Real Estate Express AL FInal Exam Questions With Verified Answers

that the contract is null and void. - Answer The end result of rescinding the contract is If a contractor is planning to build a new apartment complex, he or she needs to consult the _______ to avoid any potential fines by the United States Attorney General. - Answer Americans with Disabilities Act Standards What is true regarding the platform-frame construction method? - Answer It is the type of construction most generally used in home building. What type of agent has power of attorney? - Answer A universal agent An agent's duties to a principal include which of the following? - Answer Disclosure or notice Licensee Finn reported to the lender that the sales price was $5,000 higher than it actually was as the buyer requested him to. This is an example of - Answer intentional fraud. Does a seller have the option to reject subagency when signing the listing agreement? - Answer : Yes, the seller can choose to reject or accept subagency In most states, a licensee must provide a(n) _______ of any existing agency relationships to all parties _________ to whom they provide real estate brokerage services. - Answer written disclosure, at first substantive contact Which of the following is a common type of agency relationship? - Answer : Buyer/Tenant agency Licensee Chad works for broker Michael. Licensee Chad has a listing agreement with seller Ray. Licensee Chad decided to transfer brokers. What will most likely happen with Chad's listing? - Answer It will stay with Michael's brokerage. In a(n) _____, an owner sets a minimum amount that he wants to receive from the sale of the property and lets the broker have as commission any amount above the set minimum. - Answer net listing Both the agent and seller just signed the listing agreement. What must the licensee give to the seller now? - Answer A copy of the signed listing agreement Carson had partial ownership of a property. He sold his ownership share for $40,000 after receiving permission from the other owners before the closing. Carson was a - Answer Carson was a joint tenant. Albert had the legal authority to sign the $128,000 sales contract for a property held in trust. Albert is - Answer the executor of the estate There is no time limit on tenant Trent's lease. What type of lease has he entered? - Answer An estate at will Lamar sells another broker's $800,000 listing for $785,000 at a commission rate of 6.5%. Lamar has a 40% commission split with his broker. If there is also a 50% brokerage split, what commission will Lamar receive? - Answer $10,205 Salesperson Jonathon joins a brokerage as an independent contractor. Which of the following will he probably have to pay for on his own? - Answer Self-employment tax Which of the following is typically a licensee's duty to the brokerage? - Answer Work to promote and sell the broker's listings Insurance policies are called _______ because the insurer only performs the promised action if a specified chance event occurs. - Answer aleatory contracts A conveyance instrument for a property that is sold to enforce a tax lien is a - Answer tax deed. Which of the following properties would most likely be exempted from real estate taxes? - Answer A building owned by the Department of Transportation Tax assessors cannot do "spot" reassessments of properties unless - Answer a material change in the property has been reported. Before someone can move into a new home, a building inspector must see if the structure complies with building codes. If the home does, the municipality or county will issue a - Answer certificate of occupancy. In a neighborhood, there is a transition zone between residential zone and a commercial zone. This transition zone also often called a - Answer buffer zone. Which document guarantees a person's right to own land in the United States? - Answer The U.S. Constitution What happens under the strict foreclosure process? - Answer The lender files suit asking a court to order the borrower to pay the mortgage debt by a certain date or the lender will automatically gain full title to the property A foreclosure sale generated $500,000. What is the first item to be paid out of this amount? - Answer The costs of sale including advertising, attorney fees, and trustee fees Which of the following is one of the means of enforcing a lien against real estate? - Answer Powers granted in the loan document Seller Gareth is certain there are no clouds on his property's title. What type of deed should he provide buyers to show his assurance of title? - Answer General warranty Title records protect the public by giving all concerned parties ________ of the condition of a property's legal title - Answer constructive notice Which of the following is an example of an involuntary lien? - Answer A judgment lien Terrell is hosting a one-time sporting event on his property. Every person who buys a ticket has essentially - Answer bought a license that allows them to be on Terrell's property during the sporting event. How is a testamentary trust different from a living trust? - Answer A testamentary trust only takes effect when the trustor dies. Upon the death of a joint tenant, the tenant's interest in the estate - Answer passes to the surviving joint tenants Which of the following rights is included in a fee simple absolute estate? - Answer Right to grant an easement Which of the following statements about eminent domain is false? - Answer It can only be applied in cases where the owner agrees with the government's superior claim What terms are included in every metes and bounds legal description? - Answer Distances, angles, and reference points There are ____ sections in a township and each section is ______. - Answer 36, one square mile What would qualify as real property? - Answer Attached fences The set of rights enjoyed by the owner of a property are commonly referred to as the... - Answer bundle of rights. Salesperson Rashad is writing an advertisement for one of his broker's listings. Which of the following phrases should he avoid? - Answer Baptist subdivision Which of the following best describes title insurance? - Answer Protection to an owner of property against losses sustained as a result of a defective title to real estate Which of the following is not a major warehousing agency in the secondary mortgage market? - Answer Robbie Mac The Real Estate Settlement Procedures Act (RESPA) - Answer prohibits lenders from taking kickbacks or unearned fees. There are a number of specific steps in the appraisal process. What is the final step? - Answer To reconcile the values derived from the three valuation approaches The Davidsons built a new porch on their property. The porch added $2,000 to the property's market value. This is an example of the ________ principle of value. - Answer contribution A retail property valued at $710,000 earns $4,650 per month. What is the annual percent of return? - Answer 7.9% An income property generates $9,200 per month, and is valued at $985,000. What is its gross rent multiplier? - Answer 107 What type of zoning requires that new buildings conform to specific types of architecture? - Answer Aesthetic zoning How many acres are there in the W 1/2 of the S 1/2 of the SW 1/4 of a section of land? - Answer 40 acres Which of the following transactions would qualify as an "arm's length transaction"? - Answer Dennis finally sold his property that has been on the market for a year to a family from Chicago. In a comparative market analysis, the subject property has 2 bedrooms, 2 baths, a 1/2 acre lot and a swimming pool. A $115,000 comparable has 2 bedrooms, 1 bathroom, no pool, a 1/2 acre lot, and a screened porch. The appraiser adjusts by $9,000 for the bath, $11,000 for the pool, and $5,800 for the porch. What is the indicated value of the subject? - Answer $129,200 A lender is charging 2.75 points on a $275,000 loan. The borrower must therefore pay the lender an advance amount of - Answer $7,563 A borrower earns $8,000/month and makes credit card and car note payments of $900. A conventional lender requires a 30% income ratio. What monthly amount for housing expenses (principle, interest, taxes, insurance) will the lender allow this person to have in order to qualify for a conventional mortgage loan? - Answer $2,400 A small apartment building has a NOI of $40,000, interest expense of $14,000 and annual depreciation of $6,000. Assuming a 30% tax bracket, what is its income tax liability? - Answer $6,000 Jennifer wants to net $35,000 on her house. Her closing costs will be 7,500 plus a 7% commission. She owes $185,000 on her loan. What should the sale price be (round to the nearest $1,000)? - Answer $245,000 Goodsprings has a tax base of $90,000,000 and a budget of $1,100,000. What is the tax rate in terms of mills? - Answer 12.2 mills A building contains 50 one-bedroom units and 150 two-bedroom units. The one-bedroom units rent for $550 monthly; two-bedrooms rent for $675. The vacancy rate is 7 percent; operating expenses are estimated at 40 percent of effective gross income. There is an additional income of $2,000 from vending machines. What are the Operating expenses of this building? - Answer $575,540 Tyler owns a property within the city limits of a town that is on the Mississippi River. Who owns the land under this navigable river? - Answer The state A commercial tenant installed a grill to cook hamburgers and steaks. What will happen to this grill upon the expiration of the lease? - Answer The tenant would be able to take the grill prior to the expiration of the lease since the grill was a trade fixture, and it was installed by the tenant. Beginning at the NW corner of the intersection of Pine & 675, thence north 950 feet, thence west 380 feet, thence south 950 feet, thence southeast 380 feet. Is this an acceptable metes and bounds description? - Answer No, this is not a good legal description because it does not begin and end at the point of beginning Licensee Katy sees a legal description that includes a subdivision plat map. This indicates the legal description method utilized is - Answer the lot and block system. Tenant Kelly has the right to use landlord Bob's property according to his lease. Does Kelly have an interest in the property? - Answer Yes, because Kelly can use the property. Earl was a life tenant who lived in Lilly's property. Earl recently passed away. As a result of his death, Earl's interest will pass to which of the following? - Answer Lilly Jamal recently purchased a cooperative's stock and moved into one of the cooperative's units. What type of lease does Jamal have with the cooperative corporation? - Answer A proprietary lease