Cebu 350pts Mock No Answer

2014 Appraiser’s CRES Batch 5 Mock Examination Part 1 (100 items)
1. Scheduled rent (or contract rent) that is higher than market rent creates
a. Overage rent c. Excess rent
b. Gross rent d. Escalator rent
2. The amount paid over minimum base rent in a percentage lease is

a. Overage rent c. Excess rent
b. Gross rent d. Escalator rent
3. The lease under which the tenant pays a fixed rental and the landlord pays all expenses of ownership is the
a. Gross rate c. Net lease
b. Triple net lease d. Percentage lease
4. An index will be referred to in a(n)

a. Gross lease c. Escalator clause
b. Triple net lease d. Expense-stop clause
5. The interest of a sublessee is a

a. Leasehold c. Subleasehold
b. Lease fee d. Sandwich lease
6. In income property investments

a. Low risk = low cap rate = low value
b. Low risk = low cap rate = low value
c. High risk = high cap rate = low value
d. Low risk = high cap rate = high value
7. All other factors being equal, as the location of an income property becomes less desirable, the cap rate used
will be
a. Lower c. Less reliable
b. Higher d. Unaffected
8. Recapture generally applies to

a. Wasting assets, such as buildings c. Both a and b
b. Non-wasting assets, such as land d. Neither a nor b
9. In the land residual technique, the appraiser starts with an assumption of:
a. Replacement cost c. Net capitalization
b. Building value d. Land value
10. In the building residual technique, the appraiser starts with an assumption of:
a. Replacement cost c. Net capitalization
b. Building value d. Land value
11. The cash on cash rate is the same as the

a. Yield capitalization rate c. overall capitalization rate
b. Equity dividend rate d. break-even point
12. Name the two component rates that are inherent in every capitalization rate
a. Investors rate c. interest and recapture rates
b. Leased rate d. interest and depreciation rates
Cesar E. Santos Real Estate Academy Inc: 1

2014 Appraiser’s CRES Mock Examination
13. Under which method are the recapture installments lowest in the earlier years?
a. Annuity c. gross income multiplier method
b. Straight-line d. band of investment method
14. Under which method are the installments highest?

15. Which recapture method suggests the greatest reduction in risk?

16. Increase in maintenance costs are passed on to tenants under a(n)

a. Tax-stop clause c. Gross lease
b. Expense-stop clause d. Escalator clause
17. The average of all variates is the

a. Mean c. Median
b. Mode d. Range
18. The center of all variates is the

a. Mean c. Median
b. Mode d. Range
19. The difference between the highest and lowest variates is the
a. Mean c. Median
b. Mode d. Range
20. The mean of five house sales prices of P200,000, P150,000, P350,000, P400,000, and P300,000 is
a. P280,000 c. P700,000
b. P150,000 d. P175,000
21. The median of the house sales prices in question 20 is

a. P140,000 c. P700,000
b. P150,000 d. P175,000
22. The aggregate of the house sales prices in question 20 is

a. P140,000 c. P700,000
b. P150,000 d. P175,000
23. Geography is the scientific study of the location of people and activities across the earth’s surface and the
reason for their _________________.
a. Existence c. Planning
b. Distribution d. Space
24. The system used to transfer locations on the earth’s surface to locations on the map is ________________.
a. Plotting c. Projection
b. Mapping d. Survey
25. The Greek scholar who invented the word Geography is __________________.
a. Hipparchus c. Ptolemy
b. Eratosthenes d. Aristotle

26. The scientific study of population characteristic is ________________.
a. Migration c. Density
b. Ecumene d. Demography
27. In economic development, economic factor indicators are availability of consumer goods, worker productivity,
access to raw materials, economic structure and ______________.
a. Density c. Polulation
b. GNP d. Per capita income
28. In determining the Quality of Life (QOL), it is based on indicators of socioeconomic environment and
___________________.
a. Physical environment c. Population
b. Planning d. Migration
29. Urbanization is a process of becoming from a state of less concentration to a state of _________.
a. Threshold c. Calamity
b. More concentration d. Divisiveness
30. The two factors considered in relation to migration are _______________.

a. Push and pull c. Come and go
b. Push and push d. Pull and pull
31. Geography has relations to other disciplines and sciences such as biological, physical, social, mathematical and
_____________________.
a. Medical c. Arts and humanities
b. Cultural d. Botanical
32. ___________________ concerns with the relationship between humans and the physical environment.
a. Physical density c. Human geography
b. Physical geography d. Human density
33. A property has 25 apartment units, 15-units-two-bedroom unit renting for P5,000.00 per month each and 10
one-bedroom unit renting for P2,000.00 per month east.
There are 14 two-bedroom units occupied and 8 one-bedroom units occupied.
The potential gross income yearly is.
a. P1,000,000.00 c. P1,140,000.00
b. P1,120,000.00 d. P1,150,000.00
34. If houses in your area have increases in value 8% during the past year and the average price of houses sold last
year was P95,000.00. What is the average price of houses sold today?
a. P101,000.00 c. P102,600.00
b. P101,500.00 d. P103,000.00
35. An appraisal is to be made of a three-bedroom house. One comparable with two bedrooms sold for
P50,000.00. The appraiser makes an adjustment of P1,000.00 to the comparable to account for the difference
in the number of bedrooms. The adjustment sales price of the comparable is:
a. P49,000.00 c. P52,000.00
b. P51,000.00 d. P53,000.00

36. Which of the following estimates would result in a capitalization rate of 4 percent?
a. Potential gross income P200,000.00; value P5,000,000.00
b. Effective gross income P200,000.00; value P5,000,000.00
c. Net operating income P200,000.00; value P5,000,000.00
d. None of the above
37. In regard to zoning, which of the following statement is CORRECT?

a. Zoning ordinances are always more restrictive that deed restrictions
b. A nonconforming use and variance refer to the same thing
c. Zoning normally establishes land-use districts and provided for different restriction within each district
d. Exclusive zoning and spot zoning refer to the same thing
38. A comparable site sold a month ago @ P25,000.00 per square meter. Its location is considered 15% superior
and its shape and topography is 10% inferior to the subject site. The time adjustment is 12% per year.
Determine the adjustment sale price of the comparable site using straight plus and minus adjustment.
a. P18,250.00 per sqm. c. P25,750.00 per sqm.
b. P24,000.00 per sqm. d. P26,250.00 per sqm.
39. BR, 4 T&B and 4 car garage residential building was sold for P40,000,000.00. Using the rules of thumb of
building-to-land ratio of 3:2, what is the value of the building?
a. P10,000,000.00 c. P24,000,000.00
b. P11,000,000.00 d. P 8,000,000.00
40. An appraiser was asked to compute for the fair market rent per square meter of a P500.00 per square meter
vacant commercial lot using the following assumptions:
Fair market value of lot per sqm. - P24,000.00
Interest rate - 10% p.a.
The yearly market rent is:
a. P1,000,000.00 c. P1,500,000.00
b. P1,200,000.00 d. P800,000.00
41. If a commercial structure is a rectangle with sides of 65 meters and 135 meters and the current local cost to
built a similar structure id P5,000.00 per square meter, what is the estimate construction cost of the structure
using the square meter method:
a. P18,000.000.00 c. P43,875,000.00
b. P180,000,000.00 d. P36,450,000.00
42. A house and a lot are priced at P8,8000,000.00. The lot alone is values at P1,650,000.00. What percentage of
the total asking price is attributable to the value of the lot?
a. 18.8% c. 18 and ¾ %
b. 19.0% d. 18 and ¼%
43. R.A. 7279, Sec-18, specifies that developers of proposed subdivision projects shall be required to develop an
area for socialized housing equivalent to:
a. 25% of the total subdivision area
b. 20% of the net saleable area
c. 20% of the total subdivision area
d. 25%of the cost of development.
44. The basic formula for property valuation via income capitalization is:
a. Value = Income xRate c. Value = Rate / Income
b. Value = Income /Rate d. Value = Selling Price / Income

45. In a property residual capitalization approach what is the value of an improved property with a net income of
P80,000.00 a year, an interest rate of 8% and a recapture of 2%?
a. P1,000,000.00 c. P840,000.00
b. P800,000.00 d. P850,000.00
46. If houses in your area have increased in value 8% during the past year and the average price of houses sold
last year was P95,000.00. What is the average price houses sold today?
a. P101,000.00 c. P102,600.00
b. P101,500.00 d. P103,000.00
47. Assuming four different shapes of a 500 square meter house which would be the least expensive to built,
assuming the same materials and quality of construction?
a. A rectangle c. An H-shape
b. An L-shape d. A U-shape
48. Assume the following figures:

Annual net income form property -P100,000.00
Land Value -P200,000.00
Interest rate -8%
Recapture rate (based on the remaining economic life of 25 years) -4%
What is the property value indicated by the building residual technique?
a. P800,000.00 c. P960,000.00
b. P900,000.00 d. P980,000.00
49. Ideally, the appraiser of a residential property will collect data on comparable property sales that occurred
earlier than:
a. Six months prior to the date of appraisal
b. One year prior to the date of appraisal
c. 18 months prior to the date of appraisal
d. Two years prior to the date of appraisal
50. Which of the following is an advantage of two-storey house over a single-storey house?
a. Stairs
b. Lower construction cost per square meter
c. Easier to paint and maintain error
d. Less danger in case of fire
51. When a part of a building, or an obstruction physically intrudes, overlaps, or trespasses the property of
another, this is referred to as an:
a. Assemblage c. Easement
b. Escheat d. Encroachment
52. The term real estate is generally used to refer to the physical land and improvements, whereas the term real
property denotes:
a. Machinery and equipment c. Legal interest and rights inherent in
b. Surface rights only ownership
d. Air and subsurface rights

