CERTIFIED APPRAISAL EXAM REVIEW UPDATED QUESTIONS
AND ANSWERS
Steps.
1. Determine Cost New
Main house 2400 SF x 85/SF =204,000
Garage 440 x 18/SF = 7920
======================================
204,000 + 92 = 211,920
2. Determine Depreciation Cost
Sale Price 240,000 -
Land Value 50,000 -
Improvements 25,000
========================
165,000
3. Determine Total Depreciation
Cost New 211,920 - Depreciation Cost 165,000 = 46,920
4. Determine Depreciation Percentage
Cost New 211,920/Total Depreciation 46,920 = 22.14% - CORRECT ANSWER✅✅✅For the purpose of
estimating depreciation via the extraction method, you have utilized Comparable Sale #1, which is a
2,400 sq. ft. home with a two-car, 440 sq. ft. attached garage, having a replacement cost of $85/sq. ft.
for gross living area and $18/sq. ft. for the garage area. This property sold for $240,000 and has a
chronological age of 10 years. Through your research, the indicated land value is $50,000 and the site
improvements have a replacement cost of $25,000. What is the percentage total amount of accrued
depreciation indicated by this sale?
Allocation: a method of estimating land value in which sales of improved properties are analyzed to
establish a typical ratio of site value to total property value and this ratio is applied to the property being
appraised or the comparable being analyzed.
,Extraction: a method of estimating land value in which the depreciated cost of the improvement on the
improved property is estimated and deducted from the total sale price to arrive at an estimated sale
price for the land; most effective when the improvements contribute little to the total sale price of the
property. - CORRECT ANSWER✅✅✅Allocation method vs. extraction method
size - CORRECT ANSWER✅✅✅Which is a physical force in relationship to value?
utilize the site as one home site, since the site cannot legally be split - CORRECT ANSWER✅✅✅What
is the highest and best use of a rural property that has 300 lineal feet of frontage and a depth of 300
lineal feet, when zoning requires a site to be at least two acres for the development of a single-family
home?
effective demand.
RATIONALE The characteristic of purchase ability, or affordability, is known as effective demand or
effective purchasing power. - CORRECT ANSWER✅✅✅Regardless of the desire for a property in a
particular market, if there is not general purchase ability linked to the desire within the market, the
market is lacking
scarcity and utility. DUST - CORRECT ANSWER✅✅✅Which of the following characteristics create
value in real estate?
it could remain in that phase indefinitely.
RATIONALE
Stability is when buyer interest in the neighborhood remains strong and prices rarely drop. Some
neighborhoods remain in this stage and don't experience decline. - CORRECT ANSWER✅✅✅Once a
neighborhood has reached the phase of stability in its life cycle
If the condition is not adhered to, the title to the property could be forfeited
RATIONALE
Fee simple conditional provides that the owner may hold the estate only as long as some specified act or
condition does or does not occur. Thus, if the condition is not observed, the owner could forfeit title. -
CORRECT ANSWER✅✅✅Legal interest of a subject property was conveyed to the current owner as
fee simple conditional. What can be best said about the estate held by the current owner?
,Life estate with a reversionary interest
RATIONALE
A life estate is a freehold estate that lasts only as long as a specified person lives. A life estate with a
reversionary interest means that the property will go back (revert) to the grantor or the grantor's heirs. -
CORRECT ANSWER✅✅✅When an individual has a freehold estate that only lasts as long as a
specified person lives and then the interest goes back to the grantor or the grantor's heirs, what type of
freehold estate does the individual have?
increases at a decreasing rate.
RATIONALE
With a fixed frontage, as the depth of the lot increases, the overall value of the lot increases. However,
as the lot extends back, the value of the land farther back becomes less and the increase in overall value
becomes smaller. Therefore, the front foot rate will increase, but as the lot extends farther back, the
amount of increase in rate will decrease. - CORRECT ANSWER✅✅✅As the depth of the lot increases,
the value per front footage
takes a ratio of the land or site value to the total improved value.
RATIONALE
When the ratio of land to total value is calculated for the comparable sales and then applied to the
subject, the allocation method is being used. - CORRECT ANSWER✅✅✅The allocation method for
determining site value
$8,756
RATIONALE
HP-12C Keystrokes: [f] [Sigma] [150000] [Sigma+] [165000] [Sigma+] [148000] [Sigma+] [156000]
[Sigma+] [163000] [Sigma+] [170000] [Sigma+] [g] [s] gives you a result of $8,756. - CORRECT
ANSWER✅✅✅Six homes sold within the past few months. What is the standard deviation among
the data provided? $150,000, $165,000, $148,000, $156,000, $163,000, $170,000
12.30
RATIONALE
, HP 12C method: 47 [Sigma+], 14 [Sigma+], 37 [Sigma+], 29 [Sigma+], 37 [Sigma+], [g] [s] = 12.2963, or
12.30 rounded. Be sure to clear all registers before beginning entries. The[s]key is the decimal key ('s' in
blue on front of key). - CORRECT ANSWER✅✅✅Using this number set, find the standard deviation:
47 - 14 - 37 - 29 - 37, rounded to two places.
