mock 5 Flashcards
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
$6,008.69
Which of the following would appear as CREDITS on the purchaser’s statement of adjustments?
Assumption of an existing first mortgage, purchaser’s share of paid taxes, real estate commission.
Agreement for sale, deposit paid into brokerage’s trust account, vendor’s share of taxes not yet due.
Legal fees to discharge an existing mortgage, proceeds of new first mortgage, deposit paid into the brokerage’s trust account.
Legal fees for conveyance, legal fees for discharging an existing mortgage, vendor’s share of taxes not yet due.
Agreement for sale, deposit paid into brokerage’s trust account, vendor’s share of taxes not yet due.
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
Houses recently sold between relative parties
A ten story apartment building in New West generates an annual net operating income of $15,000. Subject to a debt coverage ratio of 1.22, the bank is willing to grant the owners of the apartment building a loan at J2 = 10% with quarterly payments, a 15 year amortization period, and an 8 year term.
$95,670
$96,460
$114,550
$71,760
$95,670
As a borrower of mortgage funds, which of the following rates would you choose ?
A. 3.95% per annum, compounded monthly
B. 4.25% per annum, compounded annually
C. 4% per annum, compounded semi-annually
Rate A
Rate B
Rate C
Impossible to determine
Rate A
Which of the following statements regarding the stress test borrower qualification rule for uninsured mortgages is TRUE?
The mortgage qualifying rate is always based on an additional 2% above the mortgage’s negotiated contract rate.
The stress test mortgage qualifying rate is also known as the benchmark interest rate.
The Financial Institutions Commission of BC established the stress test requirements for all new mortgages from federally chartered institutions.
The stress test qualification rules only apply to mortgages from credit unions.
The stress test mortgage qualifying rate is also known as the benchmark interest rate.
Which one of the following statements is FALSE?
In an entirely residential condominium complex, a bylaw must be amended by a ¾ vote of the strata corporation.
If a rule conflicts with a bylaw, the bylaw prevails.
Subject to some exemptions, a bylaw may prohibit the rental of strata lots in the condominium complex.
Assuming the standard bylaws have not been amended, the strata council may pass rules with respect to the safety and cleanliness of individually owned strata lots.
Assuming the standard bylaws have not been amended, the strata council may pass rules with respect to the safety and cleanliness of individually owned strata lots
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.
She may register her judgment in the land title office and apply to the court for a judicial sale of Clive’s property.
Which of the following statements regarding the comparative method of appraisal is TRUE?
The comparative method of appraisal should be used 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
The comparative method reflects market behavior and requires a minimum of subjective opinion from the appraiser
The principle of substitution in the comparative method of appraisal states that:
“market value” equals “value to owner”.
similar properties which have recently sold are comparable.
properties have to be identical in order to be comparable.
the market value of land plus the cost of a newly constructed building equals the market value of a property.
similar properties which have recently sold are comparable.
Which of the following statements made during a recent discussion about ownership is TRUE?
A. A corporation is subject to income tax, unlike a partnership.
B. Only shareholders are entitled to manage a corporation in accordance with the Consumer Protection Act.
C. A corporation whose shares are traded on a stock exchange is referred to as a private company.
D. Individuals who acquire shares in a company do not own the assets of the company.
Only statements A and D are true
Only statements A, B and C are true
Only statements B and D are true.
A, B C and D are true.
Only statements A and D are true
You have a partially completed appraisal report that you need to fill in. The subject property has 4 bedrooms and 5 bathrooms. The house next door is similar in all respects except for the number of bedrooms and bathrooms. It sold for $321,000 and has 3 bedrooms and 4 bathrooms. If the market value of a bedroom is $3,200 and the market value of a bathroom is $5,700, this comparable will have to be adjusted for bedrooms and bathrooms by:
+$3,200 and –$5,700 respectively.
+$3,200 and +$5,700 respectively.
$0 and –$6,400 respectively.
–$3,200 and +$6,400 respectively.
+$3,200 and +$5,700 respectively.
Which of the following statements about the principle of indefeasibility is FALSE?
In British Columbia, there are a number of exceptions to the principle of indefeasibility.
The principle of indefeasibility is inconsistent with the common law doctrine of the void deed.
Legal mortgages, but not equitable mortgages, are guaranteed by the principle of indefeasibility in British Columbia.
The guarantee of title is the key feature of Torrens system.
Legal mortgages, but not equitable mortgages, are guaranteed by the principle of indefeasibility in British Columbia.
