Real Estate Broker Exam — National Portion
Property value and appraisal: practice questions
Our Real Estate Broker (National) bank has 35 questions on this topic. Here are 5 of them with answers; the full mock exam draws from every topic, like the real one.
Question 1
A worn-out roof that can be economically replaced is an example of:
- Incurable external obsolescence
- Economic obsolescence
- Curable physical deterioration
- Functional obsolescence
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C. Curable physical deterioration — Physical deterioration is wear and tear; it is curable if the cost to fix is no more than the value added.
Question 2
Net operating income is:
- Potential gross income minus vacancy only
- Gross income minus debt service
- Rent minus depreciation and mortgage interest
- Effective gross income minus operating expenses
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D. Effective gross income minus operating expenses — NOI excludes debt service, depreciation and income taxes.
Question 3
A house sells for $410,000 after a bidding war, though comparable homes suggest $385,000. The $410,000 is the:
- Market value
- Insured value
- Assessed value
- Market price
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D. Market price — Market price is the actual sale price, which may differ from market value.
Question 4
A home with four bedrooms and only one bathroom suffers from:
- External obsolescence
- Physical deterioration
- Functional obsolescence
- Economic life extension
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C. Functional obsolescence — Functional obsolescence is loss in value from poor design or outdated features within the property.
Question 5
In the sales comparison approach, if a comparable has a feature the subject lacks, the appraiser:
- Adds the value to the comparable's price
- Adds the value to the subject
- Subtracts its value from the comparable
- Drops the comparable
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C. Subtracts its value from the comparable — Adjustments are always made to the comparable to make it like the subject: comp better, subtract; comp worse, add.