Valuation and Financing Practice Question

Question

An escrow officer requests clarification from the broker involving sales comparison approach. Which response best protects the client and keeps the transaction compliant? (Item 83)

Answer choices

1. A. It is primarily a tax rule with no effect on brokerage practice.
2. B. It removes the need for written disclosure if the licensee believes the client already knows.
3. C. Apply comparable sales adjustments to estimate residential value.
4. D. It can be ignored if the transaction is expected to close quickly.

Correct Answer

C. Apply comparable sales adjustments to estimate residential value.

Explanation

The correct answer is C because sales comparison approach requires candidates to apply comparable sales adjustments to estimate residential value. The other options overstate the effect of custom, oral agreement, escrow, or independent salesperson action and do not reflect safe California exam practice.

Question details

• Difficulty: easy
• Domain: Valuation and Financing
• Objective: sales comparison approach

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