Mckissock General Appraiser Sales Comparison Approach Practice Test

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• Immediately following Hurricane Katrina, why was the cost approach ineffective in valuing industrial properties that had been affected by the disaster?
• Accrued depreciation in the cost approach includes which of the following?
• In a bell-shaped curve, what percentage of observations fall within one standard deviation of the mean according to the empirical rule?
• Which list correctly identifies the five intangible adjustments used in paired sales analyses?
• When developing the income approach, what may an appraiser need to reconcile?
• An arms-length transaction implies which of the following about buyer and seller?
• What factor largely determines how much weight is given to each approach to value?
• Why are location adjustments often necessary in real estate appraisals?
• Gross Building Area includes which components?
• When a sale includes interests beyond the real estate, what should be deducted from the real estate value?
• In location-based adjustments for paired sales, the adjustment for a more favorable highway-oriented location relative to a standard street location is typically about which amount?
• Calculate the mean of these Gross Rent Multipliers: 77, 88, 72, 69, 77, 91.
• Which document is used to demonstrate USPAP compliance in the appraisal process?
• Which statement is TRUE regarding appraisers and value?
• Which value characteristic describes usefulness or practicality to satisfy wants or needs?
• Which option is not typically considered secondary data?
• In the sales comparison approach, each comparable sale _______.
• Which of the following is an example of secondary data?
• Based on a six-month increase of 10% on a property originally priced at $800,000, what is the implied annual appreciation rate?
• What happens to the sample mean as the sample size increases?
• Which data type is exemplified by the measurement 25,000 square feet?
• Under legal permissibility and current land use regulations, an appraiser must consider __________.
• Which principle is demonstrated by the one-year loan example where $1,000 becomes $1,100?
• Adjustments in the sales comparison approach must be ___________.
• Which urban land-use model describes urban structure as rings around a central business district?
• Why do forced sales occur?
• Which party's relationship should be examined to determine arms-length status?
• In the appraisal of an apartment building, adjustments for higher rent for elevator and central air conditioning are needed. Why must the appraiser be careful in making this adjustment?
• Data used in sales comparison appraisals are usually local, but national data may be appropriate in some cases.
• A comparable property sold for $800,000. In the sales comparison grid, it is adjusted downward 5% for property rights, downward 10% for financing terms, and upward 15% for market conditions. What is the dollar adjustment for market conditions?
• Which term describes broad, non-site-specific information used in appraisals, such as employment statistics and housing trends?
• In the five-acre parcel scenario, the total value for industrial use is what amount?
• Which statement is TRUE regarding the role of USPAP in appraisal development and reporting?
• Which of the following is an example of functional obsolescence?
• Verifying arms-length status helps ensure that comparable data reflects what?
• Which statement is true regarding sale dates of comparable sales and adjustments for market conditions (time)?
• Which market is inefficient?
• Which statement best explains why appraisers inspect each comparable sale property in person?
• An appraiser inspects a subject property, which is an old, abandoned school building. The appraiser's measurements and field notes from the inspection would be considered what type of data?
• A capitalization rate demonstrates the relationship between the ________ income of a property and its sales price.
• When performing a market value appraisal on a property with an office building, which statement about highest and best use analysis is most likely TRUE?
• In a sales comparison scenario, three comparables are analyzed with varying quality and the reconciled value is $220,000. This process illustrates which type of analysis?
• The highest quality buildings located in the best areas of their markets are usually considered which type of office buildings?
• The concept of adjustments is based primarily on what principle?
• Arms-length transactions help ensure that the sale price reflects what?
• During the reconciliation within the sales comparison approach, what does the appraiser consider?
• Which factors are considered transactional differences in an appraisal?
• Which adjustment is typically applied when a comparable sale is superior to the subject property?
• Which ownership form includes survivorship rights and can file for partition?
• Which statement about primary data is true?
