Sales General Exam (Stringham)
Which of the following is NOT true about a sale and leaseback of a commercial property?
(a) Seller frees up funds
(b) Ownership does not actually transfer
(c) Buyer can deduct depreciation from his taxes
(d) Seller is able to deduct rent payments from his gross income - Ownership does not actually
transfer
Which is not correct about PMI?
(a) To request cancellation of PMI, you must be current on your loan.
(b) For "high-risk loans" lenders are required to automatically remove PMI when the loan balance
reaches 77% of the original purchase price.
(c) In order to remove PMI, the lender must receive a request from the borrower.
(d) You may request PMI removal when the current loan balance equals 80% of the original purchase
price or current appraised value, whichever is less. - In order to remove PMI, the lender must
receive a request from the borrower
The owner of a commercial property wants to sell. The seller wishes to allow many brokerages the
opportunity to sell the property. The seller should:
(a) Execute an Exclusive Agency Listing with each brokerage.
(b) Execute an Open Listing with the brokerages he/she wishes to hire.
(c) Sign an Exclusive Right to Sell Listing.
(d) Sign a Net Listing. - Execute an Open Listing with the brokerages he/she wishes to hire.
When a listing is taken how does the agent confirm the amounts owed on the mortgages?
(a) The listing agent should personally contact all lien holders and verify balances.
(b) Order an Estoppel Certificate.
(c) Have the title company verify balances.
,(d) The seller must list all lien amounts on the Seller's Proceeds Sheet. - Order an Estoppel
Certificate.
(Explanation: Estoppel Certificate is a formal term describing the document that the lender provides
accounting for the total amounts owed. Agents should not be personally gathering this information.
Agents should advise their clients to personally verify the amounts on the Estoppel Certificate.)
Truth in Lending or Reg. Z includes all the following requirements EXCEPT:
(a) Use of APR
(b) Settlement Costs & You
(c) Disclosure of costs
(d) Advertising restrictions - Settlement Costs & You
(Explanation: "Settlement Costs & You" is a booklet required to be given to prospective borrowers under
the Real Estate Settlement Procedures Act [RESPA], not Truth in Lending.)
For the purpose of property taxes, an appraisal is done and the value is determined by the:
(a) County Tax Appraiser's Office
(b) Board of Equalization
(c) County Tax Assessor
(d) State Appraisal Board - County Tax Assessor
A lien on real property, documented by a signed mortgage contract gives the lender the right to:
(a) Go to court and/or sell the property if the owner defaults any of the provisions of the mortgage
(b) Collect a particular interest rate on the loan.
(c) Sell the servicing rights to the loan to another investor.
(d) Collect monthly payments for insurance and taxes and place them in an escrow account. - Go
to court and/or sell the property if the owner defaults any of the provisions of the mortgage
,The buyers insisted they were not interested in a property that was less than 1.75 acres in size. A house
on a property that was 465 feet by 643 looked great. How many acres does it have?
(a) 5.75
(b) 6.86
(c) 7.25
(d) 4.5 - 6.86
The commission structure for the brokerage was 5% on the first $1,000,000 and 8% on the rest. The
property sold for $1,345,000. How much was the commission?
(a) $97,250
(b) $67,250
(c) $77,600
(d) $174,850 - $77,600
(Explanation: One million x 5% = part of the commission - $50,000. "The rest," or $345,000 x 8% =
$27,600. Add the two parts together for the correct answer.)
A deed filed in the public records provides which of the following:
(a) Escheat
(b) Constructive notice
(c) Statute of limitations
(d) Actual delivery - Constructive notice
(Explanation: [Deeds & Transfer] Actual delivery is giving the deed to the grantee. Escheat pertains to
dying without a will, and statute of limitations relates to contract law.)
The borrower used a document which gave the trustee power of sale as the security for the loan to buy
the home. What document would contain that power:
(a) Trustee's Deed
(b) Uniform Real Estate Contract
, (c) Mortgage
(d) Deed of Trust - Deed of Trust
George Smith, who owns his property fee simple, grants a three-year lease to Tom Green. During the
second year of the lease, George sells the property to Ned Gray. What happens to the lease when the
sale closes?
(a) The lease remains in effect with Mr. Gray and Mr. Green.
(b) It must be negotiated between Gray and Mr. Green, the leasee.
(c) Property cannot be sold and title transferred to a new owner when a lease is in effect.
(d) It terminates. - The lease remains in effect with Mr. Gray and Mr. Green.
Automated underwriting systems offer the following benefits EXCEPT:
(a) Immediate feedback for correcting deficiencies
(b) Speed and low operating cost
(c) Objective-free of discrimination
(d) Reduced closing cost to borrower - Reduced closing cost to borrower
Which statement best describes the purpose of a mortgage document?
(a) It places a lien on the property allowing the mortgagee to seize the property if the mortgagor fails to
honor all obligations spelled out in the mortgage.
(b) It provides legal proof of the various property rights of the borrower.
(c) It allows the mortgagor to seize the personal assets of all mortgagees who sign the document.
(d) It spells out the interest rate and all other terms of the loan. - It places a lien on the property
allowing the mortgagee to seize the property if the mortgagor fails to honor all obligations spelled out in
the mortgage.
(Explanation: [Mortgage Law] The Mortgage contract is detailed and complex. Its primary purpose is to
allow the lender to take back the property in the event of the property owners failing to honor all the
obligations spelled out in the Mortgage.)
