Exam #1 REI

Suppose you borrow $120,000 at 10% interest per year and promise to repay the loan as an ordinary annuity with monthly payments over the next 30 years. What is your monthly payment (round to the nearest dollar)? Hint: use the PMT function as seen on this video at about the 40-second mark: a. $1,053 b. $994 c. $1,289 d. $12,000

a. $1,053

Use these inputs: Amount borrows: $200,000 Periods: 360 Rate: .08/12 to create an amortization table as seen in this video: You should get a monthly payment of $1,467.53. How much total principal is repaid over the life of the loan (i.e. sum the column with the amount of principal in each payment)? a. $200,000 b. $328,310.49 c. $528,310.49 d. $183,486.53

a. $200,000

1. Use these inputs: Amount borrows: $200,000 Periods: 360 Rate: .08/12 to create an amortization table as seen in this video: You should get a monthly payment of $1,467.53. How much total interest is repaid over the life of the loan (i.e. sum the column with the amount of interest in each payment)? a. $328,310.49 b. $528,310.49 c. $200,000 d. $183,486.53

a. $328,310.49

In exactly one year, you expect to receive a payment of $1 million. That annual interest rate is 5%. What is the present value of the future payment (rounded to the nearest dollar)? a. $952,381 b. $995,025 c. $666,667 d. $1,050,000

a. $952,381

What are some reasons that home sellers should consider using a real estate agent, according to Denise Akason ("Do Most People Need a Broker When Selling Their Home?" March 2019, Wall Street Journal). Select all that apply. a. Agents can spend their time staging and marketing the house, showing the property, and negotiating sales, all of which can be a susbatial burden for the home seller who may have a full-time job already. b. Studies have shown that using a real estate agent does not lead to higher sale prices. c. There are cheap online alternatives to brokers which charge 1% listing fees in many markets, which are several percentage points lower than most traditional brokers. d. Agents can use their professional experience to gauge local market conditions and price homes more accurately than automated valuation estimation tools.

a. Agents can spend their time staging and marketing the house, showing the property, and negotiating sales, all of which can be a susbatial burden for the home seller who may have a full-time job already. d. Agents can use their professional experience to gauge local market conditions and price homes more accurately than automated valuation estimation tools.

Which of the following could make direct investment in commercial real estate more attractive compared to more traditional investments such as stocks and bonds? Select all that apply. a. Commercial real estate tends to have income and asset prices that are not highly correlated with the stock market, which helps the investor diversify. b. Direct investment in commercial real estate takes a great deal of time and attention to manage during ownership. c. Commercial real estate tends to be more highly regulated and has more complicated tax consequences for investors. d. Stable periodic income in addition to the income from selling the asset.

a. Commercial real estate tends to have income and asset prices that are not highly correlated with the stock market, which helps the investor diversify. d. Stable periodic income in addition to the income from selling the asset.

What is dual agency, and is it legal in the U.S.? a. Dual agency is when a listing agent keeps the full commission because they're representing both the seller and the buyer. It is legal in some states in the U.S. b. Dual agency is when a listing agent keeps the full commission because they're representing both the seller and the buyer. It is illegal in all U.S. states. c. Dual agency is when the managing broker is also working as the listing broker. It is illegal in all U.S. states. d. Dual agency is when the managing broker is also working as the listing broker. It is legal in some states in the U.S.

a. Dual agency is when a listing agent keeps the full commission because they're representing both the seller and the buyer. It is legal in some states in the U.S.

Suppose you are offered two different investments: You can invest $1,000 and earn 10% interest over the next five years. You'll be repaid the future value of $1,000 in five years at 10%. The only difference between the two investments is that one pays compound interest while the other pays simple interest. Which investment would you prefer and why? a. I would prefer the compound interest investment, because it will have a higher payout at the end of five years. b. I am indifferent between the two options because they both offer the same payout at the end of five years. c. I would prefer the simple interest investment, because it will have a higher payout at the end of five years. d. There is not enough information to choose.

a. I would prefer the compound interest investment, because it will have a higher payout at the end of five years.