• Generally, commercial properties are worth less if they are located on a roadway that is:
• What are the three standard deviations of the mean?
• Which of the following are common pitfalls associated with reconciliation?
• Before an appraiser reconciles the indications from the three approaches to reach a final value, what must be done?
• In the appraisal process, what type of data pertains only to the subject property and comparables?
• Which cost approach element is used to reflect the value of land itself?
• Five-acre vacant parcel has these value estimates: residential value $225,000; commercial value $1.25 per square foot; industrial value $50,000 per acre. What is the highest and best use?
• Tangible and intangible benefits to a property, which increase its value, would be considered ____________.
• When is the sales comparison approach most effective?
• Why is it not a good idea to use standard pre-printed residential sales comparison grids in commercial appraisal reports?
• What is the difference between the Net Adjustments and the Gross Adjustments calculation?
• To mitigate errors in adjustments when using the paired sales technique, appraisers should:
• What is the purpose of using elements of comparison?
• Which metric is commonly used alongside GIM to evaluate income-producing properties?
• Which statement about the reconciliation process in the sales comparison context is true?
• Property A is a four-unit apartment building with a four-car garage, which sold for $225,000. Property B is a similar four-unit apartment building with no garage, which sold for $205,000. What is the indicated adjustment for a four-car garage?
• An industrial building sold for $800,000. Six months later, it sold again for $880,000. No physical changes were made to the property over this time. What is the annual adjustment for market conditions indicated by this sale?
• If a property sells for 250,000 and its gross annual income is 10,000, what is the GIM?
• When applying the Gross Rent Multiplier to a one-to-four-family residential property, which rent figure is used?
• How do multiple downward adjustments behave in the adjustment process?
• When an appraiser notes terms of sale, which additional verification is appropriate?
• In a competitive market, which factor will function to equalize the quantity demanded by consumers and the quantity supplied by producers?
• With the same mortgage terms, can the average household afford the average home price of $62,653 with no down payment?
• Which set lists the five intangible adjustments?
• Which factor would be considered a tangible difference in the sales comparison approach?
• In a sales comparison analysis, which aspect does the indicated pool adjustment quantify?
• Valuing vacant industrial land by value per square foot is an example of which unit of comparison?
• In multi-tenant office buildings, rental rates are determined by which factor?
• Adjustments for market conditions _________.
• What is another name for the market survey method of extracting adjustments?
• Which sale lacks river frontage?
• Leaving out entrepreneurial profit in the cost approach will most likely result in:
• What is the formula to calculate Gross Income Multiplier (GIM)?
• Under USPAP, is it acceptable to provide only a qualitative statement that value is higher or lower than a prior appraisal without giving a numeric value?
• Which ownership form is defined by shared ownership with no right of survivorship?
• In analyzing the local market, data gathered and published by a Chamber of Commerce would be considered ________.
• If a sale is not arms-length, what is a potential effect on the appraisal?
• Which data source is explicitly identified as secondary data in the material?
• In the riverfront scenario, approximately what percentage of the property's value is attributed to location?
• In the sales comparison approach, which concept is used to adjust the sale prices of comparables to reflect differences with the subject?
• Which of the following represents the formula for the cost approach?
• When estimating adjustments based on the cost of a feature or item, what is necessary?
• Highest and best use is defined as the use that is legally permissible, physically possible, financially feasible, and what?
• What is the principle that states that the present worth is the value of revenue or other benefits expected in the future?
• Sale A occurred how many years ago in the riverfront comparison?
• If the subject has a pool and a comparable sale without a pool sold for $30,000 per unit, what is the dollar adjustment that should be made?
• An appraiser may reconcile to what type of indicated value by the sales comparison approach?
• In an appraisal applying adjustments for financing terms, conditions of sale, and market conditions, what is the proper order of these adjustments?
• Aaron is appraising a commercial property located along a river. Because of the desirability of the river frontage, location is a major factor in the value of this property, accounting for approximately 40% of its value. Aaron is only able to find one other sale of a riverfront property, Sale A, which occurred three years ago. Sale B is located several miles away, and it sold within the last month. Sale C is located only one block from the subject, but it has no river frontage. Which sale is likely to provide the best indication of value for the subject property?
• Economic equilibrium of price and quantity occurs when which condition holds?
• When adjusting for location, financing terms, and market conditions, what is the proper order of these adjustments?
• If a property has a debt coverage ratio of 1.1, which statement best describes the ratio?
• Which statement would indicate the sale is not arms-length?
• An industrial building is worth less than other buildings in its market because it has low ceilings and outdated design and fixtures. This is an example of ___________.
• What does the adjustment process use to value the subject by adjusting the comparable sales based on differences?
• Which depreciation categories are included in accrued depreciation?
• When valuing a proposed new building with a prospective effective date, an appraiser is utilizing which type of assumption?
• In a market where construction costs exceed sale prices, which approach is most likely to be given greater weight in final reconciliation?
• What category best describes information published by organizations like a Chamber of Commerce?
• When applying the sales comparison approach, what is the objective of the appraiser?
• A property sold for $400,000, with the seller agreeing to carry the financing for the buyer, at below-market terms. How is the appraiser most likely to get information regarding the details of the financing and its effect on the sale price?
• Using a 5% interest rate, a 30-year term, and a monthly payment of 313, what is the maximum loan amount described?
• If an appraiser values vacant land by value per square foot, this demonstrates which concept?
• What factor is addressed by location adjustments?
• When reconciling, the best sales are always the ones that require the fewest or smallest adjustments.
• An elevator is not present in an office building. Comparable Sale 1 had an elevator installed at a cost of $50,000, allowing an extra $3,000 per year in rent. The Gross Income Multiplier is 20. What is the appropriate adjustment for the elevator?
• If a physical difference exists between the subject and a comparable property, what is the correct statement about the necessity of an adjustment?
• When local comparables are scarce, which data may be used to supplement the sales comparison analysis?
• What is the purpose of the sales comparison grid?
• In reconciling values, when one comparable is rated overall superior to the subject and another is rated inferior, what type of analysis is typically used?
• Measures of central tendency include all of the following EXCEPT:
• What other information must the appraiser verify regarding the contract for deed?
• What unit of measurement was used for the vacant commercial lot example?
• Net operating income (NOI) excludes which of the following?
• Which statement below is the proper verification step for a contract-for-deed sale to ensure credibility?
• A low-cost apartment building has been remodeled with very expensive high-end plumbing fixtures, creating a super-adequacy for the structure. This would be an example of which obsolescence?
• Which statement about debt coverage ratio greater than 1 is true?
• What term is used to describe the motivation of an individual, group, or business entity involving the purchase of an item?
• Transferability, as it applies to appraisal, refers to the ability to change the ownership of an asset.
• How should each sale be verified?
• In a scenario where a new owner-occupied retail building is under construction and market evidence shows that properties sell for significantly more than their cost to construct, which appraisal approach is likely to be given greater weight in the final reconciliation?
• If a sales price or terms cannot be verified by a party to the transaction or by the local assessment office, what is usually wise to do?
• In the five-acre parcel scenario, the residential value is what amount?
• Which statement is FALSE regarding the sales comparison approach?
• The indicated pool adjustment is 24%. The subject is superior, so the comparable is adjusted upward. 24% of $30,000 is $7,200. Which of the following best represents the dollar adjustment described?
• How many independent variables are used in simple linear regression?
• An industrial building is worth less than other buildings because it has low ceilings and outdated design and fixtures. This is an example of which concept?
• When valuing a property using the income approach, what is typically used as evidence of market rent?
• Which statement is FALSE regarding the use of listings as comparables in the sales comparison approach?
• It is important for appraisers to consider the specific definition of value that is appropriate for the appraisal assignment.
• Which term describes a sale between related parties that should be avoided in analysis?
• An appraiser is using sale price per square foot as a unit of comparison for a vacant commercial lot. The subject property is 2 acres. One of the appraiser's comparable sales is 0.3 acre; another comparable sale is 6 acres. What should the appraiser consider at this point?
• An appraiser reconciles three comparables with Sale 1 at 225,000 and superior to the subject, Sale 2 at 208,000 and inferior, Sale 3 at 215,000 and inferior, reconciling at 220,000. This is an example of _________ analysis.
• Which statement best describes the Gross Income Multiplier?
• After Hurricane Katrina, why were prices of warehouse buildings in New Orleans related much more strongly to the size of the lot rather than the size of the building?
• Market segmentation subdivides a large market based on which criteria?
• A buyer is unable to obtain typical market financing. The seller agrees to carry the financing for the buyer, at below-market terms. The sale price of this property is likely to be ________ than it would have been if typical market financing had been utilized.
• What is the mode of this set of Gross Rent Multipliers: 69, 77, 88, 77, 91?
• What is the greatest weakness in using GIM as a unit of comparison?
• If an interviewee is rude or refuses to answer a question, what should the appraiser do?
• A comparable property sold for $80,000 and adjustments include downward 10% for financing terms and downward 10% for market conditions. What is the net adjusted sale price?
• Why is verifying arms-length nature important in the Sales Comparison Approach?
• What is a common practice when adjusting for tangible property differences among comparable properties?
• Which statement best describes the appraisal or valuation process?
• Which distribution term describes a symmetrical, bell-shaped curve used to model many natural phenomena?
• Which factor is NOT among the forces influencing real estate markets?
• An appraiser finds a sale and re-sale 18 months apart indicating a 1.5% monthly decrease in value. What might be a problem with using this market conditions adjustment?
• An appraiser inspects a subject property, which is a vacant apartment building. The appraiser's measurements and field notes from the inspection would be considered what type of data?
• If the subject has superior amenities relative to the comps, which direction should the adjustment move?
• Which zones are included in the Concentric Zone Model?
• Which statement best describes gross adjustments?
• To convert a nine-month percentage change of 15% into an annual rate, which method is correct?
• According to the empirical rule, what percentage lie within two standard deviations of the mean?
• What is the principle that states that larger land parcels tend to sell for less per acre than smaller parcels?
• Which scenario would raise concern that a sale is not arms-length?
• Which statement about non-comparability in the sales comparison approach is true?
• Which of these is NOT another name for the paired sales technique?
• A property sold for $60,000, then nine months later for $69,000 with no modifications. What is the indicated annual market conditions adjustment?
• What two kinds of adjustments may be made for elements of comparison?
• Which statement best expresses why the pool adjustment is applied upward when the subject has a pool?
• Unverified sales data gathered from a local multiple listing service would be considered primary data.
• The Sales Comparison Approach relies primarily on which principle, stating that similar properties should set value?
• In the example, what is the annual debt that the average household in this area can afford?
• Which is an example of a time-adjustment method used in paired sales analysis?
• Which of the following is NOT a test criterion for highest and best use?
• Which is NOT cited as a critical factor in selecting an office location?
• What is the final step in the scientific method?
• Marcy is appraising a new owner-occupied retail building under construction, and market-based evidence shows these properties sell for significantly more than their cost to construct. Which appraisal approach is likely to be given greater weight in the final reconciliation?
• What is the result of subtracting the product of GRM and the capitalization rate from one?
• In a sales comparison approach, if the subject property has a pool but the comparable does not, how should the comparable be adjusted?
• Which of the following best describes when adjustments are applied in the sales comparison approach?
• In the five-acre vacant parcel scenario, what is the highest and best use of the property?
• When is the sales comparison approach most effective?
• What is the implication of the subject property having a pool when adjusting the price of a comparable without a pool?
• In addition to terms of sale, which factor must the appraiser verify?
• Unverified sales data gathered from a local MLS would be considered primary data.
• Which statement about data types in real estate analysis is correct?
• Which graphical representation demonstrates a variable that clusters around the mean?
• A commercial building sold for $1,000,000 two years ago and recently sold for $1,115,000. What is the adjustment for time per month using the compounding method?
• Which of the following cost approach factors might require reconciliation?
• Which cost approach element is often not included in standard appraisal report forms, and its omission might distort the cost approach conclusion?
• What is the formula to calculate price per front foot as presented?
• In the sales comparison approach, an appraiser should never simply average the indicated values of the comparable sales.
• What helps appraisers understand and apply accurate analysis in the evaluation of real estate?
• How is the appraiser most likely to get information regarding the details of the financing and its effect on the sale price?
• In reconciliation within the sales comparison approach, the sales with the fewest adjustments are given the least weight.
• When appraising a parcel of real property, when should an appraiser make modifications to the scope of work decision?
• Which USPAP standard governs appraisal reporting?
• In the adjustment sequence, the adjusted sale price becomes the base for subsequent adjustments.
• The Concentric Zone Model explains the proper layout and functional utility of heavy industrial properties, and specifies work zones, office zones, and transition zones.
• In the Massachusetts court case, what happened after the expert assumed a selling price 10% less than the asking price, and then adjusted for the differences in square footage to arrive at his opinion?
• Which statement correctly expands the acronym GRM?
• What are two other names for the empirical rule?
• Sale B is located where relative to the subject and when did it sell?
• The reconciliation process is based on the quality and quantity of the data, and the appropriateness of the appraisal methods and techniques used in the appraisal.
• Tangible differences between the subject and comparable sales are known as what?
• What is the most profitable use to which a property can be put?
• From the paired sales example, what is the implied market value per square foot for building size?
• Under what circumstances might market condition adjustments be unnecessary?
• Which statement best summarizes the role of river frontage in determining value in the given example?
• Jerald is researching data for an appraisal of an apartment building. On the internet, he finds information on employment statistics, housing trends, and transportation studies. What type of data is this?
• Which value characteristic is directly associated with scarcity in the market?
• When verifying sales, which technique should be used?
• What type of sale occurs when the buyer and the seller are unrelated and act without pressure?
• The phrase 'terms of sale' refers to which aspects?
• What is the appropriate stance on using listings when sales data are limited?
• In practice, arms-length verification is part of evaluating what aspect of data quality?
• During verification, if the buyer is the grandson of the seller, what should the appraiser do with this sale?
• If an appraiser is considering whether to express a value range, what is the most important factor to consider?
• Which concept can be used to demonstrate a variable that clusters around the mean?
• What is the focal point of a real property appraisal?
• If the subject property has energy-efficient windows that a comparable sale does not, which statement is true?
• What is the typical final conclusion when reconciling multiple indicators from comparables?
• Utilities and their availability are essential to every market analysis and highest and best use opinion but rarely require adjustments in the sales comparison approach.
• If an appraiser is valuing a property as of a date in the past, what is this type of value opinion called?
• What is the mode of the set of Gross Rent Multipliers: 77, 88, 72, 69, 77, 91?
• Which sampling technique does the Bureau of the Census perform for the Department of Housing and Urban Development?
• In a study which indicates that spending more hours on an appraisal assignment equates to higher customer satisfaction, the number of hours spent would be considered the _________ variable.
• When significant differences exist between the conclusions of the three approaches to value, which action should the appraiser NOT take?
• What is the greatest weakness in using GIM as a unit of comparison?
• If the most likely purchaser of the subject property is an investor, which appraisal approach becomes more relevant?
• What types of owners can file for partition?
• In a seller-financed sale, the appraiser most often obtains the financing details by which method?
• Under economies of scale, how does price per square foot typically change as building size increases?
