REAL ESTATE BROKER REVIEWER

BASIC APPRAISAL FOR REAL ESTATE BROKERS

1. Estimate or opinion of value.
a. Estimating
b. Appraisal
c. Valuing

2. Employment and interest rate.

a. Economic Factors
b. Political factor
c. Economic Factors

3. Presence of pollutant in the area

a. Ecological factors
b. Area factors
c. Environmental factors

4. The real estate location, size and condition.

a. Environmental
b. Physical
c. Description

5. Demand for an aging population.

a. Social factors
b. Population factors
c. Demand factors

6. The value that appraisers deal with most often.

a. Appraisal Value
b. Economic Value
c. Market value

7. Implies that no relationship exists between the parties and that the buyer and seller each act in
his or her own best interest.
a. Free from biases
b. Arms length transaction
c. Act of Freedom

8. Value a property holds to a specific person who may use it for a specific purpose that's generally
unavailable to the typical buyer.
a. Value in use
b. Market value
c. Sentimental value

9. Value to a specific investor with a specific plan for the property.

a. Specific value
b. Investor value
c. Investment value

10. Value used on property for tax purposes.

a. Assessed value
b. Tax value
c. Property value

11. All property value is created by the of the future benefits the property will provide.
a. Forecasting
b. Anticipation
c. Speculating

12. You never want to build a house that costs 100,000.00 on a piece of vacant land that costs
500,000.00
a. Conformity
b. Anticipation
c. Balance

13. The idea that nothing remains the same.

a. Constant
b. Change
c. Constant change

14. If that building is a success other builders are likely to follow with more office buildings until the
last office building a builder erects remains partially vacant because the suppliers have created a
surplus of office space.
a. Copy
b. Competitor
c. Competition

15. If you live in a neighborhood of single-family houses, you don't want an office building to be built
across the street from your house.
a. Conformity
b. Balance
c. Zoning
16. Use that result in the highest value for that property.
a. Economic use
b. Profitable use
c. Highest and best use

17. The whole is sometimes greater than the sum of its parts.
a. Plottage
b. Summation
c. Combination

18. The higher values of larger homes tend to have a positive effect on the lesser value of the smaller
home.
a. Progression
b. Regression
c. Degradation

19. The buyer will pay no more for a property than the cost of an equally desirable alternative
property.
a. Substitution
b. Affordability
c. Thriftiness

20. The positive difference between selling price and cost

a. Profit
b. Surplus productivity
c. Net income

21. Involves calculating the cost of construction by multiplying the square footage of the structure
by the construction cost for that particular type of building.
a. Quantity method
b. Unit in place method
c. Square footage method

22. Provides the cost to construct a building by estimating the installation costs, including materials,
of the individual components of the structure.
a. Unit in place method
b. Square footage method
c. Quantity method
23. It requires you to break down all the components of a building and estimate the cost of the
material and installation separately.
a. Square footage method
b. Unit in place method
c. Quantity survey method

24. The loss in value to any structure due to a variety of factors, such as wear and tear, age, and poor
location.
a. Net loss
b. Depreciation
c. Old

25. The normal wear and tear that a building experiences as it ages and it depends on the original
quality of construction and the level of ongoing maintenance.
a. Quality
b. Depreciation
c. Physical deterioration

26. Form of deterioration that is economically feasible to repair.

a. Quality
b. Depreciation
c. Curable

27. Outmoded design in older structures or unacceptable design in newer structures usually points
to a type of depreciation.
a. Economic obsolescence
b. Functional obsolescence
c. Technological obsolescence

28. Estimating depreciation is a way to calculate depreciation caused by wear and tear on the
structure that presumes that structures wear at the same rate each year.
a. Sum of digit year
b. Straight line method
c. Diminishing

29. The number of years a building contribute to the value of the land.
a. Serviceable life
b. Profitable life
c. Economic life
30. Estimate of how old the building appears to be.
a. Appearance
b. Physical age
c. Effective age

31. Analyzes the future financial benefits of a piece of real estate and converts it into an estimate of
present value.
a. Cost approach
b. Income approach
c. Financial approach

32. Technique for estimating value is based on the idea that a property value can be calculated as a
multiple of the gross rent.
a. Gross rent multiplier
b. Rent multiplier
c. Net rent multiplier

33. Uses the gross annual rent rather than monthly

a. Gross income multiplier
b. Net income multiplier
c. Income multiplier

34. Method for appraising real estate based on its income.

a. Income capitalization approach
b. Income Approach
c. Capital approach

35. The income that the building generates when rented at 100 percent occupancy.
a. Potential profit
b. Potential income
c. Potential gross income

36. The result of subtracting the vacancy and collection loss from potential gross income.
a. Net income
b. Net profit
c. Effective gross income

37. The process of analyzing and weighing the results of the various approaches as applied to an
appraisal problem.
a. Reconciliation
b. Analysis
c. Balancing

38. Valuation approach use in the unique properties such as the church
a. Income approach
b. Cost approach

39. Valuation approach use in investment properties such as office space or commercial space.
a. Income approach
b. Rent approach
c. Cost approach

40. Valuation approach use in the single family homes.

a. Income approach
b. Cost approach
c. Sales comparison approach

41. Valuation approach use in the unique properties such as the church
a. Sales approach
b. Income approach
c. Cost approach

42. Value is determine by the interaction of forces in the appropriate market

a. Principle of demand and supply
b. Market
c. Forces

43. The value of an element or component of property depends on how much it contributes to the
whole.
a. Contribution
b. Balance
c. Plottage

44. When successive element of one or more factor of production added to a fix amount of factor
there is a resulting in income up to a point of maximum return.
a. Income
b. Succession
c. Increasing and diminishing return

45. Value is created by expectation of future benefits.

a. Forecasting
b. Anticipation
c. Prediction
46. Value of superior property is adversely affected by the value of inferior property.
a. Detraction
b. Progression
c. Regression

47. The key criterion in the valuation of real property or personal property.
a. Utility
b. Profit
c. physical

48. Tasked with the professionalizing and raising the level of property valuation industry by
developing valuation standard for public and private use.
a. DTI
b. DENR
c. DOF

49. The often market measure of agriculture or farm properties.

a. Per square meter
b. Per hectare
c. Per foot

50. Cost to create a virtual replica of the existing structure.

a. Reproduction
b. Replacement
c. Recopy
51. Cost of constructing a structure with comparable utility.
a. Replacement
b. Reproduction
c. Construction

52. A mass appraisal process which facilitate the appraisal of multiple properties at a given date.
a. Appraisal facilitation
b. Mass appraisal
c. Preparation and Application of SMV

53. Process of valuing many properties at the same time.

a. Mass appraisal
b. Numerous appraisal
c. Current appraisal
54. Very open and most transparent method of selling property.
a. Free sale
b. Open sale
c. Auction sale

55. The seller is under financial or other pressure to sell quickly.

a. Coercive Sale
b. Forced sale
c. Emergency sale

56. When the seller help finance part or all of the purchase price.
a. Financer
b. Buyer financing
c. Sellerfinancing

57. The seller receives the full payment from the buyer.
a. Cash sale
b. Full sale
c. Option sale

58. The amount for which an asset could be exchanged between knowledgeable, willing parties in
an arm's length transaction.
a. Market value
b. Fair value
c. Book value

59. An amount above the Market Value that reflects particular attributes of an asset that are only of
value to a Special Purchaser.
a. Market value
b. Purchaser value
c. Special value

60. Additional element of value created by the combination of two or more interests where the value
of the combined interest is worth more than the sum of the original interests.
a. Synergistic value
b. Plottage value
c. Market value

61. Describes a situation where an entire business is transferred as an operational entity.

a. Business value
b. Going concern value
c. Operational value
62. This describes a situation where a group of assets employed together in a business are offered
for sale separately, usually following a closure of business.
a. Liquidation value
b. Closirg value
c. Losing value

63. Describes the value of an asset that has reached the end of its economic life for the purpose it
was made.
a. Economic value
b. Salvage value
c. Disposal value

64. Final step in the valuation process.

a. Valuation report
b. Analyzing report
c. Reconciliation

65. The present value of the future cash flows expected to be derived from an asset or
cash-generating unit.
a. Derivation value
b. Value in use
c. Transposable value

66. Provide a framework for valuations of assets that are to be offered or taken as loan security.
a. PVA 1
b. PVA 3
c. PVA 2

67. In the absence of sufficient direct market evidence, acceptable method of arriving value of
specialized property.
a. Cost method
b. Income method
c. DRC

68. Resulting from external influences may affect the value of the asset.
a. Obsolescence.
b. Depreciation
c. Physical
69. Individual properties, such as hotels, fuel stations, and restaurants that usually change hands in
the marketplace while remaining operational.
a. Operational Property
b. Trade Related property
c. Changeable property

70. A revenue-raising procedure, based on the assessed value of property related to a scale of
charges defined by statute within a specified timeframe.
a. Ad Valorem Property Taxation
b. Assessment
c. Taxation

71. The process of analyzing sets of property and market data to determine the specific parameters
operating upon a model.
a. Reconciliation
b. Calibration
c. Analysis

72. Approaches in valuing historic properties, except.

a. Cost and income capitalization approaches
b. Sales comparison.
c. Income approach

73. A valuation review performed by a Valuer to form an opinion as to whether the analyses,
opinions, and conclusions in the report under review are appropriate, reasonable, and supportable.
a. Peer Review
b. Technical review
c. Review

74. A valuation review that includes inspection of the exterior and sometimes the interior of the
subject property and possibly inspection of the comparable properties to confirm the data provided
in the report.
a. Held review
b. Peer review
c. Technical review

75. A valuation review that is limited to the data presented in the report, which may or may not be
independently confirmed.
a. Technical review
b. Peer review
c. Desk review
76. A valuation review performed by a client or user of valuation service as an exercise in due
diligence when the valuation is to be used for purposes of decision-making such as underwriting,
purchasing, or selling the property.
a. Desk review
b. Administrative review
c. Peer review

