Alabama Real Estate Final Exam Study Guide - 60 Hour Course

Alabama Real Estate Final Exam Study Guide - 60 Hour Course Flashcards Unintentional misrepresentation is generally consideredA.an accident that requires no punishmentB. the same as fraudC. more series than intentional misrepresentation because it demonstrates a lack of professional competenceD. less serious than intentional fraud but still a violation to be punished

• less serious than intentional fraud but still a violation to

be punished

A condominium estate is distinguished by:A. Ownership of

a share in an association and a condominium lease on the owned unitB. Tenancy in common interest in airspace and common areas of the propertyC. Fee simple ownership of a unit and undivided share of the common areasD. Fee simple ownership of an equal share of the entire property

• Fee simple ownership of a unit and undivided share of

the common areas In evaluating a loan application, a mortgage lender is most

concerned aboutA: the loan interest rate and loan termB.

the property location and the amount of the borrowers downpaymentC. the applicant's financial capability and the value of collateralD. the applicants credit history and background

• the applicant's financial capability and the value of

collateral The taxable income from an investment property is estimated by using which of the following formulas?A. cash flow minus depreciationB. Net income plus depreciationC.Net income minus debt serviceD. Net income minus interest and depreciation

• Net income minus interest and depreciation

A landlord agrees to pay a broker for procuring a tenant unless someone else finds the tenant first. This is an example of a(n)A. exclusive right to sell agreementB.exclusive agency agreementC. open listingD. net listing

• open listing

Under a special agency agreement, a broker is not authorized toA. schedule open housesB. advertise the property using the name of the brokerageC. discuss price adjustments with the principalD. execute a contract for sale agreement

• execute a contract for sale agreement

A property has a net income of $50,000 interest payments of $35,000, principal payments of $3,000, and annual cost recovery of $7,000. The property's tax rate is 28%. What is the property's annual tax on income?A. $4,200B. $3,360C.

$2,240D. $1,400

C. $2,240

A master plan can be best described asA. a forecast of existing land use patterns in a marketB. a plat of a subdivision preceding the design of a land use

developmentC. a fusion of land use laws and local land use objectives and strategiesD. None of the above

• a fusion of land use laws and local land use objectives

and strategies.

A lender determines that a homebuyer can afford to borrow $120,000 on a mortgage loan. The lender requires an 80% loan to value ratio. How much can the borrower pay for a property and still qualify for this loan amount?A. $96,000B.

$106,000C. $150,000D. $160,000

C. $150,000

A property owner in a development is required to have a shake roof. This is a requirement is most likely to come

from:A. a deed restrictionB. a zoning ordinanceC. a

building codeD. a condominium declaration

• a deed restriction

In a lien-theory state:A. Liens are recorded in trusts as

opposed to title recordsB. the lender records a lien while the borrower retains titleC. liened properties are foreclosed by strict foreclosureD. trustees retain title during a mortgage period

• the lender records a lien while the borrower retains title

Spenser, who works for selling broker Smith, sells a house listed by listing broker Adams. The house sells for $425,000. The co-brokerage split between Smith and Adams is 50-50. Spenser is on a 65% commission schedule with Smith. If the total commission rate is 7%, what is Spenser's commission?A. $9,669B. $13,812C.

$14,875D. $19,338

A. $9,669

Which of the following is true of a homestead?A. A homestead interest can be conveyed by one spouseB. A homestead interest cannot be exempt from creditorsC. A homestead interest is a form of legal life estateD. A homestead is any privately owned single-family residence

• A homestead interest is a form of legal life estate

An easement by prescription requires that:A. the use be

continuous, known, and permitted by the owner for a period of timeB. the use by continuous, open, and hostile for a required period of timeC. the owner of an adjoining property be landlockedD. the owner of the affected property be and adverse possessor

• the owner of an adjoining property be landlocked

A tax rate is derived byA. dividing the tax requirement by the tax baseB. multiplying the tax base times the tax requirementC. Subtracting other sources of revenue from the total budget of the taxing districtD. dividing the tax base by the tax requirement

• multiplying the tax base times the tax requirement

A buyer representative locates a suitable property through an owner broker. The buyer buys the property; the seller pays a commission, and the two agents split the commission. In this instance, the owner broker is acting asA. a single agent for the ownerB. a dual agentC. a subagentD. a co-operating agent

• a single agent for the owner

A principal residence is bought for $180,000. A new porch is added, costing $7,000. Five years later the homes sells

for $220,000 and the closing costs $18,000. What is the homeowner's capital gain tax?A. $15,000B. $29,000C.

$33,000D. $51,000

A. $15,000