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REAL ESTATE
NATIONAL PRACTICE QUIZ 2
| Question | Answer |
|---|---|
| An agent forgot to get the buyer to sign the offer. What is the status of the offer? | void |
| If there is a low vacancy rate, the property manager should probably | raise the rent |
| The charge for the use of the lender's money in a loan is | the interest |
| Legal instruments may be prepared by | attorneys |
| General real estate property taxes are also known as | ad valorem taxes. |
| In the purchase agreement, the buyer and seller agreed to liquidated damages as a remedy for default. If the buyer defaults, this means the seller | keeps only the buyer’s earnest money. |
| A homeowner's son starts college soon. The homeowner has lived in her home for 10 years. To obtain funds to pay for her son's schooling, the homeowner might use | a home equity loan. |
| A tenant signs a lease that includes a schedule of rent increases on specific dates over the course of the lease term. What kind of lease has this tenant signed? | graduated |
| Defined as a loss in value from any cause, depreciation is generally divided into three categories. The loss of value due to the normal wear and tear on a property is called | physical deterioration. |
| A buyer purchased a property that is one square mile and another that measures 511.23' × 511.23'. At a cost of $2,000 an acre, how much did she pay for the property? | The answer is $1,291,999. Property 1: 5,280 × 5,280 = 27,878,400; 27,878,400 ÷ 43,560 = 640 acres. Property 2: 511.23 × 511.23 = 261,356.1129; 261,356.1129 ÷ 43,560 = 5.9999 acres. 640 + 5.9999 = 645.9999 total acreage 645.9999 × $2,000 = $1,291,999 |
| In a typical agency relationship between broker and client, under the common laws of agency, the broker's commission is determined by | negotiation in advance. |
| The income approach as used by an appraiser makes use of which of the following? | Capitalization |
| A house has outdated electric and plumbing. This is an example of | functional obsolescence |
| Which of the following actions is NOT a responsibility of the landlord? | Timely payment of the monthly rent |
| When a homeowner with an existing mortgage gets a home equity loan to consolidate existing credit card loans, | the original mortgage loan remains in place. |
| A buyer entered into a buyer agency agreement that gave him the right to purchase property on his own and not pay the buyer's agent. This BEST describes | an exclusive agency buyer agency contract. |
| Which of the following liens usually would be given highest priority in disbursing funds from a foreclosure sale? | Unpaid real estate property taxes |
| The primary intent of zoning ordinances is to | ensure that proposed land uses conform to the master plan. |
| With a Veterans Affairs-guaranteed mortgage, | the borrower must apply for a certificate of eligibility. |
| In general, when the supply of a certain commodity increases, | price tends to drop. |
| Investment prop was purch for $250k. Owner added a tennis court at a cost of $10k. 2 years later, the prop sold for $325k and seller pd a 7% com +$250 in attorney fees. If he purchases another property for $350k, how much cap gains will he exclude? | $250,000 + $10,000 = $260,000 $325,000 – $22,750 (7%) = $302,250 – $250 = $302,000 $302,000 – $260,000 = $42,000 |
| Before the buyer signs a buyer agency contract, a real estate professional must do all of the following EXCEPT | obtain financial information from the buyer. |
| A mortgage broker generally | brings the borrower and the lender together. |
| A seller has listed her home with a broker for $190,000. The listing broker tells a prospective buyer to submit a low offer because the seller is desperate to sell. The buyer offers $185,000 and the seller accepts it. In this situation, | the broker has violated his fiduciary relationship with the seller. |
| A woman has a nine-year-old grandson living with her, and her application for an apartment has been rejected, as the community does not allow anyone under the age of 18. Is this permissible? | Yes, if the housing complies with regulations for senior housing. |
| The buyer has made an offer that the seller has accepted and proper notice has been given to the buyer of the seller's acceptance. The offer is now considered | an executory contract. |
| Three friends were concurrent owners of a parcel of real estate. One of the friends died, and his interest passed according to his will to become part of his estate. The deceased friend was | a tenant in common. |
| A property manager's job description, duties, and obligations, while varied, are BEST defined by | the property management contract. |
| A woman applies to the municipality for permission to open an adult daycare facility in her neighborhood. Many elderly persons live in the neighborhood. The municipality may grant her | a special-use permit. |
| All of the following are typically found in a listing contract EXCEPT | the date the broker will schedule an open house. |
| A seller wants to net a 12% profit after paying the brokerage firm a 6.5% commission. If the original purchase price was $104,500, what is the minimum offer he can accept? | The answer is $125,176. $104,500 + 12% (.12) = $117,040 100% – 6.5% = 93.5% $117,040 ÷ 93.5% (.935) = $125,176.47 round to $125,176 |
| Reconciliation is BEST described as | analyzing the findings obtained from the three approaches to value. |
| The term of a loan is | the length of time the borrower has to repay the loan. |
| The principle of appraising, which states that the maximum value is achieved when the property is in harmony with its surroundings, is the principle of | conformity. |
| Upon purchasing a small apartment complex, the owner had the in-ground swimming pool filled in with concrete. This action is an example of | avoiding the risk. |
| In a land contract, the buyer | has possession during the term of the contract. |
| The terms of settlement and closing are determined by | the purchase contract |
| An option | binds the optionor for a specified time. |
| Purchaser buys a home using a mortgage loan from a local lender. Lender promptly recorded the mortgage. 3 years later, homeowner needs additional cash, so he places a second mortgage with a different lender. Based on these facts, which statement is TRUE? | The loan from the original lender has priority over the loan made three years later with the new lender. |
| The type of easement granting a right-of-way for a utility company's power lines is | an easement in gross. |
| A sales associate was paid $2,500, which was half of the 7% that the brokerage collected. What was the sale price of the property? | The answer is $71,429. $2,500 × 2 = $5,000 $5,000 ÷ 7% (.07) = $71,428.57 round to $71,429 |
| An example of functional obsolescence is | a five-bedroom home with one bathroom. results from outmoded or unacceptable physical features in a property |
| When a property is misrepresented because defects are not disclosed to a buyer, the buyer may be able to rescind a sales contract or receive | compensatory damages for repair of the defect. |
| The sales comparison approach to value is MOST important when estimating the value of | an existing residence |
| With a tenancy for years | no notice is required to terminate the lease. |
| Listing broker presents a seller w/ offer much lower than what the seller is asking. Allows seller 24 h to accept. Broker recommends seller counteroffer and leaves blank. Seller emails the broker children, not on the title, she has accepted. The offer | may be a voidable contract due to duress. |
| Agent and his spouse, separated, still own a property. Listing agent brings offer from his separated spouse to a seller, his client. The agent does not tell the seller that the buyer is his spouse. The agent's action | violates his duty of disclosing material facts to the seller. |
| The primary purpose of errors and omissions (E&O) insurance is to | protect against catastrophic lawsuits. |
| Homeowners may deduct all of the following expenses when preparing their income tax return EXCEPT | homeowners' association dues. |
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