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Aceable Agent Principles of Real
Estate 2 Exam Questions and Answers
100% Pass
Amortization - ✔✔The repayment of a loan principle over time
Arrears - ✔✔Payment for an item or service after it's received
Down Payment - ✔✔The initial payment made when buying something on credit, a
____________ is paid directly by the buyer to the seller
Proration - ✔✔The allocation or distribution of an annual expense across smaller
chunks of time
Acreage - ✔✔A unit of measurement used to determine the size of land; 1 acre = 43560
square feet
Appraisal - ✔✔The value of property, based on factors determined by a certified
appraiser
General data - ✔✔Information about the area surrounding a property, this could
include the city, region, and neighborhood in which the property is situated
Specific Data - ✔✔Information regarding the property itself
Katelyn Whitman© 2025, All Rights Reserved.
,2|Page
Limited Appraisal - ✔✔A simple, abbreviated version of a regular appraisal
Market Value - ✔✔The price for which a property would sell if offered openly under
normal conditions. This refers to the economic principle, it's the price that a buyer and
seller would probably accept
Appraised Value - ✔✔Refers to the value given by a licensed appraiser during the
mortgage origination process. Appraisers are chosen by the lender but paid for by the
homebuyer.
Assessed Value - ✔✔Refers to the value placed on a property by a governmental unit
for use in levying annual real estate taxes
Loan-to-Value Ratio (LTV) - ✔✔The limit on the value of a loan, usually a certain
percentage of the home's appraised value or sales price, whichever is lower
Subject Property - ✔✔The property that is being evaluated in any given appraisal
Highest and Best Use - ✔✔What is achieved when a property is used for the most
appropriate purpose with the highest returns
Principle of Anticipation - ✔✔The present value of a property is affected by the
anticipated income or utility that property will give to the property owner
Principle of Contribution - ✔✔A property's overall value is made of the combined value
of each of its parts
Katelyn Whitman© 2025, All Rights Reserved.
,3|Page
Principle of Substitution - ✔✔The value of something is effected by the cost of getting a
similar (substitute) item elsewhere
Principle of Change - ✔✔The condition of a property, the desirability of its location, and
the market in which it exists can always change
Principle of Conformity - ✔✔Values are the highest when houses in a neighborhood
look roughly the same
Principle of Regression - ✔✔Lower value properties surrounding a subject property are
can drag down the value of a property
Principle of Progression - ✔✔Higher value properties of a subject property can bump of
the value of a property
Sales Comparison Approach - ✔✔Determining value by comparing the subject property
to similar properties ("comps") that have sold recently. It's most commonly used for
single family residences.
Cost Approach - ✔✔Determining value by considering how much the same property
would cost to build brand new at current prices (replacement cost), then adjusting for
depreciation
Income Approach - ✔✔Determining value by considering how much income the
property would generate when used as rental property
Depreciation - ✔✔The loss of value because of obsolescence or deterioration
Katelyn Whitman© 2025, All Rights Reserved.
, 4|Page
Functional Obsolescence - ✔✔Loss of value because a property's function or appearance
has gone out of style or has been replaced by a more appealing version
External Obsolescence - ✔✔Loss of value caused by negative forces outside the
property which are beyond the control of the owner (unfavorable changes in the
environment or market)
Deterioration - ✔✔Loss of value caused by physical wear and tear over time
Chronological age - ✔✔The literal age of a property; a home built 30 years ago has a
________________ age of 30
Effective Age - ✔✔An estimated age that is influenced by the updates and quality of
maintenance of the property; a 30 year house that has been well cared for might have an
effective age of 15
Reconciliation - ✔✔When an appraiser compares estimates using different techniques
(cost approach, sales approach, and/or income approach) and comes to a single number
for value
Appraisal Report - ✔✔a report from a licensed appraiser that sums up a property's
market value based on collected data
Appraisal Review - ✔✔a review of the appraisal report to make sure the appraisal
meets the lender's standards
Katelyn Whitman© 2025, All Rights Reserved.
