Texas Principles of Real Estate 2: Mini-Quizzes
Incurable
.............. depreciation cannot be fixed at an economically feasible cost? Incurable Curable Economic Viable
Mixed Number
1-1/4 is an example of a...? Proper fraction Mixed number Numerator Denominator
12.417'
12'-5" is equal to...? 12.25' 12.35' 12.417' 12.50'
Improper Fraction
5/4 is an example of a/an...? Integrated fraction Root fraction Improper fraction Proper fraction
1.6
8/5 is equal to...? 0.625 1.6 1.8 5.0
Improper Fraction
8/7 is an example of a/an...? Improper fraction Integrated fraction Root fraction Proper fraction
Mortgage Broker
A broker who arranges a mortgage loan between a lender and a borrower for a fee is referred to as a...? Mortgage banker Mortgage broker Real estate broker Loan originator
$7,200
A house is appraised at $240,000. If the local property tax rate is $3 per $100 of appraised value, what is the amount paid in annual property taxes...? $2,400 $3,600 $7,200 $8,600
$7,200
A house is appraised at $360,000. If the local property tax rate is $2 per $100 of appraised value, what is the amount paid in annual property taxes...? $2,400 $3,600 $7,200 $8,600
$600
A house is appraised at $360,000. If the local property tax rate is $2 per $100 of appraised value, what is the amount paid in monthly property taxes...? $1,200 $600 $2,100 $7,200
$3,840
A house sold for $320,000 with a 6% commission rate. The commission split between the seller and buyer's broker was 50%. The commission split between the seller's broker and his salesperson was 60/40. How much did the salesperson earn as a commission...? $3,840 $4,480 $5,650 $9,600
$36,000
A lender is willing to provide a mortgage up to 90% of a property's $360,000 contract price. How much will the borrower have to put up as a down payment...? $18,000 $24,000 $36,000 $72,000
Primary Residence
A lender will most likely provide a higher LTV for which of the following property types...? Primary residence Investment property Secondary residence Vacation home
Economic Obsolescence
A loss in value due to factors away from the subject property but adversely affecting the value of the subject property is known as...? Principle of conformity Principle of change Physical obsolescence Economic obsolescence
Interest
A monthly mortgage payment primarily consists of which of the following in the early stages of the loan...? Principal Insurance Taxes Interest
Insurance Payments
A mortgage payment includes principal, interest, taxes, and...? Insurance payments Discount points Fees Deductibles
Conventional Loan
A mortgage securing a loan made by investors without governmental underwriting is referred to as a/an...? Conventional loan Unconventional loan FHA loan VA loan
Term Mortgage
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...? Balloon mortgage Term mortgage Conventional mortgage FHA mortgage
Mortgage Banker
A person whose principal business is the originating, financing, closing, selling and servicing of loans secured by the real property for institutional lenders on a contractual basis is referred to as a...? Mortgage banker Mortgage broker Real estate broker Loan originator
$15,000
A property owner wants to build a new fence around his property. The fence will cost $20 per linear foot. If the property measures 175' x 200', how much will the fence cost to build...? $15,000 $20,000 $22,000 $25,000
$8,100
A property sold for $270,000 with a 5% total commission paid to the seller and buyer's broker. If the commission split between the seller and buyer's broker is 60/40, how much did the seller's broker earn...? $5,250 $5,400 $6,750 $8,100
$930
A room measures 12'-0" x 15'-6". What would it cost to lay down new flooring that costs $5 per square foot...? $630 $780 $910 $930
Reconciliation
A single value is derived from the three appraisal methods of determining value during the ............ process? Pro-forma Verification Highest and best use Reconciliation
All of the Above
A term loan is typically used for which of the following...? Second mortgages Home improvement loans Investor loans All of the above
Uniform Residential Appraisal Report
A typical residential appraisal report is issued on a...? HUD-1 Form National Appraisal Form Uniform Residential Appraisal Report Estimated Home Value Appraisal Report
Bond
A written notice of an obligation given by a corporation or government entity is known as a...? Deed Promissory Note Bond Bill of Sale
Determine the Highest and Best Use
After the needed data has been obtained and verified, what is the next step in the appraisal process...? Determine the highest and best use State the problem Reconciliation Issue the appraisal report
Income Approach
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. Which of the following appraisal methods will the appraiser most likely use to determine the value of the office building...? Cost approach Income approach Sales comparison approach Market data approach
Sales Comparison Approach
David is in the process of buying his first house. David's lender requires an appraisal to be done on the property. Which of the following appraisal methods will most likely be used to determine the value of David's house...? Income approach Cost approach Sales comparison approach Assessed approach
300 Hours
How many hours of appraisal education is required to become a general certified real estate appraiser...? 75 hours 150 hours 200 hours 300 hours
75 Hours
How many hours of appraisal education is required to become an appraiser trainee...? 75 hours 150 hours 180 hours 260 hours
No Experience is Needed
How much experience is needed to become a real estate appraiser trainee...? No experience is needed At least 6 months working under a licensed appraiser At least 1 year working under a licensed appraiser At least 2 years working under a licensed appraiser