53. What is the distinction between the term market price and market value?
a. Market price is what the seller asks for, while market value is what the buyer actually pays
b. Market price is what the property sells for, while market value is what the sales price should be to
typical buyer
c. Market price is what is currently owned on the property, while market value is what is bought for
d. Market price is synonymous with replacement cost, while market value is the same as assessed value
54. The assessor’s Office is an agency where we inquire and conduct research on
a. Title verification c. Zonal value
b. Certified lot plan d. Cadastral map/tax map
55. An appraisal is best defined as:

a. An unbiased opinion of the nature, quality, value or utility of an interest in real estate and related
personality
b. An unbiased opinion of the most likely price for which a parcel of real estate would sell at a given
date
c. The process of studying the nature, quality, or utility of an interest in real estate in which a value
estimate is not necessarily required
d. The process of developing an opinion as to the market value or other defined value of a specified
interest in a specified point in time
56. Edwin owned a small farm of 1,500sqm.inAntipolo. When he died, he had no heirs, no friends, and no will.
a. The state will take the property and sell it
b. The land will be in Bob’s name forever because he died without heirs
c. The land will pass to the first person to occupy the land for seven years (i.e., squatter’s rights)
d. The land will pass to the adjacent owners equally
57. A 7-year old residence is currently valued at P720,000. What was the original value if it has appreciated by
60% since it as built?
a. P270,000 c. P378,000.00
b. P450,000 d. P1,152,000.00
58. In a soft market, a landlord accepted a new tenant with a 60-month lease at P5,000 per month but gave the
new tenant six months free rent. Using the average rent method, what is the effective monthly rent?
a. P5,555 c. P3,000
b. P4,500 d. P5,000
59. An office building recently sold for Php50,000,000. Given the following information:
Gross (potential) income : Php10,000,000
Vacancy factor : 8 percent
Expenses : 45 percent of effective gross income
Annual mortgage payment : Php4,125,000
Equity : Php12,500,000
What is the overall rate of return for the property? What is the pre-tax cash flow?
a. 8.3 percent c. 10.12%
b. 10 percent d. 9%

60. If the subject property is 10% superior to Comparable Sale no. 1 and the comparable sold for P1,000,000,
what is the indicated value of the subjects?
a. P1,000,000 x 0.90 = P900,000
b. P1,000,000 x 1.10 = P1,100,000
c. P1,000,000/ 1.10 = P909,090
d. P1,000,000/ 0.90 = P1,111,111
61. A tenant has a lease that states the base rent is P5,000 per month plus 3% of the sales above P50,000 in
gross sales per month. The tenant’s sales last year were P850,000. How much rent was paid last year?
a. P25,500 c. P60,000
b. P75,000 d. P67,500
62. If comparable sale #1 sold for Php2,000,000 and has two-car garage, adding Php100,000 to the value and the
subject property does not have a garage, the indicated value of the subject property would be found by:
a. Subtracting Php100,000 from the subject property
b. Adding Php100,000 to the comparable sale
c. Subtracting Php100,000 from the comparable sale
d. Adding Php100,000 to the subject property
63. A residence has been listed for sale for the last six months at a price of P1,249,000, and it has not sold, in this
market, the average marketing period is 45 days for this type for property.
a. The subject property’s market value could be higher than the list price
b. The subject property’s market value could be higher or lower than the list price
c. The subject property’s market value is less than the list price
d. The subject property’s market value could be lower than the list price
64. A property has an overhead garage door that is 13 years old. It cost P19,000 to replace. Because the
inclement weather comes out of the northwest, these doors typically last 15 years if they face the west and
25 years if they face east. This door faces east. What is the amount of value left in this item?
a. P9,120.00 c. P16,470.00
b. P9,880.00 d. P2,660.00
65. The area of rectangle with a base of 10 length and a length of 20 meters is
a. 250 sq.m. c. 300 sqm.
b. 200 sq.m. d. 400 sqm.
66. All of the following statement are true except:

a. Real property refers to items that are not permanently fixed to a part of the real estate
b. Appraising is the art and science of estimating the value of asset
c. Assets value change with time
d. Market change with supply and demand
67. The principle of substitution holds that a purchaser will pay no more for a property than
a. The minimum he can afford
b. The cost of acquiring an equally desirable substitute
c. The price of a previously owned property
d. The price of a property with grater utility
68. Which of the following conditions is assumed in the normal definition of market value?
a. The estate value is as of a future date
b. The property will sell promptly
c. Payment will be made in cash or its equivalent
d. Only the buyer is knowledgeable as to the potential uses of the property

69. In which market are there many potential buyers but few properties available?
a. Demand c. Seller’s
b. Buyer’s d. Low-priced
70. To estimate market value, an appraisers follows the

a. Appraisal report c. Evaluation methodology
b. Valuation process d. Appraisal guidelines
71. An appraisal of real estate

a. Guarantees its value c. Determine its value
b. Assures its value d. Estimates its value
72. In which market is the direct sales comparison approach most applicable?
a. Seller’s c. Reasonable
b. Buyer’s d. Active
73. The legal right to move items such as topsoil or coal from another is known as a/an:
a. Easement c. Escheat
b. Profit d. Emblements
74. The process of changing the use of a building from an apartment complex to a condominium form of
ownership is normally referred to as a(n):
a. Conversion c. Interim use
b. Proration d. Variance
75. Which approach would be best when appraising a 15-to-20 years old house?
a. Cost c. Income capitalization
b. Sales comparison d. Replacement cost new less depreciation
76. Before reconciliation the appraiser should

a. Re-inspect the subject property
b. Evaluate the reliability of each approach to value
c. Review the over-all appraisal process and check for technical accuracy
d. Seek the property owner’s opinion
77. A large home built in an area of smell cottage is an example of:

a. Over-improvement c. Land regression
b. Under-improvement d. Functional obsolescence
78. The walls between two condominium units are NORMALLY considered to be:
a. Individual unit elements c. Limited common elements
b. Common elements d. Proprietary lease elements
79. What would be the indicated value of a property that rented for P7,500 per month, using a monthly gross
rent multiplier of 110, if the expenses attributable to the property were P1,250 per month?
a. P756,700.00 c. P687,500.00
b. P825,000.00 d. P611,250.00
80. A 7-year old residence is currently valued at P720,000. That is the original value if it has appreciated by 60
percent since it was built?
a. P270,000.00 c. P450,000.00
b. P378,000.00 d. P1,152,000.00

81. ________________ includes not only the ground or soil but everything which is attached to the earth
whether by bourse of nature or by man
a. Land c. Other land improvements
b. Building d. Real property
82. This evolution of value theory emphasized the relationship of market, price and value, normal value under
conditions of balanced supply and demand
a. Social theory of Mill c. Theories of Austrian School
b. Cost theory of Adam Smith d. Theories of Physiocrats
83. Under the international valuation standard (IVSC), two types of values are:
a. Fair market value and sound value
b. Market value and non-market value
c. Economic value and market value
d. Fair market value and liquidation value
84. Under the IVSC, the “C” stands for:

a. Corporation c. Conference
b. Committee d. Charter
85. A property with an annual net income of P382,500.00 was recently sold for P4,250,000.00. The remaining
economic life of the building is estimated to be 25 years. Land value is estimated to be P900,000.00. Based on
the data gathered.The overall rate of the property is:
a. 8% c. 10%
b. 9% d. 12%
86. There are various types of appraisal reports. Which of the following step would be the final one taken in the
appraisal process?
a. Narrative report `c. Personal letter of opinion
b. Bank form report d. Valuation report
87. A house and lot is period at P7,500,000.00. The lot alone is valued P2,531,250.00. What percentage of the
total asking price is attributed to the house?
a. 33 ¾% c. 66 ¼ %
b. 33 ¼% d. 66 ¾%
88. The value of the property with a monthly net income of P75,000.00 and with an overall capitalization rate of
9% is:
a. P833,333.00 c. P1,000,000.00
b. P10,000,000.00 d. P900,000.00 75K x 12 / .09
89. A regression gives the following information to estimate monthly rent for apartments:
Rent = 250 + (75 x Rooms) + (50 x students) + (25 x distance)
Where:
Rooms is the number of rooms in the apartment
Students is the percent of students in the apartment building (0 = 0 percent, 1.00 = 100 percent)
Distance is the distance from the periphery of the campus
The rent for an apartment with 3 rooms, 100 percent students and 50 meters from campus would be:
a. Php 1,500.00 c. Php2,500.00
b. Php 1,775.00 d. Php3,000.00

90. Building value : Php50,000,000.00
Net operating income : Php 8,350,000.00
Building capitalization rate : 14 percent
Land capitalization rate : 9 percent
What is the residual income to the land?

