REAL ESTATE FINAL EXAM Flashcards

REAL ESTATE FINAL EXAM Flashcards When calculating a loan-to-value ratio, which items will the lender use?The lower of the appraised value or the contract price and the loan amount If a comparable property does not have a swimming pool, but the subject property does, how should the appraisal be adjusted?The value of the comparable property should be adjusted up.A small home built in 1945 on a slab has three bedrooms and one bathroom. If the home is valued at $50,000 and the cost to add another bathroom is $30,000, what BEST DESCRIBES the loss of value caused by having one bathroom?Incurable functional obsolescence If a broker works as the qualifying broker for two real estate companies, which of the following statements would be false according to Alabama license law?He must serve equal time in the offices between each location.The Mission of the Alabama Real Estate Commission is to...?To serve and protect the public through licensing and regulating of real estate activitiesin the state of Alabama If a student took the state licensing exam, passed it, and then immediately took the post- license course, what happens?The student cannot receive credit for the post-license course if he did not apply for atemporary license.A licensee is representing prospective buyer. The licensee orally informed the buyer that the developer would be paving the streets in front of a house in a rural subdivision.The licensee had not verified this information but assumed that it was true because the developer had done the paving in similar subdivisions. The buyer relied on the licensee's statement in deciding to buy the house. If no contract exists spelling out paving responsibilities, who can be held accountable for damages?The licensee because his unverified statement was negligent misrepresentation.If a buyer's home loan is providing 100% financing for the purchase of his home loan, what type of loan is it MOST

LIKLEY?

VA Loan Which of the following is not a responsibility of the commissioners of the Alabama Real Estate Commission?To oversee the daily business and educational activities of the Commission.A licensee received an offer on a home she had listed on a Friday afternoon. On Saturday morning the licensee had called the sellers four times, but each time she called, her call was sent directly to voicemail. Assuming the sellers did not wish to be disturbed and it was the weekend, she decided to wait until Monday to present the offer and did not email the offer to her client until Monday. Has the licensee violated Alabama license law?Yes, the licensee should not wait and to do so could violate Alabama license law.

If a buyer is interested in purchasing a 24-unit apartment complex, what type of approach would an appraiser MOST LIKELY use to gauge the value of the property?Income approach Who is not eligible to use a VA loan?Veterans that were dishonorably discharged A borrower negotiated a loan of $360,000 at 4.25% interest for 30 years. If his annual homeowner's insurance payment is $2,040 and the annual property taxes are $1,800, would the monthly PITI payment be? (Round all calculations to two decimal points.)

$2,595.00

Which of the following is an example of a fixture?Bathroom faucet Jay and Halley live across the street from each other in a subdivision in which homeowners are prohibited by deed restrictions from keeping chickens on their property. If Jay discovers that Halley is keeping five hens in her backyard, can Jay take action to enforce the deed restriction?Yes, because Jay can force any other property owner in the subdivision to comply withthe deed restrictions through a court injunction.According to Alabama license law, all of the following transactions requires a RECAD disclosure form EXCEPT?Sale of a 3,000 SF commercial building All of the following are violations of the Sherman Anti-trust Act EXCEPT?A lender refusing to make a loan based on the location of the property.When is the interest portion of a monthly mortgage payment typically paid?In arrears What happens when a lender agrees to accept less from a buyer than the current mortgage balance owed?Short sale All of the following are violations of the federal fair housing acts EXCEPT?Boycotting A licensee lists property and the neighbor informed him that a suicide was committed in the home ten years ago. While showing the home, the licensee notices dark brown water stains on the ceiling in several rooms. After discussing both issues with the seller, the licensee learns that the seller's aunt died in the home from natural causes and the water heater located in the attic burst two years ago. How should the licensee disclose this information to potential buyers?The licensee may disclose the death of the aunt but must disclose the burst water heater According to Alabama license law, who is responsible for applying for the company license?The qualifying broker An owner of land, who lives in Georgia, contacts an Alabama licensee to sell his farm property in Elmore County, AL for $35,000. The licensee knows that the land is in an area that will soon be rezoned for commercial use because a new strip mall is being built. He tells the owner he will purchase the property himself. He buys the property and resells the same property for $150,000 a month later.Which of the following statements about this situation is correct?The licensee can legally purchase the property after informing the owner of the zoningchange and how it will affect the value of the property.

A seller listed a house and insisted that no "For Sale" sign be placed in the yard. Two days later the seller leaves the country for three months and the listing licensee decided to place a "For Sale" sign in the yard anyway. Has the licensee violated Alabama license law?Yes, the licensee is in clear violation of Alabama license law.Which of the following is considered a breach of fiduciary duties for a licensee representing a seller?The licensee refuses to host an open house on a Tuesday morning.The responsible broker of a firm can require his licensees, who are classified by the IRS as independent contractors, to do which of the following?Conform to federal marketing regulations One discount point costs the borrower 1% of the loan amount and increases the lender's yield by 1/8th of one percent. How many discount points are required to lower the interest rate by three-fourths percent?6 If a salesperson violates license law, who is held liable?The sales associate and his qualifying broker If a real estate agent is convicted of a felony or a crime of moral turpitude, what action can the Commission take against the licensee?The Commission can require all or none of the choices above.Dewayne agreed to a contract price of $200,000 for residential home and appraisal value was $205,000. If Dewayne is using a conventional loan and the seller is paying half of the closing costs, how much money does Dewayne need to bring to the closing table assuming the loan has a 95LTV% and the closing costs will be $6,000 according to the lender?

$13,000

All of the following are violations of the federal fair housing acts EXCEPT?Checking the credit of a member of a protected class What is an odorless and colorless gas that is a byproduct of incomplete combustion when burning fuels?Carbon monoxide If a salesperson renewed his license on July 31 in the second year of licensure, what was the total amount he paid to the Commission?$185 If a husband signs a durable power-of-attorney that allows his wife to act as his representative in a real estate transaction, what type of agency relationship is this?Universal agency If a business developer purchases a 4,500 SF commercial building to open a franchise restaurant, will the Truth in Lending Act apply to this transaction?No, because it is commercial.What is the purpose of a percolation test? The test the rate of water absorption in the ground Which of the following situations would NOT cause a termination or cancellation of a sales contract?If the agent representing the buyer dies or becomes incapacitated A house is sold for $184,500 and the commission rate is 6%. If the commission is split 60/40 between the selling broker and the listing broker, respectively, and each broker splits his share of the commission evenly with his

salesperson, how much will the agent representing the buyers receive from this sale?

$3,321

A buyer would be protected against the claims of ownership from a third party under which of the following?Title insurance