Louisiana Real Estate Course Unit 1-3
Exam 1
A divisible joint obligation is the situation where - ANS-each obligor is obligated to perform only
his or her portion of the obligation and receives only his or her portion of what is due.
A licensee who works as a dual agent must keep a copy of the signed Dual Agency Disclosure
on file for - ANS-five years.
What makes an offer to buy irrevocable? - ANS-It specifies a time for acceptance.
When a broker dies, he or she might leave behind agreements that were "under contract." What
becomes of them? - ANS-They are still valid, since the principals are the buyer and seller, not
the broker.
Property is sometimes given by the owner to someone else for services rendered. Such a gift is
called - ANS-a remunerative donation.
Where must non-resident brokers deposit escrow money that they receive? - ANS-In an escrow
account in a financial institution in Louisiana or in their home state
Flyers, brochures, and "just listed" cards that advertise properties for sale must include -
ANS-the month and year the advertisement is printed, published, or distributed.
A building has 9 apartments generating annual potential rent of $1,500 each month. Vacancy =
6% and annual expenses are $84,000. Vending machines yield $1,800 per year. What is the
NOI? - ANS-$70,080
A property's taxes are $9,540 and are paid for in arrears. The property was sold, and closing
took place on March 7. The seller was responsible for the day of closing. Using the 360 day
method, how will taxes be prorated? - ANS-Credit the buyer $1775.50 and Debit the Seller
$1775.50
If licensees and sponsoring brokers have employment or financial disputes, how must they be
adjudicated? - ANS-Between themselves or in the courts
Concerning "confidential information," it is true that - ANS-it does not include material
information about property condition.
,Vanessa DeWitt is dual agent of seller Stephen Lowry and buyer Robin Struthers, and, as such,
is duty-bound to disclose to Struthers whatever she knows about - ANS-Latent material defects
in Lowry's property.
Tyler Holdlong owns a small retail property that he inherited from his father. There are no
mortgages or interest expenses connected with the property. Tyler takes an annual cost
recovery expense of $3,000. The property has a monthly gross income of $3,500 and monthly
operating expenses of $1,100. Tyler's taxable income from this property will be taxed at a rate of
25%. What is the tax liability for the year? - ANS-$6,450
Some people, when taking the licensing exam, pass the national part but fail the state portion.
What is the next step for these applicants? - ANS-They may retake just the failed portion if they
do so within one year of the failure.
All records related to a real estate transaction must be retained for a period of - ANS-five years.
Property that is neither common nor public is classified as - ANS-a private thing.
A property has sold for $185,000. The listing agreement calls for a commission of 6.5%. The
listing broker and selling broker agree to share the commission equally. What will the listing
agent receive if the agent is scheduled to get a 65% share from his broker? - ANS-$3,908
What does the Law of Agency say about vicarious liability? - ANS-A client is not responsible for
the actions of his agent.
Dan is buying Jessica's house. The closing date (day belongs to seller) of the sale transaction is
March 9th. Current year real estate taxes are $1,900 (will be billed to Dan next year). Use the
365-day method for prorating. What is Jessica's share of the real estate taxes for the current
year? - ANS-$354
Dorothy Brownell is trying to help a client sell her home, where an earlier owner shot and killed
his family. What are Brownell's disclosure duties toward prospective buyers? - ANS-She isn't
obligated to tell them anything about the past crime.
Every sales escrow checking account, rental trust checking account or security deposit trust
checking account must be opened as a ____________ unless all parties having an interest in
the funds to be deposited have agreed otherwise in writing. - ANS-Non-interest bearing account
A sales escrow account can be opened by which one of the following? - ANS-A sponsoring
broker
Brokers can put their own money in sales escrow checking accounts to cover service charges,
but no more than - ANS-$2500.
,A resident broker's rental trust account must be - ANS-established in a financial institution in
Louisiana.
A property sells for $140,000 two years after it was purchased. If the annual appreciation rate is
6%, how much did the original buyer pay for it? - ANS-$124,600
In order to end an indeterminate lease on a residential property, what is necessary? -
ANS-Written notice with the prescribed lead time
How does one become a designated agent? - ANS-A licensee gets named by a broker as the
agent of a client
What is an agent's disclosure responsibility, if any, when a known sex offender lives near a listed
property? - ANS-The agent must be sure that the purchase agreement includes the required
notice about the state's sex offender registry.
