1. In appraising most residential properties, a real estate appraiser relies primarily on the:
A. reproduction cost approach
B. replacement cost approach
C. income approach
D. market data approach Correct
Explanation
The market data approach, also known as the sales comparison approach, is the primary method for appraising residential properties. It compares the subject property to similar properties recently sold in the area, adjusting for differences to estimate value. This approach is most reliable for residential properties due to the availability of comparable sales data.
2. Which of the following would be a basic principle of value?
A. Price
B. Reconciliation
C. Substitution Correct
D. Obsolescence
Explanation
The principle of substitution states that a buyer will not pay more for a property than the cost of acquiring a comparable substitute property. This is a fundamental principle of value in real estate appraisal, as it drives market behavior. Price is an outcome, reconciliation is a process, and obsolescence is a factor affecting value, not a principle.
3. The purpose of submitting construction plans to a municipality before obtaining a building permit is to:
A. notify the municipality for a tax valuation
B. provide evidence of compliance with local codes and regulations Correct
C. identify the responsible parties
D. determine which Municipal Utility Districts (MUD) have jurisdiction
Explanation
Submitting construction plans ensures the proposed construction complies with local building codes, zoning regulations, and safety standards, which is necessary to obtain a building permit. The other options are unrelated to the primary purpose of plan submission.
4. HUD initially attempts to bring parties together when a complaint is filed directly with the agency. This is called:
A. the conciliation period Correct
B. injunctive relief
C. monetary relief
D. the cooling off period
Explanation
HUD's conciliation period involves attempting to resolve fair housing complaints through negotiation and mediation between parties, aiming for a voluntary resolution before further action. The other options refer to different legal remedies or unrelated concepts.
5. The listing broker representing a seller completes a CMA and suggests a listing price of $425,000. The seller agrees to list the property and have the broker market it for $425,000. There are multiple offers on the home, and the seller accepts an offer for $474,000. The sale closes. What is the market value of the home?
A. $474,000 Correct
B. $495,000
C. $475,000
D. $425,000
Explanation
Market value is the price a property actually sells for in an arm's-length transaction, assuming a willing buyer and seller. Since the home sold for $474,000, that is its market value, regardless of the initial listing price or CMA.