Real Estate Licensing Exam

Emily received Gerty's name through a previous client whose home she sold. This is an example of ______.

A referral

Which of the following phrases doesn't potentially discriminate against any protected class?

"Easy access to local shops"

Let's apply the concept of proration to rent. Monthly rent for a property is $2,100. The tenant won't be moving into the property on the first of the month, so the entire rent isn't due. Instead, the lessor prorates the amount of the rent based on the number of days in the month the tenant will occupy the property. Assuming the tenant will occupy the property for 17 days (and also assuming a 30-day month), how much rent is due?

$1,190

An appraiser collects rental income information on a subject property at $1.24/sq. ft., and three very similar properties which are renting for $1.20/sq. ft., $1.26/sq. ft., and $1.29/sq. ft. What's the market rent that the appraiser will most likely use to find a value for the subject property?

$1.25/sq. ft.

What's the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?

$110,000-To estimate value using the cost approach, an appraiser adds the site value to the cost to replace improvements, then subtracts the amount of depreciation. Here, that gives us $100,000 + $25,000 - $15,000.

Let's look at a few more scenarios on this and the next couple of slides. Seller Angela's property is assessed real estate taxes of $900 for the year. Closing is held on February 29th (that's right, it's a leap year). What amount does Angela owe for taxes accrued and not yet paid that will appear as a debit for the seller and a credit for the buyer at closing? Use the statutory year and assume that Angela owns the day of closing.

$150-Yes, that's right! You calculate the taxes per month ($900 ÷ 12 = $75), and then calculate the accrued taxes owed and not yet paid by the seller ($75 × 2 months = $150).

Sandy is an appraiser calculating the gross dollar adjustment for a comparable. If her adjustments were: ‒$10,000, + $5,000, and ‒$3,000, what would her gross dollar adjustment total?

$18,000

Karen is appraising a newer residential property. She's calculated the living area of the house as 2,000 square feet, at a current construction cost of $90 per square foot. The non-living areas consist of an attached two-car garage that's 576 square feet, with a construction cost of $25 per square foot, and a deck valued at $2,000. Other site improvements (landscaping) are valued at $1,500. What's the reproduction cost of this property?

$197,900: The estimated reproduction cost new of the subject building is $197,900. The calculation is as follows: (2,000 x 90) + (576 x 25) + 2,000 + 1,500 = $197,900.

Devin is a real estate licensee in Ohio. He violated license law by failing to provide timely copies of signed contracts to a client. This is the first time he's committed a violation. What's the maximum fine the commission may impose?

$2,500

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

Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?

$25,000

Because appraisers use both percentage adjustments and dollar adjustments on the sales price of comparables, the order of application of the adjustments matters. Why is that? Consider this simple adjustment problem: The sales price of a comparable property is $225,000. The appraiser needs to add 10% of the sales price for time because market prices have changed since the date of sale. The appraiser also needs to adjust the comparable sales price by adding $10,000 because the subject property has a finished basement with an additional bedroom. Select the adjusted sales price that relies upon the correct sequence of adjustments.

$257,500 (The $225,000 sales price plus 10%, or $22,500, is $247,500. Then the $10,000 is added to get an adjusted sales price of $257,500.)

Celina is considering buying a residential income property that has a potential gross income of $535,000 and a 12% vacancy and loss rate. The appraiser figures she'll pay $210,000 annually in total expenses. What's the NOI for this property?

$260,800

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

Two years ago, Amelia purchased a commercial building for $619,000. It was in great shape, so she didn't need to make any renovations. She will use straight-line depreciation to determine the amount of depreciation she can take each year. What is the total amount of depreciation Amelia has accounted for including last year and this year?

$31,743.58-Straight-line depreciation for a commercial building means that you should divide the building's basis ($619,000) by 39 years. The yearly depreciation is $15,871.79, and you'd multiply this by two to get the two-year depreciation total.

A buyer is purchasing a home appraised at $480,000. The buyer is obtaining a 90% loan, and the lender will charge an origination fee of 1% at closing. How much will the loan origination fee be?

$4,320

An office building is fully occupied with five tenants. Three of the tenants pay $800 per month, and the other two pay $500 per month. The building is 70 feet by 100 feet. How will an appraiser most likely express the scheduled rent for this building, in order to compare it effectively with the rents from similar office buildings?

$5.83/sq. ft.

In Ohio, a landlord must pay the tenant 5% interest annually on any security deposit amount in excess of ______.

$50 or one month's rent, whichever is greater

John uses the VA home loan to purchase property. His mortgage is $200,000. Then, two years later, John defaults on his loan. How much will the VA reimburse the lender?

$50,000

The purchase price of the home Leroy is buying is $300,000. He's putting $100,000 down and is paying three discount points. How much will this cost?

$6,000-Each point is 1% of the loan value. The amount of Leroy's loan is $200,000, so each point is $2,000 ($200,000 × 1%, or .01). He's paying three points, for a total of $6,000 ($2,000 × 3).

A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What's the amount of the loan origination fee if the lender charges one-and-a-half points?

$6750-The amount paid for points = loan amount × number of points. The buyer is financing $450,000 ($500,000-$50,000). Multiply the loan amount of $450,000 by 1.5% (or 0.015) to get $6,750.

Let's try a slightly more difficult calculation. This time, seller Ricky's property is assessed real estate taxes of $1,400 for the year. Closing is held on August 15. If Ricky owns the day of closing, what is the amount that Ricky owes for taxes accrued and not yet paid based on the statutory year?

$875.04-Yes, that's right! First, you calculate the taxes per month ($1,400 ÷ 12 = $116.67), and then you calculate the accrued taxes owed and not yet paid by the seller for the number of full months ($116.67 x 7 = $816.69). However, because you have a partial month, you also have to calculate the taxes per day ($116.67 ÷ 30 = $3.89; $3.89 × 15 = $58.35) and then add that to the taxes per month amount ($816.69 + $58.35 = $875.04).

Property B, a sales comparable, must be adjusted as follows: Property B has a $10,000 addition that the subject property doesn't have, and a market timing adjustment of 5%, because prices have risen 5% since Property B sold. If Property B's sales price were $100,000, what would its adjusted sales price be?

$95,000

Mary Jane shows her client Margaret a 2,500-square-foot home priced at $240,000. What is the price per square foot?

$96-To find the price per square foot, we divide the price by the square footage. So, $240,000 ÷ 2,500 = $96.

Mortgage Broker

-Works with multiple lenders to search for and locate the best deal -Doesn't lend money itself

Mortgage Banker

-lends money -has in house loan processors and underwriters -can close quickly because it funds loans in house -Offers a limited # of products

Pattie is the widow of Oscar, a member of the Army who was killed in action. When she uses the VA loan to buy her first home, what percentage of her loan amount will be charged as a funding fee?

0%

Ohio Complaint Investigation Process Overview

1. Consumer or licensee files a complaint with division of real estate 2. Superintendent acknowledges receipt to complainant and notifies licensee 3. Complainant and licensee decide whether to go to informal mediation 4. Superintendent assigns an investigator Assigned investigator investigates, then files a report with superintendent. 5. Superintendent decides whether a licensing violation has occurred. If no, Superintendent informs everyone that investigation is over. If yes, formal hearing occurs. 6. Formal hearings are held, including witness testimony and document review 7. After hearings conclude, hearing examiner files findings of fact and conclusions of law with:• Superintendent• Commission• Complainant• Licensee 8. Real estate commission reviews the report at next regularly scheduled commission meeting; commission can hear additional testimony on request 9. Commission decides whether to impose disciplinary sanctions

Corinne is in the process of purchasing a home that was built in 1968. As a prospective buyer of a home built prior to 1978, how long does Corinne have to conduct a paint inspection or risk-assessment for lead-based paint or lead-based paint hazards?

10 Days

Parties to an Ohio complaint may request informal mediation rather than go through the formal hearing process, if requested within ______ days of complaint notification.

10 Days

In Ohio, real estate brokers must complete ______ hours of post-license education within the first year of initial licensing.

10

A three-unit income-producing property has a sale price of $600,000. Monthly gross rent is estimated at $6,000. What's the gross rent multiplier?

100x

A 20-unit apartment building sells for $5 million. The property can bring in $400,000 in annual gross income. What is the gross income multiplier (GIM)?

12.5

A four-unit rental property has a sales price of $800,000. Annual gross rent is estimated at $72,000. What is the gross rent multiplier? Round if necessary.

133

A complainant who wishes to appeal the Ohio superintendent's decision to dismiss a complaint must make that request within how many days of receiving the decision?

15 Days

Matthew was called to active duty military service for the past eight months, so his salesperson's license expired and was suspended. How long does he have after discharge to reactivate his license?

180 Days

If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?

20%-The cap rate is 20%. To calculate cap rate, divide the income by the property value. The formula for this is rate = income / value.

Over how many years is a residential income-producing property depreciated?

27.5 Years

The Ohio division of real estate tries to audit each real estate brokerage in the state every ______ years.

3

Kayla, an Ohio broker, is sorting through digital and hard copy records. For how long must she keep trust account records?

3 years

Regarding a formal hearing for a real estate complaint, the licensee or the superintendent can request an extension for more time to prepare for the hearing. How long an extension can be requested?

30 Days

A qualified mortgage's loan term limit is ______.

30 Years

A buyer can obtain a qualified mortgage with a debt-to-income ratio of ______.

38%

Over how many years is a commercial property depreciated?

39 Years

Your client, Joseph, has a commercial income-producing property. How long does he depreciate this property?

39 years

What percentage of homes in the U.S. are owner-occupied?

57%

Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. What is the brokerage's commission rate?

6.5%-Jared was paid $12,239.50, which is 70% of the amount paid to his broker as commission. That makes his firm's commission $12,239.50 ÷ .70 = $17,485. Multiply that by two for the total commission the firm grossed, since it's shared 50/50 with a cooperating brokerage (the brokerage that brings the buyer to the sale), giving you $34,970. Then divide by the total sales amount for the brokerage's commission rate: $34,970 ÷ $538,000 = 0.065, or 6.5%.

A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?

7.9%

Who or what entity directs the activities of credit unions?

A board of directors

To practice real estate in Ohio, salespeople must be sponsored by ______.

A broker

A buyer representation agreement is also known as _________.

A buyer agency agreement

What does the principle of substitution say?

A buyer won't pay more for a property if a similar property is available at a lower price.

Cathy is hoping to purchase a home using a VA loan. A VA-assigned real estate appraiser is required to provide ______ for the property.

A certificate of reasonable value

With a VA loan, the borrower must receive a certificate of eligibility. What must the property receive?

A certificate of reasonable value

What's an example of a situation where a foreign real estate dealer's license would be needed?

A company wants to sell Florida timeshares in Ohio.

Which of the following provides an example of a universal agent?

A court-appointed guardian

Related to title insurance, what is "subrogation"?

A covered party grants permission to the title company to pursue the party who caused a claim or loss.

If Freddie Mac didn't exist, which of the following would be a likely effect?

A decrease in the amount of credit available to loan originators

Land given to the government without compensation is best known as what?

A dedication by deed

What happens after a lien foreclosure sale if not enough money were made from the auctioning of the property to pay off the lien holders?

A deficiency judgment against the property owner for the outstanding balance to the lien holders is issued.

Legal description of property

A description of such certainty and accuracy that one can go to the ground and identify the land- a description prepared by a surveyor

There are three types of international buyers: those who have work visas and are looking for a home to purchase while they're in the U.S., those who are looking for a second home in the U.S., and those who are looking for ______.

A home to purchase as an investment

Wrap-around Mortgage

A junior mortgage which provides an owner additional capital without refinancing the first mortgage. (The original mortgage is not disturbed)

What is the statute of frauds?

A law requiring contracts conveying ownership in real property to be in writing to be enforceable

Ohio licensee Karl must provide his brokerage's policy on agency in which of the following transactions?

A lease for vacant land

What is probate?

A legal process to determine a will's validity

Who would apply for a foreign real estate license?

A licensee from another state or jurisdiction who wants to sell out-of-state real estate in Ohio

Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it's going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?

A lien theory state

amortized loan

A loan in which the principal as well as the interest is payable in monthly or other periodic installments over the term of the loan.

Construction Mortgage

A loan secured by real estate which is for the purpose of funding the construction of improvements or building(s) upon the property.

Fixed Rate Loan

A loan with a rate that does not change over the life of the loan.

While Martha's paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?

A promissory note

Which of these examples describes a prepayment penalty?

A monetary penalty imposed on a borrower for paying off a loan before its intended time

What's an example of an unrecorded interest in a property?

