National Exam CE Class

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

Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?

$1,042.29

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

A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month's mortgage payment is interest?

$2,333.33

A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value?

$200,000

Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?

$255,000

A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing?

$320,000

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?

$4,000

Dale and Barbara, your buyer clients, aren't thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They're financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?

$4,700

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?

$54,150

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?

$896.88

Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax.

$962.50

Generally, what's the common range for loan origination fees?

1-3%

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

75%

Which of the following acts requires commercial buildings to be accessible to disabled individuals, such as those who use wheelchairs?

Americans with disabilities act

Danielle's friend, Joanna, is an agent. Danielle is considering listing her property and shares the details with Joanna. Joanna creates an MLS listing and places a sign in Danielle's yard. Danielle knows that Joanna will do a good job, so even though she hadn't actually agreed to let Joanna list the property, she permits her to start scheduling showings. Which of these is an example of ratification?

Danielle knows Joanna will do a good job, so she permits Joanna to start scheduling showings

Which of these situations represents an illegal tie-in arrangement?

Grayson tells his seller client, Geneva, that he will reduce the listing commission if Geneva uses MBS Title Services to close her transaction

What's the best definition of real property?

Real estate, plus all of the interests, benefits, and rights included in ownership

Sergeant Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit?

VA

Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue?

Xavier is guilty of commingling and conversion

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.

accepting liquidated damages

Newt's buyer client isn't happy with him. The buyer has accused Newt of breaching his duty of ______ by mishandling the earnest money.

accounting

Which of the following is true regarding the definition of agency?

agency describes the relationship between the real estate professional and the person or person being represented

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

Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to, and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?

arbitration

Which of the following would a home inspector note as a defect in a report due to its link to lung cancer?

asbestos tiles in a basement

Who typically performs an appraisal?

certified appraiser

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it?

compare it to the loan estimate

Sophie received title to her grandmother's farm last spring. For almost 100 years, Sophie's family has kept cows and goats on the 120-acre property. The deed came with a caveat: Sophie is never to raise pigs on the farm. If she does, then the property is transferred to her brother. What did Sophie's grandmother create?

condition

Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent?

consideration

Callum is working with Darby, who received an honorable discharge from the Air Force. Callum is preparing to discuss options for down payment assistance with Darby. Which of the following would be Callum's best resource for information for this specific client?

department of veteran affairs

A decrease in property value over time is called ______.

depreciaition

Which of the following is a common element of a buyer representation agreement?

description of the property being sought

Property managers are typically responsible for market analysis and marketing the properties they manage. Which of the following tasks is a component of that duty?

determine rent rates based on comparative analyses with other properties

You're a real estate broker supervising 24 licensees. What's the most effective way for you to protect your firm from lawsuits?

develop, implement, and train firm members on policies and procedures

The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______.

downzoning

You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

dual licensed dual agency

Which of the following properties requires a lead disclosure?

duplex built in 1959

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tells Ed that they thought inspections were only for older homes. How should Ed respond to that?

ed should remind them that every dwelling, no matter the age or size, should have a home inspection

Which real property ownership right protects the owner from harassment or interference?

enjoyment

The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?

fee simple determinable

Brenda represents Tina in a real estate transaction. Brenda therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care.

fiduciary

Your clients, the Harpers, live in Area B that's adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?

file a claim of inverse condemnation

Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent?

finding properties to show Fred and regina

Frances collected an earnest money check from her client, but didn't have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true?

francés is guilty of commingling

Angel's credit card company sued him in civil court for nonpayment. There was a judgment against him, and so now Angel has to sell his classic car and his primary residence to pay the credit card company. What type of lien did the company have?

general

What can brokerages do to ensure licensees use technology properly?

have a solid polices and procedures manual in place

Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home?

her heirs, as described in her will or according to state law, will receive the property

Simon recently passed away. He owned title to his property in severalty, as a fee simple absolute estate. What will happen to his property?

his heirs, as described in his will or the state law of descent, will get the property

Prior to a certain act's existence, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. What's this act called?

housing and community development act of 1974

To meet the requirements of the statute of frauds, an agreement must clearly identify the contract's subject matter, present the contract's essential terms and conditions, and ______ to be enforceable.

identify the contracting parties

As interest rates fall, what is the number of buyers in the market likely to do?

