000DdownwardDadjustment.DWhatDisDtheDadjustme96ntDforDfinancing?D-DcorrectDanswer-4000
TheDappropriateDtimeDadjustmentDisDconcludedDtoDbeDanDincreaseDofD7%DperDyearDcompounded.DTheDtime
DadjustmentDforDaDcomparableDsaleDthatDsoldDforD$40,000,D2DyearsDagoDis:D-DcorrectDanswer-5796
WhenDanDappraiserDresearchesDtheDmarketDdirectlyDwithDparticipantsDandDtheDdataDhasDnotDbeenDpreviou
slyDcollected,DitDisDcalledD-DcorrectDanswer-PrimaryDdata
ADconditionsDofDsaleDadjustmentDreflectsD-DcorrectDanswer-
TheDdifferencesDbetweenDtheDmotivationsDofDtheDsellerDandDbuyerDonDtheDdateDofDsaleDofDaDcomparableDa
ndDtheDtypicalDmotivationDofDbuyersDandDsellersDasDdescribedDinDtheDdefinitionDofDvalue
, ComparativeDanalysisDisD-DcorrectDanswer-
ADgeneralDtermDusedDtoDdescribeDtheDprocessDbyDwhichDqualitativeDorDquantitativeDtechniquesDareDusedDt
oDderiveDaDvalueDopinionDinDtheDsalesDcomparisonDapproach
ComparableDsaleDsoldDforD$150,000DwithDdownDpaymentDofD$30,000
·DSellerDfinancedDmortgageDforDaD30-yearDtermD@D7%DinterestDcompoundedDmonthly.
·DHomesDinDareaDareDtypicallyDheldDforD30Dyears
·DMarketDderivedDinterestDrateDisD9%DcompoundedDmonthly.
(ImplicitDinDthisDmethodDisDtheDassumptionDthatDtheDdifferenceDbetweenDtheDmarketDinterestDrateDandDthe
DcontractDrateDwillDremainDconstantDforDtheDentireD30Dyears)
WhatDisDtheDadjustedDsaleDpriceDafterDtakingDintoDconsiderationDfinancingDterms?D-DcorrectDanswer-
129,222.04
ValuationDassignmentDforDtheDsubjectDpropertyDisDforDbothDtheDbuildingDandDland.
·DADComparableDOfficeDBldgDownedDandDsoldDseparatelyDfromDitsDsiteD(land),DwhichDisDsubjectDtoDaD99-
yearDgroundDlease.
·DTheDcomparableD80,000DsfDbldgDsoldD(separatelyDfromDtheDland)DforD$4,000,000,DorD$50/sf.
·DAssumeDtheDannualDgroundDrentDisD$250,000,DwhichDisDconsistentDwithDtheDmarket
· MarketDLandDCapitalizationDrateDisD11%.
D D
IfDnoDotherDadjustmentsDwereDmadeDexceptDforDtheDvalueDofDtheDland,DwhatDwouldDbeDtheDfinalDadjustedD
salesDpriceDofDthisDcomparable?D-DcorrectDanswer-6,272,727.27
ADcomparableDsaleDincludedDtheDsellerDtakingDbackDaDpurchase-
moneyDmortgageDatD3%DunderDtheDmarketDrateDforD10Dyears.DTheDappraisalDwasDbasedDonDtheDcash-
equivalentDmarketDvalue.DTheDadjustmentDforDthisDfactorDwouldDbeDcalledDaD-DcorrectDanswer-
financingDtermsDadjustment
InDaDmarketDvalueDappraisalDassignment,DtheDappraiserDfoundDpricesDwereDincreasingDatDaboutD3%DperDye
arDcompoundedDannually.DTheDappraiserDfoundDseveralDcomparableDsalesDbutDtheyDwereDnotDveryDrecentD
transactions.DSheDdecidedDtoDmakeDanDadjustmentDtoDcompensateDforDpriceDincreasesDinDthisDmarket.DThe
seDadjustmentsDareDcalledD-DcorrectDanswer-MarketDconditionsDadjustments
WITH CORRECT ANSWERS 2025
QualitativeDanalysisDisDbasedDonD-DcorrectDanswer-"Inferior"DorD"superior"Dratings
ADmarketDconditionsDadjustmentDisDappliedDinDsomeDsituationsDbecauseD-DcorrectDanswer-
TheDmarketDhasDchangedDsinceDtheDcomparableDpropertyDsold
AdjustmentsDforDfinancingDtermsDcompensateDforD-DcorrectDanswer-
ADcomparableDthatDsoldDwithDfinancingDtermsDthatDwereDdifferentDthanDtheDtermsDdefinedDinDtheDappraisa
lDreport
AdjustmentsDforDtheDpropertyDrightsDconveyed,Dfinancing,DconditionsDofDsale,DandDtheDdateDofDsaleDareDoft
enDmadeDtoDtheD_______________DofDtheDcomparableDproperty.D-DcorrectDanswer-ActualDsaleDprice
TheDpreferredDsequenceDofDadjustmentDisD-DcorrectDanswer-
PropertyDrights,Dfinancing,DconditionsDofDsale,DexpendituresDafterDpurchase,DmarketDconditions,DandDphysi
calDattributes
YouDareDanalyzingDaDsaleDinDwhichDtheDmathematicalDcalculationDofDcashDequivalencyDcallsDforDaD$10,000Dd
ownwardDadjustment.DHowever,DbyDuseDofDseveralDpairedDdataDsets,DyouDfindDthatDtheDmarketDonlyDrecog
nizesDaD$4,000DdownwardDadjustment.DWhatDisDtheDadjustme96ntDforDfinancing?D-DcorrectDanswer-4000
TheDappropriateDtimeDadjustmentDisDconcludedDtoDbeDanDincreaseDofD7%DperDyearDcompounded.DTheDtime
DadjustmentDforDaDcomparableDsaleDthatDsoldDforD$40,000,D2DyearsDagoDis:D-DcorrectDanswer-5796
WhenDanDappraiserDresearchesDtheDmarketDdirectlyDwithDparticipantsDandDtheDdataDhasDnotDbeenDpreviou
slyDcollected,DitDisDcalledD-DcorrectDanswer-PrimaryDdata
ADconditionsDofDsaleDadjustmentDreflectsD-DcorrectDanswer-
TheDdifferencesDbetweenDtheDmotivationsDofDtheDsellerDandDbuyerDonDtheDdateDofDsaleDofDaDcomparableDa
ndDtheDtypicalDmotivationDofDbuyersDandDsellersDasDdescribedDinDtheDdefinitionDofDvalue
, ComparativeDanalysisDisD-DcorrectDanswer-
ADgeneralDtermDusedDtoDdescribeDtheDprocessDbyDwhichDqualitativeDorDquantitativeDtechniquesDareDusedDt
oDderiveDaDvalueDopinionDinDtheDsalesDcomparisonDapproach
ComparableDsaleDsoldDforD$150,000DwithDdownDpaymentDofD$30,000
·DSellerDfinancedDmortgageDforDaD30-yearDtermD@D7%DinterestDcompoundedDmonthly.
·DHomesDinDareaDareDtypicallyDheldDforD30Dyears
·DMarketDderivedDinterestDrateDisD9%DcompoundedDmonthly.
(ImplicitDinDthisDmethodDisDtheDassumptionDthatDtheDdifferenceDbetweenDtheDmarketDinterestDrateDandDthe
DcontractDrateDwillDremainDconstantDforDtheDentireD30Dyears)
WhatDisDtheDadjustedDsaleDpriceDafterDtakingDintoDconsiderationDfinancingDterms?D-DcorrectDanswer-
129,222.04
ValuationDassignmentDforDtheDsubjectDpropertyDisDforDbothDtheDbuildingDandDland.
·DADComparableDOfficeDBldgDownedDandDsoldDseparatelyDfromDitsDsiteD(land),DwhichDisDsubjectDtoDaD99-
yearDgroundDlease.
·DTheDcomparableD80,000DsfDbldgDsoldD(separatelyDfromDtheDland)DforD$4,000,000,DorD$50/sf.
·DAssumeDtheDannualDgroundDrentDisD$250,000,DwhichDisDconsistentDwithDtheDmarket
· MarketDLandDCapitalizationDrateDisD11%.
D D
IfDnoDotherDadjustmentsDwereDmadeDexceptDforDtheDvalueDofDtheDland,DwhatDwouldDbeDtheDfinalDadjustedD
salesDpriceDofDthisDcomparable?D-DcorrectDanswer-6,272,727.27
ADcomparableDsaleDincludedDtheDsellerDtakingDbackDaDpurchase-
moneyDmortgageDatD3%DunderDtheDmarketDrateDforD10Dyears.DTheDappraisalDwasDbasedDonDtheDcash-
equivalentDmarketDvalue.DTheDadjustmentDforDthisDfactorDwouldDbeDcalledDaD-DcorrectDanswer-
financingDtermsDadjustment
InDaDmarketDvalueDappraisalDassignment,DtheDappraiserDfoundDpricesDwereDincreasingDatDaboutD3%DperDye
arDcompoundedDannually.DTheDappraiserDfoundDseveralDcomparableDsalesDbutDtheyDwereDnotDveryDrecentD
transactions.DSheDdecidedDtoDmakeDanDadjustmentDtoDcompensateDforDpriceDincreasesDinDthisDmarket.DThe
seDadjustmentsDareDcalledD-DcorrectDanswer-MarketDconditionsDadjustments
