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One thing you should ask any buyer prior to showing a property is ____________
"Are you working with another agent?"
Charlie and Wendy's debts look like this: $400 credit card payment and a $150 payment for a student loan that will be paid off in six months. They're anticipating a house payment close to $1,500. The couple's combined gross monthly income is $6,500. When calculating ratios, the lender doesn't consider any debt with 10 or fewer payments remaining. What's their current housing ratio?
23.1%
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 Closing Disclosure must be provided to the borrower at least ______ days before the day of closing.
3 days
For conventional loans in which the loan-to-value ratio is in excess of a certain percentage, lenders generally require private mortgage insurance. What's this percentage?
80%
Suppose an appraiser tells a seller a ballpark range of value for the listed property. What is this considered, per USPAP?
A formal opinion of value
Because it needs to be removed in writing, the removal of the contingency is known as ________ removal.
Active
Gabe is preparing an appraisal for 123 Baker Street. He notes that one of the comparables he's using has a $5,000 fireplace feature that's not included in his subject property. Gabe should:
Adjust the comparable downward
What should you always start with during a buyer presentation?
Agency disclosures
If a contract contains ______, the courts generally interpret the agreement against the party who prepared it.
Ambiguity
Determine whether the fees are considered paid outside of closing fees.
Appraisal fee - yes title search fee - no credit report fee - yes home inspection fee - yes
Improvements to old houses ________.
Are often worth less than the same feature on a new house
In Georgia, buyer representation agreements ______.
Aren't limited to any a state-specified form
Mortgage Company A reviewed and accepted the appraisal they ordered, but your buyer/borrower found a better interest rate and terms at Mortgage Company B. What can be done so Company B can close the transaction quickly?
Ask Company B to send a new appraisal request
What should you do if a buyer refuses to sign the buyer representation agreement and you can't answer the buyer's objections?
Ask the buyer to agree verbally to be loyal to you.
Your client, Andrew, is in the process of buying a home. You should be sure to do which of the following?
Attend the inspection
The Home Valuation Code of Conduct (HVCC) requires that appraisers ______.
Be assigned by a third party, such as an appraisal management company
In order to be a valid contract, the financing agreement must:
Be documented in writing Include an accurate legal description of the property that is being pledged as collateral, including how title is held Include a detailed statement of the amount of the loan and how it will be repaid Be formed by parties who are legally competent Be signed
What's happened to disclosure requirements over the years?
Become stricter
In Georgia, what's true about working with a buyer as a customer?
Brokers are entitled to a commission if they identify the property that the buyer customer purchases.
What's the primary purpose of the buyer presentation?
Build trust
A buyer has just called you for the first time. Why should you ask how the buyer got your name?
Buyer pre-qualification purposes
Buyer Angus is suing a seller, Danielle, because she failed to disclose the damaged masonry on the side of the house. The damage was clearly visible. Angus's case has no legal merit because ______.
Buyers may not recover for nondisclosure of a material defect that could be easily detected
Why should you suggest that sellers think like buyers when determining the list price for their property?
By taking the buyer's point of view, sellers can see whether their pricing is reasonable for the market.
Calculate prorated expenses
Completed
Prepare closing statements
Completed
With the cost approach to value, what is the replacement cost?
Cost to build a functionally equivalent improvement
Exterior peeling paint and worn carpet are examples of ______.
Curable physical depreciation
Increased interest rates
Declining housing prices
Which of the following are other disclosures that lenders must provide to borrowers?
Escrow closing notice Mortgage servicing transfer Partial payment notice
Most hurdles that delay or prevent closings fall into one area: final walk-throughs.
False
You are preparing a CMA for your clients. Their home is more than 50 years old. Your clients completely re-landscaped last year, adding a waterfall, pond, and outdoor kitchen area. They spent more than $30,000 creating this unique outdoor space. You cannot find any other recent local listings that include this type of key feature. According to the information in this unit, which of these options would return the most accurate value estimate?
Find properties similar in all ways except the landscaping, and add to them 80 percent of the cost of the landscaping
You've explained to a buyer the benefits of an exclusive buyer representation agreement, but she decides against it. After asking for her loyalty, what should you do next?
Have the buyer sign a written waiver declining exclusive representation
Spiro, a real estate professional, just finished touring a property he'd like to list for sale. When talking with the owner about the property and comparing it to other properties recently sold in the area, he tells the owner that in his opinion an appropriate list price for the home is $350,000. What, if anything, did Spiro do wrong?
He didn't do anything wrong.
Marco, a buyer in Atlanta, wants to terminate his buyer's representation agreement with his agent. What is TRUE about this situation?
He may or may not owe an amount under the terms of the agreement.
finding how much interest is paid at the end of 30 years
Here are the numbers we need: 360 (total payments), $1,798.35 (monthly payment), and $335,000: $1,798.35 x 360 = $647,406 ‒ $335,000 = $312,406.
Decreased taxes
Higher housing prices
Your client, Octavia, needs to sell quickly. She paid $250,000 for her condo, and her neighbor's condo sold two years ago for $300,000. A similar condo across town, however, recently sold for $400,000. Which factor should impact your list price strategy?
How soon Octavia needs to sell
Jan has been approached by a buyer. The first question she should ask is, ________.
How the buyer got her name
Alistair has decided to work with you as a customer instead of a client. You explain to him the ministerial tasks you're permitted to perform on his behalf, including ______.
Identifying property and property information
Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?
Income generated
High unemployment
Increased supply of homes
What does the inspection contingency allow?
It authorizes inspections only.
Lily is considering signing a buyer representation agreement with you, but she's unconvinced. "What's in it for me?" she asks. What's one major benefit to her when she signs the buyer representation agreement?
It means you're representing her and not the seller.
Why is it recommended that buyers hire an inspector before purchasing a property?
It reduces the risk to the buyer.
Which of the following statements is TRUE regarding a buyer presentation?
It should build trust and rapport and soft pedal any sales pitch.
What's another name for a nonconforming loan?
Jumbo loan
While buyers may not be familiar with buyer representation agreements, most ______.
Know about listing agreements
Which of these situations represents reproduction cost in the cost approach to value?
Kristina's antebellum mansion in New Orleans was severely damaged by a hurricane. She spends several years repurposing materials from other similar homes to rebuild it exactly as it was before the hurricane.
Which of the following duties does the agent owe the buyer under the terms of a buyer representation agreement?
Locating and showing properties
Chuck is a broker for a firm that has 22 agents. He established a policy that all agents with less than 2 years on the job must have their contracts reviewed by him prior to execution. This would be considered which one of the following steps of risk management?
Mitigating risk
The tone of voice you use matters ________ the words you say.
More than
In order to calculate the value of a house by the income approach, if you know that the GRM derived from the comparables is 67X, you would:
Multiply the gross monthly rental income by 67X
Debt coverage ratio =
Net operating income/Annual debt service
Distribute funds to seller and brokers
Not Completed
Caleb, an appraiser, has not yet completed his appraisal, but MLS figures and public records indicate that the property will "make value." If the lender asks Caleb for an opinion on that matter, Caleb may ________.
Not answer the question
The agreement includes a security instrument, which is what allows the lender to foreclose on the property if the borrower defaults on the loan. The agreement takes one of these forms:
Note with mortgage Note with deed of trust Note with security deed
Regarding buyer representation agreements, Georgia REALTORS® ______
Offers several sample agreements that a brokerage can use as is or adapt
What is the purpose of the preliminary title report?
Offers to issue a title insurance policy
Using the income approach, the value of a business is based ________.
On its future ability to generate income
In Georgia, what can a broker do for a buyer customer, as compared to a client?
Only ministerial tasks
How can you help avoid loan fraud and other potential problems?
Put everything in the contract or agreement.
If a foreclosed property doesn't move at auction, it reverts to the bank and is considered to be ______.
Real estate owned (REO)
If a buyer asked you to perform the home inspection to save money, what should you do?
Refuse
The three types of appraisals most commonly used are the _______, the cost approach and the income approach.
Sales comparison
Your client's offer asks that the seller replace the roof, in addition to other requests. The seller agrees to some of the other requests, but not the roof, which is a big deal to your client. You should do which of the following?
Skip the roof issue for now and gain your client's approval on the rest of the offer
When formulating a desired outcome, you should ______.
State the outcome in the positive
Regarding VA loans, which of the following is true?
The VA guarantees 25% of the home loan amount.
For loan pre-qualification, what do lenders base their estimates on?
The accuracy of a borrower's disclosures
With whom may the appraiser discuss value?
The appraiser's client only
Who should fill out the buyer representation agreement?
The buyer
Whose responsibility is it to review the preliminary title report?
The buyer and the buyer's agent
Ned learned that a new buyer has been looking for a property for more than a year. One potential problem with this is that ________.
The buyer may be looking for an impossible to find property
calculating what interest is a month
The calculation is $335,000(loan amount) x 0.05(rate). This gives us $16,750. We divide this number by 12 (because we want the amount of interest per month, and there are 12 months in a year).
An exclusive right-to-represent agreement provides _______.
The highest level of representation
What is the URAR?
The most widely used appraisal reporting document
If the buyer who's party to an Exclusive Buyer Brokerage agreement has an issue or claim, how should they resolve it?
The parties should mutually select an arbitrator.
When it comes to the income approach to value for residential rental properties, what's the definition of a gross rent multiplier?
The ratio of a comparable's sale price to its monthly gross income
Mark, a prospective buyer, fell down a flight of stairs while touring a property. The seller failed to disclose a faulty railing. Who could be sued?
The seller
Who completes the property condition disclosure statement, and who is liable for the information provided?
The seller completes it, and the seller is liable for the contents.
One truism about Internet buyers is that ________.
They expect immediate response
The ______ is the most widely used appraisal reporting instrument.
URAR
Ethical standards for appraisers are spelled out in the ______.
USPAP
When do most lenders require that a property must have been appraised?
Within the 12 months that precede the effective date of the appraisal
Using preprinted purchase agreement forms is the standard, but ______.
You should know what to fill in the blanks
Net operating income ÷ capitalization rate =
approximate value
Perform a title search
completed
A buyer found you through a sign call on your listing and asks for a showing. If your state allows it, you should prepare for ________.
dual agency
A prequalification establishes an approved line of credit.
false
Getting prequalified requires a formal verification process.
false
Darby's loan exceeds the conforming loan limit and is known as a ______.
jumbo loan
Value (purchase price) × cap rate =
net operating income
Pay off existing loans
not completed
Record deed and loan documents
not completed
To force Deidra to sell him the home at the agreed upon price, Winston can go to court and seek an order of ________.
specific performance
To whom may an appraiser reveal a property's value estimate?
the client
From a financing standpoint, which DCR provides the least risk?
the highest is best (1.3)
When Don reviews the document that says he pledges the property he just purchased as collateral for his loan, he notices the terms "grantor" and "grantee." Who is the grantee?
the lender
During the preapproval process, a(n) ________ verifies the borrowers' credit and determines if the loan will be approved.
underwriter
