PRINCIPLES OF REAL ESTATE II PAST PAPERS 2025/2026
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔A property is sold for $899,999. The buyer has paid $17,000 as earnest money and
is obtaining a 65% loan. Based on the information provided, how much additional cash
will the buyer have to bring to the closing day? - ✔✔$297,999
✔✔Appraisal: - ✔✔The value of a property, based on factors determined by the opinion
of a certified appraiser
✔✔A seller does not feel like waiting any longer for an appraiser, so they ask their
listing agent to do the appraisal for them. The listing agent agrees and performs the
appraisal. What is TRUE of this situation? - ✔✔Unless they are also a licensed
appraiser, the listing agent acted illegally.
✔✔Which is NOT one of the levels an Appraisal Trainee could reach in their career? -
✔✔Master Commercial Appraiser
✔✔During a real estate transaction, to whom is the appraisal important? - ✔✔ALL
CHOICES ARE CORRECT (the seller, the lender, and the buyer)
✔✔General data: - ✔✔is information about the area surrounding the property. This
could include the city, region, and neighborhood in which the property is situated.
✔✔Specific Data: - ✔✔on the other hand, is information regarding the property itself.
✔✔3 types of Value: - ✔✔Market value
Appraised value
Assessed value
✔✔Market value is generally the price that a property can sell for when the seller is in a
weaker financial position. - ✔✔FALSE
(Explanation: Market value is the price for which a property will sell if offered openly
under normal conditions.)
✔✔Which value is given to a property by the local tax authority for tax purposes? -
✔✔assessed value
✔✔The principle of contribution states: - ✔✔a property's overall value is made up of the
combined value of each of its parts
✔✔What are the three approaches to value? - ✔✔sales comparison approach, income
approach, and cost approach
,✔✔Functional obsolescence: - ✔✔Loss of value because a property's function or
appearance has gone out of style or has been replaced by a more appealing version
✔✔Economic obsolescence: - ✔✔Loss in value caused by negative forces outside the
property which are beyond the control of the owner (unfavorable changes in the
environment or market)
✔✔Deterioration: - ✔✔Loss of value caused by physical wear and tear over time
✔✔Sharon's newly renovated home is in great condition, but its value has been affected
by a nearby major employer shutting down. This is an example of: - ✔✔economic
obsolescence
✔✔Effective age: - ✔✔An estimated age that is influenced by the updates and quality of
maintenance of the property. A 30-year-old house that has been well cared for might
have an effective age of 15.
✔✔Reconciliation is based on an exact formula that calculates the average of all the
values the appraiser found. - ✔✔FALSE
(Explanation: Reconciliation compares the different values appraisers found using
different approaches, but it is not based on any formula or science. Appraisers have
some freedom in they way they determine the final appraised value.)
✔✔Principles of Regression and Progression - - ✔✔-Houses in a neighborhood tend to
be fairly close in value.
-The presence of higher value or lower value homes near the subject property can
change its value.
✔✔Principle of Anticipation - - ✔✔-The present value of a property is affected by the
anticipated income or utility.
-Steve buys a house for more than its current market price because he believes the
house will increase in value.
✔✔Principles of Supply and Demand - - ✔✔-When not many houses are available and
lots of people want to buy houses, prices increase.
-When many houses are for sale and there are few potential buyers, prices drop.
-The value of real estate is affected by the number of available properties and potential
buyers.
✔✔Principle of Change - - ✔✔-Appraisals are only good for a few months.
-The condition of a property, the desirability of its location, and the market in which it
exists can always change.
, ✔✔Appraisal Report: - ✔✔A report from a licensed appraiser that sums up a property's
market value based on collected data
✔✔Appraisal Review: - ✔✔A review of the appraisal report to make sure the appraisal
meets the lender's standards
✔✔Desk Review: - ✔✔When the lender carries out an appraisal review at their desk (as
opposed to sending someone out into the field) to make sure the original appraisal is
accurate
✔✔Field Review: - ✔✔When a third-party appraiser is sent back out to the property to
check the validity of the first appraisal
✔✔8 Steps to completing an appraisal: - ✔✔1.Stating the objective
2.Listing the data needed
3.Gathering and recording data
4.Determining the highest and best use
5.Estimating the land value
6.Estimating value using applicable approaches to appraisal
7.Reconciling the final value estimate
8.Completing and presenting the value report
✔✔Which of the following is part of Step One of the appraisal process? - ✔✔ALL
CHOICES ARE CORRECT (stating the date, stating the full legal description of the
property, stating the purpose of the appraisal)
✔✔In real estate transactions involving financing, to whom does the appraiser send the
final appraisal? - ✔✔the lender
✔✔Desk Review: - ✔✔an be done right at the lender's desk! They go through the
original appraisal and ensure that it's been properly completed and that the opinions
formed by the appraiser are supported by the findings of the report.
✔✔Field Review: - ✔✔is performed by a third-party appraiser who carefully checks the
validity of all the work that the first appraiser did. Since this takes more time and money,
lenders generally reserve this method for cases in which the loan is riskier than
average.
✔✔Things to Know about Market Value - - ✔✔1. It's not the same thing as the sales
price.