A month-to-month lease

Purchase Money Mortgage

A mortgage given by the seller to the buyer to cover all or part of the sale price. Seller financing. (Downpayment)

Home Equity Line of Credit

A mortgage loan, usually in second position, that allows the borrower to obtain cash drawn against the equity of his home, up to a predetermined amount.

Blanket Mortgage

A mortgage which covers more than one piece of real estate. Often used by a developer in the financing of undeveloped lots. Contains a partial release clause.

Package Mortgage

A mortgage, used in the purchase of new residential property which, in addition to real property, covers certain personal property items and equipment. (Washer, dryer, drapes, refrigerator, stove)

Robin has great credit and was able to secure a loan for her ocean-side dream home. Her 30-year, fixed-rate loan is for an amount that's above conventional loan limits. What type of loan does Robin have?

A non-conforming loan

Which of the following best describes vacancy and collection losses?

A percentage of potential gross income based on the market, the property, and the appraiser's judgment

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

What would you expect to find in the condition field for a comparable property in the sales comparison grid of the URAR?

A rating from the C1‒C6 scale

Disparate impact is when ______.

A seemingly neutral law or regulation ends up being discriminatory because it affects one group more than another

Which project would a life insurance company be most likely to finance?

A shopping mall

In Ohio, a designated agent is known as __________.

A split Agent

In Ohio, an agent who represents a party to a transaction in which another agent from the same brokerage represents the other party is known as ________.

A split Agent

A commercial property has rental income, income from several vending machines, and income from parking meters. The potential gross income for this property should be shown as which of the following?

A statement with a line for rental income and a line for non-rental income

What is a transfer tax?

A tax that's applied to the transfer of property from one person to another

What's the definition of a marketable title?

A title that is clear and free of encumbrances

Which of the following types of properties may be eligible for purchase by Freddie Mac?

A triplex purchased as a primary residence

Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions?

A verbal lease agreement Martha has with her neighbor who leases Martha's garage

To which of the following borrowers might a lender be most likely to recommend an FHA loan?

A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores-Loans insured by the Federal Housing Administration require a 3.5% down payment and permit buyers with lower credit scores to qualify for a loan.

What type of clause is this? "If any monthly installment under this Note is not paid when due and remains unpaid after a date specified by a notice to Mortgagor, the entire principal amount outstanding and accrued interest thereon shall at once become due and payable at the option of the Note holder."

Acceleration Clause

The addition of value to property through labor or the addition of new materials.

Accesion

The build-up of land from sand, silt or gravel over water.

Accretion

To determine property value with the cost approach, the appraiser subtracts the ______ from the reproduction/replacement cost and then adds the site value.

Accrued depreciation

Your client, Cassandra, asks you at what stage in her property ownership life cycle she'll be impacted by income tax issues. You tell her that it's likely that she'll be affected at ______.

Acquisition, ownership, and reversion

Special Agent

Acts as an intermediary, but doesn't make decisions or enter into contracts on the client's behalf Acts with limited authority on a client's behalf Covers most real estate transactions involving a buyer and seller

What's the term for a notice given directly to and received by a person?

Actual notice

When a sales contract doesn't cover the terms needed by the parties, which of the following actions is a licensee allowed to take?

Add a standard addendum using standard language.

In what part of a narrative appraisal report would you expect to find a glossary of terms, a flood hazard map, and qualifications of appraiser and company profile?

Addendum

When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at?

Addendum

A buyer requests that the warranty for the home's HVAC system be included as part of the agreement of sale. This is called a(n) ______.

Additional provision

Lucy inherited some land. When she makes the drive to check on it about two years later, she finds that, to her surprise, someone is living in a small cottage on that property. What's this an example of?

Adverse possession

Joy and her new client, Kyle, have just signed a buyer representation agreement. Now that Joy is Kyle's ______, she can advocate for him.

Agent

Through which covenant does a grantor offer assurances that there are no other claims or liens against the title, other than those in the public record or the deed itself?

Against encumbrances

With which of the four methods used to measure depreciation does the appraiser compare the structure's effective age at the time it's appraised with the structure's total economic life?

Age-life

Which of the following must a licensee provide to a consumer only if the licensee is engaged in an agency relationship?

Agency disclosure

Suzy has lost her job and wasn't able to make last month's mortgage payment. How is her lender most likely to help Suzy stay in her home?

Agreeing to modify her loan

Seller Ahmed wants to waive some of the duties his Ohio real estate agent owes him. How can he do this?

Ahmed and the agent must make the Waiver of Duties statement part of their agency agreement.

The ______ clause is also known as a due-on-sale clause.

Alienation

Albert wants to sell his house to his cousin, who's willing to assume his FHA loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this?

Alienation Clause

Which statement is true regarding how a face-to-face closing is conducted?

All parties are present and physically meet to sign and exchange documents.

What's true about an escrow closing?

All settlement services are handled by a closing agent.

A six-unit residential property is being appraised. Four units are occupied by tenants, one unit is empty, and the property owner lives in one unit. How will this affect the appraiser's calculation of potential gross income?

All six units will be included in the potential gross income, calculated at the per-room market rent.

Lease with option to buy

Allows tenant to purchase property at end of lease term-Buyer and Seller will negotiate a sales price

What is the term used for the land mass that is built up by accretion?

Alluvion

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

Americans with Disabilities Act

Amortization

Amortization is the process of paying off a loan over time. Every monthly loan payment made on a mortgage loan reduces the amount of principal owed and also pays the portion of interest owed for the past month. A typical mortgage loan is designed so that at the end of the loan term, the entire principal balance is paid off. This is called a fully amortized loan. Negative amortization means that the monthly payment a borrower makes isn't sufficient to fully pay off the loan at the end of the loan term. For example, balloon mortgages are designed so the borrower pays off a portion of the loan's principal while making payments but then pays off a lump sum at the end of the loan term. Many amortization charts and tables are available, especially online. Sometimes, though, even using a table can be confusing. To complete a monthly principal and interest payment, you need to know the interest rate and the loan term.

Esmerelda makes regular monthly payments on her loan. In addition to paying interest, she's slowly paying down the principal of the loan. With each payment she makes, more will go towards the principal and less to interest. What type of loan does she have?

Amortized

When a buyer takes over the seller's original loan with the lender's permission, this is called ______.

An Assumption

What is a codicil?

An amendment to a will that involves drafting an additional document

Reverse Mortgage

An arrangement where the lender agrees to pay money to a homeowner, either regularly or occasionally, and to be repaid from the homeowner's equity when he or she sells the home or obtains other financing.

Encumbrances

Are there any existing liens, easements, or restrictions against the property?

Judgements

Are there any outstanding judgments against the property at the municipal, state, or federal level? Is there any pending civil litigation? Is the property under foreclosure proceedings?

Divorce

Are there any pending divorce proceedings

What's a discount point?

An upfront charge to make up for the difference between the rate the borrower is receiving and the rate the lender normally requires

Which part of the narrative appraisal part is the essential core, containing the appraisal methodology, assumptions and limiting conditions, highest and best use feasibility, and the approach(es) used?

Analysis and Opinions

What's a fixed annual return on an investment?

Annuity

______ is another method of yield capitalization, which simplifies the discounting process through the use of published financial tables.

Annuity capitalization

Which of the following statements about annuity capitalization is true?

Annuity tables work best for stable investments.

The value principle of ______ is the basis of the income approach to appraisal.

Anticipation

If Ohio licensees disagree with sanctions the Ohio Real Estate Commission imposes on them, what option can the licensee exercise?

Appeal to the Court of Common Pleas.

Designated Agent

Appointed by the brokerage's broker to represent one party in an in-house transaction Designated to perform fiduciary duties to a client Known also as an appointed agent or assigned agent

Which of the following statements is true about appraisals?

Appraisals can only be performed by certified appraisers (with certain exceptions in some states)

Through the divorce process, Gail was granted ownership of the couple's vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband Daniel's name is still on the deed, creating a cloud on the title. What should Gail do?

Ask Daniel to sign a quitclaim deed to release his ownership share.

Licensee Boris noticed a stain on the seller's bedroom ceiling when he toured the property as part of his market analysis. What should he do?

Ask the seller what caused the stain.

Ed is a homebuyer reviewing the Loan Estimate he received from a lender. He notices the loan terms include a prepayment penalty. Because he's a savvy consumer, he _______.

Asks the lender if there are other options available that would not involve a prepayment penalty

In which of the following situations does a new tenant take the place of a departing tenant, thereby becoming responsible for the lease?

Assignment

Ricky has decided to take a job in another state, causing him to leave his beloved home state of Ohio. His lease states that novation is not an option, but it doesn't forbid him from assigning the lease or subleasing. Since he needs a tenant to take over until the end of the lease term, which of the following best meets his needs?

Assignment

When a promissory note is sold, what is recorded in county land records?

Assignment of the note

Rose, a new licensee, is thrilled that a potential buyer client has agreed to have a sit-down meeting with her. Where should this meeting take place?

At Rose's office

When must lenders deliver the Closing Disclosure form to buyers?

At least three days before closing

When is the mortgage loan commitment or title insurance contract signed?

At the closing

When is the seller paid the full amount of the purchase price for the property?

At the closing

Which of the following sources can provide real estate professionals with important market data?

Banking, bond, and investment analysts

The Ohio Division of Real Estate and Professional Licensing doesn't have the authority to do what relative to complaints?

Award monetary damages

Why might an appraiser use only one approach to valuation in an appraisal?

Because the other two approaches aren't relevant to the subject property

When must an Ohio seller's agent provide an agency disclosure to a buyer consumer?

Before the buyer reveals any confidential or compromising information to the licensee

What's meant by the term of a lease?

Beginning and ending dates

When considering loan risk, which two items will lenders consider in equal measure?

Borrower and Property

Which of the following situations would make a borrower ineligible for a loan modification?

Borrower has filed for bankruptcy

Why is a foreclosure more likely to have title issues than a non-foreclosure?

Borrowers who can't afford loan payments may have taken out other loans against the property.

Which of the following represents a potential concern when borrowing funds from a pension or retirement plan?

Borrowing without consulting a financial expert can result in unintended consequences, such as income tax liability and loss of retirement income.

Which of the following statements about the unit-in-place and square-foot methods is true?

Both methods rely on information provided by cost manuals.

In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?

Bracketing

Lenders prefer that appraisers select at least one comparable that is superior and a comparable that is inferior to the subject property. What is this method of selecting comparable properties called?

Bracketing

Britney is selling her bungalow on an installment contract. The buyer made payments dutifully for five years, but has not made any payments for more than a year. Which of the following is true?

Britney can keep all of the proceeds received and repossess the property.

In addition to investigating complaints about licensed individuals, the Ohio real estate division will investigate complaints about unlicensed individuals possibly engaging in ______.

Brokerage services

Who must complete at least three CE hours during each licensing period on brokerage operations and duties?

Brokers and management level licensees

Which of the following is a true statement regarding Ohio property management trust accounts?

Brokers must maintain a separate ledger for each property owner.

When HUD pursues actions that are designed to reduce housing discrimination and help communities recover from disasters, which of its goals is it supporting?

Build strong, resilient, and inclusive communities

Which of the following is a drawback to applying the cost approach to residential property?

Builders' costs vary widely in a specific area.

When the land value is known, but the building value is unknown, the ______ technique can be used.

Building residual

Which of the following is an example of an escalator offer?

Buyer offers $650,000 with clause that buyer will beat all competing offers by $3,000 up to $675,000.

Which of these is most likely to be the list of individuals who attend a closing meeting?

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

How are adjustments made in the analysis used in the sales comparison approach?

By adding or subtracting a dollar value or percentage from the sales price of the comparable property.

How is the adjusted sales price calculated for a comparable property using the sales comparison approach?

By adding or subtracting the sum of the adjustments made on a comparable property

How should the proximity of a comparable property be indicated in the sales comparison grid of the URAR?

By distance in miles and direction relative to the subject property

How can a foreclosure process be temporarily stalled?

By filing for Chapter 7 bankruptcy

In the Site section of the Uniform Residential Appraisal Report, how is property of less than one acre noted?

By the amount of square feet

How does an appraiser determine site value when using the cost approach method?

By using the sales comparison method

Appraiser Alan appraises a property that's only two months old, and has never been occupied. When rating the Improvements in the Uniform Residential Appraisal Report, he gives it the highest rating, which is defined as, "Improvements have been recently constructed and not previously occupied. Structure and components are new and there's no physical depreciation." Which of the following ratings did he give it?

C2

An appraiser reviews the expenses from an income property, and notices that the management records expenses when they're paid and income when it's received. What is this method of accounting called?

