Principles, Property, and Land Use Practice Question

Question

A broker is correcting a new licensee’s misunderstanding for the Massachusetts Real Estate Salesperson Exam involving cost approach and lead paint and consumer disclosure awareness. Which statement is most accurate for exam purposes? (Item 57)

Answer choices

1. A. Combine land value with replacement cost less depreciation in a way that fits Massachusetts exam practice.
2. B. The affiliated licensee may handle the matter independently without broker responsibility.
3. C. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
4. D. The requirement matters only when the buyer obtains institutional financing.

Correct Answer

A. Combine land value with replacement cost less depreciation in a way that fits Massachusetts exam practice.

Explanation

The correct answer is A because cost approach requires candidates to combine land value with replacement cost less depreciation. The Massachusetts 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: easy
• Domain: Principles, Property, and Land Use
• Objective: cost approach

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