REE 4103 EXAM QUESTIONS WITH
REVISED ANSWERS – UPDATED
What is the adjusted sale price after taking into consideration financing terms?
A. $107,615.52
B. $129,222.04
C. $99,222.04
D. $170,777.95
E. None of the above - Answer-$129,222.04
This Narrative Applies to the Next Question
Valuation assignment for the subject property is for both the building and land.
· A Comparable Office Bldg owned and sold separately from its site (land), which is
subject to a 99-year ground lease.
· The comparable 80,000 sf bldg sold (separately from the land) for $4,000,000, or
$50/sf.
· Assume the annual ground rent is $250,000, which is consistent with the market
· Market Land Capitalization rate is 11%.
If no other adjustments were made except for the value of the land, what would be the
final adjusted sales price of this comparable?
A. $2,272,727.27
B. $4,000,000
C. $2,636,363.64
D. $6,272,727.27
E. None of the above - Answer-$6,272,727.27
A comparable sale included the seller taking back a purchase-money mortgage at 3%
under the market rate for 10 years. The appraisal was based on the cash-equivalent
market value. The adjustment for this factor would be called a
A. Financing terms adjustment
B. Conditions of sale adjustment
C. Expenditures made immediately after purchase adjustment
D. Real property rights conveyed adjustment - Answer-Financing terms adjustment
,In a market value appraisal assignment, the appraiser found prices were increasing at
about 3% per year compounded annually. The appraiser found several comparable
sales but they were not very recent transactions. She decided to make an adjustment to
compensate for price increases in this market. These adjustments are called
A. Financing terms adjustments
B. Conditions of sale adjustments
C. Market conditions adjustments
D. Real property rights conveyed adjustments - Answer-Market conditions adjustments
This Narrative Applies to the Next Two (2) Questions
Valuation assignment for the subject property is for both the building and land.
· A Comparable Office Bldg owned and sold separately from its site (land), which is
subject to a 99-year ground lease.
· The comparable 80,000 sf bldg sold (separately from the land) for $4,000,000, or
$50/sf.
· Assume the annual ground rent is $150,000, which is consistent with the market
· Market Land Capitalization rate is 11%.
If no other adjustments were made except for the value of the land, what would be the
final adjusted sales price of this comparable?
A. $1,363,636
B. $4,000,000
C. $2,636,363.64
D. $5,363,636.36
E. None of the above - Answer-$5,363,636.36
A comparable sale included the seller taking back a purchase-money mortgage at 3%
under the market rate for 10 years. The appraisal was based on the cash-equivalent
market value. The adjustment for this factor would be called a
A. Financing terms adjustment
B. Conditions of sale adjustment
C. Expenditures made immediately after purchase adjustment
D. Real property rights conveyed adjustment - Answer-Financing terms adjustment
When reconciling the adjusted sales price of comparables, the greatest emphasis
should be given to:
A. The average
B. The median
C. The mode
D. None of the above - Answer-None of the above
, Consider a 10,000 sf strip shopping center that sold five years ago for $300,000 and
then sold again recently for $345,000.
The indicated average annual appreciation of the shopping center would be?
A. $9,000
B. $45,000
C. -$45,000
D. -$9,000 - Answer-$9,000
In the same market, a 12,000 sf shopping center with similar characteristics sold for
$323,000 five years ago, and another 12,000 sf property sold last year for $365,000.
What is the average annual change per unit (sf) for those comparable properties?
A. $42,000 sf
B. $10,500 sf
C. $0.87 /sf
D. $3.50 / sf - Answer-$0.87 /sf
Consider a corner vacant lot being appraised and two sales of vacant lots similar to the
subject in most respects except for location.
Comparable A, a corner lot with frontage on two streets, was sold for $12/sf.
Comparable B, an interior lot with frontage on only one street, was sold for $9/sf.
What is the adjustment for Comparable B?
A. -25%
B. +25%
C. -33%
D. +33% - Answer-+33%
CH 27
A building that is too large for the neighborhood is an example of functional
obsolescence in the form of overimprovement. Another example of functional
obsolescence is:
A. a sound building with a worn-out heating system
B. an awkwardly shaped floor plan in an office building
C. a residence abutting a new freeway
D. an older building with modernized elevators
an awkwardly shaped floor plan in an office building
In the cost approach, the valuation of land involves the principle of:
A. conformity
B. Contribution
C. Highest and Best use
D. variable proportions - Answer-Highest and Best use
