Professional Documents
Culture Documents
Which type of studies test the ability of various _________ is the amount that has been asked,
proposed improvements to meet investment offered, or paid for the item.
objectives? Value
Cost-Benefit Cost
Feasibility Market Value
Market Price
Marketability
Appraisal is:
To estimate market value, an appraiser follows The act or process of developing an opinion
the: of value
Appraisal Guidelines A lucrative profession
Valuation Process The report conveyed to the client
Appraisal Report The act or process of telling the Client the
Evaluation Methodology market value of the property
18. When an opinion of value is needed in a 25. When appraising the market value of a
valuation, the type of value required must be unique and unconventional property, which
defined _________. approach is typically considered the most
Before Site Inspection reliable?
During the Negotiation Phase Regression analysis approach
At the Beginning of the Valuation Process Income approach
Before Valuation Assignment Acceptance Cost approach
Sales comparison approach
19. The purpose and intended use of a valuation
are: 26. In a rapidly growing real estate market, how
Dependent on the assignment does an increase in demand typically affect the
Slightly different but similar concepts market value of properties?
One and the same concepts Market value increases due to limited supply
Related but have different concepts and high demand
Market value fluctuates randomly and is not
20. Which of the following is the best way to influenced solely by demand
determine the market value of a property? Market value remains unaffected by changes in
Compare the property to similar properties demand
that have recently sold. Market value decreases as a result of excessive
Use the income approach to value the property. supply and low demand
Estimate the cost of building a similar property.
Add up the value of the land and the value of the 27. Which of the following factors has the most
improvements. significant impact on the price of residential
properties?
21. When determining the price of a property, The average income level of the neighborhood
which of the following is NOT typically residents
considered? The presence of high-quality schools in the
The personal preferences of the property vicinity
owner Consumer sentiment and economic
The current market conditions conditions
The condition and age of the property The size of the property's backyard
The cost of any recent renovations or upgrades
28. When assessing the cost of a property,
22. Which of the following factors contributes to which of the following expenses is considered
the cost of a property? an external cost?
The amount of mortgage interest paid over time The cost of repairs and maintenance
The property's market value The property taxes paid by the owner
The expenses associated with property The property's mortgage interest
maintenance and repairs The environmental impact of the property's
The price at which the property was sold in the location
past
29. When appraising the market value of a
23. What is the primary difference between historic property, which approach is typically the
market value and price? most challenging to apply accurately?
Market value is a fixed amount, while price can Sales Comparison Approach
vary based on negotiation and market
conditions. Income Approach
Market value is the historical value of a property, Residual Approach
while price is the current value in the market. Cost Approach
Market value is determined by a certified
appraiser, while price is negotiated between the 30. Which of the following factors is NOT
buyer and seller. typically considered in the cost approach to
Market value represents the worth of a determine the value of a commercial property?
property in the eyes of potential buyers, Depreciation of the property
while price is the amount actually paid by the Cash flow generated by the property
buyer. Land value
Construction materials used Capitalized Value = P100,000 / 0.08 =
P1,250,000
31. What is the term used to describe the
economic principle that states the maximum Next, we subtract the estimated land value from
value of a property is typically achieved when the capitalized value to find the value of the
the cost of creating or acquiring an equally improvements:
desirable substitute is approximately the same?
Principle of anticipation Estimated value of improvements = Capitalized
Principle of substitution Value - Land value = P1,250,000 - P500,000 =
Principle of conformity P750,000
Principle of contribution
Therefore, the estimated value of the property's
32. Which of the following statements best improvements is P750,000.
describes the concept of "plottage" in real estate
appraisal? 36. What is the term used to describe a type of
The decrease in value due to functional depreciation that occurs due to factors outside
obsolescence the property itself, such as changes in the
The cost of removing a structure from a property neighborhood or surrounding area?
The increase in value resulting from Obsolescence
combining adjacent parcels of land Physical depreciation
The loss in value due to external factors such as Functional depreciation
noise pollution External obsolescence
33. A property is appraised using the cost 37. A property is appraised using the cost
approach. The appraiser estimates the cost to approach. The replacement cost of the building
replace the building at P400,000. The land is is estimated to be P1,000,000. The effective age
worth P100,000. The appraiser estimates the of the building is 20 years, and its total economic
amount of depreciation to be P50,000. What is life is estimated to be 50 years. What is the
the estimated market value of the property? estimated accrued depreciation for the building?
P 550,000
P 450,000 P 200,000
P 500,000 P 400,000
P 250,000 P 500,000
P 600,000
34. A property is appraised using the income Feedback
approach. The appraiser estimates the net To find the estimated accrued depreciation for
operating income (NOI) to be P50,000 per year. the building using the cost approach, we
The appraiser uses a capitalization rate of 10%. calculate the depreciation as a percentage of the
What is the estimated market value of the replacement cost.
property?
P 550,000 Accrued depreciation = (Effective age / Total
P 500,000 economic life) * Replacement cost
P 55,555.55
Accrued depreciation = (20 / 50) * P1,000,000 =
P 55,000 P400,000
35. A property is appraised using the residual
Therefore, the estimated accrued depreciation
approach. The expected net operating income
for the building is P400,000.
(NOI) for the property is projected to be
P100,000 per year. The required rate of return is 38. When using the sales comparison approach,
8%, and the estimated land value is P500,000. which of the following adjustments is typically
What is the estimated value of the property's made for a comparable property that has a
improvements? larger square footage than the subject property?
P 875,000 No adjustment
P 500,000 Adjustment depends on other factors
P 625,000 Positive adjustment
P 750,000 Negative adjustment
Feedback 39. What is the term used to describe the
To find the estimated value of the property's process of estimating the value of a property by
improvements using the residual approach, we examining its historical income and expense
first calculate the capitalized value of the net data, as well as the income potential of similar
operating income (NOI). properties?
Cash-on-cash return
The formula is: Capitalized Value = NOI / Capital expenditure analysis
Required Rate of Return. Income capitalization approach
Gross rent multiplier
40. A commercial property generates an annual If the interest rate is zero, then both options are
net operating income (NOI) of P200,000. The equally valuable.
estimated capitalization rate is 7.5%. What is the
estimated value of the property using the direct However, if the interest rate is positive, then
capitalization method? Option B is more valuable than Option A. This is
P 2,000,000 because the future value of Option B will be
P 2,666,667 greater than the present value of Option A, due
P 2,666,666 to the interest earned.
P 3,000,000
For example, if the interest rate is 5%, then the
Feedback future value of Option B will be P126,000 in one
Estimated Value = NOI / Capitalization Rate year. This is greater than the present value of
Estimated Value = P200,000 / 0.075 Option A, which is P100,000.
Estimated Value = P2,666,666.667 or
P2,666,667 (rounded off) 43. You want to have P100,000 in five years.
How much money do you need to invest today if
Note: The rule of thumb for rounding off the interest rate is 7%?
numbers is to round off to the nearest whole P71,298.61
number if the decimal is less than 0.5, and to the P75,000
next highest whole number if the decimal is P82,000
greater than or equal to 0.5. P85,306.05
Feedback
In this case, the decimal is 0.667, which is Present Value = Future Value / (1 + Interest
greater than or equal to 0.5. Therefore, the Rate)^Number of Periods
number should be rounded off to the next
highest whole number, which is P 2,666,667. Present Value = 100,000 / (1 + 0.07)^5
Present Value = 100,000 / 1.40255
41. A 4-unit apartment building has a net Present Value ≈ P71,298.617
operating income (NOI) of P120,000 per year.
The appraiser uses a cap rate of 10% to 44. Property rights conveyed adjustments in the
estimate the market value of the property. sales comparison approach are used to
However, the appraiser is concerned that the compensate for differences:
cap rate for similar properties in the area may be In the financing terms included with the
closer to 12%. What is the range of possible comparable sales
market values for the property? In the ages of improvement of the subject and
P 1,200,000 to P 1,440,000 the comparable sales
P 1,680,000 to P 1,920,000 In the locations of the subject and the
P 1,000,000 to P 1,200,000 comparable sales
P 1,440,000 to P 1,680,000 In the rights in realty of the subject and the
comparable sales
Feedback
Lower Cap Rate: 45. The percentage of gross adjustment in the
Market Value = NOI / Cap Rate sales comparison approach is:
Market Value = P120,000 / 0.10 A. The sum of the absolute values
Market Value = P1,200,000 (regardless of sign) of the adjustments as a
percentage of the gross sale price
Higher Cap Rate: B. The net amount adjustment (considering the
Market Value = NOI / Cap Rate signs) based on a percentage of the gross sale
Market Value = P120,000 / 0.12 price
Market Value = P1,000,000 C. The final value opinion divided by the value
conclusion derived in the sales comparison
The range of possible market values for the approach
property is between P1,000,000 and D. The gross sale price divided by the average
P1,200,000. adjustment rate
46. The sales comparison approach is based on 52. The Philippine Valuation Standards are
the concept that: intended to facilitate the use and adaptation of
Appraisers can study market participants’ internationally recognized appraisal standards
behavior in the past and draw inferences for:
about future buyer actions based on that Valuation Process
data Valuation Purpose
Buyers can always build a new building instead Taxation Purpose
of buying the subject Appraisal Purpose
Buyers may decide to rent a property in lieu of
buying the subject 53. Under the PVS, in order to promote and
Past market behavior will seldom be replicated preserve the public trust inherent in professional
in future markets appraisal practice, an assessor/appraiser must
observe the highest standards of professional
47. If a comparable sold for P 4,000,000 today ethics.
and prices in this market were decreasing by 5%
per year, what would have been the sale price 3 This standard refers to the:
years ago? Ethical Code and Standards
Valuers Code of Ethics
Use annual, straight line (not compounded) Code of Conduct
calculations. Code of Ethics and Professional Conduct
P 3,400,000
P 4,000,000 54. To perform valuations that comply with these
P 3,478,260 Standards and General Valuation Concepts and
P 4,705,880 Principles (GVCP), it is mandatory that
Appraisers/Assessors adhere to the Code of
Feedback Conduct pertaining to, except:
P 4M/.85 = P 4,705,880 Reporting
Competence
48. It is the study of how to collect, organize, Disclosure
analyze, and interpret numerical information. Integrity
Data Analytics
Data Mining 55. In developing a mass appraisal, an appraiser
Statistics must be aware of, understand, and correctly
Artificial Intelligence employ those recognized methods and
techniques necessary to produce and
49. The best comparable for Market Data communicate credible mass appraisal.
Approach is the sale that
Sold most recently A mass appraisal includes the following except:
Was most proximate Reconciling the Mass Appraisal Results
Required the most amount of adjustments Identifying the property to be appraised
Required the least amount of adjustments Adjusting the differences between the model
and the market comparable
50. Which step of the valuation process is Identifying factors and forces that affect and
“defining the value” a part of? influence value
Definition of the problem
Preliminary analysis and data selection and 56. Mass Appraisal provides for a systemic
collection approach and uniform application of appraisal
Land value opinion methods and techniques to obtain estimates of
Highest and best use analysis
value that allow for statistical review and
analysis of results. Although a distribution of a price value between
land and improvements by statistical ratio can
This requirement recognizes that this principle be useful at times, the procedure has limitations.
which continue to affect the manner in which Anticipation
appraiser perform mass appraisals. Capitalization
Contribution Abstraction
Change Allocation
Highest and Best Use
62. Affirms that value is created by the
Conformity anticipation of future benefits.
Allocation
57. In developing mass appraisal, an appraiser Anticipation
must observe the following specific appraisal Abstraction
requirements, except: Capitalization
Identify Intended Users
Identify the problem and solutions involved 63. The act of estimating the value of a property.
Identify the Purpose and Intended Use of the It is an estimate or opinion of value, usually
Appraisal market value or value as defined by the
Identify the scope of work necessary to appraiser.
complete the assignment, including any special
limiting conditions It is made as of a specific date and is a
conclusion which results from a logical and
58. An extraordinary assumption in Mass orderly analysis of facts.
Appraisal may be used in an assignment only if: Valuation Process
It is required to property develop credible Appraisal Process
opinions and conclusions Valuation
The scope of work is necessary to complete Appraisal
the assignment
The Appraiser has a reasonable basis for the 64. The date as of which the conclusion or
extraordinary assumption opinion rendered in an appraisal is applicable
Use of the extraordinary assumption results in a and valid.
credible analysis Inspection Date
Appraisal Date
59. In reconciling a mass appraisal, an appraiser Report Date
must, except for one: Date of Assignment
Employ recognized mass appraisal testing
procedures and techniques to ensure that Feedback
standards of accuracy are maintained The applicable and valid date for the conclusion
Reconcile the quality and quantity of data or opinion rendered in an appraisal is the
available and analyzed within the approaches Appraisal Date. The Appraisal Date refers to the
used and the applicability or suitability of the specific date on which the appraiser conducted
approaches used the appraisal and arrived at their conclusion
Value sites by recognized methods or regarding the value of the property.
techniques; such techniques include but are
not limited to the sales comparison 65. Based on the PVS, there are only two (2)
approach, allocation method, abstraction values, namely Market Value and:
method, capitalization of ground rent, and
land residual technique Non-Market Value
Fair Market Value
60. A method of land valuation in the absence of Value in Exchange
vacant land sales, whereby improvement values Appraised Value
obtained from the cost model are subtracted
from sales prices of improved parcels to yield 66. A transaction freely arrived at in the open
residual land value estimates. market, unaffected by abnormal pressure or by
Anticipation the absence of normal competitive negotiation
Abstraction as might be true in the case of a transaction
Capitalization between related parties.
Allocation Market Forces
Actual Sale
61. The distribution of the appraised value of the Arm's Length
property between land and building which is Flipping
accomplished on a ratio basis utilizing
percentage breakdowns from comparable 67. Holds that the value is created and
locations by subtracting a figure representing the maintained in proportion to the equilibrium
percentage contribution of buildings to total attained in the amount and location of the
value from total value of the improved property essential uses of real estate.
(100%). Contribution
Surplus Productivity Change
Anticipation Contribution
Balance
75. Under this approach to value, the land is
68. It is the combination of rights associated with appraised as vacant. The land value is then
the ownership of real property. added to the depreciated cost of the
Property improvements to arrive at an indication of value.
Bundle of Rights
Real Estate It is based on the "Theory of Substitution" which
Real Property states that no property is worth more than
replacement cost of a similar property having
equal utility and equally desirable location which
69. A scale map showing the dimensions of can be obtained without undue delay.
each parcel and related information such as Direct Market Approach
parcel identifier, survey lines, and easements. Residual Technique
Cadastral Map Cost Approach
Topographic Map Income Capitalization Approach
Location Map 76. It is loss in value within the property as a
Vicinity Map result of the development of new
technology,changes in design or market
70. It is the process of converting into present preferences.
value a series of anticipated future periodic External Obsolescence
installment of net income. Functional Obsolescence
Physical Obsolescence
In real estate appraising, it usually takes the Obsolescence
form of discounting.
Allocation 77. The right of the government or specified
Anticipation quasi-public bodies, such as public utilities, to
Capitalization acquire private property for public or quasi-
Yield public use upon payment of just compensation.
Jura Regalia
71. A statement that appraisers, in their Condemnation
professional capacity, personally conducted the Eminent Domain
appraisal in an objective manner. Expropriation
Such a statement permits appraisers to state 78. An absolute fee, without any limitation to any
their precise position, thus protecting their particular class of heirs or restrictions, but
integrity and the validity of their appraisals. subject to the limitation of eminent domain,
Appraisal Certificate escheat, policice power, and taxation and is an
Certification of Value inheritable estate.
Appraisal Statement Ownership
Valuation Statement Fee Simple
Equitable Owner
72. Holds that economic, physical, Real Property
governmental, and social forces are constantly
at work and because changes brought by these 79. The value existing in the proven property
forces affect real property, the appraiser view operation, considered as an entity with business
real property and its environment as in established, as distinct from the value of real
transition, observing evidence of trends which estate only, ready to operate but without a going
may affect the property in the future. business.
Conformity Investment Interest
Change Going Concern Value
Competition Financial Value
Contribution Business Value
Correct answer
73. Holds that profit tends to breed competition Going Concern Value
and excess profit tends to breed ruinous
competition. 80. Broadly buildings or other more or less
Contribution permanent structures or developments located
Conformity upon or attached to land.
Competition Real Property
Change Improvements
Real Estate
74. Holds that the maximum value is realized Land
when a reasonable degree of homogeneity is Correct answer
present. Improvements
Conformity
Competition
81. The rate of return on investment irrespective 89. The cost of constructing a similar property
of, and independent of, any capital recovery which is equally desirable and has the same
received or demanded by the investor or the rate utility as the one under appraisal.
on borrowed money. Reproduction Cost New
Recapture Rate Quantity Survey
Rate of Return Replacement Cost New
Capitalization Rate Unit in Place Cost
Interest Rate
90. The cost of constructing an exact replica of
82. Assets which are not readily convertible to the building being appraised using current prices
cash. of labor and materials and contractor's practices.
Intangible Assets Quantity Survey
Tangible Assets Unit in Place Cost
Fixed Assets Replacement Cost New
Capital Property Reproduction Cost New
13. These people prepare raw land for building 18. ECONOMIC CHARACTERISTICS OF
which results in new product for the market. REAL ESTATE:
A. Facilitators
B. Renovators A parcel of land can be improved in ways that
C. Developers will have a substantial impact on its use and
D. Renter value, and certain types of improvements will
E. Owner also affect the use and value of neighbouring
F. Owner/User land.
21. Real estate is said to be a “spark plug” For something to have value, it must be desired.
which triggers off activities in allied industries, Real estate has value because it is a rare
creates income opportunities for different private commodity that satisfies human desires.
sectors, and enhances the market. A. Demand
A. Multiplier Effect B. Utility
B. Universal C. Scarcity
C. Shelter D. Transferrability
D. Inflation E. Purchasing Power
E. Collateral
F. Appreciation 26. The ability to participate, economically
speaking, in an activity. The methods of
Feedback calculating what products people can afford vary
ECONOMIC SIGNIFICANCE OF REAL from product to product and industry to industry.
ESTATE A. Demand
B. Utility
• Multiplier Effect – real estate is said to be a C. Scarcity
“spark plug” which triggers off activities in allied D. Transferrability
industries, creates income opportunities for E. Purchasing Power
different private sectors, and enhances the
market; 27. DETERMINANTS OF VALUE
• Universal – there is a universal need for real
estate; The ability to transfer title/ ownership or use of
• Shelter– one of the basic needs of man is the property to someone else.
shelter; A. Demand
• Inflation – investment in real estate is a hedge B. Utility
against inflation; C. Scarcity
• Collateral– real estate is the most preferred D. Transferrability
collateral and is therefore the major source of E. Purchasing Power
capital formation;
• Appreciation – land generally appreciates in 28. DETERMINANTS OF VALUE
value;
Relates to a product or service’s ability to satisfy
22. It is the combination of the factors of a want, need, or desire.
production to produce an improvement or A. Demand
development. It is the amount of money used to B. Utility
construct improvements plus the value of the C. Scarcity
land. It may or may not equal value be D. Transferrability
depending on whether costs are warranted or E. Purchasing Power
wisely made.
A. Price 29. DETERMINANTS OF VALUE
B. Value/Market Value
C. Cost For an item to have value, it must not be readily
D. Supply available. some degree of rareness &
uniqueness.
23. It is the amount of money or its equivalent A. Demand
given in exchange for real estate property or any B. Utility
interest therein. It is the amount for which the C. Scarcity
property is actually sold. D. Transferrability
A. Price E. Purchasing Power
B. Value/Market Value
C. Cost 30. In real estate economics, the main
D. Supply determinants of the demand for housing is:
A. Supply
24. It is the utility or attribute of a property to B. Demographics
satisfy human want or to command other C. Demand
properties in exchange. D. Cost
31. If the supply of existing housing deteriorates 40. One which lacks the proper formalities, form
due to wear, then the stock of housing supply: or words or other requisites prescribed by law
A. Appreciates for a mortgage, but shows the intention of the
B. Remains constant parties to make the property subject of the
C. Become stagnant contract as security for a debt and contains
D. Depreciates nothing impossible or contrary to law.
Correct answer A. Closed Mortgage
D. Depreciates B. Conventional Mortgage
C. Blanket Mortgage
32. One of the following is not an economic D. Equitable Mortgage
characteristic of real estate:
A. Area Preference 41. What fractional interest is involved in the
B. Scarcity sale of either limited ownership, rights to use
C. Transferability and occupy a residential or hotel rooms?
D. Fixity A. Joint Tenancy
B. Leasehold
33. The most important economic characteristic C. Timeshare
of real estate is: D. Co-ownership
A. Situs Feedback
B. Scarcity A timeshare is a property with a divided form of
C. Fixity ownership or use rights. These properties are
D. Modifications typically resort condominium units, in which
multiple parties hold rights to use the property,
34. Which of the following is not a physical and each owner of the same accommodation is
characteristic of real estate? allotted their period of time.
A. Immobility
B. Utility 42. All of the following clauses in a loan
C. Indestructibility agreement enable the lender to demand the
D. Uniqueness entire remaining balance be paid immediately
EXCEPT:
35. Refers to the process of making installment A. Due-on-Sale Clause
payments consisting of principal and interest B. Alienation Clause
that reduces the loan balance. C. Defeasance Clause
A. Amortization D. Acceleration Clause
B. Interest
C. Downpayment 43. An existing mortgage loan can have its lien
D. Term Payment priority lowered through the use of a:
A. Reconveyance Of Mortgage
36. It is the compensation paid for the use of the B. Subordination Agreement
capital. C. Satisfaction Of Mortgage
A. Interest D. Hypothecation Agreement
B. Income
C. Rent 44. The clause in a mortgage instrument that
D. Earnest Money would prevent the assumption of the mortgage
by a new purchaser is a:
37. Refers to the capacity to satisfy wants, A. Power Of Sale Clause
production by labor, and their exchangeability. B. Defeasance Clause
A. Economic Utility C. Due-on-sale Clause
B. Economic Life D. Certificate Of Sale Clause
C. Economic Value
D. Exchange Value 45. What project management tool is
appropriate to use to schedule, organize and
38. A real estate mortgage that covers several coordinate activities within a project?
properties is called: A.FLOW CHART
A. Closed Mortgage B.CPM
B. Conventional Mortgage C.PERT
C. Blanket Mortgage D.GANTT
D. Equitable Mortgage
Feedback
39. A type of mortgage loan that is not insured Program Evaluation Review Technique (PERT)
or guaranteed by the government. Instead, the is a project management planning tool used to
loan is backed by private lenders, and its calculate the amount of time it will take to
insurance is usually paid by the borrower. realistically finish a project. PERT charts are
A. Closed Mortgage used to plan tasks within a project — making it
B. Conventional Mortgage easier to schedule and coordinate team
C. Blanket Mortgage members.
D. Equitable Mortgage
46. A horizontal bar chart used in project c.Land, building, machineries and
management to visually represent a project plan improvements of the land
over time. It illustrates a project schedule. d.Land, building, and improvements of the land
A.FLOW CHART
B.CPM 54. An upfront fee charged by a lender to
C.PERT process a new loan application.
D.GANTT A. Loan origination fee
B. Prepayment penalty
47. An extension of credit from a seller to a C. Prepayment of mortgage insurance
buyer to allow the buyer to complete the D. Advance interest payment
transaction is called:
A. Purchase money mortgage 55. A measure comparing the amount of your
B. Package mortgage mortgage with the appraised value of the
C. Blanket mortgage property. It is the amount of a loan expressed
D. Growing equity mortgage as a percentage of the value of the real estate
offered as collateral.
48. The act of lending money at an interest rate A. Debt-to-equity ratio
that is considered unreasonably high or that is B. Amortization ratio
higher than the rate permitted by law. C. Loan-to-value ratio
A. Usury D. Capital-use ratio
B. Deficiency
C. Flopping 56. It is a financial ratio indicating the relative
D. Redlining proportion of shareholders' equity and debt used
to finance a company's assets. Closely related
49. An illegal discriminatory practice in which a to leveraging, the ratio is also known as risk,
mortgage lender denies loans or an insurance gearing or leverage.
provider restricts services to certain areas of a A. Debt-to-equity ratio
community, often because of the racial B. Amortization ratio
characteristics of the applicant’s neighbourhood. C. Loan-to-value ratio
A. Usury
B. Deficiency D. Capital-use ratio
C. Flopping
D. Redlining 57. The right a mortgagor has to regain the
property by paying the debt after a foreclosure
50. Where the buyer of a short sale purchases sale is called:
the property for less than the true fair market A. Recapture
value by influencing the appraiser or real estate B. Reversion
agent to provide a Broker Price Opinion (BPO) C. Redemption
which undervalues the property. D. Acceleration
A. Usury
B. Deficiency 58. The clause in a trust deed or mortgage that
permits the lender to declare the entire unpaid
C. Flopping balance immediately due and payable upon
D. Redlining default is the
A. Acceleration clause
51. If a property sold at a mortgage foreclosure B. Escalation clause
does not bring an amount suffficient to satisfy C. Judgement clause
the outstanding mortgage debt, the mortgagor D. Forfeiture clause
may be responsible for:
A. Default judgement 59. The type of real estate loan that allows the
B. Liquidated damages lender to increase the outstanding balance of a
C. Punitive damages loan up the original sum in the note while
D. Deficiency judgement advancing additional funds is the:
A. Graduated-payment mortgage
52. The defeasance clause in a mortgage B. Wraparound mortgage
requires the mortgagee to execute: C. Open-end mortgage
A. Assignment of mortgage D. Growing-equity mortgage
B. Satisfaction of mortgage
C. Subordination agreement 60. A unique financing option that allows a
D. Partial release agreement mortgage owner to get a second mortgage to
support the payment of the original real estate
53. Under RA#7160, real property is an asset mortgage plan.
which includes: A. Graduated-payment mortgage
a.Land, building, machineries, trees and B. Wraparound mortgage
improvements C. Open-end mortgage
b.Land, building, trees and improvements of the D. Growing-equity mortgage
land
61. A type of fixed-rate mortgage with an
amortization schedule that provides lower B. Recapture Rate
payments early on that then increase over time. C. Interest Rate
A. Graduated-payment mortgage D. Discount Rate
B. Wraparound mortgage
C. Open-end mortgage 69. A type of loan wherein the Lender has some
D. Growing-equity mortgage complete control over the project and the
income from a certain period, part or all of which
62. A type of fixed-rate mortgage where is assigned to him to amortize the project.
monthly payments increase over time according A. Turn-key Loan
to a set schedule, rather than remaining fixed B. Multi-Window Lending Program
and equal over the loan term. The interest rate C. Project Loan
on the loan does not change, and there is never D. Construction Loan
any negative amortization.
A. Graduated-payment mortgage 70. A branch of finance which deals with
investing money or wealth in real estate is
B. Wraparound mortgage called:
C. Open-end mortgage A. Real Estate Finance
D. Growing-equity mortgage B. Real Estate Investment
C. Real Estate Investment Trust
63. The pledging of property as security for D. Real Estate Development Corp.
payment of a loan without surrendering
possession is: 71. A condition prevailing in a particular place as
A. Subordination of a certain period of time when demand is great
B. Hypothecation but very few properties are for sale, thereby
C. Equity tending to increase the price.
D. Disintermediation A. Buyer's Market
B. Seller's Market
64. When depositors withdraw savings deposits C. Perfect Market
from an intermediary financial institution, such D. Imperfect Market
as a savings and loan association or commercial
bank, in favor of direct investment. 72. A condition prevailing in a particular place as
A. Subordination of a certain period of time when there are many
B. Hypothecation buyers and sellers; price is at its lowest.
C. Equity A. Buyer's Market
D. Disintermediation B. Seller's Market
C. Perfect Market
65. The difference between the market value of D. Imperfect Market
your home and the amount you owe the lender
who holds the mortgage. 73. A condition prevailing in a particular place as
A. Subordination of a certain period of time when demand is low
B. Hypothecation while many properties are for sale, thereby
C. Equity tending to suppress price.
D. Disintermediation A. Buyer's Market
B. Seller's Market
66. The process of ranking home loans C. Perfect Market
(mortgage, HELOC or home equity loan) by D. Imperfect Market
order of importance.
A. Subordination 74. An environment in which all parties do not
B. Hypothecation have complete information, and in which
C. Equity participants can influence prices.
D. Disintermediation A. Buyer's Market
B. Seller's Market
67. A real estate loan payable in periodic C. Perfect Market
installments that are sufficient to pay the D. Imperfect Market
principal in full during the term of the loan is
called a: 75. The desirability of the economic utility of the
A. Straight loan property is known as:
B. Partially amortized loan A. Economic Utility
C. Conventional loan B. Economic Life
D. Fully amortized loan C. Economic Value
Correct answer D. Economic Obsolescence
D. Fully amortized loan
76. An undertaking by two or more parties for
68. The rate of return earned by an investor, the purpose of implementing a particular
which does not include allowance for capital business and sharing costs and earnings in
recovery is: proportion to that share is known as:
A. Cash Flow A. Joint Venture
B. Partnership 85. Interest rate is the rate of return earned by
C. Business Development an investor, which does not include allowance
D. Syndication for:
A. Capital Recovery
77. When a group of investors pools together B. Cash Flow
their capital to jointly purchase a large real C. Recapture
estate property. D. Discount
A. Joint Venture
B. Partnership 86. These refer to the changes that result when
C. Business Development wealthier people acquire or rent property in low
D. Syndication income and working class communities.
A. Progression
78. The composite interest rate that represents B. Gentrification
the anticipated income of the investments made C. Competition
and the return which represents recovery of the D. Regression
investments.
A. Capitalization Rate 87. The Gross Income Multiplier is a factor
B. Recapture Rate derived from comparable properties and applied
C. Nominal Rate to expected rental income to estimate:
D. Over-all Rate of Return A. A known price
B. A gross income
79. A commercial property producing an annual C. A established cost
gross income of Php 390,000 was sold two D. A value
months ago for Php 3,412,500. What is the
property's gross income multiplier? 88. Many seller and buyers, price at its lowest.
A. 8.75
B. 7.0 A. Perfect Market
C. 7.75 B. Imperfect Market
D. 8.5 C. Monopoly
D. Monopsony
80. It is a factor derived from the comparable E. Oligopoly
properties and applied to expected rental F. Oligopsony
income to estimate a value.
A. Gross Income Multiplier 89. Single seller, multiple buyers.
B. Gross Income Tax A. Perfect Market
C. Appraised Value B. Imperfect Market
D. Gross Income C. Monopoly
D. Monopsony
81. Refers to buying an under priced property E. Oligopoly
and then quickly reselling it at market value. F. Oligopsony
A. Flipping
B. Bird Dogging 90. Few sellers, more buyers; few buyers, more
C. Deal Swinging sellers; price goes up and down accordingly.
D. Brokering A. Perfect Market
Correct answer B. Imperfect Market
A. Flipping C. Monopoly
D. Monopsony
82. Getting paid a referral fee for finding good E. Oligopoly
deals for investors is known as: F. Oligopsony
A. Flipping
B. Bird Dogging 91. Single Buyer, multiple seller.
C. Deal Swinging A. Perfect Market
D. Brokering B. Imperfect Market
C. Monopoly
83. Economic Utility refers to the capacity to D. Monopsony
satisfy wants, production by labor and their: E. Oligopoly
A. Exchangeability F. Oligopsony
B. Uniqueness
C. Transferability 92. Few seller, multiple buyers
D. Scarcity A. Perfect Market
B. Imperfect Market
84. A Blanket Mortgage is a real estate C. Monopoly
mortgage that covers: D. Monopsony
A. A single property E. Oligopoly
B. All Properties F. Oligopsony
C. Several Properties
D. Not more than two (2) properties 93. Few buyers, multiple sellers.
A. Perfect Market
B. Imperfect Market 101. It is during this life cycle where a
C. Monopoly neighborhood or zone regains momentum or
D. Monopsony sees rebirth and occurs because of an area's
E. Oligopoly proximity to employment or other conveniences
F. Oligopsony within fringe areas around older downtown
business districts.
94. A personal property mortgage is a: A. Growth
A. Real Estate Mortgage B. Stability
B. Blanket Mortgage C. Decline
C. Chattel Mortgage D. Revitalization
Feedback
The gross rent multiplier is calculated using the
gross rent for a property. On the other hand, the
gross income multiplier is calculated using gross
potential income, which considers all sources of
income for a property, not just the rental income.
Analyzing the capacity of a particular property to 48. In the absence of an agreement to the
contain economic activities, services, and other contrary, the mortgage normally having priority
comforts to supply client's needs is called will be the one:
____________ analysis. That is a construction loan mortgage
Economic That was recorded first
Property Productivity For the greatest amount
Social That is a permanent mortgage
Market
49. The seller would have the least financing
42. An economic concept refers to the price exposure in:
most likely to be concluded between the buyers Purchase "subject to" mortgage
and sellers of a good/property or services that is Assumption of loan by buyer
available for purchase. New financing by buyer
Price Purchase money mortgage
Profit
Value 50. A type of secured loan where funds are
Market released by providing a piece of real estate as a
collateral to the lender.
43. What refers to the actual or estimated period Real Estate Finance
of net income produced by the revenues and Pre-approved Loan
expenditures in the operation of an income Mortgage
producing property? HDMF Loan
Capitalization
Cost Approach 51. The original size of the loan, which may or
Market Analysis may not include certain other costs.
Cash Flow
Goes down in size as the loan is repaid.
44. What is the term used that refers to the Interest
withdrawal of funds from intermediary financial Amortization
institutions, such as bank and savings and loan Principal
association to invest them directly? Loan-to-Value Ratio
Bail out
Disintermediation 52. A financial charge for use of the lender's
Funds Flow money.
Cash Flow Profit
Amortization
45. Select the most probable value which a Principal
property should bring in a competitive and open Interest
market under all conditions requisite to be a fair
sale, the buyer and seller each acting prudently, 53. Helps banks and other lenders assess how
knowledgeably, and assuming the price is not much risk they are taking in providing a loan to a
affected by undue stimulus. borrower. It is the ratio of the loan amount
Substitution divided by the value of the property.
Economic Negative Leverage
Market Loan to Value Ratio (LTV)
Special Gross Rent Multiplier
Positive Leverage
Debt to Income Ratio (DTI)
Leverage
Gross Income Multiplier
It is a metric used in commercial real estate
54. Percentage of gross monthly income that analysis to compare the income-producing
goes to paying your monthly debt payments. characteristics of properties.
Gross Rent Multiplier Gross Income Multiplier
Leverage Debt to Income Ratio (DTI)
Debt to Income Ratio (DTI)
Positive Leverage Positive Leverage
Negative Leverage Gross Rent Multiplier
Loan to Value Ratio (LTV) Leverage
Gross Income Multiplier Loan to Value Ratio (LTV)
Negative Leverage
55. An investment strategy of using borrowed
money, specifically, the use of various financial 60. A legal process that allows lenders to
instruments or borrowed capital, to increase the recover the amount owed on a defaulted loan by
potential return of an investment. taking ownership of and selling the mortgaged
property.
It is the amount of debt used to finance assets or Garnishment
investing activities. Writ of Execution
Positive Leverage Foreclosure
Loan to Value Ratio (LTV) Attachment
Gross Income Multiplier
Negative Leverage 61. It is a preliminary legal procedure to seize
Gross Rent Multiplier property in anticipation of a favorable ruling for a
Leverage plaintiff who claims to be owed money.
Debt to Income Ratio (DTI) Attachment
Foreclosure
56. Occurs when you borrow money at a lower Garnishment
interest rate than the return you get on the Writ of Execution
amount of cash that would otherwise be
invested. 62. An order directing a third party to seize
Loan to Value Ratio (LTV) assets, usually wages from employment or
Negative Leverage money in a bank account, to settle an unpaid
Positive Leverage debt.
Leverage Writ of Execution
Debt to Income Ratio (DTI) Foreclosure
Gross Rent Multiplier Attachment
Gross Income Multiplier Garnishment
57. When a loss is incurred whereby the return 63. An indicator of price inflation and it
would be less than the interest rate. represents changes in a basket of goods.
Gross Income Multiplier
Negative Leverage It is used to estimate the average variation
Debt to Income Ratio (DTI) between two given periods in the prices of
Leverage products consumed by households.
Positive Leverage Purchasing Power
Gross Rent Multiplier Consumer Price Index
Loan to Value Ratio (LTV) Macroeconomics
Real Estate Economics
58. A screening metric used by investors to
compare rental property opportunities in a given 64. The broadest measure of a country’s
market. economy, and it represents the total market
value of all goods and services produced in a
It is the ratio of the price of a real estate country for a given period.
investment to its annual rental income before Gross Domestic Product
accounting for expenses such as property taxes, Microeconomics
insurance, and utilities. Macroeconomics
Leverage Gross National Product
Gross Income Multiplier
Debt to Income Ratio (DTI) Represents the value of all goods and services
Negative Leverage for all Filipino-owned enterprises and activities
Loan to Value Ratio (LTV) within and outside of the country’s national
Gross Rent Multiplier borders.
Positive Leverage Gross Domestic Product
Gross National Product
59. It is the ratio between the sale price or value Macroeconomics
of a property and its gross income from rent and Microeconomics
other income sources.
66. A measure of the extent to which available 74. When the Banko Sentral ng Pilipinas sells
labour resources are being used. more treasury notes and bonds to mop up
Balance of Payments excess liquidity in the system, the government in
Unemployment Rate effect is using:
Consumer Confidence Index (Retail Sales) Fiscal Policy
Employment Rate Power of the Purse
Political policy
67. Measures the share of workers in the labor Monetary Policy
force who do not currently have a job but are
actively looking for work. 75. A key aspect of a political system in which a
Balance of Payments central governmental authority dictates the
Unemployment Rate levels of production that are permissible and the
Consumer Confidence Index (Retail Sales) prices that may be charged for goods and
Employment Rate services.
68. The ratio between the amount of payments It is also known as Planned Economy.
received from abroad and the amount of Command Economy
payments going abroad. Traditional Economy
GNP Mixed Economy
Consumer Confidence Index (Retail Sales) Market Economy
GDP
Balance of Payments 76. An economic system in which economic
decisions and the pricing of goods and services
69. The report is particularly useful because it is are guided by the interactions of a country's
a timely indicator of broad consumer spending individual citizens and businesses.
patterns that is adjusted for seasonal variables. Traditional Economy
Mixed Economy
It provides an indication of future developments Command Economy
of households' consumption and saving. Market Economy
Marketability Analysis
Consumer Price Index 77. A basic economic system where customs
Consumer Confidence Index (Retail Sales) and traditions are the elements that determine
Balance of Payments the way trade and commerce are performed. It is
a self-sufficient economy where the community
70. Generally the process by which the central engages in different activities to produce goods
bank, or government controls the supply and or services that are required by the rest of the
availability of money, the cost of money, and the community.
rate of interest. Mixed Economy
Command Economy
This is used by the government to be able to Market Economy
control inflation, and stabilize currency. Traditional Economy
Fiscal Policy
Monetary Policy 78. A system that combines aspects of both
capitalism and socialism.
71. Measures employed by governments to
stabilize the economy, specifically by It protects private property and allows a level of
manipulating the levels and allocations of taxes economic freedom in the use of capital, but also
and government expenditures. allows for governments to interfere in economic
Fiscal Policy activities in order to achieve social aims.
Monetary Policy Command Economy
Market Economy
72. In the country where there is only one telco Traditional Economy
provider, that specific company enjoy its: Mixed Economy
Monopsonic Market
Oligopolistic Market
Monopolistic Market 79. A foundational assumption of many
Oligopsonic Market economic theories that claims human beings are
Correct answer generally self-interested and will take advantage
Monopolistic Market of others when possible.
Capitalism
73. The ________ is the amount of interest Communism
charged on your loan every year. Socialism
Interest Per Annum Traditionalism
Annual Percentage Rate Opportunism
Loan increment
Principal Interest 80. A political and economic system in which
property and the means of production are owned
in common, typically controlled by the state or 87. Where any change in price is matched by an
government. equal change in quantity (where the number is
equal to 1).
It is based on the idea that common or public Unit Elastic
ownership of resources and means of Relatively Inelastic
production leads to a more equal society. Perfectly Inelastic
Traditionalism Relatively Elastic
Capitalism Perfectly Elastic
Communism
Opportunism 88. Where small changes in price cause large
Socialism changes in quantity demanded (the result of the
formula is greater than 1).
81. One where class distinctions are eliminated Perfectly Elastic
and the community as a whole owns the means Perfectly Inelastic
to production. Relatively Elastic
* Relatively Inelastic
Capitalism Unit Elastic
Socialism
Traditionalism 89. Where any very small change in price
Opportunism results in a very large change in the quantity
Communism demanded.
Relatively Elastic
82. The economic system where the factors of Perfectly Inelastic
production such as capital goods, labour, natural Perfectly Elastic
resources, and entrepreneurship are controlled Relatively Inelastic
and regulated by private businesses. Unit Elastic
Socialism Correct answer
Communism Perfectly Elastic
Opportunism
Capitalism 90. The minimum amount that a lender agrees
Traditionalism to advance in order for a builder to commence
construction on a project.
83. A system that relies on customs, history, Hard Money Loan
and time-honored believes. CRE Loan
Traditionalism Floor Loan
Communism Acquisition, Development, and Construction
Socialism Loan
Opportunism
Capitalism 91. A contract of sale with the stipulation that
the vendor shall have the right to buy back the
84. The ratio of the percentage change in property within the agreed period.
quantity demanded of a product to the Pacto De Retro Sale
percentage change in price. Pactum De Non Aliendo
Pactum Commissorium
Economists employ it to understand how supply Dacion En Pago
and demand change when a product’s price Tacita Reconducta
changes.
Hypothecation 92. It means that if at the end of the period of
Demand Index lease, the lessee continues to enjoy the thing
Price Elasticity of Demand leased with the acquiescence of the lessor, it is
Supply and Demand undertood that there is an implied lease.
Pactum Commissorium
85. Where the quantity demanded does not Pacto De Retro Sale
change when the price changes. Dacion En Pago
Relatively Elastic Tacita Reconducta
Unit Elastic Pactum De Non Aliendo
Relatively Inelastic Correct answer
Perfectly Elastic Tacita Reconducta
Perfectly Inelastic
93. A stipulation which prohibits the mortgagor
86. Where large changes in price cause small from alienating the property within the period of
changes in demand (the number is less than 1). the mortgage.
Perfectly Elastic
Relatively Elastic In the Philippines, this is considered as void and
Unit Elastic of no legal effect.
Relatively Inelastic Pactum De Non Aliendo
Perfectly Inelastic Tacita Reconducta
Dacion En Pago
Pactum Commissorium from the entry of judgment, and that in default of
Pacto De Retro Sale such payment the property shall be sold at
public auction to satisfy the judgment.
94. A stipulation which authorizes the mortgagee Equity of Redemption
to appropriate the property as his own upon Right of Redemption
failure of the debtor to fulfill the principal Redemption
obligation. Conventional Redemption
Legal Redemption
In the Philippines, this is considered as void and
of no legal effect. 100. The mortgagor may redeem the property
Pacto De Retro Sale within the term of one (1) year from the date of
Pactum De Non Aliendo registration of auction sale.
Pactum Commissorium Redemption
Tacita Reconducta Legal Redemption
Dacion En Pago Conventional Redemption
Equity of Redemption
95. Payment of the debt or obligation with a Right of Redemption
property. It means "Payment in Kind."
Pacto De Retro Sale 101. The process by which a mortgagee
Pactum Commissorium acquires an absolute title to the property of
Tacita Reconducta which he had previously been only the
Pactum De Non Aliendo conditional owner or upon which he had
Dacion En Pago previously a mere lien or encumbrance.
A. Equitable Mortgage
96. A transaction through which the mortgagor, B. Foreclosure
or one claiming in his right, by means of a C. Judical Confirmation
payment or the performance of a condition, re- D. Adjudication
acquires or buys back the value of one title
which may have passed under the mortgage. 102. A contract of sale whereby part of the
Legal Redemption purchase price is paid upon the execution of the
Equity of Redemption contract with the balance to be paid within a
Right of Redemption stipulated period and the property is mortgaged
Redemption by the VENDEE to the VENDOR to secure the
Conventional Redemption payment of the said balance.
DEED OF SALE WITH ASSUMPTION OF
97. The right to be subrogated upon the same MORTGAGE
terms and conditions stipulated in the contract, DEED OF SALE WITH MORTGAGE
in the place of one who acquires a thing by
purchase or by payment in kind or by any other
transaction whereby ownership is transmitted by 103. A contract of sale whereby the property
onerous title. being sold is presently mortgaged and the
Redemption VENDEE pays a certain amount to the VENDOR
Equity of Redemption and assumes as well the existing obligation
Conventional Redemption which is secured by a mortgage over the
Legal Redemption property.
Right of Redemption DEED OF SALE WITH ASSUMPTION OF
MORTGAGE
98. Takes place when a vendor reserves the DEED OF SALE WITH MORTGAGE
right to repurchase the thing sold with the
obligation of returning to the vendee the price of
the sale, the expenses of the contract and any
other legitimate payments made by reason of
the sale, the necessary and useful expenses
made on the thing sold, and of complying with
other stipulations which may have been agreed
upon.
Redemption
Legal Redemption
Right of Redemption
Conventional Redemption
Equity of Redemption
Correct answer
Conventional Redemption
Foreign Exchange Rate: The foreign exchange Addenda: The addenda section includes any
rate refers to the rate at which one currency can additional supporting documentation, data, or
be exchanged for another. It is not directly information that may be relevant to the appraisal
related to the appraisal of machinery using the but not necessarily included in the main body of
RCN method, which focuses on local price the report. This can include maps, photographs,
variations and does not involve foreign market data, or other supplemental materials.
exchange considerations.
97. What statistical measurement measures the
94. In percent, what is the assessment level on dispersion of a dataset relative to its mean and
Machineries at commercial and agricultural is calculated as the square root of the variance?
classification? Predictive
80 and 50 Regression
80 and 60 Descriptive
80 and 40 Standard deviation
80 and 30
Feedback
Feedback Standard deviation provides a way to quantify
RA 7160: On Machineries Class Assessment the spread or dispersion of data points in a
Levels (ARCI) dataset. It tells us how much individual data
Agricultural 40% points deviate from the mean. A smaller
Residential 50% standard deviation indicates that the data points
Commercial 80% are close to the mean, while a larger standard
Industrial 80% deviation indicates that the data points are more
spread out from the mean.
95. Define Donor’s Tax.
Tax on the privilege of transmitting one’s The formula for calculating the standard
property or property rights to others without deviation is as follows:
adequate and full consideration
Tax on transmitting one’s property or property Standard Deviation (σ) = √Variance
rights to others without adequate and full
consideration Where Variance is the average of the squared
Tax on transmitting one’s property to others differences between each data point and the
without adequate and full consideration mean.
Tax on the privilege of transmitting one’s
property to others without adequate and full 98. Since lakes do not allow access to
consideration seaborne trade, which of the following provinces
are still considered to be “landlocked”?Untitled
Question
Batangas and Cavite
Cavite and Rizal
Rizal and Laguna
Calamba and Laguna
The adjusted sales price of the comparable is: 37. A yield rate used to convert future payments
P4,550,000.00 or receipts to present value.
P4,500,000.00 Split Rate
P5,500,000.00 Capitalization Rate
P5,550,000.00 Overall Rate
Discount Rate
Feedback
5,000,000 Value of a comparable with two 38. To arrive at net operating income, expenses
bedrooms are deducted from:
500,000 Appraisers adjustment for the three Gross Potential Income (PGI)
bedrooms Operating Profit
5,500,000 Net Operating Income (NOI)
Effective Gross Income (EGI)
*If comparable is SUPERIOR, DEDUCT Correct answer
adjustment to its value Effective Gross Income (EGI)
*If comparable is INFERIOR, ADD adjustment to
its value 39. The lessee pays the lessor a fixed
percentage of the total amount transacted in the
34. An office building recently sold for leased property is called a:
P50,000,000. Given the following information: Step-Up Lease
Inflation-Indexed Lease
Gross potential income: P10,000,000 Percentage Lease
Vacancy factor: 8% Flat Lease
Net capitalization
40. The estimated additional cash flow at the
end of the economic life of the subject property
under appraisal is known as: 49. In the building residual technique, the
Market Value appraiser starts with the assumption of:
Present Value Net Capitalization
Discounting Replacement cost
Reversion Value Land Value
Building Value
41. Suppose a lease contract called for rent of
P100 per sq.m . However, similar space in the 50. Schedule rent that is higher than market rent
market rented at P150 per sq.m . The amount creates:
specified in the lease is known as the Overage Rent
_________ rent. Excess Rent
Overage Gross Rent
Contract Escalation Rent
Market
Economic 51. Other name for contract rent is:
Market Rent
42. A positive leasehold interest maybe created Economic Rent
only if the contract rent is: Schedule Rent
Greater than the market rent Surplus Rent
Equal to market rent
Less than the market rent 52. All factors being equal, as the location of an
NOTA income property become less desirable, the cap
rate used will be:
43. Effective gross income (EGI) is the Unaffected
anticipated income from operation of a project Lower
after adjustment for: Higher
Operating expense Less Reliable
Realty tax and insurance
Vacancy and credit loss 53. Why is the gross income multiplier normally
All of the above not subject to adjustments by the appraiser?
Relative desirability is presume to be
44. Which of the following terms refers to the reflected in the gross income multiplier
right of a person who owns a property but has generated in the market place
leased it to someone else? It is impossible to make adjustment when using
Lessee’s estate income data
Leasehold estate Any differences between properties would be
Fee simple estate significant
Leased fee estate The income approach never allows for
adjustment of any kind
45. The rate in percent which is the sum of the
interest rate and recapture rate for building 54. An appraiser calculates the present value of
Capitalization Rate income based on the contract rent and adds the
Interest Rate present value of the reversion at the end of the
Overall Rate lease.
Split Rate
What legal interest is being calculated?
46. The interest belonging to the tenants created Life estate
by the leasing of the property: Fee Simple Estate
Economic Rent Leasehold Estate
Leased Fee Estate Leased Fee Estate
Contract Rent
Leasehold Estate
55. The determination of the capitalization rate
47. Which of the approaches to value would by the process of dividing the net income by the
involve an investigation into the rent schedules selling price is:
of the subject property and the comparables The Summation Method
Cost Approach The Comparative Method
Income Approach The Yield Method
Market Approach The Band of Investment Method
48. In the land residual technique, the appraiser 56. The leased fee estate pertain to the property
starts with the assumption of: interest of the:
Land value Owner of the land in Fee Simple
Replacement cost Lessee
Building value Owner of the Leasehold Estate
Lessor Feedback
Overall Cap Rate = NOI/SP
57. The net income before recapture is 0.75/9 = 8.33%
estimated by deducting the following from the
effective gross income: 64. If a property’s net income ratio is 0.85, what
All building expenses excluding maintenance is its operating expense ratio?
and repair cost 0.015
All expense excluding depreciation 0.58
All expenses in the operation of the property 1.5
including depreciation 0.15
All real estate taxes only
65. Given the following information:
58. Rent saving is the difference between: Building capitalization rate: 0.11
Flat contract rent and step up contract rent Land capitalization rate: 0.09
Sublease rent and lessee’s rent Land value as a percent of total value: 35%
Market rent and economic rent
Market rent and contract rent What is the over all capitalization rate by using
the band of investment approach?
59. The basic formula for property valuation via 0.097
the income capitalization approach is: 0.110
V = IR 0.100
V = R/I 0.103
V = I/R Feedback
V = SP/GR Band of Investment Method
60. The simplest and most reliable method of 35% x 0.09 = 0.0315
the income capitalization is: 65% x 0.11 = 0.0715
The equity residual technique 0.0315 + 0.0715 = 0.103
The building residual technique
The land residual technique 66. An office building recently sold for
The direct capitalization technique P50,000,000. Given the following information:
61. The total anticipated revenue from income Gross potential income: P10,000,000
property operations after vacancy and collection Vacancy factor: 8%
losses are deducted is: Expenses: 45% of effective gross income
Property residual technique Annual mortgage payment: P4,125,000
Net operating income Equity: P12,500,000
Effective gross income
Potential gross income What is the over all rate of return for the
property?
62. A commercial property producing an annual 10%
gross income of P390,000 was sold two months 7.48%
ago for P3,412,500. What is the property’s gross 10.12%
income multiplier? 8.3%
7.75
8.75 Feedback
7 1st. PGI less vacancy and collection losses
8.5 10,000,000 x 92% = 9,200,000 (EGI)
Feedback 2nd: EGI less Operating Expenses
GIM = Sale price / Gross income 9,200,000 x 55% = 5,060,000 (NOI)
GIM = 3,412,500 / 390,000 = 8.75 3rd: NOI divided SP
5,060,000 / 50,000,000 = 10.12%
Therefore, the property's gross income multiplier
is 8.75. 67. What would be recapture rate of a building
having a remaining economic life of 15 years?
This means that the property was sold for 8.75
times its annual gross income. 7%
15%
63. If a property has a net income ratio of 0.75 150%
and a gross income multiplier of 9, what is the 6.67%
indicated over all capitalization rate?
6.75% Feedback
8.33% 100 (Years) divided by 15 Years = 6.66666 or
2.78% 6.67%
12%
68. The value of a building with a net operating Income Attributable to Building = 1,400,000 x
income of P200,000 and with an over all 10%
capitalization rate of 9.5% is: = 140,000
P2,000,000
P2,200,000 Income Attributable to Land = 200,000 - 140,000
P2,300,840 = 60,000
P2,100,000
Land Value = 60,000/9.5%
Feedback = 631,578.95
Value = NOI / Cap rate
Value = 200,000 / 0.095 Property Value = 1,400,000 + 631,578.95
Value = P2,105,263.15 = Php 2,031,579 (rounded off)
Nearest answer is 2.1M. 72. A vacant lot is rented for a car display for
P24,000 per month. The interest rate applicable
69. Which of the following estimates would result to this type of property is 8%.
in a capitalization rate of 4%:
Net operating income of P200,000, value of Compute the value of the property by income
P5,000,000 approach.
Potential gross income of P200,000, value P2,400,000
P5,000,000 P2,800,000
Effective gross income of P200,000, value of P2,600,000
P5,000,000 P3,600,000
Feedback Feedback
A capitalization rate (cap rate) is a measure of Value = Income / Rate Value = 24,000/ 8%
the potential return on investment for a real Value = 3,600,000
estate property. It is calculated by dividing the
net operating income (NOI) of a property by its 73. A 30 year mortgage covering 75% of
market value. property value can be obtained from a bank for
8.5%. The mortgage constant is 0.092. Equity
In this case, the cap rate is 4%, which means for this type of property requires 12% return.
that the NOI of the property is 4% of its market
value. So, if the NOI is P200,000, then the What is the capitalization rate using the band of
market value of the property is P5,000,000. investments method?
10.50%
70. A building has a rental income of P350 per 9%
month. Using the monthly gross rent multiplier of 10.00%
125, the value of the building would be 9.90%
estimated at:
P35,714 Feedback
P437,500 CapRate by Band of Investment
P357,142
P43,750 R = (LTV x MC) + (ETV x ED)
R = (Loan to Value x Mortgage Constant) +
Feedback (Equity to Value x Equity Dividend)
GRM = SP/Income
SP = GRM x Income R (.75x .092) + (.25 x .12)
= 125 x 350 R = 9.90%
= P43,750
74. In a property residual capitalization
71. With the building value of P1,400,000, land approach, what is the value of an improved
capitalization rate of 9.5%, building capitalization property with a net income of P80,000 a year, an
rate of 10% and net operating income of interest rate of 8% and a recapture rate of 2%?
P200,000. P840,000
P1,000,000
The total property value, using the land residual P850,000
method would be: P800,000
P2,100,000
P2,022,500 Feedback
P2,031,579 Value = Income / Rate Value = 80,000/ (8%
P2,000,500 +2%)
Value = 800,000
Feedback
NOI = 200,000 75. Assume the following:
Building Value = 1,400,000
Building Cap Rate = 10% Annual net income from the property = P100,000
Land value = P200,000
Interest rate = 8%
Recapture rate = 4% 80. Which of the following property features
is/are important in the analysis of gross rent
What is the property value by the building multiplier comparables
residual technique? Income expense ratio
P900,000 Services included in the rent
P960,000 Location
P980,000 All of the above
P800,000
81. Economic rent can be defined as:
Feedback The potential gross rent
Land Value (LV) = 200,000 The contract rent
Interest Rate (I) = 8% The average rent
Recapture Rate (R) = 4% NOTA
Annual Net Income = 100,000
82. Which of the following is an example of a
Income due to Land (IL) = LV x I = 200,000 x 8% specific expense item rather than a basic
=16,000 expense category?
Income due to Building (IB) = NOI - IL = 100,000 Property taxes
- 16,000 = 84,000 Operating expenses
Fixed charges or expenses
Building Value (BV) = IB/(I+R) = 84,000 / 12% = Reserve for replacement
700,000
83. The property under appraisal has a 100%
occupancy. What conclusion would you most
Total (LV + BV) = 900,000
likely draw if the typical occupancy rate in the
76. If a particular buyer requires a recapture of area is only 95%?
the building portion of the price in 30 years, what Advertising is superior
is the indicated recapture rate of the building? Management is better
3 1/4% The rents are too high
3 1/3% The rents are too low
3 1/2 %
84. A rent survey reveals that buildings offering
3%
one bedroom units have a considerably lower
vacancy factor than those with two bedroom
Feedback
units. If the subject property includes only units
Recapture Rate = 1 /REL
with two bedrooms, the appraisal should
Recapture Rate = 1/30
probably project:
Recapture Rate = 3.333%
An average of the vacancy factors for all units
77. Which of the following might be classified as surveyed
tangible rather than intangible amenities? A higher factor than found in the one
Work satisfaction bedroom units
Free rent The same factor as found in the one bedroom
A sense of security units
Pride of ownership A lower factor than found in the one bedroom
No correct answers units
78. Anna of Las Piñas has a savings account 85. An apartment owner spent P125,000 last
that just paid a P35,000 annual dividend. If the year to replace five built in stoves. In a 10 unit
declared interest was 7%, which of the following apartment house, what annual expense would
represents the amount of the deposit? be projected for replacement if all the units had
P 500,000 stoves?
P 50,000
P 850,000 Assume a 10 year life for all replacements.
P 37,634 P50,000
P500,000
Feedback P125,000
Value = I/R P25,000
Value = 35,000/7%
Value = 500,000 Feedback
Cost per stove = 125000/ 5
79. An income property renting for P500,000 per Cost per stove = 25,000
year before expenses just sold for P5,000,000 Annual Expense = 25,000 x 10 units ÷ 10 years
cash. What was the gross income multiplier? Annual Expense = 25,000 per unit per year
1/10 or 10%
5 86. If economic rent is less than contract rent,
10 the difference is known as:
15 Excess rent
Overage rent In which method is invested capital recovered
Percentage rent from the annual income in exactly the same
Capital gain manner as a loan is paid off?
The double declining balance method
87. In market value appraisals, which of the The annuity or Inwood Method
following items should be excluded rom the The accelerated method
expense statement? The straight line recapture
Necessary current expenses
Projected expenses 93. The simplest and most reliable method of
Loan interest payments income capitalization is:
Correct answer The direct capitalization technique
Loan interest payments The building residual technique
The equity residual technique
88. Painting and redecorating of units is an The land residual technique
expense that appraisers normally treat as:
A fixed expense 94. If a P5,000,000 property has qualified for a
An operating expense 75% loan and at a 16% loan constant and the
Overhead buyer wants a 6% annual cash return on his
Unnecessary if you have 100% occupancy down payment, what net income would the
property have to produce?
89. Income capitalization is the broad term used P800,000
to describe the process of estimating the value P300,000
of income property by studying the economic P607,000
relationship between income and value. P675,000
II. Converts the net income of a property into its Ro (.75x .16) + (.25 x .06)
equivalent capital value Ro = .135
Ro= NOI/Value
III. Focuses on the present worth of future .135 = NOI/5,000,000
benefits NOI = .135 x 5,000,000
I and II only NOI = 675,000
II and III only
I and III only 95. If a particular buyer requires a recapture of
I,II,III the building portion of the price in 10 years, what
I only is the indicated recapture rate for the building,
assuming straight line recapture?
90. The appraiser’s choice of a capitalization 10%
technique and rate should consider the 5%
investment criteria that motivate purchasers of 20%
investment property. 2%
Feedback
Gross Potential Income = Rent x 12 x 1,000
= 500 x 12 x 1,000 = 6,000,000
Feedback
(1,445,000-1,350,000)/1,350,000/4 = .017593
Now, we also have a factor of 4.917324. This 📌Note: Interest Rate + Recapture Rate = Overall
factor is used to simplify the calculation of the Rate (OAR) or CapRate
present value. The factor is derived from the
above formula. 4. A machinery costing P500,000.00 had been
appraised at P1,000,000.00. The accumulated
PV = Pmt * factor depreciation on cost is P200,000.00 and an
appraised value of P500,000.00. The original life
Substitute the values: asset is 10 years.
PV = 500,000 * 4.917324 What is the age of the asset at the time of the
appraisal?
PV = 2,458,662
Preferred Answer format: __ Years
So, the present value (amount Mr. DJ should Example: 100 Years
pay today) is Php 2,458,662 to be assured of **Round off your answer accordingly
earning 6% on his investment of Php 500,000 **Do not include your solutions, just type in your
per year for 6 years, considering the factor of answer in the space provided below.
4.917324.
Correct answers
2. Zambales Realty will receive P100,000 in 7 4 years
years. If the appropriate interest rate is 10%, the
present value of the P100,000 receipt is: Feedback
Age of the Asset = Accumulated Depreciation /
Preferred Answer format: Php _,_,_ Original Cost x Original Life
Example: Php 56,000,123
**Round off your answer accordingly Age of the Asset = 200,000 / 500,000 x 10
**Do not include your solutions, just type in your Age of the Asset = 4 Years
answer in the space provided below.
5. A machinery costing P500,000.00 had been
Correct answers appraised at P1,000,000.00. The accumulated
P51,316 depreciation on cost is P200,000.00 and an
appraised value of P500,000.00. The original life
Feedback asset is 10 years.
Present Value of 1 Formula
PV = FV (1 + r)^-n What is the amount of annual appreciation that
PV = 1/(1.10)^7 = 0.5131581182 should be reported in the income statement of
PV = 0.5131581182 x 100,000 subsequently to the appraisal?
PV = 51,316
Preferred Answer format: Php _,_,_
Example: Php 56,000,123.01
**Round off your answer accordingly Now, we can calculate the area of the circle:
**Do not include your solutions, just type in your
answer in the space provided below. Area = π * (4 feet)^2
Area = π * 16 square feet
Correct answers
P125,000.00 Using the approximation of π as 3.14159:
So, the area of the square circumscribed by a Given that the radius (r) is 1 meter and the depth
circle with a diameter of 4 meters is (h) is 3 meters, we can now calculate the
approximately 8 square meters. volume:
Now, we have a rectangular area with Preferred Answer format: __ (unit of measure)
dimensions 10 meters (frontage) by 20 meters Example: 100 sqm
(depth). To find the maximum allowable building **Round off your answer accordingly
footprint, we calculate the area of this rectangle: **Do not include your solutions, just type in your
answer in the space provided below.
Area = 10 meters * 20 meters = 200 square
meters Correct answers
56sqm
Therefore, the maximum allowable building
footprint on this land is 200 square meters. Feedback
A = LW
13. What is the required area for the platform to A = 14 x 4
accommodate 3 tanks, each with a radius of 1 A = 56 sqm
meter, placed 1 meter apart, and with a 0.5-
meter clearance from all sides? 16. The flooring of a house covers an area of 30
square meters. How many tiles are required if
Preferred Answer format: __ (unit of measure) each tile measures 12 x 12 inches?
Example: 100 sqm
**Round off your answer accordingly Preferred Answer format: __ (unit of measure)
**Do not include your solutions, just type in your Example: 100 sqm
answer in the space provided below. **Round off your answer accordingly
**Do not include your solutions, just type in your
Correct answers answer in the space provided below.
27 m2
Correct answers
Feedback 323 Tiles
Radius of Tank = 1 meter
Distance between tank = 1 meter Feedback
Clearance on Sides = 0.5 To calculate the number of tiles required to
cover a flooring area of 30 square meters, we
Area = LW need to convert the measurements to the same
Area = 9m x 3m unit (inches or meters) to get a consistent result.
Area = 27m^2/ 27 square meters
Given that each tile measures 12 x 12 inches,
14. The area of a right triangle with a height of we can convert this measurement to square
150 feet and a base of 60 feet is: meters:
Area of one tile = 0.3048 meters * 0.3048 meters The total cost of the building is P 16,770,000.
= 0.09290304 square meters
18. Find the quantity of concrete required to fill
Next, to find the number of tiles required, we a cylindrical hole with a radius of 1 meter and a
divide the total area of the flooring by the area of depth of 3 meters.
one tile:
Preferred Answer format: __ (unit of measure)
Number of tiles = Total area of flooring / Area of Example: 100 sqm
one tile **Round off your answer accordingly
Number of tiles = 30 square meters / **Do not include your solutions, just type in your
0.09290304 square meters ≈ 322.92 answer in the space provided below.
Now, the usable area for the building is the area 19. The lot will be divided into five equal parts.
of the lot minus the setbacks on all sides. Each Among these parts, one part will be further
setback is 3.5 meters, so the dimensions of the subdivided into three equal parts. Calculate the
usable area will be: share of each of the three equal parts after the
subdivision.
Usable width = Frontage - (2 * setback) = 20
meters - (2 * 3.5 meters) = 20 meters - 7 meters **Do not include your solutions, just type in your
= 13 meters answer in the space provided below.
Usable length = Length - (2 * setback) = 50
meters - (2 * 3.5 meters) = 50 meters - 7 meters Correct answers
= 43 meters 1/15 of the entire lot
There are 21 Aspiring Real Estate Appraisers in So, the shares are:
the group. Randolph's share = 2x
Rudolf's share = 3x
21. As an Appraiser, you have identified a Roi's share = 4x
comparable property that is identical to the
subject property being appraised. The The sum of the shares is equal to the total
comparable property was sold six months ago amount received:
for P1,000,000. However, you need to make an
adjustment for the time difference between the 2x + 3x + 4x = 27,000
subject property and the comparable.
To make the time adjustment, you have found a Now, combine like terms:
paired sale of two houses. One of these houses
was sold one year ago for P800,000, and the 9x = 27,000
other house was sold yesterday for P880,000.
Now, solve for x:
Now, you need to calculate the proper estimated
adjusted sales price for your comparable x = 27,000 / 9
property based on the paired sale information. x = 3,000
P 1,050,000
Now, we can find Roi's share: 25. The scores of 5 students on a test are 75,
80, 85, 90, and 95. What is the mean of the
Roi's share = 4x scores?
Roi's share = 4 * 3,000 80
Roi's share = 12,000 85
90
Roi received P12,000. 95
Feedback
Mean = (Sum of all values) / (Number of values)
Mean = (25 + 28 + 22 + 30 + 25 + 27 + 29) / 7 This means changes in price yield a significant
Mean = 186 / 7 ≈ 26.57 change in demand.
Unitary
30. The ages of a group of friends are: 20, 22, Inelastic
25, 30, 35, 40, 45. What is the median age of Perfectly Elastic
the friends? Elastic
30 Perfectly Inelastic
45 Correct answer
31 Elastic
25
36. If the percentage change in quantity
Feedback demanded divided by the percentage change in
To find the median age of the friends, we first price equals 1, it is known as ______.
need to arrange the ages in ascending order:
This means changes in price yield equivalent
20, 22, 25, 30, 35, 40, 45 (percentage) changes in demand.
Unitary
Since there are seven ages in total, the median Perfectly Elastic
will be the fourth value in the ordered list. In this Perfectly Inelastic
case, the median age is 30. Inelastic
Elastic
31. The following factors affect price elasticity of
demand, except: 37. As a rule of thumb, if the quantity of a
Utility product demanded or purchased changes more
Availability of Substitutes than the price changes, then the product is
Duration of Price Change considered to be ________.
Urgency Unitary
Perfectly Inelastic
32. If the percentage change in quantity Inelastic
demanded divided by the percentage change in Elastic
price equals infinity, it is known as ______. Perfectly Elastic
This means changes in price result in demand 38. One that examines the price-quantity
declining to zero. relationship for an individual consumer, or how
Elastic much of a product an individual will buy given a
Inelastic particular price.
Unitary Market Demand Curve
Perfectly Inelastic Individual Demand Curve
Perfectly Elastic Demand Elasticity
Consumer Curve
33. If the percentage change in quantity
demanded divided by the percentage change in 39. The summation of the individual demand
price equals 0, it is known as ______. curves in a given market. It shows the quantity
of a good demanded by all individuals at varying
This means changes in price yield no change in price points.
demand. Demand Elasticity
Unitary Consumer Curve
Elastic Individual Demand Curve
Perfectly Elastic Market Demand Curve
Perfectly Inelastic
Inelastic 40. A non-luxury product for which there is no
viable substitute—for example, a staple food,
34. If the percentage change in quantity like bread or rice.
demanded divided by the percentage change in Giffen Goods
price is less than 1, it is known as ______. Veblen Goods
Emblement
This means changes in price yield an Goodwill
insignificant change in demand.
Unitary 41. Generally luxury items, such as cars, yachts,
Elastic fine wines, and designer jewelry, that are high
Inelastic quality and out of reach for the majority of
Perfectly Inelastic consumers.
Perfectly Elastic Giffen Goods
Veblen Goods
35. If the percentage change in quantity Assets
demanded divided by the percentage change in Opulentia
price is greater than 1, it is known as ______.
42. According to the Law of Demand, the
quantity of a product purchased varies 50. In a court proceeding where the
_________ with its price. Appraiser/Valuer is presented as expert witness,
Conversely which report is most appropriate at the moment?
Inversely Deposition Report in Writing
Directly Oral Report
Conspicuously Short Letter Report
A Full Narrative Report or Form Report
43. This represents the relationship between the
price of a good or service and the quantity 51. The following are types of appraisal reports
demanded for a given period of time. according to the PVS. Which one is no longer
Demand Curve allowed under the Real Estate Service Act?
Free Market Written Report
Economy Oral Report
Supply Curve Form Report
Narrative Report
44. Typically, as the price of a product
increases, the quantity supplied also increases. 52. The TWO RULES ON STANDARDS says:
The resultant curve slopes 1. Follow the STANDARDS. 2. Follow the
_________________. Standards.
Downward from left to right 1. Follow the STANDARDS. 2. If the Standards
Downward from right to left are wrong, repeat the Standards.
Upward from right to left 1. Follow the STANDARDS. 2. Disregard the
Upward from left to right Standards.
Correct answer 1. Follow the STANDARDS. 2. If the
Upward from left to right Standards are wrong, refer to Rule No. 1.
45. This is a clay-based unglazed or glazed 53. A valuation review performed by a Valuer to
ceramic, where the fired body is porous. form an opinion as to whether the analysis,
Shingles opinions, and conclusions in the report under
Terra Cotta review are appropriate, reasonable, and
Tegulla supportable.
Balluster Technical Review
Desk Review
46. Gunite is: Field Review
Pneumatically placed concrete usually Administrative Review
associated with in-ground pools
A type of insulating material 54. Communicates to users and third-party
A type of roof shingle readers the value conclusion and confirms the
Part of a staircase basis of the valuation, the purpose of the
valuation, and any assumptions or limiting
47. Gross living area is: conditions underlying the valuation:
Commonly used in residential properties Appraisal Report
Commonly used in industrial properties Certificate of Value
Commonly used in apartments Value Declaration
Commonly used in retail centers Valuation Report
48. When Valuation Reports are transmitted 55. The following statements are true when
electronically, a Valuer should ensure the applied to Valuation Standards except:
following except: Standards are statements of recognized
Take reasonable steps to protect the integrity of principles and concepts
data Standards prescribe specific methods of
Take steps to ensure no error is made in valuation for different purposes
transmitting Standards are statement of best practice in
Take reasonable steps to protect the text in the procurement and reporting
report Standards are statements of accepted
Takes care of the cost of transmitting the definitions
report
56. In International Financial Reporting
49. The following are some of the minimum Standards (IFRS), this term refers to the amount
requirements of a Valuation Report except: for which an asset could be exchanged between
The Acceptable Principles in the analysis of knowledgeable, willing parties in an arm's length
Data transaction.
The Identify of Property, Location, and Interest Fair Value
The identify of Client, Valuer, and Date of Value in Use
Report Value as a going concern
The instructions, Date of Value, Purpose or Investment Value
Intended Use
57. IFRS adopted two models for the recognition 8 Years
of property assets in the balance sheet, namely: 12 Years
A Market Value Model and Historic Model
An Investment Model and Market Model 65. The remaining economic life of Atty. Duane's
A Fair Market Model and Market Value Model residence described above is:
A Cost Model and Fair Value Model 100 Years
48 Years
58. Conclusion as to the Highest and Best Use 52 Years
is part of which step? 60 Years
Analyzing the Data
Making the Final Estimate of Value 66. Normal life expectancy of Atty. Duane's
Preliminary Analysis residence described above is:
Defining the Appraisal Problem 100 Years
60 Years
59. What aspect of the feasibility study analysis 12 Years
separates it from the real estate 8 Years
appraisal/valuation?
The Viewpoint of the Owner of its best use 67. A value of a building with a first year net
General Supply and Demand Analysis operating income of P 200,000 and with an
Estimation of an Absorption Rate overall capitalization rate of 9.52% is:
Evaluation of the Rate of Return on Investment P 2,100,000
P 2,200,000
60. If the Client wants to know the land use P 2,100,840
pattern of an area or community, a ________ is P 2,300,840
probably needed.
Comprehensive Land Use Plan Study Feedback
Highest and Best Use Study V= I/R
Real Estate Appraisal/Valuation Report V= 200,000 / 9.52%
Re-Use Appraisal Study V = P 2,100,840
61. If the subject property is 10% superior to the 68. A parallel beam is known as:
comparable sale and the comparable was sold A girder
for P1,000,000, what is the indicated value of A jamb
the subject? A joist
P 1,000,000 / 1.10 = P 909,000 A batten
P 1,000,000 x 0.90 = P 900,000
P 1,000,000 / 0.90 = P 1,111,111 69. That piece of metal which protect a structure
P 1,000,000 x 1.10 = P 1,100,000 from water seepage is called:
Downspout
62. The appropriate adjustment for time is Flushing
determined to be 9% per year. The time Coving
adjustment for a comparable property that was Gutter
sold a year ago for P 100,000 per square meter
is: 70. In conventionally constructed house, the
Plus P 9,000 per square meter highest member of the frame is:
Less P 9,000 per square meter Girder
Plus P 6,050 per square meter Rafter
Less P 6,000 per square meter Collar Beam
Ridge Board
For Nos. 63 - 66. Correct answer
Ridge Board
Atty. Duane's House in Dasmariñas Village is 12
years old but has been well cared for, that it is in 71. A house with two levels of Living area
good condition as a typical 8-year old property. characterized by a steep roof slope and
Residences in this area typically last for 60 dormers, in which the area of the upper level is
years, and even that life span maybe extended 40% - 60% of the lower level is classified as a:
with extensive renovation. One and a half storey
Slit Level
Effective age of the residence is: Two Storey
100 Years One Storey
12 Years
60 Years 72. This comprise of thin, small sheets of
8 Years waterproof materials used as surfacing materials
on roofs and walls:
64. The chronological age of Atty. Duane's Shake
residence described above is: Tegula
100 Years Placa Romana
60 Years Shingles
80. The Office of the Municipal Assessor was
73. This effective gross income less operating created in:
expenses and sometimes less capital expenses 1977
and reserves for replacement, is the amount of 1976
money the owners of the real estate would 1978
expect to put in their pockets after paying 1979
expenses but before paying the mortgage 81. Declaring newly acquired, newly built, or
payment and the income taxes. newly transferred real property is required under
the following conditions, but not:
It is the estimated amount that is divided by the Conversion of presently taxable properties to
capitalization rate to produce a value estimate in exempt
“IRV” ratio analysis. Demolition of buildings or other structures
Effective Gross Income Change in classification and/or Correction in
Net Operating Income area
Potential Gross Income Dismantling and cessation of operation of
Profit machinery
74. Refers to enforced proportionate 82. Under local government code, the local
contribution/s imposed by the legislature upon government/sanggunian can set the assessment
person, property or interest within its jurisdiction levels which can be prescribed through
for the purpose of supporting government and all ordinance at:
its public needs. Regular Rates
Taxation Maximum Rates
Real Property Tax Minimum Rates
Taxes Standard Rates
Special Education Fund Tax Correct answer
Maximum Rates
75. The earliest forms of property taxation were
employed by the: 83. Real property shall be appraised at its
Spaniards current and fair market value based on the duly
Americans approved or enacted:
Japanese Classification of Real Properties
Roman Empire Schedule of Fair Market Values
Tax Map
76. This became the earliest forms of “tax rolls” Assessment Roll
listing the taxability of land, farm implements,
money, clothing, and transport and cargo modes 84. The appraisal and assessment of real
such as ships, carriages, and mules. property shall be:
American Census Standard
Greek Census Regular
Spanish Census Equitable
Roman Census Uniform
77. The Spanish “encomienda system levied 85. Which of the following rules in the appraisal
taxes on male tenant farmers of military age (16 of urban lands for taxation purpose is not true?
– 60) in a form of tribute or _________ for the Stripping method shall not be applied on
privilege of working the land. commercial and industrial properties
Special Tax Stripping method shall not apply to corner lots
Income Tax Stripping method and standard depth – applies
Property Tax only to residential lots
Personal Tax Stripping method shall apply to commercial
lots
78. The short-lived “1st Philippine Republic of
1898" provided for a system of realty taxation 86. Roads and streets, unless donated or turned
but was not implemented completely under the: over to local authorities shall be valued on the
Philippine Constitution basis of the cost of cementing, asphalting, or
Malolos Constitution paving with gravel and sand per square meter
Republic of Biak-na-Bato and shall be listed in the name of:
Commonwealth Constitution Local Government Unit
79. This Code became the basis of the Real Homeowner Association
Property Tax Administration System in the Barangay Council
Philippines in 1974. Subdivision Owner
Valuers Code
Real Property Tax Code 87. The Rule for adjustment of Triangular lots
National Property Tax Code with its base on the street is:
Real Property Code
Reduce the irregular lot to the nearest
equivalent rectangular, triangular and 93. The Rule in the appraisal of machinery and
trapezoidal sectors and apply the foregoing rules equipment with respect to the pricing and
Compute the value of the rectangular and estimating the cost of reproduction includes all
triangular portions separately according to the or any of the following, but not:
rules hereof, then get the summation Cost of machine, auxiliaries and/or optional
Compute as a rectangular lot then take 2/3 of accessories
the resultant value Brokerage, arrastre, heavy lifts, Customs duties,
Compute as a rectangular lot then take 1/3 of taxes and installation
the resultant value Freight, Insurance, Bank charges
Cost of demobilization
88. The Rule for adjustment of Triangular lot
with its apex on the street is: 94. All assessments made after the 1st day of
Compute as a rectangular lot then take 2/3 of January of any year shall take effect on the 1st
the resultant value day of the succeeding year, provided, however,
Reduce the irregular lot to the nearest that the reassessment of real property due to its
equivalent rectangular, triangular and partial or total destruction, or to a major change
trapezoidal sectors and apply the foregoing rules in its actual use, or to any great and sudden
Compute as a rectangular lot then take 1/3 of inflation or deflation of real property values, or to
the resultant value the gross illegality of the assessment when
Compute the value of the rectangular and made, or to any other abnormal causes, shall be
triangular portions separately according to the made within:
rules hereof, then get the summation 90 days from the date any such cause or
causes occurred; the same to take effect at
the beginning of the quarter next following
89. The Rule for adjustment of Irregular lot is: the reassessment
Compute as a rectangular lot then take 1/3 of 120 days from the date any such cause or
the resultant value causes occurred; the same to take effect at the
Compute as a rectangular lot then take 2/3 of beginning of the quarter next following the
the resultant value reassessment
Reduce the irregular lot to the nearest
equivalent rectangular, triangular and 30 days from the date any such cause or causes
trapezoidal sectors and apply the foregoing occurred; the same to take effect at the
rules beginning of the quarter next following the
Compute the value of the rectangular and reassessment
triangular portions separately according to the 60 days from the date any such cause or causes
rules hereof, then get the summation occurred; the same to take effect at the
beginning of the quarter next following the
90. The Rule for adjustment of Trapezoidal lot is: reassessment
Compute the value of the rectangular and
triangular portions separately according to 95. The distribution of the collected real property
the rules hereof, then get the summation tax proceeds in case of provinces shall be:
Compute as a rectangular lot then take 2/3 of Province, 30%: Municipality, 40%: Barangay,
the resultant value 30%
Reduce the irregular lot to the nearest Province, 35%: Municipality, 35%: Barangay,
equivalent rectangular, triangular and 30%
trapezoidal sectors and apply the foregoing rules Province, 35%: Municipality, 40%: Barangay,
Compute as a rectangular lot then take 1/3 of 25%
the resultant value Province, 30%: Municipality, 35%: Barangay,
35%
91. According to the Rule in the appraisal of
agricultural lands for assessment purpose, RA 96. The distribution of the collected real property
7160 has no specific provisions on the valuation tax proceeds in case of cities shall be:
and assessment of: City, 80%: Barangay, 20%
Plants and Trees City, 85%; Barangay, 15%
Farm Lands City, 70%; Barangay, 30%
Rawlands City, 75%: Barangay, 25%
Agricultural Lots
97. The distribution of the collected real property
92. Agricultural lands convertible into residential tax proceeds in case of MM/Municipality shall
subdivisions or industrial use shall be classified be:
and valued until such time that they shall have
been actually converted and developed into MMDA, 35%; Municipality 30%; Barangay, 35%
such, as: where 50% to host barangay
NOTA MMDA, 40%; Municipality 35%; Barangay, 25%
Residential where 50% to host barangay
Agricultural MMDA, 35%; Municipality 35%; Barangay,
Industrial 30% where 50% to host barangay
MMDA, 30%; Municipality 35%; Barangay, 35%
where 50% to host barangay
475. If a particular buyer requires a recapture of 480. A property with an annual net operating
the building portion of the price in 30 years, income of P336,000 was sold for
what is the indicated recapture rate of the P4,200,000. The remaining life of the
building? building is 40 years. Land value is
a. 3% P1,200,000. What is the value of the
b. 3 ½% building?
c. 3 1/3% (1/30) a. P 3,000,000 (4,200 – 1200)
d. 3 ¼% b. P 2,000,000
476. Mr. A is leasing a 60-square meter c. P 2,500,000
commercial space for P3,000 per square d. P 3,500,000
meter per year. Research indicate that 481. A property was sold for P60,000,000. Using
similar space has a going market rate of the rule-of-thumb of building-to-land ratio of
P3,200 per square meter per year. What is 4:2, what is the value of the building?
the rental gain realized by Mr. A per year? a. P 20,000,000
a. P 1,200 b. P 30,000,000
b. P 12,000 c. P 40,000,000 (60M × 4/6)
c. P 2,400 d. P 50,000,000
d. P 24,000 482. A 10-year old residential apartment has a
reproduction cost of P6,250,000, broken
Solution down into P 2,500,000 representing the
Market Rent – 3,200 structural component, and P 3,750,000 for
Contract Rent – 3,000 the other component. Yearly allowance for
Gain = 3.2K – 3K = 200 × 12 = 12,000 ordinary structural deterioration is 2%, while
the depreciation rate for the curable
477. A house and lot is priced at P8,800,000. The component is 5% per year. Economic
lot alone is valued at P1,650,000. What obsolescence result in a rental loss of
percentage of the total asking price is P60,000 per year. What is the estimated
attributable to the value of the lot? value of the building?
a. 18.5 % a. P 5,150,000
b. 19.0 % b. P 3,875,000
c. P 3,275,000 880K : Sold yesterday
d. P 3,775,000
880K/800K = 1.10 or 10% in value in 1 year
Solution 1M × 1.05 = 1,050,000 adjusted sales price
RCN : 6,250,000
Structural Component : 2,500 486. If a property has a net income ratio of 0.75
Other Component : 3,750,000 and a gross income multiplier of 9, what is
Deterioration : 2% per year the indicated over-all capitalization rate?
