COMPREHENSIVE

REVIEWER AND REFRESHER

LICENSURE EXAMINATION FOR
REAL ESTATE APPRAISER (REA)

ALL RIGHTS RESERVE

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

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Foreword

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

The state recognizes the vital role of Real Estate Service practitioners
in the social, Political, economic development and progress of the
country by promoting the real estate market, simulating economic
activity and enhancing government income from real property based-
transactions, hence, it shall develop and nurture through proper and
effective regulation and supervision a corps of technically competent,
responsible and respected professional real estate service
practitioners whose standards of practice and service shall be globally
competitive and will promote the growth of real estate industry (Rule
1, sec. 2 of the IRR of RA 9646)

To pass any kind of examinations, a thorough study and preparation is

very important indeed.

The Authors

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EXAMINATION TIPS AND HELPFUL STRATEGIES

ON TAKING BOARD EXAM

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

2. Skipping Test Items

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

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

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

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

May GOD bless us All. TO THE GREATER GLORY OF GOD, MAGIS!

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TABLE OF CONTENTS

PART I: Fundamentals of Real Estate Appraisal

1.) Fundamentals of Real Estate Principles and practice

2.) Standards and Ethics
3.) Theories and Principle of Appraisal
4.) Human and Physical Geography
5.) Real estate finance and economics
6.) Land Management system and property laws

PART II: Professional Appraisal Practice

1.) Methodology of Appraisal Approaches

2.) Valuation procedure and research
3.) Appraisal report writing
4.) Case studies

PART III: Answer key

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PART I: Fundamentals of Real Estate Appraisal
1. A duly registered and licensed natural person who works in a local government unit and performs
appraisal and assessment of real estate properties, including plants, equipment, and machineries,
essentially for taxation purposes.
a. Real estate appraiser d. real estate assessor
b. Real estate consultant e. real estate salesperson
c. Real estate broker

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

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

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

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

6. In corporate practice of real estate service, there shall be at one license real estate broker for every
a. 25 accredited salesperson d. 35 accredited salesperson
b. 20 accredited salesperson e. 40 accredited salesperson
c. 30 accredited salesperson

7. what is PRBRES

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a. Philippine regulating board of real estate service
b. Philippine regulation board of real estate service
c. Philippine regulatory board of real estate service
d. Philippine regulatory board of real estate salesperson

8. Who is the Chairperson of PRBRES

a. Edgardo Gutierrez Ong d. Bansan C. Choa
b. Eduardo Gutierrez Ong e. Nicolas P. Lapena, Jr.
c. Ernesto Gutierez Ong

9. Who is the commissioner of PRC

a. Manansala d. Bansan C. Choa
b. Ong e.Carpio
c. Samonte

10. Refers to any natural or juridical person engaged in the business of developing real estate
development project for his/her own account and offering them for sale
a. Real estate person d. Real estate developer
b. Real estate development project e. Real estate consultant
c. Real estate dealer

11. Refers to an official in the local government unit, who performs appraisal and assessment of real
properties, including plants, equipment and machineries for taxation purposes.
a. Valuer d. Local assessing operation officer
b. Appraiser e. Tax Mapper
c. Assessor

12. Composition of the board of PRBRES

a. 1 chairperson and 3 members d. 1 chairperson and 4 members
b. 1 chairperson and 2 members e. 1 chairperson and 7 members
c. 1 chairperson and 5 members

13. For Real estate salesperson to be accredited by the board must at least meet the ff. requirements of
a. at least high school graduate and 80 credit units of seminar and training
b. at least 1 year of college and 12 credit units of seminar and training
c. at least high school graduate and 12 credit units of seminar and training
d. at least 2 years of college and 12 credit units of seminar and training

14. Any violation of RA 9464, including violation of IRR shall meted the penalty of a fine of not less
than______ or imprisonment of not less than______ upon discretion of the court
a. 100,000.00 and 6 months
b. 50,000.00 and 2 years
c. 100,000.00 and 2 years
d. 100,000.00 and 1 year

15. In relation to question number 633. In case the violation is committed by an license real estate
service practitioner, the penalty shall be_______the aforesaid fine and imprisonment
a. Tripled d. doubled

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b. fivefold e. reclusion perpetua
c. one half

16. In order to qualify for registration without examination, fifteen hours of continuing professional
education (CPE) credits are needed for:
a. A licensed broker who failed to renew his license prior to July 30, 2009
b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed
to renew their license upon the effectivity of RA 9646
c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to
renew their license upon the effectivity of RA 9646
d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had
failed to renew their license upon the effectivity of RA 9646
e. None of the above

17. In order to qualify for registration without examination, eighteen hours of continuing professional
education (CPE) credits are needed for:
a. A licensed broker who failed to renew his license prior to July 30, 2009
b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed
to renew their license upon the effectivity of RA 9646
c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to
renew their license upon the effectivity of RA 9646
d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had
failed to renew their license upon the effectivity of RA 9646
e. None of the above

18. In order to qualify for registration without examination, one hundred twenty hours of continuing
professional education (CPE) credits are needed for:
a. A licensed broker who failed to renew his license prior to July 30, 2009
b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had failed
to renew their license upon the effectivity of RA 9646
c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to
renew their license upon the effectivity of RA 9646
d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had
failed to renew their license upon the effectivity of RA 9646
e. None of the above

19. In order to qualify for registration without examination, assessors and appraisers must have the
following qualifications:
A. Holds permanent appointment on the date of effectivity of RA 9646 or as of July 30, 2009
a. Is performing actual appraisal and assessment functions for the last 5 years
b. Have passed the Real Property Assessing Officer (RPAO) Examination
c. Have at least ten years actual experience in real property appraisal or assessment
e. Completed at least one hundred twenty hours of accredited training on real property appraisal
f. Have relevant CPE credit units to the satisfaction of the board
g. a or b

20. The realty service practice can be performed by juridical persons, except:

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a. Real estate salesperson d. Real estate consultant
b. Real estate broker e. All of the above
c. Real estate appraiser

21. The national integrated organization of natural persons duly registered and licensed as real
estate service practitioners
a. Accredited and Integrated Professional Organization
b. Professional Regulatory Board of Real Estate Service
c. Professional Regulation Commission
d. Philippine Association of Real Estate Practitioners
e. None of the above

22. Conducts licensure examinations for the practice of the real estate service procession
a. Accredited and Integrated Professional Organization
b. Professional Regulatory Board of Real Estate Service
c. Professional Regulation Commission
d. Philippine Association of Real Estate Practitioners
e. None of the above

23. The minimum educational requirement for an applicant for a real estate broker’s license is:
a. Holder of bachelor’s degree d. 108 units in college
b. 72 units in college e. 144 units in college
c. 82 units in college

24. A broker’s complaints for non-payments of commission by the developer shall be filed with:
a. HLURB d. BTRCP
b. HUDCC e. Regular Court
c. NHMFC

25. A licensed real estate practitioner is qualified to be appointed as member of the Professional
Regulatory Board of Real Estate Service provided that prior to his/her appointment, he/she has
been an active licensed practitioner for at least:
a. Twenty years c. Five years
b. Fifteen years d. Three years e. Ten years

26. To constitute negligence or failure to disclose or ascertain to any person with whom a broker is
dealing relative to the property and within his knowledge at the time of the transaction, what
matters must the broker fail to disclose?
a. Previous owner of property or history of title
b. Fair market value of the property
c. Location, topography, and shape of property
d. Material fact, data or information
e. Whether property is updated in tax payments

27. The scope of brokerage as follows, but not:

a. Authority to look for property
b. Engagement to look for a buyer
c. Procurement of insurance for properties secured by real estate

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d. Procurement of loans secured by real estate
e. Procurement of tenants for rental properties

28. Any of these acts shall be grounds for revocation of license except:
a. Procurement of Certificate of Registration of real estate service practitioner by fraud or
deceit
b. Unprofessional or unethical conduct
c. Allowing an unqualified person to practice the profession by using one’s certificate of
registration
d. Non-payment of dues
e. Misleading ads

29. Under the Code of Ethics, the following is considered ethical:

a. Negotiate a property listed directly with the owner if the listing broker goes out of town for a
few days and cannot be contacted
b.Should cooperate with other brokers on property listed provided they are members of any
national real estate broker’s association
c. Use the services of the salesman of another broker provided the salesman is paid the agreed
upon commission
d. Willingly share with other brokers the lessons from his experience and study

30. The national integrated organization of natural person duly registered and license as real estate
service practitioner
A. Philippine association of real estate practitioner
B. Philippine realtors board
C. Philippine regulation commission
D. Accredited and integrated professional organization
E. All of the above

30. Any of these acts shall be ground for revocation of license except.
A. non payment of dues
B. engaging in the practice of the profession during the period of ones suspension
C. unprofessional or unethical
D. allowing an unqualified person to practice the profession by using ones certificate of
registrations

31. Realty service practice can be performed by juridical persons except

a. real estate consultant
b. real estate broker
c. real estate appraiser
d. real estate sales person
e. all of the above

32. What should be indicated by the broker in his letterhead, dry seal, sigh board,
advertisement or other announcement in relation to real service practice
a. price of the property
b. address of the owner

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c. ptr number
d. license number
e. house number

33. Real estate broker must not encourage the following act when with a sale transaction to help the
client reduce cost
a. undervalue the amount in the deed of sale
b. pay to BIR where the property is located
c. pay the proper taxes on time
d. register immediately the sale with the ROD
e. pay the taxes on sale on time

34. The following acts are unethical except

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

35. Renewal of professional id card of resp

a. every year
b. 2 years
c. 3 years
d. 4 years
e. 5years

36. Minimum requirement for applicant for real estate broker exam is
a. 80 units in college
b. 60 units in college
c. Holder of vocational
d. Holder of college degree
e. High school graduate

37. Real estate broker is usually authorized to the following acts except
a. advertise the listing
b. look for the property
c. bind the principal in the contract
d. place for sale sign in the property
e. cooperate with other broker

38. Real estate practitioner to be appointed as member of the PRBRES provided that the prior his
appointment he has been active for at least
A. 5 years

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B. 20 years
C. 15 years
D. 10 years
E. 25 years

39. Real estate service practitioner consist of the following except

A. real estate sales person
B. real estate assessor
C. real estate appraiser
D. real estate broker
E. real estate dealer

40. In order to qualify for registration without examination, assessor and appraiser must have the
following
a. have relevant CPE credit units to the satisfaction of the board
b. have passed RPAO examination
c. holds permanent appointment on the date of the effectivity of RA 9646 OR AS
OF JULY 30, 2009
d. have at least ten years experience on real property appraisal or assessment
e. completed at least 120 accredited training on real property appraisal
f. all of the above

41. The following subject in the real estate broker exam licensure exam except
a. property management
b. subdivision development
c. real estate laws and taxation
d. fundamentals of property ownership
e. code of ethics and responsibilities

42. Act as agent of a party in a real estate transaction to offer, solicit, list, promotes. Mediate,
negotiate or effect the meeting of the minds on the sale, purchase, exchange, mortgage, lease or
joint venture or other similar transactions in real estate or any interest therein
A. real estate consultant
B. real estate appraiser
C. real estate assessor
D. real estate broker
E. real estate sales person

43. The board may reinstate any revoked certificate of registration

A. for reasons deemed proper and sufficient
B. upon application and compliance with the require CPE
C. after the expiration of 2 years from the date of revocation
D. none of the above
E. all of the above

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44. Following are restriction of property rights except
A. zoning
B. escrow
C. taxation
D. escheat

45. The best evidence of ownership is

a. Tax declaration d. Vicinity map
b. Torrens title e. None of the above
c. Technical description

46. Refers to the compulsory successional rights granted by the law and the same cannot be taken by
anybody except when alienated during the lifetime of the testator with consideration
A. Legitime d. intestate
B. Succession e. hier
C. testate

47. Immovable or real property in favor the easement is established

A. servient estate d. fixture
B. dominant estate e. legitime
C. land estate

48. Immovable or real property subjected to the easement established

A. servient estate d. fixture
B. dominant estate e. legitime
C. land estate

49. Buyers who paid installment of less than 2 years are also protected by the Maceda law and
entitled to a grace period of___days from the added their installment become due and
demandable
A. 30 days d. 15 days
B. 20 days e. 25 days
C. 60 days

50. Maceda , how many times the can the buyers exercise his rights
A. once every 10 years d. once every 3 years
B. once every 2 years e. none of the aboved
C. once every 5 years

51. Anything which is or maybe the object of appropriation

A. Tax d. asset
B. Equipment e. real estate
C. property

52. Real properties used for family homes or house and lot where the family resides

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A. life estate d. real estate
B. fee tail e. remainder
C. homestead estate

53. Doctrine which reserve to the state the full ownership of all natural resources or natural
wealth that may be found in the bowels of the earth.
A. public domain d. regalian doctrine
B. res allicujos e. stewardship principle
C. res alienate

54. Right to the state to en act laws and enforce them for the safety, order, health, morals and
general welfare of the public
A. Escheat d. eminent domain
B. police power e. taxation
C. zoning

55. Power of the state to imposed and collect takes and other charges on real estate
A. Escheat d. eminent domain
B. police power e. taxation
C. zoning

56. Reversion of privately owned properties in favor of the state upon the death of the owner who
is not survived with any heir
A. escheat
B. police power
C. zoning
D. eminent domain
E. taxation

57. Power of the state to take private property for public use upon payment of just compensation
A. Escheat d. eminent domain
B. police power e. taxation
C. zoning

58. Refers to the used of restrictions of a particular areas or delineation of allowable areas for use
A. Escheat d. eminent domain
B. police power e. taxation
C. zoning

59. Under the phil constitution that every property owners are bound to used or utilized their
lands in a manner that will promote welfare and benefits not only for themselves but also for the
state
A. public domain d. regalian doctrine
B. res allicujos e. stewardship principle
C. res alienate

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60. Owner of the property adjoining or abutting the bank of river
A. Avulsion d. land owner
B. Accession e. land lord
C. riparian owner

61. Property owned by the state in its proprietary or private capacity which is not devoted to
public used or public service and the development of national wealth
A. public domain d. regalian doctrine
B. res allicujos e. stewardship principle
C. patrimonial property

62.. Any and unknown deposit of money, precious object or jewelry and the lawful ownership
thereof is unknown. Its ownership belongs to the land
A. yamasita treasure d. alluvium
B. hidden treasure e. minerals
C. accession

63. System of land registration by which the title is recorded becomes indefeasible, absolute and
imprescriptible
A. Torres system d. Tax declaration
B. Allen system e. Bonds
C. Torrens system

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

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

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

67. Right of common dominion which two or more persons have in spiritual part of the property
or thing which is not physically divided
A. co ownership d. extra judicial
B. Paraphernal property e. capital property
C. absolute community of property

68. Increase in value of real estate without any effort or expense of the owner
A. avulsion
B. accession
C. adhesion

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D. erosion

69. Acquisition of alienable land of the public domain by homestead patent, free patent, sales patent,
government awards
A. private grant
B. inheritance
C. involuntary grant
D. public grant

70. The process by which the current of the river, creek or torrens segregated from the estate a known
portion and transfer it to another estate
A. reclamation
B. accretion
C. avulsion
D. alluvium

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

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

73. Real property consists of

a. Rights in realty
b. Land and all improvements thereon
c. The right to use or occupy real estate
d. Single-family residences

74. Real property includes

a. Any and all buildings on the subject site
b. All interests, benefits, and rights inherent in the ownership of real estate
c. The physical land and appurtenances affixed to the land
d. Property that is not artificial

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

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76. The highest form of real property ownership is
a. homestead estate
b. leasehold estate
c. fee simple
d. life estate

77. Jackfruit that fell on the ground are

a. ordinarily real estate c. both of the above
b. ordinarily personal property d. none of the above

78. A deed should be recorded because

a. Recording gives public notice of the transaction and sets the priority
b. It is required by law
c. Title does not pass until the deed is recorded
d. Recording makes the deed a legal document

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

80. The sudden removal of land from one parcel to another when a body of water, such as a river,
abruptly changes.
Avulsion c. alluvium
Accretion d. usufruct

81. The soil gradually deposited by the process of accretion, usually considered to belong to the owner
of he land to which it is added.
a. avulsion c. alluvium
b. accretion d. usufruct

82. Land is unique because

A. No two parcels have the same soil composition
B. No two parcels have the same owners
C. No two parcels have the same tax levies
D. No two parcels can occup y the same space on the face of the earth

83. The supply of land is

A. Increasing all the time c. Infinite
B. Established by the surveyors d. Finite

84. The concepts of land are

A. Land is immobile, durable, finite and useful
B. Social, economic, governmental and legal, geographic and environmental
C. Land, labor, capital, and entrepreneurialism
D. Leasehold, leased fee, and fee simple

85. Knowledge of land value is required for all of the following except
A. a. property taxation c. fire insurance

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B. b. a ground lease d. a grazing lease

86. Real estate is

A. The rights in realty
B. The physical land and appurtenances affixed to the land
C. What transfers on the day of closing
D. The "bundle of rights"

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

88. The terms “real estate” and “real property”:

A. Mean exactly the same thing in all cases
B. Are defined to refer to the physical land and the bundle of rights respectively
C. Are both important concepts in appraisal
D. Both (b) and (c)

89. The value most commonly sought in real estate appraisals is

A. Investment value c. Insurable value
B. Value in use d. Market value

90. The four agents of production are

a. Land, labor, capital, improvements d. Land, improvements, labor, materials
b. Land, labor, capital, entrepreneurship
c. Land, labor, capital, money

91. The value of improved residential real estate is most influenced by

a. Passage of time
b. Brokers opinions of the value of properties
c. Changes in shopping patterns for consumers of goods and services
d. Cost of` construction increases

92. Real property has value because a

a. It is nearby c. It is desirable
b. It is popular d. It provides future benefits

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

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

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95. When demand for housing increases, the supply
a. Increases immediately c. Is unaffected
b. Increases slowly d. Will diminish

96. Overproduction of new homes

a. Causes oversupply and lower prices
b. Causes increases in demand
c. Causes prices to increase
d. Causes the market to move toward a state of equilibrium

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

98. Demand for real estate may be affected by

a. Increasing population and employment c. Increases in purchasing power
b. Availability of mortgage financing d. All of the above

99. A less expensive house tends to gain in value because of more expensive neighborhood houses
because of
a. Progression Principle c. Both of the above.
b. Regression Principle d. None of the above.

100. A good’s capacity to satisfy human desires or needs is known as

a. Creative demand c. Functional obsolescence
b. Utility d. Effective demand

101. Two homes in the same addition have the same amenities, size, features, and location. One is priced
at P1,000,000 and the other is priced at P1,100,000.
a. The lower-priced home will sell quickly.
b. The lower-priced home will attract more demand.
c. The lower-priced home will get more showings.
d. The lower-priced home will sell for the full list price.

102. In a high demand market, the cost of building a new property will increase substantially until
a. It becomes impossible for prices to go higher
b. The supply increases because new builders get into the market
c. The charges from suppliers and subcontractors go down
d. The BSP increases interest rates

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

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104. Synergy or Plottage is
a. The process whereby large parcels of land are divided into lots and recorded in the
register of deeds
b. Is the assemblage of two or more parcels of land
c. Is the name of the discount given when larger parcels sell for more per hectare than smaller ones
d. An incremental increase of value that results when two or more sites are combined to produce
greater utility

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

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

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

108. A trade fixture:

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

109. Which of the following courses would benefit a professional appraiser?

a. real estate finance, land use planning, real estate law
b. urban sociology, demographics, information systems
c. All of the above .
d. One of the above.

110. An appraisal may include a(n)

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

111. The reliability of an appraisal depends on the

a. knowledge and judgment of the appraiser
b. accuracy of the data used
c. Both a and b.
d. Neither a nor b.

112. An appraisal of current market value is considered to be accurate for

a. 90 days c. one year

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b. until the property is sold d. date of appraisal

113. Appraisals are always used

a. To make residential mortgages c. to settle lawsuit
b. To settle divorces d. to solve problem that involve real estate values

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

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

a. Market value c. actual use

b. Investment value d. value in transition

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

117. Investment value is best measured by

b. Market price to a specific investor
c. Market value to a specific investor
d. The cost of acquiring a competitive substitute property with the same utility to a typical purchaser
e. The present worth of anticipated future benefits to a specific investor

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

119. Market value is based on

a. insurable value c. cost
b. most probable price d. value in use

120. Which of the following is not a part of the market value definition?
a. Buyer and seller are typically motivated
b. The property sells in 90 to 120 days
c. Payment is made in cash or cash equivalent terms
d. Both parties are well informed

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

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

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

124. A church in a residential area is an example of

a. police power c. a nonconforming use
b. forecast absorption d. a private restriction

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

126. The value of improved residential real estate is most influenced by

a. Passage of time
b. Brokers opinions of the value of properties
c. Changes in shopping patterns for consumers of goods and services
d. Cost of` construction increases

127. A buyer invests in a small strip center because she believes the property will net
P350,000 per year. This is an example of
a. Anticipation
b. Change

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c. Competition
d. Substitution

128. The statement “property values are created and sustained when the characteristics of a property
conform to the demand of its market" refers to
a. Use value
b. Contribution
c. Conformity
d. Supply and demand analysis

129. To be considered the highest and best use, a use must be

a. Physically possible, legally permissible, appropriately justified, financially feasible, and maximally
productive
b. Physically correct and legally possible
c. In existence already and legal
d. Physically possible and appropriate

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

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

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

133. A legally nonconforming use is

a. A use that was legally established and maintained but no longer conforms to existing zoning
b. A use that was illegally established and maintained
c. A use that was not legally established and maintained and still does not conform to existing zoning
d. A use that was not legally established and maintained but the government is not enforcing the laws

134. The purpose of regulating the real estate service practitioners practice in the
Philippines is to

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a. Protect the public from dishonest realty practitioners.
b. Protect realty practitioners from unfair competition.
c. Upgrade the standards of realty service practice.
d. All of the above.

135. Market area life cycles include

a. Growth, stability, decline, and revitalization
b. Growth, stability, decline, and gentrification
c. Growth, stability, appreciation, and decline
d. Growth, level of appreciation, and decline

136. Neighborhood social influences include all of the following except

a. Population density c. Occupant age levels
b. Occupant skill levels d. Vacancy rates

137. The economic base is

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

138. Economic influences include all of the following except

a. Occupant income levels
b. Crime levels
c. Property rent levels d. Birth rate

139. Governmental influences include all of the following except

a. Tax burdens c. Zoning, building, and housing codes
b. Special assessments d. Changes in property use

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

141. Linkages are

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

142. The scientific study of population statistics is

a. scientography c. egmentation
b. demography d. forecasting

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

144. A real estate market is

a. A shopping center office of a realty company
b. A group of individuals or firms that are in contact with one another for the purpose of conducting real
estate transactions
c. A list of potential buyers for the subject
d. A list of potential sellers who have property similar to the one requested by the buyer

145. What will be the best tool for locating the next Jollibee fast food restaurant in a city?
a. GPS (Global Positioning System).
b. GIS (Geographic Information System).
c. Microsoft Words.
d. Remote Sensing.

146. The industry competition which arises from profits refers to

a. Principle of Change d. Principle of Substitution
b. Principle of Conformity e. Principle of Supply and Demand
c. Principle of Competition

147. The value of a property will reach to its maximum level when the factors of production such as:
land, labor, capital, coordination or entrepreneurship are in balance refers to
a. Principle of Balance d. Principle of Substitution
b. Principle of Conformity e. Principle of Anticipation
c. HABU

148. The principle of increase and decreasing returns applied to a portion or the whole of an
improvement refers to
a. Principle of Anticipation d. Principle of Contribution
b. Principle of Conformity e. Principle of Substitution
c. HABU

149. The net income remaining after the cost of labor, capital and coordination have been paid refers to
a. HABU d. Principle of Substitution
b. Principle of Anticipation e. Principle of Surplus Productivity
c. Principle of Conformity

150. The result of reasonable degree of architectural homogeneity and compatible land uses brought
about by market attitudes, societal trends, economic conditions and public policy refers to
a. HABU d. Principle of Substitution
b. Principle of Conformity e. Principle of Anticipation
c. Principle of Utility

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

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d. Principle of Conformity e. Principle of Anticipation
c, Principle of Utility

152. The factor where the value is increased if supply is reduced by effective demand, resulting in
scarcity refers to
a. Principle of Anticipation d. HABU
b. Principle of Supply and Demand e. Principle of Consistent Use
c. Principle of Contribution

153. That factor where the property is cannot be valued on the basis of one use for land and another
use of improvements refers to
a. Principle of Consistent Use d. HABU
b. Principle of Anticipation e. Principle of Substitution
c. Principle of Contribution

154. Refers to the most profitable and likely use of the property at the time of appraisal. It refers to that
which in all probability will yield the maximum return at a given time. It is the first necessary
consideration in studying a tract of land to estimate its value.
a. Principle of Supply and Demand d. Principle of Contribution
b. Principle of Substitution e. Principle of Anticipation
c. Principle of Highest and Best Use

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

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

157. One which states that the maximum value of a property tends to be set by the cost of purchasing
an equally desirable and valuable replacement property, as the basic principle that underlies the Market
Data Approach of Sales Comparison,
a. Principle of Anticipation d. Principle of Highest and Best Use
b. Principle of Substitution e. Principle of Supply and Demand
c. Principle of Contribution

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

159. One method of compensating for sales that involved different terms of financing is use of the
a. financing readjustment grid
b. loan-to-value ratio
c. cash equivalency technique

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d. operating statement ratio

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

161. Site valuation techniques include

a. Sales comparison method; allocation method; abstraction method
b. Subdivision development method; ground rent capitalization; land residual method
c. both a and b
d. none of the above

162. Another term for developer’s profit is

a. contractor’s profit
b. entrepreneurial profit
c. surplus productivity
d. management profit

163. Depending on market practice, entrepreneurial profit can be estimated as percentage of

a. direct and indirect costs plus land value
b. the value of the completed project
c. both a and b
d. none of the above

164. Barricade around the construction site is a building

a. direct cost
b. indirect cost
c. overhead expense
d. incidental expense

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

166. The cost of improvements identical in utility to those of the subject property is called the subject’s
a. reproduction cost
b. replacement cost
c. sales price
d. market value

167. In using the cost approach to appraising, the estimated construction cost of improvements usually
will be based on

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a. their original cost
b. the cost of new improvements at current prices
c. book value
d. the national cost average of all components

168. The index method of estimating construction cost is based on

a. the original cost of improvements
b. the cost of new improvements at current prices
c. book value
d. the national cost average of all components

169. The amount of entrepreneurial profit

a. reflects the success of the project
b. is based on how project expenses are categorized
c. always be the same, provided the project is completed within its estimated budget
d. cannot be estimated accurately

170. The predominant depreciation category for a residential location on heavily traveled national
highway is
a. Physical deterioration—curable
b. Physical deterioration—long-lived incurable
c. Functional obsolescence—curable
d. External obsolescence—incurable

171. The predominant depreciation category for severe termite damage throughout a structure
a. Physical deterioration—curable
b. Physical deterioration—long-lived incurable
c. Functional obsolescence—curable
d. External obsolescence—incurable

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

173. The ratio of net operating income to effective gross income is the
a. operating expense ratio
b. net income ratio
c. effective gross income ratio
d. break-even ratio

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

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

176. In the formula for the operating expense ratio

a. operating expenses are divided by effective gross income
b. effective gross income is divided by operating expenses
c. potential gross income is divided by effective gross income
d. effective gross income is divided by potential gross income

177. In the formula for the net income ratio

a. effective gross income is divided by potential gross income
b. potential gross income is divided by effective gross income
c. effective gross income is divided by net operating income
d. net operating income is divided by effective gross income

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

179. While working on an appraisal of a residential property in a new home subdivision, the appraiser
finds that the builders have a total of 100 home sites currently offered for sale. In measuring market
demand the appraiser notes that all of the builders are currently averaging 2 new sales contracts per
month (combined), and are expecting to sell 24 homes within the next year. What conclusion could be
drawn with regard to the 100 available home sites and a market period of the next 12 months?
a. The market is in a condition of supply and demand.
b. The market is in a condition of balance.
c. The market is in a condition of oversupply.
d. The market is in a condition of undersupply.

180. For land sales to be used as comparables, they must be

a. competitive with the subject
b. relatively recent
c. open market transactions
d. all of the above

181. A bad floor plan would generally be classified as

a. physical depreciation
b. economic obsolescence
c. functional obsolescence

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d. economic deterioration

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

183. Land valuation techniques include

a. Subdivision development, depreciated cost, consensus
b. Sales comparison approach, consensus, extraction
c. Sales comparison approach, allocation, extraction
d. Assessment multipliers, assessor’s opinions, multiple regression multipliers

184. Land value can be estimated using all of the following techniques except
a. The sales comparison method
b. The cost method
c. The income method
d. The allocation method

185. Improvement cost data can be obtained from

a. Builders
b. Cost Manuals
c. Sales of new homes
d. All of the above

186. In economics, the four factors of production are

a. land, labor, capital, and improvements
b. land, labor, capital and entrepreneurship
c. land, labor, capital and money
d. land, improvements, labor and materials
e. land, labor, site, and improvements

187. Which of the is NOT an agent of production?

A. land
B. transportation
C. labor
D. capital
E. entreprenuership

188. Political forces affecting value may include

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

189. What are the two categories of tangible property?

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A. real property and personal property
B. intangible property and real property
C. real estate and intangible property
D. legal and illegal investments
E. open and shut transactions

190. Zoning is an exercise of the

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

191. Is the amount paid by the lessee of a house or flat fee of a commercial bldg.
a. economic rent d. rental
b. interest e. market price
c. lease

192. The revenue derived from the use of land and of the forces inherent to land
a. economic rent d. rental
b. interest e. price
c. lease

193. It is the price of any commodity in its market at a specified time

a. economic rent d. rental
b. interest e. market price
c. lease

194. Functional utility depends on

A. zoning d. age of equipment
B. wear and tear on the structure e. insurance requirements
C. tastes and standards

195. Value in use is

A. subjective
B. objective
C. readily measurable
D. a market phenomenon
E. synonymous with market price

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

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

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

199. Studying appraisal helps a person

A. to improve value estimation skills
B. to pass the real estate broker’s license examination
C. to understand other real estate courses
D. to communicate with appraisers
E. all of the above

200. Plant and Equipment are

a. t angible assets, other than realty.
b. tangible assets, oth er than personalty.
c. intangible assets, other than realty.
d. int angible assets, other than personalty.

201. Assets that are inextricably combined with others and that may include specialised buildings,
machinery, and equipment.
a. Plant
b. Machinery
c. quipment
d. Business asset

202. Individual machines or a collection of machines. A machine used for a specific process in
connection with the operation of the entity.
a. Plant
b. Machinery
c. quipment
d. Business asset

203. For assets in the public sector, the assumption equivalent to a business continuing as a going
concern is that the public sector assets
a. Will continue to be used for the provision of the relevant public good or service.
b. Will cease to be used for the provision of the relevant public good or service.
c. Both of the above.

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d. None of the above.

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

205. Plant and equipment are

a. Tangible assets
b. Intangible assets
c. Both of the above.
d. None of the above.

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

207. The value of patterns and dies is often inextricably linked to

a. associated intellectual property rights
b. operating software
c. Both of the above.
d. None of the above.

208. The period over which property may be profitably used is

a. Invested Capital
b. Capital Structure
c. Going Concern
d. Economic Life

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

210. Which of the following types of property is subject to ad valorem taxation?

A. property owned by a religious organization and used for a religious purpose
B. new industrial plants that state and local governments have induced, with tax exemption as an
incentive, to locate within their jurisdictions
C. commercial buildings leased in part by nonprofit foundations
D. state colleges and universities
E. a state capitol

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

212. All of the following statements are true EXCEPT

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

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

214. Capacity to satisfy wants, production by labor and their exchangeability

A. economic concept
B. economic principle
C. economic value
D. economic utility
E. economic forces

215. Amount may be recovered when the property will be retired or disposed at a future time
A. scrap value
B. book value
C. zonal value
D. salvage value
E. market value

216. Fair market value of the land in a specific zone or areas as established by the BIR
A. scrap value
B. book value
C. zonal value
D. salvage value
E. market value

217. Impairment of the desirability and usefulness of a real property brought by the physical, economic,
and other changes
A. depreciation
B. externalities
C. obsolescence

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D. damages
E. loss

218. Loss in value of property because of external influence

A. external loss
B. external obsolescence
C. economic obsolescence
D. functional obsolescence
E. external forces

219. Real estate investment using others people money

A. loan
B. investment
C. leverage
D. fullback
E. lending

220. Appraisal under the unified housing loan program shall be undertaken by
A. NHA
B. HLURB
C. HDMF
D. HIGC
E. HUDCC

221. Loss in value of property because of the buyers desire or because of the presence of fixtures which
are not desirable
A. external loss
B. external obsolescence
C. economic obsolescence
D. functional obsolescence
E. external forces

222. The selling price of real estate is usually based on its:

a. Market Value d. Exchange Value
b. Speculative Value e. None of the above
c. Intrinsic Value

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

224. Conjugal partnership can be dissolved by:

a. Legal separation d. Any of the above
b. Annulment of marriage e. None of the above
c. Judicial separation of property

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

226. The best evidence of ownership is

a. Tax declaration d. Vicinity map
b. Torrens title e. None of the above
c. Technical description

227. The application of more factors of production will tend to increase net income up to certain point
beyond which the introduction of more factors of production will tend to decrease net income
A. principle of conformity
B. principle of substitution
C. principle of progression
D. principle of increasing and diminishing return
E. principle of regression

228. The displacement of present resident by people of lower economic status

A. progression
B. substitution
C. gentrification
D. infiltration
E. nuclei

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

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

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

232. A loss in value from any cause is a common definition of:

a. Depreciation c. Economic obsolescence
b. Functional obsolescence d. Effective age e. None of the above

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

234. The income approach to value is an application of the principle of:

a. Anticipation c. Substitution
b. Progression d. Highest and Best Use e. None of the above

235. The following are determinants of value in appraisal of realty except:

a. Transferability c. Scarcity
b. Demand d. Utility e. Purchasing Power

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

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

238. Is a factor derived from comparable properties and applied to expected rental income in order to
estimate a value. It may be used in finding the value of a property. It is the ratio that expresses the
relation between gross income and sales prices of a property.
a. Gross Income Multiplier d. Multiplier Effect Factor
b. Zonal Value e. Market Value
c. Scrap Value

239. Method of identifying the boundaries of a parcel of land by placing pins or stakes on the ground
A. subdivision survey d. relocation survey
B. topographic survey e. schematic survey
C. geodetic survey

240. Survey of land to determine the elevation or undulation of the terrain at various section
A. subdivision survey d. relocation survey
B. topographic survey e. rectangular survey
C. geodetic survey

241. Grid of north and south meridians and east and west lines surveyed by the government in
identifying Philippines boundaries
A. subdivision survey d. relocation survey
B. topographic survey e. rectangular survey
C. geodetic survey

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242. Survey plan indicating the division of the property
a. subdivision plan d. leche plan
b. location plan e. vicinity plan
c. lot plan

243. Imaginary lines connection to point 1 of a lot with a reference point such as BLBM
A. contour line d. Bearings
B. tie back e. Metes and bounds
C. Tie line

244. lines in topographic map which indicate the elevation of the terrain at various sections of the land
A. contour line
B. tie back
C. Tie line
D. Bearings
E. Metes and bounds

245. Subdivision plan for flat terrain

A. Gridiron d. cul de sac
B. tie line e. square planning
C. chaplan

246. Refers to subd scheme wher the resulting blocks rectangular in shape
A. Gridiron d. cul de sac
B. tie line e. square planning
C. chaplan

247. Directions of any respective given meridian.

A. contour line d. Bearings
B. tie back e. Metes and bounds
C. Tie line

248. Prepared out of a cadastral survey of extensive area consisting of several lots for cadastral
registration proceedings
A. Phil map d. Cadastral map
B. Vicinity map e. Territorial map
C. Tax map

249. Land located in the fringes of built up communities which has the provincial characteristics but is
favored with city utilities, amenities and facilities
A. city land c. urbanized land
B. metropolis land d. idle land

250. Lands in metro manila or NCR are covered by the Urban Land Reform Law when they located
within _______areas for priority development sites
A. 214
B. 234
C. 224 d. 244

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251. Wrote eight volume guide to geography; forerunner of the present geography
A. Hipparchus
B. Aristotle
C. Ptolemy
D. Erastosthenes
E. Humbult and ritter

252. The earth is sphere

A. Hipparchus
B. Aristotle
C. Ptolemy
D. Erastosthenes
E. Humbult and ritter

253. Drew imaginary lines on the surface of the earth in order to describe the location of places
A. Hipparchus
B. Aristotle
C. Ptolemy
D. Erastosthenes
E. Humbult and ritter

254. Says geographers should study human environment relationships by concentrating on how
physical environment causes social development
A. Hipparchus
B. Aristotle
C. Ptolemy
D. Erastosthenes
E. Humbult and ritter

255. Used the word geography and calculated the circumference of the earth within 0.5 percent
accuracy
A. Hipparchus
B. Aristotle
C. Ptolemy
D. Erastosthenes
E. Humbult and ritter

256. Physical character of the location

A. land
B. site
C. toponym
D. situation e. mathematical location

257. Place given to a portion of the earth surface or nominal location

A. land
B. lot site
C. toponym

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D. situation
E. mathematical location

258. Relative location of place compared with other places, identification of streets, buildings and
landmarks to direct people to a desired location
A. land
B. lot site
C. toponym
D. situation
E. mathematical location

259. The science of making map

A. calligraphy
B. surveying
C. mapping
D. cartography
E. pattern

260. Two dimensional flat representation of the earth surface or portion of it

A. calligraphy
B. surveying
C. map
D. cartography
E. pattern

261. The portion of earth occupied by permanent human settlement

A. toponym
B. demography
C. density
D. ecumene

262. Geometric arrangement of object

A. toponym
B. demography
C. density
D. ecumene
E. pattern

263. Frequency that something occurs within a given unit of area

A. toponym
B. demography
C. density
D. ecumene
E. pattern

264. Migration to location

A. emigration
B. migration

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C. immigration
D. net migration
E. exodus

265. Permanent move to a new location

A. emigration
B. migration
C. immigration
D. net migration
E. exodus

266. Mass departure from a location

A. emigration
B. migration
C. immigration
D. net migration
E. exodus

267. Difference between the number of immigrants and the number of imegrants
A. emigration
B. migration
C. immigration
D. net migration
E. exodus

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

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

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

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271. Factors that will influence value related to population growth, birth control measures and
migration
a. Physical d. Cultural
b. Economic e. Political
c. Social

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

273. Factors what will influence value which forces include the nature or basic industry and business
activity in the neighborhood, trend of employment, and expansion of housing programs;
a. Physical d. Cultural
b. Economic e. Political
c. Social

274. Factors that will influence value which refer to the location and age of the neighborhood (size,
area, shape and land topography), type of improvements and architectural trends, street pattern,
sidewalks and underground drainage.
a. Physical d. Cultural
b. Economic e. Political
c. Social

275. Former natural born Filipino citizen who acquired foreign citizenship and has not applied and been
granted dual citizenship, can purchase for his use as residence
A. 1,000 sq.m. of urban land and 1 has of rural land
B. 1,000 sq.m. of urban land and 2 has of rural land
C. 1,000 sq.m. of urban land and 5 has of rural land
D. 1,000 sq.m. of urban land and 3 has of rural land

276. Buyers of real property covered by RA 6552 do not include installment buyers of
A. industrial lots
B. house and lot packages
C. residential subd lots
D. residential condominiums

277. Retention limits under carp for foreign individuals on lease, management grower or service
contract
A. not more than 100 has
B. not more than 500 has
C. not more than 10 has
D. not more than 1,000 has

278. Comprehensive agrarian reform program extension with reforms

A. RA 8435

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B. PD 957
C. RA 6657
D. RA 9700

279. RA 6552 or the Maceda law

A. realty installment and protective decree
B. realty installment buyers protection act
C. realty installment and buyers protective decree
D. realty installment and financing

280. Process of bartering land for another piece of land and or shares of stock of equal value in the
government or quasi government corporation
A. land assembly
B. land reform
C. land banking
D. land exchange

281. Acquisitions of lots of varying ownership through, among others, expropriation or negotiated
purchase for the purpose of planning and development unrestricted by individual property boundaries
A. expropriation
B. land banking
C. land assembly
D. land reform

282. In the absence of pre nuptial agreement all properties of the husband and wife shall only have a
total retention of
A. 1 has
B. 5 has
C. 10 has
D. 3 has

283. Refers to the commitment for more than a limited duration of funds, land resources, facilities and
service by the two or more legally separate interest, to an enterprise for their mutual benefit
A. corporation
B. land assembly
C. cooperative
D. joint venture

284. Acquisition of land in advance of actual need for the purpose of acquiring lands at existing use
value and disposing of them in a manner which would influence land price formation and promote
planned development
A. land reform c. land exchange
B. land assembly d. land banking

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

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

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

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

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

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

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

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

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

294. The conveyance of real estate in payment of an obligation is:

a. Pacto en retro sale d. Dacion en pago
b. Quit claim Deed e. Cession of ownership
c. Deed of waiver

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

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

297. X, owner of a 10- door apartment rented a unit to Y for a period of one year. Under the law on
lease, Y, without the consent of X, may perform any of the following acts, except:
a. Sublease the unit
b. Assign his rights
c. Suspend payment if X fails to make the necessary repairs.
d. Demand payment reimbursement constituting one half of the value of the usual improvements
introduced in good faith
e. All of the above

298. A special power of attorney to sell a real estate carries with it all the following except:
a. Power to find a purchaser d. Power to fix the term of sale
b. Power to sell directly e. None of the above
c. Power to sell only for cash

299. A mortgage which covers two or more properties is called:

a. Open mortgage d. Close mortgage
b. Equitable mortgage e. Blanket mortgage
c. Conventional mortgage

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

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

302. Document to be checked before buying a subdivision lot

A. license to sell
B. development permit
C. approve plan
D. map
E. none of the above

303. Condominium act

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A. RA 2774
B. RA 4276
C. RA 4727
D. RA 4726
E. NOTA

304. Urban Development and housing Act

1. RA 7927
2. RA 7972
3. RA 9279
4. RA 7279
5. NOTA

305. In the absence of any provision in the master deed of a condominium project, the interest of the
unit owner in the common areas shall be;
1. equal
2. based on value
3. decided by the condominium corporation
4. proportionate
5. NOTA

306. Unless justifiable cause, the period of completion of development of a subdivision project counted
from issuance of license to sell is;
1. eighteen months
2. twenty four months
3. six months
4. twelve months
5. NOTA

307. Registration of mortgage covering a subdivision project or completion of development of a

subdivision project is a
A. NHA
B. HLURB
C. LGU
D. HUDCC
E. HIGC

308. A buyer of a subdivision lot on installment after sufficient notice to the developer discontinued
paying amortization because the developer failed to develop the subd as certified by the HLURB in such
a situation and under PD 957, the buyer is entitled to a refund which would be
A. Total payment made less penalty charges
B. Total payment made less penalty plus interest charges
C. Total payment made less penalty charges and interest on total payment
D. Total payment plus penalty charges
E. NOTA

309. Provided by RA 7279 a developer of a subd. Project is required to develop an equivalent 20% of the
project for

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A. socialized housing
B. economic housing
C. open space
D. commercial area

310. Title to condominium unit is vested in

A. lot owner of the condo project
B. corporation owning the building
C. association of the bldg
D. owner of the condominium unit
E. NOTA

311. sometimes refered to as a vertical subd.

A. condominium
B. town houses
C. row houses
D. mansion
E. NOTA

312. Subdivision and condominium buyers protective decree

A. PD 1216
B. PD 957
C. PD 1981
D. BP 220
E. NOTA

313. The term of a condominium corporation is

A. 10 years
B. 50 years
C. 25 years
D. Co terminus with the duration of condo project
E. ALL OF ABOVE

314. The performance bond for a subd project may be in the form of a surety bond equivalent to
A. 30% of the development cost
B. 40% of the development cost
C. 20% of the development cost
D. 10% of the development cost
E. 25% of the development cost

315. The areas reserve for parks, playground and recreational areas of a subd project are
A. saleable lots
B. non alienable public land
C. Exclusively owned by the owner developer
D. Co owned by the developer and lot owner

316. The area reserved for roads, alleys and open spaces in a subd. Project with an area of one hectare
or more is

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A. 10% of the gross area
B. 30% of the gross area
C. 35% of the gross area
D. 25% of the gross area

317. In mixed use condominium project, the master deed may be amended by the simple majority of
unit owners. Majority is based on.
A. floor area of ownership
B. number condominium units
C. total area of condominium units
D. all of the aboved

318. The amendment of master of deed of a condominium project is decided by the majority of
registered owners must be approved by the HLURB and
A. City or municipal council c. City of Municipal Engineer
B. City of Municipal Mayor d. City or Municipal Assessor

319. Amendment to the master of deed of a condominium project approved by majority of registered
owner also need to be approved by the city engineer and
A. NHA d. HUDCC
B. LRA e. HLURB
C. LGU

320. Notice of adverse claim annotated on title is valid only for

A. 15 days d. 60 days
B. 90 days e. 10 days
C. 30 days

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

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

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

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

325. The property of a person who dies leaving no heirs passes to the state by the right of

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a. acquisition c. escheat
b. condemnation d. eminent domain

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

327. All of the following areas of regulation affect appraisers EXCEPT

a. DTI c. LGU Planning Office
b. PRC d. DSWD

328. The agency that now insures deposits in financial institutions is

a. BSP c. HUDCC
b. HMDF d. PDIC

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

330. Tenancy by the entirety is a form of

a. marital property ownership c. business property ownership
b. tenancy in common d. ownership in severalty

331. The four unities required for a joint tenancy include

a. tenancy, location, title, and possession
b. time, title, interest, and possession
c. possession, ownership, use, and enjoyment
d. title, time, location, and possession

332. A life estate is a(n)

a. present, possessory interest. c. estate of tenancy.
b. future interest. d. fee simple defeasible.

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

334. Property acquired by a spouse during marriage by gift or inheritance is

a. marital property c. separate property
b. community property d. jointly owned property

335. A deed of trust is

a. A document that makes a third party responsible for the money
b. A document that gives a third party the deed until the mortgage loan is paid off
c. A deed given by a prisoner who has behaved for many years
d. Used as a tool to make foreclosure more efficient

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

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

338. Under the local government code, agricultural lands of more than one hectare are subject to
additional tax of no more than 5% of assessed value when at lest
A. entire area is uncultivated
B. 50% of the area is uncultivated
C. 30% of the area is uncultivated
D. 20% of the area is uncultivated

339. Annual levy on real estate equivalent to 1% of the assessed value which shall be in addition to the
basic real estate tax
A. ad valorem tax c. special education fund tax
B. excise tax d. vat

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

341. BIR revenue regulation no 17-2003, the seller of a family home who failed to utilized the proceeds
to acquire a new residence within 18 months from the sale shall be assessed additional deficiency
capital gains tax inclusive of penalties and
A. 5% p.a. c. 20% p.a.
B. 25% p.a. d. 10% p.a.

342. Ground floor of a condominium project per BIR 28-29 shall be considered as commercial and a
additional rate shall be added on established residential zonal value of
A. 20% c. 15%
B. 10% d. 25%

343. The estate tax return shall be filed with the BIR within
A. 90 days from the death of the decedent
B. 120 days from the death of the decedent
C. 60 days from the death of the decedent
D. 180 days from the death of the decedent

344. Taxpayer has__ to redeem his real property which was levied and subsequently forfeited and
acquired by the local government for tax delinquency
A. 3 years c. 1 year
B. 5 years d. 2 years

345. The following composed the board of assessment of Makati city, except

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A. city assessor c. register of deed
B. city treasurer d. city engineer

346. Documentary stamp tax on the sale of property must be paid

A. within 30 days from the date of notarization
B. within 5 days after the close of the month of the date of sale
C. within 10 days after the close of the month of the date of sale
D. at the time payment of capital gains tax

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

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

349. Tax fixed on documents, instruments and papers evidencing acceptance, assignment or sale of a
right, property or obligation
A. community tax c. excise tax
B. estate tax d. documentary stamp tax

350. Banks acquired assets which form part of its real estate inventories at the close of its accounting
period shall be classified
A. ordinary asset c. fixed asset
B. capital asset d. tangible asset

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

352. Which of the following cannot be issued condominium certificates of titles

A. subdivision lots c. two level row house
B. one level raw house d. industrial warehouse

353. The required number of votes of registered owners to authorize a condominium corporation to sell
or otherwise dispose of the common areas in a condominium project is
A. unanimous votes c. Simple majority votes
B. 2/3 votes d. 1/3 votes

354. A space to be considered a condominium unit

A. at least 5 storey high
B. manage by condominium corporation
C. be susceptible to independent use and owner ship
D. unencumbered by any restriction

355. The right of an owner lessor to receive the contract rent and reversion of property at the end of
the lease is

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A. fee simple c. lease fee estate
B. net lease d. freehold

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

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

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

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

360. Under BIR Revenue Regulation No. 17-2003, the seller of a family home who failed to utilize the
proceeds to acquire a new residence within 18 months from the sale shall be assessed additional
deficiency capital gains tax inclusive of penalties and:
a. 5% interest per annum d. 10% interest per annum
b. 15% interest per annum e. 20% interest per annum
c. 25% interest per annum

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

362. Based on net gifts, the maximum rate of donor’s tax is:
a. Ten Percent c. Fifteen percent e. Thirty percent
b. Twenty percent d. Twenty-five percent

363. The value placed on taxable property by the assessor for ad valorem tax purpose is:
a. Market Value d. Appraised Value
b. Assessment Value e. Assessed Value
c. Economic Value

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

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

366. The documentary stamp tax on the sale of property must be paid
a. Within thirty (30) days from the date of notarization
b. Within five (5) days after the close of the month of the date of sale
c. Within ten (10) days after the close of the month of the date of sale
d. At the time of payment of capital gains tax
e. At any time

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

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

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

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

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

372. The documentary stamp on every mortgage or pledge of real estate is:
a. P20.00 for the 1st P5,000.00 plus P10.00 for every P5,000.00 thereafter
b. P10.00 for every P5,000.00 or fraction thereof
c. P15.00 for every P5,000.00 or fraction thereof
d. P2.00 on each P200.00 or fraction thereof

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e. None of the above

373. In case of sale of agricultural lands not exceeding five (5) hectares, aside from clearance from
DAR, buyer must also submit what document?
a. Undertaking to surrender land in excess of retention limits
b. Affidavit of compliance with CARL
c. Affidavit of total or aggregate landholding
d. Certification from DAR
e. Affidavit of waiver

374. The retention limit of landowners under the CARP is:

a. 5 has for the landowner and 3 has per child irrespective of age
b. 5 has for the landowner and 3 has per child who must be at least 15 years old
c. 5 has for the landowner and 5 has per child whether or not they till the land or manage the farm
d. 5 has for the landowner and 3 has per child who must be at least 15 years old and is actually
tilling the land or managing the farm
e. 5 has for the landowner and 3 has per child who must be over 21 years old

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

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

377. Registration of a mortgage covering a subdivision project or completion of development of a

subdivision project is at the:
a. Local Government Unit
b. Housing and Urban Development Coordinating Council
c. Home Insurance Guarantee Corporation
d. Housing and Land Use Regulatory Board
e. National Housing Authority

378. In the absence of any provision in the master deed of a condominium project, the interest of the
unit o owners in the common areas shall be:
a. Proportionate d. Decided by the condominium corporation
b. Based on Value e. None of the above
c. Equal

379. Urban Development and Housing Act:

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a. R.A. 7279 c. R.A. 9279 e. None of the above
b. R.A. 7927 d. R.A. 7972

380. Condominium Act:

a. R.A. 4727 c. R.A. 4276 e. None of the above
b. R.A. 2774 d. R.A. 4726

381. Document to be checked before buying a subdivision lot:

a. Development permit d. Map
b. License to sell e. None of the above
c. Bureau of Land approval

382. Sometimes referred to as vertical subdivision:

a. Row Houses d. Mansion
b. Town Houses e. None of the above
c. Condominium

383. Subdivision and Condominium Buyers Protective Decree:

a. P.D. 1216 d. P.D. 957
b. B.P. 220 e. None of the above
c. P.D. 1981

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

385. For a space to be considered a condominium unit, it must:

a. be encompassed by interior surface of walls, floors and ceilings
b. be managed by a condominium corporation
c. be susceptible of independent use and ownership
d. be unencumbered by any restriction
e. at least five storeys high

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

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

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388. Under the local government code, the appraisal of the fair market value of real property shall be
based on
a. actual used
b. independent appraisal value
c. declaration of lot owner
d. assessed value

389. When to pay Estate tax if the case is settled judicially

a. Not exceeding 2 years d. not exceeding 10 years
b. Not exceeding 3 years e. Not exceeding 5 years
c. Not exceeding 4 years

390. When to pay Estate tax if the case is settled extra judicially
a. Not exceeding 2 years d. not exceeding 10 years
b. Not exceeding 3 years e. Not exceeding 5 years
c. Not exceeding 4 years

391. Ecology solid waste management act is

a. RA 9003 d. RA 9030
b. RA 467 e. RA 674
c. RA 1096

392. It is the introduction of harmful substance or by products into the environment

a. Degradation d. Pollution
b. Solid waste e. Contamination
c. Discharge

393. It is a certification issued by the EMB certifying that based on the submitted project description, the
project is not covered by the EIS system and is not required to secure an ECC
a. Environmental compliance certificate d. Feasibilty study
b. Project impact study e. Environmental impact study
c. certificate of non coverage

394. what is EMB under the bureau of DENR

a. Ecosystem Management bureau d. Environmental Management Bureau
b. External Management bureau e. Environmentally Management Bureau
c. Ecology Management bureau

395. The effectivity of Maceda law or RA 6552.

a. August 16, 1972 d. Feb. 26, 1978
b. August 26, 1972 e. March 12, 1976

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

397. Maximum amount of loan available under Unified Home Lending Program

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a. 250,000.00 d. 375,000.00
b. 200,000.00 e. 500,000.00
c. 300,000.00

398. Zero Assessment level refers to an assessment of all building whose market value does not exceed-
_______ which are exempted from payment of real property taxes
a. 75,000.00 d. 175,000.00
b. 125,000.00 e. 275,000.00
c. 150,000.00

399. How often does the real property assessment be revised by the City/ Municipal assessor
a. every year d. 7 years
b. 3 years e. 10 years
c. 5 years

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

401. Who is the chairman of LBAA or Local board of assessment Appeal

a. Provincial auditor d. Register of Deeds
b. City Treasurer e. Fiscal
c. City Assessor

402. Tax imposed on every citizen of the Philippines

a. excise tax d. Real property tax
b. documentary tax e. Ad valorem tax
c. Community tax

403. All real estate broker and private appraiser shall be required to post a professional indemnity
insurance/cash or surety bond, in an amount with no less than_____, without prejudice to additional
requirement of the client. It will be renewable every 3 years.
a. 2,000 pesos d. 15,000 pesos
b. 5,000 pesos e. 20,000 pesos
c. 10,000 pesos

404. a stock corporation established principally for the purpose of owning income generating real estate
assets
A. real estate trust
B. real estate company
C. real estate investment trust
D. real estate investment corporation
E. Philippine stock exchange

405. The Real estate investment trust act

A. RA 9856

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B. RA 9886
C. RA 9865
D. RA 9646
E. RA 9586

406. A real estate investment trust is a

A. a public company
B. upon and after listing, have at least 1,000 public shareholders
C. maintain as a listed company in sec/pse
D. nota
E. all of the aboved

407. Real estate investment trust must distribute annually at least ______ of its distributable income as
dividends to its shareholder
A. 50%
B. 20%
C. 75%
D. 90%
E. 40%

408. The price or value of property agreed upon the seller who is not is compelled to sell and a buyer
who is not compelled to buy, both knowing all material facts relative to the property and the transaction
A. appraised value
B. assessed value
C. economic value
D. fair market value
E. zonal value

409. The sale of or transfer of real property to real estate investment trust, which includes the sale or
transfer of any and all security interest thereto, shall be subject to.
A. 25% of the applicable DST
B. 10% of the applicable DST
C. 75% of the applicable DST
D. 50% of the applicable DST

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

411. Real estate investment trust may only invest in

A. real estate related asset
B. debts securities, manage funds and listed shares issued by local or foreign non property
corporations
C. real estate located in the phils
D. government securities issued in behalf of the GRP or the government of the other countries
and securities issued by multilateral agencies

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E. all of the above

412. Transfer of awarded lands from CARP is prohibited for a period of

A. 5 years
B. 8 years
C. 20 years
D. 15 years
E. 10 years

413. PD 1517 or Urban Land Reform Law an area considered urban when it has a population density of
at least an area of.
A. 1,000 resident per sq.km. and at least 25% of active resident engage in non agricultural activities
B. 2,000 resident per sq.km. and at least 50% of active resident engage in non agricultural activities
C. 1,500 resident per sq.km. and at least 50% of active resident engage in non agricultural activities
D. 2,000 resident per sq.km. and at least 70% of active resident engage in non agricultural activities
E. 1,000 resident per sq.m. and at least 25% of active resident engage in non agricultural activities

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PART II: Professional Appraisal Practice

Model Exam 1
1.) The present and future demand for a property and its absorption rate is considered in a
a.) letter in appraisal
b.) market feasibility study
c.) market segmentation
d.) highest and best used analysis
e.) transmittal letter
2.) The appraiser final estimate should be based on
a.) average of three value indications obtained by three approaches
b.) weighing of the reliability of the information analyzed in each of the three approaches
c.) the most sophisticated guess technique
d.) adjustment for most recent indicators in the local market
3.) the appropriate time adjustment is concluded to be an increase of 7% per year compounded.
The time adjustment for a comparable sales property that should for 80,000.00 two years ago.
a.) 11,529 d.) 11,200
b.) 9,200 e.) 91,592
c.) 5,600
4.) the criteria for determining the highest and best used include all of the following EXCEPT
a.) physical possibility d.) probable use
b.) financial feasibility e.) effect on community welfare
c.) legal permissibility
5.) the broad forces affecting value do not include
a.) physical d.) social
b.) life cycle e.) economic
c.) political
6.) the certification of value section of an appraisal report states everything EXCEPT that
a.) the appraiser has no interest in the property
b.) the fee is not contingent upon any aspect of the report
c.) the facts are correct to the best of the appraiser knowledge
d.) last year the property was appraised by the another person
e.) the property was personally inspected by the appraiser
7.) one implication of competition and excess profit is that
a.) there is a certain optimum combination of land, labor, capital and entrepreneurship
b.) an estimate of value should be based on future expectation
c.) abnormally high profits cannot be expected to continue indefinitely
d.) maximum value accrues to real estate when social and economic homogeneity are present in a
neighborhood
8.) cost indexes offered by standardized services are used to
a.) derive units of comparison
b.) catalog building component
c.) estimate operating expenses
d.) update past cost into current cost

