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Humber College PREX-1060A Exam Syllabus Topics:

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) Get a letter from the seller to guarantee a maximum amount of realty tax payment in the coming year.
C) Include the current tax assessment as a schedule of the agreement.
D) 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.

2. Which of the following is most likely to be a factor in an appraisal for an industrial property?

A) Proximity to museums and historical sites
B) Price trend for detached homes in nearby neighborhoods
C) Access to raw materials used in the region
D) Amount of advertising and publicity

3. Which of the following is a correct statement regarding a design-build arrangement in commercial real estate?

A) A design-build arrangement is a sale/leaseback arrangement.
B) A design-build arrangement is commonly associated with a seller's market.
C) A design-build arrangement means the buyer will only buy the property if the landowner builds a building to the buyer's specifications.
D) A design-build arrangement requires the buyer to acquire suitable land and construct a building themselves.

4. A salesperson, who is representing a tenant, has completed a comparative market analysis (CMA) of the management fees charged, assessed on a square footage basis, at the different office buildings that their client is interested in leasing. The management fees vary across the comparable office buildings, and the tenant is interested to know why there is a difference. Which of the following is an accurate statement the salesperson can make about the difference in management fees between the buildings?

A) The salesperson should identify the reasons for high management fees charged for a building and determine the relative value it provides.
B) The salesperson should explain that a tenant occupying a smaller rentable area in a building pays higher management fees per square foot compared to a tenant with an average or larger rentable area.
C) The salesperson should tell their client that higher management fees charged for a building always indicates that the tenant is getting superior service and value.
D) The salesperson should tell the tenant that the Condominium Authority of Ontario regulates management fees charged by buildings as per their size.

5. 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
B) Use the R/U factor to calculate the figures
C) Use a laser measuring tool to take the measurements and use the R/U factor to calculate the figures
D) Recommend that the landlord obtain the professional services of a measuring company to obtain the figures

Solutions: