Real Estate Sales Exam FREE Real Estate Sales Property Valuation and Appraisal Questions and Answers 2

Question 1

Which appraisal approach estimates value by calculating the cost to rebuild the structure, minus depreciation, plus land value?

Accepted Answer

Cost approach

Answer

Sales comparison approach

Answer

Income capitalization approach

Answer

Gross rent multiplier approach

Question 2

A property generates $60,000 in annual net operating income and the capitalization rate is 8%. What is the estimated property value using the income approach?

Accepted Answer

$750,000

Answer

$480,000

Answer

$600,000

Answer

$720,000

Question 3

What type of depreciation is caused by factors external to the property, such as a nearby landfill?

Accepted Answer

External (economic) obsolescence

Answer

Physical deterioration

Answer

Functional obsolescence

Answer

Deferred maintenance

Question 4

In the sales comparison approach, if a comparable property has a feature that the subject property lacks, how should the appraiser adjust?

Accepted Answer

Subtract the value of the feature from the comparable

Answer

Add the value of the feature to the subject property

Answer

Add the value of the feature to the comparable

Answer

No adjustment is needed

Question 5

Which principle of value states that the maximum value of a property is set by how much it would cost to acquire an equally desirable substitute?

Accepted Answer

Principle of substitution

Answer

Principle of contribution

Answer

Principle of anticipation

Answer

Principle of conformity

Question 6

What does the gross rent multiplier (GRM) measure?

Accepted Answer

The ratio of sale price to gross monthly or annual rent

Answer

The ratio of net operating income to sale price

Answer

The ratio of operating expenses to gross income

Answer

The ratio of debt service to net income