Principles, Property, and Land Use Practice Question

Question

A client asks whether a fact should be disclosed for the New Jersey Real Estate Salesperson Exam involving income approach and New Jersey Real Estate Commission. What should the licensee understand? (Item 18)

Answer choices

1. A. Client funds may be mixed with business funds if the broker reconciles the account later.
2. B. Use income and capitalization concepts for income-producing property in a way that fits New Jersey exam practice.
3. C. The issue can be ignored if the parties want to close quickly.
4. D. The rule applies only to commercial transactions and never to residential transactions.

Correct Answer

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

Explanation

The correct answer is B because income approach requires candidates to use income and capitalization concepts for income-producing property. The New Jersey 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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