Real Estate State Practice 2
Donald purchases a $310000 home. The lender requires 2% down on the first $100000 and 4% on the balance of the purchase price. The lender is charging 3 discount points. Calculate the discount points due at closing
$100000 X 2%= $ 2000 down $210000 X 4%= $ 8400 down $2000 + 8400= 10400 $310000-10400= 299600 LOAN $299600 X 3% (points)= $8988
A home is being purchased for $275000. The buyer agrees to an 80% loan with the seller paying $5000 the buyer's closing costs. What amount must he have to meet his down payment requirement?
$275000 X 20%= $55000
Bill pays his property tax bill of $980 for the calendar year. He signs a purchase and sale contract on June______ and close the sale on July 15 the contract states, that the seller is responsible for expenses on the day of closing. What is the amount of prepaid taxes due back to Bill at closing? Assume 360 days per year.
$449.17
An apartment complex generating $70000 annually in net income is purchased based upon a 5% cap rate. What would the owner's equity gain be if the net increases to $100000 per year?
$600,000
Ted and Carol want to buy a house that is listed for $ 105,000. The seller accepts the offer they wrote for $5000 less than list price. They have 20% down payment and need to get an 80% LTV mortgage. Their lender offers them a 30 Yr. mortgage at 5.5% interest. The taxes are $1494 per year and the insurance is $480 per year. How much is their monthly PITI payment? Be sure to use the amortization table.
$606.40
The owner of a home with no liens obtained a home equity loan of $75000, secured by his home. Several months later, he borrowed $15000and then $13000, each loan secured by a lien against his home. He then lost his job and failed to pay his past due property taxes of $7500. His loan went into default and his home was foreclosed. Assuming that the liens for all three homes were recorded in a timely manner, what is the order of the payoff to the lienholders?
$7500, $75000, $15000, $13000 Property taxes, mortgage, Lien 1, Lien 2 (EXPLANATION)
A national company desires a parcel of land which must be 4 times the size of its proposed building. If the building design includes 20,000 square feet then which of the following minimum sized lots should be purchased?
1 acre = 43560 2 acres= 87120 4 times building 20000s square-feet 4 X 20000= 80000 2 acres
A home is being purchased with an 80% loan. The buyer is making a $15000 down payment in addition paying all typical buyer's loan costs. What was the sale price of the home?
100%-80% loan= 20% 15000/20%= $ 75,000
Written offers to purchase Real Estate in New Jersey must be presented to the seller within
24 hours
Properties in an area are assessed at 50% of their value. The tax rate is $6 per $100 of assessed value. How much is the tax bill is the property is valued at $72000?
72000 x 50% = 36000 36000/100= 360 360 x 6%= $2160
Real Estate taxes that are paid in advance are prorated on the closing statement as
A debit to buyer a credit to seller
Which of the following best defines a material fact in the real estate context?
A fact significant enough to influence an individual's decision about whether or not to purchase
A buyer's agent is NOT permitted to tell a buyer that
A former occupant of a property has AIDS
Which of the following is a permitted free offering?
A free dinner for attendees at a homebuyer's evening seminar
A license may use the term "REALTOR" or "REALTOR ASSOCIATE" only if the licensee is
A member of the National Association of REALTORS
Which of the following is the BEST example of the protection offered by the Fair Housing Laws to a person with a disability?
A person who is blind uses a seeing eye dog must be allowed to rent in a building that does not allow pets
Which of the following analyze must be prepared by a certified appraiser?
A property valuation report supporting a federally- related loan application
A seller's property condition disclosure constitutes
A statement of the seller's actual knowledge
In its advertisements, a New Jersey real estate company may NOT
Abbreviate its regular business name
In a jurisdiction where the common law of agency governs real estate activities, a broker has a single agency relationship with his buyer. They pass "For Sale by Owner" property that the buyer is interested in viewing. The broker secures a commission agreement with the seller as his customer. The seller tells the broker that he needs to sell the house quickly and will accept less for a quick closing. The agent must tell the buyer
About this information because the buyer is his principal
Under New Jersey Real Estate Commission rules, a licensee's obligations to the public include all of the following EXCEPT
Accepting any reasonable commission offered by a seller in the course of negotiating a listing agreement
A real estate licensee is assisting her buyer client in determining the feasibility of purchasing a restaurant that was built in 1965, and observes that the flooring is a checkerboard pattern of black and cream colored 9 by 9 tiles, worn but not broken or cracked. Which of the following would be the most appropriate action for the licensee to take?
