CE SHOP Q's MISSED ON TEST Flashcards
(226 cards)
1
Q
which of the following would be considered a foreign person according the FIRPA?
A
A incorporated in France w/regional development offices in the U.S.
(Corporate entities that are formed outside the U.S. are considered foreign persons for the sake of the Foreign Investment in Real Estate Property Tax Act (FIRPTA).
2
Q
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
A
Rectangular Survey
(Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.)
3
Q
Two essential elements of a deed are the _________.
A
Grantor’s signature and conveyance clause
(Only the grantor’s signature is required, not the grantee’s. The habendum clause is required only if the deed is conveying less than a fee simple estate.)
4
Q
A licensee told a family who doesn’t attend church that she didn’t know of any properties that would meet their needs, even though that wasn’t true. What protected class is the licensee discriminating against?
A
Religion
5
Q
Which one of the following is a common chimney or fireplace problem?
A
Creosote
5
Q
Plants in a yard would be considered part of the real property because of the ______.
A
Method of annexation
(The method of annexation—planting in the ground—implies that the plantings were expected to stay with the land.)
5
Q
Simon is looking for a facility for a large grocery distribution operation. He found two options, one of which is offering him a triple net lease, and the other an absolute net lease. Why is his attorney arguing against the latter?
A
An absolute net lease has no legal defenses if Simon fails to pay.
6
Q
How many parties does a deed of trust involve?
A
Three: borrower, lender, and trustee
7
Q
An appraiser used the cost approach to estimate a property’s value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?
A
$174,000
8
Q
Which element is applied first when using the sales comparison approach to value?
A
Financing terms and cash equivalency
(When using the sales comparison approach, appraisers consider elements in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.)
9
Q
Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account?
A
It depends on the states requirements.
10
Q
A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?
A
$1,335.67
First, find the square footage (5.5 × 43,560 = 239,580). You’re given one dimension of the rectangle, so find the other: 239,580 ÷ 400 = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95 = $1,335.67 per front foot.
11
Q
Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?
A
Her down payment of $50,000 isn’t at least 20% of the purchase price.
12
Q
What information does the Loan Estimate provide to buyers under required disclosures law?
A
Loan payment schedule
(Lenders provide the Loan Estimate within three days of receiving a borrower’s application. Borrowers receive final closing cost information (on the Closing Disclosure) three days before closing.)
13
Q
Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can’t determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?
A
Citytown will apply to the CERCLA trust fund for cleanup costs.
CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund.
13
Q
Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?
A
Alda tells Marge that she’s hired an inspector to perform a property inspection.
(Alda’s engagement of an inspector isn’t confidential in any way and would be expected by the buyer, so it’s not a potential breach of a fiduciary duty for Marge to share that information with the seller.)
13
Q
Which of the following is the best definition of a township?
A
A 36-square-mile square formed when using the rectangular survey system
13
Q
When completing a CMA, what might be indicated if a comparable property had a quick sale?
A
The market for similar homes is good.
(A quick sale of a comparable home usually indicates that the market for similar homes will be good.)
14
Q
The Truth in Lending Act requires lenders to make certain ______ to consumers.
A
Disclosures
15
Q
Luci’s client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?
A
Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren’t likely to lock in an interest rate for more than 90 days before closing.
(Because lenders won’t lock in an interest rate for more than 90 days before closing, Kaden needs to plan for the possibility of a 1% interest rate increase between now and closing, or risk not qualifying for the loan when the time comes.)
16
Q
A licensee requires all clients to use her friend’s mortgage company for their financing. What’s this an example of?
A
Tie-in arrangement
(Tie-in arrangements are antitrust violations that involve predicating one service on the consumer’s business with a recommended company.)
17
Q
Which clause in a contract states that one or more parties won’t be held liable if there are losses or expenses related to the contract?
A
Indemnification clause
18
Q
A buyer has signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until the buyer exercises the option to buy, only the seller is bound by the option agreement; the seller may not sell the property to anyone else during the option period. What type of contract does this describe?
A
Unilateral
19
Q
Brynn’s listing agent told potential buyers that all offers on Brynn’s property would be considered at 5 p.m. on May 3. By that date and time, four offers had been made. The persons making these offers are the ______.
A
Offerors (The party making an offer is known as the offeror.)
20
Your buyer wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn’t part of the standard sales contract in your area. What will you use to accomplish this request?
Addendum
21
A buyer's offer has been signed by all parties and delivered to the seller. This means that ______ has occurred.
Binding acceptance
22
What’s a good policy that a buyer’s agent should employ regarding contingencies?
Use contingencies judiciously to protect the clients and the deal.
23
Hannah wasn’t able to get the financing to open her boutique, so her mother became a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah’s mother can’t be held financially or legally liable if there are any problems with the store. What type of contract clause is this?
Indemnification
(Indemnifying one of the contract parties releases that party from all liability or loss.)
24
Three sisters owned a vacation home two blocks from the beach. Sadly, one sister passed away over the winter, so when summer arrived, the other sisters shared the home with a nephew, to whom one sister willed her share of the property. What type of ownership is this?
Tenancy in common
(This is a form of shared ownership, but only tenancy in common provides for inheritability—the other forms share the rights of survivorship (the existing tenants assume the deceased’s share of the property).
25
Marketo Building Designs is selling the air rights above its office building. The lot is 450 feet by 350 feet. How would you determine the air lot height in order to calculate the area?
The city or other governing authority establishes the air lot's height.
26
Angelo’s aging mother needs a place to live out her remaining years. Angelo conveys a home to her, but only for her lifetime. This is an example of what type of life estate?
Ordinary
(Ordinary life estates are granted for the lifetime of the grantee. When the life estate holder dies, remaining interest is either returned to the original owner (reversion) or is granted to a third party (the remainderman).
27
Centennial Development is constructing a new condo. The exterior of the building is 60 feet square. Which of these about the air lot is true?
The air lot is the same perimeter as the condo and the lot on which it's built.
(Picture a box drawn over the property boundaries. The perimeter of this box is the perimeter of the air lot.)
28
Mutual assent in a real estate contract is best demonstrated by
Signed written offer and acceptance
29
How is the Loan-to-Value Ratio (LTV) calculated in real estate financing?
Loan Amount/Properties Appraised Value
30
What is the primary purpose of purchase and lease contracts in real estate?
To outline terms of sale or lease
31
If a buyer fails to complete the purchase of a property as agreed in the purchase contract, what is the most likely legal remedy for the seller?
Sue for specific performance
32
A client is considering leasing a commercial property and prefers a lease agreement that allows for rent adjustments based on changes in the Consumer Price Index (CPI). Which type of lease should the broker recommend?
Percentage Lease
33
A real estate contract in which one party agrees to sell a property without receiving anything in return is generally:
Unenforceable
34
What is a common legal consequence of a breach of contract in a real estate transaction?
Potential contract termination
35
A real estate agent offers to list a property for sale at no charge. The homeowner agrees. Which essential element is missing for this to be considered a valid contract?
Consideration
36
What is true about void contracts?
They lack legal effect from the beginning
37
What type of insurance is a form of indemnity insurance that can protect both the buyer and the buyer’s lender?
Title Insurance
38
Which of the following is an example of constructive eviction?
A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
39
Federal trade commission regulates?
Advertising
40
Federal trade commission regulates?
Advertising
41
Which of these professional activities is NOT covered by the Fair Housing Act?
Vickie's staging company works with investor clients to stage vacant properties.
(The federal Fair Housing Act doesn't impact third-party providers who don't engage in real estate, financing, or appraisal services, though other anti-discrimination laws prevent businesses from discriminating.)
42
A couple bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next-door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?
Easement by prescription
Easements by prescription are created through continuous, exclusive, and long-term use of another’s property without actual permission.
43
Cheryl and Roberto just signed a contract for Cheryl to buy Roberto’s house for $235,000. Roberto owes $48,750 on his current mortgage, he’s going to replace the old furnace ($800), he’s agreed to pay 3% toward closing costs, and he’ll pay a 6% commission to his agent. How much in whole dollars will he have left to put down on the condo he wants to buy?
$164,300
Roberto’s closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06). If you subtract all the costs given ($7,050, $14,100, plus the $800 furnace, and the $48,750 mortgage payoff) from the $235,000 price, you end up with $164,300.
44
Which of these situations represents an illegal tie-in arrangement?
A licensee tells his seller client he'll only represent her if the client uses a specific company to close her transaction.
45
“Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Bethany Smith …” is an example of what type of legal description?
Metes and bounds
46
A client's accountant tells her that they're eligible to deduct the property taxes they paid last year. Select the statement about this deduction that's true.
They are in the ownership stage of the property ownership lifecycle.
47
Which clause in the listing agreement gives the listing broker the authority and obligates the broker to market the property to other brokers?
Multiple listing clause
48
Which of these is an example of severability?
Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force.
49
First-time buyers have decided to purchase a newly built townhouse. Their agent tells them that the builder must provide a one-year home warranty. Which of the following conditions is most likely true?
The homeowners are using an FHA-insured loan.
50
Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18 feet by 6 feet. The kitchen is 20 feet by 30 feet. The living room is 25 feet by 45 feet. There are two bedrooms, which measure 12 feet by 16 feet each, plus a master bedroom that is 14 feet by 20 feet. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?
$17,404.09
First, find the area of each room and add them together to get the total square footage. 108 + 600 + 1,125 + 192 + 192 + 280 = 2,497 square feet. The total cost of the flooring per sq. ft. is $5.48 + $1.49 = $6.97. So 2,497 × $6.97 = $17, 404.09.
51
A family purchased a dilapidated townhome in an estate sale. Due to their fix-up work and the current economy, the property value has skyrocketed. They decide to sell it to get their equity out of it. After they list it, a woman comes forward, saying she is an heir to the previous owner and lays claim to the property. Which general warranty deed covenant protects the family?
The covenant of warranty
The covenant of warranty assures that the grantor will warrant and defend the title against the lawful claims of others.
52
In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?
Investors always pay cash
53
What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?
Purchase money mortgage
54
Generally, what's the common range for loan origination fees?
1% to 3%
55
What type of antitrust violation is an agreement between competitors to establish or adhere to uniform price discounts?
