CERTIFIED RESIDENTIAL APPRAISER EXAMUPDATED
QUESTIONS AND ANSWERS
hypothetical condition - CORRECT ANSWER✅✅✅a condition, directly related to a specific
assignment, which is contrary to what is KNOWN by the appraiser to exist on the effective date of the
assignment results, but is used for the purpose of analysis.
Extraordinary Assumption - CORRECT ANSWER✅✅✅something that is BELIEVED to be True for the
sake of the Appraisal... but may or may not be True as of the Effective Date of the Appraisal.
Appraisal - CORRECT ANSWER✅✅✅the act or process of developing an opinion of value
Marketing Period - CORRECT ANSWER✅✅✅Time Period required to actually sell the property once
the decision to sell is made. Time necessary to close a sale.
Exposure Time - CORRECT ANSWER✅✅✅the time period assumed to have occurred prior to the
date of the appraisal
Attributes of Land - CORRECT ANSWER✅✅✅unique in location and composition, physical immobile,
durable, finite, and useful
Four Powers of Government - CORRECT ANSWER✅✅✅1. Police Power
2. Eminent Domain
3. Taxation
4. Escheat
(PETE)
Police Power - CORRECT ANSWER✅✅✅zoning, health codes, building codes, traffic, environmental
regulations, air
,Eminent Domain - CORRECT ANSWER✅✅✅the RIGHT of government to take private property for
public use
Condemnation - CORRECT ANSWER✅✅✅The PROCESS of exercising eminent domain through court
action.
Concepts of Land - CORRECT ANSWER✅✅✅geographic and environmental, legal, economic, social
Forces that Influence Real Estate - CORRECT ANSWER✅✅✅Social, Economic, Governmental,
Environmental (SEGE)/
Agents of Production - CORRECT ANSWER✅✅✅Land, Labor, Capital, Entrepreneurial Coordination
(LLCEC)
Factors of Value - CORRECT ANSWER✅✅✅utility, scarcity, desire, effective purchasing power (USDE)
Valuation Process - CORRECT ANSWER✅✅✅1.Definition of Problem
2. Scope of Work
3. Data Collection and Property Description
4. Data Analysis (HBU and Market Analysis)
5. Land Value Estimate
6. Three Approaches to Value
7. Reconciliation
8. Report
Going Concern Value - CORRECT ANSWER✅✅✅The value of an established business including the
value of real property and goodwill generated through business operations. Includes Real, Personal, and
Intangibles.
Investment Value - CORRECT ANSWER✅✅✅The value of the property to a particular investor, based
on his or her specific requirements, discount rate, expectations, and so on.
, Substitution - CORRECT ANSWER✅✅✅when several similar or commensurate things are available
the lowest price will attract the greatest demand and widest distribution.
Individual Ownership - CORRECT ANSWER✅✅✅sole proprietorship
General Partnership - CORRECT ANSWER✅✅✅partnership in which partners share equally in both
responsibility and liability
Limited Partnership (LP) - CORRECT ANSWER✅✅✅A partnership consisting of one or more general
partners and one or more limited partners. General partner is liable and limited partners are to the
extent of their initial investment
Tenant in Common - CORRECT ANSWER✅✅✅A form of ownership where two or more people hold
title on the same property. Each person's interest is held in severalty and each person retains the right
to will away their interest.
Joint Tenancy - CORRECT ANSWER✅✅✅The joint ownership of property by two or more co-owners
in which each co-owner owns an undivided portion of the property. On the death of one of the joint
tenants, his or her interest automatically passes to the surviving joint tenants.
Corporation - CORRECT ANSWER✅✅✅
Condominium Ownership - CORRECT ANSWER✅✅✅A form of ownership for units in a multiple-
family complex. Each person owns his or her own unit and shares ownership of common areas such as
hallways and grounds.
Tenancy by the Entirety - CORRECT ANSWER✅✅✅The joint ownership, recognized in some states, of
property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor
becomes the owner of the property.
Book Value - CORRECT ANSWER✅✅✅the capital amount at which the property is shown on the
account books of the corporation.
