A broker took a listing on an 8-unit apartment house and stated that it showed a 14% yield on the investment. In figuring the yield, the broker unknowingly did not allow for maintenance expenses or a vacancy factor. A buyer purchased the property on the basis of the broker's analysis. Which of the following best describes this particular violation of real estate law?

Question

Quizplus · Accepted Answer

The broker's failure to account for maintenance expenses or a vacancy factor in calculating the yield of the investment constitutes a misrepresentation, as the buyer would have reasonably relied on the broker's analysis when making the purchase.

A Broker Took a Listing on an 8-Unit Apartment House