RELE 1238 Final Exam Answers

 

. Real estate appraising
a. requires good negotiating and sales skills.
b. requires advanced training and credential designations to ensure an adequate level of
competence.
c. is a fairly easy field to enter
as a new associate.
d. in the mortgage banking industry does not require a real estate license.
2
. Which of the following is NOT an example of gove
rnment’s exercise of its police
powers?
a. rent controls
b. building codes
c. zoning laws
d. restrictive cove
nants
3
. Typically, physical possession of the property is given to the buyer:
a. upon signing of the sales contract.
b. before close of escrow (settlement).
c. the day of close of escrow (settlement).
d. 30 days following close of escrow (settlement).
4
.
The phrase ‘time is of the essence’ in a sales contract means that:
a. the time limits set by the contract must by faithfully observed or the contract is
voidable.
b. the parties are prohibited from giving each other an extension.
c. the contract is void.
d. the contract is a counteroffer.
5
. When property is sold by means of an installment contract:
a. the seller delivers deed at closing.
b. the buyer is NOT given the right to occupy the property until the contract terms have
been fulfilled.
c. the
seller retains title.
d. time is of the essence.
6
. A purchaser’s right to acquire legal title to real prop
erty under the terms of a valid
agreement is known as:
a. naked title.
b. equitable title.
c. specific performance.
d. contract title.
7
. Tax
defer
red real estate exchanges are possible only when:
a. all properties are of equal value.
b. no more than two properties are involved.
c. properties are ‘like
kind’.
d. there are no mortgages.
8
. Which of the following prohibits discrimination by lenders?
a.
Fair Housing Act
b. Equal Credit Opportunity Act
c. Real Estate Settlement Procedures Act
d. Texas Real Estate License Act
9
. In order to convey title to real property, a deed must be signed by the:
a. grantee.
b. grantor.
c. agent.
d. grantee and
grantor.
10
. Deeds are usually acknowledged to:
a. make them valid.
b. provide constructive notice.
c. make them enforceable.
d. make them admissible to the public records.
11
. Once a person is aware of another’s rights or interest in p
roperty, that person is said to
have:
a. constructive notice.
b. legal notice.
c. inquiry notice.
d. actual notice.
12
. Which of the following would not ordinarily be checked in s
earching a title to a parcel of
land?
a. judgment records
b. lien records
c.
chattel mortgage records
d. lis pendens index
13
. Protection against incomplete or defective records o
f the title to land can best be
obtained by securing:
a. an abstract of title.
b. title insurance.
c. an attorney’s opinion.
d. a title searcher’s opini
on.
14
. Marketable title to real estate is title which is:
a. absolutely free of any possible defect.
b. free of reasonable doubt as to ownership.
c. issued by a court after completion of a quiet title action.
d. free of all liens.
15
. A mortgagee’s
policy of title insurance protects:
a. seller.
b. buyer.
c. agent.
d. lender.
16
. Evidence of the amount and terms of a borrower’s
debt to a lender is provided by
means of a(n):
a. mortgage.
b. promissory note.
c. first mortgage.
d. hypothecation.
17
. A
borrower’s property serves as collateral while the
borrower retains the rights of
possession and use of it by
the process of:
a. alienation.
b. hypothecation.
c. amortization.
d. acceleration.
18
. Which
of the following covenants ensures that the borrower will keep the property in good condition?
a. covenants of forbearance
b. covenant of hypothecation
c. covenant against encumbrances
d. covenant of good repair
19
. The lien priority of mortgages is determined by the:
a. date of the mortgage instrument.
b. date of the promissory note.
c.
language of the mortgage instrument.
d. date of recordation.
20
. The lender is also called the:
a. mortgagor.
b. trustor.
c. mortgagee.
d. trustor.
21
. A loan wherein the principal is all repaid in one lum
p sum payment at the end of the
loan’s life is kn
own as a(n):
a. straight or term loan.
b. amortized loan.
c. budget mortgage.
d. balloon note.
22
. Clyde borrowed money to purchase a home under
terms that required him to make
monthly payments that
included loan amortization p
lus prorated insurance premiums
and annual real property tax payments. This loan is
referred to as a:
a. budget loan.
b. package loan.
c. blanket loan.
d. chattel loan.
23
. As used in real estate finance, the term ‘point’ means:
a. one
percent of the purchase price.
b. the down payment expressed as a percentage of price.
c. one percent of the loan amount.
d. the borrower’s equity expressed as a percentage of value.
24
. If a contract is executed employing the Texas Veterans
Land Board,
the purchase price
of the land cannot
exceed the lower of: 95% of purchase
price, 95% of the appraised
value, or:
a. $40,000.
b. $60,000.
c. $80,000.
d. $100,000.
25
. A first mortgage and equity loan together cannot exceed:
a. any limit.
b. 75% of value.
c
. 80% of value.
d. 90% of value.
26
. The reason that a Graduated Payment Mortgage is ca
lled a Negative Amortization is
because:
a. the public perception of the Graduated Payment Mortgage is very Negative.
b. the interest rate becomes negative during the l
ife of the loan.
c. when the interest paid is less than the amount due, the deficiency is added to the
loan balance.
d. the negative effect on the borrower’s credit when payment are late.
27
. When numerous properties are pledged against a s
ingle mortgage,
the mortgage is
called a:
a. package mortgage.
b. reverse mortgage.
c. blanket mortgage.
d. blended
rate mortgage.
