Wisconsin Real Estate License FREE Wisconsin Real Estate License Property Valuation and Financing Questions and Answers 2

Question 1

In Wisconsin, which appraisal approach estimates value by calculating the cost to rebuild a 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 Wisconsin property generates $48,000 in annual net operating income and the capitalization rate is 8%. What is the estimated property value using the income approach?

Accepted Answer

$600,000

Answer

$384,000

Answer

$480,000

Answer

$576,000

Question 3

Under Wisconsin law, which type of mortgage clause allows the lender to demand full repayment if the property is sold without lender approval?

Accepted Answer

Due-on-sale clause

Answer

Prepayment penalty clause

Answer

Subordination clause

Answer

Defeasance clause

Question 4

What does the loan-to-value (LTV) ratio represent in a Wisconsin real estate financing transaction?

Accepted Answer

The percentage of the property's appraised value that is financed by the mortgage

Answer

The borrower's annual income divided by the loan amount

Answer

The ratio of closing costs to the purchase price

Answer

The percentage of equity the buyer holds after closing

Question 5

Which form of property depreciation in an appraisal refers to loss of value caused by factors outside the property boundaries?

Accepted Answer

External obsolescence

Answer

Functional obsolescence

Answer

Physical deterioration

Answer

Deferred maintenance

Question 6

In Wisconsin, a buyer obtains an FHA loan requiring a 3.5% down payment on a $200,000 home. What is the minimum down payment amount?

Accepted Answer

$7,000

Answer

$6,000

Answer

$10,000

Answer

$3,500