Ch. 9 - Course Final Exam
A property valued at $295,000 has a gross rent multiplier of 135. What is this property's monthly income? $2,458 $2,185 $2,525 $2,328
$2,185
A real estate salesperson brings a buyer to a For-Sale-By-Owner transaction. The home sells for $120,000, and the seller agrees to pay a commission of 3%. The salesperson is on a 65% commission schedule with her broker. How much will the salesperson receive from this transaction? $3,600 $1,260 $3,120 $2,340
$2,340
A borrower earns $8,000/month and makes credit card and car note payments of $900. A conventional lender requires a 30% income ratio. What monthly amount for housing expenses (principle, interest, taxes, insurance) will the lender allow this person to have in order to qualify for a conventional mortgage loan? $2,400 $900 $1,500 $1,200
$2,400
Jennifer wants to net $35,000 on her house. Her closing costs will be 7,500 plus a 7% commission. She owes $185,000 on her loan. What should the sale price be (round to the nearest $1,000)? $228,000 $237,000 $245,000 $256,000
$245,000
A rental house has monthly gross income of $3,000. A suitable gross income multiplier derived from market data is 13. What estimated sale price (to the nearest $1,000) is indicated? $360,000 $390,000 $429,000 $468,000
$468,000
A property sells for $620,000 two years after it was purchased. If the annual appreciation rate was 4%, how much did the original buyer pay for the property (round to the nearest $1,000)? $600,000 $566,000 $573,000 $596,000
$573,000
A small apartment building has a NOI of $40,000, interest expense of $14,000 and annual depreciation of $6,000. Assuming a 30% tax bracket, what is its income tax liability? $7,800 $10,200 $4,500 $6,000
$6,000
Emma's property is assessed at $650,000. Her property qualified for a $50,000 homestead tax exemption and was appraised at $800,000. What is the taxable value of Emma's property? $650,000 $800,000 $600,000 $750,000
$600,000
A duplex generates $1,400 rent for each of its two units per month. The property has been recently appraised for $350,000. What is this property's GIM? 9.6 4.8 10.4 20.83
10.4
An income property generates $9,200 per month, and is valued at $985,000. What is its gross rent multiplier? 99 82 107 274
107
How many discount points are required to increase the percentage yield on a mortgage from 6% to 7.5%? 1.5 points 8 points 12 points 15 points
12 points
There are ____ sections in a township and each section is ______. 12, ten square miles 24, six square miles 36, one square mile 48, one square kilometer
36, one square mile
How many acres are there in the W 1/2 of the S 1/2 of the SW 1/4 of a section of land? 50 acres 15 acres 40 acres 160 acres
40 acres
Kate bought a home for $210,000. However, all the town's jobs disappeared when the local factory closed. Kate sold this home one year later for $120,000. What was her percentage of loss? 75% 57% 43% 36%
43%
Under the rectangular survey system, one section is equal to 360 acres. 36 acres. 64 acres. 640 acres.
640 acres.
A retail property valued at $710,000 earns $4,650 per month. What is the annual percent of return? 0.9% 9.8% 11.1% 7.9%
7.9%
Which of the following properties would most likely be exempted from real estate taxes? A 1,000 acre corn field A car manufacturing facility A building owned by the Department of Transportation A low-rise office building
A building owned by the Department of Transportation
Which of the following is an example of an involuntary lien? A first mortgage on a property A judgment lien A second mortgage on a property A car loan
A judgment lien
What is the legal avenue for an owner who wants to dispose of his or her interest against the wishes of other co-owners? A foreclosure suit A partition suit A redistribution suit A plottage suit
A partition suit
Which of the following is a way of terminating a restrictive covenant? Requesting the state's Real Estate Commission to ban restrictive covenants Restrictive covenants cannot be terminated. A suit for partition filed by a majority of property owners in a subdivision Failure of property owners to enforce the restrictions in a timely manner
A suit for partition filed by a majority of property owners in a subdivision
Eldrick bought a certificate that allows him to apply for a tax deed after a certain period. What did Eldrick purchase? A title certificate A renewal certificate A homestead certificate A tax certificate
A tax certificate
What type of agent has power of attorney? A general agent A universal agent A special agent A unilateral agent
A universal agent
78 of 100__________ and _________ determine a building's potential for generating income. Size, location Ability to attract tenants, operating expenses Style, vacancy rate Taxing district, restrictive covenants
Ability to attract tenants, operating expenses
What type of properties tend to have the shortest leasing terms? Industrial properties Cooperatives Hotel rooms Agricultural properties
Hotel rooms
Broker Jean just opened Purple Mountain Realty. What administrative steps should Jean undertake to help ensure fair housing compliance? Train her agents how to discover the testers. Have all agents carry around a fair housing brochure when they are with clients. Include a fair housing policy in her policy and procedures manual. Make sure one half of Jean's agents are minorities regardless of the applicant pool.
Include a fair housing policy in her policy and procedures manual.
How is a rent roll useful to a property manager? It shows the personal and demographic information for each tenant. It shows the last time each unit has been inspected. It can help determine the annual rental income for the property. It lists the various problems of each unit that will be addressed when the current lease expires.
It can help determine the annual rental income for the property.
Fair Housing law first began with the ________ which prohibited discrimination in housing based on race. Civil Rights Act of 1866 Sherman Antitrust Act Civil Rights Act of 1964 Civil Rights Act of 1903
Civil Rights Act of 1866
An apartment complex's units have had their rusting bathroom drain pipes replaced with PVC. What type of maintenance is this? Construction Preventive maintenance Corrective maintenance Initiative maintenance
Corrective maintenance
Upgrade Realty typically sells houses valued between $150,000 to $300,000. However, they just listed an upscale property for $7,875,000. What would be a good advertising medium to utilize to sell this pricey home? Magazines Direct mail The Home Shopping Network None, the potential buyers will find the property without advertising.
Direct mail
What terms are included in every metes and bounds legal description? Distances, angles, and reference points Base lines, meridians, and plots Lot numbers, degrees of latitude and longitude Parallels, intersections, and street numbers
Distances, angles, and reference points
Hubert is a veteran of the First Gulf War. What could be a reason for him to seek a VA loan? The VA automatically pays for half of the mortgage payment It is the easiest way to obtain a loan larger than $750,000 The VA does not require Hubert to live on the property with a VA loan Many VA loans do not require down payments
Many VA loans do not require down payments
Which of the following statements about eminent domain is false? It can only be applied in cases where the owner agrees with the government's superior claim. The government must pay compensation for the property. The property must be used for the public good. No private property is exempt from the exercise of this power.
No private property is exempt from the exercise of this power.
A written contract to sell timber rights is performed by both parties. Six months later, the seller has second thoughts and wants to reclaim the rights under Regulation Z. What is the likelihood that the seller will succeed? Slight, if the seller fells like he was taken advantage of. Good, because Regulation Z requires the contract be in writing. Nonexistent, since this contract has nothing to do with a violation or, or compliance with, Regulation Z. Excellent, because landowners are not allowed to sell timber rights under Regulation Z.
Nonexistent, since this contract has nothing to do with a violation or, or compliance with, Regulation Z.
Which of the following is not a major warehousing agency in the secondary mortgage market? Ginnie Mae Fannie Mae Robbie Mac Freddie Mac
Robbie Mac
Which of the following would NOT be a legal way for a salesperson to advertise a piece of listed property? Run an ad in the paper through the broker's name that said an open house was going to be held on a continuous basis. Run a classified ad in their own name advertising the property for sale. To send out cards with the company name stating an open house will be held. To send out flyers on the company stationery to homes in that area.
Run a classified ad in their own name advertising the property for sale.
What piece of legislation states that commercial emails must offer an opt-out option and cannot have a deceptive subject line? The Do-Email Protection Act The Uniform Email Law of 2009 The CAN-SPAM Act The Freedom of Email Act
The CAN-SPAM Act
What significant piece of legislation created the Environmental Protection Agency (EPA)? The Federal Nature Protection Act of 1977 The Clean Land Act of 1962 The National Environmental Policy Act of 1969 The Green Act of 1980
The National Environmental Policy Act of 1969
What is an advantage of a VA loan compared to a traditional mortgage? The loan must typically be paid off in 10 years instead of 30 years. The VA insures the lender against loss. The VA does not allow prepayment penalties to be charged if a veteran pays off a loan early. The VA will pay at least 25% of the monthly payments.
The VA does not allow prepayment penalties to be charged if a veteran pays off a loan early.
Mayor Rodney is unsure how ad valorem real estate taxes are calculated for a particular property. What is the best answer? The appraised value of the property multiplied times the area's millage rate. The appraised value of the property divided by the area's millage rate. The assessed value of the property divided by the area's millage rate. The taxable value of the property multiplied by the area's millage rate.
The appraised value of the property multiplied times the area's millage rate.
A foreclosure sale generated $500,000. What is the first item to be paid out of this amount? The first mortgage lien A mechanic's lien The costs of sale including advertising, attorney fees, and trustee fees Any special assessment taxes
The costs of sale including advertising, attorney fees, and trustee fees
Jamie bought a tax certificate for $3,200. What did Jamie actually purchase? Immediate legal title to the foreclosed property Nothing, Jamie simply paid for another person's taxes for nothing in return Legal title to the property if the homeowner does not pay her back within 3 years The right to apply for the property's deed by agreeing to pay the taxes due on that property
The right to apply for the property's deed by agreeing to pay the taxes due on that property
In a real estate transaction, who has the responsibility for filling out the property condition disclosure statement? The appraiser The seller The seller's broker The home inspector
The seller
In a foreclosure sale, which of the following must be paid off first? The special assessments The utility liens The first mortgage The mechanic's lien
The special assessments Ask about question
A commercial tenant installed a grill to cook hamburgers and steaks. What will happen to this grill upon the expiration of the lease? The owner would be able to keep the grill since it is considered an encroachment. The landlord must keep the grill since it is now real property. The tenant would be able to take the grill prior to the expiration of the lease since the grill was a trade fixture, and it was installed by the tenant. The owner would be able to keep the grill since it is considered an emblement.
The tenant would be able to take the grill prior to the expiration of the lease since the grill was a trade fixture, and it was installed by the tenant.
What phrase emphasizes the requirement that events related to the contract must be performed on time? Delivery is of importance Freedom of will Time is of the essence Contingencies of magnitude
Time is of the essence
What is a major downside for a business to own its own building? The business does not have to worry about renewing its lease. They have more total assets once the purchase is complete. A portion of each mortgage payment builds equity in the building. When a business owns the property, it must operate, maintain and repair the building.
When a business owns the property, it must operate, maintain and repair the building.
Which of the following is typically a licensee's duty to the brokerage? Work to promote and sell the broker's listings. Ignore continuing education requirements. Provide legal advice to clients. Establish compensation agreements with other ancillary service providers.
Work to promote and sell the broker's listings.
A couple sold an investment property for a realized gain of $58,000. Do they have to report this to the IRS and if so, on what form? No, real estate sales do not have to be reported to the IRS. Yes, real estate sales must be reported on Form 1099. Yes, real estate sales must be reported on Form W-4. No, real estate sales must only be reported if the realized gain is more than $250,000.
Yes, real estate sales must be reported on Form 1099.
Does a seller have the option to reject subagency when signing the listing agreement? No, sellers must accept subagency. Yes, subagency is banned in every state. Yes, the seller can choose to reject or accept subagency. No, unless they ask their Real Estate Commission for permission.
Yes, the seller can choose to reject or accept subagency.