Advise the buyer that the floor tile very likely contains asbestos, and that an expert should be consulted about whether to test it and options for dealing with it
According to the CAN SPAM ACT, every email advertisement for real estate services must do all of the following EXCEPT
Advise the recipient that it will take 180 days to remove the recipient's name from this email list
The common area of a condominium development is owned by
All owners as tenants in common
When a licensee takes a listing to sell a new multi-family residential property, the document that must be provided to the owner is
An Attorney General's Memorandum on Discrimination
A buyer and seller agreed upon a selling price for a property and both signed a written contract. As part of the contract the buyer reserved the right to cancel the sale if the buyer's house, which has on the market, did not sell within 30 days, this contract is
An Executory Contract
A property was listed with a broker, but the owners advertising the property found a buyer and negotiated the sale, they still had to pay the commission to the broker. The broker must have had
An exclusive right-to-sell listing
The clause designed to ensure that a broker will receive a commission if negotiations with a ready, willing and able concluded after the listing agreement has expired is called
An extension or "Tail Clause"
A lender may add 1/12th of the estimated cost of the annual property taxes and hazard insurance on the mortgaged property to the loan through a
An impound, escrow or reserve account
After announcing that a new City Park will soon be developed, homes in the immediate are experience a rise in value. This is an example of which of the following principles of value?
Anticipation
What does the mortgage lender most often rely on when deciding how much is safe to lend on a parcel of real estate?
Appraisal Report
The sellers have listed their property for sale because they are in a difficult financial situation and would like to get the house sold quickly. If one neighbor in the area asks why that client is selling, the agent should response by explaining that they
Are looking to sell their house
An order for payment from the Real Estate Guaranty Fund issued as a result of conduct by a licensee will result in
Automatic revocation of license with no eligibility for reinstatement until the fund is reimbursed
A potential buyer signs a contract with a seller but then decides not to buy. The seller may sue potential buyer for specific performance because the contract was
Bilateral Contract
Latino families were beginning to move into the neighborhood that had previously been all white. A local broker passed out flyers stating "Sell now before it's too late". We have beautiful new homes with attractive financing and good schools". These flyers would likely be viewed as
Blockbusting
After making three sales in six weeks to growing families with young children in a neighborhood of mostly retirees, a broker decided to seek additional listing there. He went door to door suggesting that homeowners who enjoyed living in their quiet neighborhood might wish to sell now and move to a different area where there would not be so many noisy children. He listed four houses during the marketing campaign. This was an example of
Blockbusting because he persuaded them to list because of an influx of a protected class.
According to common-law fiduciary principles, a real estate licensee acting solely as a buyer's agent will not disclose any confidential information received from the
Buyer
When operating in a disclosed dual agency relationship, a licensee must disclose the
Buyer being laid-off after submitting a mortgage application
A seller is offering his property for sale in as is condition. A buyer enters into a contract with the seller and has the home inspected. A latent defect is found that is known to, but not disclosed by, the seller. The buyer
Can void the contract due to the seller's failure to disclose the latent defect
Salesperson P leaves the employ of Broker A. One of the listing at broker A's firm has agreed to list Salesperson P. Which of the following is TRUE?
Cannot be taken because it belongs to Broker A
When using the cost approach to develop an estimate of property value, which step would NOT be part of the process?
Capitalize the net operating income utilizing the current LIBOR rates
Which of the following is NOT an example of a fixture?
Cast Iron Garden Bench
What should buyers insert into the purchase offer to make sure they would NOT have to go through with the purchase if they are not met?
Contingencies
According to the New Jersey Law Against Discrimination, which of the following classes is NOT protected?
Convicted felons -- Conviction
According to the New Jersey Real Estate Licensing Laws, what method of payment may NOT be accepted in the purchase of real estate?
Credit Card
Janet is he property manager for a 20-unit building. What steps would she take when asked to prorate the rent if a new tenant wants to move in on the 8th day of the month in June?
Divide the monthly rent by 30 days and multiply that number by 22
Two unmarried people purchased a property together with unequal interests in the property. Which statement is true?
Either owner may sell her interest without permission of the other owner
In many states, usury laws
Establish a maximum rate of interest allowed for loans
With regard to the termination date in listing contracts, which of the following statements is CORRECT?
Exclusive agency listings must have a definite termination date
Which of the following statement in an advertisement would be an example of non-discriminatory language under HUD's Fair Advertising Guidelines?
Female seeking female roommate
Which of the following is NOT prohibited by New Jersey Real Estate Commission Rules?
Firing a new salesperson who did not achieve specific sales goals
A salesperson preparing a written offer from a prospect may do so by filling in the blanks on a pre-approved broker's contract form if the subject property is a
Five-acre unimproved lot zone as single- family residential
A deposit check from a buyer paid upon the submission of an offer may be held without being deposited into the broker's escrow account
For no more than five business days after receipt of the money
In an advertisement seeking a roommate to share rent, under what conditions it is legal to include language that might otherwise violate discriminatory laws when seeking a tenant or tenant roommate?
Gender specific language is allowed as long as the advertiser seeks to share the living quarters
Which of the following types of deeds provides the purchaser of real estate the greatest protection of any deed?
General Warranty Deed
Whenever a salesperson receives cash to be held in trust, the salesperson MUST
Give a written receipt signed by the salesperson to the prospective purchaser an immediately give the cash to the broker
A salesperson has the opportunity to list 6-PLEX? That is 100% rented. The salesperson does not need to account for any expenses in order to predict the price at which the building will sell is known as
Gross Rent Multiplier (GRM)
A low loan-to-value ratio indicates a
Higher Equity in the property
Which of the following groups is NOT protected by the Federal Fair Housing Laws?
Homosexuals
When should you be sure that the seller completes a Lead-Based paint and/or Lead-Based Paint Hazards form?
If the house was built prior to 1978
According to the Real Estate Licensing Law, a real estate licensee can provide a rebate of the commission to a buyer
If the licensee is the broker
1. The purpose of Regulation Z
Inform the public of credit costs
A land contract is sometimes known as an
Installment Contract
Two days after closing, the seller gives a $500 bonus check to the selling agent. The agent
Instruct the seller to issue the check to the agent's broker
A condominium complex is exempt from the fair housing requirements regarding familial status
Is intended for at least one person 55 years of age or older per unit
A contract is terminated if
It is impossible for one of the parties to perform
Which of the following statements about airborne radon is true?
It is inexpensively detected and mitigated
A property located in county F but close to county G may not be advertised "In the vicinity of county G" UNLESS
It is placed in a newspaper under the municipality heading in which the property is located.
Title insurance has allowed for more accessible loans for buyers. This is because
It reduces the risk of loss due to title defects
Who establishes zoning ordinances?
Local Authorities
All of the following activities constitute property management for which licensure is required EXCEPT
Maintenance Calls
Under the New Jersey Real Estate Licensing Law, which of the following is an unlicensed assistant or secretary NOT permitted to do?
Make telephone calls to request rent payments
A seller has listed a home with a broker for $112000 the seller is leaving for a 45-cruise midway through the listing period, and authorizes the broker through a limited power of attorney to accept any offer of all cash at a price of $108000 or more pending his return. The broker receives an offer for $110000 all cash. The broker
May accept the offer
In which of the following would prevent a seller from providing marketable title?
Mechanic's Lien
What is required to establish mutual assent?
Meeting of the Minds
The railroad tracks near a property are being moved closer to the development where a client is buying home. This fact
Must be disclosed because the change is likely to create significant noise and air pollution hazards
In general option contract
Must be in writing
According to New Jersey Real Estate Licensing Laws, which of the following is a requirement for any advertisement made by a salesperson
Name of the salesperson firm
As required by the New Jersey Real estate Sales Full Disclosure Act, before signing any contract for the purchase or lease of a property registered with Real estate Commission, the purchaser or lessee MUST BE
New Jersey Public Offering Statement approved by the commission
Which of the following is NOT a characteristic of negative amortization?
Occurs in every interest only loan
All of the following types of out-of-state real estate marketed in New Jersey through New Jersey Brokers must be registered with the Real Estate Commission EXCEPT
Office Condominiums
A candidate passes the prelicensure course examination on November 8. The candidate must apply for the license within
One year from completing the pre licensure course
Maintains a real estate agency and terminated two salespersons in this situation, the broker is REQUIRED to take all the following steps EXCEPT
Permit them to remove original sales and listing contracts from the broker's office
When using photographs or illustrations of people in advertising property, the broker should avoid
Photographs that are nonexclusive
Which of the following would automatically be included in the sale of a property?
Plumbing Fixtures
The lead paint addendum that must be presented with the purchase and sales contract for certain older homes
Provide the buyer with the opportunity to waive the right to a lead paint inspection
An acknowledgement
Provides evidence that a signature is genuine
A lender places a property for auction at a foreclosure sale. A number of bids are offered at the sale but none of the bids are satisfactory, so the lender decides to keep the property in inventory. This property becomes
Real Estate Owned (REO)
In New Jersey, the fee which MUST be paid when fee simple title to a parcel of real estate passes for a consideration from the seller is called
Realty Transfer Fee
A seller talks with three different agents to establish a probable selling price for a home. The first agent's market analysis suggests a price around $79900. The second agent's market analysis suggests approximately $81500. The third agent doesn't research any comparable but simply lists the home at $91500. Three months later the property sells for $76900. What duty to the principal has the third agent breached?
Reasonable Care
What is one way that a lender can reduce the buyer's total monthly payment amount so the buyer is able to afford it?
Reducing the interest rate by charging an extra point
The purchase and sales agreement provides for release of earnest money to the seller after the buyer's property inspection. The sellers request it prior to the property inspection. The broker should
Release the earnest money on the buyer's verbal approval
A CORRECT statement about transaction brokers is that they
Represent neither the buyer nor the seller
A buyer-broker locates a property that is listed with another broker. The buyer makes an offer through the buyer-broker and an agreement of sale results. In this situation, the buyer-broker is acting as
Representative of the buyer and owes no fiduciary obligations to the seller
The Pinelands Protection of 1979 is a New Jersey law that
Restricts development on real estate in certain designated areas
A seller has given a counteroffer to the buyer. If the seller receives a second offer for a higher price that means that the seller can
Revoke the counteroffer to the first buyer
A tax against a specific property resulting from a public improvement that benefits that property is known as
Special Assessment
Which of the following is least likely to be considered in establishing the value of a property by the sales comparison approach?
The Capitalization Rate
Which of the following is TRUE of a VA loan?
The Department of Veteran Affairs guarantees to lender that they will not suffer a loss if the veteran defaults
Broker A has created an extremely aggressive business model which has allowed for very quick success in the market. The other brokers in the market area have decided not to allow Broker A to show their listings or show Broker A's listings. This would violate
The Sherman Antitrust Act
1. A salesperson acquired a listing. The supervising broker approved the listing and it was put in the MLS. The property was shown by several agents who brought an offer to be presented to the owner. If no agency agreement besides the listing agreement has been signed, which of the following is TRUE?
The broker and the listing agent represent the seller
If a license mentions MLS when advertising in a newspaper, the New Jersey Licensing law requires
The full name of the Multiple Listing System
The buyer was given a loan estimate at the time of the application for the mortgage and it is now three business days before the closing. The appraisal and the closing disclosure have been given to the buyer. The buyer's broker meets her client at the property for a walk-through and to review the documents. Which of the occurrences will result in the buyer having the right to an additional three days to review the documents?
The loan product was changed form a fixed rate to one that is adjustable
In a platted subdivision there may be separate covenants, conditions, and restrictions. If this is the case, and they are stricter than the local zoning ordinances, which of the following is typically TRUE?
The more restrictive provision will apply, and the courts will enforce if neighboring owners complain of a violation
The seller has entered into an exclusive right to sell agreement with Terry Hill. Ms. Hill presents the seller with an offer to purchase. Which of the following is appropriate?
The seller is under no obligation to accept the offer or make a counteroffer
Under what conditions may a salesperson accept a bonus offered by a seller for services rendered?
The seller pays the bonus to the broker, who passes is on the salesperson
The seller has required that the buyer must use his title insurance company and that brokers reduce their portion of the real estate commissions, increasing the seller's net proceeds
This is illegal according to RESPA
Regarding contracts for the sale of residential property, a New Jersey real estate licensee may prepare the contract of sales for one to four family properties provided that a
Three-day attorney review clause is included
1. Which of the following statements about Branch Offices is INCORRECT?
Two salespersons may be designated to share supervising responsibilities
Seller A entered into an option contract with Buyer B. The contract allowed for a price of $200,000 which Seller A will honor for a 12-month period exclusively for Buyer B. This would be an example of a
Unilateral Contract in which only seller A has made a promise to perform
The buyer wrote an offer to purchase a property and gave the broker $10000 earnest money. The offer required the seller to respond within six days. Three days later the buyer decided to terminate the offer has asked for the earnest money to be refunded. What will normally happen to the earnest money in this situation?
Until the seller has accepted the offer, the buyer has right to terminate and receive a refund of deposit
Standard title insurance policy would protect a buyer
When the seller has forged his ex-wife signature on the deed
A seller wants $120000 for his home, and still owes $20000of his original loan at 7% interest. The current interest rate is 12%. A buyer can pay $60000 down and wants to carry a mortgage that includes the seller's $20000 existing mortgage and the remaining $40000 for a total of $60000 at an interest rate of 10%. What kind of mortgage loan is this?
Wraparound
Quality Supermarkets has taken occupancy of a retail building and has a long-term lease. As part of their fit-up, they bolt to the floor their meat and dairy counters and checkout stands. When Quality Supermarkets vacates the property at the end of the lease, will Quality Supermarkets be legally entitled to remove these features?
Yes, if removed prior to the end of the lease
A 15-year-old inherited some property from a grandparent. The 15-year-old put the property for sell and received an offer. Can the 15-year-old cancel the agreement to sell property?
Yes, the contract is voidable because the seller is a minor
