Real Estate Brokerage Appraisal & Property Management Exam Q&A, Exams of Real Estate Management

Download Real Estate Brokerage Appraisal & Property Management Exam Q&A and more Exams Real Estate Management in PDF only on Docsity! REAL ESTATE BROKERAGE APPRAISAL & PROPERTY MGT COMPLETE EXAM Q & A 2024 1. A real estate broker is hired by a property owner to manage a residential building. The broker is responsible for collecting rents, paying expenses, maintaining records, and supervising repairs. The broker's compensation is based on a percentage of the gross income of the property. This type of arrangement is known as: a) a net lease b) a gross lease c) a management contract* d) a fiduciary agreement Rationale: A management contract is an agreement between a property owner and a manager who undertakes the operation and maintenance of the property for a fee, usually a percentage of the gross income. 2. A real estate appraiser is hired by a lender to estimate the market value of a property that is being offered as collateral for a loan. The appraiser uses three approaches to value: the cost approach, the sales comparison approach, and the income approach. The appraiser assigns the most weight to the approach that: a) is the most reliable and relevant for the type of property and market* b) results in the highest value for the property c) is the easiest and quickest to apply d) is preferred by the client or intended user Rationale: The appraiser should use professional judgment to determine which approach to value is the most reliable and relevant for the type of property and market, and assign the most weight to that approach in the final reconciliation of value. 3. A property manager is hired by a condominium association to oversee the common areas and facilities of a condominium complex. The property manager has to deal with various issues such as maintenance, security, budgeting, and enforcing rules and regulations. The property manager's authority and responsibilities are derived from: a) the condominium declaration and bylaws* b) the state condominium act c) the local zoning ordinance d) the federal fair housing act Rationale: The condominium declaration and bylaws are the legal documents that create and govern the condominium association, and define the rights and obligations of the unit owners and the property manager. 1. What is the primary purpose of an appraisal in real estate? a) To determine the market value of a property. b) To estimate the potential income generated by a property. c) To assess the physical condition of a property. d) To identify any legal issues related to a property. Answer: a) To determine the market value of a property. Rationale: Appraisals are primarily conducted to estimate the market value of a property, which is the most probable price that a property would bring in a competitive and open market. This information is crucial for real estate transactions, financing, and insurance purposes. 2. Which of the following is a characteristic of a well-managed property? a) High tenant turnover. b) Regular property maintenance and repairs. c) Frequent changes in lease terms. d) High vacancy rates. Answer: b) Regular property maintenance and repairs. Rationale: A well-managed property ensures regular maintenance and repairs to maintain the property's condition and attractiveness. This helps retain tenants, reduce vacancy rates, and enhance the long-term value of the property. 3. When determining the market value of a property, an appraiser will most likely consider: a) The property's current assessed value. b) The property owner's desired selling price. c) Recent sales prices of similar properties in the area. d) The total cost of construction for the property. the value of an income-generating property based on its potential income and expenses. It involves analyzing the property's net operating income (NOI) and applying a capitalization rate to determine the property's value. 11. A property's capitalization rate is determined by: a) The land's appraised value. b) The tenant's credit history. c) Market supply and demand. d) Market interest rates and risk. Answer: d) Market interest rates and risk. Rationale: The capitalization rate reflects the relationship between the property's net operating income (NOI) and its value. It is influenced by market interest rates and perceived risk associated with the property, such as vacancy rates, lease terms, and market conditions. 12. Which of the following factors is NOT typically considered during the property management process? a) Routine property maintenance. b) Tenant screening and selection. c) Property acquisition or sale. d) Negotiating lease agreements. Answer: c) Property acquisition or sale. Rationale: Property management primarily focuses on the day-to-day operational aspects of a property, tenant relations, and maintenance. Property acquisition or sale is typically handled separately by the property owner or real estate professionals specializing in those areas. 13. In the context of property management, what is the purpose of a property inspection? a) To evaluate potential tenants' credit history. b) To verify the condition of the property. c) To assess the property's market value. d) To determine a property's assessed value. Answer: b) To verify the condition of the property. Rationale: Property inspections in property management involve physically examining the property to assess its current condition. Inspections help identify maintenance or repair needs, ensure tenant compliance with lease terms, and document the property's condition for liability and insurance purposes. 14. Which of the following is a common responsibility of a property manager? a) Determining property tax rates. b) Conducting tenant background checks. c) Implementing local building codes. d) Assigning real estate agents to property listings. Answer: b) Conducting tenant background checks. Rationale: A property manager is responsible for conducting thorough tenant background checks, which typically include verifying credit history, employment stability, rental history, and criminal background checks. These checks help ensure tenant suitability and reduce risks associated with potential defaults. 15. What is the purpose of a property management agreement? a) To establish property ownership rights. b) To determine property tax obligations. c) To outline the property manager's responsibilities and compensation. d) To provide a market analysis report. Answer: c) To outline the property manager's responsibilities and compensation. Rationale: A property management agreement is a contract between the property owner and the property manager that defines the responsibilities, expectations, and compensation structure for the property management services provided. This agreement serves as a legal document outlining the scope of services and terms of the business relationship. Question 1: Which of the following is NOT a factor considered in the cost approach to property appraisal? A) Depreciation B) Land value C) Replacement cost D) Rental income Answer: D) Rental income Rationale: The cost approach to property appraisal focuses on the cost of replacing the property with a similar one, considering factors such as depreciation, land value, and replacement cost. Rental income is a consideration in the income approach, not the cost approach. Question 2: In property management, what does the term "cap rate" refer to? A) Capital improvement rate B) Capitalization rate C) Capital asset ratio D) Capital expenditure Answer: B) Capitalization rate Rationale: The cap rate in property management is a key metric used to estimate the potential return on an investment property. It is calculated by dividing the property's net operating income by its current market value. Question 3: Which of the following is an example of external depreciation in property appraisal? A) Wear and tear of the interior walls B) Outdated plumbing system C) Proximity to a noisy highway D) Inadequate insulation Answer: C) Proximity to a noisy highway Rationale: External factors such as proximity to a noisy highway can cause external depreciation, impacting the property's value. Wear and tear of interior walls and outdated plumbing system are examples of functional depreciation. Question 4: What is the primary purpose of a property appraisal? A) To determine property taxes B) To estimate market value C) To assess rental income potential D) To calculate insurance premiums Answer: B) To estimate market value Rationale: The primary purpose of a property appraisal is to determine the market value of a property, which is crucial for various real estate transactions and financing. Question 5: Which property management activity involves ensuring that the property complies with local building codes and regulations? A) Lease administration B) Facility management C) Risk management D) Compliance management Answer: D) Compliance management Rationale: Compliance management in property management involves ensuring that the property adheres to all applicable building codes and regulations, thereby mitigating legal and safety risks. Question 6: In property appraisal, what does "comparables" refer to? A) Properties with similar characteristics used for valuation B) Properties in need of extensive renovation C) Properties with unique historical significance D) Properties with high rental yields Answer: A) Properties with similar characteristics used for valuation Rationale: Comparables, also known as "comps," are similar properties that are used as benchmarks to determine the value of the subject property in an appraisal. Question 7: Which property management function involves negotiating and enforcing lease agreements? B) Minimizing operating expenses C) Ensuring accurate financial reporting D) Maximizing rental income Answer: C) Ensuring accurate financial reporting Rationale: Property management accounting aims to ensure accurate financial reporting, providing essential information for decision-making and transparency in property operations. 