28
. The type of financing in which the seller retains title to the property is called a:
a. wraparound mortgage.
b. land lease.
c.
subordination.
d. contract for deed.
29
. A real estate practitioner can advertise which of the
following terms and not trigger
Regulation Z?
a. 7% interest rate
b. $498 monthly payments
c. 90% financing
d. low down payment
30
. Which of the following st
atements is true regarding real estate leases?
a. All leases for real estate must be in writing to be enforceable.
b. There are no TREC promulgated lease forms except the temporary lease forms.
c. Only the landlord needs to sign a lease.
d. A holdover tena
nt is exactly the same as a trespasser.
31
. With Regard to landlord
tenant Laws, which of the following statements is correct?
a. In the event of non
payment of rent the landlord can place a lien on all tenant’s
furniture.
b. Habitable premises is rigidly
defined for all properties.
c. The landlord has an obligation to install security devices.
d. The maximum occupancy limits prohibit more than two adults per bedroom.
32
. With regard to the adjustment phase of the appraisal, which of the following is true?
a. The adjustment is made to the subject property.
b. More weight is given to the comparable that has the most adjustments.
c. Term and conditions of sale are not considered when making adjustments.
d. The “Adjusted Market Price” is the dollar value of ea
ch comparable sale after it has
gone through an adjustment process.
33
. If land under an apartment building is being apprais
ed, the most likely method used
would be the:
a. front
foot basis.
b. square foot basis.
c. lot method.
d. county appraisal distric
t records.
34
. The most appropriate method used to appraise a public school building would be the:
a. market comparison approach.
b. income approach.
c. cost approach.
d. unit in place approach.
35
. In using the cost approach in an appraisal, a building
is f
ound to have faulty or outdated
design. It would be
subject to which type of depreciation?
a. Functional obsolescence
b. Economic obsolescence
c. Physical deterioration
d. Fictional depreciation
36
. If unavoidable circumstances cause a delay in closin
g, but it is important to close
anyway, the parties may:
a. perform a dry closing.
b. close into escrow.
c. perform an internet closing.
d. disburse the funds and sign the deed later.
37
. A use of property that is not in agreement with present zoning laws
a. may never be permitted in Texas.
b. may be permitted under a “grandfather clause”.
c. may be changed with 66% vote of the legislature.
d. must escheat to the state.
38
. The effects of a proposed development on a
community is determined by the
prepa
ration of:
a. an environmental impact statement.
b. deed restrictions.
c. zoning laws and variances.
d. a conditional
use permit.
39
. When considering a real estate investment, leverage implies that
a. the property is priced below market.
b. available fin
ancing will allow the buyer to acquire the property for a percent of the
purchase price.
c. the property can be purchased a portion at a time.
d. there are more concessions to the buyer than to the seller.
40
. Having a strong background in land use, zonin
g, e
nvironmental issues, local land
planning issues and politics is
necessary for an individual dealing in
which of the
following investment types?
a. Apartment buildings
b. Office buildings
c. Retail properties
d. Land
41
. Real Estate Settlement
Procedures Act
a. prohibits payments outside of closing.
b. allows any settlement fee up to a percentage of the purchase price.
c. prohibits the seller from requiring that the buyer purchase insurance from a particular
title company.
d. does not apply to p
urchases using conventional financing.
42
. Which of the following is true regarding zoning?
a. The right to zone comes from the government’s power of escheat.
b. Zoning is based on the principal of use separation.
c. Most zoning laws are imposed by the st
ate or federal government.
d. There is no provision for variation from existing zoning laws.
43
. In the absence of zoning, land use can be controlled by use of:
a. Environmental Impact Statements.
b. deed restrictions
c. government powers of escheat.
d. g
overnment of taxation
44
. With regard to real estate investment opportunities, which of the following is correct?
a. Larger apartment buildings cost much more per unit to manage than smaller projects.
b. The higher construction and operating costs of an
office building reflect the amenities
and services office users demand.
c. Houses and condominiums are typically out of the financial reach of most investors.
d. Land investments typically involve little risk.
45
. Which of the following is true regarding
specializing in commercial leasing?
a. A separate real estate license is required by TREC.
b. Commercial leasing is almost identical to residential leasing.
c. Once established as a commercial leasing agent there is little additional updating
required.
d.
Much of commercial leasing is on
the
job
46
. The clause that gives the lender the right to call in the not
e if the mortgaged property is
sold or otherwise
conveyed by the borrower is known as the:
a. subordination clause.
b. alienation clause
c. release cl
ause.
d. redemption clause.
47
. The value of the property above the total liens or mortgages is called:
a. the equity.
b. due on sale.
c. the assessment.
d. the loan
to
value ratio.
48
. The expenses that a lender incurs while processing
a mortgage loan a
pplication are
recovered from the
borrower as:
a. discount points.
b. origination fees.
c. mortgage insurance premium.
d. private mortgage insurance.
49
. If a monthly principal and interest payment for a 30
ye
ar, 12% loan of $1,000 would be
$10.29, what
would the
monthly payment be for a home pu
rchased at $75,500 with an
80% loan on those terms?
a. $10.29
b. $621.52
c. $755.90
d. $776.90
50
. Regarding mortgage insurance, which of the following is true?
a. PMI insures only the top 10
15% of the loan.
b. F
HA insures the entire loan.
c. VA insures the entire loan.
d. Is only available on conventional loans.