IAAO 101 - FUNDAMENTALS OF REAL
PROPERTY APPRAISAL EXAM
QUESTIONS & ACCURATE CORRECT
ANSWERS
Responsibilities of Assessor - Correct Answer ✔✔ Discover, list, value
Steps for Discovery (Responsibilities of Assessor) - Steps for Locating - Correct Answer
✔✔ 1) Adequate mapping system (GIS/Cadastral)
2) Recorded Information
3) Periodic on-site inspection
Steps for Listing (Responsibilities of Assessor) - Correct Answer ✔✔ 1) Inventory
quantity, quality, & important characteristics of all taxable property
2) Preparing and certify assessment roll
3) Incorporate all elements needed in listing property (legal description, address, PID,
property class, property use, situs, physical attributes of property)
4) Determining extent of taxability for all property
Steps for Valuation (Responsibilities of Assessor) - Correct Answer ✔✔ 1) Estimate of
the actual or market value of all taxable property
2) Assessed value
3) Informal and formal review of assessments
4) Certification of assessments
Ad Valorem - Correct Answer ✔✔ According to value
Tax Rate (formula) - Correct Answer ✔✔ Budget - Other Revenues / Assessed Value
$Taxes (formula) - Correct Answer ✔✔ Tax Bill = Tax Rate x Assessed Value (AV)
Assessment Ratio (AR) formula - Correct Answer ✔✔ AR = AV/MV
Effective Tax Rate (formula) - Correct Answer ✔✔ Eat Triangle where E=ETR,
A=Assessment Ratio, T=Tax Rate
Effective Tax Rate (definition) - Correct Answer ✔✔ Rate expressing the ratio between
the current tax bill and the property value
Real Property - Correct Answer ✔✔ Interest, benefits, and right (bundle of rights)
inherent in ownership of land and improvements
, Real Estate - Correct Answer ✔✔ Land and improvements
Six basic rights associated with ownership of property - Correct Answer ✔✔ S ell
L ease or rent
U se
G ive away
E nter or leave
R efuse to do any of these
Governmental Restrictions on Property - Correct Answer ✔✔ T axation
E minent domain
P police power (regulate use; safety, zoning, codes, etc)
E scheat (revert to state for nonpayment or no heirs)
For property to have value, it must have... - Correct Answer ✔✔ D esirability
U tility
S carcity
T ransferability (effective purchasing power)
Principle of Anticipation - Correct Answer ✔✔ Value created by "expected future
benefits"
Principle of Change - Correct Answer ✔✔ Market value never constant b/c of PEGS
(physical, economic, governmental, and social forces)
Principle of Balance - Correct Answer ✔✔ Maximum market value is reached when the
4 agents of production (land, labor, capital, management) are in equilibrium
Principle of Competition - Correct Answer ✔✔ Availability must be in harmony with
demand
Principle of Conformity - Correct Answer ✔✔ Max market value is achieved when there
is similarity among improvements in a neighborhood
Principle of Consistent Use - Correct Answer ✔✔ Property value must be valued with a
single use for the entire property (land value cannot be based on one use while
improvement value is based on another use)
Principle of Contribution - Correct Answer ✔✔ The value of a component of property
depends on its "contribution to the whole"
Principle of Increasing and Decreasing Returns - Correct Answer ✔✔ After a certain
point, the addition of successive increments of one agent of production decrease future
incomes or amenities (economies of scale)
PROPERTY APPRAISAL EXAM
QUESTIONS & ACCURATE CORRECT
ANSWERS
Responsibilities of Assessor - Correct Answer ✔✔ Discover, list, value
Steps for Discovery (Responsibilities of Assessor) - Steps for Locating - Correct Answer
✔✔ 1) Adequate mapping system (GIS/Cadastral)
2) Recorded Information
3) Periodic on-site inspection
Steps for Listing (Responsibilities of Assessor) - Correct Answer ✔✔ 1) Inventory
quantity, quality, & important characteristics of all taxable property
2) Preparing and certify assessment roll
3) Incorporate all elements needed in listing property (legal description, address, PID,
property class, property use, situs, physical attributes of property)
4) Determining extent of taxability for all property
Steps for Valuation (Responsibilities of Assessor) - Correct Answer ✔✔ 1) Estimate of
the actual or market value of all taxable property
2) Assessed value
3) Informal and formal review of assessments
4) Certification of assessments
Ad Valorem - Correct Answer ✔✔ According to value
Tax Rate (formula) - Correct Answer ✔✔ Budget - Other Revenues / Assessed Value
$Taxes (formula) - Correct Answer ✔✔ Tax Bill = Tax Rate x Assessed Value (AV)
Assessment Ratio (AR) formula - Correct Answer ✔✔ AR = AV/MV
Effective Tax Rate (formula) - Correct Answer ✔✔ Eat Triangle where E=ETR,
A=Assessment Ratio, T=Tax Rate
Effective Tax Rate (definition) - Correct Answer ✔✔ Rate expressing the ratio between
the current tax bill and the property value
Real Property - Correct Answer ✔✔ Interest, benefits, and right (bundle of rights)
inherent in ownership of land and improvements
, Real Estate - Correct Answer ✔✔ Land and improvements
Six basic rights associated with ownership of property - Correct Answer ✔✔ S ell
L ease or rent
U se
G ive away
E nter or leave
R efuse to do any of these
Governmental Restrictions on Property - Correct Answer ✔✔ T axation
E minent domain
P police power (regulate use; safety, zoning, codes, etc)
E scheat (revert to state for nonpayment or no heirs)
For property to have value, it must have... - Correct Answer ✔✔ D esirability
U tility
S carcity
T ransferability (effective purchasing power)
Principle of Anticipation - Correct Answer ✔✔ Value created by "expected future
benefits"
Principle of Change - Correct Answer ✔✔ Market value never constant b/c of PEGS
(physical, economic, governmental, and social forces)
Principle of Balance - Correct Answer ✔✔ Maximum market value is reached when the
4 agents of production (land, labor, capital, management) are in equilibrium
Principle of Competition - Correct Answer ✔✔ Availability must be in harmony with
demand
Principle of Conformity - Correct Answer ✔✔ Max market value is achieved when there
is similarity among improvements in a neighborhood
Principle of Consistent Use - Correct Answer ✔✔ Property value must be valued with a
single use for the entire property (land value cannot be based on one use while
improvement value is based on another use)
Principle of Contribution - Correct Answer ✔✔ The value of a component of property
depends on its "contribution to the whole"
Principle of Increasing and Decreasing Returns - Correct Answer ✔✔ After a certain
point, the addition of successive increments of one agent of production decrease future
incomes or amenities (economies of scale)
