STUDY THESE 3

Sally bought a piece of property that was currently being rented at $990 per month. Comparable properties in the area are operating on a GRM of 116. Based on the comparable, what is the value of Sally's property? Select one: a. $104,800. b. $114,840. c. $118,350. d. $119,250.

b. $114,840.

A broker was retiring and placing her license inactive. What BEST describes what happens to her only salesperson? Select one: a. The salesperson can send her license to the GREC and be assigned to a different broker b. The broker can send the salesperson's license in and the salesperson can associate with another broker within one month c. The salesperson can continue to work there although the broker will not be active d. The salesperson may be appointed a temporary broker by the GREC and continue to run the office

b. The broker can send the salesperson's license in and the salesperson can associate with another broker within one month

What is the margin of an ARM? Select one: a. The difference between the current rate and the future rate. b. The difference between the index and the note rate. c. The difference between the cap rate and the current rate. d. The lenders increase in yield.

b. The difference between the index and the note rate.

Which best describes the difference between a fully amortized loan and a balloon note? Select one: a. A balloon note shows no decrease in the loan balance, whereas a fully amortized loan shows a decrease as the payments are made. b. A balloon note includes a balloon payment on interest where a fully amortized loan does not. c. A fully amortized loan extinguishes the loan in equal payments, whereas a partially amortized loan does not. d. A balloon note extinguishes the loan in equal payments, whereas a fully amortized loan does not.

c. A fully amortized loan extinguishes the loan in equal payments, whereas a partially amortized loan does not.

The protection clause in a contract: Select one: a. Protects the buyer and seller from breach of contract b. Assures the broker will be paid a commission c. Insures the broker a commission if the seller and buyer enter into a contract after the listing has expired d. Safeguards the borrower from foreclosure by a lender

c. Insures the broker a commission if the seller and buyer enter into a contract after the listing has expired

Which of the following does NOT have to exist for a valid contract to be enforceable in the sale of real estate? Select one: a. The contract must be in writing. b. An offer and acceptance. c. Performance. d. Consideration.

c. Performance.

ABC Incorporated was organized with five stockholders. How would ABC Incorporated take title to the property? Select one: a. Tenants in common b. Joint tenants c. Tenancy by the entirety d. Severalty

d. Severalty

The net income on a property is $350 per month which represents a 9.2% annual rate of return on the value of the property. What is the approximate value of the property? Select one: a. $45,650. b. $38,000. c. $35,300. d. $46,500.

a. $45,650.

A seller is willing to pay a broker a 6% commission if the broker can sell his house for enough money to pay off the existing loan of $75,300 and allow the seller to clear $10,000 cash on the deal. How much will the property sell for (to the nearest dollar)? Select one: a. $90,745. b. $90,418. c. $85,300. d. $80,106.

a. $90,745.

The largest source of second mortgage money is provided by: Select one: a. Fannie Mae. b. FHA. c. Private individuals. d. Mortgage bankers.

c. Private individuals.

The amount of commission or fee that a listing broker is to receive is determined by: Select one: a. The Multiple Listing Service b. The National Association of Realtors c. The seller and the broker d. The Real Estate Board or Commission

c. The seller and the broker

When does title pass in an installment sales contract (land contract)? Select one: a. At closing. b. In one year. c. When the debt has been satisfied. d. When the contract is signed.

c. When the debt has been satisfied.

Which of the following is not true about a deed to secure debt? Select one: a. When the document is delivered and accepted, it passes legal title. b. In order to be recorded, it is witnessed the same way a mortgage is. c. With a security deed, the lender holds equitable title. d. Once recorded, the deed to secure debt creates a lien on the property.

c. With a security deed, the lender holds equitable title.

A house sold for $145,500. The seller paid $3,490 in closing costs and 5% commission to the broker. The seller received $31,400 from the proceeds of the sale after paying off an existing loan. What was the amount of the loan? Select one: a. $94,785. b. $102,025. c. $105,425. d. None of these choices

d. None of these choices

Which of the following does NOT describe a cooperative form of ownership? Select one: a. A corporation owns the land and improvements. b. Taxes are general liens against a corporation. c. Unit owners are stockholders. d. Unit owners hold a real property interest in the land and improvements.

d. Unit owners hold a real property interest in the land and improvements.

For answering some of the following questions, you may need to be sure of the number of days in each month. For those items, you should refer to the table below. Tax calculations assume that property taxes are due and payable on July 1. If a closing is before July 1, you are to assume the taxes have not been paid (unless told otherwise). If closing is July 1 or later, you are to assume taxes have been paid (unless told otherwise). The tax year will begin on January 1 and end on December 31 and is a 365 day year. Interest prorations will be based on a 360 day year unless told otherwise. Loan amounts will be lowered to the next lower $100 increment if not in even $100 amounts. January............. 31 February........... 28 March............... 31 April................. 30 May.................. 31 June.................. 30 July................... 31 August.............. 31 Sept.................. 30 October............. 31 November......... 30 December......... 31 The sales price of the property is $185,000. The new loan is $145,000. How much will the transfer tax be? Select one: a. $40 b. $185 c. $145 d. $435

b. $185

Under which of the following conditions would a buyer most likely sue for specific performance? Select one: a. If the seller did not inform the buyer that the property being purchased is a servient estate (easement placed upon it). b. If the seller defaulted on the contract before closing c. If the broker lied about the location of the schools d. If the salesperson misquoted the size of the lot

b. If the seller defaulted on the contract before closing