Which if the following is/are correct? Select all that apply. a. Indirect investment in commercial real estate is when investors become owners by purchasing various market securities such as Real Estate Investment Trusts (REITs). b. Indirect investment in commercial real estate is when investors hire property managers to oversee the commercial real estate properties the investors own. c. Direct investment in commercial real estate is when investors buy various securities such as Real Estate Investment Trusts (REITs) directly from the issuer instead of going through a broker. d. Direct investment in commercial real estate is when investors become landlords through ownership of the physical property.

a. Indirect investment in commercial real estate is when investors become owners by purchasing various market securities such as Real Estate Investment Trusts (REITs). d. Direct investment in commercial real estate is when investors become landlords through ownership of the physical property.

Use these inputs: Amount borrows: $200,000 Periods: 360 Rate: .08/12 to create an amortization table as seen in this video: a. Interest: $9.72, Principal: $1,457.81 b. Interest: $1,329.72, Principal: $137.81 c. Interest: $1,467.53, Principal: $0 d. Interest: $0, Principal: $1,467.53

a. Interest: $9.72, Principal: $1,457.81

Which of the following are actual types of listing agreements? Select all that apply. a. Open listing agreement b. Closed listing agreement c. Exclusive right to sell d. Net listing agreement

a. Open listing agreement c. Exclusive right to sell d. Net listing agreement

According the article "Tearing down the house - Technology is poised to upend America's property market" from The Economist that is posted in Module 5, what are some reasons that real estate brokerage commissions have remained high in the U.S. while they have fallen in most other countries? a. Prior to 2008, the MLS (multiple listing service) allowed brokers to prevent MLS-listed homes from appearing on other online platforms, which would steer buyers to the MLS service in order to see all homes available to buy. b. The industry convention where sellers pay the commission, which causes brokers to steer buyers away from properties with lower commissions. c. Homes are similar assets, which means the home selling market is ripe for automation - i.e. autonomous models than can price homes more accurately than brokers, which will eventually cut brokers out as middlemen. d. "Network effects" of the MLS (multiple listing service) used in the U.S. - i.e. most homes are listed on the MLS, so home sellers want to use it since that is where home buyers will go to look for homes to buy.

a. Prior to 2008, the MLS (multiple listing service) allowed brokers to prevent MLS-listed homes from appearing on other online platforms, which would steer buyers to the MLS service in order to see all homes available to buy. b. The industry convention where sellers pay the commission, which causes brokers to steer buyers away from properties with lower commissions. d. "Network effects" of the MLS (multiple listing service) used in the U.S. - i.e. most homes are listed on the MLS, so home sellers want to use it since that is where home buyers will go to look for homes to buy.

Which of the following best describes a listing agent? a. Professionals who help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures. b. A person who oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person sometimes also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. c. A real estate professional has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents. d. Professionals who represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

a. Professionals who help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.

Pick the professional below that best fits the following description: Someone who has completed education beyond his or her state's minimum number of pre-licensing hours, has passed an exam to acquire a professional license to help people buy, sell, or rent all sorts of housing and real estate, and has passed an additional licensing exam that assesses more in-depth knowledge of ethics, contracts, taxes, and insurance. a. Real estate broker b. Realtor c. Rental agent d. Real estate agent

a. Real estate broker

Which of the following correctly describes a double-net (NN) lease? a. The tenant is responsible for paying property taxes and insurance in addition to rent. b. The tenant pays only rent, and the landlord pays for the building's property taxes, insurance, and maintenance. c. The tenant is responsible for paying property taxes in addition to rent. d. The tenant is responsible for paying property taxes, insurance, and maintenance in addition to rent.

a. The tenant is responsible for paying property taxes and insurance in addition to rent.

True or False: The primary difference between commercial and residential real estate is that commercial real estate properties are used for business purposes, while residential real estate is used for living space. a. True b. False

a. True

True or false: At 5-6%, real estate brokerage commission in the U.S. are among the highest in the developed world. a. True b. False

a. True

True or false: If you are working with a real estate agent to buy house and your contract doesn't specify that it is strictly a buyer's agent agreement, you should assume that the agent will be a seller's representative — not yours. a. True b. False

a. True

True or false: Triple net leases tend to have a lower rent charge because the tenant assumes more of the ongoing expenses for the property. a. True b. False

a. True

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics (Links to an external site.)), what is the difference between pre- qualification and pre-approval? a. With pre-qualification, the lender collects basic information and provides the mortgage amount for which you may qualify. With pre-approval, the lender collects your income documentation, runs a credit report, and tells whether you qualify for a mortgage and the maximum amount you can borrow and your interest rate options. b. Pre-approval means you have been approved for a government-guaranteed loan, while pre-qualification means you are qualified for a standard mortgage. c. Pre-qualification means you qualify for a government-guaranteed loan, while pre-approval means you are approved for a standard mortgage. d. With pre-approval, the lender collects basic information and provides the mortgage amount for which you may qualify. With pre-qualification, the lender collects your income documentation, runs a credit report, and tells whether you qualify for a mortgage and the maximum amount you can borrow and your interest rate options.

a. With pre-qualification, the lender collects basic information and provides the mortgage amount for which you may qualify. With pre-approval, the lender collects your income documentation, runs a credit report, and tells whether you qualify for a mortgage and the maximum amount you can borrow and your interest rate options.

Assume you invest money in a bond that will pay you $250,000 in four years. The bond has an annual interest rate of 5%. You do not receive interest payments while you own the bond; it is zero-coupon. In other words, there are only two cash flows: The price you pay today and the $250,000 you will receive in four years. What is price must you pay today in order to earn 5%. (i.e. What is the bond's present value)? Round to the nearest dollar. a. $303,877 b. $205,676 c. $240,385 d. $238,095

b. $205,676

1. Use these inputs: Amount borrows: $200,000 Periods: 360 Rate: .08/12 to create an amortization table as seen in this video: You should get a monthly payment of $1,467.53. What is the total number of dollars repaid over the life of the loan (i.e. sum the column with the the total monthly payment)? a. $183,486.53 b. $528,310.49 c. $200,000 d. $328,310.49

b. $528,310.49

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics (Links to an external site.)), what is an escrow account? a. An account you must open before qualifying for an FHA loan. b. An account that receives a portion of your monthly payment, which will be used to pay your annual property taxes and insurance on the property. c. An account that the interest portion amount of your mortgage payment goes into to return to the lender. d. An account that the principal portion of your mortgage payment goes into to return to the lender.

b. An account that receives a portion of your monthly payment, which will be used to pay your annual property taxes and insurance on the property.

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics (Links to an external site.)), what is the difference between and adjustable-rate mortgage and a fixed-rate mortgage? a. An adjustable-rate mortgage has payments that are fixed even though the interest rate changes over time, while a fixed-rate mortgage has payments that change because the interest rate on the loan is "fixed" to the changing market interest rates (i.e. the rate on the loan follows changes in market rates).. b. An adjustable-rate mortgage has payments that change as interest rates change, while a fixed-rate mortgage has payments that are fixed over the life of the loan because the interest rate is fixed. c. An adjustable rate mortgage is one that is not guaranteed by the government, while a fixed-rate mortgage is guaranteed by the government. d. An adjustable-rate mortgage is hwt you can get if you pre-qualify for a mortgage, while a fixed-rate mortgage is what you get if you are pre-approved for a mortgage

b. An adjustable-rate mortgage has payments that change as interest rates change, while a fixed-rate mortgage has payments that are fixed over the life of the loan because the interest rate is fixed.

Suppose a direct investor in commercial real estate purchases and apartment building in a growing city. Which of the following are reasons that the investor may be able to sell the property in five years for a higher price than she paid? Select all that apply. a. The investor reduced overhead costs by cutting maintenance staff and keeping appliances, carpet, etc. in the apartment longer, which increased the net profit over the five-year period and made the cash flows look more attractive for the next owner. b. Economic growth in the city increased property values as new renters and entertainment venues moved into the area. c. Commercial real estate prices tend to be "sticky" over time (tha is, prices tend to not rise or fall, but rather stay the same), so it is unlikely that the investor will be able to sell at a higher price in five years even if she makes improvements to the property. d. The investor renovates each apartment as tenants leave, adding newer and higher quality appliances, fixtures, carpet, etc. and is able to charge higher rent for the renovated apartments.

b. Economic growth in the city increased property values as new renters and entertainment venues moved into the area. d. The investor renovates each apartment as tenants leave, adding newer and higher quality appliances, fixtures, carpet, etc. and is able to charge higher rent for the renovated apartments.