1% of the Loan
If a lender charges a 1 point origination fee, what will be the cost of the origination fee...? 0.1% of the loan 1% of the loan 2% of the loan 10% of the loan
$20,000
If a lender charges an origination fee of 1 point and 3 discount points, what will be the total amount paid in points on a $500,000 loan...? $5,000 $10,000 $15,000 $20,000
540'
If a property measures 150' wide by 120' deep, how many linear feet will the perimeter of the property measure...? 300' 360' 420' 540'
50%
If an owner obtained a $100,000 loan on a $200,000 property, what LTV was provided by the lender...? 50% 60% 80% 200%
$125,000
If the annual interest paid on a loan is $10,000, with an interest rate of 8%, what is the total amount of the loan...? $80,000 $125,000 $160,000 $180,000
5%
If the annual interest paid on a loan is $3,000, and the total loan amount is $60,000, what is the annual interest rate...? 5% 6% 7% 8%
1
Improper fractions are always greater than...? 0.01 0.1 0.5 1
Numerator
In an improper fraction, the ............... is larger than the denominator? Numerator Root Decimal Integer
Flexible Payment Loan
In this type of loan, a borrower initially pays a reduced interest rate, which gradually increases to the market rate after a period of time...? Flexible payment loan Conventional loan Term loan FHA loan
Private Mortgage Insurance
Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as...? Title insurance Property insurance Private mortgage insurance Priority mortgage insurance
Fully Amortized
Most deed of trust loans are...? Fully amortized Interest only Partially amortized Balloon loans
Flexible Payment Loan
Negative amortization may occur in which of the following types of loans...? Conventional loan Term loan Flexible payment loan FHA loan
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 is referred to as a/an...? Appraiser Attorney Real estate broker All of the above
True
Real estate appraisers used to appraise a property cannot be selected by the real estate brokers involved in the transaction...? True False
Uniform Residential Loan Application
The Fannie Mae form 1003 is also known as the...? Primary Loan Application HUD-1 Form Uniform Residential Loan Application Credit Loan Application
12
The Federal Reserve System is divided into how many geographical districts....? 12 13 25 50
Reserve Requirements
The Federal Reserve regulates the flow of money and interest rates indirectly by controlling which of the following requirements for its member banks...? Credit requirements Reserve requirements Minimum loan requirements All of the above
All of the Above
The Texas Department of Housing and Community Affairs offers which of the following mortgage and housing assistance programs...? The Texas First-Time Homebuyers Program The Texas Bootstrap Loan Program Veterans Housing Assistance Program All of the above
$2,400
The annual taxes on a property are $4,800. If the property is sold at the mid-date of the year, how much of the annual property taxes will the seller be responsible for...? $0 $1,200 $2,400 $4,800
Denominator
The bottom number in a written fraction is called the...? Denominator Numerator Root Integer
Utility
The capacity to satisfy human needs and desires is referred to as...? Scarcity Utility Value Demand
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 is known as...? Reproduction cost Replacement cost Substitution cost Conforming cost
Effective Demand
The desire for possession or ownership backed by the financial means to satisfy that need is referred to as...? Effective Demand Net Demand Value Demand Market Demand
Loan Origination Fee
The financing charge that a lender requires is referred to as the...? Loan origination fee Prepayment fee Discount fee Closing fee
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 is referred to as...? Assessed Value Market Value Investment Value Insured Value
Net Operating Income
The income approach determines value by applying a capitalization rate to the...? Net operating income Gross income Effective gross income After tax profit
Yield
The interest earned by a bank on the money it has loaned is referred to as...? Return IRR Yield Profit
Amortization
The liquidation of a financial obligation on an installment basis is referred to as...? Buy-down Discounting Amortization None of the above
Physical Deterioration
The loss in value brought about by wear and tear, disintegration, and use and actions of the elements is known as...? Economic obsolescence Functional obsolescence Physical deterioration Capital expenditure
Depreciation
The loss of value of a property brought about by age, physical deterioration or functional or economic obsolescence is referred to as...? Depreciation Deflation Discount Capital expenditure
Discount Rate
The minimum interest rate set by the Federal Reserve for lending to other banks is known as the...? Bond rate Discount rate Minimum interest rate Term rate
Market Value
The most common objective of an appraisal is to develop an opinion of...? Assessed value Market value Insured value Investment value
Highest and Best Use
The most probable use to which a property is suited that results in its highest value or highest returns to the land is known as...? Investment use Highest and best use Assessed use Insured use
Value
The present worth of future benefits arising out of ownership to typical users/investors is known as...? Cost Return Value Interest
S&L
The primary function of a .......... is to promote thrift and home ownership? Credit Union Savings bank Commercial bank S&L
Transferability
The relative ease with which ownership rights are transferred from one person to another is known as...? Demand Scarcity Substitution Transferability
Market Data Approach
