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Kentucky IAAO Residential Evaluation Specialist
(RES) Exam COMPLETE QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE THIS YEAR
Kentucky IAAO Residential Evaluation Specialist (RES) Exam,
Summarized Exam Topics Covered (Point Form – Accurate for KY RES Exam)
• Primary Appraisal Approaches: Sales Comparison Approach (most common for single-family
homes), Cost Approach, Income Approach (for investment properties)
• Sales Comparison Approach: Adjustments for differences between subject and comparables,
bracketing, units of comparison (price per sq ft, site value), reconciliation
• Cost Approach & Depreciation: Replacement cost new, physical deterioration, functional
obsolescence (outdated design), economic obsolescence (external factors)
• Kentucky Property Tax System: Appraised market value as basis for taxation (KRS 133.225), role
of Property Valuation Administrator (PVA) (KRS 132.420), assessment process, tax rates
• Highest and Best Use: Legally permissible, physically possible, financially feasible, maximally
productive use
• Market Value Definition: Buyer and seller not compelled, knowledgeable parties, reasonable
exposure
• Factors Affecting Residential Value: Location (primary), physical characteristics (lot size,
condition), external factors (schools, employment, industrial development, traffic)
• Income Approach: Capitalization of net operating income (NOI), direct capitalization rate
development, ratio of restricted rent to market rent (KAR 103 5 200)
• Multi-Unit Housing with Government Restrictions: KAR 103 5 200 – direct capitalization,
restricted rent to market rent method, income/expense reporting by owner
• Obsolescence Types: Functional (design/layout), Economic (external factors), Physical
(wear/tear)
• Depreciation: Physical deterioration, functional obsolescence, economic obsolescence
• Comparable Property Adjustments: Positive or negative adjustments to comparable or subject;
adjustments for lot size, condition, location, quality, amenities
• IAAO Mass Appraisal Concepts: Real Property Modeling Concepts (Course 311), sales ratio
studies, model specification, calibration
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• Kentucky Assessment Calendar: PVA assessment, taxpayer notification, appeal process
• IAAO Certification Designations: RES (Residential Evaluation Specialist), CAE, etc.
1. What is the primary purpose of a residential property appraisal under Kentucky assessment practices?
A) To determine the market value for taxation purposes
B) To establish the replacement cost for insurance
C) To estimate the property’s potential rental income
D) To calculate capital gains for a future sale
Answer: A
Rationale: Residential property appraisals primarily establish market value for assessment and taxation
purposes. Kentucky bases property taxes on appraised market value .
2. Which approach is most commonly used for valuing single-family residences in Kentucky?
A) Cost approach
B) Income approach
C) Sales comparison approach
D) Depreciated replacement cost approach
Answer: C
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Rationale: The sales comparison approach is preferred for single-family homes because it relies on recent
sales of similar properties, reflecting the actions of buyers and sellers in the market .
3. In Kentucky, what is the effective property tax rate generally based on?
A) Assessed value of the property
B) Original purchase price
C) Market value multiplied by a legislated rate
D) Appraised value divided by property size
Answer: C
Rationale: Kentucky uses a legislated tax rate applied to the appraised market value to determine
property taxes. The taxing authorities set the rate, and the tax is market value × rate .
4. Which factor most directly affects residential property value?
A) Age of the property
B) Local school quality
C) Distance to the nearest city
D) Interior paint color
Answer: B
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Rationale: Quality of nearby schools significantly influences residential property market values. Location
remains the primary driver of value, and school quality is a key component of locational desirability .
5. A property with a poorly planned kitchen that reduces market appeal is experiencing:
A) Physical deterioration
B) Functional obsolescence
C) Economic obsolescence
D) External depreciation
Answer: B
Rationale: Functional obsolescence occurs when design or layout features decrease the property’s utility
or appeal. An outdated or poorly planned kitchen is a classic example .
