FREE Arkansas Real Estate License Property Valuation and Appraisal Questions and Answers

Question 1

An Arkansas real estate agent is preparing a Comparative Market Analysis (CMA) for a residential property.
Which of the following principles of value is the primary basis for the Sales Comparison Approach used in the CMA?

Accepted Answer

Principle of Substitution

Answer

Principle of Contribution

Answer

Principle of Highest and Best Use

Answer

Principle of Conformity

Question 2

A property in a well-kept residential neighborhood loses value because a large, noisy factory is built on an adjacent lot. This loss of value is an example of which type of depreciation?

Accepted Answer

Economic Obsolescence

Answer

Physical Deterioration

Answer

Functional Obsolescence

Answer

Curable Depreciation

Question 3

When an appraiser is determining the value of a special-purpose property, such as a public school or a church in Arkansas, which valuation approach is likely to be given the most weight?

Accepted Answer

Cost Approach

Answer

Sales Comparison Approach

Answer

Income Approach

Answer

Gross Rent Multiplier Analysis

Question 4

A residential investment property in Arkansas generates a gross annual rental income of $60,000. If it sells for $750,000, what is the Gross Rent Multiplier (GRM) for the property?

Accepted Answer

12.5

Answer

10.5

Answer

125

Answer

8

Question 5

Which of the following BEST describes the role of a Comparative Market Analysis (CMA) in an Arkansas real estate transaction?

Accepted Answer

It is a tool used by a real estate licensee to estimate a probable selling price for a client.

Answer

It is a formal appraisal used by a lender to determine the maximum loan amount.

Answer

It is a legally binding document that establishes the property's value for tax purposes.

Answer

It is an analysis of the cost to replace the property's improvements, minus depreciation.

Question 6

An appraiser is valuing a house using the Cost Approach. They discover that the house has a poor floor plan, with a bedroom only accessible by walking through another bedroom. This an example of:

Accepted Answer

Functional obsolescence - curable

Answer

Physical deterioration - incurable

Answer

External obsolescence

Answer

Physical deterioration - curable

An Arkansas real estate agent is preparing a Comparative Market Analysis (CMA) for a residential property.Which of the following principles of value is the primary basis for the Sales Comparison Approach used in the CMA?

An Arkansas real estate agent is preparing a Comparative Market Analysis (CMA) for a residential property.
Which of the following principles of value is the primary basis for the Sales Comparison Approach used in the CMA?