CPP41419 Property Valuation and Appraisal 1

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

Real estate agents primarily use a Comparative Market Analysis (CMA), which compares recent sales of similar properties in the same area to estimate market value.

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

Proximity is the most critical factor as properties in the same suburb or street share similar locational attributes, making them the most reliable comparables.

Question 3

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

Accepted Answer

A certified practising valuer (CPV)

Answer

Only a certified practising valuer (CPV) registered under state legislation is legally authorised to provide a formal property valuation in Australia.

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 formal valuation is conducted by a licensed valuer and is recognised for legal and lending purposes, whereas a price appraisal is an agent's market estimate not valid for formal financial 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

Capital growth refers to the increase in a property's market value over time, which is a key measure of investment performance in Australian real estate.

Real Estate Licence Practice Test

Real Estate Licence Practice Test

CPP41419 Property Valuation and Appraisal 1