Real Estate Final Flash Cards

The tax rate applied to owner occupied residential property tax is: A) 10% B) 12% C) 14% D) 16%

A) 10%

The IRS ensures it receives capital gains taxes owed when a non-resident sells real property owned in the U.S. by withholding what percentage of the gross sales price of the property when it's sold? A. 15% B. 28% C. 39.6% D. t depends on sellers

A. 15%

John wants to do a 1031 tax exchange. He just sold his property. How many days does he have to close on a new property? A. 180 B. 30 C. 45 D. 60

A. 180

New construction commissions are typically _____. A. Based on either the base price of the property or the final purchase price B. Based on the base price of the property plus a percentage of any upgrades C. Based on the final purchase price of the property, just like resale homes. D. Lower than resale commissions

A. Based on either the base price of the property or the final purchase price

A certified professional home inspector is licensed by the Arizona: A. Board of Technical Registration B. Department of Agriculture C. Department of Financial Institutions D. Department of Home Inspectors

A. Board of Technical Registration

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? A. Compare it to the Loan Estimate. B. File it with her mortgage papers. C. Take it to the closing. D. Use the information to compare loan costs with those of other lenders.

A. Compare it to the Loan Estimate.

Which of the following could an investor who sells an apartment house buy using a 1031 exchange? A. Duplex, office building, or warehouse B. Duplex only C. Office building only D. Warehouse or office building only

A. Duplex, office building, or warehouse

Which of the following is true of an express contract? A. It requires verbal agreement. B. It's illusory. C. It's implied. D. It's stated specifically.

A. It requires verbal agreement.

Raw or vacant land is appraised by which of the following approaches? A. Market B. Cost C. Income D. Highest and best use

A. Market

What type of loan can change in payment, interest rate and amount owed? A. Open-end mortgage B. Take out mortgage C. Amortized mortgage D. Package mortgage

A. Open-end mortgage ("Open end Loan" Allows borrower to permit additional Sums of money from lender)

Which of the following is a true statement regarding record keeping requirements for Arizona real estate licensees? A. Records are subject to ADRE audit. B. Records must be stored electronically. C. Records must be stored electronically, in hard copy, or both, but must be available to be produced within 48 hours of a ADRE request. D. Records must be stored in hard copy, off site, in a fireproof filing container.

A. Records are subject to ADRE audit.

Which covenant requires the grantor to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing? A. The covenant of further assurances B. The covenant of seisin C. The covenant of the right to convey D. The covenant of warranty

A. The covenant of further assurances (The covenant of further assurances requires grantors to take necessary steps (within their scope of power) to perfect the title conveyed.)

Which of the following items is required in an Arizona purchase agreement? A. The form of the earnest money must be stated B. The parties signatures must be notarized C. Prorations will always be done as of the closing date D. The manner in which title is taken must be stated

A. The form of the earnest money must be stated

What is the purpose of the Arizona homestead exemption? A. To allow homeowners to exempt part of their primary residence's value from seizure for payment of debts B. To allow homeowners to exempt part of the value of their primary residence from property taxes C. To provide homeowners with a state tax credit D. To provide homeowners with a state tax deduction B. To allow homeowners to exempt part of the value of their primary residence from property taxes C. To provide homeowners with a state tax credit D. To provide homeowners with a state tax deduction

A. To allow homeowners to exempt part of their primary residence's value from seizure for payment of debts

What is the purpose of the Truth in Lending Act? A. To better educate consumers about the cost of credit or obtaining a loan B. To establish loan terms that lenders must follow C. To require borrowers to disclose specific information to lenders D. To set strict restrictions on the amount of interest a lender may charge for a loan or credit

A. To better educate consumers about the cost of credit or obtaining a loan

The document that expresses an intention to purchase without creating any firm legal obligation to do so is known as: A. a letter of intent. B. an offer to purchase C. a purchase contract D. an exclusive right to sell

A. a letter of intent.

The Arizona homestead exemption allows homeowners to exempt up to ______ of the value of their home from seizure for payment of debts. A. $125,000 B. $250,000 C. 50% D. 75%

B. $250,000

ADRE has just asked Newman for his transactional records, which he stores these records online. How long does he have to produce them for ADRE's auditor? A. 10 business days B. 24 hours C. 30 days D. Three business days

B. 24 hours

Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides? A. A bargain and sale deed does not come with any covenants of warranty. B. A bargain and sale deed may come with or without covenants of warranty. C. A bargain and sale deed provides the same covenants as a general warranty deed. D. The bargain and sale deed includes all covenants except the covenant of warranty.