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e.) estimate the local consumer price index
9.) a summary appraisal report
a.) contains many items that are not considered in practice
b.) is an appraisal report prepared for a client
c.) summarizes the item that might be used in practice
d.) may be based on hypothetical or assumed data
e.) should be prepared on a nontypical property to appraisal practice
10.) real estate a submarket is
a.) a group of sales person who deal mostly in the same type of propert
b.) a group of sales that occur at the same time
c.) a group of similar properties in the same area
d.) a small portion of the market of similar properties
e.) an area where sandwiches on French bread are eaten
11.) the fact that rents for equally desirable space tend to be set by the market reflects the principle
of
a.) balance
b.) substitution
c.) externalities
d.) consistent used
e.) conformity
12.) the fee for an appraisal assignment is
a.) based on a percentage of the final value estimate
b.) agreed upon during the preliminary study stage
c.) determined after the appraisal is completed
d.) set by the fee schedule of the local board of realtors
e.) set by a fee scale from real estate commission
13.) the last step in the appraisal report is to
a.) write the report
b.) reconcile all data
c.) analyze the data
d.) inspect the property
e.) set the fee to be charge
14.) the form of which a formal appraisal is presented is called
a.) a presentation of value
b.) an appraisal log
c.) an appraisal report
d.) a value certification
e.) a narrative report
15.) a formal appraisal must include the
a.) date of value estimate
b.) signature of the appraiser
c.) identification of property appraised
d.) certification
e.) all of the above

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16.) the highest and best used of land as if vacant forms part of the basis for
a.) mortgage-equity analysis
b.) property rights adjustment
c.) an operating expense estimate
d.) the cost approach
e.) the square footage practice
17.) identifying and studying submarkets of a larger market is called
a.) market research
b.) market survey
c.) market agglomeration
d.) market segmentation
e.) market data
18.) the identification and study of a pertinent market is called
a.) market analysis
b.) neighborhood review
c.) property research
d.) market reflection
e.) market interaction
19.) which of the following is important for good appraisal communication
a.) word choice
b.) reading level
c.) grammatical correctness
d.) clarity
e.) all of the above
20.) all of the following are true except
a.) real property is a type of service
b.) value is dependent on market condition
c.) a good or service has no value in exchange unless it possesses certain economic and legal
characteristics
d.) the price representing value is usually quoted in terms of money
e.) Real estate may be sold for all cash or financed
21.) in estimating the market value of comparable sale, an appraiser must consider all of the
following EXCEPT
a.) whether the transaction was made in cash, terms equivalent to cash, or other precisely revealed
terms.
b.) Whether the property had reasonable exposure in a competitive market
c.) Whether a fair sale was transacted, with neither the seller nor the buyer acting under duress
d.) Whether the replacement cost of the property corresponds to its market value
e.) Whether the seller was related to the buyer
22.) in preparing the appraisal report, your analysis concludes that one of the approaches to value is
not applicable to this particular case. You should
a.) omit the approach all together
b.) base the approach on hypothetical data
c.) state that the approach is not relevant
d.) state that the approach is not applicable, explain the reason for this contention
e.) find another approach so as to include three approaches

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23.) in the cost approach the site is valued as if it were
a.) vacant and available for development to its highest and best use
b.) improved and suited for its intended use or development
c.) developed and operating
d.) attractively landscape
e.) without nearby utilities
24.) investment value is best describe as
a.) market price
b.) market value
c.) the cost of acquiring a competitive substitute property with the same utility
d.) the present worth of anticipated future benefits to a certain entity
e.) value in exchange
25.) location decision involve analysis on which three level
a.) general, specific, detailed
b.) country, state, community
c.) residential, commercial, industrial
d.) country, state, county
e.) region, neighborhood, site
26.) the length of a tract of land along a street is called
a.) depth
b.) width
c.) frontage
d.) abutment
e.) lineage
27.) the most comprehensive type of appraisal report is
a.) form report
b.) oral report
c.) letter report
d.) narrative demonstration report
e.) unbiased report
28.) the principle of ______states that buyer will not pay more for the a site than for another equally
desirable one
a.) anticipation
b.) imbalance
c.) substitution
d.) balance
e.) conformity
29.) the principle of anticipation is
a.) future oriented
b.) past oriented
c.) the as of date of appraisal
d.) anticipated loan to value ratio for the subject property
e.) similar to the principle of substitution
30.) the principle of_______states that the value levels are sustained when the various elements in
an economic or environmental mix are in equilibrium
a.) anticipation
b.) equivalence
c.) substitution

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d.) balance
e.) highest and best used
31.) price and value are
a.) not necessarily the same
b.) synonymous
c.) different, depending on financing terms
d.) almost the same in an active market
e.) interchangeably in a report
32.) the purpose of a ____ is to analyzed a property potential for success
a.) feasibility study
b.) marketability study
c.) market segmentation study
d.) appraisal report
e.) need study

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

a.) physically and legally possible and financially feasible

b.) physically and legally possible
c.) Already in existence and legal
d.) Physically possible and appropriate
e.) Legal and profitable
34.) an appraiser
a.) determines the price
b.) defends value
c.) estimates price
d.) estimates value
e.) determines value
35.) the objective of the appraisal should be stated in the report
a.) the market needs it
b.) it define the problems and identifies the value sought
c.) it identifies the function of the report
d.) it absolves the appraiser of liability
e.) there are too many definitions of market price
36.) the value estimate provided in an appraisal
a.) changes with the use to which it is put
b.) changes with the function of the appraisal
c.) remains the same regardless of use
d.) depends upon the use or function of the appraisal
e.) always reflects market value
37.) population increases______demand for housing
a.) depress the
b.) are incapable of simulating the
c.) have no effect on the
d.) are likely to create a
e.) are determined by the

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38.) environment hazards that an appraiser must be conscious of include all of the following except
a.) asbestos
b.) radon
c.) drano
d.) urea formaldehyde
e.) PVC
39.) In analyzing the environment and market area, it is best to
a.) start at the general level and work down to the specific
b.) start at the specific and work up to the general level
c.) limit the analysis to the national level
d.) limit the analysis to the local level
e.) generally consider the traffic flow
40.) the first step in general process is to
a.) define the problem
b.) gather data
c.) analyze data
d.) determine the approaches to value
e.) make a final value estimate
41.) combining to or more sites in order to develop one site with a greater value than the individual
sites have separately called
a.) synergy
b.) plottage
c.) surplus land
d.) excess land
e.) highest and best use of land
42.) assemblage is
a.) always reflect in the market value
b.) the act of bringing to or more smaller lots into common ownership for use
c.) inappropriate for parcels two or more hectares
d.) uneconomical
e.) illegal
43.) typically, land is appraised by the
a.) square foot
b.) front foot acre
c.) all of the above
d.) none of the above
44.) it is_________for an appraiser to receive or pay finders or referral fees
a.) reasonable
b.) unethical
c.) necessary
d.) customary
e.) convenient
45.) a sale between relatives is considered
a.) an arms length transaction
b.) a purely comparable sale
c.) an open market sale
d.) a distorted sale
e.) a good deal

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46.) What of the following is true about zoning
a.) it reflects the expectation that government will preserve property values
b.) it is based on the right of government to regulate for health, moral, welfare and safety
c.) it is inappropriate for parcels withed uses
d.) it represents an effort to establish the land highest and best use
e.) it represent the right to reuse the property

47.) for an appraiser to use the assistance of another appraiser is

a.) inconsiderate
b.) unethical
c.) illegal
d.) ethical
e.) questionable
48.) it is_________to provide a value range to a client who request it and understand its meaning
and use.
a.) foolish
b.) appropriate
c.) un ethical
d.) approximate
e.) difficult
49.) any recent sale of a subject property being appraised
a.) should be considered confidential
b.) cannot, under any circumstances, be considered in estimating the current market value of the
property
c.) should be discussed in appraisal report
d.) was not an arms length sale
e.) should be used as comparable sale, though adjusted for its time and terms
50.) the dimensions of a warehouse are customarily measured from
a.) a roof line
b.) the midpoint of exterior wall
c.) the inside of finished wall
d.) the outside of finished wall
e.) be reasonable or appropriate
51.) the construction of a luxury home in a neighborhood almost completely developed with one and
two bedroom apartments would
a.) produce external obsolescence
b.) be called an under improvement
c.) results in plottage value
d.) results in neighborhood amenities
e.) be reasonable or appropriate
52.) the most detailed, complex, costly and time consuming method of cost estimation is the
a.) quantity survey
b.) trade breakdown
c.) comparative unit
d.) unit in place
e.) comparable unit
53.) An improvements remaining economic life

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a.) it is chronological stage
b.) it is effective age
c.) is the period over which the improvements are expected to generate benefits
d.) is effective age minus chronological age
e.) effective age ;us chronological age
54.) the cost approach most applicable when the property being appraise
a.) has old improvement
b.) has relative new improvements that represent the highest and best use of the land
c.) suffers substantial functional obsolescence
d.) is more costly than the surroundings
e.) has many older features that make interesting reading in a report
55.) price per front foot
a.) a physical unit of comparison
b.) not as accurate as price per acre
c.) rarely used in residential site analysis
d.) an accurate guide to site marketability
e.) useful when there are few physical differences between sites
56.) which is the last step in reconciliation
a.) identify which of the three approaches is used
b.) apply the three approaches to the data collected
c.) apply to judgment to the data collected
d.) review previous work and analysis
e.) select a final value of estimate
57.) the highest and best use of the site is its
a.) existing use
b.) most probable use
c.) immediate next used
d.) synonymous with ordinary and necessary value
e.) different from most probable use
58.) markets in residential real estate are
a.) equivalent to those for securities
b.) related to physical boundaries
c.) local
d.) physically obscure
e.) found by courthouse sales
59.) inflation tends to increase the value of
a.) fixed income securities
b.) mortgages
c.) deeds in lieu of foreclosure
d.) real estate
e.) debts
60.) Real estate markets
a.) are international in scope
b.) meet none pf the criteria of a perfect market
c.) are centralized in nature
d.) consist of used property only
e.) are well developed in former Communist countries

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61.) The subject property has 85% occupancy. What conclusion would you most likely draw if the
typical occup0nacy rate in the area was 95%?
a.) Advertising is average.
b.) The rents are high.
c.) The rents are low.
d.) Management is good.
e.) New construction will occur soon.

62.) The fact that the value of a property tends to equal the cost of an equally desirable substitute is
an example of the principle of
a.) balance
b.) substitution
c.) contribution
d.) diminishing returns
e.) supply and demand
63.) Population flow to different regions of the United States will change primarily because of
a.) changing economic opportunities
b.) environmental control legislation
c.) rezoning legislation
d.) state tax policies
e.) air conditioning in the Sunbelt
64.) When each alternative use requires the same capital investment, the use that maximizes the
investment’s______ on a long-term basis is the highest and best use.
a.) diversified portfolio
b.) operating expenses
c.) net operating income
d.) potential gross income
e.) occupancy rate
65.) What would be the indicated value of a property that rented for 750 per month, using a monthly
gross rent multiplier of 100, if the expenses attribute to the property were 115 per month?
a.) 75,670
b.) 75,000
c.) 68,750
d.) 61,125
e.) 13,750
66.) Which of the following criteria most completely defines “highest and best use”?
a.) physically possible, legally acceptable, and generating a higher present land value than any
other use
b.) legally authorized, politically viable, and socially acceptable
c.) physically possible, comparable to other uses in the neighborhood, and legally authorized
d.) comparable to other local uses, physically possible, and generating a higher present land value
that any other use
e.) the tallest and most beautiful structure that can be placed on the land
67.) The total income anticipated from income property operations after vacancy and collection
allowances and operating expenses are deducted is
a.) net operating income
b.) before-tax cash flow

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c.) effective gross income
d.) potential gross income
e.) property residual income
68.) Which principle of value best affirms that value is the present worth of expected future
benefits?
a.) supply and demand
b.) balance
c.) substitution
d.) anticipation
e.) conformity
69.) Which principle of value best affirms that the maximum value of property generally cannot
exceed the cost of its replacement?
a.) increasing and decreasing returns
b.) supply and demand
c.) substitution
d.) balance
e.) anticipation
70.) Which of the following would be classified as a tangible rather than an intangible amenity?
a.) pride of ownership
b.) a sense of security
c.) a free dishwasher
d.) work satisfaction
e.) clean air
71.) Which type of property is subject to ad valorem taxation?
a.) property owned by a religious organization and used for religious purpose
b.) new industrial plants that state and local governments have induced, with tax exemption as an
incentive, to locate within their jurisdictions
c.) commercial property with more that 50% nonprofit tenants
d.) state colleges and universities
e.) a state capitol
72.) Compared with other assets, real estate is
a.) immobile
b.) expensive
c.) long-lived
d.) mortgagable
e.) all of the above
73.) All of the following are sources of comparable sales EXCEPT
a.) public records
b.) brokers
c.) buyers and sellers
d.) mortgage servicers
e.) appraisers
74.) An allowance for vacancy and collection loss is estimated as a percentage of
a.) net operating income
b.) before-tax cash flow
c.) effective gross income
d.) potential gross income
e.) after-tax cash flow

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75.) The annual net operating income from an apartment house is 11,000. If a capitalization rate of
11% is used, the indicated market value is
a.) 126,000
b.) 176,000
c.) 100,000
d.) 242,000
e.) 2,420

76.) which of the following is true of a gross lease

a.) the tenant pays all operating expense
b.) the landlord pays all operating expense
c.) this lease is used only for commercial properties
d.) rent rises with the cost of living
e.) this lease must be drafted by an attorney
77.) a forecast using discounted cash flow analysis would include
a.) income, vacancy and operating expense
b.) an economic analysis
c.) reversion at the end of the holding period
d.) discounting expected future cash flows to a present value
e.) all of the above
78.) in discounted cash flow analysis, the reversion to be received at the end of the holding period is
a.) a separate cash flow
b.) an annuity in arrears
c.) an ordinary annuity
d.) percentage of annual income
e.) amount to be capitalized in perpetuity
79.) a 1,000,000.00 property will have a 70% loan at an 8% annual mortgage constant. what must
the NOI be to produce 12% cash on cash return
a.) 120,000.00
b.) 56,000.00
c.) 92,000.00
d.) 84,000.00
e.) 700,000.00
80.) Income capitalization is the term used to describe the process of estimating the value of income
property by studying expected future income. This process
a.) converts the net income of a property into its equivalent capital value
b.) reflects the time value of money by reducing or discounting future income into its present worth
c.) focuses on the present worth of future benefits
d.) uses markets interest rates
e.) all of the above
81.) to earn 12% on your investment, what should you pay for a property earns 6,000.00 per month
and has operating expenses of 1,250.00 per month
a.) 475,000.00
b.) 150,000.00
c.) 229,166.00
d.) 333,333.00
e.) 400,000.00

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82.) the land development method is used to estimate the value of vacant acreage that is ready to
be subdivided. This method requires
a.) study of current sales of subdivided lots
b.) the projection of land of subdivided lots
c.) RTC approval
d.) Both A and B
e.) None of the above
83.) a technique in income capitalization in which the analyst need not distinguish interest rates
from capital recovery rates, but that is most useful for comparable income
a.) direct capitalization
b.) building residual
c.) land residual
d.) bank of investment
e.) internal rate of return
84.) cash on cash return is
a.) the annual cash flow divided by the equity investment
b.) an internal rate of return that represents annual income and all gains or losses prorated to an
effective annual amount
c.) a percentage or decimal rate that, when divided into a periodic income amount, offers a lump-
sum capital value for income
d.) a value that does not change with time
e.) none of the above
85.) Which report is usually NOT prepared by a real estate appraiser?
a.) marketability study
b.) economic study
c.) feasibility study
d.) mineral valuation study
e.) highest and best use

Questions 86-89 based on the information below.

