RE National Final Exam Flashcards

RE National Final Exam Flashcards What's the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is

$15,000?

$110,000To estimate value using the cost approach, an appraiser adds the site value to the cost to replace improvements, then subtracts the amount of depreciation.Here, that gives us $100,000 + $25,000 - $15,000.Which of the following is considered unauthorized practice of law?Interpreting the legal consequences of a client's actions Which legal description method is regulated by the U.S.Department of the Interior's Bureau of Land Management?Rectangular government survey Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do?Leave clients unattended in the office.Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter?Add two times the length to two times the width.Gerald practices real estate in a state that recognizes sub-agency. Which of the following statements is true of Gerald's authority to appoint a sub-agent?He must receive the principal's permission in writing in order to appoint a sub-agent.What's one benefit of a rural development loan? Its optional longer term means a lower monthly payment.Your client is purchasing a single-family home with a conventional loan. The listing price is $150,000. Does this situation require a licensed or certified appraiser?No, since the sales price is less than $400,000.Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What's his first step?Obtain a pre-qualification letter.What's the relationship between TILA, RESPA, and TRID?The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID).Governments like property taxes as a revenue source because ______.Property values, and therefore taxes, tend to remain stable Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?Aesthetic zoning Which type of buyer agency offers the flexibility to work with multiple agents but results in buyers acting on their own behalf since no agent owes fiduciary duties?Open agency Joaquin sold his house for $327,600. He bought it several years ago for $139,900 with a $100,000 loan. The loan balance when he sold it was $73,400. What was Joaquin's equity?$254,200Joaquin's equity was $254,200. Subtract the loan balance from the market value of the home to find the equity ($327,600 - $73,400).At what point must a listing agent disclose material facts to all parties involved in the transaction?As soon as possible

While Martha's paying off her loan, her lender is holding on to something that includes her name, property address, the interest rate on her loan, what the late charge amount would be, and the amount and term of the loan. When her loan is paid off, the lender returns it to Mary, marked paid in full. What is this item?A promissory note Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value.Because of this, you notice a bump in your property value.Which economic principle is at work here?Progression In contract law, undue influence differs from duress in that duress includes ______.Use or threat of force Which of these statements about a deed's habendum clause is true?It's a description of the act of conveyance.You're explaining to your client that using electronic documents and signatures simplifies the home buying process. Your client is skeptical about these signatures.You describe the Uniform Electronic Transactions Act (UETA) and tell your client ______.The UETA gives electronic signatures the same legal weight as "wet" signatures Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?Inspection contingency Quentin brought an application before city council to build a shopping mall on 17 acres south of town that currently don't have a zoning designation. The council referred him to the planning commission, which will review the application in light of the city's ________.Comprehensive plan If a property's income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?20%The cap rate is 20%. To calculate cap rate, divide the income by the property value. The formula for this is rate = income / value.Picture a drawing of a section of land. Where is Township 1 located?Upper right (NE) corner Question 61A form of depreciation or loss in value caused by defects in design is called _______.Functional obsolescence Dale and Barbara, your buyer clients, aren't thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They're financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?

$4,700

Which of these is an example of bulk zoning? Misty Falls restricts building any structure within 15 feet of a roadway.In general, a person in a position of loyalty and trust is a(n)

______.

Fiduciary

Avery is about to close on his first home. What will protect him from financial loss if his ownership later comes into question?Title insurance A buyer is securing a home loan for $500,000. The state mortgage recording tax rate is $0.115 per $100. What's the mortgage recording tax?$575At a rate of $0.115 per $100, the mortgage recording tax amount is $575 ($500,000 x 0.00115).Cheryl and Roberto just signed a contract for Cheryl to buy Roberto's house for $235,000. Roberto owes $48,750 on his current mortgage, he's going to replace the old furnace ($800), he's agreed to pay 3% toward closing costs, and he'll pay a 6% commission to his agent. How much in whole dollars will he have left to put down on the condo he wants to buy?$164,300Roberto's closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06).Subtract those two amounts, the furnace cost ($800), and the mortgage loan payoff ($48,750) from $235,000 to get

$164,300.

Which of these statements about title marketability standards is correct?Marketable title carries a higher standard of assurance than insurable title.Which of the following statements is true about government loans?They're insured or guaranteed by a government agency.Which of these areas would be included in the livable area calculation?A pool house connected to the house by a hallway Why would buyers want to know whether a property is currently experiencing a tax abatement?Their taxes are likely to increase when the abatement period ends.Jacob's family has operated a neighborhood grocery store in the community since before the land was zoned residential. Jacob continues to operate the store legally.What would you call this?Non-conforming use Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?The chandelier in the foyer Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement?

Credit of $721.50Tax daily rate: ($1,350 ÷ 365 = $3.70) 195

days (days from closing until year end) = a $721.50 seller credit. Any prepaid seller's homeowners insurance will be refunded to the seller outside closing, so this doesn't appear on the closing statements.Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?Contribution Which one of the following tasks must a licensee perform for seller clients?Inform sellers of their responsibility to make all required property condition disclosures.Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June

using the 360-day proration method. What will her prepaid interest cost be at closing?$842.74Calculate the daily interest rate for 30 days ($871.86 ÷ 30 = $29.06). Because Doug owns the closing day, Maria will pre-pay interest for 29 days, June 2 - 30, so