Mini Quizes Flashcards
In an improper fraction, the …………... is larger than the denominator? ▫️Numerator ▫️Root ▫️Decimal ▫️Integer
Numerator
5/4 is an example of a/an…? ▫️Integrated fraction ▫️Root fraction ▫️Improper fraction ▫️Proper fraction
Improper fraction
Improper fractions are always greater than…? ▫️0.01 ▫️0.1 ▫️0.5 ▫️1
1
1-1/4 is an example of a…? ▫️Proper fraction ▫️Mixed number ▫️Numerator ▫️Denominator
Mixed number
8/7 is an example of a/an…? ▫️Improper fraction ▫️Integrated fraction ▫️Root fraction ▫️Proper fraction
Improper fraction
8/5 is equal to…? ▫️0.625 ▫️1.6 ▫️1.8 ▫️5.0
1.6
The bottom number in a written fraction is called the…? ▫️Denominator ▫️Numerator ▫️Root ▫️Integer
Denominator
The total commission on the sale of a home was $10,000. If the seller’s broker earned a 60% commission split, and the buyer’s broker earned a 40% commission split, how much did the selling broker earn…? ▫️$3,000 ▫️$4,000 ▫️$5,000 ▫️$6,000
$6,000
A property sold for $270,000 with a 5% total commission paid to the seller and buyer’s broker. If the commission split between the seller and buyer’s broker is 60/40, how much did the seller's broker earn…? ▫️$5,250 ▫️$5,400 ▫️$6,750 ▫️$8,100
$8,100
The total commission paid on the sale of a home was $8,000. The commission split between the seller and buyer’s broker was 50%. If the commission split between the seller’s broker and his salesperson is 50%, how much did the salesperson earn…? ▫️$2,000 ▫️$2,500 ▫️$3,000 ▫️$4,000
$2,000
The total commission on the sale of a home was $9,000. If the seller’s broker earned a 60% commission split, and the buyer’s broker earned a 40% commission split, how much did the selling broker earn…? ▫️$3,600 ▫️$4,500 ▫️$5,400 ▫️$9,000
$5,400
A house sold for $320,000 with a 6% commission rate. The commission split between the seller and buyer’s broker was 50%. The commission split between the seller’s broker and his salesperson was 60/40. How much did the salesperson earn as a commission…? ▫️$3,840 ▫️$4,480 ▫️$5,650 ▫️$9,600
$3,840
What is the annual interest on a $200,000 loan with an interest rate of 5%...? ▫️$5,000 ▫️$10,000 ▫️$15,000 ▫️$20,000
$10,000
If the annual interest paid on a loan is $10,000, with an interest rate of 8%, what is the total amount of the loan…? ▫️$80,000 ▫️$125,000 ▫️$160,000 ▫️$180,000
$125,000
If the annual interest paid on a loan is $3,000, and the total loan amount is $60,000, what is the annual interest rate…? ▫️5% (percent) ▫️6% (percent) ▫️7% (percent) ▫️8% (percent)
5% (percent)
What is the annual interest on a $320,000 loan with an interest rate of 6%...? ▫️$12,600 ▫️$14,200 ▫️$16,400 ▫️$19,200
$19,200
Which of the following loan terms will yield the highest monthly mortgage payment…? ▫️10 years ▫️15 years ▫️20 years ▫️30 years
10 years
The liquidation of a financial obligation on an installment basis is referred to as…? ▫️Buy-down ▫️Discounting ▫️Amortization ▫️None of the above
Amortization
Which of the following is used by lenders to increase the lender’s yield on the loan without increasing the annual interest rate…? ▫️Amortization ▫️Loan discount points ▫️Balloon payments ▫️Reduced broker fees
Loan discount points
If a lender charges a 1 point origination fee, what will be the cost of the origination fee…? ▫️0.1% of the loan ▫️1% of the loan ▫️2% of the loan ▫️10% of the loan
1% of the loan
Which of the following loan terms will yield the lowest monthly mortgage payment…? ▫️10 years ▫️15 years ▫️20 years ▫️30 years
30 years
If a lender charges an origination fee of 1 point and 3 discount points, what will be the total amount paid in points on a $500,000 loan…? ▫️$5,000 ▫️$10,000 ▫️$15,000 ▫️$20,000
$20,000
A house is appraised at $240,000. If the local property tax rate is $3 per $100 of appraised value, what is the amount paid in annual property taxes…? ▫️$2,400 ▫️$3,600 ▫️$7,200 ▫️$8,600
$7,200
A house is appraised at $360,000. If the local property tax rate is $2 per $100 of appraised value, what is the amount paid in monthly property taxes…? ▫️$1,200 ▫️$600 ▫️$2,100 ▫️$7,200
$600
The annual taxes on a property are $4,800. If the property is sold at the mid-date of the year, how much of the annual property taxes will the seller be responsible for…? ▫️$0 ▫️$1,200 ▫️$2,400 ▫️$4,800
$2,400
A house is appraised at $360,000. If the local property tax rate is $2 per $100 of appraised value, what is the amount paid in annual property taxes…? ▫️$2,400 ▫️$3,600 ▫️$7,200 ▫️$8,600
$7,200
A lender is willing to provide a mortgage up to 90% of a property’s $360,000 contract price. How much will the borrower have to put up as a down payment…? ▫️$18,000 ▫️$24,000 ▫️$36,000 ▫️$72,000
$36,000
What did an owner originally pay for his home if he sold it for $200,000, which yielded a 10% profit…? ▫️$90,918.09 ▫️$181,818.18 ▫️$161.812.18 ▫️$180,000
$181,818.18
Three investors purchased a property for $580,000. Investor A contributed $157,000, while investor B contributed $220,000. What percentage of ownership was left for the third investor…? ▫️33% (percent) ▫️35% (percent) ▫️40% (percent) ▫️45% (percent)
35% (percent)
What did an owner originally pay for his home if he sold it for $360,000, which yielded a 15% profit…? ▫️$210,068.00 ▫️$214,053.32 ▫️$306,000 ▫️$313,043.48
$313,043.48
A property owner wants to build a new fence around his property. The fence will cost $20 per linear foot. If the property measures 175’ x 200’, how much will the fence cost to build…? ▫️$15,000 ▫️$20,000 ▫️$22,000 ▫️$25,000
$15,000
What is the area of a room that measures 15’-6” x 13’-3”…? ▫️175.125 square feet ▫️205.375 square feet ▫️220.25 square feet ▫️235.275 square feet
205.375 square feet
12’-5” is equal to…? ▫️12.25’ ▫️12.35’ ▫️12.417’ ▫️12.50’
12.417’
If a property measures 150’ wide by 120’ deep, how many linear feet will the perimeter of the property measure…? ▫️300’ ▫️360’ ▫️420’ ▫️540’
540’
A room measures 12’-0” x 15’-6”. What would it cost to lay down new flooring that costs $5 per square foot…? ▫️$630 ▫️$780 ▫️$910 ▫️$930
$930
The highest price in terms of money which a property will bring in a competitive and open market and under all conditions required for a fair sale is referred to as…? ▫️Assessed Value ▫️Market Value ▫️Investment Value ▫️Insured Value
Market Value
How much experience is needed to become a real estate appraiser trainee…?
▫️No experience is needed
▫️At least 6 months working under a licensed appraiser
▫️At least 1 year working under a licensed appraiser
▫️At least 2 years working under a licensed appraiser
No experience is needed
How many hours of appraisal education is required to become an appraiser trainee…? ▫️75 hours ▫️150 hours ▫️180 hours ▫️260 hours
75 hours
How many hours of experience is required to become a certified residential real estate appraiser…? ▫️2,000 hours ▫️1,500 hours ▫️3,000 hours ▫️3,500 hours
1,500 hours
How many hours of appraisal education is required to become a general certified real estate appraiser…? ▫️75 hours ▫️150 hours ▫️200 hours ▫️300 hours
300 hours
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes is referred to as a/an…? ▫️Appraiser ▫️Attorney ▫️Real estate broker ▫️All of the above
Appraiser
The present worth of future benefits arising out of ownership to typical users/investors is known as…? ▫️Cost ▫️Return ▫️Value ▫️Interest
Value
What is the first step in the appraisal process…? ▫️Gather the needed data ▫️State the problem ▫️Verify the data ▫️Determine the highest and best use
State the problem
What is the second step in the appraisal process…? ▫️State the problem ▫️Determine the highest and best use ▫️List the data needed ▫️Reconciliation
List the data needed
After the needed data has been obtained and verified, what is the next step in the appraisal process…? ▫️Determine the highest and best use ▫️State the problem ▫️Reconciliation ▫️Issue the appraisal report
Determine the highest and best use
Real estate appraisers used to appraise a property cannot be selected by the real estate brokers involved in the transaction…?
▫️T (True)
▫️F (False)
T (True)
When using sales data to compare to the subject property, appraisers should use sales that are…? ▫️Current ▫️Comparable ▫️Close ▫️All of the above
All of the above
Which of the following is the lowest real estate appraiser classification…?
▫️Appraiser trainee
▫️State licensed real estate appraiser
▫️Certified residential appraiser
▫️Certified general real estate appraiser
Appraiser trainee
The most common objective of an appraisal is to develop an opinion of…? ▫️Assessed value ▫️Market value ▫️Insured value ▫️Investment value
Market value
A single value is derived from the three appraisal methods of determining value during the ………... process? ▫️Pro-forma ▫️Verification ▫️Highest and best use ▫️Reconciliation
Reconciliation
The desire for possession or ownership backed by the financial means to satisfy that need is referred to as…? ▫️Effective Demand ▫️Net Demand ▫️Value Demand ▫️Market Demand
Effective Demand
The capacity to satisfy human needs and desires is referred to as…? ▫️Scarcity ▫️Utility ▫️Value ▫️Demand
Utility
The supply of property in relation to effective demand is known as…? ▫️Utility ▫️Demand ▫️Scarcity ▫️Value
Scarcity
The relative ease with which ownership rights are transferred from one person to another is known as…? ▫️Demand ▫️Scarcity ▫️Substitution ▫️Transferability
Transferability
Which of the following externalities can have a negative effect on home values…? ▫️Proximity to a landfill ▫️Proximity to a power plant ▫️Proximity to a noisy highway ▫️All of the above
All of the above
The most probable use to which a property is suited that results in its highest value or highest returns to the land is known as…? ▫️Investment use ▫️Highest and best use ▫️Assessed use ▫️Insured use
Highest and best use
A typical residential appraisal report is issued on a…? ▫️HUD-1 Form ▫️National Appraisal Form ▫️Uniform Residential Appraisal Report ▫️Estimated Home Value Appraisal Report
Uniform Residential Appraisal Report
This appraisal method consists of comparing similar type properties, which have recently sold, to the subject property…? ▫️Cost approach ▫️Sales comparison approach ▫️Income approach ▫️Assessed approach
Sales comparison approach
Which of the following appraisal methods will most likely be used to determine the value of a church…? ▫️Income approach ▫️Market data approach ▫️Cost approach ▫️Sales comparison approach
Cost approach
David is in the process of buying his first house. David’s lender requires an appraisal to be done on the property. Which of the following appraisal methods will most likely be used to determine the value of David’s house…? ▫️Income approach ▫️Cost approach ▫️Sales comparison approach ▫️Assessed approach
Sales comparison approach
The cost of replacing the subject improvement with one that is the exact replica, having the same quality of workmanship, design and layout, or cost to duplicate an asset is known as…? ▫️Reproduction cost ▫️Replacement cost ▫️Substitution cost ▫️Conforming cost
Reproduction cost
What is the first step an appraiser takes when valuing a property using the cost approach…?
