Final Exam

Question 1

Purpose of Appraisal

Answer 1

And estimate or opinion of value based on an analysis of the relevant data.

Question 2

Trade fixtures are?

Answer 2

A fixture placed with the intention of being removed.

Question 3

Cost Replacement Approach

Answer 3

The cost at today’s prices, using today’s construction materials to replace a building with one that has the same function.

Question 4

Reproduction Cost

Answer 4

The cost at today’s prices of constructing an exact replica.

Question 5

Hazard Insurance- paid in advance how far?

Answer 5

One year

Question 6

Property Tax Formula?

Answer 6

Annual Tax divided by 365= Daily Rate

Then,

Daily Rate x the number of days.

Question 7

Insurance Proration formula?

Answer 7

Annual Premium divided by 365 = daily rate

Then,

Daily rate x the number of days

Question 8

Accrued Interest formula

Answer 8

Loan Balance x Rate of Interest =annual interest

Then,

Annual Interest divided by 360 = daily interest

Then,

Daily Interest x number of days owed.

Question 9

Special Agent

Answer 9

One who is appointed to act on a particular occasion or for a specific purpose. A person with limited authority.

Question 10

Exclusive right to sell

Answer 10

Right to market is exclusive and commission is guaranteed if property is sold, no matter who sells it. Contract must be in writing & have a definite date of termination.

Question 11

Universal Agent

Answer 11

Authorized to perform any act that the principal could perform.

Question 12

General Agent

Answer 12

Has the authority to bind the principal in business conduct.

Question 13

Fiduciary

Answer 13

Implies trust and confidence

Question 14

Earnest Money

Answer 14

A purchaser’s initial commitment by use of something valuable to indicate that he/she wants to buy the property. This earnest money is deposited into the broker’s trust account until the transaction is closed.

Question 15

Lien

Answer 15

Creditor uses this as a way to take a debtor’s property as payment for the debt owed.

Question 16

Voluntary or Involuntary Debt

Answer 16

Depending on whether they are recorded with the owners consent or without it.

Question 17

Statutory Lien

Answer 17

Mechanics lien, involuntary

Question 18

Equitable lien

Answer 18

Vendee’s lien, voluntary

Question 19

Specific lien

Answer 19

Attached to only one parcel of property.

Question 20

General lien

Answer 20

Attached to all properties the debtor has.

Question 21

Property Tax Lien

Answer 21

When ad valorem taxes and special assessment taxes are not paid by the property owner within the time allowed.

Question 22

Mortgage Lien

Answer 22

When a purchaser pledges a property to the lender as security for a loan. If repayment is not paid according to terms, the lender can force sale of the property. These liens are voluntary.

Question 23

Mechanics lien

Answer 23

This allows contractors workmen and suppliers of building materials to place a lien against the property if they are not paid for improving it. These liens are involuntary.

Question 24

Vendee’s lien

Answer 24

This protects a buyer from losing their earnest moneydeposit in case of default. This is voluntary.

Question 25

Attachment lien

Answer 25

This grants the court custody of a specific property to prevent the owner from transferring ownership while a suit for damages is being decided.

Question 26

Judgment lien

Answer 26

Arises out of a lawsuit. When one person sues another person for damages. The debtor receives a lien on any property they own in that county.

Question 27

IRV

Answer 27

I= net operating income R= capitalization Rate V= value If any two of these components are known, the third component can be calculated.

Question 28

Net Operating Income (NOI)

Answer 28

Effective gross income minus the total operating expenses. Deals with income made from a business within the past year.

Question 29

Income Approach

Answer 29

The value of property is based on the anticipated amount of income.

Question 30

Net Operating Income formula

Answer 30

``` Potential Gross Income - Vacancy Rate =Effective Gross Income - Operating Expenses = net Operating Income ```

Question 31

Regulation Z

Answer 31

Gives lenders guidelines to follow in disclosing to borrowers their exact cost of credit.

Question 32

Who does Regulation Z apply to?

Answer 32

- All loans up to $25,000 for personal family & household purposes. - All residential real estate transactions involving credit regardless of the amount. - Residential mortgage loans for 2 to 4 family residential properties providing the owner occupies one of the units.

Question 33

CAM license (community association management)

Answer 33

Limited to tasks involved in managing homeowners associations such as are found in subdivisions and condominium complexes. Must work as agents of a broker.

Question 34

Property Manager

Answer 34

One who is given the responsibility of maintaining preserving and enhancing an owners property & generating the highest possible net return from it.