Real estate- national
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
Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller. She's financing the transaction, and Her closing costs and down payment total $4,800. How much should Helen bring to the closing?
$2,300 Helen must bring $2,300 to closing to pay the total amount due. She owed a total of $4,800 minus the earnest money she provided when the contract was signed, $2,500, which left the amount still owed of $2,300.
Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing? - $34,750 - $20,850 - $39,000 - $29,750
$34,750 Almanzo set aside $104,250 as earnest money ($695,000 x 0.15). Subtract that from his total due at closing, and you get $34,750 ($139,000 - $104,250) as the amount he'll need to bring to closing.
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?
$896.88
The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay?
1.71 A point is 1% of the loan amount. The Smithwicks' loan is $360,000 ($400,000 x .90), and they paid $6,150 for points at closing. Divide the cost in points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71).
As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
10 years
Your client, Joseph, has a commercial income-producing property. How long does he depreciate this property?
39 years
Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?
75% Lenders use the lesser of the sales price or appraised value. This results in an LTVR of 75%.
example of a tie-in arrangement
A business requires its clients to also purchase services from another business.
Shelly's flower business is blooming and it's time for her business to grow. She plans to take out a business loan to open two more shops on the north side of town. Which lending institution would she most likely go to for the loan?
A commercial bank
what happens after a federal fair housing complaint is made?
A fair housing specialist will review the complaint.
Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don't have the best credit score. They've decided to buy the home using an FHA loan. Which of these is a true statement? - The loan-to-value ratio must be less than 80%. - They must have PMI. - A minimum down payment of 3.5% is required. - Mortgage insurance is not required.
A minimum down payment of 3.5% is required.
Budget Mortgage
A mortgage with payments that cover principal and interest, plus taxes, fire insurance, lease rent. PITI
Which of these areas would be included in the livable area calculation? An attached garage A detached garage A pool house connected to the house by a hallway An unfinished attic area with seven-foot ceilings
A pool house connected to the house by a hallway
Which of the following is a way in which property taxes could impact your clients? - Tax abatements could harm buyers financially. - Tax refunds are not possible if property tax deductions are taken. - Neighbors may be jealous about favorable tax rates. - A sale in the area may prompt a reassessment, impacting new buyers.
A sale in the area may prompt a reassessment, impacting new buyers. A sale can prompt a reassessment, resulting in higher property taxes.
Special use permit
A special use permit, also called a conditional use permit, requires a public hearing and may be granted as long as the use is in harmony with zoning ordinances and doesn't adversely affect the community.
Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne now finds that she needs to move the closing date to June 15. She'll accomplish this with an ________ to the sales contract.
Amendment When added, an amendment changes the original terms of the sales contract.
Which of the following is a true statement about FHA financing? - An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments. - FHA loans are available to all borrowers, regardless of credit history. - FHA is best for borrowers who have large down payments. - FHA loans have more stringent requirements than conventional loans do.
An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.
tie-in arrangement
An antitrust violation in which the provider of a service requires the customer or client to purchase another service
The economic principle known as ______ means that the value of property today is impacted by the current value of the total expected future benefits.
Anticipation
Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?
Arbitration
Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______.
Avoid unauthorized practice of law
Bobbi Jo wants to purchase a house for $350,000. She's pre-approved for $300,000, but wants to buy a $350,000 house and doesn't have $50,000 in cash. A down payment assistance program approves her for a second mortgage for $40,000, and the sale closes two weeks later. What made this a legal second mortgage, and not fraud?
Bobbi Jo disclosed the down payment assistance to the lender.
Which department typically decides which development projects require a permit or approval?
Building department
Why did the implementation of TRID impact closing dates?
Certain financing changes may trigger a new three-day waiting period.
Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to every buy, sell, convey, inherit, and possess property?
Civil Rights Act of 1866
someone who has agency representation with the licensee is a ______.
Client
What does CAN-SPAM Act stand for?
Controlling the Assault of Non-Solicited Pornography and Marketing Act
A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement. - Debited $1,207 - Credited $1,207 - Debited $742 - Credited $742
Credited $1,207 The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days = $1,206.84. That's $1,207 if rounded to the nearest whole dollar.
Special warranty deed
Deed that warrants that the grantor received title and there were no encumbrances other than those noted
Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?
Depreciable basis
Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip's never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise?
