General Appraiser Sales Comparison
Approach Latest Final Test Review of 600
Recently Tested Questions and Correct
Answers/ Practice Test for General
Appraiser Sales Comparison Approach
Final Exam
SECTION 1: PRINCIPLES AND CONCEPTS (Questions 1-50)
1. The Sales Comparison Approach is most effective when:
A) Market data is limited or unavailable
B) The subject property is new construction
C) Sufficient market data is available to extract and support adjustments
D) The property is income-producing
Correct Answer: C
Rationale: The Sales Comparison Approach relies on market-derived adjustments from
comparable sales. When sufficient data exists to extract and support these adjustments,
the approach yields the most reliable results . Limited data (A) makes adjustments
difficult to support. The approach can be used for all property types, not just new
construction (B) or income-producing properties (D).
,2. The principle that supports the adjustment process in the Sales Comparison
Approach is:
A) Anticipation
B) Change
C) Substitution
D) Contribution
Correct Answer: C
Rationale: The principle of substitution states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute. This principle
underlies the entire sales comparison approach—adjustments are made to determine
what comparable sales would have sold for if they were equivalent substitutes for the
subject .
3. Which of the following is FALSE regarding the use of listings as comparables in
the Sales Comparison Approach?
A) Listings can provide insight into current market conditions
B) Listings indicate the upper end of the value range
C) Listings require adjustment for sale-to-list ratio
D) In areas where sales data are limited, listings can be used in place of sales
Correct Answer: D
Rationale: Listings cannot replace actual sales in the Sales Comparison Approach. While
listings provide market information, they represent asking prices, not concluded
transactions. In areas with limited sales data, listings can supplement the analysis but
cannot substitute for actual comparable sales .
4. If there is an oversupply of new homes in a market, __________ will decline:
A) Cost
B) Supply
,C) Value
D) Demand
Correct Answer: C
Rationale: An oversupply of new homes creates excess inventory, leading to price
competition among sellers. When supply exceeds demand, property values decline .
Cost (A) may remain relatively stable despite oversupply.
5. If there is an undersupply of new homes in a market, __________ will remain
relatively stable:
A) Value
B) Cost
C) Demand
D) Supply
Correct Answer: B
Rationale: When supply is limited, costs of construction typically remain stable as
builders are not forced to lower prices to compete. Values may increase due to scarcity,
but construction costs are driven by material and labor markets, not directly by housing
supply levels .
6. The principle of regression states that:
A) A lower-valued property increases in value when surrounded by higher-valued
properties
B) A higher-valued property decreases in value when surrounded by lower-valued
properties
C) All properties depreciate over time
D) Property values are independent of surrounding uses
Correct Answer: B
, Rationale: The principle of regression suggests that a property of higher value may be
negatively impacted by being located among lower-valued properties. The opposite is
the principle of progression .
7. The principle of progression states that:
A) A lower-valued property increases in value when surrounded by higher-valued
properties
B) A higher-valued property decreases in value when surrounded by lower-valued
properties
C) All properties appreciate over time
D) Property values are independent of surrounding uses
Correct Answer: A
Rationale: The principle of progression suggests that a property of lower value can
benefit from being located among higher-valued properties. This is the opposite of the
principle of regression .
8. In many cases, _________ remains at a relatively stable level, while at the same
time, _________ fluctuates according to the dictates of the market:
A) Value, cost
B) Cost, value
C) Supply, demand
D) Demand, supply
Correct Answer: B
Rationale: Construction costs tend to remain relatively stable compared to market
values, which fluctuate with supply and demand dynamics. Cost is driven by labor and
material markets, while value is determined by market perceptions and competition .
Approach Latest Final Test Review of 600
Recently Tested Questions and Correct
Answers/ Practice Test for General
Appraiser Sales Comparison Approach
Final Exam
SECTION 1: PRINCIPLES AND CONCEPTS (Questions 1-50)
1. The Sales Comparison Approach is most effective when:
A) Market data is limited or unavailable
B) The subject property is new construction
C) Sufficient market data is available to extract and support adjustments
D) The property is income-producing
Correct Answer: C
Rationale: The Sales Comparison Approach relies on market-derived adjustments from
comparable sales. When sufficient data exists to extract and support these adjustments,
the approach yields the most reliable results . Limited data (A) makes adjustments
difficult to support. The approach can be used for all property types, not just new
construction (B) or income-producing properties (D).
,2. The principle that supports the adjustment process in the Sales Comparison
Approach is:
A) Anticipation
B) Change
C) Substitution
D) Contribution
Correct Answer: C
Rationale: The principle of substitution states that a buyer will not pay more for a
property than the cost of acquiring an equally desirable substitute. This principle
underlies the entire sales comparison approach—adjustments are made to determine
what comparable sales would have sold for if they were equivalent substitutes for the
subject .
3. Which of the following is FALSE regarding the use of listings as comparables in
the Sales Comparison Approach?
A) Listings can provide insight into current market conditions
B) Listings indicate the upper end of the value range
C) Listings require adjustment for sale-to-list ratio
D) In areas where sales data are limited, listings can be used in place of sales
Correct Answer: D
Rationale: Listings cannot replace actual sales in the Sales Comparison Approach. While
listings provide market information, they represent asking prices, not concluded
transactions. In areas with limited sales data, listings can supplement the analysis but
cannot substitute for actual comparable sales .
4. If there is an oversupply of new homes in a market, __________ will decline:
A) Cost
B) Supply
,C) Value
D) Demand
Correct Answer: C
Rationale: An oversupply of new homes creates excess inventory, leading to price
competition among sellers. When supply exceeds demand, property values decline .
Cost (A) may remain relatively stable despite oversupply.
5. If there is an undersupply of new homes in a market, __________ will remain
relatively stable:
A) Value
B) Cost
C) Demand
D) Supply
Correct Answer: B
Rationale: When supply is limited, costs of construction typically remain stable as
builders are not forced to lower prices to compete. Values may increase due to scarcity,
but construction costs are driven by material and labor markets, not directly by housing
supply levels .
6. The principle of regression states that:
A) A lower-valued property increases in value when surrounded by higher-valued
properties
B) A higher-valued property decreases in value when surrounded by lower-valued
properties
C) All properties depreciate over time
D) Property values are independent of surrounding uses
Correct Answer: B
, Rationale: The principle of regression suggests that a property of higher value may be
negatively impacted by being located among lower-valued properties. The opposite is
the principle of progression .
7. The principle of progression states that:
A) A lower-valued property increases in value when surrounded by higher-valued
properties
B) A higher-valued property decreases in value when surrounded by lower-valued
properties
C) All properties appreciate over time
D) Property values are independent of surrounding uses
Correct Answer: A
Rationale: The principle of progression suggests that a property of lower value can
benefit from being located among higher-valued properties. This is the opposite of the
principle of regression .
8. In many cases, _________ remains at a relatively stable level, while at the same
time, _________ fluctuates according to the dictates of the market:
A) Value, cost
B) Cost, value
C) Supply, demand
D) Demand, supply
Correct Answer: B
Rationale: Construction costs tend to remain relatively stable compared to market
values, which fluctuate with supply and demand dynamics. Cost is driven by labor and
material markets, while value is determined by market perceptions and competition .
