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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) Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller's business
D) Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund

2. Which of the following accurately describes a landlord's commercial property insurance coverage?

A) A landlord's commercial property insurance policy should cover the loss of the tenant's assets due to theft from their employees or third parties.
B) A landlord's commercial property insurance policy should cover the loss of the property's equity due to a change in market conditions or to a recession.
C) A landlord's commercial property insurance policy should cover the loss of the tenant's assets and income due to business interruption as the result of a fire or flood.
D) A landlord's commercial property insurance policy should cover the loss of rental income in the event of a fire, for the period the premises is vacant while repairs are made.

3. In regard to cash flow into and out of a business, which of the following is correct?

A) Sales proceeds cash flow does not affect investor decisions.
B) Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.
C) Operating cash flow is used when determining yield on an investment property, while sales proceeds cash flow is not used for this purpose.
D) Operating cash flow can be positive or negative.

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

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

Solutions: