Although the function of commercial brokerage is the same as that of residential
brokerage, the activities of commercial brokers usually differ considerably from those
of residential brokers due to fundamental differences in these two markets. All of the
following statements regarding commercial brokerage are true EXCEPT:
A. Relative to residential transactions, commercial transactions tend to be larger
B. The parties in commercial mortgage transactions are typically less knowledgeable
than those in residential transactions.
C. An important part of the commercial broker's service is to provide the prospective
buyer with reports that enable him to complete due diligence for the property
D. Commercial brokers are often required to lower their commission in order to
negotiate compromises between buyers and sellers when they reach an impasse over
price.
Some commercial mortgages have adjustable, or floating, interest rates. The index rate
to which the contract rate is tied is typically which of the following for commercial
mortgages?
A. The yield on a constant maturity Treasury security of the same term
B. The cost of funds index (COFI)
C. The London Interbank Offer Rate (LIBOR)
D. The interest rate on a comparable maturity level-payment mortgage