Recent National Exam Challenging Questions

Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan? $1,038.59 $1,042.29 $1,044.79 $1,750

$1,042.29

Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment she can afford? $1,075 $1,152 $1,176 $1,512

$1,152

Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing? $106,250 $156,250 $31,250 $81,250

$106,250

Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax? $242,500 $249,700 $255,000 $257,000

$255,000

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment? $35,025 $54,150 $57,000 $62,100

$54,150

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 25 to 33; 28 to 36 28 to 36; 25 to 33 33 to 36; 25 to 28

25 to 28; 33 to 36

Related to title insurance, what is "subrogation"? A covered party grants permission to the title company to pursue the party who caused a claim or loss. The act of conveyance when the seller turns over all property rights to the buyer with a clear, marketable title. The process by which the lender receives coverage under a title insurance policy the borrower has purchased. The process by which the title policy pays out any claims to the buyer or lender.

A covered party grants permission to the title company to pursue the party who caused a claim or loss.

Which act sets guidelines for public and common use areas at housing developments? Accessibility Options Act Americans with Disabilities Act Fair Housing Act Multi-Family Dwelling Act

Americans with Disabilities Act

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

Eileen is preparing a report pursuant to the terms of a property management agreement. This report shows actual results from operating the property versus what had been projected. What report is she preparing? Budget comparison statement Cash flow report Operating budget Profit and loss statement

Budget comparison statement

Which legislative act prohibits certain types of electronic communication? CAN-SPAM NO-SPAM SPAM-CAN SPAM-JAM

CAN-SPAM

What does the metes and bounds system use to develop a property's legal description? Compass headings and directions Plat references Principal meridians and base lines Townships and sections

Compass headings and directions

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing? Averaging Bracketing Conformity Correlation

Correlation

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. Credited $1,207 Credited $742 Debited $1,207 Debited $742

Credited $1,207

What are the two types of physical depreciation? Curable and incurable Economic and material Internal and external Qualitative and quantitative

Curable and incurable

Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this? Aesthetic zoning Downzoning Incentive zoning Spot zoning

Downzoning

The doctrine of laches refers to the ______ of restrictive covenants/deed restrictions. Creation Enforcement History Types

Enforcement

Which type of deed conveys real property from a decedent's estate to a buyer? Deed in trust Executor's deed Quitclaim deed Referee's deed

Executor's deed

Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally? Attorney general's office Consumer Reports Federal Trade Commission National Bar Association

Federal Trade Commission

Which act created an agency to investigate antitrust practices? Attorney General Act Clayton Act Federal Trade Commission Act Sherman Antitrust Act

Federal Trade Commission Act

The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this? Fee simple absolute Fee simple defendable Fee simple determinable Fee simple subject to a condition subsequent

Fee simple determinable

Another term for a valuation is ______. Assessment Comparative market analysis Evaluation Formal appraisal

Formal appraisal

What does the income approach to value rely on when valuing properties that are five or more units? Gross income multiplier Gross rent multiplier Monthly gross rent Sales comparison

Gross income multiplier

Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home? Her heirs, as described in her will or according to state law, will receive the property. Her home will transfer automatically to a co-owner. The property will have no owner and must be sold at auction. The property will revert to a remainderman.

Her heirs, as described in her will or according to state law, will receive the property.

To meet the requirements of the statute of frauds, an agreement must clearly identify the contract's subject matter, present the contract's essential terms and conditions, and ______ to be enforceable. Achieve a result that's fair to all parties Be agreed to verbally Be reviewed by an attorney Identify the contracting parties

Identify the contracting parties

The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this? Aesthetic zoning Downzoning Incentive zoning Spot zoning

Incentive zoning

Which one of the following tasks must a licensee perform for seller clients? Assist the seller in finding someone who can effectively market the property. Inform sellers of their responsibility to make all required property condition disclosures. Set the listing price of the property based on comparables. Tell the sellers how to deposit the buyer's earnest money into their personal checking account.

Inform sellers of their responsibility to make all required property condition disclosures.

Property ownership gives the title holder a bundle of rights. What's significant about the concept of a bundle of rights? It describes an infinite number of rights associated with property ownership. It describes the ability to separate one right from the others while leaving the rest of the bundle intact. It's an ancient Latin term meaning the property owner's rights can't be taken away. The property owner must identify each separate right that will be purchased; they're not automatically included in a transfer.

It describes the ability to separate one right from the others while leaving the rest of the bundle intact.

Which ownership type is defined by four unities: time, title, interest, and possession? Freehold estate Joint tenancy Tenancy by the entirety Tenancy in common

Joint tenancy

Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan's property. Stan filed a civil legal action against Emile. What will the court use to determine the actual lot line? Aerial photographs Affidavit from surveyor Legal descriptions of both properties Testimony from long-time neighbors

Legal descriptions of both properties

John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property? Add 185 to 225. Multiply 185 by 225, then divide by four. Multiply 185 by .5; multiply your answer by 225. Multiply 185 x 225.

Multiply 185 by .5; multiply your answer by 225.

In which of these situations has the licensee compromised the duties of loyalty and disclosure? Diana failed to present the most recent offer to the seller because it was under list price. Hillary, in working with the seller, told the buyer about a material defect the seller hadn't disclosed. Josia, in listing Rob's property, failed to disclose to Rob that he represents the seller. Nate didn't tell his client about a conflict of interest related to the sale of the client's property.

Nate didn't tell his client about a conflict of interest related to the sale of the client's property.