Depreciation : 5% per year a. 6.75%
Economic Obsolescence rental loss : 60K b. 8.33%
per year c. 2.78%
d. 12.00%
RCN Structural Component = 2.5M – (2% ×
10 × RCN) = 2.5M – 500K = 2M Solution
RCN Other Component = 3.75M – ( 5% × 10 GIM : 9
× RCN) = 3.75M – 1.875M = 1.875M NIR : .75
Total RCN = 2M + 1.875M = 3.875M
Gross Rent Multiplier = Sales Price /
483. A comparable property sold six months ago Gross Income = .75/9 = 8.33%
for P1,250,000. Market investigation
indicates the following 487. Corporation T is to lease a parcel of land for
Location adjustment : +5% 1 year at P2,000,000. Research indicate that
Time adjustment : +6% similar land has a market rent of P2,200,000
Age adjustment : -7% per year. What is the estimated value of the
Given the above information, what is the leasehold interest if the rental payment is to
indicated value based on the comparable be paid as a lump sum amount today and the
property? interest rate is 10%?
a. P1,232,250 a. P 200,000
b. P1,300,000 b. P 220,000
c. P1,325,000 c. P 180,000
d. P1,293,860 d. P 181,818
Solution Solution
1,25M – (5% + 6% - 7%) = 1.3M Contract Rent : 2M
Market Renr : 2.2M
484. What is the reversion value of a property with Value : ?
an estimated market value of P12,540,000 2 PV = V(1+i)n
years from now at an interest rate of 10% per V = 200,000/1.1
year? V = 181.818
a. P 15,048,000
b. P 15,173,400 488. A commercial structure is a rectangle with
c. P 10,363,635 sides of 80 meters and 145 meters and the
d. P 10,157,400 current local cost to build a similar structure
is P18,500 per square meter. What is the
PV = FV/ (1+i)2 = 12.54M/1+.1)2 = 12.54M / estimated construction cost of the structure?
1.21 = 10,363,636.36 a. P 214,600,000
b. P 208,800,000
485. A comparable property is identical to the c. P 218,600,000
subject property being appraised. The d. P 215,600,000
comparable was sold six months ago for
P1,000,000. As the appraiser, you must Questions nos. 47 to 49 are based on the
make an adjustment for the time difference following information:
between the subject property and the Building Value : P50,000,000
comparable. You have found a paired sale of Net Operating Income : P8,350,000
two houses, one of which was sold one year Building Capitalization Rate : 14%
ago for P800,000, and the other sold Land Capitalization Rate : 9%
yesterday for P880,000. What is the proper 489. What is the residual income to the land?
estimated adjusted sales price for your a. P 1,350,000
comparable? b. P 4,500,000
a. P880,000 c. P 3,850,000
b. P1,000,000 d. P 70,000,00
c. P1,050,000
d. P1,100,000 Solution
Income of Building = Building Value ×
Solution Building Rate
1M : Sold 6 Months = 50M × 14% = 7M
800K : Sold 1 yr. ago Income Land = NOI – Income of Building
= 8.35M – 7M = 1.35M b. The highest and best use as improved
would always be consistent with the "as
490. What is the value of the land? vacant" analysis
a. P 4,500,000 c. The improvement value must be
b. P15,000,000 adjusted down if the land’s highest
c. P 9,642,850 and best use is different than the
d. P 42,777,750 improved highest and best use
d. The vacant land value can never exceed
Solution the improved value
Value of Land = Land Income / Land Cap 497. When a property’s highest and best use is
Rate likely to change in the near future, the
= 1.35M/.09 = 15M prevailing highest and best use is called
a(n)
491. What is the total value of the property? a. Pending use
a. P 54,500,000 b. Temporary use
b. P 65,000,000 c. Interim use
c. P 59,642,850 d. Alternative use
d. P 92,777,750 498. A legally nonconforming use is
a. A use that was legally established and
Total Property Value = Land Value + Building maintained but no longer conforms to
Value existing zoning
= 15M+50M = 65M b. A use that was illegally established and
492. A buyer invests in a small strip center maintained
because she believes the property will net c. A use that was not legally established
P350,000 per year. This is an example of and maintained and still does not conform
a. Anticipation to existing zoning
b. Change d. A use that was not legally established
c. Competition and maintained but the government is not
d. Substitution enforcing the laws
493. The statement “property values are created 499. The purpose of regulating the real estate
and sustained when the characteristics of a service practitioners practice in the
property conform to the demand of its Philippines is to
market" refers to a. Protect the public from dishonest realty
a. Use value practitioners.
b. Contribution b. Protect realty practitioners from unfair
c. Conformity competition.
d. Supply and demand analysis c. Upgrade the standards of realty service
494. To be considered the highest and best use, a practice.
use must be d. All of the above.
a. Physically possible, legally 500. Market area life cycles include
permissible, appropriately justified, a. Growth, stability, decline, and
financially feasible, and maximally revitalization
productive b. Growth, stability, decline, and
b. Physically correct and legally possible gentrification
c. In existence already and legal c. Growth, stability, appreciation, and
d. Physically possible and appropriate decline
495. Highest and best use analysis requires an d. Growth, level of appreciation, and decline
estimate of the use as though vacant and 501. Neighborhood social
as improved to influences include all of the
a. ESTIMATE THE VALUE OF THE following except
IMPROVEMENTS a. Population density
b. ENSURE THAT APPRAISERS
RECOGNIZE THAT THE PROPERLY b. Occupant age levels
COULD BE WORTH MORE WITHOUT c. Occupant skill levels
THE BUILDINGS THAN WITH THEM d. Vacancy rates
c. ESTIMATE FUNCTIONAL 502. The economic base is
OBSOLESCENCE CAUSED BY a. The lower line in a graph showing the
INAPPROPRIATE IMPROVEMENTS economy of a community
d. ALL OF THE ABOVE b. The ratio of basic industries to technical
496. The concept of consistent use requires an Industries in a community
improvement to be valued based on a use c. An inexpensive, large string instrument
that is consistent with the site’s highest and d. The economic activity that enables it
best use. This means to attract income from outside its
a. The highest and best use of the site as borders
though vacant must always consider the 503. Economic
improvements thereon influences include
all of the following d. Principle of Supply and Demand
except e. Principle of Competition
a. Occupant 511. The value of a property will reach to its
income levels maximum level when the factors of
b. Crime levels production such as: land, labor, capital,
c. Property rent levels coordination or entrepreneurship are in
d. Birth rate balance refers to
504. Governmental influences include all of the a. Principle of Balance
following except b. Principle of Substitution
a. Tax burdens c. Principle of Conformity
b. Zoning, building, and housing codes d. Principle of Anticipation
c. Special assessments e. HABU
d. Changes in property use 512. The principle of increase and decreasing
505. Gentrification is returns applied to a portion or the whole of
a. A class of citizens who live in blighted an improvement refers to
areas a. Principle of Anticipation
b. A process in which older homes in a b. Principle of Contribution
neighborhood are remodeled and c. Principle of Conformity
different residents replace the lower- d. Principle of Substitution
income residents e. HABU
c. A group of complementary land uses 513. The net income remaining after the cost of
d. A part of the life cycle of a market area in labor, capital and coordination have been
which property values are stable and the paid refers to
maintenance levels are adequate a. HABU
506. Linkages are b. Principle of Substitution
a. The devices used to change a property c. Principle of Anticipation
from one use to another d. Principle of Surplus Productivity
b. The relationships between a buyer and e. Principle of Conformity
seller in a real estate deal 514. The result of reasonable degree of
c. Time-distance relationships between a architectural homogeneity and compatible
property use and the supporting land uses brought about by market attitudes,
facilities societal trends, economic conditions and
d. The tools necessary to market real estate public policy refers to
507. What form of diffusion is represented a. HABU
by the spread of Shoe Mart (SM)? b. Principle of Substitution
a. cascade. c. Principle of Conformity
b. relocation. d. Principle of Anticipation
c. reverse hierarchical e. Principle of Utility
d. stimulus. 515. The meeting desires and requirements of
508. A real estate market is human beings. It is not only the capacity to
a. A shopping center office of a realty give satisfaction in use but also the power to
company excite desire for continued possession refers
b. A group of individuals or firms to
that are in contact with one a. HABU
another for the purpose of b. Principle of Substitution
conducting real estate c. Principle of
transactions Conformity
c. A list of potential buyers for the d. Principle of
subject Anticipation
d. A list of potential sellers who have e. Principle of
property similar to the one requested by Utility
the buyer 516. The factor where the value is increased if
509. What will be the best tool for locating the supply is reduced by effective demand,
next Jollibee fast food restaurant in a city? resulting in scarcity refers to
a. GPS (Global Positioning System). a. Principle of Anticipation
b. GIS (Geographic Information System).
c. Microsoft Words. b. HABU
d. Remote Sensing. c. Principle of Supply and Demand
510. The industry
competition which d. Principle of Consistent Use
arises from profits e. Principle of Contribution
refers to 517. That factor where the property is cannot be
a. Principle of Change valued on the basis of one use for land and
another use of improvements refers to
b. Principle of a. Principle of Consistent Use
Substitution b. HABU
c. Principle of Conformity c. Principle of Anticipation
d. Principle of Substitution b. SUBDIVISION DEVELOPMENT
e. Principle of Contribution METHOD; GROUND RENT
518. Refers to the most profitable and likely use CAPITALIZATION; LAND RESIDUAL
of the property at the time of appraisal. It METHOD
refers to that which in all probability will yield c. BOTH A AND B
the maximum return at a given time. It is the d. none of the above
first necessary consideration in studying a
tract of land to estimate its value. 526. Depending on market practice,
a. Principle of Supply and Demand entrepreneurial profit can be estimated as
b. Principle of Contribution percentage of
c. Principle of Substitution a. DIRECT AND INDIRECT COSTS PLUS
d. Principle of Anticipation LAND VALUE
e. Principle of Highest and Best Use b. THE VALUE OF THE COMPLETED
519. Is the amount that maybe recovered when PROJECT
the property will be retired or disposed at a c. BOTH A AND B
future time. d. none of the above
a. Salvage Value 527. Barricade
b. Scrap Value around the
c. Market Value construction
d. Principle of Substitution site is a building
e. Principle of Anticipation a. DIRECT
520. Is the fair market value of the land in a COST
specific zone or area as established by the b. indirect cost
BIR. c. overhead expense
a. Salvage Value d. incidental expense
b. Scrap Value 528. The cost of improvements identical in
c. Market Value design and material to those of the subject
d. Zonal Value property is called the subject’s
e. Principle of Contribution a. reproduction cost
521. One which states that the maximum value of b. replacement cost
a property tends to be set by the cost of c. sales price
purchasing an equally desirable and valuable d. market value
replacement property, as the basic principle 529. The cost of improvements identical in utility
that underlies the Market Data Approach of to those of the subject property is called the
Sales Comparison, subject’s
a. Principle of Anticipation a. reproduction cost
b. Principle of Highest and Best Use b. replacement cost
c. Principle of Substitution c. sales price
d. Principle of Supply and Demand d. market value
e. Principle of Contribution 530. In using the cost approach to
522. To be considered comparable to the subject appraising, the estimated
property, a comparable must have been sold construction cost of improvements
a. in an arm’s-length transaction usually will be based on
b. with a conventional mortgage a. their original cost
c. without any form of secondary financing b. THE COST OF NEW IMPROVEMENTS
d. for all cash AT CURRENT PRICES
523. One method of compensating for sales that c. book value
involved different terms of financing is use d. the national cost average of all
of the components
a. financing readjustment grid 531. The index method of
b. loan-to-value ratio estimating construction
c. CASH EQUIVALENCY TECHNIQUE cost is based on
d. operating statement ratio a. THE ORIGINAL COST
524. Recent sales of comparable sites OF IMPROVEMENTS
competitive with the subject site b. the cost of new improvements at current
a. Are the most reliable guide to the prices
probable current market behavior and c. book value
reactions of informed buyers. d. the national cost average of all
b. Do not indicate any probable current components
market behavior and reaction of informed
buyers. 532. The predominant depreciation category
c. Both a and b. for a residential location on heavily traveled
d. None of the above. national highway is
525. Site valuation techniques include a. Physical deterioration—curable
a. SALES COMPARISON METHOD; b. Physical deterioration—long-lived
ALLOCATION METHOD; incurable
ABSTRACTION METHOD c. Functional obsolescence—curable
d. External obsolescence—incurable b. net operating income, found by
533. The predominant depreciation category deducting normal annual operating and
for severe termite damage throughout a other expenses from the effective gross
structure income; the capitalization rate for the
a. Physical deterioration—curable property; that is, the rate that can be
b. Physical deterioration—long-lived applied to the property’s net annual
incurable income, the result being the appraiser’s
c. Functional obsolescence—curable estimate of the property’s value;
d. External obsolescence—incurable c. both a and b
534. The ratio of total operating d. none of the above
expenses to effective gross 541. While working on an appraisal of a
income is the residential property in a new home
a. OPERATING EXPENSE subdivision, the appraiser finds that the
RATIO builders have a total of 100 home sites
b. net income ratio currently offered for sale. In measuring
c. effective gross income ratio market demand the appraiser notes that all
d. break-even ratio of the builders are currently averaging 2
535. The ratio of net operating new sales contracts per month (combined),
income to effective gross and are expecting to sell 24 homes within
income is the the next year. What conclusion could be
a. operating expense ratio drawn with regard to the 100 available home
b. NET INCOME RATIO sites and a market period of the next 12
c. effective gross income ratio months?
d. break-even ratio a. The market is in a condition of supply
536. The ratio of the operating expenses plus and demand.
annual debt service to potential gross income b. The market is in a condition of balance.
is the c. The market is in a condition of
a. operating expense ratio oversupply.
b. net income ratio d. The market is in a condition of
c. effective gross income ratio undersupply.
d. BREAK-EVEN RATIO 542. For land sales to be
537. To arrive at net operating used as
income, expenses are comparables, they
deducted from must be
a. operating profit a. COMPETITIVE
b. gross income WITH THE
c. Effective gross income SUBJECT
d. None of these b. RELATIVELY RECENT
538. In the formula for the operating expense ratio c. OPEN MARKET TRANSACTIONS
a. operating expenses are divided by d. ALL OF THE ABOVE
effective gross income 543. A bad floor
b. effective gross income is divided by plan would
operating expenses generally be
c. potential gross income is divided by classified as
effective gross income a. physical
d. effective gross income is divided by depreciati
potential gross income on
539. In the formula for the net income ratio b. economic obsolescence
a. effective gross income is divided by c. functional obsolescence
potential gross income d. economic deterioration
b. potential gross income is divided by 544. The valuation technique in which land
effective gross income and building are valued separately is
c. effective gross income is divided by net a. The income capitalization approach
operating income b. The sales comparison approach
d. net operating income is divided by c. Linear regression
effective gross income d. The cost approach
540. The data needed for an appraisal by the 545. Land valuation techniques include
income approach using direct capitalization a. Subdivision development, depreciated
are cost, consensus
a. the potential gross income from the b. Sales comparison approach, consensus,
property, which includes the annual extraction
income from all sources; the amount of c. Sales comparison approach,
the expected annual effective gross allocation, extraction
income from the property, estimated by d. Assessment multipliers, assessor’s
subtracting anticipated vacancy and opinions, multiple regression multipliers
collection losses from potential gross 546. Land value can be estimated using all
income; of the following techniques except
a. The sales comparison method 556. The value added to total property value by
b. The cost method a particular component is an example of
c. The income method the principle of
d. The allocation method a. substitution
547. Which of the is NOT an agent of production? b. anticipation
a. land c. change
b. transportation d. contribution
c. labor e. conformity
d. capital 557. The concept that the value of a particular
e. entreprenuership components is measure by the amount that
548. Political forces affecting value may include its absence would detract from the value of
a. life-styles and living standards the whole is
b. topography a. opportunity cost
c. athletic levels and recreation facilities b. substitution
d. government spending and taxation c. competition
policy d. contribution
e. primary registration and turnout e. conformity
549. What are the two categories of tangible 558. The market loss cause by depreciation in an
property? older structure may be offset by all of the
a. real property and personal property following EXCEPT
b. intangible property and real property a. architectural interest
c. real estate and intangible property b. historical registration
d. legal and illegal investments c. strong demand relative to supply
e. open and shut transactions d. strong supply relative to demand
550. Zoning is an exercise of the e. renovation of the structure
a. equity courts 559. Studying appraisal helps a person
b. police powers a. to improve value estimation skills
c. Environmental Protection Agency b. to pass the real estate broker’s license
d. Right of condemnation examination
e. Right of escheat c. to understand other real estate courses
551. Is the amount paid by the lessee of a d. to communicate with appraisers
house or flat fee of a commercial bldg. e. all of the above
a. economic rent 560. Plant and Equipment are
b. rental a. TANGIBLE ASSETS, OTHER THAN
c. interest REALTY.
d. market price b. tangible assets, other than personality.
e. lease c. intangible assets, other than realty.
552. The revenue derived from the use of d. intangible assets, other than personality.
land and of the forces inherent to
land 561. Assets that are inextricably combined with
a. economic rent others and that may include specialised
b. rental buildings, machinery, and equipment.
c. interest a. PLANT
d. price b. Machinery
e. lease c. equipment
553. It is the price of any d. Business asset
commodity in its market at 562. Individual machines or a collection of
specified time machines. A machine used for a
a. economic rent specific process in connection with the
b. rental operation of the entity.
c. interest
a. Plant
d. market price
b. MACHINERY
e. lease
c. equipment
554. Functional utility depends on
d. Business asset
a. zoning
563. For assets in the public sector, the
b. age of equipment
c. wear and tear on the structure assumption equivalent to a business
d. insurance requirements continuing as a going concern is that the
e. tastes and standards public sector assets
555. Value in use is a. WILL CONTINUE TO BE USED FOR
a. subjective THE PROVISION OF THE
b. objective RELEVANT PUBLIC GOOD OR
c. readily measurable SERVICE.
d. a market phenomenon b. Will cease to be used for the provision
e. synonymous with market price of the relevant public good or service.
c. Both of the above.
d. None of the above.
564. Plant for the supply of electricity, gas, c. a good or service has no value in
heating, cooling or ventilation and equipment exchange unless it possesses certain
such as elevators economic and legal characteristics
a. Should be reflected in the value of the d. the price representing value is usually
real estate interest quoted in terms of money
b. Would not normally be reflected in the e. real estate may be sold for all cash or
value of the real estate interest financing arranged
c. Both of the above. 572. All of the following will affect the
d. None of the above. market value of a property
565. Intangible assets that can have an impact on EXCEPT
the value of plant and equipment include a. political factors
a. PRODUCTION RECORDS b. economic factors
b. PATENTS c. legal use restriction e. social concerns
c. OPERATING SOFTWARE d. acquisition cost to present owner
d. ALL OF THE ABOVE. 573. Capacity to satisfy wants, production by
566. The value of patterns labor and their exchangeability
and dies is often a. economic concept
inextricably linked to b. economic principle
a. ASSOCIATED c. economic value
INTELLECTUAL d. economic utility
PROPERTY RIGHTS e. economic forces
b. operating software 574. Amount may be recovered when the property
c. Both of the above. will be retired or disposed at a future time
d. None of the above. a. zonal value
567. The period over which b. salvage value
property may be c. market value
profitably used is d. Book value
a. Invested Capital 575. Fair market value of the land in a specific
b. Capital Structure zone or areas as established by the BIR
c. Going Concern a. scrap value
d. Economic Life b. book value
568. Valuations of plant and equipment can be c. zonal value
carried out using any of the following d. salvage value
approaches: e. market value
a. the sales comparison approach. 576. Impairment of the desirability and
b. the cost approach (depreciated usefulness of a real property brought by the
replacement cost) physical, economic, and other changes
c. the income capitalization approach a. depreciation
d. All of the above. b. externalities
569. Which of the following types of property is c. obsolescence
subject to ad valorem taxation? d. damages
a. property owned by a religious e. loss
organization and used for a 577. Loss in value of property because of external
religious purpose B. new industrial influence
plants that state and local a. external loss
governments have induced, with b. external obsolescence
tax exemption as an incentive, to c. economic obsolescence
locate within their jurisdictions d. functional obsolescence
b. commercial buildings leased in part by e. external forces
nonprofit foundations 578. Real estate investment using others people
c. state colleges and universities money
d. a state capitol a. loan
570. A person owning less than the entire bundle b. investment
of rights has c. leverage
a. escheat d. fullback
b. a fee simple title e. lending
c. a partial interest 579. Appraisal under the unified housing loan
d. personal property program shall be undertaken by
e. a fee tail a. NHA
571. All of the following statements are true b. HLURB
EXCEPT c. HDMF
a. real property is a type of service d. HIGC
b. value is dependent on market conditions e. HUDCC
580. Loss in value of property because of the b. Principle of progression
buyers desire or because of the presence of c. Principle of highest and best use
fixtures which are not desirable d. None of the above
a. external loss e. Principle of increasing and diminishing
b. external obsolescence return
c. economic obsolescence 589. The increase in value of real estate without
d. functional obsolescence any effort or expense of the owner is:
e. external forces a. Unearned increment
581. The selling price of real estate is usually b. Accretion
based on its: c. Unearned income
a. Market Value d. Accession
b. Exchange Value e. Adhesion
c. Speculative Value 590. The study of current supply and demand
d. None of the above conditions in a particular area for particular
e. Intrinsic Value type of property is:
582. The average selling price of homes in a a. Market analysis
district can best be determined by: b. Absorption method
a. Comparative Analysis c. Real Estate appraisal
b. Any of the above d. Income projection
c. Assessed Value e. Cash flow analysis
d. None of the above 591. A loss in value from any cause is a common
e. An appraisal definition of:
583. Conjugal partnership can be dissolved by: a. Depreciation
a. Legal separation b. Economic obsolescence
b. Judicial separation of property c. Functional obsolescence
c. Annulment of marriage d. Effective age
d. Any of the above e. None of the above
e. None of the above 592. The process of making installment payments
584. Income approach in appraisal would be most consisting of principal and interest that
widely used: reduces the loan balance:
a. On commercial and investment a. Amortization
properties b. Liquidation
b. On properties heavily insured c. b. Acceleration
c. On newly opened subdivision d. Hypothecation
d. None of the above e. None of the above
e. On properties heavily mortgage 593. The income approach to value is an
585. The best evidence of ownership is application of the principle of:
a. Tax declaration a. Anticipation
b. Vicinity map b. Substitution
c. Torrens title c. Progression
d. None of the above d. Highest and Best Use
e. Technical description e. None of the above
586. The application of more factors of 594. The following are determinants of
production will tend to increase net value in appraisal of realty
income up to certain point beyond which except:
the introduction of more factors of a. Transferability
production will tend to decrease net b. Scarcity
income c. Demand
a. principle of conformity d. Utility
b. principle of substitution e. Purchasing Power
c. principle of progression 595. In the computation of depreciation of
d. principle of increasing and properties, the method widely used by the
diminishing return practitioner is the:
e. principle of regression a. Straight line method
587. The displacement of present resident by b. Declining balance method
people of lower economic status c. Diminishing return method
a. progression d. None of the above
b. substitution e. Cost benefits method
c. gentrification 596. An appraisal principle which holds that the
d. INFILTRATION value of property tends to be enhanced by
e. nuclei association with superior properties is:
588. The principle of value which states that value a. Principle of Progression
of a property tends to be enhanced when b. Principle of Attrition
there is reasonable homogeneity in use: c. Principle of Regression
a. Principle of conformity d. None of the above
e. Principle of Infiltration d. city engineer
597. The rate of real estate tax in municipalities 606. Documentary stamp tax on the sale of
within metro manila is not more than property must be paid
a. 5% a. within 30 days from the date of
b. 10% notarization
c. 2% b. within 5 days after the close of the
d. 20% month of the date of sale
598. Under the local government code, c. within 10 days after the close of the
agricultural lands of more than one hectare month of the date of sale
are subject to additional tax of no more than d. at the time payment of capital gains tax
5% of assessed value when at lest 607. Value placed on taxable property by the
a. entire area is uncultivated assessor for ad valorem tax purpose
b. 50% of the area is uncultivated a. economic value
c. 30% of the area is uncultivated b. assessed value
d. 20% of the area is uncultivated c. appraised value
599. Annual levy on real estate equivalent to 1% d. market value
of the assessed value which shall be in 608. The property sold is an ordinary asset, what
addition to the basic real estate tax is the applicable tax
a. ad valorem tax a. estate tax
b. special education fund tax b. capital gains tax
c. excise tax c. percentage tax
d. vat d. creditable withholding tax
600. Capital gains on the sale of real estate 609. Tax fixed on documents, instruments and
classified as capital asset is papers evidencing acceptance, assignment
a. prepaid income tax or sale of a right, property or obligation
b. expanded withholding tax a. community tax
c. creditable tax on sale b. excise tax
d. creditable tax on sale c. estate tax
601. BIR revenue regulation no 17-2003, the d. documentary stamp tax
seller of a family home who failed to utilized 610. Banks acquired assets which form part of its
the proceeds to acquire a new residence real estate inventories at the close of its
within 18 months from the sale shall be accounting period shall be classified
assessed additional deficiency capital gains a. ordinary asset
tax inclusive of penalties and b. fixed asset
a. 5% p.a. c. capital asset
b. 20% p.a. d. tangible asset
c. 25% p.a. 611. Sale of a dealer of a residential dwelling is
d. 10% p.a. not subject to VAT when the price does not
602. Ground floor of a condominium project per exceed (2021)
BIR 28-29 shall be considered as a. 1,500,000.00
commercial and a additional rate shall be b. 1,000,000.00
added on established residential zonal value c. 2,500,000.00
of d. 3,199,200.00
a. 20% 612. Which of the following cannot be issued
b. 15% condominium certificates of titles
c. 10% a. subdivision lots
d. 25% b. two level row house
603. The estate tax return shall be filed with the c. one level raw house
BIR within d. industrial warehouse
a. 90 days from the death of the decedent 613. The required number of votes of registered
b. 120 days from the death of the decedent owners to authorize a condominium
c. 60 days from the death of the decedent corporation to sell or otherwise dispose of
d. 180 days from the death of the the common areas in a condominium project
decedent is
604. Taxpayer has__ to redeem his real property a. unanimous votes
which was levied and subsequently forfeited b. Simple majority votes
and acquired by the local government for tax c. 2/3 votes
delinquency d. 1/3 votes
a. 3 years 614. A space to be considered a condominium
b. 1 year unit
c. 5 years a. at least 5 storey high
d. 2 years b. manage by condominium corporation
605. The following composed the board of
assessment of Makati city, except
a. city assessor
b. register of deed
c. city treasurer
c. be susceptible to independent use and c. One percent of assessed value
owner ship d. None of the above
d. unencumbered by any restriction e. Two percent of assessed value
615. The right of an owner lessor to receive the 622. Based on net gifts,
contract rent and reversion of property at the the maximum rate
end of the lease is of donor’s tax is:
a. fee simple a. Ten Percent
b. lease fee estate b. Fifteen percent
c. net lease c. Thirty percent
d. freehold d. Twenty percent
616. An authority given by the developer to a e. Twenty-five percent
broker to look for a supplier of backfilling 623. The value placed on taxable property by the
materials who shall be paid with developed assessor for ad valorem tax purpose is:
lots is: a. Market Value
a. Procurement agency b. Appraised Value
b. Sales agency c. Assessment Value
c. General Brokerage d. Assessed Value
d. None of the above e. Economic Value
e. Exchange agency 624. The estate tax return shall be filed with the
617. An agreement between an owner and a BIR within :
broker to sell a real estate property: a. 60 days from death of decedent
a. Listing b. 180 days from death of decedent
b. Power of Attorney c. 90 days from death of decedent
c. Authority to sell d. 240 days from death of decedent
d. None of the Above e. 120 days from death of decedent
e. Joint venture 625. Under the Local Government Code, the next
618. In the real estate period for the property owner to file a sworn
business, another declaration of ownership and value with the
term for the owner is: assessor is:
a. Customer a. Year 2018
b. Principal b. Year 2019
c. None of the above c. None of the above
d. Prospect d. Year 2020
e. Alter Ego e. Year 2021
619. The documentary stamp on lease of real 626. The documentary stamp tax
estate is P6.00 for the first P2,000.00 or on the sale of property must
fraction thereof and additional (2021) be paid
a. P0.50 for every P1,000 in excess of the a. Within thirty (30) days
first P2,000 from the date of
b. P1.00 for every P1,000 in excess of the notarization
first P2,000 b. Within five (5) days after the close of
c. P1.50 for every P1,000 in excess of the the month of the date of sale
first P2,000 c. Within ten (10) days after the close of the
d. P2.00 for every P1,000 in excess of the month of the date of sale
first P2,000 d. At the time of payment of capital gains tax
e. P3.00 for every P1,000 in excess of the e. At any time
first P2,000 627. The ground floor of a condominium project,
620. Under BIR Revenue Regulation No. 17- per BIR 28-98, shall be considered as
2003, the seller of a family home who failed commercial and an additional rate shall be
to utilize the proceeds to acquire a new added on established residential zonal value
residence within 18 months from the sale of:
shall be assessed additional deficiency a. 10%
capital gains tax inclusive of penalties and: b. 25%
a. 5% interest per annum c. 15%
b. 10% interest per annum d. 30%
c. 15% interest per annum e. 20%
d. 20% interest per annum 628. The schedule of fair market value in
e. 25% interest per annum municipalities in Metro Manila is prepared by:
621. The rate of real estate tax in municipalities a. MMDA
within Metro Manila is not more than b. Bureau of Internal Revenue
a. One-half percent of assessed value c. Concerned Municipal Assessor
b. Three percent of assessed value d. Sangguniang Bayan by ordinance
e. None of the above
629. 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
b. P 1,000,000.00
c. P1,500,000.00
d. P 2,000,000.00
e. P 750,000.00
630. 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
b. 60 days
c. 2 years
d. 4 years
e. 3 years
631. In case of foreclosure sale where right of
redemption is not exercised by the
mortgagor, who pays the capital gains tax?
a. Owner-mortgagor
b. Buyer of the property
c. None of the above
d. Creditor-bank
e. Any of the above
632. The documentary stamp on every
mortgage or pledge of real estate is:
(2021)
a. P40.00 for the 1st P5,000.00 plus
P20.00 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
None of the above
633. Market value is ____ the same as selling b. should describe the community
price. objectively
a. always c. is a study by the estate’s industrial
b. usually development commission
c. never d. considers the negative aspects only
d. none of the above e. considers the positive aspects only
e. sometimes 642. In analyzing the economic environment and
634. Price is market area, it is best to
a. market value a. start at the general level and work
b. a historical fact down to the specific
c. most probable sales price b. start at the specific and work up to the
d. all of the above general level
e. investment value c. limit the analysis to the national level
635. Functional utility depends on d. generally consider traffic flow
a. zoning 643. Which of the following reports is usually NOT
b. wear and tear on the structure prepared by a real estate appraiser?
c. tastes and standards a. marketability study
d. age of the equipment b. economic study
e. insurance requirements c. feasibility study
636. Value in use is d. transportation network study
a. subjective e. valuation study
b. objective 644. An appraisal of a specific-purpose for
c. readily measurable insurance purpose would depend most
d. a market phenomenon heavily on
e. synonymous with market price a. book value
637. The value added to total property value by a b. highest and best use
particular component is an example of the c. cost estimate
principle of d. specialty value
a. substitution e. land value
b. contribution 645. The first step in the appraisal process is to
c. anticipation a. define the problem to be solved
d. conformity b. gather relevant data
e. change c. analyze the data
638. The concept that the value of a particular d. inspect the property
components is measure by the amount that e. set the fee to be charged
its absence would detract from the value of 646. An appraisal is
the whole is a. an estimate of net
a. opportunity cost realizable value
b. contribution b. always concerned
c. substitution with the market value
d. conformity c. an appraiser’s
e. competition opinion of market
639. The market loss cause by depreciation in value
an older structure may be offset by all of d. a precise statement of value
the following EXCEPT e. a broker’s comparative sales analysis
a. architectural interest with further detail
b. historical registration 647. The “as of” date in an appraisal report is
c. strong demand relative to supply a. the date to which the value applies
d. strong supply relative to demand b. immaterial to the value estimate
e. renovation of the structure c. the date on which the report is delivered
a. S d. the date on which the property will be
b. to pass the real estate broker’s license conveyed
examination e. the anticipated closing date
c. to understand other real estate courses 648. Sales data descriptions of an appraisal
d. to communicate with appraisers report contain
e. all of the above a. details about each comparable sale
640. A dramatic change in short-term demand for b. an analysis of the date, using the value
real estate in the local market is likely to approaches
immediately precipitate c. the investigation of market forces
a. construction d. analysis of the street each comparable
b. activity property is on
c. price changes e. zoning details
d. no change in supply 649. All of the following are ways to delineate a
e. conversions neighborhood EXCEPT
641. The area and community analysis section of a. natural barriers
an appraisal report b. streets
a. should “sell” the community c. UTILITY SERVICE
d. income characteristics b. a value certification
e. political boundaries c. an appraisal log
650. All of the following are sources of d. a narrative
comparable sales EXCEPT e. an appraisal report
a. public records 658. The form of an appraisal report
b. mortgage services a. has no influence on the appraisal
c. brokers process
d. appraisers b. is the same, regardless of the problem
e. buyers and sellers c. is set by the amount of the fee
651. Which of the following criteria most d. is determined by the appraiser
completely define “highest and best use”? e. determines the appraisal framework
a. legally authorized, politically viable, 659. The effective age and the useful life of a
and socially acceptable building represent judgments made by the
b. physically possible, comparable to other a. appraiser
uses in the neighborhood, and legally b. buyer
authorized c. property owner
c. physically possible, legally d. insurer
permissible, financially feasible, and e. tax assessor
generating a higher present land value 660. The period over which existing improvements
than any other use are expected to continue to contribute to
d. comparable to other uses in the property value is their
neighborhood, physically possible, and a. effective age
generating a higher present land value b. period of diminishing returns
than any other use c. remaining economic life
e. the tallest and most beautiful structure d. chronological age
that can be placed on land e. remaining physical life
652. The three basic approaches used to estimate 661. For a building, effective age is best defined
value are as
a. use, exclusion, and disposition a. the average age of the roof
b. cost, sales comparison, and use b. the actual age divided by the age-life
c. cost, sales comparison, and market data c. the age of other property in equivalent
d. cost, sales comparison, and production condition and utility the chronological
e. cost, sales comparison, and income age of the building
capitalization d. the chronological age of the building
653. Units of comparison are used in e. the period over which the building may be
a. only the sales comparison approach effectively used
b. only the cost approach 662. The utility of real estate is its
c. only the income capitalization approach a. attractiveness to the trained observer
d. A, B and C b. longevity
e. the appraisal of special-purpose c. capacity to satisfy human needs and
properties only desires
654. When reconciling the adjusted sales prices d. effective demand
of comparables, the greatest emphasis e. remaining economic life
should be given to 663. In appraising a residence, adjustments are
a. the average NOT made to the comparable property for
b. the median a. age
c. the mode b. terms of sale
d. the mean of A, B, and C c. lot value
e. none of the above d. size
655. Which of the following forms of appraisal e. ASSESSED VALUATION
report is NOT recommended? 664. When a site has improvements on it, the
a. completely filled-in institutional form highest and best use
b. telephone conversation a. is not definable
c. letter report b. is its existing use
d. long narrative report c. is its potential use
e. demonstration d. depends on whether or not the existing
656. Which of the following approaches would use is changeable
probably be given the most weight in e. MAY BE DIFFERENT FROM ITS
appraising a large office building? EXISTING USE
a. reproduction cost 665. To be considered as a comparable, a
b. income capitalization property
c. subdivision development a. a must have been sold within the past 5
d. market absorption years
e. replacement cost b. must be competitive with the subject
657. The form in which a formal appraisal is c. must have been sold by an open-market
presented is called transaction
a. a presentation of value d. must be a similar color
e. both B and C b. capital recovery
666. The direct sales comparison approach is c. diminished utility
better than the income or cost approach d. sinking fund factor
because e. book depreciation
a. FEWER COMPARABLE PROPERTIES 674. The present and future demand for a
ARE REQUIRE, SO IT IS EASIER TO property and its absorption rate is considered
OUTLINE THE RESULTS TO CLIENTS in a
b. THERE ARE FEWER MATHEMATICAL a. letter in appraisal
CALCULATIONS, SO THERE IS LESS b. market feasibility study
CHANCE OF MATHEMATICAL ERRORS c. market segmentation
c. THE MARKET FOR REAL ESTATE IS d. highest and best used analysis
SLOW TO CHANGE e. transmittal letter
d. IT IS ALWAYS EASIER TO OBTAIN 675. The appraiser final estimate should be based
DATA FOR THE DIRECT SALES on
COMPARISON APPROACH a. average of three value indications
e. NONE OF THE ABOVE TRUE obtained by three approaches
667. The appraisal of an established 20-year old b. weighing of the reliability of the
motel on a road with numerous competitive information analyzed in each of the
motels would most likely be based on the three approaches
a. square foot are of improvements c. the most sophisticated guess technique
b. number of units d. adjustment for most recent indicators in
c. reproduction cost the local market
d. gross rent multiplier 676. the appropriate time adjustment is concluded
e. occupancy rate to be an increase of 7% per year
668. In applying gross rent multiplier analysis to compounded. The time adjustment for a
the subject property, the appraiser would use comparable sales property that should for
the 80,000.00 two years ago.
a. market rental a. 11,529
b. actual rent being paid b. 11,200
c. rent currently asked by the owner c. 9,200
d. rent offered by a potential tenant d. 91,592
rent listed in advertising the property e. 5,600
677. the criteria for determining the highest and
669. Reproduction or replacement cost includes best used include all of the following
all of the following EXCEPT EXCEPT
a. DIRECT OR HARD COSTS a. physical possibility
b. INDIRECT OR SOFT COSTS b. probable use
c. ENTREPRENEURIAL PROFIT c. financial feasibility
d. FIXED AND VARIABLE EXPENSES OF d. effect on community welfare
OPERATIONS e. legal permissibility
e. ELEVATOR SHAFTS 678. the broad forces affecting value do not
670. In analyzing obsolescence , the test of include
curability of a component in a building is a. physical
whether the cost to cure is no greater than b. social
the c. life cycle
a. EXPECTED INCREASE IN VALUE d. economic
b. reproduction cost new e. political
c. replacement cost 679. the certification of value section of an
d. installation cost appraisal report states everything EXCEPT
e. economic life of the new component that
671. Which of the following is NOT a type of a. the appraiser has no interest in the
depreciation? property
a. ENTREPRENEURIAL LOSS b. the fee is not contingent upon any aspect
b. functional obsolescence of the report
c. external obsolescence c. the facts are correct to the best of the
d. economic obsolescence appraiser knowledge
e. physical deterioration d. last year the property was appraised
672. Estimation of occurred depreciation and by the another person
obsolescence does NOT involve e. the property was personally inspected by
a. physical deterioration the appraiser
b. functional obsolescence 680. one implication of competition and excess
c. economic obsolescence profit is that
d. wear and tear a. there is a certain optimum combination of
e. financial structure land, labor, capital and entrepreneurship
673. In appraisal, accrued depreciation is really b. an estimate of value should be based on
an estimate of future expectation
a. physical deterioration
c. abnormally high profits cannot be b. signature of the appraiser
expected to continue indefinitely c. identification of property appraised
d. maximum value accrues to real estate d. certification
when social and economic homogeneity e. all of the above
are present in a neighborhood 689. the highest and best used of land as if vacant
681. cost indexes offered by standardized forms part of the basis for
services are used to a. mortgage-equity analysis
a. derive units of comparison b. property rights adjustment
b. catalog building component c. an operating expense estimate
c. estimate operating expenses d. the cost approach
d. update past cost into current cost e. the square footage practice
e. estimate the local consumer price index 690. identifying and studying submarkets of a
682. a summary appraisal report larger market is called
a. contains many items that are not a. market research
considered in practice b. market survey
b. is an appraisal report prepared for a client c. market agglomeration
c. summarizes the item that might be d. market segmentation
used in practice e. market data
d. may be based on hypothetical or 691. the identification and study of a pertinent
assumed data market is called
e. should be prepared on a nontypical a. market analysis
property to appraisal practice b. neighborhood review
683. real estate in a submarket is c. property research
a. a group of sales person who deal mostly d. market reflection
in the same type of property e. market interaction
b. a group of sales that occur at the same 692. which of the following is important for good
time appraisal communication
c. a group of similar properties in the a. word choice
same area b. reading level
d. a small portion of the market of similar c. grammatical correctness
properties d. clarity
e. an area where sandwiches on French e. all of the above
bread are eaten 693. all of the following are true except
684. the fact that rents for equally desirable a. real property is a type of service
space tend to be set by the market reflects b. value is dependent on market condition
the principle of c. a good or service has no value in
a. balance exchange unless it possesses certain
b. substitution economic and legal characteristics
c. externalities d. the price representing value is usually
d. consistent used quoted in terms of money
e. conformity e. Real estate may be sold for all cash or
685. the fee for an appraisal assignment is financed
a. based on a percentage of the final value 694. in estimating the market value of comparable
estimate sale, an appraiser must consider all of the
b. agreed upon during the preliminary following EXCEPT
study stage a. whether the transaction was made in
c. determined after the appraisal is cash, terms equivalent to cash, or other
completed precisely revealed terms.
