Humber College : PREX-1060A Questions & Answers
Updated: Aug 11, 2026
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Humber College PREX-1060A Exam Syllabus Topics:
| Section | Objectives |
|---|---|
| Commercial Real Estate Transactions | - Property valuation and market evaluation
|
Humber College Exam 4: Invigilated Theory Sample Questions:
1. A seller client wants to know the actual size of their unit to avoid any discrepancies. How should the salesperson assist the client?
A) Add a disclaimer to protect the seller from any discrepancy.
B) Recommend the services of third-party professionals to measure it.
C) Tell the seller the usable size is 80 percent of the rentable size.
D) Use a laser measuring device to take the measurements.
2. 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) To play it safe, the salesperson should amend the condition with May 18 as the expiry date.
D) The salesperson should prepare the amendment with midnight, May 17 as the irrevocable time.
3. If a property in Ontario is assessed and valued as farmland by the Municipal Property Assessment Corporation (MPAC), the farmer could receive a 75% tax reduction for municipal taxes if certain conditions are met. Which of the following describes a condition that must be met?
A) They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.
B) They carry on a farming business generating a net profit of $100,000.
C) They submit the appropriate application semi-annually.
D) They are Canadian citizens or permanent residents of Canada.
4. Which of the following is a risk associated with investing in commercial real estate?
A) The fact that rent, leased space, and building size are fixed
B) The insufficiency of cash flow during the holding period
C) The relative lack of capital growth during the holdover period
D) The relative lack of liquidity
5. 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 typically used to appraise income-generating properties.
B) The cost approach is preferred for older construction properties, as calculating depreciation on them is fairly straightforward.
C) 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.
D) 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.
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: D | Question # 3 Answer: A | Question # 4 Answer: D | Question # 5 Answer: B |
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