TheCEShop Practice Exams - 2
Which of the following formulas can be used to calculate annual rent for a net lease? Base rent + percentage of gross sales (Base rent square feet + number of square feet leased) × 12 Rent per square feet × number of square feet leased (Rent per square foot + TIM expenses) x number of square feet leased
(Rent per square foot + TIM expenses) x number of square feet leased
Days notice by landlord to change locks
3-5 days
Statutory year vs banker year (number of days)
360 vs 365
Clouded title
A cloud on title is a claim or encumbrance that affects the ownership of a property. These claims or encumbrances can arise from easements or mortgages on the land. They can also arise from a defect in a deed or a lien that may yield title to a third party such as mechanic's liens.
Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place? An affidavit from the resident Approval from the current owner A public record of tenancy A tenant add-on insurance policy
A public record of tenancy
Economic principals Anticipation Conformity Contribution Progression Regression Substitution
Anticipation - The value of property today is the current value of the total anticipated future benefits. Conformity - Value is created and maintained when the characteristics of a property conform to the demands of the market. For example, a house built in the middle of a commercial zone (due to zoning changes) would be valued differently than a house in the middle of a neighborhood made up of similar houses. Contribution - A change in a property impacts the value as a whole. Does converting a garage into a family room contribute to or detract from value? That would be in the eyes of the buyer. Progression - Lower value property raised by more expensive homes nearby Regression - Value of higher value property lowered by shitty homes Substitution A property's value is determined by what it would cost to purchase a similar substitute property. If someone offered you a car that is an exact replica of another car but was $3,000 less, it would impact your perceived value of the other car.
Economic principals Anticipation Contribution Progression Regression
Anticipation - future value expected to increase Contribution-improvement Progression is the bump in value that a lower-value property gets by being near a higher-value property.
The fibers of what material are dangerous when inhaled because they can lodge in the lungs and intestines, causing cancer? Asbestos Lead paint Radon Silicone
Asbestos fibers enter the air when asbestos decays and is disturbed.
Which of the following would property managers be expected to personally do as part of their assigned duties? Budget preparation and oversight Employee supervision Overnight care of tenant pets Property maintenance
Budget preparation and oversight
Different types of risk Capital Dynamic Business risk Static Financial risk
Capital risk: ability to secure financing at an affordable rate Dynamic risk: uninsurable business risk determined by economic, tax, or market changes Business risk: risk that the required return on investor capital will not be met Static risk: insurable business risk Financial risk: risk that is directly related to leverage
The four phases of an environmental assessment include investigation, testing, and management. Which phase is missing? Assessment Cleanup Diligence Monitoring
Cleanup
FACTA requires anyone with access to consumers' credit reports to ______. Comply with the records disposal rule Keep a record of all of the requests they have made for a period of two years Report consumers with bad credit so that their spending habits can be monitored Sign a confidentiality waiver
Comply with the records disposal rule
Who owns what in Texas (deed, title, ect) Type of forclosure
Deed of trust state, instead of two parties (lender and borrower), there are three parties (lender, borrower, and trustee). Trustee (neutral third party) holds the property deed until borrower pays off the loan Lender is the beneficiary Borrower is the grantor Trustee appointed by beneficiary (typically escrow company) NON-JUDICIAL FORCLOSURE
Dynamic and static risk are considered ________ risks. Business Capital Financial Insurance
Dynamic and static risks are types of business risks. One is insurable, the other is not.
Types of Easement Easement in gross
Easement - right held by one person to use the land for another specific purpose (example: access to property) Easement in gross - utility companies
Types of Encumbrances Liens Easements Encroachments
Encumbrance - limitations and restrictions on a property Liens - right to another person property until debt is paid off (general or specific, voluntary or involuntary) Easement - right held by one person to another person property Encroachment - physical intrusion structure or improvement on another persons land
Types of depreciation External depreciation Functional obsolescence Physical depreciation
External depreciation - or economic obsolescence is a loss in value caused by an undesirable or hazardous influence offsite. Functional obsolescence - the loss of property value due to an obsolete feature, such as an old house with one bathroom in a neighborhood filled with new homes that have at least three bathrooms. Physical depreciation - the loss in value of a real estate property due to the physical wearing out of a building. It can also describe the normal wear and tear that buildings experience as they age. For example, the heating and cooling systems wear out at some point in the future.
Types of Freehold estates Fee simple absolute Fee simple defeasible Life estate
Freehold estates - exclusive rights to property, estates of indefinite duration that can exist for a lifetime or forever. Fee simple absolute - Ownership can not be defeated by previous owners or heirs, most common way real estate is owned Fee simple defeasible - Grantor places conditions: (1) Fee simple determinable - "as long as used for, park vs commercial" - (2) Fee simple subject to a condition subsequent - "no alcohol to be used" Life estate - during the life of a person granting the property
Which of the following duties is part of the licensee's role in a residential lease transaction for an owner client? Assist the owner in locating a property to lease. Collect the first month's rent and security deposit from the tenant and hold it in a separate bank account for the owner. Determine what clauses should be included in the lease agreement and the monthly lease amount. Gather information about the type of property that the owner wants to lease and then list and market the property accordingly.