QUESTIONS AND ANSWERS
hypothetical condition - CORRECT ANSWER✅✅✅a condition, directly related to a specific
assignment, which is contrary to what is KNOWN by the appraiser to exist on the effective date of the
assignment results, but is used for the purpose of analysis.
Extraordinary Assumption - CORRECT ANSWER✅✅✅something that is BELIEVED to be True for the
sake of the Appraisal... but may or may not be True as of the Effective Date of the Appraisal.
Appraisal - CORRECT ANSWER✅✅✅the act or process of developing an opinion of value
Marketing Period - CORRECT ANSWER✅✅✅Time Period required to actually sell the property once
the decision to sell is made. Time necessary to close a sale.
Exposure Time - CORRECT ANSWER✅✅✅the time period assumed to have occurred prior to the
date of the appraisal
Attributes of Land - CORRECT ANSWER✅✅✅unique in location and composition, physical immobile,
durable, finite, and useful
Four Powers of Government - CORRECT ANSWER✅✅✅1. Police Power
2. Eminent Domain
3. Taxation
4. Escheat
(PETE)
Police Power - CORRECT ANSWER✅✅✅zoning, health codes, building codes, traffic, environmental
regulations, air
,Eminent Domain - CORRECT ANSWER✅✅✅the RIGHT of government to take private property for
public use
Condemnation - CORRECT ANSWER✅✅✅The PROCESS of exercising eminent domain through court
action.
Concepts of Land - CORRECT ANSWER✅✅✅geographic and environmental, legal, economic, social
Forces that Influence Real Estate - CORRECT ANSWER✅✅✅Social, Economic, Governmental,
Environmental (SEGE)/
Agents of Production - CORRECT ANSWER✅✅✅Land, Labor, Capital, Entrepreneurial Coordination
(LLCEC)
Factors of Value - CORRECT ANSWER✅✅✅utility, scarcity, desire, effective purchasing power (USDE)
Valuation Process - CORRECT ANSWER✅✅✅1.Definition of Problem
2. Scope of Work
3. Data Collection and Property Description
4. Data Analysis (HBU and Market Analysis)
5. Land Value Estimate
6. Three Approaches to Value
7. Reconciliation
8. Report
Going Concern Value - CORRECT ANSWER✅✅✅The value of an established business including the
value of real property and goodwill generated through business operations. Includes Real, Personal, and
Intangibles.
Investment Value - CORRECT ANSWER✅✅✅The value of the property to a particular investor, based
on his or her specific requirements, discount rate, expectations, and so on.
, Substitution - CORRECT ANSWER✅✅✅when several similar or commensurate things are available
the lowest price will attract the greatest demand and widest distribution.
Individual Ownership - CORRECT ANSWER✅✅✅sole proprietorship
General Partnership - CORRECT ANSWER✅✅✅partnership in which partners share equally in both
responsibility and liability
Limited Partnership (LP) - CORRECT ANSWER✅✅✅A partnership consisting of one or more general
partners and one or more limited partners. General partner is liable and limited partners are to the
extent of their initial investment
Tenant in Common - CORRECT ANSWER✅✅✅A form of ownership where two or more people hold
title on the same property. Each person's interest is held in severalty and each person retains the right
to will away their interest.
Joint Tenancy - CORRECT ANSWER✅✅✅The joint ownership of property by two or more co-owners
in which each co-owner owns an undivided portion of the property. On the death of one of the joint
tenants, his or her interest automatically passes to the surviving joint tenants.
Corporation - CORRECT ANSWER✅✅✅
Condominium Ownership - CORRECT ANSWER✅✅✅A form of ownership for units in a multiple-
family complex. Each person owns his or her own unit and shares ownership of common areas such as
hallways and grounds.
Tenancy by the Entirety - CORRECT ANSWER✅✅✅The joint ownership, recognized in some states, of
property acquired by husband and wife during marriage. Upon the death of one spouse, the survivor
becomes the owner of the property.
Book Value - CORRECT ANSWER✅✅✅the capital amount at which the property is shown on the
account books of the corporation.