Cash basis

Chuck needs to make a few repairs and upgrades to his home, but he needs some cash to do it. He decides to tap into the equity in his home, which he purchased using a VA home loan. What VA program can Chuck use to do this?

Cash-Out Refinance

Where in a narrative appraisal report does the appraiser state the appraiser's lack of bias or hidden motive, the truthfulness of the report, and that the appraisal was conducted in conformance with the prevailing standards of practice?

Certificate of appraisal

The ______ tells the lender how much entitlement the veteran has available under the VA loan program.

Certificate of eligibility

Kaycie is a new employee at a mutual savings bank. During orientation, she learned that mutual savings banks have limitations that are set by their ______.

Charter

Which of these items is a demand deposit?

Checking account

Some countries have banks that issue loans for U.S. real estate purchases. Besides Mexico, what are those countries?

China, the U.K., and Canada

According to the National Association of REALTORS®, the majority of foreign investors in U.S. real estate are ______.

Chinese

Which of these is a member of the primary mortgage market?

CitiBank (National bank working directly with customers)

An appraiser finds that the subject property—a 10-unit apartment building—has historical vacancy and loss rates of nearly 40%. Comparable properties in the area have rates that are typically about 20%. The subject property suffers from poor management, but is otherwise in good physical condition. How should the appraiser set the vacancy and loss rate used in the appraisal?

Close to 20% to align with the market

When the buyer and seller both have costs to pay, which form shows who pays what?

Closing Statement

Fatima is using a VA loan to purchase a home from Sue. Sue agrees to pay Fatima's closing costs. Which of the following statements is true?

Closing costs aren't considered a seller concession.

In what type of market could the buyer's strategy be to offer 10% below list price?

Cold Market

Tiffany just obtained a list of all of the homeowners in an area. She checks the numbers to make sure they're not on the Do Not Call Registry, then starts making calls to see if they or anyone they know is interested in selling their home. What method is this?

Cold calling

In what type of market is pricing a home below market value an especially good strategy?

Cold market

When Fannie Mae purchases a loan, they pay the loan originator a(n) ______ fee.

Collection

Ohio brokers must maintain trust account records for three years, and they must be in ______ format.

Columnar

Investor Igor has a minimum rate of return he requires from his investment. This is known as the ______.

Cost of capital

A bank that addresses a community development need in its assessment area and donates to recovery efforts of a flooded lower-income area might be an example of the bank supporting what act?

Community Reinvestment Act

A multibillion dollar online retail distributor has decided to set up operations in Ashland. The population of Ashland is 22,000. What is the potential impact to the area?

Community is potentially put at risk.

Properties that are similar to the subject property in terms financing, conditions of sale, market conditions, location, and physical characteristics are known as ______.

Comparables

You're comparing a property for a market analysis against similar properties you've found. These similar properties are called ______.

Comparables

In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

Comparables-When sizing up the competition to the subject in the marketplace, comparable properties must be selected and compared both qualitatively and quantitatively.

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.

A written agreement between an Ohio broker and a nonresident commercial broker must detail the terms of cooperation and ________ between the brokers.

Compensation

Jimmy owns a vacant piece of land. He plans to build a home on the land and then sell it. What type of loan is he most likely to acquire to finance this project?

Construction

Charles is a real estate salesperson in Michigan. He'd like to obtain an Ohio salesperson license as well. What actions must he take?

Complete 120 hours of pre-licensing education, pass the national and Ohio portions of the licensing exam, and provide a Consent to Service of Process.

Eminent domain is the governments' power to take private land for public use. What is it called when the government actually seizes someone's property?

Condemnation

Jerry's home has been in his family for nearly 75 years and sits smack dab in the middle of where a public university wants to expand. A government authority has made a fair offer for seizing Jerry's home as part of the process of taking someone's property called ______.

Condemnation

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

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?

Conditions of Sale-The elements appraisers consider in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.

Which of the following fiduciary duties are still owed by Ohio licensees after a listing agreement expires?

Confidentiality

Raymond and Jean own a shoe store in a rented space in a suburban strip mall. They've decided to move to less expensive retail space, and so are packing up their inventory for the move. Their son Brandon helps them remove the wall-based shelving units, making sure not to damage the walls in the process. The shelving units are ________.

Considered Trade Fixtures

What's the primary source of funds for commercial banks?

Demand deposits

Serena's tenant has been late with the rent for the past several months. Serena is pretty sure that the tenant also has an unauthorized long-term guest living in the house. In an attempt to get the tenant to move without having to initiate eviction proceedings, Serena has the utilities turned off. What's this called?

Constructive eviction

Which of the following forms explains the types of agency relationships recognized in Ohio, as well as the types of agency performed by the licensee's brokerage?

Consumer Guide to Agency Relationships

The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ________.

Contact for Deed

A vendor and vendee are the parties involved when the finance instrument is a ______.

Contract for deed

Which real estate finance instrument includes the promise to repay and the security instrument within the same document?

Contract for deed

You may see a ________ named as a land contract, real estate contract, contract for sale, agreement for deed, or as articles of agreement.

Contract for deed

When a buyer obtains an FHA loan, the seller may ______.

Contribute up to 6% of the sales price (or appraisal, if that's lower) to the buyer's closing costs

What type of loan is neither guaranteed nor insured by government agencies?

Conventional

Which of the following items increases the supply of real estate properties on the market?

Conversion of properties

When working with commercial properties, the appraiser develops an estimate of market rent by ______ and comparing rents across the subject and comparable properties.

Converting rental income to annual dollars per square foot

Davidson Real Estate is an Ohio brokerage. Normal business hours are Tuesday through Sunday from 9 a.m. until 6 p.m. An audit is scheduled for 11 a.m. on Thursday. What is the broker expected to do?

Cooperate with the audit and give the auditor access to the items being audited.

Secured corporate bonds use ________ as collateral.

Corporate Assets

Memoryjet, Inc has developed a new technology for high-volume jump drives. In order to manufacture their new devices they will need to gear up a new production line, which will cost about $85 million. What kind of bond instrument could they use to help secure the funds they need for their new line?

Corporate bond

Which appraisal approach is likely the best choice for appraising a movie theater?

Cost

The ______ measures the cost to reproduce a property, including land acquisition and construction costs.

Cost approach

Which approach to value measures the cost to produce a property, including land acquisition and construction costs?

Cost approach

From what do appraisers usually derive cost data?

Cost handbooks

An investor wants to know how much he could have earned if he had put his money into a different investment. This is known as the ______, and it's also the minimum rate of return an investor requires.

Cost of capital

______ basically answers the question, "How much could my money have earned if I had put it into a different investment?"

Cost of capital

With the cost approach to value, what is the replacement cost?

Cost to build a functionally equivalent improvement

With the cost approach to value, what is the reproduction cost?

Cost to build an exact replica of the subject, with the same materials and deficiencies

Landlord Chance has never liked the tenants at 220 Foley Street, a pair of college roommates that never ceased to cause trouble during the 10 months they lived there. He's thrilled to receive notice that they're leaving, and he's sure he'll need to keep most, if not all, of their security deposit. Of course, Chance better be careful to only retain the amounts needed for legal purposes. Which of these is NOT a legal reason for Chance to retain any portion of a security deposit?

Cost to install new landscaping in the front yard

In which method of involuntary alienation does a court decide how the proceeds from the sale of land owned by tenants in common will be distributed?

Court-ordered partition of property

Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement?

Credit of $721.50-Tax daily rate: ($1,350 ÷ 365 = $3.70) 195 days (days from closing until year end) = a $721.50 seller credit. Any prepaid seller's homeowners insurance will be refunded to the seller outside closing, so this doesn't appear on the closing statements.

Related to depreciation, what are the two types of physical deterioration?

Curable and incurable

What acronym can be used to remember factors that influence real property value?

DUST

If market conditions change between the time a comparable property was sold and the time the appraisal is made, which of the following must be adjusted by an appraiser using the sales comparison approach?

Date of sale

What's the term for a charge that either party has to pay at closing?

Debit

Seller Martin is looking at his Closing Disclosure. Which one of the following items is he likely to see?

Debits

Richard gave his town six acres adjacent to his property for use as a public park. This type of property transfer is called a ______.

Dedication by deed

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

Matthew Sorkin owns his home. Which of the following is the term for the legal document showing that property ownership was transferred to him?

Deed

You've just helped Maribella and Antonio Vega purchase a new home. Which of the following should be recorded to ensure that someone else doesn't try to claim ownership of the same property?

Deed

A third party holds legal title to Jackie and Tom's house until their loan is paid off. What type of security instrument was used to secure the real estate transaction?

Deed of Trust

Private mortgage insurance protects the lender in case the borrower ______.

Defaults on the loan

Shirley's lender discharged the mortgage lien on Shirley's property after processing her final payment. Which clause requires the lender to take this action?

Defeasance

Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

Defeasance

Matt is getting ready to sell his home. Before the property is sold, a title search is conducted to determine if there are any ______.

Defects on the title

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

Which of the following is a form of commercial bank revenue related to mortgage financing?

Demand Deposits

Sheryll is a licensee who works for Adamson Properties. She is responsible for managing two six-unit apartment buildings. She currently has one vacancy but showed the apartment yesterday and the tenant is bringing her security deposit by later today. What does Sheryll need to do with the check the tenant gives her?

Deposit it into an escrow account.

Which line item in the Cost Approach section in the URAR form is used to capture the appraiser's total cost estimate for the accrued depreciation costs?

Depreciated Cost of Improvements

A real estate licensee is acting as what type of agent when assigned by the broker to represent one party in an in-house transaction?

Designated Agent

The rate used for vacancy and collection loss rate is ______.

Determined by the appraiser based on local market conditions

The person named as the recipient of real property in a will is called the _______.

Devisee

What's a primary difference between direct capitalization and yield capitalization?

Direct capitalization analyzes one year of income, while yield capitalization analyzes anticipated cash flows for multiple years.

Which fiduciary duty is missing: loyalty, care, obedience, confidentiality, accounting, and ______?

Disclosure

The Truth in Lending Act requires lenders to make certain ______ to consumers.

Disclosures

Yield capitalization estimates future income and then applies a ______ in order to provide an investment's present value.

Discount rate

What happens when two fiduciary duties conflict? For instance, your clients ask you not to show their property on evenings and weekends, when most showings occur. To obey (a fiduciary duty) means to fail in reasonable skill and care (another fiduciary duty). What should you do?

Discuss the issue with your clients and let them decide.

The city of Abernathy has approved an ordinance requiring voter approval for subsidized housing developments. The ordinance has been brought to the attention of the state's fair housing committee, which believes that the ordinance has ______.

Disparate impact

Which agency or department does the superintendent of real estate oversee in Ohio?

Division of Real Estate and Professional Licensing

What are the two types of adjustments an appraiser can make in the sales comparison approach?

Dollar adjustment and percentage adjustment

Which of the following do an Ohio salesperson, an individual broker, and a corporate broker have in common?

Each is considered a licensee.

In investments, each type of depreciation is defined by a particular event. Which of the following best describes a depreciation type and an event it's tied to?

Economic depreciation and physical deterioration

Which two terms are synonymous and are defined as the amount of rent typical for properties that are comparable to the subject property?

Economic rent, market rent

Which measure of time, with regard to depreciation, can be higher or lower than its chronological age, depending on the quality of the structure's original construction, and the care and updates it's received since then?

Effective age

Jeff and Jamie are limited partners organized in a limited liability partnership (LLP). They would like to use their partnership's name to apply for an Ohio broker's license. Which of the following requirements do they have to meet in order to be eligible?

Either Jeff or Jamie must be a licensed broker and perform brokerage services solely for the partnership.

The Real Estate Settlement Procedures Act protects consumers by _______.

Eliminating illegal kickbacks and referral fees among settlement service providers and requiring lender disclosures as part of a residential real estate transaction involving credit

Smalltown is building a new interstate exchange to facilitate access to shopping and restaurants. In order to do so, it purchased two homes and tore them down so the ramps to and from the interstate could be constructed. What principal allowed Smalltown to do this?

Eminent domain

Through which method of involuntary alienation may the government take private land for public use?

Eminent domain

Universal Agent

Empowered to do anything the principal could do personally Holds the most authority of any agent Considered an uncommon role for a real estate agent

The doctrine of laches refers to the ______ of restrictive covenants/deed restrictions.

Enforcement

When property values remain at the same level and are at their highest monetary value, the neighborhood is in what stage of the neighborhood life cycle?

Equilibrium

Your clients, the Nguyens, have signed a contract for deed to purchase a property. What rights do the Nguyens receive?

Equitable title and possession of the property

The gradual loss of land due to water, wind, or other natural disturbances.

Erosion

A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of?

Escalator

The state's claim to property when a property owner dies, leaving no will, heirs or creditors, is the power of ______.

Escheat

To prevent commingling and accidentally using the funds from one income property to pay for the expenses of another, a broker should ______.

Establish a separate escrow account for each property.

Which of the following is a leasehold estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

Estate at will

Which line item in the Cost Approach section in the URAR form is only used if the appraisal is being completed for property that is being purchased through a HUD or VA loan?

Estimated Remaining Economic Life

Which of these duties is outside the scope of Ohio's superintendent of real estate?

Evaluating commission splits between licensees

What formal role does the superintendent of real estate play relative to the Ohio real estate commission?

Executive officer of the commission

Which type of deed conveys real property from a decedent's estate to a buyer?

Executor's deed

Which entity services rural development loans?

FSA-Farm Service Agency

Which of the following is a common mistake when calculating potential gross income?

Excluding potential income from a unit that is currently owner-occupied

In which phase of the real estate market would you expect to see an increase in hiring and employment, increased public confidence, and an increase in buyers in the market?

Expansion

Contacting homeowners whose listing contracts have ended without a sale describes the ______ approach to finding listings.

Expired listings

When there is a very low loan‐to‐value ratio, or when the financial strength of the borrower is unquestioned, clients often opt for which of the following reports?

Exterior‐Only Inspection Residential Appraisal Report (Form 2055)

Nearby industrial odor is an example of which type of depreciation?

External depreciation

An appraiser who, upon appraising a property, sees a decrease in property value due to external issues such as pollution, traffic, and other nuisances has found an example of ______.

External obsolescence

This could happen if a factory were put in next door that changed and impacted property value.

External obsolescence

Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don't have enough money saved to put down 20%. What type of loan seems most appropriate?

FHA

Which of these HUD programs is primarily responsible for providing mortgage insurance on home loans?

FHA

Lauren obtained a loan that's insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has?

FHA-With FHA loans, the Federal Housing Authority insures the loan for the lender, because the down payment amount can be so low—as little as 3.5%—with an FHA-insured loan.

Which section of the appraisal contains facts that affect the appraisal, including state, local and federal economic information, and local infrastructure challenges and projects?

Factual Data

Mike's been friends with Tim since college. They often work together: Mike flips houses and Tim's an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they're engaging?

Falsely Inflating Appraisals

Which institution was created as the Federal National Mortgage Association in 1938?

Fannie Mae

Credit flows to rural communities largely through the actions of _________.

Farmer Mac

Matt owns Pic Bar Ranch and is looking to purchase the adjacent ranch. When he talked to his local lender, the lender offered Matt a loan that will likely be backed by _____.

Farmer Mac

The Federal Agricultural Mortgage Company (FAMC), created in the late 1980s, is more commonly known as _________.

Farmer Mac

_________ works with lenders to make long-term credit available to homeowners and businesses in agricultural and rural communities, including farmers and ranchers.

Farmer Mac

When establishing guidelines for conforming loans, Fannie Mae and Freddie Mac use loan limits set by which entity?

Federal Home Financing Agency

Freddie Mac

Federal Home Loan Mortgage Corporation-an purchase any type of loan, but primarily deals with conventional loans from smaller lending institutions (thrifts)

Fannie Mae

Federal National Mortgage Association-can purchase any type of loan, but primarily deals with conventional loans from commercial banks.

Which of these HUD programs allows mortgage lenders to obtain a better price for their mortgage loans in the secondary mortgage market?

Ginnie Mae

Which process temporarily stalls foreclosure?

Filing for Chapter 7 bankruptcy

Which of the elements of comparison must be applied first?

Financing terms

Janelle is eager to have a place to call her own. She brings her mom and best friend to every showing and relies heavily on their opinions, since she doesn't know much about the process. After years of apartment living, she's looking for a place with some space and privacy. What type of buyer is Janelle?

First-time buyer

An appraiser just finished an appraisal for a new client. How long must he retain the work file and the report?

For at least 5 years

Ginnie Mae

Government National Mortgage Association-guarantees mortgage-backed securities (MBSs) that contain loans insured or guaranteed by a U.S. government agency.

A lender initiated a(n) ______ action against a borrower to recover monies owed.

Foreclosure

Which action can be taken if you don't pay a lien against your property?

Foreclosure

Which type of appraisal report makes use of pre-printed documents?

Form Report

How many residential leases must an Ohio licensee negotiate and sign, as either a landlord's agent or a tenant's agent, to count as one transaction?

Four

HUD's strategic plan outlines the ______ that support its mission.

Four goals

A consumer who wants to recover damages from the Ohio real estate recovery fund must submit an application to whom?

Franklin County court of common pleas

______ is regulated by the Federal Housing Finance Agency.

Freddie Mac

If your Ohio license was suspended as the result of a disciplinary sanction, what must you do to reactivate your license?

Fulfill the terms of your disciplinary sanction

A poor floor plan is an example of which type of depreciation?

Functional Obsolescence-Functional obsolescence is a form of depreciation or loss in value caused by defects in design.

Appraiser Shada notes that the property she's appraising has suffered a decrease in property value due to its outdated design and materials. This is known as _____________.

Functional obsolescence

Homes in a new home development have been built with a floor plan that doesn't appeal to today's buyers. In a cost approach valuation of the houses, what sort of depreciation will the appraiser apply?

Functional obsolescence

______ means that a building is unusable for today's needs. Some of these will be curable defects and some will be incurable.

Functional obsolescence

The amount of the ______ a veteran must pay depends on factors such as military status, down payment amount, and whether the veteran's entitlement is being used for the first time or a subsequent time.

Funding fee

Stephanie was having trouble making her mortgage payments. Now her payments are lower than they were, and she's able to pay them each month. This is because her lender __________.

Gave her a loan modification

Paulo is a property manager for several large properties. Which type of agent is he in relation to the landlord/client?

General

Property managers most often serve as which type of agents?

General Agent

What type of real estate agency relationship usually exists when a licensee has the broad responsibility of handling all of the details of a specific transaction?

General Agent

Which of the following deed types provides the strongest and broadest form of guarantee of title?

General warranty deed

Donna is about to do an appraisal of a two-story home that's under contract. Which of the following tasks can she do before her site visit?

Get a copy of the subject property's purchase agreement.

What is an acceptable ad based on Regulation Z?

Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.

You're representing a seller. Which of the following is one of your duties?

Getting the seller an acceptable price and terms

Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have?

Gross Lease

What does the income approach to value rely on when valuing properties that are five or more units?

Gross income multiplier

When property values increase in a newly developed area, the neighborhood is in what stage of its life cycle?

Growth

At the conclusion of a formal hearing, who prepares the report submitted to the Ohio Real Estate Commission for its review and decision regarding a complaint against a licensee?

Hearing Examiner

General Agent

Handles all dealings for a specific piece of client property Conducts duties of property managers Enters into contracts on the client's behalf

secured transactions

Has the property owner entered into any agreements that give a creditor or creditors ownership rights to the property should the current owner be in default?

Mark has been openly using a property without the owner's permission for the last 30 years. What else must he do to meet the adverse possession requirements?

Have a reasonable belief in his right to possess the property.

When a real estate transaction is financed using a contract for deed, what advice should real estate agents give to their clients?

Have an attorney review the contract.

xGary is preparing to place a lockbox on the property that his brokerage has recently listed. Which of the following is true?

He must get the seller's permission to place the lockbox.

How would Mark, an appraiser using the sales comparison approach to value, reconcile the adjusted sales prices of comparable properties to indicate the value of the subject property?

He would choose the adjusted sales price of the property most like the subject property.

Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?

Her down payment of $50,000 isn't at least 20% of the purchase price.

Byron placed his Ohio salesperson license on deposit when he joined the Air Force. Following discharge from the military, when does Byron need to renew his license, if he so chooses?

His first birthday following discharge.

When an appraiser determines a property's potential gross income for a property, the ______ provides information about trends that may influence market rent.

Historical rent

Which of the following was created as part of the Homeowner Affordability and Stability Plan?

Home Affordable Modification Program (HAMP)

Thad received multiple offers on his property and is reviewing them with his agent Nora. All of the offers have at least one contingency. Nora recommends that they reject the second offer, because it has a _______ contingency, which is generally the most risky.

Home Sale

Claudia is applying for permission to take the Ohio real estate salesperson licensing exam. Which of these items are required to receive permission?

Honesty, truthfulness, and a good reputation

Your buyer clients Jen and Tony really like the patio set and bedroom furniture in the house you've just shown them. However, you've suggested that they not ask for them as part of the offer to purchase, because the market is ______.

Hot

In what type of market is a buyer cautioned against asking for personal items?

Hot Market

Which of the following can you offer to your low-income buyer clients with a small down payment?

Housing choice vouchers

Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?

Hybrid REIT

At a listing appointment, licensee Chet asks Sam, the seller, if his property is his own home or an investment property. Why would Chet ask this?

If the home is his own, he's likely to be purchasing a new one, so Chet has a chance to land two transactions.

Where on the Uniform Residential Appraisal Report is information about the building's exterior and interior materials and condition noted?

Improvements

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

Income approach

Which of the following must be included in the potential gross income calculated for a property?

Income from a lease paid on a minimum-plus-percentage basis

Historically, what do property values tend to do over short periods of time?

Increase and decrease

Which line item in the Cost Approach section in the URAR form is used to capture the appraiser's opinion of value for the property?

Indicated Value By Cost Approach

Which of these should tenants keep in mind regarding trade fixtures?

Installation and removal should not cause damage to the property.

Commercial banks fall into which of the following category of lenders?

Institutional lenders

Mortgage, homeowners, and flood are types of _________ that may be included the mortgage payment.

Insurance

Which one of the following expenses listed on the appraiser's operating statement is classified as a fixed expense?

Insurance

Only ______ is paid until the end of a straight mortgage loan term, when the principal is repaid in full.

Interest

Veterans using the ______ program aren't required to submit a COE, get a new appraisal, or verify income.

Interest Rate Reduction Refinance

Interest

Interest is the cost of borrowing money from someone else. If Joe borrows money from Larry's Lending, Larry will charge Joe interest for using Larry's money. Loan interest is stated as an annual percentage; i.e., 4.5%.

Construction loans are a type of _______ financing.

Interim

A thorough identification of the property, which provides the reader with a true picture of the property being valued, is located in the ______ section of the narrative appraisal report.

Introduction

In which section of the report would the appraiser include the subject property's history, and its recent sales and listings?

Introduction

Which part of the narrative appraisal report states the purpose of the appraisal, identifies and describes the subject property, and presents the value conclusion?

Introduction

Noah owns an LLC that buys and sells stocks on the NASDAQ 100. He needs some additional financing. To which type of lending institution might he prefer to go?

Investment Group

Which of the following is true about investors and tax depreciation?

Investors can depreciate an appreciating asset.

Which of the following best describes an equity real estate investment trust?

Invests in equity by owning income-producing property, such as malls, apartments, or office parks

Conveyance of property by escheat is an example of _______ alienation.

Involuntary

Which form of alienation occurs without the owner's consent?

Involuntary

Jessica hasn't paid the roofing company that replaced the roof on her home. The contractor placed a mechanic's lien on her property, which is a/an ______ lien.

Involuntary and specific

Max has a dog that bit his neighbor. The neighbor sued Max, which resulted in a judgment against him. Max refused to pay the neighbor according to the judgment. The neighbor placed a lien against Max. How is this lien classified?

Involuntary, general

Sean hasn't paid his property tax. The tax collector places a lien on his property. How is this lien classified?

Involuntary, specific

A set of tables that appraisers use to calculate an annuity's present value for a number of years at various interest rates are known as ______ annuity tables.

Inwood

If a corporation submits an application for an Ohio broker's license, the application must include the name of the president and what else?

List of all company officers

Which of the following characteristics applies to a partnership between mortgagors?

It Involves more than one mortgagor as owner, sharing responsibility for payment of a single mortgage.

Which of the following best describes the Ohio Real Estate Commission?

It consists of one unlicensed individual, four licensed brokers, and the superintendent.

What's the purpose of title insurance?

It protects the buyer against loss resulting from previously unreported title defects.

How does title insurance affect the lender?

It protects the lender from loss due to defective titles.

When property changes hands, the deed is recorded. There's a fee for recording, so why would anyone choose to pay this fee?

It puts the public on notice regarding ownership.

Which of the following is true about the right of redemption?

It requires the defaulting homeowner to repay all costs of the foreclosure sale plus any debt owed.

What did the National Association of REALTORS® say about foreign investment in U.S. real estate?

It was on the rise

Which of the following is a true statement about the "hardest hit fund"?

It's available in the states with the most underwater homeowners.

