Real estate prep

A manager for real property may be compensated in all he following except

Paid by receiving discounts on purchases or supplies

Which of the following are synonymous

Construction loan / interim loan

When escrow closes on a home purchase the closing statement typically shows that the seller has paid certain items in arrears or in advance related to the ownership of that home. These items are usually prorated or adjusted. All of the following would be included in these prorated items except

Delinquent interest and principal payments for a home improvement loan

Who can insure a mortgage

Fha or private mortgage insurer

How are interest rates determined for the trust deed loans

Supply and demand for money

Concerning the relationship between an effective and nominal interest rate which of the following is correct

The effective interest rate is paid. Y the borrower for the use of the money and the nominal rate is a rate specified within the note

Under a land contract for the sale real property who holds legal title

Vendor

John borrowed money from a company bank and gave the lender a trust deed for 9 separate pieces of property that John owns free and clear without any encumbrances. What kind of trust deed would this be

A blanket deed of trust

When a money award for damages does not satisfy the damages on a defaulted contract a lawsuit for specific performance can be brought by all of the following except

A broker who has a current license acting on behalf of their client

How would an existing sellers mortgage that is assumed by a buyer appear on the closing statement

A debut to the seller

What best describes equity

A down payment on a property The price of the property minus he loan amount The amount of the property the owner has an interest in minus the loan amount

According to the real estate settlement procedures act when a lender makes a loan they must first provide

A good faith estimate

According to the statute of frauds all contracts must be in writing in order to be enforced in the court of law. Of the following choices the statement that is not an example of this would be

A lease agreement which is less than one year

Which of the following does not require agency disclosure

A lease for 10 months

Compliance with agency relationship law, which is enacted and part of the civil code is required in which of the following transactions?

A lease for a period lasting for more than a year

Of the following which is not needed to create an agency relationship

A written agreement to pay consideration

What does it mean when a lender calls a loan

Accelerates the amount due on the loan

A licensee who is acting as an agent for their principal in the sale of property can do the following without authority from the principal

Accept a purchase contract from a buyer that is signed and will become binding if the seller accepts it

Licensee rob acts as an agent for both he buyer and seller and did. It disclose that fact to both parties involved. It was not disclosed because licensee rob was unaware that both buyer and seller considered him as their agent. Agent rob is now involved in a

Accidental dual agency

How can a minor or incompetent person acquire property without requiring court approval

Acquire real property by way of a gift or an inheritance

A broker who looks for buyers and accepts a deposit from a buyer to purchase a piece of real property without the express written authorization and acknowledgement from the owner to sell the property is

Acting as an agent for the buyer not the seller

According to the civil code which of the following is a fiduciary duty of the agent working for a buyer

Acting with the utmost care integrity and honest when working with buyers

The fiduciary obligation to protect a client's confidential info should continue

After the listing agreement term

A licensee who is working with their client to sell their real property to a third party is said to be operating under he law of

Agency

The real estate disclosure law which came into effect January 1 1988 refers to the

Agency relationship disclosure

Per statute of frauds which must be in writing

An agreement by a purchaser of real property to oay a debt secured by a mortgage or deed of trust on the property purchased

An individual who is delegated to legally act for another person is known as

An attorney in fact

Ottis bought the browns house through the browns agent Jacob. In October there was rain and the roof leaked. Otis took everyone involved to court. During the trial it was announced that the seller browns told their agent Jacob about the leaks. Jacob withheld he info from the buyer because they didn't ask about the roof. What is the outcome of the trial

Buyer Otis recovered damages from seller Brown who recovered damages from agent Jacob

If a seller declines to fill in their section of real estate transfer disclosure statement the agent should

Complete the listinf agents portion of the transfer disclosure statement and submut it to the buyer

A fha loan is different from a conventional loan in all the following ways except

Conventional loans always permit a deficiency judgement fha loans do not

If a buyer applies equal payments to a long term home loan what will happen to the payment of the principal over the life of the loan

Increase while interest payments decrease

The supply of real estate loans tends to increase by all of the following except

Increased demand for liquid assets

Broker robert is showing buyer Sarah property hat he has under contract. Broker robert is aware of a major defect in the plumbing. Broker robert should

Inform buyer Sarah of this issue because it is a material fact about the property

Of the following which is the least likely to show as adebit on a buyers closing statement

Interest on an assumed loan

What does an acceleration clause do when added to a note that is otherwise negotiable

It does not reduce the negotiability of the note

A binding contract between two parties can become voidable if

It is legally retracted by one of both parties

The law of agency states that an agency has imputed authority of their principal when dealing with third parties. What does that imputed power allow

