mock 11 Flashcards
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.
- market reason.
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
- the increasing size of payments over time
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.
- property that an owner may be granted exclusive use of through the designation of it as “limited common property.
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
- 158
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.
- An agreement among licensees to advertise their services as “the best in the
world”.
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 contract which one of the parties has an option to cancel
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.
- similar with respect to factors that have a major influence on the buyers and sellers.
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
- The immobility of real estate as a commodity allows it to be moved to a better market
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
- Names of the corporation’s shareholders
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
- 45 days
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.
- Results from the operation of the legal doctrine of estoppel
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%
- 1.149929%
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
- Doug discovers later that Todd is illiterate.
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
- All of the above
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
- $212.000
Which of the following is NOT a privacy principle from the Personal Information Protection Act?
- Limit collection
- Obtain consent
- Provide recourse
- Identify the proposal
- Identify the proposal
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
- Rate B
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
- Names of the corporation’s shareholders
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.
- client of the mortgage broker
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 psychological phenomenon whereby the first number quoted in a negotiation causes the rest of the negotiation to be based on that number
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
- Place, product, promotion, and price
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
- the redevelopment approach
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.
- Frustration can only occur after a contract has been made.
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 and C only
A real estate investment trust is:
- taxed at corporate income tax rates
- created to invest in mortgages or properties
- managed by the Registrar of Companies
- a combination of three legal entities, which cooperate in carrying out real estate development
- created to invest in mortgages or properties
In mortgage lending, a ‘bonus’ is:
- the mortgage principal amount outstanding at any point in time
- the fee charged by a mortgage broker that can be deducted or added to the future value of the loan
- always subtracted from the ceiling price of the property
- the portion of the face value of a mortgage loan which exceeds the funds actually received by the borrower
- the portion of the face value of a mortgage loan which exceeds the funds actually received by the borrower
Which of the following statements is TRUE?
- The adjustment date and the possession date must be the same day.
- a deposit paid by a buyer will appear on the buyer’s statement of adjustments as a debt.
- It is standard practice to hold the buyer responsible for the taxes on the adjustment date itself.
- 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.
- It is standard practice to hold the buyer responsible for the taxes on the adjustment date itself.
How is “ethics” different from “law”?
- Ethics are unwritten, whereas laws are written
- Breaches of law are not breaches of ethics
- 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
- Breaches of ethics are always less serious than breaches of law.
- 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
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?
- $2,614.00
- $2,558.77
- $2,595.84
- $2,603.17
- $2,603.17
Which of the following describes a Replacement Reserve?
- It is a special fund to be used for emergency only
- Its an annual sum set aside for replacement, repairs and renovations
- It’s a written schedule of anticipated costs for replacement of equipment,
appliances, excluded major roof repairs and renovations - It’s a stock of monthly supplies which be periodically replaced
- Its an annual sum set aside for replacement, repairs and renovations
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?
- $716,000
- $460,667
- $340,000
- $436,000
- $436,000
When a judge ‘distinguishes’ a case on its facts, he or she:
- highlights of former decision as one that establishes an important legal principal.
- Formally reports the case before him or her since it is a crucial decision
- Follows a former decision because it is based on similar facts
- 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
- 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
In mortgage lending, the interest adjustment period is:
- one period after the date on which the first payment is due on
- Any period of 12 consecutive months chosen by a business as its accounting period
- 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.
- The period of time between the date that funds are advanced and the beginning of the first payment period
- The period of time between the date that funds are advanced and the beginning of the first payment period
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?
- $532,106.49
- $484,174.13
- $536,068.20
- $544,174.13
- $536,068.20
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?
- All of the above are true
- Only B and C are true
- Only A and C are true
- Only A and B are true
- Only B and C are true
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:
- houses in different neighbourhoods.
- houses with different square footage.
- houses recently sold between related parties.
- houses sold over six months ago.
- houses recently sold between related parties.
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)?
- 17.548922%
- 15.235263%
- 1.269052%
- 16.345450 %
- 16.345450 %
In marketing, the initial trigger that starts the buying process is known as:
- The buying decision
- Self actualization
- The product purchase activity
- A felt need
- A felt need
The blend and extend refinancing option
- Involves renegotiating a first mortgage with the lender and making repayment penalties.
- always provides the largest amount of new funds for borrowers
- 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
- Is illegal and not available in Canada
- 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
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)?
- X=10 % ; Y=5
- X=20%; Y= 20
- X=7%; Y= 55
- X =15% ; Y=90
- X=7%; Y= 55