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| Section | Objectives |
|---|---|
| Commercial Real Estate Transactions | - Property valuation and market evaluation
|
1. A buyer client is interested in purchasing a 30,000 sq. ft. industrial building in an industrial park. The buyer's salesperson drafts an agreement of purchase and sale that includes an environmental site assessment condition that must be met at the buyer's own expense, and to the buyer's satisfaction. Which of the following is NOT an accurate statement regarding the environmental site assessment condition?
A) The environmental site assessment condition makes the offer conditional upon the seller delivering documents, records, and reports relating to environmental matters to the buyer upon request.
B) The environmental site assessment condition makes the offer conditional upon the buyer determining that no limitations or restrictions affecting the continued use of the property exist.
C) The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.
D) The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.
2. A buyer client is interested in purchasing an industrial property for their manufacturing business. The buyer's salesperson informs them of the building criteria, along with the minimum requirements for clear height and clear span that would be suitable for the buyer's business. What should the salesperson explain to the buyer regarding clear span?
A) The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the highest point of the ceiling or roof component.
B) The salesperson should explain that clear span refers to the amount of floor area that is clear of interference from columns and walls.
C) The salesperson should explain that clear span refers to the unobstructed vertical distance from the floor to the bottom of the lowest ceiling or roof component.
D) The salesperson should explain that clear span refers to the total amount of floor area in the space, including the space that is occupied between columns and walls.
3. In regard to cash flow into and out of a business, which of the following is correct?
A) Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.
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) Operating cash flow can be positive or negative.
D) Sales proceeds cash flow does not affect investor decisions.
4. Location preferences and accessibility are important when matching a potential buyer client with an appropriate commercial property. Which of the following is NOT a location preference consideration?
A) Financial health of the company
B) Demographics
C) Surrounding uses
D) Traffic counts
5. Obtaining the size and boundaries of a commercial condominium unit is an important task for a salesperson.
Which of the following statements regarding this task is NOT correct?
A) Space should be measured in accordance with BOMA standards.
B) The original plans should be used to determine the size of a unit.
C) An Ontario Land Surveyor can be hired to measure the space.
D) An architect can be hired to measure the space.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: A | Question # 5 Answer: B |
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