a. Php 1,350,000.00 c. Php4,500,000.00
b. Php 3,850,000.00 d. Php70,000,000.00
91. What is the present value of a 40-year net income of Php 10,000 per year if payments are in advance and the
net income is discounted at a rate of 12 percent?
(Factor = 8.233030)
a. Php 82,330.00 c. P92,210.00
b. Php 82,438.00 d. P92,330.0
92. Which of the following types of data is most likely to be derived from secondary data sources?
a. Building data
b. Site data
c. Neighborhood data
d. Regional data
93. Which of the following is NOT a regional value indicator

a. Economic base
b. Transportation systems
c. Neighborhood boundaries
d. Average household size
94. Neighborhood boundaries:

a. are determined by market influences
b. always correspond to physical barriers such as roads or streams
c. never correspond to physical barriers such as roads or streams
d. are the same as subdivision boundaries
95. Neighborhood data in an appraisal is used to:

a. identify comparable properties for analysis (sales comparison approach)
b. identify value influences that affect the subject property
c. support the appraiser’s estimate of value
d. all of the above
96. Off-site improvements that are relevant to a site description include:
a. streets
b. neighborhood utilities
c. storm sewers
d. all of the above
97. In an appraisal of residential property, building data would NOT be used to:
a. determine highest and best use of the land as if vacant
b. adjust the sales prices of comparable properties (sales comparison approach)
c. estimate reproduction cost or replacement cost in the cost approach to value
d. identify comparable properties for analysis

98.The most reliable building data for the subject property is acquired by:
a. reviewing the plans and specifications
b. interviewing the property owner
c. personal inspection
d. reviewing previous appraisal report on the property
99. The sales price of a comparable property may need to be adjusted to account for:
a. financing terms
b. date of sale
c. building size
d. all of the above
100. If market interest rates are 8%, and a comparable property is sold with seller financing at 6%, the price paid
for the comparable property is likely to be:
a. higher than market value
b. lower than market value
c. the same as market value
d. none of the above

1. Which principle of value suggests that the maximum value of a property generally cannot exceed the cost of
its replacement?
a. Balance c. Anticipation
b. Substitution d. Opportunity cost
2. Which of the following statements is NOT true in regard to real estate markets?
a. Price is seldom equal to value
b. Supply and demand are seldom in balance
c. Supply adjusts more quickly than demand
d. There are many government regulations
3. The term absorption rate refers to:

a. An estimate of the expected annual sales or new occupancy of a particular type of land use.
b. An estimate of the rate at which a type of real estate space will be sold or occupied.
c. The rate at which the cash flows from a property will cover the initial investment in the property
d. The rate of return used to convert future payments into present cash values?
4. Which of the following explanations would be the BEST definition of market value?
a. Value to a typical investor
b. Value to any investor who is willing to purchase the property in the open market
c. Value to a typical seller
d. Value to the user who pays market rent
5. The term market value is MOST closely associated with which of the following value concepts?
a. Highest sales price c. Value in use
b. Value in exchange d. Assessed value
6. Which of the following economic principles BEST explains the occurrence of locational obsolescence
resulting from a change in surrounding land use?
a. Anticipation c. Contribution
b. Conformity d. Substitution
7. What economic principle suggests that the value of property is created and maintained when there is
equilibrium in the supply, demand, and location of real estate?
a. Balance c. Substitution
b. Equilibrium d. Surplus productivity
8. Which of the following land uses would NOT be considered a single purpose property?
a. Nuclear power plant c. Golf course
b. Grain elevator d. Cemetery
9. Normally, the amount of money a lender will agree to lend against a specific parcel of real estate is based on
which of the following prices or values?
a. Contract price
b. Appraised value
c. Contract price or appraised value, whichever is less
d. Assessed value

10. The legal ownership rights in real estate are limited by all of the following conditions EXCEPT:
a. Private voluntary restrictions such as deed restrictions
b. The law of nuisance
c. Supply of real estate in the marketplace
d. Public limitations such as eminent domain
11. The real property in a condominium form of ownership in severalty is referred to as:
a. Unit c. Limited common area
b. Common area d. Cooperative
12. Property taxes levied by local governments are normally referred to as ad valorem taxes. The term ad
valorem means:
a. Ability to pay c. According to most likely sales price
b. According to value d. Ability to collect the tax
13. If a commercial use such as retail store is permitted to remain in business following a zoning change to
residential use, the owner is said to have received a:
a. Variance c. Local exception
b. Nonconforming use d. Buffer zone use
14. A hectare of land contains ___________ square meters

a. 10,000 c. 100,000
b. 1,000 d. 1,000,000
15. A fixture such as a permanent bookcase or wall-to-wall carpeting is legally treated as:
a. Personality c. Intangible property
b. Realty d. Personal property
16. When a real estate is put up as a collateral for a loan, the borrower is known as the ____________ and the
lender is known as the ___________
a. Mortgagor, mortgagee c. Mortgage, financial intermediary
b. Mortgage, mortgagor d. Agent, principal
17. The term fee simple estate refers to an estate that:

a. Has all leases at the market rate
b. Has been leased at a specified fee
c. Is not a subject to any leases
d. Is fully encumbered by leases
18. What term is used to identify recently sold or leased properties that are similar to a particular property
being evaluated and used to indicate the value for the property being appraised?
a. Subjects c. Relatives
b. Comparables d. Outliers
19. Reconciliation criteria used to estimate the final value in an appraisal include which of the following factors?
a. Appropriateness, accuracy, market evidence
b. Appropriateness, quantity of evidence, accuracy
c. Accuracy, differences in value, appropriateness
d. Quantity of evidence, accuracy, market value

20. In the valuation process, which of the following steps identifies the items that contribute to a concise
appraisal completed in a thorough and efficient manner?
a. Definition of the problem
b. Data collection and analysis
c. Highest and best use analysis
d. Reconciliation
21. A common phrase included in all real estate appraisal forms includes the use of the “as of” date. Normally,
the “as of” date in an appraisal report refers to the date:
a. The appraisal assignment was accepted
b. The appraisal assignment is to be delivered
c. Of the last inspection
d. The loan is to close
22. In using the sales comparison approach, the appraiser finds that one of the comparables is superior to the
subject property in terms of location. In this event what adjustment will be made?
a. The comparable will be adjusted upward
b. The comparable will be adjusted downward
c. The subject property will be adjusted upward
d. The subject property will be adjusted downward
23. Normally, the comparable sales approach would be considered the MOST reliable when which of the
following conditions exist?
a. The property is new and unoccupied
b. A high rate of inflation exists
c. Obsolescence must be measured
d. Access to reliable market data exists
24. Your appraisal assignment involves the estimation of value for a 10 meter by 18 meter parcel of land. You
have identified and examined 10 comparables that are similar to the subject property except for size
differentials. You have developed a simple linear regression equation in which sales price (expressed in
thousands of pesos) is the dependent variable and size (expressed in square meters) is the independent
variable. The equation you have developed is Y₍ = 180,000 + 1,000 (x). using this equation and the
information given, what is the indicated sales price for the subject property?
a. Php180,000 c. Php280,000
b. Php360,000 d. Php435,000 180K + (1000 x (10 x 18))
25. In appraising a property, the appraiser identifies a similar property that appears to be a very good
comparable. The appraiser finds that when the comparable sold, very favorable financing was part of the
sale. In regard to the comparable, what is the appropriate action?
a. Not use the sale under any condition
b. Give the sale less weight than any of the other comparables
c. Adjust the sales price for cash equivalency and explain
d. Do nothing because the comparable sold and thus represents normal market activity
26. The portion of land that is NOT necessary for the existing improvement is referred to as:
a. Over improved land c. Useless land
b. Excess land d. Under improved land

27. The term site refers to:
a. Land that has been improved
b. Land within a certain set of boundaries
c. A legal description of a plot of land
d. Raw land with no improvements
28. _____________ is the estimated cost at current price to construct an exact replica of the building using the
same standards, materials, design, and lay out and including any deficiencies, super adequacies, and
obsolescence as the subject building.
a. Replacement cost c. Reproduction cost
b. Unit-in-place cost d. Market cost
29. The cost approach to value is generally MOST accurate when which of the following situations exists?
a. The building is old and suffers from a great deal of depreciation
b. The building is new and is being used under its highest and best use
c. The building is old and reproduction or replacement cost is not known
d. A vacant tract of land is being appraised
30. In the appraisal of real estate, the necessary step taken by the appraiser of valuing the land as if vacant is
part of which approach to value?
a. Cost c. Income capitalization
b. Sales comparison d. Gross rent multiplier
31. Which of the following statement is CORRECT in regard to estimating the value of residential real estate?
a. The highest and best use of a site with a newly constructed house property located on the site is
always its present value
b. The total area of a single family residence for purpose of using the cost approach to value is
calculated by summing the interior and the exterior areas of the structure
c. A newly constructed house cannot suffer from any type of depreciation
d. Total accrued depreciation is a loss in value from all causes
32. Super adequacies that might exist in a structure would be recognized and included in which of the following
types of depreciation?
a. Physical deterioration c. Economic obsolescence
b. Functional obsolescence d. Locational obsolescence
33. A house being appraised has a total living area of 50 square meters. For a house of similar construction
quality, national cost service indicates a cost of Php15,000 per square meter. The locational multiplier is .95.
The cost figures are five months old and the appraiser estimates that construction costs have increased 5
percent during this period. What is the current estimated replacement cost of this house?
a. Php712,425 c. Php 784,500.00
b. Php748,125 d. Php 874,000.00
34. The method of estimating total replacement cost of a building that measures the total floor area and
multiplies this total by the current cost per square meter is referred to as which of the following methods?
a. Comparative unit method c. Unit in place method
b. Builder’s method d. Quantity survey method
35. The term amortization refers to:

a. An increase in value of the property
b. A decrease in value of the property
c. Periodic repayment of debt
d. Assessment of property for tax purposes

