national practice exam questions

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

Which one of the following is an example of group boycotting?

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business.

When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at?

Addendum (An addendum is a separate form that becomes part of the sales contract.)

The owner of a six-unit apartment building is worried that there may be some electrical issues. The owner's leasing agent, Katrina, meets with him to discuss his concerns. What's her responsibility to the owner?

Advise him to consult an expert.

Which of the following is an example of the duty of reasonable skill and care?

Advising clients to seek expert advice on matters outside of your expertise

Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needs to move the closing date to June 15. She'll accomplish this with an ______ to the sales contract.

Amendment (When added, an amendment changes the original terms of the sales contract. This is unlike an addendum, which may be added without changing other terms already agreed to in the sales contract.)

Which of these is an example of agency coupled with interest?

An agent foregoes buyer agent commission, provided the purchasing developer gives the agent the listings on the developed lots. (Agency coupled with interest means the agent holds an estate (or interest) in a property that is the subject of the agency relationship. Forgoing commission now in turn for listings down the road is an example.)

A CMA or a BPO is an example of ______.

An informal estimate of market value (Remember, it's good practice to never call anything you'll produce as a real estate professional an "appraisal.")

Shannon doesn't understand why her agent wants her to add a contingency to her purchase offer. Her agent, Scott, explains that the property is in a transitional neighborhood, and it might be overpriced. What type of contingency is Scott recommending?

Appraisal An appraisal contingency gives the buyer the opportunity to renegotiate the price if the appraisal comes in less than the agreed-upon purchase price. This is an important contingency in an area where values are shifting.

The fibers of ______ are dangerous when inhaled because they can lodge in the lungs and intestines, causing cancer.

Asbestos

Which of the following would a home inspector note as a defect in a report, due to its link to lung cancer?

Asbestos tiles in a basement

Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have?

Bilateral (A contract involving an exchange of promises or other consideration between two parties is a bilateral contract.)

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

Which department typically decides which development projects require a permit or approval?

Building department

Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing?

$34,750 (Almanzo set aside $104,250 as earnest money ($695,000 x 0.15). Subtract that from his total due at closing, and you get $34,750 ($139,000 - $104,250) as the amount he'll need to bring to closing.)

If an apartment building is valued at $970,000 and has a capitalization rate of 9%, what is the net operating income?

$87,300 (The formula to determine net operating income when you know capitalization rate and value is: rate × value = income (R × V = I). Remember to convert the 9% into a decimal by shifting the decimal point two places to the left: .09 × $970,000 = $87,300.)

Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax.

$962.50 (A mortgage recording tax is based on the loan amount. Phyllis will pay a mortgage tax amount of $962.50 on her loan amount ($275,000 x .0035).)

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. How many payments will the borrower make over the course of the loan?

180 (The borrower will have 180 payments (assuming the loan isn't paid off early). This is 12 monthly payments per year for 15 years: 12 x 15 = 180.)

How many acres are in a parcel described as, "The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM"?

20 This legal description defines half of a quarter-quarter section. A quarter-quarter section is 40 acres; half of a quarter-quarter section is 20 acres. Alternatively, multiply the three fractions' denominators (2 × 4 × 4) and divide into 640 (640 ÷ 32 = 20).

The main floor of Kinsey's home is 1,425 square feet. The upper level is 875 square feet with one unfinished bedroom that measures 150 square feet. The finished basement is 1,425 square feet with 7.5-foot ceilings. Kinsey's MLS listing includes below-grade square footage in livable area. What's the reportable square footage for Kinsey's home?

3,575 (Kinsey should exclude the 150-square-foot unfinished bedroom. This gives us a calculation of: 1,425 + (875 - 150) + 1,425, or 3,575 square feet.)

How many feet are in a mile?

5,280. (When the British started using it as a length unit, it was necessary to relate it to furlong, a common length unit used in agriculture. One furlong is 660 feet. It was decided that one mile would be eight furlongs (8 x 660=5,280).)

An exclusive right-to-sell agreement must include ______.

A start and end date for the listing period (Different forms are in use in different areas, so you'll need to use the specific form provided by your broker or from the standard source in your state.)

Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?

Client data can be exposed when a brokerage's computer system is compromised. (Any data kept on a computer system is vulnerable when the system is hacked. This includes client data.)

Which of these is a potential title issue with a foreclosure?

Clouds on title (Potential clouds on the title from unpaid taxes or other types of liens are more common with foreclosure properties than standard sales. While the right of redemption, delays for audits, and a longer process are also issues, they're not title-related.)

Which of the following is an example of a universal agent?

Conservator (A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator.)

Which of the following is a common chimney or fireplace problem?

Creosote

Property managers are typically responsible for market analysis and marketing the properties they manage. Which of the following tasks is a component of that duty?

Determining rent rates based on comparative analyses with other properties (Determining rent potential based on current condition and on upgraded condition of the property relative to comparable properties is part of performing a market analysis.)

You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?

Disclosed limited agency

When it comes to earnest money, which one of the following statements is true?

Earnest money must be placed in a trust account. (which is also known as an escrow account)

Derrick was thrilled to find out that the land he purchased includes several small caves. He's been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?

Enjoyment (The right of enjoyment gives the property owner the right to participate in any activities desired (as long as they are legal).)

When a buyer finances a newly built home with a Federal Housing Administration loan, FHA requires the builder to ______.

Purchase a third-party home warranty to protect the buyer

A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?

Regression (Regression is when a lower-quality property is adjacent to a higher-quality property, and it can diminish the value of the higher-quality property.)

Which of these is NOT an example of a group boycott?

Sean and the associated brokers in his firm agree to purchase their marketing materials from a single supplier so they get a quantity discount. (A brokerage firm can elect to do all of its business for supplies, advertising, etc., with a single vendor. This isn't a group boycott because the firm isn't agreeing to not do business with any other specific business.)

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?

Termination of co-ownership by partition (Termination of tenancy in common by partition allows each tenant to have a specific, divided portion of the property exclusively. If the property can't be divided, the court may rule that the property be sold and the proceeds divided by the tenants.)

Which type of pest may make mud tubes-tunnels that run along your walls-or shed tiny wings?

Termites

Morris needs to pay for some repairs made to one of the units in his apartment complex. Which bank account should he use?

The firm's operating account (Funds in the firm's operating account are used for operating expenses. Trust account funds are disbursed only for very specific purposes, such as return of a security deposit.)

Stan is a home inspector who's evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report?

The lack of air circulation in a moist room can lead to mold growth.

Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true?

The lender must provide the Closing Disclosure by Friday of the week before closing. (Lenders must deliver the Closing Disclosure at least three days before closing.)

Which of these situations would be exempt from most provisions of the federal Fair Housing Act?

The local Elks club owns a property that's rented only to Elks club members. (Housing operated by religious organizations and private clubs that limit occupancy to members are exempt from the provisions of the Fair Housing Act.)

Your buyer clients, the Thompsons, told you about a problem they ran into with the lender that handled their mortgage. The Thompsons, who are African American, were given less favorable loan terms than a white couple they know who used the same lender. You know the Thompsons have excellent credit. Which act should you make them aware of?

Equal Credit Opportunity Act (The Equal Credit Opportunity Act lists protected classes against which lenders may not discriminate when making credit available. You should be aware of the rules and notify your clients if the rules have possibly been broken.)

Which of these describes a bridge loan?

Gina is moving across the country to be closer to her family. Her existing home hasn't sold, but she is ready to purchase her new home. (A bridge loan is an option that will help Gina make the down payment on her new home while waiting for her existing home to sell.)

Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer agents showing her listings to not do business with this company, either. What is this an example of?

Group boycotting

What economic principle is related to a property's most profitable use that is both legal and economically feasible?

Highest and best use (legal means it conforms to zoning and economically feasible means it won't cost more than the increase in value.)

Which of the following duties are owed to customers and other parties to a real estate transaction?

Honesty and fairness (Licensees must also disclose all material facts to these parties.)

Which of these situations represents the illegal practice of redlining?

Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods, based on the neighborhood's demographics. (Redlining is the practice of selecting geographical areas in which no mortgage loans will be written (based on demographics instead of creditworthiness).)

Christy found a property that was For Sale by Owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists?

Implied agency (Christy and Zelda never signed a formal agency agreement, but through Zelda's actions in her attempt to help Christy, she created an implied agency agreement.)

You're a new licensee who's thrilled to be working with five different buyer clients. Under what circumstances is it appropriate for you to determine the earnest money amount for your clients?

In no circumstances. (You can advise your client about local customs or provide a recommendation, but buyers must set the amount to offer, and sellers may stipulate a minimum acceptable amount.)

Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

Indestructibility

Which of the following is considered unauthorized practice of law?

Interpreting the legal consequences of a client's actions (Interpreting legal consequences should be left to someone who practices law (an attorney).)

Why might a licensee want a buyer to sign a buyer representation agreement?

It helps ensure buyer loyalty. (Buyer agency agreements help define and solidify the working relationship between the parties. Without an agreement in place, the buyer could purchase through another licensee.)

Why is proof of ownership required when transferring real property?

It provides evidence that the title is marketable.

Virginia is finally living her dream-she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she'll have to meet. Virginia was surprised to learn that her five-table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse?

It's a commercial enterprise that's open to the public.

Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now?

The seller may not be required to attempt to clear the defect before closing. (depending on the type of defect (e. g., an easement) it may not impact closing. Other types of defects may require action before closing.)

