Real Estate: Property Sales, Mortgages, and Regulations, Exams of Real Estate Management

Download Real Estate: Property Sales, Mortgages, and Regulations and more Exams Real Estate Management in PDF only on Docsity! 45 HOUR POST LICENSE EXAM LATEST EXAM 2024 | ALL QUESTIONS AND CORRECT ANSWERS | ALREADY GRADED A+ | VERIFIED ANSWERS A recent sale at $290,000 incurred expenses of $4,300, and a brokerage fee of 25,500. Prorations for taxes and interest are $5,800 and the mortgage payoff is 192,000. What are the Sellers net proceeds from the sale? ------CORRECT ANSWER-------------- -290,000 - 192,000 = 98,000 sellers equity 98,000 - 4,300 - 25,000 - 5,800 = 62,400 net proceeds A salesperson wants to earn $120,000 this year. He/she plans 70% of their income will come from listings and 30% from sales. If the average commission from the listings sold is $4,000, how many listings must the salesperson sell to achieve their goal? ----- -CORRECT ANSWER---------------120,000 x 70% = 84,000 / 4,000 = 21 listings A salesperson wants to take home $70,000 annually. If taxes dues, advertising and fees are about 25% of his total earnings, he should set his goal at: ------CORRECT ANSWER--------------- $70,000 / .75 = $93,333 The Smith's sell their home for $628,000. The brokerage fee is $37,680, expenses of the sale are $5,600, prorations for taxes and interest are $8,480 and the mortgage payoff is $465,000. What is the Sellers equity ------CORRECT ANSWER--------------- $628,000 - 465,000 = sellers equity A sales associate is making the calculations for a buyer's cost estimate. Selling price is $325,000, and the buyers will secure 90% financing. Closing cost estimates are $9,600 and prepaid are $3,00. If the buyer has given a $5,000 good faith deposit, how much will be due at closing? ------CORRECT ANSWER-------------- -$325,000 x 10% + 9,600 + 3,000 - 5,000 = 40,100 A property sold for $538,000. The buyer made a 20% down payment and financed the balance with a new mortgage. Calculate the documentary stamp taxes on the deed. ------ CORRECT ANSWER---------------538,000 / 100 x .70 = 3,766.00 Carolina has a condo listed at $285,000 on 6th Street. It's overprice and she feels it only has a 60% chance of selling during the original listing period. She also has a house listed at $325,000 house that has an 80% chance of selling during the original list period. A quality review of her listing would indicate she technically has.... ------CORRECT ANSWER---------------1.4 listings with $431,000 volume 60% x 285,000 = 171,000 80% x 325,000 = 260,000 combined = 431,000 Which event automatically allows a buyer to void a purchase and sale contract? ------CORRECT ANSWER---------------The appraisal value is lower than the value required in a contract contingency. An example of redlining occurs when ------CORRECT ANSWER--- ------------a loan officer tells a buyer that the mortgage interest rate will be higher because the home is located in a minority area. Learning to complete a listing agreement is called ------CORRECT ANSWER---------------Technical Knowledge Callers on classified advertising usually ask for the... ------ CORRECT ANSWER---------------Property Address The major reason listings expire is almost always... ------ CORRECT ANSWER---------------Price The percentage added to Adjustable Rate Mortgage is called the - -----CORRECT ANSWER---------------Margin The best source for Sales Associates to Find FSBO'S is the ------ CORRECT ANSWER---------------Classified Ads The 3 components of a title search are: ------CORRECT ANSWER---------------Survey, Physical Inspection, and Public Records An owner lists his house with a Broker but doesn't have to pay a commission if he sells his property himself. This a/n.... ------ CORRECT ANSWER---------------Exclusive Agency Listing To ensure that no damage was done to the home during moving a buyer should.... ------CORRECT ANSWER---------------conduct a Preclosing Walk-through Inspection Which duty falls under Transaction Brokerage? ------CORRECT ANSWER---------------Limited Confidentiality, Disclosing all known Facts that Materially Affect the Value, Dealing Honestly and Fairly, Accounting for all Funds, Presenting all Offers and Counteroffers in a timely manner 3 keys to Prospecting success are: ------CORRECT ANSWER----- ----------Consistency, Numbers, and Organization A broker must give a written Brokerage Relationship Disclosure for "Single" and "No Brokerage" Relationships for residential sales. Name the 3 criteria for a property to Qualify as a Residential Sale: ------CORRECT ANSWER--------------- Residential Property with 4 Units or Less, Vacant Land zoned for 4 Units or Less, and Agricultural Property 10 Acres or Less The Housing for Older Persons Act allows certain communities to be exempt from "family status" protection provided by the Fair Housing Act, if two conditions are met: ------CORRECT ANSWER- --------------At least 80% of the units have at least one occupant who is 55 years of age The Can-Spam Act requires 3 things: ------CORRECT ANSWER-- -------------1. The Form and To and routing information be correct and identify sender. 