1.The market data method (comparative approach) is best used for:

A. houses                                  C. vacant land
B. condominiums                        D. all of the above

2. Which of the following is NOT one of the three methods to determine the value of real property?

A. Correlation approach            C. Capitalization approach
B. Cost approach                       D. Comparative approach

3. The approach that takes the current selling prices of similar properties and adjusts these prices for any differences is called the:

A. income approach                           C. cost approach
B. comparative approach                  D. none of the above

4. Which of the following is NOT a type of depreciation?

A. political              C. functional
B. physical               D. economic

5. Loss of value due to outmoded style or nonusable space is called:

A. income obsolescence                     C. economic obsolescence
B. functional obsolescence                 D. physical deterioration

6. Another term for the income approach is:

A. replacement approach             C. capitalization approach
B. correlation approach                 D. appropriation method

7. The unit of comparison in the market data approach for a house would be:

A. just lot size                            C. location
B. lot and building size                  D. the entire property

8. The replacement cost approach to appraisal is best used for:

A. raw land                          C. single-family dwellings
B. new construction             D. apartments

9. A quick way to convert gross income into the approximate value is to use a:

A. mortgage calculator                     C. gross rent multiplier
B. gross comparable multiplier         D. all of the above

10. Which of the following is an example of economic obsolescence?

A. Rundown neighborhood      C. Eccentric design
B. Peeling paint                         D. Wear and tear on the load bearing members

11. Which of the following would be considered operating expenses to be subtracted from the gross income of a property when determining its value through the income capitalization approach?

A. Interest payments             C. Payments on loan principal
B. Property taxes                 D. All of the above

12. Depreciation can be:

A. curable                     C. loss in value due to any cause
B. incurable                     D. all of the above

13. What is NOT an example of functional obsolescence?

A. Massive cornices                 C. Out-dated kitchen
B. Hole in the roof                     D. One-car garage

14. Which type of depreciation is incurable; meaning nothing can be done?

A. Physical deterioration                     C. Economic obsolescence
B. Functional obsolescence                 D. All of the above

15. Which of the following is TRUE concerning fee appraisers?

A. They don’t charge a fee                                     C. They are self-employed
B. They are mortgage company employees             D. none of the above

16. The capitalization rate is a:

A. return “on” investment                      C. return “on” and “of” investment
B. return “of” investment                          D. none of the above

17. Which appraisal method measures the “present worth of future benefits”?

A. Market data approach                 C. Income approach
B. Cost Approach                             D. All of the above

18. Which appraisal method uses the principle of substitution?

A. Market data approach                 C. Income approach
B. Cost approach                             D. All of the above

19. In the income approach, the Net Income divided by the Capitalization Rate equals:

A. value                             C. expenses
B. interest rates                     D. all of the above

20. Because they are “asking prices” in most cases listings are:

A. are lower than market value                         C. set a ceiling on market value
B. are always grossly inflated                              D. none of the above