ACEABLE FINAL EXAM STUDY TERMS (GA) QUESTIONS AND ANSWERS, Exams of Business Administration

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ACEABLE FINAL EXAM STUDY

TERMS (GA) QUESTIONS AND

ANSWERS

what is one way a co-op sales contract differs from the sales contract for a single-family home? the co-op sales contract includes a section detailing what the buyer must do it they hope to gains the corporations board approval (One of the most important differences is that purchasing cooperative shares requires the approval of the corporation. So the co-op sales contract includes a section detailing what the buyer must do if they hope to gain the corporation's approval (usually called "board approval"). which of the following BEST defines a circumstance requiring a real estate license? performing a real estate act for another party with the intent to receive compensation (Performing a real estate act for another party with the intent to receive compensation best defines the real estate license requirement.) What is the MOST COMMON clause in listing agreements? sign posting clause which document provides a detailed list of each partys expenses at closing? the closing disclosure how is debt service ratio calculated? by dividing net operating income by total debt service What is NOT NEEDED when prorating an expense? real estate transfer amount (usually paid by seller) what mortgage is short-term and paid out in draws? construction mortgage (lender pays funds to borrower in installments, called draws, as the construction progress) Molly wants to buy a property downtown so she will be closer to the local nightlife and have a shorter work commute. Her interest in a property is greatly influenced by the economic significance of the property's location. What is Molly influenced by? Situs (economic significance of a propertys location) Seller Jordan chooses to not disclose an easement on his property and the buyer never asks about it. What is this an example of? Silent fraud

Agent Laura completed a CMA on a property her client was interested in making an offer on. What kind of value was Laura attempting to determine? Market Value (CMA = comparative market analysis) what does "vicarious liability" mean? broker is responsible for their licensees actions or omissions what is easement by condemnation? easement in which property is taken via eminent domain and serves as a declaration that a structure must be closed because it's unfit for occupants (An easement by condemnation is an easement in which private property is taken for public use via eminent domain. It serves as a declaration that a structure must be closed or demolished because it is unfit for occupants.) How would an appraiser be able to adjust for the size of the property using the sales comparison approach? they would need to find the price per square foot of the comparable property Laureen is a license holder in Georgia. Her clients, a married couple, are asking her how they should take title on the home they're purchasing. She urges them to speak to their attorney about their options. Did Laureen handle the situation correctly? Why or why not? yes, because even though couples decide how to co-own property in Georgia, lawyers and not real estate agents should help the decide how What general purpose do deeds serve? they allow property to be transferred and conveyed (deed = transfer of legal title) what is a red flag for predatory lending? unexpected, undisclosed lender fees that appear at closing which is NOT an example of deed restriction? Joleen is required to use a licensed electrician to build her home (building code is not a deed restriction) What deed provides the greatest protection for the grantee (Buyer)? general warranty deed which of the following is an example of express agency? ted calls broker joe asking for help selling his condo. (Express agency is created when the principal explicitly appoints the broker/agent to act on their behalf. This can be accomplished orally or in written form.) A real estate agent publishes the following ad: "New three-bed, two-bath home can be yours for just $20,000 down!" Does this trigger a TILA disclosure? Why or why not? yes, mentioning a down payment amount triggers a disclosure (A down payment amount triggers a disclosure because the amount you put down would depend on things like your interest rate, loan terms, etc.) What two types of agency have to do with when a third party is led to mistakenly believe that agency exists between a principal and an agent?

Ostensible agency and agency by estoppel (Ostensible agency and agency by estoppel both have to do with when a third party is led to mistakenly believe that agency exists between a principal and an agent.) Which of these is a method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself? cost approach (The cost approach is a method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself.) You're doing a CMA on a five-bedroom, three-bath, 2,700-square-foot property. In your area, bedrooms are worth $20,000, baths $10,000, and square footage $200 per square foot. Your comp is a five-bedroom, four-bath, 2,900-square-foot home that recently sold for $540,000. What is the adjusted value of your comp? $490,000 furmula - > $540,000 - (200 x 200 = $40,000) - $10,000 = $490, On the advice of a real estate broker, Harold calls up Lender Lisa to get a ballpark figure as to how big of a mortgage loan he could afford. The Lender Lisa asks Harold how much he makes and, based on what Harold tells her, states a general range for which Harold could probably get financing. What step of the loan approval process is Harold in at this point? pre-qualification (Harold has participated in the first step of the loan approval process known as pre- qualification. The lender, taking Harold at his word about his income, provided Harold with a very general estimate regarding the amount for which he would likely be able to get financing.) When Bart approached his lender for a loan to buy a ranch, he was given two offers, one with the loan secured by the property being purchased and one as an unsecured note. Which of the two loan offers do you think had the better (lower) interest rate and why? the secured note would be perceived as a lower risk, so it would come with a lower interest rate offer. (Even without knowing many of the details, it's very likely that the secured loan would feature the better interest rate. Having property serve as collateral on the loan lowers the risk for the lender, and the interest rate offered will reflect that lower risk.) In order to protect the public interest, Georgia requires real estate professionals to get licenses. What kinds of licenses are offered? broker, associate broker, salesperson, community association manager Chuck signs Linda to a salary-based employment contract to sell used cars on his lot. He also points out to her that he has a contest for all his salespeople that she can win if she meets the sales goal. What can be said of the contracts that Chuck has entered into with Linda? employment contract is bilateral, contest is unilateral (Linda's employment contract with Chuck is a bilateral contract wherein both parties are making promises. The contest is a unilateral contract between Chuck and Linda wherein he makes a promise, but she doesn't. If she chooses to perform and meets the sales goal, Chuck is bound to the contract.)

Kelsey and Elliot have a contract that literally spells out all the terms and conditions of their lease agreement while Mike and Carl have an unspoken understanding regarding what Carl needs to do in exchange for living in Mike's basement. How would you describe these two contracts? kelset and eliot have an express contract. Mike and carl have an implied contract. Both may be legally binding The government seizes Farsch's property to expand a highway. What is this an example of? eminent domain and involuntary alienation what refers to the permanence of land? fixity what is an example of police power? zoning (police powers are zoning laws, building codes, private land use controls, and the application of rules) The interest in an estate wherein, upon the death of the life estate owner, full ownership reverts back to the original owner (grantor) is known as: revisionary interest (The reversionary interest is the interest in an estate wherein, upon the death of the life estate owner, full ownership reverts back to the original owner (grantor). what is the relationship between an escalator and a multiple offer situation? buyer should only include an escalator if they are pretty sure seller will recieve multiple offers (Don't use an escalator unless you're pretty certain that there will be multiple offers. If the property is not as hot as your buyer thought, you've exposed their upper limit (and therefore weakened their bargaining power) for no reason.) Title X requires that: sellers of properties built prior to 1978 must make a disclosure of hazards related to lead-based paint A certificate of occupancy is issued by a governmental authority to indicate that: a building is ready and fit for inhabitants What is a land survey process in which a licensed land surveyor starts at a readily identifiable point of beginning and defines the boundaries of a property in terms of distances and compass directions, finally returning to the point of beginning? metes and bounds (Metes and bounds is a land survey process in which a licensed land surveyor starts at a readily identifiable point of beginning and defines the boundaries of a property in terms of distances and compass directions, finally returning to the point of beginning.) Ophelia put a client's down payment into a trust account that also held her personal finances. The next day, she used money from the trust account for a car payment. This is an example of: conversion (Conversion occurs when funds (which have likely been commingled) are actually spent on something. Ophelia has converted funds.) If a lender wishes to understand the gap between the value of a property and the cost of the loan being used to purchase that property, what risk assessment tool would they use?

loan to value ratio A non-amortizing loan of $95,000 has an interest rate of 4.5%. How much will be paid in interest over the year? $4,275 (0.045 x $95,000 = $4,275) What is the name for the element of a valid deed this is something of value exchanged by the parties as evidence of agreement to the terms of a contract? consideration (Consideration is something of value exchanged by the parties as evidence of agreement to the terms of a contract.) What purpose does BRRETA, the Brokerage Relationships in Real Estate Transactions Act, serve? protects both licensees and customers by putting protective measures around agency. (Georgia passed BRRETA in 1994 to put extra protective measures around the practice of agency and protect both licensees and customers.) An ad reads, "Beautiful house with gorgeous hardwood floors and an unbelievable view." The language used is: puffing (exaggerated claims) You are doing a CMA on a four-bedroom, three-bath, five-year old property. Choose the BEST comp for that property from this list: 3 bed, 3 bath, 10 year old property located .25 miles away that sold 4 months ago (The others are either too far away, too old, or too dissimilar.) What is panic peddling? illegal practice of causing homeowners to sell their homes by creating fear that members of protected class are moving in (Panic peddling, also known as blockbusting, is the illegal practice of causing owners to sell their homes by creating fear that members of a protected class are moving into the area) What kinds of loans are eligible for a three-day right of rescission under Regulation Z? loans where already-owned homes are used as collateral (they have 3 days right of rescission under Reg Z) A tenant in an apartment building was concerned when they found out that the property was being foreclosed on. There are still 6 months left on the lease. Which of the following lease clauses would protect the tenant and ensure they can stay until the end of their lease, even if there is a new landlord? non disturbance clause (ensures the tenant will remain in place) After Marvin signed a purchase contract to take possession of one of Ralph's Jack Russell Terrier puppies once it was weaned from the mother, Marvin learned that this breed can be destructive if left alone all day in an apartment. Marvin might:

