Q Book: Missed answers Flashcards
Which of the following would be the best method for appraising vacant land?
a. Market data approach
b. Income approach
c. Cost approach
d. Substitution approach
Market data approach
The affidavit of legal value must be signed by:
a. Title officer and loan originator
b. Buyer and seller or their agents
c. County recorder
d. Mortgage broker and the seller
Buyer and seller or their agents
When do the anti-deficiency statutes apply?
a. The property at issue must be a duplex or a single-family residence
b. The real property must be 2.5 acres or less
c. The loan at issue must be a purchase money mortgage
d. All of the above
All of the above
Mary and Jack started a brokerage together. Jack made a mistake that resulted in a lawsuit. One of the two had a large sum of money that had to be used to pay the lawsuit. What type of ownership did Mary and Jack have?
a. Joint Venture
b. Corporation
c. LLC
d. Sole Proprietor
Joint venture
In a judicial foreclosure, which of the following is not true?
a. There is a ‘Power of sale clause’
b. A lawsuit is filed to obtain a court order
c. There is a statutory redemption period
d. The home is auctioned to the highest bidder
There is a “Power of sale clause”
The Central Arizona Water Conservation District (CAWCD) was formed in:
a. 1964
b. 1968
c. 1971
d. 1988
1971
Maggie May just purchased a condominium in Scottsdale Towers from the original purchaser who was allowed a 5 day right of recission. How many days is Maggie allowed to rescind her contract?
a. 5 days
b. 10 days
c. 7 days
d. 0 days
0 days
A buyer purchases an unimproved lot from a developer who will also build a house on the lot within 6 months. How long does the buyer have to rescind the transaction?
a. 6 months
b. 7 calendar days
c. 7 business days
d. No recission
No recission
What legal purpose does recording the deed fulfill?
a. Guarantees title
b. Creates the tax lien
c. Increases the value of the property
d. Gives constructive notice to 3rd parties about the title
Gives constructive notice to 3rd parties about the title
The commissioner will not issue a cease and desist order to a licensee for?
a. Act
b. Practice
c. Transaction
d. Recover fund claim
Recovery fund claim
To be in compliance with Regulation Z (Truth in Lending Act), which of the following statements in advertising would require full disclosure?
a. FHA financing available
b. 10% down payment
c. Low monthly payment
d. Small down payment
10% down payment
The foreclosure sale on a commercial property brought in $50,000 less than what was owed. The lender can?
a. Not get the money back
b. File a deficiency judgment
c. Force the owner into bankruptcy
d. None of the above
File a deficiency judgment
When was the Arizona Fair Housing Act enacted?
a. July, 1991
b. April, 1987
c. October, 1998
d. December, 1986
July, 1991
When the government takes private property without paying any compensation is called?
a. Eminent domain
b. Escheat
c. Taxation
d. Inverse condemnation
Escheat
When entering into a listing contract with a client, the omission of which of the following items could result in the licensee being disciplined by the Department of Real Estate?
a. A specific rate of commission
b. A definite termination clause
c. A broker protection clause
d. A legal description
A definite termination clause
Josephine wanted to purchase a home but was not able to obtain a federally insured loan. The seller agreed to help her with the financing by having Josephine put down a $12,000 deposit and make monthly payments until the loan is paid off. This type of financing is called a
a. term loan
b. agreement for sale
c. take-out loan
d. amortized loan
agreement for sale
To be extinguished by a court action brought by the servient property owner, a prescriptive easement must of been abandoned for at least
a. 5 years
b. 7 years
c. 10 years
d. 20 years
5 years
Two sisters inherit a home from their recently deceased parents. They want the title to reflect that they own the home together, and they want to assure title will pass to the other should one of them die. Which of the following methods of ownership would allow them to accomplish this?
a. Community property
b. Tenancy in common
c. Joint tenancy with right of survivorship
d. Community property with right of survivorship
Joint tenancy with right of survivorship
A real estate licensee must make an agency disclosure to prospective purchasers or tenants:
a. Before they are shown any properties
b. At an open house
c. At the close of escrow
d. Before any purchase offers or leases are prepared
Before any purchase offers of leases are prepared
Addison Woods is a salesperson for Grayson Realty Group and is representing Steve Braxton a home owner looking to sell his home. The type of agency created is:
a. Designated agency
b. DIsclosed dual agency
c. Special agency
d. Exclusive buyer agency
Special agency
Charles has just made the final payment on his home mortgage to the mortgagee. There will still be a lien on the property until the mortgagee records a(n):
a. Deed of reconveyance
b. Satisfaction certificate
c. Alienation of mortgagee
d. Promissory note
Satisfaction certificate
A “friendly foreclosure” enables a mortgagor to prevent the mortgagee from taking the property by statutory means. This can be accomplished by use of a(n)
a. Reconveyance deed
b. Deed in lieu of foreclosure
c. Assumption
d. Escrow deed
Deed in lieu of foreclosure
Who administers the Real Estate Settlement and Procedures Act (RESPA)?
a. Federal Trade Commission
b. Consumer Financial Protection Bureau
c. Office of the US Attorney General
d. Department of Veteran Affairs
Consumer Financial Protection Bureau
A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is called:
a. title insurance policy
b. certificate of title
c. abstract of title
d. chain of title
title insurance policy
The severalty owner of a parcel of land sells it to a buyer. The buyer insists that the owner’s wife join in signing the deed. The purpose of obtaining the wife’s signature is to:
a. satisfy the parole of evidence rule
b. provide evidence that the owner is married
c. defeat any curtesy rights
d. waive any marital or homestead rights
satisfy the parole of evidence rule
When purchasing a commercial property, the buyer places $15,000 in an escrow account, and the offer stipulated the seller was to place $15,000 in an escrow account. If either party breached the contract, the aggrieved party was to receive the $15,000. This is best described as a(n)
a. liquidated damage clause
b. equitable damage clause
c. earnest money clause
d. punitive damage clause
liquidated damage clause
What is the meaning of a non-conforming loan?
a. Borrower is delinquent in payments
b. the loan is secured by personal property rather than real property
c. lacks government guarantee of insurance
d. Does not meet the purchase requirements of Fannie May
Does not meet the purchase requirements of Fannie May
When would employers need to be in compliance with Title 1 of the Americans with Disabilities Act?
a. All employers
b. Those with 3 or more employees
c. Those with 12 or more employees
d. Those with 15 or more employees
Those with 15 or more employees
If the grantor delivers a deed to the grantee in which the name of the grantee has been left out inadvertently, the deed is
a. Void
b. Voidable
c. Valid
d. Forged
Void
Broker Y has a listing, broker K represents the buyer and presents the offer, and notes the home has a sewer. Broker Y knows the home is on a septic system. Broker Y should
a. Advise the buyer to counteroffer with the correction to avoid misrepresentation
b. Advise the seller to accept the offer
c. Advise the buyer to accept the offer and then add a clause in the contract later
d. Advise the seller to reject the offer
Advise the seller to accept the offer
A claim of title can be defeated by adverse possession by the property owner by:
a. permission
b. condemnation
c. will
d. confirmation
permission
When real estate is sold under a contract for deed, possession is usually given to the buyer. The vendee’s interest in the property is:
a. held by the mortgagee until final payment is made
b. held by the seller until the full purchase price is paid in full
c. legal title interest
d. equitable title interest
equitable title interest
What is true about the Federal National Mortgage Association?
a. it participates in the secondary mortgage market
b. it participates in the primary mortgage market
c. it regulates the savings and loan market
d. it lends money to first time home buyers
it participates in the secondary mortgage market
You bought a home for $375,000 which was 20% less than the list price and sold the home for 10% more than the list price. What was your percentage of profit?
a. 25%
b. 38%
c. 42%
d. 52%
purchase price / (100-%) = list price
list price x 1.(%) = sold price
sold - purchase = profit $
profit $ / purchase = % profit
375000/80% = 468750
468750 x 1.10 = 515625
515625-375000 = 140625
140625/375000 = .375
An apartment complex was purchased two years ago for $850,000 and now appraises for $925,000. The net operating income for the year is $65,000. What would the capitalization rate be?
a. 5%
b. 7%
c. 10%
d. 18%
income/value = cap rate 65000/925000 = 0.07
How much annual tax will be paid on a parcel of real estate assessed at $278,000, using an equalization factor of 1.20 and a tax rate of $3.25 per $100 of assessed value?
a. $9035
b. $10,842
c. $12,324
d. $14,383
assessed value x equalization factor / 100 x $$
278,000 x 1.20 = 333600 / 100 = 3336 x 3.25 = 10842
A homeowner borrows $4800 from a lender to install a new air conditioner at 8% interest. When the loan is paid off at the end of 9 months, the total paid will be?
a. $5,088
b. $5,184
c. $6,250
d. $6,875
4800 x .08 = 384 annual interest
384/12 = 32 monthly interest
32 x 9 = 288 total interest paid
4800 + 288 = 5088 total paid with interest
Lance Thomas owner acreage described as the SE1/4 of section 8. He sold half of his property for $6,000 per acre and a quarter of the balance for $5,200 per acre. What was the total sales price?
a. $688,000
b. $584,000
c. $1,064,000
d. $896,000
SE1/4 of section 8 = 160 acres
1/2 is 80 acres x 6000 = 480000
1/4 balance is 20 acres x 5200 = 104000
480000+104000 = 584000
There is a tract of land that is 2.25 acres. The lot is 275 feet deep. How much will the lot sell for at $1,865 per front foot?
a. $512,875
b. $375,000
c. $425,534
d. $664,686
total acreage x 43560 = 98010
98010/275 = 356.40
356.40 x 1865 = 664686
If the capitalization rate on a property is 7% and the income property has 50 units renting for $875 per month, what would the value be if operating expenses are $58,000 per year and the vacancy rate is 5% of the gross income?
a. $62,900.50
b. $6,296,429
c. $629,000
d. $614,000
875 x 50 = 43750 x 12 = 525000 gross income
525000 x .05 = 26250
525000-26250-58000 = 440750 NOI
440750 / .07 = 6296429
Tom and Beth wish to obtain a new loan. Their combined monthly income is $10,000. What monthly P&I payment can they qualify for using the 28/36 qualifying ratios set by Fanny May if they have no other debt?
a. $3,600
b. $2,800
c. $4,800
d. $10,000
- housing payment cannot exceed 28% of gross monthly income
- housing payment plus all other monthly obligations cannot exceed 36% of the borrower’s gross monthly income
10000 x .28 = 2800
Bobby owns an apartment building that contains 14 units. The total monthly rent generated is $5,000 and it represents a 8% return on Bobby’s investment. What was the original cost of the property?
a. $62,500
b. $78,000
c. $750,000
d. $825,000
5000 x 12 = 60000
60000 / 0.08 = 750000
In regards to priority of a lien, which would be paid in second position?
a. Property tax lien
b. HOA lien
c. IRS lien
d. Mortgage lien
Mortgage lien
What does a purchase money mortgage and agreement for sale have in common?
a. Both originate from federally insured banking institutions
b. both types of financing involve seller carry-back financing
c. Both types of financing are used for land transactions only
d. both are prohibited in AZ
Both types of financing involve seller carry-back financing
Jordan purchased a home for $220,000. He took out a 95% conventional loan and would pay 0.78% PMI in which 1/12th of that amount would be due monthly. How much of a PMI payment is due the first of the month?
a. $1,630
b. $171.45
c. $1,850
d. $135.85
220000 x .95 = 209000
209000 x .0078 = 1630.20
1630.20 / 12 = 135.85
Which of the following defects on a property would be considered an environmental concern?
