Real Estate National Exam

Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.

$100,000

Sandra retired from a career in the Navy and is ready to buy her first home, a small bungalow in a quiet neighborhood, for $169,900. Her military service gives her the benefit of Veterans Affairs (VA) loan. What's her required down payment?

$0

Dale is purchasing a property that has an assessed value of $35,190. If the tax rate is 5%, what will he likely pay annually in property taxes?

$1,759.50

Seller Adelaide and buyer Colin close on a transaction for two rental condos on March 15. They live in a state where the seller is considered the owner of the property on the day of closing. The combined rental income per month is $4,000. How much rental income can Colin expect to earn in March?

$2,064.48

Whitney and Justin are about to close on their refinance, and their loan amount is $362,000. They are paying a 1.5% origination fee. How much will their origination fee be?

$5,430

Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing?

$842.74

You're working with buyers who are pre-approved for a loan of his much is $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go towards interest?

$875

Alan and Kay want to build a 5000 square-foot ranch style home on 2 acres of land they just bought. Once the house is built, how many acres of undeveloped land will remain

1.89 acres

if a property's income value is $200,000, and it's earning a net operating income of $40,000, what would the cap rate be?

20%

A property is 330 feet long by 100 feet wide. How many square feet is the property?

33,000

The town planning and zoning board is considering some new zoning regulations to ensure that one of the neighborhoods maintains its designation on the national register of historic places. What type of zoning are they likely to an act?

Aesthetic zoning

select the statement that accurately reflects the type of deed used for the transfer

A deed of trust conveys real estate to a trustee for the beneficiary named in the deed.

Which of these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint.

which of these is an example of usury

A lender charges a borrower an interest rate that is excessively high.

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

which of these statements about the size of a section of land is NOT true?

A section is 43,560 square feet.

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

The element of a deed that signifies the granters intention to transfer title to the grantee is the

Act of conveyance

which if the following is more likely to act as a closing agent?

An attorney or title company representative

Through the divorce process, Gail was granted ownership of the couple's vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband Daniel's name is still on the deed, creating a cloud on the title. What should Gail do?

Ask Daniel to sign a quitclaim deed to release his ownership share

which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan

Buydown

Sam was putting up a basketball hoop by his driveway when one of the officers of the homeowners association walked by. " i'm so sorry," she said, " but you'll have to take that down. Basketball hoops and direct view of the street are prohibited" what was in place in Sam's subdivision that would prohibit this?

CC&Rs

Why did the implementation of TRID impact closing dates?

Certain financing changes may trigger a new three-day waiting period.

State usury laws are typically not applicable to what type of lending?

Credit Cards Credit cards, retail installment contracts, and consumer leases are typically exempt from usury laws.

Private mortgage insurance protects the lender in case the borrower takes which of the following actions?

Defaults on the loan

Which of the following could indicate a problem with the chimney flu or ventilation?

Drafts near the fireplace

How are principal meridians and baselines used in the rectangular government service system?

Each legal description in the system originates at the intersection of a principal meridian and a baseline

Justin decided to build a privacy fence around his yard. He thought the fence was along the property line, but it turns out he built it one foot inside his neighbor's property. What will an inspector document as existing on the neighboring property?

Encroachment

Jenner purchases first home, to which will have access forever, as far as he knows. Jenner owns_____?

Freehold estate

You need to perform a sales comparison for your clients. Comparable A's adjusted sales price is $277,000. Comparable B's adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients' home?

Give more weight to the list price on the comparable that's most similar to the property.

A landlord has an available unit but refuses to show it to several applicants. These applicants are all single women with children. The applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law?

He is discriminating against people based on familial status by refusing to show available housing.

Wendell just listed Barb's home. Barb told him that there weren't any easements on the property, and Wendell hasn't seen a copy of the survey. What is Wendell's responsibility relative to the disclosure of any easements?

He only needs to disclose easements if they're known.

when negotiating the purchase of a property that's subject to an existing lease, it's critical for your clients to clearly understand the lease terms, including the property management responsibilities, rent amount, renewal purchase options, And the _____

Lease duration

Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?

Indestructibility **Indestructibility is the physical characteristic that states that while improvements may deteriorate, land can't be destroyed.

which of the following is an example of the duty of disclosure?

Informing parties to the transaction of material facts related to the transaction

In the eyes of a lender, when financing a residence, what advantage does an investor have over owner-occupied borrowers?

Investors can use rental income to qualify.

Which offer would be the most appealing to a seller?

It depends on the seller's needs and motivations.

Andrea and Jim were planning to list their home with Cheryl, but just let her know they no longer wish to work with her. When Cheryl mentioned that the listing agreements are legally binding, Andrea and jam reminded her that they are agreement is not legally binding. What would be the reason for this?

Jim didn't sign it

which of these is an example of serverability?

Jules and Katrina are under contract for the purchase Of Katrina's house. A dispute arises over some contract terms, they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force

The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.

Letters of apology to all affected consumers

what is the overarching theme addressed by statutory duties in most states?

Licensees may not take any action that might be detrimental to the client's legal interests.

Which of the following is a true statement about police power in public land use controls?

Local governments and their planning boards control budgeting, site-plan review, and building codes.

What's one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

Loyalty

Which of these circumstances does not require agent disclosure?

Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.

Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal?

Meg must sign the deed and have her signature acknowledged. As the grantee, Christian doesn't have to sign the deed, and he doesn't have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn't have to have a monetary value.

Which option is the most concerned to licensees an advertising when it comes to the federal trade commission?

Misleading ads

Murphy's farmhouse has been in his family for generations, since his great great great grandfather received it as a land grant in 1862. what's the beginning point of his property chain line?

Murphy the current owner

Which of the following statements about asbestos is true

No amount of it is considered safe

Property owner Susan and property manager feel just entered into a property management agreement. Which of the following is not some thing that would be addressed in the agreement?

Phils power to sell the property without consulting Susan

what is the term for an increase in property value caused by the joining of two neighboring parcels of land?

Plottage

What does PITI stand for?

Principal, Interest, Taxes, Insurance

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

Which of the following statements related to the power of taxation is true?

Property tax liens take priority over any and all other liens on the property in most states.

When questions arise that are outside of your scope of expertise, what should you do?

Refer clients and customers to a competent professional in that field.

Seller Gena feels awful that Martha, who is going to buy her property, lost her job. Gena decided to___ Martha from the purchase contract

Release

Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?

Rural development loan

Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true?

Sam can revoke the license at any time.

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?

September 18

which of these tasks that jenna performs does not represent the fiduciary duty of accounting

She discloses the terms of the listing agent's compensation to her client.

Which of the following could be a clue that a property was formally a waste disposal site?

Soft spots, mounds, and discolored soil

the question, "What's the purpose of this appraisal?" can be answered by the first step of the appraisal process

State the problem

In which form of coownership is a persons ownership inheritable?

Tenancy in common

You're on a planning board that's disgusting how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What's your response

That's a great way to meet our objectives

Kenneth plans to shop around for his mortgage loan to be sure he's getting the best interest rate and terms. What lender-provided document outlines loan rates and fees so he can make comparisons?

The Loan Estimate permits Kenneth to comparison shop.

When a government entity exercises its powers to create zoning ordinances, what must be followed?

The area's comprehensive plan

Your clients closed on their property yesterday, but you still have some paperwork you need to deliver to them as soon as possible. Under which fiduciary duty are you acting?

The duty of accounting

Which statement regarding fee simple defeasible estate is true

The estate includes the full bundle of legal rights, but ownership is based on a condition

A family of four, with children ages six and nine, is denied the opportunity to view an available unit at a community that caters to seniors. Which of the following statements is true?

The federal Fair Housing Act allows an exemption for communities that are designed and operated for senior use.

A prospective buyer is curious why a previous owner is selling such a perfect home. The license he knows that the previous owner recently died due to complications from aids. How should the licensee respond to the perspective buyers inquiry?

The license he can't disclose that the previous owner had HIV or aids

Rene listed her property for three months starting on March 13. By August, the property hasn't sold. This is after lots of marketing an effort from the agent, a price adjustment, and several showings. Rene decided to list the property with another firm. Under which these conditions can Rene list the property with another firm without reaching her agreement?

The listing agreement expired

Quad City National Bank has several REO properties on its books. Why does the bank own these properties?

The properties went through the foreclosure process and didn't sell at auction.

Assuming licensee Shannon has actual knowledge of all of the following property issues, which should she disclose to prospective buyers?

The upstairs bathroom has a leaky toilet.

Developer A has a project planned that does not conform to the community zoning regulations and wants to make a change request. Which local land use group would the developer ask, and for what?

The zoning board of appeals for a variance.

Why are galvanized pipes a problem and older homes?

They can rust and cause leaks and low water pressure.

Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing date back. Soon the summer was over and she still hadn't closed. Gail was guilty of not adhering to which aspect of the contract?

Time is of the essence

Garrett wanted to move his real estate closing so that he can get through his wedding first. His broker and attorney encouraged him not to do it because of which contract clause?

Time is of the essence

What's the purpose of a buyer representation agreement?

To establish an exclusive agent, buy a relationship

While walking around the exterior of a rural home she's inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard?

Underground Storage Tank

Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion: she'll need to buy a new house city before her current one is sold. So she won't have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?

bridge loan

it's January, and The pool at Rodgers listing has been prepared for winter for several weeks. The homeowner insurance Roger that it's in good Working order. Roger has no reason to display the homeowner, so he tells a prospective buyers at the pool is fine. The property Cells, spring comes, and the new owners called to complain about the pump not working, and the pool drain appears to be clog. What did Roger commit

Unintentional misrepresentation

Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he sees how ownership of the common areas is shared among the ________.

Unit owners

Kevin and Regina sold their property to Vickey using a general warranty deed. Which of these statements is true?

Vickey is the grantee.

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway

Paul and Blake are touring an open house when they notice that the glass on the sliding patio door is very foggy. Is this a concern, and if so, why?

Yes, this is a sign of a leaky seal which reduces efficiency.

Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?

arbitration

You're showing a house when you notice powers of what looks like sawdust outside near the basement windows. This may be evidence of which pest?

carpenter ants

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to Valley Falls apartments manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on

color

What's the most common indicator of illegal property flipping?

falsely inflated appraisal

After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?

fee simple

which type of estate gives the owner contain free interest in a property? This type of estate conveys the highest possible interest.

fee simple absolute

title 11 of the financial institutions reform, recovery, and enforcement act of 1989 states that its purpose, in part, is to require that real estate appraisals used in the connection with federally related transactions be performed

in writing, and an ordinance with uniform standards

which type of antitrust Violation occurs when real estate firms agree to divide the market so they don't compete with another?

market allocation

Even though the laws are different in every state, sellers must typically disclose ______, information that would be important to a person in deciding to purchase a home.

material facts

which of the following is a promise from the borrower to repay certain sum of money to another party ( the lender or holder of the note) under specified terms?

promissory note

Landlord refuses to show or rent an apartment to someone who is not Christian or Jewish. What type of discrimination is this?

religious discrimination

which one of these would void a deed that's intended to convey a property?

the grantor is not mentally competent

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?

voidable

Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What's the maximum number of adjustments Steve should make to the Joneses' property?

zero