National Exam Prep
What is a township? A 36-square-mile square formed in the use of the rectangular government survey system A one-square-mile square formed in the use of the rectangular government survey system A permanent reference point used in the measurement of elevations The point of beginning used in a metes and bounds survey
A 36-square-mile square formed in the use of the rectangular government survey system
Leonard is offered a loan at 5.75%. Because he plans to be in his home for several years, he chooses to pay points up front to have the rate reduced to 5.25%. What's this an example of? Discount points Down payment Gap financing Usury
Discount points
A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property? $1,335.67 $2000 $363.64 $598.95
$1,335.67 First, find the square footage (5.5 x 43,560' = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400' = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95' = $1,335.67 per front foot.
The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill? $1,262 $1,664 $1,854 $1,907
$1,907
Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she's going to pay on her loan? $10,170 $16,950 $4,520 $6,780
$10,170 A point is 1% of the loan amount. Faye's loan amount is 60% of the sales price, or $339,000 ($565,000 x 0.60). Her lender is charging three points total, or 3% of the loan amount. That comes out to $10,170 ($339,000 x 0.03)
What's the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000? $110,000 $115,000 $140,000 $90,000
$110,000
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 $164,771 $167,696 $168, 688
$164,300 Roberto's closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06). Subtract those two amounts, the furnace cost ($800), and the mortgage loan payoff ($48,750) from $235,000 to get $164,300.
Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She's financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing? $2,300 $2,700 $4,800 $7,300
$2,300
Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller, which will be applied to her down payment. She's financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing? $2,300 $2,700 $4,800 $7,300
$2,300 to closing to pay the total amount due. She owed a total of $4,800 minus the earnest money she already paid ($2,500). That leaves her with $2,300 still to pay. This is the amount she still has to pay.
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? $247,957.29 $248,854.17 $249,103.12 $250,000.10
$249,103.12 If $1,145.83 of the total payment is interest, that leaves $896.88 to be applied to principal: $250,000 - $896.88 = $249,103.12.
Jimmy is a real estate investor who owns several rental properties in the area. After the economy took a turn, he was relying on TRA 86 to be able to deduct some of his losses. He is active in the management of the properties and his taxable income is $90,000. What is the maximum deduction Jimmy can claim on his taxes to make up for his losses on those rental properties? $10,000 $100,000 $25,000 $35,000
$25,000
Your investor client Julia wants to buy a three-bedroom, one-bath, income-producing property for $125,000. It rents for $820. Comparable three-bedroom, two-bath homes in the area rent for around $1,000 and are valued an average of $20,000 more. The area's gross rent multiplier is 147. Calculate the loss in income due to depreciation based on functional obsolescence using the capitalized value method. $11,111 $13,605 $26,460 $98,540
$26,460 The monthly rental difference between a one-bath property and a two-bath property is $180 ($1,000 - $820). Multiply that by the area's GRM to find the loss in income due to the subject property's functional obsolescence ($180 x 147 = $26,460).
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 Rolan's monthly taxes? $6,667.00 $667.00 $8,000.00 $80,000.00
$667.00
Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax. $1,137.50 $1,662.50 $700 $962.50
$962.50 A mortgage recording tax is based on the loan amount. Phyllis will pay a mortgage tax amount of $962.50 on her loan amount ($275,000 x .0035).
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 3 5 7
10
A 30-unit income-producing property has a sales price of $6 million. Annual gross income is estimated at $500,000. What's the gross income multiplier? 10x 12x 14x 8x
12x
What is the ROI for this scenario? An investor pays $80,000 cash toward the purchase price, finances the rest, and has a cash flow of $11,000 after repairs and debt services. 107.3% 13.75% $69,000 7.3%
13.75%
Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio? 72% 75% 82% 96%
75% Lenders use the lesser of the sales price or appraised value. This results in an LTV ratio of 75% ($300,000 ÷ $400,000).
Which of these examples describes a prepayment penalty? A fee the government charges the lender if the borrower pays off a loan before its intended time A fee the lender charges for servicing a loan A loan origination fee charged to the borrower A monetary penalty imposed on a borrower for paying off a loan before its intended time
A monetary penalty imposed on a borrower for paying off a loan before its intended time repayment penalties are rare. When used, the consumer must be made aware that there are loans available that don't include prepayment penalties.
Malcolm loves his apartment, even though he's rarely there. His job in international development has him on the road for months at a time. He doesn't have to worry about missing out on his lease renewal, though, because he has _______. A freehold estate An estate at will An estate for years A periodic estate
A periodic estate
Which of the following is a way in which property taxes could impact your clients? A sale in the area may prompt a reassessment, impacting new buyers. Neighbors may be jealous about favorable tax rates. Tax abatements could harm buyers financially. Tax refunds are not possible if property tax deductions are taken.
A sale in the area may prompt a reassessment, impacting new buyers
When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at? Addendum Amendment Annotation Appendix
Addendum
Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn't part of the standard sales contract in your area. What will you use to accomplish this request? Addendum Amendment Annotation Appendix
Addendum
Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this? Aesthetic zoning Downzoning Incentive zoning Spot zoning
Aesthetic zoning
FAR, or floor-to-area ratio, includes ______. All of the habitable structures on a lot All structures, including habitable structures and parking structures, but not parking lots None of the habitable structures on a lot The area within parking lots or parking structures
All of the habitable structures on a lot
Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue? Arbitration Choice of law Damages block Liquidated damages
Arbitration An arbitration clause in a contract specifies that any contract disputes will be settled through arbitration, rather than through the court system.
What are improvements with regard to property? Another name for a building permit Artificial attachments to land that include items such as fencing, buildings, and walkways Natural fixtures that are part of the land and that enhance its value The right to increase the value of a property
Artificial attachments to land that include items such as fencing, buildings, and walkways
After all BPO comps have been adjusted, how is the value usually presented to the lender? As a median (the middle value of the six you calculated) As an average of the three sold and the three active comps As an average of the three sold comps As a range of values
As a range of values
Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison. Bracketing Competition Correlation Substituting
Bracketing
SARA is an amendment to which environmental act? CERCLA Clean Air Act Clean Water Act Environmental Responsibility Act
CERCLA
Marla, a buyer, is in breach of her purchase contract with seller Carlton. The contract notes that liquidated damages will be equal to the earnest money deposit. Which of these statements is true? Carlton can pursue all legal and equitable remedies. Carlton can sue for specific performance but not for damages. Carlton is limited to accepting the amount of damages specified in the contract. Carton can sue for damages over and above the liquidated damages specified in the contract
Carlton is limited to accepting the amount of damages specified in the contract.
Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller's mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation? Christine listed the property with you. Christine's mother, Freida, owns the house you listed. Freida is paying your commission. Tailleur represents the buyer.
Christine listed the property with you.
In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property? Alternatives Comparables Conformables Substitutions
Comparables
Kirby is found to be in breach of contract in the sale of his house to Marta. Kirby's contract doesn't limit Marta's remedies. Which of these remedies is most likely to be awarded by a court? Breach of contract fees Compensatory damages Default fees Punitive damages
Compensatory damages
When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work? Competition Conformity Progression Regression
Competition
Which of these is a violation of the RRP Rule? A homeowner performs DIY work in a home built prior to 1978. A seller of a home built in 1952 doesn't make the appropriate lead disclosures. Contractors from a home improvement store install windows or doors. Contractors perform renovations that disturb lead-based paint without holding proper certification.
Contractors perform renovations that disturb lead-based paint without holding proper certification.
Which of the following is defined as what it would take to recreate that property if it disappeared off the face of the earth today? Cost Insurance Price Value
Cost
With the cost approach to value, what is the reproduction cost? Cost of the materials used in construction Cost to build a functionally equivalent improvement Cost to build an exact replica of the subject, with the same materials and deficiencies Cost to buy the property
Cost to build an exact replica of the subject, with the same materials and deficiencies
A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of settlement, has already paid annual property taxes of $1,949. Using calendar year proration, the seller will be ______ on the closing statement (round to the nearest dollar). Credited $1,207 Credited $742 Debited $1,207 Debited $742
Credited $1,207 The seller is required to pay the for January 1 through May 19. The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days (the number of days the buyer is required to pay) = $1,206.84. That's $1,207 if rounded to the nearest whole dollar.
