Real Estate Practice : Lesson 801 - 08/30/10 02:21 AM
                                                       #801
 A real estate transaction is scheduled to close in the month of May on the 12th.
The seller paid the annual premium for his hazard insurance about six months ago.
The buyer decided not to take over the policy.
When the settlement statement is presented part of the hazard insurance premium will be listed as a debit to the seller.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
If the seller paid the hazard insurance in advance it'll show up as a credit on the seller's … (0 comments)

Real Estate Practice : Lesson 800 - 08/30/10 02:18 AM
                                                         #800
Giving the permission and the right to someone to cross your property so they may come and go unhampered is known as granting equitable interest in the easement.
Is this true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
Giving someone permission to cross your property, so they may come and go, is known as granting them a license.
A license is revocable and usually non assignable permission to use the property of another
… (0 comments)

Real Estate Practice : Lesson 799 - 08/30/10 02:09 AM
                                                     #799
When money is held prior to the acceptance of an offer to purchase real estate that money belongs to the seller and the buyer.
Is this true or false ?
Take your time the solution is posted below the wildlife photo.

A. False
If the offer hasn't been accepted the money belongs to the buyer only.
… (0 comments)

Real Estate Practice : Lesson 798 - 08/30/10 02:05 AM
                                                     #798
A home was constructed in 1955 in Texas that didn't include central heat or central air conditioning.
When an appraiser is considering cost depreciation he would classify the abscence of central heat and air conditioning as an incurable feature of the older home.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The abscence of central heat and air conditioning is curable, but for the purposes of considering cost depreciation the appraiser would consider the absence of central heat and air conditioning as a form of functional obsolescence.
… (0 comments)

Real Estate Practice : Lesson 797 - 08/30/10 02:00 AM
                                                       #797
A broker in BIrmingham, Alabama decided to leave town with a clients money and spend a couple of days in British Columbia golfing and disco dancing.
He's guilty of misrepresentation.
True or false ?
Take your time. The soultion is posted below the wildlife photo.

A. False
The scoundrel (ahem) broker is guilty of conversion which is the misappropriation of property and money belonging to another person.
Misrepresentation is when one makes a false statement to a client.
… (0 comments)

Real Estate Practice : Lesson 796 - 08/30/10 01:58 AM
                                                        #796
A broker is Washington State was sent to prison for felony elderly financial abuse and vehicular homicide.
His real estate license would be suspended until his prison term ends.
True of false ?
Take your time.
The soultion is posted below the wildlife photo.

A. False
The license of a felon would be revoked.
… (0 comments)

Real Estate Practice : Lesson 795 - 08/30/10 01:52 AM
                                                       #795
Sales commission to the listing agent is usually considered part of the buyer's closing costs.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
Sales commission is usually the seller's responsibility.
In a buyer's agency agreement, however, the negotiation of commission may vary and could actually be seller paid or buyer paid.
Review the types of agency and commission agreements.
… (0 comments)

Real Estate Practice : Lesson 794 - 08/30/10 01:49 AM
                                                      #794
 A loan origination fee is always part of the seller's closing costs.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The loan origination fee is part of the buyer's setllement.
That's always the case unless there's some variation I'm unaware of.
Let me know if you know of a situation where the seller is assessed the loan origination fee.
 
… (0 comments)

Real Estate Practice : Lesson 793 - 08/30/10 01:44 AM
                                                        #793
Whenever a buyer assumes a mortgage the mortgage balance will appear as a credit to the seller and a debit to the buyer on the settlement statement.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
Once again, the opposite is true in this case.
Whenever a buyer uses a loan to finance an assumption the loan is listed as a credit to the buyer.
Once the financing has been approved for the buyer and the seller's loan has been assumed the assumption will appear as a debit to the … (0 comments)

Real Estate Practice : Lesson 792 - 08/30/10 01:39 AM
                                                      #792
When a settlement statement has been prepared the purchase price of the property will always be shown as a a debit to the seller and a credit to the buyer.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
The opposite is true.
The purchase price of the property will be shown as a debit to the buyer and a credit to the seller on the settlement statement.
… (0 comments)

Real Estate Practice : Lesson 791 - 08/23/10 02:07 AM
                                                        #791
Security deposits are always prorated on the sale of rental  property when going to the closing table.
Is this fact true or false ?
Take your time. The soultion is posted below the wildlife photo.

A. False
Security deposits aren't prorated at closing. They're ususally transferred to the buiyer.
… (0 comments)

Real Estate Practice : Lesson 790 - 08/23/10 02:05 AM
                                                             #790
If the seller agrees to include the dishwasher in the sale of the home for 250 dollars the seller should include this item in the HUD-1 report.
Is this true or false ?
Please take your time solution is posted below the wildlife photo.

A. False
The seller should provide a bill of sale for the buyer.
… (0 comments)

Real Estate Practice : Lesson 789 - 08/23/10 02:02 AM
                                                        #789
When a residential appraiser starts looking for comparables and a sales comparison approach is used he's interested in homes that have been occupied for at least two out of the last three years.
Is this fact true or false ?
Please remember to take your time. The solution is posted below the wildlife photo.

A. False
When a residential appraisal is undertaken and the appraiser wants to use comparables the appraiser wants to include homes that were sold within six months of the appraisal.
When a sales comparison approach is used it considers the sales prices of homes sold … (0 comments)

Real Estate Practice : Lesson 788 - 08/23/10 02:00 AM
                                                         #788
A contract to build a new home is signed with a builder to build a luxury home costing 675 thousand dollars in a neighborhood of homes valued 150 thousand dollars and less.
The new new will lose value.
This loss of value is known as aversion.
Is this true or false ?
Take your time. The soution is posted below the wildlife photo.

A. False
The loss of value is known as regression.
Regression is defined as a that which reduces the value of a property because of the impact of the lower value properties adjacent to the more … (0 comments)

Real Estate Practice : Lesson 787 - 08/23/10 01:53 AM
                                                            #787
When we speak of an appraiser collecting data which is accumulated in a general manner the appraiser has conducted an analysis of the building as well as analyzed the site.
Is this true or false ?
Take your time. the solution is posted below the wildlife photo.

A. False
If the appraiser is collecting general data this is data that is collected outside of the subject property and the outside data accumulated is studied to consider the impact on the value of the subject property.
The analysis of the building and it's site involve specific data and is … (0 comments)

Real Estate Practice : Lesson 786 - 08/23/10 01:48 AM
                                                                        #786
An owner of a multi-family property thinks that a hot tub area with a shower would be a nice addition to the work-out area on the property.
He's asked an appraiser if the addition of the new hot tub and shower area would create value for the property.
 The appraiser is concerned with the principle of regression.
Is this true or false.
Take your time. The solution is posted below the wildlife photo.

A. False
The appraiser is concerned with the principle of contribution which determines whether or not the addition of the hot tub area would add … (0 comments)

Real Estate Practice : Lesson 785 - 08/23/10 01:45 AM
                                                       #785
When a developer declares that he or she plans to build a mixed-use development, which includes a beautiful shopping mall, and this development will occur adjacent to your lot which is zoned commercial, property values start to increase because of the developers project.
When the property values increase because of the developers declaration this is a reflection of the highest and best use of the property.
Is this true or false ?
Please take your time. The soultion is posted below the wildlife photo.

A. False
If property values increase because of the developers declaration the principle of anticipation has occurred.
… (0 comments)

Real Estate Practice : Lesson 784 - 08/23/10 01:42 AM
                                                           #784
When an appraiser is using an income approach to value mortgage payments are generally figured in as part of the property's operating expenses.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
Mortgage payments are not considered to be operating expenses by the appraiser when using the income approach to value.
Mortgage payments are the property's existing debt service.

 
 
… (0 comments)

Real Estate Practice : Lesson 783 - 08/23/10 01:36 AM
                                                         #783
When an appraiser considers the early phases of a property's life cycle they're referring to the phase which is commonly referred to as the phase of appreciation.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
The phase they're referring to which is the early part of the property's life cycle is referred to as the phase of integration.
Integration is the developmental period of the property, the earliest phase.

 
… (0 comments)

Real Estate Practice : Lesson 782 - 08/23/10 01:30 AM
                                                            #782
When we speak of the highest and best use of a property we're generally speaking of the best way that a property could benefit the community and satisfy the needs of the neighborhood.
is this fact true or false.
Please remember to take your time. The solution is posted below the wildlife photo.

A. False
A property's highest and best use is use that produces the greatest net return.
Other considerations include restrictions of use, regulation of zoning in effect and how they combinatively affect the highest and best use.
… (0 comments)

Real Estate Practice : Lesson 781 - 08/16/10 05:57 PM
                                                          #781
The Uniform Standards of Professional Appraisal Practice endorse the use of letter reports when communicating with a client.
Is this fact true or false ?
Remember to take your time. The solution is posted below the wildlife photo.

A. False
Letter reports are not acceptable to the USPAP.
Letter reports do not meet the requirements for the acceptable report formats conforming to USPAP standards which include form reports and narrative reports.
… (0 comments)

Real Estate Practice : Lesson 780 - 08/16/10 05:55 PM
                                                       #780
Appraisals are performed so that the seller and the broker can determine a fair sales price for the property.
Is this true or false ?
Take your time. the solution is posted below the wildlife photo.

