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The CE Shop TX Principles of Real Estate II Course Exam
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The CE Shop TX Principles of Real Estate II Course Exam
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THE CE SHOP TX PRINCIPLES OF REALESTATE II COURSE EXAM 100%
SOLVED QUESTIONS AND ANSWERS
j Which of the following best defines capitalization rate? - The expected rate of return on an investment
In a 1031 tax-deferred exchange, what role does the qualified intermediary serve? - Coordinates the
exchange
Which of these is a landlord's basic duty under Texas law? - Comply with state and local laws that relate
to the health and safety of the tenant
Parcels of land are valued at $50,000 each. However, when two of the parcels are joined, they are valued
at $120,000. What economic principle is at work here? - Plottage
A preapproval letter is evidence that ________. - The borrower's financial information has been verified
What is the term for an increase in property value caused by the joining of two neighboring parcels of
land? - Plottage
What are prepaid expense items? - Items to be divided proportionately between the buyer and seller
that the seller hasn't fully used
The mortgagee's title insurance policy provides for reimbursement ______. - Up to the current
outstanding loan balance
Which of these terms describes the actions that are required to effect a transfer of title by deed? -
Delivery and Acceptance
Former landfills are often used for what purpose? - Development of golf courses and parks
A rundown home is driving down property values on the block. What economic principle is at work
here? - Regression
Why would a buyer want to know if any easements or encroachments exist on a property? - Easements
and encroachments affect the property's lot size, enjoyment, and use, which can affect its value
The economic principle of ______ says that when there are two houses in the same neighborhood with
the same size, appeal, and utility, the lower-priced one will tend to sell first. - Substitution
In the sales comparison approach, using comparables that are five and 15 years old when appraising a
subject that is 10 years old is an example of what? - Bracketing
In the real estate business, which professional's primary role is to finance mortgage loans, while also
funding development/construction projects if the risk is not too great? - Traditional lenders
, There are a lot more sellers than buyers in the current market. How does this demand influence value? -
Value is pushed downward
What do appraisers use in addition to depreciation to determine the indicated value when using the cost
approach? - Reproduction cost
The Closing Disclosure must be provided to the borrower at least ______ days before the day of closing. -
Three
What's the minimum number of business days prior to closing that lenders have to provide borrowers
with the Closing Disclosure form? - Three
Which of the following is a true statement about police power and public land use controls? - Local
governments and their planning boards control budgeting, site-plan review, and building codes
What does a balloon payment represent at the end of a loan term? - It means that some principal
remains at the end of the loan term
Which veteran loan program offers qualified veterans help with the purchase of land in Texas? - Veterans
Land Program
Which economic principle says that a property's value is determined by what it would cost to purchase a
similar property? - Substitution
When co-owners of a property decide to partition the property, what does it mean? - They're dividing
the property proportionally so that each co-owner becomes sole owner of a portion
Which program offered by the TDHCA helps residents purchase their first home? - My First Texas Home
In Texas, which deed type provides the strongest and broadest form of guarantee of title? - Full Covenant
and Warranty deed
On which type of property would the cost approach typically be used when determining value? - New
Construction
Which economic principle says that value is created and maintained when the characteristics of a
property fit in with its surroundings? - Conformity
Which type of property manager is most likely to work for real estate developers and investors? - Real
Estate Development
What percentage of loss would the seller have if he paid $18,000 for a vacant lot, built a home on the lot
that cost $145,000, and then sold the property for $153,000? Round your answer to the nearest percent.
- 6%
Who are the parties to a property management agreement? - The property manager and property
owner
What does an appraiser do? - Provide an unbiased estimate of value
A home has an assessed value of $64,120, and the tax rate is 3.2%. What is the annual tax bill? -
Assessed Value x Tax Rate = Annual Property Tax
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