A decrease in property value over time is called ______. Amortization An anomaly Appreciation Depreciation
Depreciation
The Town of Petersville has just decided to restrict density in one area of town that previously allowed a higher density. This is known as ______. Aesthetic zoning Density zoning Downzoning Reduction zoning
Downzoning
Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this? Easement by prescription Easement in gross Express easement Visible easement
Easement by prescription
What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach? Broad and specific Components and measures Elements and units General and detailed
Elements and units There are two categories of comparison: elements, which look at physical and locational characteristics, and units, which look at the numbers.
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? Bad Dynamic Elevator Escalator
Escalator
Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends? Estate at sufferance Estate at will Estate for years Periodic estate
Estate for years
The Nettles have accepted the Briars' purchase offer, and both parties have signed the sales contract. What type of contract do the Nettles and the Briars have? Executed Executory Unilateral Voidable
Executory The Nettles and Briars have a valid contract that's in the process of being completed. Because one or more terms of the contract must still be completed, they have an executory contract.
A loss in value caused by an undesirable or hazardous influence offsite is which type of depreciation? Economic and material External depreciation Functional obsolescence Physical depreciation
External depreciation
Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements. Department of Veterans Affairs Environmental Protection Agency Farm Service Agency Federal Housing Authority
Farm Service Agency
Prior to the _______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. Civil Rights Act of 1866 Fair Housing Amendments Act of 1988 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974
Federal Fair Housing Act of 1968
Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development? Americans with Disabilities Act of 1990 Equal Credit Opportunity Act of 1974 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974
Federal Fair Housing Act of 1968
Local authorities lack police power over which of the following? Budgeting Federal government construction projects Subdivision development Zoning
Federal government construction projects
When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment? Area demographics Financing terms and cash equivalency Seller motivation Types of obsolescence
Financing terms and cash equivalency
For which of the following reasons would a title insurance survey require that Joy have a spot survey performed? done to satisfy the title insurance company's requirement for a(n) ______. As part of a typical home inspection For an appraisal For an improvement location certificate To ensure clear title
For an improvement location certificate
Greta was showing a property to the Gagnon family when Mrs. Gagnon slipped on a wet floor and broke her wrist. Determine which of these statements is true. Greta can rely on her brokerage firm's liability policy to protect her in this situation. Greta can't be held responsible for Mrs. Gagnon's injury. Greta's E&O insurance protects her if Mrs. Gagnon files a claim against her. Greta's liability insurance policy protects her if Mrs. Gagnon files a claim against her.
Greta's liability insurance policy protects her if Mrs. Gagnon files a claim against her.
Christopher is in a negative equity situation. What does this mean? He owes less on his mortgage loan than his home's value. He owes more on his home than its value. His home equity line of credit is in default. His mortgage loan is in default.
He owes less on his mortgage loan than his home's value.
What economic principle is related to a property's most profitable use that is both legal and economically feasible? Anticipation Contribution Highest and best use Progression
Highest and best use
Lot and Block Realty received a cease-and-desist order from the FTC due to misleading ads the firm was running. When does the order become effective? 30 days after issuance 90 days after issuance and for 120 days total Immediately upon issuance Retroactive from the first date of the prohibited activity
Immediately upon issuance
Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this? Arbitration Choice of law Damages block Indemnification
Indemnification
Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property? Immobility Improvements Indestructibility Uniqueness
Indestructibility
Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed? Immobility Indestructibility Permanence of investment Uniqueness
Indestructibility
Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair? Appraisal contingency Financing contingency Home sale contingency Inspection contingency
Inspection contingency
In the early years of a mortgage loan term, which portion of the payment is likely to be the largest? Insurance Interest Principal Taxes
Interest
Conveyance of property by escheat is an example of _______ alienation. Hereditary Involuntary Unlawful Voluntary
Involuntary
Which of the following is a key fact to remember about E&O insurance? All real estate professionals (licensed and unlicensed) must carry insurance. E&O insurance isn't permitted at the licensee level, only at the broker level. It doesn't cover all situations encountered in real estate. It's not considered a risk prevention measure.
It doesn't cover all situations encountered in real estate.
Jenna's closing agent has asked her to get a spot survey of the property she's purchasing. What will this accomplish for Jenna and the closing agent? It decides the location of the point of beginning. It notes the location of major appliances and features inside a home. It notes the location, size, and shape of any improvements on a property. It's provides a sketch based upon driving by the property.
It notes the location, size, and shape of any improvements on a property.
