mock 1

Question 1

A development company has received a contractual loan in the amount of $1,250,000 at 8% per annum, compounded monthly, with 2 year term, and annual interest-only payments. What is the amount of these interest-only payments?

1. $102,000.00
2. $120,113.19
3. $102,178.19
4. $103,749.39

Answer 1

4. $103,749.39

Question 2

In appraising an income producing property using the income method, gross potential rents must be estimated. How are gross potential rents best determined?

1. based on long term vacancy rates in the area in which the subject property is located
2. based on published surveys of relevant real estate trends
3. based on the relationship between money actually received and units actually rented
4. based on actual current rents of similar properties

Answer 2

4. based on actual current rents of similar properties

Question 3

The difference between a License and a lease is important in determining the set of rights a tenant has. What is the best way to distinguish the difference between a license and a lease?

1. Look to the Residential Tenancy Act for making the determination between a license and a lease.
2. Look at the terms in the agreement to determine the parties intention as to whether or not an agreement has granted exclusive possession to the tenant.
3. Look at the language used in the agreement to see if the lease describes a lease relationship of landlord and tenant or a license relationship of licensor and licensee.
4. Look at the document as a whole.

Answer 3

2. Look at the terms in the agreement to determine the parties intention as to whether or not an agreement has granted exclusive possession to the tenant.

Question 4

Where a borrower believes that the amount of interest being charged is excessive, under which statute might relief be granted?

1. the Interest Act
2. the Business Practices and Consumer Protection Act
3. the Land Titles Act
4. all of the above

Answer 4

2. the Business Practices and Consumer Protection Act

Question 5

Which of the following is NOT an “interest” in a negotiation, but a “position”?

1. The fear of carrying two loans at the same time
2. The need to close the deal by Jan 12th
3. The need to secure a house to live in prior to work commencing
4. The desire to ensure that the wife receives more of the estate than the husband

Answer 5

2. The need to close the deal by Jan 12th

Question 6

Which of the following statements regarding Teams is TRUE:

A. a Team can consist of licensees that belong to different brokerages
B. you may advertise using an existing, approved team name as long as they are from different brokerage
C. Team names used in advertisements must be approved by the BC Real Estate Council
D. When advertising with unlicensed team members, there is no need to indicate that they are not licensed as long as they are part of an approved team with at least one licensed member.

1. A, B and D
2. A and C
3. Only C
4. All of the above

Answer 6

3. Only C

Question 7

A limitation or restriction placed upon the use of one person’s land for the benefit of another is called:

1. a remuneration.
2. a zoning bylaw.
3. a restrictive covenant.
4. an order absolute of foreclosure.

Answer 7

3. a restrictive covenant.

Question 8

In which of the following instances would a contract of purchase and sale be most likely to remain in full force?

1. The Purchaser assigns his or her rights under the contract of purchase and sale, which includes the seller’s consent, to a 3rd party before completion.
2. The vendor and purchaser decide together to reopen the negotiations on their original agreement.
3. The contract contains a vague description of vendor financing which is to follow completion.
4. In none of the above instances would a contract of purchase and sale remain in full force and effect.

Answer 8

1. The Purchaser assigns his or her rights under the contract of purchase and sale, which includes the seller’s consent, to a 3rd party before completion.

Question 9

The investment method of appraisal is generally used for:

1. Properties that produce rental income
2. Single family homes
3. Air space rights
4. Properties that possess latent value

Answer 9

1. Properties that produce rental income

Question 10

Where a deposit paid directly to a seller on account of the purchase price:

1. The amount of the deposit will appear as a credit to the buyer’s statement and a debit on the seller’s statement
2. The amount of the deposit will appear only on the seller’s statement of adjustments
3. The amount of the deposit will appear as a debit on the buyer’s statement and a credit to the seller
4. The amount of the deposit will appear in the same column as the purchase price on the sellers statement

Answer 10

1. The amount of the deposit will appear as a credit to the buyer’s statement and a debit on the seller’s statement

Question 11

Which of the following is NOT an example of a breach of contract?

1. After Don contracted with Toni to buy his car, the night before Don was supposed to pay the price and take the car, it was struck by lightning in Toni’s driveway and destroyed.
2. After Babs contracted with Quin in May to rent his motorhome for one week in July, Quin telephoned Babs and told her that he was going to be using the home himself that week, and that she would not be able to rent it.
3. Fred contracted with Jordan to sell him his collection of hockey cards, but one day later Fred sold them to Andrew, who paid him $15 more than Jordan had agreed to pay.
4. Adrian contracted to paint Woodie’s house starting on September 1 for a price of $500. On September 1 Adrian failed to turn up, and did not return any of the messages that Woodie left on his answering machine.

Answer 11

1. After Don contracted with Toni to buy his car, the night before Don was supposed to pay the price and take the car, it was struck by lightning in Toni’s driveway and destroyed.

Question 12

Which of the following statements regarding the comparative method of appraisal is TRUE?

1. The comparative method should be used if a property possesses latent value.
2. To apply the comparative method of appraisal, the appraiser estimates the market value of the subject property using the evidence of sale prices of similar properties which were sold at any time prior to the date of the appraisal.
3. The comparative method of appraisal is the most inexact approach for finding market value since cost and market value are not necessarily equal at any particular time.
4. The comparative method reflects market behavior and requires a minimum of subject opinion from the appraiser.

