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Final Missed Questions
Terms in this set (74)
Which of the following requires lenders to show the true cost of borrowing money?
FHA generally offers loans to what type of borrower?
FHA does not offer loans (they insure them)
This type of loan is mainly designed for borrowers over the age of 62
Reverse mortgage (bank pays them monthly payments and upon that persons death the bank would take back the property)
Discount points and origination points
Both charged only one time (at the beginning of the loan)
Discount points-used to lower APR
Origination points-lenders upfront profit
A borrower gets a loan from bank for $220,000. The borrower buys his interest rate down 1/4% and has 1% origination fee. What are the lender fees?
$6,600 (1 origination fee=$2,200 + 2 discount points= $4,400 (0.02*$220,000))
During a 1031 exchange an investor looking to transfer and hold their sales proceeds and funds before purchasing a new property would use which type of agent?
Facilitator (neutral 3rd party who's elected to hold sales proceeds)
A condo was purchased in Las Vegas in a foreclosure auction for $190,000. The investor purchaser spent $15,000 in rehab costs and at closing has a $6,500. His net profit was $31,500. What is the beginning basis for this investor for tax reporting purposes?
$190,000 (the beginning or cost basis is the purchase price plus buying costs if any)
By leveraging her cash, investor Mary Poppins and her family have what options made available to them: that they otherwise would not have had?
Buying larger investment properties using less money by borrowing
(by leveraging, the investor can increase her purchasing power by borrowing money from lenders instead of using all of her cash to pay for only one property)
The current waiting time to purchase a home after a foreclosure using conventional financing is how long?
The State of AZ has a legal life estate homestead exemption. What would be the homestead protection for a married couple vacation home?
$0 (married couples only get tax exemptions or homestead protections on primary residences which is a taxable exemption on the first $500,000 of gain and a homestead protection of $150,000)
In AZ it is allowed for the broker to place how much of their own money in the general operating fund account as long as it is recorded and managed as such?
Where must the records of all closed files for a brokerage be located if in the state of AZ?
On site in the employing brokers office (all closed files must remain the brokers main office at an offsite location that has been approved by ADRE)
AAA Agency of America has over 1000 agents and a whole marketing department dedicated to social media, online, print, mail, and other forms of advertising. One day it's discovered that over 2500 mailers were sent out without the Equal Housing Logo displayed. What happens?
the designated broker is liable
Bob Dole is the remainderman in an estate set up by his father for the life of his mother. What must happen for Bob Dole to obtain the property?
The life tenant must pass
A holder or possessor of a life estate is
a life tenant
Chattle is best described as
chattle can be either corporal or incorporal
At some point in the past, the grantor added a condition on the deed, which was recorded. What could be the result?
Defeasible fee (by having a defeasible clause something could happen that would make the ownership go to somebody else)
What types of estates are created by law?
Legal Life Estates
Savvy Sam bought 5 acres of land for $320,000 and then quickly subdivided the parcel in 15 equally sized residential lots with the intent to build a single family home on each lot. Since the zoning allowed this, he put the property up for sale and then he sold each of these lots for $2 per square foot. What did Savvy Sam make?
$115,600 (1 acre= 43,560 sqft. so 5 acres= 217,000 sqft.*$2= $435,600 minus $320,000(purchase price)= $115,600)
A family's home has appreciated 22% since they bought it 9 years ago. It is being sold today for $455,400. What was the value when they bought it?
$373,278 ($455,400 is 122% of what number? $455,400/1.22= $373,278)
The primary difference between an escrow company and a title company is
Only title companies issue title insurance policies
During a recent recession, the property values in a certain area decreased by 13% in one year. The current land has been valued at $130,000 and the improvements have been valued at $260,000. What was the value before the recession?
$448,276 ($130,000+$260,000= $390,000. 100%-13%=87%. $390,000/.87= $448,276)
Lender Lenny loaned Louis $9,000. It was a note that earn Lender Lenny $300 per quarter. What is the APR?
(4 quarter per year=$1200 in total. $1200/$9000= 13.3%)
The agency disclosure must be signed by which party?
either buyer or seller, or both if representing both parties must sign it
Under which rule are kickbacks in a settlement deemed illegal?
RESPA (Real Estate Settlement Procedures Act prohibits a licensed agent from earning any money that isn't disclosed on the settlement statement)
Agents try their best to get a property to close escrow but sometimes we are unable to disclose somethings which could adversely affect the buyer's decision. Which of the following is an agent not to disclose?
Your sellers are close to being bankrupt and would take a low offer
Arizona State gives a property owner how long to remediate a property that was used as a drug lab?
A property in AZ is serviced by a well and septic system. Which party is responsible for transferring the well and septic along with paying these costs at close of escrow?
who ever was agreed upon as part of the contract
Which of the following under the commissioners rules is exempt from having a real estate license?
A natural person acting as a broker for less than 90 days due to death of designated broker (the spouse, partner, or some other natural person can take over the brokers duties if the designated broker dies or becomes incapacitated)
In AZ a hard money lender gave a mortgage to a borrower. The borrower defaulted and the lender foreclosed. What amount of time did the borrower have for a redemption period?
180 days (6 months for redemption is allowed)
In a real estate transaction that successfully closes, which parties will sign the affidavit of value in AZ?
buyer and seller (this document is provided to the county assessor to help determine values for tax assessment purposes)
What are the time limits in AZ for a mechanic to file a lien against a homeowner's property?
120 days (the mechanic must provide a 20 day notice of intent to file a lien and if the invoice hasn't been paid by the homeowner, the mechanic must file their lien within 100 days= 120 days total)
In AZ the day of closing
Usually belongs to the buyer (this is common law that can be negotiated)
Which of the following would be used to transfer property after one dies?
