ASA Real Property Appraisal Concepts 2

Question 1

In the cost approach, 'reproduction cost' differs from 'replacement cost' in that reproduction cost is the cost to build:

Accepted Answer

An exact replica using the same materials and methods

Answer

Reproduction cost replicates the subject exactly; replacement cost constructs a building of equal utility using current materials, design, and standards.

Question 2

Which land valuation technique extracts land value by subtracting the depreciated value of improvements from total property value?

Accepted Answer

Extraction method

Answer

The extraction (abstraction) method derives land value by deducting the depreciated cost of improvements from the known sale price of a comparable property.

Question 3

A property earns above-market contract rent under an existing lease. The premium over market rent is called:

Accepted Answer

Leased fee advantage or bonus value

Answer

When contract rent exceeds market rent, the lessor (fee owner) benefits from a bonus value equal to the present value of that rent differential.

Question 4

Functional obsolescence in real property appraisal is caused by:

Accepted Answer

Deficiencies or superadequacies in the design or layout of the improvements

Answer

Functional obsolescence arises from within the building itself — features that were once standard but are now inadequate or excessive compared to current market expectations.

Question 5

The term 'assemblage' in real property appraisal refers to:

Accepted Answer

Combining two or more adjacent parcels into one larger parcel of greater value

Answer

Assemblage is the merging of adjacent parcels, and the value increment created beyond the sum of the individual parcel values is called plottage.

ASA - American Society of Appraisers Certification Practice Test

ASA - American Society of Appraisers Certification Practice Test

ASA Real Property Appraisal Concepts 2