[Full-Version] 2025 New Preparation Guide of Humber College PREX-1060A Exam
PREX-1060A Practice Exam - 108 Unique Questions
NEW QUESTION # 45
A first-time investor is looking to purchase a commercial property and asks their salesperson about the gains they can hope to achieve from this type of asset. What should the salesperson explain to their client regarding the purchase of commercial properties as a source of capital growth?
- A. The salesperson should explain that to achieve capital growth, the client should be a long-term investor.
- B. The salesperson should explain that the client should always consider being a short-term investor.
- C. The salesperson should explain that making a commercial property investment is an easy and smooth process that provides good short-term gains.
- D. The salesperson should explain that a better return on investment will be achieved with rising interest rates.
Answer: A
NEW QUESTION # 46
Audited and unaudited statements provide the financial status of a business to potential buyers. What is the main difference between audited and unaudited financial statements?
- A. Unaudited financial statements are prepared by Chartered Professional Accountants; audited financial statements are prepared by senior Chartered Professional Accountants.
- B. Audited financial statements comply with Generally Accepted Accounting Principles (GAAP); unaudited financial statements do not comply with GAAP.
- C. Audited financial statements provide an accurate picture of the financial status of a business; unaudited financial statements may only contain partially reviewed information.
- D. Unaudited financial statements are prepared by accounting students; audited financial statements are completed by accountants who have received their professional designation.
Answer: B
NEW QUESTION # 47
A retail property buyer must consider the parking requirements associated with the site. All of the statements below are considerations for parking, EXCEPT:
- A. Parking may be impacted by the municipality's parking bylaw.
- B. Parking may be impacted by zoning requirements.
- C. Required parking for persons with disabilities is usually fixed as a ratio based on the number of disabled persons in the community.
- D. There may be minimum width and depth requirements for parking spaces.
Answer: C
NEW QUESTION # 48
There are different requirements under REBBA and other legislation that affect the sale of a business. Which of the following is NOT correct?
- A. A key consideration a salesperson must keep in mind when handling the sale of a business is operating licenses.
- B. If a municipal license is associated with the business and it may be transferrable to the buyer, then it is of no concern to the sales representative.
- C. Depending on the business location, there are various municipal bylaws, zoning, permits, and other rules and regulations that could impact the sale of a business.
- D. There are various municipal bylaws that could impact the sale of a business, depending on the business activity.
Answer: B
NEW QUESTION # 49
When calculating the total purchase price of farmland with improvements on it, which of the following items is NOT included?
- A. Residence
- B. Goodwill
- C. Barns and sheds
- D. Fixed equipment
Answer: B
NEW QUESTION # 50
A salesperson is drafting an agreement to lease a retail property for a tenant client who is looking to open a women's apparel store. Which of the following would NOT be included in the agreement to lease?
- A. A description of the premises
- B. The commencement date of the lease
- C. The names of all parties to the lease
- D. The names of all the tenant's suppliers
Answer: D
NEW QUESTION # 51
Which of the following is a characteristic of main street retail?
- A. Comprises a blend of old and new stores
- B. Structure size typically ranges from 100,000 to 130,000 square feet
- C. Must be located in a small, older community
- D. Consists of newer, free-standing buildings only
Answer: A
NEW QUESTION # 52
A salesperson includes a well-drafted condition in an agreement of purchase and sale for their buyer client to arrange a new first mortgage for an industrial property. The buyer later changes their mind and does not want to borrow money for the purchase. What should the buyer's salesperson use to remove the condition?
- A. Mutual release
- B. Notice of fulfillment
- C. Acknowledgment
- D. Waiver
Answer: D
NEW QUESTION # 53
A new commercial condominium project is completed, and the buyers are given an occupancy date. On the occupancy date, a few of the buyers move into their units and begin setting up their operations. That evening, there is a severe thunderstorm. In the morning, several of the buyers start to notice roof leaks. Some of the buyers call the builder's office while others call their salespersons.Which of the following is an accurate statement regarding the building's warranty coverage?
- A. The buyers should submit their concerns to the provincial warranty authority, as they are entitled to one- year warranty coverage from the occupancy date.
- B. If the builder does not address this issue, the buyers can file a complaint with the provincial warranty authority for any outstanding work the builder did not complete.
- C. The buyers should draft a list of all their concerns and submit them to the municipality for appropriate coverage.
- D. There is no provincial warranty coverage for commercial condominiums, but the buyers can inquire with the builder about any warranties that they may offer.
Answer: D
NEW QUESTION # 54
Different clauses can be used for each transaction to address the unique needs of buyers and sellers. Which of the following may be used in an agreement of purchase and sale to buy a commercial property?
- A. A clause to confirm the remuneration payable to the brokerages will be as stated in the seller representation agreement
- B. A clause for the seller to disclose all information verbally without providing supporting documents to verify that information; documents to be provided on closing
- C. A clause for the buyer to review the leases only after all conditions have been waived and accepted
- D. A clause for the buyer to have the right to negotiate for specialized restaurant equipment that is not included in the property purchase price
Answer: D
NEW QUESTION # 55
A land developer is interested in purchasing a piece of vacant land. Which of the following statements about evaluating the highest and best use of the real property is correct?
- A. The land developer can identify the use of the property that is anticipated to produce the highest overall return so the appraiser can complete the appraisal.
