Texas Principles of Real Estate II Final Exam Actual Exam Questions And Correct Answers, Exams of Real Estate Management

Download Texas Principles of Real Estate II Final Exam Actual Exam Questions And Correct Answers and more Exams Real Estate Management in PDF only on Docsity! P ag e1 Texas Principles of Real Estate II Final Exam Actual Exam Questions And Correct Answers Verified Latest 2024-2025 Guaranteed Pass Grade A + UPDATED!! Lenders require a borrower to establish and maintain a reserve fund to ______. -- CORRECT ANSWER-->Pay any property taxes in case the borrower misses a payment Brandon recently purchased an old warehouse building. This building will serve as a hub for local deliveries of fruits and vegetables within the state. During its first week in operation, one of the delivery drivers was involved in an accident that spilled coconuts all over the road and shut down the interstate for hours. What type of risk is this? -- CORRECT ANSWER-->Static Which entity enforces subdivision covenants? -- CORRECT ANSWER-- >The civil court system What does the right of first refusal clause do when included in a lease agreement in Texas? -- CORRECT ANSWER-->Gives a tenant the option to buy the property they are leasing before the property is sold to someone else What does a CMA determine? -- CORRECT ANSWER-->Market price range P ag e2 Where do live auctions typically take place? -- CORRECT ANSWER-->On the steps of the local courthouse Which term refers to the person receiving title, often called the "party of the second part," in a deed? -- CORRECT ANSWER-->Grantee What's an affidavit as to debts and liens? -- CORRECT ANSWER-->A sworn statement by the seller that no unpaid bills remain for repairs or improvements to the property. Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination? -- CORRECT ANSWER-->Superfunds Amendments and Reauthorization Act The economic principle that tells us that when supply goes up, price goes down is commonly referred to as what? -- CORRECT ANSWER-- >Supply and demand Which of the following is most susceptible to a predatory lender? -- CORRECT ANSWER-->A borrower with poor credit Who conducts the closing? -- CORRECT ANSWER-->Closing agent What could be a consequence if there were no secondary mortgage market? -- CORRECT ANSWER-->Lenders might not have funds available to make new loans to the public. P ag e5 What section of the property management agreement states that the owner actually owns the property, and it's not facing foreclosure? -- CORRECT ANSWER-->Owner's covenants Why are residential properties popular with investors? -- CORRECT ANSWER-->They're always in demand. Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining? -- CORRECT ANSWER-->Highest and best use When a mortgage is used as a security instrument, who holds the mortgage and the promissory note? -- CORRECT ANSWER-->The lender holds the mortgage and the note. To whom would a 1031 tax exchange usually appeal? -- CORRECT ANSWER-->Investors Which of the following statements about zoning ordinances is true? -- CORRECT ANSWER-->Before zoning ordinances are changed, they must be examined for fairness and reasonableness. When a buyer assumes the seller's current loan, what is the purpose of an estoppel certificate? -- CORRECT ANSWER-->To show the balance due on the loan P ag e6 Identify the seller's responsibilities at and before closing. -- CORRECT ANSWER-->Supply the deed conveying the property, title abstract, and the payoff statement. Who is responsible for reviewing the Closing Disclosure before closing? -- CORRECT ANSWER-->The buyer and the seller In Texas, leases have the implied covenant of quiet possession. What does this mean? -- CORRECT ANSWER-->Landlords must give the tenant actual possession of the leased premises. Which of the following requires property managers and landlords to protect any sensitive personal information that they collect or maintain about their tenants from unlawful use or disclosure? -- CORRECT ANSWER-->Texas's Identity Theft Enforcement and Protection Act Commercial leases may contain an automatic renewal clause. If this is the case, what happens after the lease's original term has come to an end? -- CORRECT ANSWER-->The lease continues on a month-to-month basis. In a lease agreement, what consideration does the landlord give to the tenant? -- CORRECT ANSWER-->Right to occupy the property How many parties does a deed of trust involve? -- CORRECT ANSWER-- >Three: borrower, lender, and trustee P ag e7 Xavier and Juanita Jenkins want to make a few improvements to their leased apartment. The couple would like to rip up the carpet in the living room and have the hardwood floors underneath restored. Which of the following statements about the improvements is true? -- CORRECT ANSWER-->Xavier and Juanita need to get the landlord's permission before they make any improvements to the property. How many members belong to the Texas Apartment Association? -- CORRECT ANSWER-->Over 11,000 Your client hates the fact that out of her $1,027 monthly payment, more than $900 is going toward interest. What do you tell her? -- CORRECT ANSWER-->"That's amortization for you." Any financial institution with deposits that are insured by a federal government agency can sell mortgages to which institution? -- CORRECT ANSWER-->Freddie Mac (FHLMC) Ensuring you've answered the word problem correctly is which of the following steps? -- CORRECT ANSWER-->Checking Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______. -- CORRECT ANSWER-->Restrictive covenants If the insurance rate per $1,000 of coverage is $10 per year, and your home would be replaced for $250,000 if destroyed, then what would the annual premium be? -- CORRECT ANSWER-->$2,500 P ag e1 0 What is business risk? -- CORRECT ANSWER-->The risk that the required return on investor capital will not be met Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount? -- CORRECT ANSWER-->$105,263.16 If the daily rate is $1.23 and closing is August 31, what will the seller owe at closing? Assume a statutory year and that the seller hasn't made any payments. Round to the nearest cent. -- CORRECT ANSWER-- >$295.20 Which type of closing is conducted with a neutral third party holding the funds, and the buyer and seller may never meet? -- CORRECT ANSWER-->Escrow closing Which of the following numbers represents a calculator with the appropriate decimal place set up to eliminate most rounding errors? -- CORRECT ANSWER-->10.56789 Which one of the following responsibilities requires the licensee to secure a profitable deal for the landlord that is also affordable for the commercial tenant? -- CORRECT ANSWER-->Negotiate leases. FTC privacy rules state that a landlord or property manager doesn't have to obtain a tenant's written consent before sharing the tenant's information with ______. -- CORRECT ANSWER-->A police officer P ag e1 1 What are accrued expense items? -- CORRECT ANSWER-->Items to be divided proportionately between the buyer and seller that the seller owes Another term for a valuation is ______. -- CORRECT ANSWER-->Formal appraisal Brandy is going to purchase a strip mall. She is trying to determine exactly how much to borrow for this purchase. She understands that the more she borrows, the greater her risk. What type of risk is she evaluating? -- CORRECT ANSWER-->Financial risk Which of the following is true about ownership or title to a property? -- CORRECT ANSWER-->Constructive notice to the public of real property ownership occurs when the deed is recorded. A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value? -- CORRECT ANSWER-->$200,000 What is 1/4 x 2/3? -- CORRECT ANSWER-->1/6 What type of capital gains may property owners encounter? -- CORRECT ANSWER-->Short- and long-term Before moving out, Texas tenant Adam failed to give sufficient notice to his landlady, Yolanda. Yolanda is so happy the lease agreement included that provision in bold type about tenants who fail to give P ag e1 2 sufficient notice and what that means with regard to the security deposit. Given the situation, which of the following statements is true? -- CORRECT ANSWER-->Yolanda does not have to refund any of Adam's security deposit. What is the best description of a deed? -- CORRECT ANSWER-->A document to transfer ownership/interest in real estate Kayla purchased a home in January, fixed it up, and then sold the property in May of the same year for a gain of $45,000. What type of capital gain is this? -- CORRECT ANSWER-->Short-term Jeff has filed a quiet title suit against Roger. What's the purpose of this suit? -- CORRECT ANSWER-->To clear up a cloud on title If the buyer owed taxes for 95 days, the seller owed for 270 days, and annual taxes were $4,000, what would the buyer's prorated tax expense be? -- CORRECT ANSWER-->$1,041.20 You need to perform a sales comparison for your clients. Comparable A's adjusted sales price is $277,000. Comparable B's adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients' home? -- CORRECT ANSWER-->Give more weight to the list price on the comparable that's most similar to the property. Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What's the maximum number of adjustments Steve should make to the Joneses' property? -- CORRECT P ag e1 5 ANSWER-->So borrowers can compare loans and make decisions regarding the affordability of loans offered Identifying the purpose of the appraisal leads the appraiser to do what next? -- CORRECT ANSWER-->Identify data needed In Texas, which deed type provides the strongest and broadest form of guarantee of title? -- CORRECT ANSWER-->Full covenant and warranty deed How long does the borrower have to rescind or cancel a new mortgage obtained for an already owned property? -- CORRECT ANSWER-->The borrower has three days after loan application to rescind or cancel. How many rental units are managed by members of the Texas Apartment Association? -- CORRECT ANSWER-->Nearly 2 million Marsten is the personal representative for his grandmother's estate. After her death, he learns that he can't distribute the estate's property until after the will goes through probate. What does this mean? -- CORRECT ANSWER-->The court must determine the will's validity and supervise distribution of the estate. Loans for ______ purposes don't require TILA disclosure. -- CORRECT ANSWER-->Business Which economic principle is related to supply and demand? -- CORRECT ANSWER-->Competition P ag e1 6 What is the three-property rule as it relates to tax-deferred exchanges? -- CORRECT ANSWER-->An investor can identify up to three replacement properties and not encounter a restriction regarding fair market value as long as debt load requirement is met. To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority? -- CORRECT ANSWER-->Conditions of sale Builders weren't allowed to develop new properties in Cityville for six months. This is likely because the city had enacted a ______. -- CORRECT ANSWER-->Moratorium - A temporary halt on new building Danette hasn't paid the first quarter water bill on her property. It was due on April 1. She's closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement? -- CORRECT ANSWER-->This is an accrued expense, and will appear as a seller debit and a buyer credit. Which type of real estate property can be divided into classes A, B, and C? -- CORRECT ANSWER-->Office buildings What does the income approach to value rely on when valuing properties that are five or more units? -- CORRECT ANSWER-->Gross income multiplier P ag e1 7 What document should detail the typical reports a property manager needs to provide for a property owner? -- CORRECT ANSWER-- >Property management agreement What is the term for an increase in property value caused by the joining of two neighboring parcels of land? -- CORRECT ANSWER-->Plottage Bridget has an investment portfolio that includes an equity REIT. Which of these is most likely to be part of the REIT's investment? -- CORRECT ANSWER-->Retail shopping centers How long must a taxpayer have lived in a home in order to claim a capital gain exclusion? -- CORRECT ANSWER-->Two of the preceding five years Before development of its new zipper factory begins, XYZ Corp. finds out that a section of the property it wants to build on is prone to flooding. It decides to dedicate this portion of the property to the government for public use to get out of handling the maintenance and drainage issues. The local government refuses. Why? -- CORRECT ANSWER-->The maintenance or cost to fix the problem might outweigh the benefits of its use. Maya owns a small graphics shop and is meeting with her tax professional to review the year's receipts and other tax documentation. Her tax advisor lets her know that she has an appreciating asset, which makes Maya very happy! Which of the following is Maya's appreciating P ag e2 0 eligible rural area? -- CORRECT ANSWER-->Single Family Housing Guaranteed Loan Program Just before closing, your buyer applies for a credit card. What could be the advantage or disadvantage at closing? -- CORRECT ANSWER-->The buyer's loan could be denied. Calculate eight months' interest on a $7,500 loan at 7.5%. Round to the nearest dollar. -- CORRECT ANSWER-->$375 - Figure out the annual interest by multiplying the loan amount by the rate. Once you have the annual interest, divide by 12 months to determine the monthly interest. From there, multiply the monthly interest by the number of months. Which environmental issue facing property owners and managers is most commonly found in structures built before 1981? -- CORRECT ANSWER-->Asbestos Which of the following calculators would best be used for performing computations of monthly payments, maximum loan amount, and remaining balance on a loan? -- CORRECT ANSWER-->Real estate What's it called when a number of percentage points is added to the index to determine the rate for an adjustable rate mortgage? -- CORRECT ANSWER-->Margin Which of the following units of measurement is used when determining the length of a wall? -- CORRECT ANSWER-->Feet P ag e2 1 Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises. -- CORRECT ANSWER-->Her title insurance What type of insurance protects the business if it is unable to produce income due to a covered event? -- CORRECT ANSWER-->Business interruption The idea that $100 gains or loses value over time is called what? -- CORRECT ANSWER-->Time value of money Which of these types of tenants most often uses a percentage lease? -- CORRECT ANSWER-->Retail The current value of a property is $105,000. What was the original cost of the property if there has been a 30% loss in value? -- CORRECT ANSWER-->$150,000 - Take the current value of the property divided by the total depreciation: 100% ‒ 30% = 70%, then $105,000 ÷ 0.70. The developer of a new subdivision is placing residential properties closer together, allowing him to include large open spaces throughout the development to build bike and walking trails, as well as a community pool and recreation center. What type of zoning is this? -- CORRECT ANSWER-->Cluster P ag e2 2 What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses? -- CORRECT ANSWER-->Operating Which of the following is the price a lender believes the property will bring at a foreclosure sale? -- CORRECT ANSWER-->Mortgage value Maggie is meeting with a prospective tenant client who wants her to negotiate a two-year lease for him. Prior to entering into an agency representation agreement with her prospective client, what must Maggie do in accordance with Texas law? -- CORRECT ANSWER-- >Review the Information About Brokerage Services form with her prospective client. Paula is bidding on a property that's being sold at a foreclosure auction. She's excited about the great deal she's getting on the property after she finds out she submitted the winning bid. What could cause Paula's great deal to turn into a nightmare? -- CORRECT ANSWER-->The title to the property may have hidden issues that could cost her a lot of money to clear. Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates? -- CORRECT ANSWER-->To assess the adequacy of tenant income screening processes Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the P ag e2 5 approval of the planning and zoning commission and _____________. -- CORRECT ANSWER-->A special use or conditional use permit Boris is an appraiser working for the Smith family. They've hired him to perform an appraisal on their six-bedroom house. What two types of data will Boris gather? -- CORRECT ANSWER-->General and specific Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal leads, what does he need to do next? -- CORRECT ANSWER-->Identify what data is needed In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what? -- CORRECT ANSWER-->Bracketing What is the term used to define someone who is granted power of attorney for another person? -- CORRECT ANSWER-->Attorney-in-fact Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property? -- CORRECT ANSWER-->Zero years (personal residences cannot be depreciated) Which of the following key players attends closing to pay for and receive clear title to the property? -- CORRECT ANSWER-->Buyer Tax Increment Reinvestment Zones (TIRZs) were implemented for what purpose? -- CORRECT ANSWER-->To attract new investors to certain areas P ag e2 6 During the analyzing step of solving a word problem, what should you be doing? -- CORRECT ANSWER-->Determining what is being asked In Texas, leases may be terminated by expiration, ______, or abandonment. -- CORRECT ANSWER-->Mutual agreement With this type of loan, personal property is included with the real property in the sale. It's commonly seen in commercial real estate, but you may also see this in the sale of furnished condominiums. -- CORRECT ANSWER-->Package mortgage To determine if a rental property has a(n) ______ issue, property owners and managers should first have the property tested, and then, if the levels are high, take steps to mitigate the problem. -- CORRECT ANSWER-->Radon What's the term for a notice given directly to and received by a person? -- CORRECT ANSWER-->Actual notice Which type of investor would be interested in a "fixer" property? -- CORRECT ANSWER-->Flipper What information does the Loan Estimate NOT provide to buyers under required disclosures law? -- CORRECT ANSWER-->Final closing costs Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______. -- CORRECT ANSWER-->Subprime loans P ag e2 7 Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through ______. -- CORRECT ANSWER-->Mutual agreement Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What is this an example of? -- CORRECT ANSWER-->A land contract Find the number of square feet in a rectangular lot with 75 feet of frontage and a depth of 140 feet. -- CORRECT ANSWER-->10,500 square feet Which key on a real estate calculator is used to enter the periodic principal and interest payment? -- CORRECT ANSWER-->PMT Paul wants to rent an apartment from Wendy, but he doesn't have a Social Security number. Wendy explains that in order to rent to him, he must provide her with an acceptable form of identification. Paul hands her his green card. What does Wendy do? -- CORRECT ANSWER-- >Hands Paul a lease agreement to fill out What's a power of attorney? -- CORRECT ANSWER-->A legal document that allows a person to act as attorney-in-fact for another in a financial, business, or health matter P ag e3 0 generated. How much will she be paid for this sale? -- CORRECT ANSWER-->$14,625 If Hal sold his client's listing for $230,000, but it appraised at $200,000 and the buyers agreed to put the extra $30,000 down, what will Hal's commission be if he charged 5%? -- CORRECT ANSWER-->$11,500 What is an appraisal? -- CORRECT ANSWER-->An opinion or estimate of a property's value as of a specific date The market value of your client's property is $280,000. Taxes in the area are assessed at 60% of market value. Your client's semi-annual tax bill was $1,461. What's the tax rate per 100? -- CORRECT ANSWER-- >Multiply market value ($280,000) by assessed percentage (60% or .6) to get an assessed value of $168,000. The semi-annual bill was $1,461, so annual taxes are $2,922. Divide annual taxes by assessed value: $2,922 ÷ $168,000 = .0174. Multiply this by 100 to get $1.74. Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued at $120,000. What economic principle is at work here? -- CORRECT ANSWER-->Plottage What does RESPA stand for? -- CORRECT ANSWER-->Real Estate Settlement Procedures Act Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend's neighborhood. It's listed for $400,000. However, just down the street, another three-bedroom, 2,400-square- P ag e3 1 foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here? -- CORRECT ANSWER-->Substitution In Texas, a testator must be of legal capacity. What does that mean? -- CORRECT ANSWER-->The testator must be of sound mind and at least 18 years of age. What takes precedence over a deceased person's wishes to grant his property at death, even if those wishes are specified in the decedent's will? -- CORRECT ANSWER-->Operation of law What's one way property managers can assist property owners in maintaining their investments? -- CORRECT ANSWER-->Spend enough to maintain and upgrade the property so tenants will want to live there. Which one of the following pieces of information should all commercial leases contain? -- CORRECT ANSWER-->The lease agreement start and end dates Using a calendar year, what would the daily rate be if annual taxes are $4,662? Round to the nearest cent. -- CORRECT ANSWER-->12.77 When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment? -- CORRECT ANSWER-->Financing terms and cash equivalency P ag e3 2 Mary Ann is looking for the potential rate of return. What sort of value is she interested in? -- CORRECT ANSWER-->Investment value Property managers spend a good deal of their time overseeing and managing others: maintenance people, staff, contractors, and sometimes even tenants. To be effective in this area, a property manager needs to have what type of skills? -- CORRECT ANSWER-- >Supervisory What is a reverse exchange? -- CORRECT ANSWER-->An investor finds and closes on an investment property and then decides to immediately sell another investment property. With a triple net lease, the tenant pays _______ separately from the base rent. -- CORRECT ANSWER-->Taxes, insurance, and maintenance Jennings has received a Closing Disclosure from his lender. What's the purpose of this form? -- CORRECT ANSWER-->To detail all costs Jennings will owe at closing If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate? -- CORRECT ANSWER-->20% Who is the lessee in a lease agreement? -- CORRECT ANSWER-->Tenant According to Texas's Privacy Policy law, property managers who require tenants to provide their Social Security numbers on the lease agreement must have a privacy policy in place and P ag e3 5 Which of the following describes a census tract? -- CORRECT ANSWER-- >Geographic area developed in a community and identified by number A form of depreciation or loss in value caused by defects in design is called _______. -- CORRECT ANSWER-->Functional obsolescence The Bensons are looking at buying a $650,000 property with a 30-year loan at a 3.125% interest rate. How much would their monthly principal and interest amount be? Use 4.80738 as the factor for a 30-year loan at a 3.125% interest rate. -- CORRECT ANSWER-->$3,124.80 This section of the URAR is used to record the property's address, legal description, and neighborhood name along with some other information about the subject property. -- CORRECT ANSWER-->Subject Which of the following requires a landlord or property manager to obtain a tenant's written consent before sharing any information about the tenant with an unaffiliated third party? -- CORRECT ANSWER-- >Federal Trade Commission (FTC) privacy rule Who is responsible for obtaining evidence of title and title insurance? -- CORRECT ANSWER-->The buyer What is the calculation used to determine the estimated monthly interest amount a borrower will pay on a loan? -- CORRECT ANSWER-- >(Loan balance x interest rate) ÷ 12 P ag e3 6 In completing a CMA, finding a comparable property that had a quick sale may indicate which of the following? -- CORRECT ANSWER-->The market for similar homes is good. Jason, your client, is developing a subdivision of 140 houses. He may place deed restrictions on as many as ______ properties. -- CORRECT ANSWER-->140 (100%) When pricing a property, which of the following is a reason a licensee would consider expired listings? -- CORRECT ANSWER-->To determine the price at which a property won't sell At the closing table, who examines all documents for buyers and represents their best interests? -- CORRECT ANSWER-->Buyer's attorney Donald purchased a property five years ago. He lived in the property for a year, then rented it out to a family friend. Now he is selling the property for a capital gain of $10,000. Can he exclude the gain from his taxes? -- CORRECT ANSWER-->No, he did not live in the home for two of the preceding five years. Gloria has left a gift of real property in her will to her great-grandson, Tony. This gift is known as a ______________. -- CORRECT ANSWER-- >Devise In the real estate business, which professional's primary role is to fund high risk land development/construction projects? -- CORRECT ANSWER-->Investor P ag e3 7 Brendan's lender set him up with a loan in which the majority of Brendan's early payments go toward interest, his monthly payments remain the same, and he doesn't start paying much toward his principal until closer to the end of the loan. This is ______. -- CORRECT ANSWER- ->Typical amortization Which of the following is the purpose of most calculations that real estate professionals make for their clients? -- CORRECT ANSWER-->To provide information the client can use to help them make strategic decisions Who is responsible for obtaining an appraisal? -- CORRECT ANSWER-- >The buyer Which veteran loan program offers qualified veterans help with the purchase of land in Texas? -- CORRECT ANSWER-->Veterans Land Program A ______ is a ratio that compares two quantities. -- CORRECT ANSWER- ->Rate Which of these terms describes the actions that are required to effect a transfer of title by deed? -- CORRECT ANSWER-->Delivery and acceptance What type of value is of interest to taxing authorities? -- CORRECT ANSWER-->Assessed value P ag e4 0 What is static risk? -- CORRECT ANSWER-->An insurable business risk that includes insuring for accident liability, fire, theft, and vandalism Which consumer protection act enacted in 1974 prohibits kickbacks and referral fees and requires written lender disclosure of estimated and final settlement costs? -- CORRECT ANSWER-->Real Estate Settlement Procedures Act Victor bought a property from Yolanda for $200,000. Under the terms of a land contract, Victor agreed to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title? -- CORRECT ANSWER-->Yolanda Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that's about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What's Clark most likely asking you to provide? -- CORRECT ANSWER-->BPO _______ is the principle that the more similar properties there are on the market, the lower the price will be driven. -- CORRECT ANSWER-- >Competition In property management, what's the legal and binding contract that spells out the duties for both the property manager and property owner? -- CORRECT ANSWER-->Property management agreement P ag e4 1 A _____ is the top number of a fraction. -- CORRECT ANSWER-- >Numerator A _____ is made when a property is sold for more than the original price. -- CORRECT ANSWER-->Profit In the real estate business, whose primary role is it to provide clients with the information they need to make informed decisions about their own specific real estate interests? -- CORRECT ANSWER-->Real estate counselor Once you understand what's being asked in a word problem and have determined the appropriate formula to use, what's the next step? -- CORRECT ANSWER-->Inserting What personal information about the borrower is included in the Uniform Residential Loan Application? -- CORRECT ANSWER-->Income Lauren obtained a loan that's insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has? -- CORRECT ANSWER-->FHA If the responsible parties refuse to clean up hazardous contamination, the EPA can hire its own contractors and seek damages in court for ______. -- CORRECT ANSWER-->Up to three times the actual clean-up costs P ag e4 2 Who is ultimately responsible for ensuring that any hazardous waste produced at an apartment complex is properly disposed of? -- CORRECT ANSWER-->The property owner or manager The blueprint to the transaction is another term for the _______. -- CORRECT ANSWER-->Sales contract 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. What is Jared's brokerage's commission rate? -- CORRECT ANSWER-->6.5% In the case of adverse possession, possession and use of a property must be well known to others. This is otherwise known as what? -- CORRECT ANSWER-->Open and notorious Olivia purchased a property five years ago for $200,000. She put down $50,000 and financed $150,000. Today, the property is valued at $250,000. She'd like to purchase another property, so she refinanced her current property and used the equity to purchase a new property. Of what is this an example? -- CORRECT ANSWER-->Pyramiding If your clients want to keep their interest rates lower than the going rate and have plenty for a down payment and closing costs, they may have enough funds to _______ the interest rate. -- CORRECT ANSWER-- >Buy down P ag e4 5 What are the benefits of an energy-efficient mortgage (EEM)? -- CORRECT ANSWER-->An EEM can help the borrower qualify for a larger loan due to the potential energy savings on a monthly basis. What's a legal agreement or promise made between two parties? -- CORRECT ANSWER-->A covenant Which classification of appraiser can perform appraisals of simple residential one- to four-unit properties with a value less than $1 million, but not of properties with greater value? -- CORRECT ANSWER-- >Licensed appraiser When property changes hands, the deed is recorded. There's a fee for recording. What is the benefit to the grantee of having the deed recorded? -- CORRECT ANSWER-->It puts the public on notice regarding ownership. Which of the following is the best example of investment leverage? -- CORRECT ANSWER-->Financing most of an investment and putting very little cash in What must be done to obtain title to property after meeting all of the requirements of adverse possession? -- CORRECT ANSWER-->Obtain a court action to quiet title. P ag e4 6 To check the creditworthiness of a prospective tenant, the lease application typically requests ______. -- CORRECT ANSWER-- >Permission to run a credit report The mortgage broker is the _____ when working with clients who are obtaining a mortgage. -- CORRECT ANSWER-->Middleperson A property appraises at $320,000. If the assessment rate is 100% and the tax rate is $1 per $100, what are the semi-annual property taxes? -- CORRECT ANSWER-->$1,600 The closing funds may be in the form of ______ at closing. -- CORRECT ANSWER-->A cashier's check