• Which statement about the value definition used in an appraisal is correct?
• What is a computer-generated model that provides value estimates for properties based on information gathered from agents, brokers, appraisers, public records, and other sources?
• If there is an undersupply of new homes in a market, __________ will remain relatively stable.
• Which factor is least likely to influence office location decisions?
• Which two elements are necessary when using the Gross Income Multiplier to estimate value?
• Which data category best describes information derived from the researcher’s own measurements, such as measurements or notes from an inspection?
• A comparable property sold for $400,000. In the sales comparison grid, it is adjusted downward 5% for financing terms, and upward 10% for conditions of sale. What is the net adjusted sale price?
• If only one approach to value is developed in an appraisal, which statement is true?
• The expense of labor and materials must be equal to or less than value if the construction of a building is economically feasible.
• Which of these would provide a more reliable analysis in the paired sales technique?
• For a contract for deed, what determines the time adjustment in the sales comparison approach?
• If financing terms are below market and the buyer cannot obtain typical financing, the sale price is likely:
• Because real estate is immobile, _________ adjustments are often necessary.
• What caveat accompanies the popularity of having restaurants in office buildings?
• Which data source would be considered primary data in an appraisal?
• What is the purpose of using multiple comparable sales in the sales comparison approach?
• Which of the following is an intangible adjustment?
• Which feature is credited with accounting for about 40 percent of value in the riverfront example?
• If there are only a few comparable sales available, what is likely to be true about the credibility of the value estimate?
• Specific Data in appraisal refers to data collected about a particular subject property.
• In a competitive market, ___________ will function to equalize the quantity demanded by consumers, and the quantity supplied by producers.
• Sale C is located only one block from the subject but has no river frontage. Which option best describes its location and feature?
• What are the forces that influence real estate markets?
• Which concept describes the overall value of ownership rights in real property?
• When analyzing an industrial building, if the appraiser notes that it has 25,000 square feet, this is an example of ______ data.
• In a study where more hours spent on an appraisal correlates with higher customer satisfaction, the number of hours would be classified as the ______ variable.
• Which of these is NOT a test criterion for highest and best use?
• Who determines which sales provide the best indication of value for the subject property?
• If a comparable sale proves to be an outlier, what should the appraiser do?
• Adjustments for tangible property differences may include:
• In extreme cases where an appraiser cannot find sufficient similar sales data to estimate a reliable value by sales comparison approach:
• Among the three uses in the scenario, which yields the lowest value?
• Scenario analysis is particularly relevant to which appraisal consideration?
• Which factor is commonly cited as critical when selecting an office location?
• If there is a physical difference between the subject property and a comparable sale property, what is true about the need for an adjustment?
• A comparable property is currently offered for sale for $89,900. Properties in this area have a typical sale-to-list ratio of 92%. When using this property as a comparable listing, what is the adjustment that is necessary for sale-to-list ratio?
• Which statement best defines qualitative analysis in appraisal terminology?
• Which phrase is an example of economic equilibrium?
• Which of the following is a type of sampling technique used to ensure representation across subgroups?
• Which action would be inappropriate when reconciling multiple value indications?
• What are the most common units of comparison used when evaluating income-producing properties?
• A comparable sale that requires a location adjustment is most likely to be a:
• In the garage example, how much is the indicated adjustment for the four-car garage?
• What term is defined as the present worth of revenue or other benefits expected in the future?
• Which two tests must passes for uses to be feasible in this scenario's highest and best use analysis?
• What is the most appropriately rounded value conclusion for a property that is 5,887 square feet and valued at $164 per square foot when the data collected is typical?
• A property has a debt coverage ratio of less than 1.0. Which statement is accurate?
• An appraiser unable to find comparable old single-family sales finds large old homes converted to apartments. What may this indicate to the appraiser?
• In a data set, which value repeats most often?
