final test practice for new jersey real estate test Flashcards

final test practice for new jersey real estate test Flashcards What was the primary reason asbestos was used prior to our knowledge of the health risks?

: fire resistance

A salesperson goes on a listing appointment where the owner informs the agent that he has missed a couple of mortgage payments. The property values have declined and now the owner owes more for the property than it's worth. In order for the owner to sell without needing to bring money to the closing table, the agent should suggest that the seller negotiate a short sale with his bank A note that calls for periodic payments of principal only, with a balloon payment at the end of the loan term, is called a(n) installment note What type of relationship best describes how a real estate broker represents her principal in the sale of the principal's single-family home?special or specific agency Who makes the payments to a claimant from the Guaranty Fund?The state treasurer What document uses legal title to real property to secure debt?mortgage Archie and Bert mutually agree to terminate a contract. The buyer, Bert, asks for the earnest money back and the seller, Archie, consents. This is an example of rescission Which law is being violated when agents from different firms discuss and agree upon commission rates?Sherman Antitrust Act A listing agent tells a buyer customer the seller is desperate for an offer. The buyer asks the agent if the agent could tell him the seller's bottom line so the negotiations will be brief. The agent suggests 10% under list price. The seller accepts the offer. Has there been a violation?Yes, a breach of duty to the seller has occurred A property is appraised at $150,000 and assessed for tax purposes at 35% of value. Calculate the semi-annual tax bill if the mills total is 80.$2,100Don't forget to divide the answer by two as a final

step. The formula for obtaining property taxes is as follows:

Take the appraised value of $150,000 and multiply it by the assessed rate of 35%, which will yield the assessed value.Next, take the assessed value and multiply it by the millage of 80 and divide the answer by 1,000 (as mill means $1 per $1,000). This will give an answer of $4,200, but remember to divide by two, since the question asks for the

semi-annual tax bill: $4,200 / 2 = $2,100.

Jamie wants to sell her home. She must pay off her existing $97,500 mortgage and pay $5,000 in closing costs.

Rounding your answer to the nearest dollar, if she pays a 7% commission, what is the minimum offer she can accept?110,215Two steps are required to solve this problem. First,

add the expenses: $97,500 + $5,000 = $102,500. This is

the whole/base cost. Now, factor in the broker's commission fee. The Sale Price = 100% and the Commission = 7%; thus, net to Matt equals 93% (100% - 7% = 93%). Now, use the net to owner/seller pricing formula, Whole (Total/Gross Sale price) = Part (Net amount

• Expenses) / Percent (100% minus deductions) and plug

in the known values: $102,500 / 0.93 = $110,215.05.

Rounded, Matt should sell his home for a minimum of

$110,215.

Refusing to make loans based on the racial composition of a neighborhood is called redlining Which would NOT result from the exercise of police power?developer's restrictive covenants Which is NOT a fiduciary duty?achievement Who is NOT an agent or subagent?a non-licensed personal assistant of an agent The square footage of a two-story building that is 54' x 40' is 4,320 sq ft54' x 40' x 2 (there are two floors) = 4,320 square feet.A dual agent CANNOTall of the answers listed The offeror is the person whomakes the offer A salesperson commits racial steering if he all of the answers listed At time of license renewal, what is the renewal charge for a salespersons license?100 What is the best example of functional obsolescence?walking through on bedroom to reach another Agent Mike Brown is representing both buyer and seller in the same transaction. Since the contract was signed by all parties, did Mike have any other obligation?Obtain written consent of principals What is an involuntary specific lien?mechanic's lien What is an appraisal?an opinion of value for the day of the appraisal only Tommy Gee encounters an owner of a property who has no equity in the home because of a sharp decline in market values. The owner asks Tommy to market the property at market value but asks Tommy if he could negotiate with the bank and orchestrate a short sale. Who should Tommy recommend the owner consult with before making a decision?accountant Encumbrances on real estatemay include easements, liens, and deed restrictions Beth decides she wants to change brokers. How long does her broker have to return her license?

• days after her request

According to USPAP, what is the definition of market value?the most probable price a property will bring When a buyer agrees to purchase a new home on the condition that the salesperson sells his current home, the salesperson should include a "subject to sale" clause in the agreement of sale for the new property A brief summary of a property's history, listing all recorded documents that may affect the title, is a(n) abstract of title

A buyer's agent is paid a percentage of the gross sale price. When negotiating a contract, the agent should negotiate the lowest possible price for the client Julie is the new owner of a house and decides to remove the carpet. After doing so, she discovers there is significant pet damage to the hardwood floor beneath the carpet. Julie cuts most of the center of the floor out and replaces it with subfloor. Julie then places a Persian rug over the subfloor.When the Julie sells, can she remove the Persian rug?No, anything that covers subflooring becomes real property Which gives a government the right to take private property for public use provided the owner is given just compensation?eminent domain A contract in which each party to the agreement has an obligation under that agreement is a(n) bilateral contract A buyer deposited $15,500 on a $210,000 home. He has an 80% loan, receives a $1,500 proration credit, pays a $1,000 attorney fee, and pays 2 points on the mortgage.How much money must the buyer bring to closing?

29,360First, calculate the loan amount: $210,000 x 0.80 =

$168,000. Now, subtract the loan amount from the

purchase price to determine the down payment: $210,000 -

$168,000 = $42,000. Next, subtract the money the buyer already deposited and also the proration credit; $42,000 - $15,500 - $1,500 = $25,000. Now, calculate the amount owed in points; $168,000 x 0.02 = $3,360. Finally, add all of the expenses together; $25,000 (remaining down payment) + $3,360 (points) + $1,000 (attorney fee) = $29,360. The buyer must bring $29,360 to the closing.An out-of-state prospect asks an agent to locate a diverse neighborhood for him. The agent should explain that research of this nature is beyond the agent's scope of authority Agent Louis Lee is working with several people from his home town in Hong Kong. They sought him out because he speaks their native language. The Chans are anxious to purchase a house before the school year starts. Agent Lee listens to their needs and tells them, "I know exactly where you will be comfortable". Has agent Lee committed any violation?For Steering Marie is a buyer agent. She shows many listings each week. Marie has a very good working relationship with both buyers and sellers. Who does Marie owe a fiduciary relationship to?The buyer A court order instructing an official (e.g., a sheriff) to sell property in order to pay a judgment is called writ of execution An option, prior to being exercised, is an example of a(n)unilateral contract Which refers to the interest in real property created by the execution of a valid sales contract?equitable title What is NOT part of the secondary market? Federal Universal Mortgage Association While determining the net operating income of an investment property, an appraiser will not take into account interest expense