Arizona Real Estate License Property Valuation and Appraisal

Question 1

Which appraisal approach estimates value by calculating the cost to replace a structure minus depreciation plus land value?

Accepted Answer

Cost approach

Answer

The cost approach estimates value by determining the cost to replace the improvements, subtracting accrued depreciation, and adding the land value.

Question 2

In Arizona, who is legally authorized to perform a federally related real estate appraisal?

Accepted Answer

A certified or licensed appraiser under the Arizona Board of Appraisal

Answer

Federally related appraisals in Arizona must be performed by a certified or licensed appraiser regulated by the Arizona Board of Appraisal.

Question 3

What does 'capitalization rate' measure in real estate valuation?

Accepted Answer

The rate of return expected on an income-producing property

Answer

The capitalization rate (cap rate) measures the expected rate of return on an income-producing property by dividing net operating income by the property's value.

Question 4

Which type of depreciation is caused by factors outside the property itself, such as a noisy highway nearby?

Accepted Answer

Economic obsolescence

Answer

Economic (external) obsolescence is caused by factors outside the property, like nearby nuisances or neighborhood decline, and is generally incurable.

Question 5

An appraiser adjusts comparable sales to account for differences from the subject property. If a comparable has a feature the subject lacks, the appraiser should:

Accepted Answer

Subtract value from the comparable

Answer

When a comparable has a superior feature the subject lacks, the appraiser subtracts value from the comparable to make it equivalent to the subject.

Arizona Real Estate License Practice Test

Arizona Real Estate License Practice Test

Arizona Real Estate License Property Valuation and Appraisal