real estate 101
Michael paid $385,000 for his home, which now has an assessed value of $392,000. His tax rate is 0.51%. How much with his monthly taxes be?
$166.60
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?
$25,000
a buyer is purchasing a property for $400,000 his loan to value ratio is 80% the lender also charges a one-point loan origination fee. how much is the origination fee?
$3200
Hamish makes an offer on a loft in the city for $424,900 with a 10% earnest money deposit. The seller agrees, so Hamish secures an 80% loan. He needs to set aside funds for the mortgage tax as part of his closing costs. The rate in his area is $0.115 per $100. Calculate the mortgage tax Hamish will pay.
$390.91
A buyer is securing a home loan for $500,000. The state mortgage recording tax rate is $0.115 per $100. What's the mortgage recording tax?
$575
If you sell a home for $143,000, and your commission rate is 5%, what is your commission on the sale of this home?
$7150
You're working with a buyer who's purchasing a home that appraised at $80,000. The buyer is obtaining a 90% loan, and the lender will charge a one-point origination fee at closing. How much will the loan origination fee be?
$720
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
180
Traditionally, lenders' qualifying mortgage rules use a range of percentages to qualify for both the housing debt-to-income ratio and the total debt-to-income ratio. What are those ratio ranges?
25% to 28% for housing; 33% to 36% for total debt
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%
What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?
Substitution
Goldie and Kurt are looking at purchasing their first home. Their credit history is a little shaky and they don't have enough money saved to put down 20%. What type of loan seems most appropriate?
FHA
Which type of agent is an escrow officer?
Limited agent
which of these statements best represent what happens after a federal fair housing complaint is made
a fair housing specialist will review the complaint
which of the following statements best describes a sales contract
a legally binding written contract between a property's potential buyer and seller
When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent?
a mete
Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?
cambridge must allow an exception to the first-come first served policy for alton
Randall's clients, Carma and Trent, are looking for a mountain cabin. They tell Randall they'll pay him a $2,000 finder's fee if he finds the cabin that checks all of their boxes, and they close on it. Randall finds a likely candidate that's an FSBO, and negotiations begin. What circumstance is required for Randall to receive the finder's fee?
carma and trent must pay the finders fee to randalls broker
You have an agency agreement with Sam to list his property for sale. Because of this, what is Sam's relationship to you?
client
When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?
competition
which economic principle is related to supply and demand
competition
Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______.
cost approach
Javier represents Marcus, who's selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben's relationship to Javier?
customer
Homestead Realty had a listing agreement with Gertrude. The listing expired, and Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer client who's interested in Gertrude's property. What restrictions are in place for Homestead Realty?
homestead may represent the buyer must disclose material facts about the property and must maintain gertudes confidentiality
seth is a licensee working for a buyer, britney. britney wants to make sure the seller accepts her offer on a charming cape cod, so she tells seth she wants to make a full-price, non-contingent offer right away how should seth respond
i highly recommend a home inspection contingency with your offer to protect yourself in the event there are major defects with the house.
aamiras seller tom just received the news that his buyer are walking away from the sale. they weren't willing to proceed after they saw the inspection report. neither amire nor tom has requested a copy of the report. whats the most likely reason for that?
if they see the report they'll be required to disclose any adverse findings
to best prevent risk associated with licensee non-compliance with real estate- related federal regulations brokerage firms should do which of the following
include a review of related federal legislation in the policies and procedures manual and provide appropriate training
The Johnsons have owned a small restaurant for more than 20 years. It's open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.
inverse condemnation
what does a municipality do to verify that new construction meets building codes
issue building permits
what impact does the clean water act have on wetlands use
it governs the use, maintenance, and development of wetlands
Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille's listing. What's true about the agency relationships in this situation?
ivy is camilles sub-agent and owes loyalty to the seller
Martin placed all of his real estate investments in a trust, and the proceeds are distributed through the trust to his son Nathan. Martin still manages the properties indirectly, and Nathan currently benefits, as he's past the required beneficiary age of 18. What type of trust is this?