Which of the following is true about net listings?

They often involve a conflict of interest. (Net listings are prohibited in several states, and there's no guarantee of commission. The conflict could occur if the listing agent didn't present offers that left little for a commission, even though the offers met the seller's needs.)

Which of these is an example of severability?

Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force. (Severability refers to the concept that a court can strike down one or more contract terms while leaving the remainder in place.)

To be an effective property manager, a licensee must be familiar with a variety of ______.

Lease agreements

Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal?

Meg must sign the deed and have her signature acknowledged. (As the grantee, Christian doesn't have to sign the deed, and he doesn't have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn't have to have a monetary value.)

"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Bethany Smith ..." is an example of what type of legal description?

Metes and bounds

Roger is an unlicensed assistant in Dave's office. He performs tasks for several of the firm's licensees. Katherine is a licensed assistant, and she performs tasks for three of the firm's independent contractor licensees. The firm's broker, Michaela, has her own licensed assistant. Which of these statements best represents Michaela's liability for the acts of all these assistants?

Michaela is responsible for all licensees and employees associated with the firm.

Physical characteristics of land include its immobility, indestructibility, and ______.

Uniqueness (nonhomogeneity) (Nonhomogeneity is a unique characteristic of land. Even within a single subdivision, two identically sized parcels will have their own unique characteristics: views, access, proximity to other amenities, etc.)

In contract law, undue influence differs from duress in that duress includes ______.

Use or threat of force (Undue influence differs from duress because duress includes the use or threat of force, such as blackmail or bodily harm. Undue influence uses persuasion to overcome free will, and usually involves a position of trust.)

Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have?

Void (A contract for an illegal purpose is void!)

You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this?

Void (A party can't promise to do something that's actually impossible in a contract. This contract is void because the seller of the machine literally can't perform his side of it.)

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable (A voidable contract appears to be valid, but one or both parties have the right to rescind the contract. In this case Sylvia can enforce the contract against Marge but Marge cannot enforce against Sylvia.)

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell- listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

Yes, because "exclusive right to sell" means Bernie gets paid no matter who finds the buyer. (It's easy to confuse exclusive agency and exclusive right-to-sell agreements. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission.)

Marvin knows that three-bedroom properties with two bathrooms sell quickest in his market. In an ad for a new listing, he wrote, "Bonus room could easily be a third bedroom." Marla and Tom visit the property with their agent, and Tom, a construction supervisor, notes that the bonus room couldn't be easily converted to a bedroom because it's too small, it has no egress and no heat source, and it can only be accessed by walking through a bathroom. Is Marvin guilty of misrepresentation?

Yes, because he should have known there would be major issues converting that room to a bedroom.

Buyer Peter is eager to make an offer on the two-story home you just showed him, but you're concerned about the back bedroom, since it looks like a relatively recent addition. When Peter asks you why it's an issue, how do you respond?

You recommend that Peter check on the permits for it, so that he doesn't buy the house and then have to correct or even remove the addition because it wasn't built to code.

Because there were no deadlines specified in the contract, Myron didn't think there was a problem with his waiting to apply for a loan to help purchase the property. He was therefore a little surprised and not very happy when the seller sued him for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did Myron fail to do?

Perform his contractual obligations within a reasonable time. (When a contract doesn't provide specific dates for the terms of the contract that need to be met, performance must take place within a "reasonable time.")

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control (Subdivision regulations, such as deed restrictions imposed by developers, are private land controls.)

Edric owes $115,000 on his lakefront home, which he's selling for $350,000. He's spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he'll actually pocket at closing. What number does he come up with?

$162,000 (Once Edric's loan is paid off, he'll be left with $235,000 ($350,000 - $115,000). When he subtracts the cost of the renovations, he's left with $162,000 ($235,000 - $73,000).)

The Smith home has an assessed value of $64,120, and their tax rate is 3.2%. What is their annual tax bill?

$2,051.84 (The annual tax bill the Smith's expect to pay is $2,051.84 ($64,120 × .032 = $2,051.84).)

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

Shelly is a property manager. Her commission is a percentage of the rents she collects every month. Last month, she collected $78,450, and her commission was $5,491.50. What's her commission rate?

7% (Sales price (or in this case, total rent collected) × commission rate = total commission. We know the total rent collected and the total commission. To get the rate, divide the total commission by the sales price. 5,491.50 ÷ 78,450 = .07, which is a 7% commission rate.)

A buyer is purchasing a home for $400,000 and is financing $300,000. What is the loan-to-value ratio?

75% (We get this by dividing $300,000 by $400,000 and multiplying by 100.)

What's the rate of capitalization of a property generating net property income of $25,000 per year that's valued at $312,500?

8% (The capitalization formula is value = income ÷ rate of capitalization. To determine rate of capitalization, divide Income by value ($25,000 ÷ $312,500 = 8%).)

An abandoned or otherwise unused commercial or industrial site with suspected contaminants is known as what?

A brownfield

How's interest defined as it's related to a mortgage loan payment?

A fee paid to lenders for the use of their money

Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it's going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?

A lien theory state (In a lien theory state, the mortgage becomes a lien on the property, but title remains with the buyer. Foreclosure proceedings in a lien theory state may be more difficult for the lender.)

Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs?

Exclusive agency (It's easy to confuse exclusive agency and exclusive right to sell. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission, but the seller's listing will likely receive more attention from the agent than it would with an open listing.)

When it comes to landlord-tenant relations, a property manager needs to know _______.

Fair housing laws (a property manager also needs to know local laws and lease laws.)

The Telephone Consumer Protection Act is enforced by the ______.

Federal Trade Commission

Local authorities lack police power over what?

Federal government construction projects

After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?

Fee simple (At the end of a life estate, the reversionary owner or remainderman hold a fee simple estate.)

Select the statement that accurately describes an abstract of title.

Few states require an abstract of title when conveying property. (The abstract of title process is costly and lengthy; only a few states require this process when conveying property.)

While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and invoiced her for a nominal $15 fee to prepare transaction documents. Which of these tasks would NOT be considered unauthorized practice of law?

Filling in the contract blanks

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?

Financing terms and cash equivalency (When using the sales comparison approach, appraisers consider elements in a specific order: 1. financing terms and cash equivalency 2. conditions of sale 3. market conditions at the time of contract and closing 4. location and physical characteristics.)

Stu is buying Freddie's property. What must occur for the transfer of title to take place?

Freddie must intend to convey the property to Stu. (The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.)

Which of the following is the price a lender believes the property will bring at a foreclosure sale?

Mortgage value (Lenders won't lend on what they can't recoup. Therefore, the loan amount will be based on what a lender would hope to recoup, should a foreclosure sale be necessary.)

Which of the following is an advantage of condominium ownership?

No yard work (Condominium properties have homeowners associations and often come with shared walls with the neighbors, but they don't come with any yard work.)

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values. (Commission rates may naturally fall into similar patterns in a given area without collusion between competitors; there must be evidence of an agreement to fix commissions in order for this to be a violation.)

Which of these scenarios is an example of two parties rescinding a contract?

Sherman, the seller, decides not to sell his condo after all. Fortunately, his buyer, Alice, decided to join the Peace Corps. They mutually agree to cancel the sale with no penalty on either side, and each signs paperwork to this effect. (A contract is rescinded when both parties agree to cancel the agreement and return both parties to their pre-contract position.)

What is the definition of a legally competent party?

Someone who has the legal and mental capacity to enter into a contract

Which of these statements about statutory duties and fiduciary duties is true?

Statutory duties spring from state statutes and tend to be more specific than fiduciary duties. (Fiduciary duties are based in common law, and statutory duties arise from state statutes. Designed to be more specific than fiduciary duties, statutory duties may make it easier for licensees to understand their responsibilities.)

You know a property's effective gross income and its operating expenses. How would you calculate the net operating income?

Subtract operating expenses from effective gross income.

DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______.

Suing for specific performance

Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination?

Superfunds Amendments and Reauthorization Act (SARA)

Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn't meet the bank's normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.

The Farm Service Agency (The Farm Service Agency, which operates through the USDA, provides loan guarantees to lenders for up to 95% of the loss of principal and interest.)

A "homes for sale" magazine contains the following ad: "Cozy two-bedroom starter home, neat and clean, ready for move-in. $140,000. Low down payment and easy financing!" Which of these statements is true?

The ad complies with TILA because it doesn't contain any of the trigger terms that require full disclosure of all financing terms. (Regulation Z requires all financing terms to be included in an ad only if certain trigger terms are present, but "low down payment and easy financing" are not triggers.)

A "homes for sale" magazine contains the following ad: "One-bedroom condo. Corner unit with beautiful ocean views. Financing available, 5.25% APR." Which of these statements is true?

The ad is in compliance with TILA because providing the APR doesn't trigger the required disclosure of all credit terms. (The APR can be included in an ad without requiring disclosure of all credit terms. APR figures allow consumers to make an informed comparison between loans, which is TILA's goal.)

A seller tells his agent that he has to sell his house quickly because of a divorce proceeding and that he's willing to accept less than his list price. His agent tells a buyer that the seller will accept as much as $10,000 less than the list price. Which of these is true?

The agent has breached his duty of confidentiality to his client. (Even if the client has given the agent permission to note the price is flexible, providing the reduction the seller is willing to make impacts his ability to negotiate for the best price.)