REAL ESTATE TEST EXAM ARIZONA
QUESTIONS WITH CORRECT
ANSWERS
when people will pay more for a property but there is no objective reason to do so,
this is most likely due to: - ANSWER-Amenities
what type of property would an appraiser use the reproduction cost approach? -
ANSWER-A historical house
an example of functional depreciation is: - ANSWER-outdated interior
what does an appraiser look for first? - ANSWER-The highest and best use of the
land
what does the Gross Rent Multiplier find? - ANSWER-a multiple of gross rents to
determine price
for the best appraisal of residential property, which neighborhood would the
appraiser use? - ANSWER-Any similar neighborhood
what is the best appraisal approach to use on a fifty year old school - ANSWER-cost
which of the following would not be an operating expense? - ANSWER-vacancies
and loss of credit
capitalization rates would usually consider - ANSWER-Net income
incurable depreciation would apply to - ANSWER-economic depreciation
in the income approach of appraising, the most important figure would be -
ANSWER-net income
the difference between replacement cost and present value is - ANSWER-
depreciation
after gathering all appraisal data, the appraiser would - ANSWER-reconcile and
correlate
the loss of nearby fire service in a rural area would be considered - ANSWER-
economic depreciation
does property depreciation apply to the income approach of appraising? - ANSWER-
no
when calculating net operating income, do you take into account the CAP rate? -
ANSWER-no
,an office building has been damaged by a flood. which appraisal approach would
most likely be used to establish replacement costs? - ANSWER-cost
what would an appraiser look for when appraising an 1,800 Sq. Ft. house using the
market approach? - ANSWER-homes in a nearby area that are 1,800 Sq. Ft.
What type of depreciation is always considered incurable? - ANSWER-economic
a 60 year old home is being appraised. the best approach would be: - ANSWER-
market
Mrs. M owns a house on a cornet lot and tears the house down in order to get a
better price for the land. this is an example of: - ANSWER-Highest and best use of
the land
physical obsolescence is a problem with property deterioration. True or False? -
ANSWER-True
if cap rates in an area are going up, how does this influence value? - ANSWER-the
value goes down
in order to determine a cap rate, which equation would you use? - ANSWER-Income
÷ Value
in order to establish effective gross income, one would subtract what from scheduled
gross income - ANSWER-Vacancy and loss of credit
when one is advised to add a swimming pool to an apartment complex, this is
determined by the appraisal principle of - ANSWER-Contribution
economic obsolescence is best defined as - ANSWER-External and incurable
when would a person be best advised to use a cap rate? - ANSWER-when
converting income to value
if a real estate agent leases a building with 20-year leases and no escalation clause,
how would this affect the value of the building? - ANSWER-the value would
decrease
the cost approach would be used for a new home at its highest and best use, or for
an old home not at its highest and best use. - ANSWER-a new home at its highest
and best use
a house is located next to a drive-in movie theater. what is this called? - ANSWER-
economic depreciation
a house is located in a poor neighborhood next to a factory. this is an example of: -
ANSWER-economic obsolescence
, when a person decides to dramatically improve their existing home they would first
need to evaluate the principal of: - ANSWER-Contribution
when a developer combines two or more adjacent parcels of land into one large
development, it is known as: - ANSWER-assemblage
when the appraiser needs to calculate a separate value for the land, he is using -
ANSWER-the cost approach
after economic life of property has expired, there exists - ANSWER-residual value
smoke and dust in a given area would be considered what type of depreciation -
ANSWER-economic
when you appraise land and add to it the depreciated value of the improved property,
what appraisal approach is being used? - ANSWER-cost
value is best described as: - ANSWER-present worth of future benefits.
