BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.

REAL ESTATE APPRAISAL TRAINING AND SEMINAR

MODULE 1:

1. People seek an appraisal in order to

a. get an independent estimate of value
b. get a more reliable estimate of value other than their own
c. both of the above
d. neither of the above

2. The Land Registration Administration (LRA) is under the administrative control of:
a. Department of Environment and Natural Resources (DENR)
b. Department of Agriculture
c. Department of Justice
d. Office of the President

3. The schedule of Zonal Valuation used in the computation of the capital gains tax is
prepared by:
a. The Assessor’s Office
b. The Bureau of Internal Revenue
c. The Technical Committee of the National Tax Research Center
d. All of the above

4. Appraising has been defined as…

a. An educated guess
b. A science in which conclusions are reached from a consideration of facts
c. A process of establishing value
d. All of the above

5. The central concern of appraising is

a. Fee
b. Price
c. Cost
d. Value

6. The government agency in charge of the administration of real property taxation is the
a. Department of Finance
b. Department of Interior and Local Government
c. Bureau of Internal Revenue
d. Local Government Unit concerned
e. All of the above

7. The records at the Assessor’s Office containing the list of all properties whether taxable or
exempt is…
a. Tax Declaration
b. Assessment Roll
c. Assessment of Real Properties
d. Records of Assessment
e. All of the above

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

8. Assessment refers to
a. Assessment of Real Property
b. Assessed Value
c. Percentage of the Assessed Value
d. The Market Value
e. Percentage of the Market Value

9. An appraisal may include

a. Property description
b. Opinion of the property condition
c. Estimate of the market value
d. All of the above

10. The enactment of the Real Estate Service Act created a body that will regulate the real
estate service practice. This regulatory body is named
a. Professional Regulatory Commission
b. Professional Board of Real Property Practitioners
c. Professional Board of Real Estate Service
d. Professional Regulatory Board for Appraisers

11. The purpose of an appraisal assignment is usually to estimate which type of value
a. Investment value
b. Market value
c. Value in use
d. Replacement value

12. Land is unique because

a. No two parcels have the same soil composition
b. No two parcels can occupy the same space on the face of the earth
c. No two parcels have the same owner
d. No two parcels have the same tax levies

13. An appraisal of real estate

a. Guarantees its value
b. Assures its value
c. Determine its value
d. Estimates its value
e. Segments its value

14. The Assessor’s Office is an agency where we inquire and conduct research on
a. Title verification
b. Investment value
c. Zonal value
d. Cadastral map / tax map

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

15. An appraisal is best defined as:

a. An unbiased opinion of the nature, quality, value or utility of an interest in real
estate and related personalty
b. An unbiased opinion of the most likely price for which a parcel of real estate
would sell at a given date
c. The process of studying the nature, quality or utility of an interest in real estate
in which a value estimate is not necessarily required
d. The process of developing an opinion as to the market value or other defined
value of a specified interest in a specified point in time

16. The agency that insures deposits in financial institutions is

a. HIGC
b. BSP
c. PDIC
d. GSIS

17. All the following areas of regulation affect appraisers except

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

18. Knowledge of land value is required for all of the following except
a. Fire insurance
b. Ground lease
c. Property taxation
d. Grazing lease

19. Which of the following term is appropriate for the term REAL ESTATE?
a. Land and anything permanently attached to the land
b. Property that is not encumbered by leases
c. Building and other improvements
d. Buildings and fixtures

20. Market value is based on

a. Most probable use
b. Temporary use
c. Insurable value
d. Alternative value

21. Real property includes

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

22. Real property consists of

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

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

23. Is a classical definition which is the amount express in terms of money as of a certain
date that may reasonably be expected to exchange between a willing seller and a
willing buyer with equity to both neither under any compulsion to buy or sell and both are
aware of all relevant facts is known as:
a. Salvage value
b. Market value
c. Orderly liquidation value
d. Scrap value

24. What is the distinction between the terms market price and market value?

a. Market price is what the property sell for, while market value is what the sale
price should be to a typical buyer
b. Market price is what is currently owed on the property, while market value is
what is bought for
c. Market price is synonymous with replacement cost, while market value is the
same as assessed value
d. Market price is what the seller asks for, while market value is what the buyer
actually pays

25. Which of the following is not a part of the market value definition?

a. The property sells in 90 to 120 days

b. Both parties are well-informed
c. Buyer and seller are typically motivated
d. Payment is made in cash or cash equivalent terms

26. The three approaches to estimating value are:

a. Reproduction, cost and income

b. Cost, income and replacement
c. Cost, direct sales comparison and income capitalization
d. Replacement, income and reproduction

