ACEABLE AGENT PRINCIPLES OF REAL
ESTATE 2 Exam Questions & Answers, Well
Elaborated Already Verified Test 100% Verified
solutions LATEST UPDATE 2025
Principle of Anticipation -CORRECTANSWER The present value of a property is
affected by the anticipated income or utility that property will give to the property owner
Principle of Contribution -CORRECTANSWER A property's overall value is made of the
combined value of each of its parts
Principle of Substitution -CORRECTANSWER The value of something is effected by the
cost of getting a similar (substitute) item elsewhere
Principle of Change -CORRECTANSWER The condition of a property, the desirability of
its location, and the market in which it exists can always change
Principle of Conformity -CORRECTANSWER Values are the highest when houses in a
neighborhood look roughly the same
Principle of Regression -CORRECTANSWER Lower value properties surrounding a
subject property are can drag down the value of a property
,Principle of Progression -CORRECTANSWER Higher value properties of a subject
property can bump of the value of a property
Sales Comparison Approach -CORRECTANSWER Determining value by comparing
the subject property to similar properties ("comps") that have sold recently. It's most
commonly used for single family residences.
Cost Approach -CORRECTANSWER Determining value by considering how much the
same property would cost to build brand new at current prices (replacement cost), then
adjusting for depreciation
Income Approach -CORRECTANSWER Determining value by considering how much
income the property would generate when used as rental property
Depreciation -CORRECTANSWER The loss of value because of obsolescence or
deterioration
Functional Obsolescence -CORRECTANSWER Loss of value because a property's
function or appearance has gone out of style or has been replaced by a more appealing
version
,External Obsolescence -CORRECTANSWER Loss of value caused by negative forces
outside the property which are beyond the control of the owner (unfavorable changes in
the environment or market)
Deterioration -CORRECTANSWER Loss of value caused by physical wear and tear
over time
Chronological age -CORRECTANSWER The literal age of a property; a home built 30
years ago has a age of 30
Effective Age -CORRECTANSWER An estimated age that is influenced by the updates
and quality of maintenance of the property; a 30 year house that has been well cared for
might have an effective age of 15
Reconciliation -CORRECTANSWER When an appraiser compares estimates using
different techniques (cost approach, sales approach, and/or income approach) and
comes to a single number for value
Appraisal Report -CORRECTANSWER a report from a licensed appraiser that sums up
a property's market value based on collected data
Appraisal Review -CORRECTANSWER a review of the appraisal report to make sure
the appraisal meets the lender's standards
, Desk Review -CORRECTANSWER When a lender carries an appraisal review at the
desk (as opposed to sending someone to the field) to make sure the original appraisal is
accurate
Field Review -CORRECTANSWER When a third party appraiser is sent back out to the
property to check the validity of the first appraisal
Fair Market Value -CORRECTANSWER The price for which a property will sell if
offered openly under normal market conditions
Subject Property -CORRECTANSWER The property that is subject of the CMA
Comparative Market Analysis -CORRECTANSWER Also known as a CMA, this is a
report generated by a license holder that compares prices of recently sold homes
(comparables) in order to estimate the fair market value of a similar property (the
"subject property")
Government Sponsored Enterprises -CORRECTANSWER Publicly traded institutions
that were created by Congress to provide liquidity, stability, and affordability to the
mortgage market
ESTATE 2 Exam Questions & Answers, Well
Elaborated Already Verified Test 100% Verified
solutions LATEST UPDATE 2025
Principle of Anticipation -CORRECTANSWER The present value of a property is
affected by the anticipated income or utility that property will give to the property owner
Principle of Contribution -CORRECTANSWER A property's overall value is made of the
combined value of each of its parts
Principle of Substitution -CORRECTANSWER The value of something is effected by the
cost of getting a similar (substitute) item elsewhere
Principle of Change -CORRECTANSWER The condition of a property, the desirability of
its location, and the market in which it exists can always change
Principle of Conformity -CORRECTANSWER Values are the highest when houses in a
neighborhood look roughly the same
Principle of Regression -CORRECTANSWER Lower value properties surrounding a
subject property are can drag down the value of a property
,Principle of Progression -CORRECTANSWER Higher value properties of a subject
property can bump of the value of a property
Sales Comparison Approach -CORRECTANSWER Determining value by comparing
the subject property to similar properties ("comps") that have sold recently. It's most
commonly used for single family residences.
Cost Approach -CORRECTANSWER Determining value by considering how much the
same property would cost to build brand new at current prices (replacement cost), then
adjusting for depreciation
Income Approach -CORRECTANSWER Determining value by considering how much
income the property would generate when used as rental property
Depreciation -CORRECTANSWER The loss of value because of obsolescence or
deterioration
Functional Obsolescence -CORRECTANSWER Loss of value because a property's
function or appearance has gone out of style or has been replaced by a more appealing
version
,External Obsolescence -CORRECTANSWER Loss of value caused by negative forces
outside the property which are beyond the control of the owner (unfavorable changes in
the environment or market)
Deterioration -CORRECTANSWER Loss of value caused by physical wear and tear
over time
Chronological age -CORRECTANSWER The literal age of a property; a home built 30
years ago has a age of 30
Effective Age -CORRECTANSWER An estimated age that is influenced by the updates
and quality of maintenance of the property; a 30 year house that has been well cared for
might have an effective age of 15
Reconciliation -CORRECTANSWER When an appraiser compares estimates using
different techniques (cost approach, sales approach, and/or income approach) and
comes to a single number for value
Appraisal Report -CORRECTANSWER a report from a licensed appraiser that sums up
a property's market value based on collected data
Appraisal Review -CORRECTANSWER a review of the appraisal report to make sure
the appraisal meets the lender's standards
, Desk Review -CORRECTANSWER When a lender carries an appraisal review at the
desk (as opposed to sending someone to the field) to make sure the original appraisal is
accurate
Field Review -CORRECTANSWER When a third party appraiser is sent back out to the
property to check the validity of the first appraisal
Fair Market Value -CORRECTANSWER The price for which a property will sell if
offered openly under normal market conditions
Subject Property -CORRECTANSWER The property that is subject of the CMA
Comparative Market Analysis -CORRECTANSWER Also known as a CMA, this is a
report generated by a license holder that compares prices of recently sold homes
(comparables) in order to estimate the fair market value of a similar property (the
"subject property")
Government Sponsored Enterprises -CORRECTANSWER Publicly traded institutions
that were created by Congress to provide liquidity, stability, and affordability to the
mortgage market
