Texas SAE: Real Estate Appraisal
Exam review
Transferability - ANSWER-Which value-influencing DUST factor addresses the ease
with which the property can be conveyed to another?
Present index ÷ Index at time of construction x Original cost = Present cost
To arrive at the present cost, the appraiser applies a factor that represents the costs of
construction over time up to the appraisal date (present index ÷ index at time of
construction) multiplied by the subject building's original cost. - ANSWER-Which of the
following formulas is used with the index method to find the reproduction cost?
The same neighborhood - ANSWER-When possible, comparable sales from ______
should be used.
A parcel of land, the structures on it, and shared common areas - ANSWER-Ownership
in a planned unit development consists of ______.
Unpaid taxes become a lien against the property. - ANSWER-In what way is taxation an
inherent burden on private landownership?
Deductible on her personal income tax returns
As the resident in a cooperative, her share of mortgage interest and real estate taxes is
deductible on personal income tax returns. - ANSWER-Bianca wants to buy a
cooperative, but she's unsure that she can afford it. With a cooperative, her share of
mortgage interest and real estate taxes will be ______.
The appraiser, the lender, and the consumer - ANSWER-The Appraiser Independence
Requirements protect which party or parties?
10X (100,000/10,000) - ANSWER-Using the gross income multiplier (GIM) valuation
method, a property's sales price is divided by its gross income. If a property has a sales
price of $100,000 and gross income of $10,000, what is its GIM?
Appraiser - ANSWER-Which professional is hired by the buyer and lender to give an
opinion of value of the property?
The appraiser selects the adjusted sales price of the property most like the subject to
use as the indicated value. - ANSWER-Which of the following best describes how an
appraiser reconciles the adjusted sales prices of the comparable properties to indicate
the value of the subject property?
,An estimate of value for a specific purpose, party, and property as of a specific date -
ANSWER-What is the definition of an appraisal?
Condo Unit - ANSWER-Which of the following properties requires the appraiser to
include information about the monthly fees charged by the property management, the
location of the subject property within a community, and the areas considered private or
public?
Severalty Ownership
Corporations own property owned in severalty, like individuals do. - ANSWER-If Mega
Corporation owns real property, chances are it owns it in ______.
Land Trust
A land trust is similar to other trusts except that it's formed specifically to hold real
estate. - ANSWER-James creates a trust to hold a piece of real estate he owns. He
directs a corporate fiduciary to hold title to the real estate and provides instructions for
the management, control, and disposition of the real estate upon his death. Given that
the trust only holds real estate, James likely set up a(n) ______ trust.
This is a definition of land. - ANSWER-The earth's surface, extending downward to the
center of the earth and upward to infinity, including permanently-attached natural
objects, is called ______.
Building specifications
explain the blueprint and any features that may not be visible on that building plan. -
ANSWER-Which of these is a written description of a blueprint?
Ground Rent Capitalization Method (GRM) - ANSWER-What method of land valuation
converts the amount of yearly income a site will produce into a value using a
capitalization rate?
Complete the cost approach section of the URAR form - ANSWER-As part of
completing an appraisal using the cost approach method, what must appraisers do?
Direct Capitalization - ANSWER-Which of the following analyzes net operating income
(NOI) for a single year, and is used when the property's income isn't expected to vary
much over time?
The _method converts a single year's expected income (or an annual average) into a
market value. This is the expected return on investment the property is capable of
producing in a single year: the first year of ownership.
Real Property - ANSWER-Real estate, plus all of the interests, benefits, and rights
included in ownership, is also known as ______.
, General Data - ANSWER-The US Census Bureau is a good source of what type of data
needed by appraisers?
ENERGY STAR®-qualified home - ANSWER-What's the term for certified energy-
efficient homes that have met specific qualifications?
Ventilation - ANSWER-The ______ system keeps air fresh by recycling air and
removing odors and pollutants.
Accrued Depreciation - ANSWER-Which part of the cost approach equation is
considered the most difficult part to estimate accurately?
__is considered the most difficult part of the cost approach equation to estimate
accurately, partially because it can vary considerably based on specific market
conditions as of the appraisal date. In addition, a buyer's measure of depreciation can
also vary quite a bit, depending on the price range of homes in the local area.
Anticipated future income - ANSWER-When discounted cash flow analysis is used,
what's discounted?
_is discounted to a present value when this method is used.
The Uniform Appraisal Dataset (UAD) provides field-specific instructions for the URAR
used by Fannie Mae and Freddie Mac. - ANSWER-What guidelines must appraisers
follow when completing the sales comparison section of the URAR?
Metes and bounds, lot and block, and rectangular government survey - ANSWER-What
are the three most common forms of legal descriptions?
Physical Deterioration - ANSWER-Which of the following is a loss in value caused by
wear and tear?
vapor barrier and termiticide - ANSWER-Every foundation in direct contact with the
ground should have which two features?
$333 (150,000/450) (450X333) - ANSWER-A lot with a front footage measuring 450 feet
sold for $150,000. What was the cost per front foot? Round to the nearest dollar.
Of enjoyment, possession, exclusion, disposition - ANSWER-Real property rights
include the right ______.
the Appraisal Qualifications Board (AQB)
While the AQB is responsible for establishing minimum licensing qualifications, states
may also establish more stringent requirements. - ANSWER-Which of the following
entities is responsible for establishing minimum licensing qualifications for appraisers?
The government-sponsored enterprises Fannie Mae and Freddie Mac developed the
UAD to improve the quality and consistency of appraisal data for loans. The UAD
Exam review
Transferability - ANSWER-Which value-influencing DUST factor addresses the ease
with which the property can be conveyed to another?
Present index ÷ Index at time of construction x Original cost = Present cost
To arrive at the present cost, the appraiser applies a factor that represents the costs of
construction over time up to the appraisal date (present index ÷ index at time of
construction) multiplied by the subject building's original cost. - ANSWER-Which of the
following formulas is used with the index method to find the reproduction cost?
The same neighborhood - ANSWER-When possible, comparable sales from ______
should be used.
A parcel of land, the structures on it, and shared common areas - ANSWER-Ownership
in a planned unit development consists of ______.
Unpaid taxes become a lien against the property. - ANSWER-In what way is taxation an
inherent burden on private landownership?
Deductible on her personal income tax returns
As the resident in a cooperative, her share of mortgage interest and real estate taxes is
deductible on personal income tax returns. - ANSWER-Bianca wants to buy a
cooperative, but she's unsure that she can afford it. With a cooperative, her share of
mortgage interest and real estate taxes will be ______.
The appraiser, the lender, and the consumer - ANSWER-The Appraiser Independence
Requirements protect which party or parties?
10X (100,000/10,000) - ANSWER-Using the gross income multiplier (GIM) valuation
method, a property's sales price is divided by its gross income. If a property has a sales
price of $100,000 and gross income of $10,000, what is its GIM?
Appraiser - ANSWER-Which professional is hired by the buyer and lender to give an
opinion of value of the property?
The appraiser selects the adjusted sales price of the property most like the subject to
use as the indicated value. - ANSWER-Which of the following best describes how an
appraiser reconciles the adjusted sales prices of the comparable properties to indicate
the value of the subject property?
,An estimate of value for a specific purpose, party, and property as of a specific date -
ANSWER-What is the definition of an appraisal?
Condo Unit - ANSWER-Which of the following properties requires the appraiser to
include information about the monthly fees charged by the property management, the
location of the subject property within a community, and the areas considered private or
public?
Severalty Ownership
Corporations own property owned in severalty, like individuals do. - ANSWER-If Mega
Corporation owns real property, chances are it owns it in ______.
Land Trust
A land trust is similar to other trusts except that it's formed specifically to hold real
estate. - ANSWER-James creates a trust to hold a piece of real estate he owns. He
directs a corporate fiduciary to hold title to the real estate and provides instructions for
the management, control, and disposition of the real estate upon his death. Given that
the trust only holds real estate, James likely set up a(n) ______ trust.
This is a definition of land. - ANSWER-The earth's surface, extending downward to the
center of the earth and upward to infinity, including permanently-attached natural
objects, is called ______.
Building specifications
explain the blueprint and any features that may not be visible on that building plan. -
ANSWER-Which of these is a written description of a blueprint?
Ground Rent Capitalization Method (GRM) - ANSWER-What method of land valuation
converts the amount of yearly income a site will produce into a value using a
capitalization rate?
Complete the cost approach section of the URAR form - ANSWER-As part of
completing an appraisal using the cost approach method, what must appraisers do?
Direct Capitalization - ANSWER-Which of the following analyzes net operating income
(NOI) for a single year, and is used when the property's income isn't expected to vary
much over time?
The _method converts a single year's expected income (or an annual average) into a
market value. This is the expected return on investment the property is capable of
producing in a single year: the first year of ownership.
Real Property - ANSWER-Real estate, plus all of the interests, benefits, and rights
included in ownership, is also known as ______.
, General Data - ANSWER-The US Census Bureau is a good source of what type of data
needed by appraisers?
ENERGY STAR®-qualified home - ANSWER-What's the term for certified energy-
efficient homes that have met specific qualifications?
Ventilation - ANSWER-The ______ system keeps air fresh by recycling air and
removing odors and pollutants.
Accrued Depreciation - ANSWER-Which part of the cost approach equation is
considered the most difficult part to estimate accurately?
__is considered the most difficult part of the cost approach equation to estimate
accurately, partially because it can vary considerably based on specific market
conditions as of the appraisal date. In addition, a buyer's measure of depreciation can
also vary quite a bit, depending on the price range of homes in the local area.
Anticipated future income - ANSWER-When discounted cash flow analysis is used,
what's discounted?
_is discounted to a present value when this method is used.
The Uniform Appraisal Dataset (UAD) provides field-specific instructions for the URAR
used by Fannie Mae and Freddie Mac. - ANSWER-What guidelines must appraisers
follow when completing the sales comparison section of the URAR?
Metes and bounds, lot and block, and rectangular government survey - ANSWER-What
are the three most common forms of legal descriptions?
Physical Deterioration - ANSWER-Which of the following is a loss in value caused by
wear and tear?
vapor barrier and termiticide - ANSWER-Every foundation in direct contact with the
ground should have which two features?
$333 (150,000/450) (450X333) - ANSWER-A lot with a front footage measuring 450 feet
sold for $150,000. What was the cost per front foot? Round to the nearest dollar.
Of enjoyment, possession, exclusion, disposition - ANSWER-Real property rights
include the right ______.
the Appraisal Qualifications Board (AQB)
While the AQB is responsible for establishing minimum licensing qualifications, states
may also establish more stringent requirements. - ANSWER-Which of the following
entities is responsible for establishing minimum licensing qualifications for appraisers?
The government-sponsored enterprises Fannie Mae and Freddie Mac developed the
UAD to improve the quality and consistency of appraisal data for loans. The UAD
