Texas Principles Of Real Estate II Final Exam 120 Questions & Answers: Latest Updated 2023, Exams of Nursing

Download Texas Principles Of Real Estate II Final Exam 120 Questions & Answers: Latest Updated 2023 and more Exams Nursing in PDF only on Docsity! Texas Principles Of Real Estate II Final Exam 120 Questions & Answers: Latest Updated 2023-2024 (VERIFIED ANSWERS) Mack and Macie have a business together. They are both hands-on managers of the business, and they equally share responsibilities, profits, and losses. What kind of business are they most likely to have? - ANSWER>>They have a general partnership ability to pull $10,000 from their IRA without penalty if they are a first-time buyer - ANSWER>>What is NOT a primary tax benefit of commercial real estate investment? the HOA - ANSWER>>In a certain neighborhood, parking on the street is prohibited. Who is likely responsible for this regulation? Ricky shouldn't worry; even though the loan is being sold by the lender, Ricky will most likely not be affected at all. - ANSWER>>Ricky, a borrower, has a mortgage loan that has just been bought by a new investor. Ricky panics, as his loan conditions are bound to change with the new owner. Evaluate if Ricky's fear is accurate, and why/why not. Randy is renting his basement apartment to Josh, his son, who is a full-time college student. There is no formal lease involved. What type of leasehold estate best describes this arrangement? - ANSWER>>estate at will Maureen's bedroom is 14' by 12'. What is the square footage? - ANSWER>>168 sq ft A tenant has recently signed a lease for a new commercial property. According to the lease terms, the tenant pays a monthly rent, and the landlord covers maintenance and other property expenses. This lease is a: - ANSWER>>gross lease it must be passed to property buyers for five years and it prevents insurance companies from using previous mold claims against a property - ANSWER>>Which of the following is TRUE about a Certificate of Mold Remediation? the method by which property is transferred from the current owner to another party by either sale or gift - ANSWER>>voluntary alienation The Texas Law of Descent and Distribution applies to real estate located in Texas and owned as separate property by a deceased owner who died: - ANSWER>>intestate What is the most common type of REIT? - ANSWER>>equity REIT when the deed is delivered to and accepted by Gretta - ANSWER>>Grant is making a deed. He drafts the deed, he has a lawyer look over and approve the deed, he signs the deed, and he delivers the deed to Gretta, the grantee. When does the title officially pass to Gretta? joint tenants, tenants in common, or community property - ANSWER>>Kesha creates a deed with three grantees: Ariana, Britney, and Nicki. These grantees will assume co-ownership as: amortized loan - ANSWER>>With which type of loan will payments made at the beginning be mostly interest, while payments made at the end will be mostly principal? a fixed-rate amortized loan - ANSWER>>A payment plan features constant payments of principal and interest throughout the life of the loan. The lender first credits the monthly payment towards the interest owed for the month, with the remainder of that payment going towards reducing the principal balance. What is this payment plan called? If his property fails to gain value through renter revenue, Rex could be caught with insufficient funds at the time of the larger balloon payment. - ANSWER>>Rex purchased an investment property with the intention of renting it out. To finance it, he set up a partially amortized loan with a balloon payment. What risk could this pose for him as the borrower? $228,000 - ANSWER>>What is the value of a property if the net operating income is $45,600 and a cap rate of 20%? the landlord addressed the use and occupancy restrictions in Anne's lease - ANSWER>>Anne leases a property that is part of an HOA which states tenants cannot park in the street (a rule that was stipulated in Anne's lease), but Anne parks in the street, regardless. Anne's landlord has the right to charge her for these HOA fees and prohibit her from parking in the street because: A 20-acre property is about to be sold. Before it can be sold, however, the loan connected to the property has to be paid in full. What is the name of the provision in the mortgage that would require this full payment? - ANSWER>>alienation clause Natalie has owned a property in San Marcos for 15 years. She is concerned her property has gone down in value because it has become obsolete and its structures have begun to deteriorate. What concept is Natalie concerned about? - ANSWER>>depreciation A sales comparison approach does NOT utilize the principle of contribution. - ANSWER>>Which of the following is FALSE about a sales comparison approach? Perry's rental payments will increase over time in specific increments. - ANSWER>>Perry signed a graduated lease with her landlord. Which of the following is TRUE? the closing of the sale and the closing of the buyer's loan - ANSWER>>Jennifer and Mallory, a buyer and a seller, are going through the closing process of their real estate transaction. In their transaction, like in most sales transactions, two closings will take place: Which of the following has a long lease term and is often used in the development of commercial property? lease of bare, undeveloped land - ANSWER>>ground lease secondary mortgage market - ANSWER>>A REMIC holds commercial and residential mortgages in trust, assembles the mortgages into pools based on risk, and issues