Appraisal Review Verified Exams Questions/Answers
Graded A+ 2025/2026
Extraction: a method of estimating land value in which the depreciated cost of the
improvement on the improved property is estimated and deducted from the total sale
price to arrive at an estimated sale price for the land; most effective when the
improvements contribute little to the total sale price of the property. - Allocation method
vs. extraction method
size - Which is a physical force in relationship to value?
utilize the site as one home site, since the site cannot legally be split - What is the
highest and best use of a rural property that has 300 lineal feet of frontage and a depth
of 300 lineal feet, when zoning requires a site to be at least two acres for the
development of a single-family home?
effective demand.
RATIONALE The characteristic of purchase ability, or affordability, is known as effective
demand or effective purchasing power. - Regardless of the desire for a property in a
particular market, if there is not general purchase ability linked to the desire within the
market, the market is lacking
scarcity and utility. DUST - Which of the following characteristics create value in real
estate?
it could remain in that phase indefinitely.
RATIONALE
Stability is when buyer interest in the neighborhood remains strong and prices rarely
drop. Some neighborhoods remain in this stage and don't experience decline. - Once a
neighborhood has reached the phase of stability in its life cycle
If the condition is not adhered to, the title to the property could be forfeited
RATIONALE
Fee simple conditional provides that the owner may hold the estate only as long as
some specified act or condition does or does not occur. Thus, if the condition is not
observed, the owner could forfeit title. - Legal interest of a subject property was
conveyed to the current owner as fee simple conditional. What can be best said about
the estate held by the current owner?
Life estate with a reversionary interest
RATIONALE
A life estate is a freehold estate that lasts only as long as a specified person lives. A life
estate with a reversionary interest means that the property will go back (revert) to the
grantor or the grantor's heirs. - When an individual has a freehold estate that only lasts
as long as a specified person lives and then the interest goes back to the grantor or the
grantor's heirs, what type of freehold estate does the individual have?
,increases at a decreasing rate.
RATIONALE
With a fixed frontage, as the depth of the lot increases, the overall value of the lot
increases. However, as the lot extends back, the value of the land farther back
becomes less and the increase in overall value becomes smaller. Therefore, the front
foot rate will increase, but as the lot extends farther back, the amount of increase in rate
will decrease. - As the depth of the lot increases, the value per front footage
takes a ratio of the land or site value to the total improved value.
RATIONALE
When the ratio of land to total value is calculated for the comparable sales and then
applied to the subject, the allocation method is being used. - The allocation method for
determining site value
$8,756
RATIONALE
HP-12C Keystrokes: [f] [Sigma] [150000] [Sigma+] [165000] [Sigma+] [148000]
[Sigma+] [156000] [Sigma+] [163000] [Sigma+] [170000] [Sigma+] [g] [s] gives you a
result of $8,756. - Six homes sold within the past few months. What is the standard
deviation among the data provided? $150,000, $165,000, $148,000, $156,000,
$163,000, $170,000
12.30
RATIONALE
HP 12C method: 47 [Sigma+], 14 [Sigma+], 37 [Sigma+], 29 [Sigma+], 37 [Sigma+], [g]
[s] = 12.2963, or 12.30 rounded. Be sure to clear all registers before beginning entries.
The[s]key is the decimal key ('s' in blue on front of key). - Using this number set, find the
standard deviation: 47 - 14 - 37 - 29 - 37, rounded to two places.
22.14%
RATIONAL:
1. Cost new = (2,400 sq. ft. x $85) + (440 sq. ft. x $18) = $211,920.
2. Depreciation Cost =
Sale Price $240,000 -
Land Value $50,000 -
Site Improve $25,000 = $165,000
.
3. Total Depreciation = $46,920 ($211,920 - $165,000).
4. Percentage of Depreciation Depreciation / Cost new (46,,920 = 0.2214 or
22.14%). - For the purpose of estimating depreciation via the extraction method, you
have utilized Comparable Sale #1, which is a 2,400 sq. ft. home with a two-car, 440 sq.
ft. attached garage, having a replacement cost of $85/sq. ft. for gross living area and
$18/sq. ft. for the garage area. This property sold for $240,000 and has a chronological
,age of 10 years. Through your research, the indicated land value is $50,000 and the site
improvements have a replacement cost of $25,000. What is the percentage total
amount of accrued depreciation indicated by this sale?
52%
RATIONALE \First, determine the square footage of the three areas needing carpet: 12
x 14 = 168 sq. ft., 15.5 x 17.25 = 267.375 sq. ft., and 12.3 x 17.5 = 215.25 sq. ft. Next,
add the three areas together: 168 + 267.375 + 215.25 = 650.625 sq. ft. To convert
square yards to square feet, divide by 9: 650. = 72.291666, or 73 full square
yards. Now, determine the cost of the carpet: 73 square yards x $14.50 = $1,058.50.
The next step is to determine the installation cost: 650.625 sq. ft. x $1.50 = $975.94.
Thus, the total cost for carpet and installation would be $2,034.44 ($1,058.50 +
$975.94). $1,058.50 (cost of carpet) / $2,034.44 (total cost) = 0.52, or 52%.
ID: 10027 - An appraiser must determine the cost of carpet in a residential dwelling. The
areas needing carpet measure 12' x 14', 15.5' x 17.25', and 12.3' x 17.5'. If the carpet
must be purchased in full square yards and will cost $14.50 per square yard, and the
installation is $1.50 per square foot, what percent of the total cost is for the carpet?
RATIONALE
1. First, calculate the cubic feet of the concrete patio: 20 (Length) x 26 (Width) x 0.3333
(Depth, four inches is 1/3 of a foot) = 173.316 Cubic Feet.
2. Convert cubic feet to cubic yards by dividing by 27: 173.316 cubic feet / 27 = 6.4191
Cubic Yards. 3. Now, determine the cost of concrete needed: 6.4191 Cubic Yards x
$37.85 = $242.96, or rounded $243. - A concrete patio measures 20' x 26'. The
concrete slab is four inches thick. If concrete costs $37.85 per cubic yard, what would
be the cost of the concrete? (Round to nearest dollar.)
$171,196
RATIONALE
The HP 12C keystrokes: 8,500 [PMT], 9 [i], 12 [n], [FV]. - If $8,500 is deposited each
year into an investment account at 9% annual interest, how much will be in the account
at the end of 12 years? (Round your answer to the nearest dollar.)
52.7833
RATIONALE
The HP 12C keystrokes: 24,000 [FV]; 11 [g] [i], 15[g] [n], [PMT]. (Note: The blue key [g]
is used when monthly payments, or compounding, are noted in the question. When you
press the blue key [g], it is "times 12," indicating that the payments are paid monthly or
the compounding is monthly.) - A client's building will need a new roof in 15 years. The
estimated cost at that time will be $24,000. If the client can invest at 11% annually, how
much should the client deposit each month to have the required funds at the end of 15
years? (Round your answer to the nearest penny.)
RATIONALE
Standards Rule 1-6 in its entirety: In developing a real property appraisal, an appraiser
must: (a) reconcile the quality and quantity of data available and analyzed within the
, approaches used; and (b) reconcile the applicability or suitability of the approaches,
methods, and techniques used to arrive at the value conclusion(s). - Which is a true
statement regarding the reconciliation process as defined by Standards Rule 1-6?
highest and best use
RATIONALE
Standards Rule 1-3 of USPAP requires the appraiser, when necessary to obtain
credible results, to develop an opinion of highest and best use for the real estate when
the opinion of value being developed in an assignment is market value. The concept of
highest and best use is often not applicable with other value types. - Which analysis is
important and required when necessary for credible results by Standards Rule 1-3 of
USPAP for a market value assignment that may not be applicable with other types of
value?
exposure time
RATIONALE
Standards Rule 1-2 of USPAP requires that when reasonable exposure time is a
component of the definition for the value opinion being developed, the appraiser must
also develop an opinion of reasonable exposure time linked to that value opinion. -
When it is a component of the definition for the value opinion being developed, what
analysis and opinion, related to market conditions, must an appraiser also develop?
a citation of the source of the definition of value being used in the assignment
RATIONALE
Standards Rule 2-2 (v) of USPAP requires the appraiser to state the type and definition
of value and to cite the source of the definition in order to clearly indicate to intended
users how the definition is being applied. - Standards Rule 2-2 of USPAP requires an
appraiser to state the type and definition of value and provide what other information
relating to the type and definition of value?
$555.71
QUESTION RATIONALE
HP 12C method: 80,000 [ENTER], 0.90 [X] (or 90 [%]) = 72,000, [CHS] [PV], 8 [g] [i], 25
[g] [n], [PMT]. Remember to clear the register after each problem. f [CLX] - What is the
monthly payment for a 25-year loan at 8% if the sale price is $80,000 and the loan-to-
value ratio is 90%?
5600
QUESTION RATIONALE
Simple interest does not take into consideration compounding or periodic reduction.
Therefore, the simple interest due in the first year is 10% of the amount borrowed: 70%
of $80,000 ($80,000 x 0.70) is $56,000 x 0.10 = $5,600. - An $80,000 property has a
first mortgage equaling 70% of its value at 10% interest with annual payments. The
owner requires 14% return on equity. In dollars, what is the simple interest in the first
year of the mortgage?
