30 hour class part 1

You're assisting Jim, who's selling his South Carolina home. He asks you who's typically responsible for paying the deed recording costs. You tell him __________.

"The seller typically pays this."

South Carolina broker-in-charge Brady is working with a new licensee. What does he tell him about the residential sales contract? "The sales contract from the South Carolina Real Estate Commission must be used in the state."

"While there's not one standard sales contract form in South Carolina, our firm has one we use exclusively."

Tyrell and Barb bought a commercial investment property in 2009 during the real estate market downturn. Through what year will they be able to depreciate the investment?

2048 *Depreciation may be taken for 39 years for commercial non-residential properties.

Traditionally, lenders' qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?

25% to 28% for housing; 33% to 36% for total debt *All lenders have different underwriting standards. Although 25% to 28%, and 33% to 36% are often used, the qualifying mortgage rules set total debt-to-income ratio at no more than 43%. While this may seem generous, it's a hard and fast percentage that allows for little lender discretion.

A house sells for $135,000 and the seller pays Entity Brokerage $8,000 in commission. What is the commission rate?

5.9%

Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What's the total square footage?

850 square feet

Successful investors should treat investing as ______.

A business that requires planning, time, organization, and expertise

Which of the following is the best definition of an income shelter?

A deductible allowance from net income *An income shelter is a deductible allowance from net income.

From a seller's perspective, what represents the best offer?

A full-price offer without a contingency

The NAR Code of Ethics is considered to be ______.

A fundamental guideline for ethical practice

What do you get when you add the purchase price to closing expenses and the cost of any improvements during the time of ownership, then subtract any depreciation taken?

Adjusted basis *This is the definition of adjusted basis

"In this market, I can sell this house in two days!" Michele said to her seller client. What does this type of statement likely represent?

An exaggeration of Michele's ability to sell the property.

What is dynamic risk?

An uninsurable business risk resulting from economic, tax, and market changes *Dynamic risks are those business risks that cannot be lessened with insurance.

Arbitration is ______.

Binding

You're representing a seller. Which of the following is one of your duties?

Getting the seller an acceptable price and terms

Mark is a seller who prepaid his property taxes. What happens to the amount he prepaid and won't benefit from when he sells?

He'll receive a credit at closing.

Pamela is your seller client. Which motivating factor would impact pricing strategy when performing a market analysis for her?

How soon Pamela needs to sell

Carol is performing a market analysis, and is working with three comparable properties to her subject property. How does she account for differences between the subject property and comparables?

If the subject property has a valuable feature lacking in the comparable property, she adds this value to the comparable property's sales price.*Adjustments are made to the comparable property's sales price to account for differences between the comparable and the subject property. Value is added when the feature is missing in the comparable, and deducted when the feature is missing in the subject property.

If you're working with potential buyers who are currently renting, why should you ask when their rental contract is up?

It will help you establish a purchase time frame.

In performing a market analysis for Belinda, Jacqueline made very few adjustments to one of the comparables she selected. This means _______.

It's most similar to Belinda's property

Which of the following is a true statement about price ranges in a given market?

When studying price levels, you should look at how they rise or fall within a given price range, and not merely average sales price.

Which of the following is a useful tool in determining the most ethical course of action?

Follow the Golden Rule.

A call from a buyer who saw your sign in the yard of a recent listing needs to be qualified. What problem situation is possible with these types of buyer calls?

Buyers who call after seeing your sign may already be working with a licensee at your firm. *The possibility of dual agency is high when a buyer simply calls the number on a sign seen on a property of interest.

What is the definition of "before-tax cash flow"?

Cash flow before taking income taxes into account.

Which of the following is a listing agent's duty?

Caution the seller against sharing sensitive information during the listing term.

Investors who maintain strong relationships with local ________ will have a source of information about market trends, such as what cap rates local investors are willing to accept.

Commercial real estate lenders

Properties that are similar to the subject property in terms of financing, conditions of sale, market conditions, location, and physical characteristics are known as what?

Comparables

What do investors call an investment in vacant land?

Dead money

Who in a brokerage firm should know the firm's code of ethics?

Everyone

In South Carolina, how long must completed real estate forms be kept on file with the broker-in-charge?

Five years

Which of these would be considered a submarket within the investment strategy segment?

Fix and flip

You're representing a seller when a buyer contacts you about the listing. Which option is an ethical way to handle the situation?

Let the buyer know about your relationship with the seller and have them both sign a disclosure statement about the relationship.

Because real estate offers __________, investors can sometimes make a 100% return on their investment.

Leveraging opportunities *By leveraging other people's cash, savvy real estate investors may be able to make money without actually using any of their own capital.

Which of the following options describes a loan's beginning balance?

Loan balance before the monthly payment is applie

To compute a monthly principal and interest payment, which of the following pieces of information do you need to know?

Mortgage loan value, annual percentage rate, loan term, and payment frequency

Which option does a South Carolina seller have who's just learned that the property under contract appraised at less than the agreed upon sales price?

Negotiate with the buyer to pay the difference between appraised value and sales price

What's the amount of money you have now called?

Present value *Present value is the term given to money you have today. This represents the value of your dollars today.

Susan must get top dollar for her property. In preparing her market analysis, you find that competing properties are listed at $350,000 and $345,000. What's a good pricing strategy for Susan?

Price it at, or just below $350,000.

Why isn't it appropriate for a buyer's agent to comment on the state of a property's roof and how long it will last?

Real estate agents should leave property condition evaluations to home inspection professionals.

Besides market value, licensees consider other factors when determining a list price range, such as market dynamics, amount of competition, and _______.

Seller motivation

You're performing a market analysis for Kiki. Which factor would require an adjustment to a comparable property?

Square footage differences

Jonathan wants to move to Las Vegas as soon as possible to start a new career as a blackjack dealer. He wants to sell his house immediately. What should you do as his listing agent?

Suggest that he accept a lower offer, even if it means a reduced commission for you. *If sellers are motivated to sell quickly, they may be willing to accept a lower offer. It's your job as agent to put your client's interests above your own.

Which of the following describes economic depreciation?

The asset is worth less because it's deteriorating physically.

A change was made on page three of the South Carolina sales contract. Who must initial this change?

The buyer and seller

What needs to happen for a code of ethics to be effective?

The code needs to be enforced through consequences

Matt's buyer clients wanted to change a part of the sales contract, so Matt crossed out what was there and wrote in the preferred language. What else must happen?

The parties must initial and date the change.

What is capital risk?

The risk that an investor cannot secure financing at an affordable rate *A purchase can be put in jeopardy if an investor cannot secure the financing needed at an affordable rate. This capital risk could make the purchase unattractive or more expensive than first analyzed and no longer a pursuable investment opportunity.

In a seller agency relationship, to which party does the licensee owe undivided loyalty?

The seller

Licensee Randy has a written listing agreement with Brent, a seller. The buyer is Tim. Who is Randy's client?

The seller (Brent)

Carter, a South Carolina homebuyer, just had a property he's thinking of buying inspected. How long does he have to provide the sellers with a repair request?

Two days

After you've made a professional listing presentation and the seller has declined to use you as a listing agent, what's the best practice?

You should accept the outcome either way.