Real Estate 2

Before a person can apply to obtain a broker's license, how much experience must she have as a salesperson?

3 years

Two brokers are involved in a dispute over a commission split. Which of the following entities could become involved in settling the matter?

A court having jurisdiction over the brokers

Which person would need a license to sell property on behalf on another?

A person receiving a gift certificate to sell a property

Which person is required to hold a real estate license?

A person who, for compensation, helps to sell his neighbor's home

A three year insurance policy was purchased on October 20, 2014 at a cost of $360. The property is sold and settlement is held on June 20, 2015. If the insurance is pro-rated at the time of settlement, how much credit will be given to the buyer?

A. $0

A salesperson sells property listed by another broker for $84,500. If the listing broker is to receive 50% of the 6% commission rate, how much will the salesperson receive if he earns 40% of his broker's share?

A. $1,014

An agent is to receive 5% commission on a piece of property that was listed for $30,000. How much commission would he receive if the owner reduced the selling price by 15%?

A. $1,275

Under the terms of an FHA loan, a lender agrees to loan 96.5% for the sale of a $46,000 home. The lender is quoting four loan discount points. How much would the seller pay in discount points if he agreed to pay all four points?

A. $1,776

A seller wants to sell his property and net $14,000 from the proceeds of the sale. He must pay off his existing mortgage debt of $83,500, closing costs of $3,250, and has agreed to pay a 7% commission to his broker. How much must the property sell for to realize that $14,000?

A. $108,333

Using a Gross Rent Multiplier of 120, what is the value of a property that generates $12,000 annual income?

A. $120,000

A man buys a house for $11,000. In the years following his purchase, the value of his house appreciates 45%, then decreases 11.5% below the high point. What is the current value of the house?

A. $14,116

A new property was valued at $179,000 with an estimated life of 50 years. The value of the land has been estimated at $19,000. After allowing for depreciation, what is the total value of the property at the end of 5 years?

A. $163,000

A purchaser agrees to buy a house for $47,000, obtaining a 90% loan. The buyer makes an earnest money deposit of $2,500. If the closing costs are $225, how much will the buyer need to bring to the closing?

A. $2,425

A lady buys a house for $25,000. In the years after her purchase, the value of her house appreciates 35%, then decreases 6.25% below this high point. What is the current value of the house if rounded to the nearest dollar?

A. $31,641

A seller is willing to pay a 6% commission if the broker can sell the house at a high enough price to pay off the existing $75,300 loan and allow the seller to clear $10,000 cash on the deal. To the nearest dollar, how much must the property sell for to reach these goals?

A. $90,745

Real estate taxes for each fiscal year are due on June 30th. The seller hadn't yet paid taxes because the property sells and closes on April 15th (before the bill is due). If the annual property taxes are $2,580, what is the settlement sheet entry for the proration of taxes?

A. Credit to buyer: $2042.50

Jimmie the Gent is interested in property valued at $450,000. Jimmie will qualify for a $375,000 loan. However, Jimmie refuses to purchase if his LTV would fall under 80%. Is Jimmie likely to purchase the property?

A. Yes, the LTV is within Jimmie's range

Which person would need a license if selling real property for others?

An appraiser

Which of the following persons is NOT exempt from the licensure requirements?

An attorney-at-law who is regularly engaged as a real estate broker

An eligible VA buyer applies for a VA loan. What is the maximum amount that a lender will loan based on the following information: (i) Selling Price of property: $102,500; (ii) CRV by VA appraiser: $104,300; and (iii) County Assessed value: $96,200?

B. $102,500

Paul purchased a home for $150,000. He obtained a 9.5% interest, 30-year loan for $120,000. The monthly payment is $1,009.03. What is the balance of Paul's loan after the second payment has been made?

B. $119,881.47

A homeowner has a 95% PMI loan. If the loan balance is $60,000, what is the PMI insurance for the third year of the loan?

B. $150

A property is valued at $170,000. The value of the land is estimated to be $20,000. Based on age-life tables, the improvements have an estimated life of 50 years. What is the estimated value of the property after 5 years?

