Final Examkc

A property valued at $295,000 has a gross rent multiplier of 135. What is this property's monthly income?

$2,458 +$2,185 $2,525 $2,328 295,000/135=2,185

Broker Jim works on a flat 3% commission. He sells an in-house listing for $270,000 and also earns a $2,800 bonus from the listing client. What is owed Broker Jim?

$2,800 $5,300 +$10,900 $8,100 270,000X.03=8,100 8,100+2,800=10,900

A property's value is $125,000 and its land value is $10,000. Assuming a depreciation term of 35 years, what is the amount of annual depreciation?

$2,949 $3,571 +$3,286 $286 125,000-10,000=115,000/35 years=3,286

A real estate salesperson brings a buyer to a For-Sale-By-Owner transaction. The home sells for $120,000, and the seller agrees to pay a commission of 3%. The salesperson is on a 65% commission schedule with her broker. How much will the salesperson receive from this transaction?

$3,600 $1,260 $3,120 +$2,340 120,000X.03=3,600 3,600X.65=2,340

A rental house has monthly gross income of $3,000. A suitable gross income multiplier derived from market data is 13. What estimated sale price (to the nearest $1,000) is indicated?

$360,000 $390,000 $429,000 +$468,000 sales price=annual incomeXGIM

The principle balance of a loan is $360,000. The monthly principal and interest payment will be $2,160 per month for 30 years. How much interest will be paid over the term of the loan?

$360,000 $777,600 $288,000 +$417,600 30X12=360 2160X360=777,600 777,600-360,000=417,600

If a borrower obtains an interest-only loan of $112,500 at an annual interest rate of 6%, what is the monthly interest payment (rounded to the nearest $1)?

$550 +$563 $648 $675 112,500X.06/12=563

Assume a loan balance of $174,000, a monthly payment of $1,395, and an interest rate of 8%. On next month's payment, how much of the $1,395 will be applied to principle?

+$235 $1,395 $271 $303 174,000X8%/12 months=1,160 1395-1160=235

Taxes on the property buyer Tamara is purchasing are $8,200, due on December 31. If the closing is set for June 29th, using the 365-day method, how much of the taxes will be credited to the buyer? (Assume it is not a leap year and the day of closing belongs to the seller.)

+$4,044 $4,178 $4,077 $4,123 8200/365=22.46 Jan 1-June 29= 180 days 180X22.46=4044

An office building has $66,000 of net income and sold for $550,000. What was the rate of return?

+12% 8.3% 10% 11.1% Rate=Income/value

Mandy recently bought a condominium unit. What does Mandy actually own?

+A fee simple interest in an airspace and tenancy in common interest in a share of common elements A joint tenancy interest in a building and a tenancy in severalty in a unit Shares in a corporation and a proprietary lease in a physical unit The right to occupy a unit from the condominium association

Why would municipal governments be concerned if property values are falling?

+Because the majority of their revenue comes from real estate taxes. When property values fall, revenue for municipal governments also falls. Because when property values fall, people tend to ignore zoning regulations. Because when property values fall, more people tend to move into the area. Because the mayor will automatically be removed from office if home values fall over 10% in one year.

Which of the following is an advantage to purchasing a commercial property compared to a residential property?

+Business tenants are generally easier to deal with than apartment house tenants. The vacancy rate is higher than residential properties. Only residential property owners have to pay property taxes. These properties do not qualify for homestead exemptions.

A decrease in the availability of money would have which of the following economic effects?

+Interest rates would go up. Interest rates would go down. Interest rates would NOT be affected due to RESPA guidelines. The lender would be allowed to keep less money in reserve.

Congressional Realty advertises all of its listed properties in the Saturday newspaper. What form of advertising is this?

+Product Institutional Self-dealing Recreational

Why do states offer homestead tax exemptions to homeowners?

+To offer some amount of tax relief on an owner's principle residence To encourage people to invest in multiple properties To exempt people from all real estate tax liability To encourage people to move to rural areas

A will takes effect only after the testator's death. It is a(n) _________, meaning that it can be changed at any time during the maker's lifetime.

+amendatory instrument fixed document stationary instrument stable document

Carrie has been growing a garden on her property. However, the garden now extends onto Amanda's property. Carrie has created

+an encroachment. a judgment lien. a special assessment lien. a zoning violation.

A homeowner in a residential zone recently built a large warehouse in his backyard. He then rented out the warehouse space to a company to use. This is an example of

+an illegal use. a legal nonconforming use. a legal conforming use. a warehouse exemption.

Tallpenny Tower was built in 1985. However, the building has been constantly maintained and remodeled. In valuation terms, the building's _________ age is greater than the building's _________ age.

+chronological age, effective age effective age, chronological age depreciated age, projected age projected age, depreciated age

A ________ is an automatic switch that stops the flow of electric current in a suddenly overloaded or otherwise abnormally stressed electric circuit.

+circuit breaker fuse dam voltage detector watt valve

A(n) ________ is the common form of express written agency agreement between a seller and a broker, authorizing the broker to find a ready, willing and able buyer for the property.

+listing agreement implied agreement permanent agreement estoppel agreement

Salesperson Steve receives an hourly wage of $14 an hour from broker Clayton. Clayton tells the IRS Steve is an independent contractor. The IRS then says Steve has failed the __________ and does not qualify as an independent contractor.

+salary test sedition test seller's test safe harbor test

If the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a ________ to close any transactions that are pending.

+temporary broker continuing agent mortgage banker trustee broker

A developer wants to develop a 25-acre subdivision. He figures that the streets and common area will take up about 35% of this overall area. If the minimum lot size is to be 25,000 SF, how many lots can the developer have on this property?

15 lots 65 lots +28 lots 34 lots 100%-35%=65% 25X.65=16.2 16.2X43,560=707,850 707,850/25,000=28

Kate bought a home for $210,000. However, all the town's jobs disappeared when the local factory closed. Kate sold this home one year later for $120,000. What was her percentage of loss?

75% 57% +43% 36% 210,000-120,000=90,000 90,000/210,000=43%

Seller Frank receives an offer of $800,000 on a property he listed at $900,000. How much is the offer as a percent of the listing price?

90.6% 86.7% +88.9% 85.0% Offer/Listing price

Al manages both Brown River Apartments and Orange Acres Condominiums. These complexes are not owned by the same person. In this situation, what does Al need?

A $500,000 errors and omissions insurance policy A lawyer because this is illegal regardless of licensure Fair housing certification +A real estate license

What form should agents show sellers near the end of a listing presentation to help them become more familiar with the upcoming transaction?

A blank copy of a buyer's agency agreement A "Fair Housing and You" disclosure form +A blank copy of the purchase agreement A mortgage application form

Which of the following will terminate a contract?

A contract cannot be terminated. The agreed to amendment of a contract Assignment of the contract +Abandonment of the contract

Seller Justin just listed with broker Brittany. What should Brittany install on Justin's property before leaving the listing meeting?

A door rider Security cameras A welcome flag +A lockbox

What is the legal avenue for an owner who wants to dispose of his or her interest against the wishes of other co-owners?

A foreclosure suit +A partition suit A redistribution suit A plottage suit

______________ is a legally-required element of a valid and enforceable real estate contract.

A revision date +Valuable consideration A backout clause A separate signature page

Which of the following best describes a breach of contract?

A termination of the contract by the mutual consent of the parties Partially fulfilling the requirements of the contract +The failure of a party to perform according to the terms of the contract A contract whose purpose is illegal.

Eldrick bought a certificate that allows him to apply for a tax deed after a certain period. What did Eldrick purchase?

A title certificate A renewal certificate A homestead certificate +A tax certificate

What mortgage clause allows a lender to charge extra interest if the loan is paid off before the normal completion date?

An acceleration clause A subordination clause +A prepayment penalty clause A usury clause

Under what listing clause may the broker claim a commission if the owner sells to a person the broker introduced to the property within a certain time after the listing's expiration?

An innocence clause A prevention clause An extension clause +A safety, or protection clause

Seller Paul is represented by broker Art. Paul's house was just destroyed by a tornado. Which statement is true?

Art can sue Paul if he exits the agency relationship. +The agency relationship is involuntarily terminated. Paul must relist with Art once the home has been rebuilt. The agency relationship must continue in order to sell the underlying land.

Broker Rob believes he is being approached by a fair housing tester. What should Rob do?

Ask them if they are a tester. +Treat them equally and not violate any fair housing law. Steer the party to whatever neighborhood he or she would "fit into" the best. Tell them that they are not welcome at this brokerage.

A licensee is required to continue to provide _____________ even after the agency agreement has been terminated.

Care Obedience Compensation +Confidentiality

Broker Janet just finished a direct e-mailing campaign. How should Janet follow-up on direct e-mail advertising?

Completely change her message each time regardless of the results Call the people she mailed, even if they are on the Do-Not-Call List. +Track and repeat those campaigns that show results. Repeat the same mailing, until she gets results.

An apartment complex's units have had their rusting bathroom drain pipes replaced with PVC. What type of maintenance is this?

Construction Preventive maintenance +Corrective maintenance Initiative maintenance

Buyer Henry is going to accept seller Shannon's $282,500 counteroffer. When will this counteroffer become a contract?

Counteroffers cannot become contracts +When Henry gives Shannon notice of the acceptance When Henry signs the counteroffer When Shannon first made the counteroffer

Joe is a new broker. How often will he be required to reconcile his escrow account(s)?

Daily +Monthly Quarterly Yearly

Albert finally found a buyer for his five-plex and closing is set for August 8th. At closing, four of Albert's tenants have already paid their $987.50 monthly rent and one of the units remains unoccupied. What will the rent proration be assuming the 365-day method and that the closing day belongs to the seller?

Debit the buyer $2,931, credit the seller $2,931 +Credit the buyer $2,931, debit the seller $2,931 Credit the buyer $3,663, debit the seller $3,663 Debit the buyer $3,663, debit the seller $3,663 987.50X4=3,950/31=127.419X23 days=2,931

The following statement regarding earnest money is FALSE:

Earnest money is not required for a contract to be valid. +Earnest money must be at least 10% of the contract price. The earnest money is deposited in an escrow account if an offer is accepted. A boat could be used as earnest money.

Which of the following is not a type of appraisal report?

Form report +Title report Letter report Narrative Report

Which of the following is an accepted method of legal description?

French method Meters and kilometers +Rectangular survey Block and tackle

Florence invested in a factory requiring Federally-mandated reductions in carbon emissions. How will this impact Florence as the factory's owner?

Her factory will be worth less once the upgrades are complete. Her factory will likely be bought by the EPA. +Florence will have to invest a large amount of capital to update the factory for little financial gain. Florence will have to invest a large amount of capital to update the factory for a large financial gain.

Jamie bought a tax certificate for $3,200. What did Jamie actually purchase?

Immediate legal title to the foreclosed property Nothing, Jamie simply paid for another person's taxes for nothing in return Legal title to the property if the homeowner does not pay her back within 3 years +The right to apply for the property's deed by agreeing to pay the taxes due on that property

Seller Deangelo agreed to mediate the radon gas problem in his basement within 31 days. It has been 31 days and he still has not addressed the issue. What is the current status of the sales contract?

It is not affected and is in force. The buyer must now address the problem within 31 days. Deangelo will now receive $5,000 less from the buyer. +Deangelo has defaulted on the contract.

What powdery mineral is a health hazard when airborne?

Mercury Radon +Asbestos Uranium

Which of the following is an item that is normally prorated at closing?

Mortgage points Inspection fees Title fees +Taxes

Buyer Tal is regretting the full price offer he just made on a home. Can he still revoke the offer?

No, because it was a full price offer. +Yes, he can revoke the offer assuming the seller has not already accepted it. Yes, he can revoke an offer even after a seller has accepted it and delivered notice of acceptance. No, he must wait to hear if the seller accepted the offer.

Which of the following statements about liens is true?

Only government entities can create liens. Liens never convey ownership. +Liens are appurtenant to the property. In order to be a lien, the amount must be greater than $1,000.

Which of the following is a way of terminating a restrictive covenant?

Requesting the state's Real Estate Commission to ban restrictive covenants Restrictive covenants cannot be terminated. A suit for partition filed by a majority of property owners in a subdivision +Failure of property owners to enforce the restrictions in a timely manner

A written contract to sell timber rights is performed by both parties. Six months later, the seller has second thoughts and wants to reclaim the rights under Regulation Z. What is the likelihood that the seller will succeed?

Slight, if the seller fells like he was taken advantage of. Good, because Regulation Z requires the contract be in writing. +Nonexistent, since this contract has nothing to do with a violation or, or compliance with, Regulation Z. Excellent, because landowners are not allowed to sell timber rights under Regulation Z.

Which of the following is part of a septic system?

Slug field Floating slab +Distribution box Recovery tub

What should an agent disclose to his buyer client?

That the seller of the property is gay That the seller of the property is a Muslim +That the air conditioner is 13 years old That the seller is not an American citizen

What significant piece of legislation created the Environmental Protection Agency (EPA)?

The Federal Nature Protection Act of 1977 The Clean Land Act of 1962 +The National Environmental Policy Act of 1969 The Green Act of 1980

Mayor Rodney is unsure how ad valorem real estate taxes are calculated for a particular property. What is the best answer?

The appraised value of the property multiplied times the area's millage rate. The appraised value of the property divided by the area's millage rate. +The assessed value of the property divided by the area's millage rate. The taxable value of the property multiplied by the area's millage rate.

In a real estate transaction, who has the responsibility for filling out the property condition disclosure statement?

The appraiser The seller The seller's broker The home inspector

Borrower Patti exercised her statutory right of reinstatement after her lender initiated a foreclosure suit. What must Patti's lender do now?

The lender must pay all fees and renegotiate the mortgage. The lender must dismiss the lien and continue the suit. The lender must demand that the mortgage is paid in full within the next 60 days. +The lender must dismiss the suit and honor the mortgage.

What is an advantage of a VA loan compared to a traditional mortgage?

The loan must typically be paid off in 10 years instead of 30 years. The VA insures the lender against loss. +The VA does not allow prepayment penalties to be charged if a veteran pays off a loan early. The VA will pay at least 25% of the monthly payments.

______________ dictate(s) the minimum and maximum pressures allowed for plumbing fixtures.

The master plan +The building codes The elevation of the property The square footage of the property

Soho Ranch is a newly incorporated town. Who will be responsible for the site plans, subdivision plans, and zoning of Soho Ranch?

The mayor The state's governor +The planning commission The state's Real Estate Commission

Which person is a freehold tenant by definition?

The renter of a property +The owner of a freehold estate A person who has purchased mineral rights A person who has sold his or her interest in a property

Tyler purchased a home eight months ago for $160,000. The assessed value of his home is $120,000 and the appraised level currently is $167,000. What amount will Tyler's ad valorem taxes be based on?

The sale price of $160,000 +The assessed value of $120,000 The appraised value of $167,000 The averaged value of $149,000

For the lender, what is an advantage of a non-judicial foreclosure?

The state will automatically pay them whatever the deficiency amount is. +The process is quicker since they do not have to go through the courts. Loans in states with non-judicial foreclosure have higher interest rates. The Federal Government will automatically pay them whatever the deficiency amount is.

There is an escrow money dispute after a transaction failed to close. Who will hold the escrowed funds while the parties are sorting out who is to fault?

The state's Real Estate Commission +The sponsoring broker The HUD The mortgage lender

Which of the following statements about restrictive covenants is false?

They take priority over less restrictive zoning ordinances. The restrictive covenants will not be enforced if they go against public law or policy. Covenants may not be discriminatory by restricting ownership or use on the basis of race, religion, marital status, or gender. +They are permanent and unchangeable.

Bert just purchased his first property. To what level(s) of government will Bert have to pay real estate taxes?

To no level since the Constitution bans real estate taxes for all levels of government. Federal +County and local State

Adam did have a will prepared shortly before he died. The property that is transferred according to Adam's will is known as the

Torrens. discourse. +devise. boot.

Broker Jean just opened Purple Mountain Realty. What administrative steps should Jean undertake to help ensure fair housing compliance?

Train her agents how to discover the testers. Have all agents carry around a fair housing brochure when they are with clients. +Include a fair housing policy in her policy and procedures manual. Make sure one half of Jean's agents are minorities regardless of the applicant pool.

Which of the following statements best describes non-judicial foreclosure?

When there is a "payback" clause in the mortgage or trust deed document, a non-judicial foreclosure can force the borrower to sell the property to the state. +When there is a "power of sale" provision in the mortgage or trust deed document, a non-judicial foreclosure can force the sale of the liened property without a foreclosure suit. When there is a "sale requirement" provision in the mortgage or trust deed document, a non-judicial foreclosure cannot proceed unless the borrower agrees. When there is a "partnership" provision in the mortgage or trust deed document, a non-judicial foreclosure cannot proceed unless a circuit judge agrees with the lender.

Broker Ola has twice published advertisements that have gotten her in trouble with protected classes. What should Ola do to prevent future advertising problems?

Write the ads from the perspective of the largest protected class. +Write the ads from the perspective of all protected classes. Hire testers to see what they think of her ads. Purchase additional errors and omissions insurance.

William just purchased a residential investment property for $225,000. William is 60, married, and will not occupy the property. Will this new property qualify for a homestead exemption?

Yes, because William bought the property for less than $500,000. Yes, because William is older than 50. No, only single people can qualify for homestead exemptions. +No, he has to reside on the property to qualify for a homestead exemption.

A borrower sells a mortgaged property for less than what is owed on the loan balance. This is an example of

a quick flip. a deep dive. +a short sale. an equity sale.

Vance's property had a bird feeder that was attached to the land. Today, Vance decided to remove the bird feeder. This is an example of

attachment. +severance. enhancement. instant domain.

All the brokerages in Metropolis agreed to set their commission rates at 9%. This is an example of

boycotting. recovery funding. +price fixing. monopolizing.

A(n) _______ is the third party with whom the agent deals when working on behalf of the principal.

client +customer principal tester

When an appraiser makes a site analysis on residential property, the appraiser would be

concerned with the income of the property's owners. +trying to estimate of the property's highest and best use. concerned with the type and number of pets living on the property. trying to determine the cost to replace the building.

Clay's property is worth $300,000 and the empty lot next to him is currently worth $40,000. After buying and legally merging this lot with his old property, Clay's new property is now worth $350,000. This is an example of

conformity. unity. +plottage. competition.

Some taxing bodies recognize that local assessments can lead to unfairly high or low values for properties in certain areas. Therefore the jurisdiction may establish _________ to level out the unevenness of valuations.

diversity factors testing factors +equalization factors redistribution factors

Vernon signed a contract with Cameron allowing Cameron to deal cocaine on Vernon's property. This contract is ____ because neither party can legally enforce it.

executable accepted voidable +void

Licensee Carol is representing seller Cameron. Carol is currently a

free agent. +dual agent. listing agent. recording agent.

The traditional dower and curtesy laws throughout the United States have been largely supplanted by

joint property laws and deduced share laws. derivative property laws and integral share laws. shared property laws and de facto share laws. +community property laws and elective share laws.

The employing broker must give a copy of the employment agreement, including any modifications, to

only the employees. only the independent contractors. +every one of his or her employees and licensee contractors. their state's Real Estate Commission.

The north-south area between consecutive ______ is called a range.

parallels metes bounds +meridians

Buyer Cindy is being shown a house by licensee Craig. Cindy does not know if Craig represents the seller. This is the reason why

property disclosure laws exist. recovery fund accounts are needed. escrow fund accounts are needed. +agency disclosure laws exist.

A buyer asks if a property has radon gas in the basement. The agent says there is none when he knows there is a radon problem. This is an example of

puffing since this action is legal. active fraud since this is an intentional misstatement or omission. negligent misrepresentation since this is an unintentional misstatement or omission. +negligent misrepresentation since this is an intentional nondisclosure of a material fact.

A broker lists a property, decides to buy it for herself, then collects the agreed-upon commission is

puffing. +self-dealing. flipping. reneging.

In classifying real property by use, government- owned buildings generally qualify as

recreational real estate. divergent real estate. retail real estate. +institutional real estate.

The analysis of the extent of risk assumed in connection with a loan is known as

redlining. greenlighting. stamping. +underwriting.

An Adjustable Rate Mortgage (ARM) contains a(n) ________ that allows the interest to adjust over the loan term.

renewal clause +escalator clause index clause stationary clause

The Bernharts have been leasing a property for the past three years. The owner of the property decides he wants to sell. He offers the Bernharts the first opportunity to purchase the property. This is an example of a

right of redemption. right of recovery. +right of first refusal. right of indifference.

The recorded plat method, also called _________, is used to describe properties in residential, commercial, and industrial subdivisions.

the monument system the triangular survey system +the lot and block system the metric survey system

A chronology of successive owners of record of a parcel of real estate is known as

the title of occupancy. +the chain of title. the cloud of title. title descent.

In construction, the term "pitch" refers to

the type of flooring used. +the slope of the roof. a type of frame construction. the type of piping used.

A standardized yardstick expressing the true annual cost of borrowing is expressed as the

uniform interest rate (UIR). internal rate of return (IRR). appraised interest rate (AIR). +annual percentage rate (APR).