36. The amount of debt payment due on a loan is a function of the amount borrowed, the interest charged, and
the term of the loan. In regard to the term, which of the following statement is CORRECT?
a. The longer the term, the greater the periodic payment
b. The longer the term, the less the periodic payment
c. The longer the term, the higher the interest rate charged and thus the higher payment
d. The longer the term, the lower the interest rate charged and thus the higher the employment
37. You have collected the following data on a comparable property, which you plan to use in estimating the
gross rent multiplier for rental properties in a neighborhood: sales price is Php1,000,000, annual rent is
Php60,000, annual property taxes is Php9,000, monthly mortgage payment is Php7,150.
What is the monthly gross rent multiplier indicated by this property?

a. 100 c. 150
b. 125 d. 200
38. When payments on a loan are not sufficient to cover the interest on a loan, which of the following results is
applicable?
a. The loan has negative amortization
b. The loan will never get repaid
c. The loan has a debt coverage ratio less than one
d. The loan is a reverse annuity mortgage
39. A reversion can follow which of the following types of legal estates?
a. Leasehold c. Tenancy in common
b. Fee simple d. Fee simple absolute
40. Which of the following statements would be CORRECT if contract rent is likely to exceed market rent for the
term of the lease?
a. The leasehold estate is not likely to have any value
b. The leased fee estate is probably less valuable than a fee simple estate in the property
c. The leasehold interest will be greater than the fee simple value
d. The leasehold value is not affected by the contract rent
41. Which of the following terms refers to a lease used to sublease a property?
a. Blanket lease c. Sandwich lease
b. Subordinated lease d. Double lease
42. Which of the following reasons is often given as a weakness or disadvantage of using the sales comparison
approach?
a. The market may be too active
b. There may be so many sales that the appraiser cannot find comparables
c. The sales comparison approach is based on historical information or offerings in the market
d. A competitive and knowledgeable market may exist
43. Which principle of value suggests that the value of a property is equal to the present value of the property’s
projected-income?
a. Balance c. Opportunity cost
b. Anticipation d. Substitution
44. What term applies to the difference between the purchase price and the net proceeds from any mortgage
(s) used to purchase property?
a. Asset c. Capital gains tax
b. Reversion d. Equity

45. The relationship of a property to other properties in terms of time and distance preferences is referred to
as:
a. Linkage c. District
b. Externality d. Neighborhood
46. The demand for new homes in a market area is estimated to be 500 per year. Developer Abel’s new
subdivision, when completed, is expected to capture 10 percent of the market. Therefore Abel’s subdivision
has an expected absorption rate of:
a. 50 percent c. 50 homes per year
b. 5 percent d. 10 homes per year
47. The market value of a property and the selling price of that same property could be equal under which of
the following conditions?
a. They are always equal
b. They are never equal
c. They are sometimes equal
d. They are only equal with rental property
48. Which of the following economic principles is the underlying justification as to why the adjustment process
is used in the sales comparison (market) approach?
a. Anticipation c. Highest and best use
b. Contribution d. Opportunity cost
49. ____________ refers to that possible and legal use of land that will preserve the land’s utility and generate
a net income that forms, when capitalized, the greatest present value of the land.
a. Linkage c. Market value
b. Present value d. Highest and best-use
50. The primary difference between a straight-term (interest-only) mortgage and a fully amortized mortgage is
in the:
a. Loan-to-value ratio c. Length of the loan
b. Interest rate d. Method of principal repayment
51. In regard to an easement, which of the following statement is CORRECT?

a. An easement is a personal property right rather than a real property right
b. An easement must always be in writing
c. An easement, once created, becomes a life estate
d. An easement may be terminated once the purpose for which it was created no longer exists
52. An irregularly shaped lot is located in an area where the zoning setback requirement of 1.5 meters would
result in a planned building not properly fitting on the lot. To seek relief from the harshness of this
requirement, the owner may seek what type of adjustment from the local authority?
a. Nonconforming use c. Variance
b. Exception d. Special-use permit
53. In referring to various parties in a deed, the grantee is the:

a. Seller c. Broker
b. Buyer d. Escrow agent
54. The walls located between two condominium units are normally considered:
a. Individual unit elements c. Public elements
b. Limited common elements d. Proprietary lease elements

55. In determining whether an item is real property, which of the following test is NORMALLY considered?
a. Manner of attachment, intention of the party who made the attachment, purpose for which the
item is used
b. Manner of attachment, age of the item, cost of the item
c. Number of the items in question, current market value, purpose for which the item is used
d. Actual owner, cost of the item, current market value
56. The private rights and privileges of real property ownership are limited by what four powers of
government?
a. Police power, eminent domain, taxation, escheat
b. Police power, adverse possession, taxation, escheat
c. Eminent domain, zoning, condemnation, taxation
d. Zoning, police power, escheat, adverse possession
57. A written instrument, usually under seal, conveying some property interest from a grantor to a grantee is a
common definition of which of the following?
a. Mortgage c. Deed
b. Lease d. Sales contract
58. A current land use that existed prior to the establishment of a zoning district and is NOT consistent with the
current restrictions imposed on land uses in that district is called a(n):
a. Variance c. Illegal use
b. Nonconforming use d. Transitional use
59. In the valuation process, when does the reconciliation of value indications to a final value estimate take
place?
a. After completing of each approach
b. After completion of all three approaches
c. After the legal description is complete
d. Periodically during the appraisal process
60. Which of the following statement is CORRECT in regard to the range of value used in the final value
estimate?
a. There should be a single point estimate, not a range of values
b. A good range in values is plus or minus 5 percent
c. The range of value depends on the precision associated with the estimates and the confidence the
appraiser has in the value
d. The price should be given in whole numbers
61. Comparing the physical components of the subject property with those of comparable properties is part of
what step in the appraisal process?
a. Defining the problem
b. Collecting the data
c. Analyzing data via the sales comparison approach
d. Reconciling the value approaches
62. Which of the following guidelines is the PRIMARY one that should be followed by an appraiser in regard to
the collection and analysis of data used in the appraisal process?
a. They should be limited to public land record
b. They should be primary data only
c. They should be current
d. They should have a bearing or influence on the estimate of value

63. The valuation process has numerous steps that should be followed. Which of the following steps is NOT a
normally acceptable one undertaken by an appraiser in the appraisal process?
b. Collection and analysis of data
c. Averaging of the three approaches to value
d. Report of the defined value
64. Which of the following statements BEST describes how the adjustment process is used in the comparable
sales approach?
a. The subject property is adjusted to the comparables to make it as similar as possible
b. The comparables are adjusted to the subject property to make them as similar as possible
c. The subject property is valued using its highest and best use
d. Accrued depreciation is subtracted from replacement cost to estimate the value of the subject
property
65. Numerous elements of comparison are used by appraisers in the sales comparison approach. Which of the
following elements is NOT one that should be employed in this approach?
a. Conditions of sale c. Cost
b. Property rights being conveyed d. Location
66. For functional obsolescence to be curable, the:

a. Cost of replacing the feature must be less than the value of the feature
b. Feature as improved must contribute to the income of the property
c. Cost of replacing the feature must be the same as or less than the anticipated increase in value
d. Contribution of the improved feature to the income of the property must be greater than the cost to
install it
67. The term frontage refers to the:

a. Curb length along the perimeter of a property
b. Width of a site
c. Linear distance of a piece of land along a lake, river, street or highway
d. Distance between the front of a site and the back of the site
68. A residential neighborhood may suffer from economic obsolescence as a result of which of the following
conditions?
a. An increase in mortgage interest rates
b. Expansion of an airport runway on an adjoining property
c. Highest and best use of the surrounding land
d. A decrease in the millage rate used to calculate property taxes
69. A lot measuring 10 meters by 21 meters costs Php315,000. At the same rate per square meter, what would
a lot measuring 12.5 meters by 25 meter cost?
a. Php312,500 c. Php393,750
b. Php315,000 d. Php468,750
Solution: 315K / 10 x 21 = 1500; 12.5 x 25 = 312.50 x 1500 = 468,750
70. Corner influence is MOST important to the appraiser under which of the following conditions?
a. Traffic flow on the road fronting the property is only one way
b. The property is zoned highway commercial
c. Access to the property is readily available
d. Investigation and analysis show concerns to be more valuable

71. A house with a total living area of 100 square meters would cost Php10,000 per square meter to reproduce
new. It has an expected economic life of 50 years and is estimated to have an effective age of five years. The
lot has a market value of Php2,500,000. What is the estimated value of the property using the cost
approach?
a. Php4,000,000 c. Php 3,400,000
b. Php2,600,000 d. Php 3,500,000
72. In regard to various statistical test undertaken by appraisers, which of the following statements is CORRECT
with respect to the median?
a. The median and the mode are always the same
b. The median is the most commonly occurring value in a group
c. The median is the middle value in a group
d. The median is always greater than the mean
73. The term ground lease applies to what type of lease?