In a title theory state, which of the following is a true statement?

It's generally much easier for a lender to foreclose on a property.

What's true about a real estate complaint mediation agreement in Ohio?

It's non-binding

Which of the following is a limitation of using the sales comparison approach to valuation?

It's sometimes difficult to know if a transaction was really arm's length.

Jaime, an appraiser, is unable to use either the sales comparison approach or the income capitalization approach to determine a property's value. Given the situation, which of the following statements is true?

Jaime must use the cost approach.

Ohio licensee Jenna decides she wants to purchase her seller client's house. She has her sister, Carrie, buy the house, and the two sell the house for a profit six months later. Has Jenna committed a violation, and if so, why or why not?

Jenna has committed a violation because she didn't disclose to the principal that she was a party to buying the house.

What's a typical reason that a seller might opt for a short sale?

Job loss or other financial problems

Jocelyn is an Ohio real estate salesperson. She decides to inactivate her license to pursue other opportunities. What happens to her license?

Jocelyn's broker returns the license to the division of real estate.

Veterans who wish to use the Native American Direct Loan must ______ and their tribe must have a valid agreement with the VA to offer the program.

Meet the same eligibility criteria as for the VA guaranteed loan program

What type of foreclosure is commonly used when a mortgage is the security instrument?

Judicial

Which of the following is a mortgagor's responsibility?

Keep the property in good repair

Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What's this an example of?

Land Contract-With a land contract, the seller agrees to provide credit to the buyer for a portion (or sometimes all) of the funds required to close the transaction. The buyer makes payments directly to the seller.

Gina's mortgage payment arrives late one month. What language in the promissory note allows the lender to charge her a fee as a result?

Late charge provision

Ideally, what guides real estate licensees' behavior?

Laws and ethics

Exclusionary zoning is when ______.

Laws and regulations effectively block housing opportunities for minorities or other protected classes

What do landlord-tenant laws dictate?

Lease terms, such as security deposits, notices for termination, and habitability

What's true about a party bringing an attorney to a mediation meeting in Ohio?

Legal representation is allowed but optional.

The parties to a valid lease contract must be ______.

Legally competent

A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee?

Lender

What's the relationship between the Loan Estimate and the Closing Disclosure?

Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the loan estimate.

Which of the following is true regarding prepayment penalties?

Lenders must disclose up front if they reserve the right to charge a prepayment penalty, and under what conditions they apply.

Libby is an Ohio real estate licensee who failed to pay a final judgment ordered by a court to a former client of hers. The client sought and received payment from the real estate recovery fund. What's likely to happen to Libby?

Libby's license will be suspended until the amount distributed by the recovery fund, plus interest, is paid back in full.

Which type of agent is an escrow officer?

Limited agent

Federal Housing Finance Agency established percentage targets and ___________ for loans made to low- to moderate-income borrowers.

Limits for conforming loans

Freddie Mac's mission is to provide ______, stability, and affordability in the U.S. housing market.

Liquidity

Life insurance companies are more concerned with long-term stability of investments than they are ___________.

Liquidity

Which of the following items directly influences real estate demand?

Loan Availability

Balloon Loan

Loan characterized by an amortization term that is longer than the loan term. Because the loan balance will not be zero at the end of the loan term, a balloon payment is necessary to pay off the remaining loan balance in full.

Which of the following loan types can be packaged into a mortgage-backed security eligible for guarantee by Ginnie Mae?

Loans insured or guaranteed by U.S. government agencies

Conforming loan limits vary based on the number of units being purchased with the property and ______.

Location

Which of the following does an appraiser take into consideration when determining site value?

Location and amenities

In the early 2000s, before the 2007 financial crisis, how would you characterize the real estate market?

Low interest rates and high property values

Putting clients' interests ahead of all others describes which fiduciary duty?

Loyalty

Which type of payment is made at the end of the term for a balloon mortgage?

Lump sum

Lyle is a developer who placed a number of restrictions on the Happy Valley subdivision when he built it in 2003. Sara bought a home in Happy Valley in 2009 and was surprised to learn that storage sheds weren't allowed. Now Sara has noticed that sheds are popping up here and there throughout the neighborhood, and she puts up a shed of her own feeling no concern about a penalty. Which of the following is most likely to be true?

Lyle set up the restriction to expire after a certain number of years.

Maggie has a neighbor, Jim, who is facing foreclosure. She likes Jim and wants to help him out, so they agree to do a "subject to" purchase. What does this mean?

Maggie will take over Jim's loan payments without telling his lender she's doing so.

A title officer will perform a title search to ______.

Make sure there are no clouds on the title

When an appraiser is adjusting for differences in a sales comparison approach to value, why is a market timing adjusted before a feature, such as a formal dining room?

Market timing relates to the property, whereas features relate to one line item.

Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?

Marsha's second mortgage on the property, which was properly recorded in January.

Maryjean placed her Ohio license on inactive status with the division of real estate while she dealt with some personal issues. When she finally completed all requirements for reactivation, the superintendent denied her reactivation application. What's the most likely reason why?

Maryjean was convicted of a felony while her license was inactive.

Stefanie and María are roommates visiting Oakvale Apartments to look at an available unit. They're turned away by the landlord, who says he "doesn't like renting to Mexicans." Who has standing to sue?

María and Stefanie

Which of the following is an example of an involuntary, specific, statutory lien?

Materialman's lien

The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be cancelled?

Maybe, but they'll have to petition their lender

HUD's second goal in support of its mission is to ______.

Meet the need for quality affordable rental homes

Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal?

Meg must sign the deed and have her signature acknowledged: As the grantee, Christian doesn't have to sign the deed, and he doesn't have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn't have to have a monetary value.

A broker may use a trade name in Ohio, as long as the name can be distinguished from other businesses and isn't ________.

Misleading

Yancey purchased a home six months ago using a VA loan. Due to an inheritance, he is suddenly able to pay off his mortgage. Will he pay a pre-payment penalty?

No

Which of the following license law violations is considered a fifth-degree felony in Ohio?

Misrepresentation of material facts

What is the best definition for "the time value of money"?

Money gains or loses value over time.

How much of a mutual savings bank's assets come from savings accounts?

More than 70%

Who originates their own loans?

Mortgage Bankers

Which person or entity works with many different lenders to find the best loan for the customer?

Mortgage Broker

Which act temporarily removed the requirement that taxpayers whose homes were sold as a result of a foreclosure had to include the loan write-off amount as taxable income?

Mortgage Forgiveness Debt Relief Act of 2007

Which type of real estate investment trust involves both residential and commercial properties?

Mortgage REIT

Babs is buying Kirk's property. Babs needs help with the down payment, and Kirk offers to supplement Babs' bank loan with a second loan, allowing her to meet her lender's down payment requirements. Which finance instrument(s) may be used for the agreement between Babs and Kirk?

Mortgage or deed of trust

Payment

Most mortgage loans are paid off using monthly installments, or payments. Joe's monthly payment will probably include principal, interest, taxes, and insurance (called PITI). These loans are sometimes called "budget loans" because the monthly amount remains mostly the same every month, making it easier to budget for the payments.

An industrial development bond is a variety of _____ bond.

Municipal

The town of Oak, Nebraska has been growing and needs a new elementary school. What kind of bond instrument will they use to finance this project?

Municipal Bond

Which organization manages and charters credit unions?

NCUA

How is net operating income used in an income-based approach to appraisal?

NOI is divided by a cap rate to find estimated property value.

In which of the following situations can the state use its power of escheat?

Nadine died with no heirs and no debt.

Which type of appraisal report is lengthy and often used for complex properties?

Narrative report

You're expecting an appraisal report on a commercial property your client is interested in purchasing. What style of appraisal report would you expect to see?

Narrative report

Which method of involuntary alienation involves accession, accretion, reliction, or avulsion?

Natural processes

Which of these is generally a commercial property manager's responsibility, but not a residential property manager's responsibility?

Negotiating Leases

Information shown in this area of the Uniform Residential Appraisal Report includes market conditions, present land use, one-unit housing trends, description, and boundaries.

Neighborhood

In which type of lease does the tenant pay the rent and some expenses related to the property (e.g. maintenance) separately?

Net

A capitalization rate is applied to the ______ when using an income capitalization method of appraisal.

Net Operating Income

The income capitalization approach to appraisal uses ______ as the I in the capitalization formula V = I ÷ R.

Net operating income

Tim, an appraiser, is using the cost approach to determine property value. Which of the following property types is Tim most likely appraising?

Newly built commercial property

What are the main benefits to veterans of the VA-guaranteed loan program?

No down payment, no mortgage insurance, and no prepayment penalty

Julius sold one of his investment properties and used the proceeds of the sale to invest in some equipment for one of his other businesses. Can he defer the capital gains taxes on the sale of the investment property?

No, because the purchase was not a like-kind property.

Landon is the listing agent for Maury's property. Maury is moving out of state for a new job, so the house will be vacant for some time, depending on how long it takes to sell. Maury is pretty adamant about not having a sign in his yard, especially after he moves. Landon follows Maury's wishes, but a month after Maury moved, there hasn't been any movement on the property. Landon places a sign in the yard, hoping it will drum up some interest. Is this okay?

No, Landon shouldn't place a sign on Maury's property without Maury's written permission.

Licensee Cheryl has included a picture of a local church within a posting she just listed on the MLS. She also noted the home's proximity to the church in the description. Is this allowed?

No, because Cheryl is showing preference toward a religious group.

New licensee Lorraine has a small marketing budget, so she's very careful with where she spends her dollars. Her newest listing is directly across from a Kingdom Hall for Jehovah's Witnesses, so she decides to work with the hall director to advertise the listing in its print publications and not in any others. She's confident she will find a buyer fast. Is this allowed?

No, because Lorraine is showing preference toward a religious group.

The Winchester Mystery House is a truly unique property. If it were appraised, would the appraiser use the sales comparison approach?

No, because there's nothing to compare it to.

Ron and Dawn hope to qualify for an FHA mortgage so they can buy a home for their family. Their housing ratio is 28%, their total debt obligation is 45%, and their credit score is 650. Do they qualify under FHA underwriting guidelines?

No, they don't meet the total debt obligation requirement.

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.

What type of foreclosure is commonly used when a deed of trust is the security instrument?

Non-judicial

Karsyn lives in Ohio and would like to sell her own home. What's the minimum real estate license she must possess?

None

Bridge Loan

Not used much anymore, bridge loans are obtained by those who have not yet sold their previous property, but must close on a purchase property. The bridge loan becomes the source of their funds for the down payment. One reason for their fall from favor is that there are more and more second mortgage lenders now that will lend at a high loan to value. In addition, sellers often prefer to accept offers from buyers who have already sold their property.

Lisa, a seller, is providing Darwin, a buyer, with a seller second on the purchase of her property. Darwin's conventional lender uses a note with deed of trust to secure the first loan. What instrument is Lisa most likely to use for her second loan with Darwin?

Note with deed of trust

Jacob is selling his unencumbered property to Shem and is acting as lender in the transaction. Which type(s) of finance instrument can Jacob use for the loan agreement?

Note with mortgage, note with deed of trust, or contract for deed

Remembering the acronym ______ can help you remember the fiduciary duties an agent owes to a client.

OLD CAR

Iris is using the breakdown method to measure depreciation. By what other name is this method known?

Observed Condition

Broker Mica wants to figure out her commission from her current sale. Which numbers does she need to do this?

Sales price and commission rate

Your buyer clients Donna and Mike are submitting an offer on a home where the seller is moving to another state and wants to expedite the closing process. What would be a good strategy for structuring an offer in this case?

Offer a quick close.

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.

This HUD program is responsible for developing and enforcing federal fair housing policies and laws.

Office of Fair Housing and Equal Opportunity

Who's responsible for maintaining all transactional records for commercial transactions handled jointly by an Ohio broker and an out-of-state broker?

Ohio broker

How are prorations in real estate usually calculated?

On a 360- or 365-day basis

A requirement of the Native American Direct Loan is the borrower must live ______.

On federal trust land

Where can the Universal Appraisal Dataset and the Uniform Collateral Data Portal be found?

On the Fannie Mae website

When a buyer uses an FHA loan, the down payment amount is calculated ______.

On the lesser of the sales price or the appraised value of the property

Keira's father leaves her some property in a tiny town. When she goes to see it a year or so later, she's surprised to see that a family lives in one of the property's outbuildings. All of the neighbors know that this family had been there for the past two years. This is an example of _______.

Open and notorious possession

Ohio license law states that if a real estate licensee is the listing agent for a property that successfully closes, this would count as ________ of a transaction.

