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Texas SAE Real Estate Appraisal Exam 1 2025 - 2026
With Real Exam Questions And Correct Answers/ TX
SAE Real Estate Appraisal Test 2025- 2026 (brand
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Transferability Which value-influencing DUST factor addresses the ease with which the property can be conveyed to another? Present index ÷ Index at time of construction x Original cost = Present cost To arrive at the present cost, the appraiser applies a factor that represents the costs of construction over time up to the appraisal date (present index ÷ index at time of construction) multiplied by the subject building's original cost. Which of the following formulas is used with the index method to find the reproduction cost? The same neighborhood When possible, comparable sales from ______ should be used. A parcel of land, the structures on it, and shared common areas Ownership in a planned unit development consists of ______. Unpaid taxes become a lien against the property. In what way is taxation an inherent burden on private landownership?
Deductible on her personal income tax returns As the resident in a cooperative, her share of mortgage interest and real estate taxes is deductible on personal income tax returns. Bianca wants to buy a cooperative, but she's unsure that she can afford it. With a cooperative, her share of mortgage interest and real estate taxes will be ______. The appraiser, the lender, and the consumer The Appraiser Independence Requirements protect which party or parties? 10X (100,000/10,000) Using the gross income multiplier (GIM) valuation method, a property's sales price is divided by its gross income. If a property has a sales price of $100,000 and gross income of $10,000, what is its GIM? Appraiser Which professional is hired by the buyer and lender to give an opinion of value of the property? The appraiser selects the adjusted sales price of the property most like the subject to use as the indicated value. Which of the following best describes how an appraiser reconciles the adjusted sales prices of the comparable properties to indicate the value of the subject property?
Building specifications explain the blueprint and any features that may not be visible on that building plan. Which of these is a written description of a blueprint? Ground Rent Capitalization Method (GRM) What method of land valuation converts the amount of yearly income a site will produce into a value using a capitalization rate? Complete the cost approach section of the URAR form As part of completing an appraisal using the cost approach method, what must appraisers do? Direct Capitalization Which of the following analyzes net operating income (NOI) for a single year, and is used when the property's income isn't expected to vary much over time? The _method converts a single year's expected income (or an annual average) into a market value. This is the expected return on investment the property is capable of producing in a single year: the first year of ownership. Real Property Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.
General Data The US Census Bureau is a good source of what type of data needed by appraisers? ENERGY STAR®-qualified home What's the term for certified energy-efficient homes that have met specific qualifications? Ventilation The ______ system keeps air fresh by recycling air and removing odors and pollutants. Accrued Depreciation Which part of the cost approach equation is considered the most difficult part to estimate accurately? __is considered the most difficult part of the cost approach equation to estimate accurately, partially because it can vary considerably based on specific market conditions as of the appraisal date. In addition, a buyer's measure of depreciation can also vary quite a bit, depending on the price range of homes in the local area. Anticipated future income When discounted cash flow analysis is used, what's discounted? _is discounted to a present value when this method is used.
the Appraisal Qualifications Board (AQB) While the AQB is responsible for establishing minimum licensing qualifications, states may also establish more stringent requirements. Which of the following entities is responsible for establishing minimum licensing qualifications for appraisers? The government-sponsored enterprises Fannie Mae and Freddie Mac developed the UAD to improve the quality and consistency of appraisal data for loans. The UAD defines all fields required for specific appraisal forms. What's the primary purpose of the Universal Appraisal Dataset? Real Estate Licensee Who typically performs a CMA or BPO? Built-in sandbox Fixture attached to the property Maggie, an appraiser, has been asked to do an appraisal on a specific property that has been put up for sale. Maggie is identifying fixtures in the backyard. Which of the following will she mark as a fixture in her report? yield capitalization, which is often used to value complex commercial properties. What's the name of a process that estimates future income and then applies a discount rate in order to provide an investment's present value?
State the problem The question, "What's the purpose of this appraisal?" can be answered by which step of the appraisal process? $348 ($195,000/560) (348X560) A lot with dimensions of 560 feet x 600 feet sold for $195,000. What was the cost per front foot? Some desk work and some work in the field, but no manual labor Which of these best describes an appraiser's typical work environment? Appraiser Independence Requirements Fannie Mae instituted Appraiser Independence Requirements for all federally related transactions. The ______ stipulate that an appraiser for a federally related transaction must be licensed in the state where the property is located and also be knowledgeable about the local market. Appraiser Trainee The _________ is required to perform appraisals under the supervision of an appraiser who has qualifications consistent with the type of property under appraisal. Market rent
Local, state, and federal Jarvis is a builder. The building codes that apply to Jarvis's work were established at what level (or levels) of government? Annual dollars per square foot An appraiser is comparing income from a multi-tenant office building to comparable properties, so he converts the income for each property to ______. the number of units of that component part in the subject building unit-in-place method, appraisers multiply the cost per unit of measure of each component part of the subject property's structure by the number of units of that component part in the subject building, and then add them together to determine the total reproduction cost. To determine the total reproduction cost of a subject building using the unit-in-place method, an appraiser multiplies the cost per unit of measure of each component part of the subject property's structure by the ______ and then adds them together. The expected rate of return on investment A capitalization rate is the expected rate of return on an investment, and can be calculated using the formula of net operating income ÷ value = rate (NOI ÷ V = R). What is a capitalization rate? Income approach When an appraiser analyzes a property's ability to earn future income, which appraisal approach is the appraiser using?
62.5 (250X.25)
What's 25% of 250? Abstraction method Total sales price - cost of improvements less depreciation = land value which is sometimes used for large parcels of land when there are few or no comparable sales available. It's not considered as accurate as the sales comparison method. What method of land valuation uses the following calculation? Total sales price - cost of improvements less depreciation = land value The market values the view from the subject property more. Looking at the sales comparison section of the URAR, you see that "+$5,000" has been noted next to the description of the view for comparable property A. Assuming that this is an accurate adjustment, which of the following statements is true? 1/3 (2X5=10 5X6=30 10/30) What's 2/5 x 5/6? Market extraction Mel is estimating the value of a depreciated item using comparable properties' sales prices. Which method is Mel using to measure depreciation?
Net operating income ÷ value = rate (Or, in simpler terms, NOI ÷ V = R) Capitalization Rate the appraiser will analyze the value-to-income ratio for a comparable property, then apply the same capitalization rate to the subject property's net income to calculate the value using the following formula: Capitalization Rates and Risk Lower-risk investments are more sought after, and are valued higher than their high-risk counterparts. So, an investment with a higher capitalization rate involves higher risk, which results in a lower value and a lower selling price. Similarly, an investment with a lower capitalization rate involves lower (or less) risk, which results in a higher value and a higher selling price. 13% capitalization rate ($90,000 ÷ $700,000 = 0.13) (NOI ÷ V = R) The net operating income of a potential investment property is $100,000. A comparable property sold recently for $700,000. It had an NOI of $90,000. What's the capitalization rate? NOI ÷ R = V NOI (net operating income) ÷ capitalization rate (R) = value (V) To calculate value using direct capitalization, use this formula: NOI ÷ R = V or $100,000 ÷ .10 = $1,000,000 value for subject property
An appraisal has determined that the net operating income of a potential investment property is $100,000. A comparable property sold recently for $900,000, which had an NOI of $90,000. The capitalization rate was computed to be 10% using NOI ÷ V = R ($90,000 ÷ $900,000 = .10). To find the value of the subject property using direct capitalization: $461,538 (The formula is $60,000 ÷ .13.) An appraiser is using the direct capitalization method to value an investment property, using the following figures: Net operating income = $60, Capitalization rate = 13% Using the formula of NOI ÷ R = V, what's the market value? Yield Capitalization Method future income estimates are calculated and then a discount rate is applied to future income. The discount rate converts the future income to a present value, which is what it's worth to an investor today. Yield Capitalization is often used to value complex commercial properties like office complexes, shopping centers, or other investments that may take years to become stabilized. Discounted Cash Flow Analysis is a method of yield capitalization commonly used to value investments or investment properties.
- To calculate the total property value, add the land value and the building value together. Note: The appraiser calculates an annual amount needed to cover the expected replacement of structures and systems that will eventually wear out. This is called the reserves for replacement. 10 - unit apartment building is being appraised. The annual NOI is $50,000. The value of the land is $75,000 and the land capitalization rate is 8%. The building capitalization rate is 12%. Building Residual Formula To calculate the total property value, add the land value and the building value together. 1.Land value x land cap rate = land NOI $75,000 x 0.08 = $6,000 (In other words, $6,000 of the property's NOI can be attributed to the land.)
- Total NOI - land NOI = building NOI $50,000 - $6,000 = $44,000 (In other words, $44,000 of the property's NOI can be attributed to the building.)
- Building NOI ÷ building cap rate = building value $44,000 ÷ 0.12 = $366,
- Land value + building value = total property value $75,000 + $366,667 = $441, Land Residual Technique estimates the land's value based on how much of the total NOI can be attributed to the land itself. It's used when the building value is known, and the land value is unknown. To use this method, the appraiser must know: The building's value The land capitalization rate and building (aka improvements) capitalization rate (based on market estimates) The amount of NOI the property generates in a year
Building residential technique If the value of the land is known, but the value of the building isn't, which residual income technique would be used? income approach An approach to determining value used for investment properties based on the income it will produce Ex. Appraisers will use the income approach to value for commercial buildings and multifamily residential. It is seldom used for owner-occupied, single-family residential. The formula for the square-foot method is: (Gross living area x Cost per square foot) + Cost of the non-living areas + Cost of improvements = Reproduction cost new. Index Method the appraiser applies a factor that represents the construction costs, up to the appraisal date, to the subject building's original cost. Unit-in-place method appraisers multiply the cost per unit of measure of each component part of the subject property's structure by the number of units of that component part. They're then added to find the total reproduction cost.
An Appraiser must know every facet of building construction because each stage of the construction is broken down into separate costs for the materials and labor (known as direct costs). The appraiser must know both the cost of the materials and the cost of labor for the number of hours each stage will take. Indirect costs, the costs involved in non-construction-related, but still necessary expenses—including permits, surveys, the builder's overhead and profit, and payroll taxes—must also be added to the calculations. One final item that's usually included within the construction costs is the entrepreneurial profit (the developer's profit). the profit associated with the development function is a separate line item than the contractor's profit and other indirect costs. Because the development and management functions involved in major construction projects may be broken down into areas of specialization or even handled by a construction management firm, The amount of the entrepreneurial profit depends on the project's success. Assuming the project is a success, the entrepreneurial profit can be estimated in a variety of ways, depending on the market practice. Reproduction cost is the cost to construct the exact duplicate of the subject property at the current costs as of the appraisal date. Replacement cost is the current cost to construct a building with the same usefulness as the subject building.
Appraiser Qualifications Board (AQB) establishes minimum education and experience requirements. Appraiser trainees minimum federal qualifications states may establish more stringent requirements. Appraisers must be licensed in the state where they work. Must have minimum of 75 hours of appraisal education. No experience required experience is acquired under supervision by a certified residential or certified general appraiser. Scope of practice Any property that the supervising appraiser is qualified to appraise Licensed Real Property Appraiser 150 hours of appraiser courses, including the trainee curriculum; associate's degree or higher, or 30 credit hours of college-level education. Minimum of 1,000 hours of applicable experience obtained over at least 6 months. Residential only; one- to four-unit properties valued up to $1 million; no complexities; complex one- to four-unit properties valued at up to $250, Certified Residential Real Property Appraiser minimum qualifications 200 hours consisting of 150 hours licensed real property curriculum, plus an additional 50 hours of required courses; bachelor's degree or higher in any subject Minimum of 1,500 hours of applicable experience obtained over at least 12 months
