Practice Test #4

Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?

$285,000

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

Karen meets the experience requirements related to credit analysis and underwriting to qualify as a mortgage broker. At a minimum, how many years' experience does she have?

2

All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.

25 to 28 %, 33 to 36%

Jill is selling her property and hired David as her agent. David brings another client, Kirk, to see the property, which Kirk is interested in purchasing. What kind of agent is David acting as in this scenario?

A dual agent

Under the penal law of New York, a misdemeanor is punishable by ________.

A fine of up to $1,000 and/or imprisonment for up to one year

Which of these policies is an example of discrimination based on familial status?

A landlord charges an extra $100 security deposit for each child living in a property.

Which of the following is a way in which property taxes could impact your clients?

A sale in the area may prompt a reassessment, impacting new buyers.

What happens to insurance coverage if a home is left vacant?

After 60 days of vacany, the policy can be cancelled.

Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?

Alda tells Marge that she's hired an inspector to perform a property inspection.

Which of the following is an illegal provision of a buyer agency agreement?

An automatic renewal clause

Rick wants to remodel his home located in the New York town of Greenville. He'll need approval for his plans from the ______, which is responsible for ensuring that any building work meets the standards for design and maintains the beauty of the neighborhood.

Architectural Review Board

Based on their credit rating and stated income, a lender pre-qualified Sam and Lisa for a loan. Which statement is true?

As long as they've told the truth about their income, Sam and Lisa have a good chance of getting a loan.

Under ARELLO guidelines, which of the following is an example of active solicitation?

Broker Bonita texts a prospective client

In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?

Broker's price opinion

Why has buyer representation increased since the late 1980s?

Buyers have become more aware of who works for whom.

Isobel has begun working with a brokerage that represents European investors interested in the U.S. market. Which accreditation would be a good one for her to pursue in her new role?

Certified International Property Specialist

Paul allows his real estate license lapse. One year later, he decides to reactivate his license. To do so, he needs to _________.

Complete all of the requirements for renewal by meeting the CE requirement, submitting the application, and paying a fee

Specifically, what does the fiduciary duty of disclosure relate to?

Conflicts of interest, material facts, and adverse material facts

A ______ is a method of conveying real property from one party to another.

Deed

In order to convey real property, what document would you use?

Deed

Which factor influences property value and addresses questions such as, "What's the market like?" and "Are there more buyers than sellers, or vice versa?"

Demand

Broker Malcolm submits his client's purchase offer, then goes on vacation. When he returns two weeks later, he learns that a counter-offer was submitted, and the response date had expired. His client's offer was terminated because he failed to respond on time. This violation is an example of ______.

Demonstrating untrustworthiness or incompetency to act as a real estate broker

In addition to providing a disclosure of any lead-based paint hazards in homes built before 1978, what must sellers provide to prospective buyers?

EPA lead safety pamphlet

When presenting a CMA, if you take the time to explain the CMA process, help the prospective sellers understand what's behind the numbers, and ultimately leave the decision of the list price up to them, what characteristic have you demonstrated?

Effective Communication

A licensee must perform which of the following tasks for a buyer client?

Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

Question 86 Which written statement will be used to consider ways to minimize a project's negative impact on the environment?

Environmental impact statement

In which of the following types of contracts has one or more of the contract's terms yet to be completed?

Executory Contract

Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining?

Fair Housing Act of 1968

When it comes to landlord-tenant relations, a property manager needs to know ______.

Fair housing laws

Which protected class is protected against discriminatory practices, such as against placing limitations on the number or age of children in the residence?

Familial Status

When filing a SCAR petition, which of these steps do taxpayers follow?

File with the clerk's office within 30 days of the last date allowed for filing the assessment roll.

Buying at one price and immediately trying to sell it at a higher price is known as ______.

Flipping

Licensee Ken is working on building a foundation of understanding with his clients. In order to do that, he needs to be flexible and customer-focused, have positive intention, and _______________.

Focus on client needs

Jenner purchased his first home, to which he'll have access forever, as far as he knows. Jenner owns a(n) ______.

Freehold estate

Kobi, an appraiser, is appraising a single-family home used for a rental. If he wants to use the income approach, he will likely use ______.

GRM

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.

Why might you opt out of working with a buyer unless you're working under an agency agreement?

Having an agency agreement allows you to represent the buyer's interests.

Real estate licensees are required to serve the public with ________.

Honesty and competency

Sara is your buyer customer. She doesn't want to sign a buyer agency agreement. What duty do you owe her?

Honesty and fairness

Which of the following approaches to value uses a capitalization rate?

Income approach

Why do investors have a special interest in the impact income taxes have?

Income tax is a significant factor in return on investment.

Government regulation of a property that deprives the landowner of the economic value of the property without compensation from the government is called ______.

Inverse condemnation

What happens when your client asks you to do something that's against the law?

It allows investors to defer capital gains taxes when selling a property, provided they buy another property.

Jim represents Joel in the sale of Joel's country acreage and house. Jim's business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property.

Which of the following is an essential element of a valid real estate contract?

Legal purpose

When the property is financed, who is named as an additional insured entity on the homeowner's insurance policy?

Lender

Which of the following involves permission to do something on another's land without actually possessing any interest or ownership in the land?

License

Blake, a real estate salesperson, wants to move to a new brokerage. The first step in the process is for his broker to terminate Blake's association with his current brokerage online at the Division of Licensing Services website. To do this, the broker will need Blake's ________.

License (or UID) number

When a lawsuit is filed, a _______ is often created and filed, as well, which provides the public with a notice that a judgment may be forthcoming that could affect the property's title.

Lis pendes

Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?

