Ohio Real Estate Exam Questions and answers. 100% proven pass rate, Graded A+

Ohio Real Estate Exam Questions and answers. 100% proven pass rate, Graded A+ Document Content and Description Below Ohio Real Estate Exam Questions and answers. 100% proven pass rate, Graded A+ Which would a buyer prefer: Land installment contract or purchase money mortgage? - purchase money mortgage - the buyer will receive the deed to the property on the day of closing. -A purchase money mortgage does not transfer any title to the buyer; rather, it is a method by which the seller finances the transaction. -In a land installment contract, the buyer does not receive the deed until the final payment is made. A land installment contract transfers only equitable title. spot zoning - illegal rezone that favors a particular property owner without justification defeasance clause - found in the mortgage that cancels the mortgagees right to the land title on the payment of the debt -THE BORROWER IS GIVEN TITLE TO THE LAND ONCE MORTGAGE IS PAID OFF patent defect - a visible, obvious defect and the agent has no duty to disclose it. The listing agent is informed by the seller that the basement gets wet when it rains. The agent says nothing to the buyer. Who is liable for the failure to disclose the latent defect? - seller. The client is always liable for the acts of her agent. The agent may be liable to the seller for breaching a fiduciary duty buyer-broker contract - creates the agency relationship between buyer and broker what title insurance policy insures the holder of the right to someone elses land? - easement policy in the title Which is NOT a protected class under the Federal Fair Housing Act? - ancestry Complaints based on Title VIII should be filed with the - office of equal opportunity title VIII - Another name for the Federal Fair Housing Act, which is Title VIII of the Civil Rights Act of 1968. who uses the term realtist? - members of the national asso. of real estate brokers A broker has 1.65 acres of land listed at $0.205 per square foot. the total listing price is - $14,734.17 A buyer has obtained a mortgage in which the LTV is 95% of the first $40,000 of the sale price and 90% of the remainder of the sale price. What are the buyer's costs on a $185,000 sale if the lender charges a 2% loan origination fee and 2 points? - $6,740 $40,000 x 0.05 = $2000 $185,000 - $40,000 = $145,000 $145,000 x .10 = $14,500 $ - 2,000 - 14,500 = 168,500 $168,500 x 0.02 = 3,370 (fee) $168,000 x 0.02 = 3,370 (2 points) so, $3,370 + 3370 = $6,740 who oversees all sales activity in ohio? - dept. of commerce division of real estate - investigates ohio real estate commission - educates What occupation would need an Ohio real estate license in order to legally obtain a commission as compensation for work done? - property manager In preparing to advertise another broker's listing on a website, a licensee, while talking with the graphic designer, decides that the ad would read better if she made a few changes to the property description and some of its features. The deadline is at hand and there is no time to consult the seller's agent. If the licensee makes changes to the advertisement, what statement would be true? - how many feet are in an acre? - 43,560 how many acres in a mile? - 640 dower - common legal law that a wife has in property owned by her husband curtesy - if the wife dies, husband gets her share of the property conditional use - type of land that does not comply with the zoning restriction for its location but it benefits the public. ex schools non-conforming use - properties in compliance with old zoning laws Inverse condemnation - a count action by a private landowner against the gov't, seeking compensation for damage to the property that resulted from govt action a life estate - interest in property is held by a person who is granted a lifetime use of a property that will be transferred to a third party upon the death of the lifetime user rescission of a contract - A return of all parties to their condition before the contract was executed alienation - clause in a mortgage that allows the lender to demand loan repayment if a borrower sells the property tenancy in common - a form of co-ownership in which two or more persons each have an undivided interest in the entire property (unity of possession), but no right of survivorship ex. I own 50% of the house and sofia owns the other 50% joint tenancy - is a form of co-ownership in which the co-owners have equal undivided interest and the right of survivorship. air rights - the right to undisturbed use and control of the airspace over a parcel of land (within reasonable limits for air travel); may be transferred separately from the land. riparian or littoral rights - the water rights of a landowner whose property is adjacent to or crossed by a river (or any body of water) lien - A nonpossessory interest in a property, giving a lienholder the right to foreclose if the owner does not pay a debt owed the lienholder; a financial encumbrance on the owner's title. ownership in severalty - ownership by a single individual, as opposed to co-ownership life estate - a freehold estate that lasts only as long as a specified person lives. that person is referred to as the measuring life. pur autrie vie with remainder - Jack gives a life estate to Jill for so long as Bob lives. Upon Bob's death, the property will pass to Larry. What are the interests of Jill and Larry? covenant - 1. a contract 2. a promise 3. a guarantee (express or implied) in a document such as a deed or lease. 