6. When using the sales comparison approach, adjustments are made for:
A) Differences between the subject property and comparables
B) Inflation only
C) The age of the appraiser
D) Property tax rates
Answer: A
Kentucky IAAO Residential Evaluation Specialist
(RES) Exam COMPLETE QUESTIONS AND CORRECT
ANSWERS LATEST UPDATE THIS YEAR
Kentucky IAAO Residential Evaluation Specialist (RES) Exam,
Summarized Exam Topics Covered (Point Form – Accurate for KY RES Exam)
• Primary Appraisal Approaches: Sales Comparison Approach (most common for single-family
homes), Cost Approach, Income Approach (for investment properties)
• Sales Comparison Approach: Adjustments for differences between subject and comparables,
bracketing, units of comparison (price per sq ft, site value), reconciliation
• Cost Approach & Depreciation: Replacement cost new, physical deterioration, functional
obsolescence (outdated design), economic obsolescence (external factors)
• Kentucky Property Tax System: Appraised market value as basis for taxation (KRS 133.225), role
of Property Valuation Administrator (PVA) (KRS 132.420), assessment process, tax rates
• Highest and Best Use: Legally permissible, physically possible, financially feasible, maximally
productive use
• Market Value Definition: Buyer and seller not compelled, knowledgeable parties, reasonable
exposure
• Factors Affecting Residential Value: Location (primary), physical characteristics (lot size,
condition), external factors (schools, employment, industrial development, traffic)
• Income Approach: Capitalization of net operating income (NOI), direct capitalization rate
development, ratio of restricted rent to market rent (KAR 103 5 200)
• Multi-Unit Housing with Government Restrictions: KAR 103 5 200 – direct capitalization,
restricted rent to market rent method, income/expense reporting by owner
• Obsolescence Types: Functional (design/layout), Economic (external factors), Physical
(wear/tear)
• Depreciation: Physical deterioration, functional obsolescence, economic obsolescence
• Comparable Property Adjustments: Positive or negative adjustments to comparable or subject;
adjustments for lot size, condition, location, quality, amenities
• IAAO Mass Appraisal Concepts: Real Property Modeling Concepts (Course 311), sales ratio
studies, model specification, calibration
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• Kentucky Assessment Calendar: PVA assessment, taxpayer notification, appeal process
• IAAO Certification Designations: RES (Residential Evaluation Specialist), CAE, etc.
1. What is the primary purpose of a residential property appraisal under Kentucky assessment practices?
A) To determine the market value for taxation purposes
B) To establish the replacement cost for insurance
C) To estimate the property’s potential rental income
D) To calculate capital gains for a future sale
Answer: A
Rationale: Residential property appraisals primarily establish market value for assessment and taxation
purposes. Kentucky bases property taxes on appraised market value .
2. Which approach is most commonly used for valuing single-family residences in Kentucky?
A) Cost approach
B) Income approach
C) Sales comparison approach
D) Depreciated replacement cost approach
Answer: C
, Page 3 of 110
Rationale: The sales comparison approach is preferred for single-family homes because it relies on recent
sales of similar properties, reflecting the actions of buyers and sellers in the market .
3. In Kentucky, what is the effective property tax rate generally based on?
A) Assessed value of the property
B) Original purchase price
C) Market value multiplied by a legislated rate
D) Appraised value divided by property size
Answer: C
Rationale: Kentucky uses a legislated tax rate applied to the appraised market value to determine
property taxes. The taxing authorities set the rate, and the tax is market value × rate .
4. Which factor most directly affects residential property value?
A) Age of the property
B) Local school quality
C) Distance to the nearest city
D) Interior paint color
Answer: B
, Page 4 of 110
Rationale: Quality of nearby schools significantly influences residential property market values. Location
remains the primary driver of value, and school quality is a key component of locational desirability .
5. A property with a poorly planned kitchen that reduces market appeal is experiencing:
A) Physical deterioration
B) Functional obsolescence
C) Economic obsolescence
D) External depreciation
Answer: B
Rationale: Functional obsolescence occurs when design or layout features decrease the property’s utility
or appeal. An outdated or poorly planned kitchen is a classic example .
6. When using the sales comparison approach, adjustments are made for:
A) Differences between the subject property and comparables
B) Inflation only
C) The age of the appraiser
D) Property tax rates
Answer: A
