Practice Exam 2 Flashcards
The process of creating a subdivision normally involves three distinct stages of development. Which is the final step
The Disposition or Start Up is final stage
When someone dies testate it means they left a valid will. If the deceased left real property to their heirs using a will, what is the term used to describe this?
DEVISE
Tenant Security Deposits
Should the lease end and the tenant vacate the property, the property management company must provide and initial ACCOUNTING of the use of the security deposit within 30 days and a final accounting within 60 days
a property management company may DEPOSIT all monies from all tenants and the various owners they manage into a SINGLE TRUST or ESCROW ACCOUNT
a property manager is required to place all security deposit monies they receive into their trust account in a licensed and insured BANK physically located in NC and NO DEPOSITS into CREDIT UNIONS
A fiduciary duty of a BUYERS AGENT to assist a client in finding suitable housing, negotiating and offer and directing the buyer to a lender would be described as
Skill
Care
Diligence
When a buyers agent acts in the best interests of their buyer client by helping their client pay the lowest price possible for a home, even though the buyers agent will earn less commission, this fiduciary duty is best described as
LOYALTY
Which clause requires the lender to release their interest in the property and give the borrower back their legal title to the property when the LOAN is PD IN FULL?
Defeasance clause
A broker and a buyer agree orally that the firm will represent the buyer as the buyers agent, however its a non exclusive arrangement. By NCREC rule, when must the buyer sign a written buyer agency agreement with the firm if the buyer has found a potential property that they want to see.
No later than PRESENTATION of the OFFER on the property
Which of the following statements is correct regarding street disclosure in NC?
Streets classified as public are always maintained by the DOT
Preliminary plat approval for a sub of land prior to public sale for residential or commercial use is required and this approval must be granted by the proper county agency before recordation
If there are any material changes from the preliminary plat map, a buyer is allowed to cancel any existing contract and receive a refund of all monies
Reconciliation is an appraisal term used to describe
The appraisers analysis and comparison of the results obtained by the various approaches to value in order to obtain a singular vote.
Which of the following is correct regarding the Interstate Land Sales Full Disclosure Act ?
The purchaser of the lot, under this act is given a seven day right of rescission after the sales contract is signed, and in the event of rescission receives a refund of all monies given.
The NC Machinery Act states that when a property is reassessed either every 4 or 8 years, the assessed value by law is the
MARKET VALUE
Two sisters, Alice and Betty, own property as JOINT TENANTS with rights of survivorship. Each has a husband and three children. Alice dies and by will specifies that all real property will be passed to her children. Alice’s executrix probates Alice’s will. Which of the following is correct?
BETTY is the owner in SEVERALTY
In Federal Fair Housing cases which governmental agency will be involved?
HUD
The appraiser wants to know the EXACT TERMS AND CONDITIONS of the sale on a home from which they are attempting to determine value. Which document would be most beneficial to the appraiser?
Contracts of sale
Essential elements of a contract to purchase real property
Earnest Money
Due Diligence Fee
Due Diligence Period
(NOT consideration)
An owner of a property is sued by the local hospital because the owner failed to pay medical bills. According to the Homestead Exemption Act which of the following is true?
If the owner of the property is 65 or older up to 60K in equity of their primary residence is exempt from the hospitals general judgement lawsuit
An individual decides to pay the builder more money for upgraded kitchen cabinets in their new home. The amount which component parts either add or subtract from the value of a property is known as the appraisal principle of
CONTRIBUTION
NC Good Funds Settlement Act requires that no funds be disbursed by the settlement agent until after
RECORDATION
Which type of depreciation is considered INCURABLE?
ECONOMIC OBSOLESCENCE
Which of the following appraisal approaches would require the value of the land to be calculated separately from the value of the improvements?
COST APPROACH
In selecting comparables in a SALES COMPARISON APPROACH how are the adjustments usually made?
The adjustments are made to the comparable properties
In estimating value of a 20 unit apartment complex, an appraiser would most likely use which of the following approaches to value?
INCOME CAPITALIZATION APPROACH
The economic principle which states that the maximum value of an improved property is realized when other properties in the immediate area have compatible and harmonious architecture is called
CONFORMITY
Under the income approach to estimating value of real estate, the capitalization rate is
The rate of return the property will earn as an investment
the theory that a buyer will not pay more for a home if they can buy a reasonable substitution down the road and derive the same benefits as the higher priced home is called
The principle of SUBSTITUTION
The INCOME APPROACH to determining market value involves
a procedure used to estimate the market value of a property based on the amount of net income the property is expected to produce over its remaining economic life.
Market Value is defined as
The most probably price in terms of money that a property should sell for in an open and competitive market
Economic Obsolescence example
Increased traffic in a residential neighborhood
Physical Deterioration example
Building which has suffered depreciation as a result of sagging roof
The trend toward smaller family size and smaller homes is a reflection of which factor that influences property value?
SOCIAL
Negative Amortization
FIXED RATE MORTGAGES
ADJUSTABLE RATE MORTGAGES
Closest in meaning
LENDER and Beneficiary
DEED OF TRUST
Conveys the borrowers legal title to the trustee for security purposes to insure repayment of a lenders loan
Jane Smith is qualified to obtain an FHA loan for the purchase of a new home. From which of the following may she obtain this loan?
An FHA qualified lender
A deficiency judgement
is NOT allowed if a seller and buyer are involved in a PURCHASE MONEY MORTGAGE
LTV
the relationship between the loan amount and the lesser of the sales price or appraised value
usually expressed as a percentage
Interest rate charges by a lender on a fixed rate conventional loan are
almost always SIMPLE INTEREST
A borrower might request and open end mortgage for the following reason
so that he may borrow additional money at a later date
The Good Faith Estimate is required by which federal statute?
Real Estate Settlement Procedures Act (RESPA)
The main purpose of the Truth in Lending Act and Regulation Z is
to give a full disclosure approach to credit terms.
