mock 11 Flashcards
(100 cards)
1
Q
An appraiser must understood why the client has requested to appraisal. If the purpose id for property development, it would be known as a :
- market reason.
- capital sum reason.
- justified price reason.
- statutory reason.
A
- market reason.
2
Q
Which of the following is an element of a graduated payment mortgage?
- the decreasing indebtedness occurring in the initial years of the loan
- high initial payments that decrease over time
- the ability to adjust the interest rate during the contractual term
- the increasing size of payments over time
A
- the increasing size of payments over time
3
Q
Common property in a strata title development is:
- property that the strata council has a duty to repair and maintain under the Local Government Act
- property that an owner may be granted exclusive use of through the designation of it as “limited common property.
- owned by the strata council to manage in the best interests of the strata corporation.
- owned by the strata corporation.
A
- property that an owner may be granted exclusive use of through the designation of it as “limited common property.
4
Q
Your clients are retired and have decided to supplement their income with a reverse annuity mortgage (RAM) based on the security of their $600,000 home. The terms of the mortgage specify an interest rate of 6% per annum, compounded monthly and that the borrower will receive $1,500 per month. The bank decides that the RAM will not exceed 60% of market value of the home at the time the loan was written. How many full payments will be received during the term of the loan?
- 158
- 117
- 142
- 165
A
- 158
5
Q
Which of the following is NOT an example of a breach of the criminal conspiracy code in restraint of trade, section 45(1), of the Competition act
- An agreement among licensees to fix minimum commission rates on real
property transactions. - An agreement between real estate boards to exclude membership of
brokerages to a maximum number of member brokerages has been reached. - An agreement among licensees to advertise their services as “the best in the
world”. - An agreement among real estate brokerages to allocate markets to certain
licensees.
A
- An agreement among licensees to advertise their services as “the best in the
world”.
6
Q
A voidable contract is:
- One which is not binding on either party
- Unenforceable
- A contract which one of the parties has an option to cancel
- One which never actually came into existence and therefore cannot be
unenforceable.
A
- A contract which one of the parties has an option to cancel
7
Q
In the comparative method of appraisal , it is MOST important that the subject building and the comparable building be :
- similar with respect to factors that have a major influence on the buyers and sellers.
- free from any mortgage on title.
- of the same general architectural style.
- constructed by either average or above average workmanship.
A
- similar with respect to factors that have a major influence on the buyers and sellers.
8
Q
Which of the following statements regarding the immobility and durability of land is FALSE?
- The immobility of real estate as a commodity allows it to be moved to a better market
- The physical durability of real property means that it has value as an investment and a source of shelter.
- When considering the durability of structures, it is important to distinguish between the physical life and the economic life of the structure
- Immobility is responsible for the local nature of real property markets
A
- The immobility of real estate as a commodity allows it to be moved to a better market
9
Q
Which one of the following will NOT be found on the Balance Sheet of a corporation?
- Retained earnings to date
- Names of the corporation’s shareholders
- Original cost of the property owned by the corporation
- Number of shares issued
A
- Names of the corporation’s shareholders
10
Q
Under the Builders Lien Act, within how many days of the substantial completion, end or abandonment of a project must a claimant file a builders lien?
- 15 days
- 30 days
- 45 days
- 90 days
A
- 45 days
11
Q
With respect to the scope of an agent’s authority, apparent authority:
- Arises when an agent’s unauthorized act is later ratified.
- Results from the operation of the legal doctrine of estoppel
- Arises when the agent is in a transaction governed by “ customs of the trade”.
- Describes all agency authority that can be inferred in the agency agreement.
A
- Results from the operation of the legal doctrine of estoppel
12
Q
You have recently purchased a mortgage contract that will provide you with quarterly payments of $1,500 over 4 years. The outstanding balance of the loan in the amount of $274,000 will be paid as a last payment. If you pay $250,000 for this mortgage contract, what is your yield expressed as a quarterly periodic rate?
- 1.149929%
- 2.898149 %
- 3.064909%
- 1.182831%
A
- 1.149929%
13
Q
Doug makes a written offer to Todd; Which is the following will NOT release Doug offer?
- Doug discovers later that Todd is illiterate.
- Todd fails to accept the offer before the expiry of the time limit specified in the offer.
- Todd makes a counter-offer
- Doug revokes his offer to Todd via telephone
A
- Doug discovers later that Todd is illiterate.
14
Q
Which of the following scenarios would result in the termination of an agency relationship?
- An oral revocation of the agency relationship by the principal
- An oral revocation of the agency relationship by the agent
- The death, insanity or bankruptcy of either the principal or the agent
- All of the above
A
- All of the above
15
Q
You have applied for a mortgage loan to finance the purchase of a townhouse listed at $276,000. The market value of the townhouse is $270,000 and the lender has assigned a $265,000 lending value to it The lender demands a 30% gross debt service ratio and an 80% loan-to-value ratio The purchaser’s annual income is $59,000, property taxes are
$1,200 per annum and, if approved, the loan is to be repaid with monthly payments over 25 years with an interest rate of J2 =6 %. Calculate the maximum loan allowable under the lender’s loan-to-value criterion
- $220,800
- $190,750
- $216,000
- $212.000
A
- $212.000
16
Q
Which of the following is NOT a privacy principle from the Personal Information Protection Act?