Price fixing
Price fixing may include an agreement to establish or adhere to uniform price discounts.
56
A female tenant is 68 years old and employed full time. She’s of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, who is also female. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?
National origin, sex, disability, and familial status
Federal fair housing laws don’t name age, employment status, or sexual identity as protected classes. The tenant would be protected if she experienced housing discrimination based on her national origin, sex, disability, or familial status.
57
A real estate transaction has a closing date of May 20. The seller, who’s responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.
Credited $1,207
The seller is required to cover the property taxes for January 1 through May 19, which is 139 days. The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days (the number of days the buyer will own the property and have to cover property taxes) = $1,206.84. That’s $1,207 when rounded to the nearest whole dollar.
58
If a private individual owner owns fewer than three single-family homes at one time, which exemption from the Fair Housing Act could apply?
Single-family housing sold or rented without the use of a broker
(Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.)
59
To which of the following are most of the buyer’s closing costs typically related?
The mortgage loan the buyer’s obtaining
60
In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?
Investors can use rental income to qualify.
Investors can use rental income to offset debt-to-income imbalances.
61
Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
The smaller number
Lenders use the lesser of the sales price and appraised value.
62
In which form of co-ownership is a person's ownership inheritable?
Tenancy in common
With tenancy in common, if one owner dies, that person’s ownership is inheritable. It doesn't automatically pass to the other owners as it would with joint tenancy.
63
When calculating loan-to-value ratios, which of the following will be used by the lender?
The lesser of the sales price or appraisal value
Lenders use the lesser of the sales price and appraised value.
64
As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
10 years
Court-ordered supervision may last as long as 10 years if a brokerage is guilty of violating antitrust law.
65
If a property’s income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?
20%
*The cap rate is 20%. To calculate cap rate, divide the income by the property value. The formula for this is rate = income ÷ value.
66
Two parties agree that the seller will finance part of the purchase price, with the buyer making payments to the seller while the seller keeps the property title. What is this an example of?
A land contract
*With a land contract, the seller agrees to provide credit to the buyer for a portion (or sometimes all) of the funds required to close the transaction. The buyer makes payments directly to the seller.
67
When putting together a comparative market analysis, in what timeframe should comparable properties have been sold?
No later than three to six months ago
68
Patsy’s home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe?
Open listing
69
When appraising a property, what type of property would be best suited to the cost approach?
Historical properties
While depreciation is difficult to appraise, the uniqueness of a historical property is likely to carry more weight than the difficulty of adjusting for depreciation.
70
What type of police power allows cities to identify specific uses for an area?
Zoning
Zoning dictates how an area can be used, and should follow the area's general or comprehensive plan.
71
In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?
Bracketing
72
Rogers has been given power-of-attorney over his sister's affairs while she's out of the country in case someone needs to take care of personal or business affairs and she's out of contact. What kind of POA does Rogers likely have?
General
Rogers likely has general POA so he can deal with anything that comes up in his sister's absence.
73
A buyer has signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until the buyer exercises the option to buy, only the seller is bound by the option agreement; the seller may not sell the property to anyone else during the option period. What type of contract does this describe?
Unilateral
A contract in which consideration is only offered by one of the parties is a unilateral contract. In other words, the consideration only goes one way.
74
Your buyer wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn’t part of the standard sales contract in your area. What will you use to accomplish this request?
Addendum
75
Eleanor is moving from a starter home into something a little larger. Her agent has cautioned her against making the offer on the new place contingent on the sale of Eleanor's starter home. Why the caution?
Sellers would view an offer without that contingency as a stronger offer.
Contingencies make offers less attractive. The sellers might consider an offer without a prior home sale contingency more favorably, since it will likely have a faster close.
76
A company installed faulty equipment twice, so the homeowner filed a lawsuit in an attempt to recover the money she lost. What is this an example of?
Suing for damages and breach of contract
In this example, the homeowner sued for damages as a means of remedying the breach of contract caused by the contractor's failure to adequately address the repairs.
77
What's the primary difference between an ordinary and a pur autre vie life estate?
An ordinary life estate ends with the death of the estate holder; a pur autre vie life estate ends with the death of someone other than the life estate holder.
An ordinary life estate ends when the estate holder dies. A pur autre vie life estate ends when a named person other than the estate holder dies.
78
Which of these statements about a conventional mortgage loan is true?
Borrowers with larger down payments and higher credit scores are most likely to select a conventional mortgage.
The FHFA imposes loan limits on conventional mortgages; borrowers with larger down payments and better credit scores may select a conventional mortgage to avoid paying for mortgage insurance.
Question 79
79
inverse condemnation real estate
an action brought against the government by a landowner to obtain just compensation for a taking of property effected without a formal exercise of eminent domain
80
_______ is a standardized measure for interest rates and other costs of the loan.
Annual percentage rate
81
In many areas of the country, Marcellus Shale has become a hot commodity. This type of rock produces gas, which can be mined, stored, and sold. Abe learned that his family farmstead sat over a rich deposit of Marcellus Shale. What type of rights does Abe have relative to this shale?
