APROMAN MIDTERM EXAM Answer: B.

Utility (The usefulness of a

property to a potential buyer is the
1. What is the most important factor primary determinant of value.)
influencing land value?
A. Location 7. Which of the following is NOT a
B. Size characteristic of value?
C. Shape A. Anticipation
D. Topography B. Change
Answer: A. Location C. Substitution
D. Irreversibility
2. Which of the following is NOT a Answer: D. Irreversibility (Value is not
characteristic of land? irreversible, as it can change over time
A. Immobility due to various factors.)
B. Indestructibility
C. Heterogeneity 8. The principle of substitution suggests
D. Scarcity that:
Answer: D. Scarcity (Scarcity is a A. A buyer will not pay more for a
general characteristic of economic goods, property than the cost of a similar
not specifically land.) property.
B. A property's value is determined by
3. The concept of "highest and best use" its cost of reproduction.
refers to: C. A property's value is determined by
A. The use that will produce the highest its highest and best use.
income for the property. D. A property's value is determined by
B. The use that is most physically its location.
suitable for the land. Answer: A. A buyer will not pay more
C. The use that is most compatible with for a property than the cost of a
surrounding land uses. similar property.
D. The use that will maximize the
property's value. 9. The principle of anticipation refers to:
Answer: D. The use that will A. The expectation of future benefits or
maximize the property's value. losses that affect the value of a property.
B. The idea that a property's value is
4. What is the difference between market based on its past use.
value and assessed value? C. The concept that a property's value is
A. Market value is based on recent sales determined by its location.
of similar properties, while assessed D. The principle that a property's value
value is based on the property's cost. is determined by its cost.
B. Market value is the price a property Answer: A. The expectation of future
would sell for in an open market, while benefits or losses that affect the
assessed value is the value used for tax value of a property.
purposes.
C. Market value is determined by a 10. The principle of change suggests
professional appraiser, while assessed that:
value is determined by the government. A. Property values are always increasing.
D. All of the above. B. Property values are always
Answer: D. All of the above. decreasing.
C. Property values are always stable.
5. Which of the following factors would D. Property values are subject to change
NOT typically affect land value? over time.
A. Zoning regulations Answer: D. Property values are
B. Economic conditions subject to change over time.
C. Property taxes
D. Building materials 11. Which of the following is NOT a
Answer: D. Building materials foundation of value?
(Building materials primarily affect the A. Utility
value of improvements on the land, not B. Scarcity
the land itself.) C. Transferability
D. Permanence
6. What is the primary determinant of Answer: D. Permanence
value in real estate appraisal? (Permanence is not a foundation of
A. Cost value, as property values can
B. Utility change over time.)
C. Scarcity
D. Transferability 12. The principle of scarcity refers to:
A. The limited availability of land.
B. The fact that no two properties are A. The cost of reproducing the property.
exactly alike. B. The income generated by the
C. The idea that properties can be property.
transferred from one owner to another. C. Comparable sales of similar
D. The concept that properties can be properties.
used for various purposes. D. The physical characteristics of the
Answer: A. The limited availability of property.
land. Answer: C. Comparable sales of
similar properties.
13. The principle of transferability
suggests that: 19. The cost approach is primarily based
A. A property must be physically on:
accessible to be valuable. A. The cost of reproducing or replacing
B. A property must be legally the property.
transferable to be valuable. B. The income generated by the property.
C. A property must be able to generate C. Comparable sales of similar
income to be valuable. properties.
D. A property must be in good condition D. The physical characteristics of the
to be valuable. property.
Answer: B. A property must be Answer: A. The cost of reproducing
legally transferable to be valuable. or replacing the property.

14. Which of the following factors would 20. The income approach is primarily
NOT affect the utility of a property? based on:
A. Location A. The cost of reproducing or replacing
B. Zoning regulations the property.
C. Construction materials B. The income generated by the
D. Property taxes property.
Answer: D. Property taxes (Property C. Comparable sales of similar
taxes are a cost associated with properties.
ownership, not a factor affecting D. The physical characteristics of the
utility.) property.