1. No person shall be allowed to practice real estate service unless he complied satisfactorily with the following requirements, except: a. Passed the licensure examination given by the board b. Holder of a valid broker’s certificate and ID card c. Holder of a valid special/temporary permit d. Paid the required bond of P10,000.00 2. The earth’s surface extending downward to the center of the earth and upward to infinity, including permanent natural objects: a. Land b. Building c. Real Estate d. Real Property 3. Land at, above, and below the earth’s surface, plus all things permanently attached to it whether natural or artificial: a. Land b. Building c. Real Estate d. Real Property 4. The interests, benefits, and rights that are automatically included in the ownership of land and real estate: a. Land b. Building c. Real Estate d. Real Property 5. It is a certificate which evidences the land ownership of a CARP beneficiary that contains the restrictions provided in R.A. 6657 and shall be recorded in the Register of Deeds: a. Patent b. Certificate of Land Ownership Award c. Emancipation Patent d. Transfer Certificate of Title 6. The act or practice of negotiating the sale, lease, mortgage, exchange, or purchase of real estate on behalf of another for or in expectation of a commission or professional fee: a. Real Estate Project Selling b. Real Estate Business c. Real Estate Brokerage d. Real Estate Marketing 7. A broker must follow certain steps to start the practice of his profession, except: a. Securing listing b. Procuring prospects c. Presentation, demonstration, negotiation, and closing d. Notarization of documents 8. An Authority to Sell must contain the following, except: a. Name, address, and signature of principal/seller and broker b. Description of the property, and encumbrance, if any c. Social and financial status of the buyer d. Price, terms, and rate of commission 9. Article 4 Section 26 specifies that the Professional Indemnity Insurance / cash or surety bond in the amount of: a. Not less than P5,000.00 b. Not less than P10,000.00 c. Not less than P15,000.00 d. Not less than P20,000.00 10. Any violation of Real Estate Service Act, including that of the IRR shall be meted the penalty of a fine of not less than: a. P10,000.00 or imprisonment of 2 years or both b. P100,000.00 or imprisonment of 2 years or both c. P100,000.00 or imprisonment of 2 years or both upon the discretion of the court d. P200,000.00 or imprisonment of 2 years or both upon the discretion of the court 11. No partnership or corporation shall engage in the business of real estate service unless it is duly registered with the SEC and the persons authorized to act for the said partnership or corporation are all duly registered and licensed real estate brokers, appraisers, consultants, as the case may be. There shall be at least one real estate broker for every: a. 20 accredited sales consultants b. 20 accredited salespersons c. 20 accredited sales managers d. All of the above 12. In carrying out the provisions of the Act as well as the implementing rules and regulations and policies, the Board shall be assisted by the: a. PRC b. PhilRES c. CHED d. DepEd 13. The Real Service Act is a consolidation of Senate Bill No. 2963 and House Bill No. 3514 and was initially passed by the Senate and House of Representatives on: a. July 28, 2008 b. May 12, 2009 c. June 29, 2009 d. July 21, 2010 14. The Real Estate Service Act was enacted into law on June 29, 2009. It became effective 15 days after its complete and full publication in the: a. Official Gazette b. Bulletin Today c. Philippine Daily Inquirer d. Philippine Star 15. In case of violation of the Real Estate Service Act, including that of the IRR is committed by an unlicensed real estate service practitioner, the penalty is: a. P10,000.00 fine or imprisonment of 2 years or both b. P100,000.00 fine or imprisonment of 2 years or both c. P100,000.00 fine or imprisonment of 2 years or both upon the discretion of the court d. P200,000.00 fine or imprisonment of 4 years or both upon the discretion of the court 16. In the official seal of the PRB-RES, each symbol is properly represented. Which one is not included? a. Land and structures b. Trees and the fruits c. Moon and the stars d. Map of the Philippines 17. Real Estate Service practitioners shall not refer to: a. Real estate assessors b. Real estate salespersons c. Real estate dealers d. Real estate appraisers 18. A person who conducts valuation. Specifically, one who possesses the necessary qualifications, license, ability, and experience to execute or direct the valuation of real property: a. Real estate assessor b. Real estate consultant c. Real estate appraiser d. Real estate developer 19. To qualify to take the examination for real estate consultant, one must have the minimum years of experience as a licensed real estate appraiser: a. 10 years b. 8 years c. 5 years d. 3 years 20. It is an ownership interest held by the lessee and is created when a fee simple owner enters into an agreement or