A. False
Appraisals are usually performed in order to determine the market value of the property.
The market value is the most probable price that a property should bring in the open market faced with normal avenues of competition.
… (0 comments)

Real Estate Practice : Lesson 779 - 08/16/10 05:53 PM
                                                       #779
When a comparative market analysis is prepared it uses an approach much like the method used in the income approach to appraisal.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
A comparative market analysis or cma most closely follows the sales comparison approach in an appraisal.
… (0 comments)

Real Estate Practice : Lesson 778 - 08/16/10 05:51 PM
                                                  #778
An appraisal is generally considerd to be based on value according to a specific calendar and time element imposed on the various factors involved in estimating value.
Is this true or false ?
Please take your time. The solution is posted below the wildlife photo.
A. True
An appraisal is an opinion of value and coincides with market conditions and other conditions of value as of a specofic date associated with the appraisal.
… (0 comments)

Real Estate Practice : Lesson 777 - 08/16/10 05:48 PM
                                                      #777
A house had been appraised for the loan at $516,000 and the sales price is $510,000.
The loan-to-value ratio is 85%.
What is the eligible amount of the loan based on this loan-to-value ratio ?
How much additional money will the buyer have to bring to the closing table based on the loan-to-value amount ?
Take your time. The solution is posted below the wildlife photo.
 
A. $438,600 at 85% LTV
    $71,400 additional needed to close
$516,000 appraised valuex0.85 LTV=$438,600 loan amount based on 85% LTV
$510,000 Sales priceminus$438,600 LTV amount of loan=$71,400 additional needed at closing
… (0 comments)

Real Estate Practice : Lesson 776 - 08/16/10 05:47 PM
                                                   #776
If a lender wants to produce a better yield on a loan the lender may  increase the loan amount by 3% which will be paid at the closing table as a charge known as an origination fee.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
When the lender wants to produce a better yield on the loan the lender may charge discount points which are a percentage of the loan amount.
The yield is the profit return on the loan.
… (0 comments)

Real Estate Practice : Lesson 775 - 08/16/10 05:45 PM
                                                       #775
When we talk about an adjustable rate mortgaqge we're talking about a loan that is adjusted in a way to increase and decrease the amount but the payment always remains the same.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The payment amount and the interest rate on an adjustable rate mortgage are adjusted at intervals in the loan cycle.
The adjustable rate mortgage is based on an index and the payment may increase or decrease depending on the index.
The index is a published statistical … (0 comments)

Real Estate Practice : Lesson 774 - 08/16/10 05:41 PM
                                                       #774
When a conventional loan is sought by the borrower, private mortgage insurance to protect the loan is usually not required if the loan-to-value ration of the laon is over 95%.
Is this fact true or false ?
Please remember to take your time. The solution is posted below the royalty free wildlife photo.

A. False
If the loan-to-value ration of a loan is more than 80% private mortgage insurance will be required.
… (0 comments)

Real Estate Practice : Lesson 773 - 08/16/10 05:39 PM
                                                #773
The FHA buys and sells loan in the secondary mortgage market as well as makes loans to borrowers in the primary mortgage market.
Is this fact true or false ?
Remember to take your time. The solution is posted below he wildlife photo.

A.False
The only thing the FHA does is insure a loan made by the lender and doesn't actually make any loans.
The FHA doesn't deal in loans in the secondary mortgage market either.
 
… (0 comments)

Real Estate Practice : Lesson 772 - 08/16/10 05:37 PM
                                                    #772
It is well known that if a borrower's credit is excellent a downpayment is not required for an FHA loan.
Is this fact true or false ?
Pleaser take your time. The solution is posted below the wildlife photo.

A. False
A downpayment is always required for an FHA loan.
… (0 comments)

Real Estate Practice : Lesson 771 - 08/09/10 01:18 PM
                                                             #771
A VA loan is a loan that may never be assumed by anyone other than an eligible veteran.
Is this true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
It's possible for anyone to assume a VA loan and the person assuming the loan doesn't have to be a veteran.
The buyer has to pass a credit check before they're allowed to assume the loan, however.
… (0 comments)

Real Estate Practice : Lesson 770 - 08/09/10 01:16 PM
                                                         #770
Once the trustee's sale has been held and all of the expenses related to the foreclosure have been paid and all of the liens have been satisfied, if there is any money left over it belongs to the court.
Is this fact true or false ?
Please take your time. The solution posted below the wildlife photo.

A. False
If anything is left over after everybody's been paid off, what remains belongs to the borrower or the owner that was foreclosed.
… (0 comments)

Real Estate Practice : Lesson 769 - 08/09/10 01:14 PM
                                                                 #769
If a borrower is facing nonjudicial foreclosure the borrower is entitled to the right of being able to cure the default on the loan by paying off the delinquincy and reinstating the loan before the trustee's sale is held.
This right is known as the equitable right of redemption.
Is this fact true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False & True
The equitable right of redemption is reserved for the borrower in a judicial foreclosure, not a nonjudicial foreclosure.
The borrower may however cure the loan before … (0 comments)

Real Estate Practice : Lesson 768 - 08/09/10 01:13 PM
                                                     #768
When a mortgