PRINCIPLES OF REAL ESTATE 2 EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
Loss of value due to lack of modernization is called: - ANS Functional obsolescence
The __________ is considered the most reliable approach to value because it is based on
verifiable market events. - ANS Sales comparison approach
A loss in a property's value due to daily wear and tear is an example of _______ -
ANS Physical deterioration
The appraiser will use the cost approach to value: - ANS A unique building
A real property appraisal will contain an analysis of the each of the following, EXCEPT: -
ANS Personal property
The appraisal principle of conformity tells us that a house is worth the most when: - ANS It is
in a neighborhood of similarly priced homes
Official property value for tax purposes is called: - ANS Assessed value
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, The appraisal principle of __________ states that the purchase price of a property is affected by
the expectation of future appeal and benefits. - ANS Anticipation
The best definition of market value is: - ANS The most probable price a property should bring
in a competitive and open market
The effective age of a house can be younger than its __________ if it has been well-maintained.
- ANS Chronological age
In which approach to value is the appraiser calculating depreciation as a factor along with land
value and replacement cost for a structure? - ANS The Cost Approach
The primary purpose of the FHA is: - ANS To insure loans
When a loan is funded, the FHA charges a(n) __________ which can be paid at closing or added
to the loan at funding. - ANS Up-Front Mortgage Insurance Premium
The borrower's monthly payment includes principal and interest plus one-twelfth of the annual
property tax assessment and one-twelfth of the annual insurance premium. This is a: -
ANS Budget loan
Which of the following statements about the use of gift funds in government loans is true? -
ANS Property must be owner-occupied, Donor must be a relative, domestic partner, or
fiancé, Gift funds may be used for the entire down payment
A person who brings a borrower and a lender together for a fee is called: - ANS A lender's
agent
Most of the specific requirements imposed by TILA are found in _______ - ANS Regulation Z
The __________ is the percentage of the lesser of the appraised value or sales price that the
lender will lend - ANS Loan-to-value ratio
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
Loss of value due to lack of modernization is called: - ANS Functional obsolescence
The __________ is considered the most reliable approach to value because it is based on
verifiable market events. - ANS Sales comparison approach
A loss in a property's value due to daily wear and tear is an example of _______ -
ANS Physical deterioration
The appraiser will use the cost approach to value: - ANS A unique building
A real property appraisal will contain an analysis of the each of the following, EXCEPT: -
ANS Personal property
The appraisal principle of conformity tells us that a house is worth the most when: - ANS It is
in a neighborhood of similarly priced homes
Official property value for tax purposes is called: - ANS Assessed value
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, The appraisal principle of __________ states that the purchase price of a property is affected by
the expectation of future appeal and benefits. - ANS Anticipation
The best definition of market value is: - ANS The most probable price a property should bring
in a competitive and open market
The effective age of a house can be younger than its __________ if it has been well-maintained.
- ANS Chronological age
In which approach to value is the appraiser calculating depreciation as a factor along with land
value and replacement cost for a structure? - ANS The Cost Approach
The primary purpose of the FHA is: - ANS To insure loans
When a loan is funded, the FHA charges a(n) __________ which can be paid at closing or added
to the loan at funding. - ANS Up-Front Mortgage Insurance Premium
The borrower's monthly payment includes principal and interest plus one-twelfth of the annual
property tax assessment and one-twelfth of the annual insurance premium. This is a: -
ANS Budget loan
Which of the following statements about the use of gift funds in government loans is true? -
ANS Property must be owner-occupied, Donor must be a relative, domestic partner, or
fiancé, Gift funds may be used for the entire down payment
A person who brings a borrower and a lender together for a fee is called: - ANS A lender's
agent
Most of the specific requirements imposed by TILA are found in _______ - ANS Regulation Z
The __________ is the percentage of the lesser of the appraised value or sales price that the
lender will lend - ANS Loan-to-value ratio
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
