Exam (elaborations)
303 Post Licensing exam with correct answers
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303 Post Licensing exam with correct answers
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303 Post Licensing exam with correctanswers
Commercial Property - ANSWER: ➡ Vastly different from residential, so have to make sure you
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are an expert
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**Can be disciplined by license law and sued**
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residential vs. commercial - ANSWER: ➡ Residential: 1-4 unit dwelling
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Commercial: Anything else! Including rental and sales of commercial properties; does NOT
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include the leasing and management of residential income producing properties
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Major Differences between Residential and Commercial Practice - ANSWER: ➡
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Classification/product types
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Transaction cycle time g g
MLS vs Database
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Zoning and land use restrictions
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Leasing
Contracts and forms g g
Financing
Higher Stakes g
Business relationships g
Working hours g
Cooperating w/out of state agents g g g g
Commercial Real Estate Broker Lien g g g g
Transaction Cycle Time - ANSWER: ➡ Residential - 3-6 months
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Commercial - 12-18 months g g g
,Listing Agreements longer
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Expenses greater in commercial g g g
Class A Office Space - ANSWER: ➡ Less than 20 years old
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Higher Rents g
Represent the highest-quality buildings in their market
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Professionally managed g
Well-located with good access g g g
Class B Office Space - ANSWER: ➡ The next notch down from Class A
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Well maintained
g
More than 20 years old
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Class C Office Space - ANSWER: ➡ The lowest classification of office building
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Located in less-desirable areas g g g
Poor quality always needing renovations
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Low rents
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Special Consideration of Zoning and Land Use Restrictions - ANSWER: ➡ Zoning Changes
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Extraterritorial Jurisdiction: allows control of land use outside city limits
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- population fo 25k or more
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- Control may extend three miles past city limits
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Special Considerations in Financing - ANSWER: ➡ Underwriting standards differ
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Loan terms differ
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Little standardization
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Shorter loan terms g g
, Partially amortized g
More ARMs g
LTVs much lower
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Loans more often made to entities
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Non-recourse loans g
Upfitting may be included in loan g g g g g
Commercial Property Classification - ANSWER: ➡ Office g g g g gg g
Retail
Industrial
Land/Specialty
Commercial: Office - ANSWER: ➡ Used for clerical, management, professional, etc.
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Highrise, midrise, garden building, shopping centers
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Office space classified as class A, B, or C
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Where did classification come from and why is it used?
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- diff b/t each classification varies by market and class B and C buildings are generally classified
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relative to Class A buildings
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- Classifications used to differentiate buildings and help the reporting of market data in a
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manner that differ b/t building types
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Class A Office - ANSWER: ➡ Represent the highest quality buildings in their market
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Better construction with high quality building infrastructure
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Modern
Well-located with good access g g g
Professionally managed g
Less than 20 years old
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