real estate
Using the capitalization formula, what is the value if the net operating income is $20,000 and the rate of capitalization is 10%?
$200,000
Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier's check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What's the condo's purchase price in whole dollars?
$265,000
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 loan origination fee?
$3,200
A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing?
$320,000
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
Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?
$4,000
The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan?
$4,025
If you sell a home for $143,000, and your commission rate is 5%, what is your commission on the sale of this home?
$7,150
Alison and Brent are financing their house purchase of $232,500 with an FHA loan. Their credit score qualifies them for the minimum down payment. What do they need to put down?
$8,137.50
How would you calculate the transfer tax if it's $0.35 per $1,000 of the sales price ($400,000)?
(400,000 ÷ 1,000) x .35
Related to real estate financing, how much is a point?
1% of loan value
As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?
10 years
Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. Assuming every transaction for the month was shared with a cooperating brokerage, what is Jared's brokerage's commission rate?
6.5%
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%
When real estate licensee Brian discovered that real estate licensee Arnold was using a "Choose Your Neighbor" letter to market a property without also listing the property in the MLS, in the local paper, or even putting a for sale sign in the yard, what charge could he bring against Arnold to the National Association of REALTORS®?
A charge of agreeing to discriminate by limiting access to the property
Roy purchased a newly constructed home with a warranty that covers major structural defects for 10 years, and systems (HVAC, electrical, plumbing) for three years. After living in the home a few months, Roy notices the following defects and submits them all. Which one will likely be covered by the warranty?
A split ceiling joist in the basement
What is a transfer tax?
A tax that's applied to the transfer of property from one person to another
Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.
Accepting liquidated damages
Martha made an offer to buy Drake's home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______.
Accepting partial performance
Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?
Alda tells Marge that she's hired an inspector to perform a property inspection.
Camille, a buyer, wants to change the price already agreed to in a sales contract. What document should she use?
Amendment
What is a special flood hazard area?
An area where flood insurance is mandatory
_______ is a standardized measure for interest rates and other costs of the loan.
Annual percentage rate
Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?
Are you aware of any structural issues with the property?
Will was sued for damages related to a car accident in which he was involved last year. As part of the proceedings, the court placed a lien against his primary residence. What type of lien is this?
Attachment
Tristan's offer has been signed by all parties and delivered back to the seller. This means that ______ has occurred.
Binding acceptance
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
Breanna signed a purchase offer stating she'd buy Kathy's home for $150,000. Kathy rejected that offer but said she'd sell it to Breanna for $200,000. Breanna agreed to these terms, and they added their signatures. Which of the following statements is correct?
Breanna accepted the offer Kathy made.
Olivia owns lakefront property and therefore holds littoral rights to use the water as she sees fit because she owns up to the average high-water mark. Which of the following is she NOT permitted to do under her littoral rights?
Build a dam to create a bigger beach area on her frontage.
One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.
Bulk zoning
Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.
Color
Which one of these is an example of the doctrine of estoppel?
Corrie shows Marvin several properties and prepares CMAs for each. She assists him in making an offer on one. He becomes difficult to work with, and she then says she's not his agent because they don't have a signed agency agreement.
Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement?
Credit of $721.50
Which fiduciary duty is missing: loyalty, reasonable skill and care, obedience, confidentiality, accounting, and ______?
Disclosure
Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement.
Dominant
You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?
Dual-license dual agency
A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of?
Escalator
What's the best definition of personal property?
Everything that's not real property
When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?
Exclusive right to sell
The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?
Executed
Jerry and Lewis 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 Jerry and Lewis have?
Executory
Mike's been friends with Tim since college. They often work together: Mike flips houses and Tim's an appraiser that he uses frequently. It works out great for both friends and Mike definitely gets a better appraised value on the flips Tim handles. For every appraisal Tim handles for him, Mike gives him a $100 gift card. In what illegal practice does it sound like they're engaging?
Falsely inflating appraisals
Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?
Federal Trade Commission
Stella owns a building in an area of town that's being revitalized. Local property owners believe property values will increase considerably over the next 10 years. Stella wants to entice long-term tenants with a low initial rent but have the flexibility to increase rent as her property's value increase. What type of lease should she consider?
Graduated
Johnstone's Realty is a new discount, menu-based brokerage firm. Its approach usually results in a lower listing commission rate than other firms offer. Johnstone's also offers a lower cooperating brokerage split than most other firms. Business is booming for Johnstone's, and the remaining firms in town are concerned. These brokers agree to not show Johnstone's listings to their buyer clients. What is this an example of?
Group boycotting
Marion gave her granddaughter Sheila the deed to a brand new home, on the condition that Sheila complete her PhD in astronautics. When Sheila dropped out of school and got a job as a greeter at a big box store instead, Marion ______ to regain ownership of the property
Had to take legal action
When is a cease and desist order effective?
Immediately upon issuance
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?
Inspection contingency
When a borrower first obtains a mortgage, which portion of PITI receives most of the mortgage payment?
Interest
Which of the following is considered unauthorized practice of law?
Interpreting the legal consequences of a client's actions
Kevin is having an appraisal performed on a piece of property he's interested in buying. He's especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?
Investment value
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have?
Joint tenancy
Which of these is an example of severability?
Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force.
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.
Letters of apology to all affected consumers
Which of the following scenarios best describes a net listing?
Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.
Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?
Marsha's second mortgage on the property, which was properly recorded in January.
Even though the laws are different in every state, sellers must typically disclose ______, information that would be important to a person in deciding to purchase a home.
Material facts
Which of these situations does the Americans with Disabilities Act address?
Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.
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
A client has asked her agent for a 24-hour notice on showings. The agent knows this will have a negative impact on the number of showings. Which duty is in conflict with reasonable skill and care?
Obedience
Brynn's listing agent told potential buyers that all offers on Brynn's property would be considered at 5 p.m. on May 3. By that date and time, four offers had been made. The persons making these offers are the ______.
Offerors
Joshua just got a copy of the preliminary report from his title company and is surprised to see that there's a mechanic's lien against his property. What does he have to do to clear this lien?
Pay the bill that resulted in the mechanic's lien.
A surveyor created a lot and block survey for a new residential development. The first thing she did when she surveyed the new neighborhood was to reference a metes and bounds land description. From there, she divided the land into numbered lots and blocks. This output is known as a _______.
Plat map
What is the term for an increase in property value caused by the joining of two neighboring parcels of land?
Plottage
Rohit bought 31 acres of undeveloped and mostly forested land. He is planning a weekend with friends where they'll camp on the property while scouting good locations to place a cabin. Which right in the bundle of rights allows Rohit to do the camping weekend on undeveloped land?
Possession
Trudy loved her new neighbors. The investor couple bought every available house on Trudy's block and was working hard to renovate them and increase their value. Trudy decided that she'd sit back, relax, and let her property's value go up, too, thanks to ______.
Progression
What must be in place for a real estate licensee to manage properties for others for compensation?
Property management agreement
The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?
Ratify the implied agreement by getting a signed agency agreement.
Duke's client has asked him for advice on a legal matter. Based on the duty of reasonable skill and care, what should Duke do?
Refer his client to an attorney.
Which of these statements about the homeowner's right of redemption is true?
Rights of redemption window with REOs may have expired.
Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?
SARA
Which of these scenarios is an example of two parties rescinding a contract?
Sherman, the seller, decides not to sell his condo after all. Fortunately, his buyer, Alice, decided to join the Peace Corps. They mutually agree to cancel the sale with no penalty on either side, and each signs paperwork to this effect.
Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?
Sign the note, mark it "paid in full," and return it to Travis.
What is TRID?
TILA-RESPA Integrated Disclosures
Which type of pest may make mud tubes—tunnels that run along the walls—or shed tiny wings?
Termites
This act added familial status and disability (both physical and mental) to the existing federally protected classes.
The Fair Housing Amendment Act
Centennial Development is constructing a new condo. The exterior of the building is 60 feet square. Which of these about the air lot is true?
The air lot is the same perimeter as the condo and the lot on which it's built.
All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What's the biggest reason why it's important for your buyers to know this?
The county will likely impose an installation fee on Elm Street residents to cover the costs.
Debra's listing agent, Raj, just called to tell her that he'd received an offer on her house and an earnest money check for $4,500. "I'm on my way over to go through the offer with you. I think you'll like it!" Debra's excited, and she knows exactly what she wants to spend that $4,500 on. What's wrong with Debra's thought process?
The earnest money doesn't belong to Debra. It will be held in an escrow account.
Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result?
The house is probably not required to meet the current code.
Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?
The listing expires and is automatically terminated.
In completing a CMA, finding a comparable property that had a quick sale may indicate which of the following?
The market for similar homes is good
In pricing a property, what might expired listings tell the real estate professional?
The price at which a property won't sell
Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?
The statute of frauds
The seller disclosure indicates that the central air conditioning unit is 26 years old. Why might this worry Margot's buyers?
The unit may need to be replaced.
Charlie represents Sue, a buyer. Charlie is being paid by Claude, the seller, through his brokerage. What's true about this situation?
This doesn't change the agency relationships.
In which of these situations would the property most likely be conveyed with a trustee's deed?
Tim's property will be sold at auction in a foreclosure action.
Which of the following statements is true regarding timeshare estates?
Timeshare estates can be sold or passed down to heirs.
Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document?
To detail the estimated closing costs for Lawrence's loan
What is the primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?
To release homeowners from the responsibility of cleaning up hazardous substances if the homeowner didn't know they existed
While walking around the exterior of a rural home she's inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard?
Underground storage tank
Which one of the following property features could contaminate the soil?
Underground storage tanks
What type of timeshare involves a buyer agreeing to pay a one-time purchase price and an annual maintenance fee, and in return selecting an accommodation time and having the right to use the unit for a specified number of years?
Vacation
Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?
Voidable
Your buyer client Gwen wants to learn as much as she can and asks a lot of questions. Which of the following of Gwen's questions could you answer while staying within your scope of expertise?
What are the property taxes for this property?
Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?
When conditions are met at closing
Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?
Whether consent was voluntary
Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law?
Writing contract addenda or additional provisions that cover unfamiliar circumstances
Kennedy tends to be rather informal about her real estate business. Her daughter's teacher, Matthew, tells Kennedy that he'd like her help selling his house. Kennedy agrees and tells Matthew she'll perform all the tasks she'd perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?
Yes. Express agreements may be verbal or written.