Aceable Agent Principles of Real
Estate 2 Exam Questions and Answers
100% Pass
Amortization - ✔✔The repayment of a loan principle over time
Arrears - ✔✔Payment for an item or service after it's received
Down Payment - ✔✔The initial payment made when buying something on credit, a
____________ is paid directly by the buyer to the seller
Proration - ✔✔The allocation or distribution of an annual expense across smaller
chunks of time
Acreage - ✔✔A unit of measurement used to determine the size of land; 1 acre = 43560
square feet
Appraisal - ✔✔The value of property, based on factors determined by a certified
appraiser
General data - ✔✔Information about the area surrounding a property, this could
include the city, region, and neighborhood in which the property is situated
Specific Data - ✔✔Information regarding the property itself
Katelyn Whitman© 2025, All Rights Reserved.
,2|Page
Limited Appraisal - ✔✔A simple, abbreviated version of a regular appraisal
Market Value - ✔✔The price for which a property would sell if offered openly under
normal conditions. This refers to the economic principle, it's the price that a buyer and
seller would probably accept
Appraised Value - ✔✔Refers to the value given by a licensed appraiser during the
mortgage origination process. Appraisers are chosen by the lender but paid for by the
homebuyer.
Assessed Value - ✔✔Refers to the value placed on a property by a governmental unit
for use in levying annual real estate taxes
Loan-to-Value Ratio (LTV) - ✔✔The limit on the value of a loan, usually a certain
percentage of the home's appraised value or sales price, whichever is lower
Subject Property - ✔✔The property that is being evaluated in any given appraisal
Highest and Best Use - ✔✔What is achieved when a property is used for the most
appropriate purpose with the highest returns
Principle of Anticipation - ✔✔The present value of a property is affected by the
anticipated income or utility that property will give to the property owner
Principle of Contribution - ✔✔A property's overall value is made of the combined value
of each of its parts
Katelyn Whitman© 2025, All Rights Reserved.
,3|Page
Principle of Substitution - ✔✔The value of something is effected by the cost of getting a
similar (substitute) item elsewhere
Principle of Change - ✔✔The condition of a property, the desirability of its location, and
the market in which it exists can always change
Principle of Conformity - ✔✔Values are the highest when houses in a neighborhood
look roughly the same
Principle of Regression - ✔✔Lower value properties surrounding a subject property are
can drag down the value of a property
Principle of Progression - ✔✔Higher value properties of a subject property can bump of
the value of a property
Sales Comparison Approach - ✔✔Determining value by comparing the subject property
to similar properties ("comps") that have sold recently. It's most commonly used for
single family residences.
Cost Approach - ✔✔Determining value by considering how much the same property
would cost to build brand new at current prices (replacement cost), then adjusting for
depreciation
Income Approach - ✔✔Determining value by considering how much income the
property would generate when used as rental property
Depreciation - ✔✔The loss of value because of obsolescence or deterioration
Katelyn Whitman© 2025, All Rights Reserved.
, 4|Page
Functional Obsolescence - ✔✔Loss of value because a property's function or appearance
has gone out of style or has been replaced by a more appealing version
External Obsolescence - ✔✔Loss of value caused by negative forces outside the
property which are beyond the control of the owner (unfavorable changes in the
environment or market)
Deterioration - ✔✔Loss of value caused by physical wear and tear over time
Chronological age - ✔✔The literal age of a property; a home built 30 years ago has a
________________ age of 30
Effective Age - ✔✔An estimated age that is influenced by the updates and quality of
maintenance of the property; a 30 year house that has been well cared for might have an
effective age of 15
Reconciliation - ✔✔When an appraiser compares estimates using different techniques
(cost approach, sales approach, and/or income approach) and comes to a single number
for value
Appraisal Report - ✔✔a report from a licensed appraiser that sums up a property's
market value based on collected data
Appraisal Review - ✔✔a review of the appraisal report to make sure the appraisal
meets the lender's standards
Katelyn Whitman© 2025, All Rights Reserved.
