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Humber College PREX-1060A - Exam 4: Invigilated Theory Exam

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Total 120 questions

A salesperson has several obligations to the buyer when assisting them in the purchase of a commercial condominium unit for their own use. Which of the following is one of those obligations?

A.

Confirm the buyer's intended use adheres to all municipal zoning requirements

B.

Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection

C.

Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller’s business

D.

Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund

A seller provides you with architectural drawings of their building. Which statement is NOT correct?

A.

Architectural drawings are source documents.

B.

A photocopy of a source document can be used to verify information.

C.

If changes are made to source documents, they are still valid if you have the original document.

D.

Other types of source documents include surveys and tax records.

In regard to cash flow into and out of a business, which of the following is correct?

A.

Operating cash flow can be positive or negative.

B.

Operating cash flow is used when determining yield on an investment property, while sales proceeds cash flow is not used for this purpose.

C.

Sales proceeds cash flow does not affect investor decisions.

D.

Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.

In a commercial transaction, which of the following is NOT a responsibility of the lawyer?

A.

Exchange of legal documents

B.

Review of financial statements

C.

Review of the Agreement of Purchase and Sale

D.

Remedy of title issues

Issues that occurred prior to the closing of a transaction may be uncovered by title and non-title searches during due diligence. Which of the following is a non-title search concern?

A.

Liens and encumbrances that are registered against the property

B.

The property's use doesn't comply with municipal zoning bylaws

C.

A registered right of way that blocks the buyer's intended use of the property

D.

The seller is not entitled to transfer title to the property for some reason

A salesperson is preparing to list an industrial building and wants to assess the availability and size of utilities, as these factors may prohibit a change in use for the potential buyer. Which of the following is correct?

A.

If the information on the building's utilities is not available, the salesperson can determine it by finding out the specifications of the utilities of the neighbors.

B.

If the information on the subject building’s utilities is available, then a potential buyer will not put a condition in the offer.

C.

The salesperson should conduct a visual inspection of the building to determine the specifications of the utilities.

D.

The seller may have up-to-date documentation about the utilities but, in some situations, a third-party professional assessment is still needed.

While preparing to list a vacant retail site that allows new auto sales, the salesperson sees that there is an auto repair garage business next door with old and rusting metal storage tanks at the side of their building. Which of the following is the correct action for the salesperson to take?

A.

The salesperson should attempt to identify signs of contamination on the property and recommend an appropriate third-party expert to the seller client.

B.

The salesperson should include the information in the marketing material as it would be beneficial for an auto sales business to have a garage located nearby.

C.

The salesperson should ask the owner of the garage for more information and what course of action they recommend to assist a future purchaser of the site.

D.

The salesperson should ask the owner of the garage whether they have thought about selling their property at this time.

A salesperson is searching for properties on behalf of their retail buyer client for their designer eyewear and optical store. The buyer discusses their storage and product display needs with the salesperson. Which of the following is NOT a factor the buyer should consider regarding the product display and storage space of potential properties?

A.

The salesperson should advise the buyer to consider the price of their products.

B.

The salesperson should advise the buyer to consider the space they will need to allot for storage versus customer-facing product.

C.

The salesperson should advise the buyer to consider their business's predicted monthly inventory.

D.

The salesperson should advise the buyer to consider the size of their products.

An agreement of purchase and sale for an industrial building is accepted conditional on financing with the expiry date of May 14. On May 11, the bank informs the buyer the mortgage cannot be approved until May 17. The salesperson for the buyer then prepares an amendment to the agreement of purchase and sale for the extension of the condition. Which of the following is NOT correct?

A.

The buyer can use the same amendment to ask for a change of the closing date.

B.

The buyer can still waive the condition before the expiry date if the seller refuses to sign the amendment, provided there is a waiver provision in the condition.

C.

The salesperson should prepare the amendment with midnight, May 17 as the irrevocable time.

D.

To play it safe, the salesperson should amend the condition with May 18 as the expiry date.

The key mechanical components of commercial buildings include heating, cooling, and electrical systems. Which of the following tasks is NOT usually completed by the salesperson?

A.

Ensuring inspections are being carried out as required

B.

Contacting contractors for quotes for repairing or replacing equipment

C.

Reviewing whether the technical components have been recently replaced or upgraded

D.

Learning what types of equipment are in the building and having a general understanding of theirage and condition