Residential Appraisal Test A

&nb= sp;

1. = Which principle of value suggests that the maximum value of a property generally cannot exceed = ; the cost of its replacement?

&= nbsp; A. Balance

&= nbsp; B. Substitution

&= nbsp; C. Anticipation

&= nbsp; D. Opportunity cost

2. = Cost and market value are MOST likely to be similar under which of the following conditions?

&= nbsp; A. The property is new

&= nbsp; B. The property is small

&= nbsp; C. The property is special purpose

&= nbsp; D. The property has no deferred maintenance

3. = What term is used to denote the time-distance relationships between a property or neighborhood &= nbsp;
&= nbsp; and all other possible origins and destinations?

&= nbsp; A. Linkages

&= nbsp; B. Routes

&= nbsp; C. Access

&= nbsp; D. Trips

4. &n= bsp; Which of the following statements is NOT true in regard to real estate markets?

&= nbsp; A. Price is seldom equal to value.

&= nbsp; B. Supply and demand are seldom in balance.

&= nbsp; C. Supply adjusts more quickly than demand.

&= nbsp; D. There are many government regulations.

5. = Highest and best use analysis is used to determine which of the following fact= ors?

&= nbsp; A. The type of property to put on a site

&= nbsp; B. The amount of capital to invest in a site for improvements

&= nbsp; C. Whether any existing building on a site should be demolished

&= nbsp; D. All of the above

6. &n= bsp; The term absorption rate refers to:

&= nbsp; A. an estimate of the expected annual sales or new occupancy of a particular t= ype of land use.

&= nbsp; B. an estimate of the rate at which a type of real estate space will be sold or occupied.

&= nbsp; C. the rate at which the cash flows from a property will cover the initial investment in the property.

&= nbsp; D. the rate of return used to convert future payments into present cash values= .

7.= = A property has a market value of $100,000. The owner currently owes $60,000 in mortgage loans
agai= nst the property. The owner's equity is:

&= nbsp; A. $40,000.

&= nbsp; B. $60,000.

&= nbsp; C. $140,000.

&= nbsp; D. $160,000.

8. = Which of the following explanations would be the BEST definition of market value?=

&= nbsp; A. Value to a typical investor

&= nbsp; B. Value to any investor who is willing to purchase the property in the open market

&= nbsp; C. Value to the typical seller

&= nbsp; D. Value to the user who pays market rent

9. = Which of the following valuation concepts is indicative of special purpose properties, such as
&= nbsp; churches or schools, when the continuation of the special use is assumed?=

&= nbsp; A. Value in exchange

&= nbsp; B. Value in use

&= nbsp; C. Value in perpetuity

&= nbsp; D. Book value

10. The term market value is MOST closely associated with which of the followi= ng value concepts?

&= nbsp; A. Highest sales price

&= nbsp; B. Value in exchange

&= nbsp; C. Value in use

&= nbsp; D. Assessed value

11. Which of the following explanations BEST describes the term market price?

&= nbsp; A. The amount of money actually paid in a transaction

&= nbsp; B. The amount of the loan

&= nbsp; C. The amount of money necessary to replace the property

&= nbsp; D. Same term as market value

12. Which of the following economic principles BEST explains the occurrence of locati= onal
&= nbsp; obsolescence resulting from a change in surrounding land use?

&= nbsp; A. Anticipation

&= nbsp; B. Conformity

&= nbsp; C. Contribution

&= nbsp; D. Substitution

13.        What economic principle is BEST illustrated when an appraiser concludes that mod= ernization of
       &= nbsp;    the plumbing system in the subject property will increase the value of the prop= erty by more than
            the cost of the modernization?

&= nbsp; A. Anticipation

&= nbsp; B. Balance

&= nbsp; C. Contribution

&= nbsp; D. Substitution

14. What economic principle suggests that the value of property is created and maintained when
&= nbsp; there is equilibrium in the supply, demand, and location of real estate?

&= nbsp; A. Balance

&= nbsp; B. Equilibrium

&= nbsp; C. Substitution

&= nbsp; D. Surplus productivity

15. Which of the following statements is CORRECT in regard to the highest and be= st use of a parcel &nb= sp; of land?

&= nbsp; A. Unimproved land does not have a highest and best use.

&= nbsp; B. If the improvement to the land is a house, then the highest and best use is always residential.

&= nbsp; C. The highest and best use can change over time.

&= nbsp; D. Highest and best use is strictly an economic concept and is not influe= nced by physical or legal
&= nbsp; considerations.<= o:p>

16. Which of the following land uses would NOT be considered a single purpose propert= y?

&= nbsp; A. Nuclear power plant

&= nbsp; B. Grain elevator

&= nbsp; C. Golf course

&= nbsp; D. Cemetery

17. The total loan payment made on a parcel of real estate during any one year is generally referred to as:

&= nbsp; A. debt service.

&= nbsp; B. equity.

&= nbsp; C. mortgage constant.

&= nbsp; D. cash flow.

18. Normally, the amount of money a lender will agree to lend against a specific parcel of real estate
is based on which of the following prices or values?

&= nbsp; A. Contract price

&= nbsp; B. Appraised value

&= nbsp; C. Contract price or appraised value, whichever is less

&= nbsp; D. Assessed value

19. The test used to determine whether or not an article is a fixture depends on al= l of the following
&= nbsp; conditions EXCEPT:

&= nbsp; A. reasonable intent of the party attaching the object.

&= nbsp; B. adaptation of the object.

&= nbsp; C. cost of the item being attached.

&= nbsp; D. method of attachment.

20. The legal ownership rights in real estate are limited by all of the following conditi= ons EXCEPT:

&= nbsp; A. private voluntary restrictions such as deed restrictions.=

&= nbsp; B. the law of nuisance.

&= nbsp; C. supply of real estate in the marketplace.

&= nbsp; D. public limitations such as eminent domain.

21. The legal estate in land that provides the highest degree or extent of ownership rights recognized
&= nbsp; by law may be referred to by which of the following terms?

&= nbsp; A. Fee

&= nbsp; B. Fee simple

&= nbsp; C. Fee simple absolute

&= nbsp; D. All of the above

22. The real property in a condominium form of ownership in severalty is referred t= o as a:

&= nbsp; A. unit.

&= nbsp; B. common area.

&= nbsp; C. limited common area.

&= nbsp; D. cooperative.

23. Which of the following actions is an example of the legal right of government bas= ed on police
&= nbsp; power?

&= nbsp; A. Taxation

&= nbsp; B. Escheat

&= nbsp; C. Eminent domain

&= nbsp; D. Zoning

24. Property taxes levied by local governments are normally referred to as ad valorem ta= xes.
&= nbsp; The term ad valorem means:

&= nbsp; A. ability to pay.

&= nbsp; B. according to value.

&= nbsp; C. according to most likely sales price.

&= nbsp; D. ability to collect the tax.

25. In a voluntary conveyance of real estate, the conveys title to the property and = the receives the title.

&= nbsp; A. grantor, grantee

&= nbsp; B. grantee, grantor

&= nbsp; C. owner, seller

&= nbsp; D. grantee, granter

26. In which of the following types of residential real estate uses could individu= al units NOT be
&= nbsp; mortgaged by the individual owner?

&= nbsp; A. Condominium

&= nbsp; B. Planned unit development

&= nbsp; C. Cooperative

&= nbsp; D. Duplex

27. If a commercial use such as a retail store is permitted to remain in business following a zoning
chan= ge to residential use, the owner is said to have received a:=

&= nbsp; A. variance.

&= nbsp; B. nonconforming use.

&= nbsp; C. local exception.

&= nbsp; D. buffer zone use.

28. All legal rights, such as riparian rights or easements, that "go with= the land" when title to the land
is transferred are known as:

&= nbsp; A. encroachments.

&= nbsp; B. seizings.

&= nbsp; C. appurtenances.

&= nbsp; D. easements.

29. An acre of land contains = square feet.

&= nbsp; A. 43,560

&= nbsp; B. 45,360

&= nbsp; C. 45,660

&= nbsp; D. 53,560

30. The voluntary conveyance of title to land from an individual private owner to a public agency such
as the city or county is known as:

&= nbsp; A. accretion.

&= nbsp; B. escheat.

&= nbsp; C. patent.

&= nbsp; D. dedication.

31. Numerous public and private limitations are placed on real property. Some are volunt= ary and
&= nbsp; others are involuntary. Which of the following limitations is NOT an example = of a private involuntary limitation= ?

&= nbsp; A. Encroachment

&= nbsp; B. Adverse possession

&= nbsp; C. Mechanic's or materialman's lien

&= nbsp; D. Deed restriction

32. A fixture such as a permanent bookcase or wall-to-wall carpeting is legally treated as:

&= nbsp; A. personalty.

&= nbsp; B. realty.

&= nbsp; C. intangible property.

&= nbsp; D. personal property.

33. Reference to a plat map would be made in which of the following legal description met= hods?

&= nbsp; A. Lot and block

&= nbsp; B. Rectangular survey

&= nbsp; C. Street a= ddress

&= nbsp; D. Monuments

34. In regard to an easement, if there are two tracts of land, the one benefiting from the creation of
&= nbsp; the easement is known as the:

&= nbsp; A. estate in net.

&= nbsp; B. appurtenant estate.

&= nbsp; C. servient estate.

&= nbsp; D. dominant estate.

35. When real estate is put up as collateral for a loan, the borrower is known as th= e

&= nbsp; and the lender is known as the

&= nbsp; A. mortgagor, mortgagee

&= nbsp; B. mortgage, mortgagor

&= nbsp; C. mortgagee, financial intermediary

&= nbsp; D. agent, principal

36. Which of the following terms refers to the rights of a person who owns a property free and clear of
any leases?

&= nbsp; A. Leased fee estate

&= nbsp; B. Leasehold estate

&= nbsp; C. Fee simple estate

&= nbsp; D. Lessee's estate

37. The term fee simple estate refers to an estate that:

&= nbsp; A. has all leases at the market rate.

&= nbsp; B. has been leased at a specified fee.

&= nbsp; C. is not subject to any leases.

&= nbsp; D. is fully encumbered by leases.

38. When a building, a part of a building, or an obstruction physically intrudes, overlaps, or
tres= passes the property of another, this is referred to as an:<= /p>

&= nbsp; A. escheat.

&= nbsp; B. easement.

&= nbsp; C. encroachment.

&= nbsp; D. assemblage.

39. What term is used to identify recently sold or leased properties that are simila= r to a particular
&= nbsp; property being evaluated and used to indicate the value for the property being appraised?

&= nbsp; A. Subjects

&= nbsp; B. Comparables

&= nbsp; C. Relatives

&= nbsp; D. Outliers

40. An appraisal is best defined as:

&= nbsp; A. an unbiased opinion of the most likely price for which a parcel of real est= ate would sell at a given date.

B. an unbiased opinion of the nature, quality, value or utility of an interest= in real estate and related personalty.

C. the process of developing an opinion as to the market value or other defined value of a specified interest in a specified point in time.

&nb= sp; D. the process of studying the nature, quality, or utility of an interest in r= eal estate in which a value estimate is not necessarily required.

41. When identifying a neighborhood's boundaries, an appraiser should:

&= nbsp; A. inspect the area's physical characteristics.

&= nbsp; B. draw preliminary boundaries on a map.

&= nbsp; C. test preliminary boundaries against socioeconomic characteristics of t= he area's population.

&= nbsp; D. do all of the above.

42. Reconciliation criteria used to estimate the final value in an appraisal include which of = the following factors?

&= nbsp; A. Appropriateness, accuracy, market evidence

&= nbsp; B. Appropriateness, quantity of evidence, accuracy

&= nbsp; C. Accuracy, differences in value, appropriateness

&= nbsp; D. Quantity of evidence, accuracy, market value

43. In the appraisal process, the property being appraised is referred to as = the:

&= nbsp; A. comparable property.

&= nbsp; B. assessed property.

&= nbsp; C. subject property.

&= nbsp; D. appraised property.

44. In the valuation process, which of the following steps identifies the items th= at contribute to a
&= nbsp; concise appraisal completed in a thorough and efficient manner?

&= nbsp; A. Definition of the problem

&= nbsp; B. Data collection and analysis

&= nbsp; C. Highest and best use analysis

&= nbsp; D. Reconciliation

45. The appraisal process undertaken by an appraiser consists of many steps. W= hat is the correct
&= nbsp; first step in the appraisal process?

&= nbsp; A. Definition of the problem

&= nbsp; B. Collection and analysis of data

&= nbsp; C. Analysis of highest and best use

&= nbsp; D. Initial estimate of value

46. A common phrase included in all residential real estate appraisal forms inclu= des the use of the
&= nbsp; "as of date. Normally the "as of date in an appraisal report refers to the date:

&= nbsp; A. the appraisal assignment was accepted.

&= nbsp; B. the appraisal assignment is to be delivered.

&= nbsp; C. of the last inspection.