Alienation by will (a form of voluntary alienation because the maker of the will took the time to specify who should have possession after the makers death)
The most common type of deed that's used in Arizona is
Warranty Deed (this is what most grantors will give a grantee as it offers the most protections)
Which one of the following is not a covenant that would be found in a general warranty deed?
Covenant of Abstract of Title
Who are the parties to a deed?
Grantor and Grantee
HOA's can legally foreclose on properties in AZ for which of the following reasons?
Failure to pay dues and or assessments
A covenant that is found in a deed would best be described as
a guarantee made by the seller (usually you can find covenants in deeds, which are warranties/guarantees to do something)
Title is the _______ and the Deed is the ________.
legal concept, written document
Which of the following is personal property?
Separable Water Rights
What two sections of land are contiguous?
any section that touches at any point is contiguous (ex: 27 & 22, 7 & 12, 30 & 20)
The initial point for all rectangular survey would be found where?
meeting point at the baseline and prime meridian
The financing instrument that would describe the terms of the loan is the ______
Note (AKA Promissory Note which outlines the loan terms and is signed by the borrower)
John Tucker lives in AZ and has 2 loans on his property and was recently foreclosed on. The first lender is owed $212,000. The second lender is owed $36,000. The house was foreclosed at sold for $250,000. Who was paid at the time of foreclosure?
First lender received $212,000, second lender received $36,000 and John received $2,000 (In AZ any money left over after a foreclosure is returned to the previous legal owner who lost the property)
Which party has equitable title and who has legal title in a land contract?
Vendor has legal title, Vendee has equitable title
A cloud on title could commonly prevent a buyer from obtaining what?
Lenders who offer mortgages usually have what clause in their loans in case of default?
Due on Sale (this clause stipulates that in the event you violate a contractual obligation the lender has the right to "call" the loan demand its payment in full immediately)
All of the following should be recorded except
Voluntary HOA Assessments
A property is being forced to sell by the lender for failure to pay the loan. There are two loans on the property-who gets paid first?
Outstanding Property Taxes
A group of fishermen have trespassed for nearly a year across farmer Johns land to get to the lake. The farmer doesn't really care and as such, the fisherman have an assumed
If overtime, different dominant tenements use the servient tenements property and each one continues the practice, this is referred to as
Tacking on (term is used for both squatters and for those who continue to 'tack on' the time they were using the property most likely in hopes of obtaining title)
Clouds on title could have what effect on real property
potentially negative but not always
In order for AZ real estate licensees to sell manufactured homes, what must happen?
a recorded certificate of affixture must be present (certificate converts the manufactured home from personal property to real property)
Which of the following describes a lease where the tenant has some rights to enjoy the property but pays the same amount per month?
Gross Lease (rent where the tenant pays the same amount every month)
Maggie decides to rent a condo in Scottsdale for the winter months of November, December, and January to escape the cold of Canada. This type of lease would be known as
Estate fo Years
Upon the death of a landlord, the leasehold estate also ends. This is a:
Tenancy at Will
A tenant is allowed to withhold up to how much from their rent due to the landlord if they must fix or repair items themselves after notifying the landlord of the problem?
$300 or 1/2 of a month's rent
A five day notice must be given to a tenant for what purpose?
To provide notice of intent to evict and post notice of default
Which of the following is a type of ownership reserved for married couples?
Tenancy by the entirety
In the state of AZ if it is not otherwise explicitly stated, the state will assume joint ownership as
Tenants in common (where the heirs will receive the property if the owner dies, not the other owners as in Joint tenancy)
An attorney acting as an executor for an estate where multiple properties must be liquidated and sold to satisfy the will:
can act on behalf of the estate even if commission is being paid to the attorney
Two brothers own a building together and have title as Joint Tenants. One brother gets married and adds his new wife as the heir in case of his death. What is the form of ownership now?
The two brothers remain as joint tenants and the wife has no legal interest (there is not way to legally leave an estate to an heir in joint tenancy)
Under tenants in common, each party has
undivided interest (but could have different ownership percentages)
Al, Bea, and Cam are all equal owners and have joint tenancy. If Cam were to sell his interest to Dale and then Bea suddenly dies, what is the ownership now?
Dale is now Tenant in Common with Al who owns 2/3 and Dale who owns 1/3
Karl and Kandi have a joint tenancy. Karl dies unexpectedly and leaves his whole interest in the property to his friend Kim. How is title to the property now held?
Kandi now has fee simple estate (it's not legal to devise to someone your interests in a joint tenancy-upon death the interest will automatically pass to the remaining owners equally)
The time limits set forth by either party to bring action against another party is known as
Statute of limitations (after the prescribed statutes has expired, the party no longer has the rights to bring action)
In order for a contract to be recognized, what actions must happen?
Discrimination based on sex was added to the protected classes in what year?
In an effort to reduce the risks inherently associated with lending to lower income areas, banks would avoid this practice by
Using a sales comparison approach, an appraiser finds 3 comparable properties, all of which are inferior to the subject property. What will an appraiser need to do to complete the appraisal of the subject property?
Increase the value of the comparable properties
An investor is looking to purchase a fourplex property to rent out. The agent identified 3 potential properties in his price range but the comparable properties both had higher vacancies as well as higher overall expenses. With this being known, the third party must have what?
Lower Cap Rate
An agent in a transaction made additional commission that no one knew about. This may be a violation of the agent's duty of disclosure and could be in violation of
RESPA (violation as it didn't appear on the settlement statement which means the agent didn't disclose)
A tenant moves into a commercial building installed mounts for his tvs to display music videos while his clients were shopping. The lease ends and the landlord assume that the tvs will stay but the tenant says no. The best way to address this would be
apply the Standards of Affixture Test
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