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

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

a.) 40
b.) 128

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c.) 80
d.) 88
e.) 32
87.) What is the gross amount that will be realized from the sale of all the lots?
a.) 720,000
b.) 2,304,000
c.) 1,440,000
d.) 1,584,000
e.) 576,000
88.) What is the cost of installing streets, water, and sewer lines?
a.) 16,000
b.) 32,000
c.) 64,000
d.) 160,000
e.) None of the above
89.) What is the amount of selling cost, overhead, contingencies, carrying cost, and developer’s
profit?
a.) 921,6000
b.) 576,000
c.) 288,000
d.) 633,600
e.) None of the above

Questions 90-93 are based on the information below:

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

90.) Potential gross income is

a.) 1,289,000
b.) 112,000
c.) 107,000
d.) 1,284,000
e.) Cannot be calculated from the information given
91.) Effective gross income is
a.) 1,224,800
b.) 1,220,000
c.) 824,800
d.) 107,000
e.) Cannot be calculated from the information given
92.) Net operating income is
a.) 1,224,800
b.) 824,800
c.) 424,800
d.) None of the above

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

Questions 94-97 are based on the following information:

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

94.) potential gross income is

a.) 64,735
b.) 1,547,000
c.) 1,545,000
d.) 717,425
e.) None of the above
95.) effective gross income is
a.) 64,735
b.) 1,547,000
c.) 1,545,000
d.) 1,438,850
e.) None of the above
96.) Net operating income is

a.) 64,375
b.) 268,970
c.) 863,310
d.) 719,425
e.) None of the above
97.) operating expense are
a.) 1,545,000
b.) 54,075
c.) 2,000
d.) 719,425
e.) 575,540
98.) in one step of the land value residual technique, the building capitalization rate is
applied to the known building value to estimate the
a.) highest and best use of the site
b.) cost of the building
c.) income needed to support the land
d.) net operating income needed to support the building
e.) land value
99.) the basic formula of property valuation via income capitalization is

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a. V=IR
b. V=I/R
c. V=R/I
d. V=SP/GR
e. V=I/F
100.) all of the following lease provisions are advantageous to the lessee EXCEPT
A.) an escape clause
B.) a renewal option
C.) a purchase option
D.) an escalation clause
E.) none of the above

Model Exam 2
1. In economics, the four factors of production are
(A) land, labor, capital, and improvements
(B) land, labor, capital and entrepreneurship
(C) land, labor, capital and money
(D) land, improvements, labor and materials
(E) land, labor, site, and improvements
2. The law of supply and demand is
(A) a basic economic principle
(B) legislated by Congress
(C) seldom used in the appraisal process
(D) not a applicable in the short term
(E) all of the above
3. Which of the is NOT an agent of production?
(A) land (D) capital
(B) transportation (E) entrepreneurship
(C) labor
4. Political forces affecting value may include
(A) life-styles and living standards
(B) topography
(C) athletic levels and recreation facilities
(D) government spending and taxation policy
(E) primary registration and turnout
5. What are the two categories of tangible property?
(A) real property and personal property
(B) intangible property and real property
(C) real estate and intangible property
(D) legal and illegal investments
(E) open and shut transactions
6. Zoning is an exercise of the
(A) equity courts
(B) police powers
(C) Environmental Protection Agency
(D) Right of condemnation

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(E) Right of escheat
7. Which of the following types of property is subject to ad valorem taxation?
(A) property owned by a religious organization and used for a religious purpose
(B) new industrial plants that state and local governments have induced, with tax exemption as
an incentive, to locate within their jurisdictions
(C) commercial buildings leased in part by nonprofit foundations
(D) state colleges and universities
(E) a state capitol
8. A person owning less than the entire bundle of rights has
(A) escheat (D) personal property
(B) a fee simple title (E) a fee tail
(C) a partial interest
9. A metes and bounds description begins and ends with the
(A) street and house number (D) grid coordinates
(B) block number (E) iron pin
(C) point of beginning
10. A (n) ____ identifies a property in such a way that it CANNOT be confused with any other
property.
(A) coded map book (D) full city survey
(B) legal description (E) engineering report
(C) narrative appraisal
11. All of the following statements are true EXCEPT
(A) real property is a type of service
(B) value is dependent on market conditions
(C) a good or service has no value in exchange unless it possesses certain economic and legal
characteristics
(D) the price representing value is usually quoted in terms of money
(E) real estate may be sold for all cash or financing arranged
12. All of the following will affect the market value of a property EXCEPT
(A) political factors
(B) legal use restriction
(C) acquisition cost to present owner
(D) economic factors
(E) social concerns
13. Market value is ____ the same as selling price.
(A) always (D) usually
(B) never (E) none of the above
(C) sometimes
14. Price is
(A) market value (D) a historical fact
(B) most probable sales price (E) all of the above
(C) investment value
15. Functional utility depends on
(A) zoning
(B) wear and tear on the structure
(C) tastes and standards
(D) age of the equipment
(E) insurance requirements

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16. Value in use is
(A) subjective
(B) objective
(C) readily measurable
(D) a market phenomenon
(E) synonymous with market price
17. The value added to total property value by a particular component is an example of the principle
of
(A) substitution (D) contribution
(B) anticipation (E) conformity
(C) change
18. The concept that the value of a particular components is measure by the amount that its
absence would detract from the value of the whole is
(A) opportunity cost (D) contribution
(B) substitution (E) conformity
(C) competition
19. The market loss cause by depreciation in an older structure may be offset by all of the following
EXCEPT
(A) architectural interest
(B) historical registration
(C) strong demand relative to supply
(D) strong supply relative to demand
(E) renovation of the structure
20. Studying appraisal helps a person
(A) to improve value estimation skills
(B) to pass the real estate broker’s license examination
(C) to understand other real estate courses
(D) to communicate with appraisers
(E) all of the above
21. A dramatic change in short-term demand for real estate in the local market is likely to
immediately precipitate
(A) construction (D) activity
(B) price changes (E) no change in supply
(C) conversions
22. The area and community analysis section of an appraisal report
(A) should “sell” the community
(B) should describe the community objectively
(C) is a study by the estate’s industrial development commission
(D) considers the negative aspects only
(E) considers the positive aspects only
23. In analyzing the economic environment and market area, it is best to
(A) start at the general level and work down to the specific
(B) start at the specific and work up to the general level
(C) limit the analysis to the national level
(D) generally consider traffic flow
24. Which of the following reports is usually NOT prepared by a real estate appraiser?
(A) marketability study
(B) economic study

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(C) feasibility study
(D) transportation network study
(E) valuation study
25. An appraisal of a specific-purpose for insurance purpose would depend most heavily on
(A) book value (D) highest and best use
(B) cost estimate (E) specialty value
(C) land value
26. The first step in the appraisal process is to
(A) define the problem to be solved
(B) gather relevant data
(C) analyze the data
(D) inspect the property
(E) set the fee to be charged
27. An appraisal is
(A) an estimate of net realizable value
(B) always concerned with the market value
(C) an appraiser’s opinion of market value
(D) a precise statement of value
(E) a broker’s comparative sales analysis with further detail
28. The “as of” date in an appraisal report is
(A) the date to which the value applies
(B) immaterial to the value estimate
(C) the date on which the report is delivered
(D) the date on which the property will be conveyed
(E) the anticipated closing date
29. Sales data descriptions of an appraisal report contain
(A) details about each comparable sale
(B) an analysis of the date, using the value approaches
(C) the investigation of market forces
(D) analysis of the street each comparable property is on
(E) zoning details
30. All of the following are ways to delineate a neighborhood EXCEPT
(A) natural barriers (D) streets
(B) utility service (E) income characteristics
(C) political boundaries
31. All of the following are sources of comparable sales EXCEPT
(A) public records (D) mortgage services
(B) brokers (E) appraisers
(C) buyers and sellers
32. Which of the following criteria most completely define “highest and best use”?
(A) legally authorized, politically viable, and socially acceptable
(B) physically possible, comparable to other uses in the neighborhood, and legally authorized
(C) physically possible, legally permissible, financially feasible, and generating a higher present
land value than any other use
(D) comparable to other uses in the neighborhood, physically possible, and generating a higher
present land value than any other use
(E) the tallest and most beautiful structure that can be placed on land
33.

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34. The three basic approaches used to estimate value are
(A) use, exclusion, and disposition
(B) cost, sales comparison, and use
(C) cost, sales comparison, and market data
(D) cost, sales comparison, and production
(E) cost, sales comparison, and income capitalization
35. Units of comparison are used in
(A) only the sales comparison approach
(B) only the cost approach
(C) only the income capitalization approach
(D) A, B and C
(E) the appraisal of special-purpose properties only
36. Final value estimates should be rounded to reflect the
(A) absence of good data
(B) property’s location
(C) fact that a selling price will probably be a round number
(D) lack of precision associated with an opinion
(E) high value of real estate
37. When reconciling the adjusted sales prices of comparables, the greatest emphasis should be
given to
(A) the average
(B) the median
(C) the mode
(D) the mean of A, B, and C
(E) none of the above
38. Which of the following forms of appraisal report is NOT recommended?
(A) completely filled-in institutional form
(B) telephone conversation
(C) letter report
(D) long narrative report
(E) demonstration
39. Which of the following approaches would probably be given the most weight in appraising a
large office building?
(A) reproduction cost (D) income capitalization
(B) subdivision development (E) market absorption
(C) replacement cost
40. The form in which a formal appraisal is presented is called
(A) a presentation of value (D) a value certification
(B) an appraisal log (E) a narrative
(C) an appraisal report
41. The form of an appraisal report
(A) has no influence on the appraisal process
(B) is the same, regardless of the problem
(C) is set by the amount of the fee
(D) is determined by the appraiser
(E) determines the appraisal framework
42. The effective age and the useful life of a building represent judgments made by the
(A) appraiser (D) buyer

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(B) property owner (E) insurer
(C) tax assessor
43. The period over which existing improvements are expected to continue to contribute to
property value is their
(A) effective age (D) period of diminishing returns
(B) remaining economic life (E) chronological age
(C) remaining physical life
44. For a building, effective age is best defined as
(A) the average age of the roof
(B) the actual age divided by the age-life
(C) the age of other property in equivalent condition and utility the chronological age of the
building
(D) the chronological age of the building
(E) the period over which the building may be effectively used
45. The utility of real estate is its
(A) attractiveness to the trained observer
(B) longevity
(C) capacity to satisfy human needs and desires
(D) effective demand
(E) remaining economic life
46. In appraising a residence, adjustments are NOT made to the comparable property for
(A) age (D) terms of sale
(B) lot value (E) size
(C) assessed valuation
47. When a site has improvements on it, the highest and best use
(A) is not definable
(B) is its existing use
(C) is its potential use
(D) depends on whether or not the existing use is changeable
(E) may be different from its existing use
48. To be considered as a comparable, a property
(A) a must have been sold within the past 5 years
(B) must be competitive with the subject
(C) must have been sold by an open-market transaction
(D) must be a similar color
(E) both B and C
49. The direct sales comparison approach is better than the income or cost approach because
(A) fewer comparable properties are require, so it is easier to outline the results to clients
(B) there are fewer mathematical calculations, so there is less chance of mathematical errors
(C) the market for real estate is slow to change
(D) it is always easier to obtain data for the direct sales comparison approach
(E) none of the above true
50. The appraisal of an established 20-year old motel on a road with numerous competitive motels
would most likely be based on the
(A) square foot are of improvements
(B) number of units
(C) reproduction cost
(D) gross rent multiplier

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(E) occupancy rate
51. In applying gross rent multiplier analysis to the subject property, the appraiser would use the
(A) market rental
(B) actual rent being paid
(C) rent currently asked by the owner
(D) rent offered by a potential tenant
(E) rent listed in advertising the property

Factor Subject Comparable 1 Comparable 2 Comparable 3

Price 90,000 88,500 87,000

Living area (sq.ft.) 1,500 1,600 1,450 1,400

Condition Good Fair Excellent Good

Garage Once-car Two-car One-car Two-car

Time of sale Now Last year Last year This year

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

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

52. What is the size adjustment for Comparable 1?

(A) +1,500 (D) +3,000
(B) - 1,500 (E) - 3,000
(C) 0
53. What is the size adjustment for Comparable 2?
(A) +1,500 (D) + 3,000
(B) - 1,500 (E) - 3,000
(C) 0
54. What is the condition adjustment for Comparable 1?
(A) 0 (D) +9,000
(B) +4,500 (E) -9,000
(C) - 4,500
55. What is the condition adjustment for Comparable 2?
(A) 0 (D) +$8,850
(B) +$4,425 (E) - 8,850
(C) - 4,425
56. What is the garage adjustment for Comparable 2?
(A) 0 (D) +$3,000
(B) - 1,500 (E) - 3,000
(C) - 1,500
57. What is the garage adjustment for Comparable 3?

