Texas 30-Hour Principles of Real Estate II with Flex Units

Which of the following is a triggering term when used in advertising financing?

10% down

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

1000x 147= 147,000

A buyer put down $10,000 toward the purchase price, financed the rest, and now has a cash flow of $2,800 after repairs and debt service. What is the buyer's ROI?

28%

In Texas, how many days after a tenant moves in does a landlord have to re-key and test all key-operated devices?

7

Nina and Rob prepaid some of their interest to their lender when financing their new home. What's this called?

A buydown

What is a government sponsored enterprise (GSE)?

A privately held financial services company with a public purpose.

Jose is an investor who found and closed on an investment property, then decided to sell a property other than the one originally marked for the exchange. What is this an example of?

A reverse tax-deferred exchange

What's the difference between a special use permit and a variance?

A variance allows a deviation from the requirements of the zoning ordinance; a special use permit allows a use not ordinarily allowed in the zone.

The value principle of ______ is the basis of the income approach to appraisal.

Anticipation

Which board determines the national rules for creating an appraisal and reporting its results? Appraisal Practices Board Appraisal Qualifications Board Appraisal Standards Board Texas Appraiser Licensing and Certification Board

Appraisal Standards Board

Marsha made an offer of $325,000 on a home listed for $350,000. The seller accepted her offer. What service will her lender order to determine the home's actual value?

Appraisal by an appraiser

Which classification of appraiser is the first step to obtaining a license or certification?

Appraiser trainee

Which of the following is a true statement about how adjustments are made in the sales comparison approach?

Appraisers adjust upward when a comparable is missing a feature found in the subject property.

Which of the following statements about appraisal activities is true?

Appraisers' activities are highly regulated, especially when a federally related transaction is involved.

Carmen's original one-year commercial lease has ended, and now, with her landlord's permission, she has gone into a month-to-month lease situation. What type of clause was in the original lease agreement that enabled this situation to occur?

Automatic renewal

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

How does the Fed maintain a balanced economy? By limiting the number of loans a bank may originate By purchasing loans on the secondary market By regulating the flow of available funds and interest rates By shutting down the stock market

By regulating the flow of available funds and interest rates

Under ______, landowners can be held responsible for the cleanup costs of hazardous waste, even if they did not cause the waste.

CERCLA

James and Shondra would like to purchase airline tickets on their credit card now so they can take a much-needed vacation after closing. What would your advice to them be?

Caution your buyers to not to put anything on layaway or use lines of credit before closing, or it could cause them to no longer qualify for the loan.

Which classification of appraiser can appraise all types of real property without regard for transaction value?

Certified general appraiser

______ is the principle that the more similar properties there are on the market, the lower the price will be driven.

Competition

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act

Which agency administers the Interstate Land Sales Full Disclosure Act?

Consumer Financial Protection Bureau

Which of the following is defined as what it would take to recreate a property if it disappeared off the face of the earth today?

Cost

Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?

Depreciable basis

Which of the following could an investor who sells an apartment house buy using a 1031 exchange?

Duplex, office building, or warehouse

Which of the following is a tactic used by a predatory lender?

Encouraging debt

Which written statement will be used to consider ways to minimize a project's negative impact on the environment?

Environmental impact statement

What does the Financial Institutions Reform, Recovery, and Enforcement Act require?

Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state.

Which type of mortgage has an interest rate that remains constant over the life of the loan?

Fixed-rate

In Texas, a suit for possession breach of lease remedy is also referred to as a _______.

Forcible detainer notification

Many parks and golf courses are the sites of ______.

Former landfills

Which of the following duties is part of the licensee's role in a residential lease transaction for an owner client?

Gather information about the type of property that the owner wants to lease and then list and market the property accordingly.

What does the right of first refusal clause do when included in a lease agreement in Texas?

Gives a tenant the option to buy the property they are leasing before the property is sold to someone else

What type of loan is given based on the amount of equity a borrower has in the home?

Home equity loan

Which type of real estate investment trust derives its income from the rent or sale of property and interest dividends?

Hybrid REIT

Which of the following best describes an equity real estate investment trust?

Invests in equity by owning income-producing property, such as malls, apartments, or office parks

Which of the following describes a deed restriction?

It can be placed on a single property, an entire subdivision, or a neighborhood.

Joe and Martha have been pre-approved and the appraisal on the property they're purchasing has come back at an acceptable level. What else could happen that would cause the lender to not commit to the loan?

Joe and Martha finance a new boat.

Your client, Eric, is interested in purchasing an industrial property to start a new business. You've recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn't feel these tests are necessary. What should you do?

Keep records of your recommendations and a written response from Eric.

What could be a consequence if there were no secondary mortgage market?

Lenders might not have funds available to make new loans to the public.

Which practice involves talking the consumer into refinancing over and over so a lender can charge fees?

Loan flipping

To compute a monthly principal and interest payment, which of the following pieces of information do you need to know?

Mortgage loan value, annual percentage rate, loan term, and payment frequency

Donald purchased a property five years ago. He lived in the property for a year, then rented it out to a family friend. Now he is selling the property for a capital gain of $10,000. Can he exclude the gain from his taxes?

No, he did not live in the home for two of the preceding five years.

Where do live auctions typically take place?

On the steps of the local courthouse

Hunter Green is getting ready to move into a new apartment in a small town in west Texas. The landlord has already informed Hunter that she will require a security deposit from him and that the amount of the deposit will be equivalent to ______ rent.

One month's

Which of these provides some protection to lenders in the event that the borrower obtaining a conventional loan does not have a down payment of 20 to 25%?

PMI private mortgage insurance

Which of the following types of tenancy comes with an automatic renewal clause?

Periodic estate

Which of these is the best explanation of the loan prequalification process?

Prequalification is a lender's assessment of what a borrower might be able to afford to pay for a monthly mortgage loan.

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

Which of these properties are exempt from the FIRREA federal appraisal guidelines? Properties valued at $400,000 or less Properties valued at $450,000 or less Properties valued at $500,000 or less Refinanced properties

Properties valued at $400,000 or less

With this type of commercial lease, the lease holder does not own the apartment but instead holds the lease to the residential unit.

Proprietary lease

REIT

Real Estate Investment Trust

In the real estate business, which professional's primary role is to provide brokerage services to their clients while under the supervision of a broker?

Real estate agent

In the real estate business, which professional's primary role is to provide brokerage services to their clients and to supervise licensees who work for them?

Real estate broker

What does a mortgage real estate investment trust invest in?

Real estate debt

A property's value is dropping because the neighboring property's yard is filled with trash. What's this an example of?

Regression

Which of the following duties is part of the licensee's role in a residential lease transaction for a tenant client?

Represent the client's interest in all negotiations and transactions regarding the property lease.

The My First Texas Home program is available to ______.

Residents purchasing their first home

Shopping centers and malls belong to which of these property categories?

Retail

Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part of the REIT's investment?

Retail shopping centers

Maggie is meeting with a prospective tenant client who wants her to negotiate a two-year lease for him. Prior to entering into an agency representation agreement with her prospective client, what must Maggie do in accordance with Texas law?

Review the Information About Brokerage Services form with her prospective client.

What type of investment strategy is most similar to a 1031 tax-deferred exchange?

Rolling over funds from one IRA into another

In which market do lenders purchase packaged loans? Housing market Primary mortgage market Secondary mortgage market Stock market

Secondary mortgage market

What is one way property managers can assist property owners in maintaining their investments?

Spend enough to maintain and upgrade the property so tenants will want to live there.

The Clean Water Act regulates pollutants in U.S. waters and establishes quality standards for ______.

Surface waters

In the world of appraisals, what does TAF stand for?

The Appraiser Foundation

Recently, Francine and her husband, Frank, decided to purchase and restore a historic home in the downtown area. To be eligible for the tax credit for these renovations, Francine and Frank must follow specific federal guidelines when they renovate and restore the home. In addition, the home must be designated as an actual historic property by which of the following?

The Department of the Interior

Your buyer client, Harry, is making an offer on a home that uses an HVAC system manufactured in 2005. What's important about this?

The EPA likely prohibits the refrigerant used in such an old system, so Harry's home warranty may not cover necessary repairs.

Which one of the following is a description of economic depreciation?

The asset is worth less because the economy took a downturn.

Appraiser Victor is determining the insured value of a property. What is he evaluating?

The cost to replace or rebuild a property

Let's say you take out a 30-year adjustable rate mortgage loan with a five-year interest-only payment period. How long will you make interest-only payments?

The first five years

Under Texas law, which of the following occurs if a tenant dies during the term of lease?

The lease does not terminate and becomes the responsibility of the tenant's heirs.

Marcy's offer on a home was accepted! Which party will be contacting her

The lender

Marshall is a home inspector who is walking the lot of the property he's inspecting with a survey in hand. Which of the following will he note as an encroachment on the inspection report?

The neighbor installed a basketball hoop next to his driveway, six inches over the property line.

In pricing a property, what might expired listings tell the real estate professional?

The price at which a property won't sell

How do the primary and secondary mortgage markets work together?

The primary market packages loans to sell to the secondary market.

In addition to the property address, the lease agreement start and end dates, and the monthly rent and deposit amounts, which of the following pieces of information should all commercial leases contain?

The purpose for which the space is being rented

Capitalization Rate

The rate of return a property will produce on the owner's investment.

What should borrowers do to obtain a preapproval letter?

They should gather all of their financial documentation so their lender can verify their financial circumstances

What's the capitalization formula used in the income approach?

Value = net operating income ÷ cap rate

Which of the following terms means the price a property is worth to its owner as currently enjoyed? Appraisal Insured value Investment value Value in use

Value in use

Which veteran loan program offers qualified veterans help with the purchase of land in Texas?

Veterans Land Program

Victor bought a property from Yolanda for $200,000. Under the terms of a land contract, Victor agreed to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

Yolanda

Before moving out, Texas tenant Adam failed to give sufficient notice to his landlady, Yolanda. Yolanda is so happy the lease agreement included that provision in bold type about tenants who fail to give sufficient notice and what that means with regard to the security deposit. Given the situation, which of the following statements is true?

Yolanda does not have to refund any of Adam's security deposit.

Moritorium

action that halts the construction of a project or projects. It's imposed by local authorities or courts.

licensed appraiser

appraiser can perform appraisals of simple residential one- to four-unit properties with a value less than $1 million, but not of properties with greater value?

A property manager who _______ must have a license.

collects rent

Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn't sell, and estimating buyer appeal regarding the style, location, and size?

comparative market analysis

Niko Habshek has decided to move somewhere else when his lease ends on April 30. This would be considered termination through ______.

expiration

Bryant is a professional who spends his days drafting plans for new communities. He must consider what these newly developed areas of town will require, including streets and open areas like parks. In what profession does Bryant specialize?

he's a planner

Which type of payment is made at the end of the term for a balloon mortgage?

lump sum

Certified residential appraisers

may appraise one- to four-unit properties regardless of value, and certified general appraisers may appraise any property, regardless of difficulty or value.

Which of the following is a type of zoning action?

moritorium

Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately?

net

lump-sum payment

one-time payment of money at a future date

Cheri is the lessee of a house with a detached garage. Harriett has leased only the garage from Cheri. However, Cheri remains bound by the terms of the lease agreement with the lessor. This is an example of _______.

sublease

Allentown sits on the river, and its many bridges need repair. Which police power is Allentown likely to use in order to fund improvements to its bridges?

taxation

In the real estate business, which professional's primary role is to finance mortgage loans, while also funding development/construction projects if the risk is not too great?

traditional lender

Brendan's lender set him up with a loan in which the majority of Brendan's early payments go toward interest, his monthly payments remain the same, and he doesn't start paying much toward his principal until closer to the end of the loan. This is ______.

typical amortization