- Limit collection
- Obtain consent
- Provide recourse
- Identify the proposal
A
- Identify the proposal
17
Q
As a Mortgagor which rate would you prefer:
A. J2 = 4.5
B. J1= 4.2
C. J 365= 4.25
- Rate A
- Rate B
- Rate C
- Impossible
A
- Rate B
18
Q
Which one of the following will not be found of the corporation balance sheet?
- Retained earnings to date
- Names of the corporation’s shareholders
- Original cost of the property owned by a corporation
- Number of shares issued
A
- Names of the corporation’s shareholders
19
Q
Generally speaking, the ethical duty of professional courtesy and good faith is owned to:
- client of the mortgage broker
- fellow mortgage broker
- the Registrar of the mortgage broker
- oneself.
A
- client of the mortgage broker
20
Q
The anchoring effect is best described as:
- a sociological theory that predicts that the longer someone occupies a property, the higher the price he or she will seek upon deciding to sell it.
- a psychological phenomenon whereby the first number quoted in a negotiation causes the rest of the negotiation to be based on that number
- a market force that causes the median price of a good to fall when there is a declining market for thet good.
- an economic factor that decreases demand for real estate services due to an increase in interest rates
A
- a psychological phenomenon whereby the first number quoted in a negotiation causes the rest of the negotiation to be based on that number
21
Q
The marketing mix consists of
- Product, personal selling, price, and publicity
- Place, product, promotion, and price
- Personal selling, publicity, advertising, and promotion
- Advertising, product, place, and publicity
A
- Place, product, promotion, and price
22
Q
Which one of the following is NOT an appraisal approach to value?
- the income approach
- the redevelopment approach
- the direct comparison approach
- the cost approach
A
- the redevelopment approach
23
Q
Which of the following statements with respect to the contract is TRUE:
- Frustration can only occur after a contract has been made.
- If a contract is entered into as the result of a person in a power using his or
her position to induce a weaker party to enter a contract would not have
otherwise made, the contract will be frustrated. - Frustration occurs where both parties to a contract have made a
fundamental mistake about the contract, but each makes a different mistake. - Frustration will apply if the subject matter of the contract is destroyed before
the contract is made.
A
- Frustration can only occur after a contract has been made.
24
Q
Which of the following scenarios describes activities that are consider to be a breach under the Real Estate Services act or the Canadian Real Estate Business Practice?
A. Tom’s cousin, Marty, is interested in purchasing a property where Tom will
be a licensee. Tom agrees to give Marty $1,000 if Marty’s offer gets accepted.
Marty’s offer was the highest out of 6 offers made and was accepted. Tom
didn’t disclose to the vendor of his agreement with Marty.
B. Albert, a listing agent, receives, in addition to the commission an extra
payment from an unrepresented purchaser for his efforts in the dual agency
situation, but the vendor is aware of it and has no problem with it.
C. John, a managing broker, hires three licensees each of whom works for
another brokerage, on a 6 month contract in order to fill in a number of
spaces in his brokerage, entitling them to commissions.
- A and B only
- A and C only
- B and C only
- A, B and C
A
- A and C only
25
A real estate investment trust is:
1. taxed at corporate income tax rates
2. created to invest in mortgages or properties
3. managed by the Registrar of Companies
4. a combination of three legal entities, which cooperate in carrying out real estate development
2. created to invest in mortgages or properties
26
In mortgage lending, a ‘bonus’ is:
1. the mortgage principal amount outstanding at any point in time
2. the fee charged by a mortgage broker that can be deducted or added to the future value of the loan
3. always subtracted from the ceiling price of the property
4. the portion of the face value of a mortgage loan which exceeds the funds actually received by the borrower
4. the portion of the face value of a mortgage loan which exceeds the funds actually received by the borrower
27
Which of the following statements is TRUE?
1. The adjustment date and the possession date must be the same day.
2. a deposit paid by a buyer will appear on the buyer's statement of adjustments as a debt.
3. It is standard practice to hold the buyer responsible for the taxes on the adjustment date itself.
4. The total of the credit column on the seller's statement of adjustments will always be e identical to the total of the debit column on the seller's statement of adjustments.
3. It is standard practice to hold the buyer responsible for the taxes on the adjustment date itself.
28
How is “ethics” different from “law”?
1. Ethics are unwritten, whereas laws are written
2. Breaches of law are not breaches of ethics
3. While the law may prescribe the minimum standard of conduct of a certain individual, ethics can go further and require a higher moral standard of conduct
4. Breaches of ethics are always less serious than breaches of law.
3. While the law may prescribe the minimum standard of conduct of a certain individual, ethics can go further and require a higher moral standard of conduct
29
A local builder negotiates on interest only loan for $445,000, the interest rate is
7%, compounded daily. The loan was given for 2 years, and the interest only
payments are to be made monthly. How much is the interest only payments?
