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CE SHOP REAL ESTATE PRINCIPLES PRACTICE TEST
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CE SHOP REAL ESTATE PRINCIPLES PRACTICE TEST
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CE SHOP REAL ESTATE PRINCIPLESPRACTICE TEST
Julie has received notice that the house she is renting was sold in
foreclosure. She has a month-to-month lease, so how long does she have
until her lease may be terminated? - -90 days
-Amy acts like a salesperson and is supervised by a broker, but she holds
her broker's license. What is her job title? - -Associate broker
-Which one of the following statements about investors and tax depreciation
is true? - -Investors can depreciate an appreciating asset.
-Which of these contract-specific requirements for a lease prohibits minors
from entering into a lease agreement? - -Legal capacity
-Trudy loved her new neighbors. The investor couple bought every available
house on Trudy's block and was working hard to renovate them and increase
their value. Trudy decided that she'd sit back, relax, and let her property's
value go up, too, thanks to ______. - -Progression
-Sheila's financing calls for the use of a promissory note. What's a
promissory note? - -The borrower's promise to repay a certain sum of money
to another party (the lender or holder of the note) under specified terms
-Which of the following lease agreements should be accompanied by an
agency disclosure? - -15-month lease
-What does EER stand for with regard to air conditioners? - -Energy
efficiency ratio
EER stands for energy efficiency ratio and is calculated by dividing the unit's
British thermal units (BTUs) by the electricity needed to power the unit. The
higher a unit's EER, the more energy efficient it is.
-Phoebe's gross monthly income is $4,200, and she has $360 in monthly
non-housing debt payments. The lender's qualifying ratios are 28% for the
housing ratio and 36% for the total DTI ratio. What's the maximum housing
payment she can afford? - -$1,152
The maximum house payment is the lesser of the amounts calculated using
both ratios. DTI: $4,200 x .36 = $1,512. $1,512 - $360 = $1,152. Housing
ratio: $4,200 x .28 = $1,176. Phoebe's maximum payment is $1,152.
, -This is a loss of money or anything of value, due to failure to perform. - -
Forfeiture
A common forfeiture in a real estate transaction occurs when the buyer
defaults on terms and forfeits the earnest money.
-Which type of analysis starts with a visit to the property, a search on the
MLS, and a comparison of comparable sales, and hopefully ends in a listing
for a real estate licensee? - -Comparative market analysis
This describes a CMA. These don't always end in listings, however.
-When a buyer breaches the real estate sale contract, the seller may file a
lawsuit for compensatory damages. Which of the following best describes
compensatory damages? - -Compensation for actual loss based on the
contract's value.
Compensatory damages compensate a party for actual loss based on the
contract's value.
-How can a foreclosure process be temporarily stalled? - -By filing for
Chapter 7 bankruptcy
-Hal and Sara own a 212-acre farm. Their property is landlocked, but they
have permitted water rights to use the stream located six miles away for
irrigation purposes. What kind of water rights do they hold? - -Prior
appropriation
The doctrine of prior appropriation grants water rights based on need, not
adjacency. Hal and Sara likely live in the western part of the U.S. where
many states subscribe to this doctrine.
-First-time home buyers who've had a Roth IRA account for at least five
years may withdraw an amount that equal to the contributions they've made
to use as a down payment. After that, how much more can they withdraw to
help with a home purchase without penalty? - -Up to $10,000
-How long after a notice of cessation or completion is filed can a contractor
file a mechanics lien? - -Within 60 days
-Which of these is true about the assessed value of real estate? - -It's the
value used to calculate the property taxes, and it's based on a percentage of
the market value.
Assessed value of a property is a percentage of the market value, and it's
used to calculate the amount of property tax the owner will pay.
,-Which of the following is the best definition of a township? - -A 36-square-
mile square formed when using the rectangular survey system
-The Siegels are purchasing a commercial investment property and plan to
use straight-line depreciation on their financial statements and tax
calculations. Which of the following would NOT be included in the Siegels'
depreciation basis calculations? - -The loan origination and lender fees that
they paid at closing
* The depreciable basis is made up of the sales price plus any acquisition
costs, such as title insurance, and capital improvements. Loan costs aren't
included in the basis, but something like electrical system upgrades are
capital improvements.
-What is the danger of a seismic hazard area? - -Landslides or liquefaction
* A seismic hazard area is designated as such because of the potential for
landslides or liquefaction resulting from earthquake activity
-What is the starting point for any land surveyor who has been asked to
perform a survey? - -A review of existing historical records
-How many parties does a mortgage involve? - -Two: borrower and lender
* A mortgage involves two parties: the borrower and the lender. A trustee is
only used with a deed of trust.
-Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the
contract they sign, Jim is identified only as "the neighbor." Which statute or
contract element does this violate? - -The statute of frauds
* The statute of frauds requires not only that a contract to convey real
property be in writing, but also that the contract identify the parties to the
contract.
-Loans for ______ purposes don't require TILA disclosure. - -Business
-One of these parties is likely to be held liable for an injury resulting from
the condition of the premises. Who is it? - -A residential landlord promises to
repair the exposed wiring in the laundry room, but forgets—until someone is
electrocuted.
* Residential landlords are obligated to repair defects that are reported to
them.
, -Generally, there are covenants between the borrower and the lender within
a mortgage document. Which of the following is a mortgage covenant? - -
Pay any charges and assessments against the property.
* Covenants usually include paying charges and assessments against the
property, maintaining both the property and hazard insurance, and keeping
the property in good condition.
-Colleen and Judy purchased a dilapidated townhome in an estate sale. Due
to their fix-up work and the current economy, the property value has
skyrocketed. They decide to sell it to get their equity out of it. After they list
it, a woman comes forward, saying she is an heir to the previous owner and
lays claim to the property. Which general warranty deed covenant protects
Colleen and Judy? - -The covenant of warranty
* The covenant of warranty assures that the grantor will warrant and defend
the title against the lawful claims of others.
-Real estate licensees who want to uphold the Fair Housing Act should make
a habit out of which of the following actions? - -Tell potential clients in their
initial meeting that they are committed to upholding fair housing laws.
* Telling potential clients up front is the best way to avoid finding yourself in
a situation where someone expects you to discriminate on her behalf.
Promoting diversity is another part of promoting fair housing, and while
you're free to share your protected status if you have one, it's not actually
relevant.
-Which of these is a type of gap financing that's used temporarily until the
consumer can obtain permanent financing? - -Bridge loan
* A bridge loan is a temporary (usually 90-day) loan that provides funds in
addition to an existing loan until permanent financing can be obtained. It's
often used by buyers who've not yet sold their prior property.
-At what level of government are budgeting, site plan review, and building
codes controlled? - -Local
* It would be cumbersome to exert local control and planning from a state or
federal level.
-Which of the following statements is true about the listing presentation? - -
You should go into the presentation fully prepared with a comparative
market analysis, listing agreement, MLS listings of comparable properties,
and your plan for marketing the sellers' property.
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