CHAPTER 19-20 REE4103 QUESTIONS WITH CORRECT ANSWERS 2025

CHAPTER 19/20 REE4103 QUESTIONS
WITH CORRECT ANSWERS 2025
QualitativeDanalysisDisDbasedDonD-DcorrectDanswer-"Inferior"DorD"superior"Dratings



ADmarketDconditionsDadjustmentDisDappliedDinDsomeDsituationsDbecauseD-DcorrectDanswer-
TheDmarketDhasDchangedDsinceDtheDcomparableDpropertyDsold



AdjustmentsDforDfinancingDtermsDcompensateDforD-DcorrectDanswer-
ADcomparableDthatDsoldDwithDfinancingDtermsDthatDwereDdifferentDthanDtheDtermsDdefinedDinDtheDappraisa
lDreport



AdjustmentsDforDtheDpropertyDrightsDconveyed,Dfinancing,DconditionsDofDsale,DandDtheDdateDofDsaleDareDoft
enDmadeDtoDtheD_______________DofDtheDcomparableDproperty.D-DcorrectDanswer-ActualDsaleDprice



TheDpreferredDsequenceDofDadjustmentDisD-DcorrectDanswer-
PropertyDrights,Dfinancing,DconditionsDofDsale,DexpendituresDafterDpurchase,DmarketDconditions,DandDphysi
calDattributes



YouDareDanalyzingDaDsaleDinDwhichDtheDmathematicalDcalculationDofDcashDequivalencyDcallsDforDaD$10,000Dd
ownwardDadjustment.DHowever,DbyDuseDofDseveralDpairedDdataDsets,DyouDfindDthatDtheDmarketDonlyDrecog
nizesDaD$4,000DdownwardDadjustment.DWhatDisDtheDadjustme96ntDforDfinancing?D-DcorrectDanswer-4000



TheDappropriateDtimeDadjustmentDisDconcludedDtoDbeDanDincreaseDofD7%DperDyearDcompounded.DTheDtime
DadjustmentDforDaDcomparableDsaleDthatDsoldDforD$40,000,D2DyearsDagoDis:D-DcorrectDanswer-5796




WhenDanDappraiserDresearchesDtheDmarketDdirectlyDwithDparticipantsDandDtheDdataDhasDnotDbeenDpreviou
slyDcollected,DitDisDcalledD-DcorrectDanswer-PrimaryDdata



ADconditionsDofDsaleDadjustmentDreflectsD-DcorrectDanswer-
TheDdifferencesDbetweenDtheDmotivationsDofDtheDsellerDandDbuyerDonDtheDdateDofDsaleDofDaDcomparableDa
ndDtheDtypicalDmotivationDofDbuyersDandDsellersDasDdescribedDinDtheDdefinitionDofDvalue

, ComparativeDanalysisDisD-DcorrectDanswer-
ADgeneralDtermDusedDtoDdescribeDtheDprocessDbyDwhichDqualitativeDorDquantitativeDtechniquesDareDusedDt
oDderiveDaDvalueDopinionDinDtheDsalesDcomparisonDapproach



ComparableDsaleDsoldDforD$150,000DwithDdownDpaymentDofD$30,000

·DSellerDfinancedDmortgageDforDaD30-yearDtermD@D7%DinterestDcompoundedDmonthly.

·DHomesDinDareaDareDtypicallyDheldDforD30Dyears

·DMarketDderivedDinterestDrateDisD9%DcompoundedDmonthly.

(ImplicitDinDthisDmethodDisDtheDassumptionDthatDtheDdifferenceDbetweenDtheDmarketDinterestDrateDandDthe
DcontractDrateDwillDremainDconstantDforDtheDentireD30Dyears)




WhatDisDtheDadjustedDsaleDpriceDafterDtakingDintoDconsiderationDfinancingDterms?D-DcorrectDanswer-
129,222.04



ValuationDassignmentDforDtheDsubjectDpropertyDisDforDbothDtheDbuildingDandDland.

·DADComparableDOfficeDBldgDownedDandDsoldDseparatelyDfromDitsDsiteD(land),DwhichDisDsubjectDtoDaD99-
yearDgroundDlease.

·DTheDcomparableD80,000DsfDbldgDsoldD(separatelyDfromDtheDland)DforD$4,000,000,DorD$50/sf.

·DAssumeDtheDannualDgroundDrentDisD$250,000,DwhichDisDconsistentDwithDtheDmarket

· MarketDLandDCapitalizationDrateDisD11%.
D D




IfDnoDotherDadjustmentsDwereDmadeDexceptDforDtheDvalueDofDtheDland,DwhatDwouldDbeDtheDfinalDadjustedD
salesDpriceDofDthisDcomparable?D-DcorrectDanswer-6,272,727.27



ADcomparableDsaleDincludedDtheDsellerDtakingDbackDaDpurchase-
moneyDmortgageDatD3%DunderDtheDmarketDrateDforD10Dyears.DTheDappraisalDwasDbasedDonDtheDcash-
equivalentDmarketDvalue.DTheDadjustmentDforDthisDfactorDwouldDbeDcalledDaD-DcorrectDanswer-
financingDtermsDadjustment



InDaDmarketDvalueDappraisalDassignment,DtheDappraiserDfoundDpricesDwereDincreasingDatDaboutD3%DperDye
arDcompoundedDannually.DTheDappraiserDfoundDseveralDcomparableDsalesDbutDtheyDwereDnotDveryDrecentD
transactions.DSheDdecidedDtoDmakeDanDadjustmentDtoDcompensateDforDpriceDincreasesDinDthisDmarket.DThe
seDadjustmentsDareDcalledD-DcorrectDanswer-MarketDconditionsDadjustments