CPP41419 Property Valuation and Appraisal

Question 1

What is the primary method used by real estate agents to estimate the market value of a residential property?

Accepted Answer

Comparative market analysis (CMA)

Answer

Formal bank valuation

Answer

Replacement cost method

Answer

Gross rental yield calculation

Question 2

Which of the following factors is generally considered MOST important when selecting comparable sales for a residential property appraisal?

Accepted Answer

Proximity of the comparable properties to the subject property

Answer

The time the property has been on the market

Answer

The number of open homes held

Answer

The vendor's asking price history

Question 3

In Australian real estate, who is legally authorised to provide a formal property valuation?

Accepted Answer

A certified practising valuer (CPV)

Answer

A licensed real estate agent

Answer

A registered property manager

Answer

A licensed auctioneer

Question 4

What is the key difference between a price appraisal by a real estate agent and a formal property valuation?

Accepted Answer

A formal valuation is prepared by a licensed valuer and is legally recognised, while a price appraisal is an agent's estimate

Answer

A price appraisal is legally binding; a valuation is not

Answer

A price appraisal can be used for mortgage purposes; a valuation cannot

Answer

There is no difference; both are equally valid for legal purposes

Question 5

Which of the following best describes 'capital growth' in residential property?

Accepted Answer

The increase in a property's market value over time

Answer

The rental income generated by the property over time

Answer

The amount of equity borrowed against a property

Answer

The annual depreciation claimed on a property

Question 6

When conducting a comparative market analysis, which of the following should an agent adjust for when comparing properties?

Accepted Answer

Differences in property features such as number of bedrooms, land size, and condition

Answer

The agent's personal opinion of the neighbourhood

Answer

The vendor's emotional attachment to the property

Answer

The number of agents who have previously listed the property

Question 7

How many comparable sales should an agent ideally reference when preparing a residential price appraisal in Australia?

Accepted Answer

A minimum of three recent comparable sales to support the estimated range

Answer

Only one very recent sale from the same street

Answer

At least ten sales from across the state

Answer

No comparable sales are required if the agent knows the area well