Principles of Real Estate Part 2
The Federal Reserve System is divided into how many geographical districts....?
12
How many hours of experience is required to become a certified residential real estate appraiser?
2,500 hours
How many hours of appraisal education is required to become a general certified real estate appraiser?
300 hours
How many hours of appraisal education is required to become an appraiser trainee?
75 hours
A REIT is not subject to a corporate income tax if at least ......... of its income is distributed to shareholders?
90%
What is required to fully satisfy a balloon mortgage?
A balloon payment
Mortgage Broker
A broker who arranges a mortgage loan between a lender and a borrower for a fee
Scarcity
A finite supply
Economic obsolescence
A loss in value due to factors away from the subject property but adversely affecting the value of the subject property
Mortgage Banker
A person whose principal business in the originating, financing, closing, selling and servicing of loans secured by the real property for institutional lenders on a contractual basis
The cost to acquire a property, plus the cost of the physical improvements, minus the depreciation claimed as a tax deduction is equal to the...?
Adjusted basis
Comparative Market Analysis
An analysis of the competition in the marketplace that a property will face upon sale attempts
Appraisal
An estimate of the value of property resulting from an analysis of facts about the factory
What is the lowest real estate appraiser classification?
Appraiser trainee
Which of the following is an association of owners and managers, primarily in the office building market...?
BOMA
Broker Samuel is completing what form of appraisal for Lender Jane assuming he is only a broker and not an appraiser?
BPO
Which mortgage type is the riskiest loan for a residential borrower?
Balloon mortgage
A written notice of an obligation given by a corporation or government entity is known as a...?
Bond
Cash received in a tax-deferred exchange is known as...?
Boot
A variance may be granted for a change in the permitted ............. or use?
Building Area
A systematic regulation of construction of buildings within a municipality established by ordinance or law is known as a...?
Building Code
The total amount of money remaining after all expenditures have been paid, including the taxes, operating costs, and mortgage payments is known as...?
Cash flow
What are property managers designated as?
Certified property manager
Sales comparison approach
Consists of comparing similar type properties, which have recently sold, to the subject property
A mortgage securing a loan made by investors without governmental underwriting is referred to as a/an?
Conventional loan
What appraisal method would most likely be used to determine the value of a church?
Cost approach
When using sales data to compare to the subject property, appraisers should use sales that are?
Current Comparable Close
A non-judicial foreclosure typically occurs when there is a...?
Deed of trust
After the needed data has been obtained and verified, what is the next step in the appraisal process?
Determine the highest and best use
The minimum interest rate set by the Federal Reserve for lending to other banks is known as the...?
Discount rate
What is asked on a residential loan application?
Employment history Current monthly housing expenses List of assets and liabilities
What is a privately owned corporation that purchases FHA, VA, and conventional mortgages...?
Fannie Mae (FNMA)
Negative amortization may occur in what types of loans?
Flexible payment loan
A procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms is known as...?
Foreclosure
A quality of some asbestos that causes it to crumble, allowing toxic particles to escape into the air and lodge in people's lungs is known as...?
Friable
Most deed of trust loans are.....?
Fully amortized
Which U.S. government agency purchases FHA and VA mortgages...?
Ginnie Mae (GNMA)
A loan against the equity in a home is known as a...?
Home equity loan
Who will most likely benefit from a balloon mortgage?
Homebuyers who only intend to live in the property for a few years
An investor is in the process of purchasing an office building. The bank providing the mortgage for the property requires an appraisal to be done. What appraisal method will the appraiser most likely use to determine the value of the office building?
Income approach
What appraisal method will most likely be used to determine the value of a commercial building...?
Income approach
.............. depreciation cannot be fixed at an economically feasible cost?
Incurable
A/an ............ can be filed to stop the violation of a deed restriction?
Injunction
A mortgage payment includes principal, interest, taxes, and...?
Insurance payments
A monthly mortgage payment primarily consists of what in the early stages of the loan?
Interest
What is the second step in the appraisal process?
List the data needed
The financing charge that a lender requires is referred to as the?
Loan origination fee
What are sources of real estate financing?
Local banks Mortgage banking companies Credit unions
What is laches?
