Try and practice the latest Humber College : PREX-1060A real questions & answers

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 useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
• B. The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
• C. The cost approach is typically used to appraise income-generating properties.
• D. 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.

A salesperson sells an office building using the Commercial Agreement of Purchase and Sale along with a schedule that lists all the fixtures, chattels, and rental items of the office building. After closing the real estate transaction, a dispute arises between the seller and the buyer about which chattels, fixtures, and rental items of the office building were to be included and which were to be excluded. Which of the following is NOT an accurate statement regarding the salesperson's actions related to negotiating chattels, fixtures, and rental items?

• A. The salesperson should clearly describe and list the fixtures and chattels in the Agreement of Purchase and Sale and mark each item as an exclusion or inclusion.
• B. The salesperson should specifically exclude all fixtures that are not a part of the transaction since fixtures are considered a part of the property and are normally included in the purchase price.
• C. The salesperson should clearly list all rental items and service contracts, as these will not be included in the purchase price of the real property being purchased.
• D. The salesperson should specifically exclude all chattels that are not a part of the transaction since chattels are considered a part of the property and are normally included in the purchase price.

Different clauses can be used for each transaction to address the unique needs of buyers and sellers. Which of the following may be used in an agreement of purchase and sale to buy a commercial property?

• A. A clause for the seller to disclose all information verbally without providing supporting documents to verify that information; documents to be provided on closing
• B. A clause for the buyer to review the leases only after all conditions have been waived and accepted
• C. A clause for the buyer to have the right to negotiate for specialized restaurant equipment that is not included in the property purchase price
• D. A clause to confirm the remuneration payable to the brokerages will be as stated in the seller representation agreement

A salesperson representing a client who is selling an office property has received some documents from the seller and is trying to organize them. Which of the following documents is NOT needed by the salesperson or seller when selling the property?

• A. Income verification documents
• B. Telephone bills
• C. Private mortgage form
• D. Environmental site assessments

There are three primary items that require attention when countering an offer from a seller. Which of the following items does NOT need to be checked?

• A. The balance due clause
• B. The date of the agreement of purchase and sale
• C. The irrevocability clause
• D. The purchase price