Answer 12

4. The comparative method reflects market behavior and requires a minimum of subject opinion from the appraiser.

Question 13

A tenancy which automatically renews itself on the last day of the term for further term of the same duration until terminated by either party with proper notice is called a:

1. tenancy at will
2. tenancy at sufferance
3. periodic tenancy
4. term certain tenancy

Answer 13

3. periodic tenancy

Question 14

In which of the following mortgages does the repayment payment increase on a regular basis?

1. reverse annuity mortgage
2. graduated payment mortgage
3. straight line principal reduction mortgage
4. interest accruing mortgage

Answer 14

2. graduated payment mortgage

Question 15

The Law and Equity Act contains a provision that is often referred to as the ‘requirement of writing’. Which of the following statements in TRUE regarding the “requirement of writing”, contained in section 59 of the Real Estate Law and Equity Act?

1. facts dealing with real estate must always be in writing to be enforceable
2. the party who reasonable relied on the oral contract of real estate will be able to enforce the contract
3. leases are not subject to the requirement of writing
4. none of the above is TRUE

Answer 15

2. the party who reasonable relied on the oral contract of real estate will be able to enforce the contract

Question 16

Which are considered “Curable Functional” depreciation in a building?

1. Building style with an emphasis on low ceilings
2. Decaying foundation
3. . Old wallpaper in the master bedroom
4. Brass fixtures in the bathroom

Answer 16

4. Brass fixtures in the bathroom

Question 17

Which of the following occurs during the pleading process?

1. A Response to a civil Claim
2. Trial
3. Judgment
4. Enforcement

Answer 17

1. A Response to a civil Claim

Question 18

Which of the following terms regarding superstructure are TRUE?

1. stud – a horizontal framing member that supports the ceiling finish
2. plate – a horizontal lumber that the studs rest on at the bottom and top of framed walls
3. sheathing – dimensional lumber used to support a floor
4. column – a solid beam used to support a floor over an exterior opening

Answer 18

2. plate – a horizontal lumber that the studs rest on at the bottom and top of framed walls

Question 19

According to Real Estate Services Act Rules and Regulations, which of the following statements is FALSE?

1. A representative is a licensee who meets the educational and experience requirements established by the Rules and may apply to be a managing broker but is providing services under the supervision of a managing broker.
2. Every licensee applicant must make full and complete disclosure with respect to criminal charges or convictions, bankruptcy, and other legal proceedings in the licence application.
3. When evaluating an application for license, the Real Estate Council may conduct an investigation which could lead into a hearing.
4. A brokerage must have a managing broker.

Answer 19

1. A representative is a licensee who meets the educational and experience requirements established by the Rules and may apply to be a managing broker but is providing services under the supervision of a managing broker.

Question 20

In which of the following situations is the residual method of appraisal the most suitable method to use?

1. When the market supply and demand forces are fairly constant.
2. Where there is a large volume of available market data and the subject property represents the highest and best use.
3. Where the value to be measured is a market value expressed as an income flow.
4. Where the subject property possesses development potential.

Answer 20

4. Where the subject property possesses development potential.

Question 21

The Local Government Act creates three different levels of local law. Which of the following is NOT one of these levels of local law:

1. Local improvement district
2. Local enterprise zone
3. Regional district
4. Municipality

Answer 21

2. Local enterprise zone

Question 22

Which British Columbia Act regulates the way private sector organizations collect, use, keep secure, and disclose personal information?

1. Private Information and Disclosure Act
2. Private Sector Protection Act
3. Personal Information Protection Act
4. Privacy Collection Act

Answer 22

3. Personal Information Protection Act

Question 23

Which of the following scenarios illustrates a violation of the provisions of the Competition Act?
A. Peter, Paul and Pedra each run one of the three real estate agencies in Squamish; Peter and Paul have been planning to fix their commissions at a rate which will undercut Pedra’s business but have not yet initiated their plan

B. Harry, who is not in the real estate business, recently decided to sell his apartment himself and placed an advertisement in the paper giving the details. In the ad, he mentioned that the carpeting was new when he bought the apartment one year ago but, in actual fact, the carpeting was 5 years old at the time and in decent condition. Elaine, a ballet dancer, intended to replace the carpet with hardwood, shortly after she purchased the apartment.

1. Only A
2. Only B
3. Both A and B
4. None of the above

Answer 23

3. Both A and B

Question 24

Which of the following types of authority would not provide an agent with binding contract between his principal and a 3rd party?

1. Implied authority
2. Apparent Authority
3. Assumed Authority
4. Express Authority

Answer 24

3. Assumed Authority

Question 25

After the order NISI is granted to a petitioner and the responded borrower fails to pay the amount owed by the expiry of that redemption period, the petitioner may apply for: 1. A statutory priceity over the property 2. All charges, except for the petitioner’s to be wiped off the title 3. . A certificate of pending litigation 4. A judicial sale

Answer 25

4. A judicial sale

Question 26

Lenders who are attempting to ration mortgage funds could: 1. decrease their gross debt service ratio. 2. decrease their interest rate on mortgage loans. 3. increase their maximum loan to value ratio. 4. increase the maximum amortization period available on mortgage loans.

Answer 26

1. decrease their gross debt service ratio.

Question 27

The purpose of the R.E. Development Marketing Act is to protect the public by requiring developers to: 1. Meet preliminary requirements or approvals applicable to the type of property being marketed at the time of purchase. 2. Prepare and file a disclosure statement in the form required. 3. To assure the purchaser’s title by the Real Estate Development Marketing Act. 4. All of the above

Answer 27

4. All of the above

Question 28

Which of the clauses in a mortgage does NOT directly apply when a borrower defaults on a mortgage? 1. Omnibus clause 2. . Repayment clause 3. Acceleration Clause 4. Mortgage in possession

Answer 28

2.. Repayment clause

Question 29

Which of the following scenarios represents a method for using a manufactured home itself as security for purchase price? A) Mike transferred ownership of his manufactured home to Paul, who then gave a security agreement on the home in favor of Mike in exchange for part of the purchase price B) Alex borrowed money from his sister-in-law in order to pay for his manufactured home in exchange. Alex has a security agreement on the home in favor of his sister-in-law. C) Ivan purchased a manufactured home from Joanne under the condition that he will make biweekly payments to her for the next 3 years, at which time Joanne will transfer legal ownership to him. A & B only A & C only B & C only All the above

Answer 29

4. All the above

Question 30

Which of the following would appear as CREDITS on the buyer’s statement of adjustment? 1. Legal fees to discharge an existing mortgage, proceeds of a new first mortgage, deposit paid into the brokerage’s trust account 2. Purchase price, seller’s share of taxes not yet due, legal fees for discharging an existing mortgage 3. Assumption of existing 1st mortgage, buyer’s share of already paid taxes, real estate commission 4. Agreement for sale, deposit paid into the brokerage’s trust account, seller’s share of taxes not yet due

Answer 30

4. Agreement for sale, deposit paid into the brokerage’s trust account, seller’s share of taxes not yet due

Question 31

An Assessment Notice is: 1. an extract from the assessment roll concerning a specific property. 2. a notice issued by the municipality stating the date on which assessor will appraise your property. 3. a demand for payment of a specified amount of property taxes. 4. a notice of the cost to the property owner of a local improvement project.

Answer 31

1. an extract from the assessment roll concerning a specific property.

Question 32

Listing contracts typically contain which of the following: A. the vendor’s obligation to pay commission B. the scope of authority of the agent C. the price at which the vendor wishes to sell D. the length of the agency Only A & B B & C A, C & D A, B, C, & D

Answer 32

A, B, C, & D

Question 33

The term stare decisis means: 1. on the surface. 2. let the former decision stand. 3. beyond the powers. 4. decisions must be equitable.

Answer 33

2. let the former decision stand

Question 34

Which of the following actions would constitute a trespass by Vivian? 1. Vivian throws her empty coffee cup onto Laura’s property 2. . Vivian does door to door sales and walks onto Laura’s property to reach her front door 3. Vivian hits her head while rollerblading – strangers pull her over onto someone’s land that has a “No Trespassing” sign 4. Vivian rushes to “Shoe World” store just at the door is being locked for the day and convinces the store owner to let her in for last minute shopping

Answer 34

1. Vivian throws her empty coffee cup onto Laura’s property

Question 35

Which of the following statement regarding mortgages are TRUE? A. An insured mortgage is generally referred to as a conventional mortgage. B. In Canada, an insured loan can only be obtained from the private lenders. C. In a majority of cases, the insurance fee is added onto the loan amount; borrowers have used their cash for the down payment and other transaction D. With an insured mortgage, an insurance company guarantees that the lender can recover all of the funds loaned in case of default. Only statements C and D are true Only statements B and C are true Only statements A, C and D are true All of the above are true

Answer 35

1. Only statements C and D are true

Question 36

Which of the following would be acceptable? 1. Bob, a realtor, uses Photoshop to remove power lines from listing photos 2. Bob, a realtor, uses Photoshop to remove garbage bins from listing photos 3. Photoshop is always acceptable to use 4. Photoshop is never acceptable to use

Answer 36

2. Bob, a realtor, uses Photoshop to remove garbage bins from listing photos

Question 37

An insured mortgage loan is: 1. mortgage loan insurance which protects the lender against loss resulting from fire or other events 2. borrower protection against loss of his property if he is unable to make a required mortgage payments 3. lender protection against loss should the borrower default 4. always under the terms of conventional mortgage

Answer 37

3. lender protection against loss should the borrower default

Question 38

Local governments execute planning controls through the use of three principal types of registration. Which of the following is NOT one of these three regulations? 1. Vacant sites bylaw 2. Subdivision bylaws 3. Building bylaws 4. Zoning bylaws

Answer 38

1. Vacant sites bylaw

Question 39

Under Real Estate Services Act and Regulations, which of the following statements is FALSE? 1. A brokerage must hire a managing broker 2. When hiring a licensee, the Real Estate Council may impose conditions or restrictions on a licensee 3. An individual may be registered independently as a real estate representative without being employed by a real estate brokerage 4. Real Estate Licensees must be at least 19 years or older

Answer 39

3. An individual may be registered independently as a real estate representative without being employed by a real estate brokerage

Question 40

Which of the following are adverse contraventions for which a penalty may be imposed by the Real Estate Council of BC (RECBC): A. Failure to have all advertising materials approved by the RECBC before using for advertising purposes B. Failure to have a team name registered and approved by RECBC before using for advertising C. Failure to display the name of a licensee’s brokerage on an advertisement in a prominent and easily readable way D. Failure to display signage that real estate services are provided from a licensee’s personal office Only statement A Only statement B and C Only statement B, C and D All of the above

Answer 40

2. Only statement B and C

Question 41

Which of the following statements are TRUE? A. An agency relationship is created when two parties agree that one will act on behalf of the other B. When the agent does not disclose that he or she is an agent and gets into the contract with the 3rd party, the principal will not be liable for the contract C. An infant can act as an agent D. An agency agreement must be written to be enforceable B and D A and B A and C C and D

Answer 41

3. A and C

Question 42

Which one of the following statements about the revocation of an offer is TRUE? 1. If an offer has a specified time of expiry, it cannot be revoked prior to that time. 2. Unless consideration is paid to keep an offer open for a specified time, revocation can be made at any time prior to the acceptance. 3. Revocation can be made prior to or after acceptance. 4. The method of revocation must be exactly the same as the method used in the offer.

Answer 42

2. Unless consideration is paid to keep an offer open for a specified time, revocation can be made at any time prior to the acceptance.

Question 43

An investor wants to decide whether he should buy a mortgage which calls for monthly payments of $450 for 20 years. If the investor can earn J12= 6% in other investments, at what price should the investor purchase the mortgage? 1. $62,811.35 2. $69,843.09 3. $66,100,37 4. $63,185.52

Answer 43

1. $62,811.35

Question 44

Max has arranged a loan of $232,000 at an interest rate of 7% per annum, compounded semi-annually. Payments are $1,528 per month. What is the period necessary to amortize the loan? approximately 30 years 2.5 Years 29,9973846 quarters approximately 10 years

Answer 44

approximately 30 years

Question 45

Under the Land Title Act in British Columbia, a mortgage is registered on the title as: 1. a charge. 2. an agreement for sale. 3. a right to purchase. 4. a restrictive covenant.

Answer 45

1. a charge.

Question 46

Which of the following correctly complete the phrase: “A mortgage is …” A. a contract B. evidence of a loan C. security for a loan D. required to be registered to be effective between the parties Only A, B and D correctly complete the phrase. Only A, B and C correctly complete the phrase. Only A and C correctly complete the phrase. All of the above correctly complete the phrase.

Answer 46

Only A, B and C correctly complete the phrase.

Question 47

Which of the following statements BEST defines the word “recent” in the context of the comparative method: 1. A period of time in which the prime interest rate has been stable 2. A period of time during which property values in the region have been stable 3. A period of time not less than one week and no more than six months 4. A period of time during which at least four properties have sold in the subject property’s neighborhood

Answer 47

2. A period of time during which property values in the region have been stable

Question 48

Which one the following statements is TRUE with respect to the doctrine of stare decisis? 1. Issues that have already been described in the courts are predictable with absolute certainty. 2. If a court in British Columbia has already decided a particular issue, and a subsequent court is faced with the same issue, the earlier decision should govern the subsequent decision. 3. Decisions in Ontario courts will have no relevance to courts in BC. 4. The BC Court of Appeal is authoritative for judges in the BC Courts.

Answer 48

2. If a court in British Columbia has already decided a particular issue, and a subsequent court is faced with the same issue, the earlier decision should govern the subsequent decision.

Question 49

Your client would like to purchase an income-producing property. You have found a property that has an annual income net operating incoming of $225,000 and a market capitalization rate of 4.5% per annum compounded annually. What is the market value of the property? $4,100,000 $4,500,000 $5,000,000 $5,625,000

Answer 49

3. $5,000,000

Question 50

An invitation to treat is: 1. a request for offers. 2. a legal offer. 3. a request for information. 4. all of the above.

Answer 50

1. a request for offers.

Question 51

One of more the following statements correctly describes the rules in regards deposits in a commercial tenancy. A. According to the Commercial Tenancy Act, the amount of a security deposit must not exceed one month’s rent. B. Someone who purchases the property from the landlord is not obligated to return the security deposit to the tenant. C. Entitlement to the interest accrued on a security deposit, if a matter of negotiation between the parties. D. The landlord is not personally liable for the return of the security deposit. Which of the above statements is/are TRUE? All of the above are true Only B and C are true Only A and C are true Only A and B are true

Answer 51

2. Only B and C are true

Question 52

We often talk about the duties of an agent to the principal; however, at common law what duty is owed by a principal to his or her agent? 1. The duty to act solely for the agent’s behalf 2. The duty to indemnify the agent for any expenses which the agent may have accrued 3. The duty of full disclosure 4. All of the above are duties owed by the principal to the agent