Which of the following statements about the fiduciary duty of disclosure is true? It only applies to the seller's agent. It requires licensees to disclose everything to all parties. It's owed to other parties, not just to the licensee's clients. It's owed to the licensee's clients only.
It's owed to the licensee's clients only.
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest? It's still in place because it doesn't terminate on the death or incompetence of the principal. Max has no recourse; the agency relationship is terminated and he receives no compensation. Max now owns the subdivision as a result of the principal's death or incapacity. Rufus must now pay Max the commission that he didn't get from the original listing, and the agency relationship is terminated.
It's still in place because it doesn't terminate on the death or incompetence of the principal.
Which of these situations addresses the fiduciary duty of confidentiality? Jeanette, a seller's agent, tells the buyer's agent that her client must sell his home because of an illness. Mark discloses the commission split he receives from his broker to a colleague at another firm. Regina tells her seller client that he's required to disclose the roof damage. Todd's lender shares Todd's financial information with the loan underwriter.
Jeanette, a seller's agent, tells the buyer's agent that her client must sell his home because of an illness.
Which of these is NOT an example of agency coupled with interest? Carma agrees to list Tera's property for free if Tera signs an agreement to purchase her new home through Carma. Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller. Jeanine agrees to charge no commission from her buyer's purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale. Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl's home for a 4% commission.
Jeanine agrees to charge no commission from her buyer's purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale.
John is selling his rental property to Tony. Marcus represents John, and Meredith is working with Tony, though there is no agency relationship between them. In this scenario, who is/are the principal(s) in an agency relationship? John John and Marcus John and Tony Tony
John
Which of these statements about the Superfund Amendments and Reauthorization Act (SARA) is true? Buyers who are evaluating a commercial or industrial real estate purchase must have an environmental impact statement performed to ensure that no contamination exists on the property. Landowners who perform due diligence when purchasing a property, including a Phase I site assessment, may be immune from liability if the property is found to be contaminated. Landowners who purchased a property after any contamination occurred can't be held responsible for the contamination. No matter what the circumstances are, SARA places liability on the current landowner for the cleanup of any contamination.
Landowners who perform due diligence when purchasing a property, including a Phase I site assessment, may be immune from liability if the property is found to be contaminated.
Which type of agent is an escrow officer? General agent Limited agent Single agent Universal agent
Limited Agent
Annabelle's previous transactions have all been median-priced, detached single-family residential homes in the main part of the city or its suburbs. In which of these situations would Annabelle be practicing within her area of competence? Listing a multi-million-dollar residence in the city's exclusive lakeshore estates Listing a property in the main part of the city that she'll market as a fixer-upper Working with a buyer client to purchase a condo Working with an investor who intends to purchase a rental property
Listing a property in the main part of the city that she'll market as a fixer-upper Listing a fixer-upper doesn't pose any variations that would cause it to be outside Annabelle's scope of expertise. Each of the other situations could require Annabelle to seek assistance from her broker or another expert in her firm.
Lawrence is a buyer closing on a home for which he's obtaining financing. Which document will give Lawrence an estimate of the costs he'll likely pay at closing? Buyer Worksheet Closing Disclosure Loan Estimate Mortgage Disclosure
Loan Estimate
Which of the following is a true statement about police power and public land use controls? Government agencies may exercise police power only when it does not restrict the freedom of its citizens. Local governments and their planning boards control budgeting, site-plan review, and building codes. Planning, zoning, and subdivision development are primarily controlled at the state level. Police power is citizens' rights to police themselves.
Local governments and their planning boards control budgeting, site-plan review, and building codes.
Margo received a great offer on her house but sent a counter-offer to the buyer. She then got a second offer from a different buyer and sent a counter-offer to this buyer as well. Which of these statements about this situation is true? Margo can rescind one of the contracts without penalty if both buyers accept her counter-offers. Margo is in danger of illegally having two accepted offers on her property. The counter-offer isn't a binding contract, so Margo is engaging in savvy negotiation. The potential buyers will have to work out who gets to purchase the property if both accept Margo's counter-offers.
Margo is in danger of illegally having two accepted offers on her property.
