Practice Exam 1 Flashcards
A property was assessed at 25% of value with a tax rate of $12 per hundred. If the taxes totaled $11,400, what was the value?
$380,000
To arrive at this sum, you would divide the total taxes ($11,400) by the rate per hundred ($12) for a total of 950. Multiply that by $100 (remember, the earlier “rate per hundred”) for a total of $95,000, which is 25% of the value. Divide $95,000 by 25% to obtain 100% value, and get the total value of $380,000.
Sydney Blackwell manages an office building with leases of $60,000 per year. Her management agreement is for 7 years, with fees as follows: 7% the first year; 5% the second and third years; and 3 % the remaining years. What will be Sydney’s total management fee?
$17,400;
Commission for each year, as follows: 7% of $60,000 = $4,200; 5% of $60,000 = $3,000, and that multiplied by 2 years at that rate is $6,000; 3% of $6,000 = $1,800 x 4 (years at that rate) = $7,200. Add these totals to reach the total of $17,400.
Several legal steps must sometimes be taken before a creditor can have his outstanding debt satisfied through the sale of the debtor’s property. Which of the following is NOT one of the steps in the process?
Writ of persecution
The current value of a property is $40,000. The property is assessed at 40% of its current value for real estate tax purposes, with an equalization factor of 1.5 applied to the assessed value. If the tax rate is $4 per $100 of assessed, what is the amount of tax due on the property?
$960
First, take $40,000 x .40 = 16,000 x 1.5 = 24,000, then 24,000/100 = 240. Then, 240 x 4 = $960.
A brokerage was paid a commission of 6% of the first $120,000 of the sale price and 4% of everything over $120,000. What would the sale price be if the total commission was $9,000?
answer: $165,000
The broker’s 6% commission came to $7,200 (.06 x $120,000). Subtracted from the total commission of $9,000, it leaves an additional balance of $1,800. Since that portion was paid at the rate of 4%, dividing $1,800 by .04 yields the home’s second cost component of $45,000. Add that to $120,000 and the home’s total selling price was $165,000.
Real Estate Tower has retail space on the first floor, office space on floors 2-17, and residential units on floors 18-35. Real Estate Tower is
a mixed-use development.
Broker Audrey has a listing agreement with seller Scarlett. One of Audrey’s salespeople commits a license law violation while interacting with Scarlett. Audrey
could be responsible due to vicarious liability.
A point, line, or surface from which elevations are measured is known as the:
datum
applies to elevations while ‘points of beginning deal with surface measurements
A portion of a township in the rectangular survey system, which is a square with mile-long sides, is called a:
section
A 3-year straight note was obtained at 10% per year. Interest paid the first two years was $42,000. The loan on the house was 75% of the value. What was the total value of the property?
$280,000
If two years’ interest payments equal $42,000, then one year’s equals $21,000. At 10%, that means the principal balance is $210,000. Additionally, since the loan is for 75% of the home value, divide $210,000 by 0.75 for a total value of $280,000. Universal Statement: From here on out, the T should be used wherever possible.
A lease that goes from month to month is known as
an estate from period to period.
The major intent of zoning regulations is to
ensure the health, safety and welfare of the community.
Which of the following items would MOST likely be enforced by the forced sale of a property?
Judgment
A straight note for $13,400 was executed at 8% annual interest. If the borrower actually paid $3,752 in interest, how many months did he take to pay it off?
42
Kate and Bill secured a loan with a 75% loan-to-value ratio. The interest rate was 7.125% and the term was for 30 years. The first month’s interest payment was $477.82. What was the appraised value of the property?
$107,300
We know that the first month’s interest payment was $477.82, therefore, we can calculate the Annual interest multiplying this first month’s interest payment by 12:
Dividing it by the interest rate (Remember that ), we get:
Finally, since Kate and Bill secured a loan with a 75% loan-to-value ratio, we get:
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The tax rate in Manatee County is 35 mills. How much is this for every $1,000 of assessed value?
$35
Find the capitalization rate on a building that is worth $430,000, and rents for $1,500 a month.
4.19%
A trust deed gives the lender a right to request that the trustee perform certain tasks in order to fulfill the terms of the trust. The trustee may take action in those circumstances because he holds
A) naked title.
Since the trustee in this case is acting on behalf of the true owner of a property, he holds a “naked title,” meaning a title without the usual rights of ownership.
If a house was sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,500, how much money would the buyer pay in discount points if the lender charged four points?
$1540
$38500 x .01 = 385
385 x 4 = $1540
The seller under a land contract is also known as:
the vendor
When a listing on a residential property is signed, which type of agency relationship is usually created?
Special agency
What is the principal federal statute that covers competition and is one of the most important pieces of antitrust legislation?
The Sherman Antitrust Act of 1890
Redlining deals with the conduct of
lending institutions.
If the mortgage loan is 80% of the appraised value of a house, and the interest rate of 8% amounts to $460 interest for the first month, then what is the appraised value of the house?
