Agency listings

Question 1

Exclusive right to sell

Answer 1

Broker gets paid regardless of the procuring cause

Question 2

Open listing

Answer 2

Seller can have multiple brokers

Broker who is procuring cause gets paid

Question 3

Net listing

Answer 3

Money received above an beyond a designated amount goes to the broker, illegal in TN

Question 4

Protection period clause ( safety clause)

Answer 4

Compensated after listing expired if you are procuring cause

Question 5

Value

Answer 5

What a willing buyer will pay on the open market

Question 6

Essential elements of value

Answer 6

STUD - scarcity, transferability, utility, demand

Question 7

Principle of regression

Answer 7

Value of a more expensive home placed in a neighborhood of less expensive homes will drop in value

Question 8

Principle of progression

Answer 8

Value of less expensive homes will increase when places in a area of more expensive homes

Question 9

Principle of highest an best use

Answer 9

How much net return you can get by building a property,

If the use in temporary then it’s the interim use

Question 10

Pottage

Answer 10

When two pieces of land that are adjacent to each other are combined and for one single larger parcel

Question 11

Appraisal

Answer 11

Estimate of value

Question 12

Market data approach

Answer 12

Examination of properties sold that are similar in value

Question 13

Cost approach

Answer 13

How much it would cost to replace the building brand new, better for new building not old

Question 14

Capitalization approach

Answer 14

Converts income into value, property that will bring in more income increases value

Question 15

Cap rate

Answer 15

Higher cap rate represents higher risk

Question 16

Gross multipliers

Answer 16

Price divide by rent

Question 17

Acre

Answer 17

43,560

Question 18

Physical deterioration

Answer 18

Wear an tear on property

Question 19

Functional obsolescence

Answer 19

Outdated, not useful

Ex - old house in a neighborhood of new house

Question 20

Economic obsolescence

Answer 20

Outside causes

Question 21

Mortgage broker

Answer 21

Originates loans

Question 22

Mortgage lender

Answer 22

Funds loans

Question 23

Amortization

Answer 23

Paying off of debt

Question 24

Negative amortization

Answer 24

Interest paid debt increases

Question 25

Appreciation

Answer 25

Increase value over time

Question 26

Contraction loan

Answer 26

Short term loan to finance building a property

Question 27

Participation loan

Answer 27

Loan that requires Interest plus portion of the profit as a payment

Question 28

Subject to

Answer 28

Seller liable, buyer not liable

Question 29

Hypothecate

Answer 29

Pledging an asset as collateral for a loan while retaining ownership

Question 30

Subordination clause

Answer 30

Current debts take priory over debts made in future

Question 31

Prepayment clause

Answer 31

Provision that permits borrower to satisfy debt before it’s due date

Question 32

Prepayment penalty

Answer 32

Regulates what the borrower is allowed to pay off an when

Question 33

Due on sale

Answer 33

Balance of the loan may be called to be relayed upon sale

Question 34

Primary mortgage market

Answer 34

Lenders make mortgage loans directly to borrowers

Question 35

Secondary mortgage market

Answer 35

Resale market place

Question 36

FHA

Answer 36

Small down payment, insures the lender does not make loans, unconventional loan because they are backed by government, no prepayment penalty , single family home, or 1-4 units

Question 37

VA loan

Answer 37

No down payment, owner occupied house, condo or townhouse

Question 38

GNMA

Answer 38

Government part of secondary market deals primarily with VA An FHA mortgages

Question 39

FNMA

Answer 39

Federally sponsored private corporation that provides a secondary market for housing