27. Which of the following approaches use market data?

a. Income approach
b. Cost approach
c. All three approaches
d. Direct sales comparison approach

28. Market value can be described as

a. The present worth of future benefits

b. The price a person paid for real property
c. Whatever someone will pay for something
d. The cost of the land plus the cost of the building

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

29. Market value is

a. Equal to market price

b. An estimate of a price that would have been negotiated for a sale today
c. A measure of value in use
d. Equal to cost to replace

30. When a real property is sold by one person to another, the amount of money used to
compensate the seller is called

a. The income of the real property

b. The price of the real property
c. The value of the real property
d. The cost of the real property

31. Which of the following explanations best describes the term market price?

a. The amount of money actually paid in transaction

b. The amount of the loan
c. The amount of money necessary to replace the property
d. Same term as market value

32. The transaction price of a property is its

a. Asking price
b. Insurance value
c. Market value
d. Sales price

33. Cost and value are most likely to be similar under which of the following conditions?

a. The property has no deferred maintenance

b. The property is a special purpose
c. The property is new
d. The property is small

34. When value is estimated by analyzing sales prices of similar properties recently sold, this is
referred to as what approach to value?

a. Income approach
b. Market approach
c. Cost approach
d. Sales value approach

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

35. For an appraiser using the sales comparison approach to value, which of the following
types of market would best provide confidence and reliability in using such approach?

a. Seller’s market
b. Buyer’s market
c. Active market
d. Inactive market

36. 1 hectare is equivalent to

a. 10,000 sq.m.
b. 1,000 sq.m.
c. 100,000 sq.m.
d. 10,500 sq.m.
e. a and c

37. The process of developing an opinion of value is referred to as a(n):

a. Market analysis
b. Investment analysis
c. Appraisal
d. Extraction

38. The highest and best use of a site is its

a. Existing use
b. Most probable use that is legal and physically possible and provides the
highest financial returns
c. Immediate next use
d. Ordinary and necessary use
e. Least expensive use

39. Refers to an official in the local government unit, who performs appraisal and assessment
of real properties, including plants, equipment, and machineries, essentially for taxation
purposes. This definition also includes assistant assessors

a. Appraiser
b. Consultant
c. Assessor
d. Broker
e. Salesman

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

40. The criteria for determining the highest and best use include all of the following except

a. Physical possibility
b. Financial feasibility
c. Legal permissibility
d. Maximal productivity
e. Effect of community welfare

41. Refers to a duly registered and licensed natural person who, for a professional fee,
commission or other valuable consideration, acts as an agent of a party 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 consultant

b. Real estate appraiser
c. Real estate broker
d. Real estate salesman

42. To estimate market value, an appraiser follows the

a. Appraisal report
b. Valuation process
c. Evaluation methodology
d. Appraisal guidelines
e. Report evaluation technique

43. The process of developing an opinion of value is referred to as a (an)

a. Market analysis
b. Investment analysis
c. Appraisal
d. Extraction

44. Price and value are

a. Not necessarily the same

b. Synonymous
c. Different, depending on financing terms
d. Close together in an inactive market
e. Used interchangeable in a report

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

45. Refers to any natural or juridical person engaged in the business of developing
real estate development project for his/her or its own account and offering them for sale
or lease

a. Real Estate Appraiser

b. Real Estate Consultant
c. Real Estate Broker
d. Real Estate Developer

46. __________ is the amount that has been asked, offered or paid for the item

a. Cost
b. Value
c. Price
d. Market value

47. Which of the following conditions is assumed in the normal definition of market value?

a. The estate value is as of a future date

b. The property will sell promptly
c. Payment will be made is cash or its equivalent
d. Only the buyer is knowledgeable as to the potential uses of the property

48. Refers to 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 consultant

b. Real estate appraiser
c. Real estate broker
d. Real estate salesman

49. The value of real estate is determined in the market mainly by its

a. Price
b. Productivity
c. Mortgage
d. Size
e. Height

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

50. Of the three approaches to valuing a parcel of real estate, which one values the land
separately from the improvement

a. Income approach
b. Market approach
c. Comparative approach
d. Cost approach
e. None of the above

51. Refers to a person who conducts valuation, one who possesses the necessary
qualifications, license, ability and experience to execute or direct the valuation of
real property

a. Assessor
b. Engineer
c. Appraiser
d. Consultant
e. Broker

52. Refers to the development of land for residential, commercial, industrial, agricultural,
institutional or recreational purposes, or any combination of such including, but not
limited to, tourist resorts, reclamation projects, building or housing projects, whether for
individual or condominium ownership, memorial parks and others of similar nature

a. Cost approach
b. Land residual technique
c. Zoning
d. Urban planning
e. Real estate development project

53. Value is a word of many meaning, but the general meaning is

a. Any price something is sold

b. Worth of something to someone for some purpose
c. The future worth of an object
d. None of the above

54. A house and lot is priced at P8,800,000. The lot alone is valued at P1,650,000. What
percentage of the total asking price is attributable to the value of the lot?

a. 18.5 %
b. 19.0 %
c. 18 ¾ %
d. 18 ¼ %

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

55. The fundamental economic principle underlying the sales comparison approach to
value is known as

a. Anticipation
b. Conformity
c. Highest and best use
d. Substitution

56. The first step in the appraisal process is to

a. Gather data, analyze them and classify them

b. Determine what information is needed
c. Review carefully the entire process
d. Analyze the problem

57. A house and lot is priced at P7,500,000. The lot alone is valued at P2,531,250. What
percentage of the total asking price is attributed to the house?

a. 33 ¾ %
b. 33 ¼ %
c. 66 ¼ %
d. 66 ¾ %

58. The area of a right triangle with a height of 10 ft. and a base of 4 ft. is

a. 40 sq.ft.
b. 25 sq.ft.
c. 1.85 sq.m.
d. 3.72 sq.m.

59. A 7-year-old residence is currently valued at P720,000. What is the original value if it has
appreciated by 60% since it was built?

a. P270,000
b. P378,000
c. P450,000
d. 1,152,000
e. None of the above

60. After two or more approaches to value have been tested, the appraiser should

a. Average the result

b. Use the highest amount estimated
c. Rely on the asking price
d. Apply the reconciliation

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

61. The value of a property tends to be set by the cost of acquiring an equally desirable
property. This is a statement of the principle of

a. Substitution
b. Anticipation
c. Consistent use
d. Balance

62. It refers to the incidental rights and interests on the land and improvements

a. Property rights
b. Bundle of rights
c. Appurtenances
d. Property interests

63. The schedule of market value prepared by the assessor are reviewed and approved by

a. Sangguniang Panlalawigan, Panglungsod or Pambayan as the case may be

b. All the Sangguniang concerned in the local government
c. Bureau of Internal Revenue
d. All of the above

64. Reconciliation of the value indication obtained using three approaches is best
accomplished by

a. Computing the average of the three approaches

b. Evaluating the applicability of each of the approaches to value
c. Evaluating the reliability and quality of the data and analysis
d. Both b and c

65. The added value inherent in the combined common ownership of two or more
contiguous lot

a. Corner influence
b. Plottage value
c. Cooperative interest
d. Joint venture

66. The sales comparison approach relies on the principle of

a. Anticipation
b. Leverage
c. Substitution
d. Highest and best use

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

67. The transaction price of a property is its

a. Sales price
b. Market value
c. Insurance value
d. Asking price

68. Conclusion as to the highest and best use is part of which step

a. Defining the appraisal problem

b. Preliminary analysis
c. Analyzing the data
d. Making the final estimate of value

69. Which of the approaches to value would involve an investigation into the rent schedules
of the subject property and the comparables

a. Cost approach
b. Market approach
c. Income approach
d. All of the above

70. Which of the following is not considered the fundamental principle in property taxation?
Real Property is

a. Appraised at current and fair market value

b. Assessed on the basis of actual use
c. Assessed on the basis of schedules of market value
d. Assessed on the basis of uniform classification

71. Those assets which are physical and material in nature

a. Intangible
b. Fixed
c. Tangible
d. Liquid

72. Which of the following definitions is appropriate for the term REAL ESTATE?

a. Land and anything permanently attached to the land

b. Property that is not encumbered by leases
c. Building and other improvements
d. Building and fixtures

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

73. Which of the following statement is not necessarily correct with regard to a local zoning
ordinance?

a. Zoning can establishes heights restrictions on buildings

b. Zoning prevents decline in property values within a certain zoning district
c. Zoning is often used to separate incompatible land use
d. Zoning establishes setback requirements for improvements on land

