Principles, Property, and Land Use Practice Question

Question

A broker is correcting a new licensee’s misunderstanding for the Pennsylvania Real Estate Salesperson Exam involving income approach and Pennsylvania Real Estate Commission. What should the licensee understand? (Item 18)

Answer choices

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

Correct Answer

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

Explanation

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