Colorado Real Estate National Exam Practice Exam Review Questions And Answers, Graded A+/ Verified| Latest Update 2024/25|

COLORADO REAL ESTATE NATIONAL EXAM PRACTICE EXAM REVIEW QUESTIONS AND ANSWERS, GRADED A+/ VERIFIED. which of these is a correct formula for calculations related to income-producing property? - -rate of return x value = net operating income an optioner and optionee entered into an option contract for an industrial building. the optionee decided not to purchase the property. the optioner sued the optionee for breach of contract. assuming the optioner received an option fee, what damages will the optioner likely receive in the lawsuit? - -none of these. explanation: an optioner (owner) receives an option fee for keeping an offer open while an optionee (prospective buyer) decides whether they'll buy the property. if the optionee decides not to buy the property, the optioner has no legal recourse other than to keep the option fee. as part of offering a lower-than-market interest rate on a loan to a borrower, the lender charges a percentage of the loan amount to increase the lender's yield. this fee is known as - -loan discount points explanation: loan discount points are charged based on the cost to buy the lower interest rate, which impacts the yield the lender will receive over the life of the loan. a discount point helps to decrease the loss to the lender and is an upfront charge at closing. two unrelated, unmarried friends purchased a parcel of real estate together and did not specify the form of ownership they desire. the buyers will hold title as - -tenants in common efore listing a property, a seller filled in and painted over several deep cracks in the living room wall. The seller only tells the broker about the filled-in cracks after the listing agreement is signed. Now, the seller wants the listing broker to lie or keep silent about the filled-in cracks. The seller reminds the listing broker that an agent owes the principal the fiduciary duties of obedience, loyalty, and confidentiality. The listing broker should - -terminate the listing explanation: in most states, a real estate licensee legally owes third parties the duty of honest and disclosure of material defects like filled-in cracks. so in this case, the broker should terminate the listing. which of these must an owner exclude from a purchase contract in order to keep it? - -a planted rose bush explanation: once a plant (like a rose bush) has been planted on the property, it is considered part of the real estate and transfers with the deed. The owner of an income-producing residential rental property asked the property manager to calculate the net income (NOI) on the property. Each of the 4 units in the apartment building rented for $750 a month. The annual property taxes are $5,000, annual insurance premiums are $3,000, lawn care and maintenance is $300 monthly and monthly debt service is $1000. What is the property's net operating income? - -$24,400 calculation: $750 (monthly unit rent) x 4 = $3,000 x 12 = $36,000 (annual rent) $300 (monthly lawn care & maintenance) x 12 months = $3,600 Expenses: $5,000 (property taxes) + $3,000 (insurance) + $3,600 (lawn care & maintenance) = $11,600 Gross Annual Rent: $36,000 - $11,600 (annual operating expenses) = $24,400 ***DEBT SERVICE IS NOT INCLUDED IN NOI CALCULATIONS*** A potential buyer was turned down for a mortgage loan because of the ethnic makeup of the neighborhood where the property is located, and the high crime rate in the area. This is an example of - -redlining by the lende