&= nbsp; D. the loan is to close.

47. The objective of undertaking an appraisal of real estate is to:

&= nbsp; A. determine asking price.

&= nbsp; B. estimate value.

&= nbsp; C. establish loan value.

&= nbsp; D. identify legal rights and interests that may exist.

48.        A technique used by market analysts and appraisers that attempts to meas= ure the current
            econ= omic activity and expected future economic growth in a specific geographic = area is
       &= nbsp;    commonly referred to as:

&= nbsp; A. basic industry analysis.

&= nbsp; B. non-basic industry analysis.

&= nbsp; C. economic base analysis.

&= nbsp; D. site analysis.

49. In using the sales comparison approach, the appraiser finds that one of t= he comparables is
&= nbsp; superior to the subject property in terms of location. In this event, what adjustment will be made?

&= nbsp; A. The comparable will be adjusted upward.

&= nbsp; B. The comparable will be adjusted downward.

&= nbsp; C. The subject property will be adjusted upward.

&= nbsp; D. The subject property will be adjusted downward.

50. If comparable sale #1 sold for $200,000 and has a two-car garage, adding $10,0= 00 to the value,
&= nbsp; and the subject property does not have a garage, the indicated value of the sub= ject property
&= nbsp; would be found by:

&= nbsp; A. adding $10,000 to the comparable sale.

&= nbsp; B. subtracting $10,000 from the comparable sale.

&= nbsp; C. adding $10,000 to the subject property.

&= nbsp; D. subtracting $10,000 from the subject property.

51. Normally, the comparable sales approach would be considered the MOST reliable when wh= ich of &nbs= p;
&= nbsp; the following conditions exist?

&= nbsp; A. The property is new and unoccupied

&= nbsp; B. A high rate of inflation exists

&= nbsp; C. Obsolescence must be measured

&= nbsp; D. Access to reliable market data exists

52.        When an appraiser is using the sales comparison approach, one of the elemen= ts of comparison
       &= nbsp;    that may have to be adjusted is often referred to as a time adjustment. What does the time
            adju= stment provide?

&= nbsp; A. An adjustment for the period of time between when a listing is taken on property and when the
property actually= sells

&= nbsp; B. An adjustment between the date of sale of a comparable and the date of the appraisal to allow
for any changes o= ver time

&= nbsp; C. An adjustment between the listing date of a comparable sale and the date the subject property
is actually appraised

&= nbsp; D. An adjustment for the period of time between the actual sale of a comparable and the date the &nb= sp;
&= nbsp; appraiser receiv= es compensation for the appraisal assignment

53.        Your appraisal assignment involves the estimation of value for a 100-feet by 180-feet parcel of
       &= nbsp;    land. You have identified and examined 10 comparables that are similar to the sub= ject property
       &= nbsp;    except for size differentials. You have developed a simple linear regression equat= ion in which
       &= nbsp;    sales price (expressed in thousands of dollars) is the dependent variable and size (expressed in
             square feet) is the independent variable. The equation you have developed is:=

       &= nbsp;    Yc =3D 10,000 + 1 (x). Using this equation and the information given, wha= t is the indicated sales
       &= nbsp;    price for the subject property?

&= nbsp; A. $10,000

&= nbsp; B. $18,000

&= nbsp; C. $28,000

&= nbsp; D. $43,560

54. An appraiser has been asked to estimate the value of a lot. In the same neighborhood, the
&= nbsp; appraiser collects the following sales data:

&= nbsp; Lot Sale = Sales Price <= /span>Time of Sale=

&= nbsp; 1 &= nbsp; $14,425 4 months ago

&nb= sp; = 2 &= nbsp; $14,705 2 months ago

&nb= sp; = 3 &= nbsp; $14,560 3 months ago

The price appreciation for lots is estimated to be at the rate of 1 percent per month (simple, not compounded). Given the above information, what is t= he estimated value of the subject property?

        &= nbsp;   A. $5,000
       &= nbsp;    B. $10,000
       &= nbsp;    C. $14,000
       &= nbsp;    D. $15,000

&= nbsp;

55.        In appraising a property, the appraiser identifies a similar property that appears to be a very good      &nb= sp;    comparable.
       &= nbsp;    The appraiser finds that when the comparable sold, very favorable financing was       &nb= sp;     part of the sale. In regard to
       &= nbsp;    the comparable, what is the appropriate action?

&= nbsp; A. Not use the sale under any condition

&= nbsp; B. Give the sale less weight than any of the other comparables

&= nbsp; C. Adjust the sales price for cash equivalency and explain

&= nbsp; D. Do nothing because the comparable sold and thus represents normal market activity

56. Deferred maintenance usually results in which of the following losses in value?=

&= nbsp; A. Incurable physical depreciation

&= nbsp; B. Curable physical depreciation

&= nbsp; C. Curable functional obsolescence

&= nbsp; D. Curable external obsolescence

57. The portion of land that is NOT necessary for the existing improvements is refe= rred to as:

&= nbsp; A. overimproved land.

&= nbsp; B. excess land.

&= nbsp; C. useless land.

&= nbsp; D. underimproved land.

58. What term applies to the effect on value of location or proximity to the intersection of two streets?

&= nbsp; A. Corner influence

&= nbsp; B. Amenity

&= nbsp; C. Externality

&= nbsp; D. Plottage

59. The term site refers to:

&= nbsp; A. land that has been improved.

&= nbsp; B. land within a certain set of boundaries.

&= nbsp; C. a legal description of a plot of land.

&= nbsp; D. raw land with no improvements.

60. Functional obsolescence could be caused by which of the following?

&= nbsp;

&= nbsp; A. A ceiling that is too high

&= nbsp; B. Deferred maintenance

&= nbsp; C. A poor location

&= nbsp; D. A worn-out roof

61.                =             &nb= sp;   is the estimated cost at current pr= ices to construct an exact replica of the building
       &= nbsp;    using the same standards, materials, design, and layout and including any deficiencies,
       &= nbsp;    superadequacies, and obsolescence as the subject building.

&= nbsp; A. Replacement cost

&= nbsp; B. Unit-in-place cost

&= nbsp; C. Reproduction cost

&= nbsp; D. Market cost

62. The building cost estimate method that replicates the contractor's develop= ment of a bid, and is
the most comprehensive way to estimate building costs, is known as the:

&= nbsp; A. replacement cost.

&= nbsp; B. highest and best use of the land.

&= nbsp; C. acquisition cost.

&= nbsp; D. accrued depreciation.

63. The cost approach to value is generally MOST accurate when which of the following situations exists?

&= nbsp; A. The building is old and suffers from a great deal of depreciation.

&= nbsp; B. The building is new and is being used under its highest and best use.<= o:p>

&= nbsp; C. The building is old and reproduction or replacement cost is not known.=

&= nbsp; D. A vacant tract of land is being appraised.

64. Included in the cost approach to value is all of the following components EXCEPT:

&= nbsp; A. unit-in-place method.

&= nbsp; B. quantity survey method.

&= nbsp; C. break-down method.

&= nbsp; D. comparative unit method.

65. A large tract of land measuring 2,200 feet by 800 feet sells for $32,000 per acre. What was the
&= nbsp; total selling price?

&= nbsp; A. $1,053,500

&= nbsp; B. $1,293,000

&= nbsp; C. $1,760,000

&= nbsp; D. $7,040,000

66. In the appraisal of real estate, the necessary step taken by the appraiser of valuing the land as if
vaca= nt is part of which approach to value?

&= nbsp; A. Cost

&= nbsp; B. Sales comparison

&= nbsp; C. Income capitalization

&= nbsp; D. Gross rent multiplier

67. In regard to accrued depreciation, which of the following terms does NOT belong toget= her?

&= nbsp; A. Physical deterioration-curable

&= nbsp; B. Functional obsolescence-incurable

&= nbsp; C. Economic obsolescence-curable

&= nbsp; D. Functional obsolescence-curable

68. Which of the following statements is CORRECT in regard to estimating the val= ue of residential
&= nbsp; real estate?

&= nbsp; A. The highest and best use of a site with a newly constructed house properly located on the site
is always i= ts present use.

&= nbsp; B. The square footage of a single-family residence for purposes of using = the cost approach to
&= nbsp; value is calcula= ted by summing the interior heated and cooled areas of the structure.

&= nbsp; C. A newly constructed house cannot suffer from any type of depreciation.=

&= nbsp; D. Total accrued depreciation is a loss in value from all causes.

69. The combining of two or more lots into a single ownership with the value of the assembled lots
&= nbsp; being more than the sum of the values of the individual lots is referred to as:

&= nbsp; A. highest and best use.

&= nbsp; B. economic rent.

&= nbsp; C. escheat.

&= nbsp; D. plottage.

70. Superadequacies that might exist in a structure would be recognized and included in which of the
&= nbsp; following types of depreciation?

&= nbsp; A. Physical deterioration

&= nbsp; B. Functional obsolescence

&= nbsp; C. Economic obsolescence

&= nbsp; D. Locational obsolescence

71. Another term used to denote the actual age of a building is:

&= nbsp; A. chronological age.

&= nbsp; B. effective age.

&= nbsp; C. economic age.

&= nbsp; D. depreciated age.

72. A house being appraised has a total living area of 2,200 square feet. For a h= ouse of similar
cons= truction quality, a national cost service indicates a cost of $55 per square fo= ot. The location &= nbsp; multiplier is .

&= nbsp; A. $113,740

&= nbsp; B. $119,427

&= nbsp; C. $121,000

&= nbsp; D. $127,050

73. A building has a roof that originally had an expected life of 25 years. The roof's effective age is
&= nbsp; 15 years. A new roof will cost $10,000 to install. Using a straight-line metho= d, what amount of
&= nbsp; depreciation would be charged for the roof?

&= nbsp; A. $4,000

&= nbsp; B. $6,000

&= nbsp; C. $8,000

&= nbsp; D. $10,000

74.        The method of estimating total replacement cost of a building that measures the total square foot
            age or cubic footage and multiplies this total by the current cost per square or cubic f= oot is
       &= nbsp;    referred to as which of the following methods?

&= nbsp; A. Comparative unit method

&= nbsp; B. Builder's method

&= nbsp; C. Unit-in-place method

&= nbsp; D. Quantity survey method

75. The basic capitalization formula used in the income approach to value cont= ains three
&= nbsp; components. Those three components are:

&nb= sp; A. market, cost, income

&= nbsp; B. value, rate, income

&= nbsp; C. physical, functional, economic

&= nbsp; D. potential, gross, net income

76.= The term amortization refers to:

&nb= sp; A. an increase in value of the property.

&= nbsp; B. a decrease in value of the property.

&= nbsp; C. periodic repayment of debt.

&= nbsp; D. assessment of property for tax purposes.

77. What is the gross income multiplier for a property with a current market va= lue of $57,000 and
&= nbsp; rents for $500 per month?

&= nbsp; A. 9

&= nbsp; B. 9.5

&= nbsp; C. 10

&= nbsp; D. 10.5

78.        The amount of debt payment due on a loan is a function of the amount borrowed, the interest
       &= nbsp;    charged, and the term of the loan. In regard to the term, which of the following statements is
       &= nbsp;    CORRECT?

&= nbsp; A. The longer the term, the greater the periodic payment.

&= nbsp; B. The longer the term, the less the periodic payment.

&= nbsp; C. The longer the term, the higher the interest rate charged and thus the high= er the payment.

&= nbsp; D. The longer the term, the lower the interest rate charged and thus the higher the payment.

79. The dollar amount of rent received from a parcel of real estate when rente= d in an open,
&= nbsp; competitive market is referred to as:

&= nbsp; A. economic rent.

&= nbsp; B. contract rent.

&= nbsp; C. ground rent.

&= nbsp; D. gross rent.

80.        You have collected the following data on a comparable property, which you plan to us= e in
       &= nbsp;    estimating the gross rent multiplier for rental properties in a neighborhood: sales pr= ice $100,000,
            annu= al rent $6,000, annual property taxes $900, monthly mortgage payment $715.        &= nbsp;

&= nbsp; What is the monthly gross rent multiplier indicated by this property?<= /o:p>

&= nbsp; A. 100

&= nbsp; B. 125

&= nbsp; C. 150

&= nbsp; D. 200

81. A mortgage loan for $30,000 at 9 percent for 30 years has been made. What is = the amount of
&= nbsp; interest for the first month?

&= nbsp; A. $16.39

&= nbsp; B. $90.00

&= nbsp; C. $225.00

&= nbsp; D. $241.39

&= nbsp;

82. When payments on a loan are not sufficient to cover the interest on a loan, whic= h of the following
&= nbsp; results is applicable?

&= nbsp; A. The loan has negative amortization &nb= sp; .

&= nbsp; B. The loan will never get repaid

&= nbsp; C. The loan has a debt coverage ratio less than one

&= nbsp; D. The loan is a reverse annuity mortgage

83.        A property costing $100,000 is financed with a first mortgage of $75,000, a second mortgage of
            $15,= 000 and $10,000 in cash. If the borrower defaults and the property is sold upon foreclosure
            for $70,000, the holder of the second mortgage will receive:

&= nbsp; A. $0.

