Free National / General study sheet
Property Value and Appraisal Texas Real Estate Exam Cheat Sheet
Quick answerAppraisal questions test the meaning of value, the appraisal process, and when to use the sales comparison, cost, or income approach. They also test CMA and BPO distinctions.
Source-checked National / General portion
Use the national rule unless the question identifies Texas law or a TREC form. The 11-item weight belongs to the National / General portion. Texas-specific recall cards below are bridges to the separate state portion.
Choose the valuation method before doing arithmetic. The property type and the reason for the valuation usually identify the right approach.
Exam scope
What Pearson tests
Verified against the official content outline.
- Market value versus market price, characteristics of value, and principles of value
- Purpose and steps of an appraisal, plus federal appraisal oversight
- Sales comparison, cost, income, depreciation, reproduction and replacement cost, GRM, and GIM
- Comparative market analysis, broker price opinion, assessed value, and tax implications
Decision traps
Common traps to catch
Check the governing source material.
- Market price is what was paid. Market value is an opinion under stated market conditions.
- In the sales comparison approach, adjust the comparable, not the subject.
- External obsolescence comes from outside the property line and is generally incurable.
- Calling a CMA an appraisal breaks the Occupations Code Section 1103.004(a)(2) exemption. The word decides it, not the math.
- Reconciliation weighs the approaches. It never averages them.
Essential vocabulary
Property Value and Appraisal terms to know
- Market value
- The most probable price under the conditions stated in the definition of value.
- Highest and best use
- The legally permitted, physically possible, financially feasible use that produces the greatest value.
- Sales comparison approach
- An approach that compares the subject with recently sold comparable properties.
- Cost approach
- Land value plus replacement or reproduction cost, less depreciation.
- Income approach
- An approach that converts a property's income into an indication of value.
- Depreciation
- Loss in value from physical, functional, or external causes.
- Net operating income
- Effective gross income minus operating expenses, before debt service and income taxes.
- DUST
- Demand, utility, scarcity, and transferability, the four elements commonly used to remember value.
- Reconciliation
- Weighing the approaches by reliability to reach one supported figure, never averaging them.
- Broker price opinion
- A license holder's written estimate of sale price, lawful only under the Occupations Code Section 1103.004(a)(2) exemption.
- Appraised value
- Tax Code Section 1.04(8): the value determined under Chapter 23; a qualifying homestead may be limited by Section 23.23(a).
- External obsolescence
- Loss in value from a cause outside the property line. Generally incurable.
- Appraisal Subcommittee (ASC)
- The federal body that oversees state appraiser and appraisal-management-company regulatory programs.
- Appraiser Qualifications Board (AQB)
- The board of The Appraisal Foundation that establishes minimum appraiser qualification criteria.
- Appraisal Standards Board (ASB)
- The board of The Appraisal Foundation that develops and updates USPAP.
Check your recall
Can you answer these without notes?
Open each card only after you commit to an answer.
1What are the three elements a Texas CMA needs to stay outside the Appraiser Act?
Not called an appraisal, given in the ordinary course of business, and tied to acquiring, disposing of, encumbering, or managing property. Occupations Code Section 1103.004(a)(2).
2Market value, appraised value, assessed value: which is capped for a homestead?
Appraised value. Tax Code Section 23.23(a) limits the annual rise to 10 percent plus new improvements.
3Does an appraiser average the three approaches?
No. Reconciliation weighs the indications by relevance and reliability to reach a supported value opinion.
4Which body provides federal oversight of state appraiser programs?
The Appraisal Subcommittee. The AQB sets minimum qualification criteria, the ASB develops USPAP, and TALCB licenses and regulates Texas appraisers.
5How must the Texas CMA statement appear?
Verbatim, as part of the written analysis, in at least 12-point font. 22 TAC Section 535.17(c).
6Value, price, or cost: which is what the builder spent?
Cost. Price is what was paid; value is an estimate of worth under stated conditions.
7Which approach is usually strongest for a typical owner-occupied home?
The sales comparison approach.
8Which approach starts with land value and construction cost?
The cost approach. Land itself is never depreciated.
9Does NOI subtract mortgage payments?
No. Debt service is not an operating expense in the standard exam formula.
10As of what date does a Texas appraisal district value property?
January 1. Tax Code Section 23.01(a), and mass appraisal must comply with USPAP under 23.01(b).
11When is a license holder obligated to provide a BPO or CMA?
When negotiating a listing, or offering to buy the property for their own account after contact made as an agent. 22 TAC Section 535.16(c).
12Which depreciation type is generally incurable?
External obsolescence, because its cause is outside the property line.
13If the cap rate rises, what happens to value?
Value falls. Rate is the denominator in the IRV relationship.
14Reproduction cost or replacement cost: which uses current design and materials?
Replacement cost. Reproduction cost estimates an exact replica.
Use the sheet, then retrieve
Turn recognition into recall.
Read the full lesson when a definition is fuzzy. Then answer the topic questions without looking back at this sheet.
Primary sources
Checked .
This is exam-prep education, not legal, tax, or transaction advice. Confirm the current law, form, and official exam materials before relying on a rule in practice.