EXAM WITH CORRECT SOLUTIONS.

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NSREC EXAM

EXAM WITH CORRECT SOLUTIONS.

Income Approach - correct answer- A Valuation method based on income capitalization. It is a six step approach that helps determine cash flow extending into the future.

• Estimate potential value
• Calculate effective rental income
• Calculate gross operating income
• Calculate net operating income
• Set appropriate cap rate
• Capitalize net operating income

Age-Life Depreciation - correct answer- A measure of depreciation based on the anticipated life of the structure.

Cap Rate - correct answer- A rate used to convert income into an estimate of capital value.

Net operating income divided by the value = cap rate.

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Direct comparison approach - correct answer- A Valuation method based on establishing value through adjustments to comparable sales. Is the most commonly used method. Is a four step approach.

• Select comparables
• make adjustments
• Establish adjusted sale price.
• Value estimate based on adjusted prices.

Cost Approach - correct answer- A valuation method based on estimating value by identifying site value land and then developing replacement costs. This is a five step process.

• Estimate site value
• Estimate replacement costs new
• Estimate the accrued depreciation
• Estimate total depreciated costs.
• Estimate the value of the property

Fiduciary Duties - correct answer- DCCOLA D-Disclose- all pertinent and material facts to the client you're providing services to.C-Competency- exercise reasonable care and skill when carrying out duties.C-Confidentiality- Do not disclose any confidential information that could negatively impact the client. (unless legally obligated) 2 / 3

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O- Obedience- Obey all lawful instruction of the client.L-Loyalty- Remain loyal to the client, protect and promote their interests.A- Accountability- account for all monies and property entrusted with the brokerage by the client.

NSREC 11 Regulatory Body - correct answer- 3 public appointments selected by the provincial government

• NSAR members appointed by NSAR
• NSREC members appointed by NSREC
• commercial appointment, appointed by commercial

committee

• Registarr appointed by commission in a non voting capacity.

Direct comparison approach adjustment process process - correct answer- * Make a plus adjustment when the subject property has a feature that the comparable lacks.

• Make a minus adjustment when the subject property lacks a

feature that the comparable has.*No adjustments made for the same features.

• adjustments are not made to the subject property,

adjustments are only made to the comparable's.

• Adjustment process is based on a few different things. For

example

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