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

A restricted appraisal report has fewer disclosure requirements and is limited in distribution to the client, not third parties.

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

An arm's length transaction assumes both parties are independent, knowledgeable, and motivated — meeting the conditions required for open market value.

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

Market rent reflects what a knowledgeable, willing landlord and tenant would agree upon in a competitive market under typical conditions.

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

Paired sales analysis compares two sales that are identical in all respects except one feature, allowing the appraiser to measure the market's reaction to that one difference.

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

Incurable physical deterioration is economically impractical to remedy because the repair cost exceeds the resulting increase in property value.

ASA - American Society of Appraisers Certification Practice Test

ASA - American Society of Appraisers Certification Practice Test

ASA Real Property Appraisal Concepts 3