comprehensive reviewer on appraiser examjen

COMPREHENSIVE

REVIEWER AND REFRESHER

LICENSURE EXAMINATION FORREAL ESTATE APPRAISER (REA)

ALL RIGHTS RESERVE

No portion of this manuscript may be reproduced, copied or disseminated in any manner without the written permission of the authors. Any unauthorized reproduction, copying or dissemination of any portion of this book shall be prosecuted in accordance with law.

Red October Educational and Review Center

ACEBUREAU APPRAISAL

City Realty Holdings

Copyright: 2010 Edition

Foreword

When Republic Act 9646, Known as the Real Estate Service Act of 2009 became law, The PRC (Philippine Regulation Commission) was tasked to supervised and regulating the Real Estate Profession. PRC then prescribe the Licensure Examination for Real Estate Broker, Real Estate Appraiser and Real Estate Consultant

The state recognizes the vital role of Real Estate Service practitioners in the social, political, economic development and progress of the country by promoting the real estate market, simulating economic activity and enhancing government income from real property based-transactions, hence, it shall develop and nurture through proper and effective regulation and supervision a

COPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

corps of technically competent, responsible and respected professional real estate service practitioners whose standards of practice and service shall be globally competitive and will promote the growth of real estate industry (Rule 1, sec. 2 of the IRR of RA 9646)

To pass any kind of examinations, a thorough study and preparation is very important indeed.

The Authors

EXAMINATION TIPS AND HELPFUL STRATEGIES

ON TAKING BOARD EXAM

1. Follow Directions Since most types of exam are given under time limit, it is indeed a must that you understand and read the every direction carefully in each part of the exam. This will help your save time and boom your confidence and when you know that you are on the right tract

2. Skipping Test Items Most of the exam questions are arrange such that earlier questions are more difficult to answer than on the later part, it is advisable to answer the easy one first and go to harder questions later and avoid wasting time on puzzling questions.

3. Process of Elimination Use an educated and reasonable guess, eliminate to answer choices that are not related to the question. Do not use random it will work against you and it is not worth at all to guess.

4. Study Seriously This reviewer provides you with a comprehensive review material on the actual board exam. Best effort that you familiarized all the questions provided.

5. Pray to GOD The power of faith gives us confidence and enlightenment, Study with prayer.

May GOD bless us All. AD MAJOREIM DEI GLORIAM

TABLE OF CONTENTS

PART I: Fundamentals of Real Estate Appraisal


1.) Fundamentals of Real Estate Principles and practice2.) Standards and Ethics3.) Theories and Principle of Appraisal4.) Human and Physical Geography5.) Real estate finance and economics6.) Land Management system and property laws

PART II: Professional Appraisal Practice

1.) Methodology of Appraisal Approaches2.) Valuation procedure and research3.) Appraisal report writing4.) Case studies

PART III: Answer key


PART I: Fundamentals of Real Estate Appraisal

1. A duly registered and licensed natural person who works in a local government unit and performs appraisal and assessment of real estate properties, including plants, equipment, and machineries, essentially for taxation purposes.

a. Real estate appraiser d. real estate assessorb. Real estate consultant e. real estate salespersonc. Real estate broker

2. A duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, offers or renders professional advice and judgment on: (i) the acquisition, enhancement, preservation, utilization or disposition of lands or improvements thereon; and (ii) the conception, planning, management and development of real estate projects.


3. A duly accredited natural person who performs service for, and in behalf of a real estate broker who is registered and licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share in the commission, professional fee, compensation or other valuable consideration.


4. A duly registered and licensed natural person who, for a professional fee, commission or other valuable consideration, acts as an agent in a real estate transaction to offer, advertise, solicit, list, promote, mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein.


5. A duly registered and licensed natural person who, for a professional fee, compensation or other valuable consideration, performs or renders, or offers to perform services in estimating and arriving at an opinion of or acts as an expert on real estate values, such services of which shall be finally rendered by the preparation of the report in acceptable written form.


6. In corporate practice of real estate service, there shall be at one license real estate broker for everya. 25 accredited salesperson d. 35 accredited salespersonb. 20 accredited salesperson e. 40 accredited salespersonc. 30 accredited salesperson

7. what is PRBRESa. Philippine regulating board of real estate serviceb. Philippine regulation board of real estate servicec. Philippine regulatory board of real estate serviced. Philippine regulatory board of real estate salesperson


8. Who is the Chairperson of PRBRESa. Edgardo Gutierrez Ong d. Bansan C. Choab. Eduardo Gutierrez Ong e. Nicolas P. Lapena, Jr.c. Ernesto Gutierez Ong

9. Refers to to any natural or juridical person engaged in the business of developing real estate development project for his/her own account and offering them for sale

a. Real estate person d. Real estate developerb. Real estate development project e. Real estate consultantc. Real estate dealer

10. Refers to an official in the local government unit, who performs appraisal and assessment of real properties, including plants, equipment and machineries for taxation purposes.

a. Valuer d. Local assessing operation officerb. Appraiser e. Tax Mapperc. Assessor

11. Composition of the board of PRBRESa. 1 chairperson and 3 members d. 1 chairperson and 4 membersb. 1 chairperson and 2 members e. 1 chairperson and 7 membersc. 1 chairperson and 5 members

12. For Real estate salesperson to be accredited by the board must at least meet the ff. requirements ofa. at least high school graduate and 80 credit units of seminar and trainingb. at least 1 year of college and 120 credit units of seminar and trainingc. at least high school graduate and 120 credit units of seminar and trainingd. at least 2 years of college and 120 credit units of seminar and training

13. Any violation of RA 9464, including violation of IRR shall meted the penalty of a fine of not less than______ or imprisonment of not less than______ upon discretion of the court

a. 100,000.00 and 6 monthsb. 50,000.00 and 2 years c. 100,000.00 and 2 yearsd. 100,000.00 and 1 year

14. In relation to question number 13. In case the violation is committed by an license real estate service practitioner, the penalty shall be_______the aforesaid fine and imprisonment

a. Tripled d. doubledb. fivefold e. reclusion perpetuac. one half

15. In order to qualify for registration without examination, fifteen hours of continuing professional education (CPE) credits are needed for:

a. A licensed broker who failed to renew his license prior to July 30, 2009b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had failed to renew their license upon the effectivity of RA 9646e. None of the aboveCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

16. In order to qualify for registration without examination, eighteen hours of continuing professional education (CPE) credits are needed for:

a. A licensed broker who failed to renew his license prior to July 30, 2009b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had failed to renew their license upon the effectivity of RA 9646e. None of the above

17. In order to qualify for registration without examination, one hundred twenty hours of continuing professional education (CPE) credits are needed for:

a. A licensed broker who failed to renew his license prior to July 30, 2009b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to renew their license upon the effectivity of RA 9646d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had failed to renew their license upon the effectivity of RA 9646e. None of the above

18. In corporate practice of real estate service, there shall be at one license real estate broker for everya. 25 accredited salesperson d. 35 accredited salespersonb. 20 accredited salesperson e. 40 accredited salespersonc. 30 accredited salesperson

19. The realty service practice can be performed by juridical persons, except:a. Real estate salesperson d. Real estate consultantb. Real estate broker e. All of the abovec. Real estate appraiser

20. The national integrated organization of natural persons duly registered and licensed as real estate service practitioners

a. Accredited and Integrated Professional Organizationb. Professional Regulatory Board of Real Estate Service c. Professional Regulation Commissiond. Philippine Association of Real Estate Practitionerse. None of the above

21. The minimum educational requirement for an applicant for a real estate appraiser’s license is:a. Holder of bachelor’s degree d. 108 units in collegeb. 72 units in college e. 144 units in collegec. 82 units in college

22. A broker’s complaints for non-payments of commission by the developer shall be filed with:a. HLURB d. BTRCPb. HUDCC e. Regular Courtc. NHMFC


23. A licensed real estate practitioner is qualified to be appointed as member of the Professional Regulatory Board of Real Estate Service provided that prior to his/her appointment, he/she has been an active licensed practitioner for at least:

a. Twenty years c. Five yearsb. Fifteen years d. Three years e. Ten years

24. To constitute negligence or failure to disclose or ascertain to any person with whom a broker is dealing relative to the property and within his knowledge at the time of the transaction, what matters must the broker fail to disclose?

a. Previous owner of property or history of titleb. Fair market value of the propertyc. Location, topography, and shape of propertyd. Material fact, data or informatione. Whether property is updated in tax payments

25. The scope of brokerage as follows, but not:a. Authority to look for propertyb. Engagement to look for a buyerc. Procurement of insurance for properties secured by real estated. Procurement of loans secured by real estatee. Procurement of tenants for rental properties

26. Any of these acts shall be grounds for revocation of license except:a. Procurement of Certificate of Registration of real estate service practitioner by fraud or deceitb. Unprofessional or unethical conductc. Allowing an unqualified person to practice the profession by using one’s certificate of registrationd. Non-payment of duese. Misleading ads

27. Under the Code of Ethics, the following is considered ethical:a. Negotiate a property listed directly with the owner if the listing broker goes out of town for a few

days and cannot be contactedb.Should cooperate with other brokers on property listed provided they are members of any national real

estate broker’s associationc. Use the services of the salesman of another broker provided the salesman is paid the agreed upon

commissiond. Willingly share with other real estate professional the lessons from his experience and study

28. Any of these acts shall be grounds for revocation of license except:a. Procurement of Certificate of Registration of real estate service practitioner by fraud or deceitb. Unprofessional or unethical conductc. Allowing an unqualified person to practice the profession by using one’s certificate of registrationd. Non-payment of duese. Misleading ads

29. Any of these acts shall be grounds for revocation of license except:a. Procurement of Certificate of Registration of real estate service practitioner by fraud or deceitb. Unprofessional or unethical conductc. Allowing an unqualified person to practice the profession by using one’s certificate of registrationd. Non-payment of dues


e. Misleading ads30. Realty service practice can be performed by juridical persons except

a. real estate consultantb. real estate brokerc. real estate appraiserd. real estate sales persone. all of the above

31. Realty service practice can be performed by juridical persons excepta. real estate consultantb. real estate brokerc. real estate appraiserd. real estate sales persone. all of the above

32. What should be indicated by the appraiser in his letterhead, dry seal, sigh board, advertisement or other announcement in relation to real service practice

a. price of the propertyb. address of the ownerc. ptr numberd. license numbere. house number

33. Real estate broker must not encourage the following act when with a sale transaction to help the client reduce costa. undervalue the amount in the deed of saleb. pay to BIR where the property is locatedc. pay the proper taxes on timed. register immediately the sale with the RODe. pay the taxes on sale on time

34. The following acts are unethical excepta. delaying submission of formal offer that he had received from a prospective buyer in the hope of securing a higher offerb. keeping a special bank account, separate and distinct from his own funds, for all monies received in trust for other persons such as clients money and similar items c. disclosing the client confidential personal information to a fellow broker in order to facilitate the sale of the clientd. encouraging the parties to a sale to indicate a consideration lower than the actual selling price

35. Renewal of professional id card of RESPa. every yearb. 2 yearsc. 3 yearsd. 4 yearse. 5years

36. Minimum requirement for applicant for real estate appraiser exam is a. 80 units in college

b. 60 units in collegec. Holder of vocationald. Holder of college degree


e. High school graduate37. Real estate broker is usually authorized to the following acts except

a. advertise the listingb. look for the propertyc. bind the principal in the contractd. place for sale sign in the propertye. cooperate with other broker

38. Real estate practitioner to be appointed as member of the PRBRES provided that the prior his appointment he has been active for at least

A. 5 yearsB. 20 yearsC. 15 yearsD. 10 yearsE. 25 years

39. Real estate service practitioner consist of the following exceptA. real estate sales personB. real estate assessorC. real estate appraiserD. real estate brokerE. real estate dealer

40. In order to qualify for registration without examination, assessor and appraiser must have the followinga. have relevant CPE credit units to the satisfaction of the boardb. have passed RPAO examinationc. holds permanent appointment on the date of the effectivity of RA 9646 OR AS OF JULY 30, 2009d. have at least ten years experience on real property appraisal or assessment and completed at

least 120 accredited training on real property appraisale. all of the aboved

41. The following subject in the real estate broker exam licensure exam excepta. property managementb. subdivision developmentc. real estate laws and taxationd. fundamentals of property ownershipe. code of ethics and responsibilities

42. Act as agent of a party in a real estate transaction to offer, solicit, list, promotes. Mediate, negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or joint venture or other similar transactions in real estate or any interest therein

A. real estate consultantB. real estate appraiserC. real estate assessorD. real estate brokerE. real estate sales person

43. The board may reinstate any revoked certificate of registrationA. for reasons deemed proper and sufficientB. upon application and compliance with the require CPEC. after the expiration of 2 years from the date of revocationD. none of the above


E. all of the above44. Following are restriction of property rights except

A. zoningB. escrowC. taxationD. escheat

45. The best evidence of ownership isa. Tax declaration d. Vicinity mapb. Torrens title e. None of the abovec. Technical description

46. Refers to the compulsory successional rights granted by the law and the same cannot be taken by anybody except when alienated during the lifetime of the testator with considerationA. Legitime d. intestateB. Succession e. hierC. testate

47. Immovable or real property in favor the easement is establishedA. servient estate d. fixtureB. dominant estate e. legitimeC. land estate

48. Immovable or real property subjected to the easement establishedA. servient estate d. fixtureB. dominant estate e. legitimeC. land estate

49. Buyers who paid installment of less than 2 years are also protected by the Maceda law and entitled to a grace period of___days from the added their installment become due and demandable

A. 30 days d. 15 daysB. 20 days e. 25 daysC. 60 days

50. Maceda , how many times the can the buyers exercise his rightsA. once every 10 years d. once every 3 yearsB. once every 2 years e. none of the abovedC. once every 5 years

51. Anything which is or maybe the object of appropriationA. Tax d. assetB. Equipment e. real estateC. property

52. Real properties used for family homes or house and lot where the family residesA. life estate d. real estateB. fee tail e. remainderC. homestead estate


53. Doctrine which reserve to the state the full ownership of all natural resources or natural wealth that may be found in the bowels of the earth.

A. public domain d. regalian doctrineB. res allicujos e. stewardship principleC. res alienate

54. Right to the state to en act laws and enforce them for the safety, order, health, morals and general welfare of the public

A. Escheat d. eminent domainB. police power e. taxationC. zoning

55. Power of the state to imposed and collect takes and other charges on real estateA. Escheat d. eminent domainB. police power e. taxationC. zoning

56. Reversion of privately owned properties in favor of the state upon the death of the owner who is not survived with any heir

A. escheatB. police powerC. zoningD. eminent domainE. taxation

57. Power of the state to take private property for public use upon payment of just compensationA. Escheat d. eminent domainB. police power e. taxationC. zoning

58. Refers to the used of restrictions of a particular areas or delineation of allowable areas for useA. Escheat d. eminent domainB. police power e. taxationC. zoning

59. Under the phil constitution that every property owners are bound to used or utilized their lands in a manner that will promote welfare and benefits not only for themselves but also for the state

A. public domain d. regalian doctrineB. res allicujos e. stewardship principleC. res alienate

60. Owner of the property adjoining or abutting the bank of riverA. Avulsion d. land ownerB. Accession e. land lordC. riparian owner

61. Property owned by the state in its proprietary or private capacity which is not devoted to public used or public service and the development of national wealth

A. public domain d. regalian doctrineB. res allicujos e. stewardship principle


C. patrimonial property62.. Any and unknown deposit of money, precious object or jewelry and the lawful ownership thereof is unknown. Its ownership belongs to the land

A. Itmigems d. alluviumB. hidden treasure e. mineralsC. accessio

63. System of land registration by which the title is recorded becomes indefeasible, absolute and imprescriptibleA. Torres system d. Tax declarationB. Allen system e. BondsC. Torrens system

64. The absence of marriage settlements, or when the regime is void what system shall governA. co ownership d. extra judicialB. judicial settlement e. capital propertyC. absolute community of property

65. Exclusive property brought by the husband to the marriage as his own.A. co ownership d. extra judicialB. judicial settlement e. capital propertyC. absolute community of property

66. Exclusive property brought by the wife to the marriage as his own.A. co ownership d. extra judicialB. Paraphernal property e. capital propertyC. absolute community of property

67. Right of common dominion which two or more persons have in spiritual part of the property or thing which is not physically divided

A. co ownership d. extra judicialB. Paraphernal property e. capital propertyC. absolute community of property

68. Increase in value of real estate without any effort or expense of the ownerA. avulsionB. accessionC. adhesionD. erosion

69. Acquisition of alienable land of the public domain by homestead patent, free patent, sales patent, government awards

A. private grantB. inheritanceC. involuntary grantD. public grant

70. The process by which the current of the river, creek or torrens segregated from the estate a known portion and transfer it to another estate

A. reclamationB. accretionC. avulsion


D. alluvium71. The right of an owner-lessor to receive the contract rent and reversion of the property at the end of the lease is called:a. Fee simple c. Leaseholdb. Lease fee estate d. Net lease e. None of the above

72. A legal provision which requires agreement for the sale of real estate to be in writing and subscribed to by the parties to be enforceable by actiona. Defeasance clause d. Parole clauseb. Statute of Fraud e. Enforceability clausec. Evidentiary clause

73. Real property consists of a. Rights in realtyb. Land and all improvements thereonc. The right to use or occupy real estate d. Single-family residences

74. Real property includesa. Any and all buildings on the subject siteb. All interests, benefits, and rights inherent in the ownership of real estatec. The physical land and appurtenances affixed to the landd. Property that is not artificial

75. What are the considerations in determining whether something attached to real property is a fixture?a. method by which the item is attached; adaptability of the item for the land’s ordinary useb. relationship of the parties; intention of the person in placing the item in the land;agreement of the parties c. both a and bd. none of the above

76. The highest form of real property ownership is a. homestead estateb. leasehold estate c. fee simpled. life estate

77. Jackfruit that fell on the ground are a. ordinarily real estate c. both of the aboveb. ordinarily personal property d. none of the above

78. A deed should be recorded because a. Recording gives public notice of the transaction and sets the priority b. It is required by lawc. Title does not pass until the deed is recorded d. Recording makes the deed a legal document

79. The addition to the land through processes of nature, such as deposits of soil carried by streams.a. avulsion c. alluviumb. accretion d. usufruct

80. The sudden removal of land from one parcel to another when a body of water, such as a river, abruptly changes.


a. Avulsion c. alluviumb. Accretion d. usufruct81. The soil gradually deposited by the process of accretion, usually considered to belong to the owner of he land to which it is added.a. avulsion c. alluviumb. accretion d. usufruct

82. Land is unique becauseA. No two parcels have the same soil compositionB. No two parcels have the same ownersC. No two parcels have the same tax leviesD. No two parcels can occup y the same space on the face of the earth

83. The supply of land isA. Increasing all the time c. InfiniteB. Established by the surveyors d. Finite

84. The concepts of land areA. Land is immobile, durable, finite and usefulB. Social, economic, governmental and legal, geographic and environmentalC. Land, labor, capital, and entrepreneurialismD. Leasehold, leased fee, and fee simple

85. Knowledge of land value is required for all of the following exceptA. a. property taxation c. fire insurance B. b. a ground lease d. a grazing lease

86. Real estate isA. The rights in realtyB. The physical land and appurtenances affixed to the landC. What transfers on the day of closingD. The "bundle of rights"

87. Items that are built to be permanent and intended to be included with real property areA. Trade fixtures c. Personal property B. Real estate d. Chattel fixtures

88. The terms “real estate” and “real property”:A. Mean exactly the same thing in all casesB. Are defined to refer to the physical land and the bundle of rights respectivelyC. Are both important concepts in appraisalD. Both (b) and (c)

89. The value most commonly sought in real estate appraisals isA. Investment value c. Insurable valueB. Value in use d. Market value

90. The four agents of production area. Land, labor, capital, improvements d. Land, improvements, labor, materialsb. Land, labor, capital, entrepreneurshipc. Land, labor, capital, moneyCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

91. The value of improved residential real estate is most influenced by a. Passage of timeb. Brokers opinions of the value of propertiesc. Changes in shopping patterns for consumers of goods and servicesd. Cost of` construction increases

92. Real property has value because a a. It is nearby c. It is desirableb. It is popular d. It provides future benefits

93. When real property is sold by one person to another, the amount of money used to compensate the seller is calleda. The cost of the real property c. The price of the real propertyb. The value of the real property d. The income of the real property

94. A single- family home owner who builds a new and unique structure will commonly find thata. The uniqueness will cause the market to like it and pay more for itb. Properties that do not conform to the popular designs will sell for morec. By definition, uniqueness means that fewer people will want to bu y itd. The market will pay as much for this property as any other because of its unique nature

95. When demand for hou sing increases, the supply a. Increases immediately c. Is unaffectedb. Increases slowly d. Will diminish

96. Overproduction of new homesa. Causes oversupply and lower prices b. Causes increases in demandc. Causes prices to increased. Causes the market to move toward a state of equilibrium

97. The city planning department indicated a vacant residential lot located in the flood zone cannot be given a building permit. This sitea. Has lost nearly all utility c. Has lost all desirabilityb. Has become scarce d. Has lost any effective purchasing power

98. Demand for real estate may be affected bya. Increasing population and employment c. Increases in purchasing powerb. Availability of mortgage financing d. All of the above99. A less expensive house tends to gain in value because of more expensive neighborhood houses because ofa. Progression Principle c. Both of the above.b. Regression Principle d. None of the above.

