Free 5-question sample test with instant feedback. See how ready you are.
Question 1
What is the definition of 'market value' as used in real estate appraisal?
Answer: Market value is the most probable price a property would bring in a competitive, open market under fair sale conditions, with both buyer and seller acting knowledgeably and without undue pressure.
Question 2
What is the difference between 'value in use' and 'value in exchange'?
Answer: Value in use is the subjective value a property has to a specific user for a specific purpose, while value in exchange (market value) is the objective price the property would command in the open market.
Question 3
What are the four essential elements of value remembered by the acronym 'DUST'?
Answer: DUST stands for Demand, Utility, Scarcity, and Transferability — all four must be present for a property to have market value.
Question 4
Which federal law requires appraisers of federally related transactions to be state-licensed or state-certified?
Answer: FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act of 1989) requires that appraisers for federally related transactions be state-licensed or state-certified.
Question 5
What is a Comparative Market Analysis (CMA) and who typically prepares it?
Answer: A CMA is an informal estimate of market value prepared by a real estate licensee (not a licensed appraiser) that compares similar recently sold properties to help price a listing or assist a buyer.