FREE Arkansas Real Estate License Property Valuation and Appraisal Questions and Answers Flashcards
6 cards from real Arkansas Real Estate License practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 FREE Arkansas Real Estate License Property Valuation and Appraisal Questions and Answers flashcards as text
In Arkansas, which appraisal approach estimates value by calculating the cost to rebuild a property minus depreciation plus land value?
Answer: Cost approach
The cost approach estimates value by determining replacement or reproduction cost, subtracting depreciation, and adding land value.
What is the primary purpose of a Comparative Market Analysis (CMA) prepared by an Arkansas real estate licensee?
Answer: To help sellers set a competitive listing price
A CMA is used by licensees to help sellers understand current market conditions and set an appropriate listing price.
Under Arkansas law, which factor is NOT typically considered a form of depreciation in property appraisal?
Answer: Proximity to a new shopping center
Proximity to a new shopping center is generally considered a positive externality that increases value rather than a form of depreciation.
When using the income approach to value a rental property in Arkansas, what does the capitalization rate represent?
Answer: The rate of return an investor expects on the investment
The capitalization rate reflects the expected rate of return on a real estate investment based on the income the property generates.
Which type of value represents the most probable price a property would bring in a competitive and open market under fair sale conditions in Arkansas?
Answer: Market value
Market value is defined as the most probable price under conditions where both buyer and seller are acting prudently and knowledgeably.
In Arkansas property appraisal, what is functional obsolescence?
Answer: Loss in value due to outdated design or layout features within the property
Functional obsolescence is a reduction in value caused by outdated or undesirable features within the property itself, such as a poor floor plan.