B. A bargain and sale deed may come with or without covenants of warranty.

The act of transferring ownership of a property is known as _______. A. Accession B. Alienation C. Devising D. Granting

B. Alienation (Alienation is the act of transferring ownership of a property. It may be voluntary (with the owner's consent) or involuntary (without the owner's consent).

In a 1031 tax-deferred exchange, what role does the qualified intermediary serve? A. Acts as trustee B. Coordinates the exchange C. Insures the replacement property D. Records the deed

B. Coordinates the exchange

Seth is a new salesperson at Harriston Homes in Tempe. He's going through his new employee orientation and learning what he can expect from his employing broker. Which of the following is among the responsibilities he can expect to be fulfilled by his new employing broker? A. Counsel licensees on personal finance and investment B. Ensure licensees are familiar with federal, state, and local laws related to real estate C. Maintain employees' licenses through registration and renewal D. Offer continuing education courses to their employees.

B. Ensure licensees are familiar with federal, state, and local laws related to real estate

Jane is selling her home to Micah. What must occur for Jane to effect a transfer of title to Micah? A. Jane must accept the deed. B. Jane must deliver the deed to Micah. C. Micah must acknowledge the deed. D. Micah must sign the deed.

B. Jane must deliver the deed to Micah.

Most homes in Arizona are sold with legal descriptions that state: A. Latitude and longitude B. Lot and block C. Township and range D. Metes and bounds

B. Lot and block

Rank the following liens in the order of their priority for payment from highest to lowest: IRS tax lien; real property taxes; special assessments. A. IRS tax lien, real property taxes, special assessments B. Real Property taxes, special assessments, IRS tax lien C. Real property taxes, IRS tax lien, special assessments D. IRS tax lien, special assessments, real property taxes

B. Real Property taxes, special assessments, IRS tax lien

When a government entity exercises its powers to create zoning ordinances, what must be followed? A. Federal zoning codes B. The area's comprehensive plan C. The state's zoning codes D. Universal design standards

B. The area's comprehensive plan

Who generally takes responsibility for reporting required information on Form 1099-S after a real estate closing? A. The buyer's agent B. The closing agent C. The seller D. The seller's agent

B. The closing agent

Which of the following is an example of easement termination by merger? A. The dominant estate owner takes action that shows a clear intent to stop using the easement. B. The owner of a servient estate buys the property of the dominant estate. C. The owner of the dominant estate has an alternate route and no longer needs the easement. D. The owners of both estates decide not to use the easement.

B. The owner of a servient estate buys the property of the dominant estate.

The priority of mortgages in relation to each other is based on which of the following: A. Time of execution B. Time of recording C. Time of delivery D. Time of acknowledgeme

B. Time of recording

Under Arizona law, the trust deed conveys the power of sale to the: A. Trustor B. Trustee C. Beneficiary D. Grantee

B. Trustee

Report this question Which of the following federal laws requires a lender to give a borrower complete information about financing costs? A. Interstate Land Sales Full Disclosure Act B. Truth-In-Lending Act (Regulation Z) C. Federal Fair Housing Act D. Equal Credit Opportunity Act

B. Truth-In-Lending Act (Regulation Z)

John wants to do a 1031 tax exchange with a property he just sold. How many calendar days does he have to identify a new property for the exchange? A. 180 B. 30 C. 45 D. 60

C. 45

A power of sale clause would MOST likely be found in: A. A mortgage B. A promissory note C. A trust deed D. A listing contract

C. A trust deed

Which of these is most likely to be the list of individuals who attend a closing meeting? A. Buyer, seller, licensees who represent the buyer and seller, lender, appraiser, home inspector, attorney, closing officer B. Buyer, seller, licensees who represent the buyer and seller, lender, appraiser, lender, closing officer C. Buyer, seller, licensees who represent the buyer and seller, lender, closing officer D. Buyer, seller, licensees who represent the buyer and seller, lender, lender, underwriter, closing officer

C. Buyer, seller, licensees who represent the buyer and seller, lender, closing officer

All contractors who want to reserve their right to file liens in Arizona have to file a _______. A. A lien invoice B. Notice of completion C. Preliminary 20-day notice D. Right-to-lien form

