Appraiser Practice Questions (2026) — Free Sample Questions with Answers

Answer: A

1. Residual land value = value on completion − development cost (incl. entrepreneurial incentive).
2. Single-family: $1,680,000 − $1,360,000 = $320,000.
3. Duplexes: $1,500,000 − $1,140,000 = $360,000.
4. Townhomes: $2,280,000 − $2,010,000 = $270,000.
5. Office: $2,600,000 − $2,150,000 = $450,000, but it is not legally permissible.
6. The maximally productive legal, feasible use is the three duplexes.

Three duplexes: Correct. Residual land values of the legal uses are $320,000 (single-family), $360,000 (duplexes) and $270,000 (townhomes); the duplexes produce the highest land value.

Four single-family homes: Feasible and legal, but its $320,000 residual land value is less than the duplexes' $360,000.

Six townhomes: Highest value on completion among legal uses, but the highest gross value is not the test; its residual land value is only $270,000.

Professional office building: Highest residual ($450,000), but zoning does not allow it, so it fails the legally permissible test.

Among legally permissible, physically possible, feasible uses, the maximally productive one gives the highest land value, not the highest gross sale value.

Answer: B

1. Q1 months of supply = 120 ÷ (150 ÷ 3) = 2.4 months.
2. Q4 months of supply = 230 ÷ (105 ÷ 3) ≈ 6.6 months.
3. Days on market rise from 18 to 58; sale-to-list ratios fall from 101% to 95%.
4. Every indicator moves toward a softening market with increasing supply relative to demand.

The market is undersupplied, because prices remain close to list prices: A 95% ratio is still close to list, but the ratio is falling every quarter; the trend, not the level, is the question.

The market is moving toward oversupply, because inventory is rising as sales slow: Correct. Supply rose from about 2.4 months (120 ÷ 50) to about 6.6 months (230 ÷ 35), with longer marketing times and falling sale-to-list ratios.

The market is stable, because annual sales absorb year-end inventory in under six months: Uses the annual average (510 sales, about 5.4 months) and hides the quarter-by-quarter shift.

The market is strengthening, because the number of active listings is rising: Rising listings with falling sales indicate weakening demand relative to supply, not strength.

Read the direction of supply, absorption, marketing time and sale-to-list ratios together; an annual average can mask a changing market.

Answer: D

1. Givens: sale price $425,000; furnishings $18,000 (supported); golf cart $4,000; built-in refrigerator $3,000. The $439,000 list price is irrelevant because the transaction price is allocated, and the buyer's $25,000 guess is unsupported.
2. Real property price = sale price − personal property included in the sale.
3. Personal property = $18,000 + $4,000 = $22,000; the built-in unit is a fixture and stays with the realty.
4. $425,000 − $22,000 = $403,000.
5. Distractors: $400,000 deducts the fixture; $396,000 uses the buyer's estimate; $393,000 makes both errors.

$393,000: Used the buyer's unsupported $25,000 furnishings estimate and also deducted the built-in fixture.

$396,000: Used the buyer's unsupported $25,000 furnishings estimate instead of the supported $18,000 figure.

$400,000: Deducted the built-in wine refrigerator, which is a fixture and part of the real property.

$403,000: Correct. Only the personal property is removed: $425,000 − $18,000 furnishings − $4,000 golf cart = $403,000. The built-in refrigerator is a fixture.

Remove supported values of personal property (and other non-realty items) from a sale price before using it; fixtures remain part of the real estate.

Answer: B

Iris and Gwen's son, as tenants in common: Assumes the will can pass a joint tenant's share; survivorship takes effect at death, before the will operates.

Iris alone: Correct. Under joint tenancy with right of survivorship, a deceased joint tenant's interest passes automatically to the survivor and cannot be passed by will.

Iris and Gwen's son, as joint tenants: An heir does not join the joint tenancy; Gwen's interest ended at her death.

Gwen's estate, until probate is complete: Survivorship passes the interest outside probate.

Joint tenancy carries a right of survivorship; tenants in common hold shares that pass by will or inheritance.

Answer: C

1. Givens: Sale 1 $96,000 ÷ $400,000; Sale 2 $108,000 ÷ $450,000; subject $500,000. Sale 3 gives only a depreciated cost, so it suits extraction, not allocation.
2. Allocation: site value = total property value × typical site-to-value ratio.
3. Sale 1: 96,000 ÷ 400,000 = 24%. Sale 2: 108,000 ÷ 450,000 = 24%.
4. $500,000 × 0.24 = $120,000.

$90,000: This is Sale 3's extracted site value; extraction is a different method.

$102,000: Averaged the two lot prices instead of applying the site-to-value ratio to the subject.

$120,000: Correct. Sales 1 and 2 each show a 24% site-to-value ratio; $500,000 × 24% = $120,000.

$125,000: Used Sale 3's 25% ratio, which comes from extraction data, not a known lot price.

Allocation applies a ratio of site value to total value, taken from sales with known lot prices, to the subject's total value.

Answer: B

1. Givens: sale price $400,000; 8 months; −0.5% per month compounded; net property adjustments −$20,000.
2. Sequence: market conditions (time) adjustment to the sale price first, then property adjustments.
3. Time factor = 0.995^8 = 0.960693; $400,000 × 0.960693 = $384,277. Then $384,277 − $20,000 = $364,277.
4. Adjusted sale price = $364,277.
5. Distractors: $364,000 uses simple rather than compound decline; $365,063 reverses the sequence; $396,283 uses the wrong direction.

$364,000: Applied a simple 4% decline (0.5% × 8) instead of compounding the monthly rate.

$364,277: Correct. $400,000 × 0.995^8 (0.960693) = $384,277; less $20,000 of property adjustments = $364,277.

$365,063: Applied the time adjustment after the property adjustments ($380,000 × 0.960693); market conditions are adjusted first.

$396,283: Treated the decline as an increase ($400,000 × 1.005^8 = $416,283, less $20,000).

Apply a compounded market-conditions factor to the sale price before property adjustments; reversing the order or using simple percentages changes the result.

Answer: B

Conditions of sale; adjust upward: Below-market financing is a financing-terms issue, and the direction is reversed.

Financing terms; adjust downward to its cash equivalent: Correct. Buyers typically pay more for below-market financing, so the price is reduced to its cash equivalent.

Financing terms; adjust upward to its cash equivalent: The right element, but the favorable financing inflated the price, so the adjustment is downward.

Market conditions; adjust downward: Market conditions concern price changes over time, not the terms of this loan.

Favorable seller financing usually raises the price paid; cash equivalency adjusts it down to what a market-financed buyer would pay.

Answer: B

1. Givens: price $412,000; $9,000 concession reflected in price; 0.5% per month × 6 months = 3% (simple).
2. Sequence: financing/concessions before market conditions.
3. $412,000 − $9,000 = $403,000 cash-equivalent price.
4. $403,000 × 1.03 = $415,090.

$403,000: Removed the concession but skipped the 3% market conditions adjustment.

$415,090: Correct. Concession first: $412,000 − $9,000 = $403,000; then time: $403,000 × 1.03 = $415,090.

$415,360: Applied the market conditions adjustment before removing the concession ($412,000 × 1.03 − $9,000).

$424,360: Applied time but left the concession in the price.

Remove concessions first, then apply the market conditions adjustment to the cash-equivalent price.

Answer: B

1. Givens: rent loss $150/month; GRM 140; building ratio 75%; site value already reflects the highway.
2. Capitalize the loss to the whole property, then allocate the building's share.
3. $150 × 140 = $21,000; $21,000 × 0.75 = $15,750.
4. External obsolescence charged to the building = $15,750.
5. Distractors: $5,250 is the site share; $21,000 is the full loss; $28,000 divides by the ratio.

$5,250: This is the share of the loss attributable to the site (25%), which the site value already reflects.

$15,750: Correct. Total loss $150 × 140 = $21,000; the building's 75% share = $15,750.

$21,000: The total loss to the property; part of it is already in the site value, so charging all of it double-counts.

$28,000: Divided the total loss by the 75% ratio instead of multiplying.

External obsolescence measured for the whole property is allocated between site and building; only the building share is deducted when site value comes from comparable land sales.

Answer: B

1. Givens: 4 × $1,250 × 12 = $60,000 PGI; vacancy 5%; expenses 35% of EGI; reserves $250 × 4 = $1,000. Debt service is not an operating expense and is excluded.
2. NOI = PGI − vacancy and collection loss = EGI; EGI − operating expenses − reserves = NOI.
3. EGI = $60,000 × 0.95 = $57,000; expenses = $57,000 × 0.35 = $19,950; NOI = $57,000 − $19,950 − $1,000 = $36,050.
4. NOI = $36,050.
5. Distractors: $35,000 applies the ratio to PGI; $37,050 omits reserves; $38,000 omits vacancy.

$35,000: Applied the 35% expense ratio to potential gross income instead of effective gross income.

$36,050: Correct. PGI $60,000; less 5% vacancy = EGI $57,000; less 35% expenses ($19,950) and reserves ($1,000) = $36,050.

$37,050: Omitted the $1,000 replacement reserve.

$38,000: Skipped vacancy and collection loss, deducting expenses from potential gross income.

Build NOI in order: PGI, less vacancy and collection loss, gives EGI; deduct operating expenses (on their stated base) and reserves, never debt service.

Answer: C

Give each approach equal weight and conclude at their average: Averaging ignores the difference in how directly each approach reflects buyer behavior.

Rely on sales comparison only; cost is unreliable for new homes: Cost is most reliable for new construction, so it should support the conclusion, not be dismissed.

Weight sales comparison most, with the cost approach as support: Correct. Three recent, lightly adjusted sales of the same model reflect buyers directly; the new-construction cost approach is strong corroboration.

Weight the cost approach most, because depreciation is near zero: Cost is strong here, but the sales comparison data are stronger and show what buyers actually paid.

Give most weight to the approach with the best data and most direct link to buyer behavior; new-construction cost is strong support but does not override excellent same-model sales.

Answer: D

Only the current contract, since it supersedes earlier activity: Listings and prior transfers within three years must also be analyzed.

The contract and listing; the quitclaim is not a sale: 2024 USPAP requires analysis of sales and other transfers, so a no-consideration transfer counts.

The contract, listing and transfers within the past five years: The look-back period for transfers is three years, not five.

The contract, the listing and the quitclaim transfer: Correct. SR 1-5 requires analysis of current agreements of sale, options and listings, and all sales and other transfers within three years before the effective date.

In a market value assignment, analyze current agreements of sale, options and listings, and all sales and other transfers of the subject within three years before the effective date.

Answer: C

Treat the renovated interior as a hypothetical condition: A hypothetical condition is contrary to known fact; the interior condition is uncertain, not known to be different.

Withdraw, because USPAP requires an interior inspection: USPAP does not require an interior inspection; the appraiser can continue if the results are credible.

Use an extraordinary assumption about the interior: Correct. When conditions limit research, the appraiser may use an extraordinary assumption about the information if credible results can still be developed.

Report the interior as renovated based on the old listing: Presenting unverified information as fact without an assumption could mislead users.

When assignment conditions block needed information, the appraiser must expand the scope, use an extraordinary assumption if results remain credible, or withdraw.

Answer: D

Accept and disclose the prior service without naming the client: Disclosing the prior appraisal at all would breach the agreement not to disclose it.

Accept without disclosure, since the prior work is confidential: Prior services within three years must be disclosed; confidentiality does not excuse non-disclosure.

Accept and disclose the prior service only to the new client orally: Disclosure is required in the certification as well, and any disclosure breaches the agreement.

Decline, because the prior service cannot be disclosed as required: Correct. When an appraiser has agreed not to disclose a prior appraisal, they must decline later assignments on that property within the three-year period.

Services on the subject in the prior three years must be disclosed to the client and in the certification; if an agreement prevents that disclosure, the appraiser must decline.