Arkansas Real Estate License Property Valuation and Appraisal 3

Question 1

When an appraiser 'brackets' comparables in the sales comparison approach, this means:

Accepted Answer

Selecting comparables with features both superior and inferior to the subject

Answer

Bracketing means selecting comparables that are both superior and inferior to the subject in key features, ensuring the subject's value falls within a supportable range.

Question 2

Which of the following best defines 'effective age' of a property?

Accepted Answer

The age indicated by the property's condition and utility relative to similar properties

Answer

Effective age reflects a property's condition and utility rather than its actual chronological age; a well-maintained older home may have a younger effective age.

Question 3

The reconciliation process in an appraisal involves:

Accepted Answer

Analyzing and weighing the results of each applicable approach to arrive at a final value opinion

Answer

Reconciliation requires the appraiser to analyze strengths and weaknesses of each approach and exercise professional judgment — not simply average — to arrive at a final value opinion.

Question 4

A property has a potential gross income of $60,000, a vacancy and collection loss of 5%, and operating expenses of $20,000. What is the net operating income?

Accepted Answer

$37,000

Answer

Effective gross income = $60,000 × 0.95 = $57,000; NOI = $57,000 − $20,000 = $37,000.

Question 5

Under Arkansas law, who is authorized to perform appraisals for federally related transactions involving property valued over $500,000?

Accepted Answer

A Certified General Appraiser

Answer

Federally related transactions on non-residential or complex properties over the applicable threshold require a Certified General Appraiser under FIRREA guidelines adopted by Arkansas.

Arkansas Real Estate License Practice Test

Arkansas Real Estate License Practice Test

Arkansas Real Estate License Property Valuation and Appraisal 3