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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A buyer client and their salesperson are doing a visual check of the industrial property that the buyer is planning to purchase. When they get to the rear of the property, the salesperson observes a potential source of contamination. Which of the following factors is likely the cause of concern for the salesperson?

A) The neighboring property includes a restaurant, a dental clinic, and a law office.
B) The office building next door has an overflow parking lot.
C) There is a residential neighborhood and playground nearby.
D) There is vacant land nearby with a small pond with discolored standing water.

2. A buyer should consider the record of site condition (RSC) document when purchasing a commercial property. Which of the following statements regarding an RSC is correct?

A) Requesting an RSC is mandatory in all real estate transactions.
B) It is not a material fact; thus, it is a formality for the buyer to get it.
C) With other documents, it will inform the buyer of any legal issues attached to the title.
D) It contains records pertaining to a property's financial condition.

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 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 preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
D) 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.

4. A buyer is in the process of closing a transaction when a tornado causes damage to the property. The necessary repairs may extend past the closing date. Which of the following may be used to resolve this problem?

A) Change the completion date by using a waiver.
B) A change is not necessary because the damage is out of the control of the buyer or the seller.
C) Change the completion date by using an amendment to the agreement of purchase and sale.
D) Change the completion date by using a notice of fulfillment.

5. A retail property buyer must consider the parking requirements associated with the site. All of the statements below are considerations for parking, EXCEPT:

A) There may be minimum width and depth requirements for parking spaces.
B) Parking may be impacted by zoning requirements.
C) Parking may be impacted by the municipality's parking bylaw.
D) Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.

Solutions: