mock 5 Flashcards by Edward Powell

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

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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.

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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

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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

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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

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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.

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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

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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.

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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

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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.

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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

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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.

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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.

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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.

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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

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“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.

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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

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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

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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

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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

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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

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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.

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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

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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.

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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 11. 6601048852% 7. 88447619357% 7. 75800136901% 8. 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.

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 term’s end

the higher the effective interest rate paid by the borrower

The purpose of a code of ethics is to: A) provide guidelines to ensure that human actions are morally fair as well as lawful. B) replace the rigidity of the legal system for professionals. C) provide a remedy through the courts to people who have been wronged by a professional. D) maintain the reputation of the profession in the eyes of the public. A and D only. A and B only. B and C only. All of the above.

A and D only.

Which of the following statements are FALSE in regards to Trespass? A trespasser’s actions must be intentional. A trespasser’s actions cannot be indirect A trespasser’s actions do not have to result damage A trespasser’s actions must occur repeatedly

A trespasser’s actions must occur repeatedly

You are trying to calculate the market value of an income-producing property . In order to determine the market value, however, you must find the yield of several comparable properties and determine a market capitalization rate. The following information is for the recent sale of a similar income-producing property: Selling Price_________________$864,000 Gross Potential Revenue ________$100,000 per annum Operation Expenses____________$22,750 per annum Market Vacancy Rate___________4% What is the yield on the sale of the comparable property? 8. 11722% 8. 47801% 9. 98964% 8. 94097%

8.47801%

Doug, an appraiser, is valuing a single family housing unit using the market comparison method. A house recently sold for $245,000, comprised of a cash down payment of $99,000 and a vendor supplied mortgage loan of $146,000 at 3.5% per annum, compounded semi-annually. The loan has an amortization period of 20 years, a term of 5 years and calls for monthly payments. Market rates of interest for equivalent mortgages are currently 4.75% per annum, compounded semi-annually. What price should Doug use if he wishes to use this sale as comparable? $138,710.56 $237,710.56 $140,131.72 $239,131.72

$237,710.56

A borrower approaches Ripley Finance Company about a mortgage on an income-producing property. The property produces an annual net operating income of $112,500. The lending value of the property is $880,000. Ripley will only lend to a maximum of 75% loan-to-value ratio, and requires a minimum debt coverage ratio of 1.125. Ripley’s terms are: J2 = 12%, a term and amortization period of 15 years, and monthly payments. Given these constraints, calculate the maximum allowable loan (rounded to the nearest dollar): $624,912 $660,000 $976,426 $634,728

$660,000

Which of the following statements is/are TRUE? A. On the completion date of the sale of real property, the purchaser is usually entitled to the transfer of title. B. The total of the debit column on the vendor’s statement must be identical to the total of the credit column on the purchaser’s statement. C. The practice is to hold the vendor responsible for the taxes on the adjustment date itself. D. The adjustment date and the possession date must be the same day. All of the above statements are true. Only A and B are true. Only A is true. None of the above statements are true.

Only A is true.

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 areas Divisibility of ownership, both physically and legally Durability of real estate property Immobility of real estate property

Immobility of real estate property

Replacement reserve (allowance) is: the amount of funds set aside for periodic replacement of building components that wear out more rapidly that the building itself and must be replaced during the building’s economic life

the amount of funds set aside for periodic replacement of building components that wear out more rapidly that the building itself and must be replaced during the building’s economic life

Which of the following statements regarding mortgages is TRUE? An acceleration clause allows the lender to accelerate the expiry of the term of the mortgage and demand repayment of the entire loan amount, provided that the borrower is given three months’ notice. Upon the execution of the mortgage contract, the lender is required to advance the total amount of the mortgage immediately, regardless of the terms of the mortgage. Under the Property Law Act, a lender cannot require the borrower to obtain the advance consent of the lender before making any alterations or improvements of the property. The mortgage contract, in addition to the common law, provides the lender with a number of options and remedies to pursue when the borrower defaults on the mortgage. It is up to the lender to choose the remedy it feels is most advantageous on the circumstances.

