Question 1

What is the definition of 'market value' as used in real estate appraisal?

Accepted Answer

Market value is the most probable price a property should bring in a competitive, open market under fair sale conditions, with buyer and seller acting knowledgeably and without undue pressure.

Question 2

What is an appraisal in real estate?

Accepted Answer

An appraisal is an unbiased, written estimate or opinion of a property's value prepared by a licensed or certified appraiser as of a specific date.

Question 3

What does the principle of substitution state in property valuation?

Accepted Answer

The principle of substitution states that a buyer will pay no more for a property than the cost of acquiring an equally desirable substitute property.

Question 4

What is the principle of contribution in real estate valuation?

Accepted Answer

The principle of contribution states that the value of any component of a property is measured by how much it adds to the overall market value, not by its actual cost.

Question 5

What is the principle of conformity in real estate?

Accepted Answer

The principle of conformity holds that maximum value is achieved when a property is in harmony with its surroundings; properties similar in style, size, and use maintain or increase value.

Property Valuation – NY Real Estate Salesperson Exam

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