2. It's an opinion, not a fact.
3. Not all appraisers will agree on the same value.
✔✔The acronym DUST helps you remember: - ✔✔the characteristics used to make real
estate valuable
QUESTIONS WITH ANSWERS GUARANTEE A+
✔✔A property is sold for $899,999. The buyer has paid $17,000 as earnest money and
is obtaining a 65% loan. Based on the information provided, how much additional cash
will the buyer have to bring to the closing day? - ✔✔$297,999
✔✔Appraisal: - ✔✔The value of a property, based on factors determined by the opinion
of a certified appraiser
✔✔A seller does not feel like waiting any longer for an appraiser, so they ask their
listing agent to do the appraisal for them. The listing agent agrees and performs the
appraisal. What is TRUE of this situation? - ✔✔Unless they are also a licensed
appraiser, the listing agent acted illegally.
✔✔Which is NOT one of the levels an Appraisal Trainee could reach in their career? -
✔✔Master Commercial Appraiser
✔✔During a real estate transaction, to whom is the appraisal important? - ✔✔ALL
CHOICES ARE CORRECT (the seller, the lender, and the buyer)
✔✔General data: - ✔✔is information about the area surrounding the property. This
could include the city, region, and neighborhood in which the property is situated.
✔✔Specific Data: - ✔✔on the other hand, is information regarding the property itself.
✔✔3 types of Value: - ✔✔Market value
Appraised value
Assessed value
✔✔Market value is generally the price that a property can sell for when the seller is in a
weaker financial position. - ✔✔FALSE
(Explanation: Market value is the price for which a property will sell if offered openly
under normal conditions.)
✔✔Which value is given to a property by the local tax authority for tax purposes? -
✔✔assessed value
✔✔The principle of contribution states: - ✔✔a property's overall value is made up of the
combined value of each of its parts
✔✔What are the three approaches to value? - ✔✔sales comparison approach, income
approach, and cost approach
,✔✔Functional obsolescence: - ✔✔Loss of value because a property's function or
appearance has gone out of style or has been replaced by a more appealing version
✔✔Economic obsolescence: - ✔✔Loss in value caused by negative forces outside the
property which are beyond the control of the owner (unfavorable changes in the
environment or market)
✔✔Deterioration: - ✔✔Loss of value caused by physical wear and tear over time
✔✔Sharon's newly renovated home is in great condition, but its value has been affected
by a nearby major employer shutting down. This is an example of: - ✔✔economic
obsolescence
✔✔Effective age: - ✔✔An estimated age that is influenced by the updates and quality of
maintenance of the property. A 30-year-old house that has been well cared for might
have an effective age of 15.
✔✔Reconciliation is based on an exact formula that calculates the average of all the
values the appraiser found. - ✔✔FALSE
(Explanation: Reconciliation compares the different values appraisers found using
different approaches, but it is not based on any formula or science. Appraisers have
some freedom in they way they determine the final appraised value.)
✔✔Principles of Regression and Progression - - ✔✔-Houses in a neighborhood tend to
be fairly close in value.
-The presence of higher value or lower value homes near the subject property can
change its value.
✔✔Principle of Anticipation - - ✔✔-The present value of a property is affected by the
anticipated income or utility.
-Steve buys a house for more than its current market price because he believes the
house will increase in value.
✔✔Principles of Supply and Demand - - ✔✔-When not many houses are available and
lots of people want to buy houses, prices increase.
-When many houses are for sale and there are few potential buyers, prices drop.
-The value of real estate is affected by the number of available properties and potential
buyers.
✔✔Principle of Change - - ✔✔-Appraisals are only good for a few months.
-The condition of a property, the desirability of its location, and the market in which it
exists can always change.
, ✔✔Appraisal Report: - ✔✔A report from a licensed appraiser that sums up a property's
market value based on collected data
✔✔Appraisal Review: - ✔✔A review of the appraisal report to make sure the appraisal
meets the lender's standards
✔✔Desk Review: - ✔✔When the lender carries out an appraisal review at their desk (as
opposed to sending someone out into the field) to make sure the original appraisal is
accurate
✔✔Field Review: - ✔✔When a third-party appraiser is sent back out to the property to
check the validity of the first appraisal
✔✔8 Steps to completing an appraisal: - ✔✔1.Stating the objective
2.Listing the data needed
3.Gathering and recording data
4.Determining the highest and best use
5.Estimating the land value
6.Estimating value using applicable approaches to appraisal
7.Reconciling the final value estimate
8.Completing and presenting the value report
✔✔Which of the following is part of Step One of the appraisal process? - ✔✔ALL
CHOICES ARE CORRECT (stating the date, stating the full legal description of the
property, stating the purpose of the appraisal)
✔✔In real estate transactions involving financing, to whom does the appraiser send the
final appraisal? - ✔✔the lender
✔✔Desk Review: - ✔✔an be done right at the lender's desk! They go through the
original appraisal and ensure that it's been properly completed and that the opinions
formed by the appraiser are supported by the findings of the report.
✔✔Field Review: - ✔✔is performed by a third-party appraiser who carefully checks the
validity of all the work that the first appraiser did. Since this takes more time and money,
lenders generally reserve this method for cases in which the loan is riskier than
average.
✔✔Things to Know about Market Value - - ✔✔1. It's not the same thing as the sales
price.
2. It's an opinion, not a fact.
3. Not all appraisers will agree on the same value.
✔✔The acronym DUST helps you remember: - ✔✔the characteristics used to make real
estate valuable
