RPA Property Valuation Principles & Methods

Question 1

What is the primary purpose of property valuation?

Accepted Answer

To estimate the market value of the property

Answer

To calculate property taxes.

Answer

To assess the rental income only.

Answer

To decide property insurance.

Question 2

Which valuation method uses comparable sales?

Accepted Answer

Sales comparison approach

Answer

Income approach

Answer

Cost approach

Answer

Replacement cost method

Question 3

What does the cost approach consider in valuation?

Accepted Answer

Cost to replace the building minus depreciation

Answer

Market value of land

Answer

Expected rental income

Answer

Sale prices of similar properties

Question 4

Which approach uses income generated by the property?

Accepted Answer

Income approach

Answer

Cost approach

Answer

Sales comparison approach

Answer

Cost replacement method

Question 5

What is depreciation in property valuation?

Accepted Answer

Loss in property value over time

Answer

An increase in property value

Answer

Cost to build new property

Answer

Market rental value

Question 6

What does highest and best use mean in valuation?

Accepted Answer

Most profitable and legal use

Answer

Current zoning restrictions only

Answer

Oldest existing use

Answer

Least costly use

Question 7

Which factor most impacts property value?

Accepted Answer

Location

Answer

Interior paint color

Answer

Number of rooms

Answer

Type of flooring

Question 8

What is market value?

Accepted Answer

Most probable price in normal conditions

Answer

Lowest possible price

Answer

Insurance value

Answer

Tax assessed value

Question 9

Why is reconciliation important in valuation?

Accepted Answer

It combines multiple valuation approaches for final estimate

Answer

It increases appraisal time

Answer

It ignores market data

Answer

It focuses only on income data