property ownership #5

Question 1

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

Answer 1

The original sales agreement and any addenda

Question 2

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?

Answer 2

Her down payment of $50,000 isn’t at least 20% of the purchase price.

Question 3

Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?

Answer 3

Prepayment

Question 4

Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What’s his first step?

Answer 4

Obtain a pre-qualification letter.

Question 5

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?

Answer 5

25% to 28% for housing; 33% to 36% for total debt

Question 6

When the lender gathers all kinds of information about the borrower’s assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.

Answer 6

Making an application for a loan

Question 7

Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?

Answer 7

Wrap-around loan

Question 8

Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?

Answer 8

Loan flipping

Question 9

In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?

Answer 9

Investors can use rental income to qualify.

Question 10

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?

Answer 10

Loan Estimate

Question 11

Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?

Answer 11

A trustee will hold the title until the loan is paid.

Question 12

When considering loan risk, which two items will lenders consider in equal measure?

Answer 12

Borrower and property

Question 13

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings and improving their agricultural property. He’s able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Answer 13

Guaranteed loans

Question 14

An inflated appraisal

Answer 14

occurs when an appraiser intentionally submits a misleading report to a lender that indicates an inflated property value. Inflated appraisals are illegal and can get both of these guys in trouble.

Question 15

Mike’s been friends with Tim since college. They often work together: Mike flips houses and Tim’s an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they’re engaging?

Answer 15

Falsely inflating appraisals

Question 16

Which entity services rural development loans?

Answer 16

FSA

The Farm Service Agency, an agency of the USDA, administers this program.

Question 17

Tanner, a property owner, wants Gina, a real estate licensee, to manage the property he owns while he’s living out of state for a few years. In return, Tanner will pay Gina a flat monthly fee. What type of agreement must be in place between Tanner and Gina?

Answer 17

property management agreement

Question 18

is a short-term loan used to bridge the gap between buying a home and selling your previous one. Sometimes you want to buy before you sell, meaning you don’t have the profit from the sale to apply to your new home’s down payment.

Answer 18

a bridge loan

Question 19

addendum

Answer 19

modifies an original lease or purchase agreement. Items in the addendum could reflect a change in the agreed-upon price, what is included in the transfer of property, what improvements must be made before the home is paid for, or any other agreed-upon requests or responsibilities

Question 20

is an employment contract between a property owner and a real estate broker. It allows the broker to act as a listing agent and find a buyer for the property on the seller’s terms.

Answer 20

a listing agreement

Question 21

is a legal, binding contract outlining the terms under which one party agrees to rent property owned by another party. The lease guarantees the tenant (also known as the lessee) use of the property and guarantees the lessor—the property owner or landlord—regular payments for a specified period in exchange

Answer 21

a lease aggreement

Question 22

is a contract of…., usually written, between the owner of a property and a renter who desires to have temporary possession of the property; it is distinguished from a lease, which is more typically for a fixed term.

Answer 22

rental agreement

Question 23

Who are the parties to a property management agreement?

Answer 23

The property manager and property owner

Question 24

means that a licensee or brokerage firm uses trust funds for personal or operating purposes

Answer 24

Conversion

Question 25

Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

Answer 25

Prior appropriation he doctrine of prior appropriation grants water rights based on need, not adjacency. Hal and Sara likely live in the western part of the U.S. where many states subscribe to this doctrine.

Question 26

What's the best definition of land?

Answer 26

The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects

Question 27

Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?

Answer 27

lots and block

Question 28

Which of these is the best definition of real estate?

Answer 28

Land, plus all things permanently attached to it naturally or artificially

Question 29

Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he saw how ownership of the common areas is shared among the ______.

Answer 29

Unit owners

Question 30

What forms the boundaries of a township?

Answer 30

Township lines and range lines

Question 31

A lot measuring 108,900 square feet is for sale. How many acres is this?

Answer 31

Two-and-a-half

Question 32

Sheila owns a timeshare that gives her ownership of the property for a certain number of weeks per year in perpetuity. What type of timeshare is this?

Answer 32

his is a timeshare estate, which conveys ownership, not simply the right to use a property.

Question 33

What's the best definition of real property?

Answer 33

Real estate, plus all of the interests, benefits, and rights included in ownership

Question 34

A professional, on-site measurement of the lot lines and dimensions of a property is known as ______.

Answer 34

a survey

Question 35

Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan’s property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?

Answer 35

Legal descriptions of both properties

Question 36

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Answer 36

Reconciliation

Question 37

What’s the role of the mortgage contingency in a sales contract?

Answer 37

Documents the type of and timeline for financing, and outlines what to do if financing falls through.

Question 38

Which of these statements about the homeowner's right of redemption is true?

Answer 38

Rights of redemption window with REOs may have expired.

Question 39

Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA?

Answer 39

Busy street

Question 40

Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don’t have the best credit score. They’ve decided to buy the home using an FHA loan. Which of these is a true statement?

Answer 40

A minimum down payment of 3.5% is required

Question 41

What does a balloon payment represent at the end of a loan term?

Answer 41

It means that some principal remains at the end of the loan term.

Question 42

In which of these situations would the property most likely be conveyed with a trustee's deed?

Answer 42

In which of these situations would the property most likely be conveyed with a trustee's deed?

Question 43

Which of these is NOT an example of price fixing?

Answer 43

Jake's firm agrees to charge all clients a listing commission of between 2% and 2.5%.

Question 44

Bill is joining his inspector Hank for an inspection of the property he hopes to purchase. Hank notices that the dirt on the exterior of the home slopes toward the house. He explains that it should slope away from the home. When it doesn’t, what problem might this create?

Answer 44

Basement leaks

Question 45

Which one of the following scenarios describes an adverse condition that would need to be disclosed?

Answer 45

A hail storm damaged some shingles last year.

Question 46

ou know a property's effective gross income and its operating expenses. How would you calculate the net operating income?

Answer 46

Subtract operating expenses from effective gross income

Question 47

Which statement regarding fee simple defeasible estates is true?

Answer 47

The estate includes the full bundle of legal rights, but ownership is based on a condition.

Question 48

Which of the following statements regarding reasonable accommodations and modifications is true?

Answer 48

An individual can make a request for accommodation or modification at any time.

Question 49

A fire destroyed Meredith’s house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn’t fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?

Answer 49

The amount it would cost to completely replace her home

Question 50

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

Answer 50

pending

Question 51

When market conditions indicate top-of-the-market pricing, is it always in your client’s best interest to price it there?

Answer 51

No, it still has to appraise.

Question 52

Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?

Answer 52

Gather and analyze data.

Question 53

What's the capitalization formula used in the income approach?

Answer 53

Value = net operating income divided by cap rate

Question 54

Identifying the purpose of the appraisal leads the appraiser to do what next?

Answer 54

Identify data needed.

Question 55

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?

Answer 55

This isn’t a federally related transaction and under federal law an appraisal isn’t required.

Question 56

When market conditions indicate top-of-the-market pricing, is it always in your client’s best interest to price it there?

Answer 56

No, it still has to appraise.

Question 57

Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home?

Answer 57

Her heirs, as described in her will or according to state law, will receive the property.

Question 58

Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened?

Answer 58

The previous owners redeemed the property by paying all mortgage payments and fees

Question 59

Why might a licensee want a buyer to sign a buyer representation agreement?

Answer 59

it helps ensure buyer loyalty

Question 60

Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?

Answer 60

The Closing Disclosure isn’t required for a HELOC.

Question 61

Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?

Answer 61

Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.

Question 62

A rectangular lot is 450 feet long and 250 feet wide. How do you calculate the square footage?

Answer 62

Multiply the length by the width.

Question 63

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?

Answer 63

A lien theory state

Question 64

What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act?

Answer 64

Superfund site

Question 65

What is the most common way that asbestos enters the body?

Answer 65

When asbestos fibers decay or are disturbed, the friable particles can be inhaled.

Question 66

Marvin knows that three-bedroom properties with two bathrooms sell quickest in his market. In an ad for a new listing, he wrote, “Bonus room could easily be a third bedroom”, even though he knows from experience that this isn't true because the room is too small, has no egress and no heat source, and can only be accessed by walking through a bathroom. Is Marvin guilty of misrepresentation?

Answer 66

Yes, because he knew there would be major issues converting that room to a bedroom.

Question 67

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

Answer 67

Use variance

Question 68

Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business deal. What kind of contract do Rex and Ben have?

Answer 68

a void contract if its for illegal use if void

Question 69

Which statement correctly identifies a federal fair housing law and what it addresses?

Answer 69

Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

Question 70

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?

Answer 70

Alda tells Marge that she's hired an inspector to perform a property inspection.

Question 71

Your buyer clients have access to property tax information for each listing that you’ve given them. Why are they asking you about county tax assessment schedules?

Answer 71

The property taxes may change drastically after reassessment.

Question 72

Why is a foreclosure more likely to have title issues than a non-foreclosure?

Answer 72

Borrowers who are in foreclosure are permitted to acquire unrecorded liens.

Question 73

A poor floor plan is an example of which type of depreciation?

Answer 73

Incurable depreciation

Question 74

Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay?

Answer 74

Yes, licensees can use standard forms provided by the brokerage or approved by an attorney.

Question 75

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

Answer 75

To detail all costs Jennings will owe at closing

Question 76

Which of the following is a common element of a buyer representation agreement

Answer 76

Description of the property being sought

Question 77

Which of the following is a planning and zoning issue that most prospective buyers might need to know?

Answer 77

The zoning designation for the given property

Question 78

Which of the following statements about the fiduciary duty of confidentiality is true?

Answer 78

It doesn't extend to material facts relating to the property.

Question 79

Select the statement that accurately depicts property ownership income tax implications.

Answer 79

During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid.

Question 80

Select the statement that correctly exemplifies the covenant term.

Answer 80

The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.

Question 81

Lily is considering signing a buyer representation agreement with you, but she's unconvinced. "What's in it for me?" she asks. What's one major benefit to her when she signs the buyer representation agreement?

Answer 81

It means you’re representing her and not the seller.

Question 82

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?

Answer 82

braketing

Question 83

While hosting an open house, Liza speaks with prospective buyers. They're interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

Answer 83

loyalty

Question 84

An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A?

Answer 84

Servient estate

Question 85

John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted’s property several years earlier. Which general warranty deed covenant does this represent?

Answer 85

The covenant against encumbrances

Question 86

Why is a foreclosure more likely to have title issues than a non-foreclosure

Answer 86

Borrowers who can’t afford loan payments may have taken out other loans against the propert

Question 87

Which of these property managers is violating fair housing law?

Answer 87

Sandra, who represents the owner of a multi-building complex, will only show families with children units available in the building closest to the park.

Question 88

Megan's law

Answer 88

A registrations system to identify sex offender living in your area, who also have kidnapped a child or committed sexual crime.

Question 89

Improvements

Answer 89

Artificial attachments to land that includes things such as fencing, buildings, and walkways

Question 90

Real estate

Answer 90

Land, was all things permanently attached to naturally or artificially

Question 91

Townhomes

Answer 91

The owner owns both the structure and the land

Question 92

Time shares

Answer 92

Ownership of property allows purchaser to use for periods throughout the year

Question 93

Metes

Answer 93

Are the directions and distance of a line forming the properties boundary

Question 94

Bounds

Answer 94

Are physical features that define the boundaries of the property

Question 95

Metes and bounds

Answer 95

Their characterized by a point of beginning come out which is where the discretion both begins and ends that it also uses monuments to Mark boundaries that the monuments are though to have more credibility than the measurements

Question 96

There 5 steps to determine if and item is real or personal property. What does the acronym MARIA stand for

Answer 96

Method of annexation, adaptability for use, relationship of the parties, intention in place and, agreement of the parties

Question 97

Land

Answer 97

It's the Earth's surface extending downward to the Center of the Earth and upward to infinity, including permanently attached naturally objects

Question 98

Fixture

Answer 98

Anything permanently attached to the land or department structure of the land If the pictures status is debatable, the country should clarify whether the item will stay or go that if a fixture should be excluded from the transfer, the cell's contract should clearly identify that the item is excluded from the transaction

Question 99

Annexation

Answer 99

Is the process of converting personal property to real property

Question 100

Severance

Answer 100

Is the process of converting something that's was real property into personal by removing it

Question 101

An encumbrance may be ______ or ____

Answer 101

Monetary or physical