a. A lease that applies to the ground floor of a structure
b. Any lease that includes land
c. A lease allowing something to be removed from the land
d. A lease that applies to the land only
74. A comparable property sold six months ago for Php1,250,000. Market investigation indicates the following:
Location adjustment: +5 percent
Time adjustment: +6 percent
Age adjustment: -7 percent
Given the above information, what is the indicated value based on the comparable property?
a. Php1,232,250 c. Php 1,300,000
b. Php1,293,860 d. Php 1,325,000
75. Data obtained from published sources are referred to as:

a. Primary data c. General data
b. Secondary data d. Specific data
76. Market rental rates tend to be set at the rate that prevails for equally desirable space. This is a reflection of
what appraisal principle?
a. Anticipation c. Substitution
b. Balance d. Competition
77. The process of identifying and analyzing submarkets of a larger market is known as:
a. Extraction c. Market segmentation
b. Market allocation d. Substitution
78. When a property’s highest and best use is in a stage of transition, which of the following action is required
of the appraiser?
a. Consider interim use
b. Ignore interim use
c. Consider interim use only if it results in a higher value
d. Consider interim use only if it results in a lower value
79. The common areas in a condominium project normally are owned by whom?
a. The developer
b. The homeowners association
c. Each individual unit owner
d. The board of directors of the homeowner’s association

80. A strip of land used to separate two adjoining parcels of land that have incompatible uses, such as a
residential subdivision and an industrial park, is referred to as a:
a. Buffer zone c. Nonconforming use
b. Planned unit development d. Variance
81. In appraising a condominium, an appraiser should consider the following approach(es) to value:
a. Cost approach c. Income comparison
b. Sales comparison approach d. All three approaches
82. Which of the following statements is CORRECT for the purpose of estimating vacancy rates in an appraisal
used to estimate the value of a fee simple estate?
a. Projects that are the highest and best use of the site normally would have no vacancy
b. The vacancy rate used in an appraisal normally should be the vacancy rate currently experiences by
the project
c. The vacancy rate used in an appraisal should reflect the typical vacancy rate for comparable
properties
d. The vacancy rate should never be zero
83. As the degree of risk and uncertainty associated with the income potential of property increases, the
income generated by that property may be capitalized at a higher rate. This action will bring about which of
the following results?
a. A higher capitalization rate will mean a higher value
b. A higher capitalization rate will mean a lower value
c. A change in the capitalization rate will have no bearing on the estimate of value
d. A change in the capitalization rate will have an effect on value only if the property is being used under
its highest and best use
84. An office building has 1,000 square meters of net leasable space. The owner has an annual mortgage
payment of Php750,000 and expects operating expenses to be Php250,000. If the owner wants a before-tax
cash flow of Php500,000, what should the gross rent per square meter be on a monthly basis?
a. Php100 c. Php 150
b. Php125 d. Php 1,500
85. Demand is one of the essential elements or characteristics of value, however, for demand to influence value
there must also be
a. Purchasing power c. An adequate supply
b. Need d. Good sales technique
86. Which of the following calculations is NOT a type of yield rate?

a. Internal rate of return c. Overall capitalization rate
b. Discount rate d. Interest rate
87. What information is NOT needed to apply the building residual technique?
a. Building value c. Net operating income
b. Land value d. Land and building capitalization rates
88. What term used to denote the difference, if any, between the present value of expected benefits, or
positive cash flows, and the present value of capital outlays, or negative cash flows?
a. Profitability index c. Internal rate of return
b. Net present value d. Net cash flow

89. Given the following information:
Building capitalization rate: 0.11
Land capitalization rate: 0.09
Land value as a percent of total value: 35 percent
What is the overall capitalization rate by using the band of investment approach?
a. 0.097 c. 0.103
b. 0.100 d. 0.110
90. Given the following information, what is the building capitalization rate for the subject property?
Land value: Php600,000 NOI - P250,000
Net operating income Php250,000 Inc. to land - 48,000
Land capitalization rate: 8 percent Inc. to bldg - P 202,000
Overall capitalization rate: 9 percent
a. 10.9 percent c. 8.4 percent

b. 9.3 percent d. 8.8 percent
91. If a property has a net income ratio of .75 and gross income multiplier of 9, what is the indicated overall
capitalization rate?
a. 2.78 percent c. 8.33 percent
b. 6.75 percent d. 12.00 percent
92. The term holding period usually refers to the:

a. Time span in which improvements continue to contribute to value
b. Period of time over which net income remains greater than operating expense
c. Time span of ownership
d. Period of time that has elapsed since construction of the improvements
93. Capitalization is the process of:

a. Forecasting future yields of a property
b. Calculating value from price
c. Deducting expenses to find net assets
d. Converting income into a value indication
94. Which of the following statements BEST describes the amount of adjustment an appraiser should make for
vacancy allowance in a property?
a. 5 percent of gross income
b. 1 percent for each year the property has been rented
c. Somewhere between 5 percent and 10 percent
d. The amount will vary with each property
95. Which of the following returns would be included in the capitalization rate established by the appraiser for a
property with a declining value and a constant land value?
a. Return on the land and building
b. Return on the land and building and recapture of the building
c. Return on the land and building and recapture of the land and building
d. Return on the land and building and recapture of the land
96. In addition to the income generated by rents, what else does the income approach always require the
appraiser to analyze?
a. Total debt service c. Operating expenses
b. Pretax cash flow d. After-tax cash flow

97. A 10-unit apartment complex has been purchased for Php25,000,000. A 75 percent loan has been obtained.
Vacancy allowance, operating expenses, reserve accounts, and debt service equal Php2,375,000 annually.
How much must each unit rent for monthly to generate a 10-percent dividend rate?
a. P23,750 c. P25,000.00
b. P24,000 d. P30,000.00
98. The mathematical process of converting investment inflows or an income stream into a present value is
commonly referred to as:
a. Compounding c. Amortization
b. Discounting d. Equity reduction
99. In analyzing the market by using a gross rent multiplier (GRM) technique, value is estimated by doing which
of the following?
a. Dividing market rent by gross rent multiplier
b. Dividing market rent by net income
c. Multiplying operating expenses by gross rent multiplier
d. Multiplying market rent by gross rent multiplier
100. Which of the following statement is MOST descriptive of what occurs with a capitalization rate used in the
income approach to value?
a. The capitalization rate increases when the risk increases
b. The capitalization rate decreases when the risk increases
c. The capitalization rate increases when the risk decreases
d. The capitalization rate remains the same as long as there is positive net income
101. A set of percentages indicating the proportion of site value attributable to each additional amount of depth
in the lot is referred to as:
a. Depth tables c. Plottage
b. Multiplication tables d. Grid
102. Risk due to the use of dept financing is referred to as:

a. Interest risk c. Leverage risk
b. Financial risk d. Equity risk
103. A large national tenant that occupies space in a shopping center is often referred to as a(n):
a. Discount tenant c. Department store
b. Anchor tenant d. Mall tenant
104. Which of the following conditions is NOT a basic assumption in the definition of market value?
a. The seller receives cash or its equivalent
b. Both the buyer and the seller are knowledgeable about current market conditions
c. The value will be as of a specific date
d. The property will sell promptly
105. Which of the following conditions is assumed in the normal definition of market value?
a. The stated value is a of a future date
b. The property will sell promptly
c. Payment will be made in cash or its equivalent
d. Only the buyer is knowledgeable as to the potential uses of the property.

106. In considering the highest and best use of a parcel of land to be improved with an office building, the
appraiser determines the optimal land to building ratio for the parcel. Which of the following economic
principles does this illustrate?
b. Balance d. Substitution
107. An existing site has an improvement on it such as a building. Which of the following statements BEST
describes the highest and best use of that site?
a. It cannot be determined
b. It is automatically the current use since the site is improved
c. It may be different from the current use
d. If the improvement is a residence, then the land does not have a highest and best use
108. A tax assessment is intended to accomplish which of the following results?

a. Set the maximum price paid at a foreclosure sale
b. Establish the asking price of property when listed for sale by the owner
c. Aid the determination of how much property tax is due
d. Determine market value
109. The process of changing the use of a building from an apartment complex to a condominium form of
ownership is normally referred to as a (n):
a. Conversion c. Interim use
b. Proration d. Variance
110. In regard to zoning, which of the following statement is CORRECT?

a. Zoning ordinances are always more restrictive than deed restrictions
b. A nonconforming use and a variance refer to the same thing
c. Zoning normally establishes land-use districts and provides for different restrictions within each
district
d. Exclusionary zoning and spot zoning refer to the same thing
111. The extension of some improvements or object, such as a building or driveway, across the legal boundary of
an adjoining tract of land is referred to as a (n):
a. Easement c. Encroachment
b. Emblements d. Profit
112. The legal right of the state to acquire property of a decedent who died without a will and without heirs is
referred to as what?
a. Eminent domain c. Dedication
b. Escheat d. Devise
113. Cost and value are MOST likely to be similar under which of the following conditions?
a. The property is new c. The property is special purpose
b. The property is small d. The property has no deferred maintenance
114. Highest and best use analysis is used to determine which of the following factors
a. The type of property to put on a site
b. The amount of capital to invest in a site for improvements
c. Whether any existing building on a site should be demolished
d. All of the above

115. Which of the following valuation concepts is indicative of special purpose properties, such as churches or
schools, when the continuation of the special use is assumed?
a. Value in exchange c. Value in perpetuity
b. Value in use d. Book value
116. Which of the following explanation BEST describes the term market place?
a. The amount of money actually paid in a transaction
b. The amount of the loan
c. The amount of money necessary to replace the property
d. Same term as market value
117. What economic principles is BEST illustrated when anappraiser concludes that modernization of the plumbing
system in the subject property will increase the value of the property by more than the cost of modernization?
b. Balance d. Substitution
118. Which of the following statements is CORRECT in regard to the highest and best use of a parcel of land?
a. Unimproved land does not have a highest and best use.
b. If the improvement to the land is a house, then the highest and best use is always residential.
c. The highest and best use can change over time.
d. Highest and best use is strictly an economic concept and is not influenced by physical and legal
considerations.
119. The total loan payment made on a parcel of real estate during any one year is generally referred to as:
a. Debt service c. Mortgage constant
b. Equity d. Cash flow
120. The test used to determine whether or not an article is a fixture depends on all of the followingconditions
EXCEPT:
a. Reasonable intent of the party attaching the object.
b. Adaptation of the object
c. Cost of the item being attached
d. Method of attachment
121. The legal estate in land that provides the highest degree or extent of ownership rights recognized by law may
be referred to by which of the following terms?
a. Fee c. Fee simple absolute
b. Fee simple d. All of the above
122. Which of the following actions is an example of the legal right of government based on police power?
a. Taxation c. Eminent domain
b. Escheat d. Zoning
123. In avoluntary conveyance of real estate, the _____________conveys the title to the property and
the______________receives the title.
a. Grantor, grantee c. Owner, seller
b. Grantee, grantor d. Grantee, grantor
125. All legal rights, such as riparianrights or easements, that “go with the land” when title to the land is
transferred are known as:
a. Encroachments c. Appurtenances
b. Seizings d. Easements

126. Numerous public andprivate limitations are placed on real property. Some are voluntary and others are
involuntary. Which of the following limitations is NOT an example of a private involuntary limitation?
a. Encroachment c. Mechanics lien
b. Adverse possession d. Deed restriction
127. Reference to a plat map would be made in which of the following legal description
methods?
a. Lot and block c. Street address
b. Rectangular survey d. Monuments
128. Which of the following terms refers to the right of a person who owns a property free and clear of any
leases?
a. Leased fee estate c. Fee simple estate
b. Leasehold estate d. Lessee’s estate
129. When a building, a part of a building, or an obstruction physically intrudes, overlaps, or trespasses the
property of another, this is referred to as an:
a. Escheat c. Encroachment
b. Easement d. Assemblage
130. An appraisal is best defined as:

a. An unbiased opinion of the most likely price for which a parcel of real estate would sell at a given date.
b. An unbiased opinion of the nature, quality, value or utility of an interest in real estate and related
personally
c. The process of developing an opinion as to market value or other defined value of a specified interest
in a specified point in time.
d. The process of studying the nature, quality, or utility of an interest in real estate in which a value
estimate is not necessarily required.
131. In the appraisal process, the property being appraised is referred to as the:
a. Comparable property c. Subject property
b. Assessed property d. Appraised property
132. The appraisal process undertaken by an appraiser consists of many steps. What is the correct first step
in the appraisal process?
b. Collection and analysis of data
c. Analysis of highest and best use
d. Initial estimate of value
133. The objective of undertaking an appraisal of real estate is to:

a. Determine asking price
b. Estimate value
c. Establish loan value
d. Identify legal rights and interest that may exist
134. When an appraiser is using the sales comparison approach, one of the elements of comparison that may
have to be adjusted is often referred to as a time adjustment. What does the time adjustment provide?
a. An adjustment for the period of time between when a listing is taken on property and when the
property actually sells.
b. An adjustment between the date of sale of a comparable and the date of the appraisal to allow for
any changes over time

c. An adjustment between the listing date of a comparable sale and the date the subject property is
actually appraised
d. An adjustment for the period of time between the actual sale of a comparable for the appraisal
assignment
135. Deferred maintenance usually results in which of the following losses in value?
a. Incurable physical depreciation
b. Curable physical depreciation
c. Curable functional obsolescence
d. Curable external obsolescence
136. What terms applies to the effect on value of location or proximity to the intersection of two streets?
a. Corner influence c. Externality
b. Amenity d. Plottage
137. Functional obsolescence could be caused by which of the following?

a. A ceiling that is to high c. A poor location
b. Deferred maintenance d. A worn-out roof
138. The building cost estimate method that replicates the contractor’s development of abid, and is the
most comprehensive way to estimate building costs, is known as the:
a. Unit-in-place method c. Breakdown method
b. Quantity survey method d. Comparative unit method
139. Included in the cost approach to value is all of the following components EXCEPT:
a. Replacement cost c. Acquisition cost
b. Highest and best use of the land d. Accrued depreciation
140. In regard to accrued depreciation , which of the following terms does NOT belong together?
a. Physical deterioration-curable
b. Functional obsolescence-incurable
c. Economic obsolescence-curable
d. Functional obsolescence-curable
141. The combining of two or more into a single ownership with the value of the assembled lots being
more than the sum of the values of the individual lots is referred to as:
a. Highest and best use c. Escheat
b. Economic rent d. Plottage
142. Another term used to denote the actual age of a building is

a. Chronological age c. Economic age
b. Effective age d. Depreciated age
143. The basic capitalization formula used in the income approach to value contains three components.
Those three components are:
a. Market, cost, income c. Physical, functional, economic
b. Value, rate, income d. Potential, gross, net income
144. What is the gross income multiplier for a property with a current market value of
Php570,000 and rents for Php5,000 per month?
a. 9 c. 10
b. 9.5 d. 10.5

145.The peso amount of rent received from a parcel of real estate when rented in an open, competitive
market is referred to as:
a. Economic rent c. Ground rent
b. Contract rent d. Gross rent
146. A mortgage loan for Php300,000 at 9 percent per annum for 30 years has been made. What is the
amount of interest for the first month?
a. Php163.90 c. P2,250.00
b. Php900.00 d. P2,413.90
147. What does the range of a group of variables indicate to the appraiser?
a. The value of the highest sample
b. The difference between the lowest and the highest values
c. The average for the group
d. The percentage variation from the mean
148. Which of the following types of lease does NOT provide at least some protection to the lessor
against inflation?
a. Flat lease c. Reappraisal lease
b. Index lease d. Graduated lease
149. Which of the following statements is CORRECT in regard to assessed value?

a. The assessed value must equal the market value
b. The assessed value is used primarily to calculate property taxes
c. The assessed value is used primarily to calculate property insurance
d. The assessed value will never exceed cost
150. A father sells his home to his daughter and her husband. Such a sale would NORMALLY be
described as which of the following sales?
a. Arm’s-length sale c. Distorted sale
b. Illegal sale d. Forced sale
151. Which of the following actions is NOT characteristic of market value?

a. Sale as soon as possible c. Typical financing
b. Well informed buyers d. Typically motivated sellers
152. Which of the following factors is NOT normally considered to affect the supply of real estate?
a. Volume of new construction c. Land use and city growth
b. Standing stock d. Competition
153. What term best describes the effect of a power plant on the value of a nearby home?
a. Balance c. Contribution
b. Externalities d. Conformity
154. Which of the following appraisal principles holds that market value is indicated by the value of
another property with similar utility?
a. Supply and demand c. Competition
b. Substitution d. Balance
155. The specific use of a parcel of land that gives that land the greatest residual of income is referred
to as the land’s:
a. Intrinsic use c. Income producing use
b. Highest and best use d. Efficient use

156. The proper or most correct placement of an improvement to land, such as the construction of a
house, is normally strongly influenced by the application of which of the following economic principles?
a. Conformity c. Escheat
b. Encroachment d. Substitution
157. The term lenders often use to refer to the relative amount of money they will lend on a specific
parcel of property is known as:
a. Gross rent multiplier c. Value to loan ratio
b. Debt-to-equity ration d. Loan to value ratio
158. Effective demand in the marketplace for housing varies MOST directly with which of the following
conditions?
a. Purchasing power c. Building codes
b. Interest rates d. Building cycles
159. A worn path crosses an owner’s property. What legal doctrine would require a potential purchaser
to take note of the fact that there may be an unrecorded prescriptive easement against that property?
a. Actual notice c. Lispendens
b. Constructive notice d. Escheat
160. An individual owner of a condominium unit is in default on payment of the property taxes to the
local government. Of thefollowing choices, which is the only one legally available to the taxing authority?
a. Levy the tax on the entire condominium project
b. Foreclose against the individual unit
c. Place a lien on the common areas
d. Foreclose against the homeowners’ association
161. The legal right of government to acquire private property for a public use or purpose with just compensation
is known as:
a. Police power c. Condemnation
b. Eminent domain d. Escheat
162. In regard to the legal concept of land, what is a landowner entitled to in addition to the surface rights?
a. Nothing
b. Air rights only
c. Everything below the surface only
d. Everything above and below the surface
163. The term real estate is generally

a. Air and subsurface rights
b. Surface rights only
c. Machinery and equipment
d. Legal interests and rights inherent in ownership
164. Which of the following activities is NOT a public limitation on real estate?
a. Building codes c. Adverse possession
b. Zoning d. Fire codes

165. If the metes-and-bounds method of legally describing land is being used, which of the following statement is
CORRECT?
a. The starting point must be a natural benchmark
b. There must be a definite point of beginning
c. Monuments cannot be used as part of the description
d. No other method, such as lot-and-block, can be used as part of the description
166. Which of the following terms refer to the legal interest belonging to a person who is leasing property from
someone else?
a. Leased fee estate c. Fee simple estate
b. Leasehold estate d. Lessee’s estate
167. Which of the following terms refers to the stages that a neighborhood goes through over time?
a. Revitalization c. Life cycle
b. Growth cycle d. Change
168. The term appraisal refers to:

a. The process of estimating the market value of a property
b. The valuation of a market and how it affects property values
c. The process of estimating the most likely sales price of a property
d. The act or process of developing an opinion of value
169. The date of valuation for an appraisal is determined by which of the following?
a. The actual date the appraisal is signed
b. The date the appraisal assignment is accepted
c. The date the property is actually inspected
d. Whatever date is specified in the appraisal report
170. What is the PRIMARY purpose of economic base analysis?

a. To forecast future economic growth in an area and divide that growth between basic and
non-basic industries
b. To forecast changes in local zoning ordinances
c. To determine property tax rates and the likely amount of taxes due on property
d. To forecast inflation rates
171. In using the sales comparison approach, the appraiser finds that in terms of location, sale #1 is superior to
the subject property but is inferior to sale #2. The correct procedure would be to adjust:
a. Both sales down to the subject property
b. Both sales up to the subject property
c. Sale #1 down and sale#2 up
d. Sale#1 up and sale #2 down
172. The adjustment in the sales comparison approach that involves comparing two properties with similar
features and characteristics but different dates of sale is referred to as the:
a. Loan closing adjustment
b. Time adjustment (market conditions)
c. Appreciation in value adjustment
d. Time value of money adjustment
173. The building cost method that finds the cost of the component parts of a building through standard cost
estimates and then adjusts for the condition of the component, time and location is known as the:
a. Unit-in-place method c. Break-down method
b. Quantity survey method d. Comparative unit method

174. Maria’s house was built 12 years ago. Because he keeps it in excellent condition, it shows only as much wear
as a typical five-year-old house. Maria’s house therefore has an effective age of:
a. 5 years c. 12 years
b. 7 years d. 17 years
175. Which of the following methods is the MOST detailed in estimating the costs of reproducing a building as part
of the cost approach to value?
a. Unit-in-place c. Comparative unit
b. Quantity survey d. Trade breakdown
176. The cost approach to value takes into consideration all of the following factors EXCEPT:
a. Value of the land
b. Replacement (reproduction) cost of the improvements
c. Original sales price
d. Physical defects
177. When using the cost approach to value, an appraiser should value the land as though:
a. It has been improved with a building
b. It is currently being used with an interim use
c. It is vacant and available for highest and best use
d. Zoning ordinances are not
178. What is the correct percentage of accrued depreciation for a 15-year old building if the building has an
effective age of 20 years and a remaining economic life of 30 years?
a. 20 percent c. 40 percent 20/ 20 +30
b. 30 percent d. 60 percent
179. What term applies to the rent specifies in a lease?

a. Base rent c. Contract rent
b. market rent d. Gross rent
180. The sales comparison approach is said to be the most reliable when which of the following market exists?
a. Active market c. Buyer’s market
b. Inactive market d. Seller’s market
181. Numerous elements should be identified when an appraiser is attempting to sue the sales comparison
approach to value. which of the following lists BEST explains those elements of comparison?
a. Demand, supply, utility, transferability
b. Physical, functional, economic, locational
c. Date of sale, location, physical condition, condition of sale
d. Location, location, location, location
182. What term is used to describe tangible and intangible factors that enhance the desirability and thus add to
the value of real estate?
a. Amenities c. Enhancements
b. Goodies d. Negative externalities
183. In the short run, which of the following conditions has the MOST effect on real estate prices?
a. More changes in demand than changes in supply
b. More changes in supply than changes in demand
c. More inflation than demand
d. More sellers than buyers

184. What term is used to describe the value to a typical investor?
a. Market value c. Sale value
b. Investment value d. Use value
185. Which of the following statements applies to a property with a nonconforming use?
a. The existing nonconforming use is the highest and best use
b. A nonconforming use is likely to arise from changes in zoning
c. A nonconforming use property may be under improved but cannot be over improved
d. In the sales comparison approach, an appraiser does not have to make a separate
adjustments for the nonconforming use
186. Owner A gives owner B an easement across A’s land to shorten the distance B has to travel to reach land he
owns. The land B owns has benefited by this easement and is known as the:
a. Dominant estate c. Lien estate
b. Servient estate d. Estate in gross
187. A description of the surface features of a parcel of land such as elevation or drainage is known as its:
a. Location c. Topography
b. Plottage d. Restrictive covenant
188. An owner of a parcel of land leases the land to a tenant for ten years. The next day the owner sells the land
to a third party. Which of the following statements is CORRECT?
a. The new owner has an option as to whether to accept the terms of the lease
b. The tenant may voluntarily terminate the lease
c. The tenant’s leasehold is not affected
d. The tenant legal interest is automatically terminated by operation of law
189. Which of the following approaches to value uses market data?

a. Income approach
b. Direct sales comparison approach
c. Cost approach
d. All three approaches
190. Which of the following estimates would result in a capitalization rate of 20 percent?
a. Potential gross income P1,000,000; value P5,000,000
b. Effective gross income P1,000,000, value P5,000,000
c. Net operating income P1,000,000, value P5,000,000
d. Cash flow P1,000,000, value P5,000,000
191. In estimating the net operating income of a building, one of the necessary steps is the calculation of “other
income”. Which of the following items is NOT considered other income?
a. Parking fees
b. Telephone switchboard services
c. TV closed-circuit connection fees
d. Escalation clauses in leases
192. A leasehold interest may be created only if the contract rent is:
a. Greater than market rent c. Less than market rent
b. Equal to market rent d. A flat rent

193. Suppose a property’s NOI and value are not expected to change over an investment holding period. What
would be the relationship between the overall rate and the property yield rate?
a. The overall rate would be less than the property yield rate
b. The overall rate would be equal to the property yield rate
c. The overall rate would be greater than the property yield rate
d. More information is required to determine the relationship between the overall rate
and the property yield rate
194. Which of the terms BEST describes a pattern of income or cash flow that is regular and predictable?
a. Reversion c. Annuity
b. Lease d. Payment
195. If a property has an overall capitalization rate of .095 and a mortgage at a 75 percent loan-to value ratio
having an annual mortgage constant of .11, what is the equity dividend rate?
a. 0.05 c. 0.07
b. 0.06 d. 0.09
196. The term effective rate refers to the:

a. Loan constant on a mortgage
b. True rate of return considering all relevant financing expenses
c. Interest rate after inflation is considered
d. Rate at which future payments are discounted to present cash flows
197. What is the present value of a 40-year net income of Php10,000 per year if payments are in advance and the
net income is discounted at a rate of 12 percent? (Factor=8.233030)
a. P82,330 c. P92,210.00
b. P82,438 d. P92,330.00
198. When a property’s vacancy and bad debts is subtracted from the property’s gross (potential) income, which
of the following incomes is derived?
a. Effective gross income c. Taxable income
b. Net operating income d. Cash flow income
199. The basic equation used in the income approach to value is:
a. Rate divided by income equals value
b. Income divided by rate equals value
c. Rate times income equals value
d. Rate plus income equals value
200. One of the standard techniques used by appraisers when analyzing the income of property is to divide the
income being generated between the land and the improvements and then to capitalize the residual income to the
improvements into a value estimate. Such a technique is referred to as the:
a. Land residual technique c. Property residual technique
b. Building residual technique d. Plottage residual technique

1. The powers of HLURB to approve subdivision plans have been devolved to local government pursuant to
________?
a. RA 7160 c. PD 957
b. BP 220 d. EO 90
2. Pursuant to Section 3 of BP 220, ________ is authorized to establish and promulgate two levels of standards
and technical requirements for the development of economic and socialized housing projects.
a. HLURB c. HUDCC
b. LGU d. SHDA
3. Under BP 220, the basic needs of human settlements in descending order are as follows:
a. Water, movement and circulation, storm drainage, solid and liquid waste disposal
b. Water, movement and circulation, storm drainage, power
c. Water, movement and circulation, power, storm drainage
d. Water, power, movement and circulation, storm drainage
4. Site preservation is one of the requirements of subdivision development under BP 220 wherein suitable trees
with a caliper diameter of _____ millimeters or more shall be preserved.
a. 100 c. 200
b. 300 d. 400
5. Under BP 220, the minimum area for land to be allocated for parks and playground should be _____% of
gross area based on 150 lots and below per hectare.
a. 2.5% c. 3.0%
b. 3.5% d. 5%
6. Under BP 220, the maximum area for land to be allocated for parks and playground should be _____% of
gross area if number of lots per hectare is above 225 lots.
a. 5.0% c. 7.0%
b. 9.0% d. 10.0%
7. Area for parks and playground under BP 220, in no case, should not be less than ____sqm.
a. 100 c. 150
b. 300 d. 350
8. Parks and playground is mandatory for BP 220 projects if gross area of subdivision is at least ________ .
a. 5,000 sqm. c. 1 hectare
b. 1.5 hectares d. 2 hectares
9. Under BP 220 projects, if saleable lots per hectare are above 225 lots, the area for community facilities should
be at least ____% per hectare.
a. 1% c. 1.5%
b. 2.0% d. 2.5%
10. Under economic housing, the minimum right-of-way for major road is ________meters.
a. 6 c. 7
b. 8 d. 10

11. Under economic housing, the maximum right-of-way for major road is ________meters.
a. 10 c. 12
b. 14 d. 15
12. Under economic housing, the minimum right-of-way for minor road is ________meters.
a. 7.0 c. 5.5
b. 6.0 d. 6.5
13. Under socialized housing, the minimum right-of-way for major road is ________meters.
a. 6 c. 7
b. 8 d. 10
14. Under socialized housing, the maximum right-of-way for major road is ________meters.
a. 10 c. 12
b. 14 d. 15
15. Under socialized housing, the minimum right-of-way for minor road is ________meters.
a. 7.0 c. 5.5
b. 6.0 d. 6.5
16. For economic housing with right-of-way of 8-meter width, the carriage way should be ____meters net
planting strip and sidewalk.
a. 7.0 c. 5.5
b. 6.0 d. 6.5
17. For socialized housing with right-of-way of 8-meter width, the carriage way should be ____meters net
planting strip and sidewalk.
a. 7.0 c. 5.5
b. 6.0 d. 6.5
18. For economic housing, the minimum lot area for single detached is ______ sqm.
a. 50 c. 60
b. 72 d. 80
19. For socialized housing, the minimum lot area for single detached is ______ sqm.
a. 50 c. 60
b. 64 d. 70
20. For economic housing, the minimum lot area for duplex and single attached is ______ sqm.
a. 50 c. 54
b. 60 d. 70
21. For socialized housing, the minimum lot area for duplex and single attached is ______ sqm.
a. 32 c. 40
b. 48 d. 50
22. For economic housing, the minimum lot area for rowhouses is ______ sqm.
a. 24 c. 30
b. 36 d. 40
23. For socialized housing, the minimum lot area for rowhouses is ______ sqm.
a. 24 c. 28
b. 30 d. 32

24. The minimum lot frontage of corner lot for economic housing single detached is _______meters.
a. 5 c. 7
b. 6 d. 8
25. The minimum lot frontage of regular lot for economic housing single detached is _____meters.
a. 5 c. 7
b. 6 d. 8
26. The minimum lot frontage of duplex for economic housing is _____meters.
a. 5 c. 7
b. 6 d. 8
27. The minimum lot frontage of rowhouse for economic housing is _____meters.
a. 3.5 c. 5
b. 6 d. 4
28. The minimum lot frontage of corner lot for socialized housing single detached is _______meters.
a. 5 c. 7
b. 6 d. 8
29. The minimum lot frontage of regular lot for socialized housing single detached is _____meters.
a. 5 c. 7
b. 6 d. 8
30. The minimum lot frontage of duplex for socialized housing is _____meters.
a. 5 c. 7
b. 6 d. 8
31. The minimum lot frontage of rowhouse for socialized housing is _____meters.
a. 3.5 c. 5
b. 6 d. 4
32. The minimum front setback for both economic and socialized housing should be _____meters.
a. 1.0 c. 1.2
b. 1.5 d. 2
33. The minimum setback for side yard for both economic and socialized housing should be _____meters from
building line.
a. 1.0 c. 1.2
b. 1.5 d. 2
34. The minimum setback at the back of the house for both economic and socialized housing should be
_____meters.
a. 1.0 c. 1.2
b. 1.5 d. 2
35. For regular rooms, if without provision for ceiling, the height from finished floor line is ______ meters.
a. 2 c. 2.2
b. 2.5 d. 2.75
36. Mezzanine floors shall have a clear ceiling height of not less than ___meters above and below it.
a. 1.6 c. 1.75
b. 1.8 d. 2

37. For BP 220 projects, minimum clear height for door should be ______meters.
a. 1.6 c. 1.75
b. 1.8 d. 2
38. For BP 220 projects, minimum clear widths for main door should be ______meters.
a. O.80 c. 0.75
b. 0.90 d. 1.0
39. For BP 220 projects, minimum clear widths for bedroom door should be ______meters.
a. O.60 c. 0.65
b. 0.70 d. 0.75
40. For BP 220 projects, minimum clear widths for bathroom door should be ______meters.
a. O.50 c. 0.55
b. 0.60 d. 0.65
41. Minimum opening of windows in relation to room floor area

a. O.05% c. 0.15%
b. 0.10% d. 0.20%
42. Minimum opening of windows in relation to room floor area

a. O.05% (1/ 20) c. 0.15%
b. 0.10% d. 0.20%
43. Minimum clear width of stairs
a. O.50 meter c. 0.65 meter
b. 0.60 meter d. 0.70 meter
44. Maximum riser height for stairs

a. O.10 meter c. 0.20 meter
b. 0.15 meter d. 0.25 meter
45. Minimum headroom clearance for stairs

a. 1.8 meters c. 1.75 meters
b. 2.0 meters d. 1.90 meters
46. Maximum height of stairs between landings

a. 3.0 meters c. 3.6 meters
b. 3.5 meters d. 3.75 meters
47. Handrails may not be provided as long as long as risers are _______ and below
a. 3 c. 5
b. 4 d. 6
48. For single attached, concrete firewall should be at least _____ inches thick.
a. 4 c. 6
b. 5 d. 7
49. Price of lot for socialized housing should not exceed ________% of the selling price.
a. 25% c. 30%
b. 40% d. 50%
50. For multi-family dwellings and condominiums, there should be one parking slot for every ____living units.
a. 6 c. 7
b. 5 d. 8


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2014 Appraiser’s CRES Batch 5 Mock Examination Part 1 (100 items)

2. The amount paid over minimum base rent in a percentage lease is

4. An index will be referred to in a(n)

5. The interest of a sublessee is a

6. In income property investments

8. Recapture generally applies to

11. The cash on cash rate is the same as the

Cesar E. Santos Real Estate Academy Inc: 1

14. Under which method are the installments highest?

15. Which recapture method suggests the greatest reduction in risk?

16. Increase in maintenance costs are passed on to tenants under a(n)

17. The average of all variates is the

18. The center of all variates is the

21. The median of the house sales prices in question 20 is

22. The aggregate of the house sales prices in question 20 is

Cesar E. Santos Real Estate Academy Inc: 2

30. The two factors considered in relation to migration are _______________.

Cesar E. Santos Real Estate Academy Inc: 3

37. In regard to zoning, which of the following statement is CORRECT?

Cesar E. Santos Real Estate Academy Inc: 4

48. Assume the following figures:

What is the property value indicated by the building residual technique?

Cesar E. Santos Real Estate Academy Inc: 5

55. An appraisal is best defined as:

Cesar E. Santos Real Estate Academy Inc: 6

66. All of the following statement are true except:

Cesar E. Santos Real Estate Academy Inc: 7

70. To estimate market value, an appraisers follows the

71. An appraisal of real estate

76. Before reconciliation the appraiser should

77. A large home built in an area of smell cottage is an example of:

Cesar E. Santos Real Estate Academy Inc: 8

84. Under the IVSC, the “C” stands for:

Cesar E. Santos Real Estate Academy Inc: 9

What is the residual income to the land?

93. Which of the following is NOT a regional value indicator

94. Neighborhood boundaries:

95. Neighborhood data in an appraisal is used to:

Cesar E. Santos Real Estate Academy Inc: 10

Cesar E. Santos Real Estate Academy Inc: 11

3. The term absorption rate refers to:

Cesar E. Santos Real Estate Academy Inc: 12

14. A hectare of land contains ___________ square meters

17. The term fee simple estate refers to an estate that:

Cesar E. Santos Real Estate Academy Inc: 13

Cesar E. Santos Real Estate Academy Inc: 14

35. The term amortization refers to:

Cesar E. Santos Real Estate Academy Inc: 15

What is the monthly gross rent multiplier indicated by this property?

Cesar E. Santos Real Estate Academy Inc: 16

51. In regard to an easement, which of the following statement is CORRECT?

53. In referring to various parties in a deed, the grantee is the:

Cesar E. Santos Real Estate Academy Inc: 17

Cesar E. Santos Real Estate Academy Inc: 18

66. For functional obsolescence to be curable, the:

67. The term frontage refers to the:

Solution: 315K / 10 x 21 = 1500; 12.5 x 25 = 312.50 x 1500 = 468,750

Cesar E. Santos Real Estate Academy Inc: 19

73. The term ground lease applies to what type of lease?