AMP Exam Prep Q's & A's

Question 1

Fannie Mae, Ginnie Mae, and Freddie Mac all

Answer 1

Purchase existing mortgage loans.

Question 2

At closing, the listing broker’s commission generally appears as a

Answer 2

debit to the seller.

Question 3

What is typically found in a listing agreement?

Answer 3

All listing contracts tend to require similar information: type of listing agreement, broker’s authority and responsibilities, names of all parties to the contract, brokerage firm, list price, real and personal property, description of property, commission, termination of the contract, and so on. They are not required to provide the dates of open houses.

Question 4

What would would require the value of the land to be calculated separately from the value of the improvements?

Answer 4

Cost approach:
The cost approach requires a separate estimated value for the land. Estimated replacement or reproduction cost less accrued depreciation plus estimated land value equals the estimated value by the cost approach.

Question 5

A suit to quiet title refers to:

Answer 5

The removal of a cloud on the title by court action.

Question 6

What covenant ensures that a landlord will NOT interfere in the tenant’s possession or use of the property?

Answer 6

Covenant of quiet enjoyment:
The covenant of quiet enjoyment is a promise by the lessor that the lessee may take possession of the premises, and the landlord will not interfere in the tenant’s possession or use of the property.

Question 7

A prospective buyer needs to borrow money to buy a house. The buyer applies for and obtains a real estate loan. Then the buyer signs a note and a mortgage. In this example, the buyer is referred to as the

Answer 7

The mortgagor.

The holder of a reversionary interest in a qualified fee estate might be able to obtain title to the property

Question 8

The holder of a reversionary interest in a qualified fee estate might be able to obtain title to the property if;

Answer 8

The holder of the qualified fee estate breaks the condition.

If the condition is broken, the holder of the reversionary interest in a qualified fee estate can go court to try and obtain ownership.

Question 9

The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of her earnest money deposit. In this situation, the

Answer 9

Buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money.

Question 10

Security deposits should be listed on a closing statement as a credit to the

Answer 10

Buyer.

Question 11

How is the due diligence fee reflected at the settlement meeting?

Answer 11

It is a credit to the buyer and a debit to the seller.

Question 12

A seller has listed a property under an exclusive-agency listing with a broker. If the seller sells the property personally during the term of the listing to someone who learns about the property through the seller, the seller will owe the broker

Answer 12

No commission.

Question 13

A type of agency practice in which there is only one principal is a

Answer 13

Single agency.

Question 14

Antitrust laws prohibit competing brokers from setting a standard commission rate, known as

Answer 14

Price-fixing.

Question 15

Fixtures are

Answer 15

Treated as real property.

Fixtures are conveyed by a deed. Trade fixtures are personal property and can be removed by the tenant.

Question 16

A house with out-Dated plumbing is suffering from

Answer 16

Functional obsolescence.

Out-Dated, although functional, design features that are no longer considered desirable would be considered functional obsolescence.

Question 17

Real estate property taxes that were NOT paid would show up on the closing statement as a

Answer 17

Debit to the seller.

Unpaid taxes are a lien that the seller must clear.

Question 18

According to law, a trade fixture is usually treated as

Answer 18

Personal property

An item used in conducting business is considered a trade fixture and can be removed by the tenant. It is considered personal property (personalty), even though it may be attached to a building.

Question 19

The purpose of a building code is to

Answer 19

Building codes are used to make sure building are structurally sound and safe.

Question 20

Money that serves to compensate a seller in the event of a buyer default is known as

Answer 20

Liquidated damages.

Question 21

The primary intent of zoning ordinances is to

Answer 21

Ensure that proposed land uses conform with the master plan.

Question 22

The cost basis, or tax basis, of a property for the IRS is calculated in which of the following ways?

Answer 22

The purchase price plus allowable closing costs when purchased.

The cost or tax basis is simply the purchase price plus any IRS allowable closing costs.

Question 23

Mechanic’s lien:

Answer 23

A mechanic’s lien gives security to persons or companies that perform labor or furnish material to improve real property, and can be filed when the owner has not fully paid for the work.

Question 24

A lease that will terminate within one year of its inception

Answer 24

May be oral.

According to the statute of frauds, in general, oral leases for one year or less that can be performed within a year of their signing are enforceable.

Question 25

Which event will terminate an agency in a broker-seller relationship?

Answer 25

The owner dies.

Common law holds that the death of either the broker or the seller ends the agency relationship created by the listing.

Question 26

The sales price would show on a settlement statement as a

Answer 26

Credit to the seller and a debit to the buyer

Question 27

Transactional brokerage.

Answer 27

A nonagent ( transactional broker) is not an agent of either party. A nonagent’s job is simply to help both the buyer and the seller with the necessary paperwork and formalities involved in transferring ownership of real property.

Question 28

The Civil Rights Act of 1866 prohibits discrimination based on:

Answer 28

Race, Color, Religion,or National Origin

Question 29

Special assessments.

Answer 29

Taxes levied on real estate to fund public improvements.

Ex. sidewalks or sewers

Question 30

A contract for the sale of real estate that does not state the consideration and is not signed by the parties is considered to be

Answer 30

Void:

A contract is void when a consideration is not stated, as it is an essential element of a contract.

Question 31

Radon is

Answer 31

An odorless, colorless radioactive gas.

Radon can cause health problems, and evidence suggests that it may be a cause of lung cancer.

Question 32

The reversion of real estate to the state because of the lack of heirs or other persons legally entitled to own the property is called

Answer 32

Escheat.

When a person dies intestate, title to the real estate passes to the state by the state’s power of escheat and is an involuntary alienation.

Question 33

The defeasance clause in a mortgage requires the mortgagee to execute a(n)

Answer 33

Satisfaction of mortgage.

Satisfaction of mortgage returns to the borrower all interest in the real estate originally conveyed to the lender.

Question 34

True or False: Offering to sell time-shares without first registering with the North Carolina Real Estate Commission is a felony.

Answer 34

True