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1. A real estate broker is hired by a property owner to manage a residential
building. The broker is responsible for collecting rents, paying expenses,
maintaining records, and supervising repairs. The broker's compensation
is based on a percentage of the gross income of the property. This type of
arrangement is known as:
a) a net lease
b) a gross lease
c) a management contract*
d) a fiduciary agreement
Rationale: A management contract is an agreement between a property owner
and a manager who undertakes the operation and maintenance of the
property for a fee, usually a percentage of the gross income.
2. A real estate appraiser is hired by a lender to estimate the market value of a
property that is being offered as collateral for a loan. The appraiser uses
three approaches to value: the cost approach, the sales comparison
approach, and the income approach. The appraiser assigns the most
weight to the approach that:
a) is the most reliable and relevant for the type of property and market*
b) results in the highest value for the property
c) is the easiest and quickest to apply
d) is preferred by the client or intended user
Rationale: The appraiser should use professional judgment to determineÂ
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