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.
It is difficult to find real properties that are very much alike.
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
publicity, sales promotion, public relations, advertising and personal selling
“Reproduction cost” is best defined as:
the current construction cost of a building which would provide the same utility as the subject property.
the current cost of moving the building to a site where the building would represent the highest and best use of that site.
the current cost of constructing an exact replica of the subject property.
the original cost of construction, adjusted for inflation.
the current cost of constructing an exact replica of the subject property.
Which of the following is an offence under the Competition Act?
Failure to disclose a conflict of interest
Charging an excessive rate of interest
Agreements in restraint of trade
Committing mortgage fraud
Agreements in restraint of trade
A borrower has arranged a loan of $285,000 at an interest rate of 5% per annum, compounded semi-annually with payments set as $2,157 per month. What is the period necessary to amortize the loan?
Exactly 191.280574401 years
Exactly 240 months
Approximately 13 years
Approximately 16 years
Approximately 16 years
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
$46,723.48
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
The Business Practices and Consumer Protection Act
A monthly payment is divided in half, and, instead of paying once a month, is paid every two weeks. This way the borrower makes one extra monthly payment per year, thus paying down the principal faster and paying less interest. This is:
Monthly payment
Accelerated bi-weekly payment
Interest only payment
Interest accruing payment
Accelerated bi-weekly payment
Mickey recently entered the real estate market and is in the process of setting up his office. He is currently looking for client management software that can provide functions specifically aimed towards the real estate industry. Which of the following criteria should Mickey consider before choosing real estate client management software for his office?
Software that can maintain client contact history for future reference.
Software that is able to record client information, such as birthdays.
Software that allows for varied searching functions for targeted marketing.
All of the above.
All of the above.
ich of the following statements are FALSE?
A. The BC Supreme Court acts as a trial court only
B. An appeal from Small Claims Court is to the BC Court of Appeal.
C. The Supreme Court of Canada is the highest appellate court in Canada.
D. The BC Supreme Court is the highest trial level court in this province.
Only A and B
Only C and D
Only A and C
Only B and D
Only A and B
Which of the following scenarios would result in he 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 the principal or the agent.
All of the above.
All of the above.
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 then 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.
Because real property is durable, a structure’s physical life may be longer than its economic life.
Which of the following does not result from the doctrine of stare decisis?
Decisions by the Supreme Court of Canada are accorded the most weight in our jurisprudence.
The outcome of the cases can be predicted with absolute certainty.
Former decisions are used as a basis for later decisions.
The common law system has uniformity.
The outcome of the cases can be predicted with absolute certainty.
Which one of the following is FALSE in regards to “credit report”:
Is a record identifying an applicant’s habits regarding their financial commitments.
In order to gain access to an applicant’s credit report, a company must follow the legislation put forth by provincial law
A record evaluates the applicants’ ability to meet the terms of a mortgage
Issues such as bankruptcy will also be reported on applicant’s credit report
A record evaluates the applicants’ ability to meet the terms of a mortgage
Barry plans to pay $400,000 for a vacant lot which he feels will sell at the end of four years for $545,000.00. What yield, expressed as an annual rate with monthly compounding, will the Barry earn? (Assume that these are the only cash flows for this investment
- 6601048852%
- 88447619357%
- 75800136901%
- 03988860568%
7.75800136901%
An offer is released or expires when one or more of the following occurs:
A. The offeror decides to revoke his or her oral offer and mails a written revocation to the offeree before acceptance.
B. No time limit is specified in the offer but a reasonable time has passed without acceptance by the offeree.
C. The offeror dies or becomes insane before the offeree accepts the offer.
D. An offer is revoked be the offeror and the revocation is communicated to the offeree before acceptance.
All of the above statements are true
Only A, B and C are true
Only A and B are true
Only B, C and D are true
Only B, C and D are true
Given the following information, calculate the cash proceeds to Vansessa , the seller from Peter, the buyer
Price: _________________ $200,000
Deposit to brokerage:_______$15,000
Financing:______________ 1st 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 owing of $105.These will be paid by the conveyancer.
Commission:____________5% of the sale price
Adjustment, completion:____August 31st
Conveyancing fees: ________$1,000
Note: assume that is NOT a leap year.
$97,166.00
$96,169.00
$97,169.00
$82,169.00
$97,169.00
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
the need for debt financing
Barb Nelson has made an offer of $165,000 on a home in Vernon, subject to finding suitable financing. The Orchard Credit Union (OCU) has offered to give Barb a loan for 75% of the appraised value of the property, and hires John Johnson to appraise the property. John’s appraisal report states value of the property as $165,000, and based on this information OCU lends Barb $123,750.
Three months later, Barb defaults on the mortgage. The outstanding balance on the mortgage is $123,400. OCU obtains two independent appraisals of the property, both of which indicate that the value of the property was $120,000 at the time of sale. OCU later sells the property for $120,000.
What actions could a, OCU and b, Barbara successfully take against John?
OCU can sue John for breach of contract and Barbra can also sue John for breach of contract.
OCU can sue John for breach of contract and Barbra has no action against John.
OCU can sue John for breach of contract and Barbra can sue John for negligence.
Neither OCU nor Barbra has an action against John.
OCU can sue John for breach of contract and Barbra can sue John for negligence.
Joe Purchaser approaches the owner of a house that is listed at a price of $150,000. Joe offers a cash down payment of $40,000 if the vendor will take back a mortgage for the balance at a rate of J2=10%, to be fully amortized over 25 years with monthly payments. The current market rate is J2=14%. What is the market value of the offer?
$83,819.72
$96,583.72
$123,819.72
$154,299.93
$123,819.72
Long story about guy Nick who dumped some toxic waste to someone backyard and the neighbour saw it. They trace it back to Nick and decided to press charges against him and sue for $20,000 in damages. Which of the following is True?
If plaintiff decides to appeal from small claim court it will go to Court of Appeal
If plaintiff decides to take actions, he has to bring his claim down to $3,000 in order to go to Small Claim Court
Court of Appeal will always rehear all cases
If plaintiff wants to appeal from small claim court he can go to any Supreme Court anywhere in his province
If plaintiff wants to appeal from small claim court he can go to any Supreme Court anywhere in his province
Which of the following is a liability on a financial statement?
Depreciation expense
Accumulated depreciation
Salaries payable
Both 1 and 3
Salaries payable
Section 52 of the Competition Act states that false or misleading advertising in a criminal offence. Which of the following statements are FALSE?
A. Section 52 requires that a representation to the public be false or misleading in any respect.
B. Section 52 covers only those representations made in writing, as oral representations cannot be proven in a court law.
C. To determine weather a given representation is false or misleading, a court is required to assess the general impression conveyed by the representation as well as its literal meaning.
D. The only penalty for those who breach section 52 is fines, which can be several thousands of dollars.
Only C is false
Only A and B are false.
Only A, B and D are false
All of the above are false
Only A, B and D are false
In mortgage lending, the interest adjustment period is:
One period after date on which the first payment is due on.
Any period of twelve consecutive months chosen by a business as a period.
The period o time agreed to by both parties to a real estate transaction to do adjustment of property taxes, rent, interest, and other terms.
The period of time between the date that funds are advanced and the first payment period.
The period of time between the date that funds are advanced and the first payment period.
Which of the following are examples of a legal, non-conforming use?
A. Zeke purchased Owen’s pet store five months after rezoning occurred.
B. Ingmar ran a successful bakery until a fire broke out and burned the building to the ground two years after rezoning occurred. Ingmar just finished rebuilding a new bakery at the same location.
C. Lydia sell tropical plants in her store, which is located in the rezoned area. In response to the growing demand for large tropical plants, Lydia constructed a 200 square foot greenhouse off the back of the store.
D. Amelia is a chiropractor with an office that occupies 50% of a building in the area which was rezoned. Due to the success of her practice, Amelia has expanded her office to occupy 75% of the building.
A and D
B and D
A, B and C
All of the above.
A and D
David Jones is being sued for creating a nuisance. He makes the following arguments:
A. The activity which is involved benefits the public.
B. The damage he has created is trifling and of little consequence.
C. He has not been negligent in carrying out the activity.
D. The activity is authorized by statute and cannot be carried on without creating a nuisance.
Which of the above is a valid defense to the lawsuit?
A, B, C and D
A and D
B and D
A and C
B and D
Martha Stuwart has recently become a limited partner in a limited partnership. It is important for her to know that in a limited partnership:
the general partner has unlimited liability and carries on the business of the partnership.
the income is taxed before it is distributed to the partners.
a limited partner can actively be engaged in managing the business without any consequences to his or her partnership status.
each limited partner is personally liable for all debts that the partnership incurs.
the general partner has unlimited liability and carries on the business of the partnership.