▫️Add the depreciated value of the improvements to the value of the land
▫️Estimate the amount of accrued depreciation
▫️Determine the current cost of the improvements
▫️Determine the value of the land as if it were vacant
Determine the value of the land as if it were vacant
The sales comparison approach is also referred to as the…? ▫️Market data approach ▫️Cost approach ▫️Assessed approach ▫️Income approach
Market data approach
This appraisal method consists of an analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land…? ▫️Income approach ▫️Market data approach ▫️Cost approach ▫️Sales comparison approach
Cost approach
An investor is in the process of purchasing an office building. The bank providing the mortgage for the property requires an appraisal to be done. Which of the following appraisal methods will the appraiser most likely use to determine the value of the office building…? ▫️Cost approach ▫️Income approach ▫️Sales comparison approach ▫️Market data approach
Income approach
The loss of value of a property brought about by age, physical deterioration or functional or economic obsolescence is referred to as…? ▫️Depreciation ▫️Deflation ▫️Discount ▫️Capital expenditure
Depreciation
The loss in value brought about by wear and tear, disintegration, and use and actions of the elements is known as…? ▫️Economic obsolescence ▫️Functional obsolescence ▫️Physical deterioration ▫️Capital expenditure
Physical determination
A loss in value due to factors away from the subject property but adversely affecting the value of the subject property is known as…? ▫️Principle of conformity ▫️Principle of change ▫️Physical obsolescence ▫️Economic obsolescence
Economic Obsolescence
The income approach determines value by applying a capitalization rate to the…? ▫️Net operating income ▫️Gross income ▫️Effective gross income ▫️After tax profit
Net operating income
………….. depreciation cannot be fixed at an economically feasible cost? ▫️Incurable ▫️Curable ▫️Economic ▫️Viable
Incurable
A person whose principal business is the originating, financing, closing, selling and servicing of loans secured by the real property for institutional lenders on a contractual basis is referred to as a…? ▫️Mortgage banker ▫️Mortgage broker ▫️Real estate broker ▫️Loan originator
Mortgage banker
A broker who arranges a mortgage loan between a lender and a borrower for a fee is referred to as a…? ▫️Mortgage banker ▫️Mortgage broker ▫️Real estate broker ▫️Loan originator
Mortgage broker
The primary function of a ………. is to promote thrift and home ownership? ▫️Credit Union ▫️Savings bank ▫️Commercial bank ▫️S&L
S&L
Which of the following is a source of real estate financing…? ▫️Local banks ▫️Mortgage banking companies ▫️Credit unions ▫️All of the above
All of the above
The Fannie Mae form 1003 is also known as the…? ▫️Primary Loan Application ▫️HUD-1 Form ▫️Uniform Residential Loan Application ▫️Credit Loan Application
Uniform Residential Loan Application
A lender will most likely provide a higher LTV for which of the following property types…? ▫️Primary residence ▫️Investment property ▫️Secondary residence ▫️Vacation home
Primary residence
Which of the followed is asked on a residential loan application…? ▫️Employment history ▫️Current monthly housing expenses ▫️List of assets and liabilities ▫️All of the above
All of the above
What is required to fully satisfy a balloon mortgage…? ▫️A balloon payment ▫️A typical monthly payment ▫️A loan origination fee ▫️Discount points
A balloon payment
A mortgage that requires the mortgagor to pay interest only during the mortgage term, with the principal due at the end of the term is referred to as what type of mortgage…? ▫️Balloon mortgage ▫️Term mortgage ▫️Conventional mortgage ▫️FHA mortgage
Term mortgage
Which of the following will most likely benefit from a balloon mortgage…?
▫️Recently married couples
▫️Retirees
▫️First time homebuyers
▫️Homebuyers who only intend to live in the property for a few years
Homebuyers who only intend to live in the property for a few years
Most deed of trust loans are…? ▫️Fully amortized ▫️Interest only ▫️Partially amortized ▫️Balloon loans
Fully amortized
Which of the following is the riskiest loan for a residential borrower…? ▫️Conventional mortgage ▫️Balloon mortgage ▫️FHA mortgage ▫️VA mortgage
Balloon mortgage
A monthly mortgage payment primarily consists of which of the following in the early stages of the loan…? ▫️Principal ▫️Insurance ▫️Taxes ▫️Interest
Interest
This occurs when monthly installment payments are insufficient to pay the interest accruing on the principal balance, so that the unpaid interest must be added to the principal due…? ▫️Positive amortization ▫️Balloon amortization ▫️Negative amortization ▫️Flexible amortization
Negative amortization
A term loan is typically used for which of the following…? ▫️Second mortgages ▫️Home improvement loans ▫️Investor loans ▫️All of the above
All of the above
Negative amortization may occur in which of the following types of loans…? ▫️Conventional loan ▫️Term loan ▫️Flexible payment loan ▫️FHA loan
Flexible payment loan
In this type of loan, a borrower initially pays a reduced interest rate, which gradually increases to the market rate after a period of time…? ▫️Flexible payment loan ▫️Conventional loan ▫️Term loan ▫️FHA loan
Flexible payment loan
A mortgage securing a loan made by investors without governmental underwriting is referred to as a/an…? ▫️Conventional loan ▫️Unconventional loan ▫️FHA loan ▫️VA loan
Conventional loan
A mortgage payment includes principal, interest, taxes, and…? ▫️Insurance payments ▫️Discount points ▫️Fees ▫️Deductibles
Insurance payments
Mortgage guaranty insurance available to conventional lenders on the first, high risk portion of a loan is referred to as…? ▫️Title insurance ▫️Property insurance ▫️Private mortgage insurance ▫️Priority mortgage insurance
Private mortgage insurance
If an owner obtained a $100,000 loan on a $200,000 property, what LTV was provided by the lender…? ▫️50% (percent) ▫️60% (percent) ▫️80% (percent) ▫️200% (percent)
50% (percent)
XYZ Bank is willing to offer a 80% LTV loan on a property. If the property was appraised at $160,000, and the contract price is $180,000, what will be the loan amount offered by XYZ Bank…? ▫️$122,000 ▫️$128,000 ▫️$140,000 ▫️$144,000
$128,000
The interest earned by a bank on the money it has loaned is referred to as…? ▫️Return ▫️IRR ▫️Yield ▫️Profit
Yield
The financing charge that a lender requires is referred to as the…? ▫️Loan origination fee ▫️Prepayment fee ▫️Discount fee ▫️Closing fee
Loan origination fee
The minimum interest rate set by the Federal Reserve for lending to other banks is known as the…? ▫️Bond rate ▫️Discount rate ▫️Minimum interest rate ▫️Term rate
Discount rate
A written notice of an obligation given by a corporation or government entity is known as a…? ▫️Deed ▫️Promissory Note ▫️Bond ▫️Bill of Sale
Bond
Which of the following is a privately owned corporation that purchases FHA, VA, and conventional mortgages…? ▫️Fannie Mae ▫️Freddie Mac ▫️Ginnie Mae ▫️All of the above
Fannie Mae
The Federal Reserve System is divided into how many geographical districts….? ▫️12 ▫️13 ▫️25 ▫️50
12
The Federal Reserve regulates the flow of money and interest rates indirectly by controlling which of the following requirements for its member banks…? ▫️Credit requirements ▫️Reserve requirements ▫️Minimum loan requirements ▫️All of the above
Reserve Requirements
The Texas Department of Housing and Community Affairs offers which of the following mortgage and housing assistance programs…?
▫️The Texas First-Time Homebuyers Program
▫️The Texas Bootstrap Loan Program
▫️Veterans Housing Assistance Program
▫️All of the above
All of the above
Which of the following is a U.S. government agency that purchases FHA and VA mortgages…?
▫️HUD
▫️Department of Housing and Community Affairs
▫️Ginnie Mae
▫️Department of Finance
Ginnie Mae
A person to whom a debt is owed is known as a…? ▫️Debtor ▫️Grantor ▫️Creditor ▫️Provider
Creditor
A loan against the equity in a home is known as a…? ▫️Reverse mortgage ▫️Home equity loan ▫️Construction loan ▫️Sale and leaseback
Home equity loan
A loan made to finance the actual construction or improvement on land is referred to as a…? ▫️Sale and leaseback ▫️Home equity loan ▫️Wrap around loan ▫️Construction loan
Construction loan
A financial arrangement where at the time of sale the seller retains occupancy by concurrently agreeing to lease the property from the purchaser is known as…? ▫️Home equity loan ▫️Wrap around mortgage ▫️Construction loan ▫️Sale and leaseback
Sale and leaseback
The right of the State to enact laws and enforce them for the order, safety, health, morals and general welfare of the public is known as…? ▫️Police Power ▫️Escheat ▫️Eminent Domain ▫️Condemnation
Police Power
The act of city or county authorities specifying the type of use to which property may be put in specific areas is known as…? ▫️Building Codes ▫️Police Power ▫️Zoning ▫️Urban Masterplan
Zoning
The control and regulation of land use is accomplished through which of the following means…? ▫️Public ownership of land ▫️Public land-use controls ▫️Deed restrictions ▫️All of the above
All of the above
Local governments use which of the of the following to help attract new businesses to an area…? ▫️Spot Zones ▫️Tax Increment Reinvestment Zones ▫️Special Purpose Districts ▫️Improvement Districts
Tax Increment Reinvestment Zones
The illegal rezoning of a certain property in a zoned area to permit a different type of use than that authorized for the rest of the area is known as…? ▫️Spot zoning ▫️Variance ▫️Preferential zoning ▫️Special zoning
Spot zoning
A systematic regulation of construction of buildings within a municipality established by ordinance or law is known as a…? ▫️Zoning Ordinance ▫️Building Code ▫️Design Narrative ▫️Comprehensive Plan
Building Code
This refers to a limitation in the deed to a property that dictates certain uses that may or may not be made of the property…? ▫️Variance ▫️Stated Use Provision ▫️Deed Restriction ▫️Enforcement
Deed Restriction
A variance may be granted for a change in the permitted …………. or use? ▫️Construction materials ▫️Construction methods ▫️Egress ▫️Building area
Building area
Which of the following are regulated by building codes…? ▫️Egress ▫️Construction materials ▫️Fire-rating of structural members ▫️All of the above
All of the above
Which of the following is an example of a deed restriction…?
▫️Only shingled roofs can be used
▫️Only brick facades can be used
▫️A minimum of 50% of the open space on a property must be grass
▫️All of the above
All of the above
Public control of land-use is primarily done through which of the following…? ▫️Deed restrictions ▫️Police power ▫️Covenants ▫️All of the above
Police Power
A ………... can be filed to stop the violation of a deed restriction? ▫️Amendment ▫️Novation ▫️Injunction ▫️Permit
Injunction
A zoning district may include which of the following uses…? ▫️Residential ▫️Commercial ▫️Industrial ▫️All of the above
All of the above
A fibrous mineral found in many building materials that when improperly disturbed, can cause serious lung diseases is known as…? ▫️Asbestos ▫️Radon ▫️UFFI ▫️Mold
Asbestos
A quality of some asbestos that causes it to crumble, allowing toxic particles to escape into the air and lodge in people’s lungs is known as…? ▫️Malleable ▫️Expandable ▫️Friable ▫️Contracting
Friable
A type of foam containing formaldehyde, a gaseous compound used for home insulating until the early 1980’s, is known as…? ▫️Polystyrene Insulation ▫️Extruded Polystyrene Insulation ▫️Mineral Wool Insulation ▫️Urea-Formaldehyde Foam Insulation
Urea-Formaldehyde Foam Insulation
Asbestos is primarily harmful when it is disturbed…?
▫️T (True)
▫️F (False)
True
Mold growth is most associated with…? ▫️Water damage ▫️Proper ventilation ▫️Asbestos ▫️Carbon monoxide
Water damage
A branch of real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties is known as…? ▫️Real Estate Development ▫️Property Management ▫️Real Estate Investing ▫️Real Estate Sales
Property Management
Which of the following is a designation earned by property managers…? ▫️Certified Property Manager ▫️Certified Project Manager ▫️Accredited Manager ▫️All of the above
Certified Property Manager
A procedure whereby property pledged as security for a debt is sold to pay the debt in event of default in payments or terms is known as…? ▫️REO ▫️Short Sale ▫️Foreclosure ▫️Buy-back
Foreclosure
If a property is not sold at a foreclosure auction, the property will become a…? ▫️REO ▫️Short Sale ▫️Repossessed Property ▫️Investment Property
REO
If a property is sold as a short sale, the owner will not receive any equity…?
▫️T (True)
▫️F (False)
True
Real estate investments fall into two categories, real property and…? ▫️Personal property ▫️Leverage ▫️Tax shelters ▫️Real estate securities
Real estate securities
A real estate security can include which of the following…? ▫️Mortgage notes ▫️Single family homes ▫️Shopping centers ▫️Self storage facilities
Mortgage Notes
Why has real estate traditionally been a good investment…?
▫️Growth in property values have not outpaced inflation
▫️Property values have depreciated over time
▫️Growth in property values have outpaced inflation
▫️Growth in property values has been equal to inflation
Growth in property values have outpaced inflation
A property with a higher intrinsic value can often demand a higher…? ▫️Sales price ▫️LTV ▫️Yield ▫️Interest rate
Sales price
Which of the following is an advantage to investing in real estate…?
▫️The use of borrowed funds to purchase investment properties
▫️Investment properties can serve as tax shelters
▫️Growth in property values typically outpaces inflation
▫️All of the above
All of the above
The total amount of money remaining after all expenditures have been paid, including the taxes, operating costs, and mortgage payments is known as…? ▫️Gross income ▫️Cash flow ▫️Effective gross income ▫️Capital gain
Cash flow
The property’s market value minus any debts is known as…? ▫️Equity ▫️Leverage ▫️Effective gross income ▫️Net operating income
Equity
The amount that a landlord can charge for rent is affected by which of the following…? ▫️The location of the property ▫️The amenities offered ▫️The condition of the property ▫️All of the above
All of the above
The use of a lower amount of leverage results in ………………………... risk to the investor? ▫️Higher ▫️Significantly higher ▫️Lower ▫️No
Lower
The cash flow a property generates is the result of which of the following…?
▫️The amount of rent received
▫️The amount spent on expenses to operate the property
▫️The amount paid to service the debt on the property
▫️All of the above
All of the above
Cash received in a tax-deferred exchange is known as…? ▫️Levy ▫️Gains ▫️Boot ▫️Leverage
Boot
The cost to acquire a property, plus the cost of the physical improvements, minus the depreciation claimed as a tax deduction is equal to the…? ▫️Adjusted basis ▫️Capital gain ▫️Base investment ▫️Leveraged gain
Adjusted basis
An investor purchased a property for $100,000. Over the course of 3 years, the investor built $5,000 worth of capital improvements. If the investor wrote off $8,000 in depreciation, what is the adjusted basis…? ▫️$92,000 ▫️$97,000 ▫️$105,000 ▫️$113,000
$97,000
The new property in a 1031 exchange is referred to as the…? ▫️Replacement property ▫️Relinquished property ▫️Deferred property ▫️Capital property
Replacement property
A syndicate real estate investor enjoys the same tax benefits as a direct ownership investor…?
▫️T (True)
▫️F (False)
True
A REIT is not subject to a corporate income tax if at least ……... of its income is distributed to shareholders? ▫️10% (percent) ▫️50% (percent) ▫️80% (percent) ▫️90% (percent)
90%
A mortgage REIT’s primarily source of income are from mortgage interest and…? ▫️Mortgage principal ▫️The sale of property ▫️Mortgage origination fees ▫️The cash flow from property
Mortgage origination fees
An owner who enters into a lease agreement with a tenant is referred to as a…? ▫️Lessor ▫️Lessee ▫️Grantor ▫️Grantee
Lessor
Renting a property, rather than owning a property, may benefit an individual who is…?
