ASA Real Property Appraisal Concepts

Question 1

Which principle holds that the value of a property is affected by, and affects, the value of surrounding properties?

Accepted Answer

Principle of conformity

Answer

The principle of conformity states that maximum value is achieved when a property is compatible with the land uses in its neighborhood.

Question 2

The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute. This principle underpins which approach?

Accepted Answer

All three approaches to value

Answer

Substitution is the foundation of all three approaches — buyers compare cost, sales of comparables, and income-producing alternatives.

Question 3

Highest and best use analysis requires that the use be legally permissible, physically possible, financially feasible, and:

Accepted Answer

Maximally productive

Answer

The fourth test of highest and best use is that the use must generate the maximum value — it must be maximally productive among all feasible uses.

Question 4

In real property appraisal, 'effective age' refers to:

Accepted Answer

The age of a property as indicated by its condition and utility

Answer

Effective age reflects the actual condition and functional utility of the improvements and may differ from chronological age due to maintenance or renovation.

Question 5

Which type of depreciation results from factors outside the property, such as proximity to a nuisance?

Accepted Answer

External (economic) obsolescence

Answer

External obsolescence is caused by factors beyond the property's boundaries — such as neighborhood decline, adverse zoning, or nearby negative land uses.

ASA - American Society of Appraisers Certification Practice Test

ASA - American Society of Appraisers Certification Practice Test

ASA Real Property Appraisal Concepts