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Humber College Exam 4: Invigilated Theory Sample Questions:

1. When a property assessment of a new commercial property has not been completed prior to its resale, what should a salesperson do to protect the buyer?

A) Ensure the offer contains a clause allowing for compensation for adjustments to the property taxes.
B) Ensure the offer contains a clause requiring the seller and the buyer to share the property taxes to be assessed for the next three years.
C) Include the current tax assessment as a schedule of the agreement.
D) Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.

2. The cost approach is one method of real estate evaluation that an appraiser may use to estimate the value of a commercial property. Which of the following is NOT an accurate statement regarding the cost approach?

A) The cost approach is typically used to appraise income-generating properties.
B) The cost approach is preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
C) The cost approach is useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
D) The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.

3. While preparing to list a vacant retail site that allows new auto sales, the salesperson sees that there is an auto repair garage business next door with old and rusting metal storage tanks at the side of their building. Which of the following is the correct action for the salesperson to take?

A) The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.
B) The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.
C) The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.
D) The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

4. Which of the following is a characteristic of main street retail?

A) Consists of newer, free-standing buildings only
B) Comprises a blend of old and new stores
C) Must be located in a small, older community
D) Structure size typically ranges from 100,000 to 130,000 square feet

5. A salesperson is helping a buyer client to purchase a piece of vacant land to develop in the future. The salesperson recommends that the buyer consult with a third-party professional because the salesperson cannot provide the service with reasonable knowledge, skill, judgment, and competence. Which of the following is NOT a professional the salesperson would likely recommend to the buyer?

A) A legal consultant who specializes in evicting residential tenants
B) An appraiser with Accredited Appraiser Canadian Institute (AACI) designation
C) A zoning specialist in the city's planning department
D) A consultant in a financial institution

Solutions: