Preview Questions Real Estate Appraiser | Role Specific Skill

Question 1: In the income approach, how is the cap rate determined?

Which action should you take?

Choose only one option

By comparing gross rental multipliers

By subtracting expenses from revenue

By dividing NOI by property value

By averaging market rent rates

Question 2: What do horizontal cracks in a basement wall typically suggest?

Which action should you take?

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Expansion of building materials

Normal settling

Poor construction technique

Lateral pressure from soil or water

Question 3: What is the primary consideration when using the cost approach for property valuation?

Which action should you take?

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Zoning and land-use restrictions

Current market trends

Estimated rental income

Replacement or reproduction cost minus depreciation

Question 4: What is the impact of foreign investment on local real estate market trends, particularly in high-demand urban areas?

Which action should you take?

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Foreign investment lowers prices by flooding the market

Foreign investment has no impact on market trends

Foreign investment increases demand, leading to higher prices and limited affordability

It generally increases the supply of properties, reducing prices

Question 5: What is the primary reason for market correction in commercial real estate, and how does it affect property valuation trends?

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Increase in demand for retail spaces causes correction in industrial real estate

A shift in economic performance leads to long-term corrections in commercial property values

Changes in tax laws or zoning lead to correction of commercial property values

Overbuilding and speculative investments lead to oversupply, causing a drop in values

Question 6: When using the Sales Comparison Approach (SCA) for property valuation, what is the most significant adjustment needed when comparing properties in different neighborhoods?

Which action should you take?

Choose only one option

Adjust for age and condition of the property

Adjust for interest rate changes

Adjust for differences in property size

Adjust for differences in location and market demand