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608 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Which of the following best defines real estate?
a. Land and the air above it b. Land and the buildings permanently affixed to it c. Land and all things permanently affixed to it d. Land and the mineral rights in the land |
c. Land and all things permanently affixed to it
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Chapter 1, page 2
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Which of the following is NOT a physical characteristic of land?
a. Indestructibility b. Scarcity c. Immobility d. Uniqueness |
b. Scarcity
This is an economic characteristic. |
Chapter 1, p 3-4
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The term nonhomogeneity refers to which of the following?
a. Scarcity b. Uniqueness c. Mobility d. Indestructibility |
b. Uniqueness
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Chapter 1, p 4
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Area preference, or situs, refers to:
I. location. II. a physical characteristic of the building on the land. a. I only b. II only c. Both I & II d. Neither I nor II |
a. I only
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Chapter 1, p 4
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Which of the following physical and economic factors would a land developer take into consideration when determining the optimum use of a parcel of land?
a. Transportation b. Available natural resources c. Contour and elevation d. All of the above |
d. All of the above
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Chapter 1, p 5
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Which of the following is NOT an economic characteristic of real estate?
I. Indestructibility II. Scarcity a. I only b. II only c. Both I & II d. Neither I nor II |
a. I only
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Chapter 1, p 4-5
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A theater or hotel is an example of:
I. industrial real estate II. special-purpose real estate a. I only b. II only c. Both I & II d. Neither I nor II |
d. Neither I nor II
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Chapter 1, p 10
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Factors that influence the demand for real estate include the:
a. number of real estate brokers in the area b. ethnic makeup of neighborhoods c. wage levels and employment opportunities in the area d. price of new homes being built in the area versus the price of existing homes |
c. wage levels and employment opportunities in the area
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Chapter 1, p 12
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The designation REALTOR refers to:
a. any person whose business involves real estate. b. any licensed real estate broker c. an active memnber of a state association or local board affiliated with the National Association of REALTORS d. any licensee with a current and active real estate license. |
c. an active memnber of a state association or local board affiliated with the National Association of REALTORS
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Chapter 1, p 9
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Which of the following statements is true of business cycles?
a. They involve periods of expansion, recession, depression, and revival. b. They are dictated by the number of real estate professionals practicing real estate on a full-time basis c. They have to do with the ethnic and religious characteristics of the area. d. They do not exist in the real estate and building industries. |
a. They involve periods of expansion, recession, depression, and revival.
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Chapter 1, p 13
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All of the following factors tend to affect supply EXCEPT
a. the labor force b. construction costs c. government controls d. demographics |
d. demographics
Demographics affect demand |
Chapter 1, p 11-12
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Real estate can be a poor investment if:
a. inflation is high b. the investor can hold on to the investment for a long period of time. c. the investor needs ready cash d. land values are increasing |
c. the investor needs ready cash
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Chapter 1, p 6
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In general, when the supply of a certain commodity increases, prices
a. tend to rise b. tend to drop c. tend to stabilize d. can no longer be established |
b. tend to drop
Remember arm gestures :) |
Chapter 1, p 10
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In general terms, a market refers to which of the following:
a. Place where sellers come to sell their goods b. Amount of goods available at a given price c. Quality of goods available to the public d. Forum where the cost of goods is established |
a. Place where sellers come to sell their goods
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Chapter 1, p 10
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The demand for real estate in a particular community is least affected by:
a. population b. wage levels c. employment d. international trade |
d. international trade
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Chapter 1, p 12-13
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The real estate market is considered local in character for all EXCEPT which of the following reasons?
a. Land is fixed or immobile b. Most people are not mobile enough to take advantage of available real estate in distant areas c. Local controls can have a significant impact on the market d. Most people are mobile enough to take advantage of available real estate in distant areas |
d. Most people are mobile enough to take advantage of available real estate in distant areas
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Chapter 1, p 11
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Compared with typical markets, the real estate market
a. is national in scope b. is always stable and is not affected by supply or demand c. does not affect any other industry but its own d. is local in nature and is slow to respond to the forces of supply and demand |
d. is local in nature and is slow to respond to the forces of supply and demand
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Chapter 1, p 10-11
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Which of the following statements is true in North Carolina?
a. All licensees are REALTORS b. All REALTORS are licensees c. All real estate commissioners are licensees d. All real estate licensees charge commission |
b. All REALTORS are licensees.
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Chapter 1, p 9
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Real property is often referred to as a bundle of legal rights. Which of the following is NOT among these rights?
a. Right of exclusion b. Right to use the property for illegal purposes c. Right of enjoyment d. Right to sell or otherwise convey the property |
b. Right to use the property for illegal purposes
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Chapter 2, p 18
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A fixture is considered to be
I. real estate II. personal property a. I only b. II only c. Both I & II d. Neither I nor II |
a. I only
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Chapter 2, p 22
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A construction firm builds an office center over a railroad right-of-way. This means that
a. trains can no longer operate on the tracks under the building during business hours because the noise would distrub occupants of the office center b. the construction firm has built the office center using the subsurface rights to the property c. the construction firm has built the office center using the air rights over the railroad right-of-way d. in building the office center the construction firm is in violation of NC law |
c. the construction firm has built the office center using the air rights over the railroad right-of-way
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Chapter 2, p 18-19
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A tenant firmly attaches appropriate appliances for his restaurant business on the leased premises. These appliances are
I. trade fixtures II. removable by the tenant within 30 days of the expiration of the lease agreement a. I only b. II only c. Both I & II d. Neither I nor II |
a. I only
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Chapter 2, p 23
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Jerry and Ann Edwards are building a new enclosed front porch on their home. The lumber dealer with whom they are contracting has just unloaded a truckload of lumber that will be used to build the porch on their property. At this point the lumber is considered a(n)
a. improvement that is real estate b. chattel that is personal property c. fixture that is personal property d. chattel that is real estate |
b. chattel that is personal property
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Chapter 2, p 21
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When the Edwards' new front porch is complete the lumber that the dealer originally delivered will be considered a(n)
a. improvement that is real estate b. chattel that is personal property c. fixture that is personal property d. chattel that is real estate |
a. improvement that is real estate
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Chapter 2, p 21-22
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Anne Ferneding is renting a single-family home under a one-year lease. With the landlord's approval, two months into the lease, she installs awnings over the building's front windows. Anne explained her need to keep the sun away from some delicate hanging plants. Which of the following statements is true?
a. Anne must remove the awnings when she vacates or leave them for the landlord b. Because of their nature, the awnings are considered real property c. The awnings are considered fixtures d. Because of the nature of the property, the awnings are considered trade fixtures |
a. Anne must remove the awnings when she vacates or leave them for the landlord
Think of the satellite dish fiasco at Greenway |
Chapter 2, p 23
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Aaron Heffner purchases a parcel of land and sells the mineral rights to an exploration company. Aaron now owns all EXCEPT which of the following rights?
a. Air b. Surface c. Subsurface d. Air and subsurface |
c. Subsurface
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Chapter 2, p 18-19
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Qualified fee generally means that the estate will terminate on the death of
I. the grantor II. the grantee a. I only b. II only c. Both I & II d. Neither I nor II |
d. Neither I nor II
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Chapter 2, p 26
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The term dower refers to which of the following?
a. Conventional life estate in real property b. Ownership of a homestead c. Marital right d. Moveable personal property |
c. Marital right
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Chapter 2, p 28-29
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Ed Roberts has the legal right to pass over the land owned by his neighbor. This is an:
a. estate in land b. easement c. emblement d. encroachment |
b. easement
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Chapter 2, p 39-40
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Which of the following describes a life estate?
a. Estate conveyed from Andrew to Betty for life b. Estate conveyed from Andrew and Betty as co-owners with right of survivorship c. Estate with use conditions d. Fee simple estate |
a. Estate conveyed from Andrew to Betty for life
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Chapter 2, p 26-27
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An estate in land that will automatically extinguish on the occurrence of a specified event is called a
I. right of entry II. fee simple determinable a. I only b. II only c. Both I & II d. Neither I nor II |
b. II only
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Chapter 2, p 26
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A purchaser of real estate learns that her ownership rights will continue forever and that no other person can claim to be the owner or has any ownership control over the property. This person owns a
a. fee simple interest b. life estate c. determinable fee estate d. fee simple on condition subsequent |
a. fee simple interest
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Chapter 2, p 25
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TP:
Joan owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. She wanted to have more control over its use, so her attorney prepared her deed to convey ownership of the lot to the hospital "so long as it is used for hospital purposes". After completion of the gift, the hospital owned a(n) a. fee simple absolute estate b. easement c. fee simple determinable d. leasehold estate |
c. fee simple determinable
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Chapter 2, p 26
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After Stacksteder had purchased his house and moved in, he discovered that his neighbor regularly uses Stacksteder's driveway to reach a garage located on the neighbor's property. Stacksteder's lawyer explained that ownership of the neighbor's real estate includes an easement over the driveway. Stacksteder's property is called
a. the dominant tenement b. a freehold c. a leasehold d. the servient tenement |
d. the servient tenement
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Chapter 2, p 39-40
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When a fee simple estate in a parcel of North Carolina real estate is conveyed by a deed to two or more owners other than husband and wife without designating the nature of their ownership, they are assumed to be
a. tenants by the entirety b. survivors c. tenants in commons d. joint tenants |
c. tenants in common
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Chapter 2, p 29-30
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A tenant in common owns an
I. undivided interest II. interest that must be equally divided a. I only b. II only c. Both I & II d. Neither I nor II |
a. I only
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Chapter 2, p 29-30
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A purchaser under the cooperative form of ownership receives
I. a lease for the unit II. stock in the cooperative corporation a. I only b. II only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 2, p 34
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If property is held by two or more owners as tenants in common, the interest of a deceased co-owner will pass to the
a. remaining owner or owners b. heirs of the deceased c. trust under which th property was owned d. state by the law of escheat, regardless of whether the deceased has any heirs |
b. heirs of the deceased
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Chapter 2, p 29-30
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A condominium is created when
a. the construction of the improvements is completed b. the owner or developer files a declaration of condominium in the public record c. the condominium owners' association is established d. all of the unit owners file documents in the public records asserting their decision |
b. the owner or developer files a declaration of condominium in the public record
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Chapter 2, p 33-34
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Ownership that allows possession for only a specific time each year is a
a. cooperative b. time-share c. condominium d. syndicate |
b. time-share
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Chapter 2, p 35
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In North Carolina, real property must be reassessed every
a. four years b. six years c. eight years d. ten years |
c. eight years
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Chapter 2, p 43
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Which of the following taxes are used to distribute the cost of public services among real estate owners?
a. Personal property b. Sales c. Real Property d. All of the above |
c. Real Property
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Chapter 2, p 42-43
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Which of the following liens usually would be given higher priority?
a. Mortgage dated last year b. Current real estate taxes c. Merchanic's liens for work started before the mortgage was made d. Judgments rendered yesterday |
b. Current Real estate taxes
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Chapter 2, p 44
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Green is the owner of a fee simple estate. The current year's property taxes are not yet payable. The title
a. is most typically marketable absent any significant liens or clouds on the title b. cannot be transferred until the lien is paid c. may be transferred to the lienholder only d. automatically reverts to the previous owner because it is encumbered with a lien |
a. is most typically marketable absent any significant liens or clouds on the title
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Chapter 2, p 25, 43
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Estevez has a freehold estate in a single family home. She rents the home to a young couple.
a. Estevez no longer has a freehold estate because a freehold estate and a leasehold (nonfreehold) estate cannot exist in the same property b. Estevez must give up her freehold estate in order to rent the property to others c. The tenants now own the freehold estate in the property d. Estevez has a freehold estate in the property and the tenants have a leasehold estate in the property |
d. Estevez has a freehold estate in the property and the tenants have a leasehold estate in the property
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Chapter 2, p 25
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David owns property that is bordered by a small stream. His property ends
a. at the mean high water mark of the stream b. at the stream border c. at the center of the stream d. five feet before the stream border |
c. at the center of the stream (Riparian Rights)
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Chapter 2, p 19-20
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Martha owns property that borders a large navigable lake. Her property ends
a. at the mean high water mark of the lake b. at the lake border c. at the center of the lake d. five feet before the lake border |
a. at the mean high water mark of the lake
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Chapter 2, p 20
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The ad valorem property tax rates may be adjusted every
a. year b. two years c. four years d. eight years |
a. year
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Chapter 2, p 42-43
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What is the assessed value of a house located in the city limits if the city tax rate is $0.80 per $100, the county tax rate is $0.50 per $100 and the owner's annual taxes are $1,600?
a. $20,000.33 b. $32,000.92 c. $52,000.00 d. $123,076.92 |
d. $0.80 + 0.50 = $1.30 city + county tax rate / 100 = 0.013; $1,600 annual taxes / 0.013 = $123,076.92 assessed value
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Chapter 2, p 43
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What is the monthly tax liability on a property assessed at $133,000 if the published tax rate is $1.678 per $100 of assessed value?
a. $2,231.74 b. $185.98 c. $1,950.00 d. $3,234.00 |
b. $185.98
$133,000 assessed value x 0.01678 tax rate = $2,331.74 annual taxes / 12 months = $185.97833 = $185.98 monthly tax liability |
Chapter 2, p 43
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If you recently paid $2,000 in annual property taxes and the assessed value of your house is $184,000, what is the tax rate?
a. $1/$100 b. $1.09/$100 c. $1.33/$100 d. $119/100 |
b. $1.09/$100
$2,000 annual taxes / $184,000 assessed valu = 0.0108695 x $100 = $1.08695 = $1.09 per $100 of assessed value. |
Chapter 2, p 43
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Which of the following are considered to be real property?
I. Crops II. Ornamental trees a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 2, p 21
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Which of the following are considered to be real property?
I. Mailboxes by the street II. Fireplace tools a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
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Chapter 2, p 21-22
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A buyer and a seller/developer executed a purchase contract for a condominium on May 6, 2000, with the buyer putting down $5,000 in earnest money. The buyer changed her mind and notified the seller on May 11, 2000, that she was rescinding the contract. Which of the following is true?
a. The buyer can legally cancel the contract and have the earnest money refunded b. The buyer cannot cancel the contract because the three-day right of rescission has passed c. The buyer can cancel only if she forfeits the earnest money d. The buyer cannot cancel the contract because there is no right of rescission |
a. The buyer can legally cancel the contract and have the earnest money refunded
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Chapter 2, p 34
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A dirt road that runs adjacent to your property is paved by ABC Paving Company under city contract. As property owner you would pay for this in the form of
a. ad valorem real property taxes b. personal property taxes c. an invoice from the contractor d. a special assessment |
d. a special assessment
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Chapter 2, p 4
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TP:
Which of the following statements is true? I. A life estate is a freehold estate II. It is possible to have a freehold estate and a nonfreehold estate on the same property at the same time a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 2, p 24-25
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Tenants in common can do all of the following EXCEPT
a. sell their interest b. will their interest c. exclude other tenant owners from the property d. have their interest partitioned |
c. exclude other tenant owners from the property
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Chapter 2, p 29-30
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What forms of concurrent ownership can be jointly held only by husband and wife?
I. Tenancy in common II. Tenancy by the entirety a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 2, p 31-32
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Which of the following would NOT be considered in determining if an item is a fixture?
a. Intent b. Adaptability c. Value d. Method of attachment |
c. Value
Remember IRMA |
Chapter 2, p 22
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What forms of concurrent ownership can be jointly held by husband and wife?
I. Tenancy in common II. Tenancy by the entirety a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 2, p 29, 32
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Concerning concurrent ownership, which of the following statements is true?
I. Tenancy in common is not available to a married couple holding title on a property II. Joint tenants must hold title to the property with equal, undivided interests a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 2, p 30-31
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Lis Pendens is
a. a recorded document that prevents transfer of title b. a recorded document that a legal action has been commenced against the property owner c. both a and b d. neither a nor b |
b. B only
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Chapter 2, p 38-39
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All of the following are characteristics of a fee simple title EXCEPT that it is
a. free from encumbrances b. of indefinite duration c. transferable with or without valuable consideration d. transferable by will or intestate succession |
a. free from encumbrances
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Chapter 2, p 25, 35-36
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William, Frank, and Jane are joint tenants without rights of survivorship. Jane sells her interest to Lloyd, and then Frank dies. As a result,
a. Frank's heirs, Lloyd and William, are joint tenants b. Frank's heirs and William are joint tenants c. William and Lloyd are joint tenants and are the only remaining owners of the property d. William, Lloyd, and Frank's heirs are tenants in common |
d. William, Lloyd, and Frank's heirs are tenants in common
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Chapter 2, p 29-32
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The state wants to condemn a strip of land through a farm or highway. The state can do this because it has
I. Police power II. Power of eminant domain a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 2, p 41, 84
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All of the following items are related to easements EXCEPT
a. by necessity b. conditions, covenants, and restrictions c. appurtenant d. servient tenant |
b. conditions, covenants, and restrictions
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Chapter 2, p 39-40
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The property of Owner One is appraised at $129,000. One's property is assessed for tax purposes at 75 percent of the appraised value. What is the assessed value of the property?
a. $69,750 b. $75,750 c. $96,750 d. $129,000 |
c. $96,750
$129,000 x 0.75 = $96,750 |
Chapter 2, p 43
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The appraised value of a property is $37,500. Taxes are assessed at 80 percent of the appraised value. What is the assessed value of the property?
a. $30,000 b. $35,500 c. $378,335 d. $387,225 |
a. $30,000
$37,500 x 0.80 = $30,000 |
Chapter 2, p 43
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Payem County sent a tax bill to Poor Payor, the owner of a property that Payem County appraised at $287,225. The property tax was assessed at 80 percent of the appraised value. What is the assessd value of the property?
a. $129,789 b. $229,780 c. $378,335 d. $387,225 |
b. $229,780
$287,225 x 0.80 = $229,780 |
Chapter 2, p 43
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Kyle and Makayla purchased a property from Tyler and Kylie using the Standard Offer to Contract and Purchase. Which of the following items, if any, would convey with the property?
a. Refrigerator and countertop microwave b. Solid oak countertop and matching butcher's block table c. Hanging Christmas tree lights festively decorating the enclosed patio d. The large mirror attached over the fireplace mantel |
d. The large mirror attached over the fireplace mantel
Key Word: ATTACHED |
Chapter 2, p 21-23
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Betty paid the ad valorem taxes on the house for 2005. The house was appraised at $389,000 for tax purposes. It was assessed at 85 percent of the appraised value. The taxes were $1.10 per $100 of value. How much were the annual taxes?
a. $3,376.15 b. $3,637.15 c. $36,371.50 d. $38,900.00 |
b. $3,637.15
($389,000 x 0.85) / 100 x $1.10 = $3,637.15 |
Chapter 2, p 42-43
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In a sales contract, which of the following is an acceptable description of the property?
a. MLS number b. Johnson property c. Legal description d. Lot number |
c. Legal description
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Chapter 3, p 52
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A monument is used in which of the following types of legal descriptions?
a. Lot and block b. Metes and bounds c. Rectangular survey d. Government survey |
b. Metes and bounds
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Chapter 3, p 53
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In describing real estate, the system that uses feet, degrees, and natural markers is the
a. rectangular survey b. metes-and-bounds description c. government survey d. lot and block system |
b. metes-and-bounds description
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Chapter 3, p 53
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In North Carolina, the statutory period for adverse possession (without color of title) is an uninterrupted period of how many years when trying to acquire privately owned property?
a. 3 b. 7 c. 20 d. 30 |
c. 20
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Chapter 4, p 73
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When property is sold for $75,000, the excise tax would be
a. $100 b. $125 c. $135 d. $150 |
d. $150
$75,000 sales price / $500 = $150 x $1 = $150 |
Chapter 4, p 71
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Which of the following statements is true of a deed that is signed but not delivered?
a. it passes title b. it passes no legal title c. it is void d. it is illegal |
b. it passes no legal title
Requirements of valid conveyance: - deed must be in writing - grantor must have legal capacity to execute the deed - both the grantor and the grantee must be identified - there must be adequate words of conveyance - must be an accurate legal description of the property conveyed - deed must be signed by the grantors - deed must be delivered and voluntarily accepted |
Chapter 4, p 61
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Title to real estate may be transferred during a person's lifetime by which of the following means
a. escheat b. descent c. involuntary alienation d. devise |
c. involuntary alienation
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Chapter 4, p 72
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A deed that an owner of real estate may use to voluntarily transfer a right, a title, or an interest in real estate may be what type of deed?
a. Sheriff's b. Warranty c. Foreclosure d. Trustee's |
b. Warranty
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Chapter 4, p 63
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An owner of real estate owned property as a tenant in common with his best friends. The owner was adjudged legally incompetent. He made a will during his stay at a nursing home leaving his entire estate to the nursing assistant assigned to his care. When he later died, he was survived by three children. After his death, his real estate passed
a. to his co-owners (best friends) b. to the nursing assistant named in his will c. according to state law of intestate succession d. to the state |
c. according to state law of intestate succession
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Chapter 4, p 73,74
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Excise taxes on real estate conveyances are usually paid
a. by the grantee b. to the state real estate commission c. by the grantor d. by the real estate agent |
c. by the grantor (Seller)
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Chapter 4, p 71
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Which of the following is NOT a means of title transfer by involuntary alienation?
a. Eminent domain b. Escheat c. Foreclosure d. Deed |
d. Deed
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Chapter 4, p 72
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Deeds conveying North Carolina real estate require the signature of the
I. grantor II. grantee a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
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Chapter 4, p 62
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Which of the following best describes the covenant of quiet enjoyment?
a. The grantor promises to obtain and deliver any instrument needed to make the title good b. The grantor guarantees that if the title fails in the future, he or she will compensate the grantee c. The grantor warrants that he or she is the owner of the property and has the right to convey title to it d. The grantor ensures that the title will be good against the title claims of third parties |
d. The grantor ensures that the title will be good against the title claims of third parties
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Chapter 4, p 63
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A purchaser went to the Registry of Deeds to check the public records. She found that the seller was the grantee in the last recorded deed and that no mortgage was ever on record against the property. Therefore, the purchaser may assume which of the following
a. All taxes are paid, and no judgments are outstanding b. The seller has good title c. The seller probably did not mortgage the property d. Probably no one else is occupying the property |
c. The seller probably did not mortgage the property
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Chapter 4, p 74-75
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Which of the following statements is true of the person who examines the chain of title for a parcel of real estate?"
a. He or she writes a brief history of the record of ownership of the property b. He or she ensures the condition of the title c. He or she inspects the property d. He or she issues a guarantee as to the quality of the title |
a. He or she writes a brief history of the record of ownership of the property
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Chapter 4, p 75
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Which of the following statements best explains why instruments affecting real estate are recorded in the public records o the county where the property is located?
I. Recording gives constructive notice to the world of the rights and interests in a particular parcel of real estate II. The instruments must be recorded to comply with the terms of the Statute of Frauds. a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
Statute of Frauds means must be in writing and signed - (s) The Conner Act would require recordation: DREAM OIL Deed Restrictive Covenants Easements Assignment Mortgage Option Installment land contract Leases over 3 Years |
Chapter 4, p 77
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Chain of title refers to which of the following?
a. Summary of all instruments and legal proceedings affecting a specific parcel of land b. Series of links measuring 7.92 inches each c. Instrument or document that protects the insured parties (subject to specific exceptions) against defects in the examination of the record and hidden risks such as forgeries, undisclosed heirs, errors in public records, and so forth d. Succession of conveyances from some starting point whereby the present owner derives title |
d. Succession of conveyances from some starting point whereby the present owner derives title
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Chapter 4, p 74-75
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A title insurance policy with standard coverage generally covers all of the following EXCEPT
a. forged documents b. incorrect marital statements c. rights of parties in possession d. incompetent grantors |
c. rights of parties in possession
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Chapter 4, p 75-76
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What is meant by condemnation?
a. the right of the government to take private property b. rezoning private property c. the process by which eminent domain is exercised d. adverse possession with just protection |
c. the process by which eminent domain is exercised
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Chapter 4, p 72-73
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Which of the following is NOT a necessary condition of eminent domain?
a. use benefits the public b. property is to be given to the owner of a quasi-public corporation c. property owner is protected by due process of law d. just compensation is paid to the property owner |
b. property is to be given to the owner of a quasi-public corporation
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Chapter 4, p 72-73
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Which of the following real estate documents is least likely to be recorded?
a. Deed b. Month-to-month lease c. Option contract d. Land contract |
b. Month-to-month lease
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Chapter 4, p 78-79
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When title passes to a third party on the death of the life tenant, what is the third party's interest in the property?
a. remainder b. reversionary c. pur autre vie d. redemption |
a. remainder
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Chapter 4, p 28
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Which of the following should be discoverable in a search of public records?
a. Encroachments b. Rights of any part in possession c. Inaccurate surveys d. Easements |
d. Easements
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Chapter 4, p 39-40
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In North Carolina, the statutory period of possession required to acquire title of privately owned property by adverse possession with color of title is how many years?
a. 7 b. 12 c. 21 d. 27 |
a. 7
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Chapter 4, p 73
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A provision in a subdivision declaration used as a means of forcing the grantee to live up to the terms under which he or she holds title to the land is a
a. protective covenant b. reverter c. loss through laches d. conditional-use clause |
a. protective covenant
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Chapter 5, p 89
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Tests commonly applied in determining the validity of zoning ordinances require all of the following EXCEPT that the
a. power be exercised in a reasonable manner b. ordinance be free from discrimination c. ordinance apply to all property in a similar manner d. ordinance causes a loss of property value for the good of the community |
d. ordinance causes a loss of property value for the good of the community
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Chapter 5, p 84
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Zoning powers are conferred on municipal governments by
I. state enabling acts II. eminent domain a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
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Chapter 5, p 82-86
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Public land use controls include all of the following EXCEPT
a. subdivision regulations b. deed restrictions c. environmental protection laws d. master plan specifications |
b. deed restrictions
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Chapter 5, p 82-86
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Zoning laws are generally enforced by
a. zoning boards of adjustment b. ordinances stipulating that building permits will not be issued unless the proposed structure conforms to zoning ordinances c. deed restrictions d. the North Carolina Secretary of State |
b. ordinances stipulating that building permits will not be issued unless the proposed structure conforms to zoning ordinances
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Chapter 5, p 84
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Zoning boards of adjustment are established to hear complaints about
a. restrictive covenants b. the effects of a zoning ordinance c. building codes d. the effects of public ownership |
b. the effects of a zoning ordinance
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Chapter 5, p 85-86
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The police power allows regulations of all of the following EXCEPT
a. number of buildings b. size of buildings c. building ownership d. building occupancy |
c. building ownership
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Chapter 5, p 84, 86
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The purpose of a building permit is to
I. maintain municipal control over the volume of building II. provide evidence of compliance with municipal regulations a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 5, p 90-91
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Dinwiddie owns a vacant lot in a residential neighborhood. His friends in the city government manage to change the zoning on his lot to commercial, so he can increase his profits on the property. This type of zoning is called
a. spot zoning b. a nonconforming use c. an illegal use d. a variance |
a. spot zoning
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Chapter 5, p 86
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The grantor of a deed may place effective restrictions on the
I. right to sell the land II. use of the land a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 5, p 89
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A new zoning code is enacted. A building that is permitted to continue in its former use even though that use does not conform to a new zoning ordinance is an example of
a. legal nonconforming use b. variance c. special use d. inverse condemnation |
a. legal nonconforming use
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Chapter 5, p 85
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To determine whether a location can be put to future use as a retail store, one would examine the
a. building code b. list of permitted nonconforming uses c. housing code d. zoning code |
d. zoning code
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Chapter 5, p 84-85
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Which of the following probably would NOT be included in a list of deed restrictions?
a. types of buildings that may be constructed b. allowable ethnic origins of purchasers c. activities that are not to be conducted at the site d. minimum size of buildings to be constructed |
b. allowable ethnic origins of purchasers
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Chapter 5, p 89, 92-93
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A restriction in a seller's deed may be enforced by which of the following?
a. court injunction b. zoning board of adjustments c. city building commission d. state legislature |
a. court injunction
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Chapter 5, p 92-93
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Julie & Janelle Enterprises just purchased a vacant lot next to their dress shop. The new owners want to expand their business and hired an architect to draw up plans for the expansion. The plans extend the addition two feet beyond the setback requirements for that location. To construct the building legally the owners must obtain a
a. nonconforming use permit b. license c. variance d. permit issued by the state |
c. variance
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Chapter 5, p 85
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To control and maintain the quality and character of a subdivision, a developer will establish which of the following?
I. deed restrictions II. building codes a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
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Chapter 5, p 89
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A neighborhood in Central City consists of very old buildings. The neighborhood is subject to a special zoning that makes it very difficult for property owners to tear down a building and replace it with a modern one. This type of zoning is called
a. historic preservation zoning b. spot zoning c. zoning amendments d. a taking |
a. historic preservation zoning
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Chapter 5, p 86
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A map illustrating the sizes and locations of streets and lots in a subdivision is called a
a. gridiron pattern b. survey c. plat of subdivision d. property report |
c. plat of subdivision
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Chapter 5, p 89
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In complying with the Intestate Land Sales Full Disclosure Act, which of the following information need NOT be included in a property report given to a land buyer?
a. soil conditions affecting foundations b. financial condition of the seller c. number of homes currently occupied categorized by race of occupants d. existence of liens |
c. number of homes currently occupied categorized by race of occupants
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Chapter 5, p 88-89
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When there is a violation of a restrictive covenant, the best remedy of other property owners is to
a. go to the zoning commission b. go to the city council c. go to the developer d. hire an attorney and go to court |
d. hire an attorney and go to court
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Chapter 5, p 93
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If present zoning restrictions cause an undue hardship for the property owner, he may be able to obtain an exception from city officials under which of the following?
a. nonconforming use b. variance c. spot zoning d. special-use permit |
b. variance
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Chapter 5, p 85
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Mr. Jones owns a gas station at the edge of town, and pursuant to a comprehensive plan, the city rezones the land as residential. Which of the following statement is true?
I. the gas station can most probably continue to operate under a variance II. the gas station may quite possibly continue to operate as a nonconforming use a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 5, p 85
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Which of the following statements is true of a real estate broker acting as the agent of the seller?
a. he or she is obligated to render faithful service to the seller b. he or she has a fiduciary duty to the buyer c. he or she can agree to change in price without seller's approval d. he or she can accept a commission from the buyer without the seller's approval |
a. he or she is obligated to render faithful service to the seller
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Chapter 6, p 116
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A broker is entitled to collect a commission from both the seller and the buyer when
I. the broker is a member of the MLS II. the broker acts as a disclosed dual agent a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 6, p 109
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Fiduciary refers to
a. the sale of real property b. principles by which a real estate broker must conduct his or her business as a real estate agent c. one who has a power of attorney to act on behalf of another d. the principal in a principal-agent relationship |
b. principles by which a real estate broker must conduct his or her business as a real estate agent
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Chapter 6, p 116
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While in the employ of a real estate broker, a provisional broker has the authority to
a. act as an agent for the seller b. assume responsibilities assigned by the broker c. accept a commission from another broker d. advertise a property on his or her own behalf |
b. assume responsibilities assigned by the broker
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Chapter 6, p 101
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A person who has the authority to enter into contracts concerning all business affairs of another is called a(n)
a. universal agent b. secret agent c. special agent d. attorney |
a. universal agent
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Chapter 6, p 102
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The legal relationship between broker and seller is usually a
a. general agency b. special agency c. secret agency d. universal agency |
b. special agency
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Chapter 6, p 102
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A real estate broker hired by an owner to sell a parcel of real estate must comply with
I. all instructions of the buyer II. the law of agency a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 6, p 99-100
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McCarthy a real estate broker, learns that her neighbor Smith wishes to sell his house. McCarthy knows the property well and is able to persuade Jones to make an offer for the property. No listing agreement has been made. McCarthy then asks Smith if she can present an offer to him, and Smith agrees. At this point
a. Smith is not obligated to pay McCarthy a commission b. Jones is obligated to pay McCarthy for locating the property c. Smith must pay McCarthy a commission d. McCarthy has become a subagent of Jones |
a. Smith is not obligated to pay McCarthy a commission
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Chapter 6, p 104
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A real estate broker who engages licensees as independent contractors must
a. withhold income tax from all commissions they earn b. require that they participate in office insurance plans offered to other agents hired as employees c. withhold Social Security from all commissions they earn d. refrain from controlling how the licensees conduct their business activities |
d. refrain from controlling how the licensees conduct their business activities
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Chapter 6, p 125
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Single agency occurs when a real estate agent
a. represents only one party in a transaction b. represents both the buyer and the seller in a transaction c. chooses to be a designated agent d. has both the listing and sales sides of a transaction |
a. represents only one party in a transaction
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Chapter 6, p 105
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An agent who breaches his or her fiduciary duties may be subject to all of the following EXCEPT
a. a civil lawsuit b. disciplinary action by the Real Estate Commission c. reprimand or suspension of licensure by the Board of REALTORS d. criminal prosecution |
c. reprimand or suspension of licensure by the Board of REALTORS
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Chapter 6, p 123
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The principal owes the agent the duty of
I. good faith II. payment of compensation a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 6, p 124
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In North Carolina, which of the following statements is true of the doctrine of caveat emptor?
a. It has been completely replaced by case law and consumer protection laws b. it is still intact for real estate transactions c. it is applicable only if the agent acts as a dual agent d. it means let the seller beware |
b. it is still intact for real estate transactions
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Chapter 6, p 99
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Under the common law of agency, a real estate broker owes all of the following duties to the principal EXCEPT
a. care b. obedience c. disclosure d. adversity |
d. adversity
LOADS: Loyalty Obedience Accounting Disclosure Skill and diligence in care |
Chapter 6, p 116-119
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An agency relationship may be terminated by all but which of the following means?
a. the owner decides not to sell the house b. the broker discovers that the market value of the property is such that he or she will not make an adequate commission c. the owner dies d. the broker secures a ready, willing, and able buyer for the seller's property |
b. the broker discovers that the market value of the property is such that he or she will not make an adequate commission
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Chapter 6, p 104
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Maude represents the seller. When should she disclose her agency relationship to the buyer?
a. after showing the buyer a home in which he is interested b. when presenting an offer to the seller c. when preparing an offer to present to the seller d. at first substantial contact |
d. at first substantial contact
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Chapter 6, p 114
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A disclosure of agency status should be made by a buyer's agent to the seller
I. with a written confirmation in the offer to purchase and contract II. at the initial contact with the seller of seller's agent, orally or in writing a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. both I & II
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Chapter 6, 114
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Barbara is representing the property seller. She is showing the property to Luis, a prospective buyer. Luis likes the house but does not want to pay as much as the seller wants. He asks Barbara if the seller would take less than the listing price. Barbara knows that the seller is very anxious to sell and would probably agree to $7,000 less than his asking price. Barbara suggests that Luis make an offer at $5,000 less than the listing price. In this situation, Barbara
a. was diligent and has done a good job for the seller b. has violated her fiduciary duties to the seller because she disclosed confidential information about the seller to the buyer c. will now be considered a general agent d. has done nothing wrong because she is not making a secret profit from the transaction |
b. has violated her fiduciary duties to the seller because she disclosed confidential information about the seller to the buyer
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Chapter 6, p 118
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Michael is representing the seller, Bart. He shows Bart's house to his cousin, Samantha, who is very interested in buying it. Michael presents Samantha's full price offer to Bart, who eagerly accepts it. Both Bart and Samantha are very happy with the transaction. Which statement is true?
a. Because both parties are happy with the transaction, it doesn't matter whether Michael disclosed his relationship with Samantha to Bart b. Bart cannot complain about Michael's actions because Samantha's offer was for the full listing price c. Michael has violated his fiduciary duties to Bart by failing to disclose his relationship with Samantha and could be subject to disciplinary action d. Michael has done nothing wrong; he was not required to disclose his relationship with Samantha |
c. Michael has violated his fiduciary duties to Bart by failing to disclose his relationship with Samantha and could be subject to disciplinary action
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Chapter 6, p 18
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The seller tells the listing agent about a latent defect in the property. The listing agent tells the buyer's agent about the defect, but the buyer's agent does not inform the buyer. Who would most likely be held responsible for the omission?
a. the seller because he made no representation on the Residential Property Disclosure form regarding the defect b. the listing agent because he has the duty to inform the buyer personally of any latent defects c. the listing firm because even though this was not a dual agency transaction, the listing firm is always liable for a mistake in a sale transaction d. the buyer's agent |
d. the buyer's agent
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Chapter 6, p 121-122
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If a broker's misrepresentation causes loss or injury to a buyer customer, which of the following could be found liable?
