IAAO TEST VERSION 4 EXAM 2025/2026 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS|ALREADY GRADED
A+|NEWEST|BRAND NEW VERSION!!|LATEST
UPDATE
A ______ may be defined as an area of complementary land uses in which all properties are
similarly influenced by the four forces affecting value.
Neighborhood
The preferred method of valuing land if adequate data are available is the:
Direct sales comparison method
In the direct sales comparison approach to land valuation, adjustments are always made to the
_____ property, never to the ______ property.
Comparable; subject
The _______ unit would be the appropriate unit when pedestrian access is an important
consideration.
Front foot
When adjustments are being made to comparable sales using percentage adjustments in the
direct sales comparison approach, the sequence of adjustments the appraiser must follow is:
Financing, market conditions, location, physical characteristics
If a comparable lot that sold is superior on some aspect to the subject lot, ______ adjustment
would be made to the comparable property.
A negative (subtract)
The first step in the cost approach is to:
1|Page
,Estimate the land (site) value as if vacant and available for development to its highest and best
use
Building A contains 10,000 sqft and is 100' x 100'. Building B contains 10,000 sqft and is 50' x
200'. Will it cost more to build Building A or Building B?
Building B (because it's a more complex shape than a perfect square)
Which of the following is not a characteristic of cost?
Land value
The cost approach is premised primarily on the principle of ________, which states an informed
buyer will not pay more to build a property than the cost of a similar property with equal utility.
Substitution
_______ references a current index for property components.
Trended historical cost
The cost of producing a building or structure having the same utility but using modern
materials, design, and workmanship is called the ______ _____.
Replacement cost
Which of the following is not an indirect cost?
Which of the following is not an indirect cost?
Supervision
Costs that occur on the construction site are considered ______ costs.
Direct
The easiest, fastest, and most widely used method of estimating cost is the _____ method.
Comparative unit (square foot)
Cost components such as the floor or roofing are considered ____ costs and are expressed as
cost per square foot.
Horizontal
Building A was constructed 20 years ago at a cost of $400,000. The index 20 years ago was 200.
The current index is 350. What is the reproduction cost new for Building A?
$700,000
2|Page
, Which of the following is a desirable feature of a cost manual?
Applicable to most structure types, based on actual costs, suitable for computerization
When a cost manual is being used, which one of the following components is not included in
the inventory of physical characteristics for the building?
Location
The direct costs for a single-family residence containing 1,500sqft are $80.00 per sqft. Indirect
costs are an additional 20% of direct costs. The land value is well supported at $50,000. The
improvements are 10 years old and have depreciated at the rate of 0.5% per year. What is the
indicated value of the property based on the cost approach?
$186,800
An indirect method of measuring depreciation is the:
Sales comparison method
The difference between the market value of an improvement and its cost at the time of
appraisal is termed:
Depreciation
An item classified as a short-lived item has a cost new of $5,000. Its actual age is 5 years, and its
total useful life is 20 years. What is the dollar amount of depreciation?
$1,250
Property B sold for $180,000 with an estimated land value of $80,000. The RCN for the
improvement is $200,000. Depreciation is ____ percent.
25%
Incurable physical deterioration is measured using the _________.
Age-life method
Curable physical deterioration is measured by _____
Cost to cure
A residence has an RCN of $200,000. Items classified as curable physical deterioration have an
RCN of $10,000 and a cost to cure of $12,000. Incurable physical deterioration (short-lived
items) have an RCN of $40,000 and a depreciation amount of $18,000. The actual age for the
3|Page
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS|ALREADY GRADED
A+|NEWEST|BRAND NEW VERSION!!|LATEST
UPDATE
A ______ may be defined as an area of complementary land uses in which all properties are
similarly influenced by the four forces affecting value.
Neighborhood
The preferred method of valuing land if adequate data are available is the:
Direct sales comparison method
In the direct sales comparison approach to land valuation, adjustments are always made to the
_____ property, never to the ______ property.
Comparable; subject
The _______ unit would be the appropriate unit when pedestrian access is an important
consideration.
Front foot
When adjustments are being made to comparable sales using percentage adjustments in the
direct sales comparison approach, the sequence of adjustments the appraiser must follow is:
Financing, market conditions, location, physical characteristics
If a comparable lot that sold is superior on some aspect to the subject lot, ______ adjustment
would be made to the comparable property.
A negative (subtract)
The first step in the cost approach is to:
1|Page
,Estimate the land (site) value as if vacant and available for development to its highest and best
use
Building A contains 10,000 sqft and is 100' x 100'. Building B contains 10,000 sqft and is 50' x
200'. Will it cost more to build Building A or Building B?
Building B (because it's a more complex shape than a perfect square)
Which of the following is not a characteristic of cost?
Land value
The cost approach is premised primarily on the principle of ________, which states an informed
buyer will not pay more to build a property than the cost of a similar property with equal utility.
Substitution
_______ references a current index for property components.
Trended historical cost
The cost of producing a building or structure having the same utility but using modern
materials, design, and workmanship is called the ______ _____.
Replacement cost
Which of the following is not an indirect cost?
Which of the following is not an indirect cost?
Supervision
Costs that occur on the construction site are considered ______ costs.
Direct
The easiest, fastest, and most widely used method of estimating cost is the _____ method.
Comparative unit (square foot)
Cost components such as the floor or roofing are considered ____ costs and are expressed as
cost per square foot.
Horizontal
Building A was constructed 20 years ago at a cost of $400,000. The index 20 years ago was 200.
The current index is 350. What is the reproduction cost new for Building A?
$700,000
2|Page
, Which of the following is a desirable feature of a cost manual?
Applicable to most structure types, based on actual costs, suitable for computerization
When a cost manual is being used, which one of the following components is not included in
the inventory of physical characteristics for the building?
Location
The direct costs for a single-family residence containing 1,500sqft are $80.00 per sqft. Indirect
costs are an additional 20% of direct costs. The land value is well supported at $50,000. The
improvements are 10 years old and have depreciated at the rate of 0.5% per year. What is the
indicated value of the property based on the cost approach?
$186,800
An indirect method of measuring depreciation is the:
Sales comparison method
The difference between the market value of an improvement and its cost at the time of
appraisal is termed:
Depreciation
An item classified as a short-lived item has a cost new of $5,000. Its actual age is 5 years, and its
total useful life is 20 years. What is the dollar amount of depreciation?
$1,250
Property B sold for $180,000 with an estimated land value of $80,000. The RCN for the
improvement is $200,000. Depreciation is ____ percent.
25%
Incurable physical deterioration is measured using the _________.
Age-life method
Curable physical deterioration is measured by _____
Cost to cure
A residence has an RCN of $200,000. Items classified as curable physical deterioration have an
RCN of $10,000 and a cost to cure of $12,000. Incurable physical deterioration (short-lived
items) have an RCN of $40,000 and a depreciation amount of $18,000. The actual age for the
3|Page