Graded A+ 2025/2026
Extraction: a method of estimating land value in which the depreciated cost of the
improvement on the improved property is estimated and deducted from the total sale
price to arrive at an estimated sale price for the land; most effective when the
improvements contribute little to the total sale price of the property. - Allocation method
vs. extraction method
size - Which is a physical force in relationship to value?
utilize the site as one home site, since the site cannot legally be split - What is the
highest and best use of a rural property that has 300 lineal feet of frontage and a depth
of 300 lineal feet, when zoning requires a site to be at least two acres for the
development of a single-family home?
effective demand.
RATIONALE The characteristic of purchase ability, or affordability, is known as effective
demand or effective purchasing power. - Regardless of the desire for a property in a
particular market, if there is not general purchase ability linked to the desire within the
market, the market is lacking
scarcity and utility. DUST - Which of the following characteristics create value in real
estate?
it could remain in that phase indefinitely.
RATIONALE
Stability is when buyer interest in the neighborhood remains strong and prices rarely
drop. Some neighborhoods remain in this stage and don't experience decline. - Once a
neighborhood has reached the phase of stability in its life cycle
If the condition is not adhered to, the title to the property could be forfeited
RATIONALE
Fee simple conditional provides that the owner may hold the estate only as long as
some specified act or condition does or does not occur. Thus, if the condition is not
observed, the owner could forfeit title. - Legal interest of a subject property was
conveyed to the current owner as fee simple conditional. What can be best said about
the estate held by the current owner?
Life estate with a reversionary interest
RATIONALE
A life estate is a freehold estate that lasts only as long as a specified person lives. A life
estate with a reversionary interest means that the property will go back (revert) to the
grantor or the grantor's heirs. - When an individual has a freehold estate that only lasts
as long as a specified person lives and then the interest goes back to the grantor or the
grantor's heirs, what type of freehold estate does the individual have?
,increases at a decreasing rate.
RATIONALE
With a fixed frontage, as the depth of the lot increases, the overall value of the lot
increases. However, as the lot extends back, the value of the land farther back
becomes less and the increase in overall value becomes smaller. Therefore, the front
foot rate will increase, but as the lot extends farther back, the amount of increase in rate
will decrease. - As the depth of the lot increases, the value per front footage
takes a ratio of the land or site value to the total improved value.
RATIONALE
When the ratio of land to total value is calculated for the comparable sales and then
applied to the subject, the allocation method is being used. - The allocation method for
determining site value
$8,756
RATIONALE
HP-12C Keystrokes: [f] [Sigma] [150000] [Sigma+] [165000] [Sigma+] [148000]
[Sigma+] [156000] [Sigma+] [163000] [Sigma+] [170000] [Sigma+] [g] [s] gives you a
result of $8,756. - Six homes sold within the past few months. What is the standard
deviation among the data provided? $150,000, $165,000, $148,000, $156,000,
$163,000, $170,000
12.30
RATIONALE
HP 12C method: 47 [Sigma+], 14 [Sigma+], 37 [Sigma+], 29 [Sigma+], 37 [Sigma+], [g]
[s] = 12.2963, or 12.30 rounded. Be sure to clear all registers before beginning entries.
The[s]key is the decimal key ('s' in blue on front of key). - Using this number set, find the
standard deviation: 47 - 14 - 37 - 29 - 37, rounded to two places.
22.14%
RATIONAL:
1. Cost new = (2,400 sq. ft. x $85) + (440 sq. ft. x $18) = $211,920.
2. Depreciation Cost =
Sale Price $240,000 -
Land Value $50,000 -
Site Improve $25,000 = $165,000
.
3. Total Depreciation = $46,920 ($211,920 - $165,000).
4. Percentage of Depreciation Depreciation / Cost new (46,,920 = 0.2214 or
22.14%). - For the purpose of estimating depreciation via the extraction method, you
have utilized Comparable Sale #1, which is a 2,400 sq. ft. home with a two-car, 440 sq.
ft. attached garage, having a replacement cost of $85/sq. ft. for gross living area and
$18/sq. ft. for the garage area. This property sold for $240,000 and has a chronological
,age of 10 years. Through your research, the indicated land value is $50,000 and the site
improvements have a replacement cost of $25,000. What is the percentage total
amount of accrued depreciation indicated by this sale?
52%
RATIONALE \First, determine the square footage of the three areas needing carpet: 12
x 14 = 168 sq. ft., 15.5 x 17.25 = 267.375 sq. ft., and 12.3 x 17.5 = 215.25 sq. ft. Next,
add the three areas together: 168 + 267.375 + 215.25 = 650.625 sq. ft. To convert
square yards to square feet, divide by 9: 650. = 72.291666, or 73 full square
yards. Now, determine the cost of the carpet: 73 square yards x $14.50 = $1,058.50.
The next step is to determine the installation cost: 650.625 sq. ft. x $1.50 = $975.94.
Thus, the total cost for carpet and installation would be $2,034.44 ($1,058.50 +
$975.94). $1,058.50 (cost of carpet) / $2,034.44 (total cost) = 0.52, or 52%.
ID: 10027 - An appraiser must determine the cost of carpet in a residential dwelling. The
areas needing carpet measure 12' x 14', 15.5' x 17.25', and 12.3' x 17.5'. If the carpet
must be purchased in full square yards and will cost $14.50 per square yard, and the
installation is $1.50 per square foot, what percent of the total cost is for the carpet?
RATIONALE
1. First, calculate the cubic feet of the concrete patio: 20 (Length) x 26 (Width) x 0.3333
(Depth, four inches is 1/3 of a foot) = 173.316 Cubic Feet.
2. Convert cubic feet to cubic yards by dividing by 27: 173.316 cubic feet / 27 = 6.4191
Cubic Yards. 3. Now, determine the cost of concrete needed: 6.4191 Cubic Yards x
$37.85 = $242.96, or rounded $243. - A concrete patio measures 20' x 26'. The
concrete slab is four inches thick. If concrete costs $37.85 per cubic yard, what would
be the cost of the concrete? (Round to nearest dollar.)
$171,196
RATIONALE
The HP 12C keystrokes: 8,500 [PMT], 9 [i], 12 [n], [FV]. - If $8,500 is deposited each
year into an investment account at 9% annual interest, how much will be in the account
at the end of 12 years? (Round your answer to the nearest dollar.)
52.7833
RATIONALE
The HP 12C keystrokes: 24,000 [FV]; 11 [g] [i], 15[g] [n], [PMT]. (Note: The blue key [g]
is used when monthly payments, or compounding, are noted in the question. When you
press the blue key [g], it is "times 12," indicating that the payments are paid monthly or
the compounding is monthly.) - A client's building will need a new roof in 15 years. The
estimated cost at that time will be $24,000. If the client can invest at 11% annually, how
much should the client deposit each month to have the required funds at the end of 15
years? (Round your answer to the nearest penny.)
RATIONALE
Standards Rule 1-6 in its entirety: In developing a real property appraisal, an appraiser
must: (a) reconcile the quality and quantity of data available and analyzed within the
, approaches used; and (b) reconcile the applicability or suitability of the approaches,
methods, and techniques used to arrive at the value conclusion(s). - Which is a true
statement regarding the reconciliation process as defined by Standards Rule 1-6?
highest and best use
RATIONALE
Standards Rule 1-3 of USPAP requires the appraiser, when necessary to obtain
credible results, to develop an opinion of highest and best use for the real estate when
the opinion of value being developed in an assignment is market value. The concept of
highest and best use is often not applicable with other value types. - Which analysis is
important and required when necessary for credible results by Standards Rule 1-3 of
USPAP for a market value assignment that may not be applicable with other types of
value?
exposure time
RATIONALE
Standards Rule 1-2 of USPAP requires that when reasonable exposure time is a
component of the definition for the value opinion being developed, the appraiser must
also develop an opinion of reasonable exposure time linked to that value opinion. -
When it is a component of the definition for the value opinion being developed, what
analysis and opinion, related to market conditions, must an appraiser also develop?
a citation of the source of the definition of value being used in the assignment
RATIONALE
Standards Rule 2-2 (v) of USPAP requires the appraiser to state the type and definition
of value and to cite the source of the definition in order to clearly indicate to intended
users how the definition is being applied. - Standards Rule 2-2 of USPAP requires an
appraiser to state the type and definition of value and provide what other information
relating to the type and definition of value?
$555.71
QUESTION RATIONALE
HP 12C method: 80,000 [ENTER], 0.90 [X] (or 90 [%]) = 72,000, [CHS] [PV], 8 [g] [i], 25
[g] [n], [PMT]. Remember to clear the register after each problem. f [CLX] - What is the
monthly payment for a 25-year loan at 8% if the sale price is $80,000 and the loan-to-
value ratio is 90%?
5600
QUESTION RATIONALE
Simple interest does not take into consideration compounding or periodic reduction.
Therefore, the simple interest due in the first year is 10% of the amount borrowed: 70%
of $80,000 ($80,000 x 0.70) is $56,000 x 0.10 = $5,600. - An $80,000 property has a
first mortgage equaling 70% of its value at 10% interest with annual payments. The
owner requires 14% return on equity. In dollars, what is the simple interest in the first
year of the mortgage?