4. a restrictive covenant. (typical covenants compel or prevent certain actions by the property owner or uses for the property) Which is both a lien and an encumbrance on property? - a mortgage All liens are encumbrances but... - Not all encumbrances are liens. A lien represents a monetary claim levied against property to secure payment—the settlement of an obligation from the property owner. An encumbrance is a much broader term, referring to any sort of claim against a property. what is limited common area? - The foyer in a unit is a part of the unit, and therefore is not common area. The assigned parking, the patio, and the unit the manager lives in are limited common elements. metes and bounds - Legal description that begins at a well marked point and follows the boundaries around the tract, back to the place of beginning lot and block - A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property) how developers legally describe the property. a government rectangular survey - a method of describing land that utilizes a grid map. That map includes base lines that run east and west. These lines are crossed by meridians that run north and south remainder - going forward to someone else. revisonary - going back to the original grantor leasehold - temporary right to possession without a title of ownership contract for deed - another name for a land contract fee simple ownership - means the owner owns the property absolutely, and can do whatever he wants with it. highest and best form of ownership interest in real estate fee simple conditional - owns it as long as you dont violate any conditions Fee Simple Defeasible - a defeasible estate could be defeated if the deed restrictions are not followed. ex. a deed used to transfer title states the conveyance will remain in effect "so long as the property is NOT used for the sale of alcoholic bevs" eminent domain - Power of a government to take private property for public use. condemnation - the act of taking land with just compensation tenancy by the entireties - requires the couple to be married and living in the same home quiet title action - A court action to determine the actual ownership of real property. This type of proceeding would be conducted to transfer title to an adverse possessor. a license - Wayne grants Brent the permission to use Wayne's property to fish on one hot summer day. Permission to use the land of another. which is revocable by the grantor at any time. easement - the right to use land for a specific and limited purpose deed restrictions - appurtenant to the real property and "run with the land". do not terminate upon death of grantor or grantee abatement - The local city council decides to reduce the assessment rate for a major corporation relocating to the area to build a manufacturing plant. Such a reduction is termed: -refers to a decrease in the assessed value of an ad valorem tax or in the assessment rate used to compute the ad valorem tax. -the reduction of the assessment rate for tax computation. special assessment tax - A tax levy on real property for government improvements (i.e., curbs, sewers, and sidewalks) is known as: -Taxes for improvements to property are called: dedication - transferring real property by donating it to the government, such as to a city for use as a park or roadway A commercial developer purchased an old gas station on the corner of Main Street and Vine. After the buyer receives the deed to the property he begins planning the construction of an office building. Upon discovery of underground storage tanks, which must the owner do before he builds his office building? - remove the tanks, test the soil, remove toxic waste and refill and retest the site for contamination Special restrictions to all properties within a subdivision would be found in the - CC & Rs Covenants, conditions, and restrictions (CC & Rs) are likely used to preserve property values. Alfred and Allie buy a 10-year-old home and have it tested for radon prior to closing. The test results in an average reading of 4.8 pCi/L. Under federal law, is the seller required to mitigate the home? - There is no federal law regarding radon mitigation. The federal government recommends mitigation on houses that test 4.0 pCi/L or higher. However, the buyer and seller, in their contract, could agree to whatever guideline they wish doctrine of laches - Under which doctrine of law can a person lose claim to title of the land for waiting too long to stake the claim? environmental protection act - Created the Environmental Protection Agency, rules and regulations to protect the environment A city decides to create a park to separate a residential neighborhood from a commercial strip of land. The area that the park occupies would be known as a(n) - buffer zone building codes - -set the standards builders must abide by when building houses in a subdivision -Which part of a government's control of land sets the standards of construction for the protection of the public's safety? escheat - The state takes property upon an owners death if there is no will & no heirs exist. Which is typically used on a market value appraisal? - replacement cost, obtained by estimating the depreciated cost of improvements with similar utility to the subject. A replacement using today's materials and methods is usually acceptable to buyers, and would be used as the basis for a market value appraisal. it would be unethical for an appraiser to - base her payment on a percentage of the appraised value the income approach is probably most appropriate for - an apartment building. -the income approach is best used for income-producing properties the cost approach - A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility. -a public building -a church market value approach - Adjustments are made to the comparables to reflect differences between the subject property and the comparable properties on the days they sold. effective gross income - The total annual income the rental property produces after subtracting vacancy losses and adding miscellaneous income. Assessed value - refers to the value of real property for purposes of computing taxes situs - an area of preference, which can attribute value. What best defines highest and best use of land? - results in the highest net income attributable to the land, rather than