1. $2,614.00
2. $2,558.77
3. $2,595.84
4. $2,603.17
4. $2,603.17
30
Which of the following describes a Replacement Reserve?
1. It is a special fund to be used for emergency only
2. Its an annual sum set aside for replacement, repairs and renovations
3. It’s a written schedule of anticipated costs for replacement of equipment,
appliances, excluded major roof repairs and renovations
4. It’s a stock of monthly supplies which be periodically replaced
2. Its an annual sum set aside for replacement, repairs and renovations
31
Consider the following information about a commercial property
Gross Potential Revenue $115,000
General Operating Expenses $ 45,000
Vacancy and Bad Debt Allowance 4% of Gross Potential Revenue
Given a capitalization rate of 15 %, how much should an investor pay for this property?
1. $716,000
2. $460,667
3. $340,000
4. $436,000
4. $436,000
32
When a judge ‘distinguishes’ a case on its facts, he or she:
1. highlights of former decision as one that establishes an important legal principal.
2. Formally reports the case before him or her since it is a crucial decision
3. Follows a former decision because it is based on similar facts
4. Decides that facts crucial to a formal decision are not present in the case at hand and therefore, that form a decision should not be followed
4. Decides that facts crucial to a formal decision are not present in the case at hand and therefore, that form a decision should not be followed
33
In mortgage lending, the interest adjustment period is:
1. one period after the date on which the first payment is due on
2. Any period of 12 consecutive months chosen by a business as its accounting period
3. The period of time agreed to by both parties to a real estate transaction for the adjustment of property taxes, rent, interest, and other items.
4. The period of time between the date that funds are advanced and the beginning of the first payment period
4. The period of time between the date that funds are advanced and the beginning of the first payment period
34
Three years ago, you bought a house at which time you arranged a mortgage in the amount of $520,000 The loan was written at a rate of 4.75% per annum, compounded semi-annually, with a 5 year term, 25 year amortization period and monthly payments. You have just received an offer to buy your house. The offer is to provide $60,000 cash and to assume the existing financing for the remainder of the term. If current lending raten for 2 year term mortgages are 5.75% per annum, compounded semi-annually, what is the market value of the offer?
1. $532,106.49
2. $484,174.13
3. $536,068.20
4. $544,174.13
3. $536,068.20
35
One of more the following statements correctly describes the rules in regards
deposits in a commercial tenancy.
A. According to the Commercial Tenancy Act, the amount of a security deposit
must not exceed one month’s rent.
B. Someone who purchases the property from the landlord is not obligated to
return the security deposit to the tenant.
C. Entitlement to the interest accrued on a security deposit, if a matter of
negotiation between the parties.
D. The landlord is not personally liable for the return of the security deposit.
Which of the above statements is/are TRUE?
1. All of the above are true
2. Only B and C are true
3. Only A and C are true
4. Only A and B are true
2. Only B and C are true
36
An appraiser is using the market data approach for his appraisal of a single family house. By proper adjustment the appraiser can use sales prices of all the following properties for comparison purposes, EXCEPT:
1. houses in different neighbourhoods.
2. houses with different square footage.
3. houses recently sold between related parties.
4. houses sold over six months ago.
3. houses recently sold between related parties.
37
You purchased a warehouse for $600,000 cash and redeveloped it over a 15 months period If you sold the warehouse for $725,000, what effective annual yield did you earn on this investment (assuming that these are the only cash flows)?
1. 17.548922%
2. 15.235263%
3. 1.269052%
4. 16.345450 %
4. 16.345450 %
38
In marketing, the initial trigger that starts the buying process is known as:
1. The buying decision
2. Self actualization
3. The product purchase activity
4. A felt need
4. A felt need
39
The blend and extend refinancing option
1. Involves renegotiating a first mortgage with the lender and making repayment penalties.
2. always provides the largest amount of new funds for borrowers
3. Typically allows borrowers to take advantage offer low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties
4. Is illegal and not available in Canada
3. Typically allows borrowers to take advantage offer low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties
40
In order to protect themselves from builders liens, individuals purchasing strata lots from an owner developer must hold back (X) of the gross purchase price for (Y) days after the
project is substantially completed, ended or abandoned. What are the values of (X) and (Y)?
1. X=10 % ; Y=5
2. X=20%; Y= 20
3. X=7%; Y= 55
4. X =15% ; Y=90
3. X=7%; Y= 55
41
Which of the following statement regarding mortgages are TRUE?
A. An insured mortgage is generally referred to as a conventional mortgage.
B. In Canada, an insured loan can only be obtained from the private lenders.
C. In majority of cases, the insurance fee is added onto the loan amount if the borrowers have used their cash for the down payment and other transaction
D. With an insured mortgage, an insurance company guarantees that the lender can recover all of the funds loaned in case of default.
1. Only statements C and D are true
2. Only statements B and C are true
3. Only statements A, C and D are true
4. All of the above are true
1. Only statements C and D are true
42
A borrower has arranged a loan of $285,000 at an interest rate of 5%, compounded semi-annually with payments set at $2,157 per month. What is the time necessary to amortize the loan?