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(A) 0 (D) + 3,000
(B) +1,500 (E) -3,000
(C) - 1,500
58. In estimating the market value of a comparable sale, an appraiser must consider all of the
following EXCEPT
(A) whether the transaction was made in cash, terms equivalent to cash, or other precisely
revealed terms
(B) whether the property had reasonable exposure in a competitive market
(C) whether a fair sale was transacted, with neither the seller nor the buyer acting under
duress
(D) whether the replacement cost of the property corresponds to its market value
(E) whether the seller was related to the buyer
59. The terms financing, whether good or bad,
(A) have no effect on the market price
(B) have no effect on the market value
(C) have no effect on affordability
(D) depend on fiscal and monetary policy
(E) should be ignored when adjusting comparables
60. Adjustments to the property rights conveyed, financing, conditions of sale, date of sale, and
location are often made to the ____ of the comparable property.
(A) unit price
(B) actual sales price
(C) price per square foot
(D) gross income multiplier
(E) cash equivalent value
61. Cumulative percentage adjustments may be used
(A) when the characteristics are interdependent
(B) when the characteristics are independent
(C) when dollar figures are available
(D) when unimproved properties are being appraised
(E) under no circumstances
62. The best unit of comparison for vacant land is
(A) the square foot
(B) the total lot
(C) a combination of square foot and front foot units
(D) the linear foot
(E) the unit considered important by the market
63. You are asked to appraise a vacant building lot. The neighborhood is about 75% built-up. Most
lots in the area are from 55 ft. to 85 ft. to 65 ft. wide; the lot under appraisal is 60 ft.
Comparable sales indicate that lots are selling at 120 to 150 per front foot. What is a good
estimate of the price range for this lot?
(A) 9,000-11,000
(B) 7,200-9,000
(C) 5,400-6,750
(D) 6,600-7,600
(E) 6,600-11,250
64. In appraising a residential property by the cost appraiser considers the
(A) sales prices of comparable properties

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(B) deprecation of the land
(C) depreciation of improvements
(D) potential for new competition
(E) potential misuse of this approach
65. In the cost approach, ____ is deducted after estimating the cost to reproduce an existing
structure.
(A) land cost (D) cash equivalence
(B) cost to maturity (E) legal factors
(C) depreciation
66. Economic obsolescence does NOT result from
(A) and outdate kitchen
(B) construction of a freeway near the property
(C) the presence of an earthquake fault nearby
(D) building restrictions in the community
(E) factors external to the subject property itself
67. Reproduction or replacement cost includes all of the following EXCEPT
(A) an outdated kitchen
(B) construction of a freeway near the property
(C) the presence of an earthquake fault nearby
(D) building restrictions in the community
(E) factors external to the subject property itself
68. Reproduction or replacement cost includes all of the following EXCEPT
(A) direct or hard costs
(B) indirect or soft costs
(C) entrepreneurial profit
(D) fixed and variable expenses of operations
(E) elevator shafts
69. In analyzing obsolescence , the test of curability of a component in a building is whether the cost
to cure is no greater than the
(A) expected increase in value
(B) reproduction cost new
(C) replacement cost
(D) installation cost
(E) economic life of the new component
70. Which of the following is NOT a type of depreciation?
(A) entrepreneurial loss (D) functional obsolescence
(B) external obsolescence (E) economic obsolescence
(C) physical deterioration
71. Estimation of occurred depreciation and obsolescence does NOT involve
(A) physical deterioration (D) functional obsolescence
(B) economic obsolescence (E) wear and tear
(C) financial structure
72. In appraisal, accrued depreciation is really an estimate of
(A) physical deterioration (D) capital recovery
(B) diminished utility (E) sinking fund factor
(C) book depreciation
73. The cost approach NOT useful for
(A) checking value approaches

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

An appraiser noted the following about a rental home:

needs exterior paint 750 cost to cure
needs new water heater 250 cost to cure
has one bath in market for two 4,000 capitalized rent loss
has poor floor pan 2,500 capitalized rent loss
is located next to a convenience store 1,200 capitalized rent loss
74. How much is curable physical deterioration?
(A) 250 (D) 2,500
(B) 750 (E) none of the above
(C) 4,000
75. How much is functional obsolescence?
(A) 250 (D) 2,500
(B) 750 (E)4,000
(C) 1,200
76. How much is environmental obsolescence?
(A) 250 (D) 2,500
(B) 750 (E)4,000
(C) 1,200
77. An appraisal of a freestanding store and the land it occupies is an unbiased estimate of the value
of an interest in
(A) personal property
(B) mortgages
(C) real estate
(D) personal property and land
(E) real estate plus business value
78. The term vertical interest does NOT refer to rights to
(A) subsurface mineral extraction
(B) the construction and railroad tunnels
(C) the use and regulation of air space
(D) subdivision and development
(E) the construction of buildings over railroad yards
79. Inflation tends to increase the value of
(A) fixed-income securities (D) tangible long-lived investments
(B) mortgages (E) debts
(C) deeds in lieu of foreclosure
80. With an amortized mortgage loan,
(A) interest only is paid until maturity
(B) some principal is repaid with each payment
(C) the entire principal is repaid before maturity
(D) equal amounts of principal are repaid each period
(E) there is a balloon payment at maturity

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81. When each alternative use requires the same capital investment, the use that maximizes the
investment’s ____ on a long-term basis is highest and best use.
(A) diversified portfolio (D) potential gross income
(B) operating expenses (E) occupancy rate
(C) net operating income
82. Land purchased for 50,000 cash appreciates at the rate of 15% compounded annually. About
how much is the land worth after 5 years? Disregard taxes, insurance, and selling expenses.
(A) 100,000 (D) 37,500
(B) 87,500 (E) 7,500
(C) 57,500
83. A land speculator expects that a certain 100-acre tract can be sold to a subdivider 4 years from
now for 10,000 per acre. If holding and selling costs are disregarded, what cash price today
(rounded to the nearest 1,000) would allow the speculator to realize a 15% compounded annual
rate of return on the entire tract?
(A) 572,000 (D) 6,000
(B) 5,000 (E) none of the above
(C) 600,000
84. Gross income multipliers are generally considered part of
(A) the cost approach
(B) the direct sales comparison approach
(C) the income capitalization approach
(D) the insurance approach
(E) none of the above
85. Use of a gross rent multiplier is valid when the subject and comparable properties have similar
(A) potential gross incomes (D) operating expense ratios
(B) effective gross incomes (E) cash flows
(C) net operating incomes
86. Time-distance relationship between a site and all relevant origins and destinations are called
(A) access roads (D) linkages
(B) transit facilities (E) synergies
(C) ingress and egress
87. The land on which a 10-year-old house is located is valued at $28,000, and the reproduction
cost of the dwelling is $92,000. Straight-line depreciation is 2% per year, applied to the building
only. If there is no other obsolescence, what is the indicated value of the property?
(A) $96,000 (D) $117,700
(B) $101,600 (E) $120,000
(C) $117,000
88. An allowance for vacancy and collection is estimated as a percentage of
(A) net operating income
(B) before-tax cash flow
89. Effective gross income is income after an allowance for
(A) depreciation (D) both A and B
(B) operating expenses (E) none of the above
(C) cash expenditures
90. In discounted cash flow analysis, the reversion to be received at the end of the holding period is
(A) a separate cash flow
(B) an annuity in arrears
(C) an ordinary annuity

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(D) a percentage of annual income
(E) an amount to be capitalized in perpetuity
91. To earn 12% annual cash return on a cash investment, what should you pay for a property that
earns 4,000 per month and has operating expenses of 1,250 per month?
(A) 150,000 (D) 333,333
(B) 275,000 (E) 400,000
(C) 229,166
92. In selecting an overall capitalization rate for an income-producing property, the appraiser will
consider all of the following EXCEPT
(A) return on invested capital
(B) risk factors
(C) return of invested capital
(D) the interest rate on the existing loan, which was arranged last year
(E) the interest rate prevailing in the market

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

93. Potential gross income is

(A) 1,289,000 (D)107,000
(B) 1,284,000 (E) none of the above
(C) 112,000
94. Effective gross income is
(A) 1,224,800 (D) $107,000
(B) 1,220,000 (E) none of the above
(C) 824,800
95. Net operating income is
(A) 1,224,800 (D) 424,800
(B) 1,220,000 (E) none of the above
(C) 824,800
96. Before-tax cash flow is
(A) 1,030,000 (D) 194,800
(B) 824,800 (E) none of the above
(C) 424,800
97. To obtain the present value of a series of incomes, a (n) ____ rate is applied.
(A) discount (D) equity capitalization
(B) income (E) stated
(C) overall capitalization
98. A fast-food chain could buy the building and land necessary for a new outlet for 200,000.
Instead, an investor bought the property for this amount and lease it for 2,000 per month over a
20-year term. Rent is payable at the end of each month. What yield to maturity is implied by the
lease, assuming that, at the end of 20 years, the property is still worth about $200,000?
(A) 8% (D) 14%
(B) 10% (E) 15%
(C) 12%
99. When market rent is less than contract rent, the difference is known as

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(A) overage rent (D) gross rent
(B) excess rent (E) slippage rent
(C) percentage rent
100. If a particular buyer requires as recapture of the building portion of the purchase price
in 25 years, what is the indicated recapture rate for the building, assuming straight-line
recapture?
(A) 0.25% (D) 20%
(B) 2% (E) 25%
(C) 4%
101. In a high-rise, 100-unit apartment building there is a basement laundry area that brings in 100
monthly from the concessionaire. The laundry income is
(A) included, as miscellaneous income, in potential gross income
(B) included, as other income, in effective gross income
(C) deducted from effective gross income
(D) added to before-tax cash flow
(E) distributed to the maintenance workers

MODEL EXAM 3
1. A building is depreciated at 2.5% per year on a straight-line basis. What is the estimated useful life of
the building?

2. A residential land is located at Orange City with an area of 2,200 square meters and cost per sq.m. is
P3,500. It has a corner influence of 25% because of its location, topography advantage of 20% because
it is plain and a plottage of 10% because of its shape. Compute the value of the property.

3. Using the 4-3-2-1 depth rule, if a 10-hectare belonging to different owners namely; Mamita, Tiyo, Alan
and L.A was sold for P10,0M, what is the share of each owner?

4. Rebisco bought 50 hectares of land at P700 per sq.m. If the medium subd. development costs of
P1,000/sq.m. is based on the saleable area which is 60% of the gross area, compute the following:

(a) Total land acquisition cost;

(b) Total Development cost;
(c) Total unit costs per sq.m. of the saleable lots;
(d) If the projected gross mark up is 100% of the total unit costs/sq.m. of the saleable lots, what
will be the selling price per square meter?

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For Question Nos. 5-7

A Real Estate Property was valued and assessed by Mun. Assessor in the following amount and rate:

Kind of Market Value Assessment Basic Realty Tax Rate SEF

Property Level Tax

Land P5.0M 50% 2% 1%

Building P15.0M 80% 2% 1%

Machineries P3.0M 80% 2% 1%

compute the following:

5. Basic realty tax before discount for one quarter?:

6. Total Special Education Fund Tax for one year before discount?

7. Total Taxes (basic and SEF) for one-year discount is 10%?

8. A commercial property producing an annual gross income of P390,000 was sold two months ago for
P3,412,500. What is the property's gross income multiplier?

9. The property under appraisal is a 25 year-old apartment building producing a net operating
income of P50,000 a year. Compute the value of the property, assuming a remaining economic
life of 40 years for the building at 10.5% interest rate and land value is estimated at
P100,000.00

10: You can afford to put 10,000 in a savings account today that pays 6% interest compounded
annually. How much will you have 5 years from now if you make no withdrawals?

11. Another financial institution offers to pay 6% compounded semiannually. How much will your
10,000 grow to in five years at this rate?

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12. What amount will accumulate if we deposit 5,000 at the end of each year for the next 5 years?
n
Assume an interest of 6% compounded annually. FV = PMT ([(1 + i ) – 1]/i )

13. What amount will accumulate if we deposit 5,000 at the beginning of each year for the next 5
n
years? Assume an interest of 6% compounded annually. . FV = PMT ([(1 + i ) + 1]/i )

14. You want to buy a house 5 years from now for 150,000. Assuming a 6% interest rate compounded
annually, how much should you invest today to yield 150,000 in 5 years?
PV=FV(1+i)^-n pv=150000(1.06)^-5

15. What amount must you invest today at 6% compounded annually so that you can withdraw 5,000 at
the end of each year for the next 5?

-n
PV = PMT [( 1-(1 + i) ] / i

5000((1-(1+.06)^-5))/.06

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ANSWER KEY
PART I: Fundamentals of Real Estate Appraisal
1. d. real estate assessor
2. b. real estate consultant
3. e. real estate sales person
4. c. real estate broker
5. a. real estate appraiser
6. b. 20 accredited sales person
7. b. Philippine regulatory board of real estate service
8. b. Eduardo Gutierrez Ong
9. d. Real estate developer
10. c. Assessor
11. d. 1 chairperson and 4 members
12. d. 2 years and 120 units
13. c. 100,000 and 2 years
14. d. Doubled
15. b. Those who had passed the 2009 & 2008 licensure examinations given by DTI but who had
failed to renew their license upon the effectivity of RA 9646
16. c. Those who had passed the 2007 licensure examinations given by DTI but who had failed to
renew their license upon the effectivity of RA 9646
17. d. Those who had passed the DTI licensure examinations in 2006 and prior years but who had
failed to renew their license upon the effectivity of RA 9646
18. c. a or b
19. a. Real estate salesperson
20. a. Accredited and Integrated Professional Organization
21. a. Holder of bachelor’s degree
22. e. Regular Court
23. e. Ten years
24. d. Material fact, data or information
25. d. Procurement of loans secured by real estate
26. d .Non-payment of dues
27. d. Willingly share with other brokers the lessons from his experience and study
28. d Accredited and integrated professional organization
29. a non payment of dues
30. d. real estate sales person
31. a. fiduciary relationship
32. d. license number
33. a. undervalue the amount in the deed of sale
34. b. keeping a special bank account, separate and distinct from his own funds, for all monies
received in trust for other persons such as clients money and similar items
35. c. 3 years
36. d. Holder of college degree
37. c. bind the principal in the contract
38. d. 10 years
39. e. real estate dealer
40. f. all of the aboved

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41. a. property management
42. d. real estate broker
43. e. all of the above
44. b. escrow
45. b.Torrens title
46. a. legitime
47. b. dominant estate
48. a. servient estate
49. c. 60 days
50. c. once every 5 years
51. c. property
52. c. homestead estate
53. regalian doctrine
54. b. police power
55. e. taxation
56. a. escheat
57. d. eminent domain
58. c. zoning
59. e. stewardship principle
60. c. riparian owner
61. c. patrimonial property
62. b. hidden treasure
63. c. torrens system
64. c. absolute community of property
65. e. capital property
66. paraphernal property
67. a. co ownership
68. b. accesson
69. d. public grant
70. c. avulsion
71. b. Lease fee estate
72. . b. Statute of Fraud
73. a. Rights in realty
74. b. All interests, benefits, and rights inherent in the ownership of real estate
75. c. both a and b
76. c. fee simple
77. b. ordinarily personal property
78. a. Recording gives public notice of the transaction and sets the priority
79. b. accretion
80. a. avulsion
81. c. alluvium
82. d. No two parcels can occup y the same space on the face of the earth
83. d. Finite
84. b. social, economic, governmental and legal, geographic and environmental
85. c. fire insurance
86. b. the physical land and appurtenances affixed to the land
87. b. Real estate
88. d. Both (b) and (c)

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89. d. Market value
90. b. Land, labor, capital, entrepreneurship
91. d. Cost of` construction increases
92. d. It provides future benefits
93. c. The price of the real property
94. c. By definition, uniqueness means that fewer people will want to bu y it
95. b. Increases slowly
96. a. Causes oversupply and lower prices
97. a. Has lost nearly all utility
98. d. All of the above
99. a. Progression Principle
100. b. Utility
101. b. The lower-priced home will attract more demand.
102. b. The supply increases because new builders get into the market
103. a. Social, economic, governmental, and environmental
104. d. An incremental increase of value that results when two or more sites are combined to
produce greater utility
105. c. frontage
106. b. across the fence value (atf)
107. a. Fixture
108. b. Contributes nothing to the value of real estate
109. c. All of the above .
110. d. All of the above.
111. c. Both a and b.
112. d. the date of the appraisal
113. d. To solve problems that involve real estate valuation
114. c. Feasibility analysis
115. c. Use value
116. c. Going-concern value
117. e. The present worth of anticipated future benefits to a specific investor
118. a. Well-informed buyers and sellers
119. b. most probable price
120. b. The property sells in 90 to 120 days
121. d. all of the above
122. c. Both a and b.
123. b. externalities
124. c. a nonconforming use
125. c. Excess land
126. d. Cost of` construction increases
127 . a. Anticipation
128. c. Conformity
129. a. Physically possible, legally permissible, appropriately justified, financially feasible, and
maximally productive
130. d. All of the above
131. c. The improvement value must be adjusted down if the land’s highest and best use is
different than the improved highest and best use
132. c. Interim use

