An independent RES exam study resource — not a Government website and not affiliated with the Council for Estate Agencies (CEA).Find My OrderHow to identify official CEA sources
Browse Papers
Home / Free RES questions / Foreign property marketing
← All foreign property marketing questions

The PI insurer must be notified that foreign property is being marketed

A worked RES examination question on foreign property marketing, from our Paper 2 bank — with the rule it turns on, and why each of the four options is right or wrong.

Paper 2Lesson 3Foreign property marketingFree — no sign-up

The question

On the pre-marketing due diligence Horizon Realty should perform for the Auckland project, consider the following statements.

  1. (i) The professional indemnity insurer must be told that foreign property is being marketed.
  2. (ii) Due diligence should cover the vendor's financial standing and track record.
  3. (iii) Due diligence should test the vendor's claims, such as any guaranteed rental returns.
  4. (iv) Where the agency cannot verify a matter itself, it may engage a third party such as a foreign lawyer.
  1. A. (ii) and (iv) only
  2. B. (i), (ii), (iii) and (iv)
  3. C. (iii) and (iv) only
  4. D. (ii), (iii) and (iv) only

The answer, and why

Answer: B

The rule. Pre-marketing due diligence for foreign property covers the vendor's financial standing and track record, tests the vendor's claims (e.g. guaranteed returns), and may draw on a third party (such as a foreign lawyer) where the agency cannot verify a matter itself. The PI insurer must be notified that foreign property is being marketed.

Why B is correct. All four are correct: (i) that the PI insurer must be told; (ii) the vendor's standing and track record; (iii) testing the vendor's claims; and (iv) engaging a third party where the agency cannot verify a matter.

The other options.

  • D drops (i), notifying the PI insurer.
  • A drops (i) and (iii), notifying the insurer and testing the vendor's claims.
  • C drops (i) and (ii), notifying the insurer and the vendor's standing.

Exam note. Vet the vendor, test its claims, use experts where needed — and notify the PI insurer.

More on Foreign property marketing

Read all Foreign property marketing questions on one page →

Want a full paper instead of one question?

The free half-paper is 20 questions with a Section B case study, explained to this same depth. The paid sets are ten full 80-question papers across Paper 1 and Paper 2, every figure checked against the current IRAS, CEA, HDB, URA and SLA position.

Free 20-question paperThe papers in PDF

Looking for past-year papers? CEA doesn't publish them — here's what it does publish.

Independent study material. Not affiliated with or endorsed by the Council for Estate Agencies. No pass guarantee — for study use only.