Disclose to his friend that he's not an agricultural expert and ask his friend's permission to work with an agricultural expert in his firm. Chip could turn down the listing or refer the listing to a more experienced agent. If he wants to work the listing for his friend, he should disclose his lack of experience to the client and ask permission to partner with an ag expert at his firm.
Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next-door neighbor who works at the park has cut through the yard to get to the park rather than go around via the streets, which saves about half a mile. What kind of easement is this?
Easement by prescription
Select the statement that accurately describes an abstract of title.
Few states require an abstract of title when conveying property.
A poor floor plan is an example of which type of depreciation? - Physical depreciation - Functional obsolescence - Incurable depreciation - External depreciation
Functional obsolescence
Brandon is interested in purchasing a piece of property, but before doing so, he'd like to verify the accuracy of the legal description. Which of these options will accomplish this?
Having a survey conducted
Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed upon. What clause in her contract allowed her to request the repair?
Inspection contingency
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest?
It's still in place because it doesn't terminate on the death or incompetence of the principal.
true statement about police power and public land use controls?
Local governments and their planning boards control budgeting, site-plan review, and building codes.
When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.
Making application for a loan This is all part of the application process.
New Day Corporation's application to build a new mixed-income housing development was denied, because the town of Springfield has halted all new development until after city elections. What did Springfield enact?
Moratorium
Novation
Novation of a contract is the substitution of one party for another, with the full and complete release of the original party from any obligations under the terms of the contract.
What can water damage on a ceiling or wall indicate?
Plumbing issues
Which of these statements best describes the concept of procuring cause?
Procuring cause means the licensee whose actions produced a ready, willing, and able buyer.
What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement?
Property taxes
Governments like property taxes as a revenue source because ______.
Property values, and therefore taxes, tend to remain stable Property taxes have specific characteristics that make them a reliable target for taxation, and one of those characteristics has to do with the value of the property.
Kelvin isn't sure how to read this legal description, but his agent said something about reading it from right to left. Here's the description: "The north half of the northwest quarter of Section 6, Township 8 north, Range 68 west of the 5th principal meridian. What land description method did surveyors use for this piece of property?
Rectangular government survey Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.
A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?
Regression
What's the purpose of a quiet title suit?
Remove any claims against a property's title A quiet title suit is a legal proceeding that asks the court to remove any claims, or "clouds," against the title so that it can be conveyed.
Marsha leases a ranch house in a bedroom community. When the owner decided to sell the house, Marsha was given the opportunity to purchase it but declined. What does Marsha have?
Right of first refusal With a right of first refusal, the holder of the right waits until the owner wants to sell and then can exercise that right or let the property go. This is a reactive position as compared to an option to buy, which is more proactive.
Ron's company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures.
Ron may take the fixtures as long as he repairs any damage caused by removal. According to the law, commercial tenants may remove trade fixtures when the lease ends, but only if they are detachable without damaging the property or if the damage is repaired.
Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?
So borrowers can compare loans and make decisions regarding the affordability of loans offered
Which of these statements accurately describes finance- and housing-related legislation?
The Civil Rights Act of 1866 provided every U.S. citizen with the right to buy, sell, convey, inherit, and possess property.
The federal Government in the Sunshine Act is part of what?
The Freedom of Information Act
Rectangular government survey Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers. - Marcus can choose whether or not to continue the listing agreement with Ron. - Bankruptcy has no impact on agency agreements. - The agency agreement only terminates if the broker or the principal declares bankruptcy. - The agency agreement is terminated because the agent filed for bankruptcy.
The agency agreement only terminates if the broker or the principal declares bankruptcy. Bankruptcy of the broker (not the agent) or the principal terminates an agency agreement by force of law.
Who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?
The buyer's agent
What must happen for an easement to be terminated due to abandonment?
The dominant estate owner takes action that shows a clear intent to stop using the easement.
definition of a straight loan
The periodic payments go to interest only and the entire principal amount is due at the end of the term.
When Edmund died he left several properties to his heirs. He owned a grocery store and a campground outright, and a strip mall which was held in a living trust. Which of the properties, if any, did NOT have to go through the probate process after his death?
The strip mall didn't have to. Properties owned in a trust do NOT have to go through probate. For this reason, trusts are commonly used in estate planning.
Which of the following is true about down payment grants? - They are repaid on a specific schedule. - There are no eligibility requirements. - They don't need to be repaid. - They come with high interest rates.