2. Recipients must be given an opt-out method. 3. Commercial e-mail must be identified as an advertisement and include the senders valid physical postal address. A contractor that disturbs paint in a property built before 1978 must: ------CORRECT ANSWER---------------At least 5 years experience, Be a licensed home inspector, be certified and follow specific work procedures, and no do work in excess of $10,000 A reflecting method that is occasionally repeated is called ------ CORRECT ANSWER---------------Matching A non-cash expense that plans for the eventual wearing out of major property components is ------CORRECT ANSWER------------ ---Reserves for replacements ...is the illegal practice of charging higher interest rates for homes located in a minority area ------CORRECT ANSWER--------------- Redlining Long-term capital gains are taxed at a maximum rate of.... ------ CORRECT ANSWER---------------15% If a sales contract describes each piece of personal property remaining with property after the sale and includes a separate price for each piece: ------CORRECT ANSWER---------------sales tax must be paid on the personal property When staging a home a seller should not... ------CORRECT ANSWER---------------use unique decorating touches A licensee may prepare an appraisal if he/she is not involved in the sale and/or ------CORRECT ANSWER---------------The listing of the property Filing a suit to quiet title is used when ------CORRECT ANSWER-- -------------a title defect is found, which is difficult to remove by ordinary means. What are the benefits of restrictive covenants? ------CORRECT ANSWER---------------Maintain and enhance value What's the downside for a principal who has a single agent? ------ CORRECT ANSWER---------------Responsible for the single agent's acts What is the likely cause of a contract for sale of real estate being ruled as unenforceable? ------CORRECT ANSWER--------------- Unwritten agreement Aside from a property's location, what is the most important factor that influences market value? ------CORRECT ANSWER------------- --Highest and best use The margin is ------CORRECT ANSWER---------------the percentage added to the index of an adjustable-rate mortgage that results in the calculated rate. A home sells for $370,000. The mortgage payoff is $262,500. What is the seller's equity? ------CORRECT ANSWER--------------- $107,500 How often do mortgage loan originators need to have a criminal background check? ------CORRECT ANSWER---------------Every year A written listing agreement with a self-renewing clause ------ CORRECT ANSWER---------------is void. When you explain the pricing process during a listing presentation, you would NOT ordinarily discuss ------CORRECT ANSWER---------------the process of closing a sale. What are the three keys to prospecting success? ------CORRECT ANSWER---------------Organization, numbers, and consistency A sales associate, to test his understanding of what the customer has said, uses words that are similar, but not exactly the same as the customer's. This is called ------CORRECT ANSWER------------- --paraphrasing. The total room count in a house would include ------CORRECT ANSWER---------------bedrooms. The four basic loan processing procedures are ------CORRECT ANSWER---------------checking the borrower's ability to repay, appraising collateral's property value, preparing loan documents, and checking the title of the collateral. The three types of operating expenses of an income property are ------CORRECT ANSWER---------------reserves for replacements, fixed, and variable. Which emails are illegal under the CAN-SPAM Act? ------ CORRECT ANSWER---------------Misleading from and to information in the email A home is being appraised for a mortgage loan. One of the comparable properties is smaller than the subject property, and the appraiser estimates the difference to be $7,800. The appraiser will make ------CORRECT ANSWER---------------a plus $7,800 adjustment to the comparable. Which purchase and sale agreement item supersedes the other? ------CORRECT ANSWER---------------Handwritten clause supersedes the printed clause Which listings may be entered into the MLS? ------CORRECT ANSWER---------------Exclusive agency listings and exclusive right-of-sale listings Florida law requires brokers to ------CORRECT ANSWER----------- ----give sellers the copies of written listing agreements within 24 hours. A sales associate is talking with a customer. When the customer crosses his legs, the associate smiles and crosses his arms. The associate is using a reflecting method called ------CORRECT ANSWER---------------matching. A substantial good-faith deposit and a bank preapproval letter means that the buyer is ------CORRECT ANSWER--------------- ready, willing, and able. What are the requirements for persons disturbing lead-based paint in a house? ------CORRECT ANSWER---------------The person must be certified and follow specific work procedures. Reconciliation is ------CORRECT ANSWER---------------the resolution of several adjusted values on a comparative market analysis. Which would be considered a preclosing duty? ------CORRECT ANSWER---------------Making a walk-through inspection of the property A buyer is closing on the purchase of a residence. The ad valorem taxes for the year are estimated to be $2,640. The closing date is February 1, and the day of closing belongs to the buyer. Using the 365-day method, what is the proration? ------ CORRECT ANSWER---------------Debit seller, credit buyer $224.22 Under the Americans with Disabilities Act, there must be at least one accessible parking space for every ------CORRECT ANSWER---------------25 spaces. What is the purpose in having your buyers write a letter to the seller saying why they want to buy the home? ------CORRECT ANSWER---------------To help sellers favor your buyers over competing buyers What are the five categories of a sales associate's leads? ------ CORRECT ANSWER---------------Close friends and family, friends, customers, acquaintances, and targeted strangers A person may not send a commercial advertising fax unless he has ------CORRECT ANSWER---------------an established business relationship. Under the Americans with Disabilities Act, if the removal of barriers can be accomplished with little difficulty or expense, it is considered ------CORRECT ANSWER---------------readily achievable. Social media is defined as ------CORRECT ANSWER--------------- technology for people who want to create and share information in the virtual communities they join. Which is NOT a requirement for a listing? ------CORRECT ANSWER---------------Having a self-renewing clause The minimum legal description for a platted subdivision would include ------CORRECT ANSWER---------------subdivision name, county, lot and block number, plat book and page number. What are the best sources for a property's legal description that will be used in a contract? ------CORRECT ANSWER--------------- The county clerk's office, owner's deed, previous title policy What is NOT the purpose for making a preclosing walk-through inspection? ------CORRECT ANSWER---------------To check that all items are in working order Which professional providing services to the real estate industry must have a high school diploma, complete a 120-hour course, and pass a state examination? ------CORRECT ANSWER----------- ----Home inspector Information on the do-not-call registry includes ------CORRECT ANSWER---------------the person's phone number. When a loan officer looks over a person's credit score, she knows that the most important factor in setting that score is the applicant's ------CORRECT ANSWER---------------payment history. The Fair Housing Act does NOT protect persons ------CORRECT ANSWER---------------in a same-sex relationship. What usually happens when a listed property is overpriced? ------ CORRECT ANSWER---------------The listing expires. In what case would sales tax be required for personal property included in a house sale? ------CORRECT ANSWER---------------If the contract for the sale of the house includes a list and separate valuation of the personal property Where is the best place to find expired listings? ------CORRECT ANSWER---------------The MLS Owners of 800 homes in a subdivision list their houses, on average, every eight years. If a sales associate farms that neighborhood and lists 20% of the homes, how many homes can she expect to list this year? ------CORRECT ANSWER--------------- 20 // 800 homes ÷ 8 years = 100 homes listed annually. 100 × .20 = 20 homes listed by the sales associate. A salesperson wishes to take home $80,000 annually. If taxes, dues, advertising, and fees are about 35% of his total earnings, he should set his goal at around ------CORRECT ANSWER--------- ------$123,000. // Divide the desired earnings by .65 (100% - 35%). $80,000 ÷ .65 = $123,077, rounded to $123,000. Which is NOT a requirement for a successful listing presentation? ------CORRECT ANSWER---------------Must be younger than 60 years old Which is an operating expense of an income property? ------ CORRECT ANSWER---------------Management fee A person who has an immediate need to buy is called ------ CORRECT ANSWER---------------a Priority 1 buyer. When you talk with a for sale by owner about her property, your principal objective should be to ------CORRECT ANSWER----------- ----make an appointment. The Civil Rights Act of 1866 prohibits discrimination based on ----- -CORRECT ANSWER---------------race. The sphere of influence is NOT ------CORRECT ANSWER---------- -----a farm area Hearing, understanding, and evaluation are part of what type of skill set? ------CORRECT ANSWER---------------Listening A show list consists of ------CORRECT ANSWER--------------- apartments that are currently available for rent and in excellent condition. A sales associate who asks a prospective buyer, "How many bedrooms do you need in the house?" is ------CORRECT ANSWER---------------qualifying the buyer's housing objectives. A sales associate receives a good-faith deposit from a buyer on Wednesday. The broker must deposit the funds into the escrow account no later than the following ------CORRECT ANSWER------ ---------Monday. Antitrust laws ------CORRECT ANSWER---------------prohibit price fixing. At closing, a seller will be asked to sign an affidavit that ------ CORRECT ANSWER---------------there are no liens or rights to file a lien on the property. When staging the home, the seller should ------CORRECT ANSWER---------------highlight with color. A person applies for a $300,000, 30-year fixed-rate mortgage loan at 4%. The mortgage payment factor is .00477415. Taxes for the year are $4,000, and insurance is $2,400. Her monthly payment for principal, interest, taxes, and insurance (PITI) will be ------ CORRECT ANSWER---------------$1,965.58. // 58. $300,000 × .00477415 = $1,432.25 principal and interest. $4,000 taxes ÷ 12 months = 333.33. $2,400 insurance ÷ 12 months = 200. $1,432.25 + $333.33 + $200 = $1,965.58 total PITI. What is a real problem for many for sale by owners when showing the property? ------CORRECT ANSWER---------------When curb appeal is not good, buyers often pass by a for-sale-by-owner house without stopping. Name four characteristics you should look for when selecting a farm area: ------CORRECT ANSWER---------------#1 high-turn-over (most important), increasing property values, not being farmed, amd mid-to-upper price range 2 successive quarterly increases of the GDP is ------CORRECT ANSWER---------------Recovery $3,000 to the Seller. This is a/n... ------CORRECT ANSWER-------- -------Unenforceable contract What is the most appropriate type of transaction when using the FAR Sale Contract? ------CORRECT ANSWER---------------Sales of a house or Vacant land What are the five categories of Sales Associates potential leads? ------CORRECT ANSWER---------------Close friends and family, Friends, Customers, Acquaintances, and Targeted strangers To comply with the Americans with Disabilities Act how many parking spaces must be reserved for disabled person? ------ CORRECT ANSWER---------------1 space for every 25 spaces If a Sales Associate leans back in his/her chair and joins their hands behind their head, they are demonstarting ------CORRECT ANSWER---------------Superiority, non-verbally A comparable property has 3 bedrooms, while the subject property has four. the subject property is in worse condition than the comparable. The subject property doesn't have a fire place while the comparable property does. An appraiser estimates the value of a bedroom at $10,000 and the difference in condition to be $12,000 and a fireplace at $4,000. The Adjustment is... ------ CORRECT ANSWER---------------minus $6,000 to the Comp (remember CBS and CIA) According to Florida, law five