PRINCIPLES OF REAL ESTATE 2 PRACTICE
EXAM 2026 QUESTIONS WITH FULL
SOLUTIONS GRADED A+
● Loan-to-Value Ratio (LTV) - The percentage of value or sales price
that a lender is willing to finance.
● limited appraisal report - exterior only/drive by inspection. deemed as
low risk loan
● highest and best use of property - legal use that gives the greatest
return
● Principal of Contribution - cost does not equal value
● Residential Mortgage Loan Originators (RMLO) - Must be certified
licence holders and is mandated by the SAFE ACT (TX dept of savings
and mortgage lending)
● Principle of Anticipation - purchase price is affected by the
expectation of future appeal and benefits
, ● Principal of Substitution - value of a commodity is influenced by the
cost of acquiring subsitute or comparable item
● Principal of progression - value of properties around yours goes up; so
does yours
● Principal of Regression - The Value of more expensive home placed in
a neighborhood of less expensive homes will drop in value
● Market Value - the most probable price a property should bring in a
competitive and open market under fair conditions requisit to a fair sale.
● appraisal process - The value of a property may be affected by social,
economic, governmental and environmental influences. An appraiser
must always be aware of these influences and possible changes in them
that could affect market value.
● Three approaches to value - (1) The Sales Comparison Approach
(2) The Cost Approach,
(3) The Income Approach.
● Sales Comparison Approach - A value for existing properties method
for comparing similar properties to the subject property. this is the best
indicator.
EXAM 2026 QUESTIONS WITH FULL
SOLUTIONS GRADED A+
● Loan-to-Value Ratio (LTV) - The percentage of value or sales price
that a lender is willing to finance.
● limited appraisal report - exterior only/drive by inspection. deemed as
low risk loan
● highest and best use of property - legal use that gives the greatest
return
● Principal of Contribution - cost does not equal value
● Residential Mortgage Loan Originators (RMLO) - Must be certified
licence holders and is mandated by the SAFE ACT (TX dept of savings
and mortgage lending)
● Principle of Anticipation - purchase price is affected by the
expectation of future appeal and benefits
, ● Principal of Substitution - value of a commodity is influenced by the
cost of acquiring subsitute or comparable item
● Principal of progression - value of properties around yours goes up; so
does yours
● Principal of Regression - The Value of more expensive home placed in
a neighborhood of less expensive homes will drop in value
● Market Value - the most probable price a property should bring in a
competitive and open market under fair conditions requisit to a fair sale.
● appraisal process - The value of a property may be affected by social,
economic, governmental and environmental influences. An appraiser
must always be aware of these influences and possible changes in them
that could affect market value.
● Three approaches to value - (1) The Sales Comparison Approach
(2) The Cost Approach,
(3) The Income Approach.
● Sales Comparison Approach - A value for existing properties method
for comparing similar properties to the subject property. this is the best
indicator.