Tax assessors cannot do "spot" reassessments of properties unless a material change in the property has been reported. a new owner has taken possession since the last assessment. the property has not been changed in any way. the property in question is worth more than $1,000,000.
a material change in the property has been reported. Ask about question
All of the following actions performed by a broker would violate the license law EXCEPT: accept a referral fee from an out-of-state broker be paid an undisclosed rebate commingle money in the trust account fail to get a dated receipt from a title company for an earnest deposit
accept a referral fee from an out-of-state broker
A buyer asks if a property has radon gas in the basement. The agent says there is none when he knows there is a radon problem. This is an example of puffing since this action is legal. active fraud since this is an intentional misstatement or omission. negligent misrepresentation since this is an unintentional misstatement or omission. negligent misrepresentation since this is an intentional nondisclosure of a material fact.
active fraud since this is an intentional misstatement or omission.
A standardized yardstick expressing the true annual cost of borrowing is expressed as the uniform interest rate (UIR). internal rate of return (IRR). appraised interest rate (AIR). annual percentage rate (APR)
annual percentage rate (APR)
Title records protect the public by giving all concerned parties ________ of the condition of a property's legal title marketable data destructive warning removable notice constructive notice
constructive notice
The Davidsons built a new porch on their property. The porch added $2,000 to the property's market value. This is an example of the ________ principle of value. contribution competition conformity regression
contribution
All are true of the commissioners EXCEPT: they must be citizens of the United States they must be residents of Kansas for at least 5 years each commissioner is appointed for a four year term each commissioner must be licensed as a broker
each commissioner must be licensed as a broker
The Bernharts have been leasing a property for the past three years. The owner of the property decides he wants to sell. He offers the Bernharts the first opportunity to purchase the property. This is an example of a right of redemption. right of recovery. right of first refusal. right of indifference.
right of first refusal.
The KREC could use all of the following types of punitive action EXCEPT: sentence the licensee to jail revoke the license restrict the license censure the licensee
sentence the licensee to jail
Vance's property had a bird feeder that was attached to the land. Today, Vance decided to remove the bird feeder. This is an example of attachment. severance. enhancement. instant domain.
severance.
A conveyance instrument for a property that is sold to enforce a tax lien is a title deed. interest deed. tax deed. foreclosure deed.
tax deed.
If the broker dies or loses her license, the state's real estate licensing agency may choose to appoint a ________ to close any transactions that are pending. temporary broker continuing agent mortgage banker trustee broker
temporary broker
Salesperson Pam was trying to remember the basic difference between an FHA and a VA loan. The answer is the FHA insures loans, the VA guarantees them. the FHA guarantees loans; the VA insures them. the FHA requires no down payment, VA requires 5% down payment. the FHA offers balloon loans and the VA offers ARM loans.
the FHA insures loans, the VA guarantees them.
Licensee Katy sees a legal description that includes a subdivision plat map. This indicates the legal description method utilized is the metes and bounds system. the urban planning method. the lot and block system. the appraisal identification system.
the lot and block system.
In which of the following instances would a licensee NOT have to hand out the Brokerage Relationships brochure? the prospective buyer has received a brochure from the secretary of the company the agent is obtaining financial information from a prospective buyer the licensee is with a seller discussing taking a listing on the property the agent is showing a prospective buyer property
the prospective buyer has received a brochure from the secretary of the company Ask about question
Which of the following best describes the prohibited activity of redlining? A broker only shows homes in certain neighborhoods based on matching existing residents with similar potential buyers. A broker convinces an owner to sell his property by warning him that a bunch of "communists" are about to move into his neighborhood. All the brokerages in a town agreeing to increase commission rates to 8%. A lender restricting the number of loans in certain areas of a community because of its racial or ethnic makeup.
A lender restricting the number of loans in certain areas of a community because of its racial or ethnic makeup.