• In reconciling data in the sales comparison approach, the appraiser should ensure that:
• The verification of arms-length status is part of which aspect of the valuation process?
• In reconciling data in the sales comparison approach, what should the appraiser ensure?
• When an appraiser retrieves measurements and field notes from her property inspection two years prior, this data is an example of which data type?
• Which category is listed as a property type in market segmentation?
• What branch of mathematics analyzes random phenomena?
• In a data set, which term describes the value that occurs most often?
• Which best describes the paired sales technique used in appraisals?
• Under a market undersupply of new homes, which variable is expected to remain relatively stable?
• What is the primary purpose of the paired sales technique in real estate appraisal?
• In the riverfront example, river frontage accounted for approximately what percent of value?
• An appraiser is analyzing sales of office buildings, and finds a 20,000 square foot office building which sold for $60 per square foot. Considering the economies of scale principle, which of these would be the MOST likely sale price for a 35,000 square foot office building?
• A comparable property sold for $80,000. In the sales comparison grid, it was adjusted downward 10% for financing terms and 10% for market conditions. What is the dollar adjustment for financing terms?
• Which type of data is measured?
• What is one way of estimating an adjustment for utilities?
• What is the mortgage amount obtainable under the terms given, based on the monthly payment of $313?
• Where does an appraiser preserve evidence of USPAP compliance?
• In the corner versus side street example, the corner location adds how much more value than a side street?
• Using non-numeric techniques to reconcile comparable sales into an indication of value is considered which type of analysis?
• In research, which term describes the variable that is intentionally altered to observe effect?
• In a sales comparison analysis, ignoring arms-length status could lead to what result?
• Since September 11, 2001, security has become the single most important influence on tenants' decisions to relocate. This statement is
• Why would an appraiser ask you why you purchased this property instead of another?
• Industrial value for five-acre parcel at $50,000 per acre is what total?
• When the national real estate market began to decline in 2006-2007, what did many appraisers do regarding time adjustments?
• Making numeric dollar adjustments to the sale prices of comparable properties would be considered which type of analysis?
• Adjustments in the sales comparison approach must be ___________.
• An appraiser is valuing a small apartment building and gathers information on demographics and employment trends. This data would be considered what type?
• If a subject has energy-efficient windows, and a comparable does not, what is the most likely market-driven approach to adjustment?
• What does GIM stand for?
• What kind of data is information personally compiled by an appraiser?
• If a comparable sale is determined to be inferior to the subject property, what type of adjustment is typically applied to the sale price?
• A comparable property sold for $80,000. In the sales comparison grid, two downward adjustments were made: 10% for financing terms and 10% for market conditions. What is the net adjusted sale price?
• If non-comparability is an issue with one or two sales in the sales comparison approach:
• Which principle explains why larger land parcels tend to sell for less per acre than smaller parcels?
• Which part of USPAP addresses communication of assignment results?
• A variable that falls outside the parameters of what can be expected is referred to as a(n) _________.
• The sales comparison approach is based primarily on the principle of ___________, which states that a prudent purchaser will pay no more for a property than he or she would pay for a similar or comparable property.
• Market segmentation defines and subdivides a large homogeneous market into segments based on which criteria?
• A 20-story office building would be classified as which type of office building?
• An appraiser finds a comparable sale in the local MLS that was purchased by the seller's grandson. What should be done with this sale during verification?
• Which maintenance aspects are most commonly cited as issues in office buildings?
• What adds the most value to land and the improvements?
• What happens when a disagreement occurs for a forced sale?
• Reconciliation is not necessary within the income approach; instead, the appraiser simply calculates a conclusion and reconciles this final indicated conclusion of the approach with the other approaches developed.
• In the sales comparison approach, each comparable sale ___________.
• Which two variables combine to make the Gross Rent Multiplier?
• An appraiser makes the following adjustments to Comparable Sale 1: +28,000, +35,000, -12,000, +8,000, -15,500. What is the net adjustment?
