Course 2 Unit 2

Kevin has asked Colleen, a real estate salesperson, to help him determine the value of his home so he can put it on the market. The home has 1,500 square feet, three bedrooms, two baths, one fireplace, and a double garage. Comparable 1 has 1,525 square feet, four bedrooms, one bath, one fireplace, and a double garage; it sold for $149,000. Comparable 2 has 1,475 square feet, two bedrooms, two baths, no fireplace, and a double garage; it sold for $139,000. As it relates to home value, a bedroom is worth $5,000, a bath is worth $1,500, and a fireplace is worth $1,500. After making all needed adjustments, what is the approximate value of the subject property? A) $147,000 B) $149,000 C) $139,500 D) $145,500

$145,500

An agent is doing a CMA and looking at a sold listing. It shows the sale price as $235,000, with a seller contribution to the buyer of $5,000. When used in a CMA, what would the net or comparable sale price of that property be? A) $235,000 B) $240,000 C) $245,000 D) $230,000

$230,000

Kevin has asked Colleen, a real estate salesperson, to help him determine the value of his home so he can put it on the market. The home has 1,500 square feet, three bedrooms, two baths, one fireplace, and a double garage. Comparable 1 has 1,525 square feet, four bedrooms, one bath, one fireplace, and a double garage; it sold for $149,000. Comparable 2 has 1,475 square feet, two bedrooms, two baths, no fireplace, and a double garage; it sold for $139,000. As it relates to home value, a bedroom is worth $5,000, a bath is worth $1,500, and a fireplace is worth $1,500. Using comparable 1, what is the adjustment needed for bathrooms? A) +$3,000 B) -$3,000 C) +$1,500 D) No adjustment is needed

+$1,500

Kevin has asked Colleen, a real estate salesperson, to help him determine the value of his home so he can put it on the market. The home has 1,500 square feet, three bedrooms, two baths, one fireplace, and a double garage. Comparable 1 has 1,525 square feet, four bedrooms, one bath, one fireplace, and a double garage; it sold for $149,000. Comparable 2 has 1,475 square feet, two bedrooms, two baths, no fireplace, and a double garage; it sold for $139,000. As it relates to home value, a bedroom is worth $5,000, a bath is worth $1,500, and a fireplace is worth $1,500. Using comparable 2, what is the adjustment needed for fireplaces? A) No adjustment is needed B) +$3,000 C) +$1,500 D) -$1,500

+$1,500

Kevin has asked Colleen, a real estate salesperson, to help him determine the value of his home so he can put it on the market. The home has 1,500 square feet, three bedrooms, two baths, one fireplace, and a double garage. Comparable 1 has 1,525 square feet, four bedrooms, one bath, one fireplace, and a double garage; it sold for $149,000. Comparable 2 has 1,475 square feet, two bedrooms, two baths, no fireplace, and a double garage; it sold for $139,000. As it relates to home value, a bedroom is worth $5,000, a bath is worth $1,500, and a fireplace is worth $1,500. Using comparable 1, what would be the dollar amount of adjustments for bedrooms? A) +$5,000 B) -$5,000 C) No adjustment is needed D) +$3,000

-$5,000

An agent wants to schedule a showing for an MLS-listed property. Which of the following is the BEST procedure? A) To call the listing broker directly B) To call the appointment phone shown in the listing C) To call the seller directly D) To just show up at the property and ask to be allowed to show it

.To call the appointment phone shown in the listing

An agent wants to find out who owns a vacant home. Where can the agent find that information? A) An old MLS listing B) A county property tax statement C) None of these D) The phone book

A county property tax statement

Which of the following statements is FALSE regarding a competitive market analysis (CMA)? A) It may not be used as a substitute for an appraisal. B) It is used to analyze current conditions affecting marketability. C) A licensed appraiser may substitute a CMA for a federally required appraisal. D) It uses current real estate data to estimate a listing price.

A licensed appraiser may substitute a CMA for a federally required appraisal.

Which of the following statements is TRUE of an MLS listing? A) After a list price reduction, both the current and original list prices will show. B) The seller's name is displayed. C) The total listing commission is displayed. D) After a list price reduction, it will show only the current list price.

After a list price reduction, both the current and original list prices will show.

When meeting a listing prospect for the first time, what should an agent ALWAYS bring? A) All of these B) An agency disclosure form C) A fair housing pamphlet D) A business card

All of these

Which of the following is a valid way to estimate the market value of certain properties? A) The value of comparable sales B) The income it produces C) The cost to replace it D) All of these

All of these

An agent lists a property with $12,000 in levied special assessments. The seller doesn't want to pay these off at closing. What options are generally available? A) The agent may pay them at closing. B) The buyer may pay them at closing. C) The buyer may assume them. D) All of these are available.