Answer 52

2. The duty to indemnify the agent for any expenses which the agent may have accrued

Question 53

Which of the following correctly completes the sentence: In a strata plan, the term “unit entitlement” refers to: A. the value of each condominium unit relative to other units. B. the share of the value on demolition owed by each condominium unit owner. C. the share of real property taxes payable by each condominium unit owner. D. the figure used to calculate a strata owner’s contribution to the common expenses of the strata corporation. B, C and D only A and C only C and D D only

Answer 53

4. D only

Question 54

Which of the following statements concerning an open listing is FALSE? a) Under an opening listing, the vendor is free to dispose of the property independently without any liability to the agent. b) Under the open listing, commission will be paid to the listing licensee whether not he or she is the effective cause of the sale. c) The Vendor may try to sell the property by him or herself and cannot use a real estate agent. d) Under the Real Estate Services Act, all listings must be in writing. A and D only A, B, and C A, C and D B, C and D

Answer 54

4. B, C and D

Question 55

Which situation does not involve a breach of duty owed by the licensee to the client? 1. Mandy works with a famous movie star who is in town to film a movie and needs to buy a house. The movie star wants his offer to be anonymous. Mandy agrees to submit the offer on anonymous client basis to the listing agent. 2. Bob represents Janet in the sale of her property, the property is popular and receives 8 offers. Bob knows that Janet is a busy businesswoman and only presents the attractive offers to Janet. 3. David is a real estate agent and is having lunch with friends when he discloses information about negotiations that he did for one of his clients in a transaction that took place four years ago. David is aware that his friend is a competitor of his client, but he feels that because the transaction occurred a long time ago, his disclosure is acceptable. 4. Peter is licensed licensee and represented Cindy in her search for a summer cottage. Cindy found a perfect property and told Peter that she is willing to pay up to $300,000 for it. She instructed Peter to subject a $280,000 offer on the property but Peter, knowing the property is attractively priced to a number of offers, submits a $295,000 offer on Cindy’s behalf. Peter felt that this was the only way for Cindy to obtain the property.

Answer 55

1. Mandy works with a famous movie star who is in town to film a movie and needs to buy a house. The movie star wants his offer to be anonymous. Mandy agrees to submit the offer on anonymous client basis to the listing agent.

Question 56

Your Clients are going to pay $355,000 for a vacant lot which they feel they can sell at the end of 4 years for $465,000. What yield, expressed as a nominal rate with quarterly compounding, will your clients earn on their investment? Assume that these are the only cash flows for their investments. 6. 7669908947% 6. 9808760535% 7. 16603994493% 6. 8052310506%

Answer 56

4. 6.8052310506%

Question 57

Assume that your firm selects a relatively small target market and then focuses its entire effort on satisfying the needs of this target market, this is known as: 1. Undifferentiated marketing 2. Combined target marketing 3. Differentiated marketing 4. Concentrated marketing

Answer 57

4. Concentrated marketing

Question 58

Real Estate values are influenced by externalities. Which of the following below could be used to determine this principle? 1. The markets suffer a significant drop in world’ oil prices, and because of this the supply of vacant office space increases in the city. 2. It’s being announced that a small residential area has been rezoned for a shopping center. The value of the houses in the residential area nearby will increase. 3. Because of unemployment, real estate prices decline. 4. All of the above.

Answer 58

2. It’s being announced that a small residential area has been rezoned for a shopping center. The value of the houses in the residential area nearby will increase

Question 59

What best defines a Balloon Payment: 1. Payment of interest, over and above regular payments, only at the end of the term 2. Payment of interest, over and above regular payments, during or at the end of the term 3. Payment of principal, over and above regular payments, during or at the end of the term 4. Payment of principal, over and above regular payments, only at the end of the term

Answer 59

3. Payment of principal, over and above regular payments, during or at the end of the term

Question 60

Which of the following describes a “strata plan”? 1. development plan for the relevant local government, including timelines 2. it is the marketing of strata development property in accordance with the Real Estate Services Act .3 indicates which parts of strata project or property are strata lots and which are common area 4. indicates the blueprints and building specifications for which of the strata units that will be in the strata project

Answer 60

.3 indicates which parts of strata project or property are strata lots and which are common area

Question 61

Which of the following statements concerning the equitable jurisdiction of the court are TRUE? A. the rules of equity were developed as a remedy for the rigidity of the common law of England B. where the rules of equity and common law conflict, the court will apply the common law rule C. Equitable remedies are available to parties in the court action as of right, regardless of their conduct D. Specific performance, injunction and legal damages are three types of equitable remedies Which of the following is correct? A, B and D are true B, and C are true Only A is true All of the above are true

Answer 61

Only A is true

Question 62

With respect to the foundation of a residential building, dampproofing is: 1. a material used to eliminate the penetration of frost in the concrete slab. 2. a material applied to foundation walls to seal minor capillary pores in the concrete. 3. a plastic vapour barrier placed under concrete footings. 4. a plastic pipe laid alongside the concrete foundation wall.

Answer 62

2. a material applied to foundation walls to seal minor capillary pores in the concrete.

Question 63

“Reproduction cost” is best defined as: 1. the current construction cost of a building which would provide the same utility as the subject property. 2. the current cost of moving the building to a site where the building would represent the highest and best use of that site. 3. the current cost of constructing an exact replica of the subject property. 4. the original cost of construction, adjusted for inflation.

Answer 63

3. the current cost of constructing an exact replica of the subject property.

Question 64

Considering that different appraisals, as estimates, are subject to some acceptable error, which of the following is LEAST likely to be considered an acceptable error for an appraiser between several recent sales? 1. Appraised for $235,000 sells on the appraisal date for $250,000 2. Appraised for $462,000 sells on the appraisal date for $410,200 3. Appraised for $321,000 sells on the appraisal date for $343,500 4. Appraised for $529,000 sells on the appraisal date for $487,000

Answer 64

2. Appraised for $462,000 sells on the appraisal date for $410,200

Question 65

Steve purchased $12,000 in new construction equipment and steel. At the end of their 5 year life they will sell for $1,000. What is the annual depreciation expense using the straight-line method? 2,400 2,200 2,600 55,000

Answer 65

2. 2,200

Question 66

What is a limited partnership: 1. A General partner carries on the business of the partnership and has limited liability 2. General and limited partners have the same income status 3. Requires only one general (or managing) partner and one limited partner 4. Limited partners can take part in the day-to-day operations of the partnership

Answer 66

2. General and limited partners have the same income status

Question 67

Which of the following describes a replacement reserve: 1. special fund for to be used for emergency only 2. annual sum set aside for replacement, repairs and renovations 3. schedule for anticipated costs for replacement of equipment, excluding major roof repairs and renovations 4. Stock of monthly supplies, which must be periodically replaced

Answer 67

2. annual sum set aside for replacement, repairs and renovations

Question 68

Which of the following statements correctly describes the law with respect to security deposits in commercial tenancy? A. under the commercial tenancy Act, the amount of security deposit may not exceed ½ months rent B. someone who purchases the property from the landlord is not obligated to repay security deposit to tenant C. proceeds of the interest accrued on the security deposit, if any, is a matter of negotiations D. the landlord is not personally liable for the return of the security deposit B, C and D B and C C only A and C

Answer 68

B and C

Question 69

You place $10,000 in a term deposit where it will accrue interest at a rate of 6.5% per annum, compounded quarterly. The term of the investment is 2 years. How much money will you receive at the end of the 2 year term? $11,376.39 $14, 723.57 $8,790.14 $11,364.75

Answer 69

1. $11,376.39

Question 70

951. You have a partially completed appraisal report that you need to fill in. The subject property has 4 bathrooms and an alarm system. The house next door is similar in all respects except for the number of bathrooms and alarm system. It sold for $226,500 and has 3 bathrooms and no alarm system. If the market value of a bathroom is $6,000 and the market value of an alarm system is $4,000, this comparable will have to be adjusted for bathrooms and an alarm system by: -$6,000 and -$4,000 respectively. +$4,000 and -$6,000 respectively. +$6,000 and +$4,000 respectively. $0 and +$4,000 respectively.

Answer 70

3. +$6,000 and +$4,000 respectively.

Question 71

Corey makes an offer of $556,000 to purchase a house in Vancouver, subject to obtaining an acceptable first mortgage. A lender, who has appraised the property at $550,000, requires 80% loan to value ratio and a 32% gross debt service ratio. Net taxes are $6,365 per annum and Corey has a gross income of $130,000 per year. What is the maximum amount this lender will advance if the rate is J2= 5.75%, the amortization period is 25 years, and payments are to be made monthly? $469,783.37 $554,647.04 $440,000.00 $435,000.00

Answer 71

3. $440,000.00

Question 72

Tanner has put his house up for sale for $260,000. Jerome has made an offer consisting of $95,000 cash and a mortgage loan for the balance. The mortgage loan has a 15 year amortization period with monthly payments over a 5 year term. The rate is J2=6%. The market rate for similar mortgages is J2=7.5%. What is the market value of Jerome’s offer? $251,582.17 $251,483.01 $251,016.87 $245,547.47

Answer 72

$251,016.87

Question 73

When a firm or representative selects a relatively small target market, and then focuses on the needs of this target market, this concept known as: 1. Niche Marketing 2. Marketing Mix 3. Promotional Mix 4. Marketing Concept

Answer 73

1. Niche Marketing

Question 74

Which of the following does NOT relate to the topic of contract law? 1. depreciation 2. consideration 3. voidability 4. quantum meruit

Answer 74

1. depreciation

Question 75

Which of the following statements is FALSE? 1. Electrical systems are protected from overload by fuses or circuit breakers 2. Gas heating tanks are normally a little bigger than electrical heating tanks because gas units have a faster recovery time. 3. Septic tanks are common in rural areas 4. For any additions to a house, current plumbing systems should be made from copper, plastic, or steel.

Answer 75

2. Gas heating tanks are normally a little bigger than electrical heating tanks because gas units have a faster recovery time.

Question 76

You received a mortgage with a face value of $175,000, at J2=6%, with a 25 year amortization period and 5 year term. Payments are to be made monthly in the amount of $1,119.67 with an outstanding balance at the end of the term of $157,213.65. A brokerage fee of $3,000 and an appraisal fee of $750 were deducted from the face value. What is the cost of funds advanced to the borrower, expressed as a nominal rate with semi-annual compounding? I= 6.5398% I= 6.8510% I= 6.9684% I= 6.7552%

Answer 76

I= 6.5398%

Question 77

954. You have a partially completed appraisal report that you need to fill in. The 2,200 square foot subject property has an alarm system. The house next door is similar in all respects except for square footage and alarm system. This 2,300 square foot comparable sold for $245,500 and does not have an alarm system. If the market value of an alarm system is $4,500 and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, this comparable will have to be adjusted for alarm system and square footage by: +$4,500 and -$6,000 respectively. +$6,000 and +$4,500 respectively. -$4,500 and +$6,000 respectively. -$6,000 and +$4,500 respectively.

Answer 77

1. +$4,500 and -$6,000 respectively.

Question 78

David Jones is being sued for creating a nuisance. He makes the following arguments: A. The activity which is involved benefits the public. B. The damage he has created is trifling and of little consequence. C. He has not been negligent in carrying out the activity. D. The activity is authorized by statute and cannot be carried out without creating a nuisance. Which of the above is a valid defense to the lawsuit? A, B, C and D A and D B and D A and C

Answer 78

B and D

Question 79

The “blend and extend” refinancing option: 1. involves renegotiating a first mortgage with the lender and making prepayment penalties. 2. requires one to obtain a second mortgage with a higher interest rate. 3. is illegal and not available in Canada. 4. typically allows a borrower to take advantage of a low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties.

Answer 79

4. typically allows a borrower to take advantage of a low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties.

Question 80

When an agent knowingly makes false representations concerning a property under the express instructions of his or her principal, which of the following statements are TRUE? 1. The agent is protected by statute law and cannot be liable for any misrepresentations. 2. The principal will not be liable because he or she did not make the misrepresentations directly. .3. The agent cannot escape personal liability by arguing that he or she was authorized to make the misrepresentation. 4. The innocent party can only recover damages from the agent’s liability insurance

Answer 80

.3. The agent cannot escape personal liability by arguing that he or she was authorized to make the misrepresentation.

Question 81

Which of the following factors is MOST likely to affect the value of residential real property in the short run? 1. Consumer opinions relating to residential real estate values 2. The supply and cost of raw materials 3. Government programs effecting real estate 4. Shifts in age composition of the population

Answer 81

1. Consumer opinions relating to residential real estate values

Question 82

Which of the following statements is TRUE regarding the liability of an occupier? 1. An occupier must object to habitual trespassers in order to prevent them from gaining an implied license of law 2. An occupier of land owes no duty of care under the common law to trespassers and may deal with them as he or she chooses 3. The duty of care owed by an occupier of land under the common law to children is somewhat less than invitees 4. An invitee is owed a lesser standard of care than that owed to a licensee

Answer 82

1. An occupier must object to habitual trespassers in order to prevent them from gaining an implied license of law

Question 83

A “Replacement Cost” is best described as: 1. the cost incurred when the building was erected 2. the amount of funds set aside for periodic replacement of building components that wear out more rapidly then the building itself 3. the cost of providing an exact replica of the subject property 4. the cost of providing a building which would represent the modern equivalent of the subject property

Answer 83

4. the cost of providing a building which would represent the modern equivalent of the subject property

Question 84

For licensees who wish to use pictures in advertising, which of the following statements regarding photo editing is TRUE? 1. Changing the physical characteristics of the property with photo editing is acceptable. 2. Editing photos in any way in not acceptable. 3. Removing power lines with photo editing is acceptable. 4. Removing a parked car in the driveway with photo editing is acceptable.

Answer 84

4. Removing a parked car in the driveway with photo editing is acceptable

Question 85

The 4 P’s of Marketing are: 1. Price, Position, Place, Product 2. People, Place, Promotion, Product 3. Also known as a Marketing concept 4. Also known as Marketing mix

Answer 85

4. Also known as Marketing mix

Question 86

When an Order Absolute of Foreclosure is obtained by a petitioner who is in the position of second mortgagee: 1. that mortgagee has right to sue the borrower on his or her personal covenant. 2. the petitioner may sell the property after taking title to it but will have to account to the borrower for any profit which might be realized in excess of the mortgage debt 3. all other charges, liens, encumbrances and interests registered on the borrower’s title are foreclosed or “wiped” off the title. 4. the order forecloses the registered owner’s interest in the mortgaged land and permits the petitioner to transfer title into his or her own name.

Answer 86

4. the order forecloses the registered owner’s interest in the mortgaged land and permits the petitioner to transfer title into his or her own name.

