IAAO COURSE 101 – FUNDAMENTALS OF
REAL PROPERTY APPRAISAL EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2026 Q&A
This course concentrates on what two approaches to value -
✔✔✔ANSW✔✔..Cost approach and Sales Comparison approach.
Chapter 1 - ✔✔✔ANSW✔✔..Working knowledge of appraisal theory
Chapter 2 - ✔✔✔ANSW✔✔..Basic understanding of methods used to
develop land values
Chapter 3 - ✔✔✔ANSW✔✔..Working knowledge of cost, including the
different definitions of cost and various types of cost estimates
Chapter 4 - ✔✔✔ANSW✔✔..Emphasizes a basic understanding of the
sales comparison approach and the systematic procedure for its
application
Property Assessment Valuation (PAV), 3rd edition -
✔✔✔ANSW✔✔..Text book used for course assigned reading
3 requirements of the Assessor - ✔✔✔ANSW✔✔..Discover
List
Value
,The Uniform Standards of Professional Appraisal Practice provides... -
✔✔✔ANSW✔✔.....standards for appraisal practice
Jurisdictional exception rule - ✔✔✔ANSW✔✔..Properties must be
values at highest and best use, unless statutes says otherwise
How is the tax rate calculated? - ✔✔✔ANSW✔✔..(Budget - Other
Revenues)/Assessed Value
3 ways that tax rates are expressed - ✔✔✔ANSW✔✔..1. $ per 100
2. $ per 1000
3. $ per mill (same as $ per 1000)
Formula for calculating taxes owed - ✔✔✔ANSW✔✔..(FCV) Market
Value
x Assessment Ratio
____________________________
Assessed Value
x Tax Rate
____________________________
Taxes owed
Effective tax rate definition and formula - ✔✔✔ANSW✔✔..Reflects the
ratio between the current tax bull and the property value.
Assessment ratio/level x tax rate
Highest and best use definition and 4 criteria - ✔✔✔ANSW✔✔..The use
that generates the highest net return to a property owner over a
reasonable time.
1. Legally permissible
2. Physically possible
,3. Financially feasible
4. Maximum productivity
What is the point at which the forces of supply and demand meet? -
✔✔✔ANSW✔✔..Equilibrium
Two types of highest and best use analysis - ✔✔✔ANSW✔✔..As if
vacant and as if improved.
Elements of the marketplace that contribute to change in demand -
✔✔✔ANSW✔✔..1) Consumer tastes & preferences
2) Consumer income
3) Price of related commodities
4) Consumer expectations
5) Price of the commodity
4 basic elements of supply - ✔✔✔ANSW✔✔..1) Cost of production
2) Price of other goods
3) Entrepreneur expectations
4) Number of sellers
4 governmental powers that can limit private property rights -
✔✔✔ANSW✔✔..Taxation
Eminent Domain
Police Power
Escheat
7 Steps in the Appraisal Process - ✔✔✔ANSW✔✔..1. Define the
problem
2. identify the scope of work
3. preliminary survey and planning
4. data collections and analysis
, 5. highest and best use analysis
6. application of the date and the approaches to value
7. reconciliation
Examples of private encumbrances - ✔✔✔ANSW✔✔..- Rights of co-
owners
- Condo and subdivision restrictions
- CC&Rs
- Mortgages
- Easements and rights-of-way
- Liens and judgements
- Leases
Six basic rights with property - ✔✔✔ANSW✔✔..Sell
Lease/Rent
Use
Give Away
Enter/Leave
Refuse
Three boundaries that delineate neighborhood boundaries -
✔✔✔ANSW✔✔..- Natural
- Political
- Manmade
Four forces that influence value - ✔✔✔ANSW✔✔..Physical
Economic
Governmental
Social
REAL PROPERTY APPRAISAL EXAM
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) PLUS RATIONALES
2026 Q&A
This course concentrates on what two approaches to value -
✔✔✔ANSW✔✔..Cost approach and Sales Comparison approach.
Chapter 1 - ✔✔✔ANSW✔✔..Working knowledge of appraisal theory
Chapter 2 - ✔✔✔ANSW✔✔..Basic understanding of methods used to
develop land values
Chapter 3 - ✔✔✔ANSW✔✔..Working knowledge of cost, including the
different definitions of cost and various types of cost estimates
Chapter 4 - ✔✔✔ANSW✔✔..Emphasizes a basic understanding of the
sales comparison approach and the systematic procedure for its
application
Property Assessment Valuation (PAV), 3rd edition -
✔✔✔ANSW✔✔..Text book used for course assigned reading
3 requirements of the Assessor - ✔✔✔ANSW✔✔..Discover
List
Value
,The Uniform Standards of Professional Appraisal Practice provides... -
✔✔✔ANSW✔✔.....standards for appraisal practice
Jurisdictional exception rule - ✔✔✔ANSW✔✔..Properties must be
values at highest and best use, unless statutes says otherwise
How is the tax rate calculated? - ✔✔✔ANSW✔✔..(Budget - Other
Revenues)/Assessed Value
3 ways that tax rates are expressed - ✔✔✔ANSW✔✔..1. $ per 100
2. $ per 1000
3. $ per mill (same as $ per 1000)
Formula for calculating taxes owed - ✔✔✔ANSW✔✔..(FCV) Market
Value
x Assessment Ratio
____________________________
Assessed Value
x Tax Rate
____________________________
Taxes owed
Effective tax rate definition and formula - ✔✔✔ANSW✔✔..Reflects the
ratio between the current tax bull and the property value.
Assessment ratio/level x tax rate
Highest and best use definition and 4 criteria - ✔✔✔ANSW✔✔..The use
that generates the highest net return to a property owner over a
reasonable time.
1. Legally permissible
2. Physically possible
,3. Financially feasible
4. Maximum productivity
What is the point at which the forces of supply and demand meet? -
✔✔✔ANSW✔✔..Equilibrium
Two types of highest and best use analysis - ✔✔✔ANSW✔✔..As if
vacant and as if improved.
Elements of the marketplace that contribute to change in demand -
✔✔✔ANSW✔✔..1) Consumer tastes & preferences
2) Consumer income
3) Price of related commodities
4) Consumer expectations
5) Price of the commodity
4 basic elements of supply - ✔✔✔ANSW✔✔..1) Cost of production
2) Price of other goods
3) Entrepreneur expectations
4) Number of sellers
4 governmental powers that can limit private property rights -
✔✔✔ANSW✔✔..Taxation
Eminent Domain
Police Power
Escheat
7 Steps in the Appraisal Process - ✔✔✔ANSW✔✔..1. Define the
problem
2. identify the scope of work
3. preliminary survey and planning
4. data collections and analysis
, 5. highest and best use analysis
6. application of the date and the approaches to value
7. reconciliation
Examples of private encumbrances - ✔✔✔ANSW✔✔..- Rights of co-
owners
- Condo and subdivision restrictions
- CC&Rs
- Mortgages
- Easements and rights-of-way
- Liens and judgements
- Leases
Six basic rights with property - ✔✔✔ANSW✔✔..Sell
Lease/Rent
Use
Give Away
Enter/Leave
Refuse
Three boundaries that delineate neighborhood boundaries -
✔✔✔ANSW✔✔..- Natural
- Political
- Manmade
Four forces that influence value - ✔✔✔ANSW✔✔..Physical
Economic
Governmental
Social