One half

Jerry's seller clients have completed closing, moved out of their Ohio home, and are just waiting for Jerry to send them a copy of the final transaction documents. Which fiduciary duties does Jerry still owe them?

Only confidentiality and accounting

Which of the following formulas represent the operating expense ratio?

Operating expenses ÷ effective gross income

An appraiser uses ______ to compare how much of a subject property's income is used for operating expenses with what is expected or standard for the property type.

Operating statement ratios

Which line item in the Cost Approach section in the URAR form is used to capture the appraiser's total cost estimate for the site alone?

Opinion of Site Value

A mortgage banker gets paid through fees from ______ and servicing loans.

Originating

In which phase of the real estate market would you expect to see properties selling for more than they're worth, many buyers in the market, and lots of new construction?

Over supply

Identifying properties being sold by owners and persuading them to list with a licensee describes the ______ approach to finding listings.

Owner sales

Michael scours the local newspaper, looking for homes for sale without real estate professional representation. This isn't because he wants to buy the house, but because he wants to represent the seller. What approach is this?

Owner sales

Several actions take place on the secondary mortgage market. Which of these is a common activity?

Packaging loans into mortgage-backed securities

Life insurance companies sometimes like to insure their investment in commercial projects by insisting on an equity position. This is known as ______ financing.

Participation

A ______ is a mortgage-backed security issued by Freddie Mac.

Participation certificate

Which type of participation agreement involves more than one mortgagee as owner of the finance instrument in which each receives an equal share of the mortgage payment?

Partnership among mortgagees

In which type of partnership is there is more than one mortgagor as owner?

Partnership among mortgagors

Generally, there are covenants between the borrower and the lender within a mortgage document. Which of the following is a mortgage covenant?

Pay any charges and assessments against the property.

Rhoda is a first-time homebuyer. She has applied for a VA loan to buy a house from Phyllis. When the CRV values the home at less than the sale price, Phyllis refuses to come down on the sale price, so Rhoda must either ______ or find a different home to buy.

Pay the difference between CRV and sale price in cash

How can a foreclosure be stopped or prevented?

Paying all outstanding liens against the property

Which of the following statements is true regarding closing costs on a VA loan?

Payment of closing costs may be negotiated.

Which type of listing can help a real estate professional determine how quickly a home in a given price range received an accepted offer?

Pending-When a property goes under contract, it's said to be pending. The timeframe from the date the property was listed until it goes under contract (becomes pending) tells the licensee how many days the property was on the market (days on market or DOM).

Tyra owns a nail salon that's located in a strip mall. Her rent every month includes $1,800 base rent and 10% of her gross sales. What kind of lease does Tyra have?

Percentage

If an appraiser using the sales comparison approach adjusts for a change in market value of 5% due to average property depreciation, what type of adjustment is the appraiser making?

Percentage adjustment

What type of adjustment will an appraiser make to show an overall effect on market value of a factor such as a change in market condition?

Percentage adjustment

When adjusting for differences between the comparable and subject properties, which type of adjustments should an appraiser make first?

Percentage adjustments

Leslie has applied for a loan modification. As part of the process, her lender will likely __________.

Perform a title search

The loss in value caused by deterioration in physical condition is called _______.

Physical Depreciation-Physical depreciation is a loss in value caused by deterioration in physical condition.

For which of the following categories of adjustment are you most likely to see a dollar adjustment instead of a percentage adjustment?

Physical features

Which of the following is a piece of general data an appraiser may gather?

Population Size

Which residential sales contract provision specifies the date by which the buyer will have unfettered access to the property?

Possession

When using the income approach, an appraiser determines the ______ using market rents and does not deduct for losses or expenses.

Potential gross income

Which clause is standard in a deed of trust and affects the foreclosure process that can be used if the borrower defaults?

Power of sale

What's the best strategy for pricing a home?

Prepare a detailed comparative market analysis and base the price on recent comparable sales.

Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?

Prepayment

Which of the following is the name of a penalty lenders charge when borrowers repay their loans earlier than expected?

Prepayment Penalty

Brandon is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers?

Present both offers to Jane.

What's an effective pricing strategy when listing a home in a cold market?

Price the home below market value.

The fewer properties on the market, the greater the scarcity. What's the effect on prices?

Prices are pushed upward.

Commercial lenders operate in the _____mortgage market, making loans directly to consumers.

Primary

Principal

Principal is the actual amount borrowed. If Joe is borrowing $120,000 to buy a house, the principal amount of his loan is $120,000.

Your client, Skip, is an investor who's just opened a thriving new sporting goods store in a location outside the city. What principle of value indicates that his thriving business will attract others to engage in similar activity in the same area, driving down his profits?

Principle of competition

When does the buyer find out how much money to bring to the closing?

Prior to the closing

Mortgage bankers are mostly ______ enterprises.

Private

Before Marvin's legatees inherit, his will has to go through ______.

Probate

Participating in professional organizations helps Ohio licensees adhere to Article 1 of the Canons of Ethics, because it helps licensees develop ________.

Professional expertise

Ohio licensees who wish to reactivate their inactive licenses must submit a renewal fee along with ______.

Proof of completed continuing education

Which of the following best describes the state of the market during the over-supply phase of the real estate cycle?

Properties selling for more than their appraised value, many buyers in the market, and lots of new construction

In terms of age of sale, which of the following properties is the best comparable property?

Property C was sold three months ago.

One significant difference between an Ohio brokerage trust account for residential sales transactions and a trust account held for property management activities is _____________________.

Property management trust accounts can earn interest, but a brokerage trust account may not

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

Property owners and property managers

Governments like property taxes as a revenue source because ______.

Property values, and therefore taxes, tend to remain stable

Akron licensee Raphael has just formed an agency agreement with buyer Kent. Once both Raphael and Kent sign and date the agreement, what must Raphael do next?

Provide a copy of the agreement to Kent in a timely manner

If Ohio revises a civil rights law that will likely affect the work of real estate professionals in the state, what should the real estate commission do?

Publicize the change and let licensees know how the change may affect them.

What type of arrangement allows the buyer to retain title to the property but places a security interest in the property on behalf of the seller?

Purchase Money Mortgage

What can buyers do to protect themselves from title issues when purchasing property?

Purchase title insurance.

Which of the four methods used to find a structure's reproduction cost is considered the most comprehensive and accurate?

Quantity Survey

With which of the four methods used to find the reproduction cost of a structure does the appraiser add the itemized costs—including direct and indirect expenses—of building or installing all of a new structure's component parts?

Quantity Survey

Landlords must give reasonable notice before entering a tenant's property to protect the tenant's right to ______.

Quiet enjoyment

______ is the tenant's right to privacy.

Quiet enjoyment

Dean just signed over any rights he had to the property to his twin sister, Jean. The deed clears any clouds that may exists on the title, but it does not offer any warranties to Jean. What type of deed is this?

Quitclaim deed

Which of the following statements about reconciliation is true?

Reconciliation means analyzing the findings from the approaches to value used, and then weighing the findings that each provided.

What factors affect an adjustable rate mortgage?

Rate, index, and margin

Which body is composed of appointed members who oversee license law in Ohio?

Real Estate Commission

Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property?

Record the deed in his name.

You were just given information that the buyer found some issues during the walk-through. You immediately phone your seller client and let her know. This is an example of ______.

Reasonable skill and care

In which phase of the real estate market cycle would you expect to see properties sit vacant and prices drop?

Recession

In which phase of the real estate market would you expect to see unemployment increasing, prices falling, and foreclosures on the rise?

Recession

As a licensee, you're helping a couple buy a new home when you come across issues that could mean there's a cloud on the title. What should you do?

Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

In what section of the Uniform Residential Appraisal Report form will you find the final appraisal value reported?

Reconciliation

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?

Recording provides constructive notice that he owns the property.

What's codified and often carries the force of law without being a law?

Regulation

The state has seized a strip of Marge's land. It's relatively small but goes right through her sheep pastures. She just found out that the state will use it for a six-lane highway. She's pretty sure that the value of her land is going to plummet, and she can't figure out how to use it as pastureland anymore. What kind of involuntary alienation is she dealing with?

Regulatory taking

Which term is defined as the increase in the amount of land by the permanent and gradual withdrawal of water?

Reliction

Willy is looking at a fairly new building that's being used as a restaurant and trying to calculate how many more years from today the property can continue to be used for this purpose. What's Willy measuring?

Remaining economic life

What's the purpose of a quiet title suit?

Remove any claims against a property's title

Which of the following is a buyer's agent's task or duty?

Representing the buyer's interests

Edwin is appraising a newer building using the cost approach method. Because it will be fairly easy for him to conduct a cost analysis with similar structures of the same or nearly the same age, Edwin is going to calculate his construction cost-new estimate using _______.

Reproduction Costs

To determine property value with the cost approach, the appraiser subtracts the accrued depreciation from the ______ and then adds the site value.

Reproduction/replacement cost

Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn't liable if Violet ever defaults. What can he do to remove his name from the loan agreement?

Request a novation

Which one of the following tasks does the Ohio superintendent of real estate perform?

Request criminal records checks.

Besides the summary and analysis of the sales comparison approach, what else is reported in the sales comparison section of the URAR below the sales comparison grid?

Research and analysis of any prior sales of the subject and comparable properties

A lender qualifies a borrower for a VA loan based on ______.

Residual income and debt-to-income

What type of appraisal report contains minimal detail, and may be prepared for a specific client for an explicit, limited purpose?

Restricted appraisal report

Judy is in her 70s and has just listed her two-story home on a quarter-acre lot. Although she loves her home, it's getting harder to go upstairs and to manage all the yard work that her land requires. She's going to make an offer on a small, one-story condo where she can walk to the market. What type of buyer is she?

Retiree

Because of the funding fee required for a VA loan, a borrower with no down payment funds saved should ______.

Roll the funding fee into the loan

For farmers and others who live in rural communities, a ______ loan may be available. One benefit of these loans is the option for a longer payback period.

Rural Development

Chris is in the process of purchasing a property with 20 acres of farmland in a rural area of the state. Assuming his income meets the criteria of the program, what type of loan may Chris find the most desirable?

Rural Development Loan

Which type of contract allows a buyer to legally possess the property after all of the terms and conditions have been met?

Sale Agreement

Which appraisal approach will likely weigh most heavily during the reconciliation step when appraising a single-family residence?

Sales comparison

Which valuation approach on the Uniform Residential Appraisal Report is required for residential properties by Fannie Mae and Freddie Mac?

Sales comparison approach

What data will appraisers need to gather to use the sales comparison approach?

Sales prices on recently sold properties similar to the subject property

Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel's mortgage?

Savings and Loan

The characteristics of value include which of the following?

Scarcity

Where can a party reviewing a title commitment find basic details about the transaction?

Schedule A

Jane is working with her first seller client. She's excited to begin marketing the property and to hold an open house. Which of the following is something she should do?

Schedule the open house soon after the property listing hits the market.

After bonds are ______, their value goes up and down with the market.

Sold

Ari owned acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction but made no record of the sale or change of ownership. A developer offered Ari several million dollars for the entire acreage, and Ari eagerly accepted the offer. What covenant is Ari in danger of violating?

Seisin

When property managers take matters into their own hands and evict a tenant without going through the proper legal procedures, what type of eviction is it?

Self Help Eviction

Which of the following occurs when an Ohio licensee buys a principal's property without disclosing it to the principal?

Self-dealing

Which of the following is provided at the time of a buyer's offer and shows what the seller's proceeds will be if the seller accepts the offer?

Seller Net Sheet

Besides market value, licensees consider other factors when determining a list price range, such as market dynamics, amount of competition, and _______.

Seller motivation

There are fewer properties available in the market than there are interested buyers. What type of market does this describe?

Seller's market

Jillian grew up visiting her grandmother, who owned five acres of forested land and a pond that the two of them swam in frequently. When Jillian's grandmother left her the property, Jillian moved in and put a fence around the forest and pond. When her neighbor went to sell his property, he discovered via survey that the pond was actually on his property. Jillian wants to claim adverse possession and keep the pond, but she's only lived there for three years. What, if anything, can she to do valid

She can use the principle of tacking.

Alyssa's mortgage loan is secured by the note and the mortgage. Which of the following is true if she lives in a lien theory state?

She holds title to the property, and the mortgage becomes a lien on the property.

Dora just received her Ohio real estate broker license. What post-licensing requirements must she fulfill?

She must complete 10 hours of post-licensing within 12 months of broker license issuance.

Maya holds an active broker's license in a state that has a reciprocity agreement with Ohio. She's worked for a broker for several years, and her license is in good standing. Which of the following is correct?

She must complete 40 hours of education and pass the state exam.

