real estate
For a home loan of $200,000 with a PMI rate of 0.5%, what is the annual cost of the private mortgage insurance?
1000
A property is valued at $200,000 and is assessed for tax purposes at 70% of its market value. If the local property tax rate is 15 mills, what is the annual property tax?
2100
A residential property generates $2,500 in monthly rental income. If the area's average Gross Rent Multiplier (GRM) is 110, what is the estimated value of the property?
3100000
A buyer is interested in a property that has an existing ground lease with 10 years remaining. The buyer plans to develop the property upon lease expiration. What factor is most critical for the buyer to consider before proceeding with the purchase?
terms of prop. reversion at lease end
A homeowner is selling a property that includes a driveway easement for the neighbor's use. What happens to the easement upon the sale of the property?
the easement auto. transfers with the property
A real estate broker is advising a client who is a veteran and is interested in purchasing a home in a rural area. The client is eligible for both a VA loan and a USDA loan. Considering the client's situation, which factor is MOST important in deciding between these two loan options?
the prop. eligible for usda loans
When selecting a new tenant for a rental property, what must a property manager prioritize to comply with Fair Housing laws?
their financial stability
Which of the following factors should be considered first when evaluating the offers? Select the best answer.
their financial strength
What is the primary purpose of a bridge loan in real estate transactions?
to bridge the gap between buying and selling
A buyer is interested in purchasing a property that has been subject to a recent foreclosure. Which type of deed is most likely to be used to transfer ownership of the property from the bank to the buyer?
trusteee deed
In applying the cost approach, an appraiser estimated the land value and construction costs correctly but reported a higher property value than expected. What is the MOST likely mistake?
underestimate depreciation
A real estate contract in which one party agrees to sell a property without receiving anything in return is generally:
unenforceable
A buyer expecting a general warranty deed receives a different type of deed. What is the most advisable action for the buyer?
verify title condition
In most jurisdictions, a real estate contract signed by a 16-year-old is generally considered:
voidable at the minor discretion
A buyer is purchasing a property from a seller who has a clear title but wants to ensure protection against any future claims against the title. Which type of deed should the buyer insist on?
warranty deed
A developer is considering purchasing land for a new residential project. What is the most important factor to check first?
zoning laws of the land
A potential buyer asks a real estate broker about the safety of the neighborhood. The broker is aware of a registered sex offender living nearby. Which law requires the broker to disclose this information?
Megans law
A client is interested in purchasing a distressed property to renovate and sell at a profit. The property requires significant repairs before it can be habitable. Which loan option should the broker recommend to the client?
a cha 203 rehab loan covers purchase and cost of renovations
What defines an 'executory contract' in real estate?
a contract with terms yet to be fulfilled
A client with a high DTI ratio is interested in purchasing a home in a rural area. Considering the client's financial situation and the property's location, which loan option would be most beneficial?
a usda loan 100% financing
To enhance property value and tenant satisfaction, what long-term investment should a property manager prioritize?
adding a community pool
What is a critical factor a buyer should consider when purchasing a property through a short sale?
approval time by the sellers lender
When advertising a financing option that includes a low introductory rate, what additional information must be disclosed to comply with Regulation Z?
apr after intro period
A client believes their property's tax assessment is unfairly high due to recent renovations. What is the MOST effective evidence to gather for appealing the assessment?
comparative market analysis
A real estate broker is listing a property that was part of a larger tract of land originally described using the metes and bounds method. The property is now in a developed area with a grid street system. Which method of legal description should the broker use for the listing?
convert to the lot and block system
A broker notices that a licensee under their supervision is using misleading advertising. What is the most appropriate action for the br
correct the advertising
Considering the legal description provided, what potential discrepancies should be investigated before proceeding with the transaction?
cross check with physical markets
A property manager receives a personal discount offer from a vendor bidding for a maintenance contract. How should the manager proceed?
decline the offer and select vendor based on merit
What is 'external obsolescence' in property appraisal?
depreciation caused by outside factors
A real estate agent knows about upcoming development plans in the neighborhood that could negatively affect property values. What is the agent's obligation?
disclose all potential buyers
A landlord requires a higher security deposit from tenants under 30, citing concerns about maturity and reliability. This practice is an example of:
disparate treatment
Under which condition can a landlord legally enter a tenant's residence without prior notice?
emergency sit.
How should a broker navigate a situation where a client's property may be subject to escheat due to the absence of a will or heirs?
encourage seek legal advice
What is the primary responsibility of a property manager?
ensuring tenant satisfaction
Before purchasing land for a new residential development, a developer learns the area is classified as a wetland. What is the most important factor the developer should consider?
enviro. impacts
What happens to a property when it becomes ownerless and there are no claimants?
escheat to the state
Which type of property ownership includes the complete bundle of rights?
fee simple absolute
What legal action is typically required to convert personal property into real property?
file a deed
What is the first step in the probate process for a property?
filing a petition with court
What are the potential consequences of a tenant's breach of a triple net lease agreement?
financial liabilities for the unmet lease terms
Under what condition can a government exercise eminent domain to acquire private property?
for public use
A contract that is 'unconscionable' can be:
found unenforceable
A client is considering leasing a commercial property and prefers a lease agreement that allows for rent adjustments based on changes in the Consumer Price Index (CPI). Which type of lease should the broker recommend?
graduated lease
Which individuals typically cannot legally enter into a contract?
induviduals under 18
In light of the recent changes in property law, how should the broker adjust their practice?