100. A good’s capacity to satisfy human desires or needs is known asa. Creative demand c. Functional obsolescence b. Utility d. Effective demand

101. Two homes in the same addition have the same amenities, size, features, and location. One is priced at P1,000,000 and the other is priced at P1,100,000.a. The lower-priced home will sell quickly.


b. The lower-priced home will attract more demand. c. The lower-priced home will get more showings.d. The lower-priced home will sell for the full list price.102. In a high demand market, the cost of building a new property will increase substantially untila. It becomes impossible for prices to go higherb. The supply increases because new builders get into the marketc. The charges from suppliers and subcontractors go downd. The BSP increases interest rates

103. The four forces that influence real estate values are a. Social, economic, governmental, and environmental b. Land, labor, capital, and green spacec. Eminent domain, police power, escheat, and taxationd. Governmental, social, taxation, and economic conditions

104. Synergy or Plottage isa. The process whereby large parcels of land are divided into lots and recorded in theregister of deedsb. Is the assemblage of two or more parcels of landc. Is the name of the discount given when larger parcels sell for more per hectare than smaller onesd. An incremental increase of value that results when two or more sites are combined to produce greater utility

105. The length of a tract of land along a street is called the land’s a. depth c. frontageb. width d. abutment

106. Refers to prices or values of land adjacent to or “across the fence” from railroad, pipeline, highway or other corridor real estate.a. buyer’s market c. corner influenceb. across the fence value (atf) d. property linec. corner influence

107. A _______ is an article that was once personal property, but that has been installed in or attached to land or a building so that such article is regarded in law as part of the real estate.a. Fixture c. domestic tradeb. Trade fixture d. all of the above

108. A trade fixture:a. Contributes to the value of the property to which it is attached b. Contributes nothing to the value of real estatec. Is considered, but given no value by real estate appraisers d. Both (b) and (c)

109. Which of the following courses would benefit a professional appraiser?a. real estate finance, land use planning, real estate law b. urban sociology, demographics, information systems c. All of the above .d. One of the above.

110. An appraisal may include a(n)COPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

a. property description c. opinion of valueb. estimate of market value d. all of the above

111. The reliability of an appraisal depends on the a. knowledge and judgment of the appraiser b. accuracy of the data usedc. Both a and b.d. Neither a nor b.

112. An appraisal of current market value is considered to be accurate for a. 90 days c. one yearb. until the property is sold d. date of appraisal

113. Appraisals are always useda. To make residential mortgages c. to settle lawsuitb. To settle divorces d. to solve problem that involve real estate values

114. What term is used to describe a study of the cost -benefit relationship of an economic endeavor?a. Investment analysis c. Feasibility analysisb. Cash flow analysis d. Market analysis

115. The mayor of a small town recently hired you to estimate the value of a new one-story, three- bay fire station. The fire station was built last year at a cost of P2.5 million (land and buildings). Similar-size d, one year-old commercial buildings in comparable locations are selling for P2 million. lf you appraise this building for approximately P2.5 million, you probably have conveyed

a. Market value c. actual useb. Investment value d. value in transition

116. You were recently asked to appraise the Midnight blue hostel. The bank asked you to value the property for loan purposes. The comparables sales you used in this analysis were all sales of the entire operation. The income used in your calculation was based on the rental rate of each sleeping room and the sales at the restaurant and the bar. You are most likely appraisinga. Market value of the fee simple interest b. Market value of the leased fee interestc. Going-concern valued. Value in use

117. Investment value is best measured byb. Market price to a specific investorc. Market value to a specific investord. The cost of acquiring a competitive substitute property with the same utility to a typical purchasere. The present worth of anticipated future benefits to a specific investor

118. Estimating market value requires identification of the desires and priorities of a. Well-informed buyers and sellers c. A typically informed purchaserb. A fully informed seller d. A typically informed seller

119. Market value is based ona. insurable value c. costCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

b. most probable price d. value in use

120. Which of the following is n ot a part of the market value definition?a. Buyer and seller are typically motivated b. The property sells in 90 to 120 daysc. Payment is made in cash or cash equivalent terms d. Both parties are well informed

121. Julita Cruz owns a vacation home near a small town almost 1 kilometers from the city in which she lives and works. She doesn’t use her vacation house more than three weeks every year. The last time she stayed there, she noticed that a gas station had been built a few hundred yards down the road. After talking to the owner, she discovered that a zoning change had been put into effect to allow construction of a new shopping center on land adjacent to the gas station. While Ms. Cruz’s property was not rezoned, she realizes that it won’t be suitable as a vacation retreat once the shopping center is built. Which basic value principle(s) does the foregoing case illustrate?a. Highest and best use (HABU) c. conformityb. change d. all of the above

122. Two bookstores are located on the same city street, and both have had good business for ten years. One store is improved with new displays, better lighting, computerized inventory control, and a snack bar. Because the store is part of a chain, remodeling costs are absorbed without general increase in prices. The other bookstore begins losing customers. Which basic value principle(s) does the foregoing case illustrate?a. competition c. Both a and b.b. contribution d. None of the above.

123. A single-family neighborhood is located adjacent to an airport. Excessive noise caused by airplanes flying overhead and the potential danger they create have adversely affected the value of homes in the immediate area. Which basic value principle(s) does the foregoing case illustrate?a. internalities c. Both a and b.b. externalities d. None of the above

124. A church in a residential area is an example ofa. police power c. a nonconforming use b. forecast absorption d. a private restriction

125. An homeowner purchased two adjacent lots in a tract subdivision 20 years ago and built a single-unit residence entirely on one lot, utilizing the second lot as a side yard. The homeowner has decided to build a smaller home on the vacant side lot and retain the existing home as a rental. What term applies to the second yard?a. Surplus landb. Vacant site c. Excess landd. Underutilized site

126. The value of improved residential real estate is most influenced by a. Passage of timeb. Brokers opinions of the value of propertiesc. Changes in shopping patterns for consumers of goods and services d. Cost of` construction increases

127. A buyer invests in a small strip center because she believes the property will netP350,000 per year. This is an example of


a. Anticipationb. Changec. Competitiond. Substitution128. The statement “property values are created and sustained when the characteristics of a property conform to the demand of its market" refers toa. Use valueb. Contributionc. Conformityd. Supply and demand analysis

129. To be considered the highest and best use, a use must bea. Physically possible, legally permissible, appropriately justified, financially feasible, and maximally productiveb. Physically correct and legally possiblec. In existence already and legald. Physically possible and appropriate

130. Highest and best use analysis requires an estimate of the use as though vacant and as improved toa. Estimate the value of the improvementsb. Ensure that appraisers recognize that the properly could be worth more without the buildings than with themc. Estimate functional obsolescence caused by inappropriate improvements d. All of the above

131. The concept of consistent use requires an improvement to be valued based on a use that is consistent with the site’s highest and best use. This meansa. The highest and best use of the site as though vacant must always consider the improvements thereonb. The highest and best use as improved would always be consistent with the "as vacant" analysisc. The improvement value must be adjusted down if the land’s highest and best use is different than the improved highest and best used. The vacant land value can never exceed the improved value

132. When a property’s highest and best use is likely to change in the near future, the prevailing highest and best use is called a(n)a. Pending useb. Temporary use c. Interim used. Alternative use

133. A legally nonconforming use isa. A use that was legally established and maintained but no longer conforms to existing zoningb. A use that was illegally established and maintainedc. A use that was not legally established and maintained and still does not conform to existing zoningd. A use that was not legally established and maintained but the government is not enforcing the laws

134. The purpose of regulating the real estate service practitioners practice in thePhilippines is toa. Protect the public from dishonest realty practitioners. b. Protect realty practitioners from unfair competition. c. Upgrade the standards of realty service practice.d. All of the above.

135. Market area life cycles includeCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

a. Growth, stability, decline, and revitalization b. Growth, stability, decline, and gentrification c. Growth, stability, appreciation, and declined. Growth, level of appreciation, and decline* 136. Neighborhood social influences include all of the following except a. Population density c. Occupant age levelsb. Occupant skill levels d. Vacancy rates

137. The economic base isa. The lower line in a graph showing the economy of a communityb. The ratio of basic industries to technical Industries in a community c. An inexpensive, large string instrumentd. The economic activity that enables it to attract income from outside its borders

138. Economic influences include all of the following except a. Occupant income levelsb. Crime levelsc. Property rent levels d. Birth rate

139. Governmental influences include all of the following except a. Tax burdens c. Zoning, building, and housing codes b. Special assessments d. Changes in property use

140. Gentrification isa. A class of citizens who live in blighted areasb. A process in which older homes in a neighborhood are remodeled and different residents replace the lower-income residentsc. A group of complementary land usesd. A part of the life cycle of a market area in which property values are stable and the maintenance levels are adequate

141. Linkages area. The devices used to change a property from one use to another b. The relationships between a buyer and seller in a real estate dealc. Time-distance relationships between a property use and the supporting facilities d. The tools necessary to market real estate

142. The scientific study of population statistics is a. scientography c. egmentation b. demography d. forecasting

143. What form of diffusion is represented by the spread of Shoe Mart (SM)?a. cascade. c. relocation.b. reverse hierarchical d. stimulus.

144. A real estate market isa. A shopping center office of a realty companyb. A group of individuals or firms that are in contact with one another for the purpose of conducting real estate transactionsc. A list of potential buyers for the subjectd. A list of potential sellers who have property similar to the one requested by the buyer


145. What will be the best tool for locating the next Jollibee fast food restaurant in a city?a. GPS (Global Positioning System).b. GIS (Geographic Information System). c. Microsoft Words.d. Remote Sensing.146. The industry competition which arises from profits refers to

a. Principle of Change d. Principle of Substitutionb. Principle of Conformity e. Principle of Supply and Demandc. Principle of Competition

147. The value of a property will reach to its maximum level when the factors of production such as: land, labor, capital, coordination or entrepreneurship are in balance refers to

a. Principle of Balance d. Principle of Substitutionb. Principle of Conformity e. Principle of Anticipationc. HABU

148. The principle of increase and decreasing returns applied to a portion or the whole of an improvement refers toa. Principle of Anticipation d. Principle of Contributionb. Principle of Conformity e. Principle of Substitutionc. HABU

149. The net income remaining after the cost of labor, capital and coordination have been paid refers to a. HABUd. Principle of Substitution

b. Principle of Anticipation e. Principle of Surplus Productivityc. Principle of Conformity

150. The result of reasonable degree of architectural homogeneity and compatible land uses brought about by market attitudes, societal trends, economic conditions and public policy refers to

a. HABU d. Principle of Substitutionb. Principle of Conformity e. Principle of Anticipationc. Principle of Utility

151. The meeting desires and requirements of human beings. It is not only the capacity to give satisfaction in use but also the power to excite desire for continued possession refers to

a. HABU d, Principle of Substitutiond. Principle of Conformity e. Principle of Anticipationc, Principle of Utility

152. The factor where the value is increased if supply is reduced by effective demand, resulting in scarcity refers toa. Principle of Anticipation d. HABUb. Principle of Supply and Demand e. Principle of Consistent Usec. Principle of Contribution

153. That factor where the property is cannot be valued on the basis of one use for land and another use of improvements refers to

a. Principle of Consistent Use d. HABUb. Principle of Anticipation e. Principle of Substitutionc. Principle of Contribution


154. Refers to the most profitable and likely use of the property at the time of appraisal. It refers to that which in all probability will yield the maximum return at a given time. It is the first necessary consideration in studying a tract of land to estimate its value.

a. Principle of Supply and Demand d. Principle of Contributionb. Principle of Substitution e. Principle of Anticipationc. Principle of Highest and Best Use

155. Is the amount that maybe recovered when the property will be retired or disposed at a future time.a. Salvage Value d. Scrap Valueb. Market Value c. Principle of Substitutionc. Principle of Anticipation

156. Is the fair market value of the land in a specific zone or area as established by the BIR.a. Salvage Value d. Scrap Valueb. Market Value e. Zonal Valuec. Principle of Contribution

157. One which states that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable replacement property, as the basic principle that underlies the Market Data Approach of Sales Comparison,

a. Principle of Anticipation d. Principle of Highest and Best Useb. Principle of Substitution e. Principle of Supply and Demandc. Principle of Contribution

158. To be considered comparable to the subject property, a comparable must have been sold a. in an arm’s-length transactionb. with a conventional mortgagec. without any form of secondary financing d. for all cash

159. One method of compensating for sales that involved different terms of financing is use of thea. financing readjustment gridb. loan-to-value ratioc. cash equivalency technique d. operating statement ratio

160. Recent sales of comparable sites competitive with the subject sitea. Are the most reliable guide to the probable current market behavior and reactions of informed buyers.b. Do not indicate any probable current market behavior and reaction of informed buyers. c. Both a and b.d. None of the above.

161. Site valuation techniques includea. Sales comparison method; allocation method; abstraction methodb. Subdivision development method; ground rent capitalization; land residual method c. both a and bd. none of the above

162. Another term for developer’s profit is a. contractor’s profitb. entrepreneurial profit c. surplus productivity


d. management profit

163. Depending on market practice, entrepreneurial profit can be estimated as percentage of a. direct and indirect costs plus land valueb. the value of the completed project c. both a and bd. none of the above164. Barricade around the construction site is a building a. direct costb. indirect costc. overhead expensed. incidental expense

165. The cost of improvements identical in design and material to those of the subject property is called the subject’sa. reproduction cost b. replacement cost c. sales priced. market value

166. The cost of improvements identical in utility to those of the subject property is called the subject’sa. reproduction cost b. replacement costc. sales priced. market value

167. In using the cost approach to appraising, the estimated construction cost of improvements usually will be based ona. their original costb. the cost of new improvements at current prices c. book valued. the national cost average of all components

168. The index method of estimating construction cost is based on a. the original cost of improvementsb. the cost of new improvements at current prices c. book valued. the national cost average of all components

169. The amount of entrepreneurial profita. reflects the success of the projectb. is based on how project expenses are categorizedc. always be the same, provided the project is completed within its estimated budget d. cannot be estimated accurately

170. The predominant depreciation category for a residential location on heavily traveled national highway isa. Physical deterioration—curableb. Physical deterioration—long-lived incurablec. Functional obsolescence—curabled. External obsolescence—incurable

171. The predominant depreciation category for severe termite damage throughout a structure a. Physical deterioration—curableCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

b. Physical deterioration—long-lived incurablec. Functional obsolescence—curabled. External obsolescence—incurable

172. The ratio of total operating expenses to effective gross income is thea. operating expense ratio b. net income ratio c. effective gross income ratio d. break-even ratio173. The ratio of net operating income to effective gross income is the a. operating expense ratiob. net income ratioc. effective gross income ratio d. break-even ratio

174. The ratio of the operating expenses plus annual debt service to potential gross income is the a. operating expense ratiob. net income ratioc. effective gross income ratio d. break-even ratio

175. To arrive at net operating income, expenses are deducted from a. operating profitb. gross incomec. Effective gross income d. None of these

176. In the formula for the operating expense ratioa. operating expenses are divided by effective gross incomeb. effective gross income is divided by operating expensesc. potential gross income is divided by effective gross income d. effective gross income is divided by potential gross income

177. In the formula for the net income ratioa. effective gross income is divided by potential gross incomeb. potential gross income is divided by effective gross income c. effective gross income is divided by net operating incomed. net operating income is divided by effective gross income

178. The data needed for an appraisal by the income approach using direct capitalization are a. the potential gross income from the property, which includes the annual income from all sources; the amount of the expected annual effective gross income from the property, estimated by subtracting anticipated vacancy and collection losses from potential gross income;b. net operating income, found by deducting normal annual operating and other expenses from the effective gross income; the capitalization rate for the property; that is, the rate that can be applied to the property’s net annual income, the result being the appraiser’s estimate of the property’s value;c. both a and bd. none of the above

179. While working on an appraisal of a residential property in a new home subdivision, the appraiser finds that the builders have a total of 100 home sites currently offered for sale. In measuring market demand the appraiser notes that all of the builders are currently averaging 2 new sales contracts per month (combined), and are expecting to sell


24 homes within the next year. What conclusion could be drawn with regard to the 100 available home sites and a market period of the next 12 months?a. The market is in a condition of supply and demand. b. The market is in a condition of balance.c. The market is in a condition of oversupply.d. The market is in a condition of undersupply.

180. For land sales to be used as comparables, they must bea. competitive with the subjectb. relatively recentc. open market transactions

d. all of the above

181. A bad floor plan would generally be classified as a. physical depreciationb. economic obsolescence c. functional obsolescence d. economic deterioration

182. The valuation technique in which land and building are valued separately is a. The income capitalization approachb. The sales comparison approach c. Linear regressiond. The cost approach

183. Land valuation techniques includea. Subdivision development, depreciated cost, consensus b. Sales comparison approach, consensus, extractionc. Sales comparison approach, allocation, extractiond. Assessment multipliers, assessor’s opinions, multiple regression multipliers

184. Land value can be estimated using all of the following techniques except a. The sales comparison methodb. The cost methodc. The income methodd. The allocation method185. Improvement cost data can be obtained from a. Buildersb. Cost Manualsc. Sales of new homesd. All of the above

186. In economics, the four factors of production are a. land, labor, capital, and improvementsb. land, labor, capital and entrepreneurshipc. land, labor, capital and moneyd. land, improvements, labor and materialse. land, labor, site, and improvementsCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

187. Which of the is NOT an agent of production?A. landB. transportation C. labor D. capitalE. entreprenuership

188. Political forces affecting value may include A. life-styles and living standardsB. topography C. athletic levels and recreation facilitiesD. government spending and taxation policy E. primary registration and turnout

189. What are the two categories of tangible property?A. real property and personal property B. intangible property and real propertyC. real estate and intangible propertyD. legal and illegal investmentsE. open and shut transactions

190. Zoning is an exercise of the A. equity courts B. police powers C. Environmental Protection Agency D. Right of condemnationE. Right of escheat

191. Is the amount paid by the lessee of a house or flat fee of a commercial bldg.a. economic rent d. rentalb. interest e. market pricec. lease

192. The revenue derived from the use of land and of the forces inherent to landa. economic rent d. rentalb. interest e. pricec. lease

193. It is the price of any commodity in its market at a specified time a. economic rent d. rentalb. interest e. market pricec. lease

194. Functional utility depends on A. zoning d. age of equipmentB. wear and tear on the structure e. insurance requirementsC. tastes and standards

195. Value in use isA. subjective B. objective


C. readily measurable D. a market phenomenonE. synonymous with market price

196. The value added to total property value by a particular component is an example of the principle of A. substitution B. anticipation C. changeD. contributionE. conformity

197. The concept that the value of a particular components is measure by the amount that its absence would detract from the value of the whole is

A. opportunity cost B. substitution C. competition D. contributionE. conformity

198. The market loss cause by depreciation in an older structure may be offset by all of the following EXCEPTA. architectural interest B. historical registration C. strong demand relative to supply D. strong supply relative to demandE. renovation of the structure

199. Studying appraisal helps a person A. to improve value estimation skills B. to pass the real estate broker’s license examination C. to understand other real estate coursesD. to communicate with appraisers E. all of the above

200. Plant and Equipment area. t angible assets, other than realty.b. tangible assets, oth er than personalty.c. intangible assets, other than realty.d. int angible assets, other than personalty.