• When identifying a property’s highest and best use, which factor is essential?
• Once data has been gathered, what is necessary for a credible value by the sales comparison approach?
• Which term describes a sale where the buyer and the seller are not related and act independently?
• An appraiser valuing a complex mixed-use property uses three comparables and arrives at an indicated value. Which statement is true regarding this situation?
• What does EVR stand for?
• Which of the following best describes a market condition adjustment in paired sales?
• A low-cost apartment building remodeled with very expensive high-end plumbing fixtures creates a super-adequacy. This is an example of which type of obsolescence?
• What type of obsolescence is illustrated by an industrial building with low ceilings and outdated design?
• Which term describes the curve used to show data that cluster around the mean?
• An industrial building sold for $800,000. Six months later, it sold again for $880,000. No physical changes were made to the property over this time. What is the annual adjustment for market conditions indicated by this sale?
• Based on the paired sales data, what would be the dollar adjustment for a 150 square foot difference in building size?
• Which principle is the primary principle associated with the Sales Comparison Approach methodology?
• Carole is appraising a vacant land parcel that could be used for residential, commercial, or industrial purposes. What is the highest and best use?
• Which term describes a computer-generated model that uses data from agents, brokers, appraisers, public records, and other sources to estimate value?
• Which of the following would NOT be a tangible difference between the subject property and a comparable sale?
• True or False: In an appraisal, there is only one indication of value.
• Stairwells, hallways, and storage areas would be included in which building measurement?
• An improvement that is highly luxurious relative to its need may create which type of obsolescence?
• Why would an appraiser ask you why you purchased this property instead of another?
• Why should an appraiser make a physical inspection of each comparable sale property?
• What is the most profitable use to which a property can be put?
• Which situation would most likely lead to disregarding a sale in the appraisal process?
• An appraiser is valuing a commercial building. The owner recently had the parking lot paved at a cost of $50,000. Comparable Sale 2 has a gravel parking area. Which statement is the most correct regarding the adjustment for the paved parking area?
• Which value characteristic implies the presence of a need or demand, which considers the monetary power to fill that need?
• True or False: Estimating site value using three or four land sales and averaging their sale prices is an acceptable practice.
• Property C is a small retail building with an energy-efficient HVAC system and a good highway location, which sold for $375,000. Property D has a standard HVAC system and an inferior location on a side street, which sold for $335,000. Analysis of other paired sales indicates that retail properties along highways sell for $30,000 more than properties on side streets. Assuming the subject has a good highway location and an energy-efficient HVAC system, what is the indicated HVAC adjustment to Property D?
• The empirical rule states that in a normal distribution, what percentage of observations lie within two standard deviations of the mean?
• Economic equilibrium is described as which of the following statements?
• In a competitive real estate market, what term best describes the price at which the market clears?
• During interviews when a respondent is rude or refuses to answer, what is the recommended conduct?
• An appraiser finds a sale and re-sale of a property which occurred 18 months apart, indicating a 1.5% monthly decrease in value. What might be a problem with using this 1.5% market conditions adjustment in the sales comparison approach?
• Which of these is created in the mind of an individual or market participant subjectively?
• The Concentric Zone Model specifies which zones for heavy industrial properties?
• If an appraiser is reviewing her data and finds an outlier, what should she do?
• If a comparable sale property had an addition put on after the sale, the appraiser should:
• Which term describes a value opinion that is prepared as of a date in the past?
• Market segmentation separates the market for different types of properties such as:
• Which condition best describes the impact of a roadway divided by a median on commercial property values?
• Why would you ask a question regarding property interest besides the real estate?
• A property sold for $150,000 with gross annual rental income of $7,500. What is the indicated Gross Income Multiplier (GIM)?
• In the five-acre parcel scenario, the total value for commercial use is what amount?
• A variable that falls outside the parameters of what can be expected is referred to as a(n) _________.