- B. A property's highest and best use is the use that, at the time the building was built, was most likely to produce the greatest net return.
- C. A designated appraiser will use all factual sales data to determine the value of the current highest and best use of the property.
- D. The estimate of value is related to how a typical buyer, with a reasonable knowledge of the market and property, wants to use the property.
Answer: D
NEW QUESTION # 56
Which of the following statements about economic development offices is NOT correct?
- A. Economic development offices can provide you with real property information regarding tax assessments and how to appeal your real estate taxes.
- B. Economic development offices have important resources for those seeking suitable commercial sites for business operations.
- C. Economic development offices can help guide development applications through municipal processes and streamline the approvals process for companies unfamiliar with regulatory requirements.
- D. Economic development offices provide background information on local, provincial, and federal research and development incentives.
Answer: A
NEW QUESTION # 57
The cost approach is one method of real estate evaluation that an appraiser may use to estimate the value of a commercial property. Which of the following is NOT an accurate statement regarding the cost approach?
- A. The cost approach is useful for the appraisal of property types for which sales and income data are scarce, such as industrial and special-purpose properties.
- B. The cost approach is preferred for newer construction properties, as the appraiser would not need to make a subjective estimation of the accrued depreciation of the building.
- C. The cost approach is typically used to appraise income-generating properties.
- D. The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
Answer: D
NEW QUESTION # 58
A salesperson is representing a commercial landlord in a lease negotiation. The landlord wants to sign back the offer with a higher rent. What should the salesperson make the landlord aware of regarding the rent increase?
- A. The rent increase cannot be more than the Consumer Price Index (CPI).
- B. The rent increase cannot be higher than the guideline set by the government.
- C. The rent increase can be any amount.
- D. The rent increase can be challenged by the Landlord and Tenant Board.
Answer: C
NEW QUESTION # 59
Which of the following statements regarding Building Owners and Managers Association (BOMA) standards is correct?
- A. The BOMA standards provide procedures to measure rentable areas only.
- B. The BOMA standards provide methods of measuring industrial buildings only.
- C. The BOMA standards provide methods of measuring office buildings only.
- D. The BOMA standards are complex.
Answer: C
NEW QUESTION # 60
Many industrial users install one or more cranes on their properties to move heavy items. Which type of industrial crane has an arm attached at an angle to a rotating mast that permits 360-degree swiveling around that mast?
- A. Jib crane
- B. Gantry crane
- C. Overhead crane
- D. Bridge crane
Answer: A
NEW QUESTION # 61
What is the best indicator of a strong office market?
- A. Low rental rates and many concessions
- B. The absorption rate, net absorption rate, and rising rental rates
- C. When tenants have lots of options because of the amount of available space at favorable rates
- D. The number of free months given to new and renewing tenants by landlords in the office marketplace
Answer: B
NEW QUESTION # 62
When discussing the sale of a business and establishing the asking price, there are questions a salesperson must ask the owner. Which of the following is one of them?
- A. What is the construction cost of the building?
- B. Is the ownership of the building a corporation or a partnership?
- C. Is inventory included in the sale of this business?
- D. Is there any easement on the property?
Answer: C
NEW QUESTION # 63
A buyer has just been approved for a commercial mortgage to purchase a retail strip plaza. They meet with their salesperson to review the mortgage documents. The buyer expresses concern about possible late payments. Which of the following is an accurate statement about provisions in the commercial mortgage documents regarding late payments?
- A. There are no penalties for late payments in a commercial mortgage.
- B. Penalties for late payments will be added to the monthly rent.
- C. The options for late payments are the same for every lender.
- D. Each lender has their own method for dealing with late payments.
Answer: D
NEW QUESTION # 64
A buyer looking for an industrial property tells the salesperson that on-site trailer storage space is an important feature. What is a reason on-site trailer storage might be important for the buyer's industrial business?
- A. Incoming trucks could have difficulty if there is a lack of on-site trailer storage.
- B. Some trucks may need to park on the property overnight.
- C. Outgoing trucks could have difficulty if there is a lack of on-site trailer storage.
- D. Businesses need to transport materials to and from the site.
Answer: B
NEW QUESTION # 65
A salesperson and their commercial seller client are discussing and preparing to list the seller's office building. The topic of defects comes up and the seller wants to know what the salesperson will have to disclose. Which of the following is an accurate statement regarding the disclosure of defects?
- A. The salesperson should discuss latent defects known to the seller of the office building with the seller and disclose them to a buyer.
- B. The salesperson should discuss patent defects known to the seller of the office building with the seller and disclose them to a buyer.
- C. The salesperson should not disclose latent defects that are known to the seller as they could affect the seller's ability to obtain a high price for the property.
- D. The salesperson should not disclose material latent defects that are known to the seller that could reduce the price or the marketability of the property.
Answer: A
NEW QUESTION # 66
A salesperson discusses with a buyer the potential advantages of purchasing brownfields for redevelopment.
What is NOT an advantage for the buyer of a brownfield property?
- A. Brownfield properties can often be purchased at well below their potential market value.
- B. An owner who rehabilitates a brownfield property can receive tax incentives.
- C. Brownfield properties typically have the advantage of existing infrastructure such as roads, utilities, water/sewer servicing, schools, and transit facilities.
- D. The contaminants in brownfields contain precious metals that can be sold to earn additional income.
Answer: D
NEW QUESTION # 67
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