NSREC Exam questions with correct answers
Income Approach Correct Answer-A Valuation method based on
income capitalization. It is a six step approach that helps determine cash
flow extending into the future.
1. Estimate potential value
2. Calculate effective rental income
3. Calculate gross operating income
4. Calculate net operating income
5. Set appropriate cap rate
6. Capitalize net operating income
Age-Life Depreciation Correct Answer-A measure of depreciation based
on the anticipated life of the structure.
Cap Rate Correct Answer-A rate used to convert income into an estimate
of capital value.
Net operating income divided by the value = cap rate.
Direct comparison approach Correct Answer-A Valuation method based
on establishing value through adjustments to comparable sales. Is the
most commonly used method. Is a four step approach.
1. Select comparables
2. make adjustments
3. Establish adjusted sale price.
,4. Value estimate based on adjusted prices.
Cost Approach Correct Answer-A valuation method based on estimating
value by identifying site value land and then developing replacement
costs. This is a five step process.
1. Estimate site value
2. Estimate replacement costs new
3. Estimate the accrued depreciation
4. Estimate total depreciated costs.
5. Estimate the value of the property
Fiduciary Duties Correct Answer-DCCOLA
D-Disclose- all pertinent and material facts to the client you're providing
services to.
C-Competency- exercise reasonable care and skill when carrying out
duties.
C-Confidentiality- Do not disclose any confidential information that
could negatively impact the client. (unless legally obligated)
O- Obedience- Obey all lawful instruction of the client.
L-Loyalty- Remain loyal to the client, protect and promote their
interests.
A- Accountability- account for all monies and property entrusted with
the brokerage by the client.
, NSREC 11 Regulatory Body Correct Answer-3 public appointments
selected by the provincial government
3 NSAR members appointed by NSAR
3 NSREC members appointed by NSREC
1 commercial appointment, appointed by commercial committee
1 Registarr appointed by commission in a non voting capacity.
Direct comparison approach adjustment process process Correct
Answer-* Make a plus adjustment when the subject property has a
feature that the comparable lacks.
* Make a minus adjustment when the subject property lacks a feature
that the comparable has.
*No adjustments made for the same features.
* adjustments are not made to the subject property, adjustments are only
made to the comparable's.
- Adjustment process is based on a few different things. For example
* Time adjustments based off the market
*front facing lot footage (not square footage)
*Total finished square feet
*House characteristics such as rec room, finished basement, garages,
number of bathrooms etc etc.
Income Approach Correct Answer-A Valuation method based on
income capitalization. It is a six step approach that helps determine cash
flow extending into the future.
1. Estimate potential value
2. Calculate effective rental income
3. Calculate gross operating income
4. Calculate net operating income
5. Set appropriate cap rate
6. Capitalize net operating income
Age-Life Depreciation Correct Answer-A measure of depreciation based
on the anticipated life of the structure.
Cap Rate Correct Answer-A rate used to convert income into an estimate
of capital value.
Net operating income divided by the value = cap rate.
Direct comparison approach Correct Answer-A Valuation method based
on establishing value through adjustments to comparable sales. Is the
most commonly used method. Is a four step approach.
1. Select comparables
2. make adjustments
3. Establish adjusted sale price.
,4. Value estimate based on adjusted prices.
Cost Approach Correct Answer-A valuation method based on estimating
value by identifying site value land and then developing replacement
costs. This is a five step process.
1. Estimate site value
2. Estimate replacement costs new
3. Estimate the accrued depreciation
4. Estimate total depreciated costs.
5. Estimate the value of the property
Fiduciary Duties Correct Answer-DCCOLA
D-Disclose- all pertinent and material facts to the client you're providing
services to.
C-Competency- exercise reasonable care and skill when carrying out
duties.
C-Confidentiality- Do not disclose any confidential information that
could negatively impact the client. (unless legally obligated)
O- Obedience- Obey all lawful instruction of the client.
L-Loyalty- Remain loyal to the client, protect and promote their
interests.
A- Accountability- account for all monies and property entrusted with
the brokerage by the client.
, NSREC 11 Regulatory Body Correct Answer-3 public appointments
selected by the provincial government
3 NSAR members appointed by NSAR
3 NSREC members appointed by NSREC
1 commercial appointment, appointed by commercial committee
1 Registarr appointed by commission in a non voting capacity.
Direct comparison approach adjustment process process Correct
Answer-* Make a plus adjustment when the subject property has a
feature that the comparable lacks.
* Make a minus adjustment when the subject property lacks a feature
that the comparable has.
*No adjustments made for the same features.
* adjustments are not made to the subject property, adjustments are only
made to the comparable's.
- Adjustment process is based on a few different things. For example
* Time adjustments based off the market
*front facing lot footage (not square footage)
*Total finished square feet
*House characteristics such as rec room, finished basement, garages,
number of bathrooms etc etc.
