Certified Appraisal Exam Review
Questions and Answers
Steps.
1. Determine Cost New
Main house 2400 SF x 85/SF =204,000
Garage 440 x 18/SF = 7920
======================================
204,000 + 92 = 211,920
2. Determine Depreciation Cost
Sale Price 240,000 -
Land Value 50,000 -
Improvements 25,000
========================
165,000
3. Determine Total Depreciation
Cost New 211,920 - Depreciation Cost 165,000 = 46,920
4. Determine Depreciation Percentage
Cost New 211,920/Total Depreciation 46,920 = 22.14% - Correct Answers -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?
Allocation: a method of estimating land value in which sales of improved properties are
analyzed to establish a typical ratio of site value to total property value and this ratio is
applied to the property being appraised or the comparable being analyzed.
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. - Correct Answers -
Allocation method vs. extraction method
size - Correct Answers -Which is a physical force in relationship to value?
,utilize the site as one home site, since the site cannot legally be split - Correct Answers
-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. - Correct Answers -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
report the opinions and conclusions reached by an appraiser
QUESTION RATIONALE
Standard 1 applies to the development of a real property appraisal, which includes
problem identification, determining the scope of work, and correctly completing research
and analysis. Standard 1 does not address reporting, which is addressed by Standard
2. - Correct Answers -Which is NOT one of the three general obligations of an appraiser
under Standard 1?
What is the structure of USPAP - Correct Answers -Structure of USPAP
1. Preamble
2. Definitions
3. Rules (5)
4. Ethics
5. Record Keeping
6. Competency
7. Scope of Work
8. Jurisdictional Exception
What are the 10 Standards in USPAP - Correct Answers -Standards (10)
1 and 2 refer to Real Property Appraisal
3 and 4 refer to the Appraisal Review
5 and 6 refer to Mass Appraisal
7 and 8 Personal Property
9 and 10 Business Appraisal
Statements (none active now)
Reporting
QUESTION RATIONALE
USPAP defines scope of work as the type and extent of research and analyses
connected with development in an assignment. Scope of work does not address
reporting. - Correct Answers -Which would NOT be part of the scope of work decision?
,Intended Use and Intended User - Correct Answers -The level of information necessary
in a report and the reporting option chosen by an appraiser depends on the ________ in
an assignment.
Is not permitted
QUESTION RATIONALE
An appraiser can never advocate the cause or interest of any party or issue and must
always remain impartial (not favoring one side over the other) and objective; much like a
judge would in a court case. - Correct Answers -While in the role of an appraiser,
advocacy
scarcity and utility. DUST - Correct Answers -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. - Correct
Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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). - Correct Answers -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%). - Correct Answers -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
Questions and Answers
Steps.
1. Determine Cost New
Main house 2400 SF x 85/SF =204,000
Garage 440 x 18/SF = 7920
======================================
204,000 + 92 = 211,920
2. Determine Depreciation Cost
Sale Price 240,000 -
Land Value 50,000 -
Improvements 25,000
========================
165,000
3. Determine Total Depreciation
Cost New 211,920 - Depreciation Cost 165,000 = 46,920
4. Determine Depreciation Percentage
Cost New 211,920/Total Depreciation 46,920 = 22.14% - Correct Answers -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?
Allocation: a method of estimating land value in which sales of improved properties are
analyzed to establish a typical ratio of site value to total property value and this ratio is
applied to the property being appraised or the comparable being analyzed.
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. - Correct Answers -
Allocation method vs. extraction method
size - Correct Answers -Which is a physical force in relationship to value?
,utilize the site as one home site, since the site cannot legally be split - Correct Answers
-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. - Correct Answers -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
report the opinions and conclusions reached by an appraiser
QUESTION RATIONALE
Standard 1 applies to the development of a real property appraisal, which includes
problem identification, determining the scope of work, and correctly completing research
and analysis. Standard 1 does not address reporting, which is addressed by Standard
2. - Correct Answers -Which is NOT one of the three general obligations of an appraiser
under Standard 1?
What is the structure of USPAP - Correct Answers -Structure of USPAP
1. Preamble
2. Definitions
3. Rules (5)
4. Ethics
5. Record Keeping
6. Competency
7. Scope of Work
8. Jurisdictional Exception
What are the 10 Standards in USPAP - Correct Answers -Standards (10)
1 and 2 refer to Real Property Appraisal
3 and 4 refer to the Appraisal Review
5 and 6 refer to Mass Appraisal
7 and 8 Personal Property
9 and 10 Business Appraisal
Statements (none active now)
Reporting
QUESTION RATIONALE
USPAP defines scope of work as the type and extent of research and analyses
connected with development in an assignment. Scope of work does not address
reporting. - Correct Answers -Which would NOT be part of the scope of work decision?
,Intended Use and Intended User - Correct Answers -The level of information necessary
in a report and the reporting option chosen by an appraiser depends on the ________ in
an assignment.
Is not permitted
QUESTION RATIONALE
An appraiser can never advocate the cause or interest of any party or issue and must
always remain impartial (not favoring one side over the other) and objective; much like a
judge would in a court case. - Correct Answers -While in the role of an appraiser,
advocacy
scarcity and utility. DUST - Correct Answers -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. - Correct
Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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. - Correct Answers -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). - Correct Answers -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%). - Correct Answers -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