22.14%
RATIONAL:
1. Cost new = (2,400 sq. ft. x $85) + (440 sq. ft. x $18) = $211,920.
2. Depreciation Cost =
Sale Price $240,000 -
Land Value $50,000 -
Site Improve $25,000 = $165,000
.
3. Total Depreciation = $46,920 ($211,920 - $165,000).
4. Percentage of Depreciation Depreciation / Cost new (46,,920 = 0.2214 or 22.14%). -
CORRECT ANSWER✅✅✅For the purpose of estimating depreciation via the extraction method, you
have utilized Comparable Sale #1, which is a 2,400 sq. ft. home with a two-car, 440 sq. ft. attached
garage, having a replacement cost of $85/sq. ft. for gross living area and $18/sq. ft. for the garage area.
This property sold for $240,000 and has a chronological age of 10 years. Through your research, the
indicated land value is $50,000 and the site improvements have a replacement cost of $25,000. What is
the percentage total amount of accrued depreciation indicated by this sale?
52%
RATIONALE \First, determine the square footage of the three areas needing carpet: 12 x 14 = 168 sq. ft.,
15.5 x 17.25 = 267.375 sq. ft., and 12.3 x 17.5 = 215.25 sq. ft. Next, add the three areas together: 168 +
267.375 + 215.25 = 650.625 sq. ft. To convert square yards to square feet, divide by 9: 650. =
72.291666, or 73 full square yards. Now, determine the cost of the carpet: 73 square yards x $14.50 =
$1,058.50. The next step is to determine the installation cost: 650.625 sq. ft. x $1.50 = $975.94. Thus,
the total cost for carpet and installation would be $2,034.44 ($1,058.50 + $975.94). $1,058.50 (cost of
carpet) / $2,034.44 (total cost) = 0.52, or 52%.
ID: 10027 - CORRECT ANSWER✅✅✅An appraiser must determine the cost of carpet in a residential
dwelling. The areas needing carpet measure 12' x 14', 15.5' x 17.25', and 12.3' x 17.5'. If the carpet must
AND ANSWERS
Steps.
1. Determine Cost New
Main house 2400 SF x 85/SF =204,000
Garage 440 x 18/SF = 7920
======================================
204,000 + 92 = 211,920
2. Determine Depreciation Cost
Sale Price 240,000 -
Land Value 50,000 -
Improvements 25,000
========================
165,000
3. Determine Total Depreciation
Cost New 211,920 - Depreciation Cost 165,000 = 46,920
4. Determine Depreciation Percentage
Cost New 211,920/Total Depreciation 46,920 = 22.14% - CORRECT ANSWER✅✅✅For the purpose of
estimating depreciation via the extraction method, you have utilized Comparable Sale #1, which is a
2,400 sq. ft. home with a two-car, 440 sq. ft. attached garage, having a replacement cost of $85/sq. ft.
for gross living area and $18/sq. ft. for the garage area. This property sold for $240,000 and has a
chronological age of 10 years. Through your research, the indicated land value is $50,000 and the site
improvements have a replacement cost of $25,000. What is the percentage total amount of accrued
depreciation indicated by this sale?
Allocation: a method of estimating land value in which sales of improved properties are analyzed to
establish a typical ratio of site value to total property value and this ratio is applied to the property being
appraised or the comparable being analyzed.
,Extraction: a method of estimating land value in which the depreciated cost of the improvement on the
improved property is estimated and deducted from the total sale price to arrive at an estimated sale
price for the land; most effective when the improvements contribute little to the total sale price of the
property. - CORRECT ANSWER✅✅✅Allocation method vs. extraction method
size - CORRECT ANSWER✅✅✅Which is a physical force in relationship to value?
utilize the site as one home site, since the site cannot legally be split - CORRECT ANSWER✅✅✅What
is the highest and best use of a rural property that has 300 lineal feet of frontage and a depth of 300
lineal feet, when zoning requires a site to be at least two acres for the development of a single-family
home?
effective demand.
RATIONALE The characteristic of purchase ability, or affordability, is known as effective demand or
effective purchasing power. - CORRECT ANSWER✅✅✅Regardless of the desire for a property in a
particular market, if there is not general purchase ability linked to the desire within the market, the
market is lacking
scarcity and utility. DUST - CORRECT ANSWER✅✅✅Which of the following characteristics create
value in real estate?
it could remain in that phase indefinitely.