B. $155,000

A house was originally purchased for $20,000. It depreciated 5% each year below the previous year's value. What was the house worth at the end of 3 years?

B. $17,147.50

A property is worth $12,000, and its furniture and household goods are worth $4,000. The owner insures them both for 80% of their value. The annual rate on the dwelling is $2.80 per $1,000, and the furniture and household goods are $3.30 per $1,000. If the premium for a three-year policy is 2-1/2 times the premium for one year, what savings would be affected by taking out a 3-year policy?

B. $18.72

Sara is purchasing a home. How much should Sara put down if she agrees to pay $80,000 for a house and wants to make a mortgage down payment of 25%?

B. $20,00

The current value of Pete and Martha's home, minus the lot, is $125,000. What did Pete and Martha originally pay, assuming the home depreciated 6% per year for the past 10 years?

B. $312,500

Mr. Jones' property is valued at $17,700. It is assessed at $10,000 and taxed at a rate of $0.036 per dollar. If the tax is increased to $0.040 per dollar with the same assessment, how much more will Jones be required to pay?

B. $40

A property was listed at $155,000. A buyer made a $140,000 offer, which the seller rejected. He then countered at $147,500, which the buyer accepted. The salesperson is to receive 60% of the brokers 5% commission on the sale. What is the commission due to the salesperson?

B. $4425

Ben and Becky purchased a home for $250,000. They have an LTV of 80%. How much of a down payment did Ben and Becky make?

B. $50,000

A homeowner is having carpeting installed in his home. The area to be carpeted is 16'6" x 15'. The cost of the carpet is $19.95 per square yard and the pad is an additional $5.00 per square yard. How much will it cost to install the carpeting?

B. $686.13

A property has a market value of $50,000, is assessed at 18% of market value, and taxed by the county at a rate of $75 per $1000 valuation. If the city received $10 for each $75 of taxes collected by the county, how much does the city receive?

B. $90

Bob and Sue make a combined annual income of $80,000 and pay $1,200 in monthly rent. What percentage is the rent of Bob and Sue's annual income?

B. 18%

Jill owns a lot that is 1,600 square feet. The lot is 80 feet in length. What is the width of her lot?

B. 20 feet

An owner receives $42,500 net income from an investment property that is valued at $542,000. What is the investor's capitalization rate?

B. 7.8%

Each floor of a two-story office building is 10.5 feet high, 18 feet wide, and 54 feet long. How many cubic yards is in the entire building?

B. 756

Which of the following formulas is used to determine annual real estate taxes?

B. Assessed value x Tax rate

A property was sold and its closing was on May 15th. The taxes for the current year had NOT been paid. Annual taxes are $3,096. What is the settlement sheet entry to prorate the tax between buyer and seller?

B. Buyer: $1,161 credit; Seller: $1,161 debit

A broker's contract to sell a building includes a 6% fee on the first $10,000 and a 2.50% fee on everything over that amount. The broker's total fee was $760. What was the sales price?

B.. 16,400

The supervising broker must post which records in a conspicuous place at the branch office?

Both A and B

A property sold for $84,500 with a settlement date of August 1st. The property's tax assessment was $12,000 for the land and $59,500 for the improvements. Tax payments are due on January 1st and July 1st for the calendar year. Only the January 1st payment was made. If the tax rate is $2.69 per hundred, which of the following statements is true?

Buyer receives $160.28; Seller owes $160.28

A homeowner is planning to install carpeting in the family room of his house. The area to be carpeted is 30ft by 15ft. The cost for the carpet is $24.50 per sq. yd. There will also be a flat charge of $265 for the installation. How much will the carpeting and installation cost?

C. $1,490

When a homeowner made his current payment of $865, he saw that $800 was applied to interest and the rest was applied to principal. If the interest rate of the loan is 9%, what is the loan balance before this payment is made?

C. $106,667

A house sold for $140,000 and the buyer made a 20% down payment. Assuming a rate of $1.00 per $1,000, the grantor's tax would be:

C. $140, based on the selling price

A house was purchased for $75,000. The lender requires a 20% down payment and will charge the buyer 3.5 points. How much is the buyer required to pay at closing?