Sub-surface rights
82
A person was sued for damages related to a car accident in which they were involved last year. As part of the proceedings, the court placed a lien against the person's primary residence. What type of lien is this?
Attachment
An attachment lien is when the courts place on encumbrance on the property of a defendant in a lawsuit for monetary damages.
83
Which of these statements best represents what happens after a federal fair housing complaint is made?
A fair housing specialist will review the complaint.
84
A buyer with a 15-year, $250,000 loan at a fixed 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments/year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 ‒ $250,000 = $117,687.80.
85
You need to perform a sales comparison for your clients. Comparable A’s adjusted sales price is $277,000. Comparable B’s adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients’ home?
Give more weight to the list price on the comparable that’s most similar to the property.
When faced with a range of prices, give more weight to the comparable that's most similar to the subject property.
86
A borrower applied for a home equity line of credit from his federally insured bank so that he could make renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to RESPA requirements?
Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.
87
Which factor that influences value considers the property's function?
Utility
Utility looks at the property’s use or function.
88
What is NOT allowed in a right-to-use timeshare?
Pass the timeshare on to an heir.
89
When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment?
Financing terms and cash equivalency
Categories of adjustment include financing terms and cash equivalency, conditions of sale, market conditions at time of contract and closing, location, and physical characteristics.
90
Which of the following statements is true about zoning classifications?
A home business would be considered an accessory use
An accessory use is one that's subordinate but related to the main use of the property.
91
Lawrence is a buyer closing on a home for which he’s obtaining financing. Which document will give Lawrence an estimate of the costs he’ll likely pay at closing?
Loan Estimate
The Loan Estimate, required by the Dodd-Frank Act, provides buyers with the costs they're likely to pay at settlement and discloses the mortgage loan specifics, such as its key features, costs, and risks.
92
The primary purpose of the Real Estate Settlement Procedures Act is to ensure that buyers ______.
Know all settlement costs up front
93
At an association meeting, a group discusses ways to deal with a new firm that charges a flat $500 to list properties. Why should a licensee refuse to take part in this discussion?
This conversation sounds like it might become an antitrust violation
This conversation sounds like it could lead to group boycotting, an antitrust violation.
94
Which of the following is the price a lender believes the property will bring at a foreclosure sale?
Mortgage value
95
Two real estate firms in one small town agreed to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?
The Sherman Antitrust Act of 1890
The Sherman Antitrust Act of 1890 expressly prohibits collusive acts that result in an unreasonable restraint of trade or reduced competition.
96
Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?
The agency agreement only terminates if the broker or the principal declares bankruptcy.
97
Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn’t ready in time. What can their listing agent do?
Create a contract amendment with the required language.
98
Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?
Fee simple determinable
A fee simple determinable has limitations as to what can or can’t be done with a property. It uses phrases such as "so long as," "while," or "during" to describe the required condition.
99
Lowell used to own 17 acres of property on the bay. After last year’s hurricanes, Lowell now owns 15.5 acres of bayfront property. Which natural process was responsible for Lowell’s loss of acreage?
Avulsion
Avulsion is the loss of land by a sudden, large-scale change in water flow. A hurricane would create a sudden large change in water flow.
100
Which covenant requires the grantor to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing?
The covenant of further assurances
*The covenant of further assurances requires grantors to take necessary steps (within their scope of power) to perfect the title conveyed.
101
A builder working on a vacant lot is laying out where the house and driveway will be situated. During the planning, they discover the driveway would spill over onto the adjacent lot by a few feet, necessitating an easement. In this situation, the builder owns the _______ estate or tenement.
Dominant
The dominant estate (or tenement) is the one that receives the benefit from the other owner, also called the servient estate.
101
At a closing, who orders, prepares and reviews closing-related documents?
The closing agent
The closing agent is responsible for ordering and reviewing the closing paperwork. Depending on local custom, this may be a broker, title representative/escrow officer, or attorney.
102
A seller wants to net $10,000 after the broker’s commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?
$276,596
To calculate this, start with 100% minus a 6% commission, which is 94% or .94. Take $250,000 plus $10,000 and divide this amount by .94.
103
It’s January, and the pool at Roger’s listing has been prepped for winter for several weeks. The homeowner assures Roger that it’s in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn’t work, and the pool drain appears to be clogged. What did Roger commit?
Unintentional misrepresentation
Roger took his client’s word as the truth and ended up committing unintentional misrepresentation, which isn’t fraud—but it isn’t good!
104
The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it's not a Leap year), how much of the pre-paid property tax was the Davises' responsibility?
$1,055
The daily tax rate is $5 ($1,825 ÷ 365). The Davises owe taxes for January 1 through July 31 (212 days), minus the closing day (paid by buyers). Therefore, the Davises owe for 211 days, which is $1,055 ($5 x 211).
105
The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill?
$1,907
The Gomez family will pay $1,907 in annual taxes. Multiply the appraised value of $272,402 × .25 (the assessment rate in the area) = $68,100 (the assessed value), and then multiply $68,100 × .028 (the tax rate) = $1,907 (rounded to the nearest dollar amount).
106
Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?
After the seller accepts the purchase offer
Earnest money funds are typically deposited after the seller accepts the buyer's offer.
