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Dual agency occurs when one agent represents both parties in a transaction. It is legal only with informed written consent. Transaction brokerage (A) provides limited assistance without fiduciary duties. Designated agency (C) assigns separate agents.

Functional obsolescence occurs when a property loses value due to outdated or inefficient design/features, like obsolete plumbing. Peeling paint and roof repair (A/D) are physical deterioration, while external factors like a noisy highway (C) are external obsolescence.

An overimprovement occurs when the cost of an improvement exceeds the value it adds, such as building a luxury mansion in a modest neighborhood. Functional obsolescence (C) refers to outdated design features. Regression (A) means higher-value homes lose value near lower-value homes. Contribution (D) is when improvements add proportionate value.

The principle of highest and best use means property value is maximized when used in its most profitable legal and feasible way. Contribution (A) addresses value from improvements. Progression (C) and conformity (D) deal with neighborhood values. Highest and best use guides development and investment.

A deed conveys legal title to real property. A lease (A) grants possession but not ownership. A mortgage (C) secures repayment of a loan, and a promissory note (D) is the borrower’s promise to repay debt. On exams, deeds are the primary legal instrument of property transfer.