74. Important reference materials my be secured from the Office of the City/Municipal
Assessor such as:

a. Transfer certificates of title

b. Realty tax receipts
c. City/town development plan
d. Parcellary map

75. A parallelogram whose angles are oblique and whose sides are equal

a. Square
b. Rectangle
c. Rhombus
d. Trapezoid

76. Whenever a river, changing its course by natural course, opens a new bed through a
private estate, this bed shall become public dominion

a. True
b. False
c. It depends
d. None of the above

77. One square kilometer is equivalent to

a. 10 hectares
b. 0.386 square mile
c. 2.471 acres
d. None of the above

78. Market value is based on

a. Insurable value
b. Most probable value
c. Cost
d. Value in use

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

79. The house flooring has an area of 30 square meters. How many vinyl tiles are needed if
the tile size is 12 inch by 12 inch? (Choose the nearest answer)

a. 300
b. 353
c. 380
d. 323
e. None of the above

80. Of the following, the most important variable in determining the value of a parcel of real
estate is

a. Location
b. Zoning
c. Credit of the buyer
d. Credit if the seller

81. A statement of limiting conditions is necessary in an appraisal report because

a. It notifies the client of items subject to which the appraisal made

b. It protects the appraiser against conditions which he or she does not have
control
c. It limits the liability of the appraiser
d. All of the above

82. The area of a trapezoid is computed as

a. ½ the sum of the parallel side x altitude

b. ½ the sum of all sides x inside radius
c. ½ the sum of all sides x height
d. sum of all side x inside radius

83. Assuming four different shapes of a 500 square meter house. Which would be the most
expensive to build, assuming the same materials and quality of constrtruction?

a. A rectangle
b. An L-shape
c. An H-shape
d. A U-shape
e. None of the above

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

84. The appraiser’s conclusion of value should be based on

a. An average of value conclusions indicated by the three approaches to value

b. A weighting of the importance of the value indicated by each of the three
approaches to value
c. None of the above
d. All of the above

85. The value of real estate is determined mainly by its

a. Price
b. Productivity
c. Mortgage
d. Size
e. Height

86. The area of a rectangle with a base of 10 meters and a length of 20 meters is

a. 250 sq. m.
b. 200 sq. m.
c. 300 sq. m.
d. 400 sq. m.

87. Price and value

a. Not necessarily the same

b. Synonymous
c. Different depending of financing terms
d. Close together in an inactive market
e. Used interchangeably in a report

88. All the following statements are true except

a. Real property refers to items that are not permanently fixed to a part of the
real estate
b. Appraising is the art and science of estimating the value of an asset
c. Assets typically requiring appraisal include real and personal property
d. Asset value change in time
e. Market change with supply and demand

89. Which of the following conditions is assumed in the normal definition of market value?

a. The estate value is as of a future date

b. The property will sell promptly
c. Payment will be made in cash or its equivalent
d. Only the buyer is knowledgeable as to the potential uses of the property

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

90. To estimate market value the appraiser follows the

a. Appraisal report
b. Valuation process
c. Evaluation methodology
d. Appraisal guidelines
e. Report evaluation technique

91. In which market are there many potential buyers but few properties available?

a. Demand
b. Buyer’s
c. Seller’s
d. Low-priced
e. Normal

92. The process of developing an opinion of value is referred to as a (an)

a. Market analysis
b. Investment analysis
c. Appraisal
d. Extraction

93. Cost and value are most likely to be similar under which of the following conditions?

a. The property has no deferred maintenance

b. The property is new
c. The property is a special purpose property
d. The property is small

94. The term real estate is generally used to refer to the physical land and improvements,
whereas the term real property denotes

a. Machinery and equipment

b. Surface rights only
c. Legal interests and rights in ownership
d. Air and subsurface rights

95. Which of the following explanations best describe the term market price?

a. The amount of money actually paid in transaction

b. The amount of the loan
c. The amount of money necessary to replace the property
d. Same term as market value

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 BANK APPRAISERS ASSOCIATION OF THE PHILIPPINES, INC.
REAL ESTATE APPRAISAL TRAINING AND SEMINAR

96. A decrease in land value is the result of

a. Wear and tear

b. Physical obsolescence
c. Functional obsolescence
d. Obsolescence
e. Market forces

97. In property appraisal, these are suppositions taken to be true, involving facts, conditions,
or situations affecting the subject (property being appraised), or the approach in the
valuation.
a. Assumptions
b. Market conditions
c. Perceptions
d. Observations

98. Is a valuer or an appraiser who is in the employ of either the entity that owns the assets or
the accounting firm responsible for preparing the entity’s financial record and/or reports.
a. External Valuer
b. Public Sector Appraiser
c. Internal Valuer
d. Valuer General

99. Any commercial, industrial, service or investment entity pursuing an economic activity is
referred to as
a. Financial interests
b. Real property
c. Personal property
d. Business

100. A rectangular site measures 12.5 meters (frontage) by 25.6 meters (depth), of
which 2.6 meters is in the public right-of-way. What is the gross and net site area?

a. 0.66 ha gross and 0.75 ha net

b. 320 sq. m. gross and 287.5 sq. m. net
c. 386.56 sq. m. gross and 320 sq. m. net
d. 351 sq. m. gross and 320 sq. m. net

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