107
Prior to a certain act's existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What's this act called?
Housing and Community Development Act of 1974
The Housing and Community Development Act of 1974 included gender or a person's sex in the list of protected classes.
108
Traditionally, lenders' qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?
25% to 28% for housing; 33% to 36% for total debt
109
What's an example of a gross lease?
The owner pays all property taxes, maintenance, and insurance costs.
In a gross lease, the owner pays all property taxes, maintenance, and insurance costs.
110
Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in a title insurance policy?
Preliminary report
Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.
111
Victor’s family has always owned this particular lake house. When he was little, he remembers the “beach” being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger?
Reliction
Reliction is the process by which water gradually recedes, which reveals new land.
112
Which of these is NOT an example of price fixing?
Jake's firm agrees to charge all clients a listing commission of between 2% and 2.5%.
Any agreement (formal or informal) between competing firms to fix prices or standardize listing terms or commission splits, etc., is considered price fixing.
113
Which ownership type is defined by four unities: time, title, interest, and possession?
Joint tenancy
This is joint tenancy. Tenancy by the entirety requires a fifth unity (person). If one joint tenant dies, that tenant's interests go to the remaining joint tenants. If only one tenant is left, that tenant owns the property in severalty.
114
Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn’t apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?
The civil court system
Covenants are enforced through the court system if an agreement can’t otherwise be reached.
115
Which of these would most likely be an implied contractual condition in a real estate sales contract?
Freedom from fraud and misrepresentation
Contracts should specifically define the purchase price, the property being sold/purchased, and buyer and seller names. It likely won't spell out that the contract should be free from fraud or misrepresentation as this is implied under contract law.
116
Which economic principle says that a property’s value is determined by what it would cost to purchase a similar property?
Substitution
The principle of substitution assumes that a reasonable person wouldn't pay more for a nearly identical property; therefore, pricing of a similar property influences a given property’s market value.
117
In the appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?
State the problem.
The state the problem portion of the appraisal process involves identifying the property and property rights to be appraised.
118
Select the statement that accurately depicts property ownership income tax implications.
During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid
Eligibility for deductions related to property ownership depend on circumstances, and tax questions should always be directed to a qualified expert. In general, homeowners and investors may be eligible to deduct mortgage interest.
119
A licensee is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?
Get a low 4.925% APR
An ad can show the APR without disclosing all the other credit terms. But if certain other “trigger” terms are included, such as down payment, payment amount, number of payments, or interest rate (other than APR), this would require full disclosure.
120
You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?
Buyer agency
You have a buyer agency relationship with the buyer in one transaction and a seller agency relationship with the seller in the other transaction.
121
A buyer backed out of a deal, and the seller kept the earnest money deposit. What is this an example of?
Accepting liquidated damages
All of the answer options are actual remedies to breach of contract, but in this scenario, the seller kept the earnest money, which is known as accepting liquidated damages.
122
Christy found a property that was for sale by owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists?
Implied agency
Christy and Zelda never signed a formal agency agreement, but through Zelda’s actions in her attempt to help Christy, she created an implied agency agreement.
123
Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate's buyer customer. Monica tells Kate, "You know Reuben inherited a bunch of money right before he sold his house, right?" Which of these statements is true?
This is a breach of confidentiality because confidentiality survives forever.
Even though Monica’s agency relationship with Reuben was terminated, Monica stills owes Reuben the duty of confidentiality, which survives forever.
123
Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?
In both types of listings, the seller who finds the buyer won’t owe a commission.
In both open listings and exclusive agency listings, the seller doesn’t have to pay a listing agent commission if the seller finds a buyer.
124
Which of the following is a reason for a tenant remedy to be applied?
The tenant informed the landlord of the problem, and it’s still not fixed more than 30 days later.
The Uniform Residential Landlord Tenant Act provides for tenants to remedy the situation only after first notifying the landlord in writing and allowing reasonable time for the landlord to correct the issue.
125
Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
Barbie owns two-thirds, and Midge owns one-third.
Joint tenancy includes the right of survivorship, so Ken’s interest will pass to the other tenants. But because Midge bought in later than the others, she isn’t considered a joint tenant. Ken’s share will therefore pass entirely to Barbie.
126
Your client, a builder, is considering buying three adjacent lots. They each have the same depth: 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have?
446 feet
The total street frontage is 446 feet. Add up the square footage of the three lots and divide by the lot depth (275) to get the total street frontage. (35,750 + 53,900 + 33,000) ÷ 275 = 446
127
Which of the following statements BEST identifies the
meaning of the term, “rescission of a contract”?
A return of all parties to their condition before the
contract was executed.
128
Which of the following clauses in a mortgage allows the
lender to demand loan repayment if a borrower sells the
property?
Alienation
129
when a principle authroizes an agent to perform a particular act or transaction, it is an example of?
Special Agency
real estate agent is hired by a client, also known as the principal, to perform one specific task or duty. A real estate agent is considered a special agent because they are authorized only in that one job, such as helping someone sell their home.
130
Select the statement that correctly exemplifies the covenant term.
The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.
The covenant of quiet enjoyment promises that the grantee won't have his enjoyment of the property hampered by claims against the title.
131
Which of these scenarios is a violation of federal fair housing laws?
Miguel follows his client's request to only show him properties where the neighborhood is mainly Hispanic.
Buyers are free to select properties based on demographics as long as licensees don't use demographics as a basis for showing properties. Landlords may refuse to rent to individuals on the basis of creditworthiness.
132
What does the Federal Trade Commission consider to be an unfair ad?
Any ad or business practice that causes or is likely to cause injury
Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC’s Unfairness Policy Statement.
133
What's the best definition of real property?
Real estate, plus all of the interests, benefits, and rights included in ownership
134
Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter?
Add two times the length to two times the width.
The perimeter equals the sum of the lengths of each side of the shape (240 × 2) + (130 × 2).
135
What factors directly affect an adjustable rate mortgage?
Rate, index, and margin
Rate adjustments are based on index rates, such as London Interbank Offered Rate (LIBOR), from which lenders determine their margins and the rate that they charge customers at each adjustment.
136
Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.
Private land use control
Subdivision regulations, such as deed restrictions imposed by developers, are private land controls.
137
When considering loan risk, which two items will lenders consider in equal measure?
Borrower and property
The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender.
138
SARA is an amendment to which environmental act?
CERCLA
139
Which of the following statements about the promissory note is true?
A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms.
140
Which of these is NOT a likely features of a bridge loan?
Amortized loan paid back over a period of no more than five years
A bridge loan is usually a temporary, short-term interest-only loan secured by the borrower's existing home.
141
At which level are police power and public land use controls enforced?
Local governments and their planning boards control budgeting, site-plan review, and building codes.
142
Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren’t going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______.
Rescinding the contract unilaterally
In this example, Jayne rescinded the contract unilaterally as a means of remedying the breach of contract.
143
Your client asks you at what stage in their property ownership life cycle they’ll be impacted by income tax issues. You tell them that it’s likely that they’ll be affected at ______.
Acquisition, ownership, and reversion
All three stages of homeownership—acquisition, ownership, and reversion—can be affected by income taxes.
144
Which of these is a NOT a reason why agency disclosure is mandated?
Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.
145
A surveyor created a lot and block survey for a new residential development. What type of description was referenced during the first step of surveying the new neighborhood?
Metes and bounds description
146
An attorney receives a request to have an appraisal performed on a property inheritance that she is transferring from her deceased client’s estate to his heir. Which of these statements is true?
This isn’t a federally related transaction and under federal law an appraisal isn’t required
Since this isn’t a federally related transaction, federal law doesn’t require a licensed or certified appraiser. However, state law may be more stringent.
147
A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what's the housing ratio?
23%
The housing ratio is 23%: ($1,000 + $150) / $5,000 = .23 x 100 = 23%.
148
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______.
In writing, and in accordance with uniform standards
FIRREA helps to regulate the ways that lenders value real property by requiring that appraisals be done by licensed, qualified personnel, and that the appraisal report be in writing.
149
A landlord owns a building in an area of town that’s being revitalized. Local property owners believe property values will increase considerably over the next 10 years. The landlord wants to entice long-term tenants with a low initial rent but have the flexibility to increase rent as her property’s value increase. What type of lease should she consider?
Graduated
Graduated leases permit an increase in rent during the lease period. The increase can be based on a number of factors, such as changes to appraised value, index, or time.
149
If the Ohio real estate superintendent determines that a complaint has merit, what’s the next step in the process?
Assign an investigator.
150
Gabi owns one parcel measuring one square mile and another parcel measuring one mile by a half mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?
$2,604.17
Since we know that one square mile is 640 acres, we can convert each parcel to acres. The first parcel is 640 acres (one square mile). The second parcel is half that size (1 mile x 1/2 mile), or 320 acres. Thus, the total acreage is 960. Divide the sales price by the total acreage (2,500,000 ÷ 960), or $2,604.17.
151
What role does the Ohio commission play in real estate ethics?
The commission is required by law to implement canons of ethics.
152
In Ohio, which of the following can apply for a broker’s license?
A person or an entity
153
Buyer Alison wants to waive some of the duties her agent, Huck, owes her. Which of the following duties can Alison waive under Ohio law?
Presenting offers to the seller or seller’s agent in a timely manner
154
How are Ohio Real Estate Commission members selected?
Appointed by the governor
155
Which of the following is a true statement regarding Ohio property management trust accounts?
Brokers must maintain a separate ledger for each property owner.
Ohio property managers must maintain a separate ledger for each owner. It’s permissible for property management trust accounts to earn interest.
156
In Ohio, which agreement is used to establish an agency relationship between a brokerage and a buyer?
An exclusive purchaser agency agreement
157
What happens if you move while you’re licensed in Ohio?
You must inform the superintendent of real estate.
158
Which of the following entities doesn’t actually create Ohio real estate licensing laws or rules, but enforces them?
Real estate commission
159
If permitted by an Ohio lease agreement, a new tenant pays rent directly to the landlord, but the original lessor is still liable for the lease as well. What type of arrangement is this?
Assignment
In an assignment, the new tenant pays rent directly to the landlord, but the original lessor is still liable for the lease as well.
160
In Ohio, all pre-licensing education must have been completed within what period prior to taking the licensing exam?
10 years
161
The Ohio Real Estate Commission can impose a $1,000 per-violation civil penalty on anyone found practicing real estate without a license. What’s considered a violation in Ohio?
One day acting without a license
162
What’s the maximum civil fine that the Ohio Real Estate Commission can impose on someone for a single violation of practicing real estate without a license?
$1,000
The commission can impose a civil penalty of up to $1,000 per violation for practicing real estate without a license. Every day that the individual practiced without a license is considered a separate violation.
163
Under one type of Ohio listing agreement, the seller agrees to pay compensation to the listing broker if any brokerage finds a buyer, but not if the seller finds a buyer. What type of agreement is this?
Exclusive agency agreement
The exclusive agency listing agreement allows the seller to reserve the right to sell the property themselves. Other real estate agencies must work through the listing brokerage.
164
Jenny is a licensed real estate broker in Ohio and member of the Ohio Real Estate Commission. How many years of recent experience must she have?
10 years
165
David resigned his broker’s license when he became a certified financial advisor. Four years have passed, and David decides he’d like to sell real estate again. What does he have to do to reactivate his Ohio license?
Start the licensing process over by completing the required coursework, taking the exam, and applying for the license.
166
Which of the following documents explains the types of agency recognized in Ohio, the types of agency performed by the brokerage, and other agency issues?
The Consumer Guide to Agency Relationships
167
Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James's property. What kind of ownership rights does Elaine have of the driveway that runs through James’s property?
Non-possessory
Elaine has non-possessory rights to the portion of the driveway that runs through James’s property.
168
A seller is closing on their property with the buyer. The seller paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?
The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.
169
Which legal description method uses compass headings and directions?
Metes and bounds
Metes and bounds uses compass headings and directions. The rectangular system divides land into townships and further divides those into sections.
170
Edric owes $115,000 on his lakefront home, which he’s selling for $350,000. He’s spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he’ll actually pocket at closing. What number does he come up with?
$162,000
Once Edric’s loan is paid off, he’ll be left with $235,000 ($350,000 – $115,000). When he subtracts the cost of the renovations, he’s left with $162,000 ($235,000 - $73,000).
171
The federal Fair Housing Act includes protections for people with disabilities. It requires multi-family buildings constructed for occupation after March 13, 1991 to have seven special features. Which of the following is one of those features?
Unit and internal doors that are usable by persons in wheelchairs
172
Which entity services rural development loans?
FSA
The Farm Service Agency, an agency of the USDA, administers this program.
173
Phoebe’s gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender’s qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What’s the maximum housing payment she can afford?
$1,152
The maximum house payment is the lesser of the amounts calculated using both ratios. DTI: $4,200 x .36 = $1,512. $1,512 – $360 = $1,152. Housing ratio: $4,200 x .28 = $1,176. Phoebe’s maximum payment is $1,152.
174
A homeowner's credit card company sued them in civil court for nonpayment. There was a judgment against them, and so now the homeowner has to sell their classic car and their primary residence to pay the credit card company. What type of lien did the company have?
General
A general lien is placed against all of an individual’s or a business’s real and personal property, not just a specific property. General liens include judgment liens—such as in this case—income tax liens, and decedent’s debts.
175
Which of the following is an example of a universal agent?
Conservator
A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator.
176
Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?
SARA
SARA, or the Superfund Amendments and Reauthorization Act, created an innocent landowner defense. Often, the courts will review a SARA case and determine liability.
177
Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?
A trustee will hold title until the loan is paid.
When a deed of trust secures a loan, a trustee holds the title until the loan is paid. Because the right to sell in the event of a default is part of the deed of trust’s language, a non-judicial foreclosure may be used.
178
Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?
Against encumbrances
The previous property owner failed to disclose to Li Meng that there was an easement (which is an encumbrance) across the property.
179
Which of these statements about a deed's habendum clause is true?
It's a description of the act of conveyance.
The habendum clause, if used, describes the type of conveyance. It's typically used if title being conveyed is less than fee simple.
180
Gene, a real estate licensee, prefers to use electronic documents and signatures because it means he doesn't have to track people down to deliver documents or have them signed. Which of these statements is true?
Parties to the contract decide whether or not to accept the use of electronic signatures and documents.
Some states allow electronic signatures and documents only if parties to the contract agree to their use.
181
What does the income approach to value rely on when valuing properties that are five or more units?
Gross income multiplier
For five or more units, the gross income multiplier (GIM) would be used for the appraised value.
182
Which fiduciary duty may continue even after the transaction closes?
The duty of accounting
The duty of accounting continues even after the transaction closes. For instance, any money the agent holds after a transaction closes must be accounted for until it's delivered to the appropriate party.
183
Margaret has an L-shaped living room. How would you calculate the area of this room?
Divide the room into two rectangles, calculate the area of each, and add those together.
To calculate the square footage of irregular shapes, divide the shape into familiar shapes (typically triangles and rectangles for exam purposes), calculate the area of each, then add the areas together.
184
Tiers in the rectangular government survey system are formed by ______.
Parallel township lines
East-west lines of a survey, which are parallel to the baseline, are called township lines. Township lines form strips of land known as tiers, and townships fall within these tiers.
185
Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?
Writing contract addenda or additional provisions that cover unfamiliar circumstances
All of these actions are outside the scope of a real estate license. Writing contract addenda or additional provisions that cover unusual circumstances falls into the category of unauthorized practice of law, since a licensed attorney should do that.
186
Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Rolan's monthly taxes?
$667.00
Assessed value + improvements = total value of $2,000,000. Multiply 2 million by 4 (mills/millage rate) then divide by 1000 = $8,000 in annual taxes . Divide $8,000 by 12 to give you the monthly tax amount ($8,000 ÷ 12 = $667.00).
187
What's the best definition of personal property?
Everything that's not real property
188
A couple own a suburban ranch home and fell behind on paying their property taxes when one lost their job last year. Both are working again, but they still haven’t saved enough to pay their back taxes. They’re worried that the county may begin foreclosure proceedings. What type of lien is this?
Specific
Property tax liens are specific, because they represent a lien against a specific piece of property
189
Which of the following is an example of constructive eviction?
A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.
190
Who typically prepares a comparative market analysis?
Real estate licensee
191
Which group ensures that community growth is controlled and orderly?
Planning board
192
According to Article 7 of the NAR Code of Ethics, which of these statements is most accurate when accepting compensation from parties to a transaction?
A licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties.
193
Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it's going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the deed to the land. What kind of state does Sondra live in?
A lien theory state
194
A parent is considering a move to a foreign country and wants to deed her property to her 17-year-old son, who agrees to maintain it. Which of these must occur to make this transfer legal?
The parent must sign the deed and have her signature acknowledged.
As the grantee, the son doesn’t have to sign the deed, and he doesn’t have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn’t have to have a monetary value (the son's agreement to maintain the property is the consideration in this case).
195
Which economic principle pertains to how a change in a property affects its value as a whole?
Contribution
Contribution pertains to how a change in a property impacts the value as a whole. Does converting a garage into a family room contribute to or detract from value? The answer to that would be in the eyes of the buyer.
196
Developer A has a project planned that does not conform to the community zoning regulations and wants to make a change request. Which local land use group would the developer ask, and for what?
The zoning board of appeals for a variance
197
Which of the following ads complies with Regulation Z's requirements for advertising?
Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.
The interest rate is a trigger term, and therefore the APR, down payment, and terms of the mortgage must also be disclosed.
198
Frontage (or front foot) refers to what?
A property's boundary line that’s adjacent to a road, street or waterway
199
What forms the boundaries of a township?
Township lines and range lines
200
Why is proof of ownership required when transferring real property?
It provides evidence that the title is marketable.
201
A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?
Refuse to rent to a female tenant.
202
Lenore makes a 95% offer on a townhouse that’s listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier’s check for $35,025 comprising the balance of her 20% down payment and closing costs. What’s the amount of her total down payment?
Lenore's offer is $270,750 which is 95% of the list price ($285,000 x .95 = $270,750 ). Her total down payment is 20% of her accepted offer of $270,750, which is $54,150 (or $270,750 x .2).
203
A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What's the total amount of interest he'll pay over the course of the loan?
First, multiply the monthly payment by the total number of payments. Then subtract the original loan value: $3,078.59 x 360 = $1,108,292.40 ‒ $500,000 = $608,292.40.
204
A property manager is preparing a quarterly report pursuant to the terms of a property management agreement. This report shows the property owner whether this property operated at a surplus or deficit during the reporting period. What report is being prepared?
Profit and loss statement
205
A couple purchased the right to stay in a vacation condo once a year for the next 10 years, but they don't own the unit. What did they purchase?
Timeshare use
206
Most often, what's the first course of action for disputed home warranty claims?
Mediation
207
In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?
The consumer’s lender
208
On what type of listing (or listings) may a net listing be used in states where they are legal?
Open, exclusive agency, or exclusive right-to-sell listings
209
In a high-competition market with similarly priced homes, how will the competition affect sales prices?
Prices will be driven down.
210
Which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan?
Buydown
211
Which type of agent is an escrow officer?
limited agent
212
A buyer finances a newly built home with a Federal Housing Administration loan. What does the FHA require the builder to do?
Purchase a third-party home warranty to protect the buyer
213
Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?
Income generated
214
Which of these is an example of an agent NOT executing the duty of reasonable skill and care?
Marta agreed to list a commercial property even though her expertise is in residential real estate.
The duty of reasonable skill and care requires licensees to exercise caution, practice within the scope of their expertise, and provide an expert level of client representation. Marta isn't able to offer this level of service for a commercial property.
215
What factors does the underwriter consider in reviewing a mortgage loan application?
Credit, capacity, and collateral
216
Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant’s lease payment. These are collectively referred to as the _______.
Nets
217
Which of these statements about statutory duties and common law fiduciary duties is true?
Statutory duties spring from state statutes and tend to be more specific than fiduciary duties.
218
Why is a foreclosure more likely to have title issues than a non-foreclosure?
Borrowers who can’t afford loan payments may have taken out other loans against the property.