the annual gross multiplier is calculated by - ANSWER-dividing the price paid by the
annual gross income
the terms of sale can be expected to affect the - ANSWER-price of the property
how would a substantial increase in interest rates as the only economic change
affect the value of a rental property - ANSWER-the value would decline
an appraiser would not depreciate - ANSWER-unimproved land leased for open
storage
"the whole is worth more than the sum of its parts" refers to - ANSWER-assemblage
land and improvements must be appraised separately using the - ANSWER-cost
approach
a 100-year old building has modern fixtures: what would the appraiser most likely
consider - ANSWER-the replacement value
when excess profits are made in a certain area of real estate this would lead to: -
ANSWER-competition
what is not considered when appraising rental property? - ANSWER-tax rate
the effective age of a property is it's: - ANSWER-observed age
what does the gross rent multiplier indicate? - ANSWER-a factor of rents to price
what is the smallest unit of measurement - ANSWER-lot and block
a plat map would INCLUDE everything except - ANSWER-buildings
QUESTIONS WITH CORRECT
ANSWERS
when people will pay more for a property but there is no objective reason to do so,
this is most likely due to: - ANSWER-Amenities
what type of property would an appraiser use the reproduction cost approach? -
ANSWER-A historical house
an example of functional depreciation is: - ANSWER-outdated interior
what does an appraiser look for first? - ANSWER-The highest and best use of the
land
what does the Gross Rent Multiplier find? - ANSWER-a multiple of gross rents to
determine price
for the best appraisal of residential property, which neighborhood would the
appraiser use? - ANSWER-Any similar neighborhood
what is the best appraisal approach to use on a fifty year old school - ANSWER-cost
which of the following would not be an operating expense? - ANSWER-vacancies
and loss of credit
capitalization rates would usually consider - ANSWER-Net income
incurable depreciation would apply to - ANSWER-economic depreciation
in the income approach of appraising, the most important figure would be -
ANSWER-net income
the difference between replacement cost and present value is - ANSWER-
depreciation
after gathering all appraisal data, the appraiser would - ANSWER-reconcile and
correlate
the loss of nearby fire service in a rural area would be considered - ANSWER-
economic depreciation
does property depreciation apply to the income approach of appraising? - ANSWER-
no
when calculating net operating income, do you take into account the CAP rate? -
ANSWER-no
,an office building has been damaged by a flood. which appraisal approach would
most likely be used to establish replacement costs? - ANSWER-cost
what would an appraiser look for when appraising an 1,800 Sq. Ft. house using the
market approach? - ANSWER-homes in a nearby area that are 1,800 Sq. Ft.
What type of depreciation is always considered incurable? - ANSWER-economic
a 60 year old home is being appraised. the best approach would be: - ANSWER-
market
Mrs. M owns a house on a cornet lot and tears the house down in order to get a
better price for the land. this is an example of: - ANSWER-Highest and best use of
the land
physical obsolescence is a problem with property deterioration. True or False? -
ANSWER-True
if cap rates in an area are going up, how does this influence value? - ANSWER-the
value goes down
in order to determine a cap rate, which equation would you use? - ANSWER-Income
÷ Value
in order to establish effective gross income, one would subtract what from scheduled
gross income - ANSWER-Vacancy and loss of credit
when one is advised to add a swimming pool to an apartment complex, this is
determined by the appraisal principle of - ANSWER-Contribution
economic obsolescence is best defined as - ANSWER-External and incurable
when would a person be best advised to use a cap rate? - ANSWER-when
converting income to value
if a real estate agent leases a building with 20-year leases and no escalation clause,
how would this affect the value of the building? - ANSWER-the value would
decrease
the cost approach would be used for a new home at its highest and best use, or for
an old home not at its highest and best use. - ANSWER-a new home at its highest
and best use
a house is located next to a drive-in movie theater. what is this called? - ANSWER-
economic depreciation
a house is located in a poor neighborhood next to a factory. this is an example of: -
ANSWER-economic obsolescence
, when a person decides to dramatically improve their existing home they would first
need to evaluate the principal of: - ANSWER-Contribution
when a developer combines two or more adjacent parcels of land into one large
development, it is known as: - ANSWER-assemblage
when the appraiser needs to calculate a separate value for the land, he is using -
ANSWER-the cost approach
after economic life of property has expired, there exists - ANSWER-residual value
smoke and dust in a given area would be considered what type of depreciation -
ANSWER-economic
when you appraise land and add to it the depreciated value of the improved property,
what appraisal approach is being used? - ANSWER-cost
value is best described as: - ANSWER-present worth of future benefits.
the annual gross multiplier is calculated by - ANSWER-dividing the price paid by the
annual gross income
the terms of sale can be expected to affect the - ANSWER-price of the property
how would a substantial increase in interest rates as the only economic change
affect the value of a rental property - ANSWER-the value would decline
an appraiser would not depreciate - ANSWER-unimproved land leased for open
storage
"the whole is worth more than the sum of its parts" refers to - ANSWER-assemblage
land and improvements must be appraised separately using the - ANSWER-cost
approach
a 100-year old building has modern fixtures: what would the appraiser most likely
consider - ANSWER-the replacement value
when excess profits are made in a certain area of real estate this would lead to: -
ANSWER-competition
what is not considered when appraising rental property? - ANSWER-tax rate
the effective age of a property is it's: - ANSWER-observed age
what does the gross rent multiplier indicate? - ANSWER-a factor of rents to price
what is the smallest unit of measurement - ANSWER-lot and block
a plat map would INCLUDE everything except - ANSWER-buildings
