REE 3043 BROXTERMAN EXAM 2 FSU QUESTIONS
AND ANSWERS 2026
If the only physical difference between the subject
property and the comparable is that the comparable
has a fireplace and the subject does not, which of the
following adjustments should take place?
A. The transaction price of the comparable property
should be adjusted downward
B. The transaction price of the comparable property
should be adjusted upward
C. The transaction price of the subject property should be adjusted downward
D. The transaction price of the subject property should be adjusted upward - Answers -
The transaction price of the comparable property
should be adjusted downward
A comparable property sold 15 months ago for
$105,000. If property values are increasing at a rate
of 0.25% per month (no compounding), what would
be the adjustment amount to the sale price of the
comparable property? (Adj amt, not ASP) - Answers - $105,000(0.0025)15 = $3,937.50
Which of the following statements best describes the concept of market value?
A. It is an estimate of the most probable selling price of a property in a competitive
market
B. It is the value a particular investor places on a property
C. It is the price we observe when a property is sold
D. It is the maximum amount that a seller would be willing to accept - Answers - It is an
estimate of the most probable selling price of a property in a competitive
market
Single-family residential
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Investment approach - Answers - Sales comparison approach
A comparable property sold 10 months ago for $200,000. If the appropriate
adjustment for market conditions is 3.6% per year (without compounding), what would
be the time adjustment in the sale comparison grid? Hint: the question asks for the
adjustment amount, not the adjusted sale price. - Answers - 3.6%/12 = 0.3% per month
, $200,000(0.003)10 = $6,000
Property A sold 18 months ago for $235,000 and
Property B sold 12 months ago for $215,000. If the two properties are priced today at
$239,500 and $222,300, respectively, assuming no compounding, what is the average
monthly rate of change in sale prices that can be used to adjust other comparable sales
in the neighborhood? - Answers - .2%
g= 1/n ((new-old)/ old))
Given the following information, calculate
EGI. Property: 4 office units, Contract rents
per unit: $2500 per month, VC: 15%, OE:
$42,000, CAPX: 10%. - Answers - Ignore CAPX and OE
PGI = 4 × $2500 × 12 = $120,000
VC = $120,000(0.15) = $18,000
EGI = $120,000 - $18,000
= $102,000
Given the following information on a
comparable sale, extract the overall
capitalization rate. SP: $950,000, PGI:
$250,000, VC: $50,000, and OE: $50,000. - Answers - NOI1 = $250,000 - $50,000 -
$50,000 = $150,000
R0 = NOI1 / SP0 = $150,000 / $950,000 = 0.1579 or 15.8%
Given the following information on a
subject property, estimate market value
using direct capitalization. Cap Rate 5%,
PGI: $200,000, VC: $50,000, and OE: $50,000. - Answers - NOI1 = $200,000 - $50,000
- $50,000 = $100,000
V0 = NOI1 / R0 = $100,.05 = $2,000,000
What is the present value of the following
series of cash flows assuming a discount rate of
10%: Year 1 = $90,000, Year 2 = $90,000, Year 3
= $100,000 + $1,000,000? - Answers - $907,513
Use direct capitalization to forecast the
terminal value of the property at the end of
its holding period. Going-in cap rate: 8.75%,
Going-out cap rate: 9%, Estimated holding
period: 5 years, NOI for year 5: $100,500,
NOI for year 6: $102,000. - Answers - SP5 = NOI6/RT
= 102,000/.09 = $1,133,333
AND ANSWERS 2026
If the only physical difference between the subject
property and the comparable is that the comparable
has a fireplace and the subject does not, which of the
following adjustments should take place?
A. The transaction price of the comparable property
should be adjusted downward
B. The transaction price of the comparable property
should be adjusted upward
C. The transaction price of the subject property should be adjusted downward
D. The transaction price of the subject property should be adjusted upward - Answers -
The transaction price of the comparable property
should be adjusted downward
A comparable property sold 15 months ago for
$105,000. If property values are increasing at a rate
of 0.25% per month (no compounding), what would
be the adjustment amount to the sale price of the
comparable property? (Adj amt, not ASP) - Answers - $105,000(0.0025)15 = $3,937.50
Which of the following statements best describes the concept of market value?
A. It is an estimate of the most probable selling price of a property in a competitive
market
B. It is the value a particular investor places on a property
C. It is the price we observe when a property is sold
D. It is the maximum amount that a seller would be willing to accept - Answers - It is an
estimate of the most probable selling price of a property in a competitive
market
Single-family residential
A. Income approach
B. Sales comparison approach
C. Cost approach
D. Investment approach - Answers - Sales comparison approach
A comparable property sold 10 months ago for $200,000. If the appropriate
adjustment for market conditions is 3.6% per year (without compounding), what would
be the time adjustment in the sale comparison grid? Hint: the question asks for the
adjustment amount, not the adjusted sale price. - Answers - 3.6%/12 = 0.3% per month
, $200,000(0.003)10 = $6,000
Property A sold 18 months ago for $235,000 and
Property B sold 12 months ago for $215,000. If the two properties are priced today at
$239,500 and $222,300, respectively, assuming no compounding, what is the average
monthly rate of change in sale prices that can be used to adjust other comparable sales
in the neighborhood? - Answers - .2%
g= 1/n ((new-old)/ old))
Given the following information, calculate
EGI. Property: 4 office units, Contract rents
per unit: $2500 per month, VC: 15%, OE:
$42,000, CAPX: 10%. - Answers - Ignore CAPX and OE
PGI = 4 × $2500 × 12 = $120,000
VC = $120,000(0.15) = $18,000
EGI = $120,000 - $18,000
= $102,000
Given the following information on a
comparable sale, extract the overall
capitalization rate. SP: $950,000, PGI:
$250,000, VC: $50,000, and OE: $50,000. - Answers - NOI1 = $250,000 - $50,000 -
$50,000 = $150,000
R0 = NOI1 / SP0 = $150,000 / $950,000 = 0.1579 or 15.8%
Given the following information on a
subject property, estimate market value
using direct capitalization. Cap Rate 5%,
PGI: $200,000, VC: $50,000, and OE: $50,000. - Answers - NOI1 = $200,000 - $50,000
- $50,000 = $100,000
V0 = NOI1 / R0 = $100,.05 = $2,000,000
What is the present value of the following
series of cash flows assuming a discount rate of
10%: Year 1 = $90,000, Year 2 = $90,000, Year 3
= $100,000 + $1,000,000? - Answers - $907,513
Use direct capitalization to forecast the
terminal value of the property at the end of
its holding period. Going-in cap rate: 8.75%,
Going-out cap rate: 9%, Estimated holding
period: 5 years, NOI for year 5: $100,500,
NOI for year 6: $102,000. - Answers - SP5 = NOI6/RT
= 102,000/.09 = $1,133,333