I. Principal II. Broker a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 6, p 124
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Which of the following statements about duel agency is correct?
I. Dual Agency can occur within one firm only after a licensee has become a buyer's agent and is showing his or her own listing to his or her buyer/client II. Dual agency can occur within one firm after a licensee has become a buyer's agent and is showing a property to his or her buyer/client that was listed by his or her broker-in-charge a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 6, p 107-108
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Under License Law and Commission Rules which of the following is true concerning designated agency?
I. The broker-in-charge cannot be a designated agent if the other agent in the transaction is a provisional broker II. An agent cannot be appointed as a designated agent if he or she has prior confidential knowledge about the other party to the transaction. a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
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Chapter 6, p 110
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It is discovered after a sale that the land parcel is 10 percent smaller than the owner represented it to be. The broker who passed the erroneous information on to the buyer is
a. not liable as long as she only repeated the seller's data b. not liable if the misrepresentation was unintentional c. not liable if the buyer actually inspected what she was getting d. liable if the broker knew or should have known of the discrepancy |
d. liable if the broker knew or should have known of the discrepancy
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Chapter 6, p 121
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Kris is representing the property seller. Megan, an agent at the same firm, is representing a buyer. Kris and Megan confer during a sales meeting and discover the compatible needs of the clients. All of the following are true EXCEPT
a. Kris is being diligent in trying to find a buyer for the seller b. Megan has performed her fiduciary duties to the buyer c. the broker-in-charge must now designate two other licensees who did not attend the meting to represent the clients d. if the parties have consented to dual agency, the broker-in-charge can allow Kris and Megan to continue their representation in brokering this transaction |
c. the broker-in-charge must now designate two other licensees who did not attend the meting to represent the clients
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Chapter 6, p 106-110
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It is discovered after a sale that the land parcel is 10 percent larger than the owner represented it to be. The broker who passed the erroneous information on to the buyer customer is
a. not liable to the seller as long as the listing agent only repeated the seller's data b. not liable if the mistake was unintentional c. not liable to the seller because sellers are required to obtain appraisals d. liable if the broker knew or should reasonably have known of the discrepancy |
d. liable if the broker knew or should reasonably have known of the discrepancy
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Chapter 6, p 121
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Provisional broker licensee Mike is Peggy's exclusive buyer agent. In accordance with NCREC Rules, Mike has a written agency agreement with Peggy. When co-brokering a deal with a listing agent at Roy Realty, Mike is NOT allowed to
a. be compensated from the commission paid by the seller to Roy Realty b. require Peggy to compensate Mike's firm c. be compensated directly by Peggy, the buyer d. negotiate a commission with Peggy because the seller has negotiated a commission with the listing agent |
c. be compensated directly by Peggy, the buyer
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Chapter 6, p 125
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Agent Darlene is Lindsay's listing agent. Darlene had Lindsay's permission to practice dual agency, Tim, another agent in Darlene's firm, is holding open house on Darlene's property on Sunday. Kermit attends the open house but never shows an interest in the property. Kermit begins to discuss with Tim his specific needs for some other property. Tim must
a. disclose to Kermit that this makes the firm a dual agent b. disclose to Kermit that Tim is Lindsay's agent c. review the Working with Real Estate Agents brochure with Kermit once Kermit begins to give Tim information about his needs d. require Kermit's initials after Tim has carefully reviewed the Working with Real Estate Agents brochure with Kermit |
c. review the Working with Real Estate Agents brochure with Kermit once Kermit begins to give Tim information about his needs
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Chapter 6, p 111
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Generally, to be enforceable, contracts for the purchase and sale of real estate
a. must be signed by only the buyer b. must be signed by only the seller c. may be oral, bound only with a handshake d. must be in writing and signed by the party or parties to be charged |
d. must be in writing and signed by the party or parties to be charged
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Chapter 7, p 138
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A real estate broker's license gives the licensee the right to
a. practice law b. fill in the blanks on contracts prepared for the broker by a lawyer c. act as a principal to the contract d. act as a notary public |
b. fill in the blanks on contracts prepared for the broker by a lawyer
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Chapter 7, p 142
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The injured party in a real estate transaction with the right to a suit for specific performance is the
a. broker b. buyer c. title company d. lender |
b. buyer
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Chapter 7, p 141
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To be enforceable, a contract must be entered into by a person who is at least
a. 16 years old b. 18 years old c. 21 years old d. 25 years old |
b. 18 years old
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Chapter 7, p 136
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A contract is said to be bilateral if
a. one of the parties is a minor b. the contract has yet to be fully performed c. only one party to the agreement is bound to act d. all parties to the contract are bound to act |
d. all parties to the contract are bound to act
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Chapter 7, p 134
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During the period of time after a valid real estate sales contract is signed but before title actually passes, the status of the contract is
I. voidable II. excutory a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 7, p 135
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Anita has a contract to buy property but would rather let her friend Laura buy it instead. Unless the contract prohibits it, Laura can take over Anita's obligation by the process known as
a. assignment b. substantial performance c. subordination d. mutual consent |
a. assignment
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Chapter 7, p 140
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A legally enforceable agreement under which two parties agree to do something for each other is known as a(n)
a. escrow instruction b. promise c. valid contract d. option agreement |
c. valid contract
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Chapter 7, p 134
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Kay drives into a filling station and tops off her gas tank. She is obligated to pay for the fuel through what kind of contract?
a. Express b. Implied c. Oral d. Voidable |
b. Implied
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Chapter 7, p 134
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A listing agreement is
a. a broker's employment contract with agents b. a broker's subagent contract with a principal c. allowed to be oral prior to presentation of an offer d. required by North Carolina License Law to be written |
d. required by North Carolina License Law to be written
|
Chapter 7, p 142-143
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Which of the following is the similarity between an exclusive-agency listing and an exclusive right to sell listing?
a. Under both listings, the seller retains the right to well real estate without the broker's help and without paying the broker a commission b. Under both listings, the seller authorizes only one particular agent to show the property c. Both listings give the responsibility of representing the seller to one broker only d. Both listings are open listings |
c. Both listings give the responsibility of representing the seller to one broker only
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Chapter 7, p 146-147
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All of the following would terminate a listing EXCEPT
a. expiration of the contract period b. death or incapacity of the broker c. nonpayment of the commission by the seller d. destruction of the improvements on the property |
c. nonpayment of the commission by the seller
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Chapter 7, p 147
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The parties to the listing contract are the
I. Seller and buyer II. Seller and broker a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
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Chapter 7, p 142
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14. A builder/seller advertising a bonus to any selling agent is an example of a(n)
a. voidable contract. b. unilateral contract. c. bilateral contract. d. open listing contract. |
b. unilateral contract
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Chapter 7, p 135
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|
A listing taken by a real estate agent belongs to the
a. firm. b. seller. c. agent. d. agent and firm equally |
a. firm
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Chapter 7, p 142
|
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All of the following are listing agreements EXCEPT a(n)
a. open listing b. exclusive agency listings c. exclusive right to sell listings d. multiple listing |
d. multiple listing
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Chapter 7, p 144-146
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A seller's residence is listed with a broker, and the seller stipulates that she wants to receive $85,000 from the sale, but the broker can sell the property for as much as possible and keep the difference in commission. The broker agrees. This contract is what type of listing?
a. exclusive right to sell b. exclusive agency c. open listing d. net listing |
d. net listing
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Chapter 7, p 152
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Seller Richard Munn has his property under an exclusive agency listing with broker Dodie Baker. If Munn sells his property himself during the term of the listing without Baker's services, he will owe Baker
a. no commission b. the full commission c. a partial commission d. only reimbursement for broker Baker's costs |
a. no commission
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Chapter 7, p 145
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|
Real estate commission rates are set by the
a. local real estate board b. North Carolina Real Estate Commission c. principal and agent d. MLS |
c. principal and agent
|
Chapter 7, p 144
|
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In a sales transaction, which of the following statements is true of a listing agreement?
I. It must be in writing II. It need only be signed by the broker a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
Chapter 7, p 138
|
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A listing contract contains a clause that gives the broker the right to collect a commission if the owner sells the property after the listing contract terminates to someone the broker negotiated with. This is what type of clause?
a. Extender b. Subordination c. Executory d. Renewal |
a. extender
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Chapter 7, p 152
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A broker listed a property at an 8 percent commission rate. After the sale closed, the seller discovered that the broker had been listing similar properties at a 7 percent commission rate. Based on this information, which of the following statements is true?
I. The broker has done nothing wrong II. The seller can cancel the transaction a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
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Chapter 7, p 152
|
|
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A broker gets a commission if her listed property is sold, no matter who sells it, if the contract is what type of listing agreement?
a. net b. open c. exclusive agency d. exclusive right to sell |
d. exclusive right to sell
|
Chapter 7, p 146
|
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The owners of a parcel of commercial property have executed three open listings with three brokers. All three brokers would like to place a for sale sign on the property. Under these circumstances which of the following is true?
a. a broker does not have to get the seller's permission before placing a sign on the property b. only one sign may be placed on the property at one time c. after getting the seller's consent, any or all brokers can place their signs on the property d. the broker who obtained the first open listing must consent to all signs placed on the property |
c. after getting the seller's consent, any or all brokers can place their signs on the property
|
Chapter 7, p 144-145, 148
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|
Nick and Kelly sign a contract under which Nick will convey Raptor Manor to Kelly. Nick changes his mind, and Kelly sues for specific performance. What is Kelly seeking in the lawsuit?
a. money damages b. new contract c. deficiency judgment d. conveyance of the property |
d. conveyance of the property
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Chapter 7, p 141
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The buyer and seller have entered into a sales contract. While the sale is pending, the listing agent receives another offer for the property. Which of the following statements is true?
a. the agent does not have to present this offer to the seller b. the agent must present this offer to the seller c. the agent has to present this offer to the seller only if its terms are better than the terms of the pending sale d. the agent must tell the offeror that offers are prohibited while a sale is pending |
b. the agent must present this offer to the seller
|
Chapter 8, p 182-183
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Which of the following statements is true of a conventional option to purchase contract?
a. it need not recite a set amount of consideration for purchase of the property b. it is limited to a specified time period c. it has an unlimited time limit d. it is illegal in North Carolina |
b. it is limited to a specified time period
|
Chapter 8, p 186
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At 1:30 p.m., an agent from Alana Realty faxed an offer to purchase to his seller client. At 2:00 p.m. after considering the offer, the seller called his agent. Seller informed his agent that seller wanted a larger earnest money deposit. At 2:15 p.m. the buyer's agent dropped by Alana Realty hoping to receive an acceptance from the seller. To make the seller's requested change for additional earnest money, the seller's agent need only
I. change the provision in the original offer, initial, and date the one change II. draw up a new offer and with the seller's permission sign on behalf of the seller a. I Only b. II Only c. Both I & II d. Neither I nor II |
d. Neither I nor II
|
Chapter 8, p 183
|
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The buyer's offer is made on the condition that the buyer's present home sells in the next 30 days. This condition is called a(n)
a. CC&R b. contingency c. unilateral offer d. option |
b. contingency
|
Chapter 8, p 179
|
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The buyer's offer is made on the condition that the buyer is able to obtain an 80 percent institutional loan at a specified interest rate. If the buyer fails to obtain such a loan, the buyer will
a. have to go ahead with the purchase anyway b. not have to purchase the home, but will forfeit the whole earnest money deposit c. not have to purchase the home, but will forfeit half of the earnest money deposit d. not have to purchase the home, and will be entitled to a full refund of his or her earnest money deposit |
d. not have to purchase the home, and will be entitled to a full refund of his or her earnest money deposit
|
Chapter 8, p 180
|
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The seller wants to net $85,000 cash from the sales transaction. The sales commission is 7 percent, the seller's closing costs are $1,000, and the seller's loan payoff figure is $65,000. What must the sales price be to accomplish the seller's goal?
a. $151,000 b. $155,000 c. $161,570 d. $162,366 |
d. $162,366
$85,000 seller desired net + $1,000 closing costs + $65,000 loan payoff = $151,000/0.93 (100%- 7%) = $162,365.59 sales price (rounded up to $162,366.00) |
Chapter 8, p 155
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Which of the following statements is true when a purchase contract has been signed by the purchaser and then given to the seller's broker with an earnest money deposit check for the seller to consider?
a. this transaction constitutes a valid contract b. the purchaser can sue the seller for specific performance c. this transaction is considered to be only an offer d. the earnest money will be forfeited if the purchaser defaults |
c. this transaction is considered to be only an offer
|
Chapter 8, p 176-177
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An offer to purchase real estate can be terminated by all of the following reasons EXCEPT
a. failure to accept the offer within a prescribed period b. revocation by the offeror communicated to the offeree after acceptance c. conditional acceptance of the offer by the offeree d. death of the offeror or offeree |
b. revocation by the offeror communicated to the offeree after acceptance
|
Chapter 8, p 180
|
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TP:
Which of the following statements is true of "Alternative 2" of the standard offer to purchase and contract? a. the option fee is applied to the purchase price b. it has the same effect of Alternative 1 c. the earnest money check is paid directly to the seller d. if the option period expires, the buyer must, within three business days, notify the seller of the buyer's decision to proceed with the contract |
a. the option fee is applied to the purchase price
|
Chapter 8, p 186-187
|
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When a buyer and seller have entered into an installment land contract, the buyer acquires an immediate interest in the property known as
I. legal title II. equitable title a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
Chapter 8, p 185
|
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Carl and Hannah enter into a real estate sales contract. Under the contract terms, Carl will pay Hannah $500 a month for ten years. Hannah will continue to hold legal title to the property. Carl will live on the property and pay all real estate taxes, insurance premiums, and regular upkeep costs. What kind of contract to Carl and Hannah have?
a. option to purchase contract b. contract for mortgage c. unilateral contract d. installment land contract |
d. installment land contract
|
Chapter 8, p 185
|
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The Taylors offer in writing to purchase a home owned by the Shorts for $120,000, including the draperies, with the offer to expire on Saturday at noon. The Shorts reply in writing on Thursday, accepting the $120,000 offer, but excluding the draperies. On Friday, while the Taylors consider the counteroffer, the Shorts decide to accept the original offer, draperies included, and state that in writing. At this point, the Taylors
a. are legally bound to buy the house although they have the right to insist that the draperies be included b. are not bound to buy c. must buy the house and are not entitled to the draperies d. must buy the house but may deduct the value of the draperies from the $120,000 |
b. are not bound to buy
|
Chapter 8, p 179
|
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Robert signs a contract under which he may purchase a house for $80,000 any time within the next three months. Robert pays the current owner $500 at the time the contract is signed. Which of the following best describes this contract?
a. contingency b. option to purchase c. installment land contract d. sales contract |
b. option to purchase
|
Chapter 8, p 186
|
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If a lease is for longer than three years, the lease must be recorded to be
I. valid between the parties II. enforceable against third parties a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
Chapter 9, p 204-205
|
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TP:
A landlord may enter leased premises to make repairs if the a. landlord knocks first to give notice of intent to enter b. lease gives the landlord this right c. landlord gives 48 hours notice of intent to enter d. landlord fulfills the covenant of quiet enjoyment |
b. lease gives the landlord this right
|
Chapter 9, p 212
|
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Which of the following statements is true of a tenancy from month to month?
a. the tenant must give notice to the landlord prior to vacating the leased premises b. the tenant need not give notice to the landlord that he or she is vacating the leased premises c. the tenant must give 45 days notice to the landlord prior to vacating the leased premises d. the tenant can receive his or her security deposit before vacating the leased premises |
a. the tenant must give notice to the landlord prior to vacating the leased premises
|
Chapter 9, p 201
|
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A lease calls for a base rent of $1,200 per month plus 4 percent of the annual gross business exceeding $150,000. This is what type of lease?
a. gross b. graduated c. percentage d. net |
c. percentage
|
Chapter 9, p 202-203
|
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The requirements of a valid lease include
a. mutual assent b. consideration c. capacity to contract d. all of the aboove |
d. all of the above
|
Chapter 9, p 204-205
|
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Which of the following best describes a net lease?
I. an agreement in which the tenant pays a fixed rent and the landlord pays all taxes, insurance, and maintenance on the property II. a lease in which the tenant pays rent in addition to some or all property charges a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
Chapter 9, p 203
|
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A percentage lease provides for a
a. rental of a percentage of the value of the building b. definite periodic rent not exceeding a stated percentage c. definite monthly rent plus a percentage of the tenant's gross receipts in excess of a certain amount d. graduated amount due monthly and not exceeding a stated percentage |
c. definite monthly rent plus a percentage of the tenant's gross receipts in excess of a certain amount
|
Chapter 9, p 203
|
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|
A tenant who transfers the remaining term of his or her lease to a third party is
a. sublease b. assigning the lease c. automatically relieved of any further obligation under the lease d. giving the third party a gross lease |
b. assigning the lease
|
Chapter 9, p 205
|
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If a tenant complains to the authorities about a housing code violation in the building that affects his or her health, the landlord may
I. offer to reduce the rent as the remedy II. evict the tenant a. I Only b. II Only c. Both I & II d. Neither I nor II |
d. Neither I nor II
|
Chapter 9, p 196-197
|
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|
To terminate a month-to-month lease, the lessor must give the lessee notice at least
a. 7 days prior to the termination date b. 30 days prior to the termination date c. 45 days prior to the termination date d. 60 days prior to the termination date |
a. 7 days prior to the termination date
|
Chapter 9, p 201
|
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If a landlord fails to keep the premises in habitable condition, the tenant may
a. stay in the premises and withhold rent b. withhold rent and deposit it with the clerk of courts c. withhold rent and deposit it in escrow at a bank d. leave the premises and stop paying rent |
d. leave the premises and stop paying rent
|
Chapter 9, p 197
|
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Special terms in a residential lease can waive the landlord's obligation to keep the
I. building in habitable condition II. common areas in safe condition a. I Only b. II Only c. Both I & II d. Neither I nor II |
d. Neither I nor II
|
Chapter 9, p 196
|
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A ground lease is usually
a. short term b. for 5 to 10 years c. for 99 years d. a gross lease |
c. for 99 years
|
Chapter 9, p 204
|
|
|
An index lease provides for a
a. rental of a percentage of the value of the building b. definite periodic rent not exceeding a stated percentage c. definite monthly rent plus a percentage of the tenant's gross receipts in excess of a certain amount d. rental based on a specified index |
d. rental based on a specified index
|
Chapter 9, p 204
|
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|
If a lessor sells the leased premises, the new owner
I. can negotiate new rental payments with the tenants II. takes the property subject to the terms of the tenants' leases a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
Chapter 9, p 213
|
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|
With a month-to-month tenancy, the landlord can require a security deposit equal to
a. one and one-half months' rent b. two week's rent c. two month's rent d. three month's rent |
a. one and one-half months' rent
|
Chapter 9, p 198
|
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|
If a residential tenant breaches his or her duty to pay rent, the landlord may
a. change the locks and prevent the tenant from entering the premises b. turn off the tenant's utilities c. file an eviction action with the courts d. seize the tenant's possessions |
c. file an eviction action with the courts
|
Chapter 9, p 197
|
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|
Constructive eviction can occur when the
a. landlord forcibly removes the tenant from the premises after obtaining a court order b. landlord fails to keep the premises in habitable condition c. tenant fails to pay rent on time d. landlord retaliates against the tenant for complaining to a state authority |
b. landlord fails to keep the premises in habitable condition
|
Chapter 9, p 197
|
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|
Which of the following statements is true of a periodic tenancy?
