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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson has several obligations to the buyer when assisting them in the purchase of a commercial condominium unit for their own use. Which of the following is one of those obligations?

A) Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection
B) Confirm the buyer's intended use adheres to all municipal zoning requirements
C) Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund
D) Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller's business

2. A salesperson includes a well-drafted condition in an agreement of purchase and sale for their buyer client to arrange a new first mortgage for an industrial property. The buyer later changes their mind and does not want to borrow money for the purchase. What should the buyer's salesperson use to remove the condition?

A) Waiver
B) Acknowledgment
C) Mutual release
D) Notice of fulfillment

3. 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 preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
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 typically used to appraise income-generating properties.

4. What should a salesperson do if they are unable to secure documentation to verify the usable and rentable areas of a property?

A) Use a laser measuring tool to take the measurements and use the R/U factor to calculate the figures
B) Use the R/U factor to calculate the figures
C) Recommend that the landlord obtain the professional services of a measuring company to obtain the figures
D) Use a laser measuring tool to take the measurements

5. Location preferences and accessibility are important when matching a potential buyer client with an appropriate commercial property. Which of the following is NOT a location preference consideration?

A) Traffic counts
B) Demographics
C) Financial health of the company
D) Surrounding uses

Solutions: