DIFFICULT STATE TEST QUESTIONS

The primary purpose of ..........*RECORDING*.......... a *valid* deed is to:

give the ..... *PUBLIC* ..... constructive notice.

An investor may *defer the payment of capital gains* if:

he *exchanges like-kind property with no boot.*

A settlement sheet indicated the following information: 7% commission to the broker; seller's mortgage payoff--$66,572.76; taxes not yet paid---$1,385; transfer tax---$310.24; deed preparation---$85; cash to the seller at closing---$117,647. The sale price of the property was:

*$200,000. NEED FORMULA*

A *general warranty deed* would *most likely* include all of the following covenants *except*:

*EXCEPT*.....covenant of *restricted ownership*.

The mayor rented an entertainment hall from April 30 thru May 3. What type of leasehold estate does she have?

*Estate at will* ....indefinite time.

What is the purchaser's monthly PMI payment on an $80,000 home if the purchaser puts $8,000 down and finances the balance with a conventional loan?

*Formula:* $80,000 - $8,000 = $72,000 x .0025 = 180 / 12 = $15.00 *why is the PMI set up as .0025 and without it being in the wording ?*

Will the death of a tenant terminate a *tenancy for years*?

*No*, the,..... *tenancy for years*..... is considered personal property and *passes to the tenant's heirs.*

Which of the following is generally income tax deductible in *home* ownership?

*Points paid to obtain the loan.*

The sale of property is to be closed on September 15. Current real estate taxes of $1,800 have been paid. Prorate accordingly using 360 days in a year and 30 days in a month, seller to pay for the day of closing. At the closing on September 15, which of the following is *correct*?

*TAX PRO-RATION FORMULA*: $1,800 / 360 days = $5 per day x days left in year based on 360 days per year is 105 = $525. answer is: *Credit seller* $525; *Debit buyer* $525.

A property manager would most likely use a *standard residential lease form* regulated by the:

*Uniform Residential Landlord Tenant Act.*

A father is leasing an apartment and *sharing it with his adult son*. The lease has an expiration date of June 30th. *The father dies* in March and the *lessor is requiring the son to pay the balance of the rent*. Is the lessor's action correct?

*Yes*, death of the lessee does not automatically terminate the lease.

In Georgia, *association management agreements* must contain which of the following?

*an expiration date.*

In Georgia, a landlord must give the tenant 60 days notice before terminating a tenancy:

*at will*

The *net operating income* of a property *minus the debt service* equals the *investor's*:

*before-tax cash flow.*

A *buyer* purchased a property for $175,000. The *seller paid a 6% commission*. The *buyer* had a 20% down payment and had to pay a 1% origination fee, $450 for the title search and insurance, $50 for the credit report, $200 for the appraisal, and $125 for the survey. In this situation, the:

*buyer* would pay $1,400 in origination fees and secure a loan for $140,000.

When a *buyer* records a deed to a property, the *buyer* is giving:

*constructive notice.*

Which of the following covenants are *not* found in a *general warranty deed*?

*covenant, conditions, and restrictions*.

The *tax deduction* that allows an investor to *recover the cost* of an income-producing property in a *trade or business* is called:

*depreciation.*

A *property manager* is considered a:

*general agent* of the owner.

A *commercial lease* in which the lessee pays a fixed amount of rent plus *all* of the expenses is called a:

*net lease*.

In the sale of a 60 year old house, the seller is unable to provide written proof of title because the courthouse records were destroyed by fire. The seller could establish ownership and perfect the title through:

*prescriptive color of title.*

A *deed of reconveyance* is used to *transfer*:

*the title from the trustee to trustor.*

Closing is September 20. How many days of interest on a new loan must the purchaser prepay at closing?

11 ......*buyer has to pay back difference for remainder of month that the seller has already paid.*

A co-owner of a property, *held in joint tenancy*, conveyed his interest to a buyer by *general warranty deed* signed only by the co-owner. Which of the following statements is *true* regarding this transaction?

It is TRUE that,.....The rights of the other co-owners were not transferred by the general warranty deed.

Which of the following is a *tax deduction for the investor* but *NOT* the homeowner?

Purchase of *hazard insurance.*

To qualify as a *tax-deferred exchange,* a property must be:

held for productive use *in a trade or business.*

A person bought property from a seller and received a *general warranty deed*. Two years later, the seller's brother came forth and claimed he had an ownership interest in the property. The brother stated he knew the court would uphold his interest. In a *general warranty deed*, the *buyer* is protected from this situation by the *covenant*:

of *seisen*, which gives *guarantee of ownership*.

Under *Section 1031 of the Internal Revenue Code* *real estate *investors can defer taxation of capital gains by:

the *exchange of like kind properties.*

The primary purpose of a deed is to:

transfer the title from the *grantor to grantee*.