C. $17,100

A house was purchased for $86,000. The lender required a 20% down payment and charged the buyer 3 points. How much is the buyer required to pay for points in this loan?

C. $2,064

A property sold for $188,000. The broker's commission rate was 5%. The salesperson is to receive 70% of the total commission. How much will the broker net from this sale?

C. $2,820

Jill's property sells for $150,000. The state transfer tax is $1 per $1,000 and the county transfer tax is $0.50 per $1,000. How much must Jill pay in total transfer taxes?

C. $225

A property was purchased for $125,000 with a down payment of $25,000. The current loan amount is $94,000, and the appraised value is $132,400. What is the owner's equity?

C. $38,400

A property was purchased for $125,000 with a down payment of $25,000. The current loan balance is $94,000 and the appraised value is $132,400. What is the owner's equity?

C. $38,400

Tom built a 28' by 140' single story home. The average cost of construction was $11.25 per square foot. What is the total cost of the house?

C. $44,100

What is the sales price of the property if the loan-to-value ratio (LTV) is 80%, the buyer puts 20% down, and then pays $1,000 in cash for two points?

C. $62,500

A term loan is 75% of the property appraisal. The annual interest rate on the loan is 8% and the interest for the first year is $3,870. What was the amount of the appraisal?

C. $64,500

Murphy is going to buy 2 parcels of land. One piece of land contains 3.5 acres and a second is 0.5 square miles in area. If the price is $2,000 per acre, what would Murphy have to pay for both parcels?

C. $647,000

A developer has 25 acres, which he plans to sub-divide into 1/2 acre building lots. Of the total tract, he must dedicate 5% for streets, and 15% for recreation and open space. Each lot will sell for $19,560. What is the developer's potential income?

C. $782,400

A seller wishes to net $60,000 on the sale of his house after paying off his $32,000 loan balance and a 6% broker commission. What is lowest possible selling price that will give the seller his desired net?

C. $97,872

A homeowner makes monthly mortgage payments of $994.32. When the current payment was made, $871.40 was applied to interest and the rest of the balance was applied to principal. If the loan interest rate is 10-5/8%, what was the balance of the loan when the payment was made?

C. $98,416.94

An $80,000 property has a gross income of $10,000 a year. Management fees are $700 annually, and heating is $92 per month. What is the approximate rate of return to the owner?

C. 10%

Betty makes a down payment of $20,000 for a house that costs $80,000. What percentage of the house price is her down payment?

C. 25%

A borrower paid $4,550 interest on a $16,000 interest-only, 10% note. What was the term of the loan?

C. 34 months

A $90,000 property has a gross income of $10,000 a year. Management fees are $800 annually, and heating is $85 per month. What is the approximate rate of return to the owner?

C. 9%

A property is purchased for $125,000 with a 20% down payment. When the first month's payment is made, $800 is applied to interest. What is the interest rate on this loan?

C. 9.6%

Marty Fields just found out that he passed the Virginia real estate sales exam! What must Marty do before he can start selling real estate?

C. Affiliate with a broker and submit an application for licensure

A developer owns four parcels of land. He plans to sell one parcel for construction of an office building. The building plans will require 2 acres, which will include the actual building, landscaping, and parking. Which of the following choices is the smallest parcel that would accommodate this construction?

C. Parcel C: 120 feet x 860 feet

Taxes are $2,100 per year. The tax rate is $3.00 per $100. The assessed value of the property is 40% of the estimated market value. What is the market value of the property?

D. $175,000

A lender requires that three months of interest be held in a reserve account for all new construction loans. If a $860,000 loan is made at 8.5% interest, how much interest will the lender require for the reserve account?

D. $18,275

A house sells for $54,000 and is assessed at $39,400. Annual taxes are calculated at $0.92 per $100 and are paid every 6 months. What is the semi-annual tax bill?

D. $181.24

A property was sold and appraised for $156,000. The assessed value of the property is based on 50% of the appraised value. What are the annual taxes on this property if the local tax rate is $3.00 per $100 value?