bonds (securities) on these pools to sell to investors in the: A major gasoline company has an oil spill in the Gulf of Mexico. In this situation, what piece of legislation will hold the the gas company responsible for the spill and also has a $9 billion Superfund to aid environmental cleanup? - ANSWER>>CERCLA Actual notice is direct or first-hand knowledge; constructive notice is the assumption of knowledge because that knowledge is in the public record. - ANSWER>>What is the difference between actual and constructive notice? Jim gradually takes over the vacant lot next to his property. After 10 years of using the property, Jim takes possession of the property. - ANSWER>>Which of the following is an example of adverse possession? $265,625 - ANSWER>>Angie is selling her home; she has $165,000 left on her mortgage, $15,000 in closing costs, and a 4% sale commission to pay her agent. Approximately, what's the LEAST Angie should sell for if she wants to earn at least $75,000 on the sale (so she can make a good downpayment on a new home)? Alexis owns a fried chicken restaurant, Tender Times. When her area is rezoned from commercial to residential, Alexis chooses to continue operating Tender Times in the same location. What is this type of property use called? - ANSWER>>nonconforming use the CFPB - ANSWER>>Who administers the Interstate Land Sales Full Disclosure Act? TALCB - ANSWER>>Micah is an appraiser in Austin. What entity is he regulated by? a clause that addresses rights, protections, and limits for the grantee - ANSWER>>habendum clause Clara needs to explicitly state the brokerage's activity limitations in writing, not just in a verbal agreement. - ANSWER>>Clara starts a new brokerage. She needs to protect herself and her agents from potential lawsuits by explicitly stating the brokerage's activity limitations. She decides to do this through verbal agreements to make each client's experience more personal. Evaluate Clara's decision. What is something that allows an individual property to deviate from a specific provision of a zoning ordinance that is usually based on features such as building height, lot square footage, or setback requirements? - ANSWER>>a variance real estate investment trust - ANSWER>>What does the acronym REIT stand for? Forcibly removing tenants for nonpayment of rent - ANSWER>>Which of the following is NOT a principal responsibility of a property manager? RESPA - ANSWER>>What protects consumers from abusive settlement practices and provides them with information pertinent to all settlement costs? The property being appraised - ANSWER>>subject property where all members equally share responsibilities, profits, and losses - ANSWER>>general partnership 241 - ANSWER>>A developer plans to build an apartment building on a lot. The lot is 525,000 square feet. City regulations dictate that there can be density no greater than 20 occupants per acre. Approximately how many occupants can this lot house? Ian is NOT correct; the borrower, not the mortgage broker or lender, must pay the origination fee. - ANSWER>>Ian shops for a new loan with his broker, Barry. Barry helps Ian use a CLO to compare prices until Ian finds the best one. Barry tells Ian a fee of 0.5% of the loan amount has been earned, but Ian doesn't think much of it - Barry will pay that fee. Evaluate if Ian is correct, and why/why not. A REMIC bond decreases in value over time as the mortgages in the pool are being paid down. - ANSWER>>How does a REMIC lose value? management agreement - ANSWER>>Property managers will need to provide reports for their property owner, such as a maintenance report, a rent roll, and an operating statement. The frequency with which the property manager will need to file these reports should be outlined in the: A reverse mortgage - allows a homeowner to pledge equity to a lender in exchange for monthly payments. - ANSWER>>A 65-year-old retiree has almost $80,000 in equity in their home. She does not have enough cash to travel as she have would have liked to do in retirement. The retiree should consider which of these financing alternatives to access her equity without selling her home? Jessie should buy as many discount points as her lender allows her to. - ANSWER>>Jessie is trying to decide whether or not she should buy discount points on her loan. Which of the following is NOT true about the discount points she could buy? green initiatives - ANSWER>>Tax incentives that cover the cost of energy efficient improvements, EEMs, and Energy Star-qualified homes are examples of: $154.81 - ANSWER>>Gabe is set to close on the condo she is selling on January 23. The condo's assessed value is $123,000 and the tax rate for her property's county, Austin County, is 1.97%. Using the 360-day year, what amount does Gabe owe for her prorated ad valorem tax? water and mineral rights, soil requirements, public land leases, hunting tags, and livestock and farm production - ANSWER>>As opposed to general license holders, agricultural land specialists should have a more specific knowledge of: a diligent individual can search the public record to gain an understanding of a property, including present and past interests in that property - ANSWER>>What does constructive notice presume? easement by prescription - ANSWER>>A land owner takes no action to force the removal of an encroachment. In Texas, after a period of ten years the encroachment may continue through a(n): the recording acts give legal priority to those interests that are recorded first - ANSWER>>Instruments affecting real estate must be recorded