TEST

REAL ESTATE APPRAISERS

1. The cost of improvements identical utility to those of the subject property is called
the subjects
a.
c. Sales price
Reproduction
d. Market value
cost b.
Replacement cost
2. All other factors being equal, as the location of an income property becomes less
desirable, the cap rate used will be
a.
c. Less
Lower b.
reliable d.
Higher
Unafected
3. Is a commercial structure is a rectangle with side of 65 meters and 135 meters and
the current local cost to built a similar structure is P4,500.00 per square meters.
What is the estimate construction cost of the structure using the square foot
method?
c.
P39,487,500.0
a.
0 d.
P18,000,000.00
P36,450,000.00
b.
P180,000,000.00
4. The mean of five house sales price of P100,000, P75,000, P175,000, P200,000 and
P150,000 is
a.
c.
P140,000.0
P700,000.00
0 b.
d.
P150,000.00
P175,000.00
5. The peso value or percentage amounts that, when added to or subtracted
from the sale price of a comparable to provide an indication of the value of a
subject property, are referred to as:
a. Comps
c.
b.
Multipliers
Adjustment
d. Sales
6. The house flooring as an area of 30 square meters. How many vinyl tiles are
needed If the tiles size is 12 inch. By 12 inch. (choose the nearest answer)
a. 350
tiles b.
332 tiles
7. A hectometer is equivalent to:
a.
b.

1 meter
10 meters

Cesar E. Santos Real Estate Academy, Inc.: Past Exam 2003

c.
d
.

380 tiles
323
tiles

c
.
d.

100
meters
300

8. What would be the recapture rate on a building having a remaining economic life a
fifteen (15) years?
a. 150
c. 15 percent
percent b.
d.
6.67 percent
7 percent

Cesar E. Santos Real Estate Academy, Inc.: Past Exam 2003

9. A building has rental income of P350/month. Using a monthly gross rent multiplier of
125, the value of the building would be estimated at
a.
c.
P35,714.00 b.
P43,750.00
P473,500.00
d.
P375,142.00
10. A home cost P400,000.00 is surrounded by homes prices substantially higher.
Which principle would be lost applicable to the P400,000.00 home in a current
appraisal.
a.
c.
Substitution
Regression
b.
d.
Contribution
Progression
11. Which of the following is not a test to determine whether a given piece of personal
property is a fixture?
a. The intention of the person affixing the personal
property of the land b. The method of afixation
c. The use or adaptability of the personal
property to the d.
All of the above
12. Of the following, the most important variable in determining the value of a parcel of
real estate is
a.
c. Credit of the
Location
buyer d. Credit
b.
of the seller
Zoning
13. As the supply of the developable land decreases, and as demand continues to
rise, the value of the remaining land will generally
a. Remain about the
same b.
Tend to
rise in value
c. Tend to fall in value
d. Demand has no efect in values
14. The principle of increasing or decreasing return can best be
applied when there is a.

An improvement on a

parcel of land
b. An under improvement on a
period of land c. A poorly designed
home
d. None of the above
15. A statement of limiting conditions in necessary in an appraisal because
a.
b.
not
d.

It notifies the client of items subject to which the appraisal is made

16. Which of the following is not a basic method of land valuation?

a. The market approach

17. The most important variable of the market approach of land valuation?
a.
Sufficient number of
recent sales b. Proper tax
records
c. Land and improvements assesses on the
same basis d. Proper tax assessment
18. Which of the following land valuation approaches considers the depreciated value of
the improvement?
a. The comparative
approach b.
The
abstractive approach
c. The land development
approach d. None of the
above
19. What is the difference between replacement cost new and reproduction cost new
a.
Reproduction cost new is an exact replica;
replacement cost new is not b. Reproduction cost new
is an exact replica; reproduction cost is not
c. Reproduction cost new is the cost to produce the same utility
d. There is no diference
20. Which of the following types of depreciation is always for all practical purpose,
incurable?
a.
Economic
obsolescence b.
Functional
obsolescence c.
Physical deterioration
d. None of the above; all types of depreciation are, practically speaking,
curable
21. Which of the following terms refer to the right of a person who owns a property
but has leased it to someone else?
a.
Leased fee
c. Fee simple
estate b.
estate d.
Leasehold estate
Lessees estate
22. Regard to zoning, which of the following statement is CORRECT?
a. Zoning ordinances are always more restrictive than
deed restriction b. A nonconforming use and a variance
refer to the same thing
c. Zoning normally establishes land-use districts and provided for
diferent restriction with east districts
d. Exclusionary zoning and spot zoning to the same thing
23. The area of a trapezoid is computed as:
a.
sum of parcel side
x altitude b. sum of all

side x inside radius c.

24. A property has 25 apartment unit, 15 units-two-bedroom unit renting for P5,000.00
per month each and
10-bedroom unit renting for P2,000.00 per month each. There are 14 two-bedroom
unit occupied had 8 one-bedroom occupied. The potential gross income yearly is:
a.
c.
P1,100,000.00
P1,140,000.0
b.
0 d.
P1,120,000.00
P1,150,000.00
25. There is an important technical difference between the term reproduction cost and
replacement cost.
Replacement cost refers to:
a. The cost of construction an exact replica building
b.
The cost of construction a building that would have similar utility
to the subject property
c. The cost of reproduction the
subject building d. None of the above
26. The capitalization of a rental loss is used to measure which of the following
types of depreciation a.