C. Preliminary 20-day notice

The Arizona real estate commissioner may perform each of the following duties, EXCEPT: A. Hire and fire the employees of the state real estate department B. Inspect the business records of a licensee at any time C. Revoke a license upon complaint of fraud D. Investigate complaints against licensees

C. Revoke a license upon complaint of fraud

___ are taxed at an ordinary taxpayer's marginal tax rate. A. Long-term capital gains B. Long-term capital losses C. Short-term capital gains D. Short-term capital losses

C. Short-term capital gains

Which of the following is a true statement about U.S. Department of Veterans Affairs loans? A. All properties are eligible. B. All veterans are eligible. C. The VA will guarantee a loan based on the sales price or the certificate of reasonable value (CRV). D. VA loans can be used for investment properties.

C. The VA will guarantee a loan based on the sales price or the certificate of reasonable value (CRV).

Which option is true if a deed is not recorded after closing? A. The buyer must pay a fine to the seller. B. The entire closing is void. C. The property's legal ownership can be challenged. D. The title never changes hands from the seller to the buyer.

C. The property's legal ownership can be challenged.

A homestead exemption can protect a person against which of the following? A. Secured loans B. Subsequent liens C. Unforeseen personal judgments D. Mechanic's liens

C. Unforeseen personal judgments

What kind of loan is usually the LEAST expensive to create? A. Seller carryback B. FHA loan C. VA loan D. Conventional Mortgage

C. VA loan

profits made from the sale of real estate, investments and personal property, are equal to the sales price less the adjusted basis.

Capital Gains

Closing prorations are based on: A. 365 days in a year B. 52 weeks in a year C. Actual days in a year D. 30 day month and 360 day year

D. 30 day month and 360 day year

The owner of a property with a condition subsequent has: A. A remainder interest B. An estate for years C. Less than a freehold interest D. A defeasible estate

D. A defeasible estate

A buyer who wants to obtain an FHA or VA loan should apply through A. A Federal National Mortgage Association (FNMA) office B. An FHA or VA office C. An insurance company D. An approved mortgage banker

D. An approved mortgage banker

Which of the following processes is not part of deed of trust foreclosure? A. Constructive notice B. Ninety-day reinstate period C. Notice to all listed creditors D. Deed of reconveyance

D. Deed of reconveyance

Arizona law requires which of the following to appear on the face of the listing contract? A. Street address B. Annual taxes C. Mortgages balance D. Expiration date

D. Expiration date

______ determines who the heir or heirs will be if a person dies without a will. A. Court appointment B. Escheat C. Intestate bequest D. Intestate succession

D. Intestate succession

The document that establishes a planned community is the _______. A. Articles of incorporation B. Bylaws C. Declaration D. Landhold proclamation

D. Landhold proclamation

What type of IRS deduction can be taken for a vacation home? A. Home improvement costs B. Loan servicing fees C. Points D. Property taxes

D. Property taxes

Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded? A. He can't legally make any improvements to the property until the deed is recorded. B. He doesn't legally own the house until that occurs. C. Recording provides actual notice that he owns the property. D. Recording provides constructive notice that he owns the property.

D. Recording provides constructive notice that he owns the property

The duties that Arizona licensees owe to their clients as outlined in the law are called ______ duties. A. Brokerage B. Client C. Fiduciary D. Statutory

D. Statutory

What title guarantees will Jody have when she buys a property at a foreclosure auction? A. The covenant against encumbrances B. The covenant of further assurances C. The covenant of quiet enjoyment D. The covenant of seisin

D. The covenant of seisin

For a homeowner to be eligible for a homestead exemption in Arizona, the following must exist: A. The homeowner must own the property on which the exemption is filed B. The homeowner need not be married C. The homeowner must be a legal resident of Arizona D. The homeowner must record the declaration of homestead

D. The homeowner must record the declaration of homestead

A parcel of land in Arizona with a part of its legal description being T4N, is approximately how far north of the Baseline? a. 12 to 18 miles b. 18 to 24 miles c. 24 to 30 miles d. 30 to 36 mileS

b. 18 to 24 miles

The mortgage MOST commonly uses: a. Compound interest b. Simple interest c. Discounted interest d. Prepaid interest

b. Simple interest

Which protected classes were added in the Fair Housing Amendments Act of 1988? a. Sex and Familial Status b. Familial Status and Religion c. Handicap and Sex d. Familial Status and Handicap

d. Familial Status and Handicap