What is the 'economic life' of a building and why does it matter in real estate?
Why The estimated period over which the building will contribute positively to the property's value, used in depreciation calculations and investment analysis Is Correct
Answer B: The estimated period over which the building will contribute positively to the property's value, used in depreciation calculations and investment analysis
Exam Tip: Agency
Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.
Key Agency Terms in This Question
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Key Terms to Know
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Math Concepts
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