Alabama Real Estate License Exam

______ fixtures are fixtures that belong to the tenant, but are removed at the end of the lease. - answer-Trade Fixtures (salon chairs, etc.) ______ requires that all deeds be in writing. - answer-Statute of Frauds "Adults Only" Housing Prohibited Unless: - answer--All units are occupied by individuals age 62 or older. OR -80% of units have persons age 55 or older and has a written policy statement of intent to house the elderly. 1 acre = ___ sq. ft. - answer-1 acre = 43,560 sq. ft. 1 mile = ___ ft. - answer-1 mile = 5,280 ft. 1 section = 1 sq mile = ___ acres. - answer-1 section = 1 sq. mile = 640 acres. 1 township = ___ sections. - answer-1 township = 36 sections. 2 Kinds of Fraud - answer--Intentional Misrepresentation (Active Fraud) -Intentional Concealment (Constructive Fraud) 2 Kinds of Misrepresentation - answer--Negligent Misrepresentation (agent fails to do something that a responsible agent would have done) -Innocent Misrepresentation. A ______ is personal property that has been attached, making it real property. - answer-Fixture A ______ Misdemeanor is committed by any person or corporation (even non-licensees) who violate any provision of AL license law or files false information with the commission. - answer-Class A. A broker other than the Qualifying Broker. - answer-Associate Broker A builder is obtaining a construction loan of $95,000 for a single-family residence. Under the Truth-in-Lending Act, disclosure of a prepayment penalty by the lender is-- - answer---not required for a business loan. The Truth-in-Lending Act is applicable to individual home owners, but it does not apply to a construction loan for a builder because the loan is for a business purpose. A Company License must be obtained for each separate location or branch. - answer-True. A Competitive Market Analysis (CMA) considers: - answer--Competitive properties that are also on the market. -Current market conditions. -Listings that have been on the market and expired. -APPRAISALS ONLY CONSIDER COMPS! A licensee shall notify AREC in writing of any change of business or residential address within 30 days of the change. - answer-True. A listing licensee has what obligations to a buyer? - answer-A licensee's duties to a buyer or customer are fairness, honesty, and accuracy. A Lot and Block legal description is also called a _______, and is used in subdivisions. - answer-Recorded Plat Map (or just Plat). A managing broker requires his licensees to mention a particular lender to buyers. The broker has a financial interest in this particular mortgage lender. Which of the following should the licensee recommend to buyers? - answer-Consider this lender, disclosing the broker's interest, and other lenders. Licensees should generally avoid recommending only one lender, and if a financial interest is involved, it should be disclosed. Since rates can change, a licensee most likely would not know which lender has the best rates. Licensees may provide a list of lenders without having to display the lenders in any particular order. A person bought property from a seller and received a general warranty deed. Two years later, the seller's brother came forth and claimed he had an ownership interest in the property. The brother stated he knew the court would uphold his interest. In a general warranty deed, the buyer is protected from this situation by the covenant-- - answer---of seisin. Although all covenants in a general warranty deed work together to protect the buyer, the covenant of seisin specifically guarantees that the owner owned the real estate at the time of the sale and had the right to convey it. A valid deed should contain all of the following: - answer--Grantor's name and signature (which must be acknowledged). -Grantee's name. -Consideration. -Granting Clause (words of conveyance). -Habendum Clause (defines type of ownership taken by grantee). -Accurate Legal Description. -Any encumbrances, restrictions, etc. -Delivery and Acceptance by the grantee. Abstract of Title - answer-Summary report of what the title search found. Does not include encroachments or any interests or conveyances that have not been recorded. Accession Rights - answer-Acquiring Land: Accretion - Gradual build up of deposits of soil such as in a riverbed. Alluvion - the soil deposits acquired by accretion. Losing Land: Avulsion - Rapid or violent loss of soil. Acknowledgement - answer-Proof before an authorized official (notary public) that a person is who he/she say they are. A statement before an authorized official (notary public) that he/she signed a document of his/her own free will. Actual Notice - answer-What a person knows because they have actually seen or experienced something. Example: A person knows that a property was sold because they were present at the closing. Adjustable Rate Mortgage (ARM) - answer-Interest rate changes according to a standard index. Two components of an ARM are: -Index -Margin (profit) Adverse Possession - answer-Hostile way to gain ownership. After completing the post-license course, candidate can apply for an Original License and pay a fee of $___. - answer-$85/year or $185/two years. After passing State Exam, candidate can apply for a Temporary License and pay a fee of $___. - answer-$150. After passing state exam, you have ___ days to apply for a Temporary License, either on an Active or Inactive basis. - answer-90 Americans with Disabilities Act (ADA) - answer-Places of public accommodations must be accessible to the handicapped. Employers (with 15 or more employees) must make reasonable accommodations for handicapped individuals that are otherwise qualified for a particular job. Amortized Loan - answer-Paid off slowly over time in equal payments (principal + interest) until the balance is zero. An office building is valued at $800,000 when the annual net income is capitalized at a rate of 20%. If the operating expenses and vacancy and rent loss total 40% of the gross income, what is the approximate gross annual income? - answer-$266,667 The income approach to value is calculated as follows: Annual net income divided by capitalization rate equals value. Therefore, net income ÷ 0.2 $800,000. The net income is $800,000 × 0.2 = $160,000. The net income is 60% (100% 40%) of the gross income. The gross income is $160,000 ÷ 0.6 = $266,667. An owner's mortgage includes a clause requiring a prepayment penalty. Three percent of any outstanding loan principal would be charged by the lender if the owner paid off the principal before the scheduled time. Payments were $296.88, due on the first of each month, and included both principal and interest in arrears at 8% per annum. After the owner's July 1 payment, her loan balance was $8,946.23. On August 1, after handing her lender the check for her August 1 payment, the owner paid off the entire remaining loan balance. What is the approximate prepayment penalty? - answer-The monthly house payment, $296.88, includes both interest and principal. The prepayment penalty is charged only on the principal, not on interest. Therefore, one must determine how much the new principal loan balance will be after the August 1st house payment is made. The calculations are as follows: The loan balance after the July 1 payment is $8,946.23 x 0.08 interest rate = $715.70 a year ÷ 12 months = $59.64 interest for July. $296.88 monthly house payment $59.64 interest = 237.24 principal payment on August 1 payment. $8946.23 loan balance $237.24 principal paid in August leaves new principal balance of $8708.99 after August 1st payment. This is the amount on which the prepayment penalty will be based: $8708.99 x 0.03 penalty = $261.27 Annual Net Income Formula - answer-Potential Gross Annual Income - Vacancies: (Vacancy Rate) x (Potential Gross Income) + Additional Income ----------------------------------- = Effective Gross Income - Expenses ----------------------------------- = ANNUAL NET OPERATING INCOME Anticipation - answer-Purchasing property today with the expectation of some an eventual benefit. AREC commissioners are appointed by the ___ with the advice and consent of the ___. - answer-Governor; Senate. AREC commissioners are paid ___. - answer-$300/month. AREC Disciplinary Timeline - answer- AREC has ___ commissioners; each commissioner serves a ___ year term, with no more than ___ consecutive terms. - answer-9 commissioners; 5 years per term; 2 consecutive term max. Back-End Ratio - answer-Total Installment Debt / Gross Monthly Income Balloon Payment Loan - answer-Payments are PARTIALLY AMORTIZED. Entirety of remaining principal (and last month's interest) is paid at the end of the loan. Bargain and Sale Deed - answer-Contains no express warranties against encumbrances.