Principles, Property, and Land Use Practice Question

Question

A property manager asks how a rule affects a rental property for the Illinois Real Estate Broker Exam involving income approach and Illinois broker licensing structure. What should the licensee understand? (Item 78)

Answer choices

1. A. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
2. B. Use income and capitalization concepts for income-producing property in a way that fits Illinois exam practice.
3. C. The requirement matters only when the buyer obtains institutional financing.
4. D. The affiliated licensee may handle the matter independently without broker responsibility.

Correct Answer

B. Use income and capitalization concepts for income-producing property in a way that fits Illinois exam practice.

Explanation

The correct answer is B because income approach requires candidates to use income and capitalization concepts for income-producing property. The Illinois reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.

Question details

• Difficulty: medium
• Domain: Principles, Property, and Land Use
• Objective: income approach

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