&= nbsp; B. $65,000.

&= nbsp; C. $75,000 plus legal expenses.

&= nbsp; D. $80,000.

84. What does the range of a group of variables indicate to the appraiser?

&= nbsp; A. The value of the highest sample

&= nbsp; B. The difference between the lowest and the highest values<= /p>

&= nbsp; C. The average for the group

&= nbsp; D. The percentage variation from the mean

&= nbsp; Questions 85 through 88 are based on the following data:

&= nbsp; &nbs= p; Sale &= nbsp; Sales Price &n= bsp; Size (Sq. Footage)

&= nbsp; &nbs= p; 1&= nbsp; &nbs= p; $50,000 &= nbsp; &nbs= p; 500

&= nbsp; &nbs= p; 2 = &nb= sp; $45,000 &= nbsp; &nbs= p; &= nbsp; 450

&= nbsp; &nbs= p; 3 = &nb= sp; $50,000 &= nbsp; &nbs= p; &= nbsp; 500

&= nbsp; &nbs= p; 4 = &nb= sp; $55,000 &= nbsp; &nbs= p; &= nbsp; 550

&= nbsp; &nbs= p; 5 = &nb= sp; $52,500 &= nbsp; &nbs= p; &= nbsp; 525

85. What is the mean selling price?

&= nbsp; A. $49,500

&= nbsp; B. $50,000

&= nbsp; C. $50,500

&= nbsp; D. $52,500

86. What is the median selling price? &nb= sp;

&= nbsp; A. $49,500

&= nbsp; B. 50,000

&= nbsp; C. $50,500 =

&= nbsp; D. $52,500 =

87. What is the mean price per square foot?

&= nbsp; A. $90

&= nbsp; B. $100

&= nbsp; C. $104

&= nbsp; D. $110

88. What is the mode selling price?

&= nbsp; A. $45,000 =

&= nbsp; B. $50,000

&= nbsp; C. $50,500

&= nbsp; D. $55,000

89. A reversion can follow which of the following=

&= nbsp; A. Leasehold

&= nbsp; B. Fee simple

&= nbsp; C. Tenancy in common <= /span>

&= nbsp; D. Fee Simple Absolute

90. Which of the following types of leases does NOT provide at least some protection = to the lessor against inflation?<= /o:p>

&= nbsp; A. Flat lease

&= nbsp; B. Index lease

&= nbsp; C. Reappraisal lease &n= bsp;

&= nbsp; D. Graduated lease

91. Which of the following statements would be CORRECT if contract rent is likely to exceed

&= nbsp; market rent for the term of the lease?

&= nbsp;

&= nbsp; A. The leasehold estate is not likely to have any value.

&= nbsp; B. The leased fee estate is probably less valuable than a fee simple estate in= the property.

&= nbsp; C. The leasehold interest will be greater than

&= nbsp; D. The leasehold value is not affected by the contract rent.=

92. Which of the following statements is CORRECT in regard to assessed value?

&= nbsp; A. The assessed value must equal the market value.

&= nbsp; B. The assessed value is used primarily to calculate property taxes.

&= nbsp; C. The assessed value is used primarily to calculate property insurance.<= /o:p>

&= nbsp; D. The assessed value will never exceed cost.&= nbsp;

93. Which of the following terms refers to a lease used to sublease a property?

&= nbsp; A. Blanket lease.

&= nbsp; B. Subordinated lease

&= nbsp; C. Sandwich lease

&= nbsp; D. Double lease

94. A father sells his home to his daughter and her husband. Such a sale would NORMALLY = be
&= nbsp; described as which of the following sales?

&nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; = &nb= sp; =

&= nbsp; A Arm's-length sale

&= nbsp; B. Illegal sale

&= nbsp; C. Distorted sale

&= nbsp; D. Forced sale

95. Which of the following reasons is often given D. Graduated lease
&= nbsp; as a weakness or disadvantage of using= the sales comparison approach?

&= nbsp; A. The market may be too active.

&= nbsp; B. There may be so many sales that the appraiser cannot find comparables.=

&= nbsp; C. The sales comparison approach is based on historical information.

&= nbsp; D. A competitive and knowledgeable market may exist.

96.        In collecting data, an appraiser concludes that comparable properties have increased in value at
       &= nbsp;    a 6-percent annual compound rate during the previous two years. The proper ti= me adjustment to
            make for a comparable that sold two years ago for $100,000 is:=

&= nbsp; A. $6,000.

&= nbsp; B. $12,000.

&= nbsp; C. $12,360.

&= nbsp; D. $112,360.

Questions 97 through 100 are based on an understanding of the Uniform Standards = of Professional Appraisal Practice.

97. Disclosing any lack of knowledge or experience to the client is part of:

&= nbsp; A. the Departure Rule.

&= nbsp; B. Standard 4.

&= nbsp; C. Standard 1.

&= nbsp; D. the Competency Rule.

98. Which of the following statements is NOT CORRECT in regard to the Departure Rule?=

&= nbsp; A. The appraiser may not enter into an agreement to perform an assignment that calls for
something l= ess than, or different from, the work required by the specific requirement= s.

&= nbsp; B. The appraiser must advise the client that the assignment calls for something less than, or
different from, = the work required by the specific requirements.

&= nbsp; C. The report must state the limited or differing scope of the appraisal.=

&= nbsp; D. The appraiser has determined that the assignment is not so limited in scope that it would
mislead or confu= se the client.

99. In appraising a proposed improvement, which of the following statements is CORRECT?

&= nbsp; A. You must examine plans and specifications to identify the character of the proposed
&= nbsp; improvements if = they are available to you.

&= nbsp; B. You do not have to examine plans and specifications to identify the charact= er of the proposed
&= nbsp; improvements if = they are available to you.

&= nbsp; C. You must have the plans and specifications reviewed by an engineer or archi= tect to see if they
adhere to local building codes.

&= nbsp; D. The appraiser must be sure that no hazardous waste exists on the site.=

100. Which rule = or standard states that in reporting the results of a real estate appraisal, a= n appraiser
&= nbsp; must communicate each analysis, opinion and conclusion in a manner that is = not misleading?

&= nbsp; A. Standard 3

&= nbsp; B. The Competency Rule

&= nbsp; C. Standard 2

&= nbsp; D. Standard 1

Answers to Residential Exam A

1. B. A replacement = would be a substitute for the existing property.

2. A.     Cost and market value are most likely to be similar when the property is new.
       &= nbsp;    However, for this to be true the pr= operty should be the highest and best use of the site.
       &= nbsp;    The cost approach must often be used for special purpose properties due to lack of
       &= nbsp;    comparable sales for the sales comparison approach and lack of income to capitali= ze
       &= nbsp;    with the income approach. However, this does not mean that cost and market value= are
       &= nbsp;    more similar with special purpose properties than for new properties.

3. A. Linkage denote= s the time-distance relationship between properties.

4. C.     Because the am= ount of real estate available can change only as quickly as it can be built= or
            reno= vated, supply changes more slowly than demand. Although the efficiency of the real estate
       &= nbsp;    market can be debated, it is usually considered true that price is seldom equal to value, and supply
       &= nbsp;    and demand are seldom in balance. It is also true that there are many government regulations.

5. D.     Highest and be= st use analysis can be used to determine several factors. For vacant land it is
            used to determine the optimal use and amount of capital to invest in. It is also used to determine
            whet= her an existing improvement should be demolished. Therefore all of the ans= wers are correct.

6. B. An absorption = rate is the measure of the rate at which a type of real estate space will be sol= d or occupied.

7. A. $100,000 - $60= ,000 =3D $40,000

8. A.     Market value c= an be considered the value to a typical investor. A typical investor is not the s= ame
            as any investor who is willing to purchase the property in the market. It must= be the most likely or
            typi= cal investor for the property being appraised.

9. B.     Value in use is derived from a specific use of real estate and is not necessarily equal to = the value       &= nbsp;
       &= nbsp;    estimate if the property were being used under its highest and best use. Value in exchange
       &= nbsp;    denotes how one item exchanges in the marketplace for other items.

10. B. Market value is defined as= the price in terms of cash or its equivalent upon which a willing buyer
       &= nbsp;    and a willing seller will agree where neither is under any pressure, both are knowledgeable, and
       &= nbsp;    both are acting in their own best interest. Of the four choices given, market va= lue is most closely
            asso= ciated with value in exchange.

11. A. Market price is the amount actually paid in a transaction. It is not the same as market value and
may or may not be the same as the amount of the loan. Replacement cost and mar&= shy;ket price are
&= nbsp; two entirely different concepts.

12. B. If a property suffers from locational obsolescence, then the maximum value is not being achieved.
The principle of conformity states that a parcel of land must be used in such a way as to conform
&= nbsp; to surrounding land use if maximum value is to be achieved.<= /p>

13. C. The principle of contribut= ion states that the value of a component part of a parcel of property,
&= nbsp; such as its plumbing system, is equal to what that component part adds to the to= tal value, less
&= nbsp; any costs incurred.

14.A. The concept of equilibr= ium in the marketplace is explained by the principle of balance. The
&= nbsp; remaining three choices are all economic principles that influence land and how it is used.

15. C. The highest and best use o= f a parcel of land can change over time. The fact that the current use
is residential does not imply that such use is indeed the highest and best use= of the land. Both
&= nbsp; physical and legal concepts as well as economic concepts influence highest and best = use.

16. C. A single-purpose property = is defined as one in which the existing use is the only reasonable use
that can be made of the site. A golf course, for example, normally involves a gr= eat deal of
&= nbsp; acreage that could, within reason, support any number of different land uses.<= o:p>

17. A. Debt service is defined as= the periodic (monthly, quarterly, annually) payment necessary to pay
the principal and interest on an amortized loan. This payment often is referred= to as debt service
on an operating statement.

18. C. Lenders normally make a lo= an decision based on the lower of the contract price or appraised
&= nbsp; value. Assessed value is not a primary factor in determining the amount of a loan.

19. C. Cost is not a criterion us= ed in determining whether an item is a fixture or whether it is merely
&= nbsp; personal property.

20. C. Supply of real estate is an economic factor and not a legal consideration. The legal rights held in
&= nbsp; real estate are affected by all of the remaining three choices.

21.D. All three of these term= s are used to denote the largest degree of ownership in real estate. Thus
they all refer to the same thing.

22. A. Individual ownership in a condominium is referred to as a unit. Common areas as well as limited
&= nbsp; common areas are held as tenants in common with others. A cooperative is a dif= ;ferent type of
owne= rship.

23. D. Zoning is a police power d= evice used by government to divide a jurisdiction into districts and
&= nbsp; establish how land may be used within those districts.

24. B. The term ad valorem is a L= atin phrase meaning "according to value." Local and state ||
&= nbsp; governments levy property taxes on real estate based on the assessed value of the prope= rty.

25. A. The person conveying title= is known as the grantor; the person receiving the title is known as the
&= nbsp; grantee.

26. C. A cooperative is an indire= ct form of real estate ownership in which individuals own shares of a
&= nbsp; corporation, which in turn owns the real estate. Thus the individual owners cannot mortg= age their units.
&= nbsp; The tenant's rights or interest in the cooperative is considered personal property.

27. B. A nonconforming use is a preexisting use of land that does not conform to the present zoning
ordi= nance.

28. C. An appurtenance is that wh= ich belongs to something and thus "passes" with the property. &= nbsp; Riparian rights and easements pass with the land.

29. A. An acre of land contains 4= 3,560 square feet.

30. D. Dedication is the donation= of property by an owner to a public authority. Examples would include
roads in a subdivision or land to be used as open space in a subdivision.

31. D. A deed restriction is a voluntary private limitation on real property. Encroachments, adverse
&= nbsp; possession and mechanic's and materialmen's liens are all examples of involuntary limitations.

32. B. A fixture is defined as pe= rsonal property that for some reason or reasons, such as the manner of
atta= chment or the intent of the parties, has become realty.

33. A. A plat map shows the specific location and boundaries of land that has been subdivided into=
&= nbsp; individual lots. Each lot is assigned

&= nbsp; a lot-and-block number so that the lot can be easily identified when it is so= ld.

34. D. The dominant estate is the= tract of land that benefits as a result of an easement on a servient
&= nbsp; estate, which is the estate burdened by the easement.

35. A. The borrower is the mortga= gor and the lender is the mortgagee. This is true since it is the
&= nbsp; mortgagor who "gives" the mortgagee a mortgage (security) against the prope= rty to secure the
&= nbsp; note signed by the borrower.

36. C. Fee simple estate refers t= o the rights to ownership of a property that is free and clear of any
&= nbsp; leases. It is the most complete form of ownership as well as the most common.<= /o:p>

37. C. A fee simple estate is one= that has maximum ownership rights and is not encumbered by any
&= nbsp; leases.

38.C. An encroachment is the extension of some improvement or object across the boundary of an
&= nbsp; adjoining tract, and it may reduce the size or value of the intruded property.

39. B. The appropriate term ident= ifying other properties used to indicate the value of the subject property
       &= nbsp;    is comparables (sometimes shortened to comps). The property being apprais= ed is the subject.
       &= nbsp;    The term outliers is a term in statistical analysis referring to data that is n= ot like the rest. For
       &= nbsp;    example, if regression analysis was being used, a property that was an outlier might be excluded     &= nbsp;      from the analysis.

40.B. An appraisal is an unbi= ased opinion of the nature, quality, value, or utility of an interest=

&= nbsp; in real estate and related personalty. The definitions of valuation and evaluation are not the same
&= nbsp; as the definition of an appraisal.

41. D. Neighborhood boundaries su= rround the area that influences the value of a property. These
boun= daries often coincide with changes in land use, natural terrain, type of occupant, availability,
and type of transportation.

42.B. Appropriateness, quanti= ty of evidence, and accuracy are reconciliation criteria used to estimate &= nbsp; the final value in an appraisal.

43.C.    The property being appr= aised is referred to as the subject property. Comparable properties are
            those that are similar to the subject property and are being used to estimate the value of the
       &= nbsp;    subject property. Assessed property refers to the valuation of property for tax purposes.

44. B. The collection and analysi= s of data is the means by which an appraiser brings about a thorough
and efficient appraisal assignment. The other choices are all steps in the appraisal process.

45. A. The first step that should= be undertaken in any appraisal assignment is a definition of the         &= nbsp; problem.
       &= nbsp;    Both the collection and analysis of= data as well as an analysis of highest and best use
            are part of the process, but both are done after the definition of the problem.=

46. C. A common inclusion in form appraisal reports is the statement "I estimate the market value, = as
       &= nbsp;    defined, of subject property as of to be Normally this date refers to the last time = the property was
            insp= ected by the appraiser, which may or may not be the date the appraisal assig= nment was
       &= nbsp;    accepted or delivered.

47. B. An appraisal is an estimat= e of value. An appraiser does not determine asking price or establish
&= nbsp; loan value.

49. B. When the sales comparison approach is employed, the comparables are adjusted to the subject
&= nbsp; property. If the comparable is superior to the subject property in regard to a certain feature, such = ; as location,
&= nbsp; the correct steps would be to adjus= t the comparable downward.

50. B. Adjustments under the sales comparison approach are always made to the comparables and
            never to the subject property. In this example, an adjustment of subtracting $10,000 from the
       &= nbsp;    comparable would be in order since the comparable has a two-car garage estimated = to have
       &= nbsp;    added $10,000 to the value of the comparable.

51.D. To accurately and successfully use the comparable sales approach, the appraiser needs access<= br> to reliable market data.

52. B. There are numerous element= s of comparison that may be appropriate for the appraiser to use
       &= nbsp;    when employing the sales comparison approach. One of the comparisons involves an adjustment      &n= bsp;    for time,
       &= nbsp;    which allows for any changes in value between the date of sale of a comparable and the       &nb= sp;     date of the
       &= nbsp;    appraisal of the subject property.

53. C. 100 x 180 =3D 18,000 squar= e feet. Yc (sales price) =3D 10,000 + 1 (18,000). Yc =3D $28,000.=

54. D. The adjusted sales prices = for the three comparables would be: comparable 1$15,002;
&= nbsp; comparable 2-$14,999; and comparable 3-$14,997. An estimate of the subject proper= ty would be &nbs= p; $15,000.

55.C.    A comparable property u= sed as part of the sales comparison approach must be adjusted to reflect
       &= nbsp;    any differences between the subject property and the comparable. In the case of favorable
            fina= ncing for a comparable, the sales price would have to be adjusted for cash equivalency and
            the adjustment explained.

48. C. Economic base analysis, wh= ich involves addressing both basic and nonbasic industry sources,
&= nbsp; attempts to measure the present as well as the future economic activity and growth potential of
an area.

56.B.    Unless it is extreme, deferred maintenance should be curable. If the extent of the deferred
            main= tenance is such that the increment to the value of the property is less than the co= st to cure, it
       &= nbsp;    becomes incurable.

57. B. Excess land is the portion= of land not needed for the existing improvements. This land is not
       &= nbsp;    necessarily underimproved and it would be rare for it to be useless. It may not be addi= ng
       &= nbsp;    "plottage" value and is most likely being held by the owner for future developmen= t. Its interim
       &= nbsp;    highest and best use may very well be as vacant land.

58. A. The specific term that exp= lains the effect on value of location where two streets intersect is corner =
       &= nbsp;    influence. In some sense, corner influence might be considered an externality because = it is a
       &= nbsp;    factor external to the property that affects its value, and perhaps an amenity if = the externality is
            posi= tive. The effect can be positive or negative depending on the specific location a= nd type of
            prop= erty; it is dangerous to generalize.

59. A. Site refers to land that h= as been improved for a specific purpose. Site improvements may be
&= nbsp; onsite or offsite and include items such as drainage systems, utility lines, and access to roads.
&= nbsp; Raw land with no improvements is referred to as a parcel, lot, plot, or tr= act.

60. A. Functional obsolescence is caused by defects in design or outdated design, such as a ceiling that=
is too high. Maintenance items are considered physical deterioration.

61. C. Reproduction cost is the c= urrent cost of constructing an exact duplicate of the property being
&= nbsp; appraised. Replacement cost is the estimated cost at current prices to construct = an equivalent
&= nbsp; building using current standards, materials, design, and layout.

62. B. The quantity survey method computes material costs and labor hours required.
&= nbsp; Then these costs are used to estimate unit and total costs. Entrepreneurial prof= it is added to costs.
&= nbsp; This approach has limited use because of the time and expense involved.

63. B. Use of the cost approach to value tends to be more accurate when the improvements are newer
&= nbsp; and when the land is being used under its highest and best use. The older impro= vements or the
&= nbsp; unknown replacement cost can result in a less accurate use of the cost approach. &= nbsp; Vacant land is not appraised using the cost approach.

64. C. The cost of acquisition is= not part of the cost approach to value.
&= nbsp; The remaining three choices are all= part of the cost approach.

65. B. 2,200 x 800 =3D 1,760,000 = sq. ft.; 1,760,000 43,560 =3D 40.404 acres; 40.404 x $32,000 =3D
$1,2= 93,000 (rounded)

66. A. The cost approach to value requires an estimate of the land's value as if vacant. None of the
other approaches requires this step.

67. C. Economic obsolescence or locational obsolescence is always considered incurable;
&= nbsp; whereas with both physical deterioration and functional obsolescence, the loss in v= alue
&= nbsp; can be either curable or incurable.

68. D. Accrued depreciation is de= fined as a loss in value caused by physical deterioration, functional
            obso= lescence, or economic obsolescence. The highest and best use of a site may not b= e
            resi= dential even though it is currently being used as such. When using the cost ap= proach to
            valu= e, the exterior measurements are used rather than the interior measuremen= ts. A newly
            cons= tructed house can indeed suffer from depreciation, such as functional or economic o= bsolescence.

69. D. Plottage is often illustra= ted when a square block in a metropolitan area is assembled into single
owne= rship. In such a case, the value of the assembled parcels is often greater than the total
value of the land when divided into, for example, 20 parcels, each owned by a dif= ferent person.

70. B. Functional obsolescence al= lows for conditions within the structure that make the building outdat= ed
&= nbsp; compared with a new building. Functional obsolescence also includes features not ful= ly valued by
the market.

71. A. Chronological age and actu= al age both refer to the historical age of a building; for example, a &= nbsp; building constructed five years ago is five years old in actual age.

72. B. 2,200 x $55.00 =3D $121,00= 0; $121,000 x .94 =3D $113,740; $113,740 x 1.05 =3D $119,427=

73. B. 15 ÷ 25 =3D = 60 percent deterioration; $10,000 x .60 =3D $6,000

74. A. Numerous techniques are us= ed to estimate replacement or reproduction cost. The comparative
&= nbsp; unit method measures the total square footage or cubic footage and multiplies th= at total by the
&= nbsp; current cost per square or cubic foot.

75. B. V =3D I - R denotes value,= income, and rate of capitalization.

76.C. Amortization refers to = the repayment of an obligation over a period of time. Real estate
&= nbsp; mortgages are normally either fully amortized or partially amortized.

77. B. $500 x 12 =3D $6,000 per year. $57,000 $6,000 =3D 9.5<= /p>

78. B. The relationship between t= he term of the loan and the payment due is inverse, which means the
long= er the term, the less the periodic payment.

79. A. Economic (market) rent is = the amount that would be received from the rental of a parcel of real
&= nbsp; estate in an open, competitive market, as opposed to contract rent, which is the a= ctual amount of
rent due as specified in a lease.

80. D. The gross rent multiplier = equals sales price divided by the monthly gross rent.
       &= nbsp;    $6,000=3D12 =3D $500 monthly rent. $100,000/ $500 =3D 200 GRM.
       &= nbsp;    The property tax and mortgage payment information given in this probl= em
       &= nbsp;    was not needed in determining the GRM.

81. C. .09 - 12 =3D .0075 =3D mon= thly interest; $30,000 x 0.0075 =3D $225

82. A. Negative amortization occu= rs when the interest on a loan is greater than the payment. This
situ= ation sometimes occurs in loans with graduated payments. In this case, the loan payment
&= nbsp; would start at a lower payment level and then increase at some time in the future= .

83. A. The holder of the first mo= rtgage receives the full amount of the unpaid principal plus legal
&= nbsp; expenses. The second mortgage holder will receive any excess after the first mort= ;gage has been
&= nbsp; fully satisfied. Thus, in this situation the second mortgage holder receives noth= ing.

84.B. If residential property= in a neighborhood is selling between $100,000 and $130,000, then the
&= nbsp; range is $30,000, which is the difference between the lowest and the highest valu= es.

85. C. The mean denotes the avera= ge selling price. $50,000 + $45,000 + $50,000 + $55,000 + $52,500
=3D $252,500 ÷ 5 =3D $= 50,500

86. B. The median selling price i= s the price in the middle. In this example, $50,000 is the middle selling
pric= e.

87. B. Mean price per square foot= is calculated by dividing each of the five sales prices by the size for
that particular sale. In all five of the sales, the price per square foot is $10= 0; thus the mean or
aver= age would also be $100.

88. B. The mode selling price ref= ers to the sales price that occurs with the most frequency. In this
&= nbsp; example, $50,000 occurred twice. No other sales price occurred more than once.<= /o:p>

89. A. A leasehold is the legal interest that a tenant has in the property as a result of a lease. Once the
tena= nt's legal interest is terminated, whatever legal interest that exists "reverts" to the landlord
&= nbsp; who therefore has a reversionary interest.

90. A. A flat lease is a type of = lease which requires the tenant to pay equal rental payments each period. &= nbsp; In such a lease arrangement, there is no provision during the term of a lease = for increases in the
rent= al payment, and thus the landlord has no protection against inflation dur= ing the term of the lease.

91. A. The leasehold interest is = not likely to have any value because the lessee is in an unfavorable
            situ= ation. In fact, the lessee may be willing to pay to get out of the lease, whi= ch means that the
       &= nbsp;    leasehold position has a negative value. The above-market rents could resul= t in a leased fee
            esta= te that is more valuable (not less valuable) because of the additional rent be= ing collected.

92. B. Assessed value is used pri= marily in the calculation of property taxes. The assessed value is
&= nbsp; usually based on the market value but does not have to equal the market value.=

93. C. The term used to refer to a lease used to sublease a property is a sandwich lease, and the legal
inte= rest that is created is sometimes referred to as a sandwich position.=

94.C.    A sale of property such= as a home sold by a father to his daughter is normally not considered an
            arm'= s-length transaction, but is distorted in terms of what the sale tells you in regard to market
            acti= vity. To use such a sale as a comparable in the sales comparison approach, t= he specifics of
            the sale would need to be known.

95. C. The sales comparison appro= ach is based on information acquired from the market from
&= nbsp; comparable properties that have sold. Such information is, by definition, histori= cal data and may
have to be adjusted to accurately reflect current market conditions.<= /span>

96.C. $100,000 x (1.06)2 =3D $112,360. During the two years, the time adjustment would be $12,360.<= /o:p>

97. D. Disclosing any lack of kno= wledge or experience to a client is part of the Competency Rule.

98. A. The Departure Rule does no= t keep the appraiser from entering into an agreement to perform an
assi= gnment different from the work required by the specific requirements.

99. A. S.R. 1-4(h) requires the appraiser to examine the plans, specifications, or other document= ation to
iden= tify the scope and character of the proposal improvements.

100. C. Standard 2 requires the appraiser to communicate each analysis, opinion, and conclusion i= n a
mann= er that is not misleading.