Bonnie always schedules an in-person meeting with prospective buyers before she begins sending them data on properties. Why might this be?

She needs to define the buyer's needs and wants.

What's it called when the market value of a property that's for sale is less than what's owed on the mortgage by the seller?

Short Sale

Comparable properties are properties that have ______ recently and are similar to the subject property in terms of location, size, number of bedrooms and bathrooms, features, and age.

Sold

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

Sign the note, mark it "paid in full," and return it to Travis.

Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?

Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.

Melanie is a buyer who has agreed to purchase Stan's property using a contract for deed. Who holds legal title to the property during the term of the loan?

Stan

John is looking for a home to purchase. If he represents demand, which of the following represents supply?

Single-family house for sale

Which of the following types of residential dwellings do life insurance companies purchase from the secondary mortgage market?

Single-family on one lot

David resigned his broker's license when he became a certified financial advisor. Four years have passed, and David decides he'd like to sell real estate again. What does he have to do to reactivate his Ohio license?

Start the licensing process over by completing the required coursework, taking the exam, and applying for the license.

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?

Special

Nikki is using the comparative unit method to find the reproduction cost of a structure. By what other name is this method known?

Square-foot

With which of the four methods used to find the reproduction cost of a structure does the appraiser multiply the cost per square foot of a recently built comparable structure by the number of square feet in the subject building?

Square-foot

When recording neighborhood growth in the Neighborhood section on the Uniform Residential Appraisal Report, an appraiser will select what status if a neighborhood is fully developed?

Stable

Ohio agency agreements aren't covered by the__________, which states that all contracts for the transfer of interest in real property must be in writing.

Statute of frauds

Roberta worked with an attorney to prepare her will. What kind of will is this?

Statutory

Information shown in this area of the URAR contains the property address, taxes, borrower, seller, and occupant.

Subject

When a buyer takes over payments on a loan without telling the lender, this is called a purchase _____________.

Subject to existing financing

Teresa, a new occupant, took possession of a leased property with the permission of the landlord and Cheri, the vacating tenant. However, Cheri remains bound by the terms of the contract until it expires. This is an example of a(n) ______.

Sublease

Trinity is taking a summer job in a national park, but she doesn't want to lose her awesome apartment in Columbus, Ohio. Which of the following should she choose to rent out her place while she's gone?

Sublease

What term is used to describe loans that were approved for borrowers with lower incomes and poor credit histories?

Subrime

When a veteran assumes a VA loan, the ______ agreement can restore the original buyer's level of entitlement as if the loan were repaid in full.

Substitution of entitlement

Which of the following is needed in order for the sales comparison approach to yield reliable results?

Sufficient sales data about recently sold comparable properties

Chester has been providing some real estate services for new buyer customer Tom. Which of these is a task that Chester may only perform if he signs an agency agreement with Tom?

Suggest negotiation terms for a listing Tom would like to buy.

In investments, there are two types of depreciation, and each is defined by a particular event. Which of the following most accurately pairs the depreciation type with the event it is tied to?

Tax depreciation and cost recovery

What calculation is used to determine the accrued taxes owed by a seller at closing? Assume the closing is held on the last day of the month, the seller owns the day of closing, and you're using a statutory year.

Taxes owed ÷ 12 months = taxes owed per month AND taxes owed per month × number of full months past = accrued taxes owed by the seller at closing

Which act exempted homeowners from paying taxes on capital gains up to a specified value?

Taxpayer Relief Act of 1997

Which of the following describes a periodic tenancy?

Tenancy for a specified period of time that automatically renews itself for the same length of time unless one party terminates

Rhonda and Jason Emerson have a listing with Clark at Fairview Realty. When Jason loses his job, the Emersons' plans change and they want to take her house off the market. Clark agrees, and agency is ________________________.

Terminated by mutual agreement

In reference to a real estate transaction, which of these terms does NOT refer to the process in which title is actually conveyed and proceeds disbursed?

Termination

Which of the following assumptions does the Torrens system make?

That any issues that arose in the previous title search have been resolved

Brooke is opening a property management trust account for her Ohio brokerage. Which of the following is a true statement?

The account may earn interest.

Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?

The CD and LE aren't required in a seller-financed transaction.

Which agency sets the guidelines for qualified mortgages?

The Consumer Financial Protection Bureau

Farmer Mac

The Federal Agricultural Mortgage Corp - a privately owned and publicly traded company established by Congress to create a secondary market for agricultural mortgage and rural utilities loans.

______ sets conforming loan limits for mortgages.

The Federal Home Financing Agency

Bart is selling his home and has accepted an offer from a buyer, who's obtaining a VA loan. The sale price is agreed upon and is in the purchase contract. Then Bart receives a call from his agent, explaining that the buyer is hoping that Bart will lower the sale price because ______, and there is a risk the buyer will not be able to get the VA loan as a result.

The VA appraiser completed the CRV and it is less than the sale price

Sylvia is shopping for a mortgage. Because she's a veteran, she compares the VA home loan with the 3.5% down FHA mortgage. If she has only $5,000 available in cash, with all else being equal, which loan will allow her to spend more on a home?

The VA loan

What numbers does the appraiser reconcile to determine the indicated value by the sales comparison approach for the subject property in the URAR?

The adjusted sales prices of the comparable properties

Who closes on the cooperative brokerage agreement?

The agents for the buyer and seller

Which of the following is a true statement about borrower qualification standards for a VA-guaranteed loan?

The applicant must have a certificate of eligibility.

If an appraiser needs to make an adjustment for time and an adjustment for the number of rooms, which of the following statements is true?

The appraiser should adjust for time and then adjust for the difference in the number of rooms.

Which of the following statements about the Torrens system is true?

The approach is only used in a handful of states.

Who or what entity has legal title to a financed property in a lien theory state?

The borrower

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.

Which of the following features is shared by the mortgage and the deed of trust?

The borrower is required to maintain the property and pay property taxes and insurance.

When an Ohio salesperson is terminated by a broker, what happens to the salesperson's license?

The broker returns it to the real estate division.

In a buyer agency relationship, who does the licensee represent?

The buyer

Loan pre-approval

The buyer actually applies for a loan with a lender. The information about income, assets, debt, and money available for a down payment is accompanied by some supporting documentation. The buyer might also be required to pay an application fee at this point. The lender will verify the buyer-provided information, determine the buyer's ability to finance, and decide what that magic number might be. While there's no guarantee at this point that the buyer will receive final approval for the loan, a loan pre-approval is generally viewed more favorably than a pre-qualification because of the verification of buyer-provided information. It's a good way to show a seller that the buyer's offer is viable. However, until a property has been identified, or the buyer's financial condition is such that the lender can easily pre-approve a loan, pre-approval is rare.

Which of the following is an arm's length transaction?

The buyer and seller are unknown to one another.

How is a loan assumption documented?

The buyer and seller both sign an assumption agreement.

Which of the following is a potential concern of a buyer who's entering into a contract for deed with a seller?

The buyer could lose the property after missing only one mortgage payment.

Which of the following actions occurs prior to closing?

The buyer obtains a binder for insurance coverage on the new home.

Loan pre-qualification

The buyer provides information to a lender about income, assets, debt, and how much money is available for a down payment. The lender uses these numbers to provide the buyer with a pre-qualification letter that estimates the amount for which the buyer might qualify but doesn't verify any of the information. This letter helps the buyer understand what price range to shop in, and there's usually no cost to the buyer.

What is put at risk if a buyer misses a contingency deadline?

The buyer's earnest money

It's closing day! What's likely to happen?

The buyer's loan funds will be transferred.

Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn't apply to temporary decorations but only to permanent ones. Their homeowner's association disagrees. Which entity enforces subdivision covenants?

The civil court system

A client terminates a listing agreement before its expiration date. What happens now?

The client may owe a commission anyway.

Both parties must sign a multitude of documents at closing. Funds must change hands. Who keeps all of this straight?

The closing agent

Which statement is true about the Ohio commission's role regarding decisions it makes about licensee disciplinary actions?

The commission has the legal authority to publicize its decisions.

In the data source field in the sales comparison grid of the URAR, what would "DOM 80" indicate?

The comparable property was on the market for 80 days before it had an accepted offer that resulted in the sale.

In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?

The consumer's lender

Why would the cost approach not be used to determine the value of an historic residential property?

The cost approach doesn't take into consideration that some properties are more valuable specifically due to their age.

Who or what entity determines whether or not a will is valid as part of the probate process?

The court

A city refuses to change its zoning regulations to allow development of multi-family buildings. Less than 3% of the city's population of 98,000 is African-American. A developer is suing the city. According to fair housing law, how will the courts rule?

The courts will rule that the ordinance is exclusionary zoning and has the effect of excluding black people from dwelling there.

Katelyn really 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 of these statements accurately represents one of the required elements in a deed?

The deed includes an act of conveyance and may include a habendum clause.

A mother conveyed land to her son using a deed that contained all of the essential elements, but she failed to record the deed. Which of the following is true?

The deed is valid.

The annual MIP is recalculated each year using ______.

The end-of-year loan balance, plus the balance after the next 11 payments

Some down payment assistance programs offer low- or no-interest deferred loans, known as silent seconds. Which of the following statements is true about these programs?

The deferred loan doesn't need to be repaid until the first mortgage is paid off or refinanced, or the home is sold.

Who's responsible for auditing Ohio brokerages for their compliance with license laws?

The division of real estate

In response to the increase in foreclosures and losses on their balance sheets, not to mention a reduced market for subprime loans, many lenders slowed their lending activities. What was the impact of this on the overall economy?

The economy headed into a recession.

Janice is selling her property, and Tim wants to assume her loan. If a due-on-sale clause exists in Janice's mortgage, ______.

The entire loan balance may be due at once, and Tim won't be able to assume it

Which of the following must be included in the Consumer Guide to Agency Relationships?

The fair housing statement

If adjustments can be made to comparable properties during the sales comparison approach, why is it important to select comparables that are most similar to the subject property?

The fewer adjustments, the more accurate the appraised value

What is reconciliation?

The final estimate of value based on results of the appraiser's approaches to value

Which of these best describes a home equity loan?

The funds are often used for home renovations or to fund a college education.

What's one of the greatest fair housing challenges that Ohio faces today?

The general public tends to be unaware of fair housing laws and their rights.

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

The grantor is not mentally competent.

Jerry's client Carla has successfully closed on the purchase of a home. The deed shows she's taken sole ownership of the property. Which of these actions is necessary before the escrow agent can have the deed recorded?

The grantor's signature must be acknowledged.

Which of the following statements about the number of contingencies in a sales contract is true?

The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.

The amount and disposition of security deposits for commercial tenancy are defined by ______.

The lease

Lorelei doesn't like the man who is living in her rental home and wants to kick him out. When she goes to his house to give him immediate notice, she takes a copy of the rental agreement, which stated that the rental agreement was at-will, meaning she could resume possession at any moment. What is the best explanation for why the tenant doesn't need to move out?

The lease provision is void, because the right to notice is a non-waivable right.

What would happen if a lease contained provisions that violated a state's landlord-tenant law?

The lease would be legally unenforceable.

When a borrower has paid off the loan, how is the release handled if the security instrument is a mortgage?

The lender executes and records a satisfaction of mortgage and returns the note to the borrower.

When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?

The lender holds the mortgage and the note.

Who's responsible for disclosing the property taxes to the buyer?

The licensee

An Ohio licensee who's considering a settlement agreement in lieu of a formal hearing must have the proposed agreement reviewed by ______.

The licensee's legal representative

What does it mean when a life insurance company uses participation financing?

The life insurance company participates by taking partial ownership of the project in exchange for funding the loan.

The Siegels are purchasing a commercial investment property and plan to use straight-line depreciation on their financial statements and tax calculations. Which of the following would NOT be included in the Siegel's depreciation basis calculations?

The loan origination and lender fees that they paid at closing

Term

The loan's term is the amount of time over which it will be paid. If Joe's loan is a 30-year mortgage, the loan term is 30 years.

Before development of its new zipper factory begins, XYZ Corp. finds out that a section of the property it wants to build on is prone to flooding. It decides to dedicate this portion of the property to the government for public use to get out of handling the maintenance and drainage issues. The local government refuses. Why?

The maintenance or cost to fix the problem might outweigh the benefits of its use.

If an Ohio corporation submits a broker's license application, what must it include?

The name of the licensed broker affiliated with the company

Who holds the promissory note while it's being repaid?

The payee

If an Ohio resident is found guilty of the first-degree misdemeanor of practicing real estate without a license, what will happen to the individual if required fines aren't paid?

The person may face a civil suit.

What source must an appraiser use to verify sales data?

The principals to the transaction

Which of the following is true regarding value?