I. It renews itself automatically unless notice to terminate is given II. It terminates automatically at the expiration of the lease term a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
Chapter 9, p 201
|
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|
An estate for years terminates
a. only with prior notice b. on its second automatic renewal c. after two day's notice d. automatically on its expiration date |
d. automatically on its expiration date
|
Chapter 9, p 200
|
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|
Dan's landlord has sold his building to the state so that a freeway can be built. Dan's lease has expired, but the landlord is letting him remain until the time the building will be torn down. What is Dan's tenancy called?
a. holdover tenancy b. month-to-month tenancy c. tenancy at sufferance d. tenancy at will |
d. tenancy at will
|
Chapter 9, p 201-202
|
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If the landlord of an apartment building breaches her lease with one of the tenants and the tenant's unit becomes uninhabitable, which of the following would be the most likely result?
a. suit for possession b. constructive eviction c. tenancy at sufferance d. covenant of quiet enjoyment |
b. constructive eviction
|
Chapter 9, p 197
|
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|
What type of lease establishes a set rental payment and requires the lessor to pay for the taxes, insurance, and maintenance on the property?
a. percentage b. net c. expense only d. gross |
d. gross
Careful with wording: lessor - landlord lessee - tenant |
Chapter 9, p 203
|
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Jody has a one year leasehold interest in Harbor House. The interest automatically renews itself at the end of each year. Jody's interest is referred to as a tenancy
a. for years b. from period to period c. at will d. at sufferance |
b. from period to period
|
Chapter 9, p 201
|
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|
Mary has assigned her apartment lease to Ben, and the landlord has agreed to the assignment. If Ben fails to pay the rent, who is liable?
a. Ben is primarily liable, Mary is secondarily liable b. Mary is primarily liable, Ben is secondarily liable c. Mary is solely liable d. Ben is solely liable |
a. Ben is primarily liable, Mary is secondarily liable
|
Chapter 9, p 205
|
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|
Which event would automatically terminate a residential lease?
a. total destruction of the property b. sale of the property c. failure of the tenant to pay rent d. death of the lessor |
a. total destruction of the property
|
Chapter 9, p 212-213
|
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|
Which transaction would best be described as involving a ground lease?
a. a landowner agrees to let a tenant drill for oil on the property for 75 years b. with the landowner's permission, a tenant builds a shopping center on a rental property at the tenant's own expense c. a landlord charges a commercial tenant separate amounts for the land and buildings under the lease d. a tenant pays a base amount for the property, plus a percentage of business generated income |
b. with the landowner's permission, a tenant builds a shopping center on a rental property at the tenant's own expense
|
Chapter 9, p 204
|
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|
What is the annual tax liability on a property that is assessed at $120,000 if the tax rate is $1.60 per $100 of assessed value?
|
$1,920
$120,000 assessed value / 100 x $1.60 tax rate |
WB, p 9
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|
What is the monthly tax liability of property that is assessed at $90,000 if the tax rate is $1.00?
|
$75.00
Watch for monthly vs annual! $90,000 / 100 x $1.00 / 12 |
WB, p 9
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|
What is the approximate tax rate on a property that is assessed at $110,000 if the annual tax liability is $2,090?
|
$1.90
$2,090 / $110,000 X $100 |
WB, p 9
|
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|
What is the approximate assessed value of a property located in the city limits if the city tax rate is $0.85, the county tax rate is $0.60 and the property owner's monthly tax liability is $130?
|
$107,586.21
Monthly liability $130 X 12 / $1.45 (inside city limits - City plus County) X 100 |
WB, p 9
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|
A residential lot is presently assessed by the county tax assessor's office at $30,000 and the tax rate is $1.20. If the property owner constructs a house on the lot that is assessed at $85,000 upon completion, what will be the property owner's new monthly tax liability?
|
$115 Monthly
$30,000 + $85,000 X $1.20 / $100 / 12 months |
WB, p 9
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|
A house with a market value of $50,000 is located in a city. The assessed value is 50% of its market value in order to calculate the city and county real property taxes. The county rate is $1.45 per hundred of assessed value. The city tax rate is $2.00 per hundred of assessed value. What is the annual real property tax bill for the property?
|
$1,035
$50,000 market value X 60% = assessed value. Assessed value X ($2.00 + $1.45) / 100 |
WB, p 10
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|
The county tax rate is $1.45 per hundred, and the city tax rate is $1.85. Smith owns property outside the city limits and recently paid annual taxes of $1,500. What is the assessed value of Smith's property?
|
$103,448
$1,500 / $1.45 (county taxes only) X 100 |
WB, p 10
|
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|
The market value of a home is $100,000. The assessed value is $90,000. If the tax rate is $0.80 per $100 of assessed value, what is the annual tax bill?
|
$720
$90,000 X $0.80 / $100 |
WB, p 10
|
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|
What is the monthly tax liability on a property assessed at $133,000 if the published tax rate is $1.678 per $100 of assessed value?
|
$185.98
$133,000 X $1.678 / $100 / 12 |
WB, p 10
|
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|
If you recently paid $2,000 in annual property taxes and the assessed value of your house is $184,000, what is the tax rate?
|
$1.09
$2,000 / $184,000 X $100 |
WB, p 10
|
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|
A residential lot in Mecklenburg County is presently assessed by the county tax assessor's office at $75,000, and the tax rate is $1.68/$100 of assessed value. If the property owner constructs a house on the same lot that is assessed at $250,000 upon completion, what is the property owner's new monthly tax liability?
|
$455
$75,000 lot + $250,000 = $325,000 assessed value. $325,000 X $1.68 / 100 / 12 |
WB, p 10
|
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|
How many acres are there in a rectangular lot that has 385 feet of frontage and is 297 feet deep?
a. 2.347 b. 2.625 c. 2.139 d. 2.536 |
b. 2.625
385 X 297 / 43,560 |
WB, p 17
|
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|
What is the cost of a 132 ft. by 330 ft. lot at $800 per acre?
a. $34,560 b. $800 c. $330 d. $17,420 |
b. $800
132 X 330 / 43,560 = 1 acre X $800 |
WB, p 17
|
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|
A rectangular tract of land whose dimensions are 500 ft by 1,000 ft was sold for $25,380. What was the price per acre?
a. $1,042 b. $2,211 c. $1,333 d. $1,200 |
b. $2,211
500 X 1,000 / 43,560 = 11.47842056932966023 Acres (Don't round on these) $25,380 / 11.47842056932966023 |
WB, p 17
|
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|
A rectangular acre of land has a depth of 165 feet. What is the road frontage?
a. 165' b. 225' c. 718' d. 264' |
d. 264'
One acre = 43,560 / 165 depth |
WB, p 17
|
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|
Mr. Jones owns a tract of land that is 450 x 600. He wants to develop the parcel into a residential subdivision. Each lot is to be 100 x 150. He needs to dedicate areas for streets, which will amount to 10% of the land.
How many square feet are in the parcel? a. 27,000 b. 270,000 c. 170,000 d. 300,000 |
b. 270,000
450 X 600 |
WB, p 18
|
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|
Mr. Jones owns a tract of land that is 450 x 600. He wants to develop the parcel into a residential subdivision. Each lot is to be 100 x 150. He needs to dedicate areas for streets, which will amount to 10% of the land.
How much land is left for lots? a. 27,000 sf b. 270,000 sf c. 243,000 sf d. 5.8 acres |
c. 243,000 sf
270,000 X 90% |
WB, p 18
|
|
|
Mr. Jones owns a tract of land that is 450 x 600. He wants to develop the parcel into a residential subdivision. Each lot is to be 100 x 150. He needs to dedicate areas for streets, which will amount to 10% of the land.
How many lots can Mr. Jones develop on the remaining land? a. 17 b. 16 c. 21 d. 18 |
b. 16
100 X 150 = 15,000 sf lots. 243,000 available land / 15,000 = 16.2 = 16 |
WB, p 18
|
|
|
A parcel of land is 660 x 660 and a small stream equally divides the parcel into two lots. How many acres are contained in each of the lots?
a. 10 b. 2.5 c. 5 d. 0.5 |
c. 5 acres
660 X 660 / 43,560 / 2 |
WB, p 18
|
|
|
Sam bought a parcel of land containing 55 acres and 1,200 feet of road frontage. Tom wants to buy the neighboring tract with the same depth, but with 4,000 feet of frontage. How many acres are in the tract Tom wishes to buy?
a. 165 b. 110 c. 183 d. 150 |
c. 183
55 acres / 43,560 / 1,200 frontage = 1,996.5 depth 7,986,000 / 43,560 = 183 lots |
WB, p 18
|
|
|
Bob bought a 344.35 acre tract. Its frontage was 3,000 feet. He wants to subdivide into 150 x 150 lots, with 8% of the land being dedicated to streets. How many lots can he get?
a. 613 b. 661 c. 667 d. 592 |
a. 613
344.35 acres X 43,560 = 14,999,886 sf X 92% = 13,799,896 / (150 x 150) = 613.328672 = 613 lots |
WB, p 18
|
|
|
A piece of land containing 4.5 acres recently sold for $80,000. The adjacent piece of property measures 650 feet by 510 feet. You want to list it at a comparable price, which would be
a. $117,777 b. $80,000 c. $135,292 d. $135,985 |
c. $135,292
$80,000 / 4.5 acres = $17,777/ac 650 X 510 / 43,560 = 7.6101928 acres 17,777 X 7.6101928 = comparable price |
WB, p 19
|
|
|
A rectangular tract of land has dimensions of 50'-6" by 450'-9". The sales price of the property was $1,800,000. What is the price per square foot?
a. $79.08 b. $78.89 c. $80.00 d. $3,591.02 |
a. $79.08
Reduce inches to decimals (6/12 and 9/12) 50.5 X 450.75 = total square feet 1,800,000 / 22,762.875 sf |
WB, p 19
|
|
|
The sales price of a property is $200,000. The commission rate is 7%. The listing firm and selling firm split is 50/50. The selling salesperson splits 60% to the salesperson and 40% to the firm.
a. What is the gross commission amount? b. What is the salesperson's commission amount? c. What is the selling company's commission amount after the agent is paid? |
a. $14,000 ($200,000 sales price X 0.07 - 7% gross commission)
b. $4,200 (14,000 / 2 X 0.60) c. $2,800 (7,000 X 0.40) |
WB, p 28
|
|
|
The selling sales associate received $3,900. The selling sales associate's commission split with their company was 95% to the agent and 5% to the company. The listing firm and selling firm split the gross commission 50/50. The commission rate is 7%. What is the sales price of the property?
|
$117,293.33
3,900 commission/ 0.95 agent share / 0.50 brokerage split / 0.07 gross commission |
WB, p 28
|
|
|
If the seller received 10% less than the list price of $100,000, what was the gross commission if the commission rate was 6%?
|
$5,400
$100,000 X 0.90 X 0.06 |
WB, p 28
|
|
|
Two brokers split a 6% commission equally on a $73,000 home. The selling salesperson was paid 70% of his broker's share. The listing salesperson was paid 30% of his broker's share. How much did the listing salesperson receive?
|
$657.00
$73,000 sales price X 0.06 (6% commission) X 0.30 (30% listing agent share) |
WB, p 28
|
|
|
The sales price of a property is $100,000. The commission rate is 6%. The listing firm and selling firm split the commission 50/50. The selling salesperson has a split of 50/50 with their firm. How much does the selling salesperson receive?
|
$1,500
$100,000 sales price X 0.06 (6% commission) X 0.50 (50/50 split) X 0.50 (50/50 split) |
WB, p 28
|
|
|
The list price for a house was $150,000. It sold for 5% less than the list price. The listing firm and selling firm split the commission 50/50. The selling salesperson received 60% of the selling split. The listing agent received 70% of the listing firm's split. What was the amount of commission received by the selling and listing firm and the selling and listing associates. Commission rate is 6%.
|
Selling and listing firm received $4,275 each.
$150,000 list price X 0.95 (5% reduction in sales price) X 0.06 commission X 0.50 firm split. Selling associate received $2,565 $4,275 X 0.60 (60% share) Listing associate received $2,992.50 $4,275 X 0.70 (70% share) |
WB, p 28
|
|
|
A seller wants to net $65,000. The seller is paying $2,000 in closing costs. The commission rate is 7%. What sales price is required to net the seller $65,000?
|
$72,043.01
$65,000 net price + $2,000 closing costs / 0.93 (7% commission) |
WB, p 32
|
|
|
Sam Seller wants to net $85,000, pay $500 in closing costs, and pay a commission rate of 6.5%. What sales price is required to net Sam $85,000.
|
$91,443.85
$85,000 net price + $500 closing costs / 0.935 (6.5% commission) |
WB, p 32
|
|
|
Susie Sellers wants to net $206,000, pay $5,000 in closing costs, and a commission rate of 8%. What sales price is required to net Susie $206,000?
|
$229,347.83
$206,000 net price + $5,000 closing costs / 0.92 (8% commission) |
WB, p 32
|
|
|
Sallie wants to net $150,000 on the sale of her property. She will pay $3,000 in closing costs. She will pay a commission rate of 6.5%. What is the minimum sales price required for Sallie to receive her net amount?
|
$163,636.36
$150,000 net price + $3,000 closing costs / 0.935 (6.5% commission) |
WB, p 32
|
|
|
You are listing a house and the seller wants to net $200,000 after paying 6% commission and $3,000 in closing costs. What will the house have to sell for in order for the seller to net $200,000.
|
$215,957.45
$200,000 net price + $3,000 closing costs / 0.94 (6% commission) |
WB, p 32
|
|
|
TP:
You are on a listing appointment and the sellers tell you they would like to net $135,000 from the sale of their home. You estimate they will have to pay $950 in miscellaneous closing costs. You will charge them a 6.5% commission to sell the property. They also have a loan payoff of $53,000. What must the property sell for to ensure they receive their desired net? |
$202,620.32
$135,000 net price + $950 closing costs + $53,000 mortgage payoff / 0.935 (6.5% commission) |
WB, p 32
|
|
|
Provision 1
Is the street address a "formal reference" or "informal reference"? |
Informal Reference
|
WB, p 69
|
|
|
Provision 1
Is the legal description a "formal reference" or "informal reference"? |
Formal Reference
|
WB, p 69
|
|
|
Provision 1
What NC Act requires a deed to be recorded? |
Conner Act
|
WB, p 69
|
|
|
Provision 1
In order to search the title of a property, what index is used in the register of deeds office? |
Grantee/Grantor Index
|
WB, p 69
|
|
|
Provision 1
Who signs the deed? |
Grantor (Seller)
|
WB, p 69
|
|
|
Provision 1
Who receives the deed? |
Grantee (Buyer)
|
WB, p 69
|
|
|
TP:
Provision 1 Is acknowledgment of a deed an essential element of a deed? |
No
|
WB, p 69
|
|
|
Provision 1
What is the best deed for a buyer to receive? |
General Warranty Deed
|
WB, p 69
|
|
|
Provision 1
What deed only warrants the period of time the current owner owned the property? |
Special Warranty Deed
|
WB, p 69
|
|
|
Provision 1
A deed of gift must be recorded within how many years in order to be valid? |
2 Years
|
WB, p 69
|
|
|
Provision 1
Are restrictive covenants a public land use control or a private land use control? |
Private
|
WB, p 69
|
|
|
Provision 1
Can a homeowner's association fine a homeowner for violating a rule of the association? |
Yes
|
WB, p 69
|
|
|
Provision 1
What is the definition of "encumbrance"? |
A charge, burden, or claim
|
WB, p 69
|
|
|
Provision 2
Are gas logs real or personal property? |
Real
|
WB, p 69
|
|
|
Provision 2
Are switch plates real or personal? |
Real
|
WB, p 69
|
|
|
Provision 2
A shrub is placed in a tub and the tub is placed in the ground. Is the shrub real or personal? |
Personal
|
WB, p 69
|
|
|
Provision 2
What is the definition of "free of liens" |
There is no debt or money owed
|
WB, p 69
|
|
|
Provision 2
What is the definition of Uniform Commercial Code? |
The seller has paid off all debts including any items financed through the power or gas company
|
WB, p 69
|
|
|
Provision 2
What is the definition of appurtenance? |
Runs with the land, passes with the land, stays with the land
|
WB, p 69
|
|
|
Provision 2
Are emblements real or personal property? |
Personal
|
WB, p 69
|
|
|
Provision 2
What is the definition of fructus naturales? |
Fruits of nature which do not require cultivation
|
WB, p 69
|
|
|
Provision 2
What is the definition of fructus industriales? |
Fruits of industry which require cultivation (personal property)
|
WB, p 69
|
|
|
Provision 2
Is a chandelier that is attached to the ceiling in a dining room classified as real or personal property? |
Real
Key word: attached |
WB, p 69
|
|
|
Provision 2
What is the name of the legal test to determine if an item is a fixture? |
Total Circumstance Test
IRMA Intent - most important Relationship Method of attachment/annexation Adaptation to real estate |
|
|
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Provision 3
What is the definition of personalty? |
Personal property/Chattel
|
WB, p 70
|
|
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Provision 3
If a buyer wants an item of personal property to remain with the property, what should an agent do? |
Name the item in the personal property section and list any items the buyer wants to remain
|
WB, p 70
|
|
|
Provision 3
Is a freestanding refrigerator real or personal property? |
Personal
|
WB, p 70
|
|
|
TP:
Provision 3 Are ornamental trees real or personal property? |
Real
|
WB, p 70
|
|
|
Provision 4
What is the definition of earnest money deposit? |
Good faith money paid by the Buyer
|
WB, p 70
|
|
|
Provision 4
What is the entry for earnest money deposit on the closing statement? |
Credit to the Buyer
|
WB, p 70
|
|
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Provision 4
When is the earnest money to be deposited? |
No later than 3 days after acceptance of the contract.
