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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson is drafting an offer for a vacant industrial site prime for development on behalf of their buyer client. The salesperson has included all proper conditions to protect the buyer, along with sufficient time periods to undertake the due diligence. Which of the following would be an appropriate conditional time period based on the corresponding condition?

A) A conditional time period for verifying the existence of services such as sewage, water, and electricity that is 30 days in length.
B) A conditional time period for verifying the soil condition or type that is five days in length.
C) A conditional time period for obtaining an approval for a zoning change that is seven business days in length.
D) A conditional time period for a property inspection that is 30 business days in length.

2. A buyer is interested in constructing a retail building and wants to use the most efficient method to save time and money. Which statement is true with regard to tilt-up wall panels and pre-cast panels?

A) Both tilt-up panels and pre-cast panels can lower construction costs.
B) Pre-cast panels cost much more than tilt-up panels.
C) Pre-cast panels are more durable than tilt-up panels.
D) Both tilt-up panels and pre-cast panels are formed off-site.

3. While preparing to list a vacant retail site that allows new auto sales, the salesperson sees that there is an auto repair garage business next door with old and rusting metal storage tanks at the side of their building. Which of the following is the correct action for the salesperson to take?

A) The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.
B) The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.
C) The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.
D) The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

4. A lender completes a financial statement analysis and calculation on various ratios that would indicate the financial performance of the commercial building. Which of the following is NOT correct?

A) The success of ventures often rests in the availability and suitability of financing.
B) The investor is afforded the opportunity to enhance yield.
C) Lenders will apply various financial ratios to get a solid understanding of the business's performance and the ability of the borrower to service debt.
D) It does not matter; mortgaging does not affect cash flow and yields.

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

Solutions: