Exam Questions and Answers
This document contains 207 questions and answers. The sources indicated refer to pages in The
Appraisal of Real Estate, 15th edition (Textbook) or The Student Handbook to THE APPRAISAL OF REAL
ESTATE, 15TH EDITION (Handbook) that students should consult for additional discussion of the topics
addressed in each problem.
Note: These questions and answers have been developed to help instructors prepare examinations
based on the material in the student handbook. These questions can and should be modified to suit the
needs of the instructor and his or her curriculum. They are presented as possible questions for an exam
and should be supplemented with questions appropriate to the interest and knowledge level of class
participants. To preserve the usefulness of the examination questions, instructors should not share the
answers to specific questions with their students.
For Educational Purposes Only
This publication, peer-reviewed by Appraisal Institute members, contained an accurate presentation of
appraisal principles and theory and an accurate application of recognized appraisal methods and
techniques at the time of its publication. No representation or warranty is made that the data and
information contained in this publication apply to any specific assignment or set of facts. Neither the
author nor the Appraisal Institute accepts any liability arising from the application of the materials in this
publication to any specific assignment or set of facts. Any views or opinions presented in this publication
are subject to future court decisions and to local, state and federal laws and regulations and any revisions
to such laws and regulations. This publication has been prepared for educational and informational
purposes with the explicit understanding that the Appraisal Institute is not engaged in rendering legal,
accounting or other professional services, and nothing in this publication is to be construed as offering
such services. The reader should obtain specific services from appropriate professionals as the need
arises.
,PART I. REAL ESTATE AND ITS APPRAISAL (24 questions)
Introduction: The Appraisal Profession
1. A real estate professional who works as an appraiser, broker, and construction supervisor was
asked to broker the sale of the property at 12345 N. Main Street in Suburbia City. If the real estate
professional accepts this assignment, she will likely be
a) Acting as an advocate for her client
b) Acting as a disinterested third party
c) Paid on a flat fee basis
d) Paid on an hourly basis
Correct answer: a)
Source: Handbook pages 2-4
2. A homeowner asked an appraiser to give him a bid to prepare an appraisal report on his residential
property to be delivered to the local bank for mortgage financing. The homeowner said the property
was worth well over $1 million and the mortgage amount was $800,000. The appraiser should
a) Educate the homeowner about the FIRREA rules and other options available when ordering
appraisals and suggest that the bank order their own appraisals
b) Give the homeowner a bid for the lowest priced appraisal and report possible since the
appraiser is going to have competition
c) Tell the homeowner that it is inappropriate to asks for bids for services
d) Give the homeowner a bid for the most detailed appraisal and report possible to ensure that the
homeowner will not have any problems with any use of the appraisal
Correct answer: a)
Source: Handbook pages 2-4
3. If a product is manufactured in a facility in one state but sold in a store in another state, the property
in which the product is manufactured is known as
a) A commercial property
b) An industrial property
c) A residential property
d) A retail–office property
Correct answer: b)
Source: Handbook page 4
1
,Chapter 1: Introduction to Appraisal
4. The right of government to take ownership of a property when its owner dies without a will or legal
heirs is known as
a) Condemnation absolute
b) Police power
c) Eminent domain
d) Escheat
Correct answer: d)
Source: Textbook page 5; Handbook page 15
5. All estates in land are subject to the four powers of government, which are
a) Taxation, eminent domain, escheat, and defense
b) Just compensation, escheat, assessments, and police power
c) Eminent domain, police power, taxation, and escheat
d) None of the above are exactly correct
Correct answer: c)
Source: Textbook page 4; Handbook page 14
6. The right of government to take private property for public use with payment of just compensation is
known as
a) Escheat
b) Condemnation
c) Titular ownership
d) Eminent domain
Correct answer: d)
Source: Textbook pages 4-5; Handbook page 15
7. Which of the following items are usually classified as real estate?
a) Furniture in an occupied house
b) Plumbing fixtures in an occupied house
c) A lamp sitting on an end table in the living room.
d) Beds and other furniture in a hotel
Correct answer: b)
Source: Textbook pages 5-6; Handbook page 16
2
, 8. Fixtures such as cabinets attached to the walls in a kitchen would be considered
a) Real estate
b) Trade fixtures
c) Chattel
d) Personal property
Correct answer: a)
Source: Textbook pages 3-5; Handbook page 16
9. The most complete form of ownership in real property is called
a) The leasehold
b) The leased fee
c) The fee simple estate
d) The life estate
Correct answer: c)
Source: Handbook page 14
10. Which of the following is an example of a governmental land use regulation?
a) A lease document signed by the owner and lessee
b) A city zoning ordinance
c) A city ordinance regulating automobile speed limits on the adjacent street
d) A federal law focused on employment contracts
Correct answer: b)
Source: Textbook page 13; Handbook page 22
3
This document contains 207 questions and answers. The sources indicated refer to pages in The
Appraisal of Real Estate, 15th edition (Textbook) or The Student Handbook to THE APPRAISAL OF REAL
ESTATE, 15TH EDITION (Handbook) that students should consult for additional discussion of the topics
addressed in each problem.