▫️Looking for a tax shelter
▫️Looking to take advantage of appreciating home prices
▫️Looking for more flexibility in where they live
▫️All of the above
Looking for more flexibility in where they live
A lease is found in which of the following types of real property…? ▫️Residential properties ▫️Industrial properties ▫️Commercial properties ▫️All of the above
All of the above
A tenant’s right to occupy real estate during the term of the lease is known as a…? ▫️Lease Fee Estate ▫️Life Estate ▫️Leasehold Estate ▫️Fee Simple Estate
Leasehold Estate
An interest in land by virtue of a contract for the possession of them for a definite and limited period of time is known as a/an…? ▫️Fee Simple Estate ▫️Estate for Years ▫️Freehold Estate ▫️Life Estate
Estate for Years
A lease that automatically renews for successive periods unless terminated by either party is known as a…? ▫️Periodic Tenancy ▫️Tenancy at Will ▫️Recurring Lease ▫️Term Lease
Periodic Tenancy
A holdover tenancy cannot extend beyond how many months…? ▫️1 month ▫️3 months ▫️6 months ▫️12 months
12 months
According to HUD, what is a reasonable occupancy standard per bedroom…? ▫️1 occupant ▫️2 occupants ▫️3 occupants ▫️4 occupants
2 occupants
The Texas Property Code sets the maximum number of adults occupying an apartment at …….. the number of bedrooms in the apartment? ▫️1x ▫️2x ▫️3x ▫️4x
3x
Which of the following is used as a means of security by the landlord for any physical damage done by the tenant to the property…? ▫️Security deposit ▫️Down payment ▫️Origination fee ▫️Principal fee
Security deposit
A lease in which the lessor pays all costs of operating and maintaining the property and real property taxes is known as a…? ▫️Net lease ▫️Gross lease ▫️Ground lease ▫️Graduated lease
Gross Lease
A lease on a property, the rental for which is determined by amount of business done by the lessee is referred to as a….? ▫️Graduated lease ▫️Gross lease ▫️Percentage lease ▫️Net lease
Percentage Lease
An agreement for the use of land only, sometimes secured by improvements placed on the land by the user is known as a…? ▫️Gross lease ▫️Net lease ▫️Percentage lease ▫️Ground lease
Ground Lease
XYZ company is looking to rent an entire office building for the long-term. What type of lease may the building owner most likely offer to XYZ company…? ▫️Triple net lease ▫️Gross lease ▫️Ground lease ▫️Percentage lease
Triple net lease
A branch of real estate business involving the marketing, operation, maintenance and day-to-day financing of rental properties is known as…? ▫️Property sales ▫️Property management ▫️Real estate investing ▫️Real estate marketing
Property Management
A person who manages properties for an owner, as the owner’s agent, is referred to as a…? ▫️Engineer ▫️Real estate broker ▫️Property manager ▫️Apartment locator
Property Manager
When is a property manager required to have a real estate license…?
▫️When the property manager leases vacant apartments
▫️When the property manager performs preventative maintenance
▫️When the property manager performs corrective maintenance
▫️All of the above
When the property manager leases vacant apartments
Which of the following contracts is signed between the property manager and the owner…? ▫️Listing Agreement ▫️Exclusive Agreement ▫️Management Agreement ▫️Disclosure Agreement
Management Agreement
What duties do property managers owe to a property owner…? ▫️Mortgage duties ▫️Fiduciary duties ▫️Appraisal duties ▫️Architectural duties
Fiduciary duties
A typical Management Agreement between a property manager and an owner includes which of the following…?
▫️The management fee
▫️The extent of the property manager’s authority
▫️Reporting
▫️All of the above
All of the above
If a property manager denies an application on the basis of the prospective tenant’s credit score, which of the following must be disclosed to the prospective tenant…?
▫️The credit score used by the property manager in making their decision
▫️The range of possible credit scores under the model used to generate the score
▫️The top 4 key factors that impacted the prospective tenant’s credit score
▫️All of the above
All of the above
A property manager’s privacy policy must include which of the following…?
▫️How information from the prospective tenant is collected
▫️How information collected from a prospective tenant is used
▫️How information collected from a prospective tenant is secured
▫️All of the above
All of the above
Which of the following applies when conducting a marketing campaign…? ▫️CAN-SPAM Act ▫️Federal and State Do-Not-Call list ▫️Junk Fax Prevention Act ▫️All of the above
All of the above
The Junk Fax Prevention Act applies to solicitation involving…? ▫️Emails ▫️Phone ▫️Fax machines ▫️Direct mail
Fax machines
Which of the following is an example of preventative maintenance…?
▫️Servicing the hot water heater
▫️Repairing a hole in the roof
▫️Repairing the entrance door to the building
▫️Re-landscaping the yard
Servicing the hot water heater
Which of the following is an acronym used to describe alternative risk management techniques…? ▫️ACTR ▫️PETE ▫️OLD CAR ▫️LEAD
ACTR
Tenant improvements are commonly found in which type of buildings…? ▫️Residential ▫️Commercial ▫️Multi-family ▫️Single-family homes
Commercial
Which of the following types of insurance are available for owners and property management companies…? ▫️Fire and Extended Coverage Insurance ▫️Business Interruption Insurance ▫️Liability Insurance ▫️All of the above
All of the above
Which of the following is an example of a specialty insurance that can be obtained by owners…? ▫️Errors and Omissions Insurance ▫️Lead Liability Insurance ▫️Employment Practices Liability ▫️All of the above
All of the above
If an insurance claim is repaid based on the depreciated value of the property, the owner will be reimbursed based on the…? ▫️Actual cash value ▫️Replacement cost ▫️Assessed value ▫️Market value
Actual cash value
An insurance claim that is paid using the replacement cost is typically more expensive than the actual cash value…?
▫️T (True)
▫️F (False)
True
The actual cash value is also known as the…? ▫️Appreciated value ▫️Depreciated value ▫️Replacement value ▫️Construction value
Depreciated value
An insurance claim can be repaid based on the actual cash value or the…? ▫️Appreciated value ▫️Depreciated value ▫️Assessed value ▫️Replacement cost
Replacement cost
A written document by which ownership of land is transferred from one party to another is known as a…? ▫️Lease ▫️Deed ▫️Purchase contract ▫️Transfer contract
Deed
Anything given or promised by a party to include another to enter into a contract is referred to as…? ▫️Conversion ▫️Novation ▫️Consideration ▫️Warranty
Consideration
The “to have and to hold” clause found in a deed is referred to as the…? ▫️Consideration clause ▫️Habendum clause ▫️Warranty clause ▫️Legal clause
Habendum clause
A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the lawful claims of third persons is known as a…? ▫️Quitclaim Deed ▫️Implied Deed ▫️Bargain and Sale Deed ▫️General Warranty Deed
General warranty deed
This is a promise by the grantor of real property that they are the owner and will be responsible to the buyer if title is other than what they represent…? ▫️Consideration ▫️Trust ▫️Guarantee ▫️Warranty
Warranty
A person who acquires an interest in land by deed, grant, or other written instrument is known as the…? ▫️Grantor ▫️Grantee ▫️Lessee ▫️Lessor
Grantee
In most real estate contracts, what is used as consideration…? ▫️Money ▫️Love and affection ▫️Personal services ▫️Barter
Money
A valid deed must be signed by…? ▫️The grantor ▫️The grantee only ▫️Both the grantor and grantee ▫️The grantor, grantee, and the Broker
The grantor
An examination of public records, laws, and court decisions to disclose the current facts regarding the ownership of real estate is known as a…? ▫️Title search ▫️Record search ▫️Legal search ▫️Executive search
Title search
Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept is known as…? ▫️Clouded title ▫️Conditional title ▫️Marketable title ▫️Warranty title
Marketable title
The past series of transactions and documents affecting the title to a given parcel of land is known as…? ▫️Chain of title ▫️Indexed title ▫️Record title ▫️Saved title
Chain of title
Title that is encumbered or burdened with defects is known as…? ▫️Marketable title ▫️Clouded title ▫️Clear title ▫️Conditional title
Clouded title
The evidence of right which a person has to the ownership and possession of land, commonly considered as a history of rights is known as…? ▫️Title ▫️Deed ▫️Contract ▫️Lease
Title
Title which is not encumbered or burdened with defects is known as…? ▫️Clouded title ▫️Conditional title ▫️Clear title ▫️Defected title
Clear title
The process of placing a document on file with a designated public official for public notice is known as…? ▫️Notice ▫️Acknowledgement ▫️Closing ▫️Recording
Recording
A condensed history, or summary of all transactions affecting a particular tract of land is known as a…? ▫️Affidavit ▫️Abstract of title ▫️Summary of title ▫️Title search
Abstract of title
Insurance against loss or damage resulting from defects or failure of title to a given parcel of real estate is known as…? ▫️Property insurance ▫️Liability insurance ▫️Professional insurance ▫️Title insurance
Title insurance
A sworn statement in writing is referred to as a/an…? ▫️Acknowledgement ▫️Testimony ▫️Affidavit ▫️Abstract
Affidavit
Title insurance protects the owner from any defects in the title before the policy was issued…?
▫️T (True)
▫️F (False)
True
Most lenders require …………………….. as satisfactory evidence of title? ▫️Title insurance ▫️Certificate of Completion ▫️Title abstract ▫️Property insurance
Title insurance
A person’s possessions is referred to as their…? ▫️Estate ▫️Tenancy ▫️Life estate ▫️Tenancy by entirety
Estate
A grant, or reservation of the right of use, occupancy and ownership for the life of an individual is referred to as a…? ▫️Life estate ▫️Leasehold estate ▫️Tenancy by entirety ▫️Tenancy in common
Life estate
An estate or interest in land held by two or more persons, each having equal rights of possession and enjoyment, but without any right of succession by survivorship between the owners is referred to as..? ▫️Tenancy by entirety ▫️Life estate ▫️Tenancy in common ▫️Leasehold estate
Tenancy in Common
Life estates can be conventional or…? ▫️Legal ▫️Inherited ▫️Defeasible ▫️Express
Legal
A will is also referred to as a…? ▫️Deed ▫️Lease ▫️Testament ▫️Affidavit
Testament
One who makes a will is referred to as the…? ▫️Testator ▫️Devisor ▫️Devisee ▫️Grantee
Testator
This designates the estate or condition of failing to leave a will at death…? ▫️Executory ▫️Testate ▫️Alienation ▫️Intestate
Intestate
A written document outlining the distribution of property previously owned by a person who dies is referred to as a…? ▫️Deed ▫️Trust ▫️Will ▫️Distribution list
Will
A claim made against the lands of another by virtue of open and notorious possession of the lands by the claimant is referred to as…? ▫️Voluntary alienation ▫️Adverse possession ▫️Condemnation ▫️Escheat
Adverse possession
The taking of private property for public use through court proceedings is known as…? ▫️Condemnation ▫️Voluntary alienation ▫️Escheat ▫️Adverse possession
Condemnation
A reversion of property to the State when heirs capable of inheriting are lacking is known as…? ▫️Voluntary alienation ▫️Condemnation ▫️Devise ▫️Escheat
Escheat
Which of the following is an example of involuntary alienation…? ▫️Gifting a property to another ▫️Foreclosure ▫️The sale of property to another ▫️All of the above
Foreclosure
Transfer of title freely by the owner is referred to as…? ▫️Voluntary alienation ▫️Involuntary alienation ▫️Adverse possession ▫️Condemnation
Voluntary alienation
The typical sale of real property between a buyer and seller involves ………………... alienation? ▫️Voluntary ▫️Involuntary ▫️Adverse ▫️Escheat
Voluntary
The transfer of property without the owner’s consent is known as…? ▫️Voluntary alienation ▫️Involuntary alienation ▫️Devise ▫️Granting
Involuntary alienation
The process by which all the parties to a real estate transaction conclude the details of a sale or mortgage is known as the…? ▫️Granting ▫️Recording ▫️Closing ▫️Transfer
Closing
The miscellaneous expenses buyers and sellers normally incur in the transfer of ownership of real property over and above the cost of the property are known as…? ▫️Granting costs ▫️Exchange costs ▫️Closing costs ▫️Transfer costs
Closing costs
The closing of a real estate transaction is also known as the…? ▫️Exchange ▫️Settlement ▫️Granting ▫️Transfer
Settlement
Real estate agents typically get paid…? ▫️Once the funds clear in the seller’s account ▫️After the deed is recorded ▫️As soon as they find a buyer ▫️At the closing
At the closing
Which of the following serves as a blueprint for the completion of a real estate transaction…? ▫️Sales Contract ▫️Letter of Intent ▫️Listing Contract ▫️Exclusive Agency Agreement
Sales Contract
Under this Act, lenders are required to disclose the costs associated with obtaining a loan…? ▫️ADA ▫️RESPA ▫️HEOP ▫️HUDA
RESPA
RESPA requirements do not apply for which of the following…?
▫️1-4 family properties
▫️A loan on a property of 25 or more acres
▫️Condominiums
▫️Cooperatives
A loan on a property of 25 or more acres
Which of the following items has an unlimited tolerance on the good faith estimate…? ▫️Loan origination fees ▫️Appraisal fees ▫️The cost of the homeowner’s insurance ▫️All of the above
The cost of the homeowner’s insurance
A lender must provide borrowers with a ………………, which discloses the possibility of a future transfer loan servicing to another company?
▫️Mortgage Servicing Disclosure Statement
▫️Good Faith Estimate
▫️HUD Settlement Costs Booklet
▫️All of the above
Mortgage Servicing Disclosure Statement
The duties related to collecting the principal, interest, taxes, and insurance payments is known as…? ▫️Performing on a loan ▫️Loan servicing ▫️Executing on a loan ▫️Loan settlement
Loan servicing
The Texas Real Estate License Act requires brokers to advise their buyers to have the title examined by an attorney or obtain title insurance…?
▫️T (True)
▫️F (False)
True
When an abstract of title is used, the buyer’s attorney will review and issue a/an…? ▫️Chain of title ▫️Opinion of title ▫️Examination of title ▫️Declaration of title
Opinion of title
In Texas, the closing of a property typically takes place at the…? ▫️Title company ▫️Real estate broker’s office ▫️Property itself ▫️Lender’s office
Real estate broker’s office
A buyer should perform a ……….. to gather any information about the property that can’t be obtained through public records? ▫️Title search ▫️Survey review ▫️Contract review ▫️Final walk-through
Final walk-through
The actual amount of cash a seller receives at closing is referred to as the…? ▫️Seller gross ▫️Seller net ▫️Net operating income ▫️Effective gross income
Seller net
A HUD-1 Settlement Statement itemizes charges and………………. for both the buyer and seller? ▫️Credits ▫️Estimates ▫️Dividends ▫️Fees
Credits
Which of the following is a credit that a seller will receive at closing…? ▫️Payment of loan origination fee ▫️Payment of loan discount points ▫️Payment of buyer’s closing costs ▫️Prorated payment of property taxes
Prorated payment of property taxes
Which of the following is a charge against the seller at the closing…? ▫️Loan origination fee ▫️Discount points ▫️Payment of the buyer’s closing costs ▫️All of the above
Payment of the buyer’s closing costs
Which of the following fees will appear on a HUD-1 Settlement Statement…? ▫️Escrow fees ▫️Attorney fees ▫️Recording fees ▫️All of the above
All of the above
Who typically pays the real estate commission in a transaction…? ▫️The buyer ▫️The seller ▫️Both the buyer and seller ▫️The title company
The seller
In a closing statement, this is an expense or money received against a credit…? ▫️Debit ▫️Deficit ▫️Debt ▫️Arrears
Debit
In a closing statement, this refers to money to be received…? ▫️Debit ▫️Credit ▫️Apportion ▫️Expense
Credit
Which of the following is prorated between the buyer and seller…? ▫️Buyer’s loan origination fee ▫️Seller’s transfer taxes ▫️Pre-paid property taxes by the seller ▫️All of the above
Pre-paid property taxes by the seller
A debit is also known as a…? ▫️Credit ▫️Fee ▫️Bill ▫️Charge
Charge
Who typically pays for the recording of the transfer of title…? ▫️The buyer ▫️The seller ▫️Both the buyer and seller ▫️The County Clerk
The buyer
The loan origination fee charged to a borrower is typically ……………. of the loan amount? ▫️0.1% (percent) ▫️0.5% (percent) ▫️1% (percent) ▫️2% (percent)
1%
Who is responsible for paying the loan origination fee…? ▫️The seller ▫️The buyer ▫️Both the buyer and seller ▫️The mortgage broker
The buyer
Which of the following are commonly prorated between the buyer and seller…? ▫️Property taxes ▫️Attorney fees ▫️Loan origination fees ▫️All of the above
Property taxes
The seller still owns the property through the day of the closing…?
▫️T (True)
▫️F (False)
True
How many days are in a statutory year…? ▫️180 ▫️360 ▫️364 ▫️365
360
Proration on a Settlement Statement gets divided on what basis…? ▫️Daily ▫️Weekly ▫️Monthly ▫️Yearly
Daily
Who typically pays to have an attorney review and issue an Opinion of Title when an abstract of title is used…? ▫️The seller ▫️The buyer ▫️Both the buyer and seller ▫️The County Clerk
The buyer
Proration in a settlement statement is typically based on a …………... year? ▫️Statutory ▫️Partial ▫️Calendar ▫️Leap
Calendar
Who is responsible for paying special assessments…? ▫️The seller ▫️The buyer ▫️Both the buyer and seller ▫️The appraiser
The seller
Which of the following are not prorated at closing…? ▫️Security deposits ▫️Special assessments ▫️Attorney fees ▫️All of the above
All of the above