the total gross annual income. economic life - The period of time in which a building produces income attributable to the structure itself points - One percent of the loan amount. Points are charged for any reason, but are often used for buydowns (where they may also be called Discount Points). Points are used to increase the lender's yield on a loan. ltv - Loan to Value The amount of money borrowed compared to the value (or price) of the property. pmi - Private Mortgage Insurance- the private equivalent of FHA insurance- allowing for high LTV/ low down payment conventional loans- PMI insures the lender's risk interest - piti - Principal, Interest, Taxes, Insurance Monthly mortgage obligation includes monthly mortgage payment, property taxes, and insurance. Monthly mortgage obligation is also known as PITI, which stands for principal, interest, taxes, and insurance. promissory note - an instrument that is a promise to pay a specific debt equal opportunity act - prohibits lenders from discriminating based on race, color, religion, sex, marital status, national origin, or age Secondary Mortgage Market - A market for the purchase and sale of existing mortgages, designed to provide greater liquidity for mortgages; also called the secondary money market. Mortgages are first originated in the primary mortgage market. regulation z - of the Truth-in-Lending Act requires that a lender disclose all costs of obtaining a loan, including: Interest rate, costs of payments over the life of the loan, etc Which is a document that uses real property to secure debt? - a Mortgage a promissory note - the instrument of obligation secured by the mortgage, with the homeowner pledging the real property as security for payment of a trustee deed - is used to transfer property that a trustee is holding in a trust situation a chattel mortgage - uses personal property, not real property, as collateral. RESPA (Real Estate Settlement Procedures Act) - prohibits kickbacks and fees for services not performed during the closing. RESPA regulations apply only to loans financed by federally-related mortgage loans (i.e., FHA or VA) or loans intended to be sold by the lender on the secondary mortgage market. RESPA applies to one- to four-family home purchases only. VA guaranteed loans (Veterans Affairs) - does not make loans, guarantees them. only available to veterans, can be 100% loan no down payment but must live in property. uses the residual income method in lieu of the housing expense ratio. Residual income is what the vet has left after paying taxes and housing expenses. Typically, a developer/builder would have which type of mortgage on his development? - a blanket mortgage -covers more than one property, with the development and its parcels released as they are sold 1. Mortgage that covers more than one parcel of real estate. 2. Mortgage that covers an entire building or development, rather than an individual unit or lot. An interest-only mortgage - Pays off interest only, so you need an investment (often an insurance policy) to run alongside the mortgage to pay off the capital at the end of its life. is usually a very short-term loan with the payments going only to the interest on the loan. a fully amortized conventional loan - would cover one parcel only, with part of the payment going toward interest and part going toward principal. The balance is due at the end of the loan period. This final payment is called a balloon payment. Trustee Deed - - Issued by a trustee in foreclosure proceedings - Few, if any, warranties are provided - term loan - only interest is paid each month and a lump-sum principal payment is due at the end. FHA (Federal Housing Administration) - Gave loans required less down payment on a house or lower interest rate under the new deal Adjustable Rate Mortgage (ARM) - A mortgage that permits the lender to periodically adjust the interest rate so that the rate reflects fluctuations in the cost of money. bridge loan - Not used much anymore, bridge loans are obtained by those who have not yet sold their previous property, but must close on a purchase property. The bridge loan becomes the source of their funds for the down payment. One reason for their fall from favor is that there are more and more second mortgage lenders now that will lend at a high loan to value. In addition, sellers often prefer to accept offers from buyers who have already sold their property. lending process application through closing - 1. mortgage pre-approval 2. house shopping 3. mortgage loan application 4. loan processing 5. underwriting 6. closing when are agency relationships terminated? - by an operation of law such as: -foreclosure -bankruptcy -death of the salesperson does not terminate the relationship special agent - a real estate agent is this. they have limited authority ex. a real estate sales agent a general agent - can do anything for the principal in one particular area ex. a property manager, managing real estate a universal agent - can do anything and everything for the principle ex. general durable power of attorney An agency relationship created through a listing contract can be terminated by the - -sellers or brokers death - A principal revokes an agency relationship, while an agent is the party that would renounce the agency relationship. who should an agent call first when something goes wrong in a transaction? - their own client sherman antitrust act - prohibits monopolization. Price fixing and market fixing would be two examples of a violation of the Sherman Antitrust Act. The fiduciary duties of ACOLD include - accountability, care, obedience, loyalty, and the disclosure of certain defects and offers. A listing broker tells their buyer client that the seller is anxious to sell because they are delinquent in their mortgage payments and do not want the property to go into foreclosure. Such a disclosure is - -unacceptable because of the fiduciary duty owed to the seller The fact t