They don't need to be repaid. A home grant is also referred to as a "gift," and doesn't have to be paid back as long as the buyer meets certain requirements.
What's the relationship between the title search, title insurance policy, and document recording?
Title representatives and attorneys who perform title searches look for documents that are publicly recorded.
price fixing
Two brokerages determine a standard commission rate.
Executor's Deed
Type of deed that conveys real property from a decedent's estate to a buyer
Regarding the need for consent for a contract to be valid, which of the following exists when an act of persuasion overcomes another person's free will and judgment? - Innocent misrepresentation - Undue influence - Fraud - Duress
Undue influence
Physical characteristics of land include its immobility, indestructibility, and ______. - Permanence of investment - Location - Uniqueness (nonhomogeneity) - Scarcity
Uniqueness (nonhomogeneity) Nonhomogeneity is a unique characteristic of land. Even within a single subdivision, two identically sized parcels will have their own unique characteristics: views, access, proximity to other amenities, etc.
When you use a comparative market analysis to calculate a suggested price range for a particular property, you will ______.
Use adjusted prices from sold comparables and refine the range with data about active listings, expired listings, and possibly pendings
Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________.
Use variance This would be a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.
What's the capitalization formula used in the income approach?
Value = income divided by rate of capitalization
Which of the following terms means the price a property is worth to its owner as currently enjoyed?
Value in use
When does offer and acceptance occur?
When both parties sign a contract with full understanding of the terms
Interest rates determine buying power. Which of the following is a true statement?
When interest rates are high, buyers are often priced out of the market.
Right of first refusal
With a right of first refusal, the holder of the right waits until the owner wants to sell and then can exercise that right or let the property go. This is a reactive position as compared to an option to buy, which is more proactive.
jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property?
Zero years (personal residences cannot be depreciated)
If someone wants to use their property in a way not permitted by a zoning ordinance, they must submit a request for a variance or special use permit to which of the following groups?
Zoning board of appeals
Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?
acceleration
Jansen and his listing agent just left the closing on Jansen's house. What kind of notice does Jansen, his agent, the buyer, and the buyer's agent have regarding the sale of Jansen's house?
actual notice
Amendment
changes the original terms of the sales contract.
In a fiduciary relationship, a ______ is also known as a principal.
client
Executor's deed
conveys real property from a decedent's estate to a buyer
Easement by Prescription
created through continuous, exclusive, and long-term use of another's property without actual permission.
On the Closing Disclosure form, what's the term for an amount that will show up in the party's favor?
credit
A ______ is a method of conveying real property from one party to another.
deed
The doctrine of laches refers to the ______ of restrictive covenants/deed restrictions.
enforcement
A home equity line of credit (HELOC) is based on the homeowner's available ______.
equity
Cedric is opening a model railroad shop, but he knows that he'll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?
estate for years
Which of the following is the cost of replacing a building in the case of total loss? - Mortgage value - Value in use - Investment value - Insured value
insured value
Which of these is the amount a lender charges for use of its money? - Interest - Usury - Discount point - Principal
interest
When a deed of trust is used as a security instrument, who holds the deed and the note?
lender holds the deed, trustee holds the note
Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits as he's past the required beneficiary age of 18. What type of trust is this? - Testamentary trust - Living trust - Probate trust - Indirect trust
living
At what level are budgeting, site plan review, and building codes controlled?
local
While hosting an open house, Liza speaks with prospective buyers. They're interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?
loyalty
For 25 years, Isadora loved being her own boss, but now she's getting tired of the day in, day out tedium of running her business. She's ready to retire and move to a tropical island. She decides to sell her entire business in one fell swoop: the property together with all the equipment and furnishings. What type of loan would the buyer need to obtain?
package loan because the sale includes both personal and real property.
Henry is Monica's listing agent. As Monica's agent, Henry has a duty to account for and properly handle her funds and ______.
paperwork
Rivers and Harbors Act of 1899
protects our nation's rivers and harbors
What's the term for the illegal practice of nudging buyers away from or toward a specific area based on the presence or absence of protected class members?
steering
moratorium
temporary halt to any new development for a certain amount of time with the community's best interest in mind.
Ellen and Isaac have a timeshare near the Grand Canyon. They'll be able to use it for two weeks every September, for the next eight years. What type of timeshare is this?
timeshare use
Discount point
upfront charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires
Which factor that influences value looks at the function for which the property is used?
utility
addendum
which may be added without changing other terms already agreed to in the sales contract