Illinois Real Estate Practice Exam Questions Flashcards

Illinois Real Estate Practice Exam Questions Flashcards If a house was sold for $140,000 and the buyer obtained an FHA insured mortgage loan for $133,700, how much would the buyer pay in discount points if the lender charged 2 discount points?a) $495b) $2,674c) $2,800d) $3,800

• $2,674Calculate discount points OFF OF THE LOAN

AMOUNT

Which of the following interests in property is held by a person who is granted a lifetime use of a property that will be transferred to a third party upon the death of the lifetime user?a) a life estateb) a remainder estatec) an estate for yearsd) a reversionary estate

• a remainder estate

How much cash MUST a buyer furnish in addition to a $2,500 deposit if the lending institution grants a 90% loan on an $80,000 property?a) $5500b) $6975c) 7450d) none of the above

• $5500LTV = 90/100.1% x $80,000 = $8000$8000 -

$2500 = $5500

Which of the following statements BEST identifies the meaning of the term, "rescission of a contract"?a) a ratification of a contract by all partiesb) a return of all parties to their condition before the contract was executedc) A transfer or assignment of a particular responsibility from one of the parties to anotherd) A review of the contract by the legal counsel of either party that may result in a cancellation without penalty or further obligation

• a return of all parties to their condition before the

contract was executed"rescind" means to go back A buyer makes an offer on a property and the seller accepts. 3 weeks later, the buyer announces that the deal is off and refuses to go through with the sale. If the seller is entitled to keep the buyers earnest money deposit, it is

most likely because the sales contract contains:a) a

liquidated damages clauseb) a contingent damages clausec) an actual damages claused) a revocation clause

• a liquidated damages clauseA liquidated damages

clause is a means of ensuring that you are compensated if the party you hired fails to do the job If a house was sold for $400,000 and the buyer obtained a mortgage loan for 80%, how much money would the buyer pay in discount points if the lender charged 2 points?$6400Loan amount = $400,000 x 80% = $320,000$320,000 x 0.02% = $6400 The Real Estate License Law of 2000 makes it possible for

a candidate to:a) Act as both an independent contractor

and employ the sponsoring brokerb) Obtain a broker license without having prior experience as a real estate licenseec) Complete 75 hours of coursework as the credential for taking the broker's testd) Renew his or her license every four years

c) Complete 75 hours of coursework as the credential for

taking the broker's test Which of the following is an acceptable name for a real estate team?a) Jane Doe Teamb) Jane Doe Property Groupc) Jane Doe Realty Teamd) Jane Doe Associates

a) Jane Doe Team

Which of the following clauses in a mortgage allows the lender to demand loan repayment if a borrower sells the property?a) defeasanceb) prepaymentc) accelerationd) alienation

• alienationaka "due-on-sale" clause - prevents a loan

assumption If a house was sold for $400,000 and the buyer obtained a mortgage loan for $320,000, how much more money would the buyer pay in discount points if the lender charged 2 points?$6400Remember that discount points are based off of the loan amount so$320,000 x 0.02% = $6,400 Which of the following single-family residences would get the MOST accurate appraisal by applying the reproduction cost approach to value?a) a rental propertyb) a vacant propertyc) a new propertyd) an historic property

• an historic propertyThe reason it's a historic property is

because it's "reproduction".

Sponsored real estate brokers may represent:a) Any owner

who employs themb) Not more than one owner at a timec) Only the sponsoring broker under whom they are licensedd) More than one sponsoring broker, depending on the parties to the transaction

c) Only the sponsoring broker under whom they are

licensed Fair Housing Act of 1968 prohibits discrimintation based

on:a) familial statusb) sexual orientationc) raced) public

assistance income

• race

You finally closed a rather difficult and challenging transaction, and your clients are thrilled! At the closing table, they give you, the designated agent, a check for $1,000 "for the extra drama." Which is state is TRUE?a) you may receive compensation only from your sponsoring brokerb) while such compensation is irregular, it is appropriate for you to accept the checkc) you should accept the check and deposit it immediately in a special escrow accountd) your sponsoring broker is entitled to 80% of the check

• you may receive compensation only from your

sponsoring broker What is the purpose of the Real Estate Recovery Fund?a) To protect the public from dishonest real estate licenseesb) To provide a pool from which to collect unpaid commissionsc) To allow an award to be given to a member of the public who has been economically injured by a licenseed) To pool monies from the broker's escrow accounts

c) To allow an award to be given to a member of the public

who has been economically injured by a licensee A buyer has an 80/20 LTV and a $5,000 earnest money deposit which would be used at closing to cover part of the down payment. If the purchase price of the home is $250,000 how much additional funds must the buyer bring to complete the down payment?a) $45,000b) $50,000c) $75,000d) $20,000

• $45,00020% x $250,000 = $50,000$50,000 - $5,000 =

$45,000