IAAO COURSE 101 REVIEW EXAM
QUESTIONS & VERIFIED COMPLETE
SOLUTIONS PASSED 100%
Tax Rate (def.) - Correct Answer ✔✔ Percent of assessed value at which each property
is taxed in a given district.
Tax Rate (formula) - Correct Answer ✔✔ Tax revenue (amount) / Assessed value
Property Tax (formula) - Correct Answer ✔✔ Subject assessed value / Tax rate
Budget Revenue (formula) - Correct Answer ✔✔ Total budget - Other taxes
Effective Tax Rate (def.) - Correct Answer ✔✔ Reflects the relationship between total
property taxes on real property and the property's market value.
Effective Tax Rate (formula) - Correct Answer ✔✔ Assessment ratio (level) X Tax rate
Jurisdictions tax rate is derived by (formula) - Correct Answer ✔✔ Budget revenue
(budget -other taxes) / Assessed value
Assessment Ratio (def.) - Correct Answer ✔✔ Estimated fractional relationship between
the assessed values and market values of a group of properties.
Assessment Ratio (formula) - Correct Answer ✔✔ Assessed value / Market value
Neighborhood Life Cycle - Correct Answer ✔✔ Growth, Stability, Decline &
Revitalization
Principle of Conformity - Correct Answer ✔✔ Value of a property depends on its
relationship to its surroundings; maximum market value is achieved when reasonable
similarity among improvements in the neighborhood.
Principle of Competition - Correct Answer ✔✔ Created by the potential for profits;
availability must be in harmony with demand; if one or the other is in excess prices will
decrease or increase.
Principle of Balance - Correct Answer ✔✔ Applied to an individual property; maximum
value is obtained when the four agents of production are balanced - land, labor, capital
and management.
, Principle of Change - Correct Answer ✔✔ Market value is never constant; estimate of
market value is only valid as of a specific date & changes in the market will impact
future value estimates.
Principle of Anticipation - Correct Answer ✔✔ Value created by the expected future
benefits from the property; related to the Principle of Change.
Principle of Consistent Use - Correct Answer ✔✔ Property must be valued with a single
use for the entire property; land cannot be valued with one use and improvements with
another.
Principle of Contribution - Correct Answer ✔✔ Value of component depends on its
contribution to the whole; basis for adjustments in the sales comparison approach.
Principle of Supply - Correct Answer ✔✔ Amount of product producers are willing to sell
under various conditions during a given period.
Principle of Demand - Correct Answer ✔✔ Amount of product producers are willing and
able to buy during a given period; given the choices available.
Principle of Increasing & Decreasing Returns - Correct Answer ✔✔ Addition of
successive increments of one agent of production will decrease future incomes or
amenities; or additions of successive increments of one agent of productions added,
future income or amenities will increase to a point.
Principle of Progression - Correct Answer ✔✔ Association with better properties of the
same type increase value of a lower priced property.
Principle of Regression - Correct Answer ✔✔ Association with lower quality properties
of the same area decrease the value of a better quality property.
Principle of Substitution - Correct Answer ✔✔ Market value of a property set by cost of
acquiring an equally desirable and valuable property; underlies the 3 approaches to
appraisal (value).
Principle of Surplus Productivitiy - Correct Answer ✔✔ Net income remaining after the
costs of labor, management and capital have been satisfied; income earned by land;
increase income = increase value.
Types of Neighborhood Boundaries - Correct Answer ✔✔ Natural, Political and Man-
made
Basic steps in definition of the appraisal problem are... - Correct Answer ✔✔ 1) Identify
the property
2) Determine property rights conveyed
3) Purpose or function of the appraisal
QUESTIONS & VERIFIED COMPLETE
SOLUTIONS PASSED 100%
Tax Rate (def.) - Correct Answer ✔✔ Percent of assessed value at which each property
is taxed in a given district.
Tax Rate (formula) - Correct Answer ✔✔ Tax revenue (amount) / Assessed value
Property Tax (formula) - Correct Answer ✔✔ Subject assessed value / Tax rate
Budget Revenue (formula) - Correct Answer ✔✔ Total budget - Other taxes
Effective Tax Rate (def.) - Correct Answer ✔✔ Reflects the relationship between total
property taxes on real property and the property's market value.
Effective Tax Rate (formula) - Correct Answer ✔✔ Assessment ratio (level) X Tax rate
Jurisdictions tax rate is derived by (formula) - Correct Answer ✔✔ Budget revenue
(budget -other taxes) / Assessed value
Assessment Ratio (def.) - Correct Answer ✔✔ Estimated fractional relationship between
the assessed values and market values of a group of properties.
Assessment Ratio (formula) - Correct Answer ✔✔ Assessed value / Market value
Neighborhood Life Cycle - Correct Answer ✔✔ Growth, Stability, Decline &
Revitalization
Principle of Conformity - Correct Answer ✔✔ Value of a property depends on its
relationship to its surroundings; maximum market value is achieved when reasonable
similarity among improvements in the neighborhood.
Principle of Competition - Correct Answer ✔✔ Created by the potential for profits;
availability must be in harmony with demand; if one or the other is in excess prices will
decrease or increase.
Principle of Balance - Correct Answer ✔✔ Applied to an individual property; maximum
value is obtained when the four agents of production are balanced - land, labor, capital
and management.
, Principle of Change - Correct Answer ✔✔ Market value is never constant; estimate of
market value is only valid as of a specific date & changes in the market will impact
future value estimates.
Principle of Anticipation - Correct Answer ✔✔ Value created by the expected future
benefits from the property; related to the Principle of Change.
Principle of Consistent Use - Correct Answer ✔✔ Property must be valued with a single
use for the entire property; land cannot be valued with one use and improvements with
another.
Principle of Contribution - Correct Answer ✔✔ Value of component depends on its
contribution to the whole; basis for adjustments in the sales comparison approach.
Principle of Supply - Correct Answer ✔✔ Amount of product producers are willing to sell
under various conditions during a given period.
Principle of Demand - Correct Answer ✔✔ Amount of product producers are willing and
able to buy during a given period; given the choices available.
Principle of Increasing & Decreasing Returns - Correct Answer ✔✔ Addition of
successive increments of one agent of production will decrease future incomes or
amenities; or additions of successive increments of one agent of productions added,
future income or amenities will increase to a point.
Principle of Progression - Correct Answer ✔✔ Association with better properties of the
same type increase value of a lower priced property.
Principle of Regression - Correct Answer ✔✔ Association with lower quality properties
of the same area decrease the value of a better quality property.
Principle of Substitution - Correct Answer ✔✔ Market value of a property set by cost of
acquiring an equally desirable and valuable property; underlies the 3 approaches to
appraisal (value).
Principle of Surplus Productivitiy - Correct Answer ✔✔ Net income remaining after the
costs of labor, management and capital have been satisfied; income earned by land;
increase income = increase value.
Types of Neighborhood Boundaries - Correct Answer ✔✔ Natural, Political and Man-
made
Basic steps in definition of the appraisal problem are... - Correct Answer ✔✔ 1) Identify
the property
2) Determine property rights conveyed
3) Purpose or function of the appraisal