d. set by the fee schedule of the local board b. Whether the property had reasonable
of realtors exposure in a competitive market
e. set by a fee scale from real estate c. Whether a fair sale was transacted, with
commission neither the seller nor the buyer acting
686. the last step in the appraisal report is to under duress
a. write the report d. Whether the replacement cost of the
b. reconcile all data property corresponds to its market
c. analyze the data value
d. inspect the property e. Whether the seller was related to the
e. set the fee to be charge buyer
687. the form of which a formal appraisal is 695. in preparing the appraisal report,
presented is called your analysis concludes that one
a. a presentation of value of the approaches to value is not
b. an appraisal log applicable to this particular case.
c. an appraisal report You should
d. a value certification a. omit the approach all together
e. a narrative report b. base the approach on hypothetical data
688. a formal appraisal must include the c. state that the approach is not relevant
a. date of value estimate
d. state that the approach is not 704. the purpose of a ____ is to
applicable, explain the reason for this analyzed a property potential for
contention success
e. find another approach so as to include a. feasibility study
three approaches b. marketability study
696. in the cost approach the site is valued as if it c. market segmentation study
were d. appraisal report
a. vacant and available for development e. need study
to its highest and best use 705. a use must be_____ to be considered as a
b. improved and suited for its intended use possible alternative for highest and best used
or development a. physically and legally possible and
c. developed and operating financially feasible
d. attractively landscape b. physically and legally possible
e. without nearby utilities c. Already in existence and legal
697. investment value is best describe as d. Physically possible and appropriate
a. market price e. Legal and profitable
b. market value 706. an appraiser
c. the cost of acquiring a competitive a. determines the price
substitute property with the same utility b. defends value
d. the present worth of anticipated future c. estimates price
benefits to a certain entity d. estimates value
e. value in exchange e. determines value
707. the objective of the appraisal should be
698. the length of a tract of land along a street is stated in the report
called a. the market needs it
a. depth b. it define the problems and identifies
b. width the value sought
c. frontage c. it identifies the function of the report
d. abutment d. it absolves the appraiser of liability
e. lineage e. there are too many definitions of market
699. the most comprehensive type of appraisal price
report is 708. the value estimate provided in an appraisal
a. form report a. changes with the use to which it is put
b. oral report b. changes with the function of the appraisal
c. letter report c. remains the same regardless of use
d. narrative demonstration report d. depends upon the use or function of the
e. unbiased report appraisal
700. the principle of ______states that buyer e. always reflects market value
will not pay more for the a site than for 709. population increases______demand for
another equally desirable one housing
a. anticipation a. depress the
b. imbalance b. are incapable of simulating the
c. substitution c. have no effect on the
d. balance d. are likely to create a
e. conformity e. are determined by the
701. the principle of anticipation is 710. environment hazards that an appraiser
a. future oriented must be conscious of include all of the
b. past oriented following except
c. the as of date of appraisal a. asbestos
d. anticipated loan to value ratio for the b. radon
subject property c. drano
e. similar to the principle of substitution d. urea formaldehyde
702. the principle of_______states that the value e. PVC
levels are sustained when the various 711. In analyzing the environment and market
elements in an economic or environmental area, it is best to
mix are in equilibrium a. start at the general level and work
a. anticipation down to the specific
b. equivalence b. start at the specific and work up to the
c. substitution general level
d. balance c. limit the analysis to the national level
e. highest and best used d. limit the analysis to the local level
703. price and value are e. generally consider the traffic flow
a. not necessarily the same 712. the first step in general process is to
b. synonymous a. define the problem
c. different, depending on financing terms b. gather data
d. almost the same in an active market c. analyze data
e. interchangeably in a report d. determine the approaches to value
e. make a final value estimate c. should be discussed in appraisal
713. combining to or more sites in order to report
develop one site with a greater value than d. was not an arms length sale
the individual sites have separately called e. should be used as comparable sale,
a. synergy though adjusted for its time and terms
b. plottage 722. the dimensions of a
c. surplus land warehouse are customarily
d. excess land measured from
e. highest and best use of land a. a roof line
714. assemblage is b. the midpoint of exterior wall
a. always reflect in the market value c. the inside of finished wall
b. the act of bringing to or more smaller d. the outside of finished wall
lots into common ownership for use e. be reasonable or appropriate
c. inappropriate for parcels two or more 723. the construction of a luxury home in a
hectares neighborhood almost completely developed
d. uneconomical with one and two bedroom apartments
e. illegal would
715. typically, land is appraised by the a. produce external obsolescence
a. square foot b. be called an under improvement
b. front foot acre c. results in plottage value
c. all of the above d. results in neighborhood amenities
d. none of the above e. be reasonable or appropriate
716. it is_________for an appraiser to 724. the most detailed, complex, costly and time
receive or pay finders or referral consuming method of cost estimation is the
fees a. quantity survey
a. reasonable b. trade breakdown
b. unethical c. comparative unit
c. necessary d. unit in place
d. customary e. comparable unit
e. convenient 725. An improvements remaining economic life
717. a sale between relatives is considered a. it is chronological stage
a. an arms length transaction b. it is effective age
b. a purely comparable sale c. is the period over which the
c. an open market sale improvements are expected to
d. a distorted sale generate benefits
e. a good deal d. is effective age minus chronological age
718. What of the following is true about zoning e. effective age ;us chronological age
a. it reflects the expectation that government 726. the cost approach most applicable when the
will preserve property values property being appraise
b. it is based on the right of government a. has old improvement
to regulate for health, moral, welfare b. has relative new improvements that
and safety represent the highest and best use of
c. it is inappropriate for parcels withed uses the land
d. it represents an effort to establish the c. suffers substantial functional
land highest and best use obsolescence
e. it represent the right to reuse the property d. is more costly than the surroundings
719. for an appraiser to use the assistance of e. has many older features that make
another appraiser is interesting reading in a report
a. inconsiderate 727. price per front foot
b. unethical a. a physical unit of comparison
c. illegal b. not as accurate as price per acre
d. ethical c. rarely used in residential site analysis
e. questionable d. an accurate guide to site marketability
720. it is_________to provide a value range to a e. useful when there are few physical
client who request it and understand its differences between sites
meaning and use. 728. which is the last step in reconciliation
a. foolish a. identify which of the three approaches is
b. appropriate used
c. un ethical b. apply the three approaches to the data
d. approximate collected
e. difficult c. apply to judgment to the data collected
721. any recent sale of a subject property being d. review previous work and analysis
appraised e. select a final value of estimate
a. should be considered confidential 729. the highest and best use of the site is its
b. cannot, under any circumstances, be a. existing use
considered in estimating the current b. most probable use
market value of the property c. immediate next used
d. synonymous with ordinary and necessary 738. Which of the following criteria most
value completely defines “highest and best use”?
e. different from most probable use a. physically possible, legally acceptable,
730. markets in residential real estate are and generating a higher present land
a. equivalent to those for securities value than any other use
b. related to physical boundaries b. legally authorized, politically viable, and
c. local socially acceptable
d. physically obscure c. physically possible, comparable to other
e. found by courthouse sales uses in the neighborhood, and legally
731. inflation tends to increase the value of authorized
a. fixed income securities d. comparable to other local uses, physically
b. mortgages possible, and generating a higher present
c. deeds in lieu of foreclosure land value that any other use
d. real estate e. the tallest and most beautiful structure
e. debts that can be placed on the land
732. Real estate markets 739. The total income anticipated from income
a. are international in scope property operations after vacancy and
b. meet none pf the criteria of a perfect collection allowances and operating
market expenses are deducted is
c. are centralized in nature a. net operating income
d. consist of used property only b. before-tax cash flow
e. are well developed in former Communist c. effective gross income
countries d. potential gross income
733. The subject property has 85% occupancy. e. property residual income
What conclusion would you most likely draw 740. Which principle of value best affirms that
if the typical occup0nacy rate in the area was value is the present worth of expected future
95%? benefits?
a. Advertising is average. a. supply and demand
b. The rents are high. b. balance
c. The rents are low. c. substitution
d. Management is good. d. anticipation
e. New construction will occur soon. e. conformity
734. The fact that the value of a property tends 741. Which principle of value best affirms that
to equal the cost of an equally desirable the maximum value of property generally
substitute is an example of the principle of cannot exceed the cost of its replacement?
a. balance a. increasing and decreasing returns
b. substitution b. supply and demand
c. contribution c. substitution
d. diminishing returns d. balance
e. supply and demand e. anticipation
735. Population flow to different regions of the 742. Which of the following would be classified
United States will change primarily because as a tangible rather than an intangible
of amenity?
a. changing economic opportunities a. pride of ownership
b. environmental control legislation b. a sense of security
c. rezoning legislation c. a free dishwasher
d. state tax policies d. work satisfaction
e. air conditioning in the Sunbelt e. clean air
736. When each alternative use requires the 743. Which type of property is subject to ad
same capital investment, the use that valorem taxation?
maximizes the investment’s______ on a a. property owned by a religious
long-term basis is the highest and best use. organization and used for religious
a. diversified portfolio purpose
b. operating expenses b. new industrial plants that state and local
c. net operating income governments have induced, with tax
d. potential gross income exemption as an incentive, to locate
e. occupancy rate within their jurisdictions
737. What would be the indicated value of a c. commercial property with more that
property that rented for 750 per month, 50% nonprofit tenants
using a monthly gross rent multiplier of d. state colleges and universities
100, if the expenses attribute to the e. a state capitol
property were 115 per month? 744. Compared with other assets, real estate is
a. 75,670 a. immobile
b. 75,000 b. expensive
c. 68,750 c. long-lived
d. 61,125 d. mortgagable
e. 13,750
e. all of the above b. 150,000.00
745. All of the following are sources of c. 229,166.00
comparable sales EXCEPT d. 333,333.00
a. public records e. 400,000.00
b. brokers
c. buyers and sellers 6,000 – 1,250 × 12 /12%
d. mortgage servicers
e. appraisers 753. the land development method is used to
746. An allowance for vacancy and collection loss estimate the value of vacant acreage that is
is estimated as a percentage of ready to be subdivided. This method
a. net operating income requires
b. before-tax cash flow a. STUDY OF CURRENT SALES OF
c. effective gross income SUBDIVIDED LOTS
d. potential gross income b. THE PROJECTION OF LAND OF
e. after-tax cash flow SUBDIVIDED LOTS
747. The annual net operating income c. RTC approval
from an apartment house is d. Both A and B
11,000. If a capitalization rate of e. None of the above
11% is used, the indicated market 754. a technique in income capitalization in which
value is the analyst need not distinguish interest rates
a. 126,000 from capital recovery rates, but that is most
b. 176,000 useful for comparable income
c. 100,000 a. DIRECT CAPITALIZATION
d. 242,000 b. building residual
e. 2,420 c. land residual
748. which of the following is true of a gross lease d. bank of investment
a. the tenant pays all operating expense e. internal rate of return
b. the landlord pays all operating 755. cash on cash return is
expense a. the annual cash flow divided by the
c. this lease is used only for commercial equity investment
properties b. an internal rate of return that
d. rent rises with the cost of living represents annual income and all
e. this lease must be drafted by an attorney gains or losses prorated to an effective
749. a forecast using discounted cash flow annual amount
analysis would include c. a percentage or decimal rate that,
a. income, vacancy and operating expense when divided into a periodic income
b. an economic analysis amount, offers a lump-sum capital
c. reversion at the end of the holding period value for income
d. discounting expected future cash flows to d. a value that does not change with time
a present value e. none of the above
e. all of the above 756. Which report is usually NOT prepared by
750. in discounted cash flow analysis, the a real estate appraiser?
reversion to be received at the end of the a. marketability study
holding period is b. economic study
a. a separate cash flow c. feasibility study
b. an annuity in arrears d. MINERAL VALUATION STUDY
c. an ordinary annuity e. highest and best use
d. percentage of annual income 757. Questions 86-89 based on the information
e. amount to be capitalized in perpetuity below.
751. Income capitalization is the term used to You are appraising a 40-acre tract of
describe the process of estimating the unimproved by a real land. The size is zoned
value of income property by studying for single-family residential use. All utilities
expected future income. This process are available along the street on which the
a. converts the net income of a property land fronts. The engineers who will plat the
into its equivalent capital value proposed subdivision told you that 20% of
b. reflects the time value of money by the land area will be used for streets and
reducing or discounting future income into sidewalks. Zoning will permit four lots per
its present worth acre of net developable land after deducting
c. focuses on the present worth of future streets. Research indicates that lots similar
benefits to those that will be available on the subject
d. uses markets interest rates land will sell for 18,000 each and that the
e. all of the above entire tract can be developed and sold in 1
752. to earn 12% on your investment, what should year. You find that 40% of the sale price of
you pay for a property earns 6,000.00 per each lot must be allocated to selling cost,
month and has operating expenses of overhead, contingencies, carrying cost, and
1,250.00 per month developer’s profit, and that 2,000 feet of
a. 475,000.00 streets (including water, storm sewer, and
sanitary sewer lines) must be installed at a c. 194,800
cost of 80 per foot. d. None of the above
e. Cannot be calculated from the information
What is the number of lots to be developed? given
a. 40 765. Questions 94-97 are based on the following
b. 128 information:
c. 80 A building contains 50 one-bedroom units
d. 88 and 150 two-bedroom units. The one
e. 32 bedroom units rent for 550 monthly; two
758. What is the gross amount that will be bedroom are 675. the vacancy rate is 7%;
realized from the sale of all the lots? operating expenses are estimated at 40% of
a. 720,000 effective gross income. There is 2,000.00
b. 2,304,000 annual income for vending machines.
c. 1,440,000
d. 1,584,000 potential gross income is
e. 576,000 a. 64,735
759. What is the cost of b. 1,547,000
installing streets, water, c. 1,545,000
and sewer lines? d. 717,425
a. 16,000 e. None of the above
b. 32,000 766. effective gross income is
c. 64,000 a. 64,735
d. 160,000 b. 1,547,000
e. None of the above c. 1,545,000
760. What is the amount of selling cost, d. 1,438,850
overhead, contingencies, carrying cost, e. None of the above
and developer’s profit? 767. Net operating income is
a. 921,6000 a. 64,375
b. 576,000 b. 268,970
c. 288,000 c. 863,310
d. 633,600 d. 719,425
e. None of the above e. None of the above
761. Questions 90-93 are based on the 768. operating expense are
information below: a. 1,545,000
A 100-unit apartment complex includes 40 b. 54,075
one-bedroom units that rent for 950 and 60 c. 2,000
two-bedroom units that rent for 1,150 d. 719,425
monthly. The vacancy rate is 5%; e. 575,540
miscellaneous income is 5,000 annually. 769. in one step of the land value residual
Operating expenses amount to 400,000. The technique, the building capitalization rate is
mortgage loan requires payments of 630,000 applied to the known building value to
annually. estimate the
a. highest and best use of the site
Potential gross income is b. cost of the building
a. 1,289,000 c. income needed to support the land
b. 112,000 d. net operating income needed to support
c. 107,000 the building
d. 1,284,000 11. Income property investments
e. Cannot be calculated from the information a. Low risk=low cap rate=high value
given b. Low risk=low cap rate=low value
762. Effective gross income is c. Low risk=low cap rate=low value
a. 1,224,800 d. Low risk=low cap rate=high value
b. 1,220,000 12. All other factors being equal, as the location
c. 824,800 of an income property becomes less
d. 107,000 desirable the cap rate used will be
e. Cannot be calculated from the information a. Lower
given b. Higher
763. Net operating income is c. Less reliable
a. 1,224,800 d. Unaffected
b. 184,800 13. Recapture generally applies to
c. 424,800 a. WASTING ASSETS, SUCH AS
d. None of the above BUILDINGS
e. Cannot be calculated from the information b. Non-wasting assets, such as land
given c. Both a and b
764. Before-tax cash flow is d. Neither a nor b
a. 1,030,000 14. In the land residual technique, the
b. 184,800 appraiser starts with an assumption of.
a. Replacement cost d. Sandwich lease
b. Building value 26. Increase in maintenance costs are passed
c. Net capitalization on to tenants under a (n)
d. Land value a. Tax-stop clause
15. In the building residual technique, the b. Expense-stop clause
appraiser starts with an assumption of c. Gross lease
a. Replacement cost d. Escalator clause
b. Building value 27. The average of all variates is the
c. Net capitalization a. Mean
d. Land value b. Mode
16. The cash on cash rate is the same as the c. Median
a. Yield capitalization rate d. Range
b. EQUITY DIVIDED RATE 28. The center of all variates is the
c. Overall capitalization rate a. Mean
d. Break-even point b. Mode
17. Name the two component rates that are c. Median /Mid range
inherent in every capitalization rate d. Range
a. Investors rate 29. The different between the highest and lowest
b. Leased rate radiates is the
c. Interest and recapture rates a. Mean
d. Interest and depreciation rates b. Mode
18. Under which method are the recapture c. Median
installments lowest in the earlier year? d. Range
a. Annuity 30. The mean of five house sales prices of
b. Straight-line P100,000, P75,000,P175,000, P200,000,
c. Gross income multiplier method and P150,000 is
d. Band of investment method a. P140,000 (P700K/5)
19. Under which methods are the installment b. P150,000
highest? c. P700,000
a. Annuity d. P175,000
b. Straight-line 31. The median of the house sales price in
c. Gross income multiplier method question 20 is
d. Band of investment method a. P140,000
20. Which recapture method suggests the b. P150,000
greatest reduction in risk? c. P700,000
a. Annuity-line d. P175,000
b. Straight-line 32. The aggregate of the house sales prices
c. Gross investment method in question 20 is
d. Band of investment method a. P140,000
21. Schedule rent (or contract rent) that is b. P150,000
higher than market rent creates c. P700,000
a. Overage rent d. P175,000
b. Gross rent 33. What is the value in 5 years of an investment
c. Excess rent of P7,500 at 10% compounded daily.
d. Escalator rent a. P20,387
22. The amount paid over minimum base rent b. P12,365
in a percentage is c. P12,340
a. Overage rent d. P12,290
b. Gross rent 34. To determine the value in 8 years of an
c. Excess rent investment of P10,000 at 10% compounded
d. Escalator rent annually the applicable factors is
23. The lease under which the tenant pays a a. 2.143589 (1.108)
fixed rental and the landlord pays all b. 2.357948
expenses of ownership is the c. 1.948717
a. Gross rate lease d. 2.182875
b. Triple net lease 35. Calculate the monthly payment required to
c. Net lease amortize a loan of P270,000 at 9 ½ percent
d. Percentage lease interest for e term of 40 years.
24. An index will be referred to in a (n) a. P221.40
a. Gross lease b. P2,187.17
b. Triple net lease c. P2,403
c. Escalator clause d. P2,214
d. Expenses-stop clause Formula
25. The interest of a sublessee is a PMT = PV × Si/S – 1
a. Leasehold 36. The factor used to find the monthly payment
b. Lease fee required to amortize a loan of P147,000 at 11
c. Subleasehold percent interest over 30 years is
a. .0092 The time adjustment is 12% per year.
b. .0096 Determine the adjustment sale price of the
c. .0100 comparable site using straight plus minus
d. .0097 adjustment
Formula a. P18,250.00 per sqm
Amortizations Factor = Si/S – 1 b. P24,000.00 per sqm
c. P25,750.00 per sqm
37. A property has 25 apartment units, 15 units d. P26,250.00 per sqm
two bedroom unit renting for P5,000.00 per 43. Building Residential, 4 T&B and 4 car garage
month each and 10 one bedrooms unit residential building was sold for
renting for 2,000.00 per month east. There P20,000,000.00 Using. The rules of thumb of
are 14 two bedroom units occupied and 8 building to land ratio of 3:2 what is the value
one bedroom units occupied. of the building?
The potential gross income yearly is. a. P10,000,000.00
a. P1,000,000.00 b. P11,000,000.00
b. P1,120,000.00 c. P12,000,000.00
c. P1,140,000.00 d. P8,000,000,00
d. P1,150,000.00 44. An appraiser was asked t compute for the
fair market rent per (square meter) of a
15 × 5K × 12 = 900K P500.00 per square meter vacant
10 × 2K × 12 = 240K commercial lot using the following
PGI = 1.14M assumptions
Fair market value of lot per sq.m –P12,00.00
38. If house in your area have increase in value Interest rate -10% p.a
8% during the past year and the average They yearly market rent is:
price of house sold last year was a. P500,000.00
P95,000.00. what is the average price of b. P600,000.00
houses sold today c. P700,000.00
a. P101,000.00 d. P800,000.00
b. P101,500.00 45. If a commercial structure is a rectangle with
a. P102,600.00 (95K × 1.08) sides of 65 meters and 135 and the current
c. P103,000.00 local cost to built a similar structure is
39. An appraisal is last to be made of a three- 4,500/sqm using the square meter method
bedroom house. One comparable with two a. P18,000,000.00
bedrooms sold for P50,000.00. the appraiser b. P180,000,000.00
makes an adjustment of P1,000.00 to the c. P 39,487,500.00 (65 × 135 × 4600)
comparable to account for the difference in d. P36,450,000.00
the number of bedrooms. The adjustment 46. A house and lot are priced at P8,800,000.00.
sales price of the comparable is: the lot alone is valued P1650,000.00. what
a. P49,000.00 percentage of the total asking price is
b. P51,000.00 attributable to the value of the lot?
c. P52,000.00 a. 18.8%
d. P53,000.00 b. 19.0%
40. Which of the following estimated would result c. 18 and ¾ % (1.65M/8.8M)
n a capitalization rate of 4 percent d. 18 and ¼ %
a. Potential gross income P200,000.00;
value P5,000,000.00 47. The basic formula for property valuation via
b. Effective gross income P200,000.00; income capitalization is:
value P5,000,000.00 a. Value=Income x Rate
c. Net operating income P200,000.00; b. Value= Income/Rate
value P5,000,000.00 c. Value=Rate/Income
d. None of the above d. Value=Selling Price/Income
41. In regard to zoning, which of the following 48. In a property residential capitalization
statement is CORRECT? approach what is the value an improved
a. Zoning ordinances are always more property with a net income of P80,000.00 a
restrictive that deed restrictions year, an interest rate 8% and rate recapture
b. A nonconforming use and variance refer of 2%?
to the same thing a. P1,000,000.00
c. Zoning normally establishes land-use b. P800,000.00 (80K/8%+2%)
districts and provided for different c. P840,000.00
restriction within each district d. P850,000.00
d. Exclusive zoning and spot zoning refers 49. If houses in your area have increased in
to the same thing valued 8% during the past years and the
42. A comparable site sold a month ago @ average price of houses sold last year was
P25,000.00 per square meter. Its location is P95,000.00. what is the average price
considered 15% superior and its and houses sold today?
topography is 10% inferior to the subject site. b. P101,000.00
c. P101,500.00 d. P5,000
d. P102,600.00 (95K × 1.08) 56. An office building recently sold for
e. P103,000.00 Php50,000,000. Given the following
information:
50. What is the distinction between the term Gross (potential) income: Php10,000,000
market price and market value? Vacancy factor : 8 percent
a. Market price is what is the seller asks for, Expenses :45 percent of effective gross
while market is what the buyer actually income
pays Annual mortgage payment :Php4,125,000
b. Market price is what the property seller Equity :Php12,500,000
for, while market value is what is what What is the overall rate of return for the
the sales price should be to typical property? What is the pre-tax cash flow?
buyer a. 8.3 percent
c. Market price is what is currently owned b. 10 percent
the property, while market value is what is c. 10.12%
bought for d. 9%
d. Market price is synonyms with Solution.
replacement cost, while market value is 10M – 8% - 45% /50Mx100
the same as assessed value 57. If the subject property is 10% superior to
51. The assessor’s Office is an agency where we Comparable Sale no. 1 and the comparable
inquire and conduct research on sold for P1,000,000, what is the indicated
a. Title verification value of the subjected?
b. Certification lot plan a. P1,000,000 x 0.90=P900,000
c. Zonal value b. P1,000,000 x 1.10=P1,100,000
d. Cadastral map/tax map c. P1,000,0q00/1.10=P9069,090
52. An appraisal is best defined as: d. P1,000,000/0.90=P1,111,111
a. An unbiased opinion of the quality, value 58. A tenant has a least that states the base rent
or utility of an interest in real estate and is P5,000 per month plus 3% of the sales
related personality above P50,000 in gross sales per month.
b. An unbiased opinion of the likely price for The tenant’s sales last year were P850,000.
which a parcel of real estate would sell at How much rent was paid last year?
a given date a. P25,500
c. The process of studying the nature, b. P75,000
quality, or utility of an interest in real c. P60,000
estate in which a value estimate is not d. P67,500
necessarily required 59. If comparable sale# 1 sold for Php2,000,000
d. The process of developing an opinion and has two-car garage, adding Php100,000
as to market value or other defined to the value and the subject property does
value of a specified interest in a not have a garage, the indicated value of the
specified in time subject property would be found by:
53. Edwin owned a small farm of 1,500 sq.m in a. Subtracting Php100,000 from the subject
Antipolo. When he died, he had no heirs, no property
friends, and no will. b. Adding Php100,000 to the comparable
a. The state will take the property and sale
sell it c. Subtracting Php100,000 from the
b. The land will be in Bob’s name forever comparable sale
because he died without heir d. Adding Php100,000 to the subject
c. The land will pass to the first person to property
occupy the land for seven years (i.e., 60. A residence has been listed for sale for the
squatter’s rights) last six months at a price of P1,249,000 and
d. The land will pass to the adjacent owner it has not sold, in this market, the average
equally. marketing period is 45 days for this type for
54. A 7-years old residence is currently valued at property.
P720,000. What was the original if it has a. The subject property’s market value could
appreciated by 60% since it is built? be higher than the list price
a. P720,000 b. The subject property’s market value could
b. P450,000 be higher or lower than the list price
c. P378,000.00 c. The subject property’s market value is
d. P1,152,000.00 less than the list price
55. In a soft market a landlord accepted a new d. The subject property’s market value could
tenant with 60-month lease at P5,000 per be lower than the list price
month but gave the new tenant six months 61. A comparable property sold six months ago
free rent. Using the average rent method, for Php1,250,000. Market investigation
what is the effective monthly rent? indicates the following:
a. P5,555 Location adjustment +5 percent Adjustment
b. P4,500 (60×50)0/66) Sequence: Time, Age, Location
c. P3,000
Time adjustment +6 perecent P1,250,000 X d. Appraisal guidelines
1.60 X.93 X 1.05 (round it) =1,293,862.5 69. An appraisal of real estate
Age adjustment +7 percent(dep-ed) a. Guarantee its value
b. Assure its value
Give the above information, what is the c. Determine its value
indicated value based on the comparable d. Estimates its value
property? 70. In which market is the direct sales
a. Php1,232,250.00 comparison approach most applicable?
b. Php1,300,000.00 a. Seller’s
c. Php1,325,000.00 b. Buyer’s
d. Php1,293,860.00 c. Reasonable
62. A property has an overhead garage door that d. Active
is 13 years old. It cost P19,000 to replace 71. The legal right to move items such as topsoil
Because the inclement weather comes outs or coal from another is known as a/an:
of the northwest, these doors typically last 15 a. Easement
years if they face the west and 25 years if b. Profit
they face east. This door faces east. What is c. Escheat
the amount of value left in this item? d. EMBLEMENTS/FRUITS
a. P9,120.00 72. The process of change the use of a building
b. P9,880.00 from an apartment complex to a
c. P16,470.00 condominium form of ownership is normally
d. P2,660.00 referred to as a (n):
13/15 (19,000) = 9,880 a. CONVERSION
19,000 – 9,880 = 9,120.00 b. Proration
63. The area of rectangle with a base of 10 c. Interim use
meters length and a length of 20 meters is d. Variance
a. 250 sq.m 73. Which approach would best when appraising
b. 200 sq.m (10×20) a 15-to-20 years old house?
c. 300 sqm. a. Cost
d. 400 sqm. b. Sales comparison
64. All of the following statement are true c. Income capitalization
except: d. Replacement cost new les depreciation
a. Real property refers to items that are 74. Before reconciliation the appraiser should
not permanently fixed to a part of the a. Re-inspect the subject property
real estate b. EVALUATION THE RELIABILITY OF
b. Appraising is the art and items that are EACH APPROACH TO VALUE
not permanently fixed to a part of the c. Review the over-all appraiser process
estate and check for technical accuracy
c. Assets value change with time d. Seek the property owner’s opinion
d. Market change with supply and demand 75. A large home built in an area of small cottage
65. The principle of substitution holds that a is an example of:
purchaser will pay not more for a property a. Over-improvement
than b. Under-improvement
a. The minimum he can afford c. Land regression
b. THE COST OF ACQUIRING AND d. Functional obsolescence
EQUALLY DESIRABLE SUBSTITUTE 76. The walls between two condominium units
c. The price of a previously owned property are NORMALLY considered to be:
d. The price of a property with grater utility a. Individual unit elements
66. Which of the following conditions is assumed b. Common elements
in the normal definition of market value c. LIMITED COMMON ELEMENTS
a. The estate value is as of a future date d. Propriety lease elements
b. The property will sell promptly 77. What would be the indicated value of a
c. Payment will be made in cash or its property that rented for P7,500 per month,
equivalent using a monthly gross rent multiplier of 110,
d. Only the buyer is knowledgeable as to the if the express attributable to the property
potential uses of the property were P1,250 per month?
67. In which market are the there many potential a. P756,700.00
buyers but few properties available? b. P825,000.00 (7,500 – 1,250)(12)(110)
a. Demand c. P687,500.00
b. Buyer’s d. P611,250.00
c. SELLER’S 78. A 7 years old residential is currently valued
d. Low-price at P720,000. That is the original value f it has
68. To estimate market value, an appraiser appreciated by 60 percent since it was built?
follows the a. P270,000.00
a. Appraiser report b. P378,000.00
b. Valuation process c. P450,000.00 (720K/160%)
c. Evaluation methodology d. P152,000.00
79. ____ includes not only the ground or soil but Rooms is the number of rooms in the
everything which is attached to the earth apartment
whether by course nature or by man Students id the percent of students in the
a. Land apartment building (0=- percent)
b. Building Distance is the distance from the periphery
c. Other land improvements of the campus
d. Real Estate The rent for an apartment with 3 rooms, 100
80. This evolution of value theory emphasized percent students and 50 meters from
the relationship of market price and value, campus would be:
normal value under conditions of balance a. Php1,500.00
supply and demand b. Php1,775.00
a. Social theory of Mill c. Php2,500.00
b. Cost theory of Adam Smith d. Php3,000.00
c. THEORIES OF AUSTRIAN SCHOOL 88. Building value :Php50,000,000.00
d. Theories of Physiocrats Net operating income :Php8,350,000.00
81. Under the international valuation standards Building capitalization rate :14 percent
(IVSC), two types of values are: Land capitalization rate :9 percent
a. Fair market value and sound value What is the residual income to the land?
b. MARKET VALUE AND NON-MARKET a. Php 1,350,000.00
VALUE b. Php 3,850,000.00
c. Economic value and market value c. Php 4,500,000.00
d. Fair market value and liquidation value d. Php 70,000,000.00
82. Under IVSC, the “C” standards for: 89. What is the present value of a 40-years net
a. Corporation income of Php 10,000 per year if payments
b. COMMITTEE are in advance and the net income is
c. Conference discounted at a rate of 12 percent?
d. Charter a. P82,330.00
83. A property with an annual net income of b. P82,438,.00
P382,500.00 was recently sold for c. P92,210.00
P4,250,000.00. the remaining economic life d. P92,330.00
of the building is estimated to be 25 years.
Linda value is estimated to be P900,000.00. 90. As the degree of risk and uncertainty
Based on the data gathered. The overall rate associated with the income potential of
of the property is: property increases, the income generated by
a. 8% that property may be capitalized a higher
b. 9% (382,500/4,250,000)(100) rate. This action will bring about which of the
c. 10% following results?
d. 12% a. A hgher capitalization rate will mean a
84. There are various types of appraisal reports. higher value
Which of the following step would be the final b. A higher capitalization rate will mean a
one taken the appraisal process? lower value
a. Narrative report c. A change in the capitalization rate will
b. Bank form report have no bearing on the estimate of value
c. PERSONAL LETTER OF OPINION d. A change in the capitalization rate will
d. Valuation report have an effect on value only if the
85. A house and lot is period at P7,500,000.00. property is being under its highest and
the lot alone is valued P2,531,250.00. what best use
percentage of the total asking price is 91. An office building has 1,00 square meters of
attribute to the house? net leased space. The owner has an annual
a. 33 ¾ % mortgage payment Php 750,000 and expects
b. 33 ¼% operating expenses to be Php 250,000. If the
c. 66 ¼% owner wants a before tax cash flow Php
d. 66 ¾% 500,000, what should the gross rent square
86. The value of the property with a monthly net meter be on a monthly basis?
income of P75,000.00 and with an overall a. Php 100
capitalization rate of 9% is. b. Php 125
a. P833,333.00 c. Php 150
b. P10,000,000.00 d. Php 1,500
c. P1,000,000.00 92. Demand is one of the essential elements
d. P900,000.00 or characteristics of value, however, for
demand to value where must also be.
A regression gives information to estimate
87. a. Purchasing power
monthly rent for apartments: b. Need
Rent=250+(75xRooms)+(50xstudents) c. An adequate supply
+(25xdistance)= d. Good sales technique
Where: 225 × 2 = 1,250 93. Which of the following calculations is NOT a
type of yield rate?
a. INTERNATIONAL RATE OF RETURN b. 1 percent for each year property has
b. DISCOUNT RATE been rented
c. OVERALL CAPITALIZATION RATE c. Somewhere between 5 percent and 10
d. INTEREST RATE percent
94. What information is NOT needed to apply the d. THE AMOUNT WILL VARY WITH EACH
building residential technique? PROPERTY
a. Building value 102. Which of the following returns would be
b. Land value include in the capitalization rate established
c. Net operating income by the appraiser for a property with a
d. Land and building capitalization rate declining value a constant land value?
95. What term used to denote the difference, if a. Return on the land and building
any, between the present value of expected b. RETURN ON THE LAND AND
benefits, or positive cash flows, and the BUILDING AND RECAPTURE OF THE
present value of capital outlays, or negative BUILDING
cash flows? c. Return on the land and building and
a. Profitability index recapture of the land and building
b. Net present value d. Return on the land and building and
c. Internal of return recapture of the land
d. Net cash flow 103. In addition to the income generated by rents,
96. Given the following information what else does the income approach always
Building capitalization rate: require the appraiser to analyze?
Land capitalization rate a. Total debt service
Land value as a percent of total value: b. Pretax cash flow
What is the overall capitalization rate by c. OPERATING EXPENSES
using the band of investment approach? d. After-tax cash flow
a. 0.097 104. A 10-unit apartment complex has been
b. 0.100 purchased for Php 25,000,000. A 75 percent
c. 0.103 loan has been obtained. Vacancy allowance,
d. 0.110 operating expenses, reserve accounts, and
97. Given the following information, what is the debt services equal Php2,375,000 annually.
building capitalization rate for the subject How much must each unit rent for monthly to
property? generate a 10-percentr dividend rate?
Land value : Php600,000 a. P 23,750
Net operating income : Php250,000 b. P 24,000
Land capitalization rate : 8 percent c. P 25,000.00
Overall capitalization rate : 9 percent d. P 30,000.00
a. 10.9 percent 105. The mathematical process of converting
b. 9.3 percent investment in flows or an income into a
c. 8.4 percent present value is commonly referred to as:
d. 8.8 percent a. Compounding
98. If a property has a net income ratio of .75 b. DISCOUNTING
and gross income multiplier of 9, what is the c. Amortization
indicated overall capitalization rate? d. Equity reduction
a. 2.78 percent 106. In analyzing the market by using a gross rent
b. 6.75 percent multiplier (GRM) technique, value is
c. 8.33 percent estimated by doing which of the following?
d. 12.00 percent a. Dividing market rent by gross rent
99. The term holding period usually refers to multiplier
the: b. Dividing market rent by net income
a. Time span in which improvements c. Multiplying operating expenses by gross
continue to contribute to value rent multiplier
b. Period of time which net income remains d. MULTIPLYING MARKET RENT BY
greater than operating expense GROSS RENT MULTIPLIER
c. TIME SPAN OF OWNERSHIP 107. Which of the following statement is MOST
d. Period of time that this since construction descriptive of what occurs with a
of the improvements capitalization rate used in the income
100. Capitalization is the process of: approach to value?
a. Forecasting future yields of a property a. THE CAPITALIZATION RATE
b. Calculating expenses to find price INCREASES WHEN THE RISK
c. Deducting expenses to find net assets INCREASES
d. CONVERTING INCOME INTO A VALUE b. The capitalization rate increases when
INDICATION the risk increases
101. Which of the following statements BEST c. The capitalization rate increases when
describes the amount of adjustment an risk decreases
appraiser should make for vacancy d. The capitalization rate remains the same
allowance in a property? as long as there is possible net income
a. 5 percent of gross income
108. A set percentages indicating the c. Aid determination of how much
proportion of site value attributable to each property tax is due
additional amount of depth in the lot is 116. Deferred maintenance usually results in
referred to as: which of the following losses in value?
a. DEPTH TABLE a. Incurable physical depreciation
b. Multiplication tables b. Curable physical depreciation
c. Plottages c. Curable functional obsolescence
d. Grid d. Curable external obsolescence
109. Risk due to the use of depth financing is 117. What terms applies to the effect on value
referred to as: of location or proximity to the intersection
a. Interest risk of two streets?
b. Financial risk a. Corner influence
c. Leverage risk b. Amenity
d. Equity risk c. Externality
110. A large national tenant that occupies d. Plottage
space in a shopping center is often to as 118. Functional obsolescence could be caused
a (n): by which of the following?
a. Discount tenant a. A ceiling that is to high
b. Another tenant b. Deferred maintenance
c. Department store c. A poor location
d. Mall tenant d. A worn-out roof
111. Which of the following conditions is NOT 119. The building cost estimate method that
a basic assumption in the definition of replicates the contractor’s development of a
market value? bid and is the most comprehensive way
a. The seller receives cash or its equivalent estimate building costs, si known as the:
b. Both the buyer and seller are a. Unit-n-place method
knowledgeable about current market b. Quantity survey method
conditions c. Breakdown method
c. The value will be as of a specific date d. Comparative unit methods
d. The property will sell promptly 120. Included in the cost approach to value is all
112. Which of the following conditions is of the following components EXCEPT:
assumption in the normal definition of market a. Replacement cost
value? b. Highest and best of the land
a. The stated value is a of a future date c. Acquisition cost
b. The property will sell promptly d. Accrued depreciation
c. Payment will be made in cash or its 121. In regard to accrued depreciation, which of
equivalent the following terms does NOT belong
d. Only the buyers knowledgeable as to the together?
potential uses of the property a. Physical deterioration-curable
113. In considering the highest and best use of a b. Functional obsolescence-incurable
parcel of land to be improved with an office c. Economic obsolescence-curable
building the appraiser determine the optimal (incurable)
land to building ratio for the parcel. Which d. Functional obsolescence-curable
of the following economic principles does this 122. The combining of two or more into a
illustrate? single ownership with the value of the
a. Anticipation assembled lots being more than the sum of
b. Balance the values of the individual lot is referred to
c. Contribution as:
d. Substitution a. Highest and best use
114. An existing site has an improvement on it b. Economic rent
such as a building. Which of the following c. Escheat
statements BEST describes the highest and d. Plottage
best use of that site? 123. Another term used to denote the actual age
a. It cannot determined of a building is
b. It is automatically the current use the site a. Chronological age HISTORICAL
is improved b. Effective age
c. It may be different from the current c. Economic age
use (IMERIM USE) d. Depreciated age
d. If the improvement is a residence, then 124. A building has a roof that originally had an
the land does not have a highest and best expected life of 25 years. The roof’s effective
use age is 15 years. A new roof will cost
115. A tax assessment is intended to accomplish Php100,000 to install. Using a straight line
which of the following results? method, what amount of depreciation would
a. Set the maximum price paid at a be charged of the roof?
foreclose sale a. Php40,000
b. Establish the asking price of property b. Php60,000
when listed for sale by the owner c. P580,000.00
d. P100,000.00 133. In collection data, an appraiser concludes
125. The basic capitalization formula used in that comparable properties have increased in
the income approach to value contains value at a 6-pecent for a comparable that
three Components. Those three components sold years ago for Php1,000,000 is:
are: a. Php60,000
a. Market, cost, income b. Php120,000
b. Value, rate, income c. P123,600.00 (1.06)2
c. Physical, functional, economic d. P1,123,600.00
d. Potential, gross, net income Sol. 1M(1.06)2
126. What is the gross income multiplier for a 134. Which of the following actions is NOT
property with a current market value of characteristic of market value?
Php570,000 and rents for Php5,000 per a. Sale as soon as possible
month? b. Well informed buyers
a. 9 c. Typical financing
b. 9.5 d. Typically motivated sellers
c. 10 135. Which of the following factors is NOT
d. 10.5 normally considered to affect the supply
Sol. 5k × 12 = 60k of real estate?
570k/60k = 9.5 a. Volume of new construction
127. The peso amount of rent received from a b. Standing stock
parcel of real estate when rented in an open, c. Land use and city growth
competitive market is referred to as: d. Competition
a. Economic rent market 136. What term best describes the effect of a
b. Contract rent power on the value of a nearby home?
c. Ground rent a. Balance
d. Gross rent b. Externalities
128. A mortgage loan for Php 300,000 at 9 c. Contribution
percent annum for 30 years has been made. d. Conformity
What is the amount of interest for the first 137. Which of the following appraisal principles
month? holds that market value is indicated by
a. Php163.90 the value of another property with similar
b. Php900.00 utility?
c. P2,250.00 a. Supply and demand
d. P2,413.90 b. Substitution
Sol. 9%/12 = 0.0075 × 300K = 2,2250 c. Competition
129. What is the range of a group of variables d. Balance
indicate to the appraiser? 138. The specific use of a parcel of land that
a. The value of the highest sample gives that land the greatest residual of
b. The difference between the lowest and income is referred to as the land’s
the highest values a. Intrinsic use
c. The average for the group b. Highest and best use
d. The percentage variation from the mean c. Income producing use
130. Which of the following types of lease does d. Efficient use
NOT provided at least some protection to the 139. The proper or most correct of an
lessor against inflation? improvement to land, such as the
a. Flat lease construction of a house, is normally
b. Index lease strongly influenced by the application of
c. Reappraisal lease which of the following economic principles?
d. Graduated lease a. Conformity
131. Which of the following statement is b. Encroachment
CORRECT in regard to assessed value? c. Escheat
a. The assessed value must equal the d. Substitution
market value 140. The term lenders often use to refer to the
b. The assessed value is used primarily relative amount of money they will lend
to calculate property taxes on a specific parcel of property is known
c. The assessed value is used primarily to as:
calculate property insurance a. Gross rent multiplier
d. The assessed value will never exceed b. Debt-to-equity ration
cost c. Value to loan ratio
132. A father sells his home to his daughter and d. Loan to value ratio
her husband. Such a sale would NORMALLY 141. Effective demand in the market place for
be described as which of the following sales? housing varies MOST directly with which of
a. Arm’s-length sale unrepresentative the following conditions?
b. Illegal sale a. Purchasing power
c. Distorted sale b. Interest rates
d. Forced sale c. Lis pendens
d. Escheat
142. A worn path crosses an owner’s property. 150. Which of the following terms refers to the
What legal doctrine would require a potential stages that a neighborhood goes through
purchaser to take note of the fact that there over time?
may be an unrecorded prescriptive easement a. Revitalization
against that property? b. Leasehold cycle
a. Actual notice c. Life cycle
b. Constructive notice d. Change
c. Lis pendens 151. The term appraisal refers to:
d. Escheat a. The process of estimating the market
143. An individual owner of a condominium unit is value of property
in default on payment of the property taxes to b. The valuation of a market and how it
the local government Of the following affects property values
choices, which is the only available to the c. The process of estimating the most likely
taxing authority? sales price of a property
a. Levy the tax on the entire condominium d. The act of process of developing an
project opinion of value
b. Procedure against the individual unit 152. The date of valuation for an appraisal is
c. Place a lien on the common areas determined by which of the following?
d. Foreclose against the homeowners a. The actual date the appraisal is signed
association b. The date the appraisal assignment is
144. The legal right of government to acquire accepted
private property for a public use or purpose c. The date the property is actually
with just compensation is known as: inspected
a. Nothing d. Whatever date is specified in the
b. Air rights only appraisal report
c. Everything below the surface only 153. What is the PRIMARY purpose of economic
d. Every above and below the surface base analysis?
145. In regard to the legal concept of land, what is a. To forecast future economic growth in
a landowners entitled to in additional to the an area and divided that growth
surface rights? between basic and non-basic
a. Nothing industries
b. Air rights only b. To forecast changes in local zoning
c. Everything below the surface only ordinances
d. Everything above and below the c. To determine property tax rates and the
surface likely amount of tax due on property
146. The term real estate is generally d. To forecast inflation rates
a. Air and sub surface rights 154. In using the sales comparison approach, the
b. Surface rights only appraiser finds that in term of location, sale1
c. Machinery and equipment is superior to the subject property but is
d. Legal interests and rights inherent in inferior to sell#2. The correct procedure
ownership would be to adjust:
147. Which of the following activities is NOT a a. Both sales down to the subject
public limitation on real estate property
a. Building codes b. Both sales up to the subject property
b. Zoning c. Sale#1 down and selle#2 up
c. Adverse possession d. Sale#1 up and sale#2 down
d. Fire codes 155. A single-family residential located on a busy
148. If the metes and-bounds method of legally street rents for Php500 per month less than
describing land is being used, which of the similar rental properties located on other
following statement is CORRECT? streets in the same area. The average gross
a. The straight point must be an natural rent multiplier in this neighborhood id 110.
benchmark What is the lump peso adjustment for the
b. There must be a define point of locational obsolescence of the residence?
beginning a. P500
c. Monuments cannot be used as part of the b. P6,000
description c. P50,000.00
d. No other methods, such as lot-and-block, d. P55,000.00.
can be used as part of the description Sol. 5k × 110%
149. Which of the following terms refer to the 156. The adjustment in the sales comparison
legal interest belonging to a person who approach that involves comparing two
is leasing property from someone else? properties with similar feature and
a. Leased fee estate characteristics but different date of sale is
b. Leasehold estate referred to as the:
c. Fee simple estate a. Loan closing adjustment
d. Lesee’s estate b. Time adjustment (market
contributions)
c. Appreciation in value adjustment
d. Time value of money adjustment 165. The sale comparison approach is said to
157. The building cost method that finds the cost be most reliable when of the following
of the component parts of a building through market exist?
standard cost estimated and then adjusts for a. Active market
the condition of the component, time and b. In acted market
location is known as the: c. Buyer’s market
a. Unit-in-place method d. Seller’s market
b. Quantity survey method 166. Numerous elements should be identified
c. Break-down method when an appraiser is attempting use the
d. Comparative unit method sale comparison approach to value. Which
158. Maria’s house was built 12 years ago. of the following list BEST explains elements
Because he keeps it in excellent condition, it of comparison?
shows only as much wear as a typical five- a. Demand, supply, utility, transferability
year-old house. Maria’s house therefore has b. Physical, functional, economic, location
an effective age of: c. Date of sale, location, physical,
a. 5 years condition of sale
b. 7 years 167. In the short run, which of the following
c. 12 years conditions has the MOST effect on real
d. 17 years estate price?
159. Which of the following methods is the MOST a. More changes in demand than changes
detailed in estimating the costs of in supply
reproducing abuilding as part of the cost b. More changes supply than in demand
approach to value? c. More inflation than demand
a. Unit-in-price d. More sellers than buyers
b. Quantity survey 168. What term is used to describe the value to a
c. Comparative unit typical investor?
d. Trade breakdown a. Market value
160. The cost approach to value takes into b. Investment value
consideration all of the following factors c. Sale value
EXCEPT: d. Use value
a. Value of the land
b. Replacement (Reproduction) cost of the 169. Which of the following estimates would
improvements result in a capitalization rate of 20
c. Original sales price percent?
d. Physical defects a. Potential gross income P1,000,000, value
161. When using cost approach to value, an P5,000,000
appraiser should value the land as though: b. Effective gross income P1,000,000, value
a. It has been improved with a building P5,000,000
b. It is currently being used with an interim c. Net operating income P1,000,000,
use value P5,000,000
c. It is vacant and available for highest d. Cash flow P1,000,000, value P5,000,000
and best use
d. Zoning ordinance are not 170. A property has NOI of Php1,000,000, interest
162. A tract of land containing four hectares payment of Php800,000 and principal
recently sold for Php600 per square meter. payments of Php100,000. What is the debt
What is the estimated land value? coverage ratio?
a. P600,000.00 a. 0.80
b. P2,400,000.00 b. .0.90
c. P6,000,000.00 c. 1.11
d. P24,000,000.00 d. 1.25
Sol 600 × 40,000 171. A small restaurant contains an oven and a
163. What is the correct percentage of accrued freezer, each of which cost Php9,000 and
depreciation for a 15-year old building if the has estimated useful life of 10 years
building has an effective age of 20 years and Carpeting costs Php35,000 and has an
a remaining economic life of 30 year? estimated usefull life of seven years. What
a. 20 percent annual reserve for replacement would be
b. 30 percent appropriate for these items?
c. 40 percent a. P5,900.00
d. 60 percent b. P6,070.00
164. What term applies to the rent specified in a c. P6,800.00
lease? d. P5,000.00
a. Based rent 172. If a property has an overall capitalization rate
b. Market rent of .095 and a mortgage at a 75 percent loan-
c. Contract rent to value ratio having an annual mortgage
d. Gross rent constant of .11, what is the equity dividend
rate?
a. 0.05
b. 0.06 b. Market price is what the seller asks for,
c. 0.07 while market value is what the buyer
d. 0.09 actually pays
173. The term effective rate refers to the: c. Market price is what the property sells,
a. Loan constant on a mortgage for, while value is what sales price
b. True rate of return considering all should be to a typical buyer
relevant finance expenses d. Market price is what is currently owned
c. Interest rate after inflation is considered the property, while market value is what is
d. Rate at which future payments are bought for
discounted to present cash flows 181. Under which of the following conditions
174. What is the present value of a 40 years net would an appraiser appraise the value of
income of Php10,000 per year if payment are the property as of future date?
in advance and the net income is discounted a. If the current use is the highest and best
at a rate of 12 percent?(Factor=8.233030) use
a. P82,330 b. If the appraiser uses all three approaches
b. P82,438 to value
c. P92,210.00 c. If the market is stable and there is no
d. P92,330.00 inflation
175. When a property’s vacancy and bad debts d. If the value is appropriately defined for
is building from the property’s gross a future date of the value
(potential) income which of the following 182. What type of analysis identifies land uses
incomes is derived? that are legally permissible, physically
a. Effective gross income possible and financially feasible?
b. Net operating income a. Sensitivity
c. Taxable income b. Highest and best use
d. Cash flow income c. Feasibility
176. The basic equation in the income approach d. Supply and demand
to value is: 183. Included in the definition of highest best use
a. Rate divided by income equal value are certain tests or criteria that must be met.
b. Income divided by rate equals value Which of the following condition is NOT a
c. Rate times income equals value certain the highest and best use of land?
d. Rate plus income equals value a. Physical possible
177. One of the standard techniques by b. Legally permissible
appraisers when analyzing the income of c. Financially feasible
property is to divided the income being d. Supply and demand
generated between the land and the 184. When two or more individual parcels are
improvements and then to capitalize the legally encumbered by one mortgage and
residential income to the improvements into one of the parcels is to be freed from the
a estimate. Such a techniques is referred to encumbrance, the instrument used is a (n):
as the: a. Partial release of mortgage
a. Land residential technique b. Satisfied agreement
b. Building residential technique c. Sub assignment of mortgage
c. Property residential technique d. Estopped certificate
d. Plottage residential technique 185. Which of the following statement is NOT
178. The income approach to value: necessarily correct about a local zoning
a. Is based on the principle of anticipation ordinaries?
b. Translated the ability of property to a. Zoning can establish height restriction on
generate income into an indication of building
value b. Zoning is often used to separate
c. Requires an estimate of net operating income incomparable land uses
income of property c. Zoning is often used separate
d. All of the above are correct incompatible land uses
179. The lump sum that an investor at the d. Zoning establishes setback requirements
termination an investment is referred to as for improvements on land
the: 186. A mortgage secured by a legal claim
a. Remainder against two or more separate properties is
b. Reversion referred to as a:
c. Lump sum a. Wraparound mortgage
d. Gain b. Participation mortgage
c. Blanket mortgage
180. What is the distinction between the terms d. Ground lease mortgage
market price and market value? 187. The property tax due on real estate
a. Market price is synonymous with calculated by what method?
replacement cost, while market value is a. A condominium the tax rate by the
the same as assessed value assessed value
b. Multiplying the tax rate by the
assessed value
c. Dividing the tax rate by the most probable property is P480,000 the property’s annual
sales price gross income multiplier is
d. Multiplying the rate by the most probable a. 7
sales price b. 9 (480K)/(750×6×12)
188. Which of the following is deducted from c. 54
potential gross income to calculate effective d. 10
when using the income approach? 197. An appraiser calculates a separate value for
a. Legal expenses the land when using the
b. Repairs a. Sales comparison approach
c. Loan payments b. Income approach
d. Vacancy loss c. Cost approach
189. Estimating the value of property requires a d. Gross rent multiplier approach
systematic set of procedures. The first in the 198. If an appraiser uses more than one appraisal
appraisal process is typical to method and assign deferent weights to
a. Develop an appraisal plan results of each, she is using
b. Collect general data on the area a. Substitution
c. Define the purpose of the appraisal b. Contribution
d. Estimate the value of the land c. Replacement
190. What is the value of a property that produces d. Reconciliation
gross income of P94,000 and the GIM is 8.5? 199. An apartment building has a capitalization
a. P66,583 rate of 6 percent. If the expenses on the
b. P110,588 property increase by P6,000 while the rent
c. P132,706 remain the same, the property value will
d. P799,000 (94K×8.5) a. Remain unchanged
191. An appraiser would use the cost approach b. Increase by P6,000
as the primary appraisal method for a c. Decrease by P36,000
a. Parking garage d. Decrease by P100,000 (6K/6%)
b. Condominium
c. Shopping mall 200. It is a legal principle that if at the end of the
d. Public school lease period the lessee continuous
192. An investor purchased a property for occupancy with the acquiescence of the
P450,000. If the property has annual net lessor and without notice to vacate, it is
income of P36,000, the capitalization rate on understood that there is an implied new
the investment is lease.
a. 6.6 percent a. Pactum de non aliendo
b. 8 percent 36K/450K b. Pacto de retro
c. 9 percent c. Pactum Commisorium
d. 12.5 percent d. Tacita Reconducta
193. If appraising a newly single-family house, 201. An authority given by the developer to a
an appraiser would be most interested in the broker to look for a supplier of backfilling
a. Cost constructing the house materials who shall be with developed lot is:
b. Capitalization rate of the house a. Procurement agency
c. Location of the house b. General brokerage
d. Gross rent multiplier c. Exchange agency
194. To calculate the monthly gross rent multiplier d. Sales agency
of a property
a. Multiply the monthly gross income by 12 202. Per BIR 28-98, the ground floor of a
b. Divide the purchase price by the gross condominium project shall be commercial
monthly income and additional rate shall be added to an
c. Divide the capitalization rate by the established residential zonal value
monthly gross income a. 10%
d. Divide the annual gross income by the b. 20%
purchase price c. 25%
195. Using the cost approach an appraiser d. 15%
determines that the value of a property is 203. The rate of real estate tax in municipalities
P230,000. If the appraiser estimated the cost within Metro Manila is not more than:
of replacing the structures on the property at a. One-half percent assessed value
P160,000 and the value at P90,000, what b. Two and a half percent of assessed value
was the amount of accrued estimated by the c. One percent of assessed value
appraiser for the property? d. Two percent of assessed value
a. P10,000 204. The payment of estate tax, an allowed
b. P20,000 (160K+90K-230K deduction to the gross estate of a decedent
c. P60,000 is funeral expenses which is
d. P90,000 a. 5% of gross estate or P200,000.00
196. An apartment building has six units that rent whichever is lower
for P750 a month. If the purchase price of the b. 5% of gross estate or P200,000.00
whichever is higher
c. 10% of gross estate or P200,000.000 c. Fixed Assets
whichever is lower d. None of the above
d. 10% of gross estate or P200,000.00 214. Several houses valued at P1,000,000.00 and
whichever is higher P2,000,000.00 were built an area where an
a. existing house valued at P300,00000 is
205. The capital gains tax due on the sale of located. As a result, the value of the latter
P2,000,000.00 property with P500,000.00 increased. The real estate principle of value
initial payment is: that applies to this situation is called the
a. P100,000.00 principle of
b. P120,000.00 a. Substitution
c. P20,000.00 b. Improvement
d. P30,000.00 (500K×6%) c. Progression
206. The best evidence fee simple ownership is a d. Regression
Torrens Title because it is indefeasible and : 215. Capital Gains Tax on the sale of real
a. Imprescriptible classified as capital assets is a:
b. Binding against the whole world a. Creditable tax on the sale
c. Has priority against a tax declaration b. Deductible item from income tax
d. All of the above c. Final withholding tax
207. Under R.A. 8791, the maximum redemption d. Expanded withholding tax
period after extrajudicial foreclosure of a 216. The real estate broker is usually authorized
mortgage executed by a corporation in favor to do all of the following except:
of the bank is: a. Advertise the listing
a. 3 months b. Cooperative with brokers
b. 6 months c. Place for sale sign on the property
c. 12 months d. Bind the principal in a contract
d. none of the above 217. When a property is sold to 2 or more buyer’s
208. A clause used in leases and mortgages that the property goes to
cancel specified right upon the occurrence of a. Buyer in good faith and who first
condition such as cancellation of mortgage registered with Register of Deeds
upon repayment of mortgage loan: b. Buyer who pays the highest price
a. Acceleration Clause c. Buyer who was first in possession
b. Defeasance Clause d. None of the above
c. Automatic Redemption Clause 218. The position of trust assumed by the broker
d. Hold over Clause as an agent for the principal is described as:
209. In sale with assumption of mortgage, the a. Trusteeship
basis of the documentary stamp on the sale b. Confidential
is c. Fiduciary relationship
a. The down payment d. Code of conduct
b. The contract price 219. If the property is an ordinary assets, what is
c. Selling price the applicable tax?
d. None of the above a. Capital Gains Tax
b. CWT
210. When the loan is fully amortized by equal c. Percentage tax
monthly payment the amount applied to the d. Estate tax
principal:
a. Decreases while interest payment 220. The type of loan wherein the lender has
increases some or complete control over the project
b. Increases while interest decreases and the income for a certain period, part or
c. Increase by a constant amount all which is assigned to him to amortize the
d. None of the above project, is:
211. To avail of exemption from capital gains in a. Straight Loan
the sale of a family home, the seller is b. Flat Loan
required, among others, to notify the BIR c. Turn-key loan
through a prescribed form his intention to
avail of the exemption. The notice must be 221. The Seller realized a 30% gross profit over
filed within: his cost. If the property is sold at
a. 15 days from the date of sale P1,950,000.00, the cost is:
b. 30 days from the date of sale a. P1,365,000.00
c. 60 days from the date of sale b. P1,350,000.00
d. None of the above c. P1,650,000.00
212. d. P1,500,000.00
213. On bank’s acquired assets which part of its
real estate inventories at the close at the 222. The documentary stamp on lease of real
close of its accounting period shall be estate is P3.00 for the first P2,000.00 or
classified as: fraction thereof and additional:
a. Ordinary Assets a. P0.50 for every P1,000.00 in excess for
b. Capital Assets first P2,000.00
b. P1.00 for every P1,000.00 in excess for 231. The estate Tax Return shall be filed and paid
first P2,000.00 with the BIR within:
c. P1.50 for every P1,000.00 in excess for a. 60 days from death of decedent
first P2,000.00 b. 90 days from death of decedent
d. P2.00 for every P1,000.00 in excess for c. 120 days from death of decedent
first P2,000.00 d. 180 days from death of decedent
223. The selling price if house and lot is
P800,000.00. if its appraised value of a.
P720,000.00 and loan to collateral ratio is 232. When to file Estate Tax return upon
80% what is it loan value? decedent death
a. P640,000.00 a. Within 3 months
b. P576,000.00 b. Within 4 months
c. P720,000.00 c. With 5 months
d. P648,000.00 d. Within 6 months
224. The capital gains tax on the sale of e. Within a year
P2,000,000.00 property with P600,000.00 233. When to pay Estate Tax if the case is settled
initial payment is: judicially
a. P100,000.00 a. Not exceeding2 years
b. P120,000.00 b. Not exceeding 3 years
c. P30,000.00 c. Not exceeding 4 years
d. P36,000.00 d. Not exceeding 10 years
225. What is the cost of the fence with total length e. Not exceeding 5 years
of 75 meters, with height above the ground of 234. A residential parcel of land located outside
2 meters and ½ meter below, if cost square metro manila has a Market value of
is P1,500.00? 500,000.00. how much is the basic yearly
a. P225,000.00 real property tax?
b. P281,250.00 a. 5,000.00
c. P140,625.00 b. 1,500.00
d. P112,500.00 c. 1,000.00 (500K×20%)×1%
226. Using the 4-3-2-1 rule (depth rule) if a 5- d. 2,000.00
hectare belonging to different owners was 235. An industrial parcel of land located outside
sold for P10,000,000.00 what is the sum metro manila has a Market value of
share of lot owners owning the first quarter 5,000,000.00. How much is the basic yearly
abutting the road? property tax and special education fund Tax?
a. P2,500,000.00 a. 75,000.00
b. P4,000,000.00 b. 50,00.00
c. P5,000.000.00 c. 60,000.00
d. P6,000,000.00 d. 100,000.00
236. The Net Taxable estate of the decedent is
227. When a done of a parcel of land is a 15,000.00 How much is the estate Tax?
stranger, the donor’s tax rate is: a. 2,215,000.00
a. 20% b. 3,500,000.00
b. 6% c. 1,750,000.00
c. 30% d. 2,650,000.00
d. 25% 237. Mr. Reyes the Donee donated worth
228. The collateral value of a house and lot 400,000.00 of car to his brother. How much
package is determined by applying the: is the donor tax?
a. Economic Value a. 12,000.00
b. Assessed Value b. 8,500.00
c. Appraised Value c. 9,750.00
d. Loan to Value Ratio d. 10,000.00
238. Ms. Beautiful donated 1,500,000.00 worth of
229. The use of borrowed funds to increase Rolex watch to Mr. Pogi who is a stranger.
purchasing power is ideally to increase the How much is the donor’s tax rate of Ms.
profitability of an investment is: Beautiful?
a. Limited Liability a. 25%
b. Debt coverage b. 35%
c. Leverage c. 15%
d. Interim financing d. 30%
230. The amount of family home equivalent to fair 239. A machine classified as Residential worth
market value considered as allowable 250,000.00. How much is the Assessed
deduction from the estate of a decedent: Value?
a. P500,000.00 a. 225,000.00
b. P1,000,000.00 b. 125, 000.00
c. P2,000,000.00 c. 200,000.00
d. P750,000.00 d. 100,000.00
240. A machine classified as Agricultural worth as
Agricultural worth 250,000.00. How much is
the Assessed Value?
a. 225,000.00
b. 125,000.00
c. 200,000.00
d. 100,000.00
REAL ESTATE LAWS TAXATION c. Ordinary asset
1. Land covered by the Agrarian Reform Code 12. The highest price in terms of money which a
except. property can command if exposed for sale in the
a. Old Settlements open market.
b. Tenanted Areas a. Fair Market Value
c. New Areas b. Market Value
c. Best Value
2. The slow pace of agrarian reform
implementation is due to. 13. Percentage of fair market value at which the
a. Social will assessed value is set.
b. Political will a. Base level
c. Economic will b. Percent level
c. Assessed level
3. Comprehensive Agrarian Reform Law was
signed. 14. The fair market value of real property
a. July 21,1990 multiplied by assessment level. It is synonymous
b. June 10, 1988 to taxable value.
c. August 8,1988 a. Assessment
b. Assessed Value
4. Philippine state policy that ensures and c. Tax Assessment
promotes welfare of landless farmers and farm
workers. 15. Percentage of assessed value at which the
a. Voluntary Sell realty tax is arrived at.
b. Homestead a. Tax Rate
c. CARP b. Assess rate
c. Value rate
5. The lead implementing agency of CARP
a. Landbank 16. The use to which the property is principally
b. DAR or predominantly devoted.
c. DILG a. Actual use
b. Principal use
6. Green color in the DAR logo stands for. c. Primary use
a. Agriculture 17. This is a kind of tax levied by the local
b. Life and Vitality government on properties and should be paid by
c. Fertility and Productivity property owners.
a. Value Added Tax
7. Refer to natural person whose primary b. Income Tax
livelihood is the cultivation of land. c. Real Property Tax
a. Farmer d. Donor’s Tax
b. Gardener
c. Laborer 18. Special education fund tax
a. 1%
8. Women who are engaged directly or indirectly b. 2%
in farming and/or fishing as their source of c. 3%
livelihood, whether paid or unpaid, regular or
seasonal. 19. Discount if payment is made in advance.
a. Urban women a. 20%
b. Rural women b. 30%
c. Laborer women c. 35%
9. Award limit to farmer under PD 27 if the land 19. Most superior lien on real property.
is not irrigated. a. Mechanic lien
a. 5 hectare b. Mortgage lien
b. 3 hectare c. Tax lien
c. 4 hectare
21. Delinquent taxpayer whose real property
10. Farmer's amortization under PD 6657 for sold on public auction can redeem property after
payment of land. sale.
a. 30 years a. Within 1 year
b. 25 years b. Within 3 months
c. 15 years c. Within 6 months
11. Real property used in trade or business is 22. Interest on delinquent real property tax per
classified as. month.
a. Business asset a. 2%
b. Capital asset b. 3%
c. 4% 33. Provided mechanism for the implementation
of the Comprehensive Agrarian Reform Program
23. Interest on unpaid real property tax shall in (CARP).
no case exceed. a. EO 21
a. 36 months b. RA 9700
b. 12 months c. EO 229
c. 24 months 34. The responsibility to determine land
valuation and compensation for all lands
24. Asset not part of inventories for sale or used covered by CARP.
in trade such as the residential lot. a. DAR
a. Ordinary Asset b. Appraiser
b. Capital Asset c. Land Bank
c. Personal asset
35. Identifies and screens potential
25. Months required to build new house to avail beneficiaries and validates their qualifications.
exemption from capital gain tax a. DENR
a. 18 months b. DAR
b. 24 months c. Barangay Official
c. 36 months
34. Lead agencies in the implementation of carp,
26. Gross selling price of residential lot subject except
to vat. a. DENR
a. Exceeding 1,919,500.00 b. DAR
b. 1,900,000.00 c. Landbank
c. 3,000,000.00
37. Shall coordinate and monitor the
27. Gross selling price of of other residential implementation of the CARP in the province.
dwelling subject to vat. a. Provincial Agrarian Reform Coordinating
a. Exceeding 3,199,200.00 Committee (PARCCOM)
b. 1,919,000.00 b. CARP Monitoring Committee
c. 3,000,000.00 c. Provincial CARP Monitoring
28. Under TRAIN Law, Lease of residential 38. Exemption on CGT sale of principal
units with a monthly rental per unit subject in residence can be availed only once every.
order to be exempted from vat. a. 10 year
a. Below 10,000 b. 5 years
b. Below 10,800 c. 3 years
c. Below 12,800
d. Below 15,000 39. Percentage of payment for an installment
sale to pay creditable withholding tax.
29. CARPER signed into law a. 2%
a. August 5, 2005 b. 25% of selling price
b. August 7, 2009 c. 30%
c. July 21,19888
40. Tax rate for the cooperative registered in
30. Letter informing a landowner that his/her CDA.
land is covered by CARP. a. 0%
a. Notice of Coverage b. 3%
b. Notice of CARP c. 5%
c. Notice Landbank
31. Authorized to divide the Philippines into 41. Real property tax share of the barangay.
different zones or areas and shall, upon a. 25%
consultation with competent appraisers both b. 30%
from the private and public sectors, determine c. 40%
the fair market value of real properties. 42. Real property tax share of the municipality.
a. Commissioner a. 40%
b. DILG b. 50%
c. Mayor c. 60%
32. If fair market valued prepared by assessor 43. In general the real property tax share of the
is higher than prepared by BIR, the one shall be barangay.
followed for taxation. a. 30%
a. BIR b. 35%
b. Assessor c. 40%
c. Court
44. Real property tax share of the barangay in b. 90 days after completion
the city. c. 120 days after completion
a. 30%
b. 40% 55. Donor tax when beneficiary is stranger.
c. 50% a. 40%
b. 25%
45. Real property tax share of the city. c. 30%
a. 60%
b. 70% 56. Engage in the business of leasing or renting
c. 40% real estate properties.
a. Real estate lessors
46. Seller shall pay to the provincial treasurer b. Developers
the real property tax from date of notarization. c. Manager
a. Within 90 days
b. Within 60 days 57.Engage in the business of developing real
c. Within 30 days estate properties into subdivision or similar units
on subdivided lots.
47. Seller shall pay to the provincial treasurer a. Manager
real property tax from date of execution of sale. b. Real estate developer
a. Within 60 days c. Corporation
b. Within 30 days
c. Within 90 days 58. Before commencing any business and
payment of taxes.
48. Right of the delinquent owner to redeem a. Register with the municipal
the property from the date of sale. b. Register with the barangay
a. Within 2 year c. Register business with BIR
b. Within 3 years
c. Within 1 years 58. Registration requirement in BIR for
individuals.
49. Allowable period for assessment of taxes a. By laws
prior to initial assessment of real property taxes. b. Articles of Incorporation
a. 3 years c. Birth certificate or ID
b. 5 years
c. 10 years 59. Registration requirement for general
partnership.
50. LGU Sanggunian may condone real property a. Owner ID
tax upon recommendation of local disaster b. Articles of partnership
committee due to reasons, except. c. Voters ID
a. General failure of crops
b. Abundance season 61. Application form for individual in registering
c. Calamity with BIR
a. BIR form 1903
51. The basic real property tax and other b. BIR form 1902
taxes can be collected from the date they c. BIR form 1901
become due and no collection shall be made
after that period. 62. Application form for partnership
a. Within 5 years a. BIR form 1903
b. Within 10 years b. BIR form 1904
c. Within 15 years c. BIR form 1905
52. The basic real property tax and other 63 Under Train Law, The VAT Exempt
taxes can be collected from the date they Threshold on sale or lease of goods or
become due and no collection shall be made PROPERTIES or the performance of services is
after that period if done fraudulently. increased from P1, 919,500 annual gross sales
a. Within 20 years and/or gross receipts to
b. Within 15 years a. P2,919,500
c. Within 10 years b. P3,000,000
c. P3,919,500
53. Shall file a sworn declaration of value of d. P4,000,000
the property once every three (3) years.
a. Tenant 64. Under the Train Law, Condominium dues
b. Owner such as association dues, membership fees,
c. Assessor and other assessments and charges collected
on a purely reimbursement basis by
54. Owner shall file a sworn declaration of the Homeowner’s association and condominium
true value of the property being improved. corporations established under RA 9904 are
a. 60 days after completion exempt from ________
a. Non-Vat or percentage tax a. Invoices
b. Withholding Tax b. Official receipts
c. Vat Tax c. Inspection paper
65. Rate of percentage taxes on gross sales or 76. Maximum optional standard deduction.
professional fees of Non-VAT registered a. 40%
persons b. 30%
a. 3% c. 20%
b. 4%
c. 5% 77. Tax rate for corporation and partnership
a. 25%
66. Form used to update information like b. 40%
address and etc. c. 35%
a. Form 1905
b. Form 1906 78. Expanded withholding tax rate if professional
c. For 1903 fees to juridical entities exceed 720,000.00
a. 15%
67. Penalties on failure to pay annual b. 20%
registration fee. c. 25%
a. 10% surcharges
b. 30% 79. Expanded withholding tax rate if professional
c. 25% fees to individuals below P3,000,000.00
a. 5%
68. Unlawful pursuit of business or omission. b. 10%
a. Fine not less than 5,000 but not more c. 15%
than 20,000
b. Fine not more than 5,000 but not more than 80. Under Train Law, Documentary Stamp Tax
20,000 Percentage for Deeds of Sale, Conveyances
c. Fine not less than 10,000 but not more than and Donation of Real Property is now
20,000 a. 1.5%
b. 2%
69. Imprisonment on unlawful pursuit of c. 3%
business or omission.
a. 6 years but not more than 20 years 81. Professional if there is no payment to be
b. 5 years but not more than 20 years made.
c. 6 years but not more than 15 years a. Shall still file tax returns
b. No need to file
70. Compromise payment for failure to register. c. File in advance
a. 10,000.00
b. 20,000.00 82. Due date for percentage taxes.
c. 5,000.00 a. 20th day after end of month
b. 15th day after end of month
71. Compromise payment for failure to pay c. 10th day after end of month
annual registration.
a. 1,000.00 83. Fiscal due date for income tax of corporation
b. 2,000.00 or partnership.
c. 3,000.00 a. 20th day of the 4th month of the succeeding
year
72. Compromise payment for failure to display b. 15th day of the 4th month of the
certificate of registration. succeeding year
a. 1,000.00 c. 15th day of the 3th month of the succeeding
b. 2,000.00 year
c. 3,000.00
84. Fine on refusal to issue official receipts or
73. Compromise payment for failure to display invoices upon conviction.
poster "ask for receipt" a. 1,000.00 but not more than 20,000.00
a. 1,000.00 b. 1,000.00 but not more than 30,000.00
b. 2,000.00 c. 1,000.00 but not more than 50,000.00
c. 3,000.00
85. Compromise payment for failure to issue
74. Invoicing requirement for sale of goods. receipt for 1st offence.
a. Inspection paper a. 10,000.00
b. Receipt b. 20,000.00
c. Sales invoice c. 30,000.00
75. Invoicing requirement for sale of services or 86. Compromise payment for 2nd offense on
professional fees. the use of unregistered receipts
a. 10,000.00 98. Creditable withholding tax for habitually
b. 20,000.00 engage in business and selling price is over
c. 30,000.00 500,000. to 2 million.
a. 1.5%
87. Compromise payment for 1st offense on b. 5%
refusal :o issue receipt. c. 3%
a. 10,000.00
b. 30,000.00 99. Creditable withholding tax for habitually
c. 25,000.00 engage in business and selling price is below
500,000.00.
88. Years to preserve books after close of a. 1.5%
taxable year. b. 3%
a. 6 years c. 5%
b. 5 years
c. 3 years
100. Creditable withholding tax for not habitually
89. Books shall be audited and examined by engage in business.
independent CPA if gross receipts exceed. a. 6%
a. 150,000.00 b. 5%
b. 120,000.00 c. 4%
c. 160,000.00
101. Registration fee payment form.
90. Monthly remittance of income taxes a. BIR form 0605
withheld on compensation. b. BIR form 0606
a. 10th of the following month c. BIR form 0607
b. 20th of the following month
c. 5th of the following month 102. BIR form Certificate of registration.
91.Monthly remittance of income taxes withheld a. BIR form 0203
on compensation for November. b. BIR form 3203
a. 15th of December c. BIR form 2303
b. 15th of January
c. 15th of November 103. BIR form to apply for authority to print
receipts
92. Documentary stamp tax. a. BIR form 0606
a. 5th day of the following month b. BIR form 1906
b. 15th day of the following month c. BIR form 0601
c. 25th day of the following month
104. Exempt from withholding tax
93. Capital gain tax. compensation.
a. Within 10 days after execution a. Minimum wage earners
b. Within 20 days after execution b. Maximum wage earners
c. Within 30 days after execution c. Regular wage earners
94. Estate tax 105. Detect non filing of tax return and non
a. Within 120 days from death payment of taxes
b. Within 360 days from death a. BIR Integrated Tax System
c. Within 100 days from death b. Tax Integrated System
c. BIR computer system
95. Donors tax
a. Within 60 days from execution 106. Effectivity threshold amount of sales of
b. Within 30 days from execution residential lot, house for sale or lease of
c. Within 50 days from execution property.
a. RR 3-2012
96. Surcharges if it is done willfully and b. RR 4-2013
fraudulently. c. RR 5-2011
a. 50%
b. 20% 107. Created to oversee and monitor the
c. 10% implementation of this RA 9700.
a. Provincial Oversight Committee
97. Creditable withholding tax for habitually b. CARP Oversight Committee
engages in business and selling price is over c.CongressionalOversight Committee
2million.
a. 5% 108. Person who knowingly or willfully violates
b. 3% the provisions of R 9700 shall be punished by
c. 1% imprisonment.
a. One month to 3 years
b. Two month to 3 years
c. Three month to 3 years 117. In computing for the Property’s taxable
109. The forcible entry or illegal detainer by value or the assessed value, you must first
persons who are not qualified beneficiaries multiply the market value to the assessment
under RA 9700 to avail themselves of the rights level. Assessment level from Section 218 of
and benefits of the Agrarian Reform Program RA7160 in Metro Manila ON LANDS should be:
shall be penalized of imprisonment.
a. 4 to 6 years Statement 1. Assessment levels of Residential
b. 3 to 6 years should not exceed 20%.
c. 1 to 6 years Statement 2. Assessment levels of Agricultural
should not exceed 40%.
110. Dwelling place where a family resides is
classified as. a. Statement 1 is True and Statement 2 is False
a. Special Asset b. Statement 1 is False and Statement 2 is True
b. Ordinary Asset c. Both Statements are True
c. Capital Asset d. Both Statements are False
111 Who should pay for Real Property Tax? 118. In computing for the Property’s taxable
a. People who owns or whose names are on value or the assessed value, you must first
titles and certificate of ownership, whether multiply the market value to the assessment
the property is for residential or commercial level. Assessment level from Section 218 of
use. RA7160 in Metro Manila ON LANDS should be:
b. People who owns or whose names are on
agreements and SEC certificate, whether the Statement 1. Assessment levels of Commercial,
property is for residential or commercial use. Industrial, Mineral should not exceed 50%.
c. People who owns or whose names are on Statement 2. Assessment levels of Timberland
Deed of Absolute Sale and Statement of should not exceed 20%.
Account, whether the property is for residential
or commercial use. a. Statement 1 is True and Statement 2 is False
b. Statement 1 is False and Statement 2 is True
112. The Metro Manila rate for Real Property tax c. Both Statements are True
is. d. Both Statements are False
a. Not exceeding 1%
b. Not exceeding 2%
c. Not exceeding 3% 119. In computing for the Property’s taxable
value or the assessed value, you must first
113. Amount of real property tax in the province. multiply the market value to the assessment
a. Not exceeding 1% level. Assessment level from Section 218 of
b. Not exceeding 2% RA7160 in Metro Manila ON BUILDINGS and
c. Not exceeding 3% Other Structures should be:
114. Real property tax is based on: Statement 1. Assessment levels of Residential
a. Zonal value of the property with a Fair Market Value of
b. Assessed value of the property
c. Market value of the property Fair Value Not Over Assessment
d. Appraised Value of the property Over Levels
P175,000 0%
115. Aside from basic real property tax, local
governments also charge additional tax for P175,000 P300,000 10%
Special Education Fund. A _______ is levied on P300,000 P500,000 20%
the assessed value of the real property and P500,000 P750,000 25%
proceeds of which go to the budget of local P750,000 P1,000,000 30%
schools. P1,000,000 P2,000,000 35%
a. 2% P2,000,000 P5,000,000 40%
b. 1% P5,000,000 P10,000,00 50%
c. 3% 0
d. 5% P10,000,000 60%
a. Statement 1 is True and Statement 2 is False 123. In 1992, Alden Ricky bought a residential
b. Statement 1 is False and Statement 2 is True house and lot in Magallanes Village, Makati City
c. Both Statements are True for P50,000,000 with a market value of
d. Both Statements are False 5,000,000 for land and 3,000,000 for the building
based on tax declaration, how much do you
*This may not the actual way on how they ask think is his real property tax assessment?
question but for the purpose of review, we better a. P50,000
to put it this way for computations of RPT. b. P44,000
c. P52,000
d. P53,000
120. In computing for the Property’s taxable
value or the assessed value, you must first
multiply the market value to the assessment 124. Vice Gondol bought a condominium
level. Assessment level from Section 218 of property in Mall of Asia, Pasay City for
RA7160 in Metro Manila ON MACHINERIES P5,000,000 with a market value of 900,000
should be: based on his tax declaration. On 2019 the Pasay
LGU implemented a new ordinance adjusting
Statement 1. Assessment levels of Residential the assessment level as follows:
should not exceed 50%
Fair Not Over RA 7160 Pasay
Statement 2. Assessment levels of Agricultural Value Assessme LGU 2019
should not exceed 40% Over nt Levels Assessme
nt Level
a. Statement 1 is True and Statement 2 is False P750,000 P1,000,0 30% 60%
b. Statement 1 is False and Statement 2 is True 00
c. Both Statements are True P1,000,0 P2,000,0 35% 65%
d. Both Statements are False 00 00
P2,000,0 P5,000,0 40% 70%
121. In computing for the Property’s taxable 00 00
value or the assessed value, you must first
multiply the market value to the assessment
What is the assessment level of Mr. Vice
level. Assessment level from Section 218 of
Gondol?
RA7160 in Metro Manila ON MACHINERIES
a. 30%
should be:
b. 60%
c. 35%
Statement 1. Assessment levels of Commercial
d. 40%
and Industrial should not exceed 80%
2. Train Law will take effect on. 8. Who among this individual is not
a. January 1, 2018 required to use the graduated income tax
b.January 1, 2019 rates.
c. January 1, 2017 a. Employees
b. Self-employed individuals, including
3. Declaration of Policy does not includes professionals, whose gross sales or
a. To enhance the progressivity of the receipts and non-operating income
tax system through the rationalization exceed P3,000,000
of the Philippine internal revenue tax c. Mixed income earners whose gross
system, thereby promoting sales or gross receipts and non-
sustainable and inclusive economic operating income exceed
growth. P3,000,000.00
b. To provide, as much as possible d. Individyals whose gross sales or
equitable relief to a greater number of receipsm regardless of amount are
taxpayers and their families in order to subject to percentage tax
improve levels of disposable income e. Partners in general professional
and increase economic activity. partnerships
c. To ensure that the government is able f. Individuals enjoying tax excemption
to provide for the needs of those g. None of the above
under its jurisdiction and care through
the provision for better infrastructure, 9. How much is the maximum non-taxable
health, jobs, and social protection for 13th month pay and other benefits?
the people. a. P82,000
d. None of the above. b. P90,000
c. P100,000
4. In the TRAIN LAW, 0% tax should be for
individuals with taxable income not 10. The removal of tax exemptions of PCSO
over______. and LOTTO Winnings exceeding P10,000
a. P10,000 benefits is
a. P10,000 or less = tax excempt; Employees, Self-Employed and
More then P10,000 will be subject Corporations for income tax return will be
to final tax 20%. a. 4 pages
b. P100,00 or less = tax exempt; More b. 8 pages
then P100,000 will be subject to final c. 12 pages
tax 20%
c. Subject to final tax of 20% 19. Under TRAIN LAW, Creditable Witholding
Tax will have same deadline but
11. Under the TRAIN LAW, how much is the ____________ is deleted.
Basic Personal Exemption? a. Requirements
a. P50,000 b. Statements
b. P100,000 c. Proviso
c. None
12. Under the TRAIN LAW, how much is the 20. What form to use for Creditable
additional exemption? Withholding Tax for the TRAIN LAW?
a. None a. 1601-E
b. P25,000 for each qualified dependent b. 0619E for the 1st 2 months of every
maximum of 4 qualified dependents quarter,, 1601EQ (with Alphalist
c. P150,000 Attachments) for the quarter
13. Under the TRAIN LAW, how much is the c. 2303
ecemption for Estates and Trust?
a. P20,000 21. Changes in Threshold Amounts for Value
b. None Added Tax for VAT Threshold Amount
c. P30,000 a. P1,919,500 to P3,000,000
b. P1,919,500 to P2,500,00
14. How much is the increase in tax rates for c. P1,919,500 to P3,500,000
Fringe Benefits received by Managerial or
Supervisory Employees? 22. Under the Train LAW, VAT exemption for
a. From 32% to 35% Sale of Residential Lot will be
b. From 32% to 33% __________________
c. From 32% to 36% a. P1,500,000
b. P1,919,500
15. Train Law change the interest income c. P3,199,200
under the expanded foreign currency
deposit system to: 23. Under the Train LAW, VAT exemption for
a. From 7.5% to 15% Sale of House and Lot and other
b. From 7.5% to 10% Residential Dwellings like condominiums
c. From 7.5% to 20% will be __________________
a. P3,199,200
16. Under the TRAIN LAW, how much is the b. P2,500,000
increase in De Minimis Benefits c. P3,000,000
a. Medical Cash Allowance to
Dependent of Employees from P750 24. Under the Train LAW, VAT exemption for
per sem to P1500 per sem Lease of Residential Unit will be
b. Rice Subsidy from P1500 to P2000 __________________
c. Uniform and Clothing Allowance from a. P12,800 per month
P5000 per annum to P6000 per b. P15,000 per month
annum c. P20,000 per month
d. All of the Above
25. ESTATE Tax Rate under the TRAIN LAW
17. Under the TRAIN LAW, Income tax will be ___________________________.
deadlines for individuals for 1st quarter will a. 6% of the Net Estate (Gross Estate
be less Allowable Deductions)
a. April 15 b. 8% of the Net Estate (Gross Estate
b. May 15 less Allowable Deductions)
c. August 15 c. Same as bebfore
Ans. A
18. Under the TRAIN LAW, maximum
26. How much is the allowed deductions from
number of pages for BIR FORM for
gross estate under TRAIN LAW.
a. 5% of Gross Estate less than 6 years and 1 day nor more than 21
b. P200,000 years referred as
c. None a. Penalty
b. Penal Provision
c. Imprisonment
27. Under TRAIN LAW, Standard deduction
for Gross Estate is 7. What is the maximum loan term
______________________. a. 20 years
a. P1,000,000 b. 30 years
b. P5,000,000 c. 50 years
c. P2,000,000
8. The shares of stock of the REIT must be
d. registered with the Commission and listed in
accordance with the rules of the Exchange.
28. Under TRAIN LAW, Filing and Payment a. Nationality Requirement
Deadline for Estate Tax b. Investment in the REIT
a. Wihtin 6 months from death b. Registration and Listing
b. Within 1 Year from Death
c. Within 2 years from Death 9. Government credit agencies that provide
loans directly for farmers and home mortgagors.
a.Government-sponsored enterprises
29. DONOR’s Tax Rate under the TRAIN b. Finance companies
LAWwillbe c. Securities firm
___________________________.
a. 6% of the total gifts in excess of 10. The change in revenue that is generated by
P250,000 made during calendar an additional unit of sales .
a. Marginal revenue
year.
b. Total revenue
b. 8% of the total gifts in excess of c. Average revenue
P250,000 made during calendar year.
c. Same as before 11. If demand rises ,the demand curve shifts to
the .
a. Center
REAL ESTATE FINANCE AND ECONOMICS b. Left
c. Right
1. REIT distribute at least ________ of its
distributable income as dividend. 12. The movement of prices will tend to go up
a. 80% because of the higher demand.
b. 90% a. Public Market
c. 50% b. Sellers market
c. Buyers Market
2. To be deducted from the loan proceeds of 13. Real estate Economics tries to describe,
pag-ibig loan explain, and predict patterns of
a. 4,000.00 a. prices, supply, and demand
b. 3,000.00 b. prices, income , and demand
c. 2,000.00 c. prices, consumer, and demand
3. What is the interest rate if the pag-ibig loan 14. Basically a result of the interplay of supply
amount is over P2M-P3.0M ? and demand of a certain product, such as real
a. 11.5% estate housing.
b. 12% a. Price
c. 10% b. Area
c. Construction
4. We mean the ultimate economic effect of a
tax on the real incomes of producers and 15. A key determinant of demand
consumers by a. Average Income
a. Incidence b. Special Influences
b. Choice c. Size of the market
c. Random
16. Important kinds of market structures are
5. Percentage change in quantity demanded a. Monopolistic competition and perfect
greater than percentage change in price. competiton
a. Inelastic demand b. Monopoly, oligopoly, monopolistic and
b. Elastic demand perfect competition .
c. Unit elastic demand c. oligopoly, monopolistic and perfect
competition
6. In REIT, A fine of not less than P200,000 nor
more than P5,000,000.00 or imprisonment of not
17. Take deposits and make loans; they are b. Investible Funds
what most people think of as bank. c. Investors fund
a. Pensions Funds
b. Insurance Company 28. Means a corporation that directly or
c. Depository Institutions indirectly, through one or more intermediaries, is
controlled by, or is under the common control of
18. Income payment to a REIT shall be subject another corporation, which thereby becomes its
to a lower creditable withholding tax of 1%. parent corporation.
a. Creditable Withholding Tax a. Affiliate
b. Income Taxation of REIT b. Subsidiary
c. Transfer of Real Property c. intermediary
19. Failure to pay 3 consecutive monthly 29. A very important formula for the computation
amortizations and/or membership contributions. involving real estate financing is:
a. Default MONTHLY AMORTIZATION [ M A ] = Principal
b. Redemption to be financed x Amortization Factor
c. Inflation a. False
b. True
20. Must have at least 2 years repayment history c. Both A and B
with current bank/institution
a. Insurance 30. Refinancing must have at least 2 years
b. Capitalization repayment history with current bank/institution
c. Refinancing a. True
b. False ,at least 3 yrs
21. Refinancing must have how many years c. False , at least 4 yrs
for repayment history with current
bank/institution 31. When demand is price inelastic ,a price
a. at least half year decrease and makes the total revenue
b. at least 2 years a. Reduces
c. at least 4 years b. Unchanged
c. Increases
22. The percentage change in quantity supplied
divided by the percentage change in price . 32. The practice of charging different prices for
a. Price elasticity of supply the same service to different customers
b. Price elasticity a. Price Discrimination
c. Price elasticity of demand b. Price
c. Price Elasticity
23. A tax is shifted forward to consumers if
the demand is inelastic relative to supply 33. In pag-ibig, the six months interim insurance
a. The statement is correct and 2k processing fee is referred to as .
b. The statement is not true a. Deductions on final loan releases
c. Statement A & B is correct b. Deductions on the first loan release
c. Deductions on prospective loan releases
24. Refers to the flow of wages ^interest
payments dividends ,and other things of value 34. A financial institution that include brokers,
accruing during a period of time . investment banks, under writers and mutual fund
a. Status companies.
b. Salary a. Pension funds
c. Income b. Securities firms
c. Saving banks
24. Another element which affects the 35. Issue stocks and bonds to the corporate
movement of real estate customers, trade them, and advise costumers.
a. statement b and c a. Mutual fund companies
b. the availability financing, both for the b. Real estate
production side or the developers c. Brokers and investment banks
c. the demand side which is the buying market
36. The structure of the financial industry that
25. Involves generally the acquisition of property includes insurance companies, securities firms,
through loan financing sources and mutual fund companies and pension funds.
a. Real estate economics a. Financial Institutions
b. Real Estate Service Practice b. Depository Institutions
c. Real Estate Financing c. Nondepository institutions
27. Refer to funds of the REIT that can be 37. Which of the statement is not correct
placed in investment vehicles other than income a. Not all securities firms are very much in
generating real estate the business of producing information
a. Investment fund
b. Finance companies are in the lending a. 65
business. b. 70
c. Brokers also provide loans to the customers c. 75
49. Refers to a professional administrator of real
properties who is engaged by the REIT to
38. If supply falls ,the supply curve shifts to provide property management services and
the left, and . lease management services.
a. Price falls and quantity goes down a. Property owner
b. Price rises and quantity goes down b. Property Manager
c. Price rises and quantity goes down c. Property administrator
39. The price at which quantity demanded 50. Refinancing loan 5% of the loan amount
equals quantity supplied. retained to ensure cancellation of mortgage/s
a. Demand Curve prior to PAG-IBIG Fund is referred to
b. Market equilibrium a. Investment
c. Shifts in Supply b. Real Interest Rate
c. Retail Accounts
40. The application of economic techniques
to real estate markets. 51. Which of the statement is not true
a. Real estate economics a. Borrower will start the 3 construction if
b. Real Estate Financing the total cost is lower than the approval loan
c. Real Estate Service Practice b. Borrower will start the 3 construction if the
41. Simply means the effect of one aspect of total cost is higher than the approval loan
the economy with the other economic activities. c. Borrower to request inspection prior to every
a. Multiplier effect of Real estate release of loan proceeds
b. Binding effect 52. It is said that for every PI million invested in
c. Repulsion effect housing it is translated to P16.6 million of
economic housing activity in the country
42. The pag-ibig maximum loan amount. a. True
a. P3 Million b. Maybe
b. PI Million c. False
c. P6 Million
1. Pag-ibig loan charges and deductions
43. Pagibig Principal borrower's age shall not processing fee.
exceed . a. P2,000.00
a. 70 years old at date of loan maturity b. P3,000.00
b. 48 years old at date of loan maturity c. P4,000.00
c. 55 years old at date of loan maturity
44. Whether or not the country provides equal 54. Based on the Pag-ibig membership
health care for all its residents ,health care must Contribution if the loan entitlement over PI.7 M
be rationed because . to 1.8 M ,what will be the monthly contribution ?
a. Supply is available a. 700
b. Supply is limited b. 950
c. Public goods is needed c. 850
45. Takes large individual risks and spreads 55. Retail and Developer Accounts with
them so broadly that they become acceptable to Transferred Titles Under Borrower's Name
a large number of individuals (REM Accounts) referred as
a. Banks a. Effects of loan
b. Loans b. Effects of sales
c. Insurance c. Effects of default
46. In refinancing latest one year amortization 2. To be paid upon filing of pag-ibig Housing
must reflect default is true Loan Application, non-refundable
a. Yes a. 1,000.00
b. No ,must not reflect default b. 10,000.00
c. A & B is correct c. 2,000.00
46. Number of contribution inorder that a 57. Is the largest insurance program
borrower elible for pag-ibig loan. a. Health care
a. 24 b. Social
b. 12 c. Educational
c. 48
58. A REIT that owns land located in the
48. Not more than years old at the date of Philippines must comply with the foreign
loan application and must be insurable; ownership limitations imposed under the
provided further, that he is not more than Philippine law.
seventy (70) years old at loan maturity. a. Registration and Listing
b. Nationality Requirement a. One year prepayment insurances
c. Investment in the REIT b. Interim Mortgage Redemption Insurance
59. A REIT must have a minimum paid-up c. Retail Accounts
capital of P300,000,000.00.
a. Finance 69. Is a stock corporation established in
b. Profit accordance with the Corporation Code of the
c. Capitalization Philippines and the rules and regulations
promulgated by the Commission principally for
60. The spirit of unity, harmony, ramaradarip, the purpose of owning income-generating real
cooperation and professional relationship among estate assets.
the practitioners is essential, and shall be a. Nationality Requirement
promoted under . b. Investment in the REIT
a. The principle of solidarity c. Real Estate Investment Trust
b. Standards of the practice
c. Government authorities 70. Properties with "Rights" instead of "Title"
61. Net revenues, or the difference between as proof of ownership.
total sales and total costs. a. NOT ALLOWED for Pag-IBIG Housing
a. Profits Loan
b. Price b. Maybe ALLOWED for Pag-IBIG Housing
c. Demand Loan
c. ALLOWED for Pag-IBIG Housing Loan
62. In the case where there are more buyers
than sellers, then it is considered a seller's 71. Real Estate Investment Trust Act of 2009
market as there are fewer real properties (R.A. no. 9856)
available vis-a-vis a higher demand for it. In this a. An act providing the legal framework for
case, real estate investment trust and for other
a. the movement of supply will tend to go up purposes
because of the higher demand b. An act Providing areas and facilities
b. the movement of prices will tend to go c. An act for maintenance and insurance
down because of the higher demand. policies,including power to enforce the provision
c. the movement of prices will tend to go of declarations of restrictions
up because or' the higher demand 72. Use as an instrument to help finance and
63. The price of real estate has a tendency to develop infrastructure projects
go down in view of the excess in supply vs. the a. Capital Market
actual demand of the market, is normally b. Economic Market
referred to as c. Community
a. Wet Market
b. Suppliers Market 73. Pag-ibig monthly repayment shall not
c. Buyers Market exceed of the borrowers gross monthly
64. Penalty of the amount due for everyday income for loans not exceeding PI,250,000.
of delay of pag-ibig loan. a. 25%
a. 1/20 of 2% b. 30%
b. 1/20 of 1% c. 35%
c. 1/20 of 5%
74. Minimum total stock public ownership of
65. The primary asset of modern commercial shareholders in REIT
banks, accounting for nearly two thirds of a. 50,000 shares
assets. b. 1,000 shares
a. Securities c. 5,000 shares
b. Loans
c. Funds
75. If a corporation builds a factory, it will
66. Which statement is true employ construction workers and their suppliers
a. Maximum of three qualified pag ibig as well as those who work in the factory. The
members may be tacked into a single loan statement best explains .
b. Maximum of two qualified pag ibig a. an effect in Society
members may be tacked into a single loan b. an effect in Economics
c. Maximum of five qualified pag ibig c. an effect in Macroeconomics
members may be tacked into a single loan
67. Loans over P400 to P3M maybe subject to 76. Refers to the total quantity of goods and
repricing services that the nations businesses willingly
a. Every 3 years but not to exceed 2% from produce and sell in the given period.
the original rate a. Investment
b. Every 2 years but not to exceed 2% from b. Consumption
the original rate c. Aggregate Supply
c. Every 4 years but not to exceed 2% from
the original rate
68. To be deducted from the loan proceeds
77. Which occurs because a good becomes c. Decrease price and decrease quantity
relatively more expensive when its price rises? demand
a. Substitution effect
b. Market demand 86. Quantity supplied generally responds
c. Income effect positively to price ,so the supply curve is .
a. Downward-sloping
78. The earnings in the market economy are b. Upward-sloping
distributed to the owners of the economy7s c. No slope
factors of production in the form of: 87. Listed are the different depository institutions
a. Wages ,profit, rent, and interest except
b. National income corporate profits and rental a. Saving banks
income b. Commercial banks
c. National income salaries and labor income c. Insurance companies
99. The loan amount retained to ensure 109. It tries to describe, explain, and predict
cancellation of mortgage/s prior to PAG-IBIG patterns of prices, demand and supply
Fund. a. Real Estate economics
a. 3% b. Real Estate Market Economy
b. 2% c. Real Estate
c. 5%
110. The equilibrium price is also called .
100. Income payment to a REIT shall be subject a. Market -clearing price
to a lower creditable withholding tax of b. Equilibrium cost
a. 1% c. Increased supply
b. 0.5%
c. 25% ===========================
REAL ESTATE INVESTMENT TRUST
101. Loan charges and deduction Processing 111. It is an act known as Real Estate
Fee of pag-ibig Investment Act.
a. P3,000.00
b. PI,000.00 Republic Act No. 9856
c. P2,000.00
102. To carry out the purposes of this Act the 112. Refers to a lawyer, Accountant, Auditor,
Commission shall retain and use 50% of all fees financial, or business consultant, and other
paid to it, relative to the establishment of REITs persons rendering professional advisory
and the registration of their securities to annual services to the REIT.
budget.
a. Use of Registration Fees Advisor
b. Registration
c. Transfer of Real Property 113. The person engaged by the REIT to
perform certain functions.
103. Loan purpose is Refinancing of an existing
mortgage with home improvement
a. Yes Fund Manager
b. No
c. Maybe 114. Means instruments or investments that are
highly liquid and marketable and are considered
104. For something to have value, it must first good as cash that has passed the accreditation
have . process of the Fund manager.
a. Scarce
b. Utility Cash Equivalent Items
c. Demand
115. Refers to real property which is held for the
105. Even if a thing has utility, it will not have purpose of generating a regular stream of
value if it is overabundant. income like: rentals, toll fees, user's fees
a. Market
b. Demand Income Generating Real Estate
c. Scarcity
116. Funds of the REIT that can be placed in
investment vehicles other than income- 3. Comprehensive Agrarian Reform Law was
generating real estate. signed.
a. July 21,1990
Investible Funds b. June 10, 1988
c. August 8,1988
117. The owner of investor securities
5. Philippine state policy that ensures and
Investor promotes welfare of landless farmers and farm
workers.
118. Shares of stock issued by a REIT or a. Voluntary Sell
derivatives thereof. b. Homestead
c. CARP
Investor Securities
5. The lead implementing agency of CARP
119. Means the Articles of Incorporation and By- a. Landbank
laws of a REIT b. DAR
c. DILG
Constitutive Documents
6. Green color in the DAR logo stands for.
110. An Individual citizen of the Philippines who a. Agriculture
is working abroad including one who retained or b. Life and Vitality
re-acquired his/her Philippine citizenship under c. Fertility and Productivity
112. Refers to the net income as adjusted for 8. Women who are engaged directly or indirectly
unrealized gains and losses/expenses and in farming and/or fishing as their source of
Impairment losses and other items in livelihood, whether paid or unpaid, regular or
accordance with internationally accepted seasonal.
accounting standards. a. Urban women
b. Rural women
Distributable Income c. Laborer women
114. The minimum paid - up capital of 10. Farmer's amortization under PD 6657 for
corporation payment of land.
a. 30 years
300,000,000 ( 300M) b. 25 years
c. 15 years
115. Minimum Public Ownership in the REIT.
11. Real property used in trade or business is
1,000 public shareholders classified as.
a. Business asset
b. Capital asset
REAL ESTATE LAWS TAXATION c. Ordinary asset
1. Land covered by the Agrarian Reform Code 12. The highest price in terms of money which a
except. property can command if exposed for sale in the
a. Old Settlements open market.
b. Tenanted Areas a. Fair Market Value
c. New Areas b. Market Value
c. Best Value
2. The slow pace of agrarian reform
implementation is due to. 13. Percentage of fair market value at which the
a. Social will assessed value is set.
b. Political will a. Base level
c. Economic will b. Percent level
c. Assessed level
25. Months required to build new house to avail
14. The fair market value of real property exemption from capital gain tax
multiplied by assessment level. It is synonymous a. 18 months
to taxable value. b. 24 months
a. Assessment c. 36 months
b. Assessed Value
c. Tax Assessment 26. Gross selling price of residential lot subject
to vat.
15. Percentage of assessed value at which the a. Exceeding 1,919,500.00
realty tax is arrived at. b. 1,900,000.00
a. Tax Rate c. 3,000,000.00
b. Assess rate
c. Value rate 27. Gross selling price of of other residential
dwelling subject to vat.
16. The use to which the property is principally a. Exceeding 3,199,200.00
or predominantly devoted. b. 1,919,000.00
a. Actual use c. 3,000,000.00
b. Principal use
c. Primary use 28. Under TRAIN Law, Lease of residential
17. This is a kind of tax levied by the local units with a monthly rental per unit subject in
government on properties and should be paid by order to be exempted from vat.
property owners. a. Below 10,000
a. Value Added Tax b. Below 10,800
b. Income Tax c. Below 12,800
c. Real Property Tax d. Below 15,000
d. Donor’s Tax
29. CARPER signed into law
18. Special education fund tax a. August 5, 2005
a. 1% b. August 7, 2009
b. 2% c. July 21,19888
c. 3%
30. Letter informing a landowner that his/her
19. Discount if payment is made in advance. land is covered by CARP.
a. 20% a. Notice of Coverage
b. 30% b. Notice of CARP
c. 35% c. Notice Landbank
20. Most superior lien on real property. 31. Authorized to divide the Philippines into
a. Mechanic lien different zones or areas and shall, upon
b. Mortgage lien consultation with competent appraisers both
c. Tax lien from the private and public sectors, determine
the fair market value of real properties.
21. Delinquent taxpayer whose real property a. Commissioner
sold on public auction can redeem property after b. DILG
sale. c. Mayor
a. Within 1 year
b. Within 3 months 32. If fair market valued prepared by assessor
c. Within 6 months is higher than prepared by BIR, the one shall be
followed for taxation.
22. Interest on delinquent real property tax per a. BIR
month. b. Assessor
a. 2% c. Court
b. 3% 33. Provided mechanism for the implementation
c. 4% of the Comprehensive Agrarian Reform Program
(CARP).
23. Interest on unpaid real property tax shall in a. EO 21
no case exceed. b. RA 9700
a. 36 months c. EO 229
b. 12 months 34. The responsibility to determine land
c. 24 months valuation and compensation for all lands
covered by CARP.
24. Asset not part of inventories for sale or used a. DAR
in trade such as the residential lot. b. Appraiser
a. Ordinary Asset c. Land Bank
b. Capital Asset
c. Personal asset
35. Identifies and screens potential b. Within 60 days
beneficiaries and validates their qualifications. c. Within 30 days
a. DENR
b. DAR 47. Seller shall pay to the provincial treasurer
c. Barangay Official real property tax from date of execution of sale.
a. Within 60 days
35. Lead agencies in the implementation of carp, b. Within 30 days
except c. Within 90 days
a. DENR
b. DAR 48. Right of the delinquent owner to redeem
c. Landbank the property from the date of sale.
a. Within 2 year
37. Shall coordinate and monitor the b. Within 3 years
implementation of the CARP in the province. c. Within 1 years
a. Provincial Agrarian Reform Coordinating
Committee (PARCCOM) 49. Allowable period for assessment of taxes
b. CARP Monitoring Committee prior to initial assessment of real property taxes.
c. Provincial CARP Monitoring a. 3 years
b. 5 years
38. Exemption on CGT sale of principal c. 10 years
residence can be availed only once every.
a. 10 year 50. LGU Sanggunian may condone real property
b. 5 years tax upon recommendation of local disaster
c. 3 years committee due to reasons, except.
a. General failure of crops
39. Percentage of payment for an installment b. Abundance season
sale to pay creditable withholding tax. c. Calamity
a. 2%
b. 25% of selling price 51. The basic real property tax and other
c. 30% taxes can be collected from the date they
become due and no collection shall be made
40. Tax rate for the cooperative registered in after that period.
CDA. a. Within 5 years
a. 0% b. Within 10 years
b. 3% c. Within 15 years
c. 5%
52. The basic real property tax and other
taxes can be collected from the date they
41. Real property tax share of the barangay. become due and no collection shall be made
a. 25% after that period if done fraudulently.
b. 30% a. Within 20 years
c. 40% b. Within 15 years
42. Real property tax share of the municipality. c. Within 10 years
a. 40%
b. 50% 53. Shall file a sworn declaration of value of
c. 60% the property once every three (3) years.
a. Tenant
43. In general the real property tax share of the b. Owner
barangay. c. Assessor
a. 30%
b. 35% 54. Owner shall file a sworn declaration of the
c. 40% true value of the property being improved.
a. 60 days after completion
44. Real property tax share of the barangay in b. 90 days after completion
the city. c. 120 days after completion
a. 30%
b. 40% 55. Donor tax when beneficiary is stranger.
c. 50% a. 40%
b. 25%
45. Real property tax share of the city. c. 30%
a. 60%
b. 70% 56. Engage in the business of leasing or renting
c. 40% real estate properties.
a. Real estate lessors
46. Seller shall pay to the provincial treasurer b. Developers
the real property tax from date of notarization. c. Manager
a. Within 90 days
57.Engage in the business of developing real b. Form 1906
estate properties into subdivision or similar units c. For 1903
on subdivided lots.
a. Manager 67. Penalties on failure to pay annual
b. Real estate developer registration fee.
c. Corporation a. 10% surcharges
b. 30%
58. Before commencing any business and c. 25%
payment of taxes.
a. Register with the municipal 68. Unlawful pursuit of business or omission.
b. Register with the barangay a. Fine not less than 5,000 but not more
c. Register business with BIR than 20,000
b. Fine not more than 5,000 but not more than
60. Registration requirement in BIR for 20,000
individuals. c. Fine not less than 10,000 but not more than
a. By laws 20,000
b. Articles of Incorporation
c. Birth certificate or ID 69. Imprisonment on unlawful pursuit of
business or omission.
61. Registration requirement for general a. 6 years but not more than 20 years
partnership. b. 5 years but not more than 20 years
a. Owner ID c. 6 years but not more than 15 years
b. Articles of partnership
c. Voters ID 70. Compromise payment for failure to register.
a. 10,000.00
61. Application form for individual in registering b. 20,000.00
with BIR c. 5,000.00
a. BIR form 1903
b. BIR form 1902 71. Compromise payment for failure to pay
c. BIR form 1901 annual registration.
a. 1,000.00
62. Application form for partnership b. 2,000.00
a. BIR form 1903 c. 3,000.00
b. BIR form 1904
c. BIR form 1905 72. Compromise payment for failure to display
certificate of registration.
63 Under Train Law, The VAT Exempt a. 1,000.00
Threshold on sale or lease of goods or b. 2,000.00
PROPERTIES or the performance of services is c. 3,000.00
increased from P1, 919,500 annual gross sales
and/or gross receipts to 73. Compromise payment for failure to display
a. P2,919,500 poster "ask for receipt"
b. P3,000,000 a. 1,000.00
c. P3,919,500 b. 2,000.00
d. P4,000,000 c. 3,000.00
64. Under the Train Law, Condominium dues 74. Invoicing requirement for sale of goods.
such as association dues, membership fees, a. Inspection paper
and other assessments and charges collected b. Receipt
on a purely reimbursement basis by c. Sales invoice
Homeowner’s association and condominium
corporations established under RA 9904 are 75. Invoicing requirement for sale of services or
exempt from ________ professional fees.
a. Non-Vat or percentage tax a. Invoices
b. Withholding Tax b. Official receipts
c. Vat Tax c. Inspection paper
65. Rate of percentage taxes on gross sales or 76. Maximum optional standard deduction.
professional fees of Non-VAT registered a. 40%
persons b. 30%
a. 3% c. 20%
b. 4%
c. 5% 77. Tax rate for corporation and partnership
a. 25%
66. Form used to update information like b. 40%
address and etc. c. 35%
a. Form 1905
78. Expanded withholding tax rate if professional c. 3 years
fees to juridical entities exceed 720,000.00
a. 15% 89. Books shall be audited and examined by
b. 20% independent CPA if gross receipts exceed.
c. 25% a. 150,000.00
b. 120,000.00
79. Expanded withholding tax rate if professional c. 160,000.00
fees to individuals below P3,000,000.00
a. 5% 90. Monthly remittance of income taxes
b. 10% withheld on compensation.
c. 15% a. 10th of the following month
b. 20th of the following month
80. Under Train Law, Documentary Stamp Tax c. 5th of the following month
Percentage for Deeds of Sale, Conveyances 91.Monthly remittance of income taxes withheld
and Donation of Real Property is now on compensation for November.
a. 1.5% a. 15th of December
b. 2% b. 15th of January
c. 3% c. 15th of November
84. Fine on refusal to issue official receipts or 96. Surcharges if it is done willfully and
invoices upon conviction. fraudulently.
a. 1,000.00 but not more than 20,000.00 a. 50%
b. 1,000.00 but not more than 30,000.00 b. 20%
c. 1,000.00 but not more than 50,000.00 c. 10%
85. Compromise payment for failure to issue 97. Creditable withholding tax for habitually
receipt for 1st offence. engages in business and selling price is over
a. 10,000.00 2million.
b. 20,000.00 a. 5%
c. 30,000.00 b. 3%
c. 1%
86. Compromise payment for 2nd offense on
the use of unregistered receipts 98. Creditable withholding tax for habitually
a. 10,000.00 engage in business and selling price is over
b. 20,000.00 500,000. to 2 million.
c. 30,000.00 a. 1.5%
b. 5%
87. Compromise payment for 1st offense on c. 3%
refusal :o issue receipt.
a. 10,000.00 99. Creditable withholding tax for habitually
b. 30,000.00 engage in business and selling price is below
c. 25,000.00 500,000.00.
a. 1.5%
88. Years to preserve books after close of b. 3%
taxable year. c. 5%
a. 6 years
b. 5 years
100. Creditable withholding tax for not habitually
engage in business. 111 Who should pay for Real Property Tax?
a. 6% a. People who owns or whose names are on
b. 5% titles and certificate of ownership, whether
c. 4% the property is for residential or commercial
use.
101. Registration fee payment form. b. People who owns or whose names are on
a. BIR form 0605 agreements and SEC certificate, whether the
b. BIR form 0606 property is for residential or commercial use.
c. BIR form 0607 c. People who owns or whose names are on
Deed of Absolute Sale and Statement of
102. BIR form Certificate of registration. Account, whether the property is for residential
a. BIR form 0203 or commercial use.
b. BIR form 3203
c. BIR form 2303 112. The Metro Manila rate for Real Property tax
is.
103. BIR form to apply for authority to print a. Not exceeding 1%
receipts b. Not exceeding 2%
a. BIR form 0606 c. Not exceeding 3%
b. BIR form 1906
c. BIR form 0601 113. Amount of real property tax in the province.
a. Not exceeding 1%
104. Exempt from withholding tax b. Not exceeding 2%
compensation. c. Not exceeding 3%
a. Minimum wage earners
b. Maximum wage earners 114. Real property tax is based on:
c. Regular wage earners a. Zonal value of the property
b. Assessed value of the property
105. Detect non filing of tax return and non c. Market value of the property
payment of taxes d. Appraised Value of the property
a. BIR Integrated Tax System
b. Tax Integrated System 115. Aside from basic real property tax, local
c. BIR computer system governments also charge additional tax for
Special Education Fund. A _______ is levied on
106. Effectivity threshold amount of sales of the assessed value of the real property and
residential lot, house for sale or lease of proceeds of which go to the budget of local
property. schools.
a. RR 3-2012 a. 2%
b. RR 4-2013 b. 1%
c. RR 5-2011 c. 3%
d. 5%
107. Created to oversee and monitor the
implementation of this RA 9700. 116. If properties become idle or no activities,
a. Provincial Oversight Committee the government also charges a maximum of
b. CARP Oversight Committee _____% of the assessed value in addition to the
c.CongressionalOversight Committee basic real property tax.
a. 2%
108. Person who knowingly or willfully violates b. 1%
the provisions of R 9700 shall be punished by c. 3%
imprisonment. d. 5%
a. One month to 3 years
b. Two month to 3 years 117. In computing for the Property’s taxable
c. Three month to 3 years value or the assessed value, you must first
109. The forcible entry or illegal detainer by multiply the market value to the assessment
persons who are not qualified beneficiaries level. Assessment level from Section 218 of
under RA 9700 to avail themselves of the rights RA7160 in Metro Manila ON LANDS should be:
and benefits of the Agrarian Reform Program
shall be penalized of imprisonment. Statement 1. Assessment levels of Residential
a. 4 to 6 years should not exceed 20%.
b. 3 to 6 years Statement 2. Assessment levels of Agricultural
c. 1 to 6 years should not exceed 40%.
110. Dwelling place where a family resides is a. Statement 1 is True and Statement 2 is False
classified as. b. Statement 1 is False and Statement 2 is True
a. Special Asset c. Both Statements are True
b. Ordinary Asset d. Both Statements are False
c. Capital Asset
118. In computing for the Property’s taxable multiply the market value to the assessment
value or the assessed value, you must first level. Assessment level from Section 218 of
multiply the market value to the assessment RA7160 in Metro Manila ON MACHINERIES
level. Assessment level from Section 218 of should be:
RA7160 in Metro Manila ON LANDS should be:
Statement 1. Assessment levels of Residential
Statement 1. Assessment levels of Commercial, should not exceed 50%
Industrial, Mineral should not exceed 50%.
Statement 2. Assessment levels of Timberland Statement 2. Assessment levels of Agricultural
should not exceed 20%. should not exceed 40%
a. Statement 1 is True and Statement 2 is False a. Statement 1 is True and Statement 2 is False
b. Statement 1 is False and Statement 2 is True b. Statement 1 is False and Statement 2 is True
c. Both Statements are True c. Both Statements are True
d. Both Statements are False d. Both Statements are False
20. The local government shall cause a notice of 27. For purposes of real property taxation idle
delinquency and thereafter the property and sold lands shall include the following, except:
at public auction in case of: A. Agricultural lands, more than one (1) hectare
A. Unpaid delinquent real estate taxes in area, suitable for cultivation, dairying , inland
B. Under declaration of value fishery, and other agricultural uses.
C. Payment under protest B. One-half ( 1/2) of which remain uncultivated
D. Delinquent real estate taxes for at least 5 or unimproved by the owner of the property or
years person having legal interest therein.
C. Agricultural lands planted to permanent or
21. The assessors Office is an agency where we perennial crops with at least fifty (50 ) trees to a
inquire and conduct research on hectare shall not be considered idle lands
A. Title Verification D. Lands actually used for grazing purposes
B. Investment Value shall likewise be considered idle lands.
C. Zonal Value
D. Cadastral Map/ tax Map 28. The rate of Tax on Transfer of Real Property
Ownership imposed by the LGU province.
22. How much will be the quarterly tax payment A. Not more than fifty percent ( 50%) of the
for a residential parcel of land valued at one percent (1%) of the total consideration or
P1,800,000.00 if the tax rate is 2%? the fair market value whichever is higher.
A. P7,200.00 B. Not more than fifty percent (50%) of the one
B. P1,800.00 percent (1%) of the total consideration or the fair
C. P3,600.00 market value whichever is lower.
D. P4,500.00 C. Not more than fifty percent (1/2%) of the one
percent (1%) of the total consideration or the fair
23. The following are to be considered in market value whichever is higher.
offering to the property owners in cases of D. Not more than fifty percent (50%) of the one
compulsory acquisition through negotiated sale percent ( 1%) of the total consideration or the
as required by the ROW project, except: fair market value whichever is lower
A. Current Market value of the land
29. What is the sharing ratio on the collections of proceeds to acquire a new residence within 18
Basic Real Property Taxes: months from the sale be assessed an additional
A. Province 30%, Municipality 40%, and deficiency capital gain tax inclusive of penalties
Barangay 30% and;
B. Province 35%, Municipality 40%, and A. 10% surcharges
Barangay 25% B. 15% compromise penalty
C. Province 40%, Municipality 35%, and C. 20% of surcharges per annum
Barangay 25% D. 25% penalty
D. Province 40%, Municipality 30% and
Barangay 30% 7. The rate of withholding tax for socialized
housing is __________ percent.
30. The following are the legal framework of the A. Zero
LGUs Power of Taxation , except: B. Five
A. Constitution C. Three
B. Local Government Code D. Two
C. Sangguniang Tax Ordinances
D. Sangguniang Tax Resolutions 8. A parcel of land was sold at P5,000,000.00
but the BIR Zonal Value is P4,800,000.00 while
II. Capital Gain Tax the local assessors fair market value is
1. Effective year 2012, a real estate broker shall P2,500,000.00 and it was appraised at
be subject to VAT if the total income for the year P5,500,00. What will be the basis to compute
exceeds. the capital gains tax?
A. P1,919,500.00 A. P5,000,000
B. P3,199,500.00 B. P4,800,000
C. P2,500,000.00 C. P5,500,000
D. P1,500,000.00 D. P2,500,000
2. Payment of the Capital Gain Tax for Capital 9.Atty Wilbert Panoy wanted to buy a new
assets become due after: residence and so he sold his personal residence
A. 30 days from the date of notarization of in Quezon City at P4,000,000.00. The BIR Zonal
document Valuation is P4,000,000.00. While looking for the
B. 30 days from the date of execution of the new residence, he escrowed to an authorized
document agent bank of BIR the 6 % capital gains tax.
C. Either a or b How much is the escrowed CGT?
D. None of the above A. P240,000.00
B. P300,000.00
3. The creditable withholding tax on the sale of a C. P375,000.00
house and lot package by a developer at the D. P75,000.00
price of Two Million Pesos is:
A. 1.5% 10. After selling his residence for P4,000,000.
B. 3% Atty. Wilbert Panoy was able to buy a new
C. 6% residence after 15 days in the amount of
D. 5% P3,000,000.00? How much is the capital gains
tax on the unutilized portion of the selling price
4. A lot was sold located at Placer, Masbate. of his old residence?
The owner Aaliya Bless is already residing in A. P60,000.00
Cebu wanted to pay transfer taxes while the B. P180,000.00
buyer in residing at Manila. Where is the Capital C. P240,000.00
Gains Tax on the sale to be paid: D. None
A. Manila
B. Masbate 11. How much will be the quarterly tax payment
C. Cebu for a residential parcel of land valued at
D. BIR Head Office P1,800,000.00 if the tax rate is 2%
A. P7,200.00
5. As provided for by RA 8424 or the Tax B. P1,800.00
Reform Act of 1997, the capital gains tax is 6% C. P3,600.00
and an exemption from it can be availed when D. P4,500.00
the sellers proceed from his principal residence
sold will be used to buy a new or construct a one 12. The following are considered engaged in the
within real estate business, except:
A. One ( 1) year A. Taxpayer whose primary purpose of engaging
B. 16 months in such business
C. 18 months B. Whose articles of incorporation states that its
D. Two (2) years primary purpose is to engage in real estate
business
6. Under BIR Revenue Regulation 17-2013, the C. Referred as Real Estate Dealers, real estate
seller of family home who failed to utilized the developers and or real estate lessors
D. Referred as Real Estate Broker, appraiser C. Execute an Affidavit of Undertaking
and consultant D. The same shall be presented for
revalidation to the District Office where the
13. Real Estate Dealers or real estate CAR was issued.
developers who are consider habitually engaged
in the real estate business should be registered 20. A bundle of rights encompasses five
with_________ different rights of the property owner, except:
A. Professional Regulation Commission A. The right to posses is the right to occupy the
B. Register of Deeds property. The right to control is the right to
C. Bureau of Internal Revenue determine interests and uses for others.
D. Housing and Land Use Regulatory Board B. The right to enjoy is the right to use the
(HLURB) or HUDCC property without outside interference.
C. The right to exclude is the right to refuse
14. The following are the basis of valuation of others interests or uses for the property.
property in computing CGT, except: D. The right not to dispose of and the right
A. Gross Selling Price not to determine how and if the property
B. Zonal Valuation should not be sold or given to another party.
C. Assessed Value of the Assessor
D. Appraisers Value III. ESTATE TAX
1. In payment of the Estate Tax, an allowed
15. The CGT rate for shares of stocks not traded deduction to the gross estate of the decedent is
on LSE effective January 1,2018 for Individual funeral expense which is:
taxpayer. A. 5% of the Gross Estate or P200,000
A. 5% whichever is lower
B. 10% B. 5% of the Gross Estate or P200,000
C. 15% whichever is higher
D. 20% C. 10% of the Gross Estate or P200,000
whichever is lower
16. The CGT rate for shares of stocks not traded D. 10% of the Gross Estate or P200,000 is
on the LSE effective January 1,2018 for higher
corporation.
A. 5% 2. Julice married to Ana in 1999. On 2009, Ana
B. 10% surviving parent died and she inherited two (2)
C. 15% hectare lot in Cebu City. After settlement of the
D. 20% estate, Ana sold the property without the
consent the objection of Julice. Is the sale valid?
17. The following are considered exempt from A. Yes, because the property is paraphernal
payment of final CGT, except: or exclusive property of the wife.
A. Dealer in securities, regularly engaged in the B. No, because the property turned to be
buying and selling of securities conjugal after the marriage
B. An entity exempt from the payment of income C. No, because Julice consent is wanting
tax under existing investment incentives and D. Yes, because the sale was already
other special laws consummated.
C. Individual/Non-individual exchanging real
property solely for shares of stocks resulting in 3. ______ is a mode of acquiring ownership and
corporate control. other real rights through the lapse of time in the
D. An private entity selling real property manner and conditions set forth by law.
A. Succession
18. ___________ is a certification issued by the B. Tradition
Commissioner or his duly authorized C. Donation
representative attesting that the transfer and D. Prescription
conveyance of land, buildings/ improvements or
shares of stock arising from sale, barter or 4. Who are compulsory heirs
exchange have been reported and the taxes due A. Legitimate children and their descendants
inclusive of the documentary stamp tax, have B. Legitimate parents and their ascendants
been fully paid. C. Illegitimate parents and siblings
A. Tax Clearance Certificate ( TCC) D. Legitimate brothers and sisters
B. Certificate Authorizing Registration ( CAR)
C. Certification Authorizing Registration (CAR) 5. _________ is the part of the testator’s
D. Certificate of Transfer of Title property which he cannot dispose of because
the law has reserved for certain heirs who are,
19. In case of failure to present the CAR to the therefore called compulsory heirs.
Registry of Deeds (RD) within the one (1) year A. Free Portion
period, what is the remedy of the taxpayer: B. Legitime
A. Present the same to the ROD C. Half of the Estate
B. Pay again the corresponding CGT and D. None of the above
request for another CAR from the BIR
6. Who are the secondary compulsory heirs A. 10 years
A. Legitimate children and their descendants B. 5 years
B. Legitimate parents and their ascendants C. 20 years
C. Illegitimate parents and siblings D. 3 years
D. Legitimate parents
13. Properties during the period of union without
7. All the property owned by the spouses at the marriage shall be governed by______
time of the celebration of the marriage or A. Provision of separation of property in the Civil
acquired thereafter constitutes___ Code
A. Conjugal Property B. Provisions of conjugal property in the Civil
B. Separation of property Code
C. Community of Property C. Laws on Co-ownership
D. None of the above D. None of the above
25. H and W are married. They have legitimate 29. Ulyanov Kerivsky, Ukrainian, died in the
children A and B. H died, survived by W, A and Philippines. The properties situated in his own
B. His estate of P12,000,0000 should be divided country will not be subject to estate tax if he was
as follows: a---
A. W - P3M, A - P4M, B - P4.5M, Free portion - A. Resident Citizen
None B. Resident Alien
C. Nonresident citizen 35. One of the following donations is not
D. Nonresident alien included as part of gross estate.
A. Revocable Transfers
Items 30 Through 32 are based on the B. Transfers with reservation of certain rights
following information: C. Transfer under special power of
appointment.
Dina Mathay, Filipino, died in the United States D. Transfer in contemplation of death
with the following properties - P2,000,000
Shared of stock in a foreign corporation- 36. Which of the following transfers is included
P600,000 in the gross estate?
A. Transfer inter vivos
Interest in a partnership, domestic - P475,000 B. Transfer under general power of
appointment.
Blank deposit in a New York City Bank - C. Transfer under special power of appointment
P150,000 D. Transfer for an adequate and full
consideration
Car in Cebu , donated inter vivos 5 years ago to
her son - P500,000 37. Decedent Jose Llamaldo has the following
data:
30. Which property should be included in the Value of the property at the time of sale -
gross estate? P1,200,000
A. All the above properties. Value if consideration when sold -
B. Only the properties located in the Philippines P1,000,000
C. All the above properties except the car. Value of the property at the time of death -
D. The properties located in the Philippines P1,500,000
except the tangible
The amount includible in the gross estate is-
31. If the decedent was a nonresident alien A. P300,000
( with reciprocity), how much is the gross B. P500,000
estate? C. P200,000
A. P3,725,000 D. P1,500,000
B. P975,000
C. P500,000 38. On the belief that he was about to die of a
D. None liver cancer, Bongbong sold to Bengbeng a
property valued at P1,000,000 for the same
32. If the decedent was a non-resident alien amount. Six months later, Bongbong died of a
( no reciprocity), how much is the gross estate? car accident. At that time, the property had
A. P3,725,000 already a value of P1,300,000. For Philippine
B. P975,000 estate tax purposes, the amount includible in the
C. P500,000 gross estate of Bongbong is--.
D. P475,000 A. P1,100,000
B. P1,300,000
33. Which of the following is an intangible C. P200,000
personal property within ? D. None
1. Franchise exercised in the Unites States.
2. Shares or rights in a domestic business 39. On February 1,2005, Angel prepared a will
partnership. on his property in favor of his children. Angel
3. Bonds issued by an American Corporation. died September 5, 2005 survived by his children
4. Stocks issued by foreign corporation with Bersabe and Contado who immediately took
business situs in the Philippines. over possession and made an extrajudicial
A. 2 Only partition on September 20, 2005 but without
B. 2 & 4 registering the same in the Register of Deeds.
C. All of the above properties Bersabe sold the Property to Contado on May
D. None of the above properties 7,2015 in order to finance his expenses for
hospitalization. Which date should be used as
34. An example of intangible personal property the basis in valuing the property for purposes of
without is: computing the estate tax?
A. Domestic shares of stocks. A. February 1, 2005
B. Foreign shares, 85% of the business of B. September 5,2005
corporation is in the Philippines. C. September 20,2005
C. Foreign shares with business situs in the D. May 7,2015
Philippines.
D. Foreign shares, with certificate of stocks 40. Which of the following is not a distinction
are kept in Makati. between estate tax and donor’s tax?
A. The tax imposed is an excise tax
B. Extension for payment A. Estate tax
C. Effectively of the transfer of property. B. Donor’s tax
D. The exemption granted in the tax table. C. Income tax
D. Transfer tax
III. DONOR’S TAX
9. The gift tax is imposed on the transfer of
1. Based on the net gift made on January 31, property (not on the property itself), which is why
2017 and January 31, 2019, the maximum it has been sustained as a (an)
donor’s tax is: A. Excise tax
A. 10% and 30% B. Property tax
B. 15% and 30% C. Donee’s tax
C. 20% and 6% D. Poll tax
D. 30% and 6%
10. A donation made by a stockholder to a
2. Donation made to a stranger on December corporation is subject to donor’s tax because of
31, 2017 is subject to____ tax based on the the following principles, except
zonal value or market value whichever is higher; A. Entity Theory
A. 15% B. Lifeblood Theory
B. 12% C. Benefit received principle
C. 20% D. Tax Benefit Rule
D. 30%
11. What is the tax implication if a corporation
3. Donation made to a stranger on December condones the debt of a stockholder because of a
31, 2019 is subject to ____ tax based on the good thing done by the latter to the corporation?
zonal value or market value whichever is higher: A. The condonation is based on the liberality of
A. 15% the corporation; therefore, it is subject to donor’s
B. 12% tax.
C. 6% B. The condonation is subject to donor’s tax on
D. 0% the corporation because it is based on its liberty.
Moreover, it is equivalent to a payment of
4. Donations made to the parish priest who heart dividend to the stockholder which is, therefore,
the confession of the donor during the latter’s subject tax of 10%.
last illness, or the minister of the gospel who C. It is tantamount to a declaration of
extended spiritual aid to him during the same dividend. Therefore, it is an income which is
period is____. subject to 10% dividend tax on the
A. Unenforceable stockholder. However, it is not subject to
B. Void donor’s tax on the corporation.
C. Voidable D. It is just a simple case of extinguishment of
D. Ineffective an obligation which is neither subject to income
tax on the stockholder not subject to donor’s tax
5. Donations made between husband and wife, on the corporation.
directly or indirectly, except moderate gifts on
the occasion of family rejoicing is_____. 12. Madz went to Bersabaren Resort and was
A. Unenforceable given a prize of P50,000 by the resort for being
B. Void its 1,000th guests. Is the prize subject to donor’s
C. Voidable tax? Income tax?
D. Ineffective A. Donors tax - Yes ; Income tax - Yes
B. Donors tax - No ; Income tax - Yes
6. ______ is an act liberality whereby a person C. Donors tax - Yes ; Income tax - No
disposes gratuitously of a thing or right in favor D. Donors tax - No ; Income tax - No
of another, who accepts it.
A. Succession 13. The following are the requisites of a donation
B. Donation for purposes of the donor’s tax, except
C. Tradition ( RPCPA)
D. Prescription A. Capacity of the donor
B. Capacity of the Donee
7. An act of liberty whereby one disposes C. Delivery of the subject matter of gift
gratuitously of a thing or right in favor of another D. Donative intent
who accepts it__
A. Succession 14. A donation of one (1) hectare of timberland--
B. Occupation A. Can be done orally or in writing
C. Donation B. Must be in writing
D. Tradition C. Maybe in a private document
D. Must be in a public document
8. A tax imposed on the gratuitous transfer of
property between two or more persons who are 15. One of the following is a valid donation
living at the time the transfer is made.
A. Oral donation of a cellular phone worth D. A and B are the only heirs of C. A
P4,500. renounces his share of inheritance in favor
B. Oral donation of a passenger jeepney worth of B.
150,000.
C. A parcel of land worth P5,000 in a private 21. Which of the following is subject to donor’s
document tax?
D. A parcel of land worth P500,000 in a private A. Donation Inter-vivos to Iglesia Ni Cristo.
document. B. Donation Inter-vivos to International Rice
Research Institute.
16. Which of the following constitutes a taxable C. Cash contribution to a political candidate,
gift? duly reported to the Commission on Elections.
A. Creditor’s gratuitous discharge of a D. Remission of debt where the debtor did
debtor’s obligation. not render services in favor of the creditor.
B. One day rent-free use of another’s property.
C. A gratuitous transfer by an incompetent. 22. A tax minimization scheme which is done by
D. An agreement to make a future which is not spreading the gift over numerous calendar years
supported by a consideration. to avail of lower tax liability-.
A. Spread-out method
17. Antonio donated shares of stocks of B. Splitting of gift
Cayatano Corporation to Barandilla on April 20, C. Donation of life insurance
2015 with a right to revoke it. The donor D. Void donation
delivered the property April 25, 2015. On June
20, 2015 Antonio relinquished the right to 23. The spouses Helena and Federica wanted to
revoke. Ten days after, the donor died. For donate a parcel of land to their son Dondon who
purposes of donor’s tax, the gross gift should be is getting married in December 2014. The parcel
based on the value of the shares on. of land has a zonal valuation of P420,000.00.
A. April 20,2015 What is the most efficient mode of donating the
B. April 25, 2015 property? (BEQ)
C. June 20, 2015 A. The spouses should first donate in 2014 a
D. June 30,2015 portion of the property valued at P20,000.00
then spread P400,000.00 equally for 2015,
18. Warren wrote a letter to Lamont on 2016, 2017 and 2018.
December 31, 2014 donating his car worth B. Spread the donation over a period of 5 years
P350,000. The letter was received by the latter by the spouses donating P100,000.00 each year
on January 7,2015 who accepted the donation. from 2014 to 2018.
The letter was not paid until May 22,2016. The C. The spouses should each donate a
donation was consummated on. P110,000.00 portion of the value of the
A. December 31, 2014 property in 2014 then each donate
B. January 15, 2015 P100,000.00 in 2015.
C. January 7, 2015 D. The spouses should each donate a
D. May 22,2016 P100,000.00 portion of the value of the property
in 2014, and another P100,000.00 portion each
19. On August 18, 2015 Elizabeth loaned to her in 2015. Then , in 2016, Helena should donate
sister Martha P200,000 at an interest of 12% per the remaining P20,000.00.
annum payable one (1) year thereafter. One
month before the debt due, Martha’s husband 24. Statement 1: When the donee is exempt
died. Consequently, Elizabeth informed her from income tax, the donation made by a
sister that she is condoning the loan including taxable individual is also tax-exempt.
the interest. How much is the value of the Statement 2: Proceeds of life insurance policy
donation made by Elizabeth to Martha? on the life of the decedent where the designation
A. P200,000 of the beneficiary is irrevocable is always subject
B. P224,000 to donor’s tax.
C. P222,000 A. Statement 1 - True ; Statement 2 - False
D. None B. Statement 1 - False ; Statement 2 - True
C. Statement 1 - False ; Statement 2 - False
20. Which of the following examples is not D. Statement 1 - True ; Statement 2 - True
taxable (RPCPA) ?
A. Filipino citizen donated a parcel of land 25. Statement 1: The agreement between the
located in the Units States to B, a nonresident donor and the donee that the latter shall assume
alien. the tax burden is binding on the government.
B. On June 12,2015, A made a gift of P200,000 Statement 2: There is no donor’s tax in a
to his daughter on account of her marriage donation on account of marriage if the marriage
celebrated May 1,2014 did not actually take place.
C. Mr. Ramos, a multi-millionaire, gives his wife A. Only the first statement is wrong
a diamond ring worth P120,000 as a birthday B. Only the second statement is wrong
gift. C. Both statements are wrong
D. Both statements are correct
C. Obligations or bonds issued by a foreign
26. On June 23, 2015, Freddie Boy, a mentally corporation with business situs in the
defective 12 - year old boy, executed a deed Philippines.
donating to his brother Aldy a one (1) hectare lot D. Shares of stocks issued by a foreign
worth P250,000 located in Magarao, Camarines corporation 51% of the business of which is
Sur which was also donated to Freddie Boy by located in the Philippines.
his father a year ago. The donation is---
A. Void, because Freddie Boy does not own the 31. Given the following statements:
property considering that the donation made to I. A donation by a nonresident alien of shares of
him by his father is void. stock issued by a domestic corporation is
B. Void, because Freddie Boy, the donor is subject to donor’s tax if such shares have
minor and mentally defective. acquired business situs in the Philippines.
C. Valid, although unenforceable II. A donations by a resident alien of shares of
D. Valid, although voidable because the stock of a foreign corporation will only be subject
donor is not capacitated to donate property. to donor’s tax if at least 85% of the business of
such corporation is located in the Philippines.
27. Which of the following donations is subject to III.A donation by a non-resident alien of bonds
donor’s tax? issued by a foreign corporation is subject to
A. Those made between persons who were donor’s tax if 90% of the business of such
guilty of adultery or concubinage at the time of foreign corporation is situated in the Philippines.
the donation. IV. A donation by a nonresident citizen of a
B. Those made to conceived and unborn franchise will be subject to donor’s tax in the
children. Philippines.
C. Those made to a public officer by reason of
his office. Which of the above statements is/are correct?
D. Those made between husband and wife A. Statement I and III
during their marriage. B. Statement II and IV
C. Statements III and IV
28. Antioquia donated a 1,000 square meter D. Statements I and IV
land to Botor with a condition that within two (2)
years from the date of donation, Botor will 32. Who of the following cannot claim P10,000
construct a two-storey building thereon, and that exemption on gifts on account of marriage?
failure of the donee to comply with the condition A. Resident Citizen
shall be sufficient ground for the revocation of B. Nonresident Citizen
the donation. C. Resident Alien
I. There shall be donor’s tax on the donation D. Non-resident Alien
even if it may be revoked in case of non-
fulfillment of the donation. 33. One of the following cannot claim P10,000
II. In case of revocation of the donation, The exemption on gifts on account of marriage?
donor’s tax paid to the government may be A. P10,000 dowries or gifts given on account
refunded to the donor. of marriage of a legitimate son
A. Statement 1 only B. Donation to the national government, its
B. Both Statements agencies or instrumentalities or political
C. Statement 2 only subdivisions thereof.
D. Neither statements C. Donation to a non-profit educational
institution not more than 30% of the gift is used
29. Which of the following statements is false? for administration purposes.
The gross gift of a non-resident alien D. The exemption of P100,000 in the tax table
A. Will include all intangible personal for donor’s tax.
properties regardless of location 34. Given the following statements:
B. Will include all intangible personal properties Statement I: A donation by husband and wife
situated in the Philippines jointly of a conjugal property will require two
C. With reciprocity will not include all intangible separate computations of donor’s tax which will
personal properties regardless of location. be contained in two separate donor’s tax return.
D. Without reciprocity will not include all
intangible personal properties situated outside Statement II: If the property donated is a
the Philippines. community property of the spouses, the spouse
who opposes the donation shall not be
considered as a donor and will not be required
30. Which of the following is not considered as to pay donor’s tax return.
an intangible personal property within?
A. Franchise which must be exercised in the Statement III: If the property donated is a
Philippines. community property of the spouses, each of
B. Shares of stocks issued by a domestic them is considered as a donor of his or her
corporation. share in the co-owned property and shall be
liable for whatever tax that may accrue on such
donations.
C. The daughter of Ananias was married to her
Statement IV: As a rule a donation inter -vivos boyfriend. As a gift, Ananias donated cash worth
between spouses during the marriage is P100,000 to his daughter.
voidable. D. Property worth P80,000 was donated by
Bibong to Barangay Maaliwalas for use as a site
A. Statement 1 and 4 are true of the Barangay Hall.
B. Statement 1 and are true
C. Statements 1,2 and 3 are true. 38. The following does not result to a gross gift.
D. Statements 2 and 3 are true. A. Donation to the Development Academy of the
Philippines.
35. Given the following statements: B. Donation of a parcel of land to brother, the
donation is in a private document.
Statement I: If the marriage is not validly C. Donation of a real property to the City of
solemnized, the donor is not entitled to the Manila.
P10,000 exemption because the donation D. Donation of property the encumbrance
propter nuptias is not also valid. therein was assumed by the donee.
Statement II: Donations propter nuptias by an 39. Exempted from donor’s taxation are gifts
adopting parent on account of the wedding of his made (BEQ)
child by natural adoption will entitle the donor to A. For the use of the Barangay
an exemption from gross gift of P10,000. B. 0In consideration of marriage.
C. To a school which is a stock corporation
Statement III: A wedding ceremony which was D. To a for-profit government corporation.
solemnized by the Mayor is not valid because he
is not authorized to solemnize marriages under 40. All the following, except one, are exempt
the Family Code, thus the P10,000 exemption from donor’s tax. Which is it?
from gross gift cannot be claimed by the donor A. Donation to the Philippine Red Cross
of a donation propter nuptias. B. Donation to the Development Academy of the
Philippines.
Statement IV: There is no P10,000 exemption C. Donation directly given to the victims of
from gross gift on a donation propter nuptias the eruption of Mount Bulusan.
given by a parent to his daughter who will D. Donation to the City of Davao for public
celebrate her 50th wedding anniversary. purpose.
Choose the best answer: 41. A non-stock, non-profit school always had
A. Statement 1 is true cash flow problems, resulting in failure to recruit
B. Statement 2 is false well-trained administrative personnel to
C. Statements 2 and 3 are false effectively manage the school. In 2015, Don
D. Statements 1 and 2 are true Leon donated P100 Million pesos to the school,
provided the money shall be used solely for
36. Justine donated cash to his son on account paying the salaries, wages, and benefits of
of marriage on October 2014 as follows: administrative personnel. The donation
January 15, 2015 - P25,000 represents less than 10% of Don Leon’s taxable
March 10,2015 - P20,000 income for the year. Is he subject to donor’s
July 15, 2015 - P50,000 taxes? ( BEQ)
September 10,2015 - P100,000 A. No, since the donation is actually, directly,
and exclusively used for educational purposes.
The donor’s tax payable on September 10,2015 B. Yes, because the donation is to be wholly
donation is__ used for administration purposes.
A. P780 C. Yes, since did not obtain the requisite NGO
B. P1,700 certification before he made the donation.
C. P1,380 D. No, because the donation does not exceed
D. Exempt 10% of his taxable income for 2015
37. Which of the following donations result to a 42. Annie donated the following properties:
net gift of P80,000? Land in Los Angeles, California, USA -
A. Alakdan donated property to Balbakwa with a P250,000
market value of P140,000. The property is Land and building in Jolo, Sulu - P175,000
subject to a mortgage indebtedness of P60,000, Car registered in the State of California , USA -
which was paid by the donor at the time of the P225,000
donation. Jewelries in the Philippines - P45,000
B. Altura requested Busines to pay Altura’s Shares of stock in a corporation based in USA -
liability with Cabangis in the amount of P60,000
P100,000 and in return, the personal property Accounts Receivable, debtor in the Philippines -
of Altura valued at P180,000 will be donated P25,000
to Busina.
If Annie is a resident citizen, the gross gift is---
A. P780,000 C. Statements 3 and 4 are correct.
B. P295,000 D. Statement 2 is false.
C. P245,000
D. P220,000 49. A stranger in donor’s taxation
A. Great Grandchild
43. The gross gift of Annie if she is a B. Nephew
nonresident alien without reciprocity is__ C. Child by natural adoption
A. P780,000 D. Grand auntie
B. P295,000
C. P245,000 50. Sayers, who is single, gave an outright gift of
D. P220,000 P150,000 to a friend, Johnson, who needed the
money to pay medical expenses prior to the
44. The gross gift if Annie is nonresident alien Train Law--
with reciprocity is--- A. The donation is not taxable because the gift is
A. P780,000 outright.
B. P295,000 B. The donor’s tax payable is P1,000
C. P245,000 C. The donor’s tax is P45,000.
D. P220,000 D. The donation is deductible from the gross
income of Sayers.
45. Butch made the donation to his children in
2015. In which of the following successive CONTINUATION OF REAL ESTATE
donation will Butch pay donor’s tax? INVESTMENT TRUST
A. January 15 - To Alma on account of
marriage , P40,000 1. Philippines first REIT firm
B. March 15 - To Ara on account of graduation - A. DoubleDragon REIT
P45,000 B. Filinvest REIT
C. May 15 - To Aiko on account of her 18 th C. GoldenLand REIT
birthday, P50,000 D. Ayala Land REIT (AREIT), Inc.
D. In all of the above donations.
2. To facilitate easier registration for REIT fund
46. Which of the following statements is false? managers, the SEC lowered the minimum paid-
A. Donor’s tax applies also to juridical persons. up capital requirement of foreign corporations
B. For purposes of donor’s tax, second cousins intending to engage in the business of fund
are strangers to each other. managers to.
C. Encumbrance on the property donated, if A. P60 million from P100million
assumed by the donor is deductible for B. P40 million from P100million
donor’s tax purposes C. P50 million from P90 million.
D. As a rule, donation between husband and D. P50 million from 100million.
wife during the marriage is void.
3. Refers to the plan, including its amendments,
47. Which of the following is not a factor in the of the REIT registered with the Commission.
determination of taxable gifts? A. Securities Regulation Code
A. Identification of transfers included in gross B. Related Corporation
gift. C. REIT Plan
B. Application of exempt transfers. D. Managed Funds
C. Subtraction of allowed deductions.
D. Multiplying net gift by the applicable rates. 4. The schedule of Zonal Valuation used in the
computation of the capital gains tax is prepared
48. Given the following statements: by.
A. The Assessor’s Office
Statement I: The donor’s tax payable on the B. The Bureau of Internal Revenue
present donation includes the previous C. National Tax Research Center
donations made during the current year. D. Department of Finance
Statement II: It is not proper to add the prior net
gifts during the current year because the taxes BASIC APPRAISAL FOR REAL ESTATE
paid on these donation will just be credited from BROKERS
the donor’s tax computed.
Statement III: The tax rates in the tax table for 1. Statement that appraisers, in their
donor’s tax are relatively lower than the tax rates professional capacity, personally conducted the
in the tax table for the estate tax. appraisal in an objective manner.
Statement IV: The highest tax rate in the tax
table for donor’s tax is higher than the highest Certification of report
tax rate for estate tax.
2.Provides the cost to construct a building by
Choose the best answer:
estimating the installation costs, including
A. Statements 1 and 2 are false.
materials, of the individual components of the
B. Statements 1,2 and 4 are false.
structure.
Economic life
Unit in place method
14. Method of land valuation in the absence of
3. Influence outside of the property boundary vacant land sales, whereby improvement values
that may affect its value. obtained from the cost model are subtracted
from sales prices of improved parcels to yield
Externalities residual land value estimates.
Plottage
9. Additional element of value created by the
combination of two or more interests where the 20. Describes the value of an asset that has
value of the combined interest is worth more reached the end of its economic life for the
than the sum of the original interests. purpose it was made.
10. In the absence of sufficient direct market 21. Individual properties, such as hotels, fuel
evidence, acceptable method of arriving value of stations, and restaurants that usually change
specialized property. hands in the marketplace while remaining
operational.
DRC
Trade Related property
11. The result of subtracting the vacancy and
collection loss from potential gross income. 22. Tasked with the professionalizing and raising
the level of property valuation industry by
Effective gross income developing valuation standard for public and
private use.
12. This describes a situation where a group of
assets employed together in a business are DOF
offered for sale separately, usually following a
closure of business. 23. All property value is created by the of the
future benefits the property will provide.
Liquidation value
Anticipation
13. The number of years a building contribute to
the value of the land. 24. The idea that nothing remains the same.
Change
Economic obsolescence
25. Risk due to uncertainty in future interest.
39. The amount for which an asset could be
Interest risk exchanged between knowledgeable, willing
parties in an arm's length transaction.
26. Uses the gross annual rent rather than
monthly Fair value
40. If that building is a success other builders
Gross income multiplier are likely to follow with more office buildings until
the last office building a builder erects remains
27. Poor layout is an example of . partially vacant because the suppliers have
created a surplus of office space.
Functional obsolescence
Competition
28. The value of an element or component of
property depends on how much it contributes to 41. Establishes that each party is motivated to
the whole. undertake the transaction, but neither is forced
or unduly coerced to complete it.
Contribution
Without compulsion
29. Provide a framework for valuations of assets
that are to be offered or taken as loan security. 42. Method for appraising real estate based on
its income.
PVA 2
Income capitalization approach
30. Review of a Valuer's work undertaken by
another Valuer exercising impartial judgment. 43. Describes a situation where an entire
business is transferred as an operational entity.
Valuation review
Going concern value
32. "Use that result in the highest value for that
property." 44. Value to a specific investor with a specific
plan for the property.
Highest and best use
Investment value
18. Considers the income that an asset will
generate over its remaining useful life and 45. The value that appraisers deal with most
estimates value through a capitalization process. often.
34. An amount above the Market Value that 46. Valuation approach use in the unique
reflects particular attributes of an asset that are properties such as the church
only of value to a Special Purchaser.
Cost approach
Special value
47. Form of deterioration that is economically
36. Risk due to the use of debt financing. feasible to repair.
36. The positive difference between selling price 48. Applies the basic economic principle that a
and cost buyer will pay no more for an asset than the cost
to obtain an asset of equal utility, whether by
purchase or by construction.
Surplus productivity
37. The buyer will pay no more for a property Cost approach
than the cost of an equally desirable alternative
property. 49. Prepared the first documented valuation
manual in Ireland.
Substitution
Sir William Petty
38. Loss in value due to factors outside the
properties
50. Cost to create a virtual replica of the existing 60. Very open and most transparent method of
structure. selling property.
51. The present value of the future cash flows 61. When the seller help finance part or all of the
expected to be derived from an asset or cash- purchase price.
generating unit.
Seller financing
Value in use
62. The seller receives the full payment from the
52. Process of valuing many properties at the buyer.
same time.
Cash sale
Mass appraisal
63. Is the use of borrowed money to finance all
53. Value is determine by the interaction of or part of purchase price of the real estate.
forces in the appropriate market
Leverage
Principle of demand and supply
64. Resulting from external influences may
54. The amount of money necessary to affect the value of the asset.
purchase the finished goods or item of property
when offered for sale in the open market. Obsolescence
Price 65. A valuation review that is limited to the data
presented in the report, which may or may not
53. Value is created by expectation of future be independently confirmed.
benefits.
Desk review
Anticipation
66. A valuation review performed by a client or
54. The process of analyzing and weighing the user of valuation service as an exercise in due
results of the various approaches as applied to diligence when the valuation is to be used for
an appraisal problem. purposes of decision-making such as
underwriting, purchasing, or selling the property.
Reconciliation
Administrative review
55. Technique for estimating value is based on
the idea that a property value can be calculated 67. A revenue-raising procedure, based on the
as a multiple of the gross rent. assessed value of property related to a scale of
charges defined by statute within a specified
Gross rent multiplier time frame.
56. The higher values of larger homes tend to Ad Valorem Property Taxation
have a positive effect on the lesser value of the
smaller home. 69. The period of time over which the structure
may reasonably be expected to perform the
Progression function for which it v/as designed or intended.
Subdivision Calibration
84. Value of superior property is adversely 96. The loss in value to any structure due to a
affected by the value of inferior property. variety of factors, such as wear and tear, age,
and poor location.
Regression
Depreciation
85. Difference between the value of the property
and current debt. 97. A mass appraisal process which facilitate the
appraisal of multiple properties at a given date.
Preparation and Application of SMV 111. Value a property holds to a specific person
who may use it for a specific purpose that's
98. Cost of constructing a structure with generally unavailable to the typical buyer.
comparable utility.
Value in use
Replacement
112. Value to a specific investor with a specific
99. Conditions and assumptions under which plan for the property.
appraisal is made.
Investment value
Limiting condition
113. Value used on property for tax purposes.
100. You never want to build a house that costs
100,000.00 on a piece of vacant land that costs Assessed value
500,000.00
114. All property value is created by
Balance the______of the future benefits the property will
provide.
101. Analyzes the future financial benefits of a
piece of real estate and converts it into an Anticipation
estimate of present value.
115. You never want to build a house that costs
Income approach 100,000.00 on a piece of vacant land that costs
500,000.00
102. Not part of the Approaches in valuing
historic properties. Balance
Income approach 116. The idea that nothing remains the same.
108. Demand for an aging population 120. The whole is sometimes greater than the
sum of its parts.
Social factors
Plottage
109. The value that appraisers deal with most
often.
Market value
5. A key determinant of demand 17. Refer to funds of the REIT that can be
placed in investment vehicles other than
Size of the market income generating real estate
25. Issue stocks and bonds to the corporate 37. Number of contribution in order that a
customers, trade them, and advise borrower eligible for pag-ibig loan.
costumers.
24
Brokers and investment banks
38. Not more than years old at the date of loan
26. The structure of the financial industry that application and must be insurable; provided
includes insurance companies, securities further, that he is not more than seventy (70)
firms, and mutual fund companies and years old at loan maturity.
pension funds.
65
Financial Institutions
39. Refers to a professional administrator of real
27. Which of the statement is not correct properties who is engaged by the REIT to
provide property management services and
Not all securities firms are very much lease management services.
in the business of producing
information Property Manager
28. If supply falls ,the supply curve shifts to the 40. Refinancing loan 5% of the loan amount
left, and retained to ensure cancellation of
mortgage/s prior to PAG-IBIG Fund is
referred to
Price rises and quantity goes down
Real estate economics 42. It is said that for every PI million invested in
housing it is translated to P16.6 million of
31. Simply means the effect of one aspect of the economic housing activity in the country
economy with the other economic activities.
TRUE
Multiplier effect of Real estate
43. Pag-ibig loan charges and deductions
32. The pag-ibig maximum loan amount. processing fee.
P6 Million P3,000.00
33. Pagibig Principal borrower's age shall not 44. Based on the Pag-ibig membership
exceed Contribution if the loan entitlement over PI.7
M to 1.8 M ,what will be the monthly
70 years old at date of loan maturity contribution ?
the movement of prices will tend to go 63. Pag-ibig monthly repayment shall not
exceed of the borrowers gross monthly
up because or' the higher demand
income for loans not exceeding PI,250,000.
53. The price of real estate has a tendency to go
down in view of the excess in supply vs. the 35%
actual demand of the market, is normally
referred to as 64. Minimum total stock public ownership of
shareholders in REIT
Buyers Market
50,000 shares
54. Penalty of the amount due for everyday of
delay of pag-ibig loan. 65. If a corporation builds a factory, it will
employ construction workers and their
suppliers as well as those who work in the
1/20 of 1%
factory. The statement best explains
55. The primary asset of modern commercial
banks, accounting for nearly two thirds of an effect in Economics
assets.
66. Refers to the total quantity of goods and
services that the nations businesses willingly
Loans
produce and sell in the given period.
56. Which statement is true
Aggregate Supply
Maximum of three qualified pag ibig
67. Which occurs because a good becomes
members may be tacked into a single relatively more expensive when its price
loan rises?
financing sources, which may be sourced
Substitution effect from the following,except
68. The earnings in the market economy are Pilfering from Relatives/Friends
distributed to the owners of the economy7s
factors of production in the form of: 79. Deductions on the first loan release:
73. Basic borrower eligibility requirements Less than 28 sqm. Lot area
Not more than 65 years old upon filing, 85. Married individuals not legally separated and
cannot secure marital consent or Special
not more than 70 years old upon loan
Power of Attorney (SPA) from spouse is
maturity allowed for Pag ibig housing.
74. Shifts in the supply and demand curves
No
change the .
86. Revenues will increase when price
Equilibrium price and quantity
Decreases
75. An increased in supply, which shifts the
supply curve to the right , will
87. The pag-ibig ratio of the loan amount to the
appraisal value of the collateral up to
Decrease price and increase quantity 1,250,000.00
demanded
90%
76. Quantity supplied generally responds
positively to price ,so the supply curve is 88. REIT act of 2009
Upward-sloping RA 9856
77. Listed are the different depository 89. The loan amount retained to ensure
institutions except cancellation of mortgage/s prior to PAG-IBIG
Fund.
Insurance companies
5%
78. Real estate financing involves generally the
acquisition of property through loan 90. Income payment to a REIT shall be subject
to a lower creditable withholding tax of
1% 11.50%
91. Loan charges and deduction Processing 103. We mean the ultimate economic effect of
Fee of pag-ibig a tax on the real incomes of producers and
consumers by
P3,000.00
Incidence
92. To carry out the purposes of this Act the
Commission shall retain and use 50% of all 104. Percentage change in quantity demanded
fees paid to it, relative to the establishment greater than percentage change in price
of REITs and the registration of their
securities to annual budget. Elastic demand
Use of Registration Fees 105. In REIT, A fine of not less than P200,000
nor more than P5,000,000.00 or
93. Loan purpose is Refinancing of an existing imprisonment of not less than 6 years and 1
mortgage with home improvement day nor more than 21 years referred as
Penal Provision
Yes
94. For something to have value, it must first 106. What is the maximum loan term
have .
30 years
Utility
107. The shares of stock of the REIT must be
95. Even if a thing has utility, it will not have registered with the Commission and listed in
value if it is overabundant. accordance with the rules of the Exchange.
96. Based on Pag-IBIG Membership 108. Government credit agencies that provide
Contribution if you have loan entitlement up loans directly for farmers and home
to 500,000 ,how much is the Monthly mortgagors.
Contribution?
Government-sponsored enterprises
200
109. The change in revenue that is generated
97. The sale or transfer of real property to by an additional unit of sales .
REITs, which includes the sale or transfer of
any and all security interest thereto, shall be Marginal revenue
subject to 50% of the applicable DST.
TRUE 110. The movement of prices will tend to go up
because of the higher demand
98. The largest source of wages, rents and
interest payment at every level form Sellers market
Government 111. Real estate Economics tries to describe,
explain, and predict patterns of
99. It tries to describe, explain, and predict
patterns of prices, demand and supply prices, supply, and demand
Real Estate Market Economy 112. Basically a result of the interplay of
supply and demand of a certain product,
100. The equilibrium price is also called such as real estate housing.
101. REIT distribute at least ________ of its 113. A key determinant of demand
distributable income as dividend.
Size of the market
90%
114. Important kinds of market structures are
102. What is the interest rate if the pag-ibig
loan amount is over P2M-P3.0M ?
Important kinds of market structures 67. Assets owned and/or controlled by
are governmental or quasi-governmental entities to
provide goods or services to the general public.
115. An increased in supply,which shifts the
supply curve to the right will Real property
Public sector assets
Real estate
Decrease price and increase quantity
Income generating assets
demanded
68. This concept is based on the notion that
The following statements are true when applied although two or more parcels of real estate may
to Valuation Standards except have physical similarities and closely resemble
Standards are statements of recognized one another, there may be significant
principles and concepts differences in how they can be used.
Standards prescribe specific methods of Value
valuation for different purposes Highest and best use
Standards are statement of best practice in Utility
procurement and reporting Substitution
Standards are statements of accepted
definitions 69. The approach to value perceives value as
created by the expectation of future benefits
62. The value of property to a particular investor, (income streams).
or a class of investors, for identified investment Cost approach
or operational objectives. Market data approach
Investment Value Allocation
Market value Income approach
Going concern value
Value in use 70. This approach to value recognizes that
property prices are determined by the market.
63. An amount above the Market Value that Market Value can, therefore, be calculated from
reflects particular attributes of an asset that are a study of market prices for properties that
only of value to a particular purchaser. compete with one another for market share.
Investment value Capitalization process
Plottage value Income approach
Value in use Cost approach
Special Value Market data approach
64. This is a form of ownership in which an 71. When data are available, this approach to
owner has an interest (usually fee simple) in a value is the most direct and systematic
certain unit defined such as the space between approach to estimating value.
the interior walls, the ceiling, and the floor of that Market data approach
unit and the owner also owns a pro rata share of Income approach
the common areas (drives, grounds, recreational Cost approach
amenities, etc.) within the development. Residual technique
Fee simple
Leased fee estate 72. Describes a valuation where an entire
Cooperative business is transferred as an operational entity.
Condominium Value in use
Investment value
65. An additional element of value created by Going concern value
the combination of two or more interests where Market value
the value of the combined interest is worth more
than the sum of the original interests. 73. This approach to value is also known as the
Market value contractor’s method, and is recognized in most
Synergistic value. countries.
Going concern value Market data approach
Investment value Asset based valuation
Income approach
66. The International Financial Reporting Cost approach
Standards adopt these two models for the
recognition of property assets in the balance 74. A form of real property, arising from the
sheet: contractual relationship between one who owns
Cost model and investment value model the property and one who typically receives a
Cost model and going concern value model non-permanent right to use the property in return
Cost model and value in use model for rental payments or other valuable economic
Cost model and fair value model consideration.
Lease interests
Fee simple
Freehold explicit assumptions regarding the prospective
Condominium income and expenses of a property or business.
Annuity method
75. In business valuation, this approach may be Discounted cash flow analysis
similar to the cost approach used by appraisers Direct capitalization
of different types of assets. Investment method
Residual technique
Market data approach 83. A type of review undertaken to ensure that a
Asset-based approach valuation meets or exceeds the compliance
Income approach requirements or guidelines of the specific market
and, at a minimum, conforms to Generally
76. Specific materials that, by their presence or Accepted Valuation Principles of the Philippine
proximity, may have adverse effect on property Valuation Standards.
value because of their potential to cause harm to Administrative review
life-forms. Field review
Non-fruit bearing trees Desk review
Informal settlers Technical review
Fully depreciated buildings and improvements
Hazardous and toxic substances 84. The rights and privileges granted to the
owner of intangible assets.
77. The current cost of replacing an asset with Bundle of rights
its modern equivalent asset less deductions for Personal property
physical deterioration and all relevant forms of Tangible property
obsolescence and optimization. Intangible property
Quantity survey method
Reproduction cost 85. A valuation review that is limited to the data
Cost to cure presented in the report, which may or may not
Replacement cost be independently confirmed.
Desk review
78. Refers to the loss in value of an asset Technical review
resulting from wear and tear over time, including Field review
any lack of maintenance. Administrative review
Functional obsolescence
Economic obsolescence 86. This theory involves the concept that land
Deferred maintenance cannot be valued under one highest and best
Physical deterioration use while the improvements are valued based
on another highest and best use.
Anticipation
79. Refers to loss in value that can be caused by Contribution
advances in technology that result in new assets Balance
being capable of a more efficient delivery of Consistent use
goods and services.
Physical deterioration 87. Refers to a housing program and projects
Functional obsolescence covering houses and lots or homeless only
Economic obsolescence undertaken by the government or the private
Deferred maintenance sector for the underprivileged and homeless
citizens.
80. A charge against a property in which the Socialized housing
property is security for payment of a debt is Low cost housing
called a Bliss project
mortgage. Subdivision development
escheat.
restriction. 88. A valuation review performed by an
lien appraiser to form an opinion as to whether the
analyses, opinions, and conclusions in the report
81. The Enchanted Kingdom theme park in Sta. under review are appropriate, reasonable, and
Rosa has had a significant impact on uses of supportable.
land in its vicinity for many years and an Administrative review
influence on the value of that land. Which of the Desk review
four forces does this represent? Field review
Governmental Technical review
Economic
Social 89. These are individual properties, such as
Environmental hotels, fuel stations, and restaurants that usually
change hands in the marketplace while
82. A financial modeling technique used in the remaining operational.
income approach to value that is based on Specialized properties
Institutional properties
Trade related properties 97. In property markets, this represents the
Public sector assets quantity of property interests that are available
for sale or lease at various prices in a given
90. A revenue-raising procedure, based on the market within a given period of time, assuming
assessed value of property related to a scale of labour and production costs remain constant.
charges defined by statute within a specified Supply
time-frame. Demand
Estate taxation Desirability
Gross income taxation Purchasing power
Ad valorem taxation
Capital gains taxation 98. In property markets, this constitutes the
number of possible buyers or renters seeking
91. In mass appraisal, this is the process of specific types of property interests at various
analyzing sets of property and market data to prices in a given market within a given period of
determine the specific parameters operating time, assuming other factors such as population,
upon a model. income, future prices, and consumer
Calibration preferences remain constant.
Standard deviation Demand
Mode Efficient market
Range Active market
Supply
92. The practice of appraising multiple
properties as of a given date by a systematic 99. This economic principle holds that value is
and uniform application of appraisal methods simply a function of the present worth of future
and techniques that allow for statistical review benefits.
and analysis of results. Principle of substitution
Grid analysis Principle of contribution
Multiple regression Principle of anticipation
Mass appraisal Principle of highest and best use
Valuation process
100. Public sector land valuation and taxation in
93. Represents the ownership interest of a the Philippines is the domain of two (2) arms of
lessor owning real estate that is subject to lease the government, namely:
to others. Land Registration Authority and Bureau of
Bundle of rights Internal Revenue
Partial interest Department of Budget and Management and
Leased fee estate Local Government Units
Leasehold fee estate Local Government Units and National Tax
Research Center
94. Any form of lease rental arrangement in Local Government Units and Bureau of
which the lessor receives a form of rental that is Internal Revenue
based on the earnings of the lessee. Percentage
rent is an example.
Base rent 101. Related to the property itself, this principle
Market rent holds that value is achieved and maintained
Economic rent when all elements are in proper proportion.
Turnover rent Principle of increasing and decreasing returns
Principle of balance
95. Rights generally inherent in the ownership of Principle of contribution
real estate include are referred to as Principle of conformity
Lease interests
Bundle of rights 102. This economic principle holds that as time
Property rights and market conditions change, so does supply
Real property and demand for real estate, and thus, the value
of real estate.
96. At the most fundamental level, value is Principle of progression or regression
created and sustained by the interrelationship of Principle of substitution
five factors that are associated with any product, Principle of anticipation
service, or commodity. These factors are – Principle of change
Utility, scarcity, desire, purchasing power,
and transferability 103. This economic principle holds that a
Utility, need, purchasing power, buyers and prudent purchaser would pay no more for a
sellers home than it would cost him or her to build or
Location, size, shape, terrain and elevation buy another one.
Capital markets, money markets, discount rate Principle of substitution
and reserve requirements Principle of conformity
Principle of balance
Principle of contribution
and related market data, and establishes a value
104. A valuation review that includes inspection estimate by processes involving comparison.
of the exterior and sometimes the interior of the Market data approach
subject property and possibly inspection of the Development technique
comparable properties to confirm the data Cost approach
provided in the report. Income approach
Desk review
Technical review 112. The process of orchestrating land, labor,
Administrative review and capital to produce an item.
Field review Conduction
Analysis
105. It is defined as that logical, legal, and most Entrepreneurship
probable use which will yield the greatest net Capitalization
income to the land over a sustained period of
time. 113. The forces that impact real estate values
Interim use are the following:
Existing use Social, economic, physical or environmental
Actual use and governmental
Highest and best use Physical, economical, sociological and
Correct answer physiological
Highest and best use Political, economical, governmental and physical
Population, income level, skill levels and social
106. An ______________ market is one that is environment
characterized by goods or services that are
easily produced and readily transferable, with a 114. These forces relate to trends in society or
large number of buyers and sellers. culture, and sometimes these forces are
Calm imagined while at other times they are based on
Efficient actual facts and figures.
Active Social
Inefficient Governmental
Environmental
107. This theory is based on the idea that the Physical
greater the volume of an item, the less each
incremental volume should cost. 115. A / An ______________________ is a
Increasing returns group of complementary land uses.
Anticipation Area
Economies of scale Zone
Cheaper by the dozen Neighborhood
Municipality
108. The surplus productivity principle
recognizes the four agents of production, which 116. In the application of this technique to
are estimate value, the building value is estimated
Land, buildings, other land improvements and as the present value of the residual income
machinery attributable to the building of an income
Plant, machinery, equipment and technology producing property.
Land, buildings, labor and capital Land residual technique
Land, labor, capital and entrepreneurship Development technique
Building residual technique
109. In any enterprise, labor must be paid first, Property residual technique
with capital paid after that, entrepreneurship is
then paid. The residual income is attributed to 117. The term used to describe the connecting
the land (including buildings). This concept of complementary uses to the homogenous land
applies in what economic principle affecting uses (zone) is
values? right-of-way.
Balance Passage.
Contribution road network.
Economies of scale linkage.
Surplus productivity
118. Neighborhoods and zones alike generally
110. This term means coordination or exist in one of four life cycle stages; these are –
management. growth, stability, decline, and revitalization.
Capital growth, stability, renovation, and rebirth
Labor growth, stability, decline and rebuilding
Entrepreneurship growth, decline, reconstruction, and
Production revitalization
111. This comparative approach considers the 119. These are assets that embody a cultural,
sales or offers of similar or substitute properties historic, and/ or architectural heritage.
Historic properties Market data approach, sales comparison
Trade related properties approach and offers
Agricultural properties
Public sector assets 127. The analysis of an environment of
buyers/sellers and/or landlords/tenants
120. The initial stage in a neighborhood or (lessors/lessees).
zone’s life cycle. This refers to the period in Marketability study
which the neighborhood or zone is expanding Investment analysis
and developing. Market study
Growth Feasibility study
Revitalization
Decline 128. Type of market analysis that addresses the
Stability time required to absorb a particular product, and
the price or rent level at which that product
121. When a neighborhood can no longer would be accepted into the marketplace.
compete with other comparable neighborhoods, Market study
it usually enters the _________________ stage Feasibility study
of its life cycle. Marketability study
Growth Investment analysis
Revitalization
Stability 129. A ____________ study is simply a
Decline comparison of cost versus the value if the
project is undertaken.
122. The act of distinguishing or delineating Investment analysis
markets that the appraiser should consider in his Marketability study
data program is called Market study
market analysis. Feasibility study
market segmentation.
market segregation. 130. A study undertaken for the purposes of
market study. development and investment, the evaluation of
investment performance, or the analysis of a
123. In this type of market, goods and services transaction involving investment properties.
are not readily produced or easily transferable, Market study
with no readily identified group of buyers and Economic base study
sellers active in a particular marketplace. Investment analysis
Buyer’s market Feasibility study
Seller’s market
Efficient market 131. A mortgage secured by a group of
Inefficient market properties or a number of lots.
Blanket mortgage
124. The study of a specific market. It is the Lein
collection and dissection of data and the Simple mortgage
conversion of that data to information that can Mechanic’s lien
be used for analysis and decision-making by an
appraiser or analyst. 132. If the contract rent and the market rent are
Feasibility study equal, the Leasehold or Lessee’s Interest is
Market analysis _______________, assuming there is no
Marketability study leasehold improvement.
Investment analysis Positive lease
Negative lease
125. A rate of return used to convert a monetary Zero
sum, payable or receivable in the future, into Balanced
present value. Theoretically it should reflect the
opportunity cost of capital, i.e., the rate of return 133. This comparative approach to value
the capital can earn if put to other uses having involves the cost of acquiring equivalent land
similar risk. and constructing an equivalent new structure.
Overall rate Builder’s method
Discount rate Cost approach
Internal rate of return Market data approach
Investment rate Income approach
126. The three types of market analysis are: 134. In operating lease, the value of the
Investment analysis, economic base analysis, Lessee’s Interest is estimated as the present
monetary analysis value
Market study, marketability study and of rental payment plus reversion value of the
feasibility study property at the end of the lease agreement
Statistical study, market study and of rental gain or loss plus reversion value of the
demographics study leasehold improvement, if any
of rental gain or loss and the value of the 142. A real estate mall developer purchases a
leasehold improvement, if any site with the intent of building a regional mall
of rental payment for remaining life of the lease because the immediate area has a significant
agreement number of households and the income level of
those households is affluent. What type of force
135. A _____________________ leasehold is the neighborhood going through?
interest is created when the contract rent is Governmental
higher than the current market rent. Economic
Zero Environmental
Equal Social
Positive
Negative 143. Specific characteristics of properties and
transactions that cause the prices paid for real
136. A group of homogenous land uses. estate to vary.
Neighborhood Units of comparison
Municipality Comparable data
City Comparable sale prices
District Elements of comparison
137. Typically, a factor produced by two 144. Method of estimating the reproduction cost
components, which reflects precise differences or replacement cost that combines the direct
between properties and facilitates analysis in the and indirect costs into a single unit-in-place
three approaches to value, e.g., price per square amount, which when multiplied by the unit
meter or square foot, or the ratio of a property’s measure of the improvement’s component will
sale price to its net income (net income yield the cost of the component.
multiplier/years’ purchase). Index or trending
Units of comparison Comparative
Physical characteristics Quantity survey
Comparable data Unit-in-place
Elements of comparison
145. The cost of replacing an asset with an
138. The cost to create a virtual replica of the equally satisfactory substitute asset; normally
existing structure, employing the same design derived from the current acquisition cost of a
and similar building materials. similar asset, new or used, or of an equivalent
Quantity survey method productive capacity or service potential.
Reproduction cost, new Unit-cost-in place
Unit-cost-in-place method Reproduction cost
Replacement cost, new Replacement cost
Builder’s method
139. The current cost of a similar new item
having the nearest equivalent utility as the item 146. The Subic Freeport Zone is one of the
being appraised. largest developments in Central Luzon. What
Replacement cost, new force does this represent?
Unit-cost-in-place method Governmental
Quantity survey method Social
Reproduction cost, new Environmental
Economic
140. An asset which has a similar function and
equivalent productive capacity to the asset being 147. The process by which a least cost
valued, but of a current design and constructed replacement option is determined for the
or made using current materials and techniques. remaining service potential of an asset.
Public sector asset Value engineering
Modern equivalent asset Reproduction cost, new
Reproduced asset Capitalization
Replacement asset Optimization
141. The process of adjusting the replacement 148. Method of estimating the reproduction cost
cost to reflect that an asset may be technically or replacement cost that involves the adjustment
obsolete or over engineered, or the asset may of the original costs to current costs by a
have a greater capacity than that required.99. multiplier derived from published cost indexes.
This economic principle holds that value is Comparative
simply a function of the present worth of future Unit-in-place
benefits. Quantity survey
Optimization Index or trending
Reproduction cost, new
Capitalization 149. Type of lease which involves the transfer
Value engineering ownership from lessor to lessee.
Leased fee
Operating lease 158. The period of time over which the
Leasehold fee components of the improvement may
Financing lease reasonably be expected to perform the functions
for which they were designed.
150. Lose in property value are caused by Remaining life
deterioration or obsolescence Economic life
Deferred maintenance Used life
Cost to cure Useful life
Depreciation
Replacement cost 159. The age indicated by the condition and
utility of a structure
151. The difference between the cost to Actual age
reproduce or replace a property and its present Used life
value Effective age
Replacement cost Chronological life
Depreciation
Cost to cure 160. A method of estimating depreciation that
Regression involves the development of a depreciation
estimate by studying sales of comparable
152. Major causes of depreciation are the properties that have depreciated to a similar
following except degree as the improvement.
External obsolescence Component method
Physical deterioration Observed condition method
Deferred maintenance Market extraction method
Functional obsolescence Cost to cure method
153. Refers to the wear and tear from regular 161. A method of estimating depreciation
use and the impact of the elements whereby the appraiser estimates the total
Functional obsolescence economic life expectancy of the existing
Adverse market condition structure as well as its effective age, based on
External obsolescence an analysis of sales of similar structures
Physical deterioration Market extraction method
Component method
154. Method of estimating reproduction or Age-life method
replacement costs by applying the average or Observed condition method
typical comparative cost (per square-meter cost)
of similar improvements. 162. The estimated period from the actual age of
Index or trending method a component to the end of its total useful life
Quantity survey method expectancy.
Unit-in-place method Remaining economic life
Comparative method Remaining useful life
Actual age
155. This cost estimate envisions constructing a Effective age
structure of comparable utility, employing the
design and materials that are currently used in 163. An impairment of the utility or salability of
the market. an improvement or property due to negative
Quantity survey method influences outside the property.
Unit-in-place method Adverse market condition
Replacement cost Economic obsolescence
Reproduction cost Functional obsolescence
Physical deterioration
156. The period of time over which
improvements contribute to property value. 164. Sometimes called historical age or
Useful life chronological age, is the number of years that
Lifespan have elapsed since building construction was
Economic life completed.
Remaining life Remaining useful life
Actual age
157. Lose in value caused by a flaw in the Remaining economic life
structure, materials, or design that diminishes Effective age
the function, utility, and value of the
improvement 165. A method of estimating the reproduction
Deferred maintenance cost or replacement cost that involves a
Functional obsolescence complete cost itemization of all direct and
Economic obsolescence indirect cost to be incurred or incurred in the
Physical deterioration construction of an improvement.
Quantity survey method
Index method
Cost-in-place method 174. Financial vehicles with traditional maturities
Comparative method or investment periods of less than one year.
Cash deposits
166. Primarily used to allocate a known amount Capital markets
of total depreciation, estimated by either the Time deposits
market extraction method or the age-life method, Money markets
into its components
Market extraction method 175. In the income approach to value,
Breakdown method reconstructed operating statements specify that
Age-life method the income projection is subject to the
Component method assumption that the property is run by a / an
inefficient operator.
167. The process of retiring a mortgage or debt expert competent management.
over a specified time period. average competent management.
Debt service substandard management.
Installment
Equity 176. Financial vehicles with usual maturities of
Amortization more than one year.
Money markets
168. Represents the money earned for the right Cash deposits
to use capital. Capital markets
Equity Time deposits
Principal amount
Amortization 177. In this technique the land value is
Interest estimated as the present value of the residual
income attributable to the land of an income
169. Also known as debt service. producing property.
Amortization Development technique
Equity Building residual technique
Installment Discounted cash flow analysis
Payment Land residual technique
170. Credit regulation devices that the Bangko 178. A loan for personal property and secured
Sentral ng Pilipinas can use to regulate the by personal property.
supply of money. Liens
Lending rates and amortization rates Blanket mortgages
Capitalization rates and mode of payments Chattel mortgage
Production of new bills and disposal of old bills Real estate mortgage
Discount rates and reserve requirements
198. Applicable to real estate improvements, the Transfer tax must be settled ________ from the
rate warranted by prudent investors that will execution of the deed of sale, barter or donation
represent the return on investment (usually the or any other mode of transfer of ownership.
interest rate or capitalization rate) and the return 90 days
of investment, for improvements, this is 60 days
represented by the recapture rate.99. This 3 months
economic principle holds that value is simply a 120 days
function of the present worth of future benefits.
Discounting rate
Recapture rate What type of bias form a sample selection bias
Internal rate of return in financial databases?
Overall rate Time-period Bias
Data-mining Bias
199. Interest Rate + Recapture Rate equals Survivorship Bias
Discounting rate Sample-Selection Bias
Internal rate of return
Overall rate
Return on investment A 7-year old residence is currently valued at
P720,000. What was the original value if it has
A comparable lot was recently sold at P5,000 appreciated by 60% since it was built?
/sqm. The subject is superior in terms of location P450, 000
by 20%. What is the estimated MV of the subject P432, 000
property? P102, 857.14
80% None of the above
P1000
GN 14 of PVS 2009
P5000
None of the above
P6000
Mass Appraisal for Property Taxation
IVS 500 Bases other than Market Value
Development Property Business Valuation
Intangible Assets
An appraisal is to be made for a three bedroom
Financial instruments
house. One comparable with two bedrooms is
Real Property Interests
sold for Php5,000,000.00. The appraiser makes
The dwelling house including the land on which an adjustment of Php500,000.00 to the
it is situated, where the husband and wife or an comparable to account for the difference in the
unmarried individual, whether or not qualified as number of bedrooms. The adjusted sales price
head of family, and members of his family of the comparable is:
reside. Php6,500,000.00
Half-way House Php4,500,000.00
Ancestral House Php5,500,000.00
Principal Residence Php6,000,000.00
Domicile
It is fundamental to the operation of International
It is a type of sale where a buyer takes over the Valuation Standards that valuation performed in
loan responsibility and obligations of a seller. compliance therewith should be provided by
Junior mortgage ________________ professional valuers.
Cash Sale Good Reputation and Religious
Seller Financing Honest and Competent
Assumption of Existing Loan Good Morals and Right Conduct
Prestigious, Organized and Popular
The most commonly used capitalization rate is A commercial property type used to maintain or
The overall rate occupy professional or business offices.
The income rate Usury Property
The composite capitalization rate Mall Property
The interest rate Agricultural Property
Office Property
Magandang for Kalooban Company will invest
P200,000 today. The investment will earn 6% 5 ____________ are those that need a particular
site for a very specific purpose and are prepared
to pay extra to get the particular site that gives
them the exposure they need _________ is the actual amount spent to build
Auction Sale Purchasers or put an property into being.
Open Market Sale Cost
Special Purpose Purchasers Discount
Forced Sale Purchasers Price
Value
Property Tax on real estate is calculated by what ________ is the percentage applied to the fair
method? market value to determine the taxable value of
Multiply the tax rate by the assessed value the property.
Dividing the assessed value by the tax rate Tax Rate
Divide the tax rate by the most probable sales Assessment Level
price Tax Discount
Multiply the tax rate by the most probable sales Tax Incentive
price
_______ are lands in which minerals, metallic or
__________ is a levy on real property non-metallic exist in sufficient quantity or grade
determined on the basis of a fixed proportion of to justify the necessary expenses to extract and
the value of the property. utilize such materials
Withholding Tax Mineral Lands
Transfer Tax Dumpsites
Excise Tax Regalian Lands
Ad Valorem Tax War Zones
___________ is a highly accurate method of __________ is the estimated period over which
field operations for identifying real property units, it is anticipated that machinery or equipment
defining property boundaries, determining actual may be profitable utilized.
use and discovering undeclared properties for Depreciable Life
taxation. Commercial Life
Data gathering Economic Life
Brokering Actual Life
Investigation Correct answer
Tax Mapping Economic Life
________ is the code used to refer to a property _________ is the numbering system used in
whether it is Land, Building or Machinery. Real Property Records to make possible the
Classification Code accounting of every parcel of land.
Kind Code Tax Identification Numbering System (TIN)
Use Code Tax Declaration Numbering System (TDN)
Update Code All of the above
Property Index Numbering System (PIN)
The DOF through the _______ shall be
responsible for the supervision of the revenue Real property declared for the first time shall be
operations of LGUs with the end in view of assessed for the period during which it would
making them less dependent on funding from have been liable but not more than ______
the national government. years back, based on the applicable SMV in
Bureau of Internal Revenue force during the corresponding period.
Bureau of Customs none of the above
Bureau of Local Government Finance 15 years
Bureau of Treasury 10 years
5 years
__________ machinery shall include machines,
_______ is an act or process of determining the
equipment, appliances or apparatus
value of a property as of a specified date for a
permanently attached to residential land and
specific purpose.
improvements not movable by destination.
Brokering
Agricultural
Selling
Residential
Assessment
Industrial
Appraisal
Commercial
________ is the remaining value after deducting
________ is land devoted principally to industrial depreciation from the acquisition cost.
activity as capital investment and is not Economic Value
classified as agricultural, commercial, timber, Salvage Value
mineral or residential land. Depreciated Value
Socialized Housing Land Networth
Urban Housing Land
Industrial Land ________ is the fair market value of a real
Economic Zone property multiplied by the assessment level and
is synonymous to taxable value.
The Board of Assessment Appeals shall be Tax Collectible
composed of the Registrar of Deeds as Assessed Value
Chairman and the provincial or city prosecutor Tax Due
and provincial or city _________ as members. Discounted Value
Assessor
Engineer _____________ is the amount required to
Accountant acquire a similar new asset having the nearest
Treasurer equivalent utility as the property being
appraised.
__________ refers to power generating Reproduction Cost New
equipment found in power plants and water Acquisition Cost
treatment equipment found in water treatment None of the Above
plants.Untitled Question Replacement Cost New
Agricultural Equipment
Industrial Equipment In cases of cities, the distribution of proceeds of
Utility Company Equipment the Basic RPT under Section 271 of RA 7160
Building Equipment shall be ________ (for city (GF)– barangay).
50% -50%
_______ is land principally devoted to 60% - 40%
habitation. 80% - 20%
Residential Land 70% - 30%
Habitable Land
Economic Land A uniform rate of basic real property tax not
Natural Habitat exceeding ______ of the Assessed Value shall
be levied in the case of provinces.
_________ is the code used in the Assessment 1.5%
Records to identify the kind of transaction made. 1.25%
Use Code 1.0%
Update Code 1.75%
Kind Code
Classification Code A tract of land with an area of 5 hectares was
recently sold for P500 per square meter. What is
In the case of municipality within the MMA the estimated land value?
(Pateros), the distribution of proceeds of the P2,500,000
Basic RPT shall be _________ (for MMA (GF) – P1,250,000
municipality(GF) – barangay) P25,000,000
30% - 35% - 35% P250,000
35% - 35% - 30%
40% - 35% - 25% ________ is the act or process of determining
40% - 30% - 30% the value of a property or proportion thereof
subject to tax, including the discovery, listing,
__________ is the period of time expressed in classification, and appraisal of properties.
years from the date of appraisal to the date Tax Mapping
when the machinery becomes valueless. Discovery
Recovery Life Assessment
Remaining Economic Life Valuation
Salvageable Life
Worthless Life __________ includes elevators, escalators,
gensets, pumps, airconditioning units and
For purposes of assessment, a depreciation ventillating equipment.
allowance shall be made for machinery at a rate Mechanical Equipment
not exceeding _____ % of the original cost for Agricultural Equipment
each year of use. Building Equipment
20% Industrial Equipment
5%
15% ___________ is the most detailed method in
10% estimating the costs of reproducing a building as
part of the cost approach to value.
Breakdown Method year of its purchase plus the cost of
Comparative Method transportation, handling and installation at the
Quantity Survey Method present site is referred to as the _____________
Unit-in-place Method .
Reproduction Cost
________ is land devoted principally for the Syndicated Cost
object of profit and is not classified as Acquisition Cost
agricultural, industrial, mineral, timber or Landed Cost
residential land.
Subdivision Land Under Section 220 of RA 7160, the local
Rawland assessor shall make a classification, appraisal
Resort and assessment of the real property listed and
Commercial Land described in the declaration irrespective of any
previous assessment in cases where
______ is the actual amount paid to a particular _________
transaction. A request is made by the person in whose name
Cost the property is declared.
Price All of the above
Value There is ongoing general revision of property
None of the above classification and assessment of real properties
Real property is declared for the first time
__________ is the price at a which a property
may be sold by a seller who is not compelled to For urban lands, the standard scale to be
sell and bought by a buyer who is not compelled considered in the preparation of the base map
to buy. shall be ________ .
Assessors Value 1:100 to 1:5000
Fair Market Value 1:100 to 1:2000
Zonal Value 1:200 to 1:5000
Taxable Value 1:500 to 1:10000
_______ of RA 7160 provides for the appraisal If the assessed value of the property is
and assessment of machineries for real property P300,000 after applying the assessment level of
tax purposes. 20%, what is the estimated market value?
Section 218 P600,000
Section 217 P1,000,000
Section 210 P500,000
Section 224 P1,500,000
For agricultural machineries, the Assessment _________ is land devoted principally to the
Level to be applied to the FMV to determine the planting of trees, raising of crops, livestock and
Assessed Value shall be fixed by an ordinance poultry, dairying, salt making, inland fishing and
at the rates not exceeding _______ similar aquacultural activities and other
40% agricultural activities, and is not classified as
50% mineral, timber, residential, commercial or
80% industrial land.
60% Industrial Land
Agricultural Land
A province or city or a municipality within the Raw land
MMA, may levy an annual tax on idle lands at Landgrabbed Land
the rate not exceeding _______ of the AV of the
property which shall be in addition to the basic _________ is the assigning of new assessed
real property tax. values to property, particularly real estate, as a
5.0% result of a general or partial revision or individual
1.5% reappraisal of the property.
1.0% Restoration
2.0% Recalibration
Retirement
In cases of provinces, the distribution or Reassessment
proceeds of the Basic RPT under Section 271 of
RA 7160 shall be ________ (for province(GF) – Guidance Note No. _____ of the PVS provides
municipality(GF) – barangay). for the standards in valuing plant, machinery and
35% - 40% - 25% equipment in the Philippines.
40% - 35% - 25% 1
35% - 35% - 30% 2
40% - 30% - 30% 4
3
The actual cost of a newly-acquired machinery
not yet depreciated and appraised within the
Machine is a device while _______________ is
a classification of the property which consists of The value of a property does not remain
physical facilities that are available for constant.
production designed for manufacturing and CHANGE
industrial purpose. CONTRIBUTION
Machinery & Equipment REGRESSION
Buildings & Other Building Structures PROGRESSION
Land & Land Improvements
Special Purpose Properties Effect on the value of property based on some
future event.
___________ is the technique used to compute REGRESSION
the Replacement Cost New under the Cost CONTRIBUTION
Approach which involves inquiring from PROGRESSION
manufacturers, suppliers and dealers and ANTICIPATION
applying the unit price to the item.
Indexing An owner adds a 4th bedroom to her home and
All of the above realizes a significant gain in property value. The
Repricing addition of a 5th bedroom a year later results in
Calibration only a modest increase in value.
REGRESSION
A property’s value is diminished by P50,000 PROGRESSION
because it lacks a garage. CONTRIBUTION
CONTRIBUTION INCREASING AND DIMINISHING BALANCE
REGRESSION
HIGHEST AND BEST USE After reviewing a property, a buyer decides that
PROGRESSION its greatest value could be realized if a strip mall
were built on it.
Effect of an improvement on a property’s value. HIGHEST AND BEST USE
HIGHEST AND BEST USE CONTRIBUTION
REGRESSION PROGRESSION
PROGRESSION REGRESSION
CONTRIBUTION
Correct answer A homeowner’s property value suffers because
CONTRIBUTION it is next to a house that has become rundown.
PROGRESSION
A prospective buyer believes a suburb will be REGRESSION
passing a rent control ordinance. HIGHEST AND BEST USE
ANTICIPATION CONTRIBUTION
CONTRIBUTION
PROGRESSION A property’s value passes through a renewal
REGRESSION phase.
CONTRIBUTION
The maximum value of a property is equal to the CHANGE
cost of purchasing an equally desirable property REGRESSION
REGRESSION PROGRESSION
PROGRESSION
CONTRIBUTION A property owner’s house is worth approximately
SUBSTITUTION the same as other similar houses in the block.
REGRESSION
Combining lots to increase the value of the new CONTRIBUTION
larger lot over the sum of the smaller ones. PROGRESSION
REGRESSION SUBSTITUTION
CONTRIBUTION
PLOTTAGE A developer decides to assemble four adjacent
PROGRESSION lots so that an office building can be built.
REGRESSION
Process of merging lots. PLOTTAGE
PROGRESSION PROGRESSION
REGRESSION CONTRIBUTION
CONTRIBUTION
ASSEMBLAGE / CONSOLIDATION The one legal use that provides its greatest
value.
The value of a poorer property will increase if it REGRESSION
is near a better quality property. PROGRESSION
CONTRIBUTION CONTRIBUTION
REGRESSION HIGHEST AND BEST USE
PROGRESSION
HIGHEST AND BEST USE
Property values change as these two forces Estimates the price by the highest bidder,
adjust themselves in the real estate market. benefits to investor and its advantages.
REGRESSION
PROGRESSION Estimates the value from past sales data, zonal
SUPPLY AND DEMAND valuation, and asking prices.
CONTRIBUTION Estimates the Price that would be achieved,
the benefits, and that would be agreed.
The value of a property is maximized if it is used Estimates the price from classified ads, interview
in the same way as neighboring properties. with owners, brokers and assessors.
HIGHEST AND BEST USE
REGRESSION Special value can arrive where an asset has
CONFORMITY attributes that make it more attractive to a
PROGRESSION particular buyer than to the general body of
buyers in the market. These attributes are;
A homeowner’s property value benefits because The asset has special desirability, profitability
it is next to a house that recently has been and best use.
renovated. Ecological, socialized, financial and market
REGRESSION characteristics of an asset.
PROGRESSION Physical, geographic, economic and legal
HIGHEST AND BEST USE characteristics of an asset.
CONTRIBUTION The asset’s characteristics are that of liquidity,
profitability and desirability.
The value of a better property will decrease it it
is near a poorer quality property. The __________ Standards of Series 200,
HIGHEST AND BEST USE describes the common different purposes for
PROGRESSION which valuation are required, relate to the IVS
REGRESSION General Standards and set tout any specific
CONTRIBUTION valuation requirements for each purpose.
Local
What would best differentiate Fair Value as General
against Market Value? Application
That Fair Value connotes a broader concept. International
The Fair Value does not take into account the
prospective advantages. How is the purpose of the valuation determined?
That Fair Value is the price to be paid for. By the Valuation Methodology.
The Market Value needs to disregard an arm’s By the Valuation Objective and Basis of
length transaction. Value.
By the Valuation General Principles.
The term __________ is often used in By the Set of the Standards required in the
circumstances where the seller is under valuation.
compulsion to sell and a proper marketing
period is not available. ___________ is the estimated amount for which
Motivated Sale an asset should exchange on the date of
Total Sale valuation between a willing buyer and willing
Forced Sale seller in an arm’s length transaction after proper
Discount Sale marketing where the parties had each acted
knowledgeably, prudently and without
Many valuations may require the use of different compulsion.
Bases of Values that are define by; Market Value
___________. Liquidated Value
Statements, Conditions, Laws and Regulation. Sound Value
Objectives, Methods, and Terms of Reference. Hypothetical Value
Ownership, Rights, and Asking prices.
Stature, Regulation, Private Contract or other As a matter of Practical Expectancy, it is normal
document. for limits to be agreed on the extent of the
Valuer’s investigation. Any such limits shall be
What Approach of Valuation utilizes depreciation recorded on the ___________.
or replacing the asset to reflect obsolescence in Scope of Work
order to estimate the value of the asset when Covering Letter
there is no direct sales evidence is available? Objective
Market Approach Limiting Conditions
Income Approach
Cost Approach The International Valuation Standards Board
Hypothetical Development Approach (IVSB) achieves the objectives ________means.
By setting up schools and colleges teaching
IVS recognizes and defines Bases of Values in Valuation Arts & Science.
each of three principal categories namely; By promoting the Code of Ethics and Standards.
By developing, promoting and monitoring Determine the special circumstances of the
the International Valuation Standards. seller.
Circumstances do not exist at the valuation date
By issuance of licenses and permits to practice that there must be clearly identified as special
valuation. assumption.
_____________ is the value of an asset to the The Basis of Value and its Objective which
owner or a prospective owner. determines the valuation is known to be the
Cost Value __________ of the valuation.
Economic Value Contract
Investment Value Engagement
Market Value Purpose
Meaning
International Valuation Standard 104 sets out
the Minimum Matters that should be addressed To ensure that the valuation report is properly
at the outset of a valuation assignment. What supported, the Appraiser needs to gather
term would best describe this required sufficient evidence by such means as;
standard? Google maps, calls to brokers, request of client.
Scope of Work Pictures, research materials and judgement.
Introduction Inspection, inquiring, computation and
Overview of the Report analysis.
Qualification of the Appraiser Ocular entry, interviews, opinion of buyers and
sellers.
The extent of the investigation is necessary to .
gather ____________. Which of these valuations do not form part of
Sufficient Evidence Asset Standards of IVS 300 series?
Listings Valuation of Property Investment.
Pictures Valuation of Plants & Equipments.
Data Valuation of Future Value.
Valuation of Business Interest.
The Concept of Market Value presumes a price
negotiated in a _________ market were the The standards of IVS apply to Assets and
participants acted freely. ________.
Private and Negotiable Properties
Closed and Favorable Land
Open and Competitive Liabilities
Semi-public and Limited Equity
The Purpose of the Valuation determines the A Basis of Value should be clearly distinguished
valuation objectives and in turn, the _________ from except;
of value. The Approach or Method used to estimate
Computation value.
Data The Actual or Assumed state of an asset at the
Example point of valuation.
Basis The Type of Asset to be valued
The Hypothetical and Assumptions to
Market value should be in accordance with the General Circumstances.
following conceptual framework except;
Estimated amount of an eager or forced What is the objective of the International
seller. Valuation Standards Board?
Estimated value on the date given. Council of International Valuation Standards
Estimated amount by a willing seller. Council of Standards and Valuations
Estimated amount that an asset should International Organization of Valuation Council
exchange. International Valuation Standard Council
___________ is the perceive life over which an What would best determine a valuation to
asset is expected to be available for use by an ensure the information obtain is adequate.
entity. Information from buyers and sellers
Useful Life Professional Judgement
Remaining Life Information from brokers
Depreciated Life Information City Assessors
Economic Life
The IVS set or framework for valuation practice
In order to obtain Forced Sale Value the explains High Level of Principles and
following are required except; Terminologies to help Valuers attain
Identify the reasons for the contract seller. consistency. However, the 2010 Edition does
Need to set a specified period by setting out not:
appropriate assumptions.
Describes different types of Valuation The procedures that will be adopted,
Objectives. assumption that would be made and the
Identify generally accepted Valuation limitations, restrictions and conditions that
Approaches. will apply before the valuation and report are
Give instructors on how to estimate value finalized.
Describes general accepted Valuation The procedure adopted as required by the client.
Concepts.
The determination of Highest and Best Use
It is necessary to gather sufficient evidence by involves considering the following except;
such means except; Economic and Social Impact.
Inspection Establish whether a use in possible.
Using old reports That the use be Financially Feasible.
Inquiring That it be Legally Permissible.
Computation and Analysis
The differences between the Investment Value
The other standards of IVS 2010 Edition is on an Asset with its Market Value is provided by
structured and organized into 100 series except; the?
IVS 104 Scope of Work Motivation for Buyers or Sellers to enter the
IVS 105 Valuation Reporting Market Place.
IVS 103 Bases of Value The conditions between a willing buyer and a
IVS 111 Equity and Liabilities willing seller.
The conditions of the cost of the asset and its
International Valuation Standards 201.01 or Fair Investment Feasibility.
Value under International Reporting Standards The situation that a seller needs to sell and a
contains the following except; buyer needs to buy.
Aggregation, Valuation Hierarchy
Fair Value Measurement, Application of _______________ is the standard – setting
Liabilities body of the International Valuation Standard
Pictures of the property, Market Value Council (IVSC).
Report, Objective of the Study The International Body of Standard Valuation
Scope of Work, Valuation Reporting The International Valuation Standard Board
International Valuation Standard Organization
What best inputs provide guidance on the The International Standard Organization
background of particular valuation requirements
that should be considered as stated in the A ______________ assumption is an
General Standards of IVS 200 Series assumption that either assumes facts that differ
Application Standards? from the actual facts existing at the valuation
The scope of work, Undertaking and Report date, and that would not be made by a typical
Writing. market practice input.
The Objective, Ocular Inspection, and Subjective
Judgement or Opinion of Value. Special
The engagement letter, Study and Report. Objective
The Letter of the Client, Inspection of the Hypothetical
Property and Study.
As a matter of Practical Expectancy, it is normal
The standards of IVS 2010 Edition, is structured for limits to be agreed on the extent of the
and organized into 100 series except; Valuer’s investigation. Any such limits shall be
IVS 101 – General Concepts of Principles. recorded on the ___________.
Liabilities IVS 110 Classified Ads
IVS 103 – Bases of Value Client or third party
IVS 102 – Valuation Approach Zonal and/or assessed values
Co-owners or neighbors
___________ in the estimated price for the
transfer of an asset or liability between identified The 200 series of the IVS or Application
knowledgeable and willing parties the reflects Standards includes the following except;
the respective interest of those parties. Valuation of Art and Intangibles. IVS
Liquidated Value 201.0123
Economic Value Valuation of Property, Plants, & Equipments in
Fair Value Public Sector IVS.201.05
Sound Value Valuation for Depreciation IVS 201.02
Fair Value under International Final Reporting
What contents in an Appraisal Report would you Standards IVS 201.01
consider important as part of the scope of work?
The procedure that is use to set limiting What organization or body is responsible for the
condition, qualification of the appraiser, and date standard setting of the international valuation
of inspection. standard council (IVSC)?
The Methodology Used, Terms of Reference The International Valuation Standard Board
and Introduction. (IVSB)
The International Valuation Standard Objective Appraised
(IVSO) Intended
The Valuation Standard Organization (VSO) Required
The International Body of Standard of Valuation Estimated
(IBSV)
A ____________ is a statement of the
___________ is the estimated amount that an Fundamental Measurement Assumptions of a
entity would currently obtain from disposal of an Valuation.
asset. Definition of Value
Reciprocal Value Limiting Conditions
Scrap Value Standards of Value
Market Value Basis of Value
Liquidation Value
__________ is additional element of value
created by the combination of two or more
Market value of an asset will reflect its interest where the value of the combined interest
_____________. is worth more than the sum of the original
Optimal and Profitable Use interest.
Flexible and Creative Use Interest in absolute value
Highest and Best Use Economic Value
Acceptable and Future Use Synergetic Value
Total Value
The International Valuation Standards Board
Members are appointed by what council?
International Valuation Standard Council
Council of International Valuation Standards
Council of Standards and Valuations 1. If a property’s net income ratio is 0.80, what is
International Organization of Valuation Council its operating expense ratio?
2.00
The International Valuation Standards (IVS) are 0.20
designated to except; 0.02
To promote the convergence of existing 0.80
Valuation Standards.
To issue licenses, certificate, and organize 2. An office building was recently sold for
seminars. P60,000,000.
To identify and promulgate common principles Given the following information:
for undertaking valuation.
To promote consistency and aid to Gross potential income : P12,000,000
understanding of valuation. Vacancy factor : 10%
Expenses : 45% of effective gross
___________ is the amount that reflects income
particular attributes of an asset that are any of Annual mortgage payment : P4,500,000
value to a special purchaser. Equity : P12,500,000
Special Value
Market Value What is the equity dividend rate or cash-on-cash
Fair Value rate of return?
Economic Value 7.48%
11.52%
The ____________ Standards of IVS 300 series
7.50%
describes the matter that influences the value of
12.00%
different types of properties, how the principles
in the General Standards are applied to their 3. For the office building above and the same
valuation. information, what is the over-all rate of return for
Property the
Business property?
Asset 12.00%
Trade 8.58%
7.50%
In an _________, transaction is one between
9.90%
parties who do not have particular or special
relationship. 4. If the land value in a subdivision has
Asking Price increased by 12% during the past year and the
Force Liquidation average price of land sold last year was P
Arm’s Length 1,560,000, what is the average price of land sold
Accretion today?
P 1,372,800
As a General Principle a valuation must be
P 1,572,500
appropriate for its ___________ purpose.
P 1,716,000
P 1,747,200 11. A building has a rental income of P 60,600
per month. Using an annual gross rent multiplier
5. A commercial property producing an annual of 15, the value of the building would be
gross income of P768,500 was sold two months estimated at _______
ago for P5,620,000. What is the property’s gross P 10,800,000
income multiplier? P 10,908,000
7.50 P 909,000
7.31 P 727,200
8.50
7.40 12. The value of a property consisting of land
and building with an annual net operating
6. What is the value of a property with a building income of P330,000 and with an overall
value of P2,400,000, a land capitalization rate of capitalization rate of 12.50% is
8.0%, building overall rate of 14% and net P 2,640,000
operating income of P545,000? P 2,750,000
P 4,012,000 P 2,400,000
P 6,812,500 P 2,570,000
P 4,921,000
P 5,012,500 13. Which of the following estimates would result
in a capitalization rate of 8%
7. To adjust the sale price of a comparable sale Property value of P 4,000,000, net operating
with a 10% better location, you should income of P 320,800
Add 10% to the sale price of the comparable Property value of P 2,500,000, potential gross
Subtract 10% from the price of the subject of income of P 200,000
appraisal Property value of P 2,500,000, effective gross
Multiply the sale price of comparable by 10% income of P 200,000
Subtract 10% from the sale price of the Property value of P 2,500,000, net operating
comparable income of P 200,000
Solution:
Annual Tax Due = 345,000 x 2% = 6,900
Total Tax Due = 6,900 x 3yrs = P20,700 (see
section 270 LGC)
39. One way of getting the amount to be financed by the buyer in the pur
contract price minus downpayment
Real estate finance and 40. Cash payment is not considered a real estate financing method in the
economics a high end subdivision compared to the following: In house financing, ba
financing
41. If financing was made in the amount of 18% interest per annum, the m
applied on a 24 months payment scheme is 1.5% per month (Because 18
1. Economic activities which emphasize harvesting or extracting materials from
42. The the ground
maximum ageor seafor
limit would
the maturity of payment of the loan from
be placed in the primary sector of the economy unit is 70 years old
2. The secondary sector of the economy manufactures finished goods43. An additional requirement in obtaining a loan which is to pay off the l
3. Economic activities which emphasize metal working and smelting, automobile
upon the death production, chemicalis mortgage redemption insurance
of the borrower
and engineering industries, aerospace manufacturing, energy utilities,44. engineering,
A paymentbreweries
scheme whereand the buyer of the condo unit pays the total p
bottlers, construction and shipbuilding would be placed in the tertiarytime without interest is referred to as deferred cash payment
4. The quartenary sector of the economy in the service industry. 45. In the Philippines multiplier effect of real estate is referred to as the
5. Economic activities which include government, culture, libraries, scientific
the other research,
economiceducation,
activitiesand
of the country
information would be placed in the quartenary sector of the economy46. An index used in the Philippines is the multiplier effect of real estate w
6. The quinary sector of the economy which includes the highest levels in of
thedecision
followingmaking in a society or
ratio 1:16.6
economy 47. The downpayment made by the buyer can be computed by using the
7. The quinary sector would include the top executives or officials in such fieldsprice
contract as government,
minus amount science,
financed
universities, nonprofit, healthcare, culture and the media. 48. Diego borrowed money from his brother to buy a lot and borrowed P
8. Among the three types of economic systems, subsistence type is the one that
payable in 2emphasizes the
years. The interest monthly is P 12,500 (Because 15% divide
production of goods and services principally for the producer’s family1,000,000)
and relatives (
Commercial type; and Planned type) 49. Freddie was paying a monthly amortization of P 54,100 per month at
9. Quarrying and Mining are pairs of sub-sectors of the primary sector that are grouped
amortization factorcorrectly
is 0.02705 tothe
be amount being financed is P2,000,000 (
identified as extractive industries divided by amortization factor yields the total financed amount)
10. In economic development, economic factor indicators are availability 50. Inofaconsumer goods, worker
housing financing scheme based on diminishing balance, interest
productivity, access to raw materials, economic structure, and per capitapaymentincomeof principal increases
11. In determining the Quality of Life (QOL), it is based on indicators of
51. Loan value is referred to as the amount of property used as a basis fo
physical environment can be given.
12. Deferred maintenance is a cause which lowers property values.
13. Demand can be comprised by the following: buyer/tenant profiles, occupancy, and absorption
14. Existing inventory, properties under construction, and planned properties
components which do not comprise supply
15. Amortization is the systematic reduction of debt over time
16. An organized exchange conduit is characteristic of an efficient market
17. A Seller’s market is a market where there are many potential buyers but few properties are available.
18. A Buyer’s market is a market where there are many properties available and few potential buyers
19. Market analysis is the study of current supply and demand conditions in a particular area for a
specific type of property.
20. The relationship of the final real estate value estimate to market perceptions should be considered
21. Current listings that have been exposed to the open market for a reasonable time
what the subject market value cannot exceed
22. Market value is based on most probable use
23. Market price is what the property will sell for, while market value is what the sale price should be to a
typical buyer
24. Market value 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.
25. Market value can be described as present worth of future benefits
26. The Multiplier Effect refers to the effect that is made by one aspect of the economy with the other
economic activities in the country.
27. It is said that real estate economics is the application of economic techniques to real estate markets
where it tries to describe, explain, and predict patterns of demand, price, and supply
include needs
28. Price is a result of the interplay and relationship between supply and demand in a particular market
like real estate
29. The formula used to compute the monthly amortization on a diminishing balance method for
installment sales of lots is amount financed multiplied by amortization factor
30. Under the present Pagibig Financing, the minimum amount of interest charged for housing loan is
31. In a subdivision, there were numerous lots being sold by owners but only a few buyers were buying.
This is referred to as a Buyer’s Market
32. A buyer will loan from the bank for the purchase of a house. The amount of difference between what
the total price will be and the amount he can borrow is referred to as
33. In computing the amortization factor on the financing of real estate sales, the factor will be based
interest rate and term of payment
34. A residential subdivision was much in demand but there were only a few lots sold but a lot of buyers
were interested to buy. This is referred to as Seller’s Market
35. Spot cash is not considered a sale on financing or installments in the purchase of a lot
36. Mr. and Mrs. Parte wanted to loan under the Pagibig Financing to buy a residential lot, and they can
purchase a maximum size of 1,000 sq.m.
37. In obtaining a housing loan from the bank, it is required that the house purchased must be
mortgaged to the bank
38. The payment to be made monthly by a buyer of a lot on installment is generally referred to as
monthly amortizations