3 Real Estate Valuation Online Quiz Questions

Which property and evidence scenario is the clearest fit for the sales comparison approach?

An appraisal is an informed opinion of value as of a specific date, not a guarantee of the price the property will later sell for.

A comparable property is inferior to the subject in a feature that buyers value. How should the appraiser account for this difference in the sales comparison approach?

A property has stabilized annual NOI of $90{,}000$ and a market-supported capitalization rate of $7.5\%$. Using direct capitalization, what is its indicated value in dollars?

An appraiser estimates land value at $260{,}000$, current replacement cost at $740{,}000$, and total depreciation at $180{,}000$. What value does the cost approach indicate, in dollars?

An appraiser uses discounted cash-flow analysis for an income-producing property. Which assumptions should be supported by market evidence? Select all that apply.

Which criteria define a property's highest and best use? Select all that apply.

When an appraiser uses more than one valuation approach, the final opinion must be the arithmetic average of the approaches' value indications.

If replacement cost is estimated accurately, the cost approach indication necessarily equals the property's market value.

A seller spent $40{,}000$ on an improvement, but market evidence indicates it adds only $12{,}000$ to the property's value. Which valuation principle explains why its value contribution is not simply its installation cost?

A rental property's annual income before vacancy and expenses is $120{,}000$. Vacancy and collection losses are $9{,}000$, and operating expenses are $21{,}000$. What is its annual NOI, in dollars, before debt payments?

An appraiser is valuing an apartment building with reliable rental and operating data but few comparable sales. Which valuation approach should likely receive substantial weight, what other approach or approaches might still be useful, and how should the appraiser reconcile the indications?

A buyer is comparing two properties with similar utility. How does the principle of substitution help establish a reasonable price for one of them?

An owner spent a large amount installing an amenity, but buyers in the market show little interest in it. Under the principle of contribution, how should the appraiser assess the amenity?

An apartment building has reliable rental income and market-supported operating expense data. Which approach is most directly suited to estimating its value from those earnings?

A comparable property sold for $400,000 but is inferior to the subject in a feature buyers value. If the appraiser determines that the difference warrants an adjustment, which direction should the adjustment to the comparable’s sale price take?

A property has an estimated land value of $\$300{,}000$, a current replacement cost of $\$900{,}000$, and total depreciation of $\$250{,}000$. What value indication does the cost approach produce?

An unfavorable change in the surrounding area reduces a property’s value. What type of depreciation does this illustrate?