All terms and conditions the client authorizes must be specified and included in an offer to sell or buy. When is it acceptable to offer the property under other terms? Never Only when your designated broker approves it Only when you're reasonably certain you can get your client a better deal by doing so Only when you're representing the seller

Never

Elaine owns a home on a flag lot behind James. Her easement for a common driveway runs through James's property. What kind of ownership rights does Elaine have of the driveway that runs through James's property? Absolute Non-possessory Possessory Temporary

Non-possessory

Patsy's home had been on the market for five weeks, and two brokers had buyers who were ready to make offers. If Patsy accepted one of those offers, the corresponding broker would be the only one to earn a commission. What type of listing does this describe? Exclusive agency Exclusive right to sell Net listing Open listing

Open listing

Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up? File a suit to quiet title. Present the signed deed to the new buyer. Present the signed deed to the title company. Record the signed deed.

Record the signed deed.

The legal description of the project, easements that run with the land, and street and traffic patterns are all under consideration when a local planning board ______. Calculates the developer's project application fee Considers granting a special use permit to a developer Reviews a developer's project plat Reviews the zoning for a developer's project

Reviews a developer's project plat

Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this? Joint liability Retroactive liability Several liability Strict liability

Strict liability

Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this? Estate in severalty Joint tenancy Tenancy by the entirety Tenancy in common

Tenancy in common

Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings? Carpenter ants Fire ants Powder post beetles Termites

Termites

Which of these is a TRUE statement regarding truth in advertising violation penalties? A cease-and-desist order from the Federal Trade Commission related to deceptive advertising becomes effective 30 days after issuance. The Federal Trade Commission determines the severity of the penalty based on the severity of the violation. The Federal Trade Commission typically imposes jail time for truth in advertising violations. The severity of the civil penalty for violating truth in advertising laws is based on the number of consumers affected by the deceptive ad.

The Federal Trade Commission determines the severity of the penalty based on the severity of the violation.

Which statement regarding fee simple defeasible estates is true? A fee simple absolute estate becomes fee simple defeasible when the owner dies intestate. A fee simple defeasible estate is granted upon the completion of a court-ordered condition. The estate includes only some of the bundle of legal rights; inheritability isn't included. The estate includes the full bundle of legal rights, but ownership is based on a condition.

The estate includes the full bundle of legal rights, but ownership is based on a condition.

Shalonda is looking to purchase a home for $325,000 using a conventional loan. She has $49,000 to place as a down payment on the house. Which of the following statements is true? Her down payment on the loan only needs to be 3.5%. She must come up with another $16,000 to purchase the house. She will be required to purchase MIP. The loan-to-value ratio exceeds 80%.

The loan-to-value ratio exceeds 80%.

Landlords must abide by all fair housing, civil rights, and ADA regulations as well as comply with all state and federal landlord-tenant legislation. What responsibility does the property manager have related to this? ADA regulations don't impact residential housing units, so neither the landlord nor the property manager is responsible for these regulations. The landlord is solely responsible for upholding all these laws and regulations. The property manager, as the day-to-day manager for a property, is the only one liable for upholding these laws and regulations. The property manager, as the landlord's general agent, is responsible for upholding all the laws and regulations required of the landlord.

The property manager, as the landlord's general agent, is responsible for upholding all the laws and regulations required of the landlord.

Which of these guarantees is offered by a general warranty deed but not a special warranty deed? The property is free of debt or other claims taken on by the grantor during the ownership period. The seller is legally allowed to sell the property. The seller owns the property (title). The seller will defend against all claims against the property's title.

The seller will defend against all claims against the property's title.

The seller and ______ must approve a short sale. A broker A short sale specialist The new buyer The seller's lender

The seller's lender

If there is some kind of defect on a property's title, what effect does this level of transferability have on the property's value? The value falls. The value remains unchanged. The value rises. Transferability has no effect on value.

The value falls.

When Stacy's clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act? This is illegal under RESPA because it's considered a kickback between settlement service providers. This is illegal under RESPA because it's considered a referral. This is legal under RESPA because Stacy has proven experience with the mortgage broker she referred, so it's an honest transaction. This is legal under RESPA because the referral fee didn't involve the grantor of credit.

This is illegal under RESPA because it's considered a kickback between settlement service providers.

What type of insurance protects a lender's collateral interest in a property that's being financed? Collateral insurance Hazard insurance Mortgage insurance Title insurance

Title insurance

A quitclaim deed does which of these? Transfers a property with only the covenant of warranty Transfers the property with full covenants Transfers without warranty any interest or title the grantor has when conveying it Transfers with warranty any interest or title the grantor has in the property when conveying it

Transfers without warranty any interest or title the grantor has when conveying it

Chelsea's mother owns several rental properties and intends to keep them to pass on to the family. Chelsea holds a special power of attorney to manage the rental properties, including working with the property manager to place and evict tenants as necessary. Which of these would violate the POA? At the property manager's recommendation, Chelsea evicts a long-time tenant for failure to pay rent. Chelsea instructs the property manager to prepare the quarterly financial reports. Without consulting her mother, Chelsea decides to completely refurbish one of the properties. Without consulting her mother, Chelsea hires a plumber to fix a major plumbing problem in one of the properties.

Without consulting her mother, Chelsea decides to completely refurbish one of the properties.

Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements? No, because Gus won't be using a real estate professional. No, because there's no transfer of title involved. Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit. Yes, because the bank is also the lender for his home mortgage. If he'd used a different lender, RESPA would not apply.

Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.