which of the following professionals involved in the real estate business are most concerned about managing real estate for clients?
Property Managers
Real estate can be defined as?
Land and everything permanently attached to it
which of the following is included in the bundle of rights inherent in ownership ?
to posses
the overriding test of whether an item is a fixture or personal property is ?
how it is described in a sale or lease contract.
an owner of a lakefront property tells a fisherman that he cannot fish in a boat within fifty feet of the owner's shoreline. the fisherman protest that the owner cannot prevent him. which of the following is true?
the fisherman is correct because the water and the land underlying it are public property
the distinguishing feature of a defeasible fee simple estate is that?
it may revert to a grantor if the prescribed use changes
Dower can best be defined as?
a wife's life estate interest in her husband's property
a distinct feature of a joint tenancy is that joint tenants
cannot will their interest to a party outside tenancy
interest in a condominium differ from those in a cooperative, in that
the coop owner owns stock in the cooperative association, whereas the condominium owner simply owns real estate.
there are two adjoining properties. An easement allows property A to use the access road that belongs to property B. In this situation, property B is said to be which of the following in relations to property A?
Servient estate
title records of a property reveals several recorder liens: a one-year old judgement lien; a mechanic's lien dating from two years ago; a special assessment tax lien recorded last month; and a first mortgage lien recorded five years ago. In case of a fore
Special assessment tax lien
a lender may terminate foreclosure proceedings of the defaulting borrower executes
a deed in lieu of foreclosure
A person has occupied a property for seven years, and no one has ever attempted to evict her or co-occupy the parcel. in this case, the person might base a claim of legal ownership on
constructive notice of possession
a person wishes to convey any and all interests in property to another with full assurances against encumbrances, lien, or any other title defects on the property. This party would most likely use which of the following types of deed?
a general warranty deed
the chain of title to a property refers to which of the following?
A chronology of successive owners of record
a leased property is conveyed to new owner. what happens to the lease?
it remains in effect
the Uniform Residential Landlord and Tenant Act fundamentally attempts to
encourage fairness and simplicity in lease forms and provisions
a primary objective of residential zoning is
promote the value and planned land use of a neighborhood
A shop was originally built in a commercial zone. The zone has since been changed to a residential zone. Zoning authorities permit the use, most likely as
a legal nonconforming use
authorities conduct comprehensive land use planning in order to
a balance public interests with individual property
the purpose of a formal legal description of a property is to
locate and identify the property reliably
a parcel is described as SW 1/4 of the N 1/2 of E 1/2 os Section 14. what is its acreage?
40 acres
A suburb has a growing need for single-family housing,but the land available for new construction is running low. in this case, its likely that the price of existing homes
will increase
the demand for homes in a market is best expressed in terms of
number of households seeking housing
what is the base employment in real estate market?
it drives total employment and population growth, which lead to demand for real estate
the concept knows as substitutions states that
buyers will not pay more for a certain house than they would for another, similar house.
The "price that a willing, informed, and unpressured seller and buyer agree upon for a property, assuming a cash price and reasonable exposure of the property to the market" describes which of the following concepts of value?
market value
A warehouse building lacks sufficient ceiling height for the operation of modern forklifts. This is an example of
functional absolescence
the derive values using the income capitalization approach, one must
divide the capitalization rate into net income
an office building rents for $600,000, has expenses of $400,000 and a cash flow of $1000,000. The prevailing gross rent is multiplier is 8. Using the GRM, what is the value of the building
4,800,000
an Owner obtains a loan and gives the mortgagee a mortgage on the property as collateral. the mortgagor/owner retains title to the property, and the mortgagee records a lien. this is an example of
hypothecation
An important characteristics of a promissory note is that
it is assignable
Disclosure of estimate closing costs is required of a lender in order to comply with
the Real Estate Settlement Procedure Act
The secondary mortgage market organizations do all the following EXCEPT
directly originate loans
Negative amortization of a loan occurs whenever
a payment does not pay the interest owed
A borrower earns $3,000/month a makes credit card and car note payments of $500. A conventional lender requires a 27% income ratio. What monthly amount for housing expenses (principal, interest, taxes, insurance) will the lender allow this person to have
$810
A $250,000 interest-only loan carries a 7% rate. Monthly payments are
$1,458
a lender is charging 2.75 points on a $240,000 loan. How much must the borrower pay for points?
$6,600
Which of the following is generally true of a real estate investment?
the greater the return, the greater the risk
the capital gain on sale of an investment is computed as
net sales proceeds minus adjusted basis
the formula for return on equity is
cash flow divided by equity
Mary Bright bought a home for $80,000 paying $10,000 down and taking a mortgage loan of $70,000. The following year she had a new rood put on.
$82,000
an office building has a potential income of $500,000 and vacancy of 10%. Its a cash-paid bills total $300,000, and annual depreciation is $5,000. Payments on the loan total $100,000. What is the property's pre-tax cash flow?
$50,000
a property is purchased for $200,000. Improvements account for 75% of the value. Given a 39-year depreciation term, what is the annual depreciation expense?
$3,846
An income property is bought for $500,000. Gross income is $100,000, and net operating income is $60,000. Cash flow is $10,000. What is the return on investment (ROI)?
12%
which of the following is the formula for deriving the tax base of a jurisdiction ?
the total of all assessed values minus exemptions
the purpose of a homestead tax exemption is
to offer tax abatement on a principal residence
A homeowner's tax bill for a taxing district is derived by
multiplying the tax rate times the taxable value of the property
the village of Parrish has an annual budget requirement of $20,000,000 to be funded by property taxes. Assessed valuations are $400,000,000 and exemptions total $25,000,000. What must the tax rate be to finance the budget?
5.33%
A canal dredging project is to cost $100,000. There are 40 properties along the canal, and 40 others across the street from the canal. the total canal footage to be dredged is 2,500 feet. How much will the assessment be for a 150-foot property on the cana
$6,000
A prospective homebuyer offers to buy a house if the seller agrees to pay financing points at closing. The sellers get the offer, sign it, and gives it to his agent to deliver. At this point the status of the offer is
still an offer
one aim of the statue of frauds is to
require certain conveyances to be in writting
a buyer agrees to all terms of a seller's offer and sends notice of acceptance back to the seller. the seller now tells the buyer the deal is off because her has learned that the home was underpriced. Which of the following is true?
the buyer has binding contract
A principal discloses to the listing agent that she must sell a property within two months to avoid a financial problem. Nearly seven weeks later, a buyer's agent hears of the seller's difficulty from the listing agent and advises his buyer to submit an o
the listing agent has violated fiduciary duties owed the client
An owner's agent is showing a buyer an apartment building. The buyer questions the agent as to whether some cracking paint contains lead. the agent's best course of action is to
inform the seller of the inquiry and test the paint
Agent Jerry, who works for Broker Lucy, obtains an owner listing to lease a building. Lucy's other agent, Linda, a tenant representative, locates a tenant for Lucy's listing. If there is no arrangement to the contrary, Broker Lucy in this instance is
a dual agent
a transaction broker should disclose his or her agency relationship to the transaction principals
upon first substantive contact
An agent obtains a listing which ensures compensation for procuring a customer, provided the agent is the procuring cause. This agent has entered into a(n)
open listing
A landlord promises to compensate a broker for procuring a tenant, provide the landlord's brother decides not to rent the property within a month. this would be an example of a(n)
exclusive agency agreement
the amount of a real estate brokerage commission is determined by
negotiation with the client
Real Estate sales agents are legally authorized to
represent buyers on their broker's behalf
In eliciting an offer from a buyer, an owner's agent must be careful to
complete any offer the buyer might decide to make
An example of conversion is
spending a customer deposit on a surety bond for the agency
Three leading agencies charge identical commission rates for brokering office properties in Phoenix. Which of the following is true?
this is perfectly legitimate business practice
A business owner insists on a price for his enterprise that exceeds the values of the tangible assets, claiming that it is a well-known family business with a loyal clientele. The amount of this goodwill is important to a buyer primarily because
it cannot be depreciated
An agent informs owners in an area that a decline in property values over the past five years is due to an influx of minority families. He suggests that the trend will continue, and advises them to sell before it is too late. This agent is probably guilty
blockbusting
An agent spends two hours with a minority buyer, then shows the buyer five available properties all over town. Later, a similarly qualified minority couple enter the office. The agent spends twenty minutes with the couple, gives them the MLS book to revie
providing unequal services
An owner suddenly pulls a property off the market after hearing from the agent that a minority party has made a full-price offer. the agent the goes back to the minority party and reports that the seller has decided to wait until next year to sell the hom
both owner and agent
An owner completes a contract to sell her property. Before closing, she runs into financial trouble and assigns the contract to her mortgagor. Which of the following is true?
the sale contract remains valid
Buyers and sellers rely on escrow accounts in order to
allow a third party fiduciary to handle the funds.
An option-to-purchase expires. The landlord agrees to extend it in exchange for a higher price. The optionee claims he can exercise the option within the redemption period. Which is true ?
the landlord is under no obligation, since options do not have redemption period.
According to RESPA, a uniform settlement statement must be used whenever
the loan is to be sold to the FNMA
when an item is prorated between buyer and seller on a settlement statement, the closing officer must
debit one party and credit the other
which of the following items are paid in arrears?
taxes and interest
A sale transaction on rental property closes on December 16. The landlord receives the December rent of $713 on December 1. Assuming the closing day is the sellers's, and that the 365-day method is used for prorating, which of the following entries would
debit seller $345.00