RE
The federal government has a goal to transform the way energy is consumed in commercial buildings across the country. It wants to accomplish this by what year?
2050
What maximum percentage of a VA loan is guaranteed?
25%
The tenants in 13C are late with the rent again. They are now officially two months behind. Landon Carson, the landlord, is done playing games and is going to start playing hardball. He's going to give the tenants ______ advance written notice and then he's going to change the locks.
3-5 days
Qualified mortgages require debt-to-income ratios of no more than _
43%
In Texas, approximately _______ of land is publicly owned.
5%
Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains 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.)
A ______ is a ratio that compares two quantities.
A RATE is a ratio that compares two quantities
What happens after a lien foreclosure sale if not enough money were made from the auctioning of the property to pay off the lien holders?
A deficiency judgment against the property owner for the outstanding balance to the lien holders is issued.
What is the best description of a deed?
A document to transfer ownership/interest in real estate
What's a purchase money mortgage?
A form of seller financing in which a mortgage is given by the buyer to the seller toward the purchase price.
Which of the following describes a high-rise building?
A high-rise building is 11-39 stories tall (anything taller than that is considered a skyscraper); they are always equipped with elevators.
Which classification of appraiser can perform appraisals of simple residential one- to four-unit properties with a value less than $1 million?
A licensed appraiser can perform appraisals of simple residential one- to four-unit properties with a value of less than $1 million.
Tom, the seller, is financing his buyer Jerry's mortgage. Tom will give this mortgage to Jerry, which will go toward the purchase price. Jerry will use this mortgage for his down payment. What kind of mortgage is this?
A purchase money mortgage is a type of seller financing in which the seller gives a mortgage to the buyer. It's put toward the purchase price.
Which term is defined as land that is built up by water depositing sand, silt, or gravel?
Accretion
When wind-power or solar-power systems are installed in a home in Texas, the value of that home may increase. This tax incentive can be applied as a tax exemption equal to the increased value of the home.
Ad Valorem Tax Credit (adding value)
What's a quiet title action?
An action to locate and notify all who may have some claim on the title, and determine the validity of all claims
Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go?
An investment group
What's the area of a triangle with a base of 14 cm and a height of 10 cm
Area = 1/2 bh (1/2 of 14 cm. = 7 cm) Height = 10 cm 7 cm x 10 cm = 70 centimeters squared
Jason is planning to invest in a new commercial development. He'd like to invest $400,000 and secure another $100,000 through financing. After shopping around, Jason could not find financing at an affordable rate. Of what type of risk is Jason the victim?
Capital Risk
Breeja sold her investment property for $330,000. Her adjusted basis in the property was $253,000. The difference between this sale price and the adjusted basis is a(n) __
Capital gains are the sales price less the adjusted basis.
What is the definition of "before-tax cash flow"?
Cash flow before taking income taxes into account.
_______ is the principle that the more similar properties there are on the market, the lower the price will be driven.
Competition
The covenant of warranty assures that the grantor will warrant and defend the title against the lawful claims of others.
Condemnation is the process of the government taking someone's property, but paying a fair price for it.
Which agency administers the Interstate Land Sales Full Disclosure Act?
Consumer Financial Protection Bureau- It may help to remember that the Interstate Land Sales Full Disclosure Act is designed to protect consumers from the fraudulent sale of property sight unseen through the regulation of land sales across state lines.
With the cost approach to value, what is the replacement cost?
Cost to build a functionally equivalent improvement
Joe Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Joe Bob do in order to satisfy delivery and acceptance of the deed to Frank?
Deliver the deed to Frank, his agent or attorney, or the title company issuing the title
Your client, Joseph, has a commercial income-producing property. How long does he depreciate this property?
Depreciation for non-residential income-producing properties is 39 years.
Ricardo has left a gift of real property in his will to his son, Juan. Ricardo is the ________________________ and Juan is the ______________.
Devisor, devisee - (think devisor/deed/property)
An estoppel certificate is a
Document that shows the balance due on the loan
Which of the following could an investor who sells an apartment house buy using a 1031 exchange?
Duplex, office building, or warehouse
Rebecca has granted power of attorney to her partner, Emily. The POA states that if Rebecca becomes incapacitated, Emily can continue to act on her behalf. What type of POA is in place?
Durable
Which type of FSA loan program is serviced by the FSA, but uses government money?
FSA direct loans are serviced by the FSA using government money.
You're a farmer. Which loan program might be tailor-made for you?
Farmer Mac
Brandy is going to purchase a strip mall. She is trying to determine exactly how much to borrow for this purchase. She understands that the more she borrows, the greater her risk. What type of risk is she evaluating?
Financial Risk (The more money an investor leverages (or borrows), the greater the financial risk.)
Another term for a valuation is ______.
Formal appraisal
An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?
Gross income multiplier
Investor Igor made $120,000 last year, but had $25,000 in losses from his rental properties. Can Igor take the full $25,000 deduction on his taxes, assuming he is actively involved in the management and operation of his rental properties?
If an investor's income exceeds $100,000, they will lose 50 cents for every dollar over $100,000. Igor's deduction would be reduced by $10,000, because Igor lost 50 cents on the dollar for the extra $20,000 he earned (over the $100,000 mark).
Because these types of properties have both specific physical and complex operational requirements, they are usually handled by more experienced real estate professionals.
Industrial
John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to identify a new property?
Investors who want to use the 1031 tax-deferred exchange must identify the property within 45 days and close within 180 days.
What are accrued expense items?
Items to be divided proportionately between the buyer and seller that the seller owes - Accrued expense items are expenses shown on a closing statement, such as real estate taxes that have been recognized but are not yet paid and get credited to the buyer on the closing statement. The seller will pay the buyer for these expenses at the closing.
Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. What is the brokerage's commission rate?
Jared was paid $12,239.50, which is 70% of the amount paid to his broker as commission. That makes his firm's commission $12,239.50 ÷ .70 = $17,485. Multiply that by two for the total commission the firm grossed, since it's shared 50/50 with a cooperating brokerage (the brokerage that brings the buyer to the sale), giving you $34,970. Then divide by the total sales amount for the brokerage's commission rate: $34,970 ÷ $538,000 = 0.065, or 6.5%.
Maud has left a gift of personal property in her will to her granddaughter, Emily. Maud is the ________________________ and Emily is the ______________.
Legator, legatee (deals with personal property)
If a tenant moves out before a lease term expires and the landlord is able to rent the unit, the tenant is ______.
Liable for rent for the month during which the move-out occurred and any month until the end of the lease that the landlord is unable to rent the unit
Which of the following is a type of zoning action?
Moratorium (this is an action not a type of zoning)
Which of the following is the price a lender believes the property will bring at a foreclosure sale?
Mortgage Value
Mick focuses on originating mortgage loans at a company that has in-house loan processors and underwriters. The options he offers consumers are limited to the products his company offers. What's Mick's position?
Mortgage bankers work for institutions that have in-house processors and underwriters, allowing them to lend money fairly quickly, but their lending options are generally limited to their own suite of products.
Which entity insures VA loans?
No entity, because they are guaranteed by the U.S. Department of Veterans Affairs
What's one of the ways that bulk zoning achieves its objectives?
One of the ways that bulk zoning achieves its objectives is through setbacks. Maximum building heights and clearance from other buildings help control building density, which is the aim of bulk zoning.
What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses?
Operating
Which of the following loan types involves a type of graduated payment?
Pledged account (Pledged accounts are a type of graduated mortgage in which the buyer deposits funds into a savings account with the lender.)
Marcus bought two adjoining pieces of land that were zoned for commercial use. When he realized that combining the two parcels would dramatically increase the land's value, he jumped at the opportunity. What's this an example of?
Plottage is the economic principle that the joining or assemblage of two neighboring land parcels increases the property value.
In which market do lenders purchase packaged loans?
Primary lenders package and sell their loans to other institutions in the secondary mortgage market.
Tammy and Reginald bought a house with a gas line easement on the property. An easement like this one placed by the utility company is an example of a ______.
Private land controls include covenants, conditions, and restrictions (CC&Rs), HOA or subdivision regulations, liens, and easements.
Which commercial lease type is used by owners of cooperative apartments who purchase shares of the corporation that owns the building?
Proprietary Lease
Which of the following is a mortgage where the consumer cannot later claim that the lender did not comply with the ability to repay requirements?
Qualified mortgage with a safe harbor status
What type of deed releases any rights of the grantor to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee?
Quitclaim deed
Cost to build an exact replica of the subject, with the same materials and deficiencies.
Reproduction Cost
Gretchen receives a call from a prospective employer wanting information on one of her tenants. In accordance with the FTC privacy rule, Gretchen can do which of the following?
Share information about her tenant with the prospective employer without her tenant's written consent. A tenant's information can be shared without the tenant's written consent with the tenant's prospective employer, a police officer, another rental housing owner or manager, or a consumer reporting agency.
Information shown in this area of the Uniform Residential Appraisal Report includes the subject property's size, shape, zoning, and access to utilities, as well as information about the Federal Emergency Management Agency's flood zone.
Site
Forecasting the income and expenses that we can reasonably expect to bring in and pay out over a short term results in a budget that's every property manager's dream. That budget is ______.
Stabilized
An affidavit of title is a _
Sworn statement by the seller that no unpaid bills remain for repairs or improvements to the property
Which of the following statements about the Texas Apartment Association is true?
TAA provides its members with association-prepared lease forms.
Which of the following is considered an acceptable form of identification for a prospective tenant who doesn't have a Social Security number?
Temporary resident card
In Texas, what type of leasehold is characterized by possession of a property, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?
Tenancy (estate) at sufferance is leasehold interest in which the tenant continues to occupy an apartment after the lease has terminated.
In Texas, in what type of leasehold is the duration of the lease unknown at the time it is created?
Tenancy at will - the duration of the lease is unknown at the time it is created
Which term is defined as someone who drafts a valid will?
Testator
When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?
The LENDER - The note and mortgage are the lender's leverage to foreclose in the event of default.
Which program offered by the TDHCA helps residents purchase their first home?
The My First Texas Home loan program helps residents purchase their first home.
Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination?
The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for clean-up of hazardous contamination.
Which organization issues the LEED certification?
The U.S. Green Building Council issues the LEED certification, which is based on a nine-point rating system.
Which of the following statements is true about constructive eviction in Texas?
The court may award damages to the tenants and order the landlord to make repairs (In Texas, tenants who are party to a constructive eviction may be entitled to receive a prorated refund of rent paid or have the court award them damages in addition to ordering the landlord to make repairs.)
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.
Colleen and Judy 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 Colleen and Judy?
The covenant of warranty assures that the grantor will warrant and defend the title against the lawful claims of others.
According to the Doctrine of Relation Back, once the conditions of the escrow agreement have been met, what must occur for the transfer of property to happen?
The deed must be delivered to the escrow agent.
The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegel's depreciation basis calculations?
The depreciable basis is composed of the sales price plus any acquisition costs, such as title insurance, and capital improvements. Loan costs aren't included in the basis, but something like electrical system upgrades are capital improvements.
How is reasonable belief defined in adverse possession?
The possessor must reasonably believe in the right to possess the property.
Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?
The principle of contribution says that a change to a portion of a property impacts the overall value. For example, adding a swimming pool could add to the value for some buyers and detract from the value for others
The property management proposal includes information such as ___
The proposal should provide information about the property manager's qualifications, the duties the property manager will perform, and the reports the property manager will provide to the owner.
The Johnsons, who own a Texas farm, recently purchased a wind turbine to help power the farm and home using a renewable energy source. Although the purchase was expensive, they decided to invest in the turbine because they can take a personal income tax credit of a portion of the turbine's price. What percentage of that purchase can be taken as an income tax credit?
The residential renewable energy tax credit is available as a personal income tax credit of 26% of the cost of a renewable energy system (either a solar water heater or wind turbine), when such a system is purchased.
What is financial risk?
The risk that is directly related to leverage (The more money an investor leverages (or borrows), the greater the financial risk.)
Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates?
To assess the adequacy of tenant income screening processes --If rental delinquency rental rates are increasing, it may be necessary to implement stricter income requirements and screening processing.
When using the sales comparison approach to value a property, all of these are categories of adjustments except
Types of obsolescence
How long does a homeowner have to pay off outstanding liens against his property?
Until the foreclosure sale is held
When does power of attorney terminate?
Upon the death of the grantor
Which of the following may an owner place on the land when it's sold to limit the use of the property?
a deed restriction on a property to preserve the use of the property or to preserve the quality of the neighborhood.
A property manager who ______ must have a license.
collects rent
The amount covered by the new loan is a ____
credit to the buyer
The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?
incentive zoning
Emerald has left a gift of personal property in his will to his nephew, Raymond. This gift is known as a
legacy or bequest
Which environmental and health issue is best addressed by property owners and managers educating employees and tenants on how to both prevent it and to clean it up if it appears?
mold
In a sublease situation in Texas, who has the right to evict the sublessee?
only the original tenant
What takes precedence over a deceased person's wishes to grant his property at death, even if those wishes are specified in the decedent's will?
operation of law - Operation of law trumps a will. It says that what's legally required must be satisfied before the terms of the will apply.
Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?
price
Jasmine has a tenancy-at-will lease agreement with her landlord. How much notice must she give her landlord when she's ready to terminate the lease?
proper advance notice
As a(n) ______ property manager, you know there's a lot more turnover in your area of expertise.
residential
Which economic principle says that a property's value is determined by what it would cost to purchase a similar property?
substitution
Who reviews transactional documents for accuracy prior to or at closing and requires the property to be free and clear of defects before approving the buyer's loan application?
the lender's attorney
According to custom, who pays the costs on the day of closing for property taxes, utilities, etc.?
the seller
Gross rent multiplier
used for income-producing properties with four or fewer units.
The Richards' farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Buyers in the area looking for a move-in ready home would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property?
utility