Missouri Property Valuation Inspector
Exam Practice Questions And Correct
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1. A property valuation inspector assessing a suburban residential
property notices that similar homes in the area have recently sold for
significantly higher prices due to a new public transportation hub.
Which appraisal principle is most directly influencing this change in
value?
A. Principle of substitution
B. Principle of conformity
,C. Principle of externalities
D. Principle of contribution
Answer: C
Rationale: The principle of externalities explains how external factors such
as infrastructure developments, zoning changes, or transportation
improvements can increase or decrease property values independent of the
property itself.
2. When determining the market value of a commercial building, an
inspector compares it with recently sold properties that are most
similar in size, location, and use. This approach is known as:
A. Cost approach
B. Income capitalization approach
C. Sales comparison approach
D. Residual valuation method
Answer: C
Rationale: The sales comparison approach estimates value by comparing
the subject property with similar properties that have recently sold,
making adjustments for differences.
, 3. A valuation inspector finds that a property generates consistent
annual rental income. Which valuation method is most appropriate for
determining its value?
A. Cost approach
B. Income capitalization approach
C. Sales comparison approach
D. Gross rent multiplier approach only
Answer: B
Rationale: The income capitalization approach values a property based on
its ability to generate future income, making it ideal for rental properties.
4. In property valuation, depreciation refers to:
A. An increase in property value over time
B. The cost of land improvements only
C. A loss in value due to physical or functional factors
D. The market demand for similar properties
Answer: C
Rationale: Depreciation is the reduction in property value due to physical
deterioration, functional obsolescence, or external factors.
5. Which of the following is NOT considered a form of depreciation?
, A. Physical deterioration
B. Functional obsolescence
C. Economic obsolescence
D. Market appreciation
Answer: D
Rationale: Market appreciation refers to an increase in property value and
is not a form of depreciation.
6. A property located near a noisy industrial zone has reduced market
value despite being structurally sound. This is an example of:
A. Functional obsolescence
B. Economic obsolescence
C. Physical deterioration
D. Curable depreciation
Answer: B
Rationale: Economic obsolescence is caused by external factors outside the
property itself, such as environmental or neighborhood conditions.
7. Which appraisal principle suggests that a property’s value is influenced
by surrounding land uses?
Exam Practice Questions And Correct
Answers (Verified Answers) Plus
Rationale 2026 Q&A| Instant Download
1. A property valuation inspector assessing a suburban residential
property notices that similar homes in the area have recently sold for
significantly higher prices due to a new public transportation hub.
Which appraisal principle is most directly influencing this change in
value?
A. Principle of substitution
B. Principle of conformity
,C. Principle of externalities
D. Principle of contribution
Answer: C
Rationale: The principle of externalities explains how external factors such
as infrastructure developments, zoning changes, or transportation
improvements can increase or decrease property values independent of the
property itself.
2. When determining the market value of a commercial building, an
inspector compares it with recently sold properties that are most
similar in size, location, and use. This approach is known as:
A. Cost approach
B. Income capitalization approach
C. Sales comparison approach
D. Residual valuation method
Answer: C
Rationale: The sales comparison approach estimates value by comparing
the subject property with similar properties that have recently sold,
making adjustments for differences.
, 3. A valuation inspector finds that a property generates consistent
annual rental income. Which valuation method is most appropriate for
determining its value?
A. Cost approach
B. Income capitalization approach
C. Sales comparison approach
D. Gross rent multiplier approach only
Answer: B
Rationale: The income capitalization approach values a property based on
its ability to generate future income, making it ideal for rental properties.
4. In property valuation, depreciation refers to:
A. An increase in property value over time
B. The cost of land improvements only
C. A loss in value due to physical or functional factors
D. The market demand for similar properties
Answer: C
Rationale: Depreciation is the reduction in property value due to physical
deterioration, functional obsolescence, or external factors.
5. Which of the following is NOT considered a form of depreciation?
, A. Physical deterioration
B. Functional obsolescence
C. Economic obsolescence
D. Market appreciation
Answer: D
Rationale: Market appreciation refers to an increase in property value and
is not a form of depreciation.
6. A property located near a noisy industrial zone has reduced market
value despite being structurally sound. This is an example of:
A. Functional obsolescence
B. Economic obsolescence
C. Physical deterioration
D. Curable depreciation
Answer: B
Rationale: Economic obsolescence is caused by external factors outside the
property itself, such as environmental or neighborhood conditions.
7. Which appraisal principle suggests that a property’s value is influenced
by surrounding land uses?