It usually binds he principal as long as the authority is granted to the agent

When a lender is loaning money to two or more co borrowers in order to protect the lender and add security and add security to the note the lender will add the following language after the names of each of the borrowers

Joint and severally

Why is it considered essential that every party to a real estate transaction receive a full and complete disclosure of who is representing whom

Legal effect, ethical and professional responsibility imputed authority

Institutional lenders often charge fees for the expenses they incur such as document preparation and underwriting. The fees are usually a percentage of the face amount of the loan. What are these fees known as

Loan origination fees

In order for a seller who owns 1-4 units to be in compliance with the California civil code regarding real estate transfer disclosure statements the owner must

Make a reasonable effort to inspect the property then complete the disclosure

When real property is sold escrow will be used in order to

Make sure all of the conditions and terms are met before the transaction closes

What does an or more clause mean in an installment note

More can be paid without receiving a penalty

Stock and bonds when compared to real property are thought be

More liquid in the market

All of the following are required for a contract to be valid except

Must be in writing

Agent Mitchell has a listing to sell a home owned by owner Donald. Which of the following actions by the licensee would result in creating an agency relationship with a potential buyer

Negotiating for the buyer

A proper fire insurance policy provides a home owner of real property with protection in the case of a loss. What should the insured expect when utilizing the insurance policy

Neither gain nor lose

Of the following what is not needed in the formation of a contract

Performance

When a licensee acts exclusively as a buyers agent they can

Present offers to the seller and sellers agent

Most junior loans that are negotiated today are secured from

Private lenders

What is the purpose of the mortgage insurance on a fha loan

Protects the lender in the case of default

One of the primary purposes of respa is

Provides the prospective buyer the ability to shop for the very best price

If a seller wants to sell their real propert and carry the loan or credit themselves and keep legal title to the property which kind of financial tool would be used

Real property installment or conditional sale contract

In real estate finance the term beneficiary statement

Refers to the current balance due to the lender and the pay off amount

Lots ofthinga can e prorated in real estate during the escrow process. Which of the following would be something buyers and sellers would agree to prorate during the sale process using escrow

Rent

Of the following which would be a primary purpose of respa

Requires disclosures made. Y lenders that make loans for 1-4 unit residences

Mr. And Mrs. Childers bought a property and they were not informed that it contained an oil tank buried in the grounds that is used for heating the home. They would have the right to

Rescind the contract

The law of agency states that real estate agents have legal responsibilities to their principals. Which of the following does not

Research what the reserves and expected expenses may be for the maintenance of a business

During an exclusive right to sell listing contract the principal no longer wishes the broker to work for them. The principal may

Revoke the listing however the seller may be held liable for damages

Which of the following would produce changes and impact the real estate market

Sudden shifts in the real estate industry Land use controls Consumer sentiment changes

What is a Fico score typically used for

Supplies the credit history of the prospective buyer

A trustor defaults on their loan and does not reinstate the deed of trust. What is the quickest way for the beneficiary to handle this situation

Trustee sale

Who does a subordination clause benefit the most

Trustor

Who has the authority to sell real property in a default situation

Trustor and trustee

A tight money policy implemented by the fed would the net effect of increasing the

Use of secondary trust deed financing for real estate purchases

Seller Andrew sold a home to buyer bill. Buyer bill was deemed to be incompetent. In this type of situation the contract would be

Void

If a contract is obtained under duress that contract is

Voidable

Tenant Greg verbally agrees to low the lawn for owner Amanda. Week after week owner Amanda asks tenant to mow yet nothing is done. After repeated attempts Amanda writes up a contract and forces tenant to sign the contract stating that Amanda will evict tenant if he does not comply with this action. This stipulation will make the contract

Voidable

Investor joe owns a duplex priced and 100,000 and has a mortgage debt that is outstanding 30,000. This property was sold using a 1031 exchange for a four plex priced at 170,000 with a first mortgage balance of 100,000. For the exchange to be completed on what profit amount will the owner have to pay property gains taxes in the profit of the first property

$0

If a broker misrepresents his principals property, what could possibly happen to the principal

Damages may be awarded to the buyer The seller may owe damages to the buyer for broker misrepresentations facts Cancellation of the sale by the prospective buyer

If a seller refuses to disclose that his property is in a flood zone on the transfer disclosure statement what should the licensee do to protect themself

Decline the listing

Real property requires more time to market require more care and comes in larger amounts than securities in the stock market. Therefore returns on real property should be

Higher than that of bonds or first mortgages

The very best way to create an agency relationship is

In writing

If Ethan bought a home with a minimal down payment and long repayment term what would the result be

Increase financing cost

When a false transfer disclosure statement is given to a buyer that omits facts about the property how long does the buyer have to bring a lawsuit against the seller and the broker

2 years

two months ago a seller had accepted an offer from a buyer to purchase their real property. Contract was in writing and signed by both parties. Later he seller refused to complete the transaction because they felt property price would increase in the near future and wanted max profit. How long would the buyer have to pursue legal action against the seller due to the breach of the written contract

4 years

Vic needed 4,000 to buy a motorcycle. He gave the lender his note for 4,8000 which was secured by a second deed trust against his personal home. The note was payable to 154/month including 10% per year over three years. How much is the total principal that Vic must pay back to the lender

4,800

Matt sold his home and escrow will close on march 1. He annual tax amount is 2,100. If the first installment has been made and the second installment will be prorated on the escrow closing date how much will the buyer be charged for taxes

700

Seller Julie listed her vacation home with agent Ann. When the sale is executed the commission will be 7% if agent Ann is able to find a buyer who is ready willing and able to purchase the property at the list price or more. Agent Ann will utilize her best efforts to find a buyer for the listing. What kind of contract must be in place for any of this to happen

A bilateral executors contract

What is the name of a contract between the seller and a licensee in which the seller agrees to pay a commission to the licensee if they produce a ready willing and able buyer of property and the licensee complies and does the due diligence procuring a buyer

A bilateral executors contract

How would a balloon loan be described

A loan that is partially amortized

Regulation z gives the borrower of a loan a 3 day right of rescission when the loan is

A loan that is secured by a second deed of trust of an owner occupied single family residence when money is borrowed for use of that purchase

Of the following types of loan which would qualify for fha insurance but not va loan guarantee

A loan to buy a 1-4 unit residential income property

What does the term warehousing mean when we use it in relation to real estate

A mortgage bank that is gathering loans and preparing them for sale

Life insurance companies who do not want to work directly with the consumer will pay a loan servicing fee and preparation fee and make real estate mortgage loans that can be purchased indirectly through

A mortgage company

All of the following are negotiable instruments assuming there is no agreement to the contrary except

A mortgage securing a promissory note

The broker works on behalf of their principal. All of the following defines the relationship between the two parties except

A power of attorney relationship

In order for a contract to be legal which of the following would be considered consideration

A promise to clean coneones pool once a week for 10 years A promissory note that has a set amount of interest A promise to apply classy roofing tiles in a building that has yet to be built

Of the following statements which is false about real estate financing

A promissory note is security for a mortgage

What does debt to income ratio mean

A qualifying tool for a loan

When showing property to potential buyers what must the listing agent disclose to the third party buyer

All known material facts about the real property

A single family home is being sold and the new buyer will be assuming the existing loan. In order for the new buyer to assume the loan without any penalties what should the real estate agent check to make certain that this is not included with the loan

An accelerating clause

Of the following which would create a dual agency situation

An agent is representing both he buyer and seller in the same transaction and all parties are aware and agree

What is the name of an arrangement where one party agrees to pay the other party for incurred damages for clearly defined risks in exchange for a payment of money

An insurance policy

Which of the following is required to create a legal and valid contract

An offer and acceptance

What would best describe a mortgage in which the terms secure the initial amount of the loan plus any additional amounts loaned at a later date

An open ended mortgage

What best describes the increase in value due to an increase in population

An unlearned increment

When does the uniform settlement need to arrive in the mail to he borrower

At or before the date of settlement

To be enforceable, a contract for real property must

Be in writing

In order to record a contract for real propert it must

Be signed by both the both and the seller must have acknowledge

A real estate broker helped their client negotiate a loan. The homeowner gave the lender a promissory note and a second trust deed for 5,600. Which of the following would be used by the broker in this transaction

Brokers loan statement

When the gross national product and the employment rate goes up which of the following. Occurs

Building and developing of new homes will start Personal income rises Existing home sales will increase

Recession prosperity expansion and depression are all related to which of the following cycles

Business

What is the primary purpose of fnma (federal national mortgage association)

Increase the amount of money available for credit financing of housing

If a buyer wishes to take title of a residential property subject to the existing loan and the lender does not allow the loan to go forward what are the potential penalties

Buyer can lose he property if they cannot get other financing up until the foreclosure The seller may be responsible personally for the amount. Of the loan and any costs accrued The lender can accelerate the loan and payment is due immediately

Who can execute escrow instructions

Buyers 3rd parties Sellers

Generally speaking, an escrow agent is authorized to perform which of the following

Call for the findings of the buyers loan

A licensee receives an offer for a property they have listed. It's in writing however it's below the asking price and they know the seller will never accept it. Which would not be acceptable for the licensee to do

Change the terms to what the licensee thinks the seller would accept

What disclosures are needed for a graduated payment mortgage under the trust in lending law

Different monthly payments

What is the purpose of the truth in lending act

Disclosure of credit terms

With regards to portfolio risk management lenders would be most concerned about

Diversification of assets Liquidity of money Reserves on hand

Of the following nine of the individuals may enter into a valid real estate contract to purchase property except

Emancipated minirs

A trust deed under California law

Encumbered the real property that is designated in the deed of trust

An investor who wants to hedge against the erosion of capital caused by inflation would invest money into

Equity interest

Of the following which answer describes why it is critically important to disclose who represents whom in a real estate transaction

Ethical and professional responsibility, legal affect of the disclosure, doctrine of imputed notice

Which of the following agencies helps to increase availability of mortgage credit by maintaining a secondary market for residential conventional mortgages

Federal home loan mortgage corporation

How is the federal housing administration different from other lending institutions

Fha insures loans it doesn't make loans

Which of the following is the best way to describe a brokers duty in keeping their principal informed and updated on the transaction

Fiduciary duty

In California escrow law would be found in which of the following documents

Financial code of California

Donald sold his home for 32,400 and took back a 25,000 note with interested at 9% per year. The property has a fair market value of 30,000 and later Donald decided to sell the mortgage note and discount the note for 19,000. Donald sold them to Laura smith and on the back of the. Orr Donald wrote "I assign this note to Laura smith without any recourse" it the maker of the note defaults before any principal payments are made Laura's best legal is to

Foreclose to enforce payment of the 25,000

Along with due diligence care and skill a real estate agent must also fully disclose all material facts of the property to the principal. If there is any purposeful concealment of material facts by the agent this could be regarded as

Fraud

The measure of goods and services produced by the nation in one calendar year is known as

Gross national product

A straight note with the same term and interest rate would

Have more interest than an installment note

You purchase a negotiable note and you are unaware of any defects with the note. You would be known as the following

Holder in due course

When the market turns from a buyers market to a sellers market what could be expected

Home prices will go up because of a lack of inventory

In the formation of a contract which of the following would not make the contract voidable

Illegal purpose

When does an agent inform others bag they are working on behalf of a buyer

Immediately

What is one of the unique features of a VA loan

No down payment

Who pays the points on a cal vet loan

No one

Seller Johnson listed his home for sale with agent mike. The listing stated cash only offers to be considered and possibly accepted. Agent mike brought a buyer who was qualified with a VA loan. Seller Johnson rejected the offer from agent mike. What is agent mike entitled to in regards to commission

None of the commission

Of the following which would not be legal for a licensee to do

Not tell prospective buyers that the foundation has documented structural issues

Agency can be terminated in many ways. Of the following which is not a way to terminate agency

Notice to perform

During the escrow process the escrow officer receives two pest control reports from two. Different companies. What should the escrow agent do immediately

Notify the real estate agent and receive written instructions from the buyer and seller as to which report to use

When is a real estate agent obligated by law and the state regulations to communicate any offers to a principal

Only if it's in writing

How would insurance be described

Substitution of certainty for uncertainty Transfer of risk from one person to another According to the policy terms and amount it protects the insured from a loss

Seller Charles put his property up for sale worth agent Samantha for 100,000. The property sold very quickly and seller Charles was impressed how quickly everything occurred. Samantha showed the property to buyer pip and made pip aware that the seller was having financial difficulties and with that info pip submitted an offer for 90,000 which seller Charles accepted. Which is true about Samantha's actions

Samantha violated her fiduciary duty to the seller and acted in excess of her authority

Of the following which lender would have the greatest percentage of their funds invested in real estate mortgages

Savings and loan associations

What's the best way for the fed to create a tight money market

Sell government bonds and raise the discount rate

You do to lust a property for sale and you find out that the seller has a conditional/installment contract of sale. While you read the agreement you notice there is no acceleration clause and there is No language that disallows he resale or assignment of the contract. What can your client do?

Sell or assign the rights to the new buyer and retain the original duties unless the contract seller agrees

Concerning an interest in real property when two parties want to create an enforceable broker/principal relationship what is the most important thing to create first?

