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NH RE Exam 5
| Question | Answer |
|---|---|
| A non-conforming loan is a loan in the amount over: | Fannie Mae and Freddie Mac’s loan limits are any loan up to $453,100 (as of 2018). Any loan over this limit is known as a “non-conforming” loan or “jumbo” loan. |
| If Jonas owns a parcel of property that is part of a township, and later on decides to convey an interest in the property to his brother Mortimer, Mortimer is then known as: | f a person owns a property and grants an interest in the property to another person, that person who receives the interest in the property is known as the grantee. |
| A bequest is when: | A bequest is when personal property is transferred by will. Historically the term bequest is for personal property and devise is for real property. In modern times, the two terms are used interchangeably on most occasions. |
| Ben the landlord wishes to charge Betty extra rent because she has a child living with her. This would be considered: | This practice is illegal according to the Fair Housing Amendments Act of 1988 that included the presence of children in a family as a protected class. |
| If a decision is made by a court of law regarding the repayment of a debt, this is called a: | A judgement is a decision made by a court of law. |
| A remainder is when: | When a life estate ends and there arises future interest in any person other than the grantor, the residue of the estate is called a remainder. |
| The main source of revenue for most local governments is: | Property taxes are the main source of revenue for most local governments. |
| The substitution of one party for another in regard to pursuing a legal right, interest, or obligation is known as: | Subrogation is the substitution of one party for another in regard to pursuing a legal right, interest, or obligation. |
| If an appraiser were to use an approach for appraising land for which there is already a market of similar properties, the appraiser would likely use which method? | The market data approach would be the most appropriate method for assessing the value of property in which there is already a larger market of similar properties. |
| Which of these terms refers to the owner of real property selling the property to someone else and is a legal right? | Disposition (which can also be called alienation), refers to the disposal of something. In real estate it is a right of alienation to do this with real property. |
| A broker’s protection clause, when inserted into a listing agreement, serves this function: | The broker’s protection clause in a listing agreement entitles a broker a commission if any property is sold to parties with whom he/she has negotiated during the term of the listing for a stated number of days after the listing has expired. |
| Private mortgage insurance is required when: | When a loan-to-value percentage is in excess of 80%, private mortgage insurance is required. |
| Land, appurtenances, permanent structures, trees, minerals, and the benefits and inherent rights thereof refers to: | Land, appurtenances, permanent structures, trees, minerals, and the benefits and inherent rights thereof is the definition of real property. |
| In New Hampshire, as part of maintaining the public’s trust, licensees must place all monies or other valuables held on behalf of others in: | In the state of New Hampshire, part of maintaining the public’s trust in real estate policies and procedures means that all licensees must place all monies or other valuables held on behalf of others in a trust account. |
| Which of these is considered to be an encumbrance? | A lease, mortgage, easement, or restriction is considered an encumbrance of a fee simple title.A thorough inspection by a professional that evaluates the structural and mechanical condition of the property is called a home inspection. Typically a continge |
| In order for a deed to be valid, it must be: | A valid deed must be in writing, it must be signed by the grantor, and it must adequately describe the property. |
| A thorough inspection by a professional that evaluates the structural and mechanical condition of the property, and is typically a contingency, is called a: | A thorough inspection by a professional that evaluates the structural and mechanical condition of the property is called a home inspection. Typically a contingency is a satisfactory home inspection. |
| When a licensed agent acquires an exclusive listing from a seller, this means that: | In an exclusive listing, the licensed agent has the exclusive right to sell the property for a specific period of time. |
| Change of locational demand is an example of: | An example of economic obsolescence would be change of locational demand. |
| The process of paying off one loan with the proceeds from a new loan using the same property as security is called a: | This type of process is known as a refinance transaction. |
| If a dispute over ownership of a property occurs, a property owner would likely be protected from loss if they had purchased: | Title insurance protects the lender or the buyer against loss arising from disputes over ownership of a property. |
| When is the down payment typically given? | In most cases the down payment is given in cash at the time of finalizing the transaction. |
| If a buyer decides to pay for a property in cash, which form is required to be filed according to the IRS? | IRS Form 8300 must be filed on all cash payments that are $10,000 or more. |
| An agent working under a broker is offered a new BBQ grill by a seller they are working with if the agent can produce a buyer by the end of the month. the seller wants to give the agent the BBQ. What should the agent do? | Inform the seller that it is not legal to receive such compensation from anyone except the broker |
| The power of attorney means: | Of the answers provided, the power of attorney grants the broker the power to execute certain actions on behalf of a principle. |
| Jeremy is a lender for a several loans. Once a year Jeremy performs a duty to make sure he is collecting the appropriate amount of money for the anticipated expenditures. This action that Jeremy takes is called a(n): | An escrow analysis is when the lender performs a type of audit to be sure they are collecting the appropriate amount of money for the anticipated expenditures. |
| If a homeowner obtains a home equity line of credit, they have obtained: | A home equity line of credit is a mortgage loan that is typically in the second position that allows the borrower to obtain cash drawn against the equity of the home. |
| A mortgage payment that is not enough to cover the scheduled monthly payment on a mortgage is called: | A partial payment is a payment that is insufficient to cover the scheduled mortgage loan payment and is normally not accepted by the lender. |
| An income property has a net income of $40,000. How much value would be lost if the current capitalization rate in the area changed from 5% to 8%? | Divide the net income of $40,000 by 5%. It will give you a value of $800,000. You divide the same net income of $40,000 by 8%. It gives you a value of $500,000. The net difference is a $300,000 decrease in value. |
| A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features is called: | |
| Another term for a title search is: | Due diligence refers to the agent’s responsibility to investigate a residential property consisting of 1-4 dwelling units to ensure the property is as represented by the seller and to disclose accurate and complete information about the title. |
| This is any condition revealed by a title search that adversely affects the title to real estate: | A cloud on a title is anything that adversely affects the title as determined by a title search. |
| In government surveys of land, why is metes-and-bounds used? | The government surveys of land use metes-and-bounds to determine the outlines of a certain area. |
| Ito wishes to have a broker represent him in the purchase of a new piece of property. This type of arrangement would be called: | Of the listed answers, Buyer Broker Agreement is the correct answer. This type of agreement can also be called an Exclusive Right to Represent Agreement. |
| Which of the following is considered an “encumbrance”? | Mortgages, Easements, Leases, or Restrictions are all considered an encumbrance limiting the fee simple title to a property. |
| If a lien has a lower priority than the first mortgage or lien, this would be known as: | Subordinate financing is any lien or mortgage that has a lower priority than the first mortgage. This means that any creditor would be paid on the first mortgage or lien before all others. |
| Objects, rights, or interests that are incidental to the land and go with or pertain to the land are called: | Appurtenances are objects, rights, or interests that are incidental to the land and go with or pertain to the land. |
| This will cover repairs to certain items like air conditioning or heating during the coverage period: | A homeowner’s warranty will cover repairs to certain items such as major appliances. This type of warranty is loosely regulated and is not required. |
| What does the term “ARM” mean? | ARM is the abbreviation for Adjustable Rate Mortgage. |
| If a contractor intends to sell 10 properties in a calendar year, he/she will need: | Because the contractor is selling 8 or more in a single calendar year, it is required that they obtain a real estate license if they are selling them by themselves as they are real property securities and there are many transactions occurring. |
| Henry and Greta are joint tenants for their property. After Henry passed away, Greta acquired the Henry’s interest in the property. This is called the right of: | In regards to the right of survivorship, it is the right of the survivors to acquire the interest in a property of a deceased joint tenant. |
| Government loans are guaranteed by: | The Rural Housing Service (RHS) is one of the institutions that guarantees government loans. The other is the Veteran’s Administration (VA). |
| A legal claim against a property that must be paid off when the property is sold is called a: | A lien is a legal claim against a property that must be paid off when the property is sold. Liens can come in many forms. |
| Fannie Mae is owned by: | Fannie Mae is a shareholder owned company. |
| A written decision of the court, that when recorded creates a lien is known as: | An abstract of judgment is a written decision of the court that when recorded creates a lien. |
| If an agent acts in a way that prevents disclosure of something, this action is called: | Preventing the disclosure of something refers to the act of concealment. |
| A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before he/she offers it for sale or lease to other parties is known as: | The first right of refusal provision in an agreement allows the party listed the first opportunity to purchase or lease a property before it is released to other parties. |
| If referring to an acceleration clause, which of these is the most similar? | An acceleration clause is most similar to a call option. |
| The secondary mortgage market consists of which major participant(s): | Fannie Mae, Ginnie Mae, and FHLMC are all major participants in the secondary mortgage market. |
| Land, appurtenances, and things affixed to the land are: | The three broad categories of real property are land, appurtenances, and things affixed to the land. |
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