$86,250
First, you need to figure out the annual interest. $460 x 12 = $5,520 total yearly interest. Now take $5,520/.08 (interest rate) = $69,000 loan. Next, divide $69,000 by 80% for the appraised value of $86,250.
Property owner Olivia does not like how much she pays in property taxes. What may she object to (and have a chance of winning)?
The assessed value of her property
Earnest money is provided when
the offer to purchase real estate is made.
A claim or interest revealed by a title search is called a
cloud on title
Typically a listing broker is usually considered to be
a fiduciary (agent) of the seller.
If a borrower must pay $6,000 for points on a $150,000 loan, how many points is the lender charging for this loan?
4
150000 x .01 = 1500
6000/1500 = 4
Farmer Donald is selling two parcels of land together. One of the parcels is one square mile and the other parcel is five acres. The sale price is $2,100 per acre. What is the total sale price of the property Donald is selling?
1 mile = 640 acres
640 + 5 = 645 acres
645 x 2100 = $1,354,500
A person who dies without leaving a will is known as having died:
intestate
Buyer Vaughn is applying for an FHA mortgage on a house priced at $108,000. The maximum loan-to-value ratio is 97.75. What is the minimum down payment?
$2430
108000 x .9775 = 105570
108000 - 105570 = 2430
A section
is one mile square.
The system established in 1785 by the U.S. government, which describes land with principal meridians and base lines, is called:
rectangular survey system
A lending institution will allow its borrowers to spend 28% of their income for housing expense. What will be the maximum monthly payment allowed for a family with an annual income of $57,000, and no other debts?
$1330
To find out the family’s monthly income, divide $57,000 by 12, which equals $4,750 monthly income. Take $4,750 x .28 (the amount allowed by the lending institution) = $1,330 is the permissible mortgage payment.
Mr. Smith’s $85,000 condominium is assessed at 35% of value. The tax rate is $2.70 per $100 of value. If the tax increases $.35 per $100 of value, his new tax will be:
$907.38
An owner of a 12-unit apartment building lived in one of the apartments. The owner refused to rent to a person because of his national origin. Based on Federal Fair Housing Laws, does the prospective tenant have a valid complaint?
Yes, because it was a 12-unit apartment building.
**Although some provisions are made regarding owner-occupied buildings of 4 units or less, a 12-unit apartment building is subject to all the rules and regulations of the Federal Fair Housing laws.
Broker Conrad represents a party in a transaction where there is a dispute regarding $4,000 of deposited escrow money. What should Conrad do?
Hold the money until both parties (or their lawyers) provide a written release.
Property over which an easement runs in favor of another parcel of real estate is known as a
servient tenement.
A loan company was referring loan applicants to a particular insurance company, which in turn paid the loan company a referral fee. This is
illegal, since the Real Estate Settlement Procedures Act prohibits kickbacks.
A house sold for $350,000. The buyer made a 20% down payment. Monthly interest on the loan was $1,400. What was the interest rate on the loan?
6%
20% down means the buyer would be carrying a $280,000 mortgage. With a monthly payment of $1,400, the annual amount of interest paid is $16,800… which is 6% of the principal and a 6% rate.
Spence Construction Company built a hangar for a helicopter, which was kept on the owner’s property. The owner did not pay for the hangar, so Spence filed a mechanic’s lien on the helicopter. Was Spence Construction Company justified in doing this?
No, because a mechanic’s lien can only be placed on the improvement.
If Inga Ingerton’s property, valued at $35,000, is assessed at 40% of its value, and the mill levy is 83, then what is Inga’s annual tax on this property?
$1162
An action taken by a creditor in which the court simply retains custody of the property while a lawsuit is being decided is known as:
a writ of attachment
**Remember, a writ of attachment is an action taken by a creditor in which the court simply retains custody of the property while a lawsuit is being decided. This is easily confused with a writ of execution, which authorizes the sale of the property. Remember that both constructive and actual evictions deal with LEASED, not owned properties
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Madison Davidson negotiated for a $30,000 loan with $200 monthly payments, plus 9 percent interest. In this case, what is the monthly interest in the first month?
$225
First, you take $30,000 and multiply it by 9% for the total annual interest paid, or $2,700. Divide that by 12 (months) for a total of $225 per month interest payment. If this is a fully amortized loan, the ratio of principal and interest will change every month, with the interest declining and principal increasing.
If Inga Ingerton’s property, valued at $35,000, is assessed at 40% of its value, and the mill levy is 83, then what is Inga’s annual tax on this property?
$1162
Remember, with this type of problem, you take the value of the property ($35,000) multiplied by the percentage taxed (40%) for the assessed value ($14,000), and then multiply THAT number by the mill levy (in this case, .083), for the total of annual taxes, which is $1,162.
Madison Davidson negotiated for a $30,000 loan with $200 monthly payments, plus 9 percent interest. In this case, what is the monthly interest in the first month?
$225
First, you take $30,000 and multiply it by 9% for the total annual interest paid, or $2,700. Divide that by 12 (months) for a total of $225 per month interest payment. If this is a fully amortized loan, the ratio of principal and interest will change every month, with the interest declining and principal increasing.