How is a testamentary trust different from a living trust? A testamentary trust only takes effect when the beneficiary turns 21. A testamentary trust can be changed at any time. A testamentary trust only takes effect when the trustor dies. A testamentary trust can only exist for up to ten years.
A testamentary trust only takes effect when the trustor dies.
Seller Blake's home just hosted a caravan for his agent's brokerage. What should he or his agent do to get feedback from the other licensees? Nothing, it is illegal to ask for their opinions. Text each agent after the home tour. Ask them to give their opinions orally while still looking at the property. Ask each agent to fill out an evaluation.
Ask each agent to fill out an evaluation.
In advertising practice, advertisers develop ad copy using the acronym "AIDA." Which of the following is included in the "AIDA" standard? Antitrust Defensiveness Aspiration Attention
Attention
Broker Smith decided to have his primary office in his home. Which is true regarding this? a primary real estate office cannot be in someone's home. Broker Smith could do this as long as he did not maintain a trust account Broker Smith could do this as long as there is enough space for maintaining records Broker Smith would need to hang his license with some other broker
Broker Smith could do this as long as there is enough space for maintaining records
What is the term for the loss of value of an improvement due to functional inadequacies, often caused by age or poor design? Chronological obsolescence Economic obsolescence Environmental obsolescence Functional obsolescence
Functional obsolescence
What is an example of an in-house sale? Jan always represents buyers and Dan always represents sellers. Jan and Dan work for the competing brokerages. A transaction where the closing occurs within the home being sold. Kim represented the buyer and Tim represented the seller in the same transaction. Kim and Tim work for the same brokerage. Kate represented the buyer and Jack represented the seller in the same transaction. Kate and Jack work for the different brokerages.
Kim represented the buyer and Tim represented the seller in the same transaction. Kim and Tim work for the same brokerage.
Tenant Kelly has the right to use landlord Bob's property according to his lease. Does Kelly have an interest in the property? No, because Kelly does not own the property. Yes, because Kelly can use the property. No, unless Kelly has a life estate. No, unless Kelly has lived there for more than a year.
No, because Kelly does not own the property.
Which of the following rights is included in a fee simple absolute estate? Right to conduct any and all activities without restriction Right to encroach on neighboring properties Right to grant an easement Right to not pay property taxes
Right to conduct any and all activities without restriction
Salesperson Mindy represents seller Isabel. There has been no interest in Isabel's property over the last week. What should Mindy do in regard to the weekly activity report? Skip the activity report for that week. Indicate that there were several buyers interested. Tell Isabel there has been no interest over the last week. Imply that one buyer was quite interested and will make an offer next week.
Tell Isabel there has been no interest over the last week.
Marylin and Andy live together and are co-owners of a property but are not married. What is the most likely form of co-ownership for Marylin and Andy? Tenancy by the entireties United tenancy Partnership tenancy Tenancy in comm
Tenancy in commonon
What should an agent disclose to his buyer client? That the seller of the property is gay That the seller of the property is a Muslim That the air conditioner is 13 years old That the seller is not an American citizen
That the air conditioner is 13 years old
Tyler purchased a home eight months ago for $160,000. The assessed value of his home is $120,000 and the appraised level currently is $167,000. What amount will Tyler's ad valorem taxes be based on? The sale price of $160,000 The assessed value of $120,000 The appraised value of $167,000 The averaged value of $149,000
The sale price of $160,000
Broker Janet just finished a direct e-mailing campaign. How should Janet follow-up on direct e-mail advertising? Completely change her message each time regardless of the results Call the people she mailed, even if they are on the Do-Not-Call List. Track and repeat those campaigns that show results. Repeat the same mailing, until she gets results.
Track and repeat those campaigns that show results.
Broker Regina commingled $5,000 of her client's earnest money in her personal checking account. Is this illegal? Yes, commingling client funds is always illegal. No, commingling client funds is always legal. Yes, it is only illegal if the amount of commingled funds is over $1,000. No, it is only illegal if the amount of commingled funds is over $10,000.
