Exam review pt 2

Sam sold a property to Emma for $225,000. Sam's loan balance was $44,500 with an interest rate of 7%. Emma's conventional loan was at 8% with a 90% loan to value ratio. The taxes for the year were $1250 and the home owner's insurance was $495. Closing took place on October 30th. Based on this information, answer the following question. How much was the prepaid interest and by whom was it paid? a) Sam $1,350 b) Emma $45 c) Emma $90 d) Sam $45

(C) Emma will pay 2 days of prepaid interest, the day of closing through the last day of the closing month.

Which of the following items would be considered emblements? a) Animals b) Fences c) Crops d) Machinery

c

Who pays the intangibles tax? a) The seller must pay the tax. b) The buyer must pay the tax. c) The seller and buyer may negotiate who is to pay the tax. d) Real estate is tangible (corporeal). Therefore, there is no intangibles tax.

c

Georgia's law that is focused on deceptive advertising is: a) an anti-trust law. b) Regulation Z. c) UDTPA. d) FBPA.

d

Which of the following covenants is generally included in a mortgage? a) Seizen. b) Further assurances. c) Quiet enjoyment. d) Pay taxes.

d

With which of the following are rental payments guaranteed to increase during the term of the lease? a) Escalator clause. b) Percentage lease. c) Index lease. d) None of these options.

d

A new property was valued at $179,000 with an estimated life of 50 years. The value of the land has been estimated at $19,000. After allowing for depreciation, what is the value of the property at the end of 5 years? a) $163,000. b) $161,000. c) $160,000. d) $144,000. **dont use land value in the calculation

a

A quitclaim deed conveys only the interest of the: a) Grantor. b) Claimant. c) Quitor. d) Property.

a

According to BRRETA, a licensee is responsible, under certain circumstances, for disclosing facts known about the area surrounding a property. What is the extent, in miles, that this disclosure encompasses? a) 1 b) 2 c) 3 d) 5

a

A broker had several branch offices. Which is true regarding the management? a) He would have to have direct supervision over the main office and branch offices b) An Associate Broker can have direct supervision over the branch office c) A salesperson must have direct supervision over the branch offices d) Each branch office must have a full-time broker who does NOT sell or list

b

A broker started a real estate company wanting to use the name ABC Realty. What is true regarding this situation? a) The broker must file a request with the GREC b) The broker must file a request with the secretary of state c) The broker cannot do this as only real names are allowed d) The broker can do this if no one in the area objects

b

A loan in which the final payment on principal is exactly equal to the amount of the original loan is known as any of the following EXCEPT: a) Straight loan b) Partially amortized loan c) Interest only loan d) Term loan

b

An agent showed a property. After writing an offer and presenting it, the seller accepted it. What date must be listed on the contract? a) Showing the property b) When any signatures or initials are obtained c) Only the date of writing the offer d) Presenting of the offer

b

How many acres in a one-half square mile parcel of land? a) 640 b) 480 c) 320 d) 160

c

The clause in a lease that allows the rent to increase is: a) An acceleration clause b) A percentage clause c) An escalator clause d) A contingency clause

c

Title to real property passes when a deed is: a) Executed. b) Acknowledged. c) Delivered and accepted by the grantee. d) Recorded.

c

A borrower has to pay PMI all at closing on a 95% conventional loan. How much would he pay? a) 2.5 % of the loan amount. b) 2.0 % of the loan amount. c) 2.5% of the price. d) 2% of the price.

a

A buyer and seller, neither of which is under contract with the broker, ask a broker to write a contract for them. What should the broker do? a) Refuse to do anything because he is not their broker b) Refuse to do anything unless he gets a commission c) Perform his normal services and charge his usual fees d) Perform his normal services and not charge a fee

a

A person owned a house which had been built over underground springs. This was a well-known fact in the area. The broker sold the property to a buyer but did not inform the buyer about the underground springs. Six months later, the back corner of the house was found to have structural damage caused by the springs. Which of the following is true? a) The agent and seller could be responsible because they did not disclose to the buyer about the house being built over the springs b) The agent and seller could not be responsible because of the time period that had elapsed between the date of the sale and the date of discovery of the damage c) Only the seller could be held responsible for not disclosing about the house being built over the springs d) Only the agent could be held responsible for not disclosing about the house being built over the springs

a

A salesperson took a listing on a property which had a crack in the foundation caused by water seepage. The owner had filled and painted over the crack and advised the sales agent that the seepage problem had been corrected, but it was obvious to the agent that the problem had not been corrected. If the salesperson shows the property without advising potential buyers of the problem, the salesperson would be guilty of: a) Fraud b) Misrepresentation c) Puffery d) Nothing

a

An owner of a 12 unit apartment building lived in one of the apartments. The owner refused to rent to a person because of their national origin. Does the person have a valid complaint? a) Yes, because it was a 12 unit apartment b) Yes, because other tenants were from his homeland c) No, because the owner lived there d) No, because the owner did not discriminate in advertising

a

How many agents are there in an exclusive right-to-sell listing? a) One b) Two c) Three d) As many as the owner chooses

a

Sam sold a property to Emma for $225,000. Sam's loan balance was $44,500 with an interest rate of 7%. Emma's conventional loan was at 8% with a 90% loan to value ratio. The taxes for the year were $1250 and the home owner's insurance was $495. Closing took place on October 30th. Based on this information, answer the following question. What was the amount of the property tax proration? a) $212.33 b) $208.90 c) $1,037.67 d) $1,041.10

a

Broker Jenkins has presented an offer from buyer Frazer. Before the seller has accepted the offer, Jenkins is informed that Frazer is acting for an unknown purchaser in this transaction. What should Jenkins do in this situation? a) Inform the seller that the offer is void b) Inform the seller of the existence of an unknown purchaser c) Return the earnest money deposit to Frazer d) Inform Frazer that his offer is illegal

b

If an applicant is turned down for a license, the GREC must notify the applicant: a) orally stating the reasons b) of their right to a hearing in accordance with the Georgia Administrative Procedure Act c) in writing within 10 days d) of their right to appeal the decision to their local board of REALTORS®

b

Mark gives Suzanne the authority to sign for him in a real estate transaction. Suzanne is considered, in the eyes of the law, to be: a) A broker b) An attorney-in-fact c) An attorney-in-trust d) An attorney-at-law

b

The final step in the appraisal of an apartment building is: a) Capitalization. b) Reconciliation. c) Recapitalization. d) Summation.

b

The property being appraised has 4 bedrooms. The comparables in the area have only 3 bedrooms. Using the Market Data approach, how does the appraiser arrive at an estimate of value for the subject property? a) Deduct the value of a bedroom from the selling price of the subject property. b) Add the value of a bedroom to the selling price of the comparables. c) Adjust the selling price of the subject property by the difference of the salary of the owners of the properties. d) Deduct the value of a bedroom from the price paid for the property by the current owner.

b

There was a home listed under an exclusive right to sell agreement. Another broker went to show the house without notifying the listing broker. Was this a violation of the license law? a) Yes, because only the listing broker can show the property b) Yes, because the selling broker must first contact the listing broker in order to show the property c) No, because the selling broker has an implied contract to show the property d) No, because under an exclusive right to sell listing, everyone is authorized to sell

b

When a consumer signs a note that places a lien on his or her property, the owner, in certain instances, has the right to rescind the agreement within 3 days, without penalty. This right is provided to the consumer by virtue of which of the following laws? a) Real Estate Settlement Procedures Act. b) Truth in Lending Act. c) Equal Credit Opportunity Act. d) Statute of Frauds.

b

Which of the following best describes the gross rent multiplier? a) The GRM is also referred to as a "cap" rate. b) It is a factor derived by dividing the sales price of a property by monthly rental income. c) Calculating the GRM is the final step used to estimate value when using the cost approach. d) GRM is used to compute depreciation.

b

Which of the following is NOT required in an open listing? a) Signature of the principal b) Definite termination date c) Agreed upon commission or fee d) Description of the property

b

Which of the following meets the minimum requirements to be eligible to take the Georgia Real Estate Salesperson's exam? a) 17-year-old with a General Education Development (GED) certificate. b) A 17-year-old who meets all the education requirements of the license law. c) An 18-year-old who meets all the education requirements of the license law. d) None of the above.

b

Which of the following statements is NOT correct? a) Prepayment penalties are prohibited with VA and FHA financing. b) HUD establishes market-based interest rates for VA and FHA loans. c) VA can make certain direct loans. d) Conventional loans may require PMI insurance.

b

A buyer makes an offer on a property with some earnest money now and some to follow later. What should the licensee do? a) Pay the difference ahead of time to the broker personally b) Encourage the seller to take the smaller amount of earnest money only c) Write the offer as is with the extra earnest money to follow later d) Not present the offer until the extra earnest money is received

c

A husband, wife and mother-in-law were looking at possible houses to buy with a real estate agent. They asked the agent how they should take title to a property. The BEST response for the agent would be: a) joint tenancy b) tenancy in the entireties c) to have them consult an attorney d) to have them consult the broker of the office

c

A property sold for $188,000. The broker's commission rate was 5%. The salesperson, per agreement, is to receive 70% of the total commission. How much will THE BROKER net from this sale? a) $9,400. b) $6,580. c) $2,820. d) None of the above.

c

A salesperson told a buyer that the air conditioner would stay with the house. However, he had NOT checked it out with the seller. After closing, the seller took the air conditioner. Which would happen? a) He would have to pay for the air conditioner b) The GREC would automatically revoke his license c) The GREC can take disciplinary action or dismiss a complaint if filed d) The buyer would have to look to the seller for relief

c

A seller had a house listed with a broker for $86,000. The broker was working with a buyer who told the broker that the buyer would start by offering $85,000 but would pay $86,000 for the property. What should the broker do? a) Present the offer and NOT mention that the buyer would raise the offer b) Pressure the buyer to raise the offer c) Present the offer as is and inform the seller of the possible increase d) Refuse to present the offer as it was for less than the seller authorized

c

Broker Lynch has an exclusive listing to sell Jones' hardware store for a $4,500 commission. He took another exclusive listing to sell Brown's grocery store for a $5,000 commission. With the consent of Jones and Brown, Lynch arranges an exchange of these two stores. How much will Lynch make from this exchange? a) $4,500 b) $5,000 c) $9,500 d) No commission, because an exchange is not a sale

c

Carolyn buys a home for $122,000 agreeing to the lenders terms of a 75% loan and paying two loan discount points. How much money does Carolyn need to bring to settlement? a) $1,830. b) $30,000. c) $32,330. d) $33,220.

c

If the loan-to-value ratio (LTV) is 80% and the buyer puts 20% down and pays $1,000 in cash for 2 points, what is the sales price of the property? a) $50,000. b) $55,750. c) $62,500. d) $70,000.

c

Which best describes the difference between a fully amortized loan and a balloon note? a) A balloon note shows no decrease in the loan balance, whereas a fully amortized loan shows a decrease as the payments are made. b) A balloon note includes a balloon payment on interest where a fully amortized loan does not. c) A fully amortized loan extinguishes the loan in equal payments, whereas a partially amortized loan does not. d) A balloon note extinguishes the loan in equal payments, whereas a fully amortized loan does not.

c

Which of the following best describes a contract? a) An offer and acceptance between competent parties to do a specific legal act. b) A written agreement between competent parties to abstain from doing a specific act. c) An offer and acceptance between competent parties to do or not to do a specific legal act for consideration. d) A mutual agreement between two or more parties.

c

Which of the following does NOT have to exist for a valid contract to be enforceable in the sale of real estate? a) The contract must be in writing. b) An offer and acceptance. c) Performance. d) Consideration.

c

Which of the following does a broker NOT have to keep for the GREC auditors? a) Listings b) Contracts c) Advertising copy d) Closing statements

c

Which of the following is NOT true about a deed to secure debt? a) When the document is delivered and accepted, it passes legal title. b) In order to be recorded, it is witnessed the same way a mortgage is. c) With a security deed, the lender holds equitable title. d) Once recorded, the deed to secure debt creates a lien on the property.

c

A branch office under a principal broker: a) would have to have its own set of licenses b) would operate under its own broker's license c) would operate under a duly appointed salesperson d) would operate under the principal broker's license

d

A buyer signed a contract and gave the broker $5,000 in earnest money. The offer was accepted by the seller and the earnest money deposited into the broker's escrow account. The buyer, however, needed $250 to pay for an appraisal. Could the broker take $250 from the escrow account and give it to the buyer? a) No, the earnest money can never be used for anything other than the down payment b) No, unless the seller provides written agreement c) Yes, provided written authorization is received from the buyer d) Yes, provided written authorization is given by all parties to the contract

d

After an offer to purchase has been made and accepted, the broker may change the contract, under which of the following circumstances? a) If there was a minor detail omitted. b) If the closing date changes. c) At the request of one of the parties to the contract. d) With the approval of all parties involved in the contract.

d

All of the following are encumbrances on real property EXCEPT: a) Easements b) Liens c) Deed restrictions. d) A license

d

An agent had a listing which would expire on July 5. On July 1 the agent showed the property to a buyer. The seller plotted with the buyer and sold it to him a few days after the listing expired. Who would the broker sue for the commission? a) Buyer for the entire commission b) Buyer and seller each for 1/2 of the commission c) The broker could not sue as it sold after the listing expired d) Seller for the entire commission

d

An appurtenant easement may be terminated by all of the following EXCEPT: a) Merger of the dominant and servient estates. b) A deed by an owner of the easement releasing his or her interest. c) Abandonment by the dominant estate. d) Condemnation of the servient estate through eminent domain.

d

An owner listed a property with Broker Dole on May 1. On July 1 the owner was declared legally insane. The broker brought a full price offer on July 3 to the seller which was accepted. How much commission is Broker Dole due? a) The full commission as the broker brought in a ready, willing and able buyer b) The full commission as the seller accepted the offer c) No commission since the property was not sold within the protected period d) No commission since the listing was terminated when the owner was declared legally insane

d

How are the members of the Georgia Real Estate Commission chosen? a) Appointed by the Commissioner & approved by the Governor b) Appointed by the Governor and voted in by the active commissioners c) Appointed by the Senate and confirmed by the House d) Appointed by the Governor and confirmed by the Senate

d

If a broker has an exclusive right-to-sell listing, which of the following statements is INCORRECT? a) There must be a definite termination date in the listing b) All money given, by the seller to the broker, must be accounted for c) The broker may cancel the listing if he chooses d) The broker is legally obligated to sell the property

d

One party to a contract has the right to change his mind and not perform as agreed. This right: a) Can be a condition of the contract itself. b) Can be created by statute. c) May require payment of monetary damages. d) Could be any of these choices.

d

Property sold for $168,000. There was an existing 1st deed of trust in the amount of $75,000. The seller paid 6% commission and $2,100 in closing costs. What was the seller's net proceeds from the sale of his property? a) $165,900. b) $93,900. c) $90,000. d) None of the above.

d

Which of the following would not be covered under RESPA? a) A VA loan for a $55,000 first mortgage on a single-family home. b) An FHA loan for a first mortgage on a single-family home. c) A conventional loan for a first two-family residence where the lender was insured by the FDIC. d) A buyer assumed a $40,000 FHA insured first mortgage on a $50,000 single-family residence.

d