Real Estate 50 Most Asked Questions

What is leverage?

the use of borrowed funds to purchase assets

How is the binder deposit shown on the Closing Disclosure Form?

credit to the buyer only

What is the status of a sales associate’s license if they don’t complete post-licensing education before their first renewal?

null and void

How many sections are in a township?

36

Which mortgage clause allows the mortgagee (lender) the right to demand the outstanding loan balance plus accrued interest in the event that the borrower sells or transfers any interest in the property without the lender’s prior consent?

due on sale clause

What requirement does not apply regarding dwellings built prior to 1978?

buyers must have the property inspected for lead based paint

Two close friends own a daycare center as joint tenants with right of survivorship. One owner passed away. Who owns the daycare center?

the surviving owner becomes sole owner of the daycare center by operation of law

The subject property is a three-bedroom, two-bath home. A comparable property is a three-bedroom, two and one-half bath home. An appraiser has determined that the extra half bath is worth about $2,200. What adjustment should the appraiser make?

subtract $2,200 from the comparables transaction price

What is INCORRECT concerning the FHA and VA mortgages?

VA is a government insured loan and could be accompanied by an origination fee

what does FHA stand for?

federal housing administration

what kind of loan is the FHA

a government insured loan

what is the FHA?

it is not a bank that gives loans, but a company that insures loans

what does VA stand for?

veterans affairs (administration)

What kind of loan does the VA have?

government guaranteed loan

What is the administration that is for veterans, with no downpayment, has a funding fee, AND if you have a deceased spouse who is a veteran you are allowed to take a VA loan if you have not remarried.

VA

What two mortgage administrations come with origination fees, are assumable, are non-conventional loans, and have optional discount points

VA and FHA

How is the intangible tax typically noted on the closing disclosure statement?

buyer debit only

Call Suzanna Smith, best sales associate in town, 555-201-2435 (cell)

example of a blind ad

the ad that does not tell you where a person works

a blind ad

penalty for a first-time minor violation that is not accompanied by a fine

a notice of non compliance

An unlicensed personal assistant may perform what activity?

hand out objective, written information on a rental property

What do you have to have a license to do? Licensed assistants can:

conduct listing presentations, show houses, present offer to a seller

Two brothers have decided to purchase investment property and are not sure how they want to take title. The brother’s wives have looked into the options and have decided that in the event that one of the brothers die, his wife would like to receive title. With this information, how should they take title?

tenancy in common

What is the #1 superior lien (AKA the lien that would take priority before all other liens)?

property tax lien

What is the second most important lien?

special assessment tax

what is an intangible tax?

tax on a new mortgage

A father intended to leave his house to his son and executed a general warranty deed to the property and gave it to his son. Shortly after, the father died before the deed could be recorded. What applies?

the son has title to the property because he accepted it when it was conveyed

What covenant in a deed states that the grantor owns the property and has the right to convey it?

covenant of seisin

Which expenses associated with a principal residence are deductible for income tax purposes?

property taxes, mortgage interest, points, and mortgage loan origination fees

Amy, Todd, Frank, and Francine all co-own a beach house on St. Petersburg beach. Frank died, and his co-ownership of the property passed, according to his will, to his son. How do these parties own the property?

tenants in common

What does tenants in common mean?

able to go to heirs

Which statement is true about the monthly payments on a 30-year, fully amortized loan?

initially, interest is the larger portion of the payment

What are the rights flowing through your property called?

riparian rights

If a sales associate picks up an escrow check on Tuesday, when does the broker have to do deposit it into the escrow account?

immediately as defined by Friday

If the title company is holding the escrow check, what must be on the purchase and sales contract regarding the title company?

the name address and phone number of the title company

A broker sold an up to date and accurate rental list to a customer on June 10th for $475. On June 14th the customer decided not to obtain a rental and then orally demanded, and should receive, how much of a refund?

$356.25

What is the economic indicator that adjusts in an adjustable-rate mortgage?

the index

What method of surveying property is used in a subdivision where plat maps have been recorded?

lot and block also called the plat method

What type of notice is also called legal notice and is achieved by recording documents in the public records?

constructive notice

In what mortgage lending theory does the borrower not retain title during the loan period?

title theory

If you are at the POB (point of the beginning) and you are headed N90 E, what direction are you headed?

East

What describes of a non-freehold estate that includes a definite specified amount of time?

estate for years

Actively licensed and inactively licensed sales associates must complete the 14 hours of continuing education.

this is true concerning continuing education

A broker has listed a seller’s property. The seller has disclosed to the broker that the roof leaks. The broker has satisfied his legal obligation if he tells the buyer

that the roof leaks

Two brokers meet and decided to set commission rates on all sales for one year. What applies or what is true for this?

this is a violation of antitrust laws

A broker sold three houses in Florida to a customer that now lives in Chicago. This same customer uncovered an opportunity with someone who might want to buy property from the Florida broker. The customer asked the broker if he would reimburse her for the expenses incurred in convincing the person to buy property from the Florida broker. What applies?

the broker cannot reimburse the customer because the customer does not have an active real estate license

Which of the following is true concerning taking listing contracts when a licensee leaves a brokerage?

if he takes original listing contracts, charged with larceny. If he takes copies of listing contracts, charged with breach of trust.

When office space rentals are plentiful, what type of market are we in?

a buyers market

What are the set guidelines called that must be followed by appraisers?

USPAP (uniform standards of professional appraisal practice)

A real estate brokerage company has entered into a single agent buyer broker relationship with the buyer. In order to show this buyer property that is listed with the same brokerage company for which it is a single agent, in what brokerage capacity may the company work with this buyer and seller?

both the seller and buyer need to transition from a single agent to a transaction broker relationship

When a buyer makes an offer on a property, they include _____ to show they are serious about it

binder deposit

Where is the money held when someone puts down a binder deposit until the sale is finalized?

in an escrow account

What is the document that summarizes all the financial details of a transaction

the closing disclosure form

If a buyer owes $20,000 at closing, they already paid $5,000 binder deposit, they now only owe $15,000. What is this?

an example of credit to the buyer only

What is a loan you take from a bank or lender to buy a house or property that you agree to pay back the money in monthly payments over time?

mortgage

What is the rule in your mortgage agreement that says: if you sell or transfer the house to someone else without asking the lender first, the lender can demand that you pay the entire loan amount (plus any interest you owe) immediately.

the due on sale clause

After what date is it illegal to have lead based paint?

January 1, 1978

What kind of estate is it if you OWN whatever it is: ie: condo, business, house, etc.?

a free hold estate

What kind of estate is it if you rent it?

non free hold

What is it called if your property always goes to whoever is alive and never their heirs?

joint tenants

The house that is being appraised is called the ____?

subject

What does fully amortized mean?

its paid off after the said amount of time