Certified General Appraiser Examination
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
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1. Which appraisal principle states that value is created and
sustained when the four agents of production are in balance?
A. Substitution
B. Anticipation
C. Contribution
D. Balance
Answer: D. Balance
Rationale: The principle of balance holds that value is maximized
when land, labor, capital, and entrepreneurship are in proper
equilibrium. An imbalance among these factors can reduce property
value and economic productivity.
, 2. What is the primary purpose of a highest and best use analysis?
A. Determine tax liability
B. Estimate replacement cost
C. Identify the most profitable legal use of a property
D. Calculate depreciation
Answer: C. Identify the most profitable legal use of a property
Rationale: Highest and best use analysis determines the reasonably
probable and legal use of a property that is physically possible,
financially feasible, and maximally productive. This analysis forms the
foundation of market value appraisal.
3. In the sales comparison approach, adjustments are generally
made to:
A. The subject property only
B. The comparable sales only
C. Both the subject and comparables equally
D. Market rents only
Answer: B. The comparable sales only
Rationale: Adjustments are applied to comparable sales to make them
equivalent to the subject property. The goal is to estimate what the
,comparable would have sold for if it possessed the same
characteristics as the subject.
4. Which type of depreciation is usually considered incurable?
A. Deferred maintenance
B. Cosmetic deterioration
C. External obsolescence
D. Interior painting needs
Answer: C. External obsolescence
Rationale: External obsolescence arises from influences outside the
property boundaries, such as economic decline or adverse zoning
changes. Because the owner typically cannot correct these factors, the
depreciation is generally incurable.
5. The principle of substitution suggests that:
A. Value depends on future benefits
B. A buyer will pay no more than the cost of an equally desirable
alternative
C. Land value always increases
D. Cost equals value
Answer: B. A buyer will pay no more than the cost of an equally
desirable alternative
, Rationale: The principle of substitution is fundamental to appraisal
theory. Rational buyers seek alternatives and generally will not pay
more for a property than the cost of obtaining a comparable
substitute.
6. Which appraisal approach is generally most applicable to owner-
occupied single-family residences?
A. Cost approach only
B. Income capitalization approach
C. Sales comparison approach
D. Gross rent multiplier approach only
Answer: C. Sales comparison approach
Rationale: Residential buyers typically base purchasing decisions on
comparisons with similar homes. Therefore, the sales comparison
approach generally provides the most reliable indication of value for
owner-occupied residences.
7. What is market value primarily based upon?
A. Historical cost
B. Insurance value
C. Typical market participant behavior
D. Tax assessments
Questions With Correct Answers (Verified
Answers) Plus Rationales 2026 Q&A | Instant
Download Pdf
1. Which appraisal principle states that value is created and
sustained when the four agents of production are in balance?
A. Substitution
B. Anticipation
C. Contribution
D. Balance
Answer: D. Balance
Rationale: The principle of balance holds that value is maximized
when land, labor, capital, and entrepreneurship are in proper
equilibrium. An imbalance among these factors can reduce property
value and economic productivity.
, 2. What is the primary purpose of a highest and best use analysis?
A. Determine tax liability
B. Estimate replacement cost
C. Identify the most profitable legal use of a property
D. Calculate depreciation
Answer: C. Identify the most profitable legal use of a property
Rationale: Highest and best use analysis determines the reasonably
probable and legal use of a property that is physically possible,
financially feasible, and maximally productive. This analysis forms the
foundation of market value appraisal.
3. In the sales comparison approach, adjustments are generally
made to:
A. The subject property only
B. The comparable sales only
C. Both the subject and comparables equally
D. Market rents only
Answer: B. The comparable sales only
Rationale: Adjustments are applied to comparable sales to make them
equivalent to the subject property. The goal is to estimate what the
,comparable would have sold for if it possessed the same
characteristics as the subject.
4. Which type of depreciation is usually considered incurable?
A. Deferred maintenance
B. Cosmetic deterioration
C. External obsolescence
D. Interior painting needs
Answer: C. External obsolescence
Rationale: External obsolescence arises from influences outside the
property boundaries, such as economic decline or adverse zoning
changes. Because the owner typically cannot correct these factors, the
depreciation is generally incurable.
5. The principle of substitution suggests that:
A. Value depends on future benefits
B. A buyer will pay no more than the cost of an equally desirable
alternative
C. Land value always increases
D. Cost equals value
Answer: B. A buyer will pay no more than the cost of an equally
desirable alternative
, Rationale: The principle of substitution is fundamental to appraisal
theory. Rational buyers seek alternatives and generally will not pay
more for a property than the cost of obtaining a comparable
substitute.
6. Which appraisal approach is generally most applicable to owner-
occupied single-family residences?
A. Cost approach only
B. Income capitalization approach
C. Sales comparison approach
D. Gross rent multiplier approach only
Answer: C. Sales comparison approach
Rationale: Residential buyers typically base purchasing decisions on
comparisons with similar homes. Therefore, the sales comparison
approach generally provides the most reliable indication of value for
owner-occupied residences.
7. What is market value primarily based upon?
A. Historical cost
B. Insurance value
C. Typical market participant behavior
D. Tax assessments
