Valuation and Financing Practice Question
Question
A broker is supervising a transaction file involving depreciation. Which statement is the most accurate exam answer? (Item 127)
Answer choices
- A. It shifts all responsibility to escrow and eliminates the broker’s duties.
- B. It makes oral promises enforceable in every real estate transaction.
- C. Distinguish physical deterioration, functional obsolescence, and external obsolescence.
- D. It is optional whenever both parties verbally agree to proceed.
Correct Answer
C. Distinguish physical deterioration, functional obsolescence, and external obsolescence.
Explanation
The correct answer is C because depreciation requires candidates to distinguish physical deterioration, functional obsolescence, and external obsolescence. 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: medium
- Domain: Valuation and Financing
- Objective: depreciation