mock 2

Question 1

A local mortgage broker has arranged a mortgage in the amount of $240,000. The borrower has agreed to pay a brokerage fee of $8,999.82 which is to be added to the loan amount, giving a face value of $248,999.82 for the loan.

The mortgage bears interest at a contract rate of 18% per annum, compounded quarterly. The mortgage has a term and amortization period of 25 years. The loan is to be repaid using monthly payments. The equivalent periodic interest rate, expressed as a rate per month, on the funds advanced is:

1. 53649446786%
2. 42140087486%
3. 50410643789%
4. 67322516185%

Answer 1

1.53649446786%

Question 2

There are many variations of identity fraud. Which one of the following is not an example of an identity fraud?

A fraudster electronically obtains information on a property and the registered owner, then forges a transfer of the title into his own name.
A fraudster creates a fake letter of employment listing a co-conspirator’s phone number who confirms the false employment record on a credit check
A fraudster purchases property and then acquires a false appraisal, which is used to sell and finance at an inflated price to an unsuspecting purchaser.
A fraudster poses as the solicitor of a fake purchaser for a transaction and steals the mortgage funds upon advancement instead of directing the funds to the vendor.

Answer 2

A fraudster purchases property and then acquires a false appraisal, which is used to sell and finance at an inflated price to an unsuspecting purchaser.

Question 3

Real Estate is effected by a wider and more serious range of externalities the any other commodity. It’s because of:

Rapid development of real estate property in highly populated area
Divisibility of ownership, both physically and legally
Durability of real estate property
Immobility of real estate property

Answer 3

Immobility of real estate property

Question 4

Which of the following statements is FALSE?

Electrical systems are protected from overload by fuses or circuit breakers
Gas heating tanks are normally a little bigger than electrical heating tanks because gas units have a faster recovery time.
Septic tanks are common in rural areas
For any additions to a house, current plumbing systems….

Answer 4

Gas heating tanks are normally a little bigger than electrical heating tanks because gas units have a faster recovery time.

Question 5

Truck driver Nick dumped toxic waste on Henry’s backyard. Henry’s neighbour saw it and they trace it back to Nick and decide to press charges against him and sue for $20,000 in damages. Which of the following is TRUE?

If the plaintiff decides to appeal from Small Claims Court it will go to the BC Court of Appeal
If the plaintiff decides to take action, he has to bring his claim down to $3,000 in order to go to Small Claims Court
If the plaintiff decides to appeal he will use the Response to a Civil Claim form
If the plaintiff wants to appeal from Small Claims Court he can go to any Supreme Court anywhere in his province

Answer 5

If the plaintiff wants to appeal from Small Claims Court he can go to any Supreme Court anywhere in his province

Question 6

The Competition Act prohibits false or misleading advertising. Which of the following statements
concerning this offence is FALSE?

A person or company can be guilty under the Competition Act even though every part of their
advertisement is literally true, when the general overall impression is misleading.
For a misrepresentation to offend against the Competition Act it must be false or misleading in a
material respect.
The standard applicable in determining whether a statement is misleading or not is whether a
knowledgeable person would be misled.
Where an accused can show that he or she had taken all reasonable care to determine the truth of
the statement and that he or she honestly believed it to be true, the accused will avoid liability.

Answer 6

The standard applicable in determining whether a statement is misleading or not is whether a
knowledgeable person would be misled.

Question 7

A mortgage broker must provide a written disclosure statement in certain circumstances. The disclosure statement must be in the prescribed form and must be dated and signed by the mortgage broker. Assuming none of the exemptions apply, in which of the following transactions would the mortgage broker be required to provide a written disclosure statement?

A transaction where the mortgage broker arranges a mortgage for a lender in return for a commission.
A transaction in which a mortgage broker arranges the sale of a lender’s interest in a mortgage in return for a brokerage fee.
A transaction in which a mortgage broker sells his or her interest in a mortgage to a third party.
In all of the above circumstances, a written disclosure is required.

Answer 7

In all of the above circumstances, a written disclosure is required.

Question 8

The evaluation of an applicant’s ability to meet the terms of a mortgage and the amount of their income available for future mortgage payment is known as:

a credit history
a credit review
a credit score
a credit analysis

Answer 8

a credit analysis

Question 9

Which of the following documents regulated by the land title office are required in order for legal title to be transferred from seller to buyer?

Income tax rates
A Title Search Certificate
A Freehold Transfer
A statement of adjustments for each of the buyer and seller

Answer 9

A Freehold Transfer

Question 10

Which of the following actions would constitute a trespass by Vivian?

