NY Real Estate Exam NY Property Valuation & Appraisal

Question 1

What are the three approaches to property valuation?

Accepted Answer

Sales comparison (market) approach, cost approach, and income capitalization approach

Answer

Appraisers use three approaches: the sales comparison approach (comparing recent similar sales), the cost approach (replacement cost minus depreciation), and the income approach (capitalized net income for investment properties).

Question 2

What is the sales comparison approach to valuation?

Accepted Answer

Estimating value by comparing the subject property to recently sold similar properties, adjusting for differences

Answer

The sales comparison approach uses recent sales of comparable properties (comps), making adjustments for differences in size, condition, location, and features to estimate the subject property's market value.

Question 3

What factors affect property value in New York?

Accepted Answer

Location, property condition, size, local market conditions, zoning, transportation access, school district, and economic factors

Answer

Property value in NY is influenced by numerous factors: location (Manhattan vs. upstate), proximity to transit, school quality, building condition, market supply/demand, interest rates, zoning, and economic trends.

Question 4

What is a Comparative Market Analysis (CMA) in NY real estate?

Accepted Answer

An analysis prepared by a real estate agent using comparable sales to estimate a property's market value for listing or purchasing purposes

Answer

A CMA is prepared by real estate agents (not appraisers) to help sellers set listing prices and buyers make offers, using recent sales, pending sales, and active listings of comparable properties.

Question 5

What is the income approach to valuation?

Accepted Answer

A method estimating property value based on the income it produces, using net operating income divided by the capitalization rate

Answer

The income approach divides net operating income (gross income minus operating expenses) by a capitalization rate derived from market data, estimating the value an investor would pay for the income stream.

(NY Real Estate Exam) New York Real Estate Exam Practice Test

(NY Real Estate Exam) New York Real Estate Exam Practice Test

NY Real Estate Exam NY Property Valuation & Appraisal