John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which? Market or sales comparison The capitalization method The gross income multiplier The gross rent multiplier
Market or sales comparison
Which of these circumstances does NOT require agent disclosure? As part of his corporation, Sean, a licensee, owns several investment properties. He's selling one. Gary represents the buyer. He's a shareholder in the title insurance company the buyer has selected. Marty is representing Dwayne in both the sale of his current home and the purchase of his new home. Megan has listed her brother's townhome for sale.
Marty is representing Dwayne in both the sale of his current home and the purchase of his new home.
Which legal description method uses compass headings and directions? Block and grid Lot and block Metes and bounds Rectangular government survey
Metes and bounds
Which of these is an example of conversion of funds? Marcus converted a CD to cash and deposited it in the firm's operating account. Monica used funds from the firm's trust account to pay her firm's rent. Soo Min transferred funds from her firm's trust account to the closing company's trust account in time for settlement. Tristan deposited a client's earnest money check into the firm's operating account.
Monica used funds from the firm's trust account to pay her firm's rent. Conversion means that a licensee or brokerage firm uses trust funds for personal or operating purposes.
Which of the following is the price a lender believes the property will bring at a foreclosure sale? Insured value Investment value Mortgage value Value in use
Mortgage value
An agency agreement between a buyer and a single agent that allows the buyer to work with other agents is a(n) __________. Exclusive buyer agency Exclusive buyer designated agency Non-exclusive buyer agency Non-exclusive buyer designated agency
Non-exclusive buyer designated agency
Effective gross income ‒ ______ = net operating income Debt services Mortgage payments Operating expenses Vacancies and credit loss
Operating expenses
Grant owns a property that's subject to an option contract. Grant is the ______. Optee Opter Optionee Optionor
Optionor
Ovid and Rollie have entered into an installment sales contract on Rollie's property. What's likely true of this situation? Ovid holds both legal and equitable title until the loan is paid off. Ovid holds equitable title and Rollie holds legal title. Ovid holds legal title and Rollie holds equitable title. Rollie holds both legal and equitable title until the loan is paid off.
Ovid holds equitable title and Rollie holds legal title. With most installment sales contract, the seller retains legal title and the buyer receives equitable title until the loan is paid in full.
An example of this type of leasehold estate is a month-to-month lease. Estate at sufferance Estate at will Estate for months Periodic estate
Periodic estate
Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. What is one of the key determinants that show that something is real property (also known as a fixture)? Internal or external to the house Made of the same material as an interior or exterior wall Over or under a certain value Permanently affixed to the property
Permanently affixed to the property
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last? Conditions of sale Location Market conditions Physical characteristics
Physical characteristics
Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here? Anticipation Contribution Plottage Progression
Plottage
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold? Alluvial Littoral Prior appropriation Riparian
Prior appropriation The doctrine of prior appropriation grants water rights based on need, not adjacency. Hal and Sara likely live in the western part of the U.S. where many states subscribe to this doctrine.
Marcia Weinstein died, and her property wasn't held in a trust. Thus, her estate will go through ______ to ensure her property is distributed to her beneficiaries in accordance with her will. A moderator An attorney Estate planning Probate
Probate
Kelvin isn't sure how to read this legal description, but his agent said something about reading it from right to left. Here's the description: "The north half of the northwest quarter of Section 6, Township 8 North, Range 68 west of the 5th principal meridian." What land description method did surveyors use for this piece of property? Lot and block Metes and bounds Monument and benchmark Rectangular government survey
Rectangular government survey
Victor's family has always owned this particular lake house. When he was little, he remembers the "beach" being no more than four feet wide before the waterline. Now Victor brings his own children to the lake house, but the beach is almost seven feet wide. What natural process could explain the beach being bigger? Avulsion Erosion Reliction Riparian
Reliction is the process by which water gradually recedes, which reveals new land.
Under the Tax Reform Act of 1986, real estate investors are allowed to take a maximum of $25,000 in losses to offset their income, under certain conditions. These losses can only be taken if they apply to which type of property? Manufacturing properties Mixed-use properties Rental properties Retail properties
Rental properties The first $25,000 of a loss from rental properties can be used to offset income if the investor is actively involved in the management and operation, and if the investor's taxable income (before the deduction is applied) does not exceed $100,000.
Which of the following scenarios is an example of corrective maintenance that may be overseen by a property manager? Hiring an HVAC contractor to inspect the air conditioner annually Oiling door hinges every six months Replacing a section of roof after a leak Replacing furnace filters according to the manufacturer-suggested timeline
Replacing a section of roof after a leak
Ron's company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures? If Ron leaves them in place and the lease expires, he has three months to remove them. Ron is required to leave the fixtures if they're attached. Ron is required to take the fixtures and return the premises to its original condition. Ron may take the fixtures as long as he repairs any damage caused by removal.
Ron may take the fixtures as long as he repairs any damage caused by removal.
For farmers and others who live in rural communities, a ______ loan may be available. One benefit of these loans is the option for a longer payback period. Farm-to-closing-table Fresh farmers Organic producers Rural development
Rural development
Frank owns a property on which there is walkway to the beach shared by his neighbors on either side. What is Frank's property? Dominant estate Gross estate Prescriptive estate Servient estate
Servient estate The servient estate is the giver of the rights to use the property—the property which serves the public good.
The Housing and Community Development Act of 1974 added which protected class to federal fair housing law? Color Disability Religion Sex
Sex
Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this? Aesthetic zoning Downzoning Incentive zoning Spot zoning
Spot zoning
Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct? Rebecca can't work with Stacey without an agency agreement. Rebecca is acting in an agency capacity for Stacey. Stacey is Rebecca's client. Stacey is Rebecca's customer.
Stacey is Rebecca's customer.
The appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent? Determine highest and best use. Estimate the land value. Gather and analyze data. State the problem.
State the problem.
The economic principle that tells us that when supply goes up, price goes down is commonly referred to as what? Conformity Price dropping Regression Supply and demand
Supply and demand
A professional, on-site measurement of the lot lines and dimensions of a property is known as a(n) ______. Abstract Appraisal Inspection Survey
Survey
Tennyson represents Micah in the sale of Micah's house. Micah's parents offer to give Tennyson a bonus if the property sells within two weeks. Which of these statements is true? Tennyson can accept this payment directly from Micah's parents. Tennyson can't be compensated by anyone but the client. Tennyson may only be compensated based on the commission agreed to in the contract. Tennyson must disclose this compensation to Micah.
Tennyson must disclose this compensation to Micah.
John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent? The covenant against encumbrances The covenant of further assurances The covenant of quiet enjoyment The covenant of seisin
The covenant against encumbrances
Your buyer client, Harry, is making an offer on a home that uses an HVAC system manufactured in 2005. What's important about this? Because the system is older, Clean Air Act regulations require Harry to carry extra homeowner's insurance as a condition of his mortgage. Clean Air Act regulations require Harry to replace the HVAC system, which is too old to operate legally. The EPA likely prohibits the refrigerant used in such an old system, so Harry's home warranty may not cover necessary repairs. The EPA requires the seller to provide a certificate proving the old prohibited refrigerant has been replaced with the approved refrigerant before the transaction can close.
The EPA likely prohibits the refrigerant used in such an old system, so Harry's home warranty may not cover necessary repairs.
The federal Government in the Sunshine Act is part of what? The first amendment The Freedom of Information Act The Sarbanes-Oxley Act The SPEECH Act
The Freedom of Information Act
Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement? Because the listing agreement is with the brokerage firm, the agreement continues. The agreement terminates by operation of law. The brokerage firm can agree to terminate the agreement if the Tolsons choose to not work with another agent. The Tolsons may choose to terminate the agency agreement.
The agreement terminates by operation of law.
Liquidated damages in real estate contracts is often limited to what? An amount equal to twice the earnest money deposit. An amount not to exceed 5% of the purchase price. The amount of earnest money paid. The amount of the buyer's down payment.
The amount of earnest money paid. Most residential real estate contracts limit the amount of liquidated damages to the amount of the earnest money deposit.
When a government entity exercises its powers to create zoning ordinances, what must be followed? Federal zoning codes The area's comprehensive plan The state's zoning codes Universal design standards
The area's comprehensive plan
Which of these statements accurately represents one of the required elements in a deed? The deed includes an act of conveyance. The grantee must be legally competent. The grantee must be of legal age. The grantee must sign the deed and provide consideration.
The deed includes an act of conveyance.
What must happen for an easement to be terminated due to abandonment? The dominant estate owner takes action that shows a clear intent to stop using the easement. The owner of a servient estate buys the dominant estate property. The owner of the dominant estate finds an alternate route and no longer needs the easement. The owners of both estates decide not to use the easement.
