Practice Test Geeks(IACP) Independent Appraisers Certification Program Practice Test
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Market Analysis & Property Valuation Flashcards

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

Read the first 7 Market Analysis & Property Valuation flashcards as text

  1. When a property's income is subject to a below-market lease, the discount applied to the leased fee value compared to fee simple value is called:

    Answer: Negative leasehold

    A negative leasehold occurs when the contract rent is below market rent, reducing the leased fee value relative to the fee simple market value.

  2. In highest and best use analysis, which test must be satisfied FIRST?

    Answer: Legally permissible

    Legal permissibility must be tested first because uses that violate zoning or other legal restrictions cannot be considered regardless of other factors.

  3. An appraiser notes that similar homes in a neighborhood sell for $10,000 more when they have an additional bathroom. This adjustment was derived using:

    Answer: Paired sales analysis

    Paired sales analysis isolates the contributory value of the bathroom by comparing otherwise similar properties that differ only in that feature.

  4. Which of the following BEST describes economic obsolescence?

    Answer: Loss in value from external forces beyond the property

    Economic (external) obsolescence is a loss in value caused by negative factors outside the property, such as nearby industrial development or economic downturns.

  5. A capitalization rate derived by dividing a property's NOI by its recent sale price is known as a:

    Answer: Overall (OAR) capitalization rate

    The overall capitalization rate (OAR) is calculated by dividing the net operating income by the sale price of a comparable property.

  6. Under USPAP, the appraisal report requirement for disclosing prior services on a property within the last three years applies to:

    Answer: All real property assignments

    USPAP requires disclosure of prior services (appraisal, appraisal review, or consulting) on the subject property within the prior three years for all real property assignments.

  7. When demand for a property type increases but supply remains fixed in the short run, the MOST likely result is:

    Answer: Value increases

    When demand rises with fixed supply, competition among buyers drives prices upward, increasing property values.