Incurable functional and economic

obsolescence
b. Curable functional and economic obsolescence
c. Curable physical deterioration
d. None of the above
27. The determination of the capitalization rate by the process of dividing the net
income by the selling price is:
a.
The comparative
sales approach b.
The
band-of-investment method c.
The summation method
d.
None of the
above
28. The term reconciliation as used in appraising means?
a. The process of determining value by referring to the highest sales that
have occurred in the neighborhood
b.
The process of bringing together all of the sales in the area
and analyzing them
c. The process of bringing together the values indicated by each
approach so that the appraiser can form an opinion about the
value of the subject property
d. The process of analyzing comparable rental properties and
establishing a gross rental multiplier
29. In the appraisal of a new, detached, single-family residence, a proper weighting
would include
a. The market
c. The income
approach b. The
approach d.
Both
cost approach
a and b
30. Which of the following is a limitation of the
cost approach?
a.

Need to find a sufficient number of comparable sales

b.
Losses validity when applied to significantly
over improved properties c. Need comparable rental
information
d. Need proper capitalization rate

31. An owner of a parcel of land leases the land to a tenant for ten years. The next
day the owner sells the land to a third party. Which of the following statement is
CORRECT?
a. The new owner has an option as to whether to accept the
terms of the lease b. The tenant may voluntarily terminate the
lease
c.
The tenants leasehold is not affected
d. The tenants legal interest in automatically terminated by operation of law
32. The purpose of the appraisal assignment is usually to estimate which type of value?
a. Investment
c. Value is use
d. Replacement value
value b.
Market value
33. All improvement cost, less depreciation, are subtracted from sales price to
derive land value in the process is called?
a. Ground rent
c. Entrepreneurial
capitalization b.
enterprise d.
Extraction
Assemblage
34. The cost of improvements identical in design and material to those of the subject
property is called the
subjects
a.
c. Sales price
Reproduction
d. Market value
cost b.
Replacement cost
35. In using the cost approach to appraising, the estimated construction cost of
improvements usually will be based on
a. Their original cost
b.
The cost of new improvements
at current prices c. Book value
d. The nation cost average of all components
36. The appropriate adjustment for time is determined to be nine percent per year. The
time adjustment for a comparable property that was sold a year ago for P50,000.00
per sq.m. is:
a. Less P9,000.00 per
c. Plus
sq.m. b. Plus
P9,000.00 d.
P6,750.00 per sq.m.
P4,500.00
37. If the commercial structure is a rectangle with side of 65 meters and 135 meters
and the current local cost to built a similar structure is P4,500.00 per sq.m., What is
the estimated construction cost of the structure using the square meter method?
a.
c.
P18,000.00 b.
P39,487,500.00
P180,000.00
d.
P36,450,000.00
38. A comparable property is identically to the subject property being appraised. The
comparable sold six months ago for P1,000,000.00. As the appraiser, you must
make an adjustment for the time difference between the subject property and the
comparable. You have found a paired sale of two houses, one of which sold one
year ago for P800,000.00 and other sold yesterday for P880,000.00. What is the
proper estimated adjustment sales price for your comparable?
a. P880,000.00

b.
P1,000,000.00

c.
P1,050,000.00
d.
P1,100,000.00

39. A house and lot are prices at P8,800,000.00. The lot alone is valued at
P1,650,000.00. What percentage of the total asking price is attributable to the value
of the lot?
a.
c. 18 %
18.5%
d. 18 %
b.
19.0%
40. In a certain real estate transaction, the purchase price of a 2.5 hectare land is
P50,000.00/hectare as indicated in the Dee of sale; the unit value per Assessors
Office is P320.00/sq.m.; the zonal of P550.00/sq.m. What is the capital gains tax
paid to the B.I.R.?
a.
c. P6,875.00
P6,250.00
d. None of the above (825k)
b.
P6,500.00
41. Which of t e following estimates would result in a capitalization rate of four percent?
a. Potential gross income P200,000.00; value
P5,000,000.00 b. Effective gross income
P200,000.00; value P5,000,000.00 c. Net
operating income P200,000.00; value
P5,000,000.00 d. None of the above
42. A house which costs P400,000.00 is surrounded by houses priced substantially
higher. Which principle would be most applicable to the P400,000.00 house in a
current appraisal?
c. Regression
a.
d.
Progression
Substitution
b.
Contribution
43. Which of the following statement applied to a property with a nonconforming use?
a. The existing nonconforming use i9n the highest
and best use b.
A nonconforming use is likely
to arise from changes in zoning
c. A conforming use property may be under improved but cannot be over
improve
d. In the sales comparison approach, an appraiser does not have to
make a separate adjustment for the nonconforming use.
44. The annual property tax on a parcel of land you are appraising is P5,000.00. The
taxing authority assesses land at 50 percent of market value. If the tax rate is 2% of
the assesses value, what is the estimates market value of the land?
a.
c. P5,000,000.00
P500,000.00
d. None of the above
b.
P250,000.00
45. The basic accepted formula expressing the relationship between value, rate and
income rate multiply by income equal value
a.

True

b.

False

46. There is theory that all structures have a total useful life that can be predicted. The
method of estimating accrued depreciation based on this theory is:
a. Capitalization income or rental method
b. Sales data or market method (abstraction method)
c.
Straight-line or age-life method
d. Cost-to-cure or observed condition method

47. The principle that prevents an appraiser from appraising a lot for its
commercial potential and the improvements thereon for residual value is the:
a. Principle on increasing and
decreasing return b.
Principle of
consistent use
c. Principle of highest and
best use d. Principle of
anticipation
48. The income Capitalization Approach to value assumes that there is no relationship
between the value of the subject property and the income which it is capable of
generating
a.

True

b.

False

49. Rent saving or rental benefit is the diference between what a lessee is current
paying (as specified in the lease contract) and what the true market rent is at the
time of valuation.
a.

True

b.

False

50. The leases fee estate pertain to the property interest of the?
a.
Lessee
b.
Lessor
c. Owner of the land in fee
simple d. Owner of the
leasehold estate