Loan flipping

When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.

Making an application for a loan

Greg tries hard to reduce his carbon footprint, so he doesn't own a car. He's able to do all his shopping at stores on the same street where he lives, and takes a convenient train to his office for work. What type of community does Greg likely live in?

Mixed-use with transit-oriented design

Which entity is responsible for registering and licensing all companies and individuals who conduct mortgage-related services in the state of New York?

NYS Department of Financial Services

It's a bad idea to include information about your loved ones and pets in your personal marketing because it's a safety risk to your loved ones. From a safety standpoint, there's also another reason to avoid including this information in your personal marketing. What is it?

Names and birthdates of children and pets can be used as clues to your passwords.

In which of these situations has the licensee compromised the duties of loyalty and disclosure?

Nate didn't tell his client about a conflict of interest related to the sale of his client's property.

Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?

Nate owes Timothy the duty of disclosure.

If you tell a buyer customer about the need of your firm's seller client to sell, in spite of the seller instructing that no one be told, what duty or duties are you breaking?

Obedience, loyalty, and confidentiality

Frank is representing Jonathan in the sale of his home. A buyer approaches Frank at Jonathan's open house, and Frank agrees to represent her in purchasing Jonathan's house. What must Frank do to avoid an illegal dual agency situation?

Obtain dual agency consent from all parties.

Seller Jeremiah has no cash on hand, but the buyers have outlined some repairs they want made in order to close on the purchase. Which of the following is his best option if he wants this transaction to close?

Offer a seller credit to cover the cost of the repairs

Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. What is one of the key determinants that show that something is real property (also known as a fixture)?

Permanently affixed to the property

Which of the following is a role of an agent who's assisting the buyer, but representing the seller?

Present the buyer's offer.

Which act prohibits the payment of kickbacks between settlement service providers?

RESPA

If the property owner selects an insurance broker, what service(s) is she likely to find?

Representation

Karla works for a single-agency firm. Which of these actions is she NOT allowed to take?

Representing both the buyer and the seller in the same transaction

Anyone working as a property manager for a property management company that has more than one owner client is ______.

Required to have a real estate license. Anyone providing property management services for more than one owner must have a real estate license. A license is also required if rent collection is involved.

What factor is a primary concern to the fix-and-flip investor?

Selling quickly for fair market value

The Housing Community and Development Act of 1974 added and protected which class to federal fair housing law?

Sex

Which of these is a recommended source for a real estate professional to use when looking for opportunities for an investor client?

Sheriff's sales

If you represent the buyer and seller in the same transaction, what type of agency relationship do you have with your clients?

Single-license dual agency

You know a property's effective gross income and its operating expenses. How would you calculate the net operating income?

Subtract operating expenses from effective gross income

Women didn't have protection under fair housing laws until sex was added to the list of protected classes when ______ passed.

The Housing and Community Development Act of 1974

What is meant by "usable" square footage?

The area occupied by the tenant

In title theory states, which of the following is true?

The borrower doesn't hold the legal title to the property until the loan is paid in full.

For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if ______.

The funds are used to buy, build, or improve the home that secures the loan

Which of these would void a deed intended to convey property?

The grantor is not mentally competent.

Under an estate at will in New York, which of the following is required of a landlord who wishes to terminate a tenant's lease?

The landlord must either personally serve the notice to the tenant or post it conspicuously on the property at least 30 days prior to the termination date.

Who's responsible for verifying that a client knows what documentation to bring to closing?

The licensee who's representing the client

As a homeowner building or renovating in an area deemed as culturally or historically significant to your community, you must demonstrate to the local Architectural Review Board that you will respect the historical significance of the property and that ________.

The proposed construction will be similar to existing structures and appropriate for the area.

Which of the following best describes condominium ownership?

The space inside the unit itself belongs to the unit owner, and all owners also share in the ownership of the common elements.

Elizabeth's property is encumbered by an easement in gross with which of these entities?

The utility company that needs to access the power line that crosses a corner of Elizabeth's land

What happens to the interest earned on a down payment deposited into a trust fund or escrow account?

There is generally no interest

How are mortgage interest, taxes, insurance, and other similar expenses prorated?

These are usually prorated based on a 360-day calendar year (30 days x 12 months).

Ida and Barry are buying a home. They'll withdraw money from their traditional IRA to help with the down payment and closing costs. What's NOT true about this withdrawal?

They can exclude the amount of the IRA withdrawal when filing their income taxes.

For the licensee's broker, what is a key point with regard to fair housing laws and responsibilities?

To minimize risk, it's important to provide fair housing training to licensees and employees.

Which governmental department guarantees VA loans?

VA

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

Vickey is the grantee.

You're driving on the freeway when you notice a police car and instinctively take your foot off the gas. The police car is what kind of anchor?

Visual

Investor Maisy found a great deal on a property. Instead of closing on it herself, Maisy is going to "assign" it to another investor for a fee. What type of investor is Maisy?

Wholesaler

What type of investor frequently "assigns" deals to other investors, rather than buying properties himself?

Wholesaler

What happens when your client asks you to do something that's against the law?

You must break your duty of obedience

When the buyer has a mortgage, the buyer will generally have

more closing costs than the seller

Henry is Monica's listing agent. As Monica's agent, Henry has a duty to account for and properly handle her funds and ______.

paperwork

Which type of investor would be interested in a "fixer" property?

Flipper-don't overthink. Fix & Flip.

Generally, a property owner will decide whether to purchase coverage ______.

That covers the actual cost or replacement cost

What is a "lender rebate?"

The difference between the wholesale and retail price

What is the best-case scenario with a debt-to-income ratio?

lowest debt to income ratio