COLORADO CERTIFIED GENERAL APPRAISER
CERTIFICATION EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) Q&A
2026|INSTANT DOWNLOAD PDF
1. What is the primary purpose of an appraisal?
A. To determine tax liability
B. To estimate market value
C. To set listing price
D. To calculate mortgage interest
Rationale: Appraisals estimate market value for decision-
making in real estate transactions.
Correct answer: B
2. Market value is best defined as:
A. The highest price paid historically
B. The lowest possible price
C. The most probable price in an open market
D. Assessed value for taxation
Rationale: Market value assumes willing buyer and seller
conditions.
Correct answer: C
3. The principle of substitution states:
A. Buyers substitute money for goods
B. No property is unique
C. A buyer will not pay more than a substitute property
,D. Cost equals value
Rationale: Rational buyers compare alternatives.
Correct answer: C
4. Which is NOT a real estate appraisal approach?
A. Cost approach
B. Income approach
C. Sales comparison approach
D. Investment replacement approach
Rationale: Only three recognized approaches exist.
Correct answer: D
5. The highest and best use must be:
A. Legally permissible only
B. Physically possible only
C. Financially feasible only
D. Legally permissible, physically possible, financially feasible,
and maximally productive
Rationale: All four criteria must be met.
Correct answer: D
6. Depreciation in appraisal refers to:
A. Market appreciation
B. Loss in value from any cause
C. Inflation adjustment
D. Construction cost increase
Rationale: Depreciation reduces property value.
Correct answer: B
, 7. An appraisal report primarily serves:
A. The lender only
B. The buyer only
C. The intended user
D. The government
Rationale: Intended user determines report use.
Correct answer: C
8. Functional obsolescence is caused by:
A. Physical wear
B. External market forces
C. Design or layout defects
D. Inflation
Rationale: Poor design reduces utility.
Correct answer: C
9. External obsolescence is:
A. Curable depreciation
B. Site-related value increase
C. Loss in value from outside influences
D. Construction error
Rationale: External factors reduce property value.
Correct answer: C
10. The cost approach is most reliable for:
A. Older residential homes
B. Unique or new properties
C. Rental apartments
D. Agricultural land only
CERTIFICATION EXAM QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) Q&A
2026|INSTANT DOWNLOAD PDF
1. What is the primary purpose of an appraisal?
A. To determine tax liability
B. To estimate market value
C. To set listing price
D. To calculate mortgage interest
Rationale: Appraisals estimate market value for decision-
making in real estate transactions.
Correct answer: B
2. Market value is best defined as:
A. The highest price paid historically
B. The lowest possible price
C. The most probable price in an open market
D. Assessed value for taxation
Rationale: Market value assumes willing buyer and seller
conditions.
Correct answer: C
3. The principle of substitution states:
A. Buyers substitute money for goods
B. No property is unique
C. A buyer will not pay more than a substitute property
,D. Cost equals value
Rationale: Rational buyers compare alternatives.
Correct answer: C
4. Which is NOT a real estate appraisal approach?
A. Cost approach
B. Income approach
C. Sales comparison approach
D. Investment replacement approach
Rationale: Only three recognized approaches exist.
Correct answer: D
5. The highest and best use must be:
A. Legally permissible only
B. Physically possible only
C. Financially feasible only
D. Legally permissible, physically possible, financially feasible,
and maximally productive
Rationale: All four criteria must be met.
Correct answer: D
6. Depreciation in appraisal refers to:
A. Market appreciation
B. Loss in value from any cause
C. Inflation adjustment
D. Construction cost increase
Rationale: Depreciation reduces property value.
Correct answer: B
, 7. An appraisal report primarily serves:
A. The lender only
B. The buyer only
C. The intended user
D. The government
Rationale: Intended user determines report use.
Correct answer: C
8. Functional obsolescence is caused by:
A. Physical wear
B. External market forces
C. Design or layout defects
D. Inflation
Rationale: Poor design reduces utility.
Correct answer: C
9. External obsolescence is:
A. Curable depreciation
B. Site-related value increase
C. Loss in value from outside influences
D. Construction error
Rationale: External factors reduce property value.
Correct answer: C
10. The cost approach is most reliable for:
A. Older residential homes
B. Unique or new properties
C. Rental apartments
D. Agricultural land only
