Real Estate Practice Test Flashcards
In the sale of property, there is often confusion over whether an item is a fixture or personal property. Which is the best way to avoid this confusion?
Specify questionable items of property in the written sales contract.
A legal easement can be created by any of the following EXCEPT
Merger of titles
A property is encumbered by a first mortgage of $60,000 and a second mortgage of $23,500. The property has just been sold at a forecloser auction to a speculating investor for $88,000. Assume that all costs of the foreclosure sale are included in these balances. Which of the following statements is false regarding the distribution of funds?
The second mortgagee receives nothing unless he forced the foreclosure auction.
Real property can be converted to personal property by
Severance.
An owner hired a construction company to build a swimming pool at a new home. The owner failed to pay the bill once the work was completed and the construction company filed a lien to obtain payment of the debt. The encumbrance created is called a
Mechanics lien
A judgement has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given
Constructive notice.
An ESCHEAT occurs when
A property owner dies without heirs or a valid will.
A deed restriction is applicable to the activities of
Present and future owners.
An environmental impact statement typically describes the effects of a proposed project on factors such as
Public health and safety.
An Environmental Impact Statement (EIS)
Projects the impact on the environment of a proposed project.
An appraiser MUST be licensed or certified to handle Federally related work on residential property valuved at more thenn
$250,000.
A formal appraisal will ALWAYS be REQUIRED when the
Lender wants to sell the mortgage to the secondary market.
A competitive market analysis is MOST often used for
Setting a listing price
A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of land, the couple can expect the value of their parcel to increase at some future time. This an example of the principle of
Anticipation (Think of RHPS)
Which rule of thumb formula for estimating property value is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?
GRM (gross rent multiplier)
Depreciation is calculated based on the
Cost of the building ONLY
Which of these federal laws regulate the advertisement of a lenders credit terms (rates, payments)?
Regulation Z
Even if a loans applicants current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicants main source of income is
Commission sales.
The FHA functions MOST like
An insurance company
In helping a buyer to select a lender, if the buyer belieces he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker instead of a mortgage broker for all of the following reasons EXCEPT
More variety of loan programs available
When the sellers are lending part of the purchase price, they may secure the debt with either a deed of trust or a mortgage. For the seller, one benefit of the deed of trust is that -
Foreclosure is usually simpler and faster.
According to the Truth-In-Lending Act, if any “trigger terms” are used in an ad, all of the following disclosures must apppear in the ad EXCEPT the
Prepayment penalties and rebates.
A broker and the buyers he represents are anxiously awaiting the closing on their new home. The closing is scheduled in 4 days. The buyers inform the broker that they just received revised Loan Estimate and Closing Disclosure forms from the lender, indicating the Annual Percentage Rate on their loan has increased by .3%. Based on the TILA-RESPA Integrated Disclosure rule, what action should the broker take in this situation?
Confirm with the seller’s broker, the lender and the closing entity that the closing must be delayed to allow for a new seven day waiting period because of the interest rate revision.
