FREE SRA Market Analysis & Highest & Best Use Questions and Answers

Question 1

What is the first step in performing a market analysis for a residential property?

Accepted Answer

Gather and analyze neighborhood market data.

Answer

Select the appraisal method.

Answer

Adjust for physical characteristics.

Answer

Calculate replacement cost.

Question 2

What does 'Highest and Best Use' refer to in real estate appraisal?

Accepted Answer

The most physically and financially feasible legal use.

Answer

The owner's preferred use of the property.

Answer

Any use that generates income.

Answer

The government-assigned use.

Question 3

Which condition must be met for a use to qualify as highest and best?

Accepted Answer

It must be legally permissible and financially feasible.

Answer

It must be the cheapest use.

Answer

It must follow historical use patterns.

Answer

It must use the most land.

Question 4

What is a key indicator of demand in residential market analysis?

Accepted Answer

Average days on market for sold listings.

Answer

Historical landmark designation.

Answer

Zoning restrictions.

Answer

Census tract boundaries.

Question 5

When should an appraiser conduct a highest and best use analysis as if vacant?

Accepted Answer

In every appraisal, regardless of property type.

Answer

Only for commercial properties.

Answer

When the land is being subdivided.

Answer

When the client requests it.