CA Real Estate Property Valuation and Appraisal 2

Question 1

The principle of substitution states that a buyer will pay no more for a property than:

Accepted Answer

The cost of an equally desirable substitute property

Answer

Its assessed value

Answer

Its appraised value plus 10%

Answer

The seller's asking price

Question 2

Which type of depreciation refers to a loss in value due to outdated or inefficient design features within the property?

Accepted Answer

Functional obsolescence

Answer

Physical deterioration

Answer

Economic obsolescence

Answer

Deferred maintenance

Question 3

A property generates a net operating income of $50,000 per year and has a capitalization rate of 5%. What is the estimated value?

Accepted Answer

$1,000,000

Answer

$250,000

Answer

$500,000

Answer

$2,500,000

Question 4

In California, who is licensed to perform federally related real property appraisals?

Accepted Answer

A licensed or certified appraiser

Answer

Any licensed real estate salesperson

Answer

A broker with 5 years experience

Answer

A notary public

Question 5

The income approach to value is MOST appropriate for which type of property?

Accepted Answer

Income-producing investment properties

Answer

Owner-occupied single-family homes

Answer

Vacant land

Answer

Historic landmark buildings

Question 6

What is the gross rent multiplier (GRM) used to estimate?

Accepted Answer

Property value based on rental income

Answer

Monthly operating expenses

Answer

Annual depreciation amount

Answer

Vacancy rate