Real Estate Part 2: Chapter 3
Salesperson F sells a house for $84,500. The listing broker receives 50% of the 6% commission. If salesperson F is due 40% of the selling broker's commission, how much will F receive?
$1014. Explanation: $84,500 price X 6%=$5,070 total commission X 50%=$2535 for each broker. $2545 X 40%-$1,014
A property closed on April 16th with recording on April 20th. The annual taxes, paid in arrears, were $3,600. What would be the amount for the tax proration?
$1060. Explanation: $3600 divided by 360=$10 per day for the taxes. $10 x 106 days (the seller owes taxes from January 1st through April 16th) =$1,060 for the tax proration. Always use a 30-day month or a 360-day year
A seller sold a property for $50,000. The buyer put 5% down in purchasing the property. The commission rate was 6% and the lender charged 3 discount points and 1! For the loan origination fee. The seller agreed to pay the closing costs on the sale. What were the seller's closing costs?
$4900. Explanation: $50,000 price x 5%=$2,500 down payment. $50,000 less $2,500=$47,500 for the loan amount. $50,000 price x 6%=$3,000 for the commission. $47,500 x 3% (3 points) =$1,425 for the discount points. $47,500 x 1%-$475 for the loan origination fee. $3000 + $1,425 + $475= $4900 total closing costs
A property was purchased in the past for $200,000. If the property now sold 12% more than the original price and the seller paid a 7% commission along with a mortgage amount of $150,000 and closing costs of $2,500, what did the seller net on this transaction?
$55,820. Explanation: $200,000 x 12%=$24,000 appreciation. $200,000 + $24,000=$224,000 sale price x 7% commission= $15,680 in commission. $224,000 less $150,000 mortgage amount less $15,680 in commission less $2,500 in closing costs equals a net of $55,820
A tenant was leasing a property which rented for $300 per month. On March 20th, the tenant notified the landlord that the tenant was leaving April 20th. The tenant had pre-paid the $300 per month rent on March 1st. the landlord charged the tenant a pro-rated amount of rent for April and a $600 penalty for terminating the lease. What was the total amount owed by the tenant?
$800. Explanation: The tenant owes April rent from the 1st through the 20th or 20 days. $300 divided by 20 days=$10 per day x 20 days=$200 rent owed for April+ the $600 penalty=$800 total amount owed by tenant
The rent on a property was $360 per month. The landlord allowed the tenant to leave early but charged rent through April 22nd. As the tenant had paid the full monthly rent on April 1st, the maximum refund to the tenant would be:
$96. Explanation: $360 divided by 30 days= $12 per day for rent. $12 per day x 8 days (the tenant gets a refund for the last 8 days from April 22nd through April 30th- $96 for the tenant refund.
From whom can a broker receive commission money from on a rea estate transaction?
A commercial tenant
Which of the following activities would be a violation of the Sherman anti-trust laws?
All the brokers in an area agreeing to set a common commission rate of 6%
Which of the following properties would an owner be able to depreciate for tax purposes?
An owner's past residence that is now rented out
Which of the following items would be prorated at closing?
Annual real estate taxes
A broker can share commission money with:
Another licensed broker
A husband and wife owned a property as joint tenants. In order to have a valid and enforceable listing agreement, who needs to sign?
Broker and both spouses
A tenant rents a property "as is". For which of the following would the tenant be responsible?
Cosmetic upgrades
Earnest money on a closing statement is shown as a:
Credit to the buyer
Which of the following would nullify a listing agreement?
Death of the seller
A licensee has a property listed for sale. The listing agent then discovered a latent defect existed on the property. In showing this property to a buyer customer, the listing agent should:
Disclose the latent defect to the buyer
An agent takes a listing on a commercial property. The agent finds a buyer for the property and the buyer and seller both sign a contract for the purchase. Prior to closing, the agent learns that the city plans on putting in a ramp on the back of the property. What should the agent do?
Disclose to seller so the buyer can be informed
What type of general risk insurance should a real estate licensee obtain if litigation is filed against the licensee for failure to perform or mistakes?
Errors and omissions insurance
The clause in a lease that allows the rent to increase is a(n):
Escalator Clause
An owner listed a property with only one broker. After the sale, the broker was not due a commission. Which type of listing was most likely in effect?
Exclusive agency
A broker who wants to receive a commission even if the owner sells the property personally should ask for which the following listings?
Exclusive right to sell
If a person gets injured whole on the property of a real estate brokerage, what type of insurance would be needed by the real estate brokerage company to be protected?
General liability insurance
Under the 1007 tax relief act, a single person can exclude up to $250,000 of capital gains on the sale of an owner-occupied residence as long at the person:
Had owned and lived in the property for 2 of the past 5 years
A real estate brokerage office suffered from a break0in. the thieves stole the brokerage office computers. In order to protect the clients of the brokerage, the best practice by the broker would have been to:
Have the office computer files backed-up offsite
Which of the following statements is true about a lease?
It is both a contract and an instrument that conveys an interest in real property
A licensee listed a house for sale. The house had real estate of $5,000. However, due to the homeowner's disability, the taxes had been reduced to $4,000. When the property was sold, the licensee failed to mention to the buyer that the real estate taxes might go up. This would be considered:
Misrepresentation
A commercial tenant pays a fixed base rent plus additional money for expense. This lease would be a:
Net lease
A salesperson who wanted to be an independent contractor for a broker would insist on which of the following?
Not having defined hours to work
Which of the following persons makes the final decision on the list price?
Owner
What authorizes one person to act for another person?
Power of attorney
An agreement whereby a person is hired to investigate potential tenants, collect rent and furnish monthly financial statements for san owner is called a:
Property management agreement
If a licensee represents a seller only, the licensee would be a:
Single agent
The legal relationships between broker and seller is generally a(n):
Special agency
Ad adverse event that has taken place on a property is referred to as a(n):
Stigmatized property
A licensee lists a property with an exclusive right to sell agreement for $180,000. The licensee knows that the seller has a mortgage on the property of $130,00 and will also have to pay commission and closing costs. A prospective buyer wants to make an offer of $120,000. What should the licensee do?
Tell the seller that is he accepts the offer he will be losing money
AAA realty has a listing with a seller. BBT realty sold the property as a sub-agent for the seller. Salesperson K was the salesperson for AAA realty and salesperson R was the salesperson for BBT realty. To whom is the commission paid?
The broker of AAA realty
An apartment was sold to a new owner with several of the leases still in effect. Which statements best describes what happens to the leases?
The new owner must honor the leases in effect
The property management agreement is between the property manager:
The property owner
From whom does a salesperson receive a commission?
The salesperson's own broker
Under a listing agreement, who would be the client?
The seller
A rental property sold with a closing date of November 18th. The monthly rent of $500 had been paid November 1st. if the seller is credited with the da of closing, which of the following statements would be correct?
The seller owes the buyer $200. Explanation: $500 prepaid rent for November divided by 30 days=$16.67 per day for the rent. The buyer of the rental earns rent from November 19th through November 30th, which is 12 days. $16.67 X 12 days=$200 the seller owes the buyer