1. Exactly 191.280874401 years
2. Exactly 240 months
3. Approximately 3 years
4. Approximately 16 years
4. Approximately 16 years
43
You were recently hired by an appraisal company. You were asked by your boss to appraise the following for properties:
A concrete plant n the garden
A small single-family house in the central business district of Langley
A residential condominium in Richmond
A multi-unit apartment complex in Coquitlam
Which appraisal method would be more suitable to appraise each of these properties?
1. A) income; B) market comparison; C) residual; D) cost
2. A) residual; B) cost; C) market comparison; D) income
3. A) market comparison; B) income; C) cost; D) residual
4. A) cost; B) residual; C) market comparison ; D) income
4. A) cost; B) residual; C) market comparison ; D) income
44
Which of the following elements are necessary to waive a condition precedent under section 54 of the Law and Equity Act
The waiver must be made before any time stipulated for fulfillment of the condition precedent, or within a reasonable time if no time is stipulated
The condition precedent must only benefit the party that seeks to waive it.
The condition precedent must have been made under seal.
The contract can be performed without the condition precedent being fulfilled
1. A and D only
2. B and C only
3. A, B and D only
4. All of the above
3. A, B and D only
45
You have promised to pay your friend $15,000 four years from today. What is the present value of the $15,000 if the effective annual rate is 7%?
1. $11,443.43
2. $19,661.94
3. $14,655.05
4. $10,995.68
1. $11,443.43
46
You have a partially completed appraisal report that you need to fill in. The 2500 square foot subject property has 5 bedrooms. the house next door is similar in all respects except for the number of bedrooms and Square footage. The 2400 square foot comparable sold $750000 and has four bedrooms. If the market value of a bedroom is $3500 and above a 2000 square foot benchmark, each hundred square feet is worth $5000, the adjusted sale price for this comparable is:
1. $741,500
2. $758,500
3. $760,000
4. $753,500
2. $758,500
47
Which of the following statements is TRUE with respect to damages for breach of contract?
1. A completely innocent party is not required to mitigate his or her damages.
2. Damage awards are intended to punish the party who breached the contract.
3. If the parties to a contract provide for a genuine pre-estimate of foreseeable damages in the contract, that amount will be enforceable, even if the actual loss is lower or higher.
4. At common law, damages can only be awarded for the breach of a condition.
1. A completely innocent party is not required to mitigate his or her damages.
48
The purpose of the Real Estate Development Marketing Act is to protect the public by
requiring developers to:
1. meet any preliminary requirements or approvals applicable to the type of property being
marketed.
2. assure the purchaser’s title upon purchase.
3. prepare and file a disclosure statement in the form required.
4. All of the above are purposes of the Real Estate Development Marketing Act.
4. All of the above are purposes of the Real Estate Development Marketing Act.
49
A seller has just agreed to sell the house and getting ready to move out. What items can she take with her?
1. Her built-in countertop
2. Her television, which is mounted on the wall.
3. The laminated flooring which were just installed 2 months ago
4. The expensive faucet in the bathroom
2. Her television, which is mounted on the wall.
50
Which of the following items will NOT appear on the buyer’s statement of adjustments?
1. cash proceeds of the sale
2. purchase price
3. property transfer tax
4. balance due to complete
1. cash proceeds of the sale
51
Which of the following is NOT relevant in the determination of the duty of care owed by an Occupier under the Occupiers Liability Act
1. The conduct of third parties on the premises
2. The conduct of a guest off the premises
3. The activities on the premises
4. The condition of the premises
2. The conduct of a guest off the premises
52
With respect to the application of the Environmental Management Act (“EMA) to mortgages, which of the following is TRUE?
1. Lenders can face liability under the EMA if they become registered owners of the property as a result of a foreclosure
2. The EMA automatically makes a lender partially responsible for environmental contamination of a property if the lender's mortgage was registered on title at the time of the contamination.
3. Lenders can file a notice with the EMA before providing mortgage proceeds directing the Director of Waste Management to conduct an environmental assessment of the subject property
4. The EMA has no application to mortgages
1. Lenders can face liability under the EMA if they become registered owners of the property as a result of a foreclosure
53
A small town in British Columbia Smallville, passes a bylaw which requires any one who runs for mayor to own an interest in land in Smallville. Any valid interest in land, no matter how small, qualifies under this bylaw. Which of the following people would NOT be able to run because of this bylaw?
1. Phil, a resident of Alberta, buys an airspace parcel above a private residence in Smallville.
2. Kelsey, a resident of a neighbouring town, has the right to operate her hot dog stand in Smallville's central park.
3. Guy, a resident of Quebec, is the remainderman of a fee simple estate in Smallville.
4. Kate has a month to month lease in an apartment in Smallville
2. Kelsey, a resident of a neighbouring town, has the right to operate her hot dog stand in Smallville's central park.
54
Your client owns a small office building and has applied for a loan at the bank. The property has an annual net operating income of $117,000 and has a lending value of $500,000. The bank uses a 1.17 debt coverage ratio and will allow a maximum loan-to value ratio of 75% Mortgage rates are J1=5% for fully amortized loans over a 4 year term with annual payments. What is the maximum 4 year loan your client will be loaned from the bank, rounded to the next higher dollar?
