Salesperson Uniform Exam #4 Chapters 18-22

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D

18-1. The income approach used in appraising property is best suited for determining the value of a(n):
a. Single family residence
b. Vacant residential lot
c. Condominium
d. Office building

B

18-2. If the value of a property is negatively affected by forces outside the property beyond the control of the
owner, an appraiser would adjust the property appraisal for:
a. Accrued depreciation.
b. Functional obsolescence.
c. Economic obsolescence.
d. Physical deterioration.

A

18-3. The difference between the value of a property and the total amount of liens against it is called the
property's:
a. Equity
b. Actual cash value
c. Highest and best use
d. Collateral

B

18-4. Which of the following economic principles best describes the amount of added value an improvement
makes to the property?
a. Conformity
b. Contribution
c. Plottage
d. Highest and best use

A

18-5. Which of the following economic principles best describes the affect on value when property is
overimproved?
a. Diminishing return
b. Contribution
c. Anticipation
d. Highest and best use

C

18-6. Which of the following economic principles best describes the effect on a property's value when it is
believed substantial economic development will occur in the area in the near future?
a. Diminishing return
b. Contribution
c. Anticipation
d. Highest and best use

C

19-1. In which of the following approaches to estimating value is the amount of depreciation calculated?
a. Gross rent multiplier
b. Income approach
c. Cost approach
d. Sales comparison approach

C

19-2. When estimating the value of a property using the cost approach, the appraiser would calculate:
a. Sales price of similar buildings in the area.
b. The accrued depreciation.
c. The replacement cost of the building.
d. The owner's original cost.

A

19-3. The income approach to estimating value would be best used in an appraisal of a:
a. Shopping mall.
b. Single family residence.
c. Vacant lot.
d. Church.

D

19-4. In which of the following approaches to estimating value would the value of the land be calculated separately
from the improvements?
a. Sales comparison approach
b. Income approach
c. Gross rent multiplier
d. Cost approach

D

19-5. When estimating the value of a property using the income approach, the appraiser would calculate the:
a. Appreciation.
b. Depreciation.
c. Equity.
d. Capitalization.

A

19-6. Which of the following would most likely be a cause of incurable functional obsolescence in an old office
building?
a. Large, closely spaced internal support columns
b. An increase in the vacancy rates in the area
c. Inadequate lighting fixtures
d. Numerous broken windows

C

19-7. In using the cost approach, the appraiser would estimate the loss in value due to normal wear and tear on
the property. This is called:
a. Functional obsolescence.
b. Economic obsolescence.
c. Physical deterioration.
d. External obsolescence.

B

20-1. Which of the following describes the mortgagor?
a. The party holding a mortgage
b. The borrower
c. The party providing the loan funds
d. The party closing the loan

C

20-2. The mortgage clause that permits the lender to declare the entire unpaid balance of the loan immediately due if
the borrower defaults is called the:
a. Alienation clause.
b. Defeasance clause.
c. Acceleration clause.
d. Escalator clause.

D

20-3. The note used in connection with a real estate loan:
a. Is used to convey title.
b. Guarantees the loan.
c. Provides security for the loan.
d. Is used to create the debt.

B

20-4. The value of the property less any debts represents the owner's:
a. Leverage.
b. Equity.
c. Basis.
d. Capital gain.

A

20-5. The mortgage clause that permits the lender to call the entire unpaid balance of the loan if title to the
property passes is called the:
a. Alienation clause.
b. Defeasance clause.
c. Acceleration clause.
d. Escalator clause.

A

20-6. A trust deed used in real estate financing is a three-party instrument. The trustor is the:
a. Mortgagor.
b. Lender.
c. Seller.
d. Grantor.

C

21-1. The relationship, expressed as a percentage, between the amount of the loan and the value of the property
securing the loan is called the:
a. Capital value ratio.
b. Debt-to-equity ratio.
c. Loan-to-value ratio.
d. Amortizing ratio.

B

21-2. When title to a property is lost through foreclosure of a mortgage, the former owner may recover title to the
property through:
a. Restitution.
b. Redemption.
c. Reclamation.
d. Adverse possession.

A

21-3. If two lenders hold mortgages on the same property and wish to exchange their lien priorities, they would use a
a. Subordination agreement.
b. Satisfaction of mortgage.
c. Subrogation agreement.
d. Mortgage reconveyance.

D

21-4. If the final payment on a mortgage has been made by the borrower, the lien will remain on the property until the
lender records a:
a. Reconveyance of mortgage.
b. Lis pendens.
c. Trustee deed.
d. Satisfaction of mortgage.

C

21-5. A borrower has a simple interest loan at 8% and pays semiannual interest of $4,200. What is the amount of the
loan?
a. $10,500
b. $52,500
c. $105,000
d. $332,600

A

21-6. Which of the following statements is true when a property is purchased subject to the seller's existing
mortgage?
a. The seller's obligations under the mortgage remains unchanged.
b. The seller's credit will not be affected if the buyer stops making payments and the property is
foreclosed.
c. A mortgage loan obtained by the buyer to complete the purchase will be a first mortgage.
d. The seller is released from all liability of the loan.

D

21-7. As a participant in the secondary mortgage market Fannie Mae:
a. Insures FHA loans.
b. Services FHA loans.
c. Initiates FHA loans.
d. Buys FHA loans.

B

22-1. The type of real estate loan that allows the borrower to obtain additional funds from time to time up to the
original amount of the loan is called a(n):
a. Growing equity loan.
b. Open-end loan.
c. Reverse annuity loan.
d. Amortized loan.

C

22-2. Where would a prospective borrower most likely go to obtain an FHA loan?
a. The Federal Housing Administration
b. A state housing agency
c. A qualified private lending institution
d. The Department of Housing and Urban Development

D

22-3. The title to the real estate under an installment sales contract is held by the:
a. Trustee.
b. Trustor.
c. Vendee.
d. Vendor.

D

22-4. The type of real estate loan payable in periodic installments that pay down the principal balance as the
payments are made is called a(n):
a. Straight loan.
b. Conventional loan.
c. Reverse annuity loan.
d. Amortized loan.

D

22-5. The type of real estate loan made by the seller to a buyer for part of the purchase price is called a:
a. Straight loan.
b. Package loan.
c. Reverse annuity loan.
d. Purchase money loan.

A

22-6. A loan that allows increases and decreases in the interest rate during the term of the loan is called a(n):
a. Adjustable rate mortgage
b. Graduated payment mortgage
c. Reverse mortgage
d. Straight loan

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