Hawaii National Test
Your clients want to include multiple contingencies in their offer. If you know it's a competitive bidding situation, you say, ______.
"Let's evaluate which contingencies matter most to you and consider omitting the rest."
The gross income multiplier for an area is 12x. If the estimated annual rent is $10,000, what's the property's estimated value?
$120,000
Cheryl and Roberto just signed a contract for Cheryl to buy Roberto's house for $235,000. Roberto owes $48,750 on his current mortgage, he's going to replace the old furnace ($800), he's agreed to pay 3% toward closing costs, and he'll pay a 6% commission to his agent. How much in whole dollars will he have left to put down on the condo he wants to buy?
$164,300
An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?
$174,000 $220,000 - $46,000
A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied?
$249,103.12
Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin's equity?
$254,200
Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?
$4,000
Dale and Barbara, your buyer clients, aren't thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They're financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?
$4,700 $235,000 x .02 = $4,700
A buyer is purchasing a property for $500,000. His lender's loan-to value ratio is 90%. How much is the buyer financing?
$450,000
The purchase price of the home Leroy is buying is $300,000. He's putting $100,000 down and is paying three discount points. How much will this cost?
$6,000 $200,000 x .03
Roland's farm land is assessed at 1.5 million dollars and the improvements for $500,000. At a tax rate of 4 mills, how much are Roland's monthly taxes?
$667.00
A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home?
$76,000
The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe?
$90.57 Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes: $209,000 x .52% = $1,086.80, and $1,086.80 / 12 = $90.57
All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.
25 to 28; 33 to 36
The main floor of Kinsey's home is 1,425 square feet. The upper level is 875 square feet with one unfinished bedroom that measures 150 square feet. The finished basement is 1,425 square feet with 7.5-foot ceilings. Kinsey's MLS listing includes below-grade square footage in livable area. What's the reportable square footage for Kinsey's home?
3,575
A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?
7.9%
In which of these situations would a listing be most likely to terminate due to listing agreement expiration?
A market with high inventory and low demand
Which of the following is an example of an easement?
A path providing neighborhood access to a pond cuts through part of Hillary's property.
Mike relocated for work and learned that the region in which he planned to buy a home had many old underground mines. In fact, Mike might even need to purchase mine subsidence insurance. What might a home inspector flag for Mike if there are any concerns about undermining?
A sinkhole on the property
Eric didn't have direct access to the small lake in his subdivision; he had an easement arranged with his neighbor. Ten months ago, the developer built a public access road to the lake, so Eric stopped using the easement. What type of easement termination is this?
Abandonment
What's the primary difference between an ordinary and a pur autre vie life estate?
An ordinary life estate ends with the death of the estate holder; a pur autre vie life estate ends with the death of someone other than the life estate holder.
Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?
Are you aware of any structural issues with the property? The agent can (and is required to) answer questions from both clients regarding material or adverse material facts.
Margot and Steve owned several rental properties at the time of their divorce. The divorce decree gave ownership to Margot in return for a cash payment by Steve. Fast forward six years, and Margot is ready to sell the properties. She soon discovers, though, that Steve's name is still on the title. What's her best course of action?
Ask Steve to generate quit-claim deeds on the properties.
Jackson Elementary School is undergoing some major renovations during the summer while school is out of session. The renovation crew has a detailed list of requirements for the disposal and drainage of wastewater and sewage. These requirements are likely part of the ________ with which the renovators must comply.
Building code
Which of the following is an action borrower take to temporarily lower the interest rate on their mortgage loan?
Buydown
You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?
Buyer agency
In states where full disclosure isn't required, it's the ________ responsibility to perform due diligence on the property.
Buyer's
Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?
Client data can be exposed when a brokerage's computer system is compromised.
The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them?
Conventional
Which of the following is a common element of a buyer representation agreement?
Description of the property being sought
Which of the following is a common problem with roof shingles?
Discoloration or curling
Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?
Discount point
A part of your property is used by the local utility company to maintain its power lines. What's this an example of?
Easement
A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of?
Escalator
Which of the following statements about escrow accounts is correct?
Escrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits.
What's the best definition of personal property?
Everything that's not real property
Local authorities lack police power over which of the following?
Federal government construction projects
Brenda represents Tina in a real estate transaction. Brenda therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care.
Fiduciary
The house that Rhema is considering purchasing is on a perfectly level lot, which is what attracted her to the home after years of living on a hill. It also has a lovely creek at the back of the 60-foot yard. What might Rhema have to purchase if she buys this home?
Flood insurance
Another term for a valuation is ___________.
Formal appraisal
Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer agents showing her listings to not do business with this company, either. What is this an example of?
Group boycotting
Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.
Guaranteed loans
What can brokerages do to ensure licensees use technology properly?
Have a solid policies and procedures manual in place.
Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?
In both types of listings, the seller who finds the buyer won't owe a commission.
You've just signed a listing with a new seller client. What's true about electronic delivery of written notice or contract forms to your seller?
It's allowed if the seller consented to it in the listing contract.
Tom and Rosanne are interested in a property, but before making an offer, they want to make sure there aren't any registered sex offenders living in the neighborhood. Which statement is most accurate?
It's up to the buyer to perform due diligence and research whether sex offenders live in the area. Licensees can direct clients to the state's registry.
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
All of the following are common property manager duties EXCEPT _________. Accepting rental applications Making mortgage payments Re-keying a property Showing vacant units
Making mortgage payments
Datums and benchmarks are used for _______.
Measuring elevations
Lena's buyer Mindy is making an offer on Leo's house. Which party decides how much earnest money to offer?
Mindy
You're representing Abe and Ben in a dual agency situation. Abe tells you something that would give Ben a distinct advantage if he knew. Do you tell Ben?
No, because you can't share confidential information with another client.
Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he's working with the homeowners to make some decisions that weren't identified in the blueprints he's working from. Which of the following details will be guided by local building codes?
Number and type of electrical breakers
Kendra made an offer on Sam's property. Sam rejected Kendra's offer, but made a counter-offer. Kendra is now considering the counter. What role does Kendra currently have in this scenario?
Offeree
Gene, a real estate licensee, prefers to use electronic documents and signatures because it means he doesn't have to track people down to deliver documents or have them signed. Which of these statements is true?
Parties to the contract decide whether or not to accept the use of electronic signatures and documents.
Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?
Price
Eileen is preparing a quarterly report pursuant to the terms of a property management agreement. This report shows the property owner whether this property operated at a surplus or deficit during the reporting period. What report is she preparing?
Profit and loss statement
Who is responsible for ensuring accessibility requirements for a commercial property are met?
Property owners and property managers
What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement?
Property taxes
Governments like property taxes as a revenue source because...
Property values, and therefore taxes, tend to remain stable
When a buyer finances a newly built home with a Federal Housing Administration loan, FHA requires the builder to _______.
Purchase a third-party home warranty to protect the buyer
Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?
Reasonable skill and care and obedience
Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded?
Recording provides constructive notice that he owns the property.
Which statement most accurately describes the type of notice provided by recording a change of ownership document?
Recording the deed provides constructive notice of the property sale.
Duke's client has asked him for advice on a legal matter. Based on the duty of reasonable skill and care, what should Duke do?
Refer his client to an attorney.
A rundown home, overgrown with weeds and in desperate need of repairs, is driving down property values on the block. What economic principle is at work here?
Regression
Kiley Ann is thrilled to have her real estate license and to be hired on at New Beginnings Brokerage. She's not positive about Luis, her employing broker, though. He seems a little sketchy. For example, when she looks at her independent contractor agreement, it says that she's not entitled to unemployment insurance and has to pay her own income taxes. What should she do?
Review the requirements for independent contractors and be prepared to pay her own income tax and unemployment insurance.
What responsibility does the seller's agent have to the seller?
Seek a sale at the best price at terms acceptable to the seller.
Eleanor is moving from a starter home into something a little larger. Her agent has cautioned her against making the offer on the new place contingent on the sale of Eleanor's starter home. Why the caution?
Sellers would view an offer without that contingency as a stronger offer.
Liz is a property manager who is screening applications from prospective tenants. Which of these reflects an acceptable way to perform this task?
She looks at each tenant's employment, rental, and credit history in exactly the same order each time she performs a review.
Trina is a licensee at Midtown Homes. Which of these factors indicates that she's classified as an employee?
She's eligible to participate in the firms 401k retirement plan.
Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?
Strict liability
What is TRID?
TILA-RESPA Integrated Disclosures
The ______ is the federal act that sets forth guidelines regarding telephone solicitation.
Telephone Consumer Protection Act
Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing?
The agent and client don't agree on the best way to price, maintain, and market the property.
What is put at risk if a buyer misses a contingency deadline?
The buyer's earnest money
Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?
The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms.
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
Katelyn wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency will document which of the following?
The date by which all inspection issues must be addressed
What's the best definition of land?
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Which statement regarding fee simple defeasible estates is true?
The estate includes the full bundle of legal rights, but ownership is based on a condition.
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?
The house is probably not required to meet the current code.
Which of the following statements about the number of contingencies in a sales contract is true?
The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.
Carly's closing on an REO property was suddenly delayed due to an internal audit. What does this mean?
The lender has requested a title audit to ensure that the foreclosure was properly handled.
Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?
The listing expires and is automatically terminated.
To which of the following are most of the buyer's closing costs typically related?
The mortgage loan the buyer's obtaining
What's the meaning of "good faith" in relation to contract law?
The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation.
Jacqueline found a ready, willing, and able buyer for her client's condo, with a sales price of $20,000 more than the asking price. However, the appraisal came in just under the asking price. Which number will the lender use to calculate the loan-to-value ratio?
The smaller number
Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?
The statute of frauds
Why would buyers want to know whether a property is currently experiencing a tax abatement?
Their taxes are likely to increase when the abatement period ends.
Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate's buyer customer. Monica tells Kate, "You know Reuben inherited a bunch of money right before he sold his house, right?" Which of these statements is true?
This is a breach of confidentiality because confidentiality survives forever.
In marketing her new listing, Alice asks the photographer to "touch-up" the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
This is deceptive advertising for which both Alice and her broker may be disciplined.
Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?
Tie-in arrangement
Garrett wanted to move his real estate closing so that he can get through his wedding first. His broker and attorney encouraged him not to do it because of which contract clause?
Time is of the essence
Which statement correctly identifies a federal fair housing law and what it addresses?
Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.
What's another name for an escrow account?
Trust account
Because Shelby has a high prepayment penalty on her high-interest loan, she is ________.
Unable to refinance her high-interest subprime loan without paying a stiff penalty
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this?
Unilateral
Which factor that influences value considers the property's function?
Utility
Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have?
Void
Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Is this contract valid?
Yes, the contract is valid.