requirements that must be included in all written listing agreements are: ------CORRECT ANSWER----- ----------Expiration date, property description, price and terms, commission, and signatures What 2 documents will convince a Seller that a Buyer is "ready, willing and able to complete the transaction?" ------CORRECT ANSWER---------------Deposit and Pre-approval letter The major reason a listing expires is: ------CORRECT ANSWER--- ------------Overpricing A listing agreement contains a provision that says if the seller does nothing when the listing reaches the expiration date, the listing will automatically be extended for an additional 90 days. This listing is: ------CORRECT ANSWER---------------Void The reason a Buyer might ride by a listing without stopping to see a property, is because it lacks: ------CORRECT ANSWER----------- ----Curb Appeal The Federal law requiring women and minorities be treated fairly when applying for a loan is ------CORRECT ANSWER--------------- Equal Credit Opportunity Act What are the 4 loan processing procedures? ------CORRECT ANSWER---------------1. Qualifying borrowers 2. Appraisal 3. Title marketability 4. Prepare closing docs The reason a Sales Associate might recommend a Buyer make a 20% rather than 15% down payment is: ------CORRECT ANSWER---------------Eliminate mortgage insurance If one spouse isn't available to sign a Contract to Purchase, and the parties wish to have the absent spouses' name included on the deed, they should: ------CORRECT ANSWER--------------- Amend the contract at closing The Sales Associate's primary objective when answering an ad call: ------CORRECT ANSWER---------------Make an appointment An appraiser estimates the subject property to be in better condition than the comparables, to which he/she assigns a value of $6,000. The subject has three bedrooms while the comparable has four. The appraiser assigns 12,000 to the value of a bedroom. The Adjustment is: ------CORRECT ANSWER----------------6,000 to the Comparable The format for an open listing can be: ------CORRECT ANSWER-- -------------Oral, Written, or Implied A legal description for a listing should not be taken from the ------ CORRECT ANSWER---------------Count Tax appraisers records The definition of a nominee loan is: ------CORRECT ANSWER----- ----------The borrowers identity is conceal through a straw buyer who allows the borrower to use the nominee's name and credit history to apply for the loan Name six important points to remember when making prospecting calls ------CORRECT ANSWER---------------1. Success in numbers 2. Consistency 3. Call at your best time 4. Make 1st call 5. Remember the goal 6. You'll improve When a licensee represents a buyer or seller in a transaction and they are responsible for the actions of the licensee, their broker relationship is one of: ------CORRECT ANSWER---------------Single Agency Regarding the closing papers required for a closing the Sales Associate should: ------CORRECT ANSWER---------------A. Review with customer one day before closing B. Give buyer amount for certified check C. Get binder check for closing A legal description for a platted subdivision would include ------ CORRECT ANSWER---------------Country where the property is located Lot and Block number Subdivision name If you are presenting a buyer's offer you should not: ------ CORRECT ANSWER---------------Present the offer without the listing agent being present At closing a seller will be required to sign an affidavit that: ------ CORRECT ANSWER---------------True owner of the property No liens Right to convey Buyers see a property they like and then say they want to sleep on it. What should the sales associate do? ------CORRECT ANSWER---------------Ask permission to prepare the paperwork as if they were buyer, then go over it together The best way to clear a cloud on a title that is difficult to remove is with a: ------CORRECT ANSWER---------------Suite to Quiet Title Operating expenses included in an income producing property include: ------CORRECT ANSWER---------------maintenance, property taxes, and insurance Discuss at least 6 areas that should be covered when explaining the pricing process during the listing presentation: ------CORRECT ANSWER---------------Current Market Conditions Months Supply of Homes on Market CMA CMA best price Your analysis of the market Pricing pyramid In a newer subdivision of about 600 homes, the median sales price is $430,000. Last year 78 homes sold a 10% decline from