The principle of substitution means that people won't pay more for a property than they have to

Quad City National Bank has several REO properties on its books. Why does the bank own these properties?

The properties went through the foreclosure process and didn't sell at auction.

How are creditors or lien holders paid during a foreclosure process?

The property is sold at auction and lien holders are paid from the proceeds of the sale.

When using the sales comparison approach to value, what might it mean if there's a large total adjustment needed for a comparable property?

The property may not be a reliable comparable for the subject property.

What's the periodic allowance to recover the investment capital from the investment property's income stream?

The recapture rate

Which of the following is a sufficient reason for a landlord to initiate eviction proceedings?

The rent hasn't been paid for two months.

Which of the following describes a difference that falls under the "terms and conditions of sale" category of adjustments?

The sale of the comparable property involved some seller financing, but the subject sale won't.

Which of the following statements applies to reproduction cost?

The same materials and technique that went into constructing the subject property must be used as part of the analysis.

Land Contract

The seller accepts a down payment on a parcel of land but title to the property does not pass until the last principal payment has been received. This is referred to as an installment sales contract or a contract for a deed.

There are several potential drawbacks to using the cost approach to determine the value of residential property. Which of the following is one of those drawbacks?

The site's highest and best use isn't taken into consideration.

Appraisers usually gather some specific data about the property before they go visit it. Which of the following information would an appraiser usually gather ahead of the site visit?

The status of title zoning and codes

Who administers the Ohio real estate recovery fund?

The superintendent of real estate

How will Ohio licensees find out when their licenses are up for renewal?

The superintendent will mail a notice of renewal.

You know that a title search will need to be performed before a title insurance policy will be issued and your buyer's loan can be funded, but who or what entity can your client expect to conduct the title search?

The title insurance company

What may happen to a transaction if a cloud on the title is discovered?

The transaction comes to a standstill until the cloud is cleared.

What is a public grant?

The transfer of land by a government body to a private party

When a borrower has paid off the loan, how is the release handled if the security instrument is a deed of trust?

The trustee executes and records a deed of reconveyance and the lender returns the note to the borrower.

The Shores are in the process of buying a beautiful 3,000-square-foot home from the Bishops. They've completed all the required paperwork on their loan application. Mary's analyzing the package to determine their ability to repay the loan. She examines the property's value, the property type, and the loan-to-value ratio, among other things. Her recommendation is that the Shores' loan application be approved. What is Mary's role?

The underwriter

What special concern do foreclosed properties often present?

There could be hidden title issues.

When does the mortgage insurance requirement end for a borrower with a VA loan?

There is no mortgage insurance requirement for a VA loan.

When does the need for mortgage insurance end for a borrower who has a VA loan?

There is no mortgage insurance requirement for a VA loan.

Historically, what do property values tend to do over long periods of time?

They increase only.

Which of the following is true about lockboxes?

They require a seller's written permission to post.

What is the benefit Ginny Mae investors have over those who invest in other MBSs?

They're able to collect timely principal and interest payments.

Which of the following statements is true about buydowns with a VA loan?

They're allowed only on fixed rate loans.

Which statement is true about government loans?

They're insured or guaranteed by a government agency

Damon is a management level licensee at Homes 'N Such Brokerage in Columbus. He represents the seller, Jolene. Jeff, another management-level licensee at the same brokerage, represents Biff, a prospective buyer of Jolene's house. What's true of this situation?

This is a single-agency situation.

When Stacy's clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act?

This is illegal under RESPA because it's considered a kickback between settlement service providers.

Drew wrote up a description for his most recent listing, planning to use it for an MLS posting, other online advertisements, and all of his print materials. In the listing description, Drew stated that the property is a "great family home in a neighborhood with lively children's programming and excellent schools." How many times in that one sentence did Drew state a discriminatory feature?

Three

What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form?

Three

How is title usually conveyed to the buyer during a foreclosure process?

Through a referee's deed

The idea that $100 gains or loses value over time is called what?

Time Value of Money

In which of the following situations will Tina's Ohio salesperson's license status at Hometown Realty be involuntarily made inactive?

Tina's broker, Drema, the only broker at Hometown, resigns her license.

Who delivers the evidence of a clear title at the closing?

Title insurance representative

What's the purpose of the title search?

To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances

Why does an appraiser convert the rent for a subject property to annual dollars per square foot?

To effectively compare rents from different buildings using a common unit of measurement

What is the trustee's role when a deed of trust is used to secure property for a loan?

To hold legal title to the property on behalf of the beneficiary until the loan is repaid

The purpose of PMI is _______________.

To protect the lender in case of borrower default when the borrower has put down less than 20%

What Does Assignment of Contract Mean?

To substitute a new party for one of the original parties stated in the contract

Why might an appraiser look at title reports?

To verify that the owner has a clear title to the property

Regina closed on the sale of her house to Tom on Thursday, then went to a second closing on Friday and sold it to Martin. How could the title company in Martin's transaction have missed the fact that Tom had purchased the property?

Tom's title company didn't have time to record Tom's deed before Regina closed with Martin.

Which line item in the Cost Approach section in the URAR form is used to capture the appraiser's total cost estimate for either reproducing or replacing the structures on the property prior to subtracting the accrued depreciation costs?

Total Estimate of Cost-New

Buyers in this category want to purchase smaller homes, likely because their children have moved out or because their financial situation has changed. Many look for smaller properties that can offer the same quality of living as the property they're moving from.

Trade-down buyer

______ rely on their knowledge from previous homebuying experiences. This experience helps them to identify what they're looking for in a new property, which is often more space or a newer home with a good location and extra living space.

Trade-up buyers

A quitclaim deed does which of these?

Transfers without warranty any interest or title the grantor has when conveying it

How many parties does a mortgage involve?

Two: borrower and lender

When using the sales comparison approach to value a property, all of these are categories of adjustments except _______.

Types of obsolescence

The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.

USDA Farm Service Agency-Direct loans are available to farmers and ranchers through the USDA Farm Service Agency, funded by congressional appropriation.

What entity sets the standards for the appraisal report?

USPAP

Which of the following best describes the state of the market during the recession phase of the real estate cycle?

Unemployment increasing, prices falling, and foreclosures on the rise

Lenders can submit electronic appraisal reports, such as the Uniform Residential Appraisal Report through what tool on the Fannie Mae website?

Uniform Collateral Data Portal

What standards do appraisers follow?

Uniform Standards of Professional Appraisal Practice

Which of the four methods used to find the reproduction cost of a structure is considered the second most accurate method?

Unit-in-place

As a court-appointed guardian, Marion serves as which type of agent?

Universal

When must a copy of an Ohio brokerage's policy be provided to each client or prospective client?

Upon the client's or prospective client's request

When HUD pursues actions that are designed to end homelessness and promote the health and housing stability of vulnerable populations, which of its goals is it supporting?

Use housing as a platform for improving quality of life.

Which of the following best describes a home equity line of credit?

Used as an open-end account similar to the revolving credit of a credit card from which borrowers can take advances, repay money, and even borrow money again

What type of loan can be obtained with no down payment?

VA

Stacey's lengthy military service makes her uniquely eligible for a(n) ________.

VA Loan-Individuals eligible for VA loans include military members who have served 181 days on active duty or three months during war time.

Sgt. 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 Loan-While the sergeant could consider any loan, the only loan option with a zero down payment is a VA loan.

The ______ are expressed as a percentage of potential gross income.

Vacancy and collection losses

Which of the following is considered an ineligible property type for which a loan to purchase or refinance wouldn't be purchased by Fannie Mae?

Vacant Lot

What's the capitalization formula used in the income approach?

Value=Net operating income/ Cap rate-The basic capitalization formula used in the income approach has three parts: value, capitalization (cap) rate, and net operating income. The formula is value = net operating income divided by cap rate.

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

Virginia is the grantee.

Which form of alienation occurs with the owner's consent?

Voluntary

Which of these statements about voluntary alienation is true?

Voluntary alienation occurs when the property owner decides who will acquire the property.

Rich wants to add a room to his house, so he takes out a home equity loan. This creates a/an __________ lien.

Voluntary and specific

In Ohio, if a landlord breaches the covenant of possession, the tenant has which of the following options?

Wait to take possession

Dani is in love with the ranch-style home on Cardinal Avenue, says she simply must have it, and is willing to pay cash. The seller is concerned about an appraisal. Which of the following would be a good strategy for structuring her offer?

Waive the appraisal.

Which governmental legislation established the Consumer Financial Protection Bureau?

Wall Street Reform and Consumer Protection Act (Dodd-Frank Act)

Which covenant is a promise by grantors to grantees that they will warrant and defend the title against the lawful claims of others?

Warranty

Under what circumstances might an appraiser use a 15% adjustment?

When housing prices have dropped by 15%

An Ohio real estate license is required ______.

When performing real estate activities for others, for compensation of any kind

Select the choice that best translates this clause into plain English. "Upon payment of all sums secured by this Mortgage, Mortgagee shall discharge this Mortgage without cost to Mortgagor. Mortgagor shall pay all costs of recordation, if any."

When the borrower has fully paid off the loan, the lender will record that the note is satisfied.

When do clients typically opt for the Exterior‐Only Inspection Residential Appraisal Report (Form 2055)?

When there's a very low loan-to-value ratio

Jason purchased his dream home six months ago. After Jason received an inheritance from his uncle, he decided he would pay off his mortgage. What might he consider before doing this?

Whether he will incur a prepayment penalty

While reconciling the values indicated from the three approaches during the appraisal process, which factor will the appraiser consider?

Which approach is most relevant to the subject property

Ownership

Who rightfully owns the property, and how is title held?

Through which method of voluntary alienation does the devisor convey both real and personal property to the devisee?

Will

Louis is drafting the description for a home he wants to list on an MLS and several other places online. The home's best feature is a very large space right next to the kitchen that opens out to a wrap-around porch. Louis calls this room the "family room" and mentions a few perks of the room, like its fireplace, large windows, and hardwood floors. Is this allowed?

Yes, because calling the room a "family room" isn't considered exclusive language.

A rapidly growing suburban county's new zoning ordinance requires that the western two-thirds of it be parceled off as two-acre-minimum lots per dwelling. The majority of local minorities and other protected classes wouldn't likely be able to afford these parcels of land. Does this ordinance violate the Fair Housing Act?

Yes, because the ordinance has a disparate impact on minorities and other protected classes.

Clive has always had an interest in real estate. He's helped a few friends determine the asking price for their properties, and now he's considering going into business doing this kind of work. Does Clive need an Ohio real estate license?

Yes, he does

Which of the following is often used to value complex commercial properties like office complexes, shopping centers, or other investments that may take years to stabilize?

Yield Capitalization

Discounted cash flow analysis and annuity capitalization are two forms of what?

Yield capitalization

Victor buys a property from Yolanda for $200,000. Using a land contract, Victor agrees to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

Yolanda

Which of the following is a reason why the Ohio Real Estate Commission might impose a disciplinary penalty against you?

You make false promises to clients or customers.

Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What's the maximum number of adjustments Steve should make to the Joneses' property?

Zero-Steve won't adjust the subject property. Only the comparable sales price is adjusted. If it is inferior, adjust upward. If it's superior, adjust downward.

Appraisal

a detailed analysis of market conditions, the property itself, comparables within close proximity to the subject property, recent sales and listings, land value, construction costs—everything a lender wants to know to value the property as collateral for a loan.

home equity loan

a loan based on the difference between the current market value of a home and the amount the borrower owes on the mortgage

Blended Rate

the interest rate for a refinancing loan which includes both the original loan rate and the current market interest rate and which may or may not include any additional funds and their interest rate

title commitment

an agreement by a title insurer to issue the final title insurance policy on a specific piece of property once the final settlement on the property has occurred, and specific conditions, as named in the binder, have been satisfied.

CMA (Comparative Market Analysis)

an opinion of price arrived at by evaluating the property, its location within the market, its condition, competing properties for sale, recent sales, and current buying tastes and trends. (Cost is free or minimal)

Which of the following entities has the authority to place an equitable lien on a property?

court order by judge

When a promissory note is sold, how is ownership transferred?

endorsement of the note

Growing Equity Mortgage

fixed-rate mortgage with payments that increase over a specific period. Extra funds are applied to the principal so that the loan is paid off more quickly

Title

is the legal concept of property ownership and all the rights that go with it.

shared equity mortgage

loan in which investor shares payments and profits

Renegotiable Rate

loan in which the interest rate is renegotiated periodically

Low-Documentation Loan

refers to loans that do not require borrowers to provide documentation of their income to lenders or do not require much documentation.

ceritificate of title

the attorney's statement of opinion regarding the status of the title.