All of these are available.

Which of the following statements is TRUE when pricing a home to sell? A) Information about expired listings is very important to discuss with the seller. B) The timing of new listing showing activity is a major factor. C) If the house is overpriced, the number of potential buyers will be greatly reduced. D) All of these are true.

All of these are true.

Kevin has asked Colleen, a real estate salesperson, to help him determine the value of his home so he can put it on the market. The home has 1,500 square feet, three bedrooms, two baths, one fireplace, and a double garage. Comparable 1 has 1,525 square feet, four bedrooms, one bath, one fireplace, and a double garage; it sold for $149,000. Comparable 2 has 1,475 square feet, two bedrooms, two baths, no fireplace, and a double garage; it sold for $139,000. As it relates to home value, a bedroom is worth $5,000, a bath is worth $1,500, and a fireplace is worth $1,500. As relates to garages, which of the following is TRUE about the needed adjustments? A) More information is needed on the value of garages in this market. B) Adjustments are always necessary for all aspects and features of a property. C) Because each property is equal in garages, no adjustment is needed. D) Garages have little value, so no adjustment is needed.

Because each property is equal in garages, no adjustment is needed.

An agent doing a CMA finds an expired listing that is very similar to the subject property. The MLS shows the following: the property was listed for eight months, the listing expired six weeks ago, the price was never changed, and it is not currently showing as an active listing. What should the agent do with this listing? A) Use it as a comp B) Include it in the listing presentation as a great example of the pitfalls of overpricing C) Ignore it D) Hide it from the seller prospect

Include it in the listing presentation as a great example of the pitfalls of overpricing

An agent doing a CMA finds an expired listing that is very similar to the subject property. The MLS shows the following: the property was listed for eight months, the listing expired six weeks ago, the price was never changed, and it is not currently showing as an active listing. What is the MOST likely reason the property didn't sell? A) The seller was unfriendly and drove buyers away. B) It was in poor condition. C) It was overpriced. D) It is in a bad location.

It was overpriced.

Which of the following real estate forms shows the commission available to a buyer broker? A) Property information worksheet B) Seller's disclosure C) Agency disclosure D) MLS listing

MLS listing

When analyzing sold search results for a CMA, why is the date of sale important? A) It's not really important; a sale is a sale. B) It's only somewhat useful. C) It was only important to the seller. D) Over time, changing market conditions can affect home prices dramatically.

Over time, changing market conditions can affect home prices dramatically.

Which of the following real estate forms should an agent NEVER fill out? A) Seller's property disclosure B) Agency disclosure C) Property information worksheet D) MLS listing

Seller's property disclosure

An appraiser can get paid more money based on the outcome of the appraisal. Which of the following BEST describes that statement? A) It is always true. B) It is false. C) More information is needed to determine if it is true or false. D) It is somewhat true, depending on who orders the appraisal.

The appraiser does not depreciate the land.

When using the cost approach to estimate the market value of a property, the value of the land is separated from the value of the improvements. Which of the following statements is TRUE? A) The land depreciates at a slower rate than the improvements. B) The land depreciates at the same rate as the improvements. C) The appraiser does not depreciate the land. D) The land depreciates at a faster rate than the improvements.

The appraiser does not depreciate the land.

Which of the following is NOT true regarding seller representation? A) The broker must disclose all material facts to prospective buyers. B) The broker who lists the property represents the seller. C) The broker owes fiduciary duties to the seller. D) The broker must disclose why the seller is selling the property.

The broker must disclose why the seller is selling the property.

An agent completing a CMA does an MLS search for sold comps going back 6 months and doesn't find very many. The search is expanded to 18 months, and the agent finds several good comps in the 12-to-18-month range. Which of the following statements is TRUE? A) The older listings may be valuable comps but would need a market condition price adjustment. B) No comps older than 12 months should ever be used. C) No comps older than 6 months should ever be used. D) The older listings can be used as comps with no adjustment.

The older listings may be valuable comps but would need a market condition price adjustment.

Which of the following is TRUE of an MLS listing? A) There is a section to enter remarks that will only be seen by other MLS agents and not the public. B) Agents never know which MLS information will show up on public websites. C) All the information on an MLS listing can be seen on public websites. D) None of the information on an MLS listing can be seen on public websites.

There is a section to enter remarks that will only be seen by other MLS agents and not the public.

Which of the following statements is TRUE regarding homeowners looking to sell their property? A) They never let their emotions interfere with determining value. B) They always think their home is worth less than the market value. C) There are so many home-pricing websites; homesellers can be effective by themselves. D) They need an agent's expertise.

They need an agent's expertise.

If several experienced agents did a CMA on the same property, which of the following would likely be TRUE? A) They would all come up with the exact same comparables. B) They would all arrive at the same market value. C) They would all arrive at a fairly close price range for the market value. D) They would all use the exact same search criteria.

They would all arrive at a fairly close price range for the market value.

The Agency Relationships in Real Estate Transactions disclosure is required to be given at first substantive contact in which of the following transactions? A) Transactions of residential properties with up to four units B) Commercial transactions up to 1.5 acres C) Only single-family residential transactions D) Sales of businesses

Transactions of residential properties with up to four units

The cost approach is often used for the appraisal of unique or historic properties when there are limited or no comparable sales. true false

True

The income approach estimates value using income capitalization, wherein a property's net income is divided by a market-derived capitalization rate. true false

True

If an agent finds that the county property tax statement and MLS tax information have different tax amounts, what is the BEST thing for the agent to do first? A) Pick the lowest amount to make the listing look better B) Notify the county that its records are out of date C) Verify that she is comparing the same property ID numbers D) Wait until closing to figure it out and ask the broker for help

Verify that she is comparing the same property ID numbers

A real estate licensee would be able to conduct all of the following activities EXCEPT A) perform an appraisal. B) ensure that trust funds are deposited. C) perform a competitive market analysis. D) facilitate the closing of a real estate transaction.

When the listing price is higher than the market value, the home will attract fewer buyers.

Which of the following is always TRUE when pricing a home? A) When the listing price is lower than the market value, the home will attract fewer buyers. B) When the listing price is higher than the market value, the home will attract more buyers. C) The homeowner sets the market value. D) When the listing price is higher than the market value, the home will attract fewer buyers.

When the listing price is higher than the market value, the home will attract fewer buyers.

An agent is listing a property that a bank has acquired through foreclosure. The bank is the seller and says it will not make any property disclosures because it has little or no information about the condition or history of the property. Can the bank waive the disclosure requirement? A) No, the bank must complete the disclosure. B) Yes it can, but only if the buyer agrees to waive the requirement. C) Possibly, depending on how long the bank has had the title. D) Yes it can, and the buyer has no choice.

Yes it can, but only if the buyer agrees to waive the requirement.

An agent is helping a buyer find a new home. The buyer is the agent's customer. The agent is acting as A) an exclusive representative. B) a facilitator. C) an agent of record. D) a buyer's broker.

a facilitator

When using the income approach, the process of capitalization converts income to A) a value. B) tax deductions. C) a listing price. D) expenses.

a value

All of the following are true regarding facilitators EXCEPT A) representation agreements trump a facilitation agreement. B) agreements to provide facilitation services must be in writing. C) facilitators do not owe fiduciary duties. D) the broker performs services without providing representation.

agreements to provide facilitation services must be in writing.

An agent is meeting with a prospective seller to discuss the home's market value. The seller is being stubborn and firmly believes his home is worth much more that the agent's CMA indicates. What can the agent do to help convince the seller of the home's true market value? A) Take the seller out to preview in person several of the comparables that are active listings B) Show the seller all of the details for the comparables in the CMA C) All of these D) Have other agents in the same office tour the property and share their feedback with the seller

all of these

Which of the following information is helpful when preparing a market analysis? A) Sold listings B) All of these C) Expired listings D) Current listings

all of these

Which of the following is a valid way to estimate the market value of certain properties? A) The income it produces B) The value of comparable sales C) The cost to replace it D) All of these

all of these

"The highest showing activity occurs in the first two to three weeks of a new listing." That statement is A) a real estate myth. B) sometimes true. C) never true. D) always true.

always true.

The cost approach to value is best suited for all of the following EXCEPT A) an elementary school building. B) an older single-family house. C) a city hall building. D) a church.

an older single-family house.

The Uniform Standards of Professional Appraisal Practice (USPAP) applies to A) appraisals. B) an assessor's opinion of value. C) licensees performing a competitive market analysis. D) a broker price opinion.

appraisals.

An agent is listing a property and finds a previous MLS listing that is five years old. To save time, the agent wants to copy the old information for the new listing. That practice A) is encouraged by brokers. B) is a good idea and will save lots of time. C) makes sense. D) could lead to errors, misinformation, and fines and penalties for the agent.

could lead to errors, misinformation, and fines and penalties for the agent.

A salesperson must complete a property tour before filling out the seller's disclosure form. true false

false

A seller's facilitator may show the seller's property to a client and still act as the seller's facilitator only if the client is represented by a different salesperson from the facilitator's brokerage. true fasle

false

An agency relationship is established when the customer signs the Agency Relationships in Real Estate Transactions form. true false

false

Entering more information into an MLS search generally yields more search results. True False

false

The Agency Relationships in Real Estate Transactions form must be presented to a client after drafting a listing or buyer representation agreement. true false

false

The one-step competitive market analysis (CMA) is preferred over the two-step because the one-step method saves time. true false

false

The price accepted by the seller is displayed on the multiple listing service (MLS) when a property is shown as pending. true false

false

When working with a seller to decide on a listing price, the agent should A) do a quick CMA in his head, give the seller his list price, and try to get the listing quickly. B) just tell the seller what the agent thinks the price should be. C) complete the CMA but take the listing at whatever price the seller wants. D) get the seller involved in the process of reviewing the CMA and agreeing on a list price.

get the seller involved in the process of reviewing the CMA and agreeing on a list price.

Per state law, the seller's property disclosure statement or seller's disclosure alternatives form A) must disclose the seller's financial status. B) must be completed before the buyer signs a purchase agreement. C) must include a list of the seller's favorite features of the home. D) is not required.

must be completed before the buyer signs a purchase agreement.

An agent has found five properties to show a buyer who is the agent's client. The agent sees that some of the listings offer a lower cooperating commission than others. Should that influence the agent's decision about whether to show that property to the buyer?

no

An agent is working with a buyer as a facilitator and shows the buyer a property that is being listed by another agent in his company. Which of the following statements is TRUE? A) The agent automatically becomes a dual agent. B) Nothing changes for the agent or the buyer. C) The agent must find another agent to show the property. D) The agent automatically represents the seller.

perform an appraisal.

If homesellers insist that they will not sell their home to members of a certain ethnic group, the broker must A) obey their request, in accordance with the law of agency. B) refuse the listing. C) report the seller to the police. D) ignore the request.

refuse the listing.

The Agency Relationships in Real Estate Transactions disclosure must be given to a consumer at the first A) substantive contact. B) meeting. C) viewing of a property. D) draft of a purchase agreement.

substantive contact.

The market value of income property is based on A) the income it produces. B) the number of tenants in the property. C) the age of the improvements to the property. D) the gross sales of all the stores on the property.

the income it produces.

In real estate transactions, licensed real estate agents owe fiduciary duties to A) the party that pays them. B) the parties that employ them. C) all parties to the transaction. D) the salesperson who signed the listing.

the parties that employ them.

"When doing a CMA, if one of the selected comparable properties is better than the subject property, the agent should adjust the price of the comparable property downward." That statement is A) wrong. B) somewhat true, depending on other circumstances. C) confusing. D) true.

true

A customer desiring representation must enter into a written representation contract. Without a contract, the agent is a facilitator. true false

true

According to the National Association of REALTORS® survey, personal referrals are the primary source of leads for real estate agents. true false

true

Data shows that overpricing a listing can be very detrimental, reducing the number of interested buyers and leading to more days on the market. True False

true

Dual agency occurs when one broker or salesperson represents both parties to a transaction, or when two salespersons licensed to the same broker each represent a party to the transaction. true false

true

Members of the multiple listing service are allowed to place other brokers' listings on their own websites. true false

true

Sellers are generally best served if they depersonalize the home, creating a generic space wherein potential buyers can visualize themselves as occupants. true false

true

The information used in a competitive market analysis includes any previous listing information regarding the property, MLS data, and property tax information. True False

true

When preparing a competitive market analysis (CMA), sold listings are generally considered the best indicator of value, more so than pending and active listings. True False

true

According to the MLS listings for pending properties, how often must the association fee be paid for 1234 Harvard Road? A) Twice per year B) There is no fee for this property C) Quarterly D) Yearly

yearly

A seller is filling out the property disclosure statement and asks, "We had water problems several years ago, but we made repairs and have had no problems since. Do we still need to disclose that?" How should the seller's agent respond? A) No, if you're sure it is not still a problem. B) No, if you're sure that information won't be discovered later. C) Yes. D) No, not if you don't want to.

yes