NAR Product Knowledge & Presentation 2 — Questions and Answers
Question 1: When presenting a comparative market analysis (CMA) to a seller, which approach best demonstrates product knowledge?
- Show only the highest comparable sales to justify the listing price
- Present active, pending, and sold comparables within the last 6 months in similar condition (Correct answer)
- Use tax assessment values as the primary basis for pricing
- Rely exclusively on automated valuation models without explanation
Correct answer: Present active, pending, and sold comparables within the last 6 months in similar condition
A credible CMA includes active, pending, and sold comparables from the recent market to give sellers a complete picture of current conditions.
Question 2: What does the term 'days on market' (DOM) indicate when analyzing a property listing?
- The number of days the seller has owned the property
- How long the property has been listed for sale in its current listing period (Correct answer)
- The total time elapsed since the property was built
- The number of showings the property has received
Correct answer: How long the property has been listed for sale in its current listing period
DOM measures the number of days a property has been actively listed for sale in its current listing period, reflecting market activity and desirability.
Question 3: A listing agent is presenting a home with a non-conforming bedroom (no closet). What is the best approach?
- Market it as a full bedroom to maximize perceived value
- Disclose that it is a non-conforming bedroom and adjust the price accordingly (Correct answer)
- Omit the room from the listing description entirely
- List it as a bonus room without clarifying its non-conforming status
Correct answer: Disclose that it is a non-conforming bedroom and adjust the price accordingly
Transparency about non-conforming rooms avoids misrepresentation and protects both the agent and seller from legal liability.
Question 4: Which factor most directly impacts a property's absorption rate in a given market?
- The age of the listing agent's license
- The ratio of homes sold to homes available within a specific time period (Correct answer)
- The color palette chosen for the home's interior staging
- The number of open houses held per month
Correct answer: The ratio of homes sold to homes available within a specific time period
Absorption rate is calculated by dividing the number of homes sold by the number of homes available, indicating how quickly inventory is being consumed.
Question 5: During a listing presentation, a seller asks why their neighbor's identical home sold for more. What is the most informative response?
- Tell them the neighbor was lucky with their buyer
- Explain how differences in condition, upgrades, timing, and buyer motivation affect sale price (Correct answer)
- Promise to match that price regardless of market conditions
- Avoid the topic and redirect to your marketing plan
Correct answer: Explain how differences in condition, upgrades, timing, and buyer motivation affect sale price
Comparing condition, upgrades, timing, and buyer motivation explains price variations between seemingly identical homes.
Question 6: What is the purpose of a seller's net sheet presented during a listing appointment?
- To estimate the agent's commission only
- To show the seller an estimated breakdown of proceeds after all selling costs (Correct answer)
- To outline the buyer's financing options
- To provide a full property inspection summary
Correct answer: To show the seller an estimated breakdown of proceeds after all selling costs
A seller's net sheet itemizes selling costs—commission, closing costs, mortgage payoff—so sellers understand their expected proceeds.
Question 7: Which NAR Code of Ethics article most directly governs an agent's duty to present accurate product information?
- Article 4, regarding personal interest disclosures
- Article 1, requiring honest and accurate representation in the public interest
- Article 12, regarding truthful advertising (Correct answer)
- Article 16, prohibiting interference with other agents' clients
Correct answer: Article 12, regarding truthful advertising
Article 12 of the NAR Code of Ethics specifically requires that advertising and representations be truthful and not misleading.
NAR Product Knowledge & Presentation 2
When presenting a comparative market analysis (CMA) to a seller, which approach best demonstrates product knowledge?