Sales Comparison Approach
McKissock Class Exam Questions and
Answers 100% Pass
What is created in the mind of an individual or market participant? - ✔✔Value
What is the motivation of an individual, group of persons, or business entity involving
the purchase of an item? - ✔✔Desire
As the term applies to appraisal, transferability refers to the number of goods and
services that can be purchased with a unit of currency. (T/F) - ✔✔True
What does not include physical mobility, but rather the control and possession of all the
rights of ownership? - ✔✔Purchasing Power
As it refers to real property appraisal, what word is best used to describe "value"? -
✔✔Opinion
Value is a fact, or an estimate of fact. (T/F) - ✔✔False
USPAP cautions appraisers to use the definition of market value that is specified in the
DEFINITIONS section of USPAP. (T/F) - ✔✔False
Which statement is TRUE regarding appraisers and value? - ✔✔Market value is only
one type of value; appraisers estimate other types of value as well.
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,It is important for appraisers to consider the specific definition of value that is
appropriate for the appraisal assignment being undertaken. (T/F) - ✔✔True
The rights and benefits inherent in the ownership of a parcel of land would be defined
as: - ✔✔Real Property - It is commonly understood that real estate is the land and
everything permanently attached thereto, while real property consists of the rights and
benefits inherent in ownership. (Chapter 1 - The Importance of Value)
USPAP cautions appraisers to use the definition of market value that is specified in the
DEFINITIONS section of USPAP. (T/F) - ✔✔False - In its DEFINITIONS section,
USPAP does not set forth a specific definition of market value; instead it provides a
somewhat generic overview of the concept. Instead of providing a specific market value
definition, USPAP cautions appraisers to identify the exact definition of value and its
authority, in every market value appraisal. (Chapter 1 - USPAP and Value Definition)
If an appraiser is valuing real property by sales comparison, whose actions is he or she
LEAST likely to consider? - ✔✔Government Agencies
Which phrase is an example of economic equilibrium? - ✔✔The quantity demanded is
equal to the quantity supplied.
What is the loss of income that results from not choosing an alternative? -
✔✔Opportunity Cost
Which principle equally applies to residential and commercial properties? -
✔✔Substitution
The principle of substitution does not apply to non-owner-occupied commercial
properties. (T/F) - ✔✔False
What adds the most value to land and the improvements? - ✔✔When the property is
used for its highest and best use
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,Which methods are most appropriate to the sales comparison approach? -
✔✔Economics and Statistics
Why is the real estate market considered inefficient? - ✔✔The real estate market is
complex. -
Because of the lack of readily available information during many of the various levels of
a transaction. -
It takes a relatively long time to improve a parcel of real estate.
The growth rate is higher in Community A than Community B, because Community A
has public water and sewage available. As a result, property values are higher in
Community A. This is an example of what force affecting the market? -
✔✔Environmental - Environmental or physical factors include transportation, open
space, availability of public utilities, among other factors. (Chapter 1 - The Four Great
Forces)
Market segmentation separates the market for different types of properties such as: -
✔✔Lodging
Residential or multi-family
Commercial or office
Which market is inefficient? - ✔✔Real estate market
A large, old, dilapidated commercial building sits in an economically depressed section
of the city. There are no market participants who have the financial capability to
renovate and use such a large building. This is an example of what force? -
✔✔Economic
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, Dave is completing a market value appraisal on a property that is currently improved
with an office building. Which statement will most likely be TRUE regarding his highest
and best use analysis? - ✔✔He will have to develop two highest and best use opinions.
Annette is appraising a five-acre vacant parcel of land, in an area where there is no
zoning. As a residential home site, the property is worth $225,000. For commercial
purposes, it is worth $1.25 per square foot. For industrial purposes, it is worth $50,000
per acre. What is the highest and best use of the property? - ✔✔Commercial
When considering legal permissibility and current land use regulations, an appraiser
must also consider __________. - ✔✔Reasonably probable modifications of land use
regulations
Which statement is FALSE regarding highest and best use analysis? - ✔✔It does not
help in selecting comparable sales.
Carole is appraising a vacant land parcel which can be used for residential, commercial,
or industrial use. What is the highest and best use of the property? - ✔✔Cannot
determine from the information provided
The criteria for highest and best use include all of the following EXCEPT: - ✔✔No
undue stimulus
Harry is preparing a real property appraisal report for his client. Which USPAP
Standard must he follow when preparing this report? - ✔✔STANDARD 2
A property is improved with a building and is valued at $425,000. It would cost $50,000
to raze and remove the building, and the value of the vacant site would be $500,000.
Under this scenario, razing and removing the building would be considered
____________. - ✔✔Financially Feasible - Razing and removing the building would be
considered financially feasible, because it produces a positive return. This is not
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McKissock Class Exam Questions and
Answers 100% Pass
What is created in the mind of an individual or market participant? - ✔✔Value
What is the motivation of an individual, group of persons, or business entity involving
the purchase of an item? - ✔✔Desire
As the term applies to appraisal, transferability refers to the number of goods and
services that can be purchased with a unit of currency. (T/F) - ✔✔True
What does not include physical mobility, but rather the control and possession of all the
rights of ownership? - ✔✔Purchasing Power
As it refers to real property appraisal, what word is best used to describe "value"? -
✔✔Opinion
Value is a fact, or an estimate of fact. (T/F) - ✔✔False
USPAP cautions appraisers to use the definition of market value that is specified in the
DEFINITIONS section of USPAP. (T/F) - ✔✔False
Which statement is TRUE regarding appraisers and value? - ✔✔Market value is only
one type of value; appraisers estimate other types of value as well.
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,It is important for appraisers to consider the specific definition of value that is
appropriate for the appraisal assignment being undertaken. (T/F) - ✔✔True
The rights and benefits inherent in the ownership of a parcel of land would be defined
as: - ✔✔Real Property - It is commonly understood that real estate is the land and
everything permanently attached thereto, while real property consists of the rights and
benefits inherent in ownership. (Chapter 1 - The Importance of Value)
USPAP cautions appraisers to use the definition of market value that is specified in the
DEFINITIONS section of USPAP. (T/F) - ✔✔False - In its DEFINITIONS section,
USPAP does not set forth a specific definition of market value; instead it provides a
somewhat generic overview of the concept. Instead of providing a specific market value
definition, USPAP cautions appraisers to identify the exact definition of value and its
authority, in every market value appraisal. (Chapter 1 - USPAP and Value Definition)
If an appraiser is valuing real property by sales comparison, whose actions is he or she
LEAST likely to consider? - ✔✔Government Agencies
Which phrase is an example of economic equilibrium? - ✔✔The quantity demanded is
equal to the quantity supplied.
What is the loss of income that results from not choosing an alternative? -
✔✔Opportunity Cost
Which principle equally applies to residential and commercial properties? -
✔✔Substitution
The principle of substitution does not apply to non-owner-occupied commercial
properties. (T/F) - ✔✔False
What adds the most value to land and the improvements? - ✔✔When the property is
used for its highest and best use
100% Pass Guarantee Emily Charlene All Rights Reserved © 2025 2
,Which methods are most appropriate to the sales comparison approach? -
✔✔Economics and Statistics
Why is the real estate market considered inefficient? - ✔✔The real estate market is
complex. -
Because of the lack of readily available information during many of the various levels of
a transaction. -
It takes a relatively long time to improve a parcel of real estate.
The growth rate is higher in Community A than Community B, because Community A
has public water and sewage available. As a result, property values are higher in
Community A. This is an example of what force affecting the market? -
✔✔Environmental - Environmental or physical factors include transportation, open
space, availability of public utilities, among other factors. (Chapter 1 - The Four Great
Forces)
Market segmentation separates the market for different types of properties such as: -
✔✔Lodging
Residential or multi-family
Commercial or office
Which market is inefficient? - ✔✔Real estate market
A large, old, dilapidated commercial building sits in an economically depressed section
of the city. There are no market participants who have the financial capability to
renovate and use such a large building. This is an example of what force? -
✔✔Economic
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, Dave is completing a market value appraisal on a property that is currently improved
with an office building. Which statement will most likely be TRUE regarding his highest
and best use analysis? - ✔✔He will have to develop two highest and best use opinions.
Annette is appraising a five-acre vacant parcel of land, in an area where there is no
zoning. As a residential home site, the property is worth $225,000. For commercial
purposes, it is worth $1.25 per square foot. For industrial purposes, it is worth $50,000
per acre. What is the highest and best use of the property? - ✔✔Commercial
When considering legal permissibility and current land use regulations, an appraiser
must also consider __________. - ✔✔Reasonably probable modifications of land use
regulations
Which statement is FALSE regarding highest and best use analysis? - ✔✔It does not
help in selecting comparable sales.
Carole is appraising a vacant land parcel which can be used for residential, commercial,
or industrial use. What is the highest and best use of the property? - ✔✔Cannot
determine from the information provided
The criteria for highest and best use include all of the following EXCEPT: - ✔✔No
undue stimulus
Harry is preparing a real property appraisal report for his client. Which USPAP
Standard must he follow when preparing this report? - ✔✔STANDARD 2
A property is improved with a building and is valued at $425,000. It would cost $50,000
to raze and remove the building, and the value of the vacant site would be $500,000.
Under this scenario, razing and removing the building would be considered
____________. - ✔✔Financially Feasible - Razing and removing the building would be
considered financially feasible, because it produces a positive return. This is not
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