A seller wants to net $55,614 from the sale of her house after paying a 7% commission. Her
minimum sales price will have to be? - ANS-$59,800
If a corporate building has nine office suites that rents for $14,800 per month each, but suffers
from a 14% vacancy rate and annual expenses of $21,100, what is the NOI of the building
(round to the nearest $100)? - ANS-$1,353,500
If one discount point costs the borrower 1% of the loan amount, and increases the lender's yield
by 1/8th of one percent, how many discount points must be purchased to lower the interest rate
by 1%? - ANS-8
A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91', side D =
18', and side E = 55'. What is the perimeter of the lot? - ANS-275 feet
Violet has a FHA loan for $90,000. The lender is requiring a 1% discount point to the lower the
interest rate. What amount is the lender charging for the discount point? - ANS-$900.00
A buyer secured a $125,000 loan at 4.5% interest rate. To receive a lower interest rate, the
buyer was required to buy down three discount points. How much were the discount points? -
ANS-$3,750.00
What is the number one rule of adjusting properties when using the sales comparison approach
to value? - ANS-Never adjust the subject property
A property is being appraised using the income capitalization approach. Annually, it has an
estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating
expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up
to the nearest $1,000)? - ANS-$368,000
, Land sells for $9,000 an acre. What will 750,000 SF of land sell for? Round to the nearest
thousand. - ANS-$155,000
Assuming that the listing broker and the seller broker in a transaction split their commission
equally, what was the sales price of the property if the commission rate was 6 ½ percent the
listing broker received $5,187? - ANS-$159,600
A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The
lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and
still qualify for this loan amount (to the nearest $1,000)? - ANS-$259,000
A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised at
$185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first
month's interest? - ANS-$637.50
Ralph is buying Terry's house. The buyer's loan amount is $105,580. If the buyer has agreed to
pay 3 points at closing, how much will he pay for the points? - ANS-$3,167
Sean, age 37, sold the home he purchased three years ago and now rents an apartment. He
had originally purchased his home for $86,500 and sold it for $115,300. What is Sean's capital
gain? - ANS-$28,800
A tax rate on a building with a $530,000 taxable value is 4.5 mills per thousand dollars of
assessed valuation. What is the annual tax liability? - ANS-$2,385
Agent Daisy agrees to a 5% commission to list a home at $330,000. The property is sold
through another cooperating brokerage with that firm to receive 50% of the total commission on
the $330,000 sale. If Daisy receives 55% of her broker's commission and does not bring the
buyer, how much does Daisy's broker receive from the sale? - ANS-$3,712.50
If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by
3/8 percent, what is the amount of interest after refinancing? - ANS-4 7/8 percent
A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is -
ANS-8 percent.
Jerry recently obtained an 65% loan on his $295,000 home, and he had to pay $4,300 for
points. How many points did he pay? - ANS-2.2 points
Seller Trevor receives an offer of $181,000 on a property he listed at $193,000. The property
has been appraised at $198,000. How much is the offer as a percent of the listing price? -
ANS-93.8%
Exam 1
A divisible joint obligation is the situation where - ANS-each obligor is obligated to perform only
his or her portion of the obligation and receives only his or her portion of what is due.
A licensee who works as a dual agent must keep a copy of the signed Dual Agency Disclosure
on file for - ANS-five years.
What makes an offer to buy irrevocable? - ANS-It specifies a time for acceptance.
When a broker dies, he or she might leave behind agreements that were "under contract." What
becomes of them? - ANS-They are still valid, since the principals are the buyer and seller, not
the broker.
Property is sometimes given by the owner to someone else for services rendered. Such a gift is
called - ANS-a remunerative donation.
Where must non-resident brokers deposit escrow money that they receive? - ANS-In an escrow
account in a financial institution in Louisiana or in their home state
Flyers, brochures, and "just listed" cards that advertise properties for sale must include -
ANS-the month and year the advertisement is printed, published, or distributed.
A building has 9 apartments generating annual potential rent of $1,500 each month. Vacancy =
6% and annual expenses are $84,000. Vending machines yield $1,800 per year. What is the
NOI? - ANS-$70,080
A property's taxes are $9,540 and are paid for in arrears. The property was sold, and closing
took place on March 7. The seller was responsible for the day of closing. Using the 360 day
method, how will taxes be prorated? - ANS-Credit the buyer $1775.50 and Debit the Seller
$1775.50
If licensees and sponsoring brokers have employment or financial disputes, how must they be
adjudicated? - ANS-Between themselves or in the courts
Concerning "confidential information," it is true that - ANS-it does not include material
information about property condition.
,Vanessa DeWitt is dual agent of seller Stephen Lowry and buyer Robin Struthers, and, as such,
is duty-bound to disclose to Struthers whatever she knows about - ANS-Latent material defects
in Lowry's property.
Tyler Holdlong owns a small retail property that he inherited from his father. There are no
mortgages or interest expenses connected with the property. Tyler takes an annual cost
recovery expense of $3,000. The property has a monthly gross income of $3,500 and monthly
operating expenses of $1,100. Tyler's taxable income from this property will be taxed at a rate of
25%. What is the tax liability for the year? - ANS-$6,450
Some people, when taking the licensing exam, pass the national part but fail the state portion.
What is the next step for these applicants? - ANS-They may retake just the failed portion if they
do so within one year of the failure.
All records related to a real estate transaction must be retained for a period of - ANS-five years.
Property that is neither common nor public is classified as - ANS-a private thing.
A property has sold for $185,000. The listing agreement calls for a commission of 6.5%. The
listing broker and selling broker agree to share the commission equally. What will the listing
agent receive if the agent is scheduled to get a 65% share from his broker? - ANS-$3,908
What does the Law of Agency say about vicarious liability? - ANS-A client is not responsible for
the actions of his agent.
Dan is buying Jessica's house. The closing date (day belongs to seller) of the sale transaction is
March 9th. Current year real estate taxes are $1,900 (will be billed to Dan next year). Use the
365-day method for prorating. What is Jessica's share of the real estate taxes for the current
year? - ANS-$354
Dorothy Brownell is trying to help a client sell her home, where an earlier owner shot and killed
his family. What are Brownell's disclosure duties toward prospective buyers? - ANS-She isn't
obligated to tell them anything about the past crime.
Every sales escrow checking account, rental trust checking account or security deposit trust
checking account must be opened as a ____________ unless all parties having an interest in
the funds to be deposited have agreed otherwise in writing. - ANS-Non-interest bearing account
A sales escrow account can be opened by which one of the following? - ANS-A sponsoring
broker
Brokers can put their own money in sales escrow checking accounts to cover service charges,
but no more than - ANS-$2500.
,A resident broker's rental trust account must be - ANS-established in a financial institution in
Louisiana.
A property sells for $140,000 two years after it was purchased. If the annual appreciation rate is
6%, how much did the original buyer pay for it? - ANS-$124,600
In order to end an indeterminate lease on a residential property, what is necessary? -
ANS-Written notice with the prescribed lead time
How does one become a designated agent? - ANS-A licensee gets named by a broker as the
agent of a client
What is an agent's disclosure responsibility, if any, when a known sex offender lives near a listed
property? - ANS-The agent must be sure that the purchase agreement includes the required
notice about the state's sex offender registry.
A seller wants to net $55,614 from the sale of her house after paying a 7% commission. Her
minimum sales price will have to be? - ANS-$59,800
If a corporate building has nine office suites that rents for $14,800 per month each, but suffers
from a 14% vacancy rate and annual expenses of $21,100, what is the NOI of the building
(round to the nearest $100)? - ANS-$1,353,500
If one discount point costs the borrower 1% of the loan amount, and increases the lender's yield
by 1/8th of one percent, how many discount points must be purchased to lower the interest rate
by 1%? - ANS-8
A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91', side D =
18', and side E = 55'. What is the perimeter of the lot? - ANS-275 feet
Violet has a FHA loan for $90,000. The lender is requiring a 1% discount point to the lower the
interest rate. What amount is the lender charging for the discount point? - ANS-$900.00
A buyer secured a $125,000 loan at 4.5% interest rate. To receive a lower interest rate, the
buyer was required to buy down three discount points. How much were the discount points? -
ANS-$3,750.00
What is the number one rule of adjusting properties when using the sales comparison approach
to value? - ANS-Never adjust the subject property
A property is being appraised using the income capitalization approach. Annually, it has an
estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating
expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up
to the nearest $1,000)? - ANS-$368,000
, Land sells for $9,000 an acre. What will 750,000 SF of land sell for? Round to the nearest
thousand. - ANS-$155,000
Assuming that the listing broker and the seller broker in a transaction split their commission
equally, what was the sales price of the property if the commission rate was 6 ½ percent the
listing broker received $5,187? - ANS-$159,600
A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The
lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and
still qualify for this loan amount (to the nearest $1,000)? - ANS-$259,000
A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised at
$185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first
month's interest? - ANS-$637.50
Ralph is buying Terry's house. The buyer's loan amount is $105,580. If the buyer has agreed to
pay 3 points at closing, how much will he pay for the points? - ANS-$3,167
Sean, age 37, sold the home he purchased three years ago and now rents an apartment. He
had originally purchased his home for $86,500 and sold it for $115,300. What is Sean's capital
gain? - ANS-$28,800
A tax rate on a building with a $530,000 taxable value is 4.5 mills per thousand dollars of
assessed valuation. What is the annual tax liability? - ANS-$2,385
Agent Daisy agrees to a 5% commission to list a home at $330,000. The property is sold
through another cooperating brokerage with that firm to receive 50% of the total commission on
the $330,000 sale. If Daisy receives 55% of her broker's commission and does not bring the
buyer, how much does Daisy's broker receive from the sale? - ANS-$3,712.50
If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by
3/8 percent, what is the amount of interest after refinancing? - ANS-4 7/8 percent
A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is -
ANS-8 percent.
Jerry recently obtained an 65% loan on his $295,000 home, and he had to pay $4,300 for
points. How many points did he pay? - ANS-2.2 points
Seller Trevor receives an offer of $181,000 on a property he listed at $193,000. The property
has been appraised at $198,000. How much is the offer as a percent of the listing price? -
ANS-93.8%
