Utah General Sales exam

A house was listed for $180,000. The owners owe $130,000 on a first mortgage. The listing agent receives an offer for $120,000. The agent knows the closing costs will be $4,560 and attorney's fees $5,440. The agent should: (a) Present the offer to the owner. (b) Refuse to present the offer to the owner because he knows it is less than the owner owes. (c) Tell buyers they should pay the closing costs. (d) Present the offer to the sellers and tell them to reject the offer.

a

A lot was purchased as an investment for $10,500. It was sold a year later at a loss of 20%. What was the loss on the sale? (a) $2,100 (b) $8,400 (c) $3,150 (d) $1,260

a

A residence had an appraised value of $338,245 and an assessed rate of 65%. The taxes were $3,720.70. What was the tax rate? (a) 0.017 (b) 0.02 (c) 0.01 (d) 0.2

a

An industrial complex was built near a residential area. In order to preserve the value of the residential area, which of the following would be the most likely to be employed? (a) Create a buffer zone by zoning restriction. (b) Zone the area between the two C1. (c) A zoning commission has no authority in such matters. (d) The local government would buy up the area in between by exercising eminent domain.

a

Certain defaults, unfortunately, happen quite often and so they are planned for and consequences outlined in the contract. An example is the earnest money deposit. This is: (a) Liquidated damages (b) Hypothecation (c) Subrogated damages (d) Pur autre' vie

a

In Utah, property taxes become delinquent: (a) 1-Dec (b) 1-Jan (c) 30-Nov (d) Nov-31

a

In a listing contract, the seller agrees to: (a) consider offers on the property. (b) sell the property. (c) sell only if a full priced offer comes in. (d) fix any appliances that are broken.

a

In order to begin the process of obtaining a VA loan, the applicant must provide what document? (a) Certificate of Eligibility (b) Certificate of Authenticity (c) Eligibility Waiver (d) Certificate of Reasonable Value

a

K has an agreement as a property manager for an owner. This would create which of the following relationships or positions? (a) Fiduciary (b) Trustee (c) Mortgagor (d) Director

a

L agreed to carry a 2nd in the sale of the home. It was for $20,000, 9% interest, 30 years, payment of $160.92 per month. However, it had a five year call when the buyer would pay off the balance of $19,176. How would you describe this loan arrangement? (a) Partially amortized (b) Fully amortized (c) Discounted (d) Wraparound

a

M starts a small business teaching people how to do unique types of quilting and stitchery and hires one person to help her. She finds an old house to rent cheaply. It only has one very small 1/2 bath, and five steps to get in the front door. In this case, ADA requirements: (a) are violated because a handicapped person would not have equal access. (b) do not apply since there's only one employee. (c) don't apply as it would be too costly for a small business to make major construction modifications. (d) only apply when there are more than 15 employees.

a

Phil paid $2,500 in discount fees on his new loan. If the discount fees were 1.50% and Phil received a 90% LTV loan, what was the appraised value of the property? (a) $185,185.17 (b) $149,999.99 (c) $150,000.00 (d) $186,186.17

a

Progression and regression are considered "sub-principles" relating to overbuilding for an area, or purchasing the least expensive model home in a development of new homes. The main principle involved is: (a) Conformity (b) Contribution (c) Competition (d) Cycle of Change

a

R wanted to buy Q's home, but being new on the job could not qualify. Q agreed that with $15,000 down, Q would carry a loan for the remainder of the purchase price, amortized over 30 years at 8% interest. This is a(n): (a) Purchase money mortgage (b) Discounted loan or note (c) Wraparound loan (d) Double contract, and illegal

a

Recording is the same as closing. (a) False (b) True

a

S was three years into a five-year lease and wanted to move elsewhere. T was willing to sublet the property. Which is true? (a) S could increase the rent and make a profit. (b) T is the only one who could be liable for damage to the property. (c) T pays rent directly to the owner. (d) S has no further liability for rents or damages.

a

T would like to purchase property from F. T sits with his agent and fills out a proper REPC. Which of the following COULD NOT be used as an earnest money deposit? (a) A handshake and a verbal agreement to cut a check later. (b) T's personal property. (c) T's pet pig, Wilbur. (d) A written IOU made out by T to F for $100.

a

The Federal Housing Administration is a mortgage lender allowing home ownership with little down payment. (a) False (b) True

a

The key difference between a lien theory state and a title theory state is: (a) In a lien theory state, the property owner holds title but in a title theory state the lender or trustee holds title. (b) A title theory state will collect more transfer taxes because of the extra steps. (c) Only a lien theory state uses legal documents to convey property rights. (d) In a title theory state, the property owner always holds title.

a

Two people buy a property together. If one dies, full ownership will automatically belong to the other. This is called: (a) Joint tenancy (b) Tenancy at sufferance (c) Tenancy in common (d) Community property

a

What do you call the person who signs a document on behalf of another? (a) Attorney in Fact (b) Client (c) Customer (d) Power of attorney

a

When a person dies leaving no will and no heirs, the government will get the property by the process of: (a) Escheat (b) Quiet Title Action (c) Eminent domain (d) Police power

a

When the buyer and seller agree to extend the closing date, the real estate agent should: (a) prepare an addendum and have both parties agree to the change in writing (b) make sure the buyer and seller shake hands to confirm the change. (c) write a whole new contract. (d) explain that time is of the essence and the closing date cannot be changed.

a

When the buyer purchased the property using a Uniform Real Estate Contract, what is the interest of the buyer called? (a) Equitable interest (b) Deed (c) Possession interest (d) Title

a

Which kind of title insurance would provide the most protection for the buyer of the property? (a) Extended Owner's policy (b) Plain Language policy (c) ALTA Lender's policy (d) Standard policy

a

Which of the examples below is NOT an exception to the requirements of the Fair Housing Laws? (a) Condo complex that requires that everyone who buys or lives there must be at least 45 years old. (b) The owner of a single family home renting a bedroom, and who advertises: "Females only." (c) A church-owned apartment building that has always rented only to members, and lets anyone join their church (d) An owner of a triplex who lives in one unit and rents out the other two.

a

A loan is obtained for $30,000. The loan calls for the principal to be paid in equal installments each month for 25 years. The interest on the loan is 0.75% per month. How much is the first payment? (a) $355 (b) $325 (c) $2,350 (d) $1,425

b

A new apartment building was constructed with an elevator. Under the Fair Housing Amendment Act of 1988, what would the owner have to do. (a) Make all hallways and doorways extra wide. (b) Make sure thermostats in all rooms are reachable from a wheelchair. (c) Not have a "No Pets" rule in case a blind person rented one unit. (d) Adapt all kitchens with sink, stove, etc. low enough for wheelchair use

b

A uniform land contract could best be described as a: (a) Real Estate Purchase Contract (b) Installment Contract (c) Trust Deed and Note (d) Listing

b

All of the following are facts about flood insurance EXCEPT: (a) Properties in a flood zone identified by FEMA must carry flood insurance. (b) Flood insurance rates are fixed by the National Flood Insurance Program. (c) Floods can occur throughout the United States and are the number one natural hazard. (d) Homeowner's insurance does not cover loss from floods.

b

An agent contacted an owner to see if they might want to sell the property. The agent said, "I think I can get you $250,000," which surprised the owner. The owner said, "Ok, and anything over that can be your commission." This is: (a) A really good deal for the agent and the agent should jump on it! (b) Is a net listing and could be grounds for disciplinary action against the agent. (c) A perfectly good way for agents to market themselves and get listings. (d) Only legal if the agent ran comps and can justify the $250,000 number.

b

An agent from a buyer brokerage represents the: (a) is a neutral facilitator (b) buyer (c) seller (d) seller and buyer

b

Any offer without an Earnest Money Deposit is considered which of the following? (a) Implied (b) Valid (c) Unilateral (d) Unenforceable

b

For the purpose of property taxes, an appraisal is done and the value is determined by the: (a) County Tax Appraiser's Office (b) County Tax Assessor (c) State Appraisal Board (d) Board of Equalization

b

If the interest rate on a straight loan is 8% and the monthly interest payment is $650, what is the amount of the loan? (a) $88,750 (b) $97,500 (c) $75,682 (d) $103,250

b

In a loan, an alienation clause: (a) Insures taxes will be paid (b) Protects the mortgagee's position (c) Insures that there will be no late payment of principal (d) Protects against illegal aliens obtaining valid ownership

b

In the list below, which item does NOT belong with foreclosure under a trust deed? (a) Equitable period of redemption (b) Statutory period of redemption (c) Three months (d) Special warranty deed

b

In which of the following situations is a special warranty deed most likely to be used? (a) A standard sale of an existing residence. (b) After a death, the executor grants the property to the devisee. (c) A lease with an option to buy. (d) In a divorce the husband gives up his rights to the home.

b

J carried back a 2nd mortgage when his home was sold. Now he needs some ready cash and is going to sell it to a secondary lender for 60% of face value. This discounting of the loan does NOT have which of the following advantages? (a) It gets a lump sum of cash immediately for J. (b) The person who bought the house and has the loan will now pay a higher interest rate. (c) It provides an increased yield for the secondary lender. (d) The secondary lender has a secured investment at relatively high interest.

b

The primary product sold by a credit bureau is: (a) Pending judicial actions against the borrower. (b) Information on the creditworthiness of an individual applicant. (c) Public records on all past criminal and civil hearings. (d) Current income statistics on similar borrowers.

b

Title insurance is paid: (a) annually. (b) only once, at closing. (c) as a part of the mortgage payment. (d) monthly.

b

Tom wants to clear $90,000 when he sells his property. He must pay a 7% commission, $250 in closing cost, and $300 to the attorney who assisted in the transaction. What should he sell the property for? (a) $96,774 (b) $97,365 (c) $96,850 (d) $97,324

b

Under a mortgage foreclosure, K made the highest bid and got the property. Within 24 hours K had paid the full amount to the sheriff. What would K receive? (a) A special warranty deed (b) A certificate of sale (c) A quit claim deed (d) A bargain and sale deed

b

Under an agreement of sale, the seller is considered the: (a) Devisee (b) Vendor (c) Grantee (d) Mortgagor

b

What term best describes a situation where the lessor collects rents from the tenants and pays expenses out of those rents? (a) License estate (b) Gross lease (c) Net lease (d) Participation lease

b

When someone makes a statement to a qualified official that they freely and voluntarily executed a deed or document: (a) Certification (b) Acknowledge (c) Recording (d) Habendum

b

Which is not correct about PMI? (a) For "high-risk loans" lenders are required to automatically remove PMI when the loan balance reaches 77% of the original purchase price. (b) In order to remove PMI, the lender must receive a request from the borrower. (c) To request cancellation of PMI, you must be current on your loan. (d) You may request PMI removal when the current loan balance equals 80% of the original purchase price or current appraised value, whichever is less.

b

Which of the following do not have the ability to enter a contract? (a) An illiterate person (b) An insane person (c) An Alien (d) A deceased person

b

Z listed the property. When the buyers expressed interest in seeing it, Z disclosed they would have no representation and the buyers agreed in writing. When writing the offer, the buyers asked Z what they should offer. Z responded, "Oh 93% of the listed price would be good." Which most applies? (a) This is limited agency and legal. (b) This is ostensible agency between Z and the buyers. (c) This would be a good suggestion for the agent to make. (d) Z is properly representing the seller and obtaining an offer.

b

Z went to a trust deed foreclosure sale on an investment property that looked like a good deal. There were other investors, but Z won the bid. Which of the following would Z expect to receive. (a) Trust Deed (b) Trustee's Deed (c) Sheriff's Deed (d) Deed of Trust

b

A bulletin board was built into the wall in the kitchen of a personal residence. If a buyer wants it, he should realize that the bulletin board: (a) must be exempted in the listing by the seller. (b) must be listed on the deed. (c) will automatically remain with the property at the time of conveyance since it is real property. (d) must be excluded from the personal property listed in the trust deed.

c

A lessee agreed to pay property tax and hazard insurance as well as rent. This lease is: (a) Gross lease (b) Percentage lease (c) Net lease (d) Proprietary lease

c

At the beginning of each month the lessee gives, and the lessor takes the rent. This best describes: (a) Tenancy by the entirety (b) Tenancy at will (c) Periodic tenancy (d) Joint tenancy

c

G followed the steps of adverse possession, hoping to end up owning the property. Five years into it, he was transferred across the country. H picked up where he left off, completing the requirements to seven years. This is called: (a) Subrogation (b) Severance (c) Tacking (d) Abandonment

c

If a property was worth $233,087 two years ago and it appreciated at the rate of 6% each year, how much is it worth now? (a) $259,633 (b) $263,942 (c) $261,897 (d) $261,057

c

K and N owned homes in the same subdivision, bought the same year and the same size lot and type of floor plan. K found out N's taxes were $480 less. Where would K appeal to get lower taxes? (a) The Division of Real Estate (b) The County Recorder's Office (c) The Board of Equalization (d) The Board of Adjustment

c

Once the appraiser calculates the adjusted prices of all the comparables, the final step for developing a single estimate of market value is called: (a) Gather data and investigage. (b) Highest and best use. (c) Reconciliation. (d) Weighted substitution.

c

The age of an improvement can be discussed from several viewpoints. Which would be considered to be the longest? (a) Effective life (b) Economic life (c) Physical life (d) Service life

c

The agent presented an offer. On the contract, in the space for the buyer's name was written: "An undisclosed buyer." This would be an example of which type of principal? (a) Illegal (b) Undisclosed (c) Partially disclosed (d) Fully disclosed

c

The borrower used a document which gave the trustee power of sale as the security for the loan to buy the home. What document would contain that power: (a) Trustee's Deed (b) Uniform Real Estate Contract (c) Deed of Trust (d) Mortgage

c

The buyers insisted they were not interested in a property that was less than 1.75 acres in size. A house on a property that was 465 feet by 643 feet looked great. How many acres does it have? (a) 5.75 (b) 4.5 (c) 6.86 (d) 7.25

c

The income capitalization approach for valuing real estate depends on each of the following elements EXCEPT: (a) A property that generates a verifiable stream of operating income. (b) Recent sales data on similar properties. (c) Accurate depreciation information. (d) Operating income data for similar properties.

c

The two largest participants in the secondary market, referred to as government sponsored enterprises, that purchase mortgages are known as: (a) Ginnie Mae and Fannie Mae (b) FHA and VA (c) Freddie Mac and Fannie Mae (d) Goldman Sachs and China

c

We refer to an FHA insured loan and a VA ________ loan (a) gifted (b) guaranteed (c) no down payment (d) entitled

c

When a lender confirms a specific loan amount and agrees to the interest rate, this process is referred to as a(n): (a) Disclosure (b) Origination fee (c) Lock (d) Interest insurance

c

When considering income tax issues, Which of the following relates to the phrase: "Two of the last five years"? (a) Interest deduction (b) $550,000 exemption (c) $250,000 exemption (d) Home office deduction

c

Which arrangement may occur in a typical construction loan? (a) The full loan is advanced before construction begins. (b) Funds are given after construction is completed. (c) Funds are paid in installments at various stages of construction. (d) Interest on the total amount of the loan is charged from the beginning.

c

Which best describes the first principle of appraising real property? (a) Conformity (b) Anticipation (c) Highest and best use (d) Neighborhood Cycle

c

Which is true regarding FHA loans? (a) You will get an FHA loan regardless of your credit history. (b) FHA would be used to originate a conventional loan. (c) There are no prepayment penalties. (d) FHA standards require a substantial amount as a down payment.

c

Which statement best describes the purpose of a mortgage document? (a) It spells out the interest rate and all other terms of the loan. (b) It provides legal proof of the various property rights of the borrower. (c) It places a lien on the property allowing the mortgagee to seize the property if the mortgagor fails to honor all obligations spelled out in the mortgage. (d) It allows the mortgagor to seize the personal assets of all mortgagees who sign the document.

c

A builder buys a lot and obtains a loan to build a "spec house." What type of loan would he have? (a) Wraparound (b) Blanket (c) Graduated (d) Construction

d

About 35% of the credit score consists of: (a) The applicant's most recent 6 months of payment behavior. (b) The applicant's mix of trade accounts open. (c) The applicant's attitude toward taking on new debt. (d) How promptly and consistently the applicant pays his/her obligations.

d

An appraisal may be considered complete without which of the following? (a) Property description (b) Signature (c) Date (d) Sales approach

d

An assessor is trying to determine the square footage of a property. He measures: (a) the home, excluding hallways. (b) inside, useable area. (c) the inside rooms including the closets. (d) the outside dimensions.

d

An easement by prescription can best be described as: (a) A right of way created for landlocked property (b) An easement recommended by a doctor for a sick land owner (c) An easement created by eminent domain (d) An adverse use

d

An up-front cost the lender charges to the borrower, usually a percent of the loan amount, that generates profit to the lender and factors in the lender's cost of getting money. (a) Document prep fee (b) Title insurance fee (c) Discount points (d) Origination fee

d

Broker L listed a home that sold for the full price of $325,000. The contract called for a 6.5% commission. How much did Broker L make? (a) $18,500 (b) $20,250 (c) $23,500 (d) $21,125

d

Broker L lists a home and offers subagency through the MLS. Broker S takes a buyer to the house and then writes an offer to purchase. Broker L has never met the buyer. Broker S has never met the seller. Broker S does not have a written contract with the buyer. Which is true? (a) Broker L is the agent of the buyer. (b) Broker S is the agent for the buyer and seller. (c) Broker L is the subagent of the buyer. (d) Both Broker L and Broker S are agents of the seller.

d

If the loan to value ratio is too high, the lender will want mortgage insurance to protect its interest in case of default and foreclosure sale. In almost all cases, what is the number that triggers mortgage insurance being paid? (a) 75% (b) 95% (c) 90% (d) 81%

d

In which of the following situations involving a 1031 would income taxes NOT have to be paid? (a) The exchange of a boat which can be a residence for a single family home. (b) Exchanging a duplex and a car for a triplex (c) The exchange of two properties resulting in one owner owing $5,000 less than before on the property loan. (d) The exchange of a fourplex in the city for a small farm of equal value.

d

M obtained a loan for $80,000 at 9 1/2% interest for thirty years. The payment is $672.68 including principal and interest. How much interest would M pay over the full term of the loan? (a) $228,000.00 (b) $242,266.01 (c) $308,000.00 (d) $162,164.80

d

Mrs. Brown has a contractual obligation to pay Ms. Larsen, her agent, a 6.5% brokerage fee for her services. Title costs are $1,300 and the seller is required to pay an extra $2,600 to cover carpet for the buyer. Assuming these are the only closing costs, what is the minimum selling price of the home if Mrs. Brown wants to net $150,000? (a) $153,900.00 (b) $2,367,692.30 (c) $164,327.80 (d) $164,598.93

d

The appraiser was determing the value of the property based on the cost approach. The outside dimensions of the home were 28' x 40' and the cost was $11.25 per square foot. His estimate of value was: (a) $126,000.00 (b) $1,530.00 (c) $765.00 (d) $12,600.00

d

The buyers made an offer; the sellers accepted it by signing the sales contract. Then the buyers decided they wanted to extend closing a week later. What should the agent do? (a) X out the old date and write in the new date on the contract. Give eveveryone a copy. (b) Get the sellers permission, then notify the buyers of their agreement. (c) Rewrite the contract with the new date and get everyone's signatures. (d) Write an addendum with the new date and have both parties sign.

d

The contract entered into between the principal broker of an office and the sales agents is usually which type of contract? (a) Defeasible (b) Unilateral (c) Qualified (d) Bilateral

d

The non-disturbance clause found in the loan comes into play when and protects whom? (a) loan is paid off: lessee (b) eminent domain: lessor (c) default on lease: owner (d) default on loan: lessee

d

The owner wants to net $40,000 upon selling the property. The commission is 7%, there will be $2,500 in closing costs, plus a $450 fee to the attorney. What does the property need to sell for to get the owner $40,000 net? (a) $215,716 (b) $50,125.00 (c) $200,555 (d) $46,182.80

d

Using the sales comparison method, if a subject property had an extra full bathroom ($6,000) that the comparable property did not, but was on a less desirable lot ($5,000), the proper adjustment would be: (a) Add $11,000 to the comparable property. (b) No adjustment necessary. (c) Add $1,000 to the comparable property. (d) Add $1,000 to the subject property.

d

Using the sales comparison method, the property adjustment for a comparable property that is viewed to be worth $10,000 more because it is newer would be: (a) Add $10,000 to the comparable property. (b) Add $10,000 to the subject property. (c) Subtract $10,000 from the subject property. (d) Subtract $10,000 from the comparable property.

d

What could happen if a property owner does not pay his/her property tax? (a) Nothing. The local taxing authority would be forced to hold out indefinitely until the property owner was able to pay. (b) The property taxes will be paid once the property is sold, and only after when the other liens have been paid. (c) The home could be purchased by a third party who would be responsible first for the taxes due. (d) It may take several years but, the home could be sold at a county auction to recoup the taxes due.

d

What does a VA loan have that an FHA loan does not? (a) No prepayment penalty (b) Discount points (c) A right of reinstatement (d) An LTVR of 100%

d

What is Radioactive, colorless, odorless, tasteless noble gas, occurring naturally in our environment as the decay of radium? (a) None of the above (b) Gas contained in lead paint (c) Natural Gas used (d) RADON

d

When an apartment building is sold, how should the renters' security deposits be handled on the HUD 1 statement? (a) They will be a debit to both since they belong to the renters. (b) They will be a debit to the seller and a notation in the buyer's credit section. (c) They will appear as a debit to the seller and a credit to the buyer. (d) They will not be noted in the settlement statement.

d

When dealing with a land contract, or Uniform Real Estate Contract, which of the following choices is NOT one of the available remedies for default? (a) Treat them as renters and evict them. (b) Hire an attorney to collect the back amounts owed. (c) Use the steps of foreclosure to get them out. (d) Change the locks and hold their belongings as security for back payments owed.

d

When taking a listing, agent J had sellers who insisted their house was worth more than the one down the street for sale, even though both houses were basically the same. J explained that buyers won't pay any more than they have to in order to get what they desire. This is the principle of: (a) Contribution (b) Balance (c) Progression (d) Substitution

d

Which of the following is NOT a true statement about the settlement statement? (a) It will note if monies were paid up front. (b) Buyer total closing cost appear on the back and front of the statement. (c) It is to account for all money involved in the transaction (d) The seller's loan payoff will be a debit to the seller, a credit to the buyer.

d

Which of the following relates to a deed: (a) Lien (b) Tax assessment (c) Personal property (d) Exceptions and reservations

d

Which of these contain only the essential elements of a real estate contract? (a) in writing, consideration, notarization (b) mutual consent, legality, consideration, recordation (c) in writing, capacity, acknowledgment (d) legal purpose, capacity, mutual consent, in writing

d

Who gives the lender the mortgage and note? (a) The mortgagee (b) The trustee (c) The fiduciary (d) The mortgagor

d

You present an offer from a qualified, willing and able minority buyer. The seller refuses to sell because the individual is a minority. You can legally do all the following EXCEPT: (a) Make the buyers aware they could possibly sue the seller. (b) Inform HUD. (c) Tell the owners they are in violation of Fair Housing Laws. (d) Do not show this house to any other minorities.

d