RATIONALE
Stability is when buyer interest in the neighborhood remains strong and prices rarely drop. Some
neighborhoods remain in this stage and don't experience decline. - CORRECT ANSWER✅✅✅Once a
neighborhood has reached the phase of stability in its life cycle
If the condition is not adhered to, the title to the property could be forfeited
RATIONALE
Fee simple conditional provides that the owner may hold the estate only as long as some specified act or
condition does or does not occur. Thus, if the condition is not observed, the owner could forfeit title. -
CORRECT ANSWER✅✅✅Legal interest of a subject property was conveyed to the current owner as
fee simple conditional. What can be best said about the estate held by the current owner?
,Life estate with a reversionary interest
RATIONALE
A life estate is a freehold estate that lasts only as long as a specified person lives. A life estate with a
reversionary interest means that the property will go back (revert) to the grantor or the grantor's heirs. -
CORRECT ANSWER✅✅✅When an individual has a freehold estate that only lasts as long as a
specified person lives and then the interest goes back to the grantor or the grantor's heirs, what type of
freehold estate does the individual have?
increases at a decreasing rate.
RATIONALE
With a fixed frontage, as the depth of the lot increases, the overall value of the lot increases. However,
as the lot extends back, the value of the land farther back becomes less and the increase in overall value
becomes smaller. Therefore, the front foot rate will increase, but as the lot extends farther back, the
amount of increase in rate will decrease. - CORRECT ANSWER✅✅✅As the depth of the lot increases,
the value per front footage
takes a ratio of the land or site value to the total improved value.
RATIONALE
When the ratio of land to total value is calculated for the comparable sales and then applied to the
subject, the allocation method is being used. - CORRECT ANSWER✅✅✅The allocation method for
determining site value
$8,756
RATIONALE
HP-12C Keystrokes: [f] [Sigma] [150000] [Sigma+] [165000] [Sigma+] [148000] [Sigma+] [156000]
[Sigma+] [163000] [Sigma+] [170000] [Sigma+] [g] [s] gives you a result of $8,756. - CORRECT
ANSWER✅✅✅Six homes sold within the past few months. What is the standard deviation among
the data provided? $150,000, $165,000, $148,000, $156,000, $163,000, $170,000
12.30
RATIONALE
, HP 12C method: 47 [Sigma+], 14 [Sigma+], 37 [Sigma+], 29 [Sigma+], 37 [Sigma+], [g] [s] = 12.2963, or
12.30 rounded. Be sure to clear all registers before beginning entries. The[s]key is the decimal key ('s' in
blue on front of key). - CORRECT ANSWER✅✅✅Using this number set, find the standard deviation:
47 - 14 - 37 - 29 - 37, rounded to two places.
22.14%
RATIONAL:
1. Cost new = (2,400 sq. ft. x $85) + (440 sq. ft. x $18) = $211,920.
2. Depreciation Cost =
Sale Price $240,000 -
Land Value $50,000 -
Site Improve $25,000 = $165,000
.
3. Total Depreciation = $46,920 ($211,920 - $165,000).
4. Percentage of Depreciation Depreciation / Cost new (46,,920 = 0.2214 or 22.14%). -
CORRECT ANSWER✅✅✅For the purpose of estimating depreciation via the extraction method, you
have utilized Comparable Sale #1, which is a 2,400 sq. ft. home with a two-car, 440 sq. ft. attached
garage, having a replacement cost of $85/sq. ft. for gross living area and $18/sq. ft. for the garage area.
This property sold for $240,000 and has a chronological age of 10 years. Through your research, the
indicated land value is $50,000 and the site improvements have a replacement cost of $25,000. What is
the percentage total amount of accrued depreciation indicated by this sale?
52%
RATIONALE \First, determine the square footage of the three areas needing carpet: 12 x 14 = 168 sq. ft.,
15.5 x 17.25 = 267.375 sq. ft., and 12.3 x 17.5 = 215.25 sq. ft. Next, add the three areas together: 168 +
267.375 + 215.25 = 650.625 sq. ft. To convert square yards to square feet, divide by 9: 650. =
72.291666, or 73 full square yards. Now, determine the cost of the carpet: 73 square yards x $14.50 =
$1,058.50. The next step is to determine the installation cost: 650.625 sq. ft. x $1.50 = $975.94. Thus,
the total cost for carpet and installation would be $2,034.44 ($1,058.50 + $975.94). $1,058.50 (cost of
carpet) / $2,034.44 (total cost) = 0.52, or 52%.
ID: 10027 - CORRECT ANSWER✅✅✅An appraiser must determine the cost of carpet in a residential
dwelling. The areas needing carpet measure 12' x 14', 15.5' x 17.25', and 12.3' x 17.5'. If the carpet must
