Principles of Real Estate 2 (Exam Review)
Exam Questions With Correct Answers
Math /Calculation /- /Principal, /Interest, /and /Term /- /correct /answer(s) /✔✔ /Principal: /the
/amount /of /the /loan /itself
Interest: /money /paid /at /a /particular /rate /for /the /use /of /money /loaned /to /a /person /or /entity
Term: /the /term /of /the /debt /obligation(s)
Real /Estate /Transaction /Terminology /- /correct /answer(s) /✔✔ /Funding: /process /of /transferring
/funds /to /a /title /or /escrow /company /for /disbursement /
Servicing: /includes /sending /monthly /payment /statements /and /collecting /monthly /payments,
/maintaining /records /of /payments /and /balances, /collecting /and /paying /taxes /and /insurance,
/remitting /funds /to /the /note /holder, /and /following /up /on /delinquencies /
Origination: /the /process /of /creating /a /new /mortgage /loan, /including /all /steps /taken /by /a
/lender /to /attract /and /qualify /a /borrower
Consummation: /the /closing /of /a /real /estate /transaction /in /which /all /appropriate /documents
/are /signed /and /the /proceeds /are /disbursed /
Closing: /final /phase /of /mortgage /loan /processing /in /which /the /property /title /passes /from /the
/seller /to /the /buyer
,Appraisal /Principles /- /correct /answer(s) /✔✔ /1) /Principle /of /Contribution /- /suggests /that /a
/property's /value /is /equal /to /the /sum /of /the /contributory /value /of /each /of /its /component
/parts; /cost /does /not /equal /value
2) /Principle /of /Change /- /forces /of /change /can /be /specific /or /external /to /the /property
3) /Principle /of /Anticipation /- /states /that /the /purchase /price /is /affected /by /the /expectation /of
/future /appeal /and /benefits
4) /Principle /of /Substitution /- /a /commodity's /value /is /influenced /by /the /cost /of /acquiring /a
/substitute /or /comparable /item
5) /Principle /of /Conformity /- /suggests /that /value /is /maximized /when /there /is /a /reasonable
/degree /of /homogeneity, /or /sameness, /in /a /neighborhood
6) /Principle /of /Increasing /& /Decreasing /Returns /- /it /is /prudent /to /improve /property /when /the
/value /added /by /the /improvement /exceeds /the /cost /of /the /improvement; /owner /should /not
/"over-improve" /a /property
7) /Principle /of /Supply /& /Demand /- /when /the /demand /for /real /estate /is /great, /and /the /supply
/is /short, /prices /go /up. /When /supply /is /low, /and /demand /is /low, /prices /decline; /does /not
/respond /as /quickly
8) /Principle /of /Regression /- /the /presence /of /lower-priced /properties /in /the /area /will /cause /a
/decline /in /the /value /of /subject /property
/Principle /of /Progression /- /the /value /of /a /subject /property /is /increased /by /the /value /of /the
/surrounding /properties
, 9) /Principle /of /Competition /- /the /absence /of /competition /will /cause /prices /to /increase /in /the
/marketplace; /increased /competition /tends /to /bring /prices /down
10) /Principle /of /Balance /- /states /that /mixed /land /use /should /result /in /the /maximum /value /for
/all /properties /involved
Types /of /Agency /Employment /Contracts /- /correct /answer(s) /✔✔ /1) /Listings /- /an /employment
/contract /and /agency /agreement /between /a /broker /and /a /seller
2) /Management /Agreement /- /establishes /the /role /of /a /property /manager
3) /BRA /- /Buyer's /Representation /Agreement; /agreement /stating /that /an /agent /is /representing
/a /buyer
Purpose /& /Timing /of /a /Buyer's /Final /Walkthrough /- /correct /answer(s) /✔✔ /The /final /days
/leading /up /to /the /closing /to /ensure /that /the /condition /of /the /property /is /consistent /with /its
/condition /when /the /contract /was /signed
Government's /Rights /in /Land /(PETE) /- /correct /answer(s) /✔✔ /P: /Police /Power; /the /right /of /the
/government /to /regulate /and /control /the /way /land /is /used
E: /Eminent /Domain; /the /right /of /the /government /to /take /private /land /for /public /use
T: /Taxation; /the /government's /right /to /tax /real /estate
E: /Escheat; /the /process /of /transferring /real /estate /to /the /state /when /a /person /dies /intestate
/and /without /heirs
Exam Questions With Correct Answers
Math /Calculation /- /Principal, /Interest, /and /Term /- /correct /answer(s) /✔✔ /Principal: /the
/amount /of /the /loan /itself
Interest: /money /paid /at /a /particular /rate /for /the /use /of /money /loaned /to /a /person /or /entity
Term: /the /term /of /the /debt /obligation(s)
Real /Estate /Transaction /Terminology /- /correct /answer(s) /✔✔ /Funding: /process /of /transferring
/funds /to /a /title /or /escrow /company /for /disbursement /
Servicing: /includes /sending /monthly /payment /statements /and /collecting /monthly /payments,
/maintaining /records /of /payments /and /balances, /collecting /and /paying /taxes /and /insurance,
/remitting /funds /to /the /note /holder, /and /following /up /on /delinquencies /
Origination: /the /process /of /creating /a /new /mortgage /loan, /including /all /steps /taken /by /a
/lender /to /attract /and /qualify /a /borrower
Consummation: /the /closing /of /a /real /estate /transaction /in /which /all /appropriate /documents
/are /signed /and /the /proceeds /are /disbursed /
Closing: /final /phase /of /mortgage /loan /processing /in /which /the /property /title /passes /from /the
/seller /to /the /buyer
,Appraisal /Principles /- /correct /answer(s) /✔✔ /1) /Principle /of /Contribution /- /suggests /that /a
/property's /value /is /equal /to /the /sum /of /the /contributory /value /of /each /of /its /component
/parts; /cost /does /not /equal /value
2) /Principle /of /Change /- /forces /of /change /can /be /specific /or /external /to /the /property
3) /Principle /of /Anticipation /- /states /that /the /purchase /price /is /affected /by /the /expectation /of
/future /appeal /and /benefits
4) /Principle /of /Substitution /- /a /commodity's /value /is /influenced /by /the /cost /of /acquiring /a
/substitute /or /comparable /item
5) /Principle /of /Conformity /- /suggests /that /value /is /maximized /when /there /is /a /reasonable
/degree /of /homogeneity, /or /sameness, /in /a /neighborhood
6) /Principle /of /Increasing /& /Decreasing /Returns /- /it /is /prudent /to /improve /property /when /the
/value /added /by /the /improvement /exceeds /the /cost /of /the /improvement; /owner /should /not
/"over-improve" /a /property
7) /Principle /of /Supply /& /Demand /- /when /the /demand /for /real /estate /is /great, /and /the /supply
/is /short, /prices /go /up. /When /supply /is /low, /and /demand /is /low, /prices /decline; /does /not
/respond /as /quickly
8) /Principle /of /Regression /- /the /presence /of /lower-priced /properties /in /the /area /will /cause /a
/decline /in /the /value /of /subject /property
/Principle /of /Progression /- /the /value /of /a /subject /property /is /increased /by /the /value /of /the
/surrounding /properties
, 9) /Principle /of /Competition /- /the /absence /of /competition /will /cause /prices /to /increase /in /the
/marketplace; /increased /competition /tends /to /bring /prices /down
10) /Principle /of /Balance /- /states /that /mixed /land /use /should /result /in /the /maximum /value /for
/all /properties /involved
Types /of /Agency /Employment /Contracts /- /correct /answer(s) /✔✔ /1) /Listings /- /an /employment
/contract /and /agency /agreement /between /a /broker /and /a /seller
2) /Management /Agreement /- /establishes /the /role /of /a /property /manager
3) /BRA /- /Buyer's /Representation /Agreement; /agreement /stating /that /an /agent /is /representing
/a /buyer
Purpose /& /Timing /of /a /Buyer's /Final /Walkthrough /- /correct /answer(s) /✔✔ /The /final /days
/leading /up /to /the /closing /to /ensure /that /the /condition /of /the /property /is /consistent /with /its
/condition /when /the /contract /was /signed
Government's /Rights /in /Land /(PETE) /- /correct /answer(s) /✔✔ /P: /Police /Power; /the /right /of /the
/government /to /regulate /and /control /the /way /land /is /used
E: /Eminent /Domain; /the /right /of /the /government /to /take /private /land /for /public /use
T: /Taxation; /the /government's /right /to /tax /real /estate
E: /Escheat; /the /process /of /transferring /real /estate /to /the /state /when /a /person /dies /intestate
/and /without /heirs