The mortgage contract, in addition to the common law, provides the lender with a number of options and remedies to pursue when the borrower defaults on the mortgage. It is up to the lender to choose the remedy it feels is most advantageous on the circumstances

Which of the following items are found in a house and considered to be chattels. A. New laminated flooring in the downstairs rooms and hallways: B. A fridge in the garage C. Wood for the fireplace D. A rose bush in the front of the house A and C only B and C only B and D only C and D only

B and C only

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

$93,655.35

When a contract is executed under seal, the seal: constitutes a written acceptance. takes the place of the signature of the offeror and offeree. stands in the place of consideration. represents intention.

stands in the place of consideration.

Two identical houses located next to one another in the same neighbourhood sell within one week of each other. Ms. Brown sells hers for $112,000, while Mr. Fisher is only able to sell his for $100,000. Which of the following could account for the difference in selling price? The listing brokerage representing Ms. Brown spent an extraordinary amount of money on advertising her property. Mr. Fisher supplied a vendor take-back mortgage at 9% while the current market rates were 12%. Ms. Brown was promoted to a new position in Edmonton and her expertise was required immediately. All of the above factors could account for the difference in selling price.

The listing brokerage representing Ms. Brown spent an extraordinary amount of money on advertising her property.

Which of the following documents regulated by the land title office is 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

A Freehold Transfer

The “ blend and extend” refinancing option: involves renegotiating a first mortgage with the lender and making prepayment penalties requires one to obtain a second mortgage with a higher interest rate is illegal and not available in Canada typically allows a borrower to take advantage of a low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties

typically allows a borrower to take advantage of a low interest rate on their current mortgage funds as well as additional funds, while avoiding costly prepayment penalties

The immobility of real property means that land is subject to external influences from the neighboring properties known as: externalities latent influencing factors immobilities. extrinsic factors

externalities

Which if the following criteria are used by negotiation experts in determining the effectiveness of negotiations? Efficiency, preservation of the relationship, a zero-sum game Distributive results, preservation of the relationship, minimal wasted resources False authority, efficiency, a zero-sum game Efficiency, satisfaction of both parties, minimum wasted resources

Efficiency, satisfaction of both parties, minimum wasted resources

Scrambling credit card information into an unreadable format is best known as: cryptomizing. digitizing. encrypting. instilling.

encrypting.

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

$1,300

Larry and Theresa orally agree that Theresa will lease 10 acres of farmland owned by Larry for 5 years. As part of the agreement, Larry agrees to build a barn which he does at a cost, to him, of $10,000. Which one of the following statements is true? The lease agreement is not enforceable by Larry because it is neither in writing nor signed by Theresa as is required by section 59 of the Law and Equity Act. Section 59 of the Law and Equity Act does not apply to lease agreements. The lease agreement may be enforceable by Larry because he has altered his position by spending $10,000 on a new barn in reliance on the lease. The lease agreement is void because it is not in writing.

The lease agreement may be enforceable by Larry because he has altered his position by spending $10,000 on a new barn in reliance on the lease.

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 3) Set your expectations low Both (1) and (2)

Both (1) and (2)

When the payments will gradually increase over time: Reverse Annuity Mortgage Straight line principal reduction mortgage Graduated mortgage Variable Rate mortgage

Graduated mortgage

You have come across a property that possesses latent value. What method of appraisal would be most appropriate to appraise the subject property? The cost method The comparison method The income method The residual method

The residual method

A life tenancy created in a will grants to the life tenant the right to use and occupy a piece of property during the life tenant’s life, “without impeachment for waste”. Upon the death of the life tenant, the remainderman is entitled to the property. If the life tenant wants to deliberately damage the property in order to ensure the remainderman will have little or nothing of value to inherit upon the life tenant’s death, which additional phrase must the will contain in order to protect the life tenant from liability for waste? Without impeachment for waste, including permissive waste Without impeachment for waste, including ameliorating waste Without impeachment for waste, including equitable waste Without impeachment for waste, including voluntary waste

Without impeachment for waste, including equitable waste

Which of the following might be the subject of a real property appraisal? air space rights a life insurance policy a diamond all of the above

air space rights

When a judge “distinguishes” a case on its facts, this means: the judge decides that facts crucial to a former decision are not present in the case at hand, and does not follow the former decision. the judge formally reports the case before him or her because it is a crucial decision. the judge follows a former decision because the same facts exist in the case which is being decided. None of the above.

the judge decides that facts crucial to a former decision are not present in the case at hand, and does not follow the former decision.

