Pearson Vue Real Estate Exam Flashcards

Pearson Vue Real Estate Exam Flashcards

A listing agreement is:An employment contract

Of the two employment arrangements, the employer/employee and the employer/independent contractor, which allows the employer to have control over the results of the salesperson's work?Either arrangement Constructing homes costing $190,000 in an area of homes valued at $140,000 would mean the current homes in the

neighborhood should see:

An increase in value The period over which a property may be profitably utilized

is known as:

Economic Life: is the estimated period over which an

improved property may be profitably utilized so that it will produce a yield over and above the economic rent attributable to the land. At the end of the economic life, the building is usually torn down or rehabilitated. The eonomic life can never be greater than the physical life, but is usually less, as physical life refers to how long the structure can stand, and economic life refers to how long it is profitable to keep it standing.There are three main causes of depreciation. Which one of these finds its origin in social sources and is the basis for

the old axiom: "more houses are torn down than fall down."

Economic Obsolescence The maximum amount of commission on a real estate

transaction is:

determined by the broker's contract with the seller.The amount of commission a principal broker must pay a SALESPERSON from a real estate sales transaction is

determined by:

The purchase contract A seller sold an acre and reserved an easement appurtenant for ingress and egress to enable him to reach

the public road. The buyer's land:

Is called the servient tenement. The Servient estate is burdened (encumbered) by the easement. Because the easement is irrevocable, it cannot be terminated due to inconvenience or hardship on the owner of the servient estate.A contract of sale accepted by the seller with the stated

understanding that the seller has an executory contract is:

a back-up contract: The seller may legally accept a back-up

contract if he or she has an executory contract.Involuntary alienation of an estate means: Ownership of estates may be transferred by operation of law. Involuntary alienation is transfer by operation of law (foreclosure, eminent domain, adverse possession, etc.) This means the law, rather than the owner, determines to whom the property is transferred, and the transfer would be without the consent of the owner.In a real estate analysis, one should be more interested in:Future economic life of the improvements.In a home sale, the seller promises to sell and the buyer

promises to buy. This is known as:

Consideration: Consideration is money, promises, or

something of value. In the purchase contract, the

consideration is the promises made by the seller and buyer.

A licensee acting on behalf of a property owner is best

described as:

A Fiduciary If a party to a real estate contract dies while the contract is

executory, the contract:

Is enforceable on the deceased party's estate A listing broker receives his authority to accept an earnest

money deposit in the:

Listing Contract A lender charges 2.25 discount points to allow the borrower to buy down the rate to 4%. What will the borrower pay for discount points on a sale of $128,000 with a LTV of 90%?$2,592$128,000 price x 0.90 loan-to-value ration= $115,200 loan $115,200 loan x 0.0225 points= $2,592 in points Reconciliation is best defined as:the appraiser's weighing of each property and approach to value.When a sales contract is signed, the earnest money is:Not legally necessary: Money is not required in a sales contract, and it is not consideration. It is used as liquidated damages if the buyer is in default. Consideration in a contract is the promises made.There are three main causes of depreciation. Which one of these finds it origin in social sources and is the basis for the

old axiom: "more houses are torn down than fall down''?

Economic Obsolescence When a party owns landlocked property and requires access over the land of an adjacent owner to reach his property, he would likely be entitled to an Easement by necessity. An easement by necessity is a type of implied easement, created when justice or necessity make it necessary that an easement be provided for access (ingress and egress) to and from the property.The loan-to-value ratio is the loan amount divided by the:appraised value or selling price, whichever is lower. As its name states, the loan-to-value ratio is the loan expressed as a percentage of the value. An 80% loan is a loan representing 80% of the appraised value. To find the ration, divide the loan amount by the value of the property. Note, however, that lenders will base the loan on the lower of the sales price or the appraised value.ABC Realty has an exclusive agency listing on the seller's property and has put it in the MLS. A salesperson from XYZ Realty brings an offer, which the seller accepts, and

the transaction closes. The commission will be:

Split between the two brokerage firms, per the MLS terms.A salesperson for ABC Realty has moved to XYZ Realty.What happens to the listing the salesperson took at ABC Realty?They belong to ABC Realty A person cannot successfully claim that he did not know about the content of any recorded document. This is due to

the legal principle know as:

Constructive notice: is notice of facts that may be

discovered by diligence or by inquiring into a public record.Recording gives constructive notice of a document's existence and contents.The principal broker at XYZ Realty has told her salespeople to try to only sign listing contracts that give the firm the most protection. In this case, the salespeople should be trying to get what type of listings?Exclusive right-to-sell listings.

The prime obligation of an agent to the client is:loyalty

An appraiser advised the owner of an older home that considerably more income could be obtained if the house were torn down and a different improvement placed upon

the lot. This illustrates the principle of:

Highest and best use The net monthly income of a five-unit apartment building is $4,600. The capitalization rate the lender uses is 6%. What is the value of the building?

$920,000

The principal broker at XYZ Realty has told her salespeople to try to only sign listing contracts that give the firm the most protection. In this case, the salespeople should be trying to get what type of listings?Exclusive right-to-sell listings The transfer of title by descent means the owner: Died intestate, and the property passed to his heirs.A person who dies testate is a person who has left a valid will. The transfer of real property under a will is called devise, and the person receiving that property is called a devisee. If no will has been left, the descendent died intestate, and the property goes to the heirs (next of kin).under the laws of descent and succession.When a person dies testate, the real property: Passes by devise. A person who dies testate is a person who has left a valid will. The transfer of real property under a will is called devise, and the person receiving that property is called a devisee. If no will had been left, the decedent died intestate, and the property goes to the heirs (next of kin) under the laws of descent and succession. If there are no heirs, the property escheats to the state.A real estate broker representing the seller usually is a(n)Special Agent: A special agent is an agent given authority to represent the principal in one specific transaction. The broker is not given general agency authority to perform in a range of matters. He is given authority to try to arrange a sale of the property for the seller. This authority is given in the listing agreement and creates an express agency rather than an ostensible (apparent) agency or a broader universal agency.The substitution of a new contract, which terminate and

replaces an existing contract, is called:

Novation: Novation removes all obligations and liabilities of

the first contract, replacing it with a new contract.Assignment still leaves some liabilities from the first contract.An appraiser seeking to find market value would be

concerned with all of the following EXCEPT:

Original cost of the property When an offeree rejects an offer and becomes an offeror, the immediate result is a Counteroffer