a. A crack in a foundation
b. Crumbling cement on a driveway
c. A home backing up to a commercial building
d. Standing water in a crawl space
Standing water in a crawl space
Who administers AZ’s “Safe Drinking Water Act”?
a. ADEQ
b. ADWQ
c. WQARF
d. CERCLA
ADEQ
The party to a deed of trust that is similar to a borrower in a mortgage is called the
a. trustee
b. beneficiary
c. testator
d. trustor
trustor
Bare and naked title best describes the interest of the
a. vendor in a contract for deed
b. trustee in a deed of trust
c. beneficiary in a deed of trust
d. trustor in a deed of trust
Trustee in a deed of trust
The person hypothecating real estate is
a. giving up possession
b. keeping possession
c. leasing the property
d. subordinating the property
keeping possession
The term usury means
a. taking advantage
b. legal amount of interest
c. illegal amount of interest
d. financing personal property
illegal amount of interest
After the foreclosure sale, a borrower has the right to pay off the debt and retain the property is called
a. equitable right of redemption
b. defeasance right
c. subrogation right
d. statutory right of redemption
statutory right of redemption
The winning bidder in a deed of trust foreclosure sale will receive a
a. trustee’s deed
b. sheriff’s deed
c. treasurer’s deed
d. beneficiary deed
trustee’s deed
A mortgage that covers more than one parcel of property is a
a. package mortgage
b. blanket mortgage
c. carry-back mortgage
d. open-end mortgage
blanket mortgage
Jim receives a mortgage in the amount of $100,000 for 30 years at an interest rate of 6%. If his monthly payments are $575 and credited first to interest, what will the balance be of principal after he makes the first payment?
a. $87,500
b. $94,925
c. $99,925
d. $99,985
100000 x .06 = 6000
6000/12 = 500
575-500 = 75
100000-75 = 99925
Who integrated the Real Estate Settlement and Procedures Act and Truth in Lending Act in November 2013?
a. The National Association of REALTORS
b. Regulation Z
c. The Federal Fair Housing Act
d. The Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau
A lender makes an 80% loan on a house that sells for $265,500 and appraises for $259,000. What is the amount of the loan?
a. $212,000
b. $207,200
c. $350,600
d. $425,400
259000 x .8 = 207200
An example of constructive eviction would be
a. tenant remains in possession after expiration of lease
b. tenant given pay or quit notice from lessor
c. landlord cutting off tenant’s water
d. tenant refuses to pay rent
landlord cutting off tenant’s water
In Arizona, a landlord has how many days to comply with tenants written request for non-emergency issues?
a. 5 days
b. 7 days
c. 10 days
d. 14 days
10 days
A broker who enters into a property management agreement with an owner of a property becomes a
a. receiver
b. trustee
c. lessor
d. fiduciary
fiduciary
Property management agreements are kept for _____ years from their termination
a. 1 year
b. 5 years
c. 7 years
d. 10 years
5 years
Which instrument is used when a property is conveyed by devise?
a. deed
b. will
c. title
d. lease
will
The personal representative that is appointed by the testator is the?
a. executor
b. administrator
c. escrow officer
d. broker
executor
What is the term that is used when a person makes an amendment to a will
a. correction
b. assertion
c. codicil
d. rider
codicil
The following is the protection a person would receive in a standard title insurance policy
a. recorded liens
b. unrecorded liens
c. possession
d. property inspection
recorded liens
The mortgagee would typically require the following type of title insurance policy to protect their interest in the property
a. ALTA
b. lender’s policy
c. owners policy
d. subordination policy
lender’s policy
What did you pay for a property that is worth $287,400 at the end of 4 years if it has appreciated 3% per year?
a. $279,029
b. $330,344
c. $256,607
d. $324,824
4 x 3% = 12%
287400 / 1.12 = 256607
