COURSE 101 - FUNDAMENTALS OF REAL
PROPERTY APPRAISAL QUESTIONS WITH
CORRECT ANSWERS 2025/2026
ad valorem tax - CORRECT ANSWER -At value or according to or based on value.
Name 3 ways tax rates are expressed. - CORRECT ANSWER -Dollars per $100, Dollars per $1,000,
and mill rate (dollar/1000 mills)
How is a jurisdiction's tax rate determined? - CORRECT ANSWER -By dividing the budget to be
derived from property tax by the total assessed value of the taxing jurisdiction.
Which type of value is usually estimated by the assessor? - CORRECT ANSWER -Market value.
What is the formula to calculate the tax rate - CORRECT ANSWER -Budget (- other revenues)
divided by assessed value
What is the effective tax rate (ETR) - CORRECT ANSWER -the rate expressing the ratio between
the current tax bill and the property value.
What is the formula for the effective tax rate? - CORRECT ANSWER -(triangle) Effective Tax Rate
(ETR) divided by Assessment Ratio (AR) times Tax Rate (TR)
What is personal property? - CORRECT ANSWER -Consists of movable items not permanently
affixed to, or part of, the real estate.
What are the six basic rights associated with the ownership of property? - CORRECT ANSWER -
Sell, lease or rent, use, give away, enter or leave, or refuse to do any of the above.
,What is taxation? - CORRECT ANSWER -The right to tax the property for the support of the
government.
Which type of ownership includes all the six basic rights (bundle of rights) and is the highest
form of ownership? - CORRECT ANSWER -Fee simple interest
Name three restrictions placed on an owners bundle of rights in property ownership? -
CORRECT ANSWER -Eminent domain, police power, escheat.
What is eminent domain? - CORRECT ANSWER -The right to take the property for public use
provided just compensation is paid.
What is police power in relation to property rights? - CORRECT ANSWER -The right to regulate
the use of property for the public welfare in the areas of safety, health, morals, zoning, building
codes, traffic, and sanitary regulations.
What is escheat in relation to property rights? - CORRECT ANSWER -the right of government to
have property revert to the state for nonpayment of taxes or when there are no legal heirs of
decedent who dies intestate (without a will).
List private encumbrances that may be placed on a property. - CORRECT ANSWER -Rights of co-
owners of the property, condominium and subdivision restrictions, covenants, conditions, and
restrictions found in the chain of title to the property, mortgages, easements and rights of way,
liens and judgments, leases.
What is a leasehold interest? - CORRECT ANSWER -A tenant interest - a lease that conveys
property rights from an owner (lessor) to a tenant (lessee).
Define value as is relates to appraisal. - CORRECT ANSWER -The present worth of future benefits
arising from the ownership of real property.
, In order for a property to have value, it must have what four things? - CORRECT ANSWER -
Utility, scarcity, desirability, and effective purchasing power.
What is value in use? - CORRECT ANSWER -It is the value of a property for a specific use.
What is value in exchange? - CORRECT ANSWER -The amount of money an informed buyer
would offer in exchange for a property under given market conditions.
List other types of value (other than value in use and exchange). - CORRECT ANSWER -Insurance
value, salvage value, market value, investment value
What is market value? - CORRECT ANSWER -The most probable price which a property should
bring in a competitive and open market under all conditions requisite to a fair sale, the buyer
and seller each acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus.
The use that generates the highest net return to a property over a reasonable time period is
called what? - CORRECT ANSWER -Highest and best use
What are the four tests that the appraiser must make in the analysis of the highest and best
use? - CORRECT ANSWER -Is the property legally permissible, physically possible, financially
feasible, and most productive?
List the two types of highest and best use analysis. - CORRECT ANSWER -As if vacant and as if
improved.
What is an appraisal? - CORRECT ANSWER -An opinion or estimate of value, usually in writing, of
an adequately described property, as of a given date.
PROPERTY APPRAISAL QUESTIONS WITH
CORRECT ANSWERS 2025/2026
ad valorem tax - CORRECT ANSWER -At value or according to or based on value.
Name 3 ways tax rates are expressed. - CORRECT ANSWER -Dollars per $100, Dollars per $1,000,
and mill rate (dollar/1000 mills)
How is a jurisdiction's tax rate determined? - CORRECT ANSWER -By dividing the budget to be
derived from property tax by the total assessed value of the taxing jurisdiction.
Which type of value is usually estimated by the assessor? - CORRECT ANSWER -Market value.
What is the formula to calculate the tax rate - CORRECT ANSWER -Budget (- other revenues)
divided by assessed value
What is the effective tax rate (ETR) - CORRECT ANSWER -the rate expressing the ratio between
the current tax bill and the property value.
What is the formula for the effective tax rate? - CORRECT ANSWER -(triangle) Effective Tax Rate
(ETR) divided by Assessment Ratio (AR) times Tax Rate (TR)
What is personal property? - CORRECT ANSWER -Consists of movable items not permanently
affixed to, or part of, the real estate.
What are the six basic rights associated with the ownership of property? - CORRECT ANSWER -
Sell, lease or rent, use, give away, enter or leave, or refuse to do any of the above.
,What is taxation? - CORRECT ANSWER -The right to tax the property for the support of the
government.
Which type of ownership includes all the six basic rights (bundle of rights) and is the highest
form of ownership? - CORRECT ANSWER -Fee simple interest
Name three restrictions placed on an owners bundle of rights in property ownership? -
CORRECT ANSWER -Eminent domain, police power, escheat.
What is eminent domain? - CORRECT ANSWER -The right to take the property for public use
provided just compensation is paid.
What is police power in relation to property rights? - CORRECT ANSWER -The right to regulate
the use of property for the public welfare in the areas of safety, health, morals, zoning, building
codes, traffic, and sanitary regulations.
What is escheat in relation to property rights? - CORRECT ANSWER -the right of government to
have property revert to the state for nonpayment of taxes or when there are no legal heirs of
decedent who dies intestate (without a will).
List private encumbrances that may be placed on a property. - CORRECT ANSWER -Rights of co-
owners of the property, condominium and subdivision restrictions, covenants, conditions, and
restrictions found in the chain of title to the property, mortgages, easements and rights of way,
liens and judgments, leases.
What is a leasehold interest? - CORRECT ANSWER -A tenant interest - a lease that conveys
property rights from an owner (lessor) to a tenant (lessee).
Define value as is relates to appraisal. - CORRECT ANSWER -The present worth of future benefits
arising from the ownership of real property.
, In order for a property to have value, it must have what four things? - CORRECT ANSWER -
Utility, scarcity, desirability, and effective purchasing power.
What is value in use? - CORRECT ANSWER -It is the value of a property for a specific use.
What is value in exchange? - CORRECT ANSWER -The amount of money an informed buyer
would offer in exchange for a property under given market conditions.
List other types of value (other than value in use and exchange). - CORRECT ANSWER -Insurance
value, salvage value, market value, investment value
What is market value? - CORRECT ANSWER -The most probable price which a property should
bring in a competitive and open market under all conditions requisite to a fair sale, the buyer
and seller each acting prudently and knowledgeably, and assuming the price is not affected by
undue stimulus.
The use that generates the highest net return to a property over a reasonable time period is
called what? - CORRECT ANSWER -Highest and best use
What are the four tests that the appraiser must make in the analysis of the highest and best
use? - CORRECT ANSWER -Is the property legally permissible, physically possible, financially
feasible, and most productive?
List the two types of highest and best use analysis. - CORRECT ANSWER -As if vacant and as if
improved.
What is an appraisal? - CORRECT ANSWER -An opinion or estimate of value, usually in writing, of
an adequately described property, as of a given date.
