Real Estate Sales Exam Financing and Valuation 4

Question 1

Which of the following best describes 'functional obsolescence' in real estate appraisal?

Accepted Answer

Loss in value from outdated or poor design features

Answer

Functional obsolescence results from flaws in the property's design or outdated features, such as a bedroom accessible only through another bedroom.

Question 2

Under RESPA, which of the following is prohibited between settlement service providers?

Accepted Answer

Paying kickbacks or unearned referral fees

Answer

RESPA Section 8 prohibits kickbacks and fee-splitting arrangements that inflate settlement costs for consumers.

Question 3

A VA loan is guaranteed by the Department of Veterans Affairs primarily to:

Accepted Answer

Allow eligible veterans to buy with no down payment

Answer

VA loans allow eligible veterans and service members to purchase homes with no down payment and no PMI.

Question 4

Which principle of value states that the value of a property is affected by the value of surrounding properties?

Accepted Answer

Principle of conformity

Answer

The principle of conformity holds that maximum value is realized when a property is compatible with surrounding land uses.

Question 5

An FHA loan differs from a conventional loan in that FHA loans:

Accepted Answer

Are insured by the federal government

Answer

FHA loans are insured by the Federal Housing Administration, allowing lenders to offer more flexible qualifying terms.

Real Estate Sales Exam Practice Test