Texas Real Estate National Flashcards
Hans bought an investment property for $5,250,000. The NOI of this property is $367,500. At what cap rate did he purchase this property?
7%
Joel was told by a lender the highest leverage he could achieve was a loan-to-value ratio of 75%. His loan principal is $315,000. What is the total purchase price?
$420,000
How does errors and omissions insurance (E&O) affect the defendants in fair housing cases?
E&O may not cover any defense for a fair housing violation.
What is novation?
the substitution of one contract for another
An appraisal is required for all:
federally related loan programs
In most cases, broker compensation, as a percentage of home price, falls somewhere between:
5 - 7%
A homeowner sells her primary residential home and realizes a profit of $185,000. How much tax will this homeowner pay on the capital gains?
None. Homeowners are exempt from capital gains up to $250,000 per person every two years.
Liability for others by mandate of law or by express agreement is called:
vicarious liability
There are no exceptions for discrimination based on:
race
An unmarried Texas couple purchased real estate together. How would the deed identify how they hold their interests if they specify they want them passed to the survivor in case of death?
joint tenancy with rights of survivorship
What does it mean when a contract says that time is of the essence?
Parties must perform their contractual duties by a specific date and time in order to avoid a breach of contract.
What is the defining feature of an estate for years?
It has a definite ending period and there is no automatic renewal.
Undivided ownership of an estate, with an interest that is exclusive from other owners is called:
ownership in severalty
A new $350,000 home is being built in a neighborhood of mostly $200,000 homes. Although the home has many updates and is in better condition than the surrounding houses, its value is significantly less than the price.
Which value principle of appraisal explains this?
principle of regression
What type of listing provides a commission to the broker ONLY if their activities bring about a sale?
open
Which of these is an economic characteristic that makes land a distinctive commodity?
situs
Which is an example of a freehold estate?
a couple living in a house they own
Mutual rescission occurs when:
both parties mutually agree to end an agency relationship
A married couple bought a home ten years ago for $400,000. Their neighborhood has rapidly grown in popularity, and they were able to sell their home this year for $950,000. How much of that money will they be required to pay capital gains tax on?
$50,000
Which of these scenarios does NOT violate fair housing law?
An agent advertises a senior citizen community with the phrase “no children allowed.”
How long after an incident does a victim of housing discrimination have to file a complaint with HUD?
one year
Stigmatized properties are properties:
with suppressed market value unrelated to their physical condition or features
A Christian organization owns a fourplex. It wants to rent to only Christian tenants. Under the federal Fair Housing Act, is this legal?
Yes. Religious organizations which rent to tenants for residential purposes are exempt from the Fair Housing Act.
Which of these will most lenders require homeowners to obtain before closing?
homeowners insurance
What happens in the secondary mortgage market?
Mortgage notes made in the primary market are bought and sold.
A bank refuses to issue mortgages to a historically Black part of town. This practice is:
redlining, and it’s illegal
Darleene is looking at an investment property. The annual net operating income (NOI) of the property is $310,000. If the capitalization rate for this class of property in this area is currently 9%, what is the total value of this property?
$3,444,444.44
What type of permission allows an individual property to deviate from a specific provision of a zoning ordinance?
variance
Which federal law amended the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)?
Superfund Amendments and Reauthorization Act (SARA)
The Americans with Disabilities Act applies to:
privately owned or government-owned public accommodations
A property manager’s PRIMARY responsibility to the owner is to:
protect the owner’s investment and maximize the owner’s return on that investment
A buyer representation agreement establishes an agency relationship between a buyer and a:
broker
What is the purpose of RESPA?
educate consumers about closing and settlement services
What happens to trade fixtures after a tenant moves out of a leased property?
The tenant removes their trade fixtures and takes them upon moving out.
The rectangular survey system depends on what?
latitude and longitude
Which law requires a lender to give a buyer an estimate of closing costs?
RESPA
Sabrina accepted Rebecca’s offer to purchase her house, and the closing date is in a few weeks. Until then, what does Rebecca have?
equitable title
An alienation clause would require a borrower to:
pay the mortgage debt in its entirety upon the property being sold
If a buyer makes a 15% down payment and obtains a $120,000 mortgage, what is the sales price of the property?
$141,176
Which part of the mortgage contract requires a borrower to repay the entire debt when the property is sold?
alienation clause
All federally related loan programs require a property to have which of these?
an appraisal
TILA does NOT apply to which of the following kinds of loans?
business loans
Which of these is an easement that is attached to a piece of land, regardless of owner?
easement appurtenant
The EPA requires that a lead-based paint disclosure be presented to buyers of all residential property built prior to:
1978
An example of a voidable contract is a contract that:
is made with one party who is not competent
A metes and bounds legal description always returns to:
the point of beginning
An investor has purchased a one-family home that they plan to rent as an investment. Which of these statements accurately describes how it can be depreciated?
It can be depreciated over 27.5 years.
When there is a breach of contract, the non-breaching party can rescind the contract, forfeit the contract, or:
sue for compensatory damages, specific performance, or both
Which type of listing agreement is most likely to cause a conflict of interest, and is therefor discouraged?
net listing
When a property management agreement is signed, it creates:
a general agency relationship between the owner and the property manager
CERCLA was passed in 1980 to:
establish a Superfund to clean up uncontrolled hazardous waste sites and to respond to spills
When you’re talking about mortgages, what is another name for an origination fee?
points
