BOMI RPA - ASSET MANAGEMENT
EXAM QUESTIONS AND ANSWERS
(GRADED A+)
REO properties acquisition methods - ANSWER-deed in lieu of foreclosure, judicial
foreclosure, trustee sale
Lender's primary objective with an REO - ANSWER-To convert the non performing
asset to performing status and or to attempt to recover the loan principal through the
disposition of the asset
Buyer apprehension - ANSWER-A critical factor asset managers should address when
converting an REO property to either cash or to a performing asset
Caveat emptor - ANSWER-Principle of law stating that a purchaser of an item is
responsible for examining and judging for him or herself the acceptability of it
Market conditions - ANSWER-A critical factor asset managers should address when
converting an REO property to either cash or to a performing asset
Costs evaluated for selling a property as is - ANSWER-Discounted price, repair poor
improvement allowances to the buyer, payment of buyer closing costs, environmental
indemnification, bonding or insurance policy
Buyer closing costs examples - ANSWER-Buyers title insurance, legal fees, costs of
inspection reports
Capital improvement project types - ANSWER-Remodeling, rehabilitations, renovations
Remodeling - ANSWER-The most economical and least time consuming method for
creating a building that has new appeal
Rehabilitations - ANSWER-Involve repairs to all building systems and cover the entire
building, requiring a larger investment which must be evaluated for positive return
Renovations - ANSWER-Require the greatest investment to deliver a 'new' building as
the final product
Hold/sell analysis critical areas - ANSWER-Review market data, develop a DCF model,
compare analysis to owners objectives
,Effective REO management strategies - ANSWER-Minimizing expenses and
maximizing value, timely resolution of deferred maintenance, completing necessary
capital improvements, evaluating market conditions, competitive rebidding of service
contracts, evaluating tax assessment
Collateral value - ANSWER-Estimated or appraised value of an asset pledged as
collateral to obtain a loan
Primary tasks of asset manager for collateral value - ANSWER-Evaluating security and
maintenance issues, insuring the property, maintaining utilities, inspecting mechanical
systems, checking for hazardous waste
Secondary tasks for collateral value protection - ANSWER-Securing rents, resolving
tenant concerns, evaluating property condition, obtaining title report, obtaining
architectural plans, bidding out work
Asset manager responsibilities - ANSWER-Disclosing any specific terms and conditions
as directed by the seller; for example that the property be sold as is, or that the seller
will not provide warranties.
Asset manager responsibilities - ANSWER-Overseeing the broker sales efforts.
Asset manager responsibilities - ANSWER-Making sure that the property manager
keeps the building looking clean and that he or she is prepared as possible for a smooth
and efficient transition in ownership.
Asset manager responsibilities - ANSWER-Pre qualifying selected buyers.
Timing in real estate sales - ANSWER-Timing can have a significant impact on the sale
price due to the improving market, declining market, interest rates and cost of
borrowing, diversified investment opportunities, and competing properties available for
sale.
Management decisions post repositioning - ANSWER-Identifying a property manager,
selecting a leasing agent, developing a marketing schedule, evaluating the property's
curb appeal
Strategies for managing stabilized property - ANSWER-Responding quickly to tenant
concerns, putting property manager on site, keeping unused spaces clean, monitoring
utility expenses
Marketing a property for sale - ANSWER-Define the price, engage a qualified broker,
define concessions, confirm proceeds, assemble rent roll and tenant correspondence,
define advertising and promotional events, identify likely buyer profile, quantify and
qualify offers
, Legal counsel's contribution in property sale - ANSWER-Responsible for drafting a
purchase and sale agreement, confirming title and seller's ability to convey property,
creating language for amendments, confirming recording of closing documents
Warranty deed - ANSWER-Expressly includes one or more covenants of title
Broker's role post sale terms finalization - ANSWER-Facilitate buyer due diligence,
prepare market surveys, confirm time and date of closing with all parties
Encumbrance - ANSWER-Any claim or interest in real property held by a person other
than the owner that diminishes the value of the property without preventing title to pass
from the owner
Property manager's tasks post sale terms definition - ANSWER-Advising tenants of
change in ownership, requesting utility companies to prorate charges, reconciling
accounting associated with rent collection, terminating services, reconciling all accounts
associated with the property
Sellers market - ANSWER-There is an abundance of qualified buyers and thus only
limited advertising and minimal exposure needed in the real estate multiple listings
service.
Buyers - ANSWER-It is necessary to work harder to attract an offer from a buyer.
Equilibrium - ANSWER-The number of buyers is equal to the number of sellers.
Factors contributing to selling a property - ANSWER-Need for cash or liquidity that
comes from the sale of property, need to invest in a more lucrative venture, an
improving market, desirability of the property from a buyer's perspective.
Asset manager responsibilities - ANSWER-Assembling and presenting all financial and
operating information associated with the property to buyers: tenant list, rent rolls,
income and expense statements, and other financial and accounting records.
Cost of sale analysis factors - ANSWER-Current, outstanding payoff amount on the loan
against the property, which needs to be prorated to the day of closing.
Cost of sale analysis factors - ANSWER-Commissions.
Cost of sale analysis factors - ANSWER-Lender's policy of title insurance.
Cost of sale analysis factors - ANSWER-Property taxes.
Cost of sale analysis factors - ANSWER-Other operating costs.
Cost of sale analysis factors - ANSWER-Miscellaneous costs.
EXAM QUESTIONS AND ANSWERS
(GRADED A+)
REO properties acquisition methods - ANSWER-deed in lieu of foreclosure, judicial
foreclosure, trustee sale
Lender's primary objective with an REO - ANSWER-To convert the non performing
asset to performing status and or to attempt to recover the loan principal through the
disposition of the asset
Buyer apprehension - ANSWER-A critical factor asset managers should address when
converting an REO property to either cash or to a performing asset
Caveat emptor - ANSWER-Principle of law stating that a purchaser of an item is
responsible for examining and judging for him or herself the acceptability of it
Market conditions - ANSWER-A critical factor asset managers should address when
converting an REO property to either cash or to a performing asset
Costs evaluated for selling a property as is - ANSWER-Discounted price, repair poor
improvement allowances to the buyer, payment of buyer closing costs, environmental
indemnification, bonding or insurance policy
Buyer closing costs examples - ANSWER-Buyers title insurance, legal fees, costs of
inspection reports
Capital improvement project types - ANSWER-Remodeling, rehabilitations, renovations
Remodeling - ANSWER-The most economical and least time consuming method for
creating a building that has new appeal
Rehabilitations - ANSWER-Involve repairs to all building systems and cover the entire
building, requiring a larger investment which must be evaluated for positive return
Renovations - ANSWER-Require the greatest investment to deliver a 'new' building as
the final product
Hold/sell analysis critical areas - ANSWER-Review market data, develop a DCF model,
compare analysis to owners objectives
,Effective REO management strategies - ANSWER-Minimizing expenses and
maximizing value, timely resolution of deferred maintenance, completing necessary
capital improvements, evaluating market conditions, competitive rebidding of service
contracts, evaluating tax assessment
Collateral value - ANSWER-Estimated or appraised value of an asset pledged as
collateral to obtain a loan
Primary tasks of asset manager for collateral value - ANSWER-Evaluating security and
maintenance issues, insuring the property, maintaining utilities, inspecting mechanical
systems, checking for hazardous waste
Secondary tasks for collateral value protection - ANSWER-Securing rents, resolving
tenant concerns, evaluating property condition, obtaining title report, obtaining
architectural plans, bidding out work
Asset manager responsibilities - ANSWER-Disclosing any specific terms and conditions
as directed by the seller; for example that the property be sold as is, or that the seller
will not provide warranties.
Asset manager responsibilities - ANSWER-Overseeing the broker sales efforts.
Asset manager responsibilities - ANSWER-Making sure that the property manager
keeps the building looking clean and that he or she is prepared as possible for a smooth
and efficient transition in ownership.
Asset manager responsibilities - ANSWER-Pre qualifying selected buyers.
Timing in real estate sales - ANSWER-Timing can have a significant impact on the sale
price due to the improving market, declining market, interest rates and cost of
borrowing, diversified investment opportunities, and competing properties available for
sale.
Management decisions post repositioning - ANSWER-Identifying a property manager,
selecting a leasing agent, developing a marketing schedule, evaluating the property's
curb appeal
Strategies for managing stabilized property - ANSWER-Responding quickly to tenant
concerns, putting property manager on site, keeping unused spaces clean, monitoring
utility expenses
Marketing a property for sale - ANSWER-Define the price, engage a qualified broker,
define concessions, confirm proceeds, assemble rent roll and tenant correspondence,
define advertising and promotional events, identify likely buyer profile, quantify and
qualify offers
, Legal counsel's contribution in property sale - ANSWER-Responsible for drafting a
purchase and sale agreement, confirming title and seller's ability to convey property,
creating language for amendments, confirming recording of closing documents
Warranty deed - ANSWER-Expressly includes one or more covenants of title
Broker's role post sale terms finalization - ANSWER-Facilitate buyer due diligence,
prepare market surveys, confirm time and date of closing with all parties
Encumbrance - ANSWER-Any claim or interest in real property held by a person other
than the owner that diminishes the value of the property without preventing title to pass
from the owner
Property manager's tasks post sale terms definition - ANSWER-Advising tenants of
change in ownership, requesting utility companies to prorate charges, reconciling
accounting associated with rent collection, terminating services, reconciling all accounts
associated with the property
Sellers market - ANSWER-There is an abundance of qualified buyers and thus only
limited advertising and minimal exposure needed in the real estate multiple listings
service.
Buyers - ANSWER-It is necessary to work harder to attract an offer from a buyer.
Equilibrium - ANSWER-The number of buyers is equal to the number of sellers.
Factors contributing to selling a property - ANSWER-Need for cash or liquidity that
comes from the sale of property, need to invest in a more lucrative venture, an
improving market, desirability of the property from a buyer's perspective.
Asset manager responsibilities - ANSWER-Assembling and presenting all financial and
operating information associated with the property to buyers: tenant list, rent rolls,
income and expense statements, and other financial and accounting records.
Cost of sale analysis factors - ANSWER-Current, outstanding payoff amount on the loan
against the property, which needs to be prorated to the day of closing.
Cost of sale analysis factors - ANSWER-Commissions.
Cost of sale analysis factors - ANSWER-Lender's policy of title insurance.
Cost of sale analysis factors - ANSWER-Property taxes.
Cost of sale analysis factors - ANSWER-Other operating costs.
Cost of sale analysis factors - ANSWER-Miscellaneous costs.
