CA Real Estate Property Valuation and Appraisal

Question 1

Which appraisal approach estimates value by calculating the cost to replace or reproduce a building minus depreciation, plus land value?

Accepted Answer

Cost approach

Answer

Income approach

Answer

Sales comparison approach

Answer

Gross rent multiplier approach

Question 2

In California, what is the primary method used by appraisers to value single-family homes?

Accepted Answer

Sales comparison approach

Answer

Income approach

Answer

Cost approach

Answer

Capitalization approach

Question 3

Which type of depreciation is caused by factors outside the property, such as a nearby freeway?

Accepted Answer

Economic obsolescence

Answer

Physical deterioration

Answer

Functional obsolescence

Answer

Structural depreciation

Question 4

What does the capitalization rate (cap rate) represent in real estate appraisal?

Accepted Answer

The ratio of net operating income to property value

Answer

The percentage of down payment required

Answer

The annual appreciation rate

Answer

The ratio of gross rent to sale price

Question 5

Which principle of value states that the value of a property is determined by what a buyer would pay in an open and competitive market?

Accepted Answer

Principle of supply and demand

Answer

Principle of substitution

Answer

Principle of contribution

Answer

Principle of conformity

Question 6

When appraising income property, which term describes the total potential rental income if the property were fully occupied?

Accepted Answer

Gross scheduled income

Answer

Effective gross income

Answer

Net operating income

Answer

Cash flow before tax