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133. a. A use that was legally established and maintained but no longer conforms to existing
zoning
134. d. All of the above.
135. c. A group of complementary land uses
136. b. A type of neighborhood that is characterized by homogeneous land use
135. a. Growth, stability, decline, and revitalization
138. d. Vacancy rates
137. d. The economic activity that enables it to attract income from outside its borders
138. b. Crime levels
139. d. Changes in property use
140. b. A process in which older homes in a neighborhood are remodeled and different residents
replace the lower-income residents
141. c. Time-distance relationships between a property use and the supporting facilities
142. b. demography
143. b. reverse hierarchical
144. f. A group of individuals or firms that are in contact with one another for the purpose of
conducting real estate transactions
145. b. GIS (Geographic Information System).
146. c. principle of competition
147. a. principle of balance
148. d. principle of contribution
149. e. principle of surplus productivity
150. b. principle of conformity
151. c. principle of utility
152. b. principle of supply and demand
153. a. principle of consistent used
154. c. principle of highest and best used
155. a. salvage value
156. e. zonal value
157. b. principle of substitution
158. a. in an arm’s-length transaction
159. c. cash equivalency technique
160. a. Are the most reliable guide to the probable current market behavior and reactions of
informed buyers.
161. c. both a and b
162. b. entrepreneurial profit
163. c. both a and b
164. a. direct cost
165. a. reproduction cost
166. replacement cost
167. b. the cost of new improvements at current prices
168. a. the original cost of improvements
169. a. reflects the success of the project
170. d. External obsolescence—incurable
171. b. Physical deterioration—long-lived incurable
172. a. operating expense ratio
173. b. net income ratio
174. d. break-even ratio

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175. c. Effective gross income
176. a. operating expenses are divided by effective gross income
177. d. net operating income is divided by effective gross income
178. c. both a and b
179. c. The market is in a condition of oversupply.
180. d. all of the above
181. c. functional obsolescence
182. d. The cost approach
183. c. Sales comparison approach, allocation, extraction
184. b. The cost method
185. d. All of the above
186. b. land, labor, capital and entrepreneurship
187. b. transportation
188. d. government spending and taxation policy
189. a. real property and personal property
190. b. police powers
191.d. Rental
192.a. Economic rent
193.e. Market price
194. b. wear and tear on the structure
195. a. subjective
196. d. contribution
197. d. contribution
198. e. renovation of the structure
199. e. all of the aboved
200. a. tangible assets, other than realty.
201. a. Plant
202. b. Machinery
203. a. Will continue to be used for the provision of the relevant public good or service.
204. a. Should be reflected in the value of the real estate interest
205. a. Tangible assets
206. d. All of the above.
207. a. associated intellectual property rights
208. d. economic Life
209. d. All of the above.
210. c. commercial buildings leased in part by nonprofit foundations
211. c. a partial interest
212. a. real property is a type of service
213. c. acquisition cost to present owner
214. d. economic utility
215. d. salvage
216. c. zonal value
217. c. obsolescence
218. b. external obsolescence
219. c. leverage
220. d. HIGC
221. d. functional obsolescence
222. a. Market Value

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223. c. An appraisal
224. d. Any of the above
225. a On commercial and investment properties
226. a. Appraisal
227. d. principle of increasing and diminishing return
228. d. infiltration
229. a. Principle of conformity
230. a. Unearned increment
231. a. Market analysis
232.. a. Depreciation
233. a. Amortization
234. a. Anticipation
235. e. Purchasing Power
236. a. Straight line method
237. a. Principle of Progression
238. a. gross income multiplier
239. d. relocation survey
240. b. topographic survey
241. e. rectangular survey
242. a. subdivision plan
243. c. tie line
244.. a. contour line
245. e. square planning
246. a. gridiron
247. d. Bearings
248. d. Cadastral map
249. c. urbanized land
250. d. 244
251. c. Ptolemy
252. b. Aristotle
253. a. Hipparchus
254. e. Humbult and ritter
255. d. Erastosthenes
256. b. site
257. c. toponym
258. d. situation
259. d. cartography
260. c. map
261. d. Ecumene
262. e. pattern
263. c. density
264. c. immigration
265. b. migration
266. a. emigration
267. d. net migration
268. b. Topographic survey
269. c. point of beginning
270. b. legal description

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271. c. social factor
272. e. political
273. b. economic
274. a. physical
275. a. 1,000 sq.m. of urban land and 1 hectare of rural land
276. a. industrial lots
277. b. not more than 500 has
278. d. RA 9700
279. b. realty installment buyer’s protection act
280. d. land exchange
281. c. land assembly
282. b. 5 has
283. d. joint venture
284. d. land banking
285. c. right of first refusal
286. a. Personal property
287. e. 10 years
288. b. Fee simple
289. c. Mechanic’s liens
290. d. Attachments
291. b. P325,000.00
292. c. Pactum Commissorium
293. d Antichresis
294. d Dacion en pago
295. b. Alienation
296. c. Automatic redemption clause
297. b. Assign his rights
298. b. Power to sell directly
299. e Blanket mortgage
300. a. 4 years
301. d .Any of the above
302. a. license to sell
303. d. RA 4726
304. d. RA 7279
305. a. equal
306. d. twelve months
307. b. HLURB
308. b. Total payment made less penalty plus interest charges
309. a. socialized housing
310. b. corporation owning the building
311. a. condominium
312. b. PD 957
313. d. Co terminus with the duration of condo project
314. c. 20% of the development cost
315. b. non alienable public land
316 b. 30% of the gross area
317. e. all of the aboved
318. C. City of Municipal Engineer

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319. e. HLURB
320. c. 30 days
321. b. 100 sq.m.
322. b. Dominant tenement
323. b. Joint tenancy
324. d. Condominium
325. c. escheat
326. c. Eminent Domain
327. d. DSWD
328. d. PDIC
329. b. reconveyance deed
330. a. marital property ownership
331. b. time, title, interest, and possession
332. a. present, possessory interest.
333. A. Remainder man
334. c. separate property
335. b. A document that gives a third party the deed until the mortgage loan is paid off
336. d. 30%
337. b. 2%
338. c. 30% of the area is uncultivated
339. c. special education fund tax
340. a. prepaid income tax
341 c. 20% p.a.
342. a. 20%
343. d. 180 days from the death of the decedent
344. c. 1 year
345. a. city assessor
346. b. within 5 days after the close of the month of the date of sale
347. c. assessed value
348. d. creditable withholding tax
349. d. documentary stamp tax
350. a. ordinary asset
351. b. 2,500,000.00
352. a. subdivision lots
353. c. Simple majority votes
354. c. be susceptible to independent use and ownership
355. c. lease fee estate
356. c. Exchange agency
357. b. Authorization to sell
358. c. Principal
359. b. P1.00 for every P1,000 in excess of the first P2,000
360. e. 20% interest per annum
361. b. One percent of assessed value
362. e. Thirty percent
363. e. Assessed Value
364. d. 180 days from death of decedent
365. b. Year 2010
366. b. Within five (5) days after the close of the month of the date of sale

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367. c. 20%
368. b. Concerned Municipal Assessor
369. c. P 1,000,000.00
370. c. 60 days
371. b. Creditor-bank
372. a P20.00 for the 1st P5,000.00 plus P10.00 for every P5,000.00 thereafter
373. c. Affidavit of total or aggregate landholding
374. d. 5 has for the landowner and 3 has per child who must be at least 15 years old and is
actually tilling the land or managing the farm
375. b. Total payments made less penalty and interest charges.
376. b. Twelve months
377. d. Housing and Land Use Regulatory Board
378. c. Equal
379. a. R.A. 7279
380. d. R.A. 4726
381. b. License to sell
382. c. Condominium
383. d. P.D. 957
384. b. 30% of gross area
385. c. be susceptible of independent use and ownership
386. e. Any of the above
387. c. Housing and Land Use Regulatory Board
388. a .actual used
389. e. not exceeding 5 yrs.
390. a. not exceeding 2 yrs.
391. c. RA 9003
392. d. Pollution
393. c. certificate of non coverage
394. d. Environmental management bureau
395. b. august 26, 1972
395. d. 1,000 sq.m.
397. d. 375,000.00
398. d. 175,000.00
399. b. 3 years
400. c. transfer fee/tax
401. d. register of deed
402. c. community tax
403. e. 20,000.00
404. c. real estate investment trust
405. a. RA 9856
406. e. all of the above
407. d. 90%
408. d. fair market value
409. d. 50% of the applicable DST
410. c. 1%
411. e. all of the above
412. e. 10 years

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413. b. 2,000 resident per sq.m. and at least 50% of active resident engage in on agricultural
activities

PART II: Professional Appraisal Practice

MODEL 1
1. B 26.C 51.A 76.B
2. B 27.D 52.A 77.E
3. E 28.C 53.C 78.A
4. E 29.A 54.B 79.C
5. B 30.C 55.A 80.E
6. D 31.A 56.E 81.A
7. C 32.A 57.B 82.D
8. D 33.A 58.C 83. A
9. C 34.D 59.D 84.A
10.C 35.B 60.B 85.D
11.B 36.C 61.B 86.B
12.B 37.D 62.B 87.B
13.A 38.C 63.A 88.D
14.C 39.A 64.C 89.A
15.E 40.A 65.B 90.D
16. D 41.B 66.A 91.A
17.D 42.B 67.A 92.B
18.A 43.D 68.D 93.C
19.E 44.B 69.C 94.C
20.A 45.D 70.C 95.D
21.D 46.B 71.C 96.A
22.D 47.D 72.E 97.C
23.A 48.B 73. D 98.B
24.D 49.C 74.D 99.C
25.E 50.D 75.C 100.B

MODEL 2
1. B 26.A 51.E 76.C
2.A 27.C 52.A 77.D
3.B 28.A 53.B 78.D
4.D 29.A 54.C 79.B
5.A 30.B 55.A 80.C
6.B 31.D 56.C 81.A
7.C 32.C 57.D 82.A
8.C 33.E 58.B 83.B

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9.C 34.D 59.B 84.D
10.B 35.D 60.A 85.D
11.A 36.E 61.E 86.B
12.C 37.B 62.B 87.D
13.C 38.D 63.C 88.E
14.D 39.C 64.C 89.A
15.C 40.A 65.D 90.B
16.A 41.A 66.A 91.D
17.D 42.B 67.A 92.B
18.D 43.C 68.A 93.A
19.D 44.C 69.A 94.C
20.E 45.C 70.C 95.D
21.B 46.E 71.B 96.A
22.B 47.E 72.C 97.C
23.A 48.E 73.E 98.B
24.D 49.B 74.C 99.C
25.B 50.A 75.C 100.B

MODEL 3
1. Answer:
Estimated Useful life = 1 = 1 = 40 years
N 2.5%
2.Answer:
Land Value (2,200 @P3,500/sq.m.) P 7,700,000
Add Adjustment factors:
Corner influence (P7.70M x 25%) 1,925,000
Topography advantage (P7.70M x 20%) 1,540,000
Plottage (P7.70M x10%) 770,000
Value of the Property 11,935,000

3. Answer:
1st Lot owner: (P10.0M x40%) P4.0M
2nd Lot owner: (P10.0M x30%) P3.0M
3rd Lot owner: (P10.0M x20%) P2.0M
4th Lot owner: (P10.0M x10%) P1.0M

Note: 4-3-2-1 Rule means:

“4” = 40% of the lot value (front quarter) adjacent
to the road;
“3” = 30% of the lot value (second quarter);
“2” = 20% of the lot value (third quarter);
“1” = 10% of the lot value (fourth quarter)

4. Answers:
(a) Land Acquisition Cost: 50 hectares x 10,000 sq.m. @P700/sq.m. = P350.00M

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(b) Development Cost: 500,000 sq.m. x @P1,000/sq.m. = P500.00M
(c) Lot Unit Cost = Land Acquisition Cost + Developmental Cost
Saleable area
= P350.0M + P500.0M = 2,8533/sq.m.
300,000 sq.m.
(d) Selling Price/sq.m.= Unit Cost + Desired Profit
= 2,8533+2,8533 =5,766/sq.m.

5. Land: P5.0M x 50% x 2%/4 quarters P12,500

Building: P15.0M x 80% x 2%/4 quarters 60,000
Machineries: P3.0M x 80% x 2%/4 quarters 12,000
Total Realty Tax for one quarter P84,500

6. Land: P5.0M x 50% x 1% P 25,000

Building: P15.0M x 80% x 1% 120,000
Machineries: P3.0M x 80% x 1% 24,000
Total Realty Tax for one quarter P169,000

7. Land: P12,500 x 90% x 4 quarters P 45,000

Building: P60,000 x 90% x 4 quarters 216,000
Machineries: P12,000 x 90% x 4 quarters 43,200
Total Basic Tax for one year, net of 10% P304,200

Land: P25,000 x 90% P 22,500

Building: P120,000 x 90% 108,000
Machineries: P24,000 x 90% 21,600
Total SEF Tax for one year, net of 10% P152,100

TOTAL BASIC AND SEF, net of 10% discount = P456,300

8. Answer: Annual Gross income = P3,412,500.00 = 8.75 GIM
Sales Price 390,000.00

9. Answer: Net Operating Income P50,000.00

Less: Income due to land (P100,000 x 10.5%) 10,500.00
Income due to building P39,500.00

Building Value {P39,500/12.04 (10.5% + 1.54 (1/65)} P328,073.00

Add: Land Value 100,000.00
Total Property Value P428,073.00

V=I/R
Where: V= Value
I= income
Rate= interest rate

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To find the Building value, the Rate should be interest rate plus recapture rate; formula property,
assuming a Rate= interest rate + Recapture rate
Recapture rate= 1/Economic life of the building

10. PV = 10,000
i = .06
n=5
FV = 10,000 (1 + .06)5 = 10,000 (1.3382255776)
ANSWER = 13,382.26

11. PV = 10,000
i = .06 / 2 = .03
n = 5 * 2 = 10
FV = 10,000 (1 + .03)10 = 10,000 (1.343916379)
ANSWER= 13,439.16

12. FVoa = PMT ((1 + i)n - 1)

i
PV = 5,000
i = .06
n=5
FVoa = 5,000 (1.3382255776 - 1)
.06
ANSWER = 5,000 (5.637092) = 28,185.46

13. FVad = FVoa (1+i)

PV = 5,000
i = .06
n=5
FVoa = 28,185.46 (1.06) = 29,876.59

14. PV = FV ( 1 )
(1 + i)n

FV = 150,000; i =.06; n = 5

PV = 150,000 ( 1 )
(1 + .06)5
= 150,000 ( 1 )
1.3382255776
ANSWER = 112,088.73

15. PMT = 5,000

i = .06
n=5
PVoa = 5,000 [(1 - (1/(1 + .06)5)) / .06] = 5,000 (4.212364)
Answer= 21,061.82

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