201. Assets that are inextricably combined with others and that may include specialised buildings, machinery, and equipment.a. Plantb. Machinery c. quipmentd. Business asset

202. Individual machines or a collection of machines. A machine used for a specific process in connection with the operation of the entity.a. Plantb. Machinery c. quipment


d. Business asset

203. For assets in the public sector, the assumption equivalent to a business continuing as a going concern is that the public sector assetsa. Will continue to be used for the provision of the relevant public good or service. b. Will cease to be used for the provision of the relevant public good or service.c. Both of the above. d. None of the above.

204. Plant for the supply of electricity, gas, heating, cooling or ventilation and equipment such as elevatorsa. Should be reflected in the value of the real estate interestb. Would not normally be reflected in the value of the real estate interest c. Both of the above.d. None of the above.

205. Plant and equipment are a. Tangible assetsb. Intangible assets c. Both of the above.d. None of the above.

206. Intangible assets that can have an impact on the value of plant and equipment includea. production records b. patentsc. operating software d. All of the above.

207. The value of patterns and dies is often inextricably linked to a. associated intellectual property rightsb. operating softwarec. Both of the above. d. None of the above.

208. The period over which property may be profitably used is a. Invested Capital b. Capital Structure c. Going Concern d. Economic Life

209. Valuations of plant and equipment can be carried out using any of the following approaches:a. the sales comparison approach.b. the cost approach (depreciated replacement cost)c. the income capitalization approach d. All of the above.

210. Which of the following types of property is subject to ad valorem taxation?A. property owned by a religious organization and used for a religious purposeB. new industrial plants that state and local governments have induced, with tax exemption as an incentive, to

locate within their jurisdictionsCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

C. commercial buildings leased in part by nonprofit foundationsD. state colleges and universitiesE. a state capitol

211. A person owning less than the entire bundle of rights has A. escheat B. a fee simple title C. a partial interest D. personal propertyE. a fee tail

212. All of the following statements are true EXCEPTA. real property is a type of service B. value is dependent on market conditionsC. a good or service has no value in exchange unless it possesses certain economic and legal characteristicsD. the price representing value is usually quoted in terms of money E. real estate may be sold for all cash or financing arranged

213. All of the following will affect the market value of a property EXCEPTA. political factors d. economic factors B. legal use restriction e. social concerns C. acquisition cost to present owner

214. Capacity to satisfy wants, production by labor and their exchangeabilityA. economic conceptB. economic principleC. economic valueD. economic utilityE. economic forces

215. Amount may be recovered when the property will be retired or disposed at a future timeA. scrap valueB. book valueC. zonal valueD. salvage valueE. market value

216. Fair market value of the land in a specific zone or areas as established by the BIRA. scrap valueB. book valueC. zonal valueD. salvage valueE. market value

217. Impairment of the desirability and usefulness of a real property brought by the physical, economic, and other changes

A. depreciationB. externalitiesC. obsolescenceD. damages


E. loss

218. Loss in value of property because of external influenceA. external lossB. external obsolescenceC. economic obsolescenceD. functional obsolescenceE. external forces

219. Real estate investment using others people money A. loanB. investmentC. leverageD. fullbackE. lending

220. Appraisal under the unified housing loan program shall be undertaken byA. NHAB. HLURBC. HDMFD. HIGCE. HUDCC

221. Loss in value of property because of the buyers desire or because of the presence of fixtures which are not desirable

A. external lossB. external obsolescenceC. economic obsolescenceD. functional obsolescenceE. external forces

222. The selling price of real estate is usually based on its:a. Market Value d. Exchange Valueb. Speculative Value e. None of the abovec. Intrinsic Value

223. The average selling price of homes in a district can best be determined by:a. Comparative Analysis d. Any of the aboveb Assessed Value e. None of the abovec. An appraisal

224. Conjugal partnership can be dissolved by:a. Legal separation d. Any of the aboveb. Annulment of marriage e. None of the abovec. Judicial separation of property

225. Income approach in appraisal would be most widely used:a . On commercial and investment properties d. On properties heavily insuredb. On newly opened subdivision e. None of the abovec. On properties heavily mortgage


226. The best evidence of ownership isa. Tax declaration d. Vicinity mapb. Torrens title e. None of the abovec. Technical description

227. The application of more factors of production will tend to increase net income up to certain point beyond which the introduction of more factors of production will tend to decrease net income

A. principle of conformityB. principle of substitutionC. principle of progressionD. principle of increasing and diminishing returnE. principle of regression

228. The displacement of present resident by people of lower economic statusA. progressionB. substitutionC. gentrificationD. infiltrationE. nuclei

229. The principle of value which states that value of a property tends to be enhanced when there is reasonable homogeneity in use:a. Principle of conformity d. Principle of progression b. Principle of highest and best use e. None of the abovec. Principle of increasing and diminishing return

230. The increase in value of real estate without any effort or expense of the owner is:a. Unearned increment c. Accretionb. Unearned income d. Accession e. Adhesion

231. The study of current supply and demand conditions in a particular area for particular type of property is:a. Market analysis d. Absorption methodb. Real Estate appraisal e. Income projectionc. Cash flow analysis

232. A loss in value from any cause is a common definition of:a. Depreciation c. Economic obsolescenceb. Functional obsolescence d. Effective age e. None of the above

233. The process of making installment payments consisting of principal and interest that reduces the loan balance: a. Amortization c. Liquidationb. Acceleration d. Hypothecation e. None of the above

234. The income approach to value is an application of the principle of:a. Anticipation c. Substitutionb. Progression d. Highest and Best Use e. None of the above

235. The following are determinants of value in appraisal of realty except:a. Transferability c. Scarcityb. Demand d. Utility e. Purchasing Power


236. In the computation of depreciation of properties, the method widely used by the practitioner is the:a. Straight line method d. Declining balance method b. Diminishing return method e. None of the abovec. Cost benefits method

237. An appraisal principle which holds that the value of property tends to be enhanced by association with superior properties is:a. Principle of Progression d. Principle of Attrition b. Principle of Regression e. None of the abovec. Principle of Infiltration

238. Is a factor derived from comparable properties and applied to expected rental income in order to estimate a value. It may be used in finding the value of a property. It is the ratio that expresses the relation between gross income and sales prices of a property.

a. Gross Income Multiplier d. Multiplier Effect Factorb. Zonal Value e. Market Valuec. Scrap Value

239. Method of identifying the boundaries of a parcel of land by placing pins or stakes on the groundA. subdivision survey d. relocation surveyB. topographic survey e. schematic surveyC. geodetic survey

240. Survey of land to determine the elevation or undulation of the terrain at various sectionA. subdivision survey d. relocation surveyB. topographic survey e. rectangular surveyC. geodetic survey

241. Grid of north and south meridians and east and west lines surveyed by the government in identifying Philippines boundaries

A. subdivision survey d. relocation surveyB. topographic survey e. rectangular surveyC. geodetic survey

242. Survey plan indicating the division of the propertya. subdivision plan d. leche planb. location plan e. vicinity planc. lot plan

243. Imaginary lines connection to point 1 of a lot with a reference point such as BLBMA. contour line d. BearingsB. tie back e. Metes and boundsC. Tie line

244. lines in topographic map which indicate the elevation of the terrain at various sections of the landA. contour lineB. tie backC. Tie lineD. BearingsE. Metes and bounds


245. Subdivision plan for flat terrainA. Gridiron d. cul de sacB. tie line e. square planningC. chaplan

246. Refers to subd scheme wher the resulting blocks rectangular in shapeA. Gridiron d. cul de sacB. tie line e. square planningC. chaplan

247. Directions of any respective given meridian.A. contour line d. BearingsB. tie back e. Metes and boundsC. Tie line

248. Prepared out of a cadastral survey of extensive area consisting of several lots for cadastral registration proceedingsA. Phil map d. Cadastral mapB. Vicinity map e. Territorial mapC. Tax map

249. Land located in the fringes of built up communities which has the provincial characteristics but is favored with city utilities, amenities and facilities

A. city land c. urbanized landB. metropolis land d. idle land

250. Lands in metro manila or NCR are covered by the Urban Land Reform Law when they located within _______areas for priority development sites

A. 214B. 234C. 224 d. 244

251. Wrote eight volume guide to geography; forerunner of the present geographyA. HipparchusB. AristotleC. PtolemyD. ErastosthenesE. Humbult and ritter

252. The earth is sphereA. HipparchusB. AristotleC. PtolemyD. ErastosthenesE. Humbult and ritter

253. Drew imaginary lines on the surface of the earth in order to describe the location of placesA. HipparchusB. AristotleC. Ptolemy


D. ErastosthenesE. Humbult and ritter

254. Says geographers should study human environment relationships by concentrating on how physical environment causes social development

A. HipparchusB. AristotleC. PtolemyD. ErastosthenesE. Humbult and ritter

255. Used the word geography and calculated the circumference of the earth within 0.5 percent accuracyA. HipparchusB. AristotleC. PtolemyD. ErastosthenesE. Humbult and ritter

256. Physical character of the locationA. land B. siteC. toponymD. situation e. mathematical location

257. Place given to a portion of the earth surface or nominal locationA. land B. lot siteC. toponymD. situationE. mathematical location

258. Relative location of place compared with other places, identification of streets, buildings and landmarks to direct people to a desired location

A. land B. lot siteC. toponymD. situationE. mathematical location

259. The science of making mapA. calligraphyB. surveyingC. mappingD. cartographyE. pattern

260. Two dimensional flat representation of the earth surface or portion of itA. calligraphyB. surveyingC. mapD. cartographyE. pattern


261. The portion of earth occupied by permanent human settlementA. toponymB. demographyC. densityD. ecumene

262. Geometric arrangement of objectA. toponymB. demographyC. densityD. ecumeneE. pattern

263. Frequency that something occurs within a given unit of areaA. toponymB. demographyC. densityD. ecumeneE. pattern

264. Migration to locationA. emigrationB. migrationC. immigrationD. net migrationE. exodus

265. Permanent move to a new locationA. emigrationB. migrationC. immigrationD. net migrationE. exodus

266. Mass departure from a locationA. emigrationB. migrationC. immigrationD. net migrationE. exodus

267. Difference between the number of immigrants and the number of imegrantsA. emigrationB. migrationC. immigrationD. net migrationE. exodus

268. A kind of survey where the shape of the earth is taken into account in computing results is known as:a. Plane survey d. Geodetic survey


b. Topographic survey e. Cadastral surveyc. Hydrographic survey

269. A metes and bounds description begins and ends with theA. street and house number B. block number C. point of beginningD. grid coordinatesE. iron pin

270. A (n) ____ identifies a property in such a way that it CANNOT be confused with any other property.A. coded map book d. full city survey B. legal description e. engineering reportC. narrative appraisal

271. Factors that will influence value related to population growth, birth control measures and migrationa. Physical d. Culturalb. Economic e. Politicalc. Social

272. Factors that will influence value which are governmental based. It is the degree of efficiency in the maintenance of peace and order and the effort of providing the essential services like: utilities, zoning and land use ordinance, anti-squatting law, rental control law and etc.

a. Physical d. Culturalb. Economic e. Politicalc. Social

273. Factors what will influence value which forces include the nature or basic industry and business activity in the neighborhood, trend of employment, and expansion of housing programs;


274. Factors that will influence value which refer to the location and age of the neighborhood (size, area, shape and land topography), type of improvements and architectural trends, street pattern, sidewalks and underground drainage.


275. Former natural born Filipino citizen who acquired foreign citizenship and has not applied and been granted dual citizenship, can purchase for his use as residence

A. 1,000 sq.m. of urban land and 1 has of rural landB. 1,000 sq.m. of urban land and 2 has of rural landC. 1,000 sq.m. of urban land and 5 has of rural landD. 1,000 sq.m. of urban land and 3 has of rural land

276. Buyers of real property covered by RA 6552 do not include installment buyers ofA. industrial lotsB. house and lot packagesC. residential subd lotsD. residential condominiums


277. Retention limits under carp for foreign individuals on lease, management grower or service contract

A. not more than 100 hasB. not more than 500 hasC. not more than 10 hasD. not more than 1,000 has

278. Comprehensive agrarian reform program extension with reformsA. RA 8435B. PD 957C. RA 6657D. RA 9700

279. RA 6552 or the Maceda lawA. realty installment and protective decreeB. realty installment buyers protection actC. realty installment and buyers protective decreeD. realty installment and financing

280. Process of bartering land for another piece of land and or shares of stock of equal value in the government or quasi government corporation

A. land assemblyB. land reformC. land bankingD. land exchange

281. Acquisitions of lots of varying ownership through, among others, expropriation or negotiated purchase for the purpose of planning and development unrestricted by individual property boundaries

A. expropriationB. land bankingC. land assemblyD. land reform

282. In the absence of pre nuptial agreement all properties of the husband and wife shall only have a total retention ofA. 1 hasB. 5 hasC. 10 hasD. 3 has

283. Refers to the commitment for more than a limited duration of funds, land resources, facilities and service by the two or more legally separate interest, to an enterprise for their mutual benefit

A. corporationB. land assemblyC. cooperativeD. joint venture

284. Acquisition of land in advance of actual need for the purpose of acquiring lands at existing use value and disposing of them in a manner which would influence land price formation and promote planned development

A. land reform c. land exchangeB. land assembly d. land banking


285. States that a specified party must be given an opportunity before any others to either accept or reject an offerA. right to redeem c. right of first refusalB. right to recover d. right to reject

286. Easement is to real property, usufruct is to:a. Personal property d. Real propertyb. Personal or real property e. None of the abovec. Personal and real property

287. As a mode of acquiring title to real property, prescription in good faith is:a. 5 years c. 15 yearsb. 30 year d. 50 years e. 10 years

288. The bundle of rights inherent in ownership without any limitations other than those imposed by law or contract is:a. Fee Estate c. Lease fee estateb. Fee simple d. Tenancy in common e. None of the above

289. The following liens can be found at the back of the title except:a. Real estate tax liens c. Mechanic’s liensb. Mortgage lien d. Judgment liens e. None of the above

290. Seizure of a property by court order, usually done to have it available in the event of adverse judgment in a pending suit, is:a. Escheat c. Forfeitureb. Foreclosure d. Attachments e. Conveyance

291. A buyer of real estate has already paid in 8 years of installment a total amount of P520,000.00 inclusive of P20,000.00 penalty interest. The cash surrender value of the property based on Maceda Law is:a. P200,000.00 c. P250,000.00b. P325,000.00 d. P350,000.00 e. None of the above

292. A stipulation in a mortgage contract where the mortgagee is authorized to appropriate the property upon default or non-payment of debt is:a. Dacion en Pago d. Pactum de non Aliendob. Tacita Reconduta e. None of the abovec. Pactum Commissorium

293. A contract where the property is hypothecated to secure an obligation where the creditor is given the right to possess the property and collect the fruits thereof is:a. Real estate mortgage c. Blanket mortgageb. Equitable mortgage d. Antichresis e. None of the above

294. The conveyance of real estate in payment of an obligation is:a. Pacto en retro sale d. Dacion en pagob. Quit claim Deed e. Cession of ownershipc. Deed of waiver

295. The voluntary transfer of title on a real estate is:a. Adverse possession c. Quit claim b. Alienation d. Surrender e. None of the above


296. A provision in the blanket mortgage that property whose loan value has been fully paid shall be released from the mortgagea. Defeasance clause d. Acceleration clauseb. Termination clause e. None of the abovec. Automatic redemption clause

297. X, owner of a 10- door apartment rented a unit to Y for a period of one year. Under the law on lease, Y, without the consent of X, may perform any of the following acts, except:a. Sublease the unitb. Assign his rightsc. Suspend payment if X fails to make the necessary repairs.d. Demand payment reimbursement constituting one half of the value of the usual improvements introduced in good faithe. All of the above298. A special power of attorney to sell a real estate carries with it all the following except:a. Power to find a purchaser d. Power to fix the term of saleb. Power to sell directly e. None of the abovec. Power to sell only for cash

299. A mortgage which covers two or more properties is called:a. Open mortgage d. Close mortgageb. Equitable mortgage e. Blanket mortgagec. Conventional mortgage

300. In the absence of any stipulation on the period, the vendor in a pacto de retro sale may repurchase the property within:a. 4 years c. 6 yearsb. 8 years d. 10 years None of the above

301. Husband and wife can sell property to each other in the following circumstances:a. Separation of property was agreed upon in the pre-nuptial agreementb. There has been a judicial separation of propertyc. There has been a legal separationd. Any of the above

302. Document to be checked before buying a subdivision lotA. license to sellB. development permitC. approve planD. mapE. none of the above

303. Condominium actA. RA 2774B. RA 4276C. RA 4727D. RA 4726E. NOTA

304. Urban Development and housing ActCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

1. RA 79272. RA 79723. RA 92794. RA 72795. NOTA

305. In the absence of any provision in the master deed of a condominium project, the interest of the unit owner in the common areas shall be;

1. equal2. based on value3. decided by the condominium corporation4. proportionate5. NOTA

306. Unless justifiable cause, the period of completion of development of a subdivision project counted from issuance of license to sell is;

1. eighteen months2. twenty four months3. six months4. twelve months5. NOTA

307. Registration of mortgage covering a subdivision project or completion of development of a subdivision project is aA. NHAB. HLURBC. LGUD. HUDCCE. HIGC

308. A buyer of a subdivision lot on installment after sufficient notice to the developer discontinued paying amortization because the developer failed to develop the subd as certified by the HLURB in such a situation and under PD 957, the buyer is entitled to a refund which would be

A. Total payment made less penalty chargesB. Total payment made less penalty plus interest chargesC. Total payment made less penalty charges and interest on total paymentD. Total payment plus penalty chargesE. NOTA

309. Provided by RA 7279 a developer of a subd. Project is required to develop an equivalent 20% of the project forA. socialized housingB. economic housingC. open spaceD. commercial area

310. Title to condominium unit is vested inA. lot owner of the condo projectB. corporation owning the buildingC. association of the bldgD. owner of the condominium unitE. NOTA


311. sometimes refered to as a vertical subd.A. condominiumB. town housesC. row housesD. mansionE. NOTA

312. Subdivision and condominium buyers protective decreeA. PD 1216B. PD 957C. PD 1981D. BP 220E. NOTA

313. The term of a condominium corporation is A. 10 yearsB. 50 yearsC. 25 yearsD. Co terminus with the duration of condo projectE. ALL OF ABOVE

314. The performance bond for a subd project may be in the form of a surety bond equivalent toA. 30% of the development costB. 40% of the development costC. 20% of the development costD. 10% of the development costE. 25% of the development cost

315. The areas reserve for parks, playground and recreational areas of a subd project areA. saleable lotsB. non alienable public landC. Exclusively owned by the owner developerD. Co owned by the developer and lot owner

316. The area reserved for roads, alleys and open spaces in a subd. Project with an area of one hectare or more isA. 10% of the gross areaB. 30% of the gross areaC. 35% of the gross areaD. 25% of the gross area

317. In mixed use condominium project, the master deed may be amended by the simple majority of unit owners. Majority is based on.

A. floor area of ownershipB. number condominium unitsC. total area of condominium unitsD. all of the aboved

318. The amendment of master of deed of a condominium project is decided by the majority of registered owners must be approved by the HLURB and

A. City or municipal council c. City of Municipal EngineerCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

B. City of Municipal Mayor d. City or Municipal Assessor

319. Amendment to the master of deed of a condominium project approved by majority of registered owner also need to be approved by the city engineer and

A. NHA d. HUDCCB. LRA e. HLURBC. LGU

320. Notice of adverse claim annotated on title is valid only forA. 15 days d. 60 daysB. 90 days e. 10 daysC. 30 days

321. Some old Spanish title , the unit of measure one 1 “are” is equal toA. 10 sq.m. d. 1,000 sq.m.B. 100 sq.m. e. 10,000 sq.mC. 1 sq.m.

322. Jose owns a house on a parcel that includes an easement over the adjoining property of Tom Yan. The Jose property is thea. Servient tenement c. For sale propertyb. Dominant tenement d. None of the above

323. Co-owners who have an equal right of possession coupled with a right of survivorship have a. Tenancy in common c. Tenancy in partnershipb. Joint tenancy d. Marital property

324. In what form of property ownership is an exclusive right to an identified segment of airspace conveyed along with an interest in common in the rest of the parcel?a. House and lot c. both of the aboveb. Townhouse d. Condominium

325. The property of a person who dies leaving no heirs passes to the state by the right ofa. acquisition c. escheatb. condemnation d. eminent domain

326. Condemnation of private property for public use is called the right of a. Seizure c. Eminent Domainb. Escheat d. Acquisition

327. All of the following areas of regulation affect appraisers EXCEPTa. DTI c. LGU Planning Office b. PRC d. DSWD

328. The agency that now insures deposits in financial institutions isa. BSP c. HUDCCb. HMDF d. PDIC


329. The form of deed used to return title to real estate to its owner when the debt secured by a deed of trust is paid in full is thea. warranty deed c. quitclaim deedb. reconveyance deed d. tax deed

330. Tenancy by the entirety is a form ofa. marital property ownership c. business property ownershipb. tenancy in common d. ownership in severalty

331. The four unities required for a joint tenancy include a. tenancy, location, title, and possessionb. time, title, interest, and possessionc. possession, ownership, use, and enjoyment d. title, time, location, and possession

332. A life estate is a(n)a. present, possessory interest. c. estate of tenancy.b. future interest. d. fee simple defeasible.

333. During the research of a subject property an appraiser learns the occupants (parents) have been granted a life estate by their children. What interest do the children hold in the property?A. Remainder man C. TrusteeB. Life tenant D. Trustor

334. Property acquired by a spouse during marriage by gift or inheritance is a. marital property c. separate propertyb. community property d. jointly owned property

335. A deed of trust isa. A document that makes a third party responsible for the moneyb. A document that gives a third party the deed until the mortgage loan is paid off c. A deed given by a prisoner who has behaved for many yearsd. Used as a tool to make foreclosure more efficient

336. Based on net gift the maximum rate of donor tax isA. 20% c. 15%B. 10% d. 30%

337. The rate of real estate tax in municipalities within metro manila is not more thanA. 5% c. 10%B. 2% d. 20%

338. Under the local government code, agricultural lands of more than one hectare are subject to additional tax of no more than 5% of assessed value when at lest

A. entire area is uncultivatedB. 50% of the area is uncultivatedC. 30% of the area is uncultivatedD. 20% of the area is uncultivated


339. Annual levy on real estate equivalent to 1% of the assessed value which shall be in addition to the basic real estate tax

A. ad valorem tax c. special education fund taxB. excise tax d. vat

340.. Capital gains on the sale of real estate classified as capital asset isA. prepaid income tax c. expanded withholding taxB. creditable tax on sale d. creditable tax on sale

341. BIR revenue regulation no 17-2003, the seller of a family home who failed to utilized the proceeds to acquire a new residence within 18 months from the sale shall be assessed additional deficiency capital gains tax inclusive of penalties and

A. 5% p.a. c. 20% p.a.B. 25% p.a. d. 10% p.a.

342. Ground floor of a condominium project per BIR 28-29 shall be considered as commercial and a additional rate shall be added on established residential zonal value of

A. 20% c. 15%B. 10% d. 25%

343. The estate tax return shall be filed with the BIR withinA. 90 days from the death of the decedentB. 120 days from the death of the decedentC. 60 days from the death of the decedentD. 180 days from the death of the decedent

344. Taxpayer has__ to redeem his real property which was levied and subsequently forfeited and acquired by the local government for tax delinquency

A. 3 years c. 1 yearB. 5 years d. 2 years

345. The following composed the board of assessment of Makati city, exceptA. city assessor c. register of deedB. city treasurer d. city engineer

346. Documentary stamp tax on the sale of property must be paidA. within 30 days from the date of notarizationB. within 5 days after the close of the month of the date of saleC. within 10 days after the close of the month of the date of saleD. at the time payment of capital gains tax

347. Value placed on taxable property by the assessor for ad valorem tax purposeA. economic value c. assessed valueB. appraised value d. market value

348. The property sold is an ordinary asset, what is the applicable taxA. estate tax c. capital gains taxB. percentage tax d. creditable withholding tax


349. Tax fixed on documents, instruments and papers evidencing acceptance, assignment or sale of a right, property or obligation

A. community tax c. excise taxB. estate tax d. documentary stamp tax

350. Banks acquired assets which form part of its real estate inventories at the close of its accounting period shall be classified

A. ordinary asset c. fixed assetB. capital asset d. tangible asset

351. Sale of a dealer of a residential dwelling is not subject to E-VAT when the price does not exceedA. 1,500,000.00 c. 1,000,000.00B. 2,500,000.00 d. 3,000,000.00

352. Which of the following cannot be issued condominium certificates of titlesA. subdivision lots c. two level row houseB. one level raw house d. industrial warehouse

353. The required number of votes of registered owners to authorize a condominium corporation to sell or otherwise dispose of the common areas in a condominium project is

A. unanimous votes c. Simple majority votesB. 2/3 votes d. 1/3 votes

354. A space to be considered a condominium unitA. at least 5 storey highB. manage by condominium corporationC. be susceptible to independent use and owner shipD. unencumbered by any restriction

355. The right of an owner lessor to receive the contract rent and reversion of property at the end of the lease isA. fee simple c. lease fee estateB. net lease d. freehold

356. An authority given by the developer to a broker to look for a supplier of backfilling materials who shall be paid with developed lots is:a. Procurement agency d. Sales agencyb. General Brokerage e. None of the abovec. Exchange agency

357. An agreement between an owner and a broker to sell a real estate property:a. Listing d. Power of Attorneyb. Authorization to sell e. None of the Abovec. Joint venture

358. In the real estate business, another term for the owner is:a. Customer c. Principal e. None of the aboveb. Prospect d. Alter Ego

359. The documentary stamp on lease of real estate is P3.00 for the first P2,000.00 or fraction thereof and additionala. P0.50 for every P1,000 in excess of the first P2,000 b. P1.00 for every P1,000 in excess of the first P2,000


c. P1.50 for every P1,000 in excess of the first P2,000 d. P2.00 for every P1,000 in excess of the first P2,000 e. P3.00 for every P1,000 in excess of the first P2,000 360. Under BIR Revenue Regulation No. 17-2003, the seller of a family home who failed to utilize the proceeds to acquire a new residence within 18 months from the sale shall be assessed additional deficiency capital gains tax inclusive of penalties and:a. 5% interest per annum d. 10% interest per annumb. 15% interest per annum e. 20% interest per annumc. 25% interest per annum

361. The rate of real estate tax in municipalities within Metro Manila is not more than a. One-half percent of assessed value d. Three percent of assessed valueb. One percent of assessed value e. None of the abovec. Two percent of assessed value

362. Based on net gifts, the maximum rate of donor’s tax is:a. Ten Percent c. Fifteen percent e. Thirty percentb. Twenty percent d. Twenty-five percent363. The value placed on taxable property by the assessor for ad valorem tax purpose is:a. Market Value d. Appraised Valueb. Assessment Value e. Assessed Valuec. Economic Value

364. The estate tax return shall be filed with the BIR within :a. 60 days from death of decedent d. 180 days from death of decedentb. 90 days from death of decedent e. 240 days from death of decedentc. 120 days from death of decedent

365. Under the Local Government Code, the next period for the property owner to file a sworn declaration of ownership and value with the assessor is: a. Year 2008 c. Year 2009 e. None of the above b. Year 2010 d. Year 2011

366. The documentary stamp tax on the sale of property must be paida. Within thirty (30) days from the date of notarizationb. Within five (5) days after the close of the month of the date of salec. Within ten (10) days after the close of the month of the date of saled. At the time of payment of capital gains taxe. At any time

367. The ground floor of a condominium project, per BIR 28-98, shall be considered as commercial and an additional rate shall be added on established residential zonal value of: a. 10% d. 25% b. 15% e. 30%c. 20%

368. The schedule of fair market value in municipalities in Metro Manila is prepared by:a. MMDA d. Bureau of Internal Revenueb. Concerned Municipal Assessor e. Sangguniang Bayan by ordinancec. None of the above


369. The amount of family home equivalent to the fair market value considered as allowable deductions from the estate of the decedent a. P 500,000.00 c. P 1,000,000.00 e. P1,500,000.00b. P 2,000,000.00 d. P 750,000.00

370. A taxpayer has ____ to redeem his real property which was levied and subsequently forfeited and acquired by the local government for tax delinquency.a. 1 year c. 60 days e. 2 yearsb. 4 years d. 3 years

371. In case of foreclosure sale where right of redemption is not exercised by the mortgagor, who pays the capital gains tax?a. Owner-mortgagor c. Buyer of the property e. None of the aboveb. Creditor-bank d. Any of the above

372. The documentary stamp on every mortgage or pledge of real estate is:a. P20.00 for the 1st P5,000.00 plus P10.00 for every P5,000.00 thereafterb. P10.00 for every P5,000.00 or fraction thereofc. P15.00 for every P5,000.00 or fraction thereofd. P2.00 on each P200.00 or fraction thereofe. None of the above

373. In case of sale of agricultural lands not exceeding five (5) hectares, aside from clearance from DAR, buyer must also submit what document?a. Undertaking to surrender land in excess of retention limitsb. Affidavit of compliance with CARLc. Affidavit of total or aggregate landholdingd. Certification from DARe. Affidavit of waiver

374. The retention limit of landowners under the CARP is:a. 5 has for the landowner and 3 has per child irrespective of ageb. 5 has for the landowner and 3 has per child who must be at least 15 years oldc. 5 has for the landowner and 5 has per child whether or not they till the land or manage the farmd. 5 has for the landowner and 3 has per child who must be at least 15 years old and is actually tilling the land or managing the farme. 5 has for the landowner and 3 has per child who must be over 21 years old

375. A buyer of a subdivision lot on installment after sufficient notice to the developer discontinued paying amortization because the developer failed to develop the subdivision as certified by the HLURB in such a situation and under P.D. 957, the buyer is entitled to a refund which would be:a. Total payment made less penalty charges.b. Total payments made less penalty and interest charges.c. Total payments made less penalty charges plus interest on total payment.d. Total payments including penalty chargese. None of the above.


376. Unless extended for justifiable cause, the period of completion of development of a subdivision project, counted from issuance of license to sell, is:a. Six months d. Eighteen monthsb. Twelve months e. Twenty four monthsc. None of the above

377. Registration of a mortgage covering a subdivision project or completion of development of a subdivision project is at the:a. Local Government Unitb. Housing and Urban Development Coordinating Councilc. Home Insurance Guarantee Corporationd. Housing and Land Use Regulatory Boarde. National Housing Authority

378. In the absence of any provision in the master deed of a condominium project, the interest of the unit o owners in the common areas shall be:a. Proportionate d. Decided by the condominium corporationb. Based on Value e. None of the abovec. Equal379. Urban Development and Housing Act:a. R.A. 7279 c. R.A. 9279 e. None of the aboveb. R.A. 7927 d. R.A. 7972

380. Condominium Act:a. R.A. 4727 c. R.A. 4276 e. None of the aboveb. R.A. 2774 d. R.A. 4726

381. Document to be checked before buying a subdivision lot:a. Development permit d. Mapb. License to sell e. None of the abovec. Bureau of Land approval

382. Sometimes referred to as vertical subdivision:a. Row Houses d. Mansionb. Town Houses e. None of the abovec. Condominium

383. Subdivision and Condominium Buyers Protective Decree:a. P.D. 1216 d. P.D. 957b. B.P. 220 e. None of the abovec. P.D. 1981

384. The area reserved for roads, alleys and open spaces in a subdivision project with an area of one hectare or more is:a. 20% of gross area d. 25% of gross areab. 30% of gross area e. 35% of gross areac. None of the above

385. For a space to be considered a condominium unit, it must:a. be encompassed by interior surface of walls, floors and ceilings


b. be managed by a condominium corporationc. be susceptible of independent use and ownershipd. be unencumbered by any restrictione. at least five storeys high

386. In mixed use condominium project, the master deed may be amended by simple majority of unit owners. Majority is based on:a. Number of condominium units d. Floor area of ownershipb. Total area of condominium units e. Any of the abovec. None of the above

387. Amendment to the master deed of a condominium project approved by majority of registered owners also need to be approved by the city engineer and:a. Local Government e. National Housing Authorityb. Housing and Urban Development Coordinating Councilc. Housing and Land Use Regulatory Boardd. Land Registration Authority

388. Under the local government code, the appraisal of the fair market value of real property shall be based ona. actual usedb. independent appraisal valuec. declaration of lot ownerd. assessed value

389. When to pay Estate tax if the case is settled judiciallya. Not exceeding 2 years d. not exceeding 10 yearsb. Not exceeding 3 years e. Not exceeding 5 yearsc. Not exceeding 4 years

390. When to pay Estate tax if the case is settled extra judiciallya. Not exceeding 2 years d. not exceeding 10 yearsb. Not exceeding 3 years e. Not exceeding 5 yearsc. Not exceeding 4 years

391. Ecology solid waste management act isa. RA 9003 d. RA 9030b. RA 467 e. RA 674c. RA 1096

392. It is the introduction of harmful substance or by products into the environmenta. Degradation d. Pollutionb. Solid waste e. Contaminationc. Discharge

393. It is a certification issued by the EMB certifying that based on the submitted project description, the project is not covered by the EIS system and is not required to secure an ECC

a. Environmental compliance certificate d. Feasibilty studyb. Project impact study e. Environmental impact studyc. certificate of non coverage


394. what is EMB under the bureau of DENRa. Ecosystem Management bureau d. Environmental Management Bureaub. External Management bureau e. Environmentally Management Bureauc. Ecology Management bureau

395. The effectivity of Maceda law or RA 6552.a. August 16, 1972 d. Feb. 26, 1978b. August 26, 1972 e. March 12, 1976

396. Under HDMF circular 189-C, a qualified Pagibig member can purchase residential lot not exceedinga. 500 sq.m. d. 1,000 sq.m.b. 750 sq.m. e. 1,500 sq.m.c. 250 sq.m.

397. Maximum amount of loan available under Unified Home Lending Programa. 250,000.00 d. 375,000.00b. 200,000.00 e. 500,000.00c. 300,000.00

398. Zero Assessment level refers to an assessment of all building whose market value does not exceed_______ which are exempted from payment of real property taxes

a. 75,000.00 d. 175,000.00b. 125,000.00 e. 275,000.00c. 150,000.00

399. How often does the real property assessment be revised by the City/ Municipal assessora. every year d. 7 yearsb. 3 years e. 10 yearsc. 5 years

400. A tax imposed on the sale, donation, barter or any other mode of transferring real property ownership or titlea. simple fee/tax d. registration feeb. filing fee/tax e. excise taxc. transfer fee/tax

401. Who is the chairman of LBAA or Local board of assessment Appeala. Provincial auditor d. Register of Deedsb. City Treasurer e. Fiscalc. City Assessor

402. Tax imposed on every citizen of the Philippinesa. excise tax d. Real property taxb. documentary tax e. Ad valorem taxc. Community tax

403. All real estate broker and private appraiser shall be required to post a professional indemnity insurance/cash or surety bond, in an amount with no less than_____, without prejudice to additional requirement of the client. It will be renewable every 3 years.

a. 2,000 pesos d. 15,000 pesosb. 5,000 pesos e. 20,000 pesosc. 10,000 pesos


404. a stock corporation established principally for the purpose of owning income generating real estate assetsA. real estate trustB. real estate companyC. real estate investment trustD. real estate investment corporationE. Philippine stock exchange

405. The Real estate investment trust act A. RA 9856B. RA 9886C. RA 9865D. RA 9646E. RA 9586

406. A real estate investment trust is aA. a public companyB. upon and after listing, have at least 1,000 public shareholdersC. maintain as a listed company in sec/pseD. notaE. all of the aboved

407. Real estate investment trust must distribute annually at least ______ of its distributable income as dividends to its shareholder

A. 50%B. 20%C. 75%D. 90%E. 40%

408. The price or value of property agreed upon the seller who is not is compelled to sell and a buyer who is not compelled to buy, both knowing all material facts relative to the property and the transaction

A. appraised valueB. assessed valueC. economic valueD. fair market valueE. zonal value

409. The sale of or transfer of real property to real estate investment trust, which includes the sale or transfer of any and all security interest thereto, shall be subject to.

A. 25% of the applicable DSTB. 10% of the applicable DSTC. 75% of the applicable DSTD. 50% of the applicable DST

410. Income payment to real estate investment trust shall be subject to a lower creditable withholding tax ofA. 5% c. 1% e. 10%B. 7.5% d. 2%

411. Real estate investment trust may only invest inA. real estate related assetB. debts securities, manage funds and listed shares issued by local or foreign non property corporations


C. real estate located in the philsD. government securities issued in behalf of the GRP or the government of the other countries and securities

issued by multilateral agenciesE. all of the above

412. Transfer of awarded lands from CARP is prohibited for a period ofA. 5 yearsB. 8 yearsC. 20 yearsD. 15 yearsE. 10 years

413. PD 1517 or Urban Land Reform Law an area considered urban when it has a population density of at least an area of.

A. 1,000 resident per sq.km. and at least 25% of active resident engage in non agricultural activitiesB. 2,000 resident per sq.km. and at least 50% of active resident engage in non agricultural activitiesC. 1,500 resident per sq.km. and at least 50% of active resident engage in non agricultural activitiesD. 2,000 resident per sq.km. and at least 70% of active resident engage in non agricultural activitiesE. 1,000 resident per sq.m. and at least 25% of active resident engage in non agricultural activities

PART II: Professional Appraisal Practice

Professional Exam 1

1. In economics, the four factors of production are (A) land, labor, capital, and improvements(B) land, labor, capital and entrepreneurship(C) land, labor, capital and money(D) land, improvements, labor and materials(E) land, labor, site, and improvements

2. The law of supply and demand is (A) a basic economic principle (B) legislated by Congress(C) seldom used in the appraisal process(D) not a applicable in the short term(E) all of the above

3. Which of the is NOT an agent of production?(A) land (D) capital(B) transportation (E) entrepreneurship(C) labor

4. Political forces affecting value may include

(A) life-styles and living standards(B) topography (C) athletic levels and recreation facilities(D) government spending and taxation policy (E) primary registration and turnout


5. What are the two categories of tangible property?(A) real property and personal property (B) intangible property and real property(C) real estate and intangible property(D) legal and illegal investments(E) open and shut transactions

6. Zoning is an exercise of the

(A) equity courts (B) police powers (C) Environmental Protection Agency (D) Right of condemnation(E) Right of escheat

7. Which of the following types of property is subject to ad valorem taxation?(A) property owned by a religious organization and used for a religious purpose(B) new industrial plants that state and local governments have induced, with tax exemption as an incentive,

to locate within their jurisdictions(C) commercial buildings leased in part by nonprofit foundations(D) state colleges and universities(E) a state capitol

8. A person owning less than the entire bundle of rights has (A) escheat (D) personal property (B) a fee simple title (E) a fee tail (C) a partial interest

9. A metes and bounds description begins and ends with the(A) street and house number (D) grid coordinates (B) block number (E) iron pin (C) point of beginning

10. A (n) ____ identifies a property in such a way that it CANNOT be confused with any other property.(A) coded map book (D) full city survey (B) legal description (E) engineering report(C) narrative appraisal

11. All of the following statements are true EXCEPT

(A) real property is a type of service (B) value is dependent on market conditions(C) a good or service has no value in exchange unless it possesses certain economic and legal characteristics(D) the price representing value is usually quoted in terms of money (E) real estate may be sold for all cash or financing arranged

12. All of the following will affect the market value of a property EXCEPT(A) political factors (B) legal use restriction (C) acquisition cost to present owner (D) economic factors (E) social concerns


13. Market value is ____ the same as selling price.(A) always (D) usually (B) never (E) none of the above (C) sometimes

14. Price is

(A) market value (D) a historical fact (B) most probable sales price (E) all of the above (C) investment value

15. Functional utility depends on

(A) zoning (B) wear and tear on the structure (C) tastes and standards (D) age of the equipment(E) insurance requirements

16. Value in use is(A) subjective (B) objective (C) readily measurable (D) a market phenomenon(E) synonymous with market price

17. The value added to total property value by a particular component is an example of the principle of (A) substitution (D) contribution (B) anticipation (E) conformity (C) change

18. The concept that the value of a particular components is measure by the amount that its absence would detract from the value of the whole is (A) opportunity cost (D) contribution (B) substitution (E) conformity (C) competition

19. The market loss cause by depreciation in an older structure may be offset by all of the following EXCEPT

(A) architectural interest (B) historical registration (C) strong demand relative to supply (D) strong supply relative to demand(E) renovation of the structure

20. Studying appraisal helps a person (A) to improve value estimation skills (B) to pass the real estate broker’s license examination (C) to understand other real estate courses(D) to communicate with appraisers (E) all of the above

21. A dramatic change in short-term demand for real estate in the local market is likely to immediately precipitate


(A) construction (D) activity (B) price changes (E) no change in supply (C) conversions

22. The area and community analysis section of an appraisal report

(A) should “sell” the community (B) should describe the community objectively (C) is a study by the estate’s industrial development commission (D) considers the negative aspects only(E) considers the positive aspects only

23. In analyzing the economic environment and market area, it is best to

(A) start at the general level and work down to the specific(B) start at the specific and work up to the general level(C) limit the analysis to the national level(D) generally consider traffic flow

24. Which of the following reports is usually NOT prepared by a real estate appraiser?(A) marketability study (B) economic study (C) feasibility study (D) transportation network study (E) valuation study

25. An appraisal of a specific-purpose for insurance purpose would depend most heavily on

(A) book value (D) highest and best use (B) cost estimate (E) specialty value (C) land value

26. The first step in the appraisal process is to (A) define the problem to be solved(B) gather relevant data(C) analyze the data(D) inspect the property(E) set the fee to be charged

27. An appraisal is

(A) an estimate of net realizable value (B) always concerned with the market value (C) an appraiser’s opinion of market value(D) a precise statement of value(E) a broker’s comparative sales analysis with further detail

28. The “as of” date in an appraisal report is

(A) the date to which the value applies(B) immaterial to the value estimate (C) the date on which the report is delivered (D) the date on which the property will be conveyed(E) the anticipated closing date


29. Sales data descriptions of an appraisal report contain(A) details about each comparable sale (B) an analysis of the date, using the value approaches (C) the investigation of market forces (D) analysis of the street each comparable property is on (E) zoning details

30. All of the following are ways to delineate a neighborhood EXCEPT (A) natural barriers (D) streets (B) utility service (E) income characteristics (C) political boundaries

31. All of the following are sources of comparable sales EXCEPT(A) public records (D) mortgage services (B) brokers (E) appraisers (C) buyers and sellers

32. Which of the following criteria most completely define “highest and best use”? (A) legally authorized, politically viable, and socially acceptable (B) physically possible, comparable to other uses in the neighborhood, and legally authorized(C) physically possible, legally permissible, financially feasible, and generating a higher present land value than

any other use(D) comparable to other uses in the neighborhood, physically possible, and generating a higher present land

value than any other use (E) the tallest and most beautiful structure that can be placed on land

33. The three basic approaches used to estimate value are (A) use, exclusion, and disposition (B) cost, sales comparison, and use(C) cost, sales comparison, and market data(D) cost, sales comparison, and production (E) cost, sales comparison, and income capitalization

34. Units of comparison are used in (A) only the sales comparison approach (B) only the cost approach(C) only the income capitalization approach (D) A, B and C(E) the appraisal of special-purpose properties only

35. Final value estimates should be rounded to reflect the (A) absence of good data(B) property’s location (C) fact that a selling price will probably be a round number(D) lack of precision associated with an opinion(E) high value of real estate

36. When reconciling the adjusted sales prices of comparables, the greatest emphasis should be given to (A) the average(B) the median(C) the mode


(D) the mean of A, B, and C(E) none of the above

37. Which of the following forms of appraisal report is NOT recommended?(A) completely filled-in institutional form (B) telephone conversation (C) letter report (D) long narrative report (E) demonstration

38. Which of the following approaches would probably be given the most weight in appraising a large office

building?(A) reproduction cost (D) income capitalization (B) subdivision development (E) market absorption(C) replacement cost

39. The form in which a formal appraisal is presented is called

(A) a presentation of value (D) a value certification (B) an appraisal log (E) a narrative (C) an appraisal report

40. The form of an appraisal report

(A) has no influence on the appraisal process (B) is the same, regardless of the problem(C) is set by the amount of the fee(D) is determined by the appraiser(E) determines the appraisal framework

41. The effective age and the useful life of a building represent judgments made by the (A) appraiser (D) buyer (B) property owner (E) insurer(C) tax assessor

42. The period over which existing improvements are expected to continue to contribute to property vale is their

(A) effective age (D) period of diminishing returns(B) remaining economic life (E) chronological age (C) remaining physical life

43. For a building, effective age is best defined as

(A) the average age of the roof (B) the actual age divided by the age-life (C) the age of other property in equivalent condition and utility the chronological age of the building (D) the chronological age of the building (E) the period over which the building may be effectively used

44. The utility of real estate is its(A) attractiveness to the trained observer (B) longevity (C) capacity to satisfy human needs and desires(D) effective demand (E) remaining economic life


45. In appraising a residence, adjustments are NOT made to the comparable property for

(A) age (D) terms of sale (B) lot value (E) size (C) assessed valuation

46. When a site has improvements on it, the highest and best use(A) is not definable (B) is its existing use (C) is its potential use(D) depends on whether or not the existing use is changeable(E) may be different from its existing use

47. To be considered as a comparable, a property

(A) a must have been sold within the past 5 years (B) must be competitive with the subject (C) must have been sold by an open-market transaction (D) must be a similar color (E) both B and C

48. The direct sales comparison approach is better than the income or cost approach because(A) fewer comparable properties are require, so it is easier to outline the results to clients(B) there are fewer mathematical calculations, so there is less chance of mathematical errors(C) the market for real estate is slow to change (D) it is always easier to obtain data for the direct sales comparison approach (E) none of the above true

49. The appraisal of an established 20-year old motel on a road with numerous competitive motels would most likely be based on the (A) square foot are of improvements(B) number of units (C) reproduction cost (D) gross rent multiplier (E) occupancy rate

50. In applying gross rent multiplier analysis to the subject property, the appraiser would use the

(A) market rental (B) actual rent being paid (C) rent currently asked by the owner (D) rent offered by a potential tenant(E) rent listed in advertising the property

for 51 to 56 questions

Factor Subject Comparable 1 Comparable 2 Comparable 3

Price

Living area (sq.ft.) 1,500

90,000

1,600

88,500

1,450

87,000

1,400


Condition

Garage

Time of sale

Good

Once-car

Now

Fair

Two-car

Last year

Excellent

One-car

Last year

Good

Two-car

This year

Adjusted Sales Price: Prices have been rising by 5% per year in the area for this type of property.

Other Adjustments: Each square foot of livable area is judged to be worth 30; condition grades are fair, good, and excellent , with each difference in condition grade worth 5%; a two-car garage is judged to be worth 1,500 more than a one-car garage.

51. What is the size adjustment for Comparable 1?(A) +1,500 (D) +3,000(B) - 1,500 (E) - 3,000(C) 0

52. What is the size adjustment for Comparable 2?(A) +1,500 (D) + 3,000(B) - 1,500 (E) - 3,000(C) 0

53. What is the condition adjustment for Comparable 1?(A) 0 (D) +9,000(B) +4,500 (E) -9,000(C) - 4,500

54. What is the condition adjustment for Comparable 2?(A) 0 (D) +$8,850(B) +$4,425 (E) - 8,850(C) - 4,425

55. What is the garage adjustment for Comparable 2?(A) 0 (D) +$3,000(B) - 1,500 (E) - 3,000(C) - 1,500

56. What is the garage adjustment for Comparable 3?(A) 0 (D) + 3,000(B) +1,500 (E) -3,000(C) - 1,500

57. In estimating the market value of a comparable sale, an appraiser must consider all of the following EXCEPT(A) whether the transaction was made in cash, terms equivalent to cash, or other precisely revealed terms(B) whether the property had reasonable exposure in a competitive market(C) whether a fair sale was transacted, with neither the seller nor the buyer acting under duress(D) whether the replacement cost of the property corresponds to its market value(E) whether the seller was related to the buyer

58. The terms financing, whether good or bad,


(A) have no effect on the market price (B) have no effect on the market value (C) have no effect on affordability(D) depend on fiscal and monetary policy (E) should be ignored when adjusting comparables

59. Adjustments to the property rights conveyed, financing, conditions of sale, date of sale, and location are often made to the ____ of the comparable property.(A) unit price (B) actual sales price(C) price per square foot(D) gross income multiplier(E) cash equivalent value

60. Cumulative percentage adjustments may be used

(A) when the characteristics are interdependent(B) when the characteristics are independent(C) when dollar figures are available(D) when unimproved properties are being appraised(E) under no circumstances

61. The best unit of comparison for vacant land is (A) the square foot (B) the total lot (C) a combination of square foot and front foot units (D) the linear foot (E) the unit considered important by the market

62. You are asked to appraise a vacant building lot. The neighborhood is about 75% built-up. Most lots in the area are from 55 ft. to 85 ft. to 65 ft. wide; the lot under appraisal is 60 ft. Comparable sales indicate that lots are selling at 120 to 150 per front foot. What is a good estimate of the price range for this lot?(A) 9,000-11,000(B) 7,200-9,000(C) 5,400-6,750(D) 6,600-7,600(E) 6,600-11,250

63. In appraising a residential property by the cost appraiser considers the (A) sales prices of comparable properties (B) deprecation of the land (C) depreciation of improvements (D) potential for new competition(E) potential misuse of this approach

64. In the cost approach, ____ is deducted after estimating the cost to reproduce an existing structure.(A) land cost (D) cash equivalence(B) cost to maturity (E) legal factors (C) depreciation

65. Economic obsolescence does NOT result from

(A) and outdate kitchenCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

(B) construction of a freeway near the property(C) the presence of an earthquake fault nearby (D) building restrictions in the community (E) factors external to the subject property itself

66. Reproduction or replacement cost includes all of the following EXCEPT(A) an outdated kitchen (B) construction of a freeway near the property(C) the presence of an earthquake fault nearby (D) building restrictions in the community (E) factors external to the subject property itself

67. Reproduction or replacement cost includes all of the following EXCEPT(A) direct or hard costs (B) indirect or soft costs (C) entrepreneurial profit (D) fixed and variable expenses of operations(E) elevator shafts

68. In analyzing obsolescence , the test of curability of a component in a building is whether the cost to cure is no greater than the (A) expected increase in value(B) reproduction cost new(C) replacement cost (D) installation cost (E) economic life of the new component

69. Which of the following is NOT a type of depreciation?(A) entrepreneurial loss (D) functional obsolescence(B) external obsolescence (E) economic obsolescence(C) physical deterioration

70. Estimation of occurred depreciation and obsolescence does NOT involve

(A) physical deterioration (D) functional obsolescence (B) economic obsolescence (E) wear and tear (C) financial structure

71. In appraisal, accrued depreciation is really an estimate of

(A) physical deterioration (D) capital recovery (B) diminished utility (E) sinking fund factor (C) book depreciation

72. The cost approach NOT useful for

(A) checking value approaches (B) appraising institutional or special-use properties(C) estimating the value of new property(D) appraising older homes in an active market (E) insurance appraisals

for 73 to 75 questionsCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

An appraiser noted the following about a rental home:needs exterior paint 750 cost to cure needs new water heater 250 cost to curehas one bath in market for two 4,000 capitalized rent loss has poor floor pan 2,500 capitalized rent loss is located next to a convenience store 1,200 capitalized rent loss

73. How much is curable physical deterioration?(A) 250 (D) 2,500(B) 750 (E) none of the above (C) 4,000

74. How much is functional obsolescence?(A) 250 (D) 2,500(B) 750 (E)4,000(C) 1,200

75. How much is environmental obsolescence?(A) 250 (D) 2,500(B) 750 (E)4,000(C) 1,200

76. An appraisal of a freestanding store and the land it occupies is an unbiased estimate of the value of an interest in (A) personal property (B) mortgages (C) real estate (D) personal property and land (E) real estate plus business value

77. The term vertical interest does NOT refer to rights to (A) subsurface mineral extraction(B) the construction and railroad tunnels (C) the use and regulation of air space (D) subdivision and development(E) the construction of buildings over railroad yards

78. Inflation tends to increase the value of (A) fixed-income securities (D) tangible long-lived investments (B) mortgages (E) debts (C) deeds in lieu of foreclosure

79. With an amortized mortgage loan,(A) interest only is paid until maturity(B) some principal is repaid with each payment(C) the entire principal is repaid before maturity(D) equal amounts of principal are repaid each period(E) there is a balloon payment at maturity

80. When each alternative use requires the same capital investment, the use that maximizes the investment’s ____ on a long-term basis is highest and best use.(A) diversified portfolio (D) potential gross income


(B) operating expenses (E) occupancy rate (C) net operating income

81. Land purchased for 50,000 cash appreciates at the rate of 15% compounded annually. About how much is the land worth after 5 years? Disregard taxes, insurance, and selling expenses.(A) 100,000 (D) 37,500(B) 87,500 (E) 7,500(C) 57,500

82. A land speculator expects that a certain 100-acre tract can be sold to a subdivider 4 years from now for 10,000 per acre. If holding and selling costs are disregarded, what cash price today (rounded to the nearest 1,000) would allow the speculator to realize a 15% compounded annual rate of return on the entire tract?(A) 572,000 (D) 6,000(B) 5,000 (E) none of the above (C) 600,000

83. Gross income multipliers are generally considered part of (A) the cost approach (B) the direct sales comparison approach (C) the income capitalization approach (D) the insurance approach (E) none of the above

84. Use of a gross rent multiplier is valid when the subject and comparable properties have similar

(A) potential gross incomes (D) operating expense ratios (B) effective gross incomes (E) cash flows (C) net operating incomes

85. Time-distance relationship between a site and all relevant origins and destinations are called(A) access roads (D) linkages (B) transit facilities (E) synergies (C) ingress and egress

86. The land on which a 10-year-old house is located is valued at 28,000, and the reproduction cost of the dwelling is 92,000. Straight-line depreciation is 2% per year, applied to the building only. If there is no other obsolescence, what is the indicated value of the property?(A) 96,000 (D) 117,700(B) 101,600 (E) 120,000(C) 117,000

87. * An allowance for vacancy and collection is estimated as a percentage of (A) net operating income (B) before-tax cash flow

88. Effective gross income is income after an allowance for (A) depreciation (D) both A and B(B) operating expenses (E) none of the above (C) cash expenditures

89. In discounted cash flow analysis, the reversion to be received at the end of the holding period isCOPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

(A) a separate cash flow (B) an annuity in arrears (C) an ordinary annuity (D) a percentage of annual income (E) an amount to be capitalized in perpetuity

90. To earn 12% annual cash return on a cash investment, what should you pay for a property that earns 4,000 per month and has operating expenses of 1,250 per month?(A) 150,000 (D) 333,333(B) 275,000 (E) 400,000(C) 229,166

91. In selecting an overall capitalization rate for an income-producing property, the appraiser will consider all of the following EXCEPT(A) return on invested capital(B) risk factors (C) return of invested capital (D) the interest rate on the existing loan, which was arranged last year (E) the interest rate prevailing in the market

for 92 to 95 questions

A 200-unit apartment complex includes 80 one-bedroom units that rent for 475 and 120 two-bedroom units that rent for 575 monthly. The vacancy rate is 5%; miscellaneous income is 5,000 annually. Operating expenses amount to 400,000. The mortgage loan requires annual payments of 630,000.

92. Potential gross income is (A) 1,289,000 (D)107,000(B) 1,284,000 (E) none of the above (C) 112,000

93. Effective gross income is (A) 1,224,800 (D) $107,000(B) 1,220,000 (E) none of the above (C) 824,800

94. Net operating income is (A) 1,224,800 (D) 424,800(B) 1,220,000 (E) none of the above (C) 824,800

95. Before-tax cash flow is (A) 1,030,000 (D) 194,800(B) 824,800 (E) none of the above(C) 424,800

96. To obtain the present value of a series of incomes, a (n) ____ rate is applied.


(A) discount (D) equity capitalization (B) income (E) stated (C) overall capitalization

97. A fast-food chain could buy the building and land necessary for a new outlet for 200,000. Instead, an investor

bought the property for this amount and lease it for 2,000 per month over a 20-year term. Rent is payable at the end of each month. What yield to maturity is implied by the lease, assuming that, at the end of 20 years, the property is still worth about $200,000?(A) 8% (D) 14%(B) 10% (E) 15%(C) 12%

98. When market rent is less than contract rent, the difference is known as (A) overage rent (D) gross rent(B) excess rent (E) slippage rent (C) percentage rent

99. If a particular buyer requires as recapture of the building portion of the purchase price in 25 years, what is the indicated recapture rate for the building, assuming straight-line recapture?(A) 0.25% (D) 20%(B) 2% (E) 25%(C) 4%

100. In a high-rise, 100-unit apartment building there is a basement laundry area that brings in 100 monthly from the concessionaire. The laundry income is(A) included, as miscellaneous income, in potential gross income(B) included, as other income, in effective gross income(C) deducted from effective gross income (D) added to before-tax cash flow(E) distributed to the maintenance workers

Professional Exam 2

1.) The present and future demand for a property and its absorption rate is considered in aa.) letter in appraisalb.) market feasibility studyc.) market segmentationd.) highest and best used analysise.) transmittal letter

2.) The appraiser final estimate should be based ona.) average of three value indications obtained by three approachesb.) weighing of the reliability of the information analyzed in each of the three approachesc.) the most sophisticated guess techniqued.) adjustment for most recent indicators in the local market

3.) the appropriate time adjustment is concluded to be an increase of 7% per year compounded. The time

adjustment for a comparable sales property that should for 80,000.00 two years ago.a.) 11,592 d.) 11,200b.) 11,200 e.) 11,592c.) 5,600


4.) the criteria for determining the highest and best used include all of the following EXCEPTa.) physical possibility d.) probable useb.) financial feasibility e.) effect on community welfarec.) legal permissibility

5.) the broad forces affecting value do not includea.) physical d.) socialb.) life cycle e.) economicc.) political

6.) the certification of value section of an appraisal report states everything EXCEPT thata.) the appraiser has no interest in the propertyb.) the fee is not contingent upon any aspect of the reportc.) the facts are correct to the best of the appraiser knowledged.) last year the property was appraised by the another persone.) the property was personally inspected by the appraiser

7.) one implication of competition and excess profit is thata.) there is a certain optimum combination of land, labor, capital and entrepreneurshipb.) an estimate of value should be based on future expectationc.) abnormally high profits cannot be expected to continue indefinitelyd.) maximum value accrues to real estate when social and economic homogeneity are present in a neighborhood

8.) cost indexes offered by standardized services are used toa.) derive units of comparisonb.) catalog building componentc.) estimate operating expensesd.) update past cost into current coste.) estimate the local consumer price index9.) a summary appraisal reporta.) contains many items that are not considered in practiceb.) is an appraisal report prepared for a clientc.) summarizes the item that might be used in practiced.) may be based on hypothetical or assumed datae.) should be prepared on a nontypical property to appraisal practice

10.)real estate a submarket isa.) a group of sales person who deal mostly in the same type of propertyb.) a group of sales that occur at the same timec.) a group of similar properties in the same aread.) a small portion of the market of similar propertiese.) an area where sandwiches on French bread are eaten

11.)the fact that rents for equally desirable space tend to be set by the market reflects the principle ofa.) balanceb.) substitutionc.) externalitiesd.) consistent usede.) conformity


12.)the fee for an appraisal assignment isa.) based on a percentage of the final value estimateb.) agreed upon during the preliminary study stage c.) determined after the appraisal is completedd.) set by the fee schedule of the local board of realtorse.) set by a fee scale from real estate commission

13.)the last step in the appraisal report is toa.) write the reportb.) reconcile all datac.) analyze the datad.) inspect the propertye.) set the fee to be charge

14.)the form of which a formal appraisal is presented is calleda.) a presentation of valueb.) an appraisal logc.) an appraisal reportd.) a value certificatione.) a narrative report

15.)a formal appraisal must include thea.) date of value estimateb.) signature of the propertyc.) identification of property appraisedd.) certificatione.) all of the aboved

16.)the highest and best used of land as if vacant forms part of the basis fora.) mortgage-equity analysisb.) property rights adjustmentc.) an operating expense estimated.) the cost approache.) the square footage practice

17.)identifying and studying submarkets of a larger market is calleda.) market researchb.) market surveyc.) market agglomerationd.) market segmentatione.) market data

18.)the identification and study of a pertinent market is calleda.) market analysisb.) neighborhood reviewc.) property researchd.) market reflectione.) market interaction


19.)which of the following is important for good appraisal communicationa.) word choiceb.) reading levelc.) grammatical correctnessd.) claritye.) all of the aboved

20.)all of the following are true ecepta.) real property is a type of serviceb.) value is dependent on market conditionc.) a good or service has no value in exchange unless it possesses certain economic and legal characteristicsd.) the price representing value is usually quoted in terms of moneye.) Real estate may be sold for all cash or financed

21.)in estimating the market value of comparable sale, an appraiser must consider all of the following EXCEPTa.) whether the transaction was made in cash, terms equivalent to cash, or other precisely revealed terms.b.) Whether the property had reasonable exposure in a competitive marketc.) Whether a fair sale was transacted, with neither the seller nor the buyer acting under duressd.) Whether the replacement cost of the property corresponds to its market valuee.) Whether the seller was related to the buyer

22.)in preparing the appraisal report, your analysis concludes that one of the approaches to value is not applicable to this particular case. You should

a.) omit the approach all togetherb.) base the approach on hypothetical datac.) state that the approach is not relevantd.) state that the approach is not applicable, explain the reason for this contentione.) find another approach so as to include three approaches

23.)in the cost approach the site is valued as if it werea.) vacant and available for development to its highest and best useb.) improved and suited for its intended use or developmentc.) developed and operatingd.) attractively landscapee.) without nearby utilities

24.)investment value is best describe asa.) market price b.) market valuec.) the cost of acquiring a competitive substitute property with the same utilityd.) the present worth of anticipated future benefits to a certain entitye.) value in exchange

25.)location decision involve analysis on which three levela.) general, specific, detailedb.) country, state, communityc.) residential, commercial, industriald.) country, state, countye.) region, neighborhood, site


26.)the length of a tract of land along a street is calleda.) depthb.) widthc.) frontaged.) abutmente.) lineage

27.)the most comprehensive type of appraisal report isa.) form reportb.) oral reportc.) letter reportd.) narrative demonstration reporte.) unbiased report

28.)the principle of ______states that buyer will not pay more for the a site than for another equally desirable onea.) anticipationb.) imbalancec.) substitutiond.) balancee.) conformity

29.)the principle of anticipation isa.) future orientedb.) past orientedc.) the as of date of appraisald.) anticipated loan to value ratio for the subject propertye.) similar to the principle of substitution

30.)the principle of_______states that the value levels are sustained when the various elements in an economic or environmental mix are in equilibrium

a.) anticipationb.) equivalencec.) substitutiond.) balancee.) highest and best used

31.)price and value area.) not necessarily the sameb.) synonymousc.) different, depending on financing termsd.) almost the same in an active markete.) interchangeably in a report

32.)the purpose of a ____ is to analyzed a property potential for successa.) feasibility studyb.) marketability studyc.) market segmentation studyd.) appraisal reporte.) need study


33.)a use must be_____ to be considered as a possible alternative for highest and best used

a.) physically and legally possible and financially feasibleb.) physically and legally possiblec.) Already in existence and legald.) Physically possible and appropriatee.) Legal and profitable

34.)an appraisera.) determines the priceb.) defends valuec.) estimates priced.) estimates valuee.) determines value

35.)the objective of the appraisal should be stated un the reporta.) the market needs itb.) it define the problems and identifies the value soughtc.) it identifies the function of the reportd.) it absolves the appraiser of liabilitye.) there are too many definitions of market price

36.)the value estimate provided in an appraisala.) changes with the use to which it is putb.) changes with the function of the appraisalc.) remains the same regardless of used.) depends upon the use or function of the appraisale.) always reflects market value37.)population increases______demand for housinga.) depress theb.) are incapable of simulating thec.) have no effect on the d.) are likely to create ae.) are determined by the

38.)environment hazards that an appraiser must be conscious of include all of the following excepta.) asbestosb.) radonc.) dranod.) urea formaldehydee.) PCB

39.)In analyzing the environment and market area, it is best toa.) start at the general level and work down to the specificb.) start at the specific and work up to the general levelc.) limit the analysis to the national leveld.) limit the analysis to the local levele.) generally consider the traffic flow


40.)the first step in general process is toa.) define the problemb.) gather datac.) analyze datad.) determine the approaches to valuee.) make a final value estimate41.)combining to or more sites in order to develop one site with a greater value than the individual sites have

separately calleda.) synergyb.) plottagec.) surplus landd.) excess lande.) highest and best use of land

42.)assemblage isa.) always reflect in the market valueb.) the act of bringing to or more smaller lots into common ownership for usec.) inappropriate for parcels two or more hectaresd.) uneconomicale.) illegal

43.)typically, land is appraised by thea.) square footb.) front foot acrec.) all of the aboved.) none of the above

44.)it is_________for an appraiser to receive or pay finders or referral feesa.) reasonableb.) unethicalc.) necessaryd.) customarye.) convenient

45.)a sale between relatives is considereda.) an arms length transactionb.) a purely comparable salec.) an open market saled.) a distorted salee.) a good deal

46.)What of the following is true about zoninga.) it reflects the expectation that government will preserve property valuesb.) it is based on the right of government to regulate for health, moral, welfare and safetyc.) it is inappropriate for parcels withed usesd.) it represents an effort to establish the land highest and best usee.) it represent the right to reuse the property


47.)for an appraiser to use the assistance of another appraiser isa.) inconsiderateb.) unethicalc.) illegald.) ethicale.) questionable

48.)it is_________to provide a value range to a client who request it and understand its meaning and use.a.) foolishb.) appropriatec.) un ethicald.) approximatee.) difficult

49.)any recent sale of a subject property being appraiseda.) should be considered confidentialb.) cannot, under any circumstances, be considered in estimating the current market value of the propertyc.) should be discussed in appraisal reportd.) was not an arms length salee.) should be used as comparable sale, though adjusted for its time and terms

50.)the dimensions of a warehouse are customarily measured froma.) a roof lineb.) the midpoint of exterior wallc.) the inside of finished walld.) the outside of finished walle.) be reasonable or appropriate

51.)the construction of a luxury home in a neighborhood almost completely developed with one and two bedroom apartments would

a.) produce external obsolescenceb.) be called an under improvementc.) results in plottage valued.) results in neighborhood amenitiese.) be reasonable or appropriate

52.)the most detailed, complex, costly and time consuming method of cost estimation is thea.) quantity surveyb.) trade breakdownc.) comparative unitd.) unit in placee.) comparable unit

53.)An improvements remaining economic lifea.) it is chronological stageb.) it is effective agec.) is the period over which the improvements are expected to generate benefitsd.) is effective age minus chronological agee.) effective age ;us chronological age


54.)the cost approach most applicable when the property being appraisea.) has old improvementb.) has relative new improvements that represent the highest and best use of the landc.) suffers substantial functional obsolescenced.) is more costly than the surroundingse.) has many older features that make interesting reading in a report

55.)price per front foota.) a physical unit of comparisonb.) not as accurate as price per acrec.) rarely used in residential site analysisd.) an accurate guide to site marketabilitye.) useful when there are few physical differences between sites

56.)which is the last step in reconciliationa.) identify which of the three approaches is usedb.) apply the three approaches to the data collectedc.) apply to judgment to the data collectedd.) review previous work and analysise.) select a final value of estimate

57.)the highest and best use of the site is itsa.) existing useb.) most probable usec.) immediate next usedd.) synonymous with ordinary and necessary valuee.) different from most probable use

58.)markets in residential real estate area.) equivalent to those for securitiesb.) related to physical boundariesc.) locald.) physically obscuree.) found by courthouse sales

59.)inflation tends to increase the value ofa.) fixed income securitiesb.) mortgagesc.) deeds in lieu of foreclosured.) real estatee.) debts

60.)Real estate marketsa.) are international in scopeb.) meet none pf the criteria of a perfect marketc.) are centralized in natured.) consist of used property onlye.) are well developed in former Communist countries61.)The subject property has 85% occupancy. What conclusion would you most likely draw if the typical occup0nacy

rate in the area was 95%?COPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

a.) Advertising is average.b.) The rents are high.c.) The rents are low.d.) Management is good.e.) New construction will occur soon.

62.)The fact that the value of a property tends to equal the cost of an equally desirable substitute is an example of the principle of

a.) balanceb.) substitutionc.) contributiond.) diminishing returnse.) supply and demand

63.)Population flow to different regions of the United States will change primarily because ofa.) changing economic opportunitiesb.) environmental control legislationc.) rezoning legislationd.) state tax policiese.) air conditioning in the Sunbelt

64.)When each alternative use requires the same capital investment, the use that maximizes the investment’s______ on a long-term basis is the highest and best use.

a.) diversified portfoliob.) operating expensesc.) net operating incomed.) potential gross incomee.) occupancy rate65.)What would be the indicated value of a property that rented for 750 per month, using a monthly gross rent

multiplier of 100, if the expenses attribute to the property were 115 per month?a.) 75,670b.) 75,000c.) 68,750d.) 61,125e.) 13,750

66.)Which of the following criteria most completely defines “highest and best use”?a.) physically possible, legally acceptable, and generating a higher present land value than any other useb.) legally authorized, politically viable, and socially acceptablec.) physically possible, comparable to other uses in the neighborhood, and legally authorizedd.) comparable to other local uses, physically possible, and generating a higher present land value that any other

usee.) the tallest and most beautiful structure that can be placed on the land67.)The total income anticipated from income property operations after vacancy and collection allowances and

operating expenses are deducted isa.) net operating incomeb.) before-tax cash flowc.) effective gross incomed.) potential gross incomee.) property residual income


68.)Which principle of value best affirms that value is the present worth of expected future benefits?a.) supply and demandb.) balancec.) substitutiond.) anticipatione.) conformity

69.)Which principle of value best affirms that the maximum value of property generally cannot exceed the cost of its replacement?

a.) increasing and decreasing returnsb.) supply and demandc.) substitutiond.) balancee.) anticipation

70.)Which of the following would be classified as a tangible rather than an intangible amenity?a.) pride of ownershipb.) a sense of securityc.) a free dishwasherd.) work satisfactione.) clean air

71.)Which type of property is subject to ad valorem taxation?a.) property owned by a religious organization and used for religious purposeb.) new industrial plants that state and local governments have induced, with tax exemption as an incentive, to

locate within their jurisdictionsc.) commercial property with more that 50% nonprofit tenantsd.) state colleges and universitiese.) a state capitol72.)Compared with other assets, real estate isa.) immobileb.) expensivec.) long-livedd.) mortgagablee.) all of the above73.)All of the following are sources of comparable sales EXCEPTa.) public records b.) brokersc.) buyers and sellersd.) mortgage servicerse.) appraisers

74.)An allowance for vacancy and collection loss is estimated as a percentage ofa.) net operating incomeb.) before-tax cash flowc.) effective gross incomed.) potential gross incomee.) after-tax cash flow


75.)The annual net operating income from an apartment house is 11,000. If a capitalization rate of 11% is used, the indicated market value is

a.) 126,000b.) 176,000c.) 100,000d.) 242,000e.) 2,420

76.)which of the following is true of a gross leasea.) the tenant pays all operating expenseb.) the landlord pays all operating expensec.) this lease is used only for commercial propertiesd.) rent rises with the cost of livinge.) this lease must be drafted by an attorney

77.)a forecast using discounted cash flow analysis would includea.) income, vacancy and operating expenseb.) an economic analysisc.) reversion at the end of the holding periodd.) discounting expected future cash flows to a present valuee.) all of the above

78.)in discounted cash flow analysis, the reversion to be received at the end of the holding period isa.) a separate cash flowb.) an annuity in arrearsc.) an ordinary annuityd.) percentage of annual incomee.) amount to be capitalized in perpetuity

79.)a 1,000,000.00 property will have a 70% loan at an 8% annual mortgage constant. what must the NOI be to produce 12% cash on cash return

a.) 120,000.00b.) 56,000.00c.) 92,000.00d.) 84,000.00e.) 700,000.0080.)Income capitalization is the term used to describe the process of estimating the value of income property by

studying expected future income. This processa.) converts the net income of a property into its equivalent capital valueb.) reflects the time value of money by reducing or discounting future income into its present worthc.) focuses on the present worth of future benefitsd.) uses markets interest ratese.) all of the above

81.)to earn 12% on your investment, what should you pay for a property earns 6,000.00 per month and has operating expenses of 1,250.00 per month

a.) 475,000.00b.) 150,000.00c.) 229,166.00d.) 333,333.00


e.) 400,000.00

82.)the land development method is used to estimate the value of vacant acreage that is ready to be subdivided. This method requires

a.) study of current sales of subdivided lotsb.) the projection of land of subdivided lotsc.) RTC approvald.) Both A and Be.) None of the above

83.)a technique in income capitalization in which the analyst need not distinguish interest rates from capital recovery rates, but that is most useful for comparable income

a.) direct capitalizationb.) building residualc.) land residuald.) bank of investmente.) internal rate of return

84.)cash on cash return is a.) the annual cash flow divided by the equity investmentb.) an internal rate of return that represents annual income and all gains or losses prorated to an effective annual

amountc.) a percentage or decimal rate that, when divided into a periodic income amount, offers a lump-sum capital value

for incomed.) a value that does not change with timee.) none of the above

85.)Which report is usually NOT prepared by a real estate appraiser?a.) marketability studyb.) economic studyc.) feasibility studyd.) mineral valuation study e.) highest and best use

Questions 86-89 based on the information below.

You are appraising a 40-acre tract of unimproved by a real land. The size is zoned for single-family residential use. All utilities are available along the street on which the land fronts. The engineers who will plat the proposed subdivision told you that 20% of the land area will be used for streets and sidewalks. Zoning will permit four lots per acre of net developable land after deducting streets. Research indicates that lots similar to those that will be available on the subject land will sell for 18,000 each and that the entire tract can be developed and sold in 1 year. You find that 40% of the sale price of each lot must be allocated to selling cost, overhead, contingencies, carrying cost, and developer’s profit, and that 2,000 feet of streets (including water, storm sewer, and sanitary sewer lines) must be installed at a cost of 80 per foot.

86.)What is the number of lots to be developed?


a.) 40b.) 128c.) 80d.) 88e.) 32

87.)What is the gross amount that will be realized from the sale of all the lots?a.) 720,000b.) 2,304,000c.) 1,440,000d.) 1,584,000e.) 576,000

88.)What is the cost of installing streets, water, and sewer lines?a.) 16,000b.) 32,000c.) 64,000d.) 160,000e.) None of the above

89.)What is the amount of selling cost, overhead, contingencies, carrying cost, and developer’s profit?a.) 921,6000b.) 576,000c.) 288,000d.) 633,600e.) None of the above

Questions 90-93 are based on the information below:

A 100-unit apartment complex includes 40 one-bedroom units that rent for 950 and 60 two-bedroom units that rent for 1,150 monthly. The vacancy rate is 5%; miscellaneous income is 5,000 annually. Operating expenses amount to 400,000. The mortgage loan requires payments of 630,000 annually.

90.)Potential gross income isa.) 1,289,000b.) 112,000c.) 107,000d.) 1,284,000e.) Cannot be calculated from the information given

91.)Effective gross income isa.) 1,224,800b.) 1,220,000c.) 824,800d.) 107,000e.) Cannot be calculated from the information given


92.)Net operating income isa.) 1,224,800b.) 824,800c.) 424,800d.) None of the abovee.) Cannot be calculated from the information given

93.)Before-tax cash flow isa.) 1,030,000b.) 824,800c.) 194,800d.) None of the abovee.) Cannot be calculated from the information given

Questions 94-97 are based on the following information:

A building contains 50 one-bedroom units and 150 two-bedroom units. The one-bedroom units rent for 550 monthly; two bedroom are 675. the vacancy rate is 7&; operating expenses are estimated at 40 of effective gross income. There is 2,000.00 annual income for vending machines.

94.)potential gross income isa.) 64,735b.) 1,547,000c.) 1,545,000d.) 717,425e.) None of the above

95.)effective gross income isa.) 64,735b.) 1,547,000c.) 1,545,000d.) 1,438,850e.) None of the above96.) Net operating income is

a.) 64,375b.) 268,970c.) 863,310d.) 719,425e.) None of the above

97.) operating expense area.) 1,545,000b.) 54,075c.) 2,000d.) 719,425e.) 575,540


98.) in one step of the land value residual technique, the building capitalization rate is applied to the known building value to estimate the

a.) highest and best use of the siteb.) cost of the buildingc.) income needed to support the landd.) net operating income needed to support the buildinge.) land value

99.) the basic formula of property valuation via income capitalization isa. V=IRb. V=I/Rc. V=R/Id. V=SP/GRe. V=I/F

100.) all of the following lease provisions are advantageous to the lessee EXCEPTA.) an escape clauseB.) a renewal optionC.) a purchase optionD.) an escalation clauseE.) none of the above

Professional Exam 2

101. In economics, the four factors of production are (A) land, labor, capital, and improvements(B) land, labor, capital and entrepreneurship(C) land, labor, capital and money(D) land, improvements, labor and materials(E) land, labor, site, and improvements

102. The law of supply and demand is (A) a basic economic principle (B) legislated by Congress(C) seldom used in the appraisal process(D) not a applicable in the short term(E) all of the above

103. Which of the is NOT an agent of production?(A) land (D) capital(B) transportation (E) entrepreneurship(C) labor


104. Political forces affecting value may include

(A) life-styles and living standards(B) topography (C) athletic levels and recreation facilities(D) government spending and taxation policy (E) primary registration and turnout

105. What are the two categories of tangible property?(A) real property and personal property (B) intangible property and real property(C) real estate and intangible property(D) legal and illegal investments(E) open and shut transactions

106. Zoning is an exercise of the

(A) equity courts (B) police powers (C) Environmental Protection Agency (D) Right of condemnation(E) Right of escheat

107. Which of the following types of property is subject to ad valorem taxation?(A) property owned by a religious organization and used for a religious purpose(B) new industrial plants that state and local governments have induced, with tax exemption as an incentive,

to locate within their jurisdictions(C) commercial buildings leased in part by nonprofit foundations(D) state colleges and universities(E) a state capitol

108. A person owning less than the entire bundle of rights has (A) escheat (D) personal property (B) a fee simple title (E) a fee tail (C) a partial interest

109. A metes and bounds description begins and ends with the(A) street and house number (D) grid coordinates (B) block number (E) iron pin (C) point of beginning

110. A (n) ____ identifies a property in such a way that it CANNOT be confused with any other property.(A) coded map book (D) full city survey (B) legal description (E) engineering report(C) narrative appraisal

111. All of the following statements are true EXCEPT

(A) real property is a type of service (B) value is dependent on market conditions(C) a good or service has no value in exchange unless it possesses certain economic and legal characteristics(D) the price representing value is usually quoted in terms of money (E) real estate may be sold for all cash or financing arranged


112. All of the following will affect the market value of a property EXCEPT(A) political factors (B) legal use restriction (C) acquisition cost to present owner (D) economic factors (E) social concerns

113. Market value is ____ the same as selling price.(A) always (D) usually (B) never (E) none of the above (C) sometimes

114. Price is

(A) market value (D) a historical fact (B) most probable sales price (E) all of the above (C) investment value

115. Functional utility depends on

(A) zoning (B) wear and tear on the structure (C) tastes and standards (D) age of the equipment(E) insurance requirements

116. Value in use is(A) subjective (B) objective (C) readily measurable (D) a market phenomenon(E) synonymous with market price

117. The value added to total property value by a particular component is an example of the principle of (A) substitution (D) contribution (B) anticipation (E) conformity (C) change

118. The concept that the value of a particular components is measure by the amount that its absence would detract from the value of the whole is (A) opportunity cost (D) contribution (B) substitution (E) conformity (C) competition

119. The market loss cause by depreciation in an older structure may be offset by all of the following EXCEPT

(A) architectural interest (B) historical registration (C) strong demand relative to supply (D) strong supply relative to demand(E) renovation of the structure

120. Studying appraisal helps a person (A) to improve value estimation skills


(B) to pass the real estate broker’s license examination (C) to understand other real estate courses(D) to communicate with appraisers (E) all of the above

121. A dramatic change in short-term demand for real estate in the local market is likely to immediately

precipitate(A) construction (D) activity (B) price changes (E) no change in supply (C) conversions

122. The area and community analysis section of an appraisal report

(A) should “sell” the community (B) should describe the community objectively (C) is a study by the estate’s industrial development commission (D) considers the negative aspects only(E) considers the positive aspects only

123. In analyzing the economic environment and market area, it is best to

(A) start at the general level and work down to the specific(B) start at the specific and work up to the general level(C) limit the analysis to the national level(D) generally consider traffic flow

124. Which of the following reports is usually NOT prepared by a real estate appraiser?(A) marketability study (B) economic study (C) feasibility study (D) transportation network study (E) valuation study

125. An appraisal of a specific-purpose for insurance purpose would depend most heavily on (A) book value (D) highest and best use (B) cost estimate (E) specialty value (C) land value

126. The first step in the appraisal process is to (A) define the problem to be solved(B) gather relevant data(C) analyze the data(D) inspect the property(E) set the fee to be charged

127. An appraisal is

(A) an estimate of net realizable value (B) always concerned with the market value (C) an appraiser’s opinion of market value(D) a precise statement of value(E) a broker’s comparative sales analysis with further detail

128. The “as of” date in an appraisal report is


(A) the date to which the value applies(B) immaterial to the value estimate (C) the date on which the report is delivered (D) the date on which the property will be conveyed(E) the anticipated closing date

129. Sales data descriptions of an appraisal report contain(A) details about each comparable sale (B) an analysis of the date, using the value approaches (C) the investigation of market forces (D) analysis of the street each comparable property is on (E) zoning details

130. All of the following are ways to delineate a neighborhood EXCEPT (A) natural barriers (D) streets (B) utility service (E) income characteristics (C) political boundaries

131. All of the following are sources of comparable sales EXCEPT(A) public records (D) mortgage services (B) brokers (E) appraisers (C) buyers and sellers

132. Which of the following criteria most completely define “highest and best use”? (A) legally authorized, politically viable, and socially acceptable (B) physically possible, comparable to other uses in the neighborhood, and legally authorized(C) physically possible, legally permissible, financially feasible, and generating a higher present land value than

any other use(D) comparable to other uses in the neighborhood, physically possible, and generating a higher present land

value than any other use (E) the tallest and most beautiful structure that can be placed on land

133. The three basic approaches used to estimate value are (A) use, exclusion, and disposition (B) cost, sales comparison, and use(C) cost, sales comparison, and market data(D) cost, sales comparison, and production (E) cost, sales comparison, and income capitalization

134. Units of comparison are used in (A) only the sales comparison approach (B) only the cost approach(C) only the income capitalization approach (D) A, B and C(E) the appraisal of special-purpose properties only

135. Final value estimates should be rounded to reflect the (A) absence of good data(B) property’s location (C) fact that a selling price will probably be a round number(D) lack of precision associated with an opinion


(E) high value of real estate

136. When reconciling the adjusted sales prices of comparables, the greatest emphasis should be given to (A) the average(B) the median(C) the mode(D) the mean of A, B, and C(E) none of the above

137. Which of the following forms of appraisal report is NOT recommended?(A) completely filled-in institutional form (B) telephone conversation (C) letter report (D) long narrative report (E) demonstration

138. Which of the following approaches would probably be given the most weight in appraising a large office

building?(A) reproduction cost (D) income capitalization (B) subdivision development (E) market absorption(C) replacement cost

139. The form in which a formal appraisal is presented is called

(A) a presentation of value (D) a value certification (B) an appraisal log (E) a narrative (C) an appraisal report

140. The form of an appraisal report

(A) has no influence on the appraisal process (B) is the same, regardless of the problem(C) is set by the amount of the fee(D) is determined by the appraiser(E) determines the appraisal framework

141. The effective age and the useful life of a building represent judgments made by the (A) appraiser (D) buyer (B) property owner (E) insurer(C) tax assessor

142. The period over which existing improvements are expected to continue to contribute to property vale is

their(A) effective age (D) period of diminishing returns(B) remaining economic life (E) chronological age (C) remaining physical life

143. For a building, effective age is best defined as

(A) the average age of the roof (B) the actual age divided by the age-life (C) the age of other property in equivalent condition and utility the chronological age of the building (D) the chronological age of the building (E) the period over which the building may be effectively used


144. The utility of real estate is its(A) attractiveness to the trained observer (B) longevity (C) capacity to satisfy human needs and desires(D) effective demand (E) remaining economic life

145. In appraising a residence, adjustments are NOT made to the comparable property for

(A) age (D) terms of sale (B) lot value (E) size (C) assessed valuation

146. When a site has improvements on it, the highest and best use(A) is not definable (B) is its existing use (C) is its potential use(D) depends on whether or not the existing use is changeable(E) may be different from its existing use

147. To be considered as a comparable, a property

(A) a must have been sold within the past 5 years (B) must be competitive with the subject (C) must have been sold by an open-market transaction (D) must be a similar color (E) both B and C

148. The direct sales comparison approach is better than the income or cost approach because(A) fewer comparable properties are require, so it is easier to outline the results to clients(B) there are fewer mathematical calculations, so there is less chance of mathematical errors(C) the market for real estate is slow to change (D) it is always easier to obtain data for the direct sales comparison approach (E) none of the above true

149. The appraisal of an established 20-year old motel on a road with numerous competitive motels would most likely be based on the (A) square foot are of improvements(B) number of units (C) reproduction cost (D) gross rent multiplier (E) occupancy rate

150. In applying gross rent multiplier analysis to the subject property, the appraiser would use the

(A) market rental (B) actual rent being paid (C) rent currently asked by the owner (D) rent offered by a potential tenant(E) rent listed in advertising the property

Factor Subject Comparable 1 Comparable 2 Comparable 3COPYRIGHT 2010: RED OCTOBER EDUCATIONAL AND REVIEW CENTER; ACEBUREAU APPRAISAL; CITY REALTY HOLDINGS

Price

Living area (sq.ft.)

Condition

Garage

Time of sale

1,500

Good

Once-car

Now

90,000

1,600

Fair

Two-car

Last year

88,500

1,450

Excellent

One-car

Last year

87,000

1,400

Good

Two-car

This year

Adjusted Sales Price: Prices have been rising by 5% per year in the are for this type of property.

Other Adjustments: Each square foot of livable area is judged to be worth 30; condition grades are fair, good, and excellent , with each difference in condition grade worth 5%; a two-care garage is judged to be worth 1,500 more than a one-car garage.

151. What is the size adjustment for Comparable 1?(A) +1,500 (D) +3,000(B) - 1,500 (E) - 3,000(C) 0

152. What is the size adjustment for Comparable 2?(A) +1,500 (D) + 3,000(B) - 1,500 (E) - 3,000(C) 0

153. What is the condition adjustment for Comparable 1?(A) 0 (D) +9,000(B) +4,500 (E) -9,000(C) - 4,500

154. What is the condition adjustment for Comparable 2?(A) 0 (D) +$8,850(B) +$4,425 (E) - 8,850(C) - 4,425

155. What is the garage adjustment for Comparable 2?(A) 0 (D) +$3,000(B) - 1,500 (E) - 3,000(C) - 1,500

156. What is the garage adjustment for Comparable 3?(A) 0 (D) + 3,000(B) +1,500 (E) -3,000(C) - 1,500

157. In estimating the market value of a comparable sale, an appraiser must consider all of the following EXCEPT(A) whether the transaction was made in cash, terms equivalent to cash, or other precisely revealed terms(B) whether the property had reasonable exposure in a competitive market(C) whether a fair sale was transacted, with neither the seller nor the buyer acting under duress(D) whether the replacement cost of the property corresponds to its market value(E) whether the seller was related to the buyer


158. The terms financing, whether good or bad,(A) have no effect on the market price (B) have no effect on the market value (C) have no effect on affordability(D) depend on fiscal and monetary policy (E) should be ignored when adjusting comparables

159. Adjustments to the property rights conveyed, financing, conditions of sale, date of sale, and location are often made to the ____ of the comparable property.(A) unit price (B) actual sales price(C) price per square foot(D) gross income multiplier(E) cash equivalent value

160. Cumulative percentage adjustments may be used

(A) when the characteristics are interdependent(B) when the characteristics are independent(C) when dollar figures are available(D) when unimproved properties are being appraised(E) under no circumstances

161. The best unit of comparison for vacant land is (A) the square foot (B) the total lot (C) a combination of square foot and front foot units (D) the linear foot (E) the unit considered important by the market

162. You are asked to appraise a vacant building lot. The neighborhood is about 75% built-up. Most lots in the area are from 55 ft. to 85 ft. to 65 ft. wide; the lot under appraisal is 60 ft. Comparable sales indicate that lots are selling at 120 to 150 per front foot. What is a good estimate of the price range for this lot?(A) 9,000-11,000(B) 7,200-9,000(C) 5,400-6,750(D) 6,600-7,600(E) 6,600-11,250

163. In appraising a residential property by the cost appraiser considers the (A) sales prices of comparable properties (B) deprecation of the land (C) depreciation of improvements (D) potential for new competition(E) potential misuse of this approach

164. In the cost approach, ____ is deducted after estimating the cost to reproduce an existing structure.(A) land cost (D) cash equivalence(B) cost to maturity (E) legal factors (C) depreciation

165. Economic obsolescence does NOT result from


(A) and outdate kitchen(B) construction of a freeway near the property(C) the presence of an earthquake fault nearby (D) building restrictions in the community (E) factors external to the subject property itself

166. Reproduction or replacement cost includes all of the following EXCEPT(A) an outdated kitchen (B) construction of a freeway near the property(C) the presence of an earthquake fault nearby (D) building restrictions in the community (E) factors external to the subject property itself

167. Reproduction or replacement cost includes all of the following EXCEPT(A) direct or hard costs (B) indirect or soft costs (C) entrepreneurial profit (D) fixed and variable expenses of operations(E) elevator shafts

168. In analyzing obsolescence , the test of curability of a component in a building is whether the cost to cure is no greater than the (A) expected increase in value(B) reproduction cost new(C) replacement cost (D) installation cost (E) economic life of the new component

169. Which of the following is NOT a type of depreciation?(A) entrepreneurial loss (D) functional obsolescence(B) external obsolescence (E) economic obsolescence(C) physical deterioration

170. Estimation of occurred depreciation and obsolescence does NOT involve

(A) physical deterioration (D) functional obsolescence (B) economic obsolescence (E) wear and tear (C) financial structure

171. In appraisal, accrued depreciation is really an estimate of (A) physical deterioration (D) capital recovery (B) diminished utility (E) sinking fund factor (C) book depreciation

172. The cost approach NOT useful for

(A) checking value approaches (B) appraising institutional or special-use properties(C) estimating the value of new property(D) appraising older homes in an active market (E) insurance appraisals

for questions 173 to 175An appraiser noted the following about a rental home:


needs exterior paint 750 cost to cure needs new water heater 250 cost to curehas one bath in market for two 4,000 capitalized rent loss has poor floor pan 2,500 capitalized rent loss is located next to a convenience store 1,200 capitalized rent loss

173. How much is curable physical deterioration?(A) 250 (D) 2,500(B) 750 (E) none of the above (C) 4,000

174. How much is functional obsolescence?(A) 250 (D) 2,500(B) 750 (E)4,000(C) 1,200

175. How much is environmental obsolescence?(A) 250 (D) 2,500(B) 750 (E)4,000(C) 1,200

176. An appraisal of a freestanding store and the land it occupies is an unbiased estimate of the value of an interest in (A) personal property (B) mortgages (C) real estate (D) personal property and land (E) real estate plus business value

177. The term vertical interest does NOT refer to rights to

(A) subsurface mineral extraction(B) the construction and railroad tunnels (C) the use and regulation of air space (D) subdivision and development(E) the construction of buildings over railroad yards

178. Inflation tends to increase the value of (A) fixed-income securities (D) tangible long-lived investments (B) mortgages (E) debts (C) deeds in lieu of foreclosure

179. With an amortized mortgage loan,(A) interest only is paid until maturity(B) some principal is repaid with each payment(C) the entire principal is repaid before maturity(D) equal amounts of principal are repaid each period(E) there is a balloon payment at maturity


180. When each alternative use requires the same capital investment, the use that maximizes the investment’s ____ on a long-term basis is highest and best use.(A) diversified portfolio (D) potential gross income (B) operating expenses (E) occupancy rate (C) net operating income

181. Land purchased for 50,000 cash appreciates at the rate of 15% compounded annually. About how much is the land worth after 5 years? Disregard taxes, insurance, and selling expenses.(A) 100,000 (D) 37,500(B) 87,500 (E) 7,500(C) 57,500

182. A land speculator expects that a certain 100-acre tract can be sold to a subdivider 4 years from now for 10,000 per acre. If holding and selling costs are disregarded, what cash price today (rounded to the nearest 1,000) would allow the speculator to realize a 15% compounded annual rate of return on the entire tract?(A) 572,000 (D) 6,000(B) 5,000 (E) none of the above (C) 600,000

183. Gross income multipliers are generally considered part of (A) the cost approach (B) the direct sales comparison approach (C) the income capitalization approach (D) the insurance approach (E) none of the above

184. Use of a gross rent multiplier is valid when the subject and comparable properties have similar

(A) potential gross incomes (D) operating expense ratios (B) effective gross incomes (E) cash flows (C) net operating incomes

185. Time-distance relationship between a site and all relevant origins and destinations are called(A) access roads (D) linkages (B) transit facilities (E) synergies (C) ingress and egress

186. The land on which a 10-year-old house is located is valued at 28,000, and the reproduction cost of the dwelling is 92,000. Straight-line depreciation is 2% per year, applied to the building only. If there is no other obsolescence, what is the indicated value of the property?(A) 96,000 (D) 117,700(B) 101,600 (E) 120,000(C) 117,000

187. An allowance for vacancy and collection is estimated as a percentage of (A) net operating income (B) before-tax cash flow

188. Effective gross income is income after an allowance for (A) depreciation (D) both A and B


(B) operating expenses (E) none of the above (C) cash expenditures

189. In discounted cash flow analysis, the reversion to be received at the end of the holding period is(A) a separate cash flow (B) an annuity in arrears (C) an ordinary annuity (D) a percentage of annual income (E) an amount to be capitalized in perpetuity

190. To earn 12% annual cash return on a cash investment, what should you pay for a property that earns 4,000 per month and has operating expenses of 1,250 per month?(A) 150,000 (D) 333,333(B) 275,000 (E) 400,000(C) 229,166

191. In selecting an overall capitalization rate for an income-producing property, the appraiser will consider all of the following EXCEPT(A) return on invested capital(B) risk factors (C) return of invested capital (D) the interest rate on the existing loan, which was arranged last year (E) the interest rate prevailing in the market

for question 192 to 194

A 200-unit apartment complex includes 80 one-bedroom units that rent for 475 and 120 two-bedroom units that rent for 575 monthly. The vacancy rate is 5%; miscellaneous income is 5,000 annually. Operating expenses amount to 400,000. The mortgage loan requires annual payments of 630,000.

192. Potential gross income is (A) 1,289,000 (D)107,000(B) 1,284,000 (E) none of the above

(C) 112,000

193. Effective gross income is (A) 1,224,800 (D) $107,000(B) 1,220,000 (E) none of the above (C) 824,800

194. Net operating income is (A) 1,224,800 (D) 424,800(B) 1,220,000 (E) none of the above (C) 824,800

195. Before-tax cash flow is (A) 1,030,000 (D) 194,800(B) 824,800 (E) none of the above


(C) 424,800

196. To obtain the present value of a series of incomes, a (n) ____ rate is applied.(A) discount (D) equity capitalization (B) income (E) stated (C) overall capitalization

197. A fast-food chain could buy the building and land necessary for a new outlet for 200,000. Instead, an

investor bought the property for this amount and lease it for 2,000 per month over a 20-year term. Rent is payable at the end of each month. What yield to maturity is implied by the lease, assuming that, at the end of 20 years, the property is still worth about $200,000?(A) 8% (D) 14%(B) 10% (E) 15%(C) 12%

198. When market rent is less than contract rent, the difference is known as (A) overage rent (D) gross rent(B) excess rent (E) slippage rent (C) percentage rent

199. If a particular buyer requires as recapture of the building portion of the purchase price in 25 years, what is the indicated recapture rate for the building, assuming straight-line recapture?(A) 0.25% (D) 20%(B) 2% (E) 25%(C) 4%

200. In a high-rise, 100-unit apartment building there is a basement laundry area that brings in 100 monthly from the concessionaire. The laundry income is(A) included, as miscellaneous income, in potential gross income(B) included, as other income, in effective gross income(C) deducted from effective gross income (D) added to before-tax cash flow(E) distributed to the maintenance workers

Professional EXAM 3

1. A building is depreciated at 2.5% per year on a straight-line basis. What is the estimated useful life of the building?

Answer: Estimated Useful life = 1 = 1 = 40 years

N 2.5%

2. A residential land is located at Orange City with an area of 2,200 square meters and cost per sq.m. is P3,500. It has a corner influence of 25% because of its location, topography advantage of 20% because it is plain and a plottage of 10% because of its shape. Compute the value of the property.

Answer: Land Value (2,200 @P3,500/sq.m.) P 7,700,000 Add Adjustment factors:


Corner influence (P7.70M x 25%) 1,925,000 Topography advantage (P7.70M x 20%) 1,540,000 Plottage (P7.70M x10%) 770,000 Value of the Property 11,935,000

3. Using the 4-3-2-1 depth rule, if a 10-hectare belonging to different owners namely; Aceboy, Alan, Ernest and L.A was sold for P10,0M, what is the share of each owner?

Answer: 1st Lot owner: (P10.0M x40%) P4.0M2nd Lot owner: (P10.0M x30%) P3.0M3rd Lot owner: (P10.0M x20%) P2.0M4th Lot owner: (P10.0M x10%) P1.0M

Note: 4-3-2-1 Rule means: “4” = 40% of the lot value (front quarter) adjacent to the road; “3” = 30% of the lot value (second quarter); “2” = 20% of the lot value (third quarter); “1” = 10% of the lot value (fourth quarter)

4. Rebisco bought 50 hectares of land at P700 per sq.m. If the medium subd. development costs of P1,000/sq.m. is based on the saleable area which is 60% of the gross area, compute the following:

(a) Total land acquisition cost; (b) Total Development cost; (c) Total unit costs per sq.m. of the saleable lots; (d) If the projected gross mark up is 100% of the otal unit costs/sq.m. of the saleable lots, what will be the selling price per square meter?

Answers: (a) Land Acquisition Cost: 50 hectares x 10,000 sq.m. @P700/sq.m. = P350.00M (b) Development Cost: 500,000 sq.m. x 60% @P1,000/sq.m. = P300.00M (c) Lot Unit Cost = Land Acquisition Cost + Developmental Cost

Saleable area = P350.0M + P300.0M = P2,166.67/sq.m. 300,000 sq.m. (d) Selling Price/sq.m.= Unit Cost + Desired Profit = P2,166.67+P2,166.67 = P4,333.34/sq.m.

For Question Nos. 5-7

A Real Estate Property was valued and assessed by Mun Assessor of Lemery, Batangas. In the following amount and rate:

Kind of Property

Market Value Assessment Level

Basic Realty Tax

Tax Rate SEF

Land P5.0M 50% 2% 1%


Building P15.0M 80% 2% 1%

Machineries P3.0M 80% 2% 1%

compute the following:

5. Basic realty tax before discount for one quarter?:

AnswerLand: P5.0M x 50% x 2%/4 quarters P12,500 Building: P15.0M x 80% x 2%/4 quarters 60,000 Machineries: P3.0M x 80% x 2%/4 quarters 12,000 Total Realty Tax for one quarter P84,500 6. Total Special Education Fund Tax for one year before discount?

AnswerLand: P5.0M x 50% x 1% P 25,000 Building: P15.0M x 80% x 1% 120,000 Machineries: P3.0M x 80% x 1% 24,000 Total Realty Tax for one quarter P169,000

7. Total Taxes (basic and SEF) for one-year discount is 10%?

Answer

Land: P12,500 x 90% x 4 quarters P 45,000 Building: P60,000 x 90% x 4 quarters 216,000 Machineries: P12,000 x 90% x 4 quarters 43,200 Total Basic Tax for one year, net of 10% P304,200

Land: P25,000 x 90% P 22,500 Building: P120,000 x 90% 108,000 Machineries: P24,000 x 90% 21,600 Total SEF Tax for one year, net of 10% P152,100 TOTAL BASIC AND SEF, net of 10% discount = P456,300

8. A commercial property producing an annual gross income of P390,000 was sold two months ago for P3,412,500. What is the property's gross income multiplier?

Answer: Annual Gross income = P3,412,500.00 = 8.75 GIM Sales Price 390,000.00

9. The property under appraisal is a 25 year-old apartment building producing a net operating income of P50,000 a year. Compute the value of the property?


assuming a remaining economic life of 40 years for the building at 10.5% interest rate and land value is estimated at P100,000.00

Answer: Net Operating Income P50,000.00 Less: Income due to land (P100,000 x 10.5%) 10,500.00 Income due to building P39,500.00

Building Value {P39,500/12.04 (10.5% + 1.54 (1/65)} P328,073.00 Add: Land Value 100,000.00 Total Property Value P428,073.00

V=I/RWhere: V= Value

I= income Rate= interest rate

To find the Building value, the Rate should be interest rate plus recapture rate; formula property, assuming a Rate= interest rate + Recapture rate Recapture rate= 1/Economic life of the building

10: You can afford to put 10,000 in a savings account today that pays 6% interest compounded annually. How much will you have 5 years from now if you make no withdrawals?

PV = 10,000i = .06n = 5FV = 10,000 (1 + .06)5 = 10,000 (1.3382255776)ANSWER = 13,382.26

11. Another financial institution offers to give you a rate of 6% compounded semiannually. How much will your 10,000 grow to in five years at this rate?

PV = 10,000i = .06 / 2 = .03n = 5 * 2 = 10FV = 10,000 (1 + .03)10 = 10,000 (1.343916379) ANSWER= 13,439.16

12. What amount will accumulate if we deposit 5,000 at the end of each year for the next 5 years? Assume an interest of 6% compounded annually.

FVoa = PMT ((1 + i) n - 1) iPV = 5,000i = .06n = 5FVoa = 5,000 (1.3382255776 - 1) .06 ANSWER = 5,000 (5.637092) = 28,185.46


13. What amount will accumulate if we deposit 5,000 at the beginning of each year for the next 5 years? Assume an interest of 6% compounded annually.

FVad = FVoa (1+i) PV = 5,000i = .06n = 5FVoa = 28,185.46 (1.06) = 29,876.59

14. You want to buy a house 5 years from now for 150,000. Assuming a 6% interest rate compounded annually, how much should you invest today to yield 150,000 in 5 years?

PV = FV ( 1 ) (1 + i) n

FV = 150,000; i =.06; n = 5

PV = 150,000 ( 1 ) (1 + .06) 5

= 150,000 ( 1 ) 1.3382255776 ANSWER = 112,088.73

15. What amount must you invest today at 6% compounded annually so that you can withdraw 5,000 at the end of each year for the next 5?

PMT = 5,000 i = .06n = 5PVoa = 5,000 [(1 - (1/(1 + .06)5)) / .06] = 5,000 (4.212364) Answer= 21,061.82

ANSWER KEYPART I: Fundamentals of Real Estate Appraisal

1. d. real estate assessor2. b. real estate consultant3. e. real estate sales person4. c. real estate broker5. a. real estate appraiser6. b. 20 accredited sales person


7. b. Philippine regulatory board of real estate service8. b. Eduardo Gutierrez Ong9. d. Real estate developer10. c. Assessor11. d. 1 chairperson and 4 members12. d. 2 years and 120 units13. c. 100,000 and 2 years14. d. Doubled15. b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed to renew

their license upon the effectivity of RA 964616. c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to renew their license

upon the effectivity of RA 964617. d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had failed to renew

their license upon the effectivity of RA 964618. b. 20 accredited sales person19. a. Real estate salesperson20. a. Accredited and Integrated Professional Organization21. a. Holder of bachelor’s degree 22. e. Regular Court23. e. Ten years24. d. Material fact, data or information25. c. Procurement of insurance secured by real estate26. d .Non-payment of dues27. d. Willingly share with other real estate professionals the lessons from his experience and study28. d Accredited and integrated professional organization29. a non payment of dues30. d. real estate sales person31. d. salesperson32. d. license number33. a. undervalue the amount in the deed of sale34. b. keeping a special bank account, separate and distinct from his own funds, for all monies received in trust for

other persons such as clients money and similar items 35. c. 3 years36. d. Holder of college degree37. c. bind the principal in the contract38. d. 10 years39. e. real estate dealer40. f. all of the aboved41. a. property management42. d. real estate broker43. e. all of the above44. b. escrow45. b.Torrens title 46. a. legitime47. b. dominant estate48. a. servient estate49. c. 60 days50. c. once every 5 years51. c. property52. c. homestead estate


53. regalian doctrine54. b. police power55. e. taxation56. a. escheat57. d. eminent domain58. c. zoning59. e. stewardship principle60. c. riparian owner61. c. patrimonial property62. b. hidden treasure63. c. torrens system64. c. absolute community of property65. e. capital property66. paraphernal property67. a. co ownership68. b. accesson69. d. public grant70. c. avulsion71. b. Lease fee estate72. . b. Statute of Fraud73. a. Rights in realty74. b. All interests, benefits, and rights inherent in the ownership of real estate75. c. both a and b76. c. fee simple77. b. ordinarily personal property 78. a. Recording gives public notice of the transaction and sets the priority 79. b. accretion80. a. avulsion81. c. alluvium 82. d. No two parcels can occup y the same space on the face of the earth83. d. Finite84. b. social, economic, governmental and legal, geographic and environmental85. c. fire insurance86. b. the physical land and appurtenances affixed to the land87. b. Real estate88. d. Both (b) and (c)89. d. Market value90. b. Land, labor, capital, entrepreneurship91. d. Cost of` construction increases92. d. It provides future benefits93. c. The price of the real property94. c. By definition, uniqueness means that fewer people will want to bu y it95. b. Increases slowly96. a. Causes oversupply and lower prices97. a. Has lost nearly all utility98. d. All of the above99. a. Progression Principle100. b. Utility101. b. The lower-priced home will attract more demand.102. b. The supply increases because new builders get into the market


103. a. Social, economic, governmental, and environmental104. d. An incremental increase of value that results when two or more sites are combined to produce greater utility105. c. frontage

106. b. across the fence value (atf)107. a. Fixture108. b. Contributes nothing to the value of real estate109. c. All of the above .110. d. All of the above.111. c. Both a and b.112. d. the date of the appraisal113. d. To solve problems that involve real estate valuation114. c. Feasibility analysis 115. c. Use value116. c. Going-concern value117. e. The present worth of anticipated future benefits to a specific investor118. a. Well-informed buyers and sellers119. b. most probable price 120. b. The property sells in 90 to 120 days121. d. all of the above122. c. Both a and b.123. b. externalities124. c. a nonconforming use 125. c. Excess land126. d. Cost of` construction increases127 . a. Anticipation128. c. Conformity129. a. Physically possible, legally permissible, appropriately justified, financially feasible, and maximally productive130. d. All of the above131. c. The improvement value must be adjusted down if the land’s highest and best use is different than the improved highest and best use132. c. Interim use133. a. A use that was legally established and maintained but no longer conforms to existing zoning134. d. All of the above.135. c. A group of complementary land uses136. b. A type of neighborhood that is characterized by homogeneous land use 135. a. Growth, stability, decline, and revitalization 138. d. Vacancy rates137. d. The economic activity that enables it to attract income from outside its borders138. b. Crime levels139. d. Changes in property use140. b. A process in which older homes in a neighborhood are remodeled and different residents replace the lower-income residents141. c. Time-distance relationships between a property use and the supporting facilities 142. b. demography 143. b. reverse hierarchical144. f. A group of individuals or firms that are in contact with one another for the purpose of conducting real estate transactions145. b. GIS (Geographic Information System).


146. c. principle of competition147. a. principle of balance148. d. principle of contribution149. e. principle of surplus productivity150. b. principle of conformity151. c. principle of utility152. b. principle of supply and demand153. a. principle of consistent used154. c. principle of highest and best used155. a. salvage value156. e. zonal value157. b. principle of substitution158. a. in an arm’s-length transaction159. c. cash equivalency technique 160. a. Are the most reliable guide to the probable current market behavior and reactions of informed buyers.161. c. both a and b162. b. entrepreneurial profit 163. c. both a and b164. a. direct cost165. a. reproduction cost 166. replacement cost167. b. the cost of new improvements at current prices 168. a. the original cost of improvements169. a. reflects the success of the project170. d. External obsolescence—incurable171. b. Physical deterioration—long-lived incurable172. a. operating expense ratio173. b. net income ratio174. d. break-even ratio175. c. Effective gross income 176. a. operating expenses are divided by effective gross income177. d. net operating income is divided by effective gross income178. c. both a and b179. c. The market is in a condition of oversupply.180. d. all of the above181. c. functional obsolescence 182. d. The cost approach183. c. Sales comparison approach, allocation, extraction184. b. The cost method185. d. All of the above186. b. land, labor, capital and entrepreneurship187. b. transportation188. d. government spending and taxation policy 189. a. real property and personal property 190. b. police powers 191.d. Rental192.a. Economic rent193.e. Market price194. b. wear and tear on the structure 195. a. subjective


196. d. contribution197. d. contribution198. e. renovation of the structure199. e. all of the aboved200. a. tangible assets, other than realty.201. a. Plant202. b. Machinery 203. a. Will continue to be used for the provision of the relevant public good or service. 204. a. Should be reflected in the value of the real estate interest205. a. Tangible assets206. d. All of the above.207. a. associated intellectual property rights208. d. economic Life209. d. All of the above.210. c. commercial buildings leased in part by nonprofit foundations211. c. a partial interest 212. a. real property is a type of service 213. c. acquisition cost to present owner 214. d. economic utility215. d. salvage216. c. zonal value217. c. obsolescence218. b. external obsolescence219. c. leverage220. d. HIGC221. d. functional obsolescence222. a. Market Value223. c. An appraisal224. d. Any of the above225. a On commercial and investment properties226. a. Appraisal227. d. principle of increasing and diminishing return228. d. infiltration229. a. Principle of conformity230. a. Unearned increment231. a. Market analysis232.. a. Depreciation233. a. Amortization234. a. Anticipation235. e. Purchasing Power 236. a. Straight line method237. a. Principle of Progression238. a. gross income multiplier239. d. relocation survey240. b. topographic survey241. e. rectangular survey242. a. subdivision plan243. c. tie line244.. a. contour line245. e. square planning


246. a. gridiron247. d. Bearings248. d. Cadastral map249. c. urbanized land250. d. 244251. c. Ptolemy252. b. Aristotle253. a. Hipparchus254. e. Humbult and ritter255. d. Erastosthenes256. b. site257. c. toponym258. d. situation259. d. cartography260. c. map261. d. Ecumene262. e. pattern263. c. density264. c. immigration265. b. migration266. a. emigration267. d. net migration268. b. Topographic survey269. c. point of beginning270. b. legal description271. c. social factor272. e. political273. b. economic274. a. physical275. a. 1,000 sq.m. of urban land and 1 hectare of rural land276. a. industrial lots277. b. not more than 500 has278. d. RA 9700279. b. realty installment buyer’s protection act280. d. land exchange281. c. land assembly282. b. 5 has283. d. joint venture284. d. land banking285. c. right of first refusal286. a. Personal property287. e. 10 years288. b. Fee simple289. c. Mechanic’s liens290. d. Attachments291. b. P325,000.00292. c. Pactum Commissorium293. d Antichresis294. d Dacion en pago295. b. Alienation


296. c. Automatic redemption clause297. b. Assign his rights298. b. Power to sell directly299. e Blanket mortgage300. a. 4 years301. d .Any of the above302. a. license to sell303. d. RA 4726304. d. RA 7279305. a. equal306. d. twelve months307. b. HLURB308. b. Total payment made less penalty plus interest charges309. a. socialized housing310. b. corporation owning the building311. a. condominium312. b. PD 957313. d. Co terminus with the duration of condo project314. c. 20% of the development cost315. b. non alienable public land316 b. 30% of the gross area317. e. all of the aboved318. C. City of Municipal Engineer319. e. HLURB320. c. 30 days321. b. 100 sq.m.322. b. Dominant tenement 323. b. Joint tenancy324. d. Condominium325. c. escheat326. c. Eminent Domain327. d. DSWD328. d. PDIC329. b. reconveyance deed330. a. marital property ownership331. b. time, title, interest, and possession332. a. present, possessory interest.333. A. Remainder man334. c. separate property335. b. A document that gives a third party the deed until the mortgage loan is paid off 336. d. 30%337. b. 2%338. c. 30% of the area is uncultivated339. c. special education fund tax340. a. prepaid income tax341 c. 20% p.a.342. a. 20%343. d. 180 days from the death of the decedent344. c. 1 year345. a. city assessor


346. b. within 5 days after the close of the month of the date of sale347. c. assessed value348. d. creditable withholding tax349. d. documentary stamp tax350. a. ordinary asset351. b. 2,500,000.00352. a. subdivision lots353. c. Simple majority votes354. c. be susceptible to independent use and ownership355. c. lease fee estate356. c. Exchange agency357. b. Authorization to sell358. c. Principal359. b. P1.00 for every P1,000 in excess of the first P2,000 360. e. 20% interest per annum361. b. One percent of assessed value 362. e. Thirty percent363. e. Assessed Value364. d. 180 days from death of decedent365. b. Year 2010366. b. Within five (5) days after the close of the month of the date of sale367. c. 20% 368. b. Concerned Municipal Assessor 369. c. P 1,000,000.00370. c. 60 days371. b. Creditor-bank372. a P20.00 for the 1st P5,000.00 plus P10.00 for every P5,000.00 thereafter373. c. Affidavit of total or aggregate landholding374. d. 5 has for the landowner and 3 has per child who must be at least 15 years old and is actually tilling the land or managing the farm375. b. Total payments made less penalty and interest charges.376. b. Twelve months377. d. Housing and Land Use Regulatory Board378. c. Equal379. a. R.A. 7279380. d. R.A. 4726381. b. License to sell382. c. Condominium383. d. P.D. 957384. b. 30% of gross area385. c. be susceptible of independent use and ownership386. e. Any of the above387. c. Housing and Land Use Regulatory Board388. a .actual used389. e. not exceeding 5 yrs.390. a. not exceeding 2 yrs.391. c. RA 9003392. d. Pollution393. c. certificate of non coverage394. d. Environmental management bureau


395. b. august 26, 1972395. d. 1,000 sq.m.397. d. 375,000.00398. d. 175,000.00399. b. 3 years400. c. transfer fee/tax401. d. register of deed402. c. community tax403. e. 20,000.00404. c. real estate investment trust405. a. RA 9856406. e. all of the above407. d. 90%408. d. fair market value409. d. 50% of the applicable DST410. c. 1%411. e. all of the above412. e. 10 years 413. b. 2,000 resident per sq.m. and at least 50% of active resident

engage in on agricultural activities

ANSWER KEY PART II: Professional Appraisal Practice

Exam 1

1. B 26.A 51.E 76.C2.A 27.C 52.A 77.D3.B 28.A 53.B 78.D4.D 29.A 54.C 79.B5.A 30.B 55.A 80.C6.B 31.D 56.C 81.A7.C 32.C 57.D 82.A8.C 33.E 58.B 83.B9.C 34.D 59.B 84.D10.B 35.D 60.A 85.D11.A 36.E 61.E 86.B12.C 37.B 62.B 87.D13.C 38.D 63.C 88.E14.D 39.C 64.C 89.A15.C 40.A 65.D 90.B16.A 41.A 66.A 91.D17.D 42.B 67.A 92.B18.D 43.C 68.A 93.A19.D 44.C 69.A 94.C20.E 45.C 70.C 95.D21.B 46.E 71.B 96.A22.B 47.E 72.C 97.C23.A 48.E 73.E 98.B


24.D 49.B 74.C 99.C25.B 50.A 75.C 100.B

Exam 21. B 26.C 51.A 76.B2. B 27.D 52.A 77.E3. E 28.C 53.C 78.A4. E 29.A 54.B 79.C5. B 30.C 55.A 80.E6. D 31.A 56.E 81.A7. C 32.A 57.B 82.D8. D 33.A 58.C 83. A9. C 34.D 59.D 84.A10.C 35.B 60.B 85.D11.B 36.C 61.B 86.B12.B 37.D 62.B 87.B13.A 38.C 63.A 88.D14.C 39.A 64.C 89.A15.E 40.A 65.B 90.D16. D 41.B 66.A 91.A17.D 42.B 67.A 92.B18.A 43.D 68.D 93.C19.E 44.B 69.C 94.C20.A 45.D 70.C 95.D21.D 46.B 71.C 96.A22.D 47.D 72.E 97.C23.A 48.B 73. D 98.B24.D 49.C 74.D 99.C25.E 50.D 75.C 100.B

Exam 31. Answer:

Estimated Useful life = 1 = 1 = 40 years N 2.5%

2.Answer: Land Value (2,200 @P3,500/sq.m.) P 7,700,000 Add Adjustment factors: Corner influence (P7.70M x 25%) 1,925,000 Topography advantage (P7.70M x 20%) 1,540,000 Plottage (P7.70M x10%) 770,000 Value of the Property 11,935,000

3. Answer: 1st Lot owner: (P10.0M x40%) P4.0M2nd Lot owner: (P10.0M x30%) P3.0M


3rd Lot owner: (P10.0M x20%) P2.0M4th Lot owner: (P10.0M x10%) P1.0M

Note: 4-3-2-1 Rule means: “4” = 40% of the lot value (front quarter) adjacent to the road; “3” = 30% of the lot value (second quarter); “2” = 20% of the lot value (third quarter); “1” = 10% of the lot value (fourth quarter)

4. Answers: (a) Land Acquisition Cost: 50 hectares x 10,000 sq.m. @P700/sq.m. = P350.00M (b) Development Cost: 500,000 sq.m. x 60% @P1,000/sq.m. = P300.00M (c) Lot Unit Cost = Land Acquisition Cost + Developmental Cost

Saleable area = P350.0M + P300.0M = P2,166.67/sq.m. 300,000 sq.m. (d) Selling Price/sq.m.= Unit Cost + Desired Profit = P2,166.67+P2,166.67 = P4,333.34/sq.m.

5. Land: P5.0M x 50% x 2%/4 quarters P12,500 Building: P15.0M x 80% x 2%/4 quarters 60,000 Machineries: P3.0M x 80% x 2%/4 quarters 12,000 Total Realty Tax for one quarter P84,500

6. Land: P5.0M x 50% x 1% P 25,000 Building: P15.0M x 80% x 1% 120,000 Machineries: P3.0M x 80% x 1% 24,000 Total Realty Tax for one quarter P169,000 7. Land: P12,500 x 90% x 4 quarters P 45,000 Building: P60,000 x 90% x 4 quarters 216,000 Machineries: P12,000 x 90% x 4 quarters 43,200 Total Basic Tax for one year, net of 10% P304,200

Land: P25,000 x 90% P 22,500 Building: P120,000 x 90% 108,000 Machineries: P24,000 x 90% 21,600 Total SEF Tax for one year, net of 10% P152,100 TOTAL BASIC AND SEF, net of 10% discount = P456,3008. Answer: Annual Gross income = P3,412,500.00 = 8.75 GIM Sales Price 390,000.00

9. Answer: Net Operating Income P50,000.00 Less: Income due to land (P100,000 x 10.5%) 10,500.00 Income due to building P39,500.00


Building Value {P39,500/12.04 (10.5% + 1.54 (1/65)} P328,073.00 Add: Land Value 100,000.00 Total Property Value P428,073.00

V=I/RWhere: V= Value

I= income Rate= interest rate

To find the Building value, the Rate should be interest rate plus recapture rate; formula property, assuming a Rate= interest rate + Recapture rate Recapture rate= 1/Economic life of the building

10. PV = 10,000i = .06n = 5FV = 10,000 (1 + .06)5 = 10,000 (1.3382255776)ANSWER = 13,382.26

11. PV = 10,000i = .06 / 2 = .03n = 5 * 2 = 10FV = 10,000 (1 + .03)10 = 10,000 (1.343916379) ANSWER= 13,439.16

12. FVoa = PMT ((1 + i) n - 1) iPV = 5,000i = .06n = 5FVoa = 5,000 (1.3382255776 - 1) .06 ANSWER = 5,000 (5.637092) = 28,185.46

13. FVad = FVoa (1+i) PV = 5,000i = .06n = 5FVoa = 28,185.46 (1.06) = 29,876.59

14. PV = FV ( 1 ) (1 + i) n

FV = 150,000; i =.06; n = 5

PV = 150,000 ( 1 ) (1 + .06) 5

= 150,000 ( 1 ) 1.3382255776 ANSWER = 112,088.73


15. PMT = 5,000 i = .06n = 5PVoa = 5,000 [(1 - (1/(1 + .06)5)) / .06] = 5,000 (4.212364) Answer= 21,061.82

END

GOOD LUCK TO THE EXAM AND MAY GOD BLESS US ALL


comprehensive reviewer on appraiser examjen

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