have to complete transaction (If Marvin cannot show that he was deceived or otherwise tricked by Ralph into entering into the contract, Marvin is obligated to complete the transaction. A contract is a legally binding agreement that cannot be abandoned without cause.) A property cost $500,000 to build. It was built 20 years ago, and has 30 years of useful life remaining. The land on which it was built is valued at $100,000. What is the value of this property using the cost approach? $400,000 (Calculate depreciation percentage: 20 divided by (20+30) which is 0.4. Calculate the property value: from the property cost ($500,000) subtract the depreciation amount (500,000 x 0.4) and add land value ($100,000). The math looks like 500,000 - 200,000 + 100,000. The property value is $400,000.) A property manager can deny a tenant's rental application based on: tenants history of bankruptcy Which of these situations could be resolved with a quitclaim deed? an unprobated will has caused a cloud on a houses title (A quitclaim deed would resolve that cloud on the title by ensuring none of the deceased's potential heirs will later make a claim of ownership.) A client request or instruction that is either illegal or unethical does not fall under the duty of: obedience (The duty of obedience does not apply when the principal's requests or instructions are illegal or unethical in any way.) Which of these statements best describes a limited partnership? has at least one partner, who is personally liable for the company's losses, and one limited partner, who is shielded from liability (A limited partnership has at least one general partner, who is personally liable for the company's losses, and one limited partner, who is shielded from liability.) what does a lifetime cap do? limits increase of interest for the life of the loan (A lifetime cap limits the increase of interest for the life of the loan.) which of the following is NOT a form of evidence title? equitable title (Evidence of title could be an opinion of title, certificate of title, Torrens certificate, or title insurance.) All of the following are exempt from the Fair Housing Act EXCEPT: bill, a real estate agent who is renting 2 units in a fourplex that he also lives in With amortized loans, the borrower is: paying in arrears (With amortized loans, the borrower is paying for what they already owe instead of paying for what they will owe.) Michelle is interested in purchasing a home where the listing agreement does not allocate compensation for cooperating brokers. She has a signed agreement with her buyer's agent for a 2% commission rate. What does this most likely mean for Michelle?

she will need to pay the commission rate of her buyers agent on top of the final sales price (If the listing agreement does not allocate compensation for cooperating brokers, the responsibility for the compensation of the buyer's agent is the responsibility of the buyer.) What is FALSE about counteroffers? during the countering process, the seller is not free to sell to someone else (License holders need to make buyers aware that while they are countering, the property IS still available and the seller is free to sell it to someone else. The other answer choices are true about counteroffers.) Corbin took out a non-amortized loan of $550,000. He ended up paying $42,250 in interest over the year. What was Corbin's interest rate? 7.6 % (To find the interest rate, you just need to divide the part (42,250) by the whole (550,000). 42,250 ÷ 550,000 = 7.6%) What is the connection between the theory of a state and its predominant foreclosure process? title theory states tend to use a nonjudicial foreclosure process whereas lien theory states typically employ judicial foreclosure (Lien theory states typically employ a judicial foreclosure process while title theory states tend to favor the use of a nonjudicial process. Because the title in a title theory state is already in the hands of the lender or a third-party trustee, it does not require nearly the effort to foreclose on the property as it does in a lien theory state where the title is held by the borrower.) Which of these best describes a condo development, according to the Georgia Condominium Act? a mall, where store units are owned individually and common elements like plazas and bathrooms are co- owned by all owners (A mall where store units are owned individually and common elements like plazas and bathrooms are co-owned by all owners is a condo development in Georgia.) Which of the following is an example of a latent defect? asbestos that is completely hidden behind drywall (non visible) What is a fidelity bond? form of insurance that protects policyholder by covering any losses they might incur as a result of theft or fraud by. specific individuals (A form of insurance that protects the policyholder by covering any losses they might incur as a result of theft or fraud by specified individuals is a fidelity bond.) What is the perimeter of a rectangular lot whose sides measure 58 feet long and 34 feet wide? 184 ft (add all sides) What is the second phase of an environmental assessment? testing What is the revenue a property could generate if 100% of the units in the building were leased at market rate? potential gross income (Potential gross income is the revenue a property could generate if 100% of the units in the building were leased at market rate.) Which of the below would the ADA NOT cover?

a free-standing brokerage with 10 employees (Many brokerages fall within the scope of the ADA because of their location (perhaps in a mall or other retail facility, which is bound to follow the requirements of the ADA), or because the brokerage has 15 or more employees.) If a loan is partially amortized, then: the monthly payments will not be enough to pay off the principal within the loans terms (If a loan is partially amortized, then its monthly payments will not be enough to pay off the principal within the loan's terms.) Who determines the compensation for the transaction coordinator? the buyer and the seller and the coordinator Perry signed a graduated lease with her landlord. Which of the following is TRUE? perrys rental payments will increase over time on specific increments (A graduated lease is a lease in which the rental rate increases over time in specific increments.)