What is tested in Valuation and Market Analysis?
| Official PSI area | Valuation and Market Analysis |
|---|---|
| Exam portion | National portion |
| Published weight | 8% of the 100-question national portion |
| Published branches | 3 |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Last verified | August 2, 2026 |
The Rule
PSI publishes an 8% area weight, not separate weights for the three approaches or for CMA questions.
Why this area matters
The tested skill is method selection. You need to recognize the kind of property, the available evidence, and the assignment before choosing an approach or valuation product.
Complete official content outline
These are all branches named in PSI's current salesperson outline. The teaching points below unpack each branch so you can move from recognition to application.
A. Appraisals
Know why an appraisal is ordered, when licensed or certified appraisal work is required, and the general sequence of an appraisal assignment.
- Appraisals for real-property valuation
- Assignments requiring a licensed or certified appraiser
- Brokerage actions that can become unauthorized appraisal practice
- Problem identification, data collection, analysis, reconciliation, and reporting
B. Estimating value
Match economic principles and property characteristics to the correct valuation approach.
- Supply and demand, substitution, anticipation, contribution, conformity, competition, progression, and regression
- Sales or market comparison approach and appropriate uses
- Cost approach and appropriate uses
- Income analysis approach and appropriate uses
C. Comparative Market Analysis
Keep brokerage estimates and automated outputs distinct from an appraisal opinion.
- CMA, BPO, or equivalent brokerage analysis
- AVM output
- How appraisal, CMA, and AVM purpose, process, and authority differ
Complete lesson sequence
Work in order the first time. Each page connects the official topic to a full lesson, Georgia distinction, worked example, exam traps, original questions, mastery check, and recommended next lesson.
Lesson 63
Appraisals: Purpose, Process, and Reports
Separate the value opinion from the process, report, price, cost, and transaction outcome.
Lesson 64
Principles and Elements of Value
Match the fact pattern to the market behavior described, not merely to a word that sounds favorable.
Lesson 65
Highest and Best Use
Reject impossible or prohibited uses before comparing financial returns.
Lesson 67
Sales Comparison Approach
Make the comparable look like the subject, using add for comparable inferiority and subtract for comparable superiority.
Lesson 68
Cost Approach to Value
Value land separately, estimate cost new, subtract all improvement depreciation, then add land.
Lesson 69
Income Approach and Market Analysis
Identify whether the problem supplies net income, gross rent, or comparable-sale evidence before choosing the method.
High-value distinctions and exam traps
Use these after the complete lesson sequence. Each comparison puts easily confused terms into the same decision table, then tests the controlling fact in a new scenario.
Comparison 182
Market Value Versus Market Price Versus Cost
Look for the verb: should sell for, did sell for, or cost to create or acquire.
Comparison 183
Appraisal Versus CMA Versus BPO Versus AVM
Identify who produced the conclusion, the intended use, the governing license, the inspection or data scope, and whether the output is represented as an appraisal.
Comparison 184
Sales Comparison Versus Cost Versus Income Approach
Match the property and assignment to the strongest evidence: comparable sales, land plus depreciated improvement cost, or income and a market rate.
Comparison 185
Physical Deterioration Versus Functional and External Obsolescence
Locate the source of the loss first, then compare cure cost with the value the cure would restore.
Comparison 186
Progression Versus Regression
Compare the subject with its surroundings and ask whether the neighborhood influence pushes the subject upward or restrains it downward.
Comparison 187
Assemblage Versus Plottage
Ask whether the question describes the combination process or the additional value produced by the combination.
Comparison 222
Potential Gross Income Versus Effective Gross Income Versus NOI
Move down the income statement in order: potential income, vacancy and collection loss, other income, effective gross income, operating expenses, and NOI.
Comparison 223
Capitalization Rate Versus Gross Rent Multiplier
Identify whether the question supplies NOI or gross rent, match monthly or annual units, and choose division for the rate or multiplier before estimating value.
Georgia-specific distinction
Worked example: Choose the approach before doing arithmetic
Scenario. An appraiser is valuing a typical owner-occupied home in a subdivision with several recent arm's-length sales of similar homes.
Reason it through. The sales comparison approach is usually most persuasive because the market provides comparable transactions. The cost approach may support the conclusion, especially for a newer property, but the income approach is not usually primary when buyers in that market do not purchase based on rental income.
Common exam traps
- Treating cost as value without depreciation or market evidence
- Adjusting the subject instead of the comparable
- Calling a CMA an appraisal
- Using gross income where a capitalization problem requires NOI
- Assuming the newest method or AVM is automatically the most reliable
Original practice questions with explanations
Answer each question before opening the explanation. These are original instructional questions mapped to the official outline. They are not copied from PSI or a live exam.
Question 1Which principle says a buyer will not pay more for a property than the cost of an equally desirable substitute?
- A. Contribution
- B. Substitution
- C. Conformity
- D. Anticipation
Show answer and explanation →
Answer: B. Substitution
Substitution supports the sales comparison approach. Buyers compare alternatives and resist paying more than an equally useful substitute.
Question 2When adjusting a comparable that has a garage but the subject does not, what is the basic direction?
- A. Add to the comparable
- B. Subtract from the comparable
- C. Add to the subject
- D. Make no adjustment
Show answer and explanation →
Answer: B. Subtract from the comparable
The comparable is superior because of the garage, so subtract the garage's contributory value from the comparable's sale price to make it more like the subject.
Question 3Which valuation product is most clearly a brokerage pricing tool rather than a formal appraisal?
- A. CMA
- B. URAR appraisal
- C. Certified appraisal report
- D. Appraisal reconciliation
Show answer and explanation →
Answer: A. CMA
A CMA helps a broker or licensee estimate a competitive market position. It is not a formal appraisal and should not be presented as one.
Mastery tracking
Mark this area mastered only when every statement below is true.
- I can explain every official branch in plain English without notes.
- I can identify the Georgia distinction before reading the answer choices.
- I can solve a new scenario and state which fact controlled the answer.
- I can explain why each tempting distractor is wrong.
- I meet my accuracy target in mixed practice on at least two different days.
- I know which lesson to reopen when this area weakens.
Related lessons
The three approaches to value
Compare method, formula, and best use.
Valuation formulas
Work cap rate, value, NOI, and GRM.
Valuation practice
Choose the correct method before calculating.
Recommended next lesson
Continue with Financing. Connect value to loan qualification, LTV, and security instruments.