Yes, commingling client funds is always illegal.
Buyer Tal is regretting the full price offer he just made on a home. Can he still revoke the offer? No, because it was a full price offer. Yes, he can revoke the offer assuming the seller has not already accepted it. Yes, he can revoke an offer even after a seller has accepted it and delivered notice of acceptance. No, he must wait to hear if the seller accepted the offer.
Yes, he can revoke the offer assuming the seller has not already accepted it.
The type of agency agreement that is NOT legal in Kansas is an exclusive right to sell listing a buyer agency agreement a property management agreement a net listing
a net listing
A power of sale clause is required for deed in lieu of foreclosure. a non-judicial foreclosure. a judicial foreclosure. a temporary foreclosure.
a non-judicial foreclosure
A borrower sells a mortgaged property for less than what is owed on the loan balance. This is an example of a quick flip. a deep dive. a short sale. an equity sale.
a short sale.
Insurance policies are called _______ because the insurer only performs the promised action if a specified chance event occurs. discharge contacts aleatory contracts executed contracts adhesive contracts
aleatory contracts
A will takes effect only after the testator's death. It is a(n) _________, meaning that it can be changed at any time during the maker's lifetime. amendatory instrument fixed document stationary instrument stable document
amendatory instrument
Carrie has been growing a garden on her property. However, the garden now extends onto Amanda's property. Carrie has created an encroachment. a judgment lien. a special assessment lien. a zoning violation.
an encroachment.
A restricted license could NOT be restricted in which of the following ways? by term by broker with whom associated by inactivation by type of real estate activity
by inactivation
A licensee is required to continue to provide _____________ even after the agency agreement has been terminated. care obedience compensation confidentiality
confidentiality
Tallpenny Tower was built in 1985. However, the building has been constantly maintained and remodeled. In valuation terms, the building's _________ age is greater than the building's _________ age. chronological age, effective age effective age, chronological age depreciated age, projected age projected age, depreciated age
effective age, chronological age Ask about question
Some taxing bodies recognize that local assessments can lead to unfairly high or low values for properties in certain areas. Therefore the jurisdiction may establish _________ to level out the unevenness of valuations. diversity factors testing factors equalization factors redistribution factors
equalization factors
An Adjustable Rate Mortgage (ARM) contains a(n) ________ that allows the interest to adjust over the loan term. renewal clause escalator clause index clause stationary clause
escalator clause
Duties of the real estate commission include all of the following EXCEPT: establishing commission rates that brokers can charge hiring a director who keeps records of the meetings hiring other employees for the commission staff appointing a chairperson
establishing commission rates that brokers can charge
Under BRRETA all of these acts are considered ministerial, and do not rise to the level of agency EXCEPT: holding an open house and answering general questions accompanying an appraiser on a visit to a property setting up appointments to view property writing up a sales contract for a new home sale
holding an open house and answering general questions
Homeowner Nick enjoys the complete bundle of rights to his property, and there are no clouds on title. Nick has what is referred to as _____ to his property legal title assumed title de facto title equitable title
legal title
Agent Emily's listing was sold by another agent in her brokerage. Emily is entitled to a selling side commission. neutral party commission. equal party commission. listing side commission.
listing side commission.
In order to collect money from the recovery revolving fund a person must have obtained a writ of execution from the court make the claim within three years of the action a real estate license a discharge of bankruptcy
make the claim within three years of the action
A resident broker's office must have a sign out front must be managed by a salesperson with at least one year's experience cannot be in his/her home must display the broker and all associate's licenses
must display the broker and all associate's licenses
An escrow account ledger would contain the amount of the accepted sales contract, the anticipated closing date, and the name of the transaction's parties. names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds. an amount of interest generated, the fee paid to the state's Commission, and the personal information of the parties. a picture of the check, the deposit slip, and the amount the broker commingled in his business account.
names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds.