ACEABLE AGENT PRINCIPLES OF REAL ESTATE
2 ACTUAL EXAM PAPER 2026 QUESTIONS
WITH ANSWERS GRADED A+
◍ Arrears . Answer: Payment for an item or service after it's received
◍ Down Payment . Answer: The initial payment made when buying
something on credit, a ____________ is paid directly by the buyer to the
seller
◍ Proration . Answer: The allocation or distribution of an annual
expense across smaller chunks of time
◍ Acreage . Answer: A unit of measurement used to determine the size
of land; 1 acre = 43560 square feet
◍ Appraisal . Answer: The value of property, based on factors
determined by a certified appraiser
◍ General data . Answer: Information about the area surrounding a
property, this could include the city, region, and neighborhood in which
the property is situated
,◍ Specific Data . Answer: Information regarding the property itself
◍ Limited Appraisal . Answer: A simple, abbreviated version of a
regular appraisal
◍ Market Value . Answer: The price for which a property would sell if
offered openly under normal conditions. This refers to the economic
principle, it's the price that a buyer and seller would probably accept
◍ Appraised Value . Answer: Refers to the value given by a licensed
appraiser during the mortgage origination process. Appraisers are chosen
by the lender but paid for by the homebuyer.
◍ Assessed Value . Answer: Refers to the value placed on a property by
a governmental unit for use in levying annual real estate taxes
◍ Loan-to-Value Ratio (LTV) . Answer: The limit on the value of a loan,
usually a certain percentage of the home's appraised value or sales price,
whichever is lower
◍ Subject Property . Answer: The property that is being evaluated in any
given appraisal
,◍ Highest and Best Use . Answer: What is achieved when a property is
used for the most appropriate purpose with the highest returns
◍ Principle of Anticipation . Answer: The present value of a property is
affected by the anticipated income or utility that property will give to the
property owner
◍ Principle of Contribution . Answer: A property's overall value is made
of the combined value of each of its parts
◍ Principle of Substitution . Answer: The value of something is effected
by the cost of getting a similar (substitute) item elsewhere
◍ Principle of Change . Answer: The condition of a property, the
desirability of its location, and the market in which it exists can always
change
◍ Principle of Conformity . Answer: Values are the highest when houses
in a neighborhood look roughly the same
◍ Principle of Regression . Answer: Lower value properties surrounding
a subject property are can drag down the value of a property
◍ Principle of Progression . Answer: Higher value properties of a
subject property can bump of the value of a property
, ◍ Sales Comparison Approach . Answer: Determining value by
comparing the subject property to similar properties ("comps") that have
sold recently. It's most commonly used for single family residences.
◍ Cost Approach . Answer: Determining value by considering how
much the same property would cost to build brand new at current prices
(replacement cost), then adjusting for depreciation
◍ Income Approach . Answer: Determining value by considering how
much income the property would generate when used as rental property
◍ Depreciation . Answer: The loss of value because of obsolescence or
deterioration
◍ Functional Obsolescence . Answer: Loss of value because a property's
function or appearance has gone out of style or has been replaced by a
more appealing version
◍ External Obsolescence . Answer: Loss of value caused by negative
forces outside the property which are beyond the control of the owner
(unfavorable changes in the environment or market)
◍ Deterioration . Answer: Loss of value caused by physical wear and
tear over time
2 ACTUAL EXAM PAPER 2026 QUESTIONS
WITH ANSWERS GRADED A+
◍ Arrears . Answer: Payment for an item or service after it's received
◍ Down Payment . Answer: The initial payment made when buying
something on credit, a ____________ is paid directly by the buyer to the
seller
◍ Proration . Answer: The allocation or distribution of an annual
expense across smaller chunks of time
◍ Acreage . Answer: A unit of measurement used to determine the size
of land; 1 acre = 43560 square feet
◍ Appraisal . Answer: The value of property, based on factors
determined by a certified appraiser
◍ General data . Answer: Information about the area surrounding a
property, this could include the city, region, and neighborhood in which
the property is situated
,◍ Specific Data . Answer: Information regarding the property itself
◍ Limited Appraisal . Answer: A simple, abbreviated version of a
regular appraisal
◍ Market Value . Answer: The price for which a property would sell if
offered openly under normal conditions. This refers to the economic
principle, it's the price that a buyer and seller would probably accept
◍ Appraised Value . Answer: Refers to the value given by a licensed
appraiser during the mortgage origination process. Appraisers are chosen
by the lender but paid for by the homebuyer.
◍ Assessed Value . Answer: Refers to the value placed on a property by
a governmental unit for use in levying annual real estate taxes
◍ Loan-to-Value Ratio (LTV) . Answer: The limit on the value of a loan,
usually a certain percentage of the home's appraised value or sales price,
whichever is lower
◍ Subject Property . Answer: The property that is being evaluated in any
given appraisal
,◍ Highest and Best Use . Answer: What is achieved when a property is
used for the most appropriate purpose with the highest returns
◍ Principle of Anticipation . Answer: The present value of a property is
affected by the anticipated income or utility that property will give to the
property owner
◍ Principle of Contribution . Answer: A property's overall value is made
of the combined value of each of its parts
◍ Principle of Substitution . Answer: The value of something is effected
by the cost of getting a similar (substitute) item elsewhere
◍ Principle of Change . Answer: The condition of a property, the
desirability of its location, and the market in which it exists can always
change
◍ Principle of Conformity . Answer: Values are the highest when houses
in a neighborhood look roughly the same
◍ Principle of Regression . Answer: Lower value properties surrounding
a subject property are can drag down the value of a property
◍ Principle of Progression . Answer: Higher value properties of a
subject property can bump of the value of a property
, ◍ Sales Comparison Approach . Answer: Determining value by
comparing the subject property to similar properties ("comps") that have
sold recently. It's most commonly used for single family residences.
◍ Cost Approach . Answer: Determining value by considering how
much the same property would cost to build brand new at current prices
(replacement cost), then adjusting for depreciation
◍ Income Approach . Answer: Determining value by considering how
much income the property would generate when used as rental property
◍ Depreciation . Answer: The loss of value because of obsolescence or
deterioration
◍ Functional Obsolescence . Answer: Loss of value because a property's
function or appearance has gone out of style or has been replaced by a
more appealing version
◍ External Obsolescence . Answer: Loss of value caused by negative
forces outside the property which are beyond the control of the owner
(unfavorable changes in the environment or market)
◍ Deterioration . Answer: Loss of value caused by physical wear and
tear over time