Note: These questions and answers have been developed to help instructors prepare examinations
based on the material in the student handbook. These questions can and should be modified to suit the
needs of the instructor and his or her curriculum. They are presented as possible questions for an exam
and should be supplemented with questions appropriate to the interest and knowledge level of class
participants. To preserve the usefulness of the examination questions, instructors should not share the
answers to specific questions with their students.
For Educational Purposes Only
This publication, peer-reviewed by Appraisal Institute members, contained an accurate presentation of
appraisal principles and theory and an accurate application of recognized appraisal methods and
techniques at the time of its publication. No representation or warranty is made that the data and
information contained in this publication apply to any specific assignment or set of facts. Neither the
author nor the Appraisal Institute accepts any liability arising from the application of the materials in this
publication to any specific assignment or set of facts. Any views or opinions presented in this publication
are subject to future court decisions and to local, state and federal laws and regulations and any revisions
to such laws and regulations. This publication has been prepared for educational and informational
purposes with the explicit understanding that the Appraisal Institute is not engaged in rendering legal,
accounting or other professional services, and nothing in this publication is to be construed as offering
such services. The reader should obtain specific services from appropriate professionals as the need
arises.
,PART I. REAL ESTATE AND ITS APPRAISAL (24 questions)
Introduction: The Appraisal Profession
1. A real estate professional who works as an appraiser, broker, and construction supervisor was
asked to broker the sale of the property at 12345 N. Main Street in Suburbia City. If the real estate
professional accepts this assignment, she will likely be
a) Acting as an advocate for her client
b) Acting as a disinterested third party
c) Paid on a flat fee basis
d) Paid on an hourly basis
Correct answer: a)
Source: Handbook pages 2-4
2. A homeowner asked an appraiser to give him a bid to prepare an appraisal report on his residential
property to be delivered to the local bank for mortgage financing. The homeowner said the property
was worth well over $1 million and the mortgage amount was $800,000. The appraiser should
a) Educate the homeowner about the FIRREA rules and other options available when ordering
appraisals and suggest that the bank order their own appraisals
b) Give the homeowner a bid for the lowest priced appraisal and report possible since the
appraiser is going to have competition
c) Tell the homeowner that it is inappropriate to asks for bids for services
d) Give the homeowner a bid for the most detailed appraisal and report possible to ensure that the
homeowner will not have any problems with any use of the appraisal
Correct answer: a)
Source: Handbook pages 2-4
3. If a product is manufactured in a facility in one state but sold in a store in another state, the property
in which the product is manufactured is known as
a) A commercial property
b) An industrial property
c) A residential property
d) A retail–office property
Correct answer: b)
Source: Handbook page 4
1
,Chapter 1: Introduction to Appraisal
4. The right of government to take ownership of a property when its owner dies without a will or legal
heirs is known as
a) Condemnation absolute
b) Police power
c) Eminent domain
d) Escheat
Correct answer: d)
Source: Textbook page 5; Handbook page 15
5. All estates in land are subject to the four powers of government, which are
a) Taxation, eminent domain, escheat, and defense
b) Just compensation, escheat, assessments, and police power
c) Eminent domain, police power, taxation, and escheat
d) None of the above are exactly correct
Correct answer: c)
Source: Textbook page 4; Handbook page 14
6. The right of government to take private property for public use with payment of just compensation is
known as
a) Escheat
b) Condemnation
c) Titular ownership
d) Eminent domain
Correct answer: d)
Source: Textbook pages 4-5; Handbook page 15
7. Which of the following items are usually classified as real estate?
a) Furniture in an occupied house
b) Plumbing fixtures in an occupied house
c) A lamp sitting on an end table in the living room.
d) Beds and other furniture in a hotel
Correct answer: b)
Source: Textbook pages 5-6; Handbook page 16
2
, 8. Fixtures such as cabinets attached to the walls in a kitchen would be considered
a) Real estate
b) Trade fixtures
c) Chattel
d) Personal property
Correct answer: a)
Source: Textbook pages 3-5; Handbook page 16
9. The most complete form of ownership in real property is called
a) The leasehold
b) The leased fee
c) The fee simple estate
d) The life estate
Correct answer: c)
Source: Handbook page 14
10. Which of the following is an example of a governmental land use regulation?
a) A lease document signed by the owner and lessee
b) A city zoning ordinance
c) A city ordinance regulating automobile speed limits on the adjacent street
d) A federal law focused on employment contracts
Correct answer: b)
Source: Textbook page 13; Handbook page 22
3
