The correct answer is (D). Choice (A) is incorrect in two ways: it is a typical item brought to a closing and it’s the buyer that brings it. Choice (B) pertains to apartment rentals, not office rentals. Choice (C) is incorrect. A seller of a rental property would provide estoppel letters from tenants indicating the rental amounts due on their leases—before the closing—so the closing agent can incorporate the amounts into the settlement statement.
The correct answer is (B). Net operating income is the method most often used to find the capitalization rate. Choice (A) seems right because people put money into a project when they capitalize it, but it’s a distracter. Choice (C) is incorrect because the capitalization rate should reflect the expected rate of return for investors, but is not the same as the ROI. Choice (D) is similar to choice (A) and incorrect.
The correct answer is (D). Choice (D) is known as the procuring cause agent. However, in the real world, determining who is the procuring cause agent is not always clear cut, so it’s important to explain the concept to buyers. Choices (A), (B), and (C) are incorrect.
The correct answer is (D). $537,620 × 0.0425 = $22,848.85
The correct answer is (C). Choice (C) is an area of land that is used to separate one type of land use from another. Its purpose is transitional. Neither choice (A) nor choice (D) is a zoning term. Choice (B) is incorrect because it defines a variance.
The correct answer is (A). Choice (B) is an example of the truism that the longest answer is often the wrong answer. The purpose of an appraisal is to provide the commissioning entity with a single valuation. Choice (C) is incorrect because highest and best use is one economic factor influencing value. Choice (D) is incorrect because the use of the property affects which appraisal approach (income, cost, sales comparison) receives more weight.
The correct answer is (A). A contract that is voidable is enforceable if the parties agree to act on it; in this case, the wronged party decides to act on it. Choice (B) is incorrect because coercion makes the contract voidable, so it can’t be valid and enforceable. Choice (C) is incorrect because it’s a voidable contract, which is not the same as void, and for this reason, choice (D) is also incorrect.
The correct answer is (A). A sole proprietorship is also tenancy in severalty. Choice (B) is an ownership arrangement for two or more individuals with right of survivorship. Choice (C) grants the holder of the lease possession, not ownership, of the property for a set period of time. Choice (D) is a qualified fee simple estates subject to certain conditions or contingencies that the grantor puts on the property.
The correct answer is (A). Having a power of attorney also gives the brother-in-law universal agency. Choice (B) is a distracter. Choice (C) bestows only limited authority on a person to act for another. While choice (D) enables an agent to take on many tasks for another person, those do not include power of attorney.
The correct answer is (C). Choice (C) is incorrect because RESPA stands for the Real Estate Settlement Procedures Act and doesn’t deal with antidiscrimination policies, so it is the correct answer to the question. Choices (A) and (B) are true about antidiscriminatory housing policies, so they are incorrect answers to the question. Choice (D) is regulated by various federal employment laws such as the Equal Employment Opportunity Act.
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