SALES COMPARISON APPROACH FINAL EXAM PRACTICE
QUESTIONS AND CORRECT ANSWER WITH
EXPLANATION LATEST 2025-2026
1. The sales comparison approach is based on:
A. Construction cost
B. Income potential
C. Comparison of similar property sales
D. Tax assessment
Answer: C
Rationale: It values property by comparing recent sales of similar properties.
2. Another name for the sales comparison approach is:
A. Cost approach
B. Market data approach
C. Income approach
D. Residual approach
Answer: B
Rationale: It relies on market sales data.
3. The principle underlying the sales comparison approach is:
A. Contribution
B. Substitution
C. Anticipation
D. Progression
Answer: B
Rationale: Buyers will not pay more than similar substitutes.
4. A comparable property is also called a:
,A. Subject
B. Comp
C. Lease
D. Appraisal
Answer: B
Rationale: “Comp” is short for comparable.
5. The subject property is:
A. A comparable sale
B. The property being appraised
C. A rental unit
D. A tax record
Answer: B
Rationale: Main focus of the appraisal.
6. The best comparable sales are:
A. Old and distant
B. Recent and similar
C. Random properties
D. Foreclosures only
Answer: B
Rationale: Similarity and recency improve accuracy.
7. Adjustments are made to comparables to:
A. Increase taxes
B. Make properties equivalent
C. Increase income
D. Reduce value
Answer: B
Rationale: Standardize differences.
8. A positive adjustment is made when the comparable is:
, A. Superior to subject
B. Inferior to subject
C. Identical
D. Older only
Answer: B
Rationale: Add value to inferior comp.
9. A negative adjustment is made when the comparable is:
A. Inferior
B. Superior
C. Identical
D. Newer only
Answer: B
Rationale: Reduce value of superior comp.
10. Time adjustment accounts for:
A. Taxes
B. Market changes over time
C. Loan rates
D. Insurance
Answer: B
Rationale: Reflects market conditions.
11. Location adjustment considers:
A. Construction cost
B. Neighborhood differences
C. Taxes
D. Loan terms
Answer: B
Rationale: Location affects value.
12. Physical characteristics include:
QUESTIONS AND CORRECT ANSWER WITH
EXPLANATION LATEST 2025-2026
1. The sales comparison approach is based on:
A. Construction cost
B. Income potential
C. Comparison of similar property sales
D. Tax assessment
Answer: C
Rationale: It values property by comparing recent sales of similar properties.
2. Another name for the sales comparison approach is:
A. Cost approach
B. Market data approach
C. Income approach
D. Residual approach
Answer: B
Rationale: It relies on market sales data.
3. The principle underlying the sales comparison approach is:
A. Contribution
B. Substitution
C. Anticipation
D. Progression
Answer: B
Rationale: Buyers will not pay more than similar substitutes.
4. A comparable property is also called a:
,A. Subject
B. Comp
C. Lease
D. Appraisal
Answer: B
Rationale: “Comp” is short for comparable.
5. The subject property is:
A. A comparable sale
B. The property being appraised
C. A rental unit
D. A tax record
Answer: B
Rationale: Main focus of the appraisal.
6. The best comparable sales are:
A. Old and distant
B. Recent and similar
C. Random properties
D. Foreclosures only
Answer: B
Rationale: Similarity and recency improve accuracy.
7. Adjustments are made to comparables to:
A. Increase taxes
B. Make properties equivalent
C. Increase income
D. Reduce value
Answer: B
Rationale: Standardize differences.
8. A positive adjustment is made when the comparable is:
, A. Superior to subject
B. Inferior to subject
C. Identical
D. Older only
Answer: B
Rationale: Add value to inferior comp.
9. A negative adjustment is made when the comparable is:
A. Inferior
B. Superior
C. Identical
D. Newer only
Answer: B
Rationale: Reduce value of superior comp.
10. Time adjustment accounts for:
A. Taxes
B. Market changes over time
C. Loan rates
D. Insurance
Answer: B
Rationale: Reflects market conditions.
11. Location adjustment considers:
A. Construction cost
B. Neighborhood differences
C. Taxes
D. Loan terms
Answer: B
Rationale: Location affects value.
12. Physical characteristics include:
