National Exam wrong answers
A townhouse is purchased for $475,000. If the transfer tax is $2.00 on the first $1,000. and $0.10 for each additional $100., how much are the transfer taxes?
$476; The first $1,000 is $2.00. The transfer tax for the remaining $474,000 will multiplied by .001 ($0.10 for each additional $100). So the total transfer tax will be $476 ([$474,000 x .001] + $2).
When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?
Exclusive right to sell
What entity enforces the Telephone Consumer Protection Act?
FCC (Federal Communications Commission)
The economic principle of ______ says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.
Substitution
A fire destroyed Meredith's house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn't fully cover what she paid for the property. How does the insurance company determine the replacement value of her home?
The amount it would cost to completely replace her home
Which covenant requires the grantor to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing? The covenant of further assurances The covenant of seisin The covenant of the right to convey The covenant of warranty
The covenant of further assurances
Which one of Gerry's statements to a client crosses the line into unauthorized practice of law? a) "I'd encourage you to have an expert look at the exceptions on your title insurance commitment." b) "Most couples take ownership of property as joint tenants, so that's what I'd advise." c) "The contingency clauses in your contract give you options to terminate the contract if, for example, your financing falls through." d) "We can add the brokerage firm's standard language into the 'additional provisions' section to cover what you're suggesting."
"Most couples take ownership of property as joint tenants, so that's what I'd advise."
Laura and Miles' lender will charge them a prepayment penalty equal to 75% of six months of interest if they pay their mortgage off within the first two years. They borrowed $210,000 at a 4% interest rate. After Laura inherited a significant amount from her uncle, they decided to pay off the mortgage 16 months after starting the payments. What is their prepayment penalty?
$3,150; Determine the annual interest rate (4% of $210,000, or $8,400). Divide by two to determine the interest for six months: $4,200. They are paying their mortgage off within the first two years so the prepayment penalty will be 75% of $4,200, or $3,150.
The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?
6.29%
Which one of the following examples describe a prepayment penalty?
A monetary penalty imposed on a borrower for paying off a loan before its intended time
Which of the following is a true statement about FHA financing? a) An FHA loan is best for borrowers who have large down payments. b) An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments. c) FHA loans are available to all borrowers, regardless of credit history. d) FHA loans have more stringent requirements than conventional loans do.
An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.
Joan is representing the buyer, Carlton, and Reggie is representing the sellers, Zeb and Teresa Martin. Carlton's Great Aunt Matilda has agreed to pay any portion of Joan's commission the sellers don't cover. Teresa's father, Teddy, has agreed to pay half of the sales commission that will be owed to the listing agent. Which of these statements is true? a) Carlton and the Martins are the agents' principals in this transaction. b) Matilda and Teddy are the agents' principals in this transaction. c) Reggie's clients are Zeb, Teresa, and Teddy. d) Since she's paying Carlton's share of the commission, Matilda is Joan's client.
Carlton and the Martins are the agents' principals in this transaction.
Randall's clients, Carma and Trent, are looking for a mountain cabin. They tell Randall they'll pay him a $2,000 finder's fee if he finds the cabin that checks all of their boxes, and they close on it. Randall finds a likely candidate that's an FSBO, and negotiations begin. What circumstance is required for Randall to receive the finder's fee?
Carma and Trent must pay the finder's fee to Randall's broker.
Which economic principle pertains to how a change in a property affects its value as a whole?
Contribution
Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?
Contribution
Gina is buying a home. Her home inspector performed a radon test and discovered a radon level of six picocuries. Which of these statements is true? a) Federal regulations require that the seller install a mitigation system. b) Gina and the seller can negotiate installation of a mitigation system. c) There's no need to mitigate for radon levels of less than seven picocuries. d) The seller isn't required to mitigate for radon, but Gina is required to before she can move in.
Gina and the seller can negotiate installation of a mitigation system.
Which of the following statements about the fiduciary duty of confidentiality is true? a) It doesn't extend to material facts relating to the property. b) It encompasses any and all information the client tells the agent, not just confidential information. c) It ends with the termination of the agency agreement. d) It never conflicts with the duty of disclosure.
It doesn't extend to material facts relating to the property.
Which of the following is the price a lender believes the property will bring at a foreclosure sale?
Mortgage value
Kirk and his cousin Dewey decided to buy a vacation home. They entered into a contract with the seller, Crystal. Before finalizing the sale, Dewey wanted out, but he didn't want to let his cousin down. So instead of pulling out altogether, Dewey convinced his son to replace him in the purchase contract. Kirk and Crystal agreed to the substitution, and Dewey was released from all his obligations under the contract. Dewey's son is now the contracting party. What's this an example of?
Novation; Novation involves discharging an existing contract and creating a new contract, substituting a new party for one of the original parties to the contract. It may also include a change to the terms or conditions of the contract.
When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract?
Performance must take place within a "reasonable time."
Which one of these statements accurately represents one of the required elements in a deed? a) The deed includes an act of conveyance. b) The grantee must be legally competent. c) The grantee must be of legal age. d) The grantee must sign the deed and provide consideration.
The deed includes an act of conveyance.
Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result? a) Aidan and the purchaser will negotiate the expense of bringing the house up to code. b) Aidan must bring the house up to code. c) The contract will fail to close because of code violations. d) The house is probably not required to meet the current code.
The house is probably not required to meet the current code.
The Shores are in the process of buying a beautiful 3,000-square-foot home from the Bishops. They've completed all the required paperwork on their loan application. Mary's analyzing the package to determine their ability to repay the loan. She examines the property's value, the property type, and the loan-to-value ratio, among other things. Her recommendation is that the Shores' loan application be approved. What is Mary's role?
Underwriter; Underwriters analyze loan applications and determine whether to approve or deny the loan.
What hazard do mining activities, landfills, or agricultural pesticides contribute to?
Waste disposal sites
