Exam 3 Missed Questions Flashcards
(26 cards)
A property use granted by the zoning committee or deed restrictions that benefits the neighborhood is called:
(a) a POA
(b) a non-conforming use
(c) a conditional use
(d) a variance
(c) a conditional use
A conditional use benefits the neighborhood - like an elementary school in subdivision
Which of the following statements about an easement appurtenant is true?
(a) It is a benefit for the dominant property and a limit for the servient property
(b) It is terminated by the sale of the property
(c) It belongs to a person or corporation
(d) It gives the owner permission to use another’s property that is easily revoked
(a) It is a benefit for the dominant property and a limit for the servient property
An easement appurtenant benefits the dominant estate. It limits the servient estate.
It is a right in land, not permission.
Permission that is easily revoked describes a license, not an easement.
it goes to the buyer when the property is sold, so it does not belong to a person or corporation
A lessee pays a fixed amount of rent. She also pays all the operating expenses of the property including the property taxes and maintenance. This lease is known as:
(a) gross lease
(b) graduated payment lease
(c) net lease
(d) periodic lease
(c) net lease
In a net lease the tenants pay rent plus other negotiated expenses.
When two people purchase real property and take title as tenants in common, they have elected a form of ownership that allows for:
(a) rights of survivorship
(b) title to pass without probate
(c) unequal shares of ownership
(d) subrogation
(c) unequal shares of ownership
tenancy in common does allow for unequal shares
Marco has purchased a property from John and received a quit claim deed. When he tries to sell the property, he learns that John and a neighbor each had a 50% tenancy in common interest in the property. What is true?
(a) Marco can transfer clear title to a buyer for the entire property
(b) Marco must honor the tenancy in common rights of the neighbor
(c) Marco cannot sell his share and must file for partition
(d) Marco can sue John for failure to disclose he was only a part owner of the property
(b) Marco must honor the tenancy in common rights of the neighbor
Marco must honor the tenancy in common rights of the neighbor
A quit claim deed only passes rights held by the neighbor grantor
A quitclaim deed does not give any guarantees of ownership on the part of the seller
John only had a 50% interest in the property, therefore Marco only has a 50% interest to sell.
A buyer has a signed sales contract on a property and has not yet gone to closing. This is an example of:
(a) the principle of anticipation
(b) an equitable estate
(c) voluntary alienation
(d) tenancy in common
(b) an equitable estate
This is an equitable estate because an interest in real property is created by a legal agreement, which has not yet been consummated.
An appraiser reduces the value of a home due to 60amp service when the standard electrical service for the subdivision is 100amp. What is he citing?
(a) Physical deterioration
(b) Economic obsolescence
(c) Functional obsolescence
(d) Deferred maintenance
(c) Functional obsolescence
Functional obsolescence occurs when a property will not function at acceptable standards for the buyer - insufficient amp service
Which of the following statements about the income approach to value is CORRECT?
(a) It determines an investment property’s value based on comparable investments
(b) It determines an investment property’s value based on its return
(c) It determines an investment property’s value based on reproduction of the amenities
(d) It determines an investment property’s value based on the GIM
(b) It determines an investment property’s value based on its return
The income approach determines an investment property’s value based on income or return
What is the difference between replacement cost and reproduction cost of a building?
(a) Both approaches describe a building with the same usefulness, but the replacement cost uses modern materials and methods, while reproduction uses historic materials.
(b) The replacement cost is about style and appearance while the reproduction cost duplicates the building
(c) Physical, functional and economic obsolescence all reduce replacement cost
(d) Only the reproduction cost is concerned with the utility of the building
(a) Both approaches describe a building with the same usefulness, but the replacement cost uses modern materials and methods, while reproduction uses historic materials.
The replacement cost is calculated based on today’s materials and methods, but the reproduction cost uses the methods and materials from when the building was built.
An appraisal is:
(a) an opinion of value
(b) a range of value
(c) a determination of value
(d) a market analysis
(a) an opinion of value
A property owner has a property tax exemption due to a physical disability. The result is a $1500 reduction in the annual property tax bill. The listing license holder has not disclosed this exemption. This failure to disclose a material fact about the property is an example of:
(a) fraud
(b) negligent misrepresentation
(c) puffing
(d) errors and omissions insurance
(b) negligent misrepresentation
A designated agent is:
(a) one appointed by a broker in a dual agency situation
(b) one appointed by a broker acting as an intermediary
(c) one hired by a consumer to list property
(d) one appointed by the court in the case of a dispute over a contract
(a) one appointed by a broker in a dual agency situation
A designated agent is appointed by a broker in a dual agency situation
When the acts or conduct of a license holder leads a consumer to believe that licensee is representing the consumer’s best interests this is an example of:
(a) agency by ratification
(b) oral agency
(c) implied agency
(d) illegal agency
(c) implied agency
Implied agency is a result of the acts or behavior of a license holder
Kathy has a signed contract that has not yet gone to closing. It has created an equitable estate for her. This contract can also be described as:
(a) defeasible
(b) executory
(c) void
(d) voidable
(b) executory
A contract that is signed, but not yet carried out is executory
A client is abandoned by the agent. What can the client do?
(a) File for release due to abandonment
(b) Wait for the written agreement to expire
(c) Verbally terminate the contract
(d) Find another agent
(d) Find another agent
The client can find another agent
The broker gives up any claim to the listing by abandonment
- A buyer files a lawsuit against a listing broker because, after closing, termite damage was discovered on the property. The listing broker had no knowledge of any termite problems on the property, and the seller did not disclose any termite problems. What type of insurance will protect the broker in this situation?
(a) general liability insurance
(b) errors and omissions insurance
(c) property and casualty insurance
(d) legal insurance
(b) errors and omissions insurance
What is the primary reason that broker-client money commingling is illegal?
(a) the accounting of commingled funds is too difficult for the average broker
(b) a creditor of the broker could seize the account if it held broker funds
(c) funds held in a trust account are too difficult to release and that could cause the broker to become delinquent in meeting financial obligations
(d) conversion of commingled funds for broker obligations is too difficult to determine and could lead to broker abuse of the trust of clients
(b) a creditor of the broker could seize the account if it held broker funds
A creditor of the broker could seize the account if it held broker funds
This would results in client money being frozen or unable to be accessed for the benefit of those clients
An agent is showing a property and notices several problems with the property which he feels are “red flag” issues. Which of the following would NOT be a “red flag”?
(a) Discolored water bubbling up from under the ground at the site of a buried fuel tank
(b) An iridescent sheen on the surface of a pond on the property
(c) The seller’s disclosure of the existence of a buried fuel tank
(d) Doors and windows that will not close properly accompanied by cracks in the wall extending from the ceiling to some of the door and window frames
(c) The seller’s disclosure of the existence of a buried fuel tank
The existence of a buried fuel tank is not a red flag
Gently used water from bathroom sinks, showers tubs and washing machines is called:
(a) white water
(b) greywater
(c) clear water
(d) blackwater
(b) greywater
White or clear water is tap water
Blackwater denotes wastewater from toilets, which likely contain pathogens
A builder has a blanket loan on a parcel of land and sells a lot from the parcel. How can he deliver a deed to the buyer at closing?
(a) He pays off the cost of the lot
(b) He gets a new mortgage on the lot
(c) He refinances the existing mortgage
(d) He gets a package mortgage
(a) He pays off the cost of the lot
A blanket loan will contain a release clause allowing the builder to pay off a portion of the loan to release a lot/parcel from the lien. The builder does not have to refinance or obtain a new mortgage of nay type
Who in a transaction would be the borrower?
(a) vendor
(b) vendee
(c) trustee
(d) mortgagor
(d) mortgagor
A mortgagor is a borrower
A vendee is a buyer who may or may not be borrowing to purchase property
A vendor is a seller
A trustee is an agent for the lender in a deed of trust
In an amortized loan, which of the following describes the loan payment during the life of the loan?
(a) With every payment made, interest increases and principal decreases
(b) With every payment made, interest decreases and principal increases
(c) With every payment made the division of principal and interest remains the same
(d) For the first year every payment is interest only
(b) With every payment made, interest decreases and principal increases
With every payment made, interest decreases and principle increases
A landlord rents a 6-unit apartment complex for $450/unit per month. The property manager receives a 10% management fee. The mortgage for the complex is $1800/month and repairs are $180/month. What is the landlord’s net income per month?
(a) $450
(b) $900
(c) $2,700
(d) $2,250
(d) $2,250
Net income is gross income less operating expenses.
Mortgage payments are not an operating expense and therefore not a factor in this equation.
$450 x 6 = $2700 gross rent
Management fee = $2700 x 10% = $270
Net income = $2700 gross net - $270 management fee - $180 repairs = $2250
An investor owns a 10-unit duplex complex containing 20 apartments. Each apartment in the complex rents for $1500 per month. Last year all the apartments were occupied for 6 months. One apartment was vacant for 5 months and two apartments were each vacant for one month. What was the occupancy rate for the property last year?
(a) 92%
(b) 94%
(c) 97%
(d) 99%
(c) 97%
Occupancy rate = occupied monthly units divided by total monthly units.
The complex has 20 units available for 12 months each = 240 months for total monthly units
5+1+1=7 empty monthly units
240-7 = 233 occupied motnhly units
233 = ? % of 240
233/240 = 97% occupancy