increase

Which clause in a contract states that one or more parties won't be held liable if there are losses or expenses related to the contract?

indemnification clause

It's 12,280 feet from Missy's house to the nearest coffee shop. Approximately how far is this?

just over two miles

Which body of law contains the rules governing the relationship between a real estate professional and the person being represented?

law of agency

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect?

listing the property on the MLS

What attracts borrowers to adjustable rate mortgages?

lower initial interest rate

All of the following are typically common property manager duties EXCEPT ______.

making mortgage payments

Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?

misleading ads

During a site evaluation to determine property value, all of the following factors are important to consider EXCEPT ______.

neighborhood demographics

Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act?

no; commercial and business loans are exempt from RESPA requirements

Following all of the client's lawful instructions describes which fiduciary duty?

obedience

Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What role does Kendra currently have in this scenario?

offeree

On what type of listing (or listings) may a net listing be used in states where they are legal?

open, exclusive agency, or exclusive right to sell listings

Which of the following statements is true about conventional loans?

originators usually package and sell the loans on the secondary market

Tyne entered a contract to buy Fred's home. Per the terms of the contract, Tyne agreed to pay $20,000 in earnest money by this coming Wednesday and have the property inspected within seven days. She submitted the earnest money deposit on time and had the property inspected within five days. What action does this scenario exemplify?

performance of this part of the contract

Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here?

progression

Who is responsible for ensuring accessibility requirements for a commercial property are met?

property owners and property managers

Who typically prepares a comparative market analysis?

real estate licensee

Duke's client has asked him for advice on a legal matter. Based on the duty of reasonable skill and care, what should Duke do?

refer his client to an attorney

Upon a life estate holder's death, the estate either reverts to the original owner or to another person the original owner has named, known as a ______.

remainderman

Stan decides to not sell his property to Crandall, even after they've signed a legal sales contract. Crandall found a property he likes better, so they mutually agree to ______ the contract.

rescind

Bob signed a contract to purchase Ingrid's apartment building. Bob decided he didn't want to be a landlord, and Ingrid decided she didn't want to sell and move to Maui. They mutually agreed to cancel the contract, and Ingrid returned Bob's earnest money. This is referred to as ______.

rescission

Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker, though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do?

review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance

Water buildup, ice damming, and a fascia damaged by moisture are common ______ issues.

roof

Adamsburg, a bedroom community outside the city, is growing by leaps and bounds. There's been a boom in the number of children under age 12. Mia wants to open an in-home daycare, but she lives in a neighborhood that isn't zoned for home occupations. She applied for a/n _________ and, after a public hearing, was granted one to operate the daycare.

special use permit

According to the process appraisers follow, what action is taken first upon being assigned a property for appraisal?

state the problem

Jerry and Simon signed a contract giving Jerry the option to purchase all of Simon's restaurant equipment for a set price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

statue of limitations

Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?

strict liability

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?

substitution

Katelyn wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency will document which of the following?

the date by which all inspection issues must be addressed

Which fiduciary duty may continue even after the transaction closes?

the duty of accounting

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

the grantor is not mentally competent

Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true?

the lender must provide the closing disclosure by Friday of the week before closing

What's an example of a gross lease?

the owner pays all property taxes, maintenance, and insurance costs

What's the meaning of "good faith" in relation to contract law?

the parties agree that they will execute the contract the best of their ability and without any fraud or misrepresentation

Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now?

the seller may not be required to attempt to clear the defect before closing

Which of the following best describes a net listing?

the seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price

Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?

the statue of frauds

Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have?

they should have a loan to value ration of 80% or less

In marketing her new listing, Alice asks the photographer to "touch-up" the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?

this is deceptive advertising for which both Alice and her broker may be disciplined

Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?

tie-in arrangement

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

to detail all costs Jennings will owe at closing

Which one of the following property features could contaminate the soil?

underground storage tanks

Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures?

uniform electronic transaction act

What's a good policy that a buyer's agent should employ regarding contingencies?

use contingencies judiciously to protect the client and the deal

Which of the following can be defined as what a property is worth?

value

Imagine that you're an active real estate licensee as well as an architect, and you'd like to partner with a builder who's just beginning a development. Which of these creates agency coupled with interest?

you agree to design the houses for this builder in return for getting the listings when the properties are finished