Final Exam CE Shop

Carl is interested in purchasing a lot that is 200 feet wide by 600 feet long. The seller has it priced at $800 per acre. How much would this lot cost?

$2,204

Proper agency disclosure protects consumers by _______.

Informing them about who represents whom and the duties owed under various agency relationships

A VA loan ______.

Is offered to qualifying veterans or spouses only

Which of the following can indicate drainage problems?

Water that pools after a heavy rain and is present more than 24 hours later

Ted wants to estimate the value of a commercial property leased to four retail tenants. In order to find the GIM he can use for his subject property, what's the minimum number of comparable properties he should try to find?

10

Calculate the housing ratio based on the following information: $1,500 condo payment; $100 association fees per month; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a gross monthly income of $5,000.

32%

Calculate the total debt ratio based on the following information, assuming the lender does not consider any debt with 10 or fewer payments remaining: $1,500 condo payment; $100 monthly association fees; $150 monthly student loan payment; $300 car payment (with only four payments remaining); and a monthly gross income of $5,000.

35%

An acre is equal to ______.

43,560 square feet

______ is allowed to perform appraisals on any type of real estate.

A certified general real property appraiser

Brenda and Joe have 20% cash to put down toward the purchase of their home, and they have great credit. What might be their best option for getting a traditional mortgage loan?

A commercial bank

How does the Federal Housing Administration help prospective homeowners?

Insuring lenders against borrower default so they assume less risk of buyer default

In Indiana, trust accounts established for property management purposes may be but aren't required to be ______.

Interest-bearing

What is the purpose of an operating budget?

It provides income and expense projections.

How do you decide which party you represent in a transaction?

It's based on the express agreement between you and the party whom you represent.

What is the purpose of a deed?

It's used to transfer real property from one party to another.

As long as a tax lien is in force, the government has a _____________________ and, if necessary, it will to use profits from the sale of the property to satisfy the tax debt.

Legal claim to the property

Bambi is buying a property using an installment sales contract. Due to her financial interest in the property, she receives equitable title while the seller retains _______.

Legal title

Which type of events are generally on a title insurance policy's schedule of exceptions?

Liens or claims that aren't on the public record

What's the term for an agency agreement between the property seller and the brokerage that represents the seller?

Listing agreement

Which of these is an example of a lot and block description?

Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds

A ______ is the individual designated to the Indiana Real Estate Commission as responsible for the actions of all licensees affiliated with the broker company.

Managing broker

Joe signed a listing agreement with Marisa. A week later, Marisa's co-worker, Tina, showed Joe a property that he's interested in buying once his home sells. A week after that, Ross submitted an offer on Joe's property on behalf of his buyer client. Who is Joe's agent?

Marisa

Which of the following is a duty that seller agents owe to clients?

Market and sell the property.

What are the three most common forms of legal descriptions?

Metes and bounds, lot and block, and rectangular government survey

You prepared a comparative market analysis and have a plan for educating the seller about the value you can provide Now you're ready to engage in the first step of the residential sales process. Which of the following describes this first step?

Obtaining the listing

Real property rights include the right ______.

Of enjoyment

What occurs when one or both parties don't meet all terms of the contract?

Partial Performance

_______ can be defined as everything that's not real property.

Personal property

For the public's benefit, the government imposes its powers over public and private land use through ____________.

Police power, eminent domain, taxation, and escheat

What's the best place for members of a brokerage firm to find detailed information about the firm's best practices and core business processes?

Policies and procedures manual

When you create fictitious scenarios of danger and determine strategies to get out, talk your way out, or fight back for each one, you are ________.

Practicing strategies for getting to safety

Which mortgage market is made up of lending institutions that lend directly to the consumer?

Primary market

What does the rectangular government survey system use as the basis for legal descriptions?

Principal meridians, base lines, and sections

If you're in a caveat emptor state, which statement about property condition disclosures is true?

The seller isn't obligated to proactively disclose property defects.

_______ are artificial attachments to land that include items such as fencing, buildings, and walkways.

Improvements

Cracks, holes, or rotten areas on a soffit are common ______ issues.

Roof

In order to advertise real estate services or listed property in any medium, you must disclose the name of your firm ______.

In a reasonable and readily apparent manner

Your listing presentation is going well, and you're about to sign a listing agreement with the customer. As you discuss the listing process, the seller flatly refuses to disclose a material defect with the property. What's the best way to respond?

"I hope you'll reconsider, but I can't take you on as a client unless you're willing to meet your obligations for seller disclosure."

Benji is a buyer's agent, and he'll receive a split of the commission paid from the sale of Harriet's listing. The property sold for $425,000. The total commission paid from the sale is 6%, split evenly between the buyer and seller brokerages. Benji has an agreement with his broker that he earns 80% of the commission received. How much will Benji be paid from this sale?

$10,200

An owner-occupied home in Hammond (tax rate 5.10%) has no mortgage and is assessed at $135,000. There's also a heritage barn on the property that's valued at $8,000. Calculate the property tax bill. The property qualifies for both the standard and the supplemental homestead deductions.

$2,575.50 The property here qualifies for both homestead deductions, and the heritage barn is eligible for a deduction equal to 100% of the barn's assessed value. So first: $135,000 - $45,000 (standard homestead deduction) multiplied by the supplemental homestead percentage (.35) equals $31,500. Then subtract all deductions from the assessed value: (135,000 - 45,000 - 31,500 - 8,000) x .051 tax rate = $2,575.50.

Bob and Mary are financing $80,500 for a new home. Their lender will approve an interest rate of 6.5% if Bob and Mary pay three-and-a-half discount points at closing. How much is this?

$2,817.50

A $300,000 property depreciated in value by 3%. What's its new value?

$291,000

An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?

$60,000

What would the monthly rate be if annual taxes are $890? Round to the nearest cent.

$74.17

Buyers James and Janie Johnson want to make sure any house they look at does not have any lead-based paint, because they're expecting their first baby next month. What would the presence of lead-based paint in a house be considered?

A material adverse fact

Which of these residential transactions is exempt from the requirement to make property condition disclosures on the Seller's Residential Real Estate Sales Disclosure form?

A newly constructed single-family residence that's never been occupied

Which of the following elements of a deed signify the grantor's intention to transfer title to the grantee?

Act of conveyance

In your role as a real estate licensee, you must understand the basics of land contracts, but what's your professional responsibility when involved in land contract transactions?

Advise your client to seek legal representation.

Which of the following scenarios is an example of group boycotting?

Agreeing with your competition to not cooperate with another business

What's the best definition of a cooperating agent?

An agent from another brokerage who brings you a buyer when you're the listing agent

Which of the following is the best definition of a covenant between a lessor and lessee?

An agreement or promise made between the parties

What hazardous material might be found in vinyl flooring, insulation, and roof shingles of older homes?

Asbestos

Which of these is an example of illegal market allocation?

Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.

When is a title search conducted?

Before a property is sold, to determine if there are any defects on the title

It's very important that a buyer obtain a/an _________that shows that he has obtained homeowners fire and hazard insurance.

Binder

Indiana license requirements may be waived for which professionals, provided they show proof of licensure in good standing and declare knowledge of relevant state laws and regulations?

Brokers with out-of-state licenses

Which of the following terms best describes a fixture and real property?

Built-in

Brian has just finished completing his loan application and has gathered supporting documentation needed to determine whether the application will be approved. Which of these parties best describes who Brian is?

Buyer

In states without full disclosure requirements, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection?

Buyer

How is general property tax calculated?

By multiplying the property's assessed value by the tax rate

What's the name for a process that converts income to value?

Capitalization

What method of payment is acceptable for any amounts owed at closing?

Certified check

Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?

Closing Disclosure

Stan, an Indiana broker, would violate the Indiana professional standards of practice if he took which of these actions?

Compensating an unlicensed person for tasks that require a real estate license

Which of these activities has a far-reaching effect on the country's overall economy and is the largest indicator of the country's economic health

Construction of new homes

An Indiana licensee representing a seller has a legal duty to ______.

Disclose any adverse material facts or transactional risks the licensee knows of

It's that time of year again in real estate where things are really slow and properties just aren't moving. In real estate, this period is referred to as a _______________.

Downcycle

The owner-manager relationship is based on the property manager performing particular duties. This would include ______.

Duties that are designed to maximize the owner's net return

What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?

Earnest money

What is one of the best ways to ensure you have the most detailed and complete transaction records before storing them away?

Enter sold information promptly into the MLS, utilizing all available fields.

Pete just returned from a trip to Paris and wants a home that will make him feel like he's living in the Notre Dame cathedral. What style home might he like?

Gothic revival

What is self dealing?

Having undisclosed personal interest in a transaction

What does a credit score tell a lender?

How likely a consumer is to repay a loan

Joe and Emma Parsons begin informally working with their neighbor Kyle, who's a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of an ______ agency agreement.

Implied

Agatha helped her client Rufus complete the form that documents Rufus's purchase offer to the seller for the property he'd like to buy. What is this form?

Sales contract

A person interested in participating in a lending investment activity might ______.

Purchase a bond

What's the acronym for the legislation that eliminates illegal referral fees among settlement service providers?

RESPA - Real Estate Settlement Procedures Act

When banks have lots of funds available for lending, what tends to happen to interest rates?

Rates decrease.

How can mobile applications assist you with personal safety?

Recording conversations, calling for help, and relaying your location

What's created by an administrative government agency and provides guidance for the enforcement of a law?

Regulation

Which type of property takes 27.5 years to completely depreciate?

Residential

Why is errors and omissions insurance beneficial to licensees?

Risk is an inherent part of real estate activities.

What's the definition of a land contract?

Sellers provide funds or credit to buyers in order to close the transaction

The National Association of REALTORS® has maintained for years that __________ is a protected class, even though it isn't covered under the Civil Rights Act.

Sexual Orientation

SRT Mortgage has a borrower who has fallen behind on her mortgage. Rather than go through a foreclosure, the borrower is attempting to sell the property. An offer came in for less than the borrower's loan balance and closing costs, but for more than what the lender feels it'd get at a foreclosure sale, so it approves the purchase. What is this an example of?

Short sale

Why would a buyer want to know whether any additions or alterations were made to a property?

So the buyer can determine if permits were pulled

Which of the following is a levy the local government applies to individual parcels of real estate that will benefit from a public improvement?

Special Assessment

To calculate the annual lease amount for a gross lease, multiply the rent per ______ by the total ______ leased. (One selection should work in both blanks.)

Square foot; square feet

One way to minimize risk is to ______.

Stay within the scope of your license and expertise

Which one of the following terms refers to a tract of land divided into lots or plots and used for building purposes?

Subdivision

The Johnsons are shopping for a mortgage loan and are attracted to the below-market interest rate offered for the first year of an adjustable rate mortgage. What's this type of rate called?

Teaser rate

Which of the following statements is true about the FHA Section 251 ARM?

The FHA sets a maximum number of percentage points that the interest rate may change over the life of the loan.

From whom or what entity do licensees receive compensation for brokerage services once a transaction is closed?

The brokerages for both sides receive their share of brokerage fees and disburse licensee shares to them.

What's the definition of a closing in its simplest form?

The buyer receives title to the property, and the seller receives consideration for it.

What's a foreclosure?

The forced sale of a property due to the borrower defaulting on the mortgage loan

At the completion of an Indiana broker's pre-license education, how many course exams are required?

Three

The Indiana Real Estate Commission sets the license renewal date for all brokers, which occurs ______ years after initial licensing.

Three

What effect will a property's utility have on the value if it's currently uninhabitable?

Value will be pushed downward.

Every foundation in direct contact with the ground should have which two features?

Vapor barrier and termiticide

Jay's new loan to purchase a property includes the seller's existing mortgage. What type of loan is this?

Wraparound