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Florida Real Estate Exam Practice Questions: Valuation and Appraisal
4 practice questions on valuation and appraisal for the Florida real estate sales associate exam. Each one has the correct answer, a full explanation of why the other options are wrong, and the statute it comes from.
What this topic covers
Value, approaches, and appraisers. Questions here test the types of value, the three approaches to value, and the rules for appraisers.
Sources these questions cite include: 12 U.S.C. § 3331.
Question 1
A large, expensive home is built in a neighborhood of small, modest houses, and its value is held down by its surroundings. What is this effect called?
- A. Regression
- B. Progression
- C. Plottage
- D. Anticipation
Show the answer and explanation
Correct answer: A.
Regression is the loss in value of the better property from the presence of less valuable properties. Progression is the opposite: the value of a modest home rises when it is surrounded by better ones. B is wrong because progression is the gain in value of a lesser property because of better surroundings. C is wrong because plottage is the increase from assembling several parcels. D is wrong because anticipation concerns the expectation of future benefits.
Source: USPAP
Question 2
An investor is considering a small apartment building with a net operating income of $48,000 per year. Similar properties sell at a capitalization rate of 8 percent. What is the indicated value?
- A. $384,000
- B. $600,000
- C. $3,840,000
- D. $480,000
Show the answer and explanation
Correct answer: B.
Value = Net operating income ÷ capitalization rate. $48,000 ÷ 0.08 = $600,000. A higher cap rate yields a lower value. A is wrong because this multiplies NOI by the rate instead of dividing. C is wrong because this is a decimal-place error. D is wrong because this divides NOI by 10 percent instead of 8 percent.
Source: USPAP
Question 3
Using the cost approach, an appraiser estimates the cost to replace the building new at $260,000, accrued depreciation at $52,000, and the land value at $90,000. What is the indicated value of the property?
- A. $402,000
- B. $208,000
- C. $298,000
- D. $350,000
Show the answer and explanation
Correct answer: C.
Cost approach value = cost new of the improvements − accrued depreciation + land value. Here $260,000 − $52,000 = $208,000, and $208,000 + $90,000 = $298,000. A is wrong because this adds the depreciation instead of subtracting it. B is wrong because this leaves out the land value. D is wrong because this does not deduct depreciation and so overstates the value.
Source: USPAP
Question 4
Which definition best describes market value?
- A. The amount the seller paid for the property plus the cost of any improvements the seller has made since buying it.
- B. The price that one particular buyer is willing to pay because of his personal attachment to the property or its location.
- C. The value that the county property appraiser assigns to the property each year for the purpose of levying property tax.
- D. The most probable price a property should bring in a competitive, open market when the buyer and seller are acting prudently and knowledgeably and neither is under undue pressure
Show the answer and explanation
Correct answer: D.
Market value assumes a typical buyer and seller, both informed, with reasonable exposure time, neither forced, and payment in cash or equivalent terms. A is wrong because that describes cost basis, not market value. B is wrong because that describes value in use or sentimental value, not the typical market price. C is wrong because assessed value is set for taxation and may differ from market value.
Source: Uniform Standards of Professional Appraisal Practice (USPAP); 12 C.F.R. § 34.42
Want more on this topic?
The full Prep475 kit has 15 questions on valuation and appraisal, all with the same statute-cited explanations, plus a timed 100-question exam simulation.
Independent study aid, not legal advice. Not affiliated with or endorsed by the Florida Real Estate Commission, the DBPR, or Pearson VUE. Questions are original practice questions, not actual exam questions. Statutes, rules, and exam details change; always confirm against current Florida law and your pre-licensing course materials.
Last reviewed October 20, 2026.