The sales comparison approach is also referred to as the...? Market data approach Cost approach Assessed approach Income approach
Scarcity
The supply of property in relation to effective demand is known as...? Utility Demand Scarcity Value
$6,000
The total commission on the sale of a home was $10,000. If the seller's broker earned a 60% commission split, and the buyer's broker earned a 40% commission split, how much did the seller's broker earn...? $3,000 $4,000 $5,000 $6,000
$5,400
The total commission on the sale of a home was $9,000. If the seller's broker earned a 60% commission split, and the buyer's broker earned a 40% commission split, how much did the seller's broker earn...? $3,600 $4,500 $5,400 $9,000
$2,000
The total commission paid on the sale of a home was $8,000. The commission split between the seller and buyer's broker was 50%. If the commission split between the seller's broker and his salesperson is 50%, how much did the salesperson earn...? $2,000 $2,500 $3,000 $4,000
Cost Approach
This appraisal method 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...? Income approach Market data approach Cost approach Sales comparison approach
Sales Comparison Approach
This appraisal method consists of comparing similar type properties, which have recently sold, to the subject property...? Cost approach Sales comparison approach Income approach Assessed approach
Negative Amortization
This 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...? Positive amortization Balloon amortization Negative amortization Flexible amortization
35%
Three investors purchased a property for $580,000. Investor A contributed $157,000, while investor B contributed $220,000. What percentage of ownership was left for the third investor...? 33% 35% 40% 45%
$181,818.18
What did an owner originally pay for his home if he sold it for $200,000, which yielded a 10% profit...? $90,918.09 $181,818.18 $161.812.18 $180,000
$313,043.48
What did an owner originally pay for his home if he sold it for $360,000, which yielded a 15% profit...? $210,068.00 $214,053.32 $306,000 $313,043.48
A Balloon Payment
What is required to fully satisfy a balloon mortgage...? A balloon payment A typical monthly payment A loan origination fee Discount points
$10,000
What is the annual interest on a $200,000 loan with an interest rate of 5%...? $5,000 $10,000 $15,000 $20,000
$19,200
What is the annual interest on a $320,000 loan with an interest rate of 6%...? $12,600 $14,200 $16,400 $19,200
205.375 sq. ft.
What is the area of a room that measures 15'-6" x 13'-3"...? 175.125 sq. ft. 205.375 sq. ft. 220.25 sq. ft. 235.275 sq. ft.
Determine the Value of the Land as if it were Vacant
What is the first step an appraiser takes when valuing a property using the cost approach...? Add the depreciated value of the improvements to the value of the land Estimate the amount of accrued depreciation Determine the current cost of the improvements Determine the value of the land as if it were vacant
State the Problem
What is the first step in the appraisal process...? Gather the needed data State the problem Verify the data Determine the highest and best use
List the Data Needed
What is the second step in the appraisal process...? State the problem Determine the highest and best use List the data needed Reconciliation
All of the Above
When using sales data to compare to the subject property, appraisers should use sales that are...? Current Comparable Close All of the above
Cost Approach
Which of the following appraisal methods will most likely be used to determine the value of a church...? Income approach Market data approach Cost approach Sales comparison approach
All of the Above
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 All of the above
Ginnie Mae
Which of the following is a U.S. government agency that purchases FHA and VA mortgages...? HUD Department of Housing and Community Affairs Ginnie Mae Department of Finance
Fannie Mae
Which of the following is a privately owned corporation that purchases FHA, VA, and conventional mortgages...? Fannie Mae Freddie Mac Ginnie Mae All of the above
All of the Above
Which of the following is a source of real estate financing...? Local banks Mortgage banking companies Credit unions All of the above
All of the Above
Which of the following is asked on a residential loan application...? Employment history Current monthly housing expenses List of assets and liabilities All of the above
Appraiser Trainee
Which of the following is the lowest real estate appraiser classification...? Appraiser trainee State licensed real estate appraiser Certified residential appraiser Certified general real estate appraiser
Balloon Mortgage
Which of the following is the riskiest loan for a residential borrower...? Conventional mortgage Balloon mortgage FHA mortgage VA mortgage
Loan Discount Points
Which of the following is used by lenders to increase the lender's yield on the loan without increasing the annual interest rate...? Amortization Loan discount points Balloon payments Reduced broker fees
10 Years
Which of the following loan terms will yield the highest monthly mortgage payment...? 10 years 15 years 20 years 30 years
30 Years
Which of the following loan terms will yield the lowest monthly mortgage payment...? 10 years 15 years 20 years 30 years
Homebuyers Who Only Intend to Live in the Property for a Few Years
Which of the following will most likely benefit from a balloon mortgage...? Recently married couples Retirees First time homebuyers Homebuyers who only intend to live in the property for a few years
$128,000
XYZ Bank is willing to offer a 80% LTV loan on a property. If the property was appraised at $160,000, and the contract price is $180,000, what will be the loan amount offered by XYZ Bank...? $122,000 $128,000 $140,000 $144,000