1. $375,000
2. $322,987
3. $354,596
4. $414,877
3. $354,596
55
Which of the following statements concerning the tort of negligence is TRUE?
1. A duty of care owed by the defendant to the plaintiff exists when the plaintiff proves that negligence action is found to have been made by a person whom the defendant ought to have known as someone likely to be injured by the defendant’s conduct.
2. Where a duty of care exists, the relevant standard of care will be that which a reasonable person would take, in all the circumstances of the case.
3. Where an employee is negligent in the performance of his or her duties of employment, the employer may be liable for any foreseeable damages under the principle of vicarious liability.
4. All of the above statements.
4. All of the above statements.
56
Real Estate values are influenced by externalities. Which of the following below could be used to determine this principle?
1. The market suffers a significant drop in world oil prices and because of this, the supply of vacant office space increases in the city
2. It is being announced that a small residential area has been rezoned for a shopping center.
The value of the houses in the residential will increase
3. Because of unemployment, real estate prices decline
4. All of the above
2. It is being announced that a small residential area has been rezoned for a shopping center.
The value of the houses in the residential will increase
57
Which of the following is estimated using actual current rents paid on similar property based on 100% occupancy?
1. gross potential revenue
2. gross realized revenue
3. effective gross income
4. net operating income
1. gross potential revenue
58
Using the cost method of appraisal, determine the market value of a property with a 40,000 square foot building if construction costs new are $60 per square foot, land value is estimated to be $1,200,000, and total depreciation on the building to date is estimated to be 6%?
1. $3,456,000
2. $3,310,480
3. $3,408,000
4. $3,481,600
1. $3,456,000
59
Which of the following interests in land require a dominant and servient tenement?
```
Life estates
Easements
Freehold estates
Profits a prendre
1. B only
2. A and C only
3. B, C and D only
4. All of the above
```
1. B only
60
Jason, a resident of Saskatchewan, came to Vancouver to visit his grandmother. Tired after the long drive from Saskatchewan, he accidentally stepped on the gas pedal instead of the brake pedal when parking near his grandmother’s house. As a result, his car hit and severely damaged the standalone garage of one of the neighbors, Charlie, who paid $37,000 to have the garage built only two months ago. Jason refuses to pay for the damage. What actions can Charlie take?
He can bring a claim against Jason in Small Claims Court for $37,000
He can sue Jason’s grandmother on the basis of vicarious liability, since Jason is staying with her while in Vancouver
He can bring an action against Jason in the Supreme Court of British Columbia for $37,000
He can make an application for court supervised mediation after initiating a claim against Jason
1. A, B and D only
2. C and D only
3. A and D only
4. C only
2. C and D only
61
You have been looking for a mortgage loan so that you can purchase a house. Two separate companies have offered you identical loans with the exception being the amortization period Company A’s offer has an amortization period of 15 years whereas Company B’s offer has an amortization period of 20 years. The interest rate, loan amount and term are the same under both options Which of the following statements is/are TRUE?
Under Company A’s offer, each monthly payment will contribute less towards paying off the principal than Company B’s offer
Your monthly payments will be higher if you take Company A’s offer.
The effective annual interest rate paid by you would be the same under either company’s offer
Company A’a capital risk is higher than Compony B’s
1. Only D is true.
2. Only A and C are true.
3. Only B and C are true.
4. All of the above statements are true.
3. Only B and C are true.
62
Which of the following statements regarding the comparative method of appraisal is TRUE?
1. The comparative method of appraisal should be used in the property possesses latent value
2. To apply the comparative method of appraisal, the appraiser estimates the market value of
the subject property using as evidence the sale prices of similar properties which would sold
at any time prior to the appraisal
3. The comparative method of appraisal is the most inexact approach for finding market value
since cost and market value are not necessary equal at any particular time
4. The comparative method reflects market behavior and requires a minimum of subjective
opinion from the appraiser
4. The comparative method reflects market behavior and requires a minimum of subjective
opinion from the appraiser
63
Your friend mentioned to you that the value of his house was $500,000
Understanding what he means, you know that the true value of an appraisal is:
1. Known as the value to the owner because it is subjective in nature.
2. The market value of the physical property.
3. A combined value that considers personal property, public property and government limitations.
4. The value of the legal rights of ownership vested in a particular piece of property
4. The value of the legal rights of ownership vested in a particular piece of property
64
Which of the following statement is FALSE regarding negotiations?
1. It is more important to focus on object to measure negotiations than the relative power of each party’s will.
2. Taking notes during negotiations is the single biggest thing that one can do to improve negotiation effectiveness.
3. Learned negotiation skill can be used in one’s personal and professional life.
4. Negotiation skill can be mastered by simply reading them, as practice is also essential.
2. Taking notes during negotiations is the single biggest thing that one can do to improve negotiation effectiveness.
65
Axel is purchasing Roddy’s house. Given the following information, calculate the cash proceeds of sale to Roddy on completion:
Prices: $295,000
Deposit paid to brokerage : $ 30,000
Financing: 1st mortgage of $105,000 to be assumed
2nd mortgage of $47,000 has been arranged by Axel.
Taxes: (391.23) The taxes in the amount of $1,200 are not yet due. Commission: 5% of sale price. (14,750)
Conveyancing fees: $900
Adjustment, completion and possession Dates: April 30th
Note: It is not a leap year.
1. $174,858.77
2. $144,858.77
3. $ 176,058.77
4. $ 174,855.48
1. $174,858.77
66
Eric and Mandy own a unit in Poppyseed Place, a beautiful strata development that sits on the waterfront of a lake in northern British Columbia They bought the unit five years ago as joint tenants and have rented it out to Ms Johnson, who continues to occupy the unit Mandy has recently passed away, and her will gifted her interest in the unit to her son, Melvin. Melvin has now contacted Eric and is demanding that he be paid one-half of the rent paid by Ms. Johnson Which of the following statements is FALSE?
Upon Mandy’s death, the entire interest remains with the surviving joint tenant, Eric
By gifting her interest in the unit to Melvin, Mandy severed the joint tenancy.
Melvin and Eric now own the unit as tenants in common
Melvin and Eric now own the unit as joint tenants
1. Only A is false
2. Only D is false
3. Only A and D are false
4. Only B, C and D are false
4. Only B, C and D are false
67
Which of the following statements regarding slide presentation guidelines are TRUE?
Make sure font sizes are legible and use simple fonts
Slides should use pictures and graphics instead of text for emphasis and explanations
Transition effects and sounds help viewers focus on the presentation
There should be no more than 6 words per slide
1. Only A and D
2. Only C and D
3. Only A, B and D
4. All of the above.
3. Only A, B and D
68
The “term” of a mortgage ALWAYS
1. is equal to the amortization period
2. necessitates the payment of an outstanding balance payment
3. specifies the duration of the contractual relationship
4. lowers the amount of the monthly payment
3. specifies the duration of the contractual relationship
69
What is the primary difference between an Assessment Appraisal and Private Fee Appraisal?
1. a private fee appraiser has access to all have a data for all real property transactions as
reported by land title office.
2. An assessor would normally adjust his or her estimate of value to reflect the tenants interest,
whereas the private fee appraiser does not.
3. The private fee appraiser looks at the market for the various indicators of values and then
proceeds toward the assessment of each property, whereas the assessor does not.
4. the assessor is constrained to certain dates and must value all interest in land.
4. the assessor is constrained to certain dates and must value all interest in land.
70
In Negotiation we should be focusing on:
A. Setting a resistance point
B. Establishing an aspiration target
C. Focusing on what each party wants
1. All of the above
2. A and B
3. B only
4. B and C
3. B only
71
Claire mails a letter to Roger, offering to sell her beach house in Fiji to Roger for $100,000. Roger mails a letter back saying he will buy it for $90,000. Claire replies by mail saying that she cannot accept less then $95,000. roger writes back and asks if he can give Claire his apartment in Thailand , worth $75,000, and rest in cash. Claire write back saying she wants the entire value in cash. Which of the following statement is TRUE?
Assume that their dealings are governed by the law applicable to British Columbia.
1. Roger may still accept Claire’s offer to sell the beach house for $100,000.
2. Roger may still accept Claire’s offer to sell the beach house for $95,000.
3. Claire may still accept Roger’s offer to buy the beach house for $90,000.
4. Roger will need to make a new offer if he still wishes to buy the beach house.
4. Roger will need to make a new offer if he still wishes to buy the beach house.
72
Given the following information, calculate the cash proceeds of sale to Victoria, the seller, from Peter, the buyer
Price: $200,000
Deposit to brokerage: $15,000
Financing: Ist mortgage of $92,000 to be assumed
2nd mortgage of $34,000 has been arranged
Taxes: Unpaid and overdue in the amount of $1,095. A penalty is owing of $105. These will be paid by the conveyancer
(-1095 ; -105 ; +369)
Commission: 5% of sale price (10,000)
Conveyancing Fees: $1000
Adjustment, completion & possession dates August 31st Note: Assume that it is NOT a leap year
1. $97,166.00
2. $96,169 00
3. $97,169.00
4. $82,169 00
3. $97,169.00
73
A mortgage loan with a face value of $475,000 is arranged through a mortgage broker. A commission of $7,250, appraisal fees of $425, as well as survey and legal fees totaling $600 will be deducted from the face value before the funds are advanced to the borrower
Calculate the cost of funds advanced to the borrower, expressed as an effective annual rate, if the loan is written at 5 % per annum, compounded semiannually, with monthly payments over 25 year amortization period and a 5 year term
1. 5.344991%
2. 5.368396 %
3. 5.502478%
4. 6.954952%
3. 5.502478%
74
A key purpose of a foreclosure action is to
1. extinguish the borrower's equitable right to redeem the property
2. obtain judicial recognition that the lender has a valid mortgage in the particular property
3. register a mortgage with the Land Title Office
4. obtain a quitclaim deed in the property whereby the borrower agrees to forfeit his or her title to the lender
1. extinguish the borrower's equitable right to redeem the property
75
Lenders who are attempting to ration mortgage funds could:
1. increase their gross debt service ratio
2. decrease their interest rate on mortgage loans
3. decrease their maximum loan to value ratio
4. make sure the safety margin limits the gross income used in calculations.
3. decrease their maximum loan to value ratio
76
You have promised to pay your friend $15,000 four years from today. What is
the value of $15,000 today if the effective annual interest rate is 7%.
1. $11,443.43
2. $19,661.94
3. $14,655.05
4. $10,995.68
1. $11,443.43
77
All other things being equal, shortening the contractual term on a constant payment mortgage always has the effect of :
1. decreasing the size of periodic payments required to fully amortize the loan.
2. increasing the number of the payments that need to be made during the loan terms.
3. increasing the size of the periodic payments required to fully amortize the loan.
4. none of the above.
4. none of the above.
78
Generally accepted accounting principles are the rules and guidelines followed in preparing financial statements. The revenue recognition principle states that
1. the asset's historical cost is the appropriate amount to record on the books of the enterprise, rather than its fair market value.
2. relatively low cost purchases that are used up over a period of several months may be immediately expensed when acquired
3. expenses directly associated with particular revenues should be recognized in the same period in which the revenue is recognized
4. revenue should be recognized by an enterprise when it is earned, not necessarily when cash is received.
4. revenue should be recognized by an enterprise when it is earned, not necessarily when cash is received.
79
Which of the following is TRUE with respect to the Contaminated Sites Registry (“CSR”) in British Columbia?
1. The CSR is port of the land title registration system in BC
2. The CSR was established by the Land Title Act
3. It is more likely that a commercial property will be in the CSR than a residential property
4. CSR searches must be done by visiting the CSR office in Victoria, BC.
3. It is more likely that a commercial property will be in the CSR than a residential property
80
When the original loan agreement between the lender and a seller of property is replaced by a new loan agreement between the lender and the buyer of the property for the mortgage debt, what legal concept has occurred
1. Assignment
2. Novation
3. Redemption
4. Foreclosure
1. Assignment
81
A borrower has decided to pay one half of a monthly payment on their mortgage loan every two weeks, The effect is that the borrower makes the equivalent of one extra monthly payment per year, thus paying down the principal faster and paying less interest. The borrower is
1. making bi-weekly interest only payments.
2. making bi-weekly accelerated payments
3. making bi-weekly accelerated interest accruing payments
4. in a reverse annuity mortgage
2. making bi-weekly accelerated payments
82
The British Columbia Supreme court takes hearings after:
1. The British Columbia Court of Appeal
2. The Small Claims Court
3. The Small Claims Tribunal
4. The Court of Queen’s Bench.
2. The Small Claims Court
83
In which of the following circumstances would an employer likely NOT to held vicariously liable?
1. An employee of a grocery store forget to clean up a spill in the beverage aisle. A customer slipped on the spill and broke his hip
2. An employee of the a fitness gym noticed that a large number of free weights are lying on the mat when they should have been stored on the racks. Instead of putting the weights back on the rack, the employee decided to leave them on the mat. A customer tripped on the weight and fell, resulting in two chipped front teeth.
3. An employee of a landscaping design company used the company’s forklift for the weekend to landscape his backyard without his employer’s permission. While operating the forklift, the employer accidently backed into and damaged the neighbour’s fence.
4. An employee of the car wash scratched the door of customer’s car while washing it.
3. An employee of a landscaping design company used the company’s forklift for the weekend to landscape his backyard without his employer’s permission. While operating the forklift, the employer accidently backed into and damaged the neighbour’s fence.
84
You are assigned the task of appraising a small apartment building Current construction Costs are $101 per square foot, the total area of the building is 10,000 square feet, the land value is estimated to be $300,000, and the Gross Potential Rent from the building is estimated at $120,000. The building was built 4 years ago, and is deemed to have depreciated 10% in this time. It has been determined that a reasonable capitalization rate is 11%. Using the cost method of appraisal, estimate the market value of the building
1. $1,010,000
2. $1,209,000
3. $1,179,000
4. $1,090,909
2. $1,209,000
85
Which of the following statements about corporations are TRUE?
corporation is subject to income tax, unlike a partnership
Only shareholders are entitled to manage a corporation in accordance with the Business Corporations Act
A corporation whose shares are traded on a stock exchange is referred to as a private Company
Individuals who acquire shares in a company do not own the assets of the company
1. Only statements A and D are true
2. Only statements A, B and C are true.
3. Only statements B and D are true
4. A, B,C and D are true
1. Only statements A and D are true
86
A mortgage common in the condominium development industry whereby the mortgage contains a clause that permits the mortgage registered against all of the lots to be released from each individual lot as it is purchased is known as a(n)
1. reverse annuity mortgage
2. wrap around mortgage.
3. interim blanket mortgage
4. release-by-sale mortgage
3. interim blanket mortgage
87
An offer of $525,000 is accepted, comprised of a cash down payment of $100,000 and a vendor supplied mortgage loan of $425,000 at 5.5% per annum, compounded semi annually. The loan has an amortization period of 15 years, a term of 5 years and calls for monthly payments rounded up to the next higher dollar. Market rates of interest for equivalent mortgages are currently 9.5% per annum, compounded semi-annually The market value of the offer is:
1. $463,807.98
2. $466,323.73
3. $461,690.44
2. $466,323.73
88
A key principle of nuisance is that
1. A person owes a duty of care to ensure that those who enters onto their property will be reasonable safe in using the premises.
2. A person may not use his or her own property in such a way that causes injury or harm to another.
3. A person who employs another will be responsible for the employed person’s conduct performed in he ordinary course of business.
4. Tenants must respect a landlord’s common law right of quiet enjoyment.
2. A person may not use his or her own property in such a way that causes injury or harm to another.
89
What is the effective annual rate of interest that is equivalent to 11 1/2% per annum, compound daily?
1. 12.185312%
2. 10.887064%
3. 0.031507%
4. 11.830625%
1. 12.185312%
90
You would like to put aside some money into a savings account to accumulate money towards a down payment. If you can deposit $500 at the end of every month, and the savings account earns interest at 3.5% per annum, compounded annually, how much money will you have in the savings account at the end of the 4th year?
1. $25,692.83
2. $25,721.05
3. $24,840.00
4. Unable to determine given the information provided.
1. $25,692.83
91
Jorden grants Mary a mortgage over his property, Blackacre. One of the terms in the standard mortgage contract that they execute allows Mary, aside from pursuing a foreclosure, to exercise the remedies of an ordinary creditor if Jordan defaults. If Jordan defaults and Mary pursues this option, she will be taking action on the
1. order nisi
2. personal covenant
3. collateral advantage
4. priorities
2. personal covenant
92
On August 1, Matt offered to buy Jason’s summer cottage which Jason accepted. The cottage was on a secluded property close to a river and neither party was aware that just two days prior the water levels rose dramatically in the river and the cottage was washed away. Jason has no insurance and is seeking to enforce the contract
Which of the following statements is TRUE?
1. Both Matt and Jason are relieved of their future obligations in the contract under the doctrine of frustration
2. The doctrine of mutual mistake allows Matt to rescind the contract.
3. This is an example of common mistake and the contract is void.
4. A court will set aside the contract based on "non est factum" (it is not my deed) or unilateral mistake since Matt did not know the nature of the document he was signing and could not have known the cottage was no longer standing
Incorrect
3. This is an example of common mistake and the contract is void.
93
Which of the following statements regarding property appraisal is FALSE
1. the courts have recognized that a reasonable margin of error exists when
calculating damages resulting from a negligent appraisal
2. The value of real property can always be established with certainty
3. A large over-valuation of property by an appraiser does not, by itself, establish
liability on the part of the appraiser
4. The courts provide some guidelines as to an appraiser’s legal responsibilities that
are outlined in the law of contract and the law of tort.
2. The value of real property can always be established with certainty
94
The investment method of appraisal is generally used for
1. Properties that produce rental income.
2. Single family homes
3. Air space rights.
4. Properties that possess latent value.
1. Properties that produce rental income.
95
With which one of the following loans is the lender’s initial capital and periodic income at the greatest risk?
1. straight line principle reduction loans
2. accelerated bi-weekly loans
3. interest only loan
4. interest accruing loans
4. interest accruing loans
96
Which of the following is within the category of law called “public law”?
1. Agency law
2. Constitutional law
3. Contract law
4. Tort law
2. Constitutional law
97
A mortgage was written for $418,000.00 with an interest rate of J2 =4 %, an amortization period of 25 years, a term of 5 years and monthly payments rounded to the next higher cent. Calculate the outstanding balance owing at the end of five years
1. $363,885.00
2. $367,724.15
3. $364,600.37
4. $364,181.28
1. $363,885.00
98
Which of the following is an offence under the Competition Act?
1. Failure to disclose a conflict of interest
2. Charging an excessive rate of interest
3. Agreements in restraint of trade
4. Committing mortgage fraud
3. Agreements in restraint of trade
99
The term ‘security” is used in the mortgage lending usually refers to:
1. The interest in land given by the borrower to assure that lender… under the
mortgage will be repaid
2. The amount advanced under the loan.
3. The documentation used in a mortgage transaction.
4. The ability of the lender to make an application to court to foreclosed on the
property on the event of the default.
1. The interest in land given by the borrower to assure that lender… under the
mortgage will be repaid
100
According to the Real Estate Service Act, which statements is FALSE?
1. A brokerage must have a managing broker.
2. When using a license, the Real Estate council may impose restrictions of the
licensee’s license.
3. An individual may be registered independently as a real estate
representative without being employed by a real estate brokerage.
4. A real estate representative is engaged by his or her brokerage to trade in
real estate services in the brokerage’s name, on behalf of the brokerage
3. An individual may be registered independently as a real estate
representative without being employed by a real estate brokerage.
