CA Real Estate Property Valuation and Appraisal 3

Question 1

Which appraisal principle holds that the value of a component is measured by how much it adds to the whole property's worth?

Accepted Answer

Principle of contribution

Answer

The principle of contribution measures a component's value by the amount it adds to the total property value.

Question 2

Which term describes the loss in value of a property due to physical wear and tear over time?

Accepted Answer

Physical deterioration

Answer

Physical deterioration is the loss in value caused by normal wear and tear, deferred maintenance, or structural damage.

Question 3

The principle of anticipation states that property value is based on:

Accepted Answer

The present worth of future benefits

Answer

The principle of anticipation holds that value is created by the expectation of future benefits the property will provide.

Question 4

When comparing properties in the sales comparison approach, adjustments are made to which property?

Accepted Answer

The comparable sale only

Answer

In the sales comparison approach, adjustments are made to the comparable sale to reflect differences from the subject property.

Question 5

What does 'effective age' mean in the context of real estate appraisal?

Accepted Answer

The age implied by the property's condition and utility

Answer

Effective age is the age suggested by a property's physical condition and maintenance, which may differ from its actual chronological age.

CA Real Estate - California Real Estate Exam Practice Test