In states where dual agency is legal, state ethics guidelines can prevent any potential conflict of interest. a. True b. False

b. False

True or False: For most commercial real estate investments, the highest returns come from property appreciation when it is sold rather than from collecting rent from tenants. a. True b. False

b. False

True or false: a gross lease is the least risky type of lease from the landlord's perspective because the lease amount is fixed over the leases's term. a. True b. False

b. False

Which of the following are NOT likely to be responsibilities for a commercial property manager? a. Screening tenants b. Identifying and screening properties for the investor to purchase c. Managing the properties budget d. Property maintenance

b. Identifying and screening properties for the investor to purchase

Which of the following statements are true? Select all that apply. Use the "Mortgage Basics" reading assignment at https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics. a. The more points a mortgage has, the lower the effective borrowing cost of the loan. b. On a mortgage, one point is equal to one percent of the total principal amount of your mortgage. For example, if your mortgage amount is going to be $125,000, then one point would equal $1,250 (or 1% of the amount financed). c. Lenders frequently charge points to cover loan closing costs—and the points are usually collected at the loan closing and may be paid by the borrower (homebuyer) or home seller, or may be split between the buyer and seller. d. When selecting a mortgage, it's important to ask about the interest rate, APR, closing costs and points as these can all vary by lender.

b. On a mortgage, one point is equal to one percent of the total principal amount of your mortgage. For example, if your mortgage amount is going to be $125,000, then one point would equal $1,250 (or 1% of the amount financed). c. Lenders frequently charge points to cover loan closing costs—and the points are usually collected at the loan closing and may be paid by the borrower (homebuyer) or home seller, or may be split between the buyer and seller. d. When selecting a mortgage, it's important to ask about the interest rate, APR, closing costs and points as these can all vary by lender.

A security offers to pay the holder $1000 at the end of every month for five years. What type of annuity is this? a. Annuity due b. Ordinary annuity c. Regular annuity d. Perpetuity

b. Ordinary annuity

Which of the following best describes a buyer's agent? a. A real estate professional has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents. b. Professionals who represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues). c. A person who oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person sometimes also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. d. Professionals who help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures.

b. Professionals who represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

Who usually pays the commission when a home is bought/sold, which is usually 6% in the U.S.? a. The local Association of Realtor® that the agents belong to. b. The home seller c. The home buyer d. It is most often split between the seller and buyer

b. The home seller

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics (Links to an external site.)), what is something you should keep in mind when considering an adjustable-rate mortgage? a. Typically these loans have lower down payment requirements and less restrictive qualifying guidelines, but they do require you to meet certain criteria. b. The loan may have an initial lower rate, but it will adjust at pre-determined periods and may go up - which will cause the payment to go up c. Typically these loans provide you with a stable and predictable monthly payment. d. Typically these loans are a good choice if interest rates are low and/or you plan to remain in the home for a long time

b. The loan may have an initial lower rate, but it will adjust at pre-determined periods and may go up - which will cause the payment to go up

Which of the following correctly describes a single-net lease? a. The tenant is responsible for paying property taxes and insurance in addition to rent. b. The tenant is responsible for paying property taxes in addition to rent. c. The tenant is responsible for paying property taxes, insurance, and maintenance in addition to rent. d. The tenant pays only rent, and the landlord pays for the building's property taxes, insurance, and maintenance.

b. The tenant is responsible for paying property taxes in addition to rent.

Which of the following correctly describes a gross lease? a. The tenant is responsible for paying property taxes, insurance, and maintenance in addition to rent. b. The tenant pays only rent, and the landlord pays for the building's property taxes, insurance, and maintenance. c. The tenant is responsible for paying property taxes and insurance in addition to rent. d. The tenant is responsible for paying property taxes in addition to rent.

b. The tenant pays only rent, and the landlord pays for the building's property taxes, insurance, and maintenance.

Which of the following best describes a net listing agreement? a. In this agreement, you still hire a listing agent, but if you are the one who ends up finding the buyer, you get to keep the commission. b. This agreement is when a listing agent guarantees to sell your house for a certain set price, and if they sell the house for a higher amount, they pocket the difference as their commission. c. This is the most common type of listing agreement. It says that the listing agent has the exclusive right to earn the commission if they bring the buyer (either directly or via another agent). It's an exclusive contract with your real estate agent that prevents you from working with another agent during the term. d. This agreement does not include a formal contract and allows local buyers' agents to market the listing in hopes of earning the 3 percent buyer's agent commission. It is not a formal contract.

b. This agreement is when a listing agent guarantees to sell your house for a certain set price, and if they sell the house for a higher amount, they pocket the difference as their commission.

Which of the following best describes a principal/designated/managing broker? a. A real estate professional has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents. b. Professionals who help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures. c. A person who oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person sometimes also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. d. Professionals who represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues).

c. A person who oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person sometimes also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff.

Which of the following are advantages of working with an exclusive buyer's agent when buying a home? Select all that apply. a. Actively negotiate price and terms strictly on behalf of the buyer and seller b. Can reduce total amount of commission paid, since the seller's agent will only collect half of the commission. c. Actively negotiate price and terms strictly on behalf of the buyer d. Act as an advocate for the buyer during the entire homebuying process

c. Actively negotiate price and terms strictly on behalf of the buyer d. Act as an advocate for the buyer during the entire homebuying process

1. Which of the following is correct about commercial real estate leases as compared to residential real estate leases? a. Commercial leases tend to be for shorter terms (six-month or month-to-month instead of annual), are quoted in annual rental dollars per square foot, and tend to have higher refurbishing costs when tenants turn over. b. Commercial leases tend to be for shorter terms (six-month or month-to-month instead of annual), are quoted as an annual sum instead of monthly rental costs, and tend to have higher refurbishing costs when tenants turn over. c. Commercial leases tend to be for longer terms (5-10 years instead of annual or month-to-month), are quoted in annual rental dollars per square foot, and tend to have higher refurbishing costs when tenants turn over. d. Commercial leases tend to be for longer terms, are quoted in annual rental dollars per square foot, and tend to have lower refurbishing costs when tenants turn over.

c. Commercial leases tend to be for longer terms (5-10 years instead of annual or month-to-month), are quoted in annual rental dollars per square foot, and tend to have higher refurbishing costs when tenants turn over.

Which of the following best describes an exclusive agency listing agreement? a. This agreement does not include a formal contract and allows local buyers' agents to market the listing in hopes of earning the 3 percent buyer's agent commission. It is not a formal contract. b. This is the most common type of listing agreement. It says that the listing agent has the exclusive right to earn the commission if they bring the buyer (either directly or via another agent). It's an exclusive contract with your real estate agent that prevents you from working with another agent during the term. c. In this agreement, you still hire a listing agent, but if you are the one who ends up finding the buyer, you get to keep the commission. d. This agreement is when a listing agent guarantees to sell your house for a certain set price, and if they sell the house for a higher amount, they pocket the difference as their commission.

c. In this agreement, you still hire a listing agent, but if you are the one who ends up finding the buyer, you get to keep the commission.

Which of the following lists correctly shows the four classes of commercial property shown in the module's reading? a. Office, medical, multifamily, and retail b. Residential, medical, multifamily, and retail c. Office, industrial, multifamily, and retail d. Office, industrial, medical, and retail

c. Office, industrial, multifamily, and retail

Pick the professional below that best fits the following description: Someone who has completed his or her state's minimum number of pre-licensing hours and passed an exam to acquire a professional license to help people buy, sell, or rent all sorts of housing and real estate. a. Realtor b. Rental agent c. Real estate agent d. Real estate broker

c. Real estate agent

Pick the professional below that best fits the following description: A licensed agent who is a member of the National Association of Realtors®. a. Rental agent b. Real estate broker c. Realtor d. Real estate agent

c. Realtor

From the perspective of the landlord (i.e. the property owner), which of the following correctly lists the net lease types from the most risky to the least risky in terms of mitigating property management costs (tax rate changes, unexpected building maintenance/repairs, changes in insurance costs, etc.)? a. Double-net lease, gross lease, triple-net lease. b. Triple-net lease, double-net lease, gross lease. c. Single-net lease, double-net lease, triple-net lease. d. Triple-net lease, double-net lease, single-net lease.

c. Single-net lease, double-net lease, triple-net lease.

How does a home get listed on the MLS (multiple listing service)? a. When potential home buyers express interest in the listing, the buyer's agent will post the listing in the MLS. b. The home seller lists the home on a specialized website such as Zillow or Trulia, which then shares the information with the local MLS. c. The home seller engages a real estate agent who is member of the local MLS, who enters the home's details into the MLS. d. The home seller lists the home for sale on the internet, and the MLS autonomously scans the internet for newly listed homes, notices the new listing, and enters the home details into the MLS.

c. The home seller engages a real estate agent who is member of the local MLS, who enters the home's details into the MLS.