Which of the following is NOT true about a sale and leaseback of a commercial property?
(a) Seller frees up funds
(b) Ownership does not actually transfer
(c) Buyer can deduct depreciation from his taxes
(d) Seller is able to deduct rent payments from his gross income - Ownership does not actually
transfer
Which is not correct about PMI?
(a) To request cancellation of PMI, you must be current on your loan.
(b) For "high-risk loans" lenders are required to automatically remove PMI when the loan balance
reaches 77% of the original purchase price.
(c) In order to remove PMI, the lender must receive a request from the borrower.
(d) You may request PMI removal when the current loan balance equals 80% of the original purchase
price or current appraised value, whichever is less. - In order to remove PMI, the lender must
receive a request from the borrower
The owner of a commercial property wants to sell. The seller wishes to allow many brokerages the
opportunity to sell the property. The seller should:
(a) Execute an Exclusive Agency Listing with each brokerage.
(b) Execute an Open Listing with the brokerages he/she wishes to hire.
(c) Sign an Exclusive Right to Sell Listing.
(d) Sign a Net Listing. - Execute an Open Listing with the brokerages he/she wishes to hire.
When a listing is taken how does the agent confirm the amounts owed on the mortgages?
(a) The listing agent should personally contact all lien holders and verify balances.
(b) Order an Estoppel Certificate.
(c) Have the title company verify balances.
,(d) The seller must list all lien amounts on the Seller's Proceeds Sheet. - Order an Estoppel
Certificate.
(Explanation: Estoppel Certificate is a formal term describing the document that the lender provides
accounting for the total amounts owed. Agents should not be personally gathering this information.
Agents should advise their clients to personally verify the amounts on the Estoppel Certificate.)
Truth in Lending or Reg. Z includes all the following requirements EXCEPT:
(a) Use of APR
(b) Settlement Costs & You
(c) Disclosure of costs
(d) Advertising restrictions - Settlement Costs & You
(Explanation: "Settlement Costs & You" is a booklet required to be given to prospective borrowers under
the Real Estate Settlement Procedures Act [RESPA], not Truth in Lending.)
For the purpose of property taxes, an appraisal is done and the value is determined by the:
(a) County Tax Appraiser's Office
(b) Board of Equalization
(c) County Tax Assessor
(d) State Appraisal Board - County Tax Assessor
A lien on real property, documented by a signed mortgage contract gives the lender the right to:
(a) Go to court and/or sell the property if the owner defaults any of the provisions of the mortgage
(b) Collect a particular interest rate on the loan.
(c) Sell the servicing rights to the loan to another investor.
(d) Collect monthly payments for insurance and taxes and place them in an escrow account. - Go
to court and/or sell the property if the owner defaults any of the provisions of the mortgage
,The buyers insisted they were not interested in a property that was less than 1.75 acres in size. A house
on a property that was 465 feet by 643 looked great. How many acres does it have?
(a) 5.75
(b) 6.86
(c) 7.25
(d) 4.5 - 6.86
The commission structure for the brokerage was 5% on the first $1,000,000 and 8% on the rest. The
property sold for $1,345,000. How much was the commission?
(a) $97,250
(b) $67,250
(c) $77,600
(d) $174,850 - $77,600
(Explanation: One million x 5% = part of the commission - $50,000. "The rest," or $345,000 x 8% =
$27,600. Add the two parts together for the correct answer.)
A deed filed in the public records provides which of the following:
(a) Escheat
(b) Constructive notice
(c) Statute of limitations
(d) Actual delivery - Constructive notice
(Explanation: [Deeds & Transfer] Actual delivery is giving the deed to the grantee. Escheat pertains to
dying without a will, and statute of limitations relates to contract law.)
The borrower used a document which gave the trustee power of sale as the security for the loan to buy
the home. What document would contain that power:
(a) Trustee's Deed
(b) Uniform Real Estate Contract
, (c) Mortgage
(d) Deed of Trust - Deed of Trust
George Smith, who owns his property fee simple, grants a three-year lease to Tom Green. During the
second year of the lease, George sells the property to Ned Gray. What happens to the lease when the
sale closes?
(a) The lease remains in effect with Mr. Gray and Mr. Green.
(b) It must be negotiated between Gray and Mr. Green, the leasee.
(c) Property cannot be sold and title transferred to a new owner when a lease is in effect.
(d) It terminates. - The lease remains in effect with Mr. Gray and Mr. Green.
Automated underwriting systems offer the following benefits EXCEPT:
(a) Immediate feedback for correcting deficiencies
(b) Speed and low operating cost
(c) Objective-free of discrimination
(d) Reduced closing cost to borrower - Reduced closing cost to borrower
Which statement best describes the purpose of a mortgage document?
(a) It places a lien on the property allowing the mortgagee to seize the property if the mortgagor fails to
honor all obligations spelled out in the mortgage.
(b) It provides legal proof of the various property rights of the borrower.
(c) It allows the mortgagor to seize the personal assets of all mortgagees who sign the document.
(d) It spells out the interest rate and all other terms of the loan. - It places a lien on the property
allowing the mortgagee to seize the property if the mortgagor fails to honor all obligations spelled out in
the mortgage.
(Explanation: [Mortgage Law] The Mortgage contract is detailed and complex. Its primary purpose is to
allow the lender to take back the property in the event of the property owners failing to honor all the
obligations spelled out in the Mortgage.)