77. Review of a Valuer's work undertaken by another Valuer exercising impartial judgment.
a. Peer review
b. Desk review
c. Valuation review

78. Comparative approach that considers the sales of similar or substitute assets and related market
data.
a. Direct market comparison approach
b. Market approach
c. Sales approach

79. Considers the income that an asset will generate over its remaining useful life and estimates
value through a capitalization process.
a. Income approach
b. Market approach
c. Sales approach

80. Applies the basic economic principle that a buyer will pay no more for an asset than the cost to
obtain an asset of equal utility, whether by purchase or by construction.
a. Market approach
b. Cost approach
c. Sales approach

81. Refers to a price expressed in terms of money payable for the asset in an arm's length market
transaction.
a. Selling amount
b. Payment amount
c. Estimated amount

82. Refers to one who is motivated, but not compelled to buy.

a. Willing buyer
b. Free buyer
c. Motivated buyer
83. Establishes that each party is motivated to undertake the transaction, but neither is forced or
unduly coerced to complete it.
a. Without compulsion
b. Willingness
c. Freedom

84. Refers to the process of analyzing sets of property and market data to determine the specific
parameters of a model.
a. Calibration
b. Reconciliation
c. Analysis

85. Method of land valuation in the absence of vacant land sales, whereby improvement values
obtained from the cost model are subtracted from sales prices of improved parcels to yield residual
land value estimates.
a. Desk method
b. Abstraction method
c. Sale price method

86. The distribution of the appraised value of the property between land and building.
a. Distribution
b. Matching
c. Allocation

87. The period of time over which the structure may reasonably be expected to perform the function
for which it v/as designed or intended.
a. Economic life
b. Useful life
c. Serviceable life

88. The amount of money necessary to purchase the finished goods or item of property when offered
for sale in the open market.
a. Price
b. Payment
c. Tender

89. Conditions and assumptions under which appraisal is made.

a. Assumption
b. Limitation
c. Limiting condition
90. The process of converting into present value (or obtaining the present worth of) a series of
anticipated future periodic installment of net income. In real estate appraising, it usually takes the
form of discounting.
a. Discounting
b. Capitalization
c. Present value

91. Statement that appraisers, in their professional capacity, personally conducted the appraisal in
an objective manner.
a. Valuation value
b. Appraisal report
c. Certification of report

92. Difference between the value of the property and current debt.
a. Net payable
b. Net income
c. Equity

93. Is the use of borrowed money to finance all or part of purchase price of the real estate.
a. Leverage
b. Financing
c. Borrowing

94. Influence outside of the property boundary that may affect its value.
a. Internalizes
b. Externalities
c. Outsiders

95. Risk due to uncertainty in rent, vacancies and operating expenses.

a. Business risk
b. Financial risk
c. Operational risk

96. Risk due to uncertainty in future interest.

a. Interest risk
b. Business risk
c. Operational risk

97. Risk due to the use of debt financing.

a. Operational risk
b. Business risk
c. Financial risk
98. Land that has been improved for specific purpose.
a. Project area
b. Site
c. Improved area

99. Tract of land divided into lots suitable for home building.
a. Subdivision
b. Condominium
c. Plot

100. Prepared the first documented valuation manual in Ireland.

a. Sir Thomas Preston
b. Sir William Benjamin
c. Sir William Petty

101. The difference between property value and debt value.

a. Down payment
b. Equity
c. Deposit

102. Identify the market supply and demand of a particular product

a. Market analysis
b. Supply and demand analysis
c. Situation analysis

103. It assumed that deterioration and wear occur at a constant average annual rate
a. Straight line depreciation
b. Average depreciation
c. Constant depreciation

104. Loss in value due to factors outside the properties

a. Economic obsolescence
b. External obsolescence
c. Physical obsolescence

105. Poor layout is an example of .

a. Physical obsolescence
b. Functional obsolescence
c. Material obsolescence

ANSWER KEYS
 Basic Appraisal for Real Estate Brokers

1 B
2 A
3 C
4 B
5 A
6 C
7 B
8 A
9 C
10 A
11 B
12 C
13 B
14 C
15 A
16 C
17 A
18 A
19 A
20 B
21 C
22 A
23 C
24 B
25 C
26 C
27 B
28 B
29 C
30 C
31 B
32 A
33 A
34 A
35 C
36 C
37 A
38 B
39 A
40 C
41 C
42 A
43 A

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 Basic Appraisal for Real Estate Brokers

44 C
45 B
46 C
47 A
48 C
49 B
50 A
51 A
52 C
53 A
54 C
55 B
56 C
57 A
58 B
59 C
60 A
61 B
62 A
63 B
64 A
65 B
66 C
67 C
68 A
69 B
70 A
71 B
72 C
73 B
74 A
75 C
76 B
77 C
78 A
79 A
80 B
81 C
82 A
83 A
84 A
85 B
86 C

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16
 Basic Appraisal for Real Estate Brokers

87 B
88 A
89 C
90 B
91 C
92 C
93 A
94 B
95 A
96 A
97 C
98 B
99 A
100 C
101 B
102 A
103 A
104 A
105 B

PREPARED BY ODPELS

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