contract called lease with a person or entity: a. Fee simple estate b. Leasehold estate c. Leased fee estate d. Life estate 21. Which one is not among the four powers of government that restricts ownership? a. Police Power b. Escheat c. Accession d. Eminent Domain 22. Refers to the rights concerning properties that abut an ocean, sea, or lake, are usually concerned with the use and enjoyment of the shore: a. Accession b. Littoral right c. Riparian right d. Water rights 23. When a property owner dies without any heirs to inherit his property, which of the following inherit powers of the state is applied on the property? a. Expropriation b. Escheat c. Eminent domain d. Taxation a. Rooms and bed spaces b. Boarding houses c. Motel rooms d. Dormitories 43. A special levy in addition to the basic property tax and is to be used only for the operation and maintenance of public schools. a. Idle Land Tax b. Special Education Fund c. Capital Gains Tax d. Value Added Tax 44. The Real Estate Service Practitioners shall be governed by the following rules of conduct and practices, except: a. Relation to the government b. Relation to the associations c. Relation to the client/customer d. Relation to the public 45. Under BIR Memorandum Circular No. 3-2007, in case of a sale of a real property, the following details must be annotated on the Transfer Certificate of Title or Condominium Certificate of Title, except: a. Serial number of the Certificate Authorizing Registration (CAR) b. Name of the buyer c. Name of the Registry of Deeds who signed the TCT d. Date of issuance of the CAR 46. The document issued to the registered owner of a land: a. Original Certificate of Title b. Original Transfer Certificate of Title c. Owner’s Duplicate Certificate of Title d. Original Certificate of Land Ownership 47. The principle that “all lands of the public domain belong to the state” refers to: a. Regalian Doctrine b. Land Ownership Doctrine c. Patrimonial Doctrine d. Friar Land Doctrine 48. The main laws governing the right to own real estate in the Philippines are the following, except: a. 1973 Philippine Constitution b. 1987 Philippine Constitution c. Special laws enacted by the Congress d. Civil Code of the Philippines on Property Ownership and its amendments 49. Which of the following is not of public dominion? a. Rivers and their natural bed b. Subterranean waters in public lands c. Subterranean waters in private lands d. Lakes and lagoons formed by nature on public lands and their beds 50. P.D. 1529 is broad in scope and it covers the following, except: a. Original registration of title, both ordinary registration proceeding & cadastral registration proceeding b. Reconstitution of lost or destroyed original of Torrens title c. Extrajudicial foreclosure proceedings d. Registration of voluntary dealings and involuntary dealings 51. Which of the following is not a patrimonial property? a. Property that the state owns which is not devoted to public use, public service, or to the development of national wealth b. Property of public dominion c. Owned by the state in its private capacity d. All of the above 52. Pursuant to the 1987 Philippine Constitution, a Filipino citizen may acquire alienable and disposable lands of the public domain for agricultural purposes and actual cultivation and residence provided that the ownership of land does not exceed an area of: a. 3 hectares b. 5 hectares c. 10 hectares d. 12 hectares 53. What are the two classifications of properties as to ownership under the Civil Code? a. Public Dominion and Private Ownership b. Movable or personal c. Immovable or real property d. None of the above 54. What rights and privileges one is entitled to on reacquiring Filipino citizenship? a. Right to suffrage b. Right to own land and property in the Philippines c. Right to engage in business or commerce as a Filipino d. Right to enjoy full civil and political rights 55. The Board shall adopt and promulgate the Code of Ethics and Responsibilities for real estate service practitioners which shall be prescribed and issued by the of real estate service practitioners: a. Interim Integrated Professional Organization of Real Estate Service Practitioners b. Accredited and Integrated Professional Organization (AIPO) c. Professional Regulatory Board of Real Estate Service d. CPE Council 56. Land escheated to the Government is considered: a. Patrimonial Property b. Property of Public Dominion c. Regalian Property d. Usufructuary 57. A licensed Real Estate Broker may set up a real estate marketing group and he may engage the services of: a. 20 real estate salespersons b. 20 accredited real estate salespersons c. 20 licensed real estate salespersons d. 20 certified salespersons 58. It is an authority where the listing broker is entitled to a commission even if the principal himself procured the prospect and closed the sale: a. Non-exclusive or Open Authority b. Exclusive c. Exclusive Agency d. Exclusive Right to Sell 59. One is not a mode of extinguishing the client and broker relationship as