Principles, Property, and Land Use Practice Question

Question

A property manager asks how a rule affects a rental property for the Tennessee Affiliate Broker Exam involving cost approach and Tennessee Real Estate Commission. Which statement is most accurate for exam purposes? (Item 77)

Answer choices

1. A. Combine land value with replacement cost less depreciation in a way that fits Tennessee exam practice.
2. B. Local custom controls even when a statute, regulation, contract, or disclosure rule applies.
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

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

Explanation

The correct answer is A because cost approach requires candidates to combine land value with replacement cost less depreciation. The Tennessee 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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