WA Real Estate Fundamentals Questions and Answers – Rockwell Exam

Which of the following is most likely to be considered a fixture? Plumbing A life estate will last until: The Death of the recipient A deed that states there is a conveyance of interest, if any, is the: Quitclaim deed A judgement lien: When paid off, requires a satisfaction of judgement to be recorded to clear the record The police powers of the government include: Building codes and zoning regulations The term "meeting of the minds" is associated with: Offer and acceptance Exaggeration about a property's positive characteristics would be considered: Puffing The seller listed the property for $95k. Assuming that their listing agreement is typical, the broker would not be entitled to a commission if the seller: Rejected a $90k offer from a financially qualified buyer A contract specifies that "time is of the essence." That means that: All contractual duties must be fulfilled on or before the date set forth in the contract. Usury laws fix which of the following: Maximum interest rates: state usury laws set max interest rates for certain types of loans For which of the following people would an adjustable rate loan not be a good idea? A person about to retire (fixed income) An appraiser needs to be state certified to perform which of the following appraisals: Appraisal related to an FHA loan On a settlement statement, an earnest money deposit that will be held by the brokerage firm until closing is a: Credit to the buyer A licensee hears that a religious group will be opening a commune in a neighborhood. He begins contacting neighbors and telling them about this, encouraging them to list their properties with him before property values decline. This is: Blockbusting An investor is interested in purchasing a multi-family dwelling. He would most likely want to look for a: Property where the rents are similar to comparable properties in the same area (key inquiry for investor market analysis is comps) Zoning requirements state that a lot must be at least four times the size of the building located on the lot. An architect draws up a plan for a building that is 20k sq. ft. At least how many acres does the lot need to be? 2! 20k x 4 = 80k sq ft. - devide by 43,560 (sq ft per acre) to find size. Tests to distinguish a fixture from personal property include all of the following except: Cost of the item (method of attachment, intent of annexor and adaptability are tests) A primary advantage of owning a property in severalty is: Flexibility All of the following are requirements for a valid deed except: Acknowledgement A homeowner has been sharing with a friendly neighbor the use of a driveway that crosses both of their properties. However, the owner is about to move out and the remaining neighbor would like to make sure that she can continue to use the driveway even if the new owner is not amenable to that. The homeowner should request an: Easement A local ordinance states that no sign can extend more than two feet above the roofline. The Morgans want to put a sign on their roof, but the sign is six feet high. To install their sign legally, the Morgans must apply for a: Variance A property is listed for $275,000. The buyers offer $265,000, and insist that the gourmet six-burner stove remain with the property. When the signed offer is presented to the sellers, the sellers accept the price, but want to take the stove with them. They cross out the item about the stove, sign the form, and return it to the buyers. Under these circumstances: The original offer is terminated, and the sellers have made a counteroffer A seller's agent, upon meeting with a prospective buyer, becomes concerned that the buyer is unlikely to be financially qualified. The agent should: Relay those concerns to the seller, who will decide. Net listings are strongly discouraged because they are likely to be unfair to the: Seller A purchase and sale agreement is for $150,000, with 80% financing, closing in 30 days with possession at closing, and a rent provision for possession after closing. This is an example of a/an: Contract with contingencies A promissory note that is secured by a mortgage is: Primary evidence of the debt (The note is evidence of the debt; the mortgage makes the property security for the debt.) Which of the following is an advantages of using private mortgage insurance from a borrower's perspective: It allows for a smaller downpayment The market price of a property would be best defined as: The amount paid to obtain the property Bronson agreed to sell his house to the Hatchers. Closing is scheduled for May 15. Bronson already paid the taxes for the entire year, but the Hatchers are assuming responsibility for the taxes as of the closing date. The settlement statement will prorate the taxes as a: Debit to the buyer and credit to the seller An agent shows his customer, who is an Asian-American, homes only in neighborhoods that are predominantly Asian-American. This is called: Steering A property manager will be paid 3% of a property's annual gross rental income. The rent paid is: $24,000 base rent; $12,000 percentage rent; $8,000 maintenance, taxes, and insurance (triple net). The commission amount that the manager will receive is: $1080 - In a triple net lease, the tenant pays operating expenses (maintenance costs, taxes, and insurance) in addition to base rent and, in some cases, percentage rent. First, calculate the rent paid each year: $24,000 base rent + $12,000 percentage rent = $36,000. Then calculate the commission amount: .03 x $36,000 = $1,080. (Expenses probably wouldn't be considered part of the rent when calculating a commission.) A borrower is purchasing a $300,000 home. She will be using a loan with an LTV of 80%. She will also be paying 3 discount points. What is the total amount of cash that she will need to bring to closing? $67,200 - There are two components that you'll need to calculate. First, calculate the size of the loan: $300,000 x .80 = $240,000. She'll need to bring $60,000 to cover the downpayment ($300,000 - $240,000 = $60,000). Second, calculate the amount of the discount points, using the loan amount and not the purchase price ($240,000 x .03 = $7,200). Add the two together for the total amount of cash needed ($60,000 + $7,200 = $67,200). A rectangular parcel of land, starting from the point of beginning, measures 180 feet north, then 90 feet east, then 180 feet south. What is the length and direction of the last side? 90 ft. west