Texas Principles of Real Estate II Questions & Answers(GRADED A+)
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Course
Texas Principles of Real Estate II
Institution
Texas Principles Of Real Estate II
What does the denominator show? - ANSWER Tells how many total parts there are
What should you do to convert fractions to decimals? - ANSWER Divide the numerator by the denominator
Landlords base rents on what criteria? - ANSWER Landlords decide what their rents will be, based on the rental...
Texas Principles of Real Estate
II Questions &
Answers(GRADED A+)
What does the denominator show? - ANSWER Tells how many total parts there are
What should you do to convert fractions to decimals? - ANSWER Divide the numerator by the
denominator
Landlords base rents on what criteria? - ANSWER Landlords decide what their rents will be, based on
the rental market, type of property and the geographic location.
Formula: Commission - ANSWER Sales price x Rate of commission =
Would it be a fair legal decision that the seller might be forced to pay a commission to an agent who
had a buyer that purchased one week after the expiration of the listing agreement but was shown
the property prior to the end of the listing agreement if the listing agreement had a sixty-day
protection (safety) period? - ANSWER Yes, if the broker provided the buyers' name to the seller
when the listing ended and the seller had not listed with another real estate broker.
Does a court of law favor an attorney at law or a licensed real estate broker? - ANSWER Neither, the
court does not favor any specific group or person.
Profit or Loss - ANSWER Selling price - Original cost =
,Percentage of Profit - ANSWER Profit ÷ Original cost =
Profit Margin - ANSWER percentage of selling price that turned into profit.
Profit ÷ Selling price =
Add-on Interest - ANSWER Loan amount x Interest rate x # of payments
(LA x IR x N)
Formula: APR (Annual Percentage Rate) - ANSWER 2 x number of payments periods in one-year x
total financing charges ÷ (principle, or amount borrowed x (number of scheduled payments + 1)
2 x n x IR ÷ P(N+1)
Points are paid at closing and are equal to what? - ANSWER 1% of the loan amount
Which of the following methods do lenders use to compute the interest on the total amount of the
loan for the entire loan term? - ANSWER The add-on rate to compute the interest on the total
amount of the loan for the entire loan term
John is getting a $95,000 loan at 7.25 percent and will pay 4 discount points. What will the effective
interest rate be? - ANSWER 7.75%
4 points x 1/8 percent = 4/8 = .50 percent
7.25 + .50 = 7.75 percent
If a lender charges two (2) origination points on a $75,000 loan, how much would that cost the
buyer? - ANSWER $1,500
$75,000 x .01 x 2
What is the purpose of Discount Points? - ANSWER Designed to offset any losses the lender might
suffer when selling the loan to the secondary mortgage market.
, What is the total simple interest due on the following loan amount, $12,500 at 5.5% for one year? -
ANSWER $687.50
$12,500 x .055 x 1 = 687.50
What is the ratio between borrowed funds and the market value of the property being financed? -
ANSWER Loan-to-value
How many square feet are in 1 acre? - ANSWER 43,560
What is a hectare? - ANSWER 10,000 square meters
2.471 acres
What ratio is calculated based on all of the monthly obligations the borrower has outstanding? -
ANSWER Debt Ratio
Which of the following procedures are used to compute the area of an irregular parcel or room? -
ANSWER Divide the shape into regular rectangles, squares, or triangles; compute the area for each
figure; then add the areas together to get the total area for the parcel.
When closing on rental property, to do the monthly proration, rents are always paid when? -
ANSWER In advance
A mixed number has both a fraction and a: - ANSWER whole number
Which of the following must be prorated or divided proportionately between the buyer and the
seller? - ANSWER Taxes, Insurance, Utilities
Convert fractions to decimals when doing a real estate math problem by - ANSWER dividing the
numerator by the denominator.
What are the conventional loan guidelines for income and debt ratios? - ANSWER Conventional
loans typically require income ratio to be under 28% and debt ratio to be 36% or lower
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