The dominant estate owner takes action that shows a clear intent to stop using the easement.
When seeking a property appraisal, which of these factors requires a lender to comply with AIR? The borrower requests it. The lender wishes to sell the loan to Fannie Mae. The loan amount is more than $250,000. The transaction is federally related.
The lender wishes to sell the loan to Fannie Mae.
When calculating loan-to-value ratios, which of the following will be used by the lender? The appraisal value The greater of the sales price or appraisal value The lesser of the sales price or appraisal value The sales price
The lesser of the sales price or appraisal value
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? Aidan and the purchaser will negotiate the expense of bringing the house up to code. Aidan must bring the house up to code. The contract will fail to close because of code violations. The house is probably not required to meet the current code.
The house is probably not required to meet the current code.
Which of the following is an example of easement termination by merger? The dominant estate owner takes action that shows a clear intent to stop using the easement. The owner of a servient estate buys the property of the dominant estate. The owner of the dominant estate has an alternate route and no longer needs the easement. The owners of both estates decide not to use the easement
The owner of a servient estate buys the property of the dominant estate.
Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have? They'll need a 90% loan-to-value ratio. They'll need to put down at least 25%. They should have a loan-to-value ratio of 80% or less. They will need to qualify for an FHA loan.
They should have a loan-to-value ratio of 80% or less.
Zelda has fifteen acres of wetlands with a channel on the back edge of her property that leads to a waterway. She would like to clear the channel of gravel and sediment so she can get her fishing boat in and out more easily. Which of the following is a true statement? No permit is required since the Zelda is only removing gravel and sediment. She can't remove the gravel and sediment. This activity may require a permit since a wetland area is involved and special federal and state protections may be in place. Zelda doesn't need a permit since the channel is on her property.
This activity may require a permit since a wetland area is involved and special federal and state protections may be in place.
What's the primary purpose of a BPO? To assist buyers in determining an offer amount or sellers in determining a listing price To assist insurers in determining the amount of liability insurance to place on a property To assist lenders in determining the marketability and potential sales price for distressed properties To ensure that the value of a property is sufficient as collateral for a mortgage loan
To assist lenders in determining the marketability and potential sales price for distressed properties
Considering where pipelines and utilities can be located and their impact on the overall look in the subdivision are factors of ______. Development cost District zoning TDR Topography
Topography
The ease with which the property can be conveyed to another describes which factor that influences value? Demand Scarcity Transferability Utility
Transferability
Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______. Beneficiary Executor Trustee Trustor
Trustor The trustor is the person who creates the trust. The trustee is the person who carries out the person's wishes.
The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation. American Agricultural Lending Service Farm Credit System USDA Farm Service Agency USDA Rural Development Program
USDA Farm Service Agency
When you use a comparative market analysis to calculate a suggested listing price range for a particular property, which of the following actions will you take Adjust prices from all properties listed or sold within a one-mile radius of the subject property. Calculate price range based on data from expired listings and pending sales. Use adjusted prices from comparables and refine a range using active listings, expired listings, and possibly pending listings. Use the prices of sold comparables and active listings, adjusted for time listed.
Use adjusted prices from comparables and refine a range using active listings, expired listings, and possibly pending listings.
Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________. Area variance Moratorium Special use permit Use variance
Use variance This is a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.
The Richards family farm is located on a 10-acre parcel of land, which is very rare to come by in their area. However, the house is rundown and in need of many repairs. Most buyers in the area are looking for a move-in ready home, which means they would need to either look elsewhere or wait several months for the home to be renovated. Which factor is most negatively impacting the value of the Richards' property? Demand Scarcity Transferability Utility
Utility
Gross potential rental income ‒ ______ = effective gross income Expense reimbursements Late rent Net operating income Vacancies and credit loss
Vacancies and credit loss
What's the capitalization formula used in the income approach? Value = cap rate minus income Value = income multiplied by cap rate Value = income plus cap rate Value = net operating income divided by cap rate
Value = net operating income divided by cap rate
You represent a seller as a listing agent. Do you owe any duties to buyer agents? No, you owe no duties Only if the agent works in your office Yes, the duty to cooperate on showings Yes, the same duties you owe to the seller
Yes, the duty to cooperate on showings