Gather information about the type of property that the owner wants to lease and then list and market the property accordingly.
What two types of data does an appraiser gather? Computer and hand-written General and specific Old and new Related and non-related
General and specific
Different types of commercial leases Gross lease Net lease Percentage lease
Gross Lease - is the simplest lease form, where all expenses related to the property are part of the lease payment and paid by the landlord. Net lease (single, double, tripple) - Where tenant pays for additional expenses: Taxes Insurance Common Area Maintenance A percentage lease is more commonly used in retail properties such as shopping centers and malls. - the tenant pays a base rent plus an additional charge that is a percentage of the tenant's gross sales.
Intestate succession vs operational of law
Intestate Succession - If you die without making a will, a court will distribute your property according to the laws of your state. This process is called "intestate succession" Operation of law - What takes precedence over a deceased person's wishes to grant his property at death, even if those wishes are specified in the decedent's will
Difference between Lead paint Asbestos Mold Radon
Lead paint - Before 1978, Lead-based paint can severely impact the health of the residents. Asbestos - Some homes, particularly older homes, have asbestos tiles, flooring, shingles, or asbestos wrapping around ducts. When inhaled, asbestos fibers can cause mesothelioma, lung cancer, and several other fatal diseases. Mold - Mold can appear wherever there's moisture and a lack of air circulation, and it can cause breathing problems and serious illness. Radon - naturally occurs in the environment. It's a colorless, odorless, radioactive gas that's released when uranium decays. It's not a problem walking around outside, because it's released into the atmosphere. But when it enters a home, which is closed up, for the most part, it can cause health problems. The gas breaks down into radioactive particles that stay behind as an unwelcome visitor. The particles, when breathed, can lead to lung cancer.
The use of one investment to finance another is called _______. Blockbusting Churning Equity build-up Pyramiding
Pyramiding makes use of one investment to finance another. This can be done through selling or refinancing the first property, then using that equity to purchase another property.
Which of the following formulas can be used to calculate annual rent for a gross lease? Base rent + percentage of gross sales (Base rent square feet + number of square feet leased) × 12 Rent per square foot × number of square feet leased (Rent per square foot + TIM expenses) × number of square feet leased
Rent per square foot × number of square feet leased
Land contract
Seller financing
Habendum clause
The "to have and to hold" clause defines or limits the ownership interest of the grantee.
Who reviews transactional documents for accuracy prior to or at closing and requires the property to be free and clear of defects before approving the buyer's loan application? The broker The lender's attorney The seller The title insurance rep
The lender's attorney - The lender's attorney reviews transactional documents for accuracy prior to or at closing and requires the property to be free and clear of defects before approving the buyer's loan application.
In addition to the property address, the lease agreement start and end dates, and the monthly rent and deposit amounts, which of the following pieces of information should all commercial leases contain? A complete list of the other tenants and their rental rates A copy of the tenant's credit report A detailed description of the property The purpose for which the space is being rented
The purpose for which the space is being rented - All commercial leases should specify the purpose for which the space is being rented.
Review deeds and titles, Title Abstract of title Chain of Title Deed General warranty deed Special warranty deed Grant deed Quitclaim deed Bargain and sale deed What is used to convey property as instrument
Title is a concept (NOT PHYSICAL) that gives right, ownership possession to a property (right of possession, control, exclusion, enjoyment, and disposition) Abstract of title - summary of title Chain of title - Establishes path and proof of ownership. Deed - PHYSICAL legal documents, contains seller and buyer names, recorded court house, given at time of sale, General warranty deed - most protection and most common, clear title Special warranty deed - only promises clear title for the time they owned the home Grant deed - does not include that youll defend after the sale has closed Quitclaim deed - least protection Bargain and sale deed - seller does not need to clear title and no protections to the buyer What is used to convey property - A deed
Cindy has gotten title insurance for the home she just purchased. She was able to put a small down payment on the home. What amount will the title insurance reimburse? Up to one-half of the purchase price Up to one-quarter of the purchase price Up to the full amount of the purchase price Up to three-quarters of the purchase price
Up to the full amount of the purchase price
Which veteran loan program in Texas offers qualified veterans help with the purchase of their primary home? Texas Veterans Land Board Veterans Home Improvement Program Veterans Housing Assistance Program Veterans Land Program
Veterans Housing Assistance Program
Which veteran loan program offers qualified veterans help with the purchase of land in Texas? Texas Veterans Land Board Veterans Home Improvement Program Veterans Housing Assistance Program Veterans Land Program
Veterans Land Program - The VLP helps qualifying veterans purchase at least one acre of land in Texas. Remember that the "L" in VLP represents "land."
Does condemnation include payment to owner?
Yes
Difference in types of tenancy Tenancy at sufferance Tenancy at will Tenancy from period to period Tenancy stated period
tenant at sufferance - If the tenant holds over without consent from the landlord tenant at will - if holding over occurs with landlord consent, either party can terminate at anytime Tenancy from period to period - specific starting date with automatic renewal cause if the tenant does not state their intent to let it expire (such as month to month) Tenancy states period - estate for years or estate for fixed years