What are some reasons that home sellers should consider NOT using a real estate agent, according to Jeffrey A. DiBartolomeo ("Do Most People Need a Broker When Selling Their Home?" March 2019, Wall Street Journal). Select all that apply. a. Some research has shown that for sale by owner (FSBO) properties sell for higher prices than broker-marketed homes. b. Brokers can use their professional experience to better market a home - e.g. to describe the desirable qualities better than the homeowner. c. There is no conclusive evidence that brokers add value by delivering higher sales prices for the home they list when compared to homes sold by owners. d. Eliminating the broker could save the seller the 4% commission, which is almost $7,500 on average in the U.S.

c. There is no conclusive evidence that brokers add value by delivering higher sales prices for the home they list when compared to homes sold by owners. d. Eliminating the broker could save the seller the 4% commission, which is almost $7,500 on average in the U.S.

Which of the following are true with respect to triple-net leases? Select all that apply. a. Triple net leases tend to have higher rent charge because the landlord assumes more of the ongoing expenses for the property. b. With a triple net lease, the tenant agrees to pay the property expenses such as real estate taxes, building insurance, and maintenance in addition to rent. The landlord agrees to pay the utilities. c. Triple net leased properties are popular investment vehicles for investors because they provide low-risk steady income. d. With a triple net lease, the tenant agrees to pay the property expenses such as real estate taxes, building insurance, and maintenance in addition to rent and utilities.

c. Triple net leased properties are popular investment vehicles for investors because they provide low-risk steady income. d. With a triple net lease, the tenant agrees to pay the property expenses such as real estate taxes, building insurance, and maintenance in addition to rent and utilities.

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics (Links to an external site.)), what is a mortgage? a. When your lender gives you an estimate of how much you may be able to borrow to purchase a home. b. When the lender takes possession of the property if you fail to make the promised loan payments. c. Type of loan that is secured by real estate (i.e., the home you purchase), where "secured" means the lender can take possession of the property if you fail to make the promised loan payments. d. When a small amount of your monthly payment goes into an account, which will be used to pay your annual property taxes and insurance on the property.

c. Type of loan that is secured by real estate (i.e., the home you purchase), where "secured" means the lender can take possession of the property if you fail to make the promised loan payments.

What is a pocket listing? a. When a buyer's agent does not inform the seller's agent that they are interested in the home. b. When a seller's agent lists the home on the MLS, but excludes the address, often for privacy reasons. c. When a seller's agent does not enter the home on the MLS, often for privacy reasons. d. When the seller's agent secretly refuses to show the home to buyers who have their own agents in an effort to keep from splitting the commission.

c. When a seller's agent does not enter the home on the MLS, often for privacy reasons.

What is the future value in 30 years of $100,000 invested today in a savings account earning a 1% compound interest rate every year (rounded up to the nearest dollar)? a. $30,000 b. $130,000 c. $131,652 d. $134,785

d. $134,785

What is the future value of $50 in two years if the interest rate is 4% per year? Assume it is compound interest unless the problem specifically says "simple interest". a. $46.23 b. $62.12 c. $58.61 d. $54.08

d. $54.08

Suppose you expect to receive $1,000 in two years. If your bank will lend money at 5% interest per year, how much can you borrow today and just be able to repay the loan with the $1,000 you will receive in two years (i.e. What is the present value of the $1,000)? Assume it is compound interest unless the problem specifically says "simple interest". a. $1,102.50 b. $953.73 c. $983.68 d. $907.03

d. $907.03

Which of the following best describes an associate broker? a. A person who oversees all licensed real estate agents at the firm and ensures that agents are operating in compliance with state and national real estate law. This person sometimes also oversees the day-to-day operation and transactions of the office and typically takes a hands-on approach to hiring agents, training new agents, and managing administrative staff. b. Professionals who help clients who are selling with a wide range of tasks, including pricing their home, recommending home improvements or staging, marketing their home, holding open houses, coordinating showings with home buyers, negotiating with buyers, and overseeing the home inspection process and closing procedures. c. represent home buyers and assist their clients through every step of the home-buying process, including finding the right home, negotiating an offer, recommending other professionals (e.g., mortgage brokers, real estate attorneys, settlement companies), and troubleshooting problems (e.g., home inspection or appraisal issues). d. A real estate professional has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents.

d. A real estate professional has a broker's license but is working under a managing broker. This person typically is not responsible for supervising other agents.

How id office space categorized? a. Class A, B, and C; where class C is the best in terms of aesthetics, age, quality of infrastructure and location; B are usually older and not as expensive; and A are usually the oldest, located in less attractive areas, and in need of maintenance. b. Medical, retail, traditional office, and contemporary office c. Medical, retail, industrial, and multifamily d. Class A, B, and C; where class A is the best in terms of aesthetics, age, quality of infrastructure and location; B are usually older and not as expensive; and C are usually the oldest, located in less attractive areas, and in need of maintenance.

d. Class A, B, and C; where class A is the best in terms of aesthetics, age, quality of infrastructure and location; B are usually older and not as expensive; and C are usually the oldest, located in less attractive areas, and in need of maintenance.

Use these inputs: Amount borrows: $200,000 Periods: 360 Rate: .08/12 to create an amortization table as seen in this video: You should get a monthly payment of $1,467.53. How much of the first payment is interest and how much is principal? a. Interest: $134.20, Principal: $1,333.33 b. Interest: $1,467.53, Principal: $0 c. Interest: $1,329.72, Principal: $137.81 d. Interest: $1,333.33, Principal: $134.20

d. Interest: $1,333.33, Principal: $134.20

According to the "Mortgage Basics" reading assignment (https://www.knowyouroptions.com/buy-overview/buying-process/qualify-for-a-mortgage/mortgage-basics(Links to an external site), what is an APR (annual percentage rate) as reported on a mortgage in the U.S.? a. The APR is the average annual rate expected over the life of an adjustable rate mortgage, but does not include fees like closing costs, origination fees, etc.). b. The APR is the annual interest rate of the loan including only simple interest, but excluding fees like closing costs, origination fees, etc.). c. The APR is the effective monthly interest rate of the loan converted to an annual rate, including compound interest. d. The APR is the total annual cost of borrowing, including the interest rate of the loan as well as other fees that will be included over the life of the loan (closing costs, fees, etc.).

d. The APR is the total annual cost of borrowing, including the interest rate of the loan as well as other fees that will be included over the life of the loan (closing costs, fees, etc.).

Which of the following correctly describes a triple-net (NNN) lease? a. The tenant is responsible for paying property taxes. b. The tenant pays only rent, and the landlord pays for the building's property taxes, insurance, and maintenance. c. The tenant is responsible for paying property taxes and insurance. d. The tenant is responsible for paying property taxes, insurance, and maintenance.

d. The tenant is responsible for paying property taxes, insurance, and maintenance.

Which of the following best describes an open listing agreement? a. This is the most common type of listing agreement. It says that the listing agent has the exclusive right to earn the commission if they bring the buyer (either directly or via another agent). It's an exclusive contract with your real estate agent that prevents you from working with another agent during the term. b. This agreement is when a listing agent guarantees to sell your house for a certain set price, and if they sell the house for a higher amount, they pocket the difference as their commission. c. In this agreement, you still hire a listing agent, but if you are the one who ends up finding the buyer, you get to keep the commission. d. This agreement does not include a formal contract and allows local buyers' agents to market the listing in hopes of earning the 3 percent buyer's agent commission. It is not a formal contract.

d. This agreement does not include a formal contract and allows local buyers' agents to market the listing in hopes of earning the 3 percent buyer's agent commission. It is not a formal contract.

Which of the following best describes an exclusive right to sell listing agreement? a. In this agreement, you still hire a listing agent, but if you are the one who ends up finding the buyer, you get to keep the commission. b. This agreement is when a listing agent guarantees to sell your house for a certain set price, and if they sell the house for a higher amount, they pocket the difference as their commission. c. This agreement does not include a formal contract and allows local buyers' agents to market the listing in hopes of earning the 3 percent buyer's agent commission. It is not a formal contract. d. This is the most common type of listing agreement. It says that the listing agent has the exclusive right to earn the commission if they bring the buyer (either directly or via another agent). It's an exclusive contract with your real estate agent that prevents you from working with another agent during the term.

d. This is the most common type of listing agreement. It says that the listing agent has the exclusive right to earn the commission if they bring the buyer (either directly or via another agent). It's an exclusive contract with your real estate agent that prevents you from working with another agent during the term.