D. $2,340

Carolyn buys a home for $122,000, agreeing to the lender's terms of a 75% loan and two loan discount points. How much money does Carolyn need to bring to settlement?

D. $32,330

A property sold for $40,625, with an 80% LTV and at 9% interest rate. If the monthly payment is $325, what is the remaining balance on the loan at the end of two months?

D. $32,337

A house is sold for $47,000, with a 75% loan for 25 years. The interest rate is 0.75% per month. A principal and interest payment of $288 is made every month. What is the total interest paid during the life of the loan?

D. $51,150

After Pruitt sold his house, the selling price ended up being 23% more than the original cost of $52,500. What was the selling price of his house?

D. $64,575

Harry the Homeowner buys a new home. The purchase is financed with a conventional, amortized loan equal to $67,000. The interest rate on the loan is 8%, payable over 30 years. Harry's first monthly payment is $500. What is the loan balance after Harry's first payment?

D. $66,946.67

Fabian owns a lot that measures 80 feet by 20 feet. What is the area of his lot?

D. 1,600 square feet

How many acres are in a square parcel of land if one side is 1/2 mile long?

D. 160

Joel is interested in an $80,000 property and is qualified for a $60,000 loan. What would Joel's LTV be?

D. 75%

When the grantor's tax is calculated, how does the tax amount appear on the settlement sheet?

D. Debit the seller only

A property sold for $162,500, and the seller agreed to pay a 6.5% commission to the broker. He also had to pay off an existing loan of $86,250 and the closing costs were $3,750. What did the seller NET from the sale of the property?

D. None of the above

A property's $784 insurance premium is due on October 2. The deed conveys title at closing on July 15. The insurance is being assigned to the buyer. How much does the buyer owe for insurance?

D. None of the above

Property sold for $168,000. There was an existing 1st mortgage in the amount of $75,000. The seller paid 6% commission and $2,100 in closing costs. What was the seller's net proceeds from the sale of his property?

D. None of the above

Which of the following options will net the greatest amount to the seller at closing?

D. Sale Price: $56,300; Commission: 7%; Expenses: $1,360

When a salesperson terminates affiliation with a broker, that salesperson must:

Do nothing

A Virginia real estate firm may operate under the name of:

Either A or C

An associate broker must be:

Employed by another broker

The Real Estate Board is responsible for:

Enforcing the License Law

Craig the Broker got his license two years ago, so it is up for renewal. Unfortunately, Craig has been so busy that he hasn't taken any continuing education yet. What will happen to Craig's license if he doesn't complete the required courses before renewal?

His license will expire

The Board takes disciplinary action against a licensed salesperson. Which circumstance might also put the employing broker at risk of disciplinary action?

If the broker knew or should have known of the agent's actions

Every resident broker licensed in Virginia MUST:

Maintain an office in Virginia

Every Virginia resident who is also licensed as a broker MUST:

Maintain an office in the state of Virginia

Once a license has been issued to a salesperson, her license:

Must be kept at the employing broker's main place of business

All firms must have one principal broker. The principal broker has all of the following duties, except:

Must keep all financial records for 5 years

A real estate licensee is required in order to:

Offer to sell, purchase, or exchange real estate on behalf of another for a fee

Which person is designated to ensure compliance with Virginia license law and be responsible for the activities of the entire firm?

Principal Broker

Margie passed her license exam in October, 2013. In December, 2014, she applies for her license. Which of the following statements is true?

She must retake the exam

If any licensee changes his principal place of residence, he must notify:

The Real Estate Board within 30 days

A motel clerk provides a few leads to a broker in exchange for a percentage of the commission. In this situation, which of the following statements is true?

The clerk must be licensed as a broker

A seller gave a friend power-of-attorney in order to consummate the sale of her personal residence. Which of the following statements is true?

The friend need not be licensed, only if he or she does not get paid

What is the purpose of Virginia's real estate laws, rules, and regulations?

To protect the public interest

A real estate license is not required for a:

Trustee acting under a court order

A broker is required to return an affiliated agent's license to the Board in all of the following situations, EXCEPT:

When the salesperson refuses to perform real estate duties