Certification Examination Practice

Illinois Real Estate Appraisal Instructor Certification Examination Practice Questions And Correct Answers (Verified Answers) Plus Rationales 2026 Q&A | Instant Download Pdf

• What is the primary purpose of real estate appraisal?
• To determine the market value of a property
• To calculate property taxes
• To inspect the physical condition of a building
• To estimate construction costs
• To determine the market value of a property

Rationale: The main goal of an appraisal is to provide an unbiased

estimate of the property’s market value, which is essential for sales, financing, and taxation. 1 / 4

• Which approach to value is most commonly used for appraising

residential properties?

• Cost Approach
• Income Approach
• Sales Comparison Approach
• Depreciation Approach
• Sales Comparison Approach

Rationale: The sales comparison approach is preferred for residential

properties because it uses recent sales of similar properties as a basis for value.

• The principle that states a property's value is influenced by the values

of surrounding properties is called:

• Contribution
• Substitution
• Progression and Regression
• Competition
• Progression and Regression

Rationale: This principle reflects that a lower-valued property can increase

in value in a higher-valued neighborhood (progression), and a higher- valued property can decrease in value in a lower-valued area (regression).

• In appraisal terminology, which type of depreciation occurs due to

physical wear and tear?

• Functional Obsolescence 2 / 4

• External Obsolescence
• Physical Deterioration
• Economic Obsolescence
• Physical Deterioration

Rationale: Physical deterioration is the loss of value caused by aging, wear,

and tear of the property.

• The type of real estate appraisal report that provides a simple

estimate of value with minimal explanation is called:

• Self-Contained Report
• Restricted Use Report
• Summary Report
• Narrative Report
• Restricted Use Report

Rationale: Restricted use reports are limited to specific users and purposes,

providing minimal explanation and analysis.

• Which federal law regulates appraisal standards for federally related

transactions?

• Fair Housing Act
• Equal Credit Opportunity Act
• Dodd-Frank Act
• Real Estate Settlement Procedures Act 3 / 4

• Dodd-Frank Act

Rationale: The Dodd-Frank Act mandates that appraisals for federally

related transactions comply with the Uniform Standards of Professional Appraisal Practice (USPAP).

• Which principle states that a property’s value is set by the cost of

acquiring an equally desirable substitute property?

• Contribution
• Substitution
• Anticipation
• Supply and Demand
• Substitution

Rationale: The substitution principle holds that a buyer will pay no more

for a property than the cost of an equally desirable alternative.

• What type of appraisal would be most appropriate for an income-

producing property?

• Cost Approach
• Sales Comparison Approach
• Income Capitalization Approach
• Replacement Approach
• Income Capitalization Approach

Rationale: The income approach is used for properties that generate

income, as it calculates value based on expected income streams.

• / 4