IRES - Iowa Real Estate Salesperson

Question 1: News breaks that a large employer will relocate its headquarters to a Cedar Falls office park, and homes in the area immediately begin selling for more even before the move occurs. Which principle of value BEST explains this rise ahead of the event?

Change

Conformity

Supply and demand

Anticipation

Question 2: Two investors capitalize identical net operating incomes on comparable income properties, but one applies a noticeably higher capitalization rate than the other because that market demands a greater return. Holding the income constant, which statement BEST describes the resulting effect on indicated value?

A higher rate yields higher value

The rate does not affect value

A higher rate yields lower value

Value rises then falls sharply

Question 3: An Iowa City brokerage, eager to close a sale, phones the appraiser and presses for a number high enough to make the buyer's loan work, hinting future assignments depend on it. Which safeguard does this conduct BEST show the brokerage is undermining?

The principle of substitution

The reconciliation process

Highest and best use analysis

Appraiser independence requirements

Question 4: A lender managing a home equity line wants an inexpensive value estimate and asks a broker to verify that a property exists and list some comparable sales, sometimes as a quick drive-by. Which valuation product is the lender most likely requesting here?

A broker's price opinion

A formal appraisal

A comparative market analysis

An automated valuation model

Question 5: A Fort Dodge homeowner debates whether a costly kitchen remodel will pay off, and the appraiser explains that any improvement adds value only to the extent it raises the worth of the entire property. Which principle of value is being described?

Substitution

Conformity

Contribution

Anticipation

Question 6: An owner builds a large, luxurious custom home on a Clinton street otherwise lined with small, aging houses, and the appraiser warns the fine home will not reach its full potential worth. Which principle of value explains this drag on the superior property?

Progression

Change

Contribution

Regression

Question 7: Computing net operating income for a Waterloo income property, an appraiser is handed a list of yearly costs that includes management, insurance, taxes, and the owner's monthly mortgage principal and interest. Which of these items must be excluded from operating expenses?

The mortgage principal and interest

The annual management costs

The property insurance premium

The real estate taxes

Question 8: While reviewing an income property analysis, an appraiser identifies the figure that remains after subtracting vacancy losses and all of the annual operating expenses from potential gross income, but before any mortgage payments. Which term names this particular figure used in capitalization?

Effective gross income

Potential gross income

Capitalization rate

Net operating income

Question 9: An appraiser studies a downtown Cedar Rapids parcel and looks for the use that is physically possible, legally permitted, financially feasible, and maximally productive before valuing it. Which concept requires a property be valued according to that single most profitable use?

Highest and best use

Plottage

Progression

Substitution

Question 10: A tidy, modern home steadily loses value after a busy interstate interchange and a noisy freight yard are both built directly beside the neighborhood, conditions the individual owner can do nothing to fix. This loss best illustrates which type of depreciation?

Functional obsolescence

Physical deterioration

External obsolescence

Curable functional obsolescence

Question 11: A well-maintained four-bedroom house is hard to sell because it offers only a single bathroom and a bedroom that can be reached solely by walking through another bedroom. This loss in value from the dated layout illustrates which type of depreciation?

Physical deterioration

External obsolescence

Curable physical deterioration

Functional obsolescence

Question 12: As an Ames appraiser begins an assignment, she first studies national, regional, city, and neighborhood influences such as economic and social trends before turning to the subject acreage itself. Which category of appraisal data is she examining at this early stage?

General data

Specific data

Comparable sales data

Reconciliation data

Question 13: Valuing an older split-level with plaster walls and a coal chute, an appraiser estimates the cost to build a structure of equivalent usefulness using today's standard materials and construction methods. Which term describes the cost figure the appraiser is using?

Reproduction cost

Reconciled value

Replacement cost

Capitalized value

Question 14: In the cost approach, an appraiser wants an estimate of constructing the improvements as an exact duplicate of the existing structure, using the same design, the same materials, and even its outdated features. Which term names this particular cost estimate?

Replacement cost

Reproduction cost

Accrued depreciation

Effective gross income

Question 15: A Waterloo broker prepares a market analysis for a seller, then labels the document an official appraisal and charges a fee tied to a percentage of the value he reports. Which principle of appraisal practice has the broker most clearly violated?

Brokers may certify any appraisal

A CMA equals an appraisal

Fee must not depend on value

Value must favor the client

Question 16: Appraising a Davenport home, an appraiser finds a comparable that sold recently but includes a finished third-car garage the subject property clearly lacks. To account fairly for this one superior feature in the comparable, what adjustment does the appraiser make?

Subtract value from the comparable

Add value to the comparable

Add value to the subject

Make no adjustment at all

Question 17: A federally regulated bank in Sioux City is financing the purchase of a commercial building and must obtain a valuation for the loan file. Federal law dictates who may prepare that valuation. Which requirement applies to an appraisal used in a federally related transaction?

Any licensed real estate broker

A salesperson preparing a CMA

Any bank loan officer

A state-licensed or certified appraiser

Question 18: A trainee suggests basing a home's value on the asking prices of three houses currently listed for sale down the street. Correcting this, an appraiser stresses that the sales comparison approach must instead rely primarily on which kind of data?

Current asking prices of listings

Recently closed comparable sales

Original construction cost figures

Projected future rental income

Question 19: A West Des Moines seller wants a quick, no-fee estimate of a realistic listing price, so his agent gathers recent solds, active competition, and expired listings nearby to guide the asking figure. Which product is the agent preparing rather than an appraisal?

A certified appraisal report

A federally related appraisal