Practice Test Geeks(REA) Real Estate Analyst Certification Practice Test
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Property Valuation & Appraisal Methods Flashcards

7 cards from real REA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Property Valuation & Appraisal Methods flashcards as text

  1. Which type of appraisal report provides the most complete description of data, analyses, and conclusions?

    Answer: Self-Contained Appraisal Report

    A Self-Contained (now called Appraisal Report with all detail) presents all data, reasoning, and conclusions in full narrative form.

  2. When using the gross rent multiplier (GRM) for residential properties, the multiplier is calculated as:

    Answer: Sale Price ÷ Monthly Gross Rent

    GRM for residential properties typically uses monthly gross rent: GRM = Sale Price ÷ Monthly Gross Rent.

  3. In the cost approach, 'entrepreneurial profit' represents:

    Answer: The developer's expected profit for undertaking the risk of development

    Entrepreneurial profit is the market-derived compensation a developer requires for organizing and executing a construction project.

  4. An 'as-is' value opinion in an appraisal reflects the property's value:

    Answer: In its current physical condition and legal status as of the appraisal date

    An as-is value reflects what the property is worth at the effective date given its actual existing condition.

  5. Which method of estimating accrued depreciation is most accurate because it identifies each individual cause and amount of depreciation?

    Answer: Observed condition (breakdown) method

    The observed condition (breakdown) method identifies and separately quantifies physical deterioration, functional obsolescence, and external obsolescence for maximum accuracy.

  6. The concept of 'plottage' in real estate refers to:

    Answer: The incremental value created by combining adjacent parcels into one larger parcel

    Plottage is the value increase that results when two or more adjacent parcels are assembled into one larger parcel with greater utility.

  7. USPAP's 'competency rule' requires an appraiser to:

    Answer: Have the necessary knowledge and experience for a specific assignment, or disclose and remedy any deficiency

    The USPAP Competency Rule mandates that appraisers must be competent for an assignment or disclose limitations and take steps to become competent.