Sign a written employment contract

He trust in a trust deed

Signs a note for the amount borrowed

When using a purchase money trust deed, the trustor

Signs the trust deed as security for the loan

Capital turnover in real estate investments is

Slower than the average commodity

For. Contract of real property to be enforceable the consideration must be relative and if sufficient value in order to enforce a suit for

Specific performance

Of the following an agency cannot be created by

Subordination

According to the California civil code real estate relationships can be terminated in many ways. Which is not that

Termination by completion

A real estate licensee may represent both sides of a real estate transaction and

The agency relationship has been disclosed and written consent is given by all parties involved A commission may be paid by each of the principals All principals involved must be aware that they will be represented by the same person

The law of agency consists of the rights liabilities and duties between

The agent and the third party The principal and the third party whom the agent deals with The principal and their agent

A broker who is hired by a property owner to sell their property must reveal all significant and material information to the seller. Of the following which would be considered significant and/or material info and must be revealed

The agent has been told by another broker that a higher priced offer is coming within the hour

When the. Rocker is an agent to a seller what is owed to the buyer

The duty to be fair and honest

Of the following which cannot create an agency relationship

The agent offering to work for the principal

Of the following which is the most challenging for the mortgage lender to calculate

The amount of risk the mortgage company will take on

He federal right to cancel notice must be given to the borrower by the agent if

The borrowers residency is being used as collateral for the loan

Which of the following scenarios would entitle a prospective buyer to damages against a real estate broker

The broker exceeds the authority given by the principal

According to the civil code when serving as a Byers agent the real estate agent has a dedicate duty to

The buyer

When both the buyer and seller sign a real property conditional sales agreement what effectively happens.

The buyer receives the equitable title

What does it mean when the buyer takes property subject to the existing loan

The buyer will not be personally responsible for the loan

A seller tells their listing agent that the pool is uneven and leaks. The broker does not inform the buyers of this material fact. A few months after the buyer purchases the property the buyer discovers the pool is leaking and uneven. The buyer files a lawsuit after buying the property and the seller immediately files a lawsuit against the broker. What is the most likely outcome

The buyer would win against the seller and the agent and the seller would win against the agent

What are discount points a percentage of

The loan amount

A trust deed note in a single family owner occupied residence which has loan from a state and savings and loan association can be repaid without penalty after

The loan matures to 7 years

What is the lender referring to when discussing discounting

The loan proceeds disbursed by the lender are less Han the face value of the note

A lender who extends a fha loan would least be concerned about

The mortgage insurance rate

To whom would a borrower apply for a fha loan

The mortgagee

When a borrower defaults on a loan and their lender chooses a judiciary foreclosure the borrower is given an amount of time to redeem the property. During the redemption period who maintains the right of possession of the property

The mortgagor

When a licensee acts as a buyers agent on a home listed by their broker the broker has a fiduciary duty to

The seller

Broker Steve has been employed by seller mike. Broker Steve has been showing property to many interested homebuyers and has been telling everyone that the roof was in great shape and did not have any issues or leaks when in fact the seller told the broker that the roof was old and had leaks. Buyer brian soon discovered that after the first rainstorm the roof was in terrible diapause. Who would brian have recourse against

The seller and the broker for fraud and damages associated with the roof

A seller wishes to sell a piece of real property using a conditional sales contract and carry back the mortgage as a first trust deed. What is the benefit of conducting he sale in this manner rather than using a grant deed

The seller retains legal ownership up until the buyer makes the final payment to satisfy he loan

The commission of a real estate listing for a lease property would typically be paid as a percentage of

The total rent collected over the period of the lease, but can be negotiated

When transferring certain real property the California civil codes states that a transfer disclosure statement is to be delivered by which of the following

The transferor

What does the security of a loan made for real property depend on

The value of the property being used for the lien

David sold Joan his home. They used a land contract and signed and recorded it. Joan made 100 down payment and the. Made 6 more equal payments over he next few months. One day Joan picked up and left never to return again. Of the following which is true

There is a cloud on title

Of the following which is he truer statement about the activities of a mortgage company

They prefer to fund loans that can be sold in the secondary market

When a blanket mortgage is placed on property and the release schedule is showing the amount that must be paid off for each lot hose amounts are normally higher for the first few lots sold. The reason is

To increase the value of the remaining lots To compensate for the loss of security for the best lists being sold first To compensate for the loss of security as the lots under the blanket encumberance are sold

Of the following which is true about the escrow process

When all requirements are met the escrow changes from dual agency to separate agency