Exam 2

Question 1

When compared to FHA loans, conventional loans off the borrower…

Answer 1

lower loan to value ratios

Question 2

The borrowers mortage is payable in monthly installments that include principal and interest over 15 years, the last payment is a larger amount than the regular monthly payments. This is known as a…

Answer 2

Ballon mortgage.

Question 3

Effective delievery of a deed depends upon the…

Answer 3

Intention of the grantor.

Question 4

An appraiser seeking to find market value would be concerned with all the following except…

Answer 4

original cost of the property.

Question 5

Whose obiligation is it to disclose lead based paint on homes before 1978?

Answer 5

The seller

Question 6

A form of real property ownnership with the right of occupancy and use of specfic property for a specific portion of each year for either a fixed number of years or forever?

Answer 6

Timeshare

Question 7

A mortgage broker acts as a…

Answer 7

intermediary.

Question 8

A voidable contract is…

Answer 8

enforeable, but is subject to rescission by one of the parties to the contract.

Question 9

Trust accounts hold…

Answer 9

funds not belonging to the firm.

Question 10

As a listing agent, what obligations do you owe to unrepresented buyer?

Answer 10

Honesty and fairness.

Question 11

What is market cap and how is it calculated

Answer 11

See example

Question 12

A declaration made by a person to an official stating that a deed has been freely and voluntarily executed is called…

Answer 12

An acknowledgement.

Question 13

The escrow agent represnts…

Answer 13

both the buyer and the seller.

Question 14

If there is a default on a mortgage, the mortgagor, after the foreclosure sale, may have the statutory right of…

Answer 14

redemption

Question 15

A valid deed must name the…

Answer 15

Grantor and Grantee

Question 16

An exlusive agency listing is NOT…

Answer 16

the owner must pay a commission if the property is sold directly by the owner.

Question 17

Consideration in a contract:

Answer 17

May be an exchange of promises.

Question 18

The main north and south line in a government survey from which townships are located is called as…

Answer 18

Principal meridian

Question 19

An established business relationship (ERB) exists if the consumer was involved in a transaction with the company during the previous…

Answer 19

18 months

Question 20

Who is responsible for the buyers actions if they fail to produce the money for a cash offer?

Answer 20

The buyer

Question 21

Which form of agency gives the agent the broadest powers to act for the principal?

Answer 21

Universal agency

Question 22

Senior housing may refuse to rent to families if…

Answer 22

80% of the units are occupied by one person over the age of 55.

Question 23

A seller mentions over the phone to the listing agent that she is willing to take less then the current sales price. The listing agent tells a REALTOR marketing group: “Bring any offer. The seller will take less then the asking price.” Did the agent break her fiduciary duties?

Answer 23

Yes, the seller did not get give the agent written permission to share confidential information.

Question 24

An appraiser was hired to prepare a feasibility study for adding a swimming pool to a 24 unit apartment building. What basis of appraising would be used?

Answer 24

Contribution

Question 25

If a seller has already accepted one offer and later accepts another offer on a contingent basis, this contract is called a...

Answer 25

Back up contract

Question 26

If there is a disagreement concerning assessed value of real property the burden of proof is upon the...

Answer 26

taxpayer

Question 27

When are licensed real estate professionals allowed to discriminate?

Answer 27

Never

Question 28

All of the following are a type of zoning control except...

Answer 28

Rent controls

Question 29

To earn a commission, a listing broker with any exclusive listing must procure a ready, willing and able buyer at the seller's listing terms and...

Answer 29

nothing else.

Question 30

When a property is sold "as-is" who is liable for disclosing any known defects in the property?

Answer 30

The seller only

Question 31

A buyer pays $45k for a lot. Five years later, he puts it on the market for 20% more than he originally paid. The lot then sells for 10% less than the asking price. What is the selling price of the lot?

Answer 31

$48.6k

Question 32

A remedy in court compelling the seller to sell the property is known as..

Answer 32

specific performance

Question 33

Prohibiting the sale of property based on the buyers race is..

Answer 33

Invalid, even if owner's agreed.

Question 34

Which of the following statements best describes the concept of land owernership?

Answer 34

Ownership of the property is to the sky above and downward to the center of the earth, as well as the surface.

Question 35

If a seller accepted an offer but changed the date of possession and initiated that change...

Answer 35

it would become a counter offer, subject to acceptance by the buyer.

Question 36

Advertising property or services by real estate professionals even on social media should at least include...

Answer 36

The brokerage firms name

Question 37

A person who hires or apoints an agent is called the ...

Answer 37

principal

Question 38

The process used to take private land for public use is known as...

Answer 38

condemnation

Question 39

Which of the following had priority claim over a previously recorded trust deed?

Answer 39

Unpaid property taxes

Question 40

The best description of a contract is...

Answer 40

An agreement between competent parties and based on legal consideration that creates legally enforceable duties and obligations.

Question 41

Closing is June 12 for the current year. The water bill is a flat rate and is paid in arrears. The bill is $41.69 for the period June 1 through June 30. The buyer is to pay the date of closing. What is the debit and credit?

Answer 41

$15.29

Question 42

All of the following concerning real estate are true except...

Answer 42

A promissory note is the security for the deed of trust.

Question 43

All of the following are a necessary element in the formation of a contract except...

Answer 43

performance

Question 44

The fact that land has a number of important uses is the basis for the essential element of value known as...

Answer 44

utility

Question 45

An option in a contract by which the owner of property gives another person the right to purchase his or her property for a stated sum within a given period of time is...

Answer 45

A voluntary encumbrance

Question 46

A property manager representing the landlord must...

Answer 46

avoid giving false information to a tenant.

Question 47

The promissory note must contain an acceleration clause and a(n)...

Answer 47

Prepayment clause

Question 48

If a commercial property sold at a court foreclosure does not sell for an amount sufficient to satisfy the mortgage loan debt, the mortgage may obtain...

Answer 48

a deficiency judgement

Question 49

The phrase "time is of the essence" is most likely to be found in a...

Answer 49

sales contract

Question 50

The length of a safety clause in a listing agreement is determined...

Answer 50

negotiation between seller and broker.

Question 51

A sale closes on Feb 12, with the seller having the day of closing. The buyer is assuming the seller's mortgage, which has an outstanding balance of $28k as of the closing date. The last mortgage payment was made on Feb 1. The annual interest rate of 7.75% and interest is paid in arrears. What interest proration appears on the buyers closing statement?

Answer 51

$72.36 credit.

Question 52

A deed of trust is normally used to...

Answer 52

secure a debt with real property.

Question 53

The practice of inducing panic selling based on race or another minority group is known as...

Answer 53

blockbusting

Question 54

The balance of the loan was $150k after the last payment, and the closing is scheduled for tomorrow. If the prepayment penalty is 0.5% what would be reflected on the seller's side of the settlement statement?

Answer 54

A debit of $750.

Question 55

All of the following are prorated at closing except...

Answer 55

Sale price

Question 56

A second offer made on a property prior to the seller's acceptance of the first should be...

Answer 56

Submitted to the seller immediately.

Question 57

If a seller signs an offer made by a purchaser, the first thing the listing agent should do is...

Answer 57

Give a copy to the seller.

Question 58

Liquidated damages are most likely to be found in which of the following?

Answer 58

Purchase contract

Question 59

The deed covenant that states that the grantor owns the property and has the right to convey it is the covenant of...

Answer 59

selsin

Question 60

In what corner of a township would you find Section 1?

Answer 60

Northeast corner

Question 61

Reconcilliation is best defined as...

Answer 61

the appraiser's weighting of each property and approach to value.

Question 62

A house sells for $165k. If the seller agrees to pay 5.5% discount points on a $155k mortgage and the broker's fee is 6%, how much did the seller net?

Answer 62

$146,575

Question 63

When the property is sold "as-is" the seller must disclose...

Answer 63

Any known material defects.

Question 64

The purchase contract specifies that the listing brokerage and the seller may keep the earnest money if the buyer defaults. This stipulation is known as...

Answer 64

liquidated damages

Question 65

The column of townships running north and south is numbered according to its distance from the principal meridian and is referred to as...

Answer 65

Tracts