Loss of a right through undue delay or failure to assert it
Depreciation
Loss of value of property brought about by age, physical deterioration or functional or economic obsolescence
The use of a lower amount of leverage results in .............................. risk to the investor?
Lower
What is the first step an appraiser takes when valuing a property using the cost approach?
Market data approach
The price paid regardless of pressures, motives or intelligence is referred to as the?
Market price
The most common objective of an appraisal is to develop an opinion of....
Market value
A real estate security can include What?
Mortgage notes
A mortgage REIT's primarily source of income are from mortgage interest and...?
Mortgage origination fees
The income approach determines value by applying a capitalization rate to the?
Net operating income
How much experience is needed to become a real estate appraiser trainee?
No experience is needed
An auto-repair shop that exists in a newly developed residential neighborhood is an example of a...?
Non-conforming use
Negative amortization
Occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due
Appraiser
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes
A lender will most likely provide a higher LTV for what property type?
Primary residence
Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as...?
Private mortgage insurance
A branch of real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties is known as...?
Property management
Which of the following externalities can have a negative effect on home values?
Proximity to a landfill Proximity to a power plant Proximity to a noisy highway
If a property is not sold at a foreclosure auction, the property will become a...?
REO
Real estate investments fall into two categories, real property and...?
Real estate securities
A single value is derived from the three appraisal methods of determining value during the ............ process?
Reconciliation
The new property in a 1031 exchange is referred to as the...?
Replacement property
The Federal Reserve regulates the flow of money and interest rates indirectly by controlling what type of requirements for its member banks...?
Reserve requirements
The primary function of a .......... is to promote thrift and home ownership?
S&L
David is in the process of buying his first house. David's lender requires an appraisal to be done on the property. What appraisal method will most likely be used to determine the value of David's house?
Sales comparison approach
A property with a higher intrinsic value can often demand a higher...?
Sales price
A term loan is typically used for what?
Second mortgages Home improvement loans Investor loans
The illegal rezoning of a certain property in a zoned area to permit a different type of use than that authorized for the rest of the area is known as...?
Spot zoning
What is the first step in the appraisal process?
State the problem
A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement
Straight Line Depreciation
Local governments use what type of zoning to help attract new businesses to an area...?
Tax Increment Reinvestment Zones
A mortgage that requires the mortgagor to pay interest only during the mortgage term, with the principal due at the end of the term is referred to as what type of mortgage?
Term mortgage
Utility
The capacity to satisfy human needs and desires
Reproduction cost
The cost of replacing the subject improvement with one that is the exact replica, having the same quality of workmanship, design and layout, or cost to duplicate an asset
Effective Demand
The desire for possession or ownership backed by the financial means to satisfy that need
Radon most often enters a house through...?
The foundation walls
Market Value
The highest price in terms of money which a property will bring in a competitive and open market and under all conditions required for a fair sale
Physical deterioration
The loss in value brought about by wear and tear, disintegration, and use and actions of the elements
Market value is equal to...?
The most probable price a property will bring in the market
Assessed use
The most probable use to which a property is suited that results in its highest value or highest returns to the land
Value
The present worth of future benefits arising out of ownership to typical users/investors
Transfer ability
The relative ease with which ownership rights are transferred from one person to another
Advantages of investing in real estate:
The use of borrowed funds to purchase investment properties Investment properties can serve as tax shelters Growth in property values typically outpaces inflation
A syndicate real estate investor enjoys the same tax benefits as a direct ownership investor...? T/F
True
Real estate appraisers used to appraise a property cannot be selected by the real estate brokers involved in the transaction?
True
A typical residential appraisal report is issued on a?
Uniform Residential Appraisal Report
The Fannie Mae form 1003 is also known as the?
Uniform Residential Loan Application
A type of foam containing formaldehyde, a gaseous compound used for home insulating until the early 1980's, is known as...?
Urea-Formaldehyde Foam Insulation
The interest earned by a bank on the money it has loaned is referred to as?
Yield
Which of the following imposes height restrictions on buildings...?
Zoning
Flexible payment loan
a borrower initially pays a reduced interest rate, which gradually increases to the market rate after a period of time
Cost approach
consists of an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land
Is asbestos harmful if undisturbed?
no