Practice Exam #5
Jose purchased a home for $195,130 with a 6% fixed-rate, fully amortized 30-year loan in the principal amount of $156,104. He makes payments of $936 per month. What is the amount of interest for the second month if calculated based on a 360-day year?
$779.74
John sees a listing for 111 any street published by the sellers agent on the internet that states the price is $199,000 and that "all cash will take this beauty" John writes to the listing agent the following: "I accept you offer of $199,000, all cash, for 111 any street"
The seller need not accept John's offer or issue a counteroffer
Which of the following statements is TRUE?
a CMA takes into consideration square footage of comparable properties
A developer has a mortgage loan that secures three different parcels of land. This developer has what kind of mortgage?
a blanket mortgage
A quiet title action is
a court proceeding intended to establish the true ownership of a property , thereby eliminating any cloud on title.
Helen owns a home in which she has a large amount of equity. She wishes to acquire a loan to help with monthly expenses over the rest of her life. What type of mortgage may be best suited for Helen's needs?
a reverse mortgage
Essential elements for the existence of a valid contract do not include
a writing
In those states that do not permit dual agency,
agents are required to disclose agency relationships
A cable company is planning to extend new fiber optic cable across Sally's backyard. The cable company should apply for
an easement in gross
A farmer sells his farm on July 1 when the corn is knee-high. Nevertheless, the farmer is able to come onto the farm the following September and harvest the corn crop because the corn is
an emblement
The National Environmental Policy Act requires that federal agencies prepare___for any development project that a federal agency could prohibit or regulate, and any development project for which any portion is federally financed.
an environmental impact statement
If a person dies intestate and no heirs can be found, a court may order
an escheat of the property
Margaret signs a listing with Broker Olivia that provides exclusive authority to Olivia to represent Margaret's property for sale but gives Margaret the right personally to procure a buyer and not pay Olivia any commission. This listing is
an exclusive agency listing
Which legal description system is being used in the following partial description? "Beginning at the northwest corner of the intersection of Highway 5 and Grant Road; then north along Grant Road 275 feet;..."
metes and bounds
Nearly every contract involving a RE transaction is express because
of the statute of frauds
Joe and Susan own adjacent parcels of land. Susan purchases Joe's parcel, making one large parcel, which has a fair market value $75,000 higher than the sum of the fair market values of the two parcels prior to Susan's purchase of Joe's parcel. This is an example of the principle of
plottage
When two or more parcels are assembled together to make a larger parcel, the value added resulting from this assemblage is called
plottage value
The Civil Rights Act of 1866 prohibited what types of discrimination?
racial only
Which of the following are included in PITI calculations?
real estate taxes
The replacement cost approach is likely to be the appraisal approach of choice if
the improvements are quite new so that data on precise current costs can be gathered
Under the Superfund Law, a person may be able to assert the innocent landowner defense if
the person acquired the property by inheritance after it was contaminated.
Susan sees a home that she likes on broker Janets website. Susan goes to visit Janets office and asks to see more info on this home that Janet has listed. At this point
the seller is Janets principal and Susan is janets cusotmer
XYZ Corp, leases an industrial building, The lease states that XYZ Corp will pay a fixed renal amount plus the landlord's property taxes, hazard insurance, and all maintenance costs not specifically reserved for the landlord's maintenance. What kind of lease does XYZ Corp have?
triple net lease
a lender's title insurance policy
typically can be transferred if the loan is sold
Which of the following statements is FALSE?
A violation of trust fund accounting is not one of the most common reasons for suspension or revocation of real estate license.
Broker Alice publishes an advertisement stating that she has a listing for a 2475 sq ft house on 111 Main Street in Any City, Texas, price $325,000. Joe sends a signed and dated letter to Alice that states: "I accept your offer for the house on 111 Main Street, Any City, Tx for $325,000"
Joe's letter does not qualify as an acceptance of an offer to sell the house.
Which of the following statements is FALSE?
States that permit transactional brokers do not impose on obligation on the nonagent to act fairly, honestly, and competently to find qualified buyers or suitable properties.
In an adjustable-rate mortgage, the margin generally is
a pre-determined number of percentage points
In many states, what must be given to the purchaser of a single-family home before the purchaser signs the purchase agreement?
a property condition disclosure statement
Some states permit a broker to act not as an agent who represents one or more parties to a real estate transaction, but to act as a mere middleman who brings the parties together and lets the parties do all of the negotiating among themsleves. Such a broker is referred to as
a transaction broker
A salesperson who lists a property under a listing agreement that permits subagents is ___of the broker and a ___of the client.
an agent, subagent
The primary purpose of zoning laws is to
help implement the local master plan
Which of the following entities does not make loans in the primary mortgage market?
FHA
Which of the following statement is TRUE?
To be valid a deed need not be signed by the grantee
A potential buyer hires an appraiser to estimate the value of a single-family home. The estimate comes in at $315,000. This estimate best represents the
market value of thehome
A broker with a net listing on a condo finds a buyer who pays $300,00 for the condo. The condo had a loan balance of $100,000; the closing costs were $5000; the sellers specified net was $200,000; and there were no other claims against the property or cost of sale. How much commission would the broker receive from this transaction?
$0
John's lender gave him an $88,000 loan based on a loan-to-value ration (LTV) of 80% of the lesser of the appraised value of the property, which of $120,000, or the sales price. What was the sales price of John's property?
$110,000
Eva received a loan with an LTV of 80% to purchase a home that had a sales price of $275,000 and an appraised value of $280,000. What is the amount of Eva's loan if the LTV was based on the lessor of the appraised value or he sales price?
$220,000
Charles makes payments of $1,872 per month, including 6% interest on a fixed-rate, full amortized 30-year loan. What was the initial amount of his loan?
$312,208
Sophie is a RE salesperson who procured a buyer for a home. Sophie's agreement with her employing broker, Eva, is that Sophie gets a commission for 40% of whatever commission that Eva receives on sales made by Sophie. Sophie procures a sale of a house that was listed by John, who had an 50/50 commission-split agreement with Eva. Sophie's commission on the sale was $4,074. The listing agreement provided for a 6% commission. What was the sale price of the house?
$399,500
Charles is purchasing a house for $285,000. The lender requires 3.2 discount points, which amounts to $7,752. How much did Charles pay as a down payment?
$42,750
In a particular township, which section is just south of section 2?
11
Pursuant to the federal Residential Lead-Based Paint Hazard Reduction Act, a seller (or lessor) of a residential dwelling unit built before___must notify a buyer (or tenant) in writing about required disclosures for lead-based paint.
1978
Example of trust funds do not include
A broker's RE commission
Which of the following statements is FALSE?
A listing broker who becomes an ostensible agent of the buyer is not a dual agent
Which of the following statement is FALSE?
A material fact is any fact that is unlikely to affect the decision of a party as to whether to enter into a transaction on the specified terms.
Which of the following statements is FALSE?
An ostensible agent is an agent authorized by a real estate broker to represent a specific principal to the exclusion of all other agents in the brokerage.
Brokers Mary and Larry meet at a real estate continuing education class. After the class, Mary asks Larry if he knows anything about broker Bob. Larry tells Mary what a dishonest person he thinks Bob is and suggests that they both stop doing business with Bob. Mary doesn't say that she agrees to do so, but shortly after their meeting, both Mary and Larry tell Bob that they will no longer cooperate with him in any real estate transaction.
Both Larry and Mary could be guilty of group boycott.
Susan is assuming John's $75,000 mortgage on the condo she is purchasing from him. At closing, what adjustment(s) should be made?
Credit to Susan $75,000, debit John and $75,000
Broker Greg knows that Susan lost her job 3 months ago and is desperate to sell her house and move into a rented apartment. If he discloses to Susan's plight to Julie, Greg would not be violating RE law.
Greg likely is a buyer's agent
I promise to pay you $20 if you mow my lawn on Tuesday, and you shrug your shoulders and say, "I'll see if I have time". If on Monday I call and tell you that I am withdrawing my offer, but you nevertheless mow my lawn on Tuesday,
I will not owe you $20 by the terms of the agreement because I revoked my offer before you accept it.
Which of the following statement is TRUE?
Leverage is increased by making a smaller down payment
An interstate project acquires a stretch of land running through the middle of Joel's farm, making it difficult for Joe to get back and forth between the two remaining portions of his farm. Joe might be able to receive what as a result of this eminent domain action?
Severance damages
Homeowners enjoy many tax advantages, including deductions for
loan discount points that represent interest
A signed will giving his farm to his friend Susan, and a deed granting his farm to his daughter Emily, were discovered in Frank's safe after he died. If the deed was signed before the will, who will probably acquire the farm?
Susan
Susan exchanges her apartment building for Emily's luxury home that Emily lives in. The depreciated cost basis of the apartment building is $2,500,000 and the fair market value of Emily's home is $3,000,000. Emily receives both the apartment building and $400,000 in cash in the exchange.
This exchange does not qualify for 1031 exchange
The Federal Fair Housing Act requires that advertisements for the sale, rent, or financing of residential real estate in any print or display advertising (except classified ads)
contain the equal opportunity logo
In states that permit the practice, a ___owes fiduciary duties to a specified principal, but other agents in the brokerage may represent other parties to the same transaction that the specified principal is a party to without creating a dual agency situation.
designated agent
Susan and John told their listing agents that they are moving because of the constant barking of the next-door neighbor's dog. The agent should
disclose this fact to prospective purchasers
The Federal Fair Housing Act does not prohibit
discrimination against children with respect to properties occupied solely by persons 62 years of age or older.
The monthly gross income multiplier is calculated by
dividing the sales price of the property by the monthly gross income
Loss in value due to out-dated equipment is referred to as
functional obsolescence
The greatest deed-warranty protection for a grantee is provided by a
general warranty deed
Margaret has a lease on a house that calls for annual increases in rent based on the average percentage increase (or decrease) in property tax on the house. Margaret has what kind of lease?
graduated lease
Susan leases an apartment from Apt. Co. The terms of the lease call for Susan to pay a fixed amount of rent each month, and the landlord pays all of the operating expenses for the premises. Susan has what kind of lease?
gross lease
XYZ Developers has a 30-year lease with the owner of 4 acres of unimproved land. The lease states that XYZ Developers will construct an industrial building on the land at XYZ's expense. At the end of the lease, the building becomes the property of the landowner. XYZ developers has what kind of lease?
ground lease
Acting without bad intention and believing that his or her assertions are true, a real estate agent may nevertheless be guilty of fraudulent misrepresentation regarding a condo
if the assertions were not warranted by the information available to the agent.
Broker Bob advertises one of his listings int he local MLS as "a beautiful home in an up-scale Chicano neighborhood." Bob's advertisement most likely is
illegal because it constitutes discriminatory advertising.
Unless specifically asked to do otherwise, Alice only shows her Korean clients homes in predominantly Korean areas because she feels they will fit in better, and be more comfortable in such areas. Alice's actions are
illegal steering
A developer in a large city is required by the zoning commission to set aside a portion of new construction for people of low to moderate income. This is an example of
inclusionary zoning
A city controls land use by all of the following EXCEPT
inverse condemnation
Private Mortgage Insurance (PMI)
is insurance that lenders often require for loans with an LTV of more than 80%
Examples of general liens include
judgment liens, federal income tax liens, state income tax liens
A provision in a listing agreement, providing that the broker will earn the full commission if the property is sold within a specified number of days after the termination of the listing to a buyer with whom the broker has negotiated on the property is called a
safety clause
Taxes on properties for improvements that confer benefits directly on the properties taxed are referred to as
special assessments
A mechanics lien is a ___; a judgment lien is a ___.
specific lien, general lien
Property owned by a decedent who does not leave a will is distributed according to the resident state's
statute of descent
A developer has a mortgage from XYZ Bank that states that construction liens recorded against the secured property later the XYZ's lien will take priority over XYZ's lien. The XYZ morgage contains a
subordination clause
If Sally dies before Janet, an estate in which Bill granted to Sally an estate for the life of Janet
vests in whoever is entitled to Sally's interest in the estate for the life of Janet.
Sherry sells her townhouse and signs the grant deed, conveying title to Philip. She personally hands the signed deed to Philip with the intention of immediately conveying title to him. Philip asks her to acknowledge the deed in front of a notary public and to record it at the county recorder's office, which she does. In most states, at what point would title to Sherry's townhouse have passed o Philip?
when Sherry handed the deed to Philip