|
WB, p 70
|
|
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Provision 4
Which firm does the NC Real Estate Commission recommend hold the earnest money deposit? |
Listing Firm
|
WB, p 70
|
|
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Provision 4
If the earnest money deposit check bounces, how many days does the buyer have to deliver good funds? |
One banking day
|
WB, p 70
|
|
|
Provision 4
Is the earnest money an essential element of the sales contract? |
No
|
WB, p 70
|
|
|
Provision 4
What is the consideration in a sales contract? |
Sales price
|
WB, p 70
|
|
|
Provision 4
What is the definition of consideration? |
Anything of value
|
WB, p 70
|
|
|
Provision 4
If the earnest money deposit becomes in dispute between the buyer and seller, what is the firm required to do? |
Hold the money until the parties agree in writing, or the courts decide, OR the firm can deliver a notice to all parties stating that after 90 days of receipt of the notice, the firm is turning the earnest money deposit over to the clerk of court in the county where the property is located.
|
WB, p 70
|
|
|
Provision 4
Is an interest bearing trust account allowed in NC? |
Yes, as long as the sales contract specifies in bold type interest bearing trust account and who will receive the interest.
|
WB, p 70
|
|
|
Provision 4
When a broker opens a trust account initially, what is the initial minimum deposit? |
$100 or whatever the bank requires
|
WB, p 70
|
|
|
Provision 4
What type of institution is allowed to hold earnest money deposit? |
An insured bank or savings and loan in NC
|
WB, p 70
|
|
|
TP:
Provision 4 Can a credit union hold earnest money deposit? |
No
|
WB, p 70
|
|
|
Provision 4
What is the definition of option fee? |
Money given to the seller to buy time in order for a buyer to do their inspections and investigations on the property.
|
WB, p 70
|
|
|
Provision 4
To whom should the option fee check be made payable? |
To the seller
|
WB, p 70
|
|
|
Provision 4
Does the real estate firm deposit the option fee check in a trust account? |
No
|
WB, p 70
|
|
|
TP:
Provision 4 Is a seller allowed a deficiency judgment when a purchased money mortgage is used in NC? |
No
|
WB, p 70
|
|
|
What is the entry on the closing statement for the loan amount on a loan assumption?
|
Credit Buyer/Debit Seller
|
WB, p 71
|
|
|
Apartment rental rates are usually expressed:
a. in monthly amounts b. on a per-room basis c. in square feet per month d. in square feet per year |
a. in monthly amounts
|
C10, p 228
|
|
|
In preparing a budget, the property manager should set up for variable expenses a(n)
a. control account b. floating allocation c. cash reserve fund d. asset account |
c. cash reserve fund
|
C10, p 228
|
|
|
An important concern in setting rents is
I. prevailing rates in the area II. local apartment owners' associations a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C10, p 228
|
|
|
Which of the following might suggest that rents are too low?
a. poorly maintained building b. many for lease signs in the area c. high occupancy rate d. high vacancy level |
c. high occupancy rate
|
C10, p 229
|
|
|
Repairing a boiler is classified as which type of maintenance?
a. preventative b. corrective c. routine d. construction |
b. corrective
|
C10, p 231
|
|
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All EXCEPT which of the following describe the relationship between a building owner and a property manager?
a. Agency b. Management c. UCC Agency d. Fiduciary |
c. UCC Agency
|
C10, p 219
|
|
|
In renting units in an apartment building, a property manager must comply with all of the following EXCEPT?
a. the terms of the management agreement b. the lawful instructions of the owner c. fair housing laws d. the AMA Code of Ethics |
d. the AMA Code of Ethics
|
C10, p 236
|
|
|
Generally, the provisions of the manager-owner agreement should include all of the following EXCEPT:
a. a definition of the managers responsibilities b. a listing of previous owners of the property c. the extent of the manager's authority as an agent d. the allocation of costs |
b. a listing of previous owners of the property
|
C10, p 220, 227
|
|
|
When selecting a tenant, consideration should be given to all of the following EXCEPT:
a. size of the space versus the tenant's requirements b. tenant's ability to pay c. racial and ethnic background of the tenant d. compatibility of the tenant's business with other tenants businesses |
c. racial and ethnic background of the tenant
|
C10, p 229
|
|
|
A property manager is usually responsible for all of the following:
I. developing a budget and controlling expenses II. communicating with the owner about physical problems with a building a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
|
C10, p 219
|
|
|
Last year your firm managed a 48-unit apartment building. Two units were 4-bedroom, penthouse units renting for $1,000 per month. Twenty five units with 3 bedrooms and 2 baths rented for $850 per month. Ten 2 bedroom units rented for $750 per month. The three bedroom units carried a 5 percent vacancy and credit loss factor; the two bedroom units carried a 5 percent vacancy and credit loss factor; the one bedroom units carried a 10 percent vacancy and credit loss factor. The management fee is 12 percent. How much commission did your firm gross last year managing this building?
a. $45,480 b. $50,036 c. $51,476 d. $53,136 |
c. 2-4 BR X $1,000/mo = $2,000 X 12 months = $24,000 recived
25-3 BR X $$850/mo = $21,250 X 12 months = $255,000 X 0.95 (5% vacancy) 10-2 BR X $750/mo = $7,500 X 12 mos = $90,000 X 0.95 (5% vacancy) = $85,500 11-1 BR X $650/mo = $7,150 X 12 mos = $85,800 X 0.95 (5% vacancy) = $77,200 Total rent received $428,970 X 0.12 mgmt fee = $51,476 |
C10, p 227
|
|
|
When a property manager is establishing a budget for the building, all of the following should be included as an operating expense EXCEPT:
a. heating oil b. cleaning supplies c. foundation repairs d. management fees |
c. foundation repairs
|
C10, p 227-228
|
|
|
In most market areas, rents are determined by
a. supply and demand factors b. the local apartment owner's association c. HUD d. a tenant's union |
a. supply and demand factors
|
C10, p 228-229
|
|
|
A property manager who enters into a management agreement with an owner is usually a
a. special agent b. general agent c. universal agent d. designated agent |
b. general agent
|
C10, p 220
|
|
|
North Carolina is characterized as a(n)
a. lien theory state b. title theory state c. intermediate theory state d. escrow theory state |
b. title theory state
|
C11, p 237
|
|
|
Which of the following statements is true of prepayment penalty in a mortgage instrument?
a. it usually penalizes early payment of the mortgage b. it is prohibited in all residential and commercial mortgage loans in North Carolina c. it can never be waived, even if the buyer's mortgage is with the same lender as the seller's d. it penalizes the lender when the mortgagor pays off the loan early |
a. it usually penalizes early payment of the mortgage
|
C11, p 241
|
|
|
Which of the following statements best describes a deed of trust?
a. it is evidence of a debt b. it uses real estate as security for the repayment of debt c. it is sometimes called a promissory note d. it is evidence of both legal and equitable title |
b. it uses real estate as security for the repayment of debt
|
C11, p249
|
|
|
A charge of three discount points on a $120,000 loan is
a. $450 b. $3,600 c. $4,500 d. $116,400 |
b. $3,600
$120,000 loan amount X 0.03 (3 discount points) = $3,600 |
C11, p 248-249
|
|
|
The person who obtains a real estate loan by signing a deed of trust is called the
I. grantee II. grantor a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C11, p 250
|
|
|
The borrower under a mortgage is known as the
a. vendee b. mortgagee c. mortgagor d. beneficiary |
c. mortgagor
|
C11, p 250
|
|
|
Laws that limit the amount of interest that can be charged to the borrower are called
a. truth-in-lending laws b. usury laws c. the statute of frauds d. RESPA legislation |
b. usury laws
|
C11, p 247
|
|
|
If a borrower pays $2,700 for points on a $90,000 loan, how many points is the lender charging for this loan?
a. Two b. Three c. Five d. Six |
b. Three
$2,700 points / $90,000 loan = 0.03 X 100 = 3 |
C11, p 249
|
|
|
Before the foreclosure sale, the borrower who has defaulted on the loan seeks to pay off the debt plus any accrued interest and costs under the right of
a. equitable redemption b. defeasance c. usury d. legal title |
a. equitable redemption
|
C11, p 256
|
|
|
The clause in a note that gives the lender the right to demand that all future installments become due on default is the
a. escalation clause b. defeasance clause c. alienation clause d. acceleration clause |
d. acceleration clause
|
C11, p 235
|
|
|
What allows a lender to proceed to a foreclosure sale without having to go to court first?
I. Power of sale II. Alienation clause a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C11, p 255
|
|
|
Pledging property for a loan without giving up possession is best described as
a. hypothecation b. defeasance c. alienation d. novation |
a. hypothecation
|
C11, p 238
|
|
|
Discount points on a mortgage are computed as a percentage of
a. selling price b. amount borrowed c. closing costs d. down pay,emt |
b. amount borrowed
|
C11, p 248
|
|
|
The clause in a deed of trust that allows the lender to accelerate the loan when the property is transferred is called the
a. acceleration clause b. prepayment penalty clause c. due-on-sale clause d. defeasance clause |
c. due-on-sale clause
|
C11, p 241
|
|
|
Proceeds from a foreclosure sale first pay
a. mortgages in the order of recordation b. outstanding property taxes c. junior liens i the order of recordation d. the cost of the sale |
d. the cost of the sale
|
C11, p 256
|
|
|
In a deed in lieu of foreclosure situation
a. the lender is obligated to accept the deed b. the lender takes the real estate subject to all junior liens c. a civil action is required d. the lender is eager to become a homeowner |
b. the lender takes the real estate subject to all junior liens
|
C11, p 255-256
|
|
|
A deficiency judgment on a promissory note may be granted to a
a. mortgagor b. trustor c. trustee d. mortgagee |
d. mortgagee
|
C11, p 257
|
|
|
Which of the following statements is/are true if a buyer purchases property subject to the seller's loan and then defaults on the loan
I. the buyer is personally liable for the underlying debt II. the seller remains personally liable for the underlying debt a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C11, p 257
|
|
|
A term loan requires that the borrower pay
a. only the interest during the term loan b. both principal and interest during the loan term c. only the principal during the loan term d. increasing amounts of principal during the loan term |
a. only the interest during the term loan
|
C11, p 244
|
|
|
A mortgage that calls for a substantially larger than normal payment at the end of the loan term is what type of loan?
a. term b. graduated payment c. balloon d. adjustable rate |
c. balloon
|
C11, p 246
|
|
|
Interest charges by the lender on a fixed-rate conventional loan are
a. subject to periodic changes b. almost always simple interest c. usually paid in advance d. all of the above |
b. almost always simple interest
|
C11, p 242-243
|
|
|
A deficiency judgment is
a. a court decision declaring that a debt is excused if a foreclosure sale does not satisfy the debt b. a judgment for the balance owing on a debt after the security has been sold to apply toward the debt c. a specific lien d. a general lien with a life of five years |
b. a judgment for the balance owing on a debt after the security has been sold to apply toward the debt
|
C11, p 257
|
|
|
Which of the following types of mortgages features increasing payments with the increases applied directly to the principal?
a. shared appreciation b. growing equity c. adjustable rate d. graduated payment |
b. growing equity
|
C11, p 247
|
|
|
A promissory note must be signed by the
I. Borrower II. Lender a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C11, p 239
|
|
|
A deed of trust is
a. two-party instrument b. three-party instrument c. promissory note d. security instrument that requires a judicial foreclosure |
b. three-party instrument
|
C11, p 238
|
|
|
A buyer has purchased a home under an agreement that made the buyer personally obligated to continue making payments under the seller's existing mortgage. If the buyer defaults and the court sale does not satisfy the debt, the buyer will be liable for making up the difference. The buyer has
a. purchased the home subject to the seller's mortgage b. assumed the seller's mortgage c. benefited from the alienation clause in the seller's mortgage d. benefited from the defeasance clause in the seller's mortgage |
b. assumed the seller's mortgage
|
C11, p 257
|
|
|
A developer has obtained a large loan to finance the construction of a planned unit development. Which of the following statements is most probably true?
a. this is a short term loan, and the developer has arranged for long term financing to repay it when the construction is completed b. the borrowed money is disbursed in one lump sum after the construction has been completed c. to be sure that suppliers and subcontractors are compensated the lender pays the money borrowed directly to them d. the developer receives all borrowed money immediately before any construction is completed |
a. this is a short term loan, and the developer has arranged for long term financing to repay it when the construction is completed
|
C12, p 273
|
|
|
The Carters purchased a residence for $95,000. They made a down payment of $15,000 and agreed to assume the seller's existing mortgage with a current balance of $23,000. The Carters financed the remaining $57,000 of the purchase price by executing a mortgage and note to the seller. This type of loan is called a
a. purchase-money mortgage b. package mortgage c. balloon note d. term mortgage |
a. purchase-money mortgage
|
C12, p 271
|
|
|
Which of the following best defines the secondary mortgage market?
I. Lenders that deal exclusively in second mortgages II. Markets in which loans are bought and sold after they have been originated a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C12, p 278
|
|
|
A borrower obtains a mortgage loan to make repairs on her home. The loan is not insured or guaranteed by a government agency, and the mortgage document secures the amount of the loan as well as any future funds advanced to the borrower by the lender. This borrower has obtained a
a. wraparound mortgage b. conventional open-end loan c. land contract d. growing equity mortgage |
b. conventional open-end loan
|
C12, p 272
|
|
|
Regulation Z requires that the lenders
a. property inform buyers and sellers of commercial property of all settlement costs in a real estate transaction b. inform prospective borrowers of all charges, fees, and interest involved in making a home mortgage loan c. disclose nothing, let the buyer/mortgagor beware! d. study the economic market before they decide what interest rate to charge on residential mortgages |
b. inform prospective borrowers of all charges, fees, and interest involved in making a home mortgage loan
|
C12, p 283
|
|
|
VA Mortgages made prior to March 1, 1988 can be
a. charged a one-time mortgage insurance premium b. charged a prepayment penalty c. made to nonveterans d. freely assumable |
d. freely assumable
|
C12, p 269
|
|
|
Aunt Fran continues to live in the home she purchased 30 years ago, but she now receives monthly checks from her mortgage lender thanks to her
a. shared-appreciation mortgage b. adjustable rate mortgage c. reverse annuity mortgage d. overriding trust deed |
c. reverse annuity mortgage
|
C12, p 274
|
|
|
The McCanns are purchasing an ocean-front summer home in a new resort development. The house is completely equipped, and the McCanns have obtained a mortgage loan that covers the purchase price of the residence, including furnishings and appliances. This kind of financing is called a(n)
a. wraparound loan b. package loan c. blanket loan d. unconventional deed of trust |
b. package loan
|
C12, p 271
|
|
|
All of the following are government owned institutions EXCEPT:
a. Fannie Mae b. Ginnie Mae c. FHA d. VA |
a. Fannie Mae
|
C12, p 278
|
|
|
A developer received a loan that covers five parcels of real estate and provides for the release of the mortgage lien on each parcel when certain payments are made on the loan. This type of loan arrangement is called a
a. purchase-money loan b. blanket loan c. package loan d. wraparound loan |
b. blanket loan
|
C12, p271-272
|
|
|
Funds for Federal Housing Administration (FHA) loans are usually provided by
a. the FHA b. the FDIC c. qualified lenders d. FNMA |
c. qualified lenders
|
C12, p 263
|
|
|
Under the provisions of the truth-in-lending act (regulation Z), the annual percentage rate (APR) of a finance charge does NOT include
a. discount points b. broker's commission c. loan origination fee d. loan interest rate |
b. broker's commission
|
C12, p 283-284
|
|
|
Using an FHA-insured 203(b) mortgage, no prepayment penalty can be imposed on a(n)
I. single family home II. apartment building of five units or more a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C12, p 264
|
|
|
If buyers were seeking a mortgage on a single-family home, they would be LEAST likely to obtain the mortgage from a
a. savings association b. commercial bank c. mortgage banker d. life insurance company |
d. life insurance company
|
C12, p 276
|
|
|
Which of the following is NOT a participant in the secondary market
I. FHLMC II. RESPA a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C12, p 285
|
|
|
As a general policy, in an uninsured loan, conventional lenders require that a borrower's proposed-monthly-housing-expense-to-income ratio be no more than
a. 22% b. 28% c. 36% d. 41% |
b. 28%
|
C12, p 281
|
|
|
The Bendermans are applying for a loan that will have a monthy loan payment of $750 (including taxes and insurance). Their recurring monthly expenses equal $500. How much monthly income do they need to quality for a conventional loan using ratios of 28/36?
a. $1,923 b. $2,083 c. $2,679 d. $3,472 |
d. $3,472
Housing Expense: $750 / 0.28 = $2,678.57 ($2,679) Recurring Obligations $750 + $500 = $1,250 / 0.36 = $3,472 Always use the higher ratio 36 |
C12, p 281-282
|
|
|
To prequalify a buyer, a real estate agent should use the qualifying standards of
I. lenders II. investors a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C12, p 280
|
|
|
The interest rate on FHA loans is set by the
a. FHA b. FNMA c. lender d. Federal Reserve |
c. lender
|
C12, p 263
|
|
|
Mortgage bankers (companies) deal with
a. only VA loans b. only FHA loans c. only conventional loans d. all types of long-term mortgage loans |
d. all types of long-term mortgage loans
|
C12, p 276
|
|
|
Mortgage bankers (companies) play an important role as a source of real estate financing. Their primary functions include all of the following EXCEPT
a. servicing mortgage loans they sell to investors b. originating all types of loans c. charging service fees to investors and origination fees to loan applicants d. using their own funds from deposit assets to originate mortgage loans |
d. using their own funds from deposit assets to originate mortgage loans
|
C12, p 276
|
|
|
Which of the following loans gives the lender the greatest degree of risk
a. FHA b. Conventional with 95 percent LTV ratios c. Construction d. VA with no down payment |
c. Construction
|
C12, p 273
|
|
|
The main purpose of the Truth-in-Lending Act is to
a. give a full disclosure of credit charges b. regulate the practice of redlining c. ensure that lenders give good faith estimates of closing costs d. establish legal usury limits |
a. give a full disclosure of credit charges
|
C12, p 288
|
|
|
For which type of loan would the buyer have to produce a CRV?
a. FHA b. Conventional c. VA d. Reverse Annuity |
c. VA
|
C12, 269
|
|
|
The major difference between a purchase-money mortgage and an installment land contract is
a. only one can be used for seller financing b. the time at which the buyer gets possession and use of the property c. the time at which delivery of the deed is made d. there is no difference |
c. the time at which delivery of the deed is made
|
C12, p 185-186, 271
|
|
|
A buyer purchased a new home for $174,000. The buyer made a down payment of $15,000 and obtained a $160,000 mortgage loan. The builder of the house paid the lender 3 percent of the loan balance for the first year and 2 percent of the loan balance for the second year. This represented total savings for the buyer of $8,000. What type of arrangement does this represent?
a. wraparound mortgage b. package mortgage c. blanket mortgage d. buydown mortgage |
d. buydown mortgage
|
C12, p 273
|
|
|
The federal Equal Credit Opportunity Act prohibits lenders from discriminating against potential borrowers on the basis of all of the following EXCEPT
a. race b. sex c. dependence on public assistance d. amount of income |
d. amount of income
|
C12, p 284
|
|
|
If a lender agrees to make a loan based on an 80 percent LTV, what is the amount of the loan if the property appraised for $114,500 and the sales price is $116,900?
a. $83,200 b. $91,300 c. $91,600 d. $93,520 |
c. $91,600
|
C12, p 262
|
|
|
In determining LTV value is
a. 80% of the sales price or less b. 95% of the appraised value c. appraisal value or price, whichever is less d. price or appraisal value, whichever is more |
c. appraisal value or price, whichever is less
|
C12, p 262
|
|
|
Using the 28/36 rule, how much annual income must one have to qualify for a $120,000 loan at 7 percent for 25 years if the proposed PITI will be $982 and the borrower has other monthly recurring debts of $745?
a. $24,833 b. $42,085 c. $57,566 d. $74,014 |
c. $57,566
PITI $982 + Debts $745 / 0.36 X 12 |
C12, p 281
|
|
|
What is the maximum loan a borrower can get using the 28/36 rule if her annual income is $60,000, the mortgage loan factor is 6.67, the estimated monthly taxes and insurance (TI) is $160, and her monthly nonhousing recurring debts total $700?
a. $91,904 b. $140,929.53 c. $142,929.53 d. $74,014 |
b. $140,929.53
$60,000 / 12 = $5,000 x 0.36 = $1,800 $1,800 - ($160 + $700) = $940 Maximum PI / 6.67 loan factor = $140.92953 X $1,000 |
C12, p 280
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If a borrower has an annual gross income of $42,000 and will have monthly recurring debts of $500, not including housing expenses, what will be the maximum monthly housing expenses using the 28/36 rule?
a. $760 b. $920 c. $980 d. $1,260 |
a. $760
$42,000 / 12 X 0.36 = $1,260 - $500 |
C12, p 281-282
|
|
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Regarding the buyer and seller, which of the following statements is true of real estate closings in North Carolina?
a. closings are usually conducted by real estate brokers b. the seller usually pays the expenses for the day of closing c. the buyer usually reimburses the seller for accrued but unpaid expenses d. the seller usually pays the attorney for the preparation of the deed of trust |
b. the seller usually pays the expenses for the day of closing
|
C13, p 303-304
|
|
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Which of the following documents would a lender generally require at the closing?
a. title insurance policy b. market value appraisal c. application d. credit report |
a. title insurance policy
|
C13, p 295
|
|
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The RESPA Uniform Settlement Statement must be used to illustrate all settlement charges for
a. every real estate transaction b. real estate transactions financed by VA and FHA loans only c. residential real estate transactions financed by federally related mortgage loans d. all real estate transactions involving commercial property |
c. residential real estate transactions financed by federally related mortgage loans
|
C13, p 295
|
|
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Assume annual real estate taxes amount to $1,800 and have been paid in advance for the calendar year. If closing is set for September 15, which of the following is true
a. Credit Seller $525, debit buyer $1,275 b. Credit seller $1,275, debit buyer $525 c. Credit buyer $525, debit seller $1,275 d. Credit seller $525, debit buyer $525 |
d. Credit seller $525, debit buyer $525
$1,800 / 360 = $5/day Day after closing to year end = 105 days |
C13, p 305
|
|
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A seller collects rent of $400 payable in advance, from the attic tenant on September 1. Which of the following is true at the closing on September 15?
a. The seller owes the buyer $400 b. The buyer owes the seller $400 c. The seller owes the buyer $200 d. The buyer owes the seller $200 |
c. The seller owes the buyer $200
debit seller/credit buyer |
C13, p 305
|
|
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A building was purchased for $50,000, with 10 percent down and a loan for the balance. If the lender charged the buyer two discount points, how much cash did the buyer need to pay the down payment and fees?
a. $900 b. $5,200 c. $5,900 d. $6,900 |
c. $5,900
90% LTV = $45,000 Down payment = $5,000 Points = $45,000 X 0.02 (2%) = $900 |
C13, p 249
|
|
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At closing, the seller's lawyer debited the seller and credited the buyer for certain accrued items. These included bills relating to the property that were
I. already paid by the seller II. yet to be paid by the buyer a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
Accrued = interim interest |
C13, p 303
|
|
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Items normally appearing on a closing statement:
The sales price of the property is: a. credit to the buyer b. debit to the seller c. credit to buyer, debit to seller d. credit to seller, debit to buyer |
d. credit to seller, debit to buyer
|
C13, p 307
|
|
|
Items normally appearing on a closing statement:
The earnest money left on deposit with the broker is a. credit to buyer b. debit to seller c. credit to buyer, debit to seller d. credit to seller, debit to buyer |
a. credit to buyer
|
C13, p 308
|
|
|
Items normally appearing on a closing statement:
The cost of purchasing the fuel oil left in a holding tank on the property is a. credit to buyer b. debit to seller c. credit to buyer, debit to seller d. credit to seller, debit to buyer |
d. credit to seller, debit to buyer
|
C13, p 307
|
|
|
Items normally appearing on a closing statement:
The principal amount of the purchaser's new mortgage loan is a. credit to seller b. credit to buyer c. debit to seller d. debit to buyer |
b. credit to buyer
|
C13, p 308
|
|
|
Items normally appearing on a closing statement:
Unpaid homeowner's association fees, water service charges, and waste disposal service fees are a. credit to buyer b. debit to seller c. credit to buyer, debit to seller d. credit to seller, debit to buyer |
c. credit to buyer, debit to seller
|
C13, p 302-303
|
|
|
The Real Estate Settlement Procedures Act applies to the activities of
a. brokers selling commercial and office buildings b. security salespeople selling limited partnerships c. Ginnie Mae or Fannie Mae when purchasing mortgages d. lenders financing the purchase of a borrower's residence |
d. lenders financing the purchase of a borrower's residence
|
C13, p 295
|
|
|
The purpose of RESPA is to ensure that
I. buyers do not borrow more than they can repay II. buyers and sellers know all settlement costs a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C13, p 296
|
|
|
A survey of property is usually paid by
a. the seller b. the buyer c. both the buyer and seller equally d. the real estate appraiser |
b. the buyer
|
C13, p 291
|
|
|
RESPA was passed to
a. protect the buyer and the seller b. protect the broker c. protect the lender d. act as consumer protection legislation |
d. act as consumer protection legislation
|
C13, p 296
|
|
|
When a broker handles a closing on his or her own, he or she must be extremely careful to make sure that all documents and exchanges are correct because the broker may be disciplined by the
a. seller b. buyer c. lender d. NCRE |
d. NCRE
|
C13, p 294
|
|
|
Under RESPA, the settlement agent must allow the borrower to examine the closing statement
I. one business day before closing II. with a lawyer present a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C13, p 297
|
|
|
On a settlement statement, the prorations for unpaid real estate taxes paid in arrears would be shown as
a. credit to seller, debit to buyer b. debit to seller, credit to buyer c. credit to both seller and buyer d. debit to both seller and buyer |
b. debit to seller, credit to buyer
|
C13, p 303
|
|
|
On a settlement statement, the option fee will always be
I. credit to buyer II. debit to buyer a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
Think of option fee as earnest money |
C13, p 302
|
|
|
R-Value refers to
a. resistance to the transfer of heat b. resistance to termite infestation c. reduction in construction costs d. a general contractor's license |
a. resistance to the transfer of heat
|
324
|
|
|
Pressure-treated lumber is used
a. to improve the appearance of a home b. to help prevent termite infestation c. to increase the R-value d. for interior wall treatment |
b. to help prevent termite infestation
|
321
|
|
|
The vertical framing member of a wall is a
a. sole plate b. girder c. joist d. stud |
d. stud
|
321
|
|
|
Based on the cost per square foot of living space, which of the following is the most economical house design?
a. split-level b. one-story c. two-story d. modern |
c. two-story
|
318
|
|
|
Which of the following statements is (are) true of exterior siding?
I. it protect the home from the elements II. it adds to the style of a home a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
|
324
|
|
|
The foundation wall rests on top of the
a. footing b. sill c. girder d. floor joist |
a. footing
|
C14, 318
|
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|
A certificate of occupancy is required
I. from the local building department II. before anyone can move into a home a. I Only b. II Only c. Both I & II d. Neither I nor II |
c. Both I & II
|
C14, 327
|
|
|
The lowest part of residential construction is
a. sill b. foundation wall c. footing d. ridge board |
c. footing
|
C14, 318
|
|
|
The highest part of the frame construction is
a. sill b. rafter c. ridge board d. ceiling joist |
c. ridge board
|
C14, 324
|
|
|
The following are components of an eave EXCEPT
a. soffit b. fascia board c. crown moulding d. frieze board |
c. crown moulding
|
C14, 324
|
|
|
The amount of money a property commands in the marketplace is its
I. market price II. market value a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C15, 332
|
|
|
Reconciliation refers to which of the following?
a. averaging the results of the sales comparison approach b. separating the value of land from the total value of property to compute depreciation c. analyzing the results obtained by the three different approaches to value to determine a final estimate of value d. the process by which an appraiser determines the highest and best use for a parcel of land |
c. analyzing the results obtained by the three different approaches to value to determine a final estimate of value
|
C15, 349
|
|
|
One method an appraiser uses to determine a building's replacement cost involves the estimated cost of the raw materials needed to build the structure, plus labor and indirect costs. This is called the
a. square-foot method b. quantity-survey method c. cubic-foot method d. unit-in-place method |
b. quantity-survey method
Need to read up on this |
C15, 343
|
|
|
If a property's annual net income is $24,000 and it is valued at $300,000, what is its CAP rate?
a. 8% b. 10.5% c. 12.5% d. 15% |
a. 8%
I / RV $24,000 / $300,000 = 0.08 X 100 |
C15, 351-352
|
|
|
Certain figures must be determined by an appraiser before value can be computed by the income approach. Which one of the following is NOT required for this process?
a. annual net operating income b. capitalization rate c. accrued depreciation d. annual gross income |
c. accrued depreciation
|
C15, p 346
|
|
|
The highest and best use of a property is the
a. sales price paid for a similar property b. most return the owner can receive for the use of the property c. cost of buying a lot and erecting a similar building on it d. use of the land for a long term lease |
b. most return the owner can receive for the use of the property
|
C15, 333
|
|
|
The income capitalization approach is given the most weight in the valuation of a(n)
a. single family residence b. industrial property c. office building d. school |
c. office building
|
C15, 346
|
|
|
Capitalization is the process by which annual net operating income is used as the basis to
a. determine cost b. establish value c. establish depreciation d. determine potential tax value |
b. establish value
|
C15, 346
|
|
|
From the reproduction or replacement cost of a building, an appraiser deducts depreciation, which represents the
a. remaining economic life of the building b. remodeling costs to increase rentals c. loss of value due to any cause d. costs to modernize the building |
c. loss of value due to any cause
|
C15, 344-345
|
|
|
Which of the following factors is NOT important in comparing properties under the sales comparison approach to value?
a. difference in dates of sale b. difference in interior decorating c. difference in appearance and condition d. difference in location |
b. difference in interior decorating
|
C15, 340-341
|
|
|
The appraised value of a residence with four bedrooms and one bathroom would probably be reduced because of
a. external obsolescence b. functional obsolescence c. physical deterioration - curable d. physical deterioration - incurable |
b. functional obsolescence
|
C15, 345
|
|
|
All of the following reasons for loss of value are possibly curable EXCEPT
a. functional obsolescence b. physical deterioration c. replacement obsolescence d. economic obsolescence |
d. economic obsolescence
|
C15, 344-345
|
|
|
Which appraisal approach makes use of a rate of investment return?
a. sales comparison b. cost c. income capitalization d. gross income multiplier |
c. income capitalization
|
C15, 346-347
|
|
|
The elements of value include which of the following?
a. competition b. scarcity c. supply d. balance |
b. scarcity
|
C15, 331
|
|
|
The market value of a parcel of real estate is an estimate of
I. it's future benefits II. the most probable price it will bring a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C15, 332
|
|
|
Which of the following statements is true of the income capitalization approach to value?
a. the reproduction or replacement cost of the building must be computed b. the capitalization rate must be estimated c. depreciation must be determined d. sales of similar properties must be considered |
b. the capitalization rate must be estimated
|
C15, 346-347
|
|
|
In the cost approach to value, it is necessary to
a. determine a dollar value for depreciation b. estimate future expenses and operating costs c. check sales prices of recently sold comparable properties in the area d. reconcile differing value estimates |
a. determine a dollar value for depreciation
|
C15, 342-343
|
|
|
An appraiser is using the sales comparison method to appraise a property. The subject property has two bedrooms and the comparable property has three bedrooms. The estimated value of the third bedroom is $2,500. The appraiser should
a. deduct $2,500 from the value of the subject b. add $2,500 to the value of the subject c. deduct $2,500 from the comparable d. add $2,500 to the comparable |
c. deduct $2,500 from the comparable
|
C15, 340-341
|
|
|
All of the following should be deducted from gross income to arrive at net operating income EXCEPT
a. utilities b. mortgage payments c. maintenance d. repairs |
b. mortgage payments
|
C15, 346
|
|
|
If the appraiser decides to increase the capitalization rate, the value of the property will
a. increase b. decrease c. stay the same d. be the same as the capitalization rate |
b. decrease
|
C15, 346-347
|
|
|
The number of years a property is expected to remain useful for its original purpose it called its
a. actual life b. economic life c. progressive life d. depreciated life |
b. economic life
|
C15, 346
|
|
|
The formula for estimating value based on the gross rent multiplier is
a. rental income X gross rent multiplier = estimated market value b. rental income / gross rent multiplier = estimated market value c. estimated market value X rental income = gross rent multiplier d. net operating income X gross rent multiplier = estimated market value |
a. rental income X gross rent multiplier = estimated market value
|
C15, 347-348
|
|
|
In estimating the value of real estate using the cost approach, the appraiser should
a. estimate the replacement cost of the improvements b. deduct for depreciation of the land c. determine the original cost and adjust for changes in capitalization rates d. review the sale price of comparable properties |
a. estimate the replacement cost of the improvements
|
C15, 342-343
|
|
|
Under the income approach to estimating the value of real estate, the capitalization rate is the
a. rate at which the property will increase in value b. rate of return the property will earn as an investment c. rate of capital required to keep the property operating efficiently d. maximum rate of return allowed by usury limits |
b. rate of return the property will earn as an investment
|
C15, 346
|
|
|
An example of economic obsolescence is
a. numerous pillars supporting the ceiling in a store b. roof leaks making the premises unusable and therefore unrentable c. massive cornices in an older structure d. vacant and abandoned buildings in the area |
d. vacant and abandoned buildings in the area
|
C15, 345
|
|
|
Mary lives in a home located in a suburban community. A new expressway is being built a few blocks away that will reduce the commute time to the urban employment center by 30 minutes. Mary's home is expected to increase in value based on the principle of
a. anticipation. b. competition. c. contribution. d. highest and best use |
a. anticipation.
|
C15, 334
|
|
|
An apartment building generates a monthly gross income of $6,000. Monthly managerial expenses total $ 1,000. Monthly taxes total $300. Monthly debt service totals $2,675. Monthly repairs and maintenance total $1,100. What is the building's monthly net income?
a. $925 b. $1,225 c. $3,600 d. $3,900 |
c. $3,600
Net income $6,000 - $1,000 mgt - $300 taxes - $1,100 repairs (Debt service is not an operating expense) |
C15, 346
|
|
|
The subject property is a two-story home with three bedrooms, three baths, a family room, a dining room, and an attached two-car garage. Which ol the following would be a legitimate comparable sale.'
I. Two-story home with 3 bedrooms and 2.5 baths in the same neighborhood that sold 18 months ago II. One-story home in a different neighborhood with 3 bedrooms and 2 baths, a detached one-car garage, and no family or dining room a. I Only b. II Only c. Both I & II d. Neither I nor II |
d. Neither I nor II
|
C15, 340
|
|
|
The subject property has 2,100 square feet, 4 bedrooms, a 2-car garage, no patio, no pool, 2.5 baths, and sits on 1 acre. The comparable recently sold for $ 140,000 and has 1,900 square feet, 3 bedrooms, a 1 -car garage, a patio, a pool, 2 baths, and sits on 1.5 acres. Market cost data shows the following values: Square foot = $72, 1 bedroom = $2,000, 1-car garage = $1,500, patio = $2,000, pool = $14,000, 1/2 bath = $800, and 1 acre = $30,000. Using this cost data, what is the estimated value of the subject property?
a. $113,700 b. $125,700 c. $127,700 d. $129,200 |
c. $127,700
|
C15, 341-342
|
|
|
A broker is asked to estimate the value of a — property. She finds four recently sold
comparables, A, B, C, and D. Comparables A, B, and D have positive features worth $3,000, $2,000, and $5,000, respectively, which are not common to the subject property. Comparable C has negative features worth $3,500 that are not common to the subject property. The compatibles sold for the following prices: A, $73,000; B, $74,000; C, $62,000; and D, $71,000. What is the range of indicated probable values for the subject property? a. $58,500 to $76,000 b. $65,500 to $66,000 c. $65,500 to $72,000 d. $66,000 to $72,000 |
c. $65,500 to $72,000
|
C15, 341-342
|
|
|
Which of the following statements is true of a comparative market analysis?
a. It is exactly the same as an appraisal. b. It can help the seller price the property. c. By law, it must be completed for each listing taken. d. Per Commission Rule, it must be retained by the broker for at least five years. |
b. It can help the seller price the property.
|
C15, 341-342
|
|
|
Which of the following statements is true of an appraisal?
a. It is the same as a comparative market analysis. b. It utilizes the sales comparison approach for determining value. c. It utilizes the net approach for determine value. d. Per Commission Rule, it must be completed for each listing taken. |
b. It utilizes the sales comparison approach for determining value.
|
C15, 336
|
|
|
In qualifying a borrower, what is the name of the first ratio?
|
Housing Expenses
|
WB p72
|
|
|
In qualifying a borrower what is the name of the second ratio?
|
Recurring obligations
|
WB p 72
|
|
|
If the property is located in a flood plain, is this fact classified as material?
|
Yes
|
WB p 72
|
|
|
If the house is not in a flood plain but the back left corner of the lot is located in a flood plain, is the agent required to disclose?
|
Yes
|
WB p 72
|
|
|
Does the lender sign the deed of trust in NC?
|
No
|
WB p 72
|
|
|
What is the name of the lender in a deed of trust?
|
Beneficiary
|
WB p72
|
|
|
What type of foreclosure method is used in a mortgage?
|
Judicial foreclosure
|
WB p 72
|
|
|
What type of foreclosure method is used in a deed of trust?
|
Non-judicial
|
WB p 72
|
|
|
In NC, what is the time period after the sale of the property at the court house?
|
10 day upset bid period (statutory redemption)
|
WB p 72
|
|
|
What is the definition of specific lien?
|
charge against the property
|
WB p 72
|
|
|
What is the definition of general lien?
|
charge against a person
|
WB p 72
|
|
|
What NC Act allows real property to be taxed?
|
Machinery Act
|
WB p 72
|
|
|
What does ad valorem mean?
|
According to value
|
WB p 72
|
|
|
Who pays for deed preparation?
|
Seller
|
WB p 73
|
|
|
Who pays for the recording fee for a deed?
|
Buyer
|
WB p 73
|
|
|
Who pays for the recording of the deed of trust?
|
Buyer
|
WB p 73
|
|
|
Who pays for the release fee?
|
Seller
|
`WB p 73
|
|
|
Who pays for the excise tax?
|
Seller
|
WB p 73
|
|
|
What is the formula to calculate excise tax?
|
Round up Sales price to the next $500 / $500
|
WB p 73
|
|
|
Who pays to measure oil in the tank?
|
Seller
|
WB p 73
|
|
|
Who pays for the oil in the tank?
|
Buyer
|
WB p 73
|
|
|
Who pays for the attorney?
|
Buyer
|
WB p 73
|
|
|
Who pays for the title insurance?
|
Buyer
|
WB p 73`
|
|
|
Who pays for the home inspection?
|
Buyer
|
WB p 74
|
|
|
What is the definition of closing?
|
The date and time of RECORDING of the deed
|
WB p 75
|
|
|
The current market interest rate is 6%. The borrower wants 5.5% interest rate. How many discount points will the lender charge?
|
6% - 5.5% = 0.5 X 8 = 4 Discount Points
Hint: Subtract the rates multiply by 8 |
WB p 85
|
|
|
The current market interest rate is 9.5%. The borrower wants 8.25%. How many discount points will the lender charge?
|
9.5% - 8.25% = 1.25 X 8 = 10
Hint: Subtract the rates multiply by 8 |
WB p 85
|
|
|
Who benefits from discount points?
|
The Lender
|
WB p 85
|
|
|
The current market interest rate is 8.75%. The borrower wants 8.5%. How many discount points?
|
8.75% - 8.5% = 0.25 X 8 = 2
|
WB p 85
|
|
|
A lender is charging a borrower 8.75% interest plus 4 discount points. What is the effective interest rate to the lender?
|
8.75% + 4/8 = 8.75% + 0.5 = 9.25%
|
WB p 85
|
|
|
A typical homeowner's insurance policy covers all of the following EXCEPT
a. the medical expenses of a person inured in the policyholder's home b. theft c. vandalism d. flood damage |
d. flood damage
|
C16, 356
|
|
|
In a homeowner's insurance policy, coinsurance refers to the
a. specific form of policy purchased by the owner b. stipulation that the homeowner must purchase insurance coverage equal to at least 80 percent of the replacement cost of the structure to be able to collect the full insured amount in the event of loss c. stipulation that the homeowner must purchase fire insurance coverage equal to at least 70 percent of the replacement cost of the structure to be able to collect the full insure amount in the event of a loss d. specific form of policy purchased when a property is owned by more than one person (i.e. partnership or co-owner) |
b. stipulation that the homeowner must purchase insurance coverage equal to at least 80 percent of the replacement cost of the structure to be able to collect the full insured amount in the event of loss
|
C16, 358
|
|
|
Which of the following statements is true of federal flood insurance?
a. it is required in certain areas to insure properties financed by federally backed mortgage loans against flood damage b. it is required of all real estate purchasers no matter where the property is located in NC c. it is never required in NC d. it is paid for by the federal government |
a. it is required in certain areas to insure properties financed by federally backed mortgage loans against flood damage
|
C16, 360
|
|
|
A subrogation clause in an insurance policy enables the insurer to
a. sue the party responsible for damage to the insured's property b. receive 100% of replacement cost less depreciation c. receive full cost of the repair or replacement of the damaged property d. protect his or her property in case of flood |
a. sue the party responsible for damage to the insured's property
|
C16, 359
|
|
|
When a property manager chooses an insurance policy with a $150 deductible, the risk management technique being employed is risk
a. avoidance b. retainment c. control d. transfer |
d. transfer
|
C16, 360
|
|
|
Property manager Carol hires Jerry as the full time maintenance person for one of the buildings she manages. While repairing a faucet in one of the apartments, Jerry steals a television set. Carol could have protected the owner against this type of loss by purchasing
a. liability insurance b. worker's compensation insurance c. a surety bond d. casualty insurance |
c. a surety bond
|
C16, 361
|
|
|
One possible method of determining the amount of a claim under an insurance policy covering damage to a building is the
I. replacement cost method II. income method a. I Only b. II Only c. Both I & II d. Neither I nor II |
a. I Only
|
C16, 358-359
|
|
|
Which type of insurance coverage protects the property owner against the claims of employees injured on the job?
a. consequential loss b. worker's compensation c. casualty d. surety bond |
b. worker's compensation
|
C16, 361
|
|
|
A guest slips on an icy apartment building stair and is hospitalized. A claim against the building owner for medical expenses may be paid under which of the following policies held by the owner?
a. worker's compensation b. casualty c. liability d. fire and hazard |
c. liability
|
C16, 361
|
|
|
Which clause in a standard homeowner's insurance policy makes the insured share in the loss?
a. exclusion clause b. coinsurance clause c. conditions clause d. casualty clause |
b. coinsurance clause
|
C16, 358
|
|
|
In 1999 the Smiths received capital gains of $22,000 for the residence they purchased in 1998. The gains will most probably be
a. deductible only from passive income b. taxed at the regular rate of 40 percent of value c. taxed as ordinary income, but at a lower rate d. subject to the purchase price rule |
c. taxed as ordinary income, but at a lower rate
|
C17, 367
|
|
|
For tax purposes, the initial cost of an investment property plus the cost of any subsequent improvements to the property, less depreciation (cost recovery deductions) represents the investment's
a. adjusted basis b. capital gain c. basis d. salvage value |
a. adjusted basis
|
C17, 367
|
|
|
Which of the following statements is true of capital gains?
a. they may be realized only from the sale of improvements to real estate, not from the sale of the land itself b. they may be realized only from the sale of the land itself, not from the sale of improvements to the real estate c. their treatment has changed over the years. An investor should consult both a lawyer and an accountant for detailed and current information d. they must be paid only by those age 55 or older |
c. their treatment has changed over the years. An investor should consult both a lawyer and an accountant for detailed and current information
|
C17, 366-367
|
|
|
Federal income tax law allows for
I. a tax on all capital gains realized from the sale of a residence II. an exclusion of gain in the amount of up to $500,000 from the sale of personal residence by a married couple filing jointly a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C17, 366-367
|
|
|
Federal income tax laws do NOT allow a homeowner to deduct which of the following expenses from his or her taxable income?
a. mortgage interest b. real estate taxes c. discount points d. repairs or maintenance |
d. repairs or maintenance
|
C17, 366
|
|
|
The profit a homeowner receives from the sale of the homeowners principal residence may be
a. rolled over into the purchase of a more expensive property without any tax liability, once every 24 months b. subject to federal income tax laws c. excluded from taxation every 18 months up to a statutory limit of $500,000 per married couple filing jointly d. taxed at a lower rate because depreciation is deductible from each annual income tax return |
b. subject to federal income tax laws
|
C17, 367
|
|
|
Mike Tyler, unmarried, age 38, sells his home of eight years and realizes a $25,000 gain from the sale. Income tax on this gain may be
a. excluded, under certain conditions b. excluded from taxation if Tyler purchases a property with a value equal to or exceeding the adjusted basis of the previous residence c. reduced by subtracting the depreciation of the property when compared to the reproduction cost of a like-kind improvement d. reduced by the amount of mortgage interest paid over the life of the property's owner |
a. excluded, under certain conditions
|
C17, 368
|
|
|
Ada Ryan, age 62 sells the home she has occupied for one of the previous five years and realizes a $52,000 gain from the sale Income tax on the profit from this sale may be
a. taxed as capital gains b. postponed by purchasing another residence of equal or greater value within 12 months before or after the sale c. eliminated if she donates at least 50 percent of the profit to charity d. reduced by the amount of mortgage interest paid over the property's economic life |
a. taxed as capital gains
|
C17, 366-368
|
|
|
A homeowner sold his principal residence for $127,500. Selling expenses were $750. The house had been purchased new three years earlier for $75,000. What is the homeowner's gain on this transaction?
a. $51,750 b. $52,500 c. $53,250 d. $75,000 |
a. $51,750
$127,500 sales price less selling expenses of $750 = $126,750 amount realized - $75,000 original cost |
C17, 367-368
|
|
|
A homeowner sold his principal residence for $127,500. Selling expenses were $750. The house had been purchased new three years earlier for $75,000.
If the property were an investment property, how much of the gain would be subject to income tax? a. $21,000 b. $42,300 c. $51,750 d. $52,500 |
c. $51,750
The entire gain would be subject to taxation if the property were an investment property |
C17, 367-369
|
|
|
A homeowner bought her house for $72,000. She spent $15,000 on an addition, $3,000 on a new deck, $5,000 on roof repairs, and $2,000 fixing broken windows. Her adjust basis is
a. $87,000 b. $90,000 c. $95,000 d. $97,000 |
b. $90,000
$72,000 Basis + $15,000 addition + $3,000 deck Roof repairs and fixing broken windows would be considered ordinary repairs or maintenance and would not increase the adjust basis. |
C17, 367-368
|
|
|
Which of the following acts is permitted under the Federal Fair Housing Act?
a. advertising property for sale only to a particular ethnic group b. altering the terms of a loan for a member of a minority group c. refusing to sell a home to an individual because of a poor credit history d. telling an individual that an available apartment has been rented because the property owner does not want to consider allowing reasonable accommodations by the applicant because the applicant is hearing impaired |
c. refusing to sell a home to an individual because of a poor credit history
|
C18, 382-383
|
|
|
Which of the following statements is true of complaints relating to the Civil Rights Act of 1866?
a. they must be taken directly to federal court b. they are no longer reviewed in the courts c. they are handled by HUD d. they are handled by state enforcement agencies |
a. they must be taken directly to federal court
|
C18, 376
|
|
|
The Civil Rights Act of 1866 is unique because it
a. has been broadened to protect the aged b. adds welfare recipients as a protected class c. contains choose your neighborhood provisions d. provides no exceptions to racial discrimination |
d. provides no exceptions to racial discrimination
|
C18, 376
|
|
|
I hear they're moving in. There goes the neighborhood. Better list with me today! is an example of
a. steering b. blockbusting c. redlining d. testing |
b. blockbusting
|
C18, 387
|
|
|
The act of channeling homeseekers to a particular area either to maintain or to change the character of the neighborhood is
a. blockbusting b. redlining c. steering d. permitted under the Federal Fair Housing Act of 1968 |
c. steering
|
C18, 387
|
|
|
A lender's refusal to lend money to potential homeowners attempting to purchase property due to the racial makeup of the neighborhood is known as
a. redlining b. blockbusting c. steering d. qualifying |
a. redlining
|
C18, 389
|
|
|
Which practice is NOT permitted under the Federal Fair Housing Act and amendments to the Act?
I. Preference in the rental of rooms by the Zachary Club to its members II. an owner of a 20-unit apartment building renting exclusively to females a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C18, 376
|
|
|
Under federal law, families with children may be refused rental or purchase in buildings where strict conditions are met and occupancy is reserved exclusively for those at least how many years old?
a. 50 b. 60 c. 62 d. 65 |
c. 62
|
C18, 381
|
|
|
Guiding prospective buyers to a particular area because the agent feels they belong there may lead to
a. blockbusting b. redlining c. steering d. bird-dogging |
c. steering
|
C18, 387
|
|
|
An african american real estate broker's practice of offering a special discount to african american clients is
a. satisfactory b. illegal c. legal but ill-advised d. of no consquence |
b. illegal
|
C18, 376-378
|
|
|
Protection from discrimination against a single father with a child under 18 in the sale or rental of real estate is provided by the
a. Fair Housing Administration of 1988 b. Civil Rights Act of 1866 c. Americans with Disabilities Act d. Equal Credit Opportunity Act of 1974 |
a. Fair Housing Administration of 1988
|
C18, 377
|
|
|
The Federal Fair Housing Amendments Act of 1988 added which of the following as protected classes?
a. occupation and source of income b. handicap and familial status c. political affiliation and country of origin d. prison record and marital status |
b. handicap and familial status
|
C18, 377,380
|
|
|
The fine for a first violation of the Federal Fair Housing Act could be as much as
a. $500 b. $1,000 c. $5,000 d. $10,000 |
d. $10,000
|
C18, 382
|
|
|
The seller who requests prohibited discrimination in the showing of a house should be told
I. I'll do what I can, but I can't guarantee anything II. We are not allowed to obey such instructions a. I Only b. II Only c. Both I & II d. Neither I nor II |
b. II Only
|
C18, 376
|
|
|
In NC a person who feels he or she has been discriminated against in housing should first
a. have the necessary funds for court costs in order to bring a civil action b. file a complaint with the NC Human Relations Commission c. contact the NC Board of REALTORS(r) d. file a complaint with the NCRE |
b. file a complaint with the NC Human Relations Commission
|
C18, 381
|
|
|
If a state or local law has been declared substantially equivalent to the Federal Fair Housing Act, violations of the fair housing laws are referred to and handled by
a. federal courts b. local boards of REALTORS(r) c. state enforcement agencies d. HUD |
c. state enforcement agencies
|
C18, 381-382
|
|
|
All of the following are in violation of the Federal Fair Housing Act of 1968 EXCEPT the
a. refusal of a property manager to rent an apartment to a Catholic couple who are otherwise qualified b. general policy of a loan company to avoid granting home improvement loans to individuals living in transitional neighborhoods c. intentional neglect of a broker to show an Asian family property listings in all-white neighborhoods d. insistence of a widowed woman on renting her spare bedroom only to another widowed woman |
d. insistence of a widowed woman on renting her spare bedroom only to another widowed woman
|
C18, 380-381
|
|
|
Under the provisions of the Federal Fair Housing Act of 1968, if a lender refuses to make loans in certain areas because the population is made up of more than 25 percent African Americans, the lender is probably guilty of
a. redlining b. steering c. blockbusting d. making difficult business decisiosn |
a. redlining
|
C18, 389
|
|
|
A real estate broker wants to end racial segregation. As an office policy, the broker requires that agents show prospective buyers from racial or ethnic minority groups only properties that are in certain areas of town in order to create more diversity in residential areas. The broker has prepared a map illustrating the appropriate neighborhoods for each racial or ethnic group. Which of the following statements is true regarding this broker's policy.
a. while the broker's policy may appear to constitute blockbusting, application of the intent proves its legality b. because of the effect of the broker's policy is discriminatory, it constitutes illegal steering, regardless of the broker's intentions c. the broker's policy clearly shows the intent to improve community diversity and is therefore legal d. while the broker's policy may appear to constitute steering, application of the intent test proves its legality |
b. because of the effect of the broker's policy is discriminatory, it constitutes illegal steering, regardless of the broker's intentions
|
C18, 387
|
|
|
After a broker takes a listing of a residence, the owner specifies that he will not sell his home to any Asian family. The broker should do which of the following?
a. advertise the property exclusively in Asian-language newspapers b. explain to the owner that the instruction violates federal law and that the broker cannot comply with it c. abide by the principals directions despite the fact that they conflict with fair housing laws d. require that the owner sign a separate legal document stating the additional instruction as an amendment to the listing agreements |
b. explain to the owner that the instruction violates federal law and that the broker cannot comply with it
|
C18,
|
|
|
A single man with two small children has been told by a real estate agent that homes for sale in a condominium complex area available only to married couples with children. Which of the following statements is true?
