Real Estate License Practice Test – Property Valuation and Appraisal
This is a timed quiz. You will be given 45 seconds per question. Are you ready?
What is the objective of most appraisals?
Although an appraiser may be used to evaluate any of these, they typically are sought to determine the market value of a property.
Market value is the same as ____.
Mortgage (or loan) value is the same as market value.
The sales comparison approach to valuation is directly related to ____.
The sales comparison (sometimes still referred to as “market”) approach to valuation involves an appraiser locating similar properties to the property being appraised. When there are more homes on the market, it is easier for the appraiser to find similar properties and to make valuation adjustments as appropriate.
Jane is depositing $400 dollars in a savings account in hopes of earning interest. If the rate of interest is 6%, and she keeps the money in her account for 5 years, what would her balance be at the end of the 5 year period?
This is a simple interest problem given that Jane’s interest is accruing only once per year. The simple interest formula is as follows: A=P(1+r)t, where P is the initial deposit, r is the interest rate, t is the number of periods, and A is the amount in the account after t periods. In this case, P=400, r=0.06, and t=5. Substitute the values into the equation and calculate A: A=400(1+0.06)5=535.29
Of the following, who can perform an appraisal?
A real estate agent or broker can not prepare an official property appraisal. Instead, they can prepare a Comparative Market Analysis (CMA) or Broker’s Opinion of Value (BOV).
How is land different than other property assets?
Land is the only property asset that is fixed and immobile. Like other properties, land can decrease or increase in value as surroundings become more or less desirable. The other options are all not true or not unique to land.