Real Estate Practice Exam 5

A home is 10 years old. It has a 50-year life, and a $100,000 reproduction cost. The appraiser assigns physical deterioration of $26,000. Which is probably correct?

The home has been better maintained than others in the area

The home probably has a swimming pool, or is next to a convenience store

The home has been poorly maintained

The appraiser is wrong

Correct! Wrong!

Which may be deducted for income tax purposes by a homeowner?

property taxes, insurance and interest

insurance, depreciation and taxes

depreciation, taxes and interest

taxes and interest

Correct! Wrong!

An appraiser values a 4-bedroom home with a pool. A pool normally adds $14,000 value to a property, and a bedroom is worth $9,000. She locates the following comparable sales: 5 bedroom home, no pool, sold for $125,000 4 bedroom home, no pool, sold for $116,000 3 bedroom home with pool, sold for $121,000 What is the value of the subject property?

$120,000

$125,000

$130,000

$135,000

Correct! Wrong!

Fred has a long-term capital loss on the sale of his personal residence. He may deduct

a maximum of 28% of the loss

a maximum of $3,000 each year until the loss has been deducted

the entire loss

none of the loss

Correct! Wrong!

Marilyn is applying for a loan to finance her new home in an area where there are minorities. The loan officer tells her that she should try to find another location, since the loan committee would prefer not to lend in that area. The lender may be involved in the illegal practice called

blockbusting.

redlining.

steering.

failure to disclose under RESPa.

Correct! Wrong!

A comparable property showed adjusted value of $40,000. The property sold two years ago, and the adjustments indicated a 7% annual appreciation rate. Assuming the appreciation was the only adjustment, how much was the total adjustment?

plus $5,063

plus $5,404

minus $5,063

plus $5,600

Correct! Wrong!

A seller receives $18,000 proceeds from the sale of her home. The mortgage balance was $32,000, she paid a commission of 7%, and her closing costs were 3%. What was the sales price?

$55,555

$50,000

$55,000

$56,000

Correct! Wrong!

A buyer purchases a 4-unit commercial building for $150,000 cash. Operating expenses of the building total $30,000 annually. What must the buyer get in monthly rent from each unit in order to achieve a 20% return?

$5,000

$2,500

$1,250

$125

Correct! Wrong!

A reasonably good balance between supply and demand of apartments is

5% occupancy.

90% vacancy.

95% occupancy.

87% occupancy.

Correct! Wrong!

A building rents for $5 per square foot, and there is an index of 1.5. The following year the index climbs to 1.8. The rent is tied to the index. What will the rent be per square foot?

$5.68

$6.00

$8.00

$5.45

Correct! Wrong!

Usually, local planning commissions are composed of

lay members representing a cross section of the community.

professionals from each of the local planning authorities.

three county commissioners and two school board members.

local developers and representatives of utilities and banks.

Correct! Wrong!

What requires lenders to give a Good-Faith Estimate?

the "Little FTC" consumer protection act.

Regulation Z.

RESPA.

FHLBB consumer protection statutes.

Correct! Wrong!

John takes out a 14% 30-year mortgage in the amount of $65,000. The loan constant is .011849. What is the balance of the loan after the second payment?

$64,976.14

$64,988.14

$64,964.00

$1,516.52

Correct! Wrong!

Which is correct about Regulation Z?

It is published by the Federal National Mortgage Association

It requires the disclosure of pertinent information such as down payment and annual percentage rate if a "triggering" item such as interest rate is advertised

It requires disclosure of estimate of settlement costs by the lender

all of the above

Correct! Wrong!

Which is deducted from gross income to arrive at net operating income?

taxes

insurance

vacancy

debt service

Correct! Wrong!

A prospect enters Broker A's office and requests to be shown houses in neighborhoods with certain racial characteristics. The broker advises the prospect that he will show him houses without regard to the racial characteristics of the neighborhood. The prospect is shown houses in certain minority neighborhoods and certain non-minority neighborhoods. The prospect becomes interested in two of the houses, both of which are in minority neighborhoods. If the broker had followed the prospect's initial instructions, which of the following would be correct?

He would have violated federal laws but not the Florida real estate license law.

He violated Federal and State law and could have been suspended or revoked.

He would not have violated any laws; he must follow his principal's instructions.

He would not have violated any laws; he must follow his prospect's instructions.

Correct! Wrong!

The Fair Housing Act of 1968 (with amendments) prohibits discrimination

on the basis of age.

on the basis of a couple having children.

on the basis of behavioral characteristics.

all of the above

Correct! Wrong!

A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected to average 5 percent over the life of the property. Operating expenses are expected to average about 30 percent of effective gross income. An overall capitalization rate of 12 percent is derived from market transactions of similar properties. What is the market value?

$208,333

$138,542

$197,917

$145,833

Correct! Wrong!

. A 3-year insurance policy costing $1,164 is taken out November 1, 1995. The property was sold on May 15, 1996, and the day of closing belongs to the buyer. If the buyer assumes the policy, what the should the buyer pay the seller at closing, using the 30-day month method?

$179.97

$955.99

$954.91

$977.97

Correct! Wrong!

A comparable property sold a year ago for $70,000, but would have sold for about eight percent more today. The appraiser should:

adjust the subject price upward by $5,600

adjust the subject price downward by $5,600

adjust the comparable price upward by $5,600

adjust the comparable price downward by $5,600

Correct! Wrong!

Real Estate Practice Exam 5

A home is 10 years old. It has a 50-year life, and a $100,000 reproduction cost. The appraiser assigns physical deterioration of $26,000. Which is probably correct?

Which may be deducted for income tax purposes by a homeowner?

Fred has a long-term capital loss on the sale of his personal residence. He may deduct

Marilyn is applying for a loan to finance her new home in an area where there are minorities. The loan officer tells her that she should try to find another location, since the loan committee would prefer not to lend in that area. The lender may be involved in the illegal practice called

A comparable property showed adjusted value of $40,000. The property sold two years ago, and the adjustments indicated a 7% annual appreciation rate. Assuming the appreciation was the only adjustment, how much was the total adjustment?

A seller receives $18,000 proceeds from the sale of her home. The mortgage balance was $32,000, she paid a commission of 7%, and her closing costs were 3%. What was the sales price?

A buyer purchases a 4-unit commercial building for $150,000 cash. Operating expenses of the building total $30,000 annually. What must the buyer get in monthly rent from each unit in order to achieve a 20% return?

A reasonably good balance between supply and demand of apartments is

A building rents for $5 per square foot, and there is an index of 1.5. The following year the index climbs to 1.8. The rent is tied to the index. What will the rent be per square foot?

Usually, local planning commissions are composed of

What requires lenders to give a Good-Faith Estimate?

John takes out a 14% 30-year mortgage in the amount of $65,000. The loan constant is .011849. What is the balance of the loan after the second payment?

Which is correct about Regulation Z?

Which is deducted from gross income to arrive at net operating income?

The Fair Housing Act of 1968 (with amendments) prohibits discrimination

. A 3-year insurance policy costing $1,164 is taken out November 1, 1995. The property was sold on May 15, 1996, and the day of closing belongs to the buyer. If the buyer assumes the policy, what the should the buyer pay the seller at closing, using the 30-day month method?

A comparable property sold a year ago for $70,000, but would have sold for about eight percent more today. The appraiser should:

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