a. because a single parent family can be disruptive if the parent provides little supervision of the children the condo is permitted to discriminate against the families under the principle of rational basis b. condominium complexes are exempt from the fair housing laws and can therefore restrict children c. the man may file a complaint alleging discrimination on the basis of familial status d. the man may file a complaint alleging discrimination on the basis of marital status |
c. the man may file a complaint alleging discrimination on the basis of familial status
|
C18,
|
|
|
The following ad appeared in the newspaper:
For sale: 4 BR brick home; Redwood School District; excellent Elm Street location; short walk to St. John's church; and right on the bus line. Move-in conditions. Priced to sell. Which of the following statements is true? a. the ad describes the property for sale and is very appropriate b. the fair housing laws to not apply to newspaper advertising c. the ad should state that the property is available to families with children d. the ad should not mention St. John's Church |
d. the ad should not mention St. John's Church
|
C18, 388
|
|
|
Asbestos is most dangerous when it
a. is used as insulation b. crumbles and becomes airborne c. gets wet d. is wrapped around heating and water pipes |
b. crumbles and becomes airborne
|
C19, 396
|
|
|
Encapsulation refers to
a. process of sealing a landfill with three to four feet of topsoil b. way in which asbestos insulation is applied to pipes and wiring systems c. method of sealing disintegrating asbestos d. way in which asbestos becomes airborne |
c. method of sealing disintegrating asbestos
|
C19, 397-398
|
|
|
Jerry is a real estate broker. He shows a pre-WWI house to Tom, a prospective buyer. Tom has two toddlers and is worried about potential health hazards. Which of the following is true?
a. there is a risk that urea-foam insulation was used in the original construction b. because Jerry is a license real estate broker, he can offer to inspect for lead and remove any lead risks c. because the house was built before 1978, there is a good likelihood of the presence of lead-based paint d. lead poisoning may occur only when lead paint chips are chewed and swallowed |
c. because the house was built before 1978, there is a good likelihood of the presence of lead-based paint
|
C19, 398-399
|
|
|
Which of the following is true regarding asbestos?
a. the removal of asbestos can cause further contamination of the building b. asbestos causes health problems only when it is eaten c. the level of asbestos in a building is affected by weather conditions d. HUD requires all asbestos containing materials to be removed from all residential buildings |
a. the removal of asbestos can cause further contamination of the building
|
C19, 397
|
|
|
Which of the following best describes the water table?
a. natural level at which the ground is saturated b. level at which underground storage tanks may be safely buried c. measuring device used by specialists to measure groundwater contamination d. always underground |
a. natural level at which the ground is saturated
|
C19, 402
|
|
|
All of the following are true of electromagnetic fields EXCEPT that electromagnetic fields are
a. a suspected but unproven cause of cancer, hormonal abnormalities and behavioral disorders b. generated by all electrical appliances c. present only near high-tension wires or large electrical transformers d. caused by the movement of electricty |
c. present only near high-tension wires or large electrical transformers
|
C19, 401
|
|
|
Which of the following describes the process of creating a landfill site?
a. waste is liquified, treated, and pumped through pipes to tombs under the water table b. waste and topsoil are layered in a pit, mounded up, then covered with dirt and plants c. waste is compacted and sealed into a container, then placed in a tomb designed to last several thousand years d. waste is buried in an underground concrete vault |
b. waste and topsoil are layered in a pit, mounded up, then covered with dirt and plants
|
C19, 404
|
|
|
Liability under the Superfund is
a. limited to the owner of record b. joint and several, retroactive, but not strict c. voluntary d. strict, joint and several, and retroactive |
d. strict, joint and several, and retroactive
|
C19, 406-407
|
|
|
Which of the following environmental hazards poses a risk due to particles or fibers in the air?
a. carbon monoxide b. radon c. UFFI d. asbestos |
d. asbestos
|
C19, 396-397
|
|
|
Under the Federal Lead Based Paint Hazard and Reduction Act, which of the following statements is true?
a. all residential housing built prior to 1978 must be tested for the presence of lead-based paint before being listed for sale or rent b. a disclosure statement must be provided to all purchasers and lessors involving residential properties built prior to 1978 c. a lead hazard pamphlet must be distributed to all prospective buyers but not to tenants d. purchasers of housing built before 1978 must be given five days to test the property for the presence of lead-based paint |
b. a disclosure statement must be provided to all purchasers and lessors involving residential properties built prior to 1978
|
C19, 381-382
|
|
|
Radon poses the greatest potential health risk to humans when it is
a. contained in insulation material used during the 1970's b. found in high concentrations of unimproved land c. trapped and concentrated in inadequately ventilated areas d. emitted by malfunctioning or inadequately ventilated appliances |
c. trapped and concentrated in inadequately ventilated areas
|
C19, 399
|
|
|
All of the following have been proven to pose health hazards EXCEPT
a. asbestos fibers b. carbon monoxide c. UFFI d. Asbestos |
c. UFFI
|
C19, 401
|
|
|
What is the function of the FHA?
|
FHA insures the loan
|
WB p 71
|
|
|
Can the mortgage insurance on a VA loan be financed into the VA loan amount?
|
Yes
|
WB p 71
|
|
|
Does the VA control the interest rates banks can charge on VA loans?
|
No
|
WB p 71
|
|
|
Are discount points a percentage of the sales price or loan amount?
|
Loan amount
|
WB p 71
|
|
|
What is the federal law which requires the lender to disclose to borrowers the "annual percentage rate"?
|
Truth in Lending Act or Regulation Z
|
WB p 71
|
|
|
TP:
Can an agent write in the blank, "initial interest rate not to exceed ____", prevailing rate or market rate? |
No, the agent must insert a number.
|
WB p 71
|
|
|
Are homeowner association dues included in the calculation of the qualifying ratios for a loan?
|
Yes
|
WB p 73
|
|
|
Is the option termination date classified as "time being of the essence"?
|
Yes
|
WB p 75
|
|
|
Can a buyer withdraw their offer at any time prior to the expiration of an offer?
|
Yes
|
WB p 78
|
|
|
Must a seller respond within the time limit requested by the buyer?
|
No
|
WB p 78
|
|
|
TP:
Bob wants to purchase a house for $150,000 with 10% down payment. The house payment is $1,800 (PITI). The taxes and insurance total $300 monthly. Bob wants a 15 year loan at 6%. What is the total amount of interest paid over the life of the 15 year loan? |
$150,000 X 90% = $135,000 loan
$1,800 - $300 = $1,500 PI $1500 X 180 months (15 yrs) = $270,000 $270,000 - $135,000 = $135,000 interest |
WB p 81
|
|
|
The principal and interest payment is $600 monthly for a 30 year loan at 8% interest. The original loan amount is $60,000. What is the total amount of interest paid over the life of the 30 year loan?
|
PI $600 X 360 (30 years) = Total payback $216,000 - Original loan amount $60,000 = $156,000 interest
|
WB p 81
|
|
|
Scott wants to borrow $175,000 at 8% interest for a term of 30 years. The monthly PITI is $2,100 and the TI equals $400. What is the total amount of interest paid over the life of this loan?
|
PITI $2,100 - TI $400 = $1,700
$1,700 X 360 = $612,000 PI $612,000 - $175,000 = $437,000 interest |
WB p 81
|
|
|
An individual wants to borrow $60,000 at 12% interest for 30 years. The principal and interest payment total is $663.72. What is the principal balance of the loan after the first month's payment?
|
$60,000 X 0.12 / 12 = $600 I/month
$663.72 - $600.00 = $63.72 principal $60,000 - $63,72 = $59,936.28 principal balance after first payment |
WB p 81
|
|
|
The original loan amount is $80,000. The monthly principal and interest payment is $890.00 for this 20 year loan at 9% interest. What is the total amount of interest paid over the life of the 20 year loan?
|
20 * 12 = 240 (Total number of payments)
$890.00 (PI) * 240 = $213,600 $213,600 - $80,000 (Original Loan) = $133,600 Total Interest Paid |
WB p 81
|
|
|
Bob wants to purchase a house for $150,000 with 10% down payment. The house payment is $1,800 (PITI). The taxes and insurance total $300 monthly. Bob wants a 15 year loan at 6%. What is the total amount of interest paid over the life of the 15 year loan?
|
15 * 12 = 180 (Total number of payments)
$1,800 (PITI) - $300 (TI) = $1,500 (PI) $1,500 (PI) * 180 = $270,000 $150,000 * 0.90 = $135,000 (Loan Amount) $270,000 - $135,000 = $135,000 Total Interest Paid |
WB p 81
|
|
|
Robert wants to obtain a 25 year loan at 6% with an original loan amount of $85,000. The monthly principal and interest payment is $1,100. The taxes and insurance total $350 monthly. What is the total amount of interest paid over the life of this loan?
|
25 * 12 = 300 (Total number of payments)
300 * $1,100 = $330,000 $330,000 - $85,000 (Original Loan) = $245,000 (Total interest paid) |
WB p 81
|
|
|
Scott wants to borrow $175,000 at 8% interest for a term of 30 years. The monthly PITI is $2,100 and the TI equals $400. What is the total amount of interest paid over the life of this loan?
|
30 * 12 = 360 (Total number of payments)
$2,100 (PITI) - $400 (TI) = $1,700 $1,700 * 360 = $612,000 $612,000 - $175,000 = $437,000 Total interest paid |
WB p 81
|
|
|
A blanket mortgage is an "open line" of credit.
|
False
|
WB p 156
|
|
|
When a builder gives a buyer a "buydown", the builder pays money upfront at the time of closing to lower the interest rate of the purchaser's loan.
|
True
|
WB p 156
|
|
|
A construction loan is the highest risk loan to a lender.
|
True
|
WB p 156
|
|
|
A construction loan is referred to as a term loan.
|
True
|
WB p 156
|
|
|
A construction loan is not "backed" by any government agency.
|
True
|
WB p 156
|
|
|
Federal National Mortgage Association is a quasi-governmental organization which is traded on the stock exchange.
|
True
|
WB p 156
|
|
|
Government National Mortgage Association only purchases conventional loans.
|
False
|
WB p 156
|
|
|
If the loan to value ratio is 80%, then the purchaser's down payment is 20%.
|
True
|
WB p 156
|
|
|
An open-end mortgage is used by developers to finance two or more lots in one loan.
|
False
|
WB p 156
|
|
|
A package loan combines real and personal property into one loan.
|
True
|
WB p 156
|
|
|
A conventional loan may require the purchaser to buy private mortgage insurance.
|
True
|
WB p 156
|
|
|
The Rural Economic and Community Development Services provide loans for low income individuals with longer than normal repayment privileges and subsidized interest rates.
|
True
|
WB p 156
|
|
|
FHA guarantees loans.
|
False
|
WB p 156
|
|
|
VA insures loans.
|
False
|
WB p 156
|
|
|
The Truth in Lending Act requires lenders to give a "good faith estimate".
|
False
The is a function of RESPA. |
WB p 156
|
|
|
FHA loans require mortgage insurance premium (MIP).
|
True
|
WB p 156
|
|
|
VA loans require funding fee.
|
True
|
WB p 156
|
|
|
If a property has an appraised value of $100,000 secured by a $90,000 loan, the LTV is 90%.
|
True
|
WB p 156
|
|
|
FHA and VA regulate the interest rates banks can charge.
|
False
|
WB p 156
|
|
|
Buyer's closing costs and points are always paid by the seller on a VA loan.
|
False
|
WB p 156
|
|
|
If a buyer purchases a home prior to 1978, the buyer is given a 10 day opportunity to conduct a lead based paint test.
|
True
|
WB p 156
|
|
|
VA appraisal is known as "Certificate of Eligibility"
|
False
|
WB p 156
|
|
|
If a house does not appraise by the FHA appraiser, the buyer can void the contract and buyer's earnest money deposit is returned to the buyer.
|
True
|
WB p 156
|
|
|
FHA maximum loan amount is determined by county in NC.
|
True
|
WB p 156
|
|
|
A non-veteran may assume a VA loan, if the purchaser qualifies for the assumption.
|
True
|
WB p 156
|
|
|
FHA loans do not allow secondary financing until after the closing.
|
True
|
WB p 156
|
|
|
A blanket mortgage can include a partial release clause.
|
True
|
WB p 156
|
|
|
A sale and leaseback allows an investor to purchase a property and then allow the seller to rent back the property from the investor.
|
True
|
WB p 157
|
|
|
Mortgage brokers typically arrange the sale of a loan from investor to investor.
|
True
|
WB p 157
|
|
|
Mortgage bankers typically originate loans and also service these loans.
|
True
|
WB p 157
|
|
|
Fannie Mae buys a block or pool of mortgages from a lender in exchange for mortgage-backed securities that the lender may keep or sell.
|
True
|
WB p 157
|
|
|
Freddie-Mac and FNMA purchase conventional, FHA, and VA loans.
|
True
|
WB p 157
|
|
|
The APR is required to be disclosed under the Truth in Lending Act.
|
True
|
WB p 157
|
|
|
Lenders cannot discriminate against loan applicants on the basis of age and marital status under the Equal Credit Opportunity Act (ECOA).
|
True
|
WB p 157
|
|
|
If a loan applicant is denied loan approval, the lender must give a reason for the loan denial within 30 days in writing to the person under the Fair Credit Reporting Act.
|
False
|
WB p 157
|
|
|
During the separation period of a couple, if a spouse becomes delinquent in loan payments and in default, the other spouse's credit cannot be affected under the Fair Credit Reporting Act.
|
False
|
WB p 157
|
|
|
Truth in Lending involves both the lenders and real estate agents in the advertising of finance numbers.
|
True
|
WB p 157
|
|
|
Under Truth in Lending, if the phrase "100% financing" is used in advertising, the real estate agent must recognize this phrase as a trigger term and provide full disclosure including APR.
|
True
|
WB p 157
|
|
|
In qualifying a buyer using the ratio method, the second ratio is called "housing expense".
|
False
|
WB p 157
|
|
|
Typically, conventional loans have buyer qualifying ratios of 29/41.
|
False
|
WB p 157
|
|
|
If a lender agrees to make a loan based on an 80 per cent LTV, the lender will use the lesser of the sales price or appraised value, whichever is less.
|
True
|
WB p 157
|
|
|
If a loan is sold on the secondary mortgage market, if mortgage insurance is required, then the mortgage insurance will go with the loan and protect the future purchasers of the loan.
|
True
|
WB p 157
|
|
|
If a loan is negotiable, the loan can be sold on the secondary mortgage market.
|
True
|
WB p 157
|
|
|
The lender requires the seller to pay all discount points on FHA loans.
|
False
|
WB p 157
|
|
|
The mortgage insurance premium and/or buyer's closing costs may be financed into the FHA loan amount or paid in cash at closing.
|
True
|
WB p 157
|
|
|
If a purchaser makes a 15% down payment, the lender can charge private mortgage insurance on a conventional loan.
|
True
|
WB p 157
|
|
|
A second mortgage typically charges higher interest rates as compared to a first mortgage and a second mortgage is usually for a shorter term than the first mortgage.
|
True
|
WB p 157
|
|
|
Term loans are interest only loans.
|
True
|
WB p 157
|
|
|
A lender is granted a deficiency judgment in NC.
|
True
|
WB p 157
|
|
|
Rural Housing Service Agency and Farm Service Agency are administered under the Rural Economic and Community Services program of the US.
|
True
|
WB p 157
|
|
|
Housing loans through the Rural Housing Service Agency includes loans for single family and groups involved in "self help" projects.
|
True
|
WB p 157
|
|
|
Eligibility requirements for Rural Housing Service Agency loans are for low income residents in rural areas or very small towns.
|
True
|
WB p 157
|
|
|
Seller financing is also known as purchase money mortgage.
|
True
|
WB p 158
|
|
|
The entry for the loan amount on purchase money mortgage is credit buyer, debit seller.
|
True
|
WB p 158
|
|
|
A veteran cannot finance closing costs into the VA loan.
|
True
|
WB p 158
|
|
|
An appraisal is an estimate or opinion of value as of a specific time.
|
True
|
WB p 161
|
|
|
Value is defined as the future worth of present benefits arising from the ownership of real property.
|
False
|
WB p 161
|
|
|
Cost may not equal either market value or market price.
|
True
|
WB p 161
|
|
|
Tax structures are an example of economic forces influencing value.
|
False
|
WB p 161
|
|
|
The cornerstone of the sales comparison approach is supply and demand.
|
False
Substitution is. |
WB p 161
|
|
|
The concept of conformity means that a buyer will not pay more money for an item which "overimproves" the property.
|
False
|
WB p 161
|
|
|
The economic concept which states maximum value is realized when properties in the immediate area have similarity and harmonious style is contribution.
|
False
Conformity. |
WB p 161
|
|
|
The first step in the appraisal process is to "choose comparables".
|
False
|
WB p 161
|
|
|
The last step in the appraisal process is "reconciliation"
|
True
|
WB p 161
|
|
|
Reconciliation is defined as the averaging of the three approaches to value.
|
False
Never use the term averaging with appraisals. |
WB p 161
|
|
|
The sales comparison approach is most applicable to vacant land and lots and single family residential.
|
True
|
WB p 161
|
|
|
When selecting comparables, the more recently sold and the fewer adjustments that are required, the more reliable will be the estimate of value.
|
True
|
WB p 161
|
|
|
All adjustments are made to the comparables and never to the subject.
|
True
|
WB p 161
|
|
|
Correlation is the last step of the sales comparison approach and is the result of a weighted averaging process.
|
True
|
WB p 161
|
|
|
If the comparable property is inferior to the subject, then you subtract from subject.
|
False
|
WB p 161
|
|
|
A CMA includes property of all types of status: active, expired, sold and pending.
|
True
|
WB p 161
|
|
|
If a property remains on the market and has not sold, a real estate agent should realize the "price" is above the market value of the property because it has not sold.
|
True
|
WB p 161
|
|
|
The sales comparison approach requires the value of the land to be calculated separately from the value of the improvements.
|
False
|
WB p 161
|
|
|
The cost approach requires the value of the land to be calculated separately from the value of improvements.
|
True
|
WB p 161
|
|
|
With the cost approach you never depreciate the land, but you depreciate the improvements.
|
True
|
WB p 161
|
|
|
Replacement cost is the cost to construct an "exact duplicate"
|
False
|
WB p 161
|
|
|
Reproduction cost is used today by appraisers and homeowner's insurance agents.
|
False
|
WB p 161
|
|
|
The quality survey method is a way to determine replacement cost.
|
False
It is quantity survey. |
WB p 161
|
|
|
A sagging roof or peeling paint is an example of functional obsolescence.
|
False
|
WB p 161
|
|
|
Outmoded plumbing fixtures is an example of physical deterioration.
|
False
|
WB p 161
|
