Real Estate Principles Practice Question
Question
A license applicant is comparing two similar real estate concepts in a Florida real estate transaction involving valuation principles. What should the licensee understand? (Item 283)
Answer choices
- A. The issue can be ignored if both parties want the transaction to close quickly.
- B. The rule applies only to commercial property and never to residential property.
- C. Apply supply and demand, substitution, contribution, and highest and best use.
- D. The broker may mix client funds with business funds if the amount is small and later reconciled.
Correct Answer
C. Apply supply and demand, substitution, contribution, and highest and best use.
Explanation
The correct answer is C because valuation principles requires candidates to apply supply and demand, substitution, contribution, and highest and best use. The other options rely on unsafe assumptions about custom, oral agreement, escrow, client preference, or independent salesperson authority and do not reflect sound Florida exam practice.
Question details
- Difficulty: medium
- Domain: Real Estate Principles
- Objective: valuation principles