inform clients of potential impacts
An agent learns of a property that perfectly matches their client's needs but also suits their own investment criteria. What is the agent's best course of action to adhere to their fiduciary duties?
inform the client about property first
An agent learns of another buyer willing to pay more for a property after their client's offer has been accepted. What is the agent's duty?
inform the seller
In an appraisal, how does the concept of investment value differ from market value?
investment value specific to the investor
Why is title insurance considered essential in real estate transactions?
it protects against unknown titles
A homeowner discovers a restrictive covenant that prohibits commercial activities on their property. What is the primary effect of this encumbrance?
limits property use
A property includes a large pond used for irrigation and recreation. What type of rights primarily govern the owner's use of the pond?
littoral rights
In the Cost Approach to property valuation, what does 'depreciation' refer to?
loss in prop value from wear and tear
What is a primary benefit of government-backed loans in the real estate market?
more flexible qualification
Which element is essential for the formation of a valid contract?
mutual consent
Which of the following is essential for a real estate contract to be considered valid?
mutual consent
Which statement is appropriate for a real estate advertisement on social media?
near places of worship
How does owning a property as joint tenants with right of survivorship compare to sole ownership in terms of property tax calculation?
no difference in tax calculations
An offer to purchase a property specifies that acceptance must be communicated by email. The buyer sends a written acceptance via postal mail, which arrives before the offer's expiration. Is the acceptance valid?
no it was not emailed
In a tenancy in common, what must a co-owner do to sell their interest in the property?
nothing can sell freely
Which element is essential for mutual consent in a contract?
offer and acceptance
A retail business owner expects seasonal fluctuations in income and seeks a lease that adjusts rent accordingly. Which lease type is most appropriate?
percentage lease
Your client is considering a loan with a balloon payment feature, believing they can manage the lump sum through future income. What should you emphasize as the most significant risk of this decision?
potential changes in financial circumstances making payments affordable
A homeowner wishes to rent out their single-family home without using a broker. Which Federal Fair Housing Act exemption applies?
private individual not owning more than three homes
A real estate broker has been approached to list a property currently in probate due to the owner dying intestate. What must the broker verify before proceeding with the listing?
probate courts sale permission
A tenant notices a leaking roof in their rented residence. According to standard property management practices, who is responsible for arranging and paying for the necessary repairs?
prop manager
How might a borrower's credit score of 680 typically affect the interest rate on a 30-year fixed-rate mortgage compared to the market average?
qualification: rate may be higher than average due to suboptimal credit
A life tenant wishes to renovate the kitchen of the property to modern standards. Which of the following is true regarding this decision?
renovations should not decrease property value
During an inspection, significant termite damage is discovered in a property. What should the buyer's agent advise?
request a specialized termite inspect.
During a closing process, the escrow agent discovers an unpaid lien on the property. What is the most appropriate next step to ensure the transaction can proceed?
request the seller pay off the lien
During a property transaction, the buyer discovers a significant defect that was not disclosed by the seller. According to general contract law, which of the following is the most appropriate action for the buyer?
rescind the contract
Upon a tenant's move-out, the property manager notes minor wear and tear but no significant damage. What is the most appropriate action regarding the tenant's security deposit?
return full deposit
What should a buyer do upon discovering a restrictive covenant on a property?
review the covenants terms to understand its impact
What is a key legal implication of owning property as joint tenants?
right of survivorship
An investor is deciding on a business structure for a new real estate investment. They are looking for a structure that offers liability protection and is also tax-efficient by avoiding double taxation. Which structure should they consider?
s corp
A homeowner wants to build an addition to their home in a subdivision with strict CC&Rs. The addition would violate the height restrictions set by the CC&Rs. What is the most appropriate action for the homeowner to take?
seek approval to amend the ccrs
In the context of contract law, 'consideration' refers to which of the following?
something of value exchanged
A seller has owned a property for a limited time and wishes to provide assurances only for that period. Which type of deed is most appropriate?
speci
A homeowner wishes to sell their house but intends to keep the custom-designed mailbox that has sentimental value. What should the homeowner do to ensure the mailbox is not included in the sale?
specific in the sale contract
Which remedy allows the non-breaching party to enforce the original terms of the contract?
specific performance
Identify the term that describes the illegal practice of guiding prospective home buyers towards or away from certain neighborhoods based on their race, religion, or other protected characteristic.
steering
A client insists on listing their property at a price significantly above market value. What is the BEST advice a broker can give?
suggest lowering the price to market value
Martha is considering purchasing a home priced at $300,000. She has been quoted a loan at an interest rate of 4.5% with 1 point due at closing. The loan-to-value (LTV) ratio is 80%, and she will also need to pay for private mortgage insurance (PMI) because her down payment is less than 20%. Assuming the PMI is estimated to be 0.5% of the loan amount annually, and she will make a single upfront payment for it at closing, calculate her total initial costs at closing including the point and PMI but excluding any other closing costs.
3600
A property purchased for $500,000 has an estimated salvage value of $50,000 and a useful life of 10 years. What is the annual depreciation expense?
45000
A homeowner is refinancing their mortgage of $150,000 to a lower interest rate of 3.75% from an original rate of 4.5%. Assuming a new 30-year term, what will be the new monthly payment, excluding taxes and insurance?
694.67
A residential property is being appraised using the cost approach. The physical deterioration of the building is estimated at $50,000, and functional obsolescence is $30,000. What is the total depreciation of the property?
80k
