Arizona Real Estate Salesperson Exam — All Questions
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An appraiser valuing a single-family residence in an established neighborhood would rely primarily on which approach to value?
- a.Cost approach
- b.Sales comparison approach✓
- c.Income capitalization approach
- d.Gross rent multiplier approach
The sales comparison approach, which analyzes recent sales of similar nearby homes, is the most reliable and heavily weighted method for owner-occupied residential property. The cost approach is best for new or special-purpose buildings, and the income approach applies to investment or rental property rather than a typical single-family home.
An outdated floor plan and a functionally obsolete single bathroom in a four-bedroom home are examples of:
- a.Economic (external) obsolescence
- b.Physical deterioration
- c.Functional obsolescence✓
- d.Curable physical depreciation only
Functional obsolescence is a loss in value caused by outdated or poorly designed features within the property itself, such as a bad floor plan or too few bathrooms. Physical deterioration is wear and tear, while external/economic obsolescence stems from negative influences outside the property, like a nearby nuisance.