Valuation and Financing Practice Question

Question

A license applicant is studying a California practice scenario involving income approach. What should a California real estate licensee understand? (Item 25)

Answer choices

1. A. Use income capitalization concepts for income-producing property.
2. B. It allows a salesperson to act independently of the responsible broker.
3. C. It shifts all responsibility to escrow and eliminates the broker’s duties.
4. D. It makes oral promises enforceable in every real estate transaction.

Correct Answer

A. Use income capitalization concepts for income-producing property.

Explanation

The correct answer is A because income approach requires candidates to use income capitalization concepts for income-producing property. 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: income approach

Practice more

Start Valuation and Financing practice

Back to Valuation and Financing