MARYLAND LICENSED RESIDENTIAL APPRAISER
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) Q&A 2026|INSTANT
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1. What is the primary purpose of an appraisal report?
A. To determine property taxes
B. To estimate market value of real property
C. To set listing price for sellers
D. To approve mortgage loans
Rationale: An appraisal provides an unbiased estimate of
market value for decision-making.
Correct Answer: B
2. Which principle states that a property's value is influenced
by surrounding properties?
A. Substitution
B. Conformity
C. Progression and regression
D. Contribution
Rationale: Progression/regression explains influence of
neighboring property values.
Correct Answer: C
,3. The highest and best use of a property must be:
A. Legally permissible, physically possible, financially feasible,
maximally productive
B. Only legally permissible
C. Only financially feasible
D. Based on owner preference
Rationale: All four criteria must be satisfied.
Correct Answer: A
4. Which approach is most commonly used for single-family
residential properties?
A. Cost approach
B. Income approach
C. Sales comparison approach
D. Residual approach
Rationale: Residential properties are primarily valued using
comparable sales.
Correct Answer: C
5. Depreciation in appraisal refers to:
A. Increase in property value over time
B. Loss in value from any cause
,C. Replacement cost of property
D. Market appreciation rate
Rationale: Depreciation is loss in value due to physical,
functional, or external causes.
Correct Answer: B
6. Which is NOT a form of depreciation?
A. Physical deterioration
B. Functional obsolescence
C. External obsolescence
D. Market appreciation
Rationale: Appreciation is an increase in value, not
depreciation.
Correct Answer: D
7. The cost approach formula is best described as:
A. Sales price – depreciation
B. Land value + improvement cost – depreciation
C. Income ÷ capitalization rate
D. Rent × multiplier
Rationale: Cost approach combines land value and depreciated
improvements.
Correct Answer: B
, 8. Which value concept assumes a property is worth no more
than a substitute?
A. Contribution
B. Substitution
C. Anticipation
D. Balance
Rationale: Buyers will not pay more than cost of comparable
substitute.
Correct Answer: B
9. Market value is best defined as:
A. Forced sale price
B. Price agreed under duress
C. Most probable price in competitive market
D. Assessed value
Rationale: Market value assumes willing buyer and seller.
Correct Answer: C
10. Which document establishes ethical standards for
appraisers?
A. FIRREA
B. USPAP
C. HUD guidelines
D. RESPA
EXAM QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) Q&A 2026|INSTANT
DOWNLOAD PDF
1. What is the primary purpose of an appraisal report?
A. To determine property taxes
B. To estimate market value of real property
C. To set listing price for sellers
D. To approve mortgage loans
Rationale: An appraisal provides an unbiased estimate of
market value for decision-making.
Correct Answer: B
2. Which principle states that a property's value is influenced
by surrounding properties?
A. Substitution
B. Conformity
C. Progression and regression
D. Contribution
Rationale: Progression/regression explains influence of
neighboring property values.
Correct Answer: C
,3. The highest and best use of a property must be:
A. Legally permissible, physically possible, financially feasible,
maximally productive
B. Only legally permissible
C. Only financially feasible
D. Based on owner preference
Rationale: All four criteria must be satisfied.
Correct Answer: A
4. Which approach is most commonly used for single-family
residential properties?
A. Cost approach
B. Income approach
C. Sales comparison approach
D. Residual approach
Rationale: Residential properties are primarily valued using
comparable sales.
Correct Answer: C
5. Depreciation in appraisal refers to:
A. Increase in property value over time
B. Loss in value from any cause
,C. Replacement cost of property
D. Market appreciation rate
Rationale: Depreciation is loss in value due to physical,
functional, or external causes.
Correct Answer: B
6. Which is NOT a form of depreciation?
A. Physical deterioration
B. Functional obsolescence
C. External obsolescence
D. Market appreciation
Rationale: Appreciation is an increase in value, not
depreciation.
Correct Answer: D
7. The cost approach formula is best described as:
A. Sales price – depreciation
B. Land value + improvement cost – depreciation
C. Income ÷ capitalization rate
D. Rent × multiplier
Rationale: Cost approach combines land value and depreciated
improvements.
Correct Answer: B
, 8. Which value concept assumes a property is worth no more
than a substitute?
A. Contribution
B. Substitution
C. Anticipation
D. Balance
Rationale: Buyers will not pay more than cost of comparable
substitute.
Correct Answer: B
9. Market value is best defined as:
A. Forced sale price
B. Price agreed under duress
C. Most probable price in competitive market
D. Assessed value
Rationale: Market value assumes willing buyer and seller.
Correct Answer: C
10. Which document establishes ethical standards for
appraisers?
A. FIRREA
B. USPAP
C. HUD guidelines
D. RESPA
