Real Estate Valuation & Appraisal 3

Question 1

The principle of conformity holds that maximum value is achieved when:

Accepted Answer

Properties in an area are similar in size, style, and use

Answer

A property is unique and unlike its neighbors

Answer

Land is used for its highest and best purpose

Answer

All homes have the same sale price

Question 2

Highest and best use is defined as the use that is:

Accepted Answer

Physically possible, legally permissible, financially feasible, and maximally productive

Answer

The most expensive to build

Answer

Preferred by the property owner

Answer

Most common in the neighborhood

Question 3

Assessed value is used primarily for:

Accepted Answer

Calculating property taxes

Answer

Setting the listing price

Answer

Determining market value for a sale

Answer

Qualifying for a mortgage

Question 4

A Comparative Market Analysis (CMA) is typically prepared by a:

Accepted Answer

Real estate agent to help price a home for listing

Answer

Licensed appraiser for bank use

Answer

Tax assessor

Answer

Mortgage underwriter

Question 5

The principle of regression states that a higher-value property placed among lower-value properties will:

Accepted Answer

Experience a decline in value

Answer

Increase the value of nearby homes

Answer

Remain unaffected by its surroundings

Answer

Increase in value over time

Question 6

Which approach to value would an appraiser emphasize most when valuing a new single-family home?

Accepted Answer

Sales comparison approach

Answer

Income approach

Answer

Cost approach

Answer

GRM approach