If a negotiator has 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

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

Whenever the amount advanced to a borrower is less that the face value of the mortgage, the loan is referred to as a: Bonused mortgage Vendor take back mortgage Assumed mortgage Graduated mortgage

Bonused mortgage

Which of the following acts would engage a category of law that is considered “public law”? Breaching a warranty in a contract Negligence Evading taxes Filing for divorce

Evading taxes

The consumer price index is a good method to adjust sales prices to the level of values prevailing as of the date of appraisal: where the comparable sales are deemed to be not recent. where there are inadequate numbers of comparable sales within a particular neighbourhood. where the cost method of appraisal is deemed to be inappropriate. under no circumstances.

under no circumstances.

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

approximately 2 years

Given the following information, calculate the purchaser’s balance due to complete: Price: $225,000 Deposit: $ 20,000 to Brokerage Financing: 1st mortgage of $80,000 to be assumed 2nd mortgage $44,000 to be arranged by purchaser. Taxes: Not paid, not due in amount of $1,600 Legal Fees: $700 Adjustment, Completion and Possession Dates: May 31st Note: It is not a leap year. $81,038.08 $92,288.08 $80,342.47 $83,542.47

$83,542.47

Jordan is a fee simple owner of a large rural property in BC. He is considering one of the following actions: A. Suing a pilot for trespass after he harmlessly flies his small plane over Jordan’s property B. Building a dam in the bed of a large river that flows through his property C. Draining part of the lake that borders his property D. Extracting and selling coal found under his property For which activities, if any, does Jordan legally have the right to perform? Only A Only B and C Only C and D Jordan may not legally perform any of the listed activities

Jordan may not legally perform any of the listed activities

The current interest right now at the banks is 5% per annum, compounded semi annually. What is the monthly periodic rate? 0. 4166 % 0. 4218 % 4. 9486 % 0. 4123 %

0.4123 %

As defined by the promotional mix, which of the following represents face-to-case communication with a potential customer? Personal selling Public relations Sale promotion Publicity

Personal selling

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.

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

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 $14,830.79 $26,787.24

$15,026.30

You have a partially completed appraisal report that you need to fill in. The 2,400 square foot subject property has 4 bedrooms. The house next door is similar in all respects except for the number of bedrooms and square footage. The 2,500 square foot comparable sold for $225,800 and has 3 bedrooms. If the market value of a bedroom is $3,200 and above an 1,800 sq. ft. benchmark, each 100 sq. ft. is worth $6,000, it can be concluded that the adjusted sale price of this comparable is: $228,600 $216,600 $223,000 $235,000

$223,000

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 a 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 the 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

Deposit, assumption of the first mortgage, real estate commission

In using the cost method of appraisal, the MAJOR difficulty is experienced in calculating: Incurable physical depreciation Curable functional depreciation Curable physical depreciation Replacement cost of the building as new.

Incurable physical depreciation

Which of the following statements comparing cooperatives and condominiums is TRUE? Both condominiums and cooperatives are created by filing a plan in the land title office. Both condominiums and cooperatives must provide each buyer with a disclosure statement. Buyers of coops will generally find it easier to finance their purchase than will buyers of cooperatives. Both owners of condominiums and owners of cooperatives are equally free to sell their units to whomever they wish.

Both condominiums and cooperatives must provide each buyer with a disclosure statement.

Which of the following statements comparing condominiums and cooperatives is TRUE? Cooperatives are generally easier to sell than condominiums. The requirement for a disclosure statement may apply to condominiums and but not to cooperatives. Purchasers of both condominiums and cooperatives acquire ownership of a fee simple interest in land. Where an existing building is being converted to either a condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the B.C. Residential Tenancy Act.

Where an existing building is being converted to either a condominium or a non-profit cooperative, the existing tenants are covered by the protections afforded by the B.C. Residential Tenancy Act.

Which of the following best describes the “strata corporation”? once the strata plan has been deposited at the land title office, the individual strata owners collectively a body of three to seven elected representatives from among the owners of the strata lots a corporation formed by a group of individuals who possess an undivided joint ownership interest in the land and/or buildings a group of professional managers hired by a condominium project to handle the matters affecting the security and maintenance of the common property, facilities and assets of the condominiums

once the strata plan has been deposited at the land title office, the individual strata owners collectively

You have a partially completed appraisal report that you need to fill in. The subject property has 4 bedrooms and 4 bathrooms. The house next door is similar in all respects except for the number of bedrooms and bathrooms. It sold for $225,500 and has 3 bedrooms and 3 bathrooms. If the market value of a bedroom is $4,000 and the market value of a bathroom is $5,700, this comparable will have to be adjusted for bedrooms and bathrooms by: -$4,000 and -$5,700 respectively. +$6,400 and +$5,700 respectively. +$4,000 and +$5,700 respectively. +$5,700 and +$4,000 respectively.

+$4,000 and +$5,700 respectively.

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

Frustration can only occur after the contract is made

To obtain a mortgage broker licence in BC, a person must meet which of the following requirements: must have experience in BC must be of good reputation must submit financial statements must meet the requirements for a managing broker’s licence.

must be of good reputation

Under the Environmental Management Act, a mortgage lender may be liable for the remediation of a contaminated site if the lender: participates only in purely financial matters related to the site. insists on environmental conditions within a security agreement. becomes the registered owner of the site. appoints a person to inspect a contaminated site to determine future actions to take.

becomes the registered owner of the site.

In which of the following situations would Ling NOT have committed a trespass to land? a. Thinking she is on her own farm, Ling walks across Peter’s farm by mistake. b. To cut down on travel time, Ling walks across Jed’s farm deliberately. c. Tripping over a rake bounced from a passing vehicle, Ling angrily throws it onto Alex’s property. d. Selling eggs door to door, Ling walks onto Scott’s property to reach the front door. only c only d only a and d only a, b and c

only d

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

$68,603.40

In a mortgage contract, the promise made by a borrower to pay instalments of interest and principal to be added

to be added

Which of the following methods of determining a promotional budget is the most difficult to apply? Incremental Analysis Follow-the-leader Percentage of sale Combined Target Strategy

Follow-the-leader

Who owns a common property of a strata corporation? Each strata lot owner owns a proportionate share of the common property based on his unit entitlement. The strata council, whose responsibility is to manage the common property in the best interests of the strata lot owners. Each strata lot owner owns an equal share of the common property. The strata manager, as a trustee for the individual strata lot owners.

Each strata lot owner owns a proportionate share of the common property based on his unit entitlement.

An arrangement where a lender makes payments to a borrower over the term of the mortgage which is paid back at the end of the term is referred to as: an interim blanket mortgage. a vendor take-back mortgage. bridge financing. a reverse annuity mortgage.

a reverse annuity mortgage.

One Sunday, Alan and Kevin entered into an oral contract whereby Alan agreed to buy Kevin’s red Volkswagen van. Unfortunately, Kevin has two red Volkswagen vans. While Alan thought he was purchasing Kevin’s 1990 van, Kevin intended to sell his 1975 van. Neither realized he other’s mistake until the completion date. Which of the following statements is true? The contract is void because their misunderstanding is a common mistake. Because the contract was made on Sunday, it is an illegal contract and thus is void. The contract is void because their misunderstanding is a mutual mistake. The contract is unenforceable because it is not in writing.

The contract is void because their misunderstanding is a mutual mistake.

Depreciation expense is: another name for capital cost allowance. a deductible expense in computing income for the purposes of income taxation. usually calculated on land by the straight-line method. none of the above.

none of the above.

The Anchoring effect: Should be avoided at all times in negotiations Is a useful tool for encouraging movement away from stated price Is a psychological phenomenon whereby negotiators make insufficient adjustments away from a stated number Is an objective standard that is agreed upon by both parties

Is a psychological phenomenon whereby negotiators make insufficient adjustments away from a stated number

Ray Allen is considering a purchasing a property for two million dollars. He would like to finance the purchase with an interest only loan of $1,800,000, written at a contract rate of 7% per annum, compounded quarterly. If the term of the loan is ten years and payments are to be made at the end of each month, what will be the size of Ray’s second payment be? $11,195.78 $8,000.00 $10,439.34 $11,599.27

$10,439.34

Lara, Patrick’s agent, has an express authority to enter into a contract with Tom on Patrick’s behalf. However, since Lara did not disclose to Tom that she is was acting as an agent for Patrick: No contract can exist because there is no disclosure. Only Lara may sue Tom to enforce the contract. Patrick may sue Lara to enforce the contract. Tom may sue either Lara or Patrick to enforce the contract.

Tom may sue either Lara or Patrick to enforce the contract.

Which of the following lenders are NOT impacted by the stress test borrower qualification rule for uninsured mortgages implemented in January 2018? Trust companies Chartered banks Credit Unions Federally regulated financial institutions

Credit Unions