Missouri Property Valuation
Practice Questions & Answers (2026)
Property valuation questions on the Missouri exam test the three approaches to value (sales comparison, cost, and income), how appraisals work, and what affects market value. The Missouri Real Estate Commission tests when each approach is most appropriate, how adjustments are made in the sales comparison approach, and what factors an appraiser considers vs. ignores. Missouri candidates often struggle with income approach calculations — particularly gross rent multiplier (GRM) and net operating income (NOI) — and with the cost approach depreciation calculations. These are high-difficulty math and concept questions where careful study of the explanations pays off significantly on exam day.
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Missouri Property Valuation — Practice Questions & Answers
118 questions on Property Valuation from the Missouri real estate question bank. First 10 are free — sign up to unlock all 118.
Q1. A Missouri appraiser values a property using the income approach. The property has gross rental income of $48,000/year, vacancy and collection losses of 5%, and operating expenses of $18,000. What is the NOI?
Explanation
Effective gross income = $48,000 × (1 − 5%) = $48,000 × 0.95 = $45,600. NOI = EGI − Operating expenses = $45,600 − $18,000 = $27,600.
Q2. An appraisal report in Missouri must conform to standards set by:
Explanation
All real property appraisals must conform to USPAP (Uniform Standards of Professional Appraisal Practice), the nationally recognized ethical and performance standards for appraisers.
Q3. The principle of contribution holds that:
Explanation
The principle of contribution states that the value of any improvement (or component) is measured by how much it adds to the total market value of the property — not by what it cost to build.
Q4. A comparable property sold 6 months ago at $300,000 in a market with 2% annual appreciation. What is the time-adjusted value of the comparable for today?
Explanation
6 months = 0.5 years. Adjustment = $300,000 × 2% × 0.5 = $300,000 × 0.01 = $3,000. Adjusted comparable value = $300,000 + $3,000 = $303,000.
Q5. The sales comparison approach to value is MOST appropriate for:
Explanation
The sales comparison approach relies on recent sales of comparable properties. It is most applicable to residential properties in active markets where comparable sales are readily available.
Q6. In Missouri appraisal, an adjustment is made to a comparable sale for a feature the subject property lacks. This adjustment is:
Explanation
When a comparable has a feature the subject lacks, the comparable is superior, so its price must be adjusted downward (subtracted) to reflect what it would have sold for without that feature.
Q7. Which type of depreciation in Missouri is considered incurable because the cost to fix it exceeds the value added?
Explanation
Both incurable functional obsolescence (e.g., poor floor plan) and external obsolescence (e.g., nearby industrial site) are typically considered incurable because the cost to remedy exceeds the benefit, or the cause is outside the owner's control.
Q8. The income capitalization approach values a Missouri property by:
Explanation
The income capitalization approach estimates value by dividing net operating income (NOI) by the capitalization rate: Value = NOI ÷ Cap Rate. It is most commonly used for income-producing properties.
Q9. A Missouri appraiser using the cost approach determines the replacement cost new is $280,000 and total depreciation is $40,000. The land value is $60,000. What is the indicated value?
Explanation
Cost approach value = (Replacement cost new − Depreciation) + Land value = ($280,000 − $40,000) + $60,000 = $240,000 + $60,000 = $300,000.
Q10. The principle of substitution in Missouri appraisal states that:
Explanation
The principle of substitution holds that a rational buyer will pay no more for a property than the cost of acquiring a comparable substitute. It is the foundation of the sales comparison approach.
Q11. In Missouri, the 'highest and best use' of a property is defined as the:
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