Real Estate Principles Practice Question
Question
A license applicant is comparing two similar real estate concepts in a New York real estate transaction involving valuation principles. Which answer best reduces transaction risk? (Item 199)
Answer choices
- A. A verbal understanding always replaces any written requirement in a real estate transaction.
- B. The licensee should avoid documenting the issue to reduce the chance of later questions.
- C. Apply market value, substitution, contribution, depreciation, and highest and best use concepts.
- D. A licensee may give legal conclusions instead of recommending qualified legal advice when the issue is uncertain.
Correct Answer
C. Apply market value, substitution, contribution, depreciation, and highest and best use concepts.
Explanation
The correct answer is C because valuation principles requires candidates to apply market value, substitution, contribution, depreciation, and highest and best use concepts. The other options rely on unsafe assumptions about custom, oral agreement, escrow, client preference, or independent salesperson authority and do not reflect sound New York exam practice.
Question details
- Difficulty: medium
- Domain: Real Estate Principles
- Objective: valuation principles