Preview Questions Real Estate Agent | Role Specific Skill

Question 1: What is the primary challenge when valuing a property with a short-term lease in a high-demand market using the Income Capitalization Approach?

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The uncertainty of future rental income and potential vacancy risks

The long-term lease terms and tenant retention issues

The impact of rising interest rates on future income

The current market value of comparable properties

Question 2: In a real estate appraisal, how is functional obsolescence in a commercial property considered in the final valuation?

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It is ignored unless it impacts the property's potential rental income

It is incorporated into the cost approach based on the property's age

It is only considered for properties over 50 years old

It is subtracted from the overall value based on inefficiencies in design or layout

Question 3: When valuing a property, which method is most reliable in estimating the value of a new construction in a high-demand urban area?

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Cost approach due to the recent construction costs

Income capitalization approach if the property is rental income-based

Gross Rent Multiplier (GRM) method for quick estimates

Sales comparison approach based on similar recent sales

Question 4: In the context of real estate contracts, what does "mutual assent" refer to?

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The agreement of both parties to the terms of the contract

The buyer's understanding of the property's value

The buyer's acknowledgment of the market conditions

The seller's agreement to provide financing

Question 5: When valuing a vacant land parcel for potential development, what must an agent consider to ensure the highest possible value is assessed?

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The condition of the surrounding infrastructure

The proximity to other developed parcels and amenities

The historical sales data for nearby land parcels

The land's zoning, current use, and any potential for future rezoning

Question 6: Why is it important to define non-negotiable terms early in a property transaction negotiation?

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To create a strong initial impression

To reduce the negotiation time

All of the above

To avoid revisiting critical points