Answer: B. The income generated by
15. The principle of anticipation refers to: the property.
A. The expectation of future benefits or
losses that affect the value of a property. 21. What is the highest form of
B. The idea that a property’s value is ownership interest in real property?
based on its past use. A. Fee simple absolute
C. The concept that a property’s value is B. Leasehold interest
determined by its location. C. Life estate
D. The principle that a property’s value D. Easement
is determined by its cost. Answer: A. Fee simple absolute
Answer: A. The expectation of future
benefits or losses that affect the 22. A life estate is a type of:
value of a property. A. Fee simple interest
B. Leasehold interest
16. What is the first step in the valuation C. Encumbrance
process? D. Deed restriction
A. Data collection Answer: A. Fee simple interest
B. Reconciliation
C. Valuation approaches 23. An easement is a:
D. Defining the problem A. Right of way
Answer: D. Defining the problem B. Type of lease
C. Deed restriction
17. Which of the following is NOT a D. Encumbrance
valuation approach? Answer: D. Encumbrance
A. Sales comparison approach
B. Cost approach 24. A leasehold interest is a:
C. Income approach A. Type of fee simple interest
D. Market approach B. Right of way
Answer: D. Market approach (The C. Deed restriction
market approach is another term for D. Temporary right to use property
the sales comparison approach.) Answer: D. Temporary right to use
property
18. The sales comparison approach is
primarily based on: 25.. A deed restriction is a:
A. Type of easement 32. What is the primary difference
B. Condition imposed on a property by a between a neighborhood and a district?
previous owner A. Neighborhoods are smaller than
C. Leasehold interest districts.
D. Government regulation B. Districts are defined by political
Answer: B. Condition imposed on a boundaries.
property by a previous owner C. Neighborhoods are typically more
homogeneous in terms of land use and
26. What is the primary purpose of data socioeconomic characteristics.
collection in real estate appraisal? D. There is no difference between
A. To determine the property’s age neighborhoods and districts.
B. To estimate the property’s value Answer: C. Neighborhoods are
C. To identify the property’s zoning typically more homogeneous in
classification terms of land use and socioeconomic
D. To assess the property’s physical characteristics.
condition
Answer: B. To estimate the 33. Which of the following is NOT a factor
property’s value that influences market area boundaries?
A. Physical features (e.g., rivers,
27. Which of the following is NOT a mountains)
common source of data for real estate B. Political boundaries (e.g., city limits)
appraisal? C. Economic factors (e.g., employment
A. Public records opportunities)
B. Property tax records D. Appraiser’s personal preferences
C. Real estate market reports Answer: D. Appraiser’s personal
D. Personal opinions preferences
Answer: D. Personal opinions
34. Why is it important to analyze the
28. When collecting data for a real estate neighborhood and district when
appraisal, it is important to consider the: appraising a property?
A. Property’s location A. To determine the property’s highest
B. Appraiser’s experience and best use.
C. Property’s age B. To estimate the property’s value.
D. Appraiser’s qualifications C. To identify potential environmental
Answer: A. Property’s location hazards.
D. To assess the property’s physical
29. Which of the following types of data condition.
is most important for the sales Answer: B. To estimate the
comparison approach? property’s value.
A. Comparable sales data
B. Cost data 35. Which of the following factors would
C. Income and expense data likely have a negative impact on property
D. Physical characteristics data values in a neighborhood?
Answer: A. Comparable sales data A. Increasing property taxes
B. Improved schools
30. When collecting data for the cost C. New businesses moving into the area
approach, it is important to consider the: D. Increased public transportation
A. Property’s location options
B. Comparable sales data Answer: A. Increasing property taxes
C. Cost of construction
D. Income generated by the property 36. What is the primary purpose of PU in
Answer: C. Cost of construction real estate appraisal?
* A. To determine the property’s age
31. What is a market area? * B. To estimate the property’s value
A. A geographic area where properties * C. To identify the property’s zoning
are similar in size and price. classification
B. A specific area within a city or town. * D. To assess the property’s physical
C. A region defined by political condition
boundaries. Answer: B. To estimate the property’s
D. A neighborhood with similar value
characteristics.
Answer: A. A geographic area where 37. What is the primary difference
properties are similar in size and between land and site?
price. A. Land refers to the natural surface of
the earth, while a site is a parcel of land
that has been improved for a specific D. To assess the property’s physical
use. condition
B. Land is a physical asset, while a site is Answer: D. To assess the property’s
an economic asset. physical condition
C. Land is a natural resource, while a site
is a man-made resource. 43. Which of the following is NOT a factor
D. There is no difference between land considered in improvement analysis?
and site. A. Age
Answer: A. Land refers to the B. Size
natural surface of the earth, while a C. Location
site is a parcel of land that has been D. Functional obsolescence
improved for a specific use. Answer: C. Location (Location is a
factor considered in site analysis,
38. Which of the following is NOT a not improvement analysis.)
physical characteristic of land?
A. Location 44. What is functional obsolescence?
B. Size A. The loss of value due to outdated or
C. Shape inefficient design.
D. Topography B. The loss of value due to physical
Answer: A. Location (Location is a deterioration.
geographic characteristic, not a C. The loss of value due to changes in
physical characteristic.) market conditions.
D. The loss of value due to
39. What is the highest and best use of a environmental factors.
site? Answer: A. The loss of value due to
A. The use that will produce the highest outdated or inefficient design.
income for the property.
B. The use that is most physically 45. What is external obsolescence?
suitable for the land. A. The loss of value due to outdated or
C. The use that is most compatible with inefficient design.
surrounding land uses. B. The loss of value due to physical
D. The use that will maximize the deterioration.
property’s value. C. The loss of value due to changes in
Answer: D. The use that will market conditions.
maximize the property’s value. D. The loss of value due to
environmental factors.
40. Which of the following factors would Answer: C. The loss of value due to
NOT affect the value of a site? changes in market conditions.
A. Zoning regulations
B. Economic conditions 46. Which of the following methods is
C. Property taxes used to estimate the cost of reproducing
D. Building materials or replacing improvements?
Answer: D. Building materials A. Sales comparison approach
(Building materials primarily affect B. Cost approach
the value of improvements on the C. Income approach
land, not the land itself.) D. Market approach
Answer: B. Cost approach
41. What is the purpose of a site
analysis?
A. To determine the property’s age
B. To estimate the property’s value
C. To identify potential environmental 47. What is the primary purpose of
hazards market analysis in real estate appraisal?
D. To assess the property’s physical A. To determine the property’s age
condition B. To estimate the property’s value
Answer: C. To identify potential C. To identify potential environmental
environmental hazards hazards
D. To assess the property’s physical
42. What is the primary purpose of condition
improvement analysis in real estate Answer: B. To estimate the
appraisal? property’s value
A. To determine the property’s age
B. To estimate the property’s value 48. Which of the following is NOT a
C. To identify potential environmental component of market analysis?
hazards A. Market area analysis
B. Economic analysis
C. Site analysis D. Depth below the earth’s surface
D. Legal analysis Answer: A. Distance north or south
Answer: C. Site analysis (Site of the equator
analysis is part of the improvement
analysis component.) 55. Longitude measures:
A. Distance north or south of the equator
49. What is the primary goal of economic B. Distance east or west of the prime
analysis in market analysis? meridian
A. To identify potential environmental C. Elevation above sea level
hazards D. Depth below the earth’s surface
B. To assess the property’s physical Answer: B. Distance east or west of
condition the prime meridian
C. To evaluate the overall economic
health of the market area 56. What is lot plotting used for in real
D. To determine the property’s highest estate appraisal?
and best use A. To determine the property’s age
Answer: C. To evaluate the overall B. To estimate the property’s value
economic health of the market area C. To identify the property’s location
D. To assess the property’s physical
50. Which of the following factors would condition
likely have a negative impact on property Answer: C. To identify the property’s
values in a market area? location
A. Increasing property taxes
B. Improved schools 57. What is a lot plot?
C. New businesses moving into the area A. A map showing the boundaries of a
D. Increased public transportation property
options B. A drawing of the property’s floor plan
Answer: A. Increasing property taxes C. A document that describes the
property’s legal description
51. What is the primary goal of legal D. A photograph of the property
analysis in market analysis? Answer: A. A map showing the
A. To identify potential environmental boundaries of a property
hazards
B. To assess the property’s physical 58. What information is typically included
condition on a lot plot?
C. To evaluate the overall economic A. Property dimensions
health of the market area B. Zoning restrictions
D. To determine the legal restrictions C. Easements
and requirements affecting the property D. All of the above
Answer: D. To determine the legal Answer: D. All of the above
restrictions and requirements
affecting the property 59. Why is lot plotting important in real
estate appraisal?
52. How are coordinates used in real A. It helps to identify potential
estate appraisal? environmental hazards
A. To determine the property’s age B. It is used to calculate property taxes
B. To estimate the property’s value
C. It is used to determine property
C. To identify the property’s location
D. To assess the property’s physical values
condition D. It helps to understand the property’s
Answer: C. To identify the property’s relationship to surrounding properties
location Answer: D. It helps to understand
the property’s relationship to
53. What are the two main types of surrounding properties
coordinates used in real estate appraisal?
A. Latitude and longitude
B. X and Y coordinates 60. What is the difference between a lot
C. Cartesian coordinates plot and a subdivision plat?
D. Polar coordinates A. A lot plot shows the boundaries of a
Answer: A. Latitude and longitude single property, while a subdivision plat
shows the layout of an entire
54. Latitude measures: development.
A. Distance north or south of the equator
B. A lot plot is a drawing, while a
B. Distance east or west of the prime
meridian subdivision plat is a photograph.
C. Elevation above sea level
C. A lot plot is used for residential
properties, while a subdivision plat is
used for commercial properties.
D. There is no difference between a lot
plot and a subdivision plat.
Answer: A. A lot plot shows the
boundaries of a single property,
while a subdivision plat shows the
layout of an entire development.