Principles of Real Estate 2 New Version Exam

Loss of value due to lack of modernization is called: - Correct Ans-Functional obsolescence The __________ is considered the most reliable approach to value because it is based on verifiable market events. - Correct Ans-Sales comparison approach A loss in a property's value due to daily wear and tear is an example of _______ - Correct Ans-Physical deterioration The appraiser will use the cost approach to value: - Correct Ans-A unique building A real property appraisal will contain an analysis of the each of the following, EXCEPT: - Correct Ans-Personal property The appraisal principle of conformity tells us that a house is worth the most when: - Correct Ans-It is in a neighborhood of similarly priced homes Official property value for tax purposes is called: - Correct Ans-Assessed value The appraisal principle of __________ states that the purchase price of a property is affected by the expectation of future appeal and benefits. - Correct Ans-Anticipation The best definition of market value is: - Correct Ans-The most probable price a property should bring in a competitive and open market The effective age of a house can be younger than its __________ if it has been well-maintained. - Correct Ans-Chronological age In which approach to value is the appraiser calculating depreciation as a factor along with land value and replacement cost for a structure? - Correct Ans-The Cost Approach The primary purpose of the FHA is: - Correct Ans-To insure loans When a loan is funded, the FHA charges a(n) __________ which can be paid at closing or added to the loan at funding. - Correct Ans-Up-Front Mortgage Insurance Premium The borrower's monthly payment includes principal and interest plus one-twelfth of the annual property tax assessment and one-twelfth of the annual insurance premium. This is a: - Correct Ans-Budget loan Which of the following statements about the use of gift funds in government loans is true? - Correct Ans-Property must be owner-occupied, Donor must be a relative, domestic partner, or fiancé, Gift funds may be used for the entire down payment A person who brings a borrower and a lender together for a fee is called: - Correct Ans-A lender's agent Most of the specific requirements imposed by TILA are found in _______ - Correct Ans-Regulation Z The __________ is the percentage of the lesser of the appraised value or sales price that the lender will lend - Correct Ans-Loan-to-value ratio The Loan Estimate: - Correct Ans-Is a detailed breakdown of the cost of the loan The Equal Credit Opportunity Act prohibits credit discrimination on the basis of: - Correct Ans-Race, Religion, Sex Which of the following is true of property taxes? - Correct Ans-Property taxes create the highest priority lien against property, Unpaid taxes are an automatic lien and at foreclosure will always be paid first, If property taxes are not paid, the property will be seized and sold Which of the following is one of the four rights that the government retains in land? - Correct Ans-Escheat Police Power is the: - Correct Ans-Right of the government to regulate and control the way land is used If a landowner sues the government in order to force it to buy his or her land, this is called: - Correct Ans-Inverse condemnation A __________ is one in which a property, with the consent of the lender, is sold by an owner/borrower at a price that is not sufficient to pay off the existing mortgage. - Correct Ans-Short sale A Residential Mortgage Loan Originator must be licensed with: - Correct Ans-Texas Department of Savings and Mortgage Lending A sponsoring broker must: - Correct Ans-Maintain written policies to ensure the competency of a supervised sales agent, Require that sales agents are adequately trained in the area in which they practice, Must advise a sales agent in writing of the scope of the sales agent's authorized activities The CHMS designation is a designation for: - Correct Ans-License holders specializing as a residential seller's agent Leverage is: - Correct Ans-The use of borrowed money to make money Disadvantages of real estate investment include which of the following? - Correct Ans-Risk, The need for management, Lack of liquidity Investors invest in real estate to satisfy which of the following objectives? - Correct Ans-Appreciation of properties, Income derived from collecting rents, Investment gain The TREC buyer's temporary lease agreement, or seller's temporary lease agreement, is for periods of time of: - Correct Ans-90 days or less Which of the following is a requirement of a valid lease? - Correct Ans-Competent parties Which of the following types of leases would be most appropriate for a shopping center? - Correct Ans-Percentage lease A lease for a period of more than one year must be in writing to comply with the _____ - Correct Ans-Statute of Frauds Which of the following is one of the four leasehold estates? - Correct Ans-Tenancy at will The Landlord and Tenant Act - Correct Ans-Is a lengthy and detailed set of rules that address issues such as security deposits, default, repairs, damage to property and the eviction process, Defines the rights and obligations of both landlord and tenant in the leasing of residential and commercial properties, Is found in the Texas Property Code, Title 8 The __________ is an instrument or conveyance used to create a leasehold estate. - Correct Ans-Lease The property manager's employment contract is the: - Correct Ans-Management agreement The property manager is most often an employee or: - Correct Ans-A general agent of the owner A property manager's responsibility is to: - Correct Ans-Generate income for the owner, Preserve the value of an investment, Serve as a "buffer" between the tenant and the landlord For a valid and properly prepared deed to transfer or convey title it - Correct Ans-Must be delivered and accepted Deeds require: - Correct Ans-Signature of the grantor When a grantor transfers title but retains some rights this is called: - Correct Ans-A reservation A handwritten will is called: - Correct Ans-A holographic will A buyer who wants to ensure that he is receiving good title should request: - Correct Ans-A general warranty deed A statement of the condition of title at a moment in time is called: - Correct Ans-A title committment If an individual dies without a will: - Correct Ans-An administrator will be appointed by the courts to settle their estate, They are said to have died intestate, Their heirs have title by descent Involuntary alienation can be the result of all of the following, EXCEPT: - Correct Ans-Conveyance by will RESPA regulates closings on: - Correct Ans-1-4 family residential properties with federally-related financing _______ is the process of dividing expenses such as property taxes and Property Owner Association fees between the buyer and seller at closing. - Correct Ans-Splitting The Loan Estimate form replaces which of the following forms? - Correct Ans-The Good Faith Estimate