living trust
which type of antitrust violation occurs when real estate firms agree to divide their market so they dont compete with one another
market allocation
Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal?
meg must sign the deed and have her signature acknowledged
Marty a land surveyor was called out to survey a property after doing some research he located the legal description for the property in question now if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to bear creek. what type of legal description i smarty working for?
metes and bounds
which legal description method uses compass headings and directions
metes and bounds
which one of these statements by a licensee to a client crosses the line into the unauthorized practice of law
mist couples take ownership of property as. joint tenants so thats what id advice
taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. these are collectively referred to as the
nets
Select the situation that correctly represents a true conflict of fiduciary duties.
nikkis seller client has instructed her not to present offers that are less than the listing price. this is a conflict of nikkis duty of disclosure which requires her to present all offers and her duty of obedience
what are the main benefits to veterans of the VA-guaranteed loan program
no down payment no mortgage insurance, and no prepayment penalty
Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way, the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount, and her mother transfers the deed to Mary. What is happening in this scenario?
novation
What's the key difference between assignment and novation of a contract?
novation releases the original party from all obligations while assignment does not
Bart is under contract with Steven to purchase Steven's home. Bart is having second thoughts and intentionally misses a couple of contingency deadlines. Which of these statements is true?
one of stevens options is to move forward with the contract
which one of the following commercial property managers duties requires that they keep the property and facilities in good condition and schedule and budget for needed repairs and upkeep work?
oversee the maintenance of buildings on the property
when a contract has been breached the wronged party attempt to sue for punitive damages which are
payments in excess of any compensatory damages
Leigh Ann is a licensee. Her cousin, Carly, is interested in buying a house. Leigh Ann shows Carly how to look for properties online and runs some CMAs for her. When Carly finds a property she likes and asks Leigh Ann to help her make the offer, Leigh Ann decides she should ratify the agreement with Carly. What are Leigh Ann's options for accepting an agency relationship after the fact?
prepare an agency agreement or continue to assist carly with the purchase
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
which of the following scenarios is an example of corrective maintenance that may be overseen by a property manager?
replacing a section of roof after a leak
which of the following is a buyers agents task or duty
representing the buyers interest
which of these is an example of practicing within your area of competence
researching the property tax amount that a client will pay on the home hes purchasing
Homebuyer Nancy has made an offer to purchase a house and has plans to schedule a home inspection. How can her agent assist her in relation to the home inspection?
review the inspection report with her and discuss options
Under which of these circumstances might a licensee get paid after an agency agreement terminates
robs listing agreement with his seller client carmine terminated the agreement included a 30-day protection clause. five days after the agreement terminated, carmine sold the property to a family who had looked at the house during the listing period
In full seller disclosure states, whose responsibility is it to fully disclose all items on a seller disclosure form and any known material defects not listed on the form
seller
which of the following is an example of a fixture that is real property
shelves attached to the wall with brackets
Which form of co-ownership is a persons ownership inheritable
tenancy in common
which of these is the best reason for a brokerage firm to ensure that all associated licensees comply with federal real estate related regulations
the broker and brokerage firm are responsible for supervising associated licensees and may be vicariously liable if licensees dont comply
What is an encumbrance?
A defect on a title that can be monetary or physical
what does the CAN-SPAM Act stand for
Controlling the Assault of Non-Solicited Pornography and Marketing Act
Juan has finalized his comparables and is ready to determine a property's appraised value. How does he do this?
he reviews his process and places more weight on the most similar comparables that he believes to be the most valid
which of these is NOT an example of price fixing
Jake's firm agrees to charge all clients a listing commission of between 2% and 2.5%.
which of these is an example of conversion funds
Monica used funds from the firm's trust account to pay her firm's rent.
in which of the following situations can the state use its power of escheat
Nadine died with no heirs and no debt
Jansen and his listing agent just left the closing on Jansen's house. What kind of notice does Jansen, his agent, the buyer, and the buyer's agent have regarding the sale of Jansen's house?
actual notice
what does the federal trade commission regulate
advertising
what information about a property is the licensee required to disclose potential buyers
any material adverse information that the licensee has actual knowledge of concerning the physical condition of the property
what type of value is of interest to taxing authorities
assessed value
Lorenzo just received a prestigious fellowship to study abroad for a year! However, he'd just signed a one-year lease on his apartment. With the landlord's permission, he substituted his sister's name on the lease, and Lorenzo's sister will pay rent directly to the landlord. Lorenzo may still be liable for the rent if she misses any payments. This is an example of ______.
assignment
Belinda's client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______.
avoid unauthorized practice of law
which of the following is the most serious consequence of treating a customer as a client
breaching your duty to your actual client
what economic principle is related to a property's most profitable use that is both legal and economically feasible
highest and best use
buyers tony and sylvia know the postal address of the property theyre purchasing but are wondering about the legal descriptions of the property. where is the most likely place to find the legal description
deed
through which method of voluntary alienation does the grantor convey real property and transfer title to the grantee
deed
Zoe and Matt just purchased a home in the Shady Acres subdivision. While replacing some windows, they learned that all shutters facing the street must be either dark blue or dark green. This is an example of a(n) ______.
deed restriction
the truth in lending act requires lenders to make certain __ to consumers
disclosures
whats an upfront charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires
discount point
how do you calculate the monthly rate for annual taxes using a statutory year
divide by 12
the town of peteresville has just decided to restrict density in one area of town that previously allowed a higher density . this is also known as __
downsizing
Fewer buyers in a higher price range would create what kind of pressure on housing prices?
downward
what are two categories of comparison when evaluating comparables to a subject property in the market comparison approach
elements and units
what type of agreement would guarantee payment of commission regardless of who actually sells the property
exclusive right to sell agreement
a seller and a buyer have entered into a sales contract. they're about three weeks into the transaction with several terms of the agreement yet to be met. what type of contract do the parties have?
executory
the clean water act and the clean air act are both what type of regulations
federal
Jarod bought a home in which he has all the rights of ownership, including the right to sell and to convey the property to heirs at his death. What type of fee simple estate is this?
fee simple absolute
your client the harpers live in area B thats adjacent to area C area C was recently downzoned if the harpers believe the rezoning has harmed their property values what can they do
file a claim of inverse condemnation
Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?
get a low 4.925% APR
Wendell just listed Barb's home. Barb told him that there weren't any easements on the property, and Wendell hasn't seen a copy of the survey. What is Wendell's responsibility relative to the disclosure of any easements?
he only needs to disclose easements if theyre known
your client closed on their property yesterday but you still have some paperwork that you need to deliver to them as soon as possible. under which fiduciary duty are you acting
the duty of accounting
Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened?
the previous owners redeemed the property by paying all mortgage payments and fees
which of these scenarios would require an environmental impact statement
the us national park service plans to build a new visitor center on property owned by the federal government
why did the civil rights act of 1866 fail to have an imediate impact on practice
there was no agency put in place to enforce the laws
which one of the following protects the owner against financial loss if the real estate title has defects
title insurance
in a real estate transaction in which you represents the seller what are your duties to other parties in the transaction
treat them honestly and fairly
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
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?
use adjusted prices from comparables and refine a range using active listings expired listings and possibly pending listings
Which factor that influences value considers the property's function?
utility
which of the following can be defined as what a property is worth
value
as part of a sales contract the seller was supposed to provide a copy of the sellers disclosure to the buyer but the seller failed to do so. what type of contract is this
voidable
You're showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?
whether or not the addition was permitted
what happens when your client asks you to do something thats against the law
you must break your duty of obedience
Steve is preparing a comparative market analysis for the Joneses and has selected three comparable properties. How many adjustments should Steve make to the Joneses' property?
zero