to the listing agreement: a. Expiration of the period of authority b. Death of principal or agent c. Withdrawal of the buyer d. Accomplishment of purpose 60. It is a kind of listing wherein the professional fee or commission is on a pre-stipulated percentage of the consideration: a. Net listing b. Percentage listing c. Referral basis d. Three way split 61. It id the process of showing the property and pointing out its physical attributes and qualities, and other benefits and advantages as to arouse desire to possess or own it: a. Negotiation and closing b. Presentation and negotiation c. Presentation and demonstration d. Demonstration and closing 62. It is the process of reconciling the opposing views of parties to a transaction as to price and terms which includes expenses, delivery and turnover of the taxes and other expenses: a. Presentation b. Demonstration c. Negotiation d. Closing 63. When are commissions or professional fees due? a. When the buyer has given an option money b. When the buyer has given an earnest money deposit c. Upon perfection of the contract d. Upon consummation of the sale 64. Which of the following is not considered a function of a real estate broker? a. To sell a subdivision lot b. To assist the buyer in obtaining a housing loan c. To find a developer for a joint venture with a lot owner d. To prepare a legal contract to sell 65. Refers to any person or juridical person directly engaged in the business of buying, selling, or exchanging real estate property whether on full time or part time basis with regards to his/her/its property: a. Real estate dealer b. Real estate broker c. Real estate appraiser d. Real estate salesperson 66. The real estate broker shall be entitled to a professional fee even if the sale was consummated after the expiration date of his authority, when the listing has a holdover clause and the broker has: a. Presented and demonstrated the property to the buyer b. The broker has entertained and treated the buyer during the presentation c. The broker has negotiated with the buyer and seller d. The broker has registered the prospective buyer to the seller within the period of the broker’s authority 67. Broker A is setting up her realty office to market subdivision projects of certain developers and the listings secured by her. Broker A is employing 20 salespersons and she must do the following: a. Accredit the 20 salespersons to HLURB b. Accredit the 20 salespersons to PRC c. Accredit the 20 salespersons to DTI d. Accredit the 20 salespersons to the developers 68. The law that governs the relationship between the real estate broker and owner in a lease transaction is: a. Law on Brokerage b. Law on Agency c. Law on Lease d. Law on Property 69. The main difference between a real estate broker and a real estate dealer as to income is that the broker earns a professional fee or commission while the dealer earns: a. Profit or income 87. Total forestland of the Philippines degraded today: a. !5 million hectares b. 12 million hectares c. 10 million hectares d. 8 million hectares 88. It is the process of deepening an existing waterway; also, a technique used for collecting bottom-dwelling marine organisms (e.g., shellfish) or harvesting corals, often causing significant destruction of reef and ocean floor ecosystem: a. Digging b. Dredging c. Compacting d. Silting 89. A species that is threatened with extinction either by direct hunting or habitat destruction: a. Wildlife species b. Marine species c. Plant species d. Endangered species 90. The source for well and natural springs. Water sources found below the surface of the earth often in naturally occurring reservoirs in permeable rock strata: a. Ocean b. River c. Ground water d. Rain water 91. Water that is safe to drink: e. Hard water f. Snow water g. Potable water h. Raw water 92. This refers to the illegal killing of animals or fish. It is a great concern with respect to endangered or threatened species: a. Punching b. Poaching c. Blasting d. Sanding 93. Which of the following is an example of all biotic factors? a. Water, temperature, deer, grass b. Water, temperature, and pH balance c. Plants, animals, fungi, protist, and bacteria d. Pond, lake, ocean, desert, mountain 94. It is the continued erosion of topsoil and the formation of desert on grazing land: a. Soil erosion b. Landslide c. Desertification d. Soil degradation 95. It is the interaction of biotic and abiotic factors: a. Population b. Community c. Organism d. Ecosystem 96. The thin film on the surface of the earth which all life exists: a. Atmosphere b. Hydrosphere c. Biosphere d. Geosphere 97. It is an area set aside to allow the way of life of societies living in harmony with the environment to adapt to modern technology at their pace: a. Natural Park b. Natural Monument c. Natural abiotic area d. Natural biotic area 98. Waste materials such as smoke, sewage, or industrial waste, which are released into the environment, subsequently polluting it: a. Smog b. Sludge c. Contaminants d. Effluents -end- Good luck! 