Vivian throws her empty coffee cup onto Laura’s property
Vivian does door to door sales and walks onto Laura’s property to reach her front door
Vivian hits her head while rollerblading – stranger pull her over on land with “No Trespassing” sign
Vivian rushes to “Shoe World” store just as the door is being locked for the day and convinces the store owner to let her in for last minute shopping

Answer 10

Vivian throws her empty coffee cup onto Laura’s property

Question 11

The Big Shoe company pays $15,500 for an asset which the income Tax Act allows capital cost allowance at 4% per a year. The asset is expected to have a useful life of 10 years and will have a salvage value of 1,500. Calculate the depreciation expense for accounting purposes for the asset’s 5th year if the accountant chooses to use straight-line depreciation

$6,020
$1,656
$1,400
$1,565

Answer 11

$1,400

Question 12

Which of the following elements is NOT required in order to establish a restrictive covenant?

It must be negative in nature.
Both the benefited and burdened land must be precisely identified in the agreement or document creating the restrictive covenant.
The burden of the restriction must have been intended by the parties to bind the land.
The covenantor must retain the restricted property as any subsequent purchaser will not be a
party to the original contract.

Answer 12

The covenantor must retain the restricted property as any subsequent purchaser will not be a
party to the original contract.

Question 13

Four years ago, Gussy Dup bought a small apartment in a very fashionable district of New Yawk. Gussy felt his purchase was a bargain at $340,000, especially considering his down payment was only $100,000 and he was able to obtain a mortgage for the remaining $240,000 at J2 = 5%, amortized over 25 years with annual payments. However, Gussy has now lost his job and must sell his apartment. He has received an offer of $50,000 cash plus assumption of the existing mortgage. The market rate for similar 21 year mortgages is J2 =3%

Calculate the market value of the offer.

$297,634.92
$347,634.92
$311,197.81
$313,571.25

Answer 13

$313,571.25

Question 14

Which of the following items are deducted from gross potential revenue to arrive at gross realized revenue when preparing an appraisal using the income method?

Vacancy and bad debt allowance.
Interest on the mortgage
Real property taxes
Parking income

Answer 14

Vacancy and bad debt allowance.

Question 15

When setting a target market, a good negotiator would:

1) Set a resistance point that effects the sale
2) Set an aspiration target that represents the best scenario
Set your expectations low
Both(1) and (2)

Answer 15

Both(1) and (2)

Question 16

Which of the following statements is TRUE regarding liability of an occupier?

An occupier must object to habitual trespassers in order to prevent them from gaining an implied license of law
An occupier of land owes no duty of care under the common law to trespassers and may deal with them as he or she chooses
The duty of care owed to an occupier or land of common law to children is somewhat less than invitees
An invitee is owed a lesser standard of care than is owed to a licensee

Answer 16

An occupier must object to habitual trespassers in order to prevent them from gaining an implied license of law

Question 17

As determined by the promotional mix, which of the following represents face-to-face communication with the potential customers:

Personal selling
Public relations
Sales presentations
Publicity

Answer 17

Personal selling

Question 18

Wattage in the Canadian Electrical Code System is:

a measure of the rate of electrical flow
a measure of electrical potential or pressure of current flow
a measure of power or consumption
none of the above

Answer 18

a measure of power or consumption

Question 19

A borrower has arranged a loan of $32,000 at an interest rate of 17% per annum, compounded semi-annually with payments set at $1,575.00 per month. What is the period necessary to amortize the loan?

exactly 24.129764086 years
exactly 23.9705036885 years
approximately 2 years
approximately 20 years

Answer 19

approximately 2 years

Question 20

Where a borrower feels that the amount of interest being charged is excessive, under which statute might relief be granted?

The Interest Act
The Business Practices and Consumer Protection Act
The Land Title Act
All of the above

Answer 20

The Business Practices and Consumer Protection Act

Question 21

If a negotiator recognized that the other negotiator is using dirty tactics, he should:

Use a similar tactic in return to prove that you are the better negotiator
Ignore the tactics and proceed with the negotiation
Raise the issue with the other negotiator and argue against it if needed
Raise his or her demands in response to dirty tactics with similar behavior

Answer 21

Raise the issue with the other negotiator and argue against it if needed

Question 22

Which of the following is NOT the powers of the Registrar of Mortgage Brokers under the Mortgage Brokers Act?

The Registrar has the power to investigate any complaints regarding a breach of Mortgage Brokers Act.
Registrar has the power to investigate criminal fraud.
Registrar’s powers of investigation allow him or her to enter, inspect all books of account and other records, and to seize any relevant information from a mortgage broker.
The Registrar has the power to freeze the trust funds of any mortgage broker pending the outcome of the investigation.

Answer 22

Registrar has the power to investigate criminal fraud.

Question 23

Which of the following would appear as a debit on the seller’s statement of adjustment?

The amount of mortgage which the buyer will assume
The legal fees involved in discharge a judgment from the seller’s title
The amount of penalty owning for overdue taxes
All of the above would appear as a debit on the seller’s statement

Answer 23

All of the above would appear as a debit on the seller’s statement

Question 24

A borrower who makes accelerated biweekly payments:

Will make a smaller number of payments in a calendar year than a borrower who makes constant monthly payments (all other terms are equal)
Will pay more interest over the life of the loan than a borrower who makes constant monthly payments (all other terms are equal)
Pays one-twelfth of the annual payments every two weeks
Pays one-half of the monthly payments every two weeks

Answer 24

Pays one-half of the monthly payments every two weeks

Question 25

Jefferson Butterfield has decided to sell his property, but first he wants to determine what the market value is. Unfortunately for Jefferson, he lives in a sparsely inhabited region where no similar properties have sold for quite some time. However, he does know the replacement cost (new) of his 3,600 square foot house is $52.50 per square foot. The land value estimate using the comparative method is $62,500.

Mr. Butterfield has taken exceptional care of his home, so it has depreciated only slightly in value. There has been $1,300 of curable physical depreciation. The bathroom and kitchen fixtures, however, are outdated and their replacement cost is $13,200.

What is the market value of his property?

$237,000
$250,200
$238,300
$251,500

Answer 25

$237,000

Question 26

Lenders who are attempting to ration mortgage funds could:

decrease their gross debt service ratio.
decrease their interest rate on mortgage loans.
increase their maximum loan to value ratio.
increase the maximum amortization period available on mortgage loans.

Answer 26

decrease their gross debt service ratio.

Question 27

Elvin is purchasing Jeremy’s beach house in Tofino. Elvin having a difficult time getting enough financing, so he decided to give Jeremy his boat, valued at $21,000. Furthermore, he will be assuming Jeremy’s existing mortgage on the property. Elvin just paid deposit of $30,000 directly to Jeremy. Which of the following items will appear EITHER debit or credit on Jeremy’s statement of adjustment?

Purchase price, property transfer tax, cash proceeds of sale
Real Estate licensee’s commission, sale price, conveyance fees
Deposit, assumption of the first mortgage, real estate commission
Boat trade, deposit, property transfer tax

Answer 27

Deposit, assumption of the first mortgage, real estate commission

Question 28

The abolition of the doctrine of notice by the Land Title Act is subject to the exception of:

innocent misrepresentation.
fraud.
breach of contract.
quantum meruit.

Answer 28

fraud.

Question 29

If an applicant for a mortgage loan has income of $1,000 per month, taxes are estimated of $60 per month and his permitted gross debt service ratio is 35%, what can he afford to pay for monthly principal and interest?

$290
$240
$300
$250

Answer 29

$290

Question 30

Which of the following are “red flags” that a mortgage broker might use to indicate a value fraud?

A. An appraisal is missing or does not make sense

B. The real estate transaction involves a relative of one of the real estate brokers

C. The appraiser is not on the approved list of appraisers for the lender

D. There are a number of trades on the property in a short period of time

only a, b and c
only a, c and d
only a, b and d
all of the above

Answer 30

all of the above

Question 31

According to the Business Practices and Consumer Protection Act, which of the following is not required on a Disclosure Statement for Fixed Credit?

The effective date of statement
The total cost of credit to the borrower
The effective annual rate
A description of prepayment rights

Answer 31

A description of prepayment rights

Question 32

Lydia has been awarded a judgement of $100,000 against Clive. If Clive refuses to pay the amount ordered, what are Lydia’s options for enforcing the judgment?

She may have Clive fined for contempt of court.
She may register her judgment in the land title office and apply to the court for a judicial sale of Clive’s property.
She may apply to have a garnishing order served on Clive’s employer, ordering the employer to pay all of Clive’s wages into court, whereupon Lydia could then apply to have it paid out to her.
She may do all of the above

Answer 32

She may register her judgment in the land title office and apply to the court for a judicial sale of Clive’s property.

Question 33

Which of the following statements are TRUE?

A. An agency relationship is created when two parties agree that one will act on behalf of other one
B. When the agent does not disclose that he or she is an agent and initiates a contract with the 3rd party, the principal will not be liable for the contract
C. An infant can act as an agent
D. An agency agreement must be written to be enforceable

B and D
A and B
A and C
A, B and D

Answer 33

A and C

Question 34

Which of the following most accurately describes a building scheme?

A set of restrictions on a development used by the developer in order to maintain a common overall look to a development.
A set of plans used by developers to protect purchasers’ rights to build according to their own tastes.
A set of restrictions that must be complied with if a developer is creating a subdivision of five or more lots.
A document filed with the disclosure statement on a conversion of an existing building to strata.

Answer 34

A set of restrictions on a development used by the developer in order to maintain a common overall look to a development.

Question 35

Which one of the following statements regarding generally accepted accounting principles is FALSE?

The consistency principle holds that once a business enterprise adopts one general accounting principle from the number of alternatives, that enterprise should follow that same principle in subsequent years.
The matching principle states that expenses are always recorded when paid
The cost principle holds that when a business acquires an asset, the amount paid is the appropriate amount to record in the books of the enterprise
The objectivity principle states that all accounting information should be reported on objectively determined and verifiable data

Answer 35

The matching principle states that expenses are always recorded when paid

Question 36

You have a partially completed appraisal report that you need to fill in. The subject property has 5 bedrooms and an alarm system. The house next door is similar in all respects except for the number of bedrooms and alarm system. It recently sold for $445,500 and had a +$3,500 adjustment for bedrooms and a +$5,500 adjustment for an alarm system. If the market value of a bedroom is $3,500 and the market value of an alarm system is $5,500, it can be concluded that this comparable has:

4 bedrooms and no alarm system.
3 bedrooms and no alarm system.
4 bedrooms and an alarm system.
5 bedrooms and an alarm system.

Answer 36

4 bedrooms and no alarm system.

Question 37

You promised to pay your friend $10,000 four years from today. What is the present value
if the effective interest rate is 6%?

$9,760.00
$7,920.94
$12,624.77
$8,798.93

Answer 37

$7,920.94

Question 38

Under the Land Title Act, in B.C. a mortgage is registered on a fee simple title as:

a charge
an agreement for sale
a caveat
a restrictive covenant

Answer 38

a charge

Question 39

An acquaintance of yours has approached you and wants to know why the bank, which may finance his purchase of a house, requires an appraisal. He claims that since an appraisal is not required for an investment in stocks, an appraisal should not be required for an investment in real property. Which one of the following statements provides the BEST reasoning for your support of the bank’s requirement?

The high turnover of real estate relative to stocks means that only an expert can keep up with changing values.
The local nature of the real estate market implies that the flow of information will be unlimited and easy to assemble.
It is difficult to find real properties that are very much alike.
All of the above statements are true.

Answer 39

It is difficult to find real properties that are very much alike.

Question 40

Which one of the following does NOT result from the immobility of land?

the need for debt financing
a vulnerability to outside environmental factors
an inability to move a listed property to a better resale market
the necessity for owners to travel in order to take advantage of services provided by different
parcels of land

Answer 40

the need for debt financing

Question 41

Which of the following is not an activity included in the definition of a mortgage broker under the Mortgage Brokers Act?

A person who carries on a business of lending money secured in whole or in part by mortgages, weather the money is the mortgage broker’s own or that of another person.
A person who, on behalf of another, in any manner acquires or disposes of real estate.
A person who carries on a business of buying and selling mortgages or agreements for sale.
A person who, in any one year, received an amount of $1,000 or more in fees or other consideration, excluding legal fees, for arranging mortgages for other persons.

Answer 41

A person who, on behalf of another, in any manner acquires or disposes of real estate.

Question 42

Which of the following statements about Fixtures and Chattels is FALSE?

One aspect of the test to determine whether an item is a fixture or chattel is a proper affixation
The courts have adopted a general two-part test to determine whether an item is a fixture or a chattel
Items that are fixtures go with the land and will belong to the purchaser upon completion unless the contract of purchase and sale specifies otherwise.
Where an object is affixed for the better use or enjoyment of the object – it is considered to be a fixture

Answer 42

Where an object is affixed for the better use or enjoyment of the object – it is considered to be a fixture

Question 43

An appraiser has located a comparable property that sold for $173,000 three weeks ago. The comparable and the subject property are similar in all respects except the following:
____________________________Subject _____________Comparable
No. of bedrooms ___________4______________________3
Square footage___________2,600___________________2,400
___Garage__________________no______________________yes

The appraiser also knows that the market value of a bedroom is $1,100, the value of a garage is $7,000, and above a 2,000 sq. ft. benchmark, each 100 sq. ft. is worth $3,000. What should the appraiser regard as the adjusted sale price of the comparable?

$173,100
$187,100
$191,000
$168,200

Answer 43

$173,100

Question 44

The breach of a condition is:

a breach that will only entitle the injured party to damages in compensation
a breach of an essential, fundamental term of a contract
a breach that does not relieve the injured party form his obligation to perform the contract
a breach of a non-essential term of a contract

Answer 44

a breach of an essential, fundamental term of a contract

Question 45

A vendor is willing to sell his house for $96,000. He demands 24 monthly payments, and payment of the outstanding balance in the amount of $75,000 with the 24th payment. He wishes to earn an effective annual rate of 15% on his money. What is the monthly payment required?

$1,955.72
$7,336.27
$1,008.85
$1,887.47

Answer 45

$1,887.47

Question 46

Governments pass statutes in order to:

change the common law.
develop a system of precedent.
alter the constitutional allocation of legislative authority between the federal and provincial governments.
All of the above

Answer 46

change the common law.

Question 47

The Big Shoe company pays $15,500 for an asset which the income Tax Act allows capital cost allowance at 4% per a year. The asset is expected to have a useful life of 10 years and will have a salvage value of 1,500. Calculate the depreciation expense for accounting purposes for the asset’s 5th year if the accountant chooses to use straight-line depreciation.

$6,020
$1,656
$1,400
$1,565

Answer 47

$1,400

Question 48

Which of the following statements regarding the promotional mix is false?

Advertising is sometimes referred to as mass communication.
Public relations helps to make the public more favourably disposed toward the firm.
Personal selling is inflexible and not appropriate to use for complex products or services.
Publicity may be perceived as unbiased because it is not from, or paid for by, the firm.

Answer 48

Personal selling is inflexible and not appropriate to use for complex products or services.

Question 49

Which of the following statements regarding print advertisement is FALSE?

A reader’s eyes 1st focuses on the 10 o’clock position and moves upward and to the right
The headline is the single most important part of the advertisement
Informal balance uses a non-symmetrical arrangement
Advertisements always end with a call for action

Answer 49

Advertisements always end with a call for action

Question 50

Which of the following are among the duties and powers of the Real Estate Council:

A. To supervise the educational qualifications of licensees
B. To lobby for real estate reform on behalf of the real estate industry
C. To establish a fund for the use of the real estate foundation
D. To advance the knowledge, skill and competency of licensees

Only B is among the duties and powers of the Real Estate Council
Only A and D are among the duties and powers of the Real Estate Council
Only A, C, and D are among the duties and powers of the Real Estate Council
All of the above are among the duties and powers of the Real Estate Council

Answer 50

Only A and D are among the duties and powers of the Real Estate Council

Question 51

Which of the following factors is MOST likely to affect the value of residential real property in the short run?

Consumer opinions relating to residential real estate values
The supply and cost of raw materials
Government programs effecting real estate
Shifts in age composition of the population

Answer 51

Consumer opinions relating to residential real estate values

Question 52

By differentiating and offering distinctly different services from competitors, the services provided by a mortgage broker would be considered a:

specialty good
staple good
felt needed good
differentiated good

Answer 52

specialty good

Question 53

Which of the following statements about federal legislation governing mortgage interest rates is TRUE?

The Interest Act requires that the rate of interest chargeable under a mortgage be “reasonable”, in the prevailing market for funds.
The Criminal Code defines a criminal rate of interest as an effective annual rate in excess of 50%.
Section 10 of the Interest Act creates the right to tender prepayment of a mortgage after 5 years provided that the borrower is not a corporation, and the mortgage is not for a business purpose.
The Interest Act provides that if a mortgage agreement does not specify the rate of interest chargeable, the rate allowed by law is 5%.

Answer 53

The Interest Act provides that if a mortgage agreement does not specify the rate of interest chargeable, the rate allowed by law is 5%.

Question 54

The practice of recognizing expenses as they are incurred, rather than when they are paid for, is a
characteristic of:

the cost principle.
the recognition principle.
the matching principle.
the conservation principle.

Answer 54

the matching principle.

Question 55

An option to purchase the mortgaged property given by the mortgagor to the mortgagee at the time that the mortgage is negotiated is:

enforceable if the mortgagor has independent legal advise
void
enforceable in all cases
none of the above

Answer 55

void

Question 56

Which of the following could be used by the defendant as a defence to a claim in negotiation?

The defendant did not intend to cause injury or damage to the plaintiff
The defendant did not know and had never previously met or interacted with the plaintiff
The defendant did not foresee the type of damage that the plaintiff suffered as following in outcome
The defendant did not breach the standard of care owed to the plaintiff

Answer 56

The defendant did not foresee the type of damage that the plaintiff suffered as following in outcome

Question 57

An appraiser has estimated the market value of a single family dwelling to be $410,000. On the day of the appraisal, the house sold for $368,000. Given that there was sufficient evidence of recent sales, was the appraiser’s estimate of value reasonable?

No, the estimate exceeds the maximum allowable error for the appraisal of market value of a residence.
No, the appraiser’s estimate is a subjective “value to owner” and does not represent the market value.
Yes, because appraisers have no maximum allowable error when calculating the market value of a residence.
Yes, it was within the maximum error allowed for appraisers in the calculation of market value of a residence.

Answer 57

No, the estimate exceeds the maximum allowable error for the appraisal of market value of a residence.

Question 58

You have promised to pay your friend $10,000 four years from today. What is the present value of this $10,000, if the effective rate is 6%?

$9,786.00
$7,920.94
$12,624.77
$8,398.93

Answer 58

$7,920.94

Question 59

Andrea Smith has promised to pay her son $20,000 three years from today. What is the present value of the $20,000 if the effective annual interest rate is 10%?

$20,000.00
$15,026.30
$14,834.79
$26,787.24

Answer 59

$15,026.30

Question 60

A company has just bought a truck for $22,500. It is expected that the truck can be sold for $3,000 fifteen years from now. The current market value of the vehicle is $27,000. Using the straight-line method, what is the annual depreciation expense?

$1,300
$1,500
$1,600
$1,800

Answer 60

$1,300

Question 61

An estimate of gross potential rents is achieved by:

comparing all rents for similar space.
comparing rents for recently leased similar space.
projecting future rental increases.
totaling current rents in the subject building.

Answer 61

comparing rents for recently leased similar space.

Question 62

Which of the following statements regarding capital cost allowance (CCA) is FALSE?

Only one-half of the maximum allowable CCA may be claimed on an asset in the year the asset is purchased
No CCA may be claimed in the year of the asset’s disposal
The maximum CCA in a given year is equal to the depreciation expense multiplied by the CCA percentage
The CCA percentage rate is determined by the Canada Revenue Agency

Answer 62

The maximum CCA in a given year is equal to the depreciation expense multiplied by the CCA percentage

Question 63

Which of the following is the best description of the property that has latent value?

A property that possesses the potential for redevelopment
A property that is in its highest and best use
A property for which the highest net return is likely to result from its current use
A warehouse, located in an industrial park, that has high value to the owner

Answer 63

A property that possesses the potential for redevelopment

Question 64

Which of the following is NOT one of the requirements of a building scheme?

The initial purchasers must receive their title from the same vendor, although the initial purchasers may then sell to others without affecting the building scheme
The building scheme must be approved by each of the initial purchasers and then enforced against the titles of each of the lots.
The vendor must have intended that the benefit of the restrictions should bind each individual lot
The vendor must have laid out and sold the property subject to restrictions which apply equally to all the individual lots and which are consistent with some general scheme of development

Answer 64

The building scheme must be approved by each of the initial purchasers and then enforced against the titles of each of the lots.

Question 65

You have been asked to calculate the Net Operating Income (NOI) of Hasselback Tower. The building has an effective gross income of $850,000, estimated monthly expenses of $7,600 and fixed annual expenses of $17,000. What is the NOI?

$825,400
$833,000
$758,800
$741,800

Answer 65

$741,800

Question 66

A real estate developer has borrowed $60,000 by way of an interest accruing loan written at J12 = 18%. How much will he owe at the end of nine months?

$74,400.00
$68,603.40
$68,279.60
$70,800.00

Answer 66

$68,603.40

Question 67

Alomar and Carter Development Co. have recently won the contract to build a new baseball stadium in Kelowna for the Little League World Series. The stadium is to be built over the next three years and will be able to hold over 7,000 fans. The company has received a construction loan in the amount of $2,500,000 written at the rate of 17% per annum, compounded monthly, with a 3 year term, a 25 year amortization period and annual interest only payments. What is the amount of annual interest only payments?

$466,586.30
$459,729.33
$425,000.00
$35,416.67

Answer 67

$459,729.33

Question 68

The loan to value ratio is the ratio of:

the annual payments on the loan divided by the market value of the mortgage.
the actual amount of the mortgage (the amount paid to the borrower net of bonus or brokerage fees) divided by the actual value of the property.
the market value of the mortgage divided by the market value of the property.
the face value of the mortgage loan divided by the lending value of the property.

Answer 68

the face value of the mortgage loan divided by the lending value of the property.

Question 69

Which marketing effort focuses on a relatively small, but active and growing, target market?

Undifferentiated marketing
Differentiated marketing
Specialty marketing
Niche marketing

Answer 69

Niche marketing

Question 70

Two years ago, Mark bought a house at which time he arranged a mortgage in the amount of $520,000. The loan was written at a rate of 4.75%, compounded semi-annually with a 5 year term and 25 year amortization and monthly payments. Mark has just received an offer from Alice to buy his house. Alice offers to provide a $60,000 deposit and to assume the existing financing for the remainder of the term. If the current lending rates for 3 year term mortgages are 5.75% per annum, compounded semi-annually, what is the market value of Alice’s offer?

$532,106.49
$476,068.20
$536,068.20
$544,174.13

Answer 70

$544,174.13

Question 71

Archie and Veronica have recently purchased a new home, partially financed by a mortgage loan. They would like to know the amount by which the principal is reduced during the five year term of their $175,000 mortgage written at J2=14% with a 25 year amortization. Assume the monthly payments are rounded to the next higher dollar and paid when due. The principal reduction is:

$170,000
$168,991.31
$6,008.69
$5,947.62

Answer 71

$5,947.62

Question 72

Which of the following is/are important client management functions?

A. Developing a client list of past, current and prospective clients containing addresses, contact numbers, and other vital information which can be constantly updated

B. Mailing or emailing personalized, individually addressed letters to an individual or group of individuals

C. Varied searching functions allowing customized grouping and targeted marketing

D. Recording client information such as the type of client, motivation, sales history, birthdays, anniversaries, and so on

only A
only A and D
only A, C, and D
all of the above

Answer 72

all of the above

Question 73

An appraiser using the comparative method of the appraisal in estimating a single-family house can use sale prices of the following comparative properties EXCEPT:

Houses in different neighborhoods
Houses recently sold between relative parties
Houses with different square footage
Houses sold over three months ago

Answer 73

Houses recently sold between relative parties

Question 74

You have promised to pay your friend $10,000 four years from today. What is the present value of this $10,000, if the effective rate is 6%?

$9,786.00
$7,920.94
$12,624.77
$8,398.93

Answer 74

$7,920.94

Question 75

A marketing initiative that involves face-to-face communication with a potential consumer is typically referred to as:

telemarketing.
emotional appeal.
brand marketing.
personal selling.

Answer 75

personal selling.

Question 76

Which of the following statements comparing condominiums and cooperatives is FALSE?

Unlike condominium ownership, cooperative ownership does not bestow an individual fee simple title to the cooperative’s owner’s unit
The requirements for disclosure statements may apply to both condominiums and cooperatives
Cooperatives are generally easier to sell than condominiums
Where an existing building is being converted to either condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the BC Residential Tenancy Act

Answer 76

Cooperatives are generally easier to sell than condominiums

Question 77

Audrey and Bart have just purchased the popular Plants-R-Us store in Vancouver. They purchased the business for $122,500 and made a cash down payment for 15% of the purchase price. The rest of the purchase was financed with a loan, calling for monthly payments of $1,022.65 over a 25 year amortization period and term. What effective annual interest rate are Audrey and Bart paying on the loan?

11. 0279838409%
12. 2844774682%
13. 6028260475%
14. 93898216767%

Answer 77

11.6028260475%

Question 78

After an order nisi of foreclosure is granted to a petitioner and the respondent borrower fails to pay the amount due as required by the order, the petitioner may apply for:

1) an order absolute of foreclosure.
2) a judicial sale.
an equitable charging order.
either (1) or (2).

Answer 78

either (1) or (2).

Question 79

Which of the following statements regarding the comparative method of appraisal is TRUE?

The comparative method of appraisal should be used in for a property which possesses latent value
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 were sold at any time prior to the appraisal
The comparative method of appraisal is the most inexact approach for finding market value since cost and market value are not necessarily equal at any particular time
The comparative method reflects market behavior and requires a minimum of subjective opinion from the appraiser

Answer 79

The comparative method reflects market behavior and requires a minimum of subjective opinion from the appraiser

Question 80

In which of the following situations is the residual method of appraisal the most suitable method to use ?

Whether the market supply and demand forces are fairly constant
Where there is a large volume of available market data and the subject property represents the highest and best use
where the value to be measured is market value expressed as an income flow
where the subject property possesses development potential

Answer 80

where the subject property possesses development potential

Question 81

Which of the following correctly outlines the “objective/task” method of creating a promotional budget?

Define the competition, outline competitors’ expenditures, and set tasks to maintain competitive parity with competitors.
Conduct tasks in order to reach a sales objective that is specific, realistic, measurable, and within a predetermined timeline.
Create an objective, analyze costs and benefits, and determine the tasks to reach the objective.
Define the advertising objective as “SMART”, outline the necessary tasks, and estimate the costs of performing the tasks.

Answer 81

Define the advertising objective as “SMART”, outline the necessary tasks, and estimate the costs of performing the tasks.

Question 82

When an Order Absolute of Foreclosure is obtained by a petitioner who is in the position of second
mortgagee:

A. that mortgagee can no longer exercise its right to sue the borrower on his or her personal covenant.
B. the order forecloses the registered owner’s interest in the mortgaged land and permits the petitioner
to transfer title into his or her own name.
C. all other charges, liens, encumbrances and interests registered on the borrower’s title are foreclosed
or “wiped” off the title.
D. the petitioner may sell the property after taking title to it and does not have to account to the
borrower for any profit which might be realized in excess of the mortgage debt.

Which of the above statements is/are TRUE?

Only A and B are true.
Only A, C, and D are true.
Only A, B, and D are true.
All of the above statements are true.

Answer 82

Only A, B, and D are true.

Question 83

A young administrative assistant has applied to her bank for a mortgage loan to enable her to purchase a house. Her income is $35,000 per year. The bank informs her that they will apply a 30% gross debt service ratio when calculating her maximum loan, and that current mortgage rates are 20% per annum, compounded monthly for 20 year term mortgages. Given that annual property taxes are $975.00, and mortgage payments are to be made monthly, what is the maximum mortgage loan the bank will grant?

$51,384.30
$50,308.24
$46,723.48
$45,346.54

Answer 83

$46,723.48

Question 84

What is the nominal rate of interest, compounded semi-annually that is equivalent to 11.5% per annum, compounded monthly?

5. 8895333892%
6. 830625%
7. 7790667784%
8. 233678675%

Answer 84

11.7790667784%

Question 85

Which of the following statements with respect to the doctrine of frustration is TRUE?

Frustration can only occur after the contract is made
If a contract is entered into as the result of a person in a superior position to induce a weaker party to enter a contract which he or she wouldn’t have wanted to be in, the contract would be frustrated
Frustration occurs where both parties to a contract have made a fundamental mistake but each mistake is different
Frustration will apply if the subject matter of the contract is destroyed before or after the contract is made

Answer 85

Frustration can only occur after the contract is made

Question 86

Steve purchased $12,000 in new construction equipment and steel. At the end of their 5 year life they will sell for $1,000. What is the annual depreciation expense using the straight-line method?

$2,400
$2,200
$2,600
$55,000

Answer 86

$2,200

Question 87

Which of the following is meant to keep a product or service at the “top-of-mind” of the consumer?

Informational message
Persuasive message
Appeal message
Reminder-oriented message

Answer 87

Reminder-oriented message

Question 88

You have recently purchased a mortgage contract that will provide you with quarterly payments of $1,700 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. 4992863176%
2. 59971452703%
3. 90681622176%
4. 22670405544%

Answer 88

1.22670405544%

Question 89

Which one of the following is termed functional incurable obsolescence in a building?

worn carpeting
no air conditioning
narrow hallways
poor landscaping

Answer 89

narrow hallways

Question 90

Which of the following statements is true?

As a result of its durability, land is subject to externalities, which are enjoyed or suffered by people other than those who produce them.
The ownership of property can be divided physically, but not legally
Because real property is durable, a structure’s physical life may be longer than its economic life.
Land is indestructible and therefore keeps its economic value forever.

Answer 90

Because real property is durable, a structure’s physical life may be longer than its economic life.

Question 91

The promotional Mix is a blend of:

publicity, sales promotion, public relations, advertising and personal selling
product, price, personal appearance, public relations and sales promotions
product, niche marketing, public relations, pricing and personal marketing
product, price, place and personal appearance

Answer 91

publicity, sales promotion, public relations, advertising and personal selling

Question 92

Max has arranged a loan of $232,000 at an interest rate of 7% per annum, compounded semi-annually. Payments are $1,528 per month. What is the period necessary to amortize the loan?

approximately 30 years
28 years
29.9973 months
approximately 10 years

Answer 92

approximately 30 years

Question 93

Which of the following is NOT a function that can be performed by most database software programs?

Automated phone dialling
Record client information such as birthdays and anniversaries
Create a mail merge, alongside word processing software
Farm new clients from the internet

Answer 93

Farm new clients from the internet

Question 94

The book value of an asset can be best defined as:

the purchase price of that asset less any depreciation taken to date.
the price for which a similar asset could currently be purchased in the market.
the price for which that asset could be sold.
a value which is subjectively arrived at by an appraiser.

Answer 94

the purchase price of that asset less any depreciation taken to date.

Question 95

What will be the purchase price of a mortgage which will provide the purchaser with 60 payments of $950 plus an outstanding balance of $94,374.21 at the end of 60 months if the purchaser of the mortgage requires an effective annual yield of 13%?

$93,611.84
$93,582.37
$92,922.78
$93,655.35

Answer 95

$93,655.35

Question 96

Which of the following is the main reason that interest accruing loans are normally written for short terms?

For long-terms, borrowers generally prefer to make periodic payments.
Total payments decline over the term of an interest accruing loan, so the sooner the loan is refinanced, the higher the potential return to the lender.
The lender’s return and original investment are at risk for the entire term of an interest accruing loan.
The outstanding balance of an interest accruing loan declines over the term of the loan, so it is prudent for the lender to keep the term short.

Answer 96

The lender’s return and original investment are at risk for the entire term of an interest accruing loan.

Question 97

Given that all the other factors are identical, the shorter the term of the contract on a bonused, partially amortized mortgage (where the bonus is paid by the borrower):

the lower the effective rate paid by the borrower
the higher the effective interest rate paid by the borrower
the higher the required monthly payment
the lower the outstanding balance at the terms’ end

Answer 97

the higher the effective interest rate paid by the borrower

Question 98

Real Estate values are influenced by externalities. Which of the following below could be used to determine this principle?

The market suffers a significant drop in world’ oil prices and because of this, the supply of vacant office space increases in the city
It’s being announced that a small residential area has been rezoned for a shopping center and as a result the value of the houses in the nearby residential area will increase
Because of unemployment, real estate prices decline
All of the above

Answer 98

It’s being announced that a small residential area has been rezoned for a shopping center and as a result the value of the houses in the nearby residential area will increase

Question 99

The Personal Information Protection Act (PIPA) regulates the information that is collected and used by all licensees. Which of the following are PIPA privacy principles?

A. Provide recourse

B. Obtain consent

C. Identify the proposal

D. Limit use, disclosure and retention

A and C only
B, C, and D only
A, B, and D only
All of the above

Answer 99

A, B, and D only

Question 100

When an order absolute is obtained by a petitioner who is in the position of a second mortgage:

The petitioner may sell the property after taking title to it and the petitioner does not have to account to the mortgagor for any profit made
The petitioner will be entitled to recover the mortgage debt upon sale of the property but must account to the borrower for any surplus amount
In the case of a shortfall between the sale proceeds and the mortgage debt, the petitioner can sue based on the borrower’s personal covenant to pay
In order to sell the property, the petitioner must obtain the approval of the court

Answer 100

The petitioner may sell the property after taking title to it and the petitioner does not have to account to the mortgagor for any profit made