Real Estate License Property Valuation and Appraisal 5

Question 1

When the value of a property feature is measured by how much its presence adds to the whole, the appraiser is applying the principle of:

Accepted Answer

Contribution

Answer

The principle of contribution measures a component's value by the amount it adds to the total property value.

Question 2

A comparable sold six months ago for $300,000 in a market appreciating 0.5% per month. What time adjustment applies?

Accepted Answer

Add about $9,000 to the comparable

Answer

At 0.5% per month over six months, roughly 3% of $300,000 (about $9,000) is added for market appreciation.

Question 3

Which approach to value would an appraiser rely on most heavily for a single-family home in an active subdivision?

Accepted Answer

Sales comparison approach

Answer

Abundant comparable sales make the sales comparison approach the most reliable for typical residential homes.

Question 4

An older building's plumbing is so outdated it cannot be economically modernized. This is an example of:

Accepted Answer

Incurable functional obsolescence

Answer

When an outdated feature cannot be economically corrected, it is incurable functional obsolescence.

Question 5

A property has a building value of $250,000 and an effective age of 10 years with a 50-year economic life. Using straight-line depreciation, how much value has been lost?

Accepted Answer

$50,000

Answer

Straight-line depreciation is 10/50 = 20% of $250,000, equaling $50,000 lost.

Real Estate License Practice Test

Real Estate License Practice Test

Real Estate License Property Valuation and Appraisal 5