ASA Real Property Appraisal Concepts 3

Question 1

In USPAP, a 'restricted appraisal report' differs from an 'appraisal report' in that it:

Accepted Answer

Contains less disclosure and is intended only for the client

Answer

Can only be prepared for federally related transactions

Answer

Must omit the reconciliation of value

Answer

Is not required to state the value conclusion

Question 2

Which of the following best describes the concept of 'arm's length transaction' in real property appraisal?

Accepted Answer

A sale between unrelated parties acting in their own self-interest with adequate market exposure

Answer

A sale between family members at a discounted price

Answer

A forced sale under a court order

Answer

A transaction involving governmental condemnation

Question 3

The concept of 'market rent' in real property appraisal is the rent a property would command in a competitive and open market assuming:

Accepted Answer

A willing landlord and willing tenant with full knowledge of market conditions

Answer

The existing tenant renewing under current lease terms

Answer

The highest rent achievable regardless of market demand

Answer

Rent controlled by local ordinance

Question 4

Paired sales analysis in the sales comparison approach is used primarily to:

Accepted Answer

Isolate and quantify the value contribution of a single property characteristic

Answer

Determine the overall cap rate from comparable sales

Answer

Calculate physical depreciation of improvements

Answer

Verify the accuracy of public assessment records

Question 5

In the cost approach, 'incurable physical deterioration' refers to items that:

Accepted Answer

Cost more to repair than the value they would add

Answer

Have never been maintained since construction

Answer

Cannot be repaired due to building code restrictions

Answer

Result from structural defects discovered after sale

Question 6

Which valuation principle states that the value of a component is measured by its contribution to the total value of the property?

Accepted Answer

Principle of contribution

Answer

Principle of balance

Answer

Principle of increasing returns

Answer

Principle of competition