An appraiser recommended tearing down a $28,000 house. There was a shopping center across the street. Which of the following appraisal principles BEST
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A. deterioration
B. highest and best use
C. capitalization
D. substitution - correct answer B. highest and best use
What could guarantee no encroachments and good title?
A. assumption package
B. title insurance policy
C. survey
D. termite inspection - correct answer B. title insurance policy
Which of the following statements is true of a private deed restriction?
A. it is imposed by an individual on other people through a contract or deed
B. it is put on a property by an owner to reduce tax liability
C. it applies only to crops on agricultural property
D. it is imposed by the city restricting the use on the property - correct answer A. it is imposed by an individual on other people through a contract or deed
A city council zoned a two block area so that only Spanish style homes could be built because of the Spanish heritage in the area. This is usually referred to as which type of zoning?
A. directive zoning
B. aesthetic zoning because of architecture
C. cultural zoning
D. bulk zoning - correct answer B. aesthetic zoning because of architecture
A person bought a house and wanted to bring along a pet cougar to keep in the backyard. Which of the following governmental rights would MOST likely prohibit this?
A. police power because the police have authority over types of animals for pets
B. urban development regulations as they list allowable animals for the properties
C. zoning ordinances because sometimes these contain what animals may be kept
D. building codes as they would contain the most restrictions for city dwellings - correct answer C. zoning ordinances because sometimes these contain what animals may be kept
Howe's property was assessed at $30,000. Rand's property was assessed at $35,000. Which is true?
A. the ad valorem tax on Rand's property is higher than Howe's
B. the improvement tax on Rand's property is higher than Howe's
C. the special assessments on Rand's property are higher than Howe's
D. the special assessments on Howe's property are higher than Rand's property - correct answer A. the ad valorem tax on Rand's property is higher than Howe's
A 3 year straight note was obtained at 10% per year. Interest paid the first two years was $4,200. The loan on the house was 75% of the value. What was the total value of the property?
A. $21,000
B. $28,000
C. $31,040
D. $38,750 - correct answer B. $28,000
$4,200 divided by 2 years = yearly interest of $2,100. $2,100 divided by 10% = $21,000 loan divided by 75% = $28,000 price
A property sold for $75,000 with a down payment of 20%. The lender charged 3 discount points. How much in dollars were the points?
A. $1,500
B. $1,800
C. $2,100
D. $2,250 - correct answer B. $1,800
$75,000 x 20% = a down payment of $15,000. $75,000 - the down payment of $15,000 = a $60,000 loan. $60,000 x 3% = discount points of $1,800
What document proves that a home loan has been paid off?
A. paid stamp on mortgage
B. mortgage release
C. defeasance clause
D. mortgage waiver - correct answer B. mortgage release
Which of the following organizations is the largest purchaser of mortgages in the secondary mortgage market?
A. federal national mortgage association (FNMA)
B. government national mortgage association (GNMA)
C. federal home loan mortgage corporation (FHLMC)
D. farmer's home administration (FMHA) - correct answer A. federal national mortgage association (FNMA)
In which way are a mortgage document and a mortgage note similar?
A. both are non negotiable instruments
B. both are debt reducing instruments
C. both are contracts
D. both are fully standardized instruments of conveyance - correct answer C. both are contracts
An agreement to waive prior rights in favor of another is:
A. subordination
B. subrogation
C. subornation
D. subjugation - correct answer A. subordination
Seller Grant entered into a sales contract with buyer Howe. Under the terms of the agreement, Howe assumed the loan of Grant. Howe ran into financial difficulties the following year and defaulted on the loan. Under the standard assumption guidelines, who would be liable to the lender on the assumed loan?
A. Howe only
B. Grant only
C. both Grant and Howe
D. neither Grant nor Howe as the lender is on their own in trying to recover the money - correct answer C. both Grant and Howe
A 44 year old man had owned a commercial property for 2 years. He then sold the property making a 20% profit (capital gain). On what percentage of capital gains would he have to pay tax?
A. 0%
B. 40%
C. 60%
D. 100% - correct answer D. 100%
A buyer purchased a property for $40,000. The buyer then added improvements of $20,000 and sold the property for $80,000. The capital gain would be:
A. $20,000
B. $40,000
C. $60,000
D. $80,000 - correct answer A. $20,000
$40,000 cost + improvements of $20,000 = a basis of $60,000. The price of $80,000 - the basis of $60,000 = a capital gain of $20,000
Which of the following can a property manager legally do?
A. rent only to the ethnic groups dictated by the owner
B. follow all the owner's instructions regarding the renting of the property
C. ask questions of potential tenants to determine if they have the ability to pay the rent
D. charge a higher security deposit to tenants who have a poor credit history - correct answer C. ask questions of potential tenants to determine if they have the ability to pay the rent [Show Less]