with the county clerk where the land is located. What purpose does this process of recording acts serve? an acceptable practice - ANSWER>>A broker divides a commission between herself and her sales agents. This is: predetermined - ANSWER>>In a fixed-rate mortgage that is fully amortized, the total amount of interest to be paid is: no, unless he is also a licensed appraiser - ANSWER>>Bob is a real estate agent. Can he perform an appraisal? $390,000 - ANSWER>>The replacement cost to build a house is approximately $350,000. Similar lots presently sell for $100,000. The property's physical deterioration equals about $60,000. Based on the cost approach, what would be the value of this property? earnest money - ANSWER>>A deposit is made by a buyer to a seller in order to show the buyer's good faith in the transaction. Upon closing, the buyer receives a credit for this prepaid deposit. What is this deposit known as? Pet rent - ANSWER>>Which would NOT be accounted for as an operating expense? give the tenant 30 days to pay the late fee - ANSWER>>If a landlord wishes to charge a tenant a late fee, the landlord MUST do all of the following EXCEPT: No fee may be charged for preparing the document. - ANSWER>>Which of these is true of the Closing Disclosure? it allows individual property to deviate from a specific provision of a zoning ordinance; neighbors must approve the variance in a public hearing - ANSWER>>What is a zoning variance and what needs to happen in order for a government to approve it? The landlord. Elmer must pay for the modifications. - ANSWER>>Elmer wants to install lowered light switches in his apartment so that he can reach them from his wheelchair. The landlord Valerie's lender is wrong; for most conventional loans, Valerie should have the option of purchasing PMI if she can't make a 20% down payment. - ANSWER>>Valerie wants to buy a home in the suburbs, but she only has enough money to make a 17% down payment. Her lender tells her that, until she saves enough to make at least a 20% down payment, she will have to wait to purchase. Evaluate if Valerie's lender is correct, and why/why not. property that is typically dependent on other businesses in the area to help create foot and car traffic - ANSWER>>commercial property The landlord doesn't legally have to install the ramps because they are cost prohibitive, but John can install them at his own expense. - ANSWER>>John is moving into a privately owned apartment complex and asks the landlord to accommodate his wheelchair. John says he needs concrete ramps to be installed around the property. The landlord says he can't afford to install ramps, but is worried that he is discriminating. What is TRUE? A tenant overstays their legal tenancy, but offers to pay the landlord rent and the landlord accepts. - ANSWER>>Which of the following cases illustrates a tenancy at sufferance turning into a periodic estate? What is the name for the form that itemizes services and fees charged to the borrower by the lender when applying for a real estate loan? This is the same form that is received by the consumer no later than three business days before consummation of the loan - ANSWER>>Closing Disclosure a graduated lease or an index lease - ANSWER>>A variable lease is a leasehold agreement in which the base rent changes. Variable leases can take the form of: The government takes some of Leslie's farmland to expand a highway. The government does NOT provide just compensation for the land acquisition. - ANSWER>>Which of the following is an example of inverse condemnation? principle of contribution; Stuart should keep in mind an improvement's cost will not always add a comparable value to his home - ANSWER>>Stuart considers making several improvements on his home before he sells it because he knows each component of his property contributes to the overall value. Which principal of appraisal is Stuart using, and what other factor should Stuart consider? Seek a conditional-use permit from the zoning board, if it is defined as allowable. - ANSWER>>An area is zoned for residential use only. If a person would like to operate a business in their home, what could they do? $3,600 - ANSWER>>3 discount points on a $120,000 loan equals: The person responsible for assembling necessary closing documents, preparing the HUD-1 settlement, and arranging the closing - ANSWER>>closing agent a form used to itemize services and fees charged to the borrower by the lender when applying for a real estate loan - ANSWER>>closing statement A property manager who is an on-site apartment manager NOT acting as an agent, leasing the owner's real estate - ANSWER>>In which of the following cases would a property manager NOT need a real estate license A subprime mortgage carries a higher interest rate than prime mortgages. - ANSWER>>How does a subprime mortgage interest rate relate to a prime mortgage interest rate? Probably not. A late fee that is the total amount of the rent seems unreasonable. Reasonable late fees is one of the conditions Sally has to meet in order to charge a late fee. - ANSWER>>Sally, a landlord, charges her tenant a late fee. The lease specifies that there will be a late charge for late rents; the tenant is two full days late; and the rent fee is the total amount of rent. Under Texas regulations, is Sally allowed to charge the late fee? before a purchase agreement is signed - ANSWER>>When does the Interstate Land Sales Full Disclosure Act require the seller to give the report to a lot purchaser? the current tenant will continue to have full possession of the property until the lease expires - ANSWER>>If an owner/landlord decides to sell their property while engaged in a lease: When the amount of money in circulation rises, decreasing the overall value of money - ANSWER>>inflation ALL real estate license holders - ANSWER>>For whom is it most important to be aware of and comply with state and federal fair housing laws? A mortgage secured by a residence - ANSWER>>Which of the following would be covered by Regulation Z? the loss of property value caused by negative forces outside the property which are beyond the control of the owner - ANSWER>>Economic obsolescence Conducting periodic inspections to catch minor issues before they become major failures - ANSWER>>Preventative maintenance A lender pays an agent in exchange for the agent referring clients to that specific lender. - ANSWER>>Which of the following is an example of an illegal kickback? This is an example of involuntary alienation - ANSWER>>Kayla, a property owner, loses an acre of her land to adverse possession. Which of the following is TRUE? the property report - ANSWER>>Mildred wants to buy some lots. The developer gives her a document that contains the distances to nearby communities over paved and unpaved roads, the existence of mortgages and liens on the property, the number of homes currently occupied, and other information. What is this document called? modifications made at the tenant's expense - ANSWER>>Landlords MUST allow tenants with disabilities to make reasonable modifications to a property so they can enjoy it. But there are also unreasonable modifications a landlord does NOT have to allow. All of the following are unreasonable modifications EXCEPT: fixed-rate amortized loans - ANSWER>>Which type of loan features constant payments of principal and interest throughout the life of the loan? Which appraisal principle states that maximum value is realized when land use is in harmony with surrounding standards? - ANSWER>>principle of conformity today's money is worth MORE now than the same amount will be in the future (because of the money's current potential to earn more money) - ANSWER>>Which of the following BEST describes the concept of the time value of money? It is sent to a lender who will make sure that it meets all the proper standards for the particular loan product they're offering. - ANSWER>>After an appraiser finishes their appraisal: Emi's offer is likely to be preferred over the other offers because the seller knows Emi is pre- approved by his lender. - ANSWER>>Emi put in an offer on a three-bedroom home. Two other parties put in offers on the home, as well. Emi was pre-approved by his lender; the second party has completed the pre-qualification process, and the third party has not yet spoken to their lender. Which of the following is TRUE? A developer develops unimproved land prior to resale or lease whereas a subdivier divides unimproved land into smaller parcels for resale or lease. - ANSWER>>What is the difference between a developer and a subdivider? the right to take private land for public use - ANSWER>>eminent domain When a parcel of real estate is conveyed and the deed specifically states that the land is granted so long as it is used for certain purposes (for example, as a schoolhouse or a church) - ANSWER>>fee simple determinable estate SAFE Act - ANSWER>>What legislation mandates a nationwide licensing and registration system for residential mortgage loan originators (MLOs)? a variance - ANSWER>>What is something that allows an individual property to deviate from a specific provision of a zoning ordinance that is usually based on features such as building height, lot square footage, or setback requirements? Jayden was NOT correct; assessed value and market value are two distinct, independent values. - ANSWER>>Jayden researches a property he's interested in buying. He uses the assessed value for all tax calculations, market comparisons, notes, etc., because assessed value is the same as market value - why complicate things by using two values? Evaluate if Jayden was correct in doing this and why/why not. The outstanding balance loaned by the mortgagee - ANSWER>>What does private mortgage insurance protect? subtract the operating expenses from the effective gross income - ANSWER>>To find the net operating income, a property manager will: Marjorie wills her family home to her children. - ANSWER>>Which of these is NOT an example of involuntary alienation? used when a tenant wishes to buy a property but cannot do so right away - ANSWER>>lease purchase agreement Grayson should NOT worry, as only her financial status should be considered. - ANSWER>>Grayson is worried that, because she is an elderly person, she will not get pre- approval on her loan. Analyze Grayson's worry. 9 - ANSWER>>Approximately how many 100,000 square foot lots could a developer fit onto a 20 acre piece of land? a lease in which the tenant pays a base rent amount plus a percentage of their business profits - ANSWER>>percentage lease package mortgage - ANSWER>>Jake takes out a mortgage loan on a furnished condominium. This mortgage cost covers the real property, but it also covers personal property like the kitchen appliances, the velvet purple paisley curtains, and the leather couches in the condominium. What kind of mortgage does Jake have? The ADA - ANSWER>>Which Act was enacted in 1990 that identified and protected disabilities? ($12,000 x 10%) / 12 X 13 = interest - ANSWER>>How would you find the interest for a $12,000 loan with an interest rate of 10% over thirteen months?