Question 87

Which of the following is a characteristic of a fee simple estate? 1. It is held subject to the Crown’s land use regulations 2. It may not be expropriated by the Crown 3. It is a Leasehold interest 4. The common law interest of other individuals cannot exist in conjunction with a fee simple interest

Answer 87

1. It is held subject to the Crown’s land use regulations

Question 88

Which of the following statements regarding general accounting principals are TRUE? A). the Materiality Principle holds that changes to accounting principles should only be made where the change results in providing more relevant and useful information to the user of the financial statement B). The consistency principle is closely aligned to the cost principle because the best way to ensure objectivity in accounting transactions is to record the amount of consideration given up at the date of the transaction. C). To conform with the cost principle, it is not appropriate to record the asset at what might be considered its fair market value; the asset should be be recorded on the accounts what the enterprise paid for it D). The matching principle requires the accrual basis of accounting be used for maintaining records; that is, expenses are recognized when incurred, which is not necessarily when they are paid only statements A and D are true only statements C and D are true only statements A and B ate true only statements B and c are true

Answer 88

only statements C and D are true

Question 89

A borrower who makes biweekly payments: 1. will make a smaller number of payments in a calendar year than a borrower who makes constant monthly payments (all other loan terms being equal). 2. will pay more interest over the life of the loan than a borrower who makes constant monthly payments (all other loan terms being equal). 3. pays one-twelfth of the annual payment every two weeks. 4. pays one-half of the monthly payment every two weeks.

Answer 89

4. pays one-half of the monthly payment every two weeks.

Question 90

How would wages payable and accounts receivable be classified on the Balance Sheet? 1. wages payable – current assets; accounts receivable– noncurrent liabilities 2. accounts receivable – current assets; wages payable – current liabilities 3. wages payable – noncurrent assets; accounts receivable – noncurrent liabilities 4. accounts receivable – noncurrent assets; wages payable – current liabilities

Answer 90

2. accounts receivable – current assets; wages payable – current liabilities

Question 91

The BC Supreme court can hear appeals from: 1. BC court of Appeal 2. Small Claims Court 3. Small Claims Tribunal 4. The Court of Queens Bench

Answer 91

2. Small Claims Court

Question 92

When can an appeal be made to a supreme court of BC regarding a real property assessment value? 1. Within 21 days of the property assessment review panel’s hearing 2. Never, as the BC court of appeal as a court only hears assessment appeals on points of laws 3. Within 30 days of a receipt of an assessment notice 4. Within 21 days of an Appeal Board decision

Answer 92

4. Within 21 days of an Appeal Board decision

Question 93

Which of the following is a defense in a nuisance causing a physical damage to the property? 1. the nuisance is the unavoidable result of a statutorily authorized activity 2. all reasonable care was taken to prevent the nuisance 3. the activity causing the nuisance benefits the public .4. a reasonable use was made of the property

Answer 93

1. the nuisance is the unavoidable result of a statutorily authorized activity

Question 94

Which of the following statements regarding green construction is/are FALSE? A. Requires less care and maintenance then a non – green home B. Green homes are designed to use less energy and more water than non-green homes C. Green construction allows for ample fresh air and artificial light D. Is designed to take advantage of renewable resources Only A and D are true Only B and D are true Only C and D are true All of the above are true

Answer 94

Only A and D are true

Question 95

A Court has power to re-open a mortgage transaction where, having regard to the risk and to all the circumstances, it is of the opinion that the cost of borrowing is excessive or harsh and unconscionable. In which one of the following statutes is this power contained? 1. Interest Act 2. Mortgage Brokers Act 3.. Real Estate Services Act .4. Consumer Protection Act

Answer 95

.4. Consumer Protection Act

Question 96

In a negotiation, determining priorities is crucial because: 1. it is essential to get every issue exactly how you would like it 2. effective negotiations revolve around convincing, pressuring, and arguments 3. you must enter negotiation with a true understanding that you will have to give up something in order to get what you value 4. you will be better able to distribute the assets or positions

Answer 96

3. you must enter negotiation with a true understanding that you will have to give up something in order to get what you value

Question 97

The book value of an asset can be best defined as: 1. the purchase price of that asset less any depreciation taken to date. 2. the price for which a similar asset could currently be purchased in the market. 3. the price for which that asset could be sold. 4. a value which is subjectively arrived at by an appraiser.

Answer 97

1. the purchase price of that asset less any depreciation taken to date.

Question 98

When will an appraiser be MOST justified in employing the cost method to determine market value? 1. . when there is nothing to compare to 2. based on the assumption that cost and value are equal 3. to use the method which represents the property’s highest and best use 4. when the property possesses latent value

Answer 98

1.. when there is nothing to compare to

Question 99

Which of the following is FALSE regarding the Real Estate Council’s power to investigate: 1. Investigating a licensee if they suspect that he or she has contravened any of the rules. 2. Conducting an investigation to determine whether a licensee has committed a crime before becoming a licensee. 3. Needing permission from the court before an beginning investigation. 4. Investigating a licensee’s conduct whether or not it has breached the provisions of the Real Estate Services Act.

Answer 99

3. Needing permission from the court before an beginning investigation.

Question 100

Which of the following statements regarding lending value and loan-to-value ratio are TRUE? A. Lending value is a long term conservative estimate of the value of the interest in land pledged as a security B. Lending value is an estimate of the mortgage loan a purchaser will be able to obtain C. The maximum loan to value ratio is set by statue as 80% for federally chartered financial institutions unless the mortgage is insured D. A loan to value ratio that is higher than the competitor’s will drive lending activity to other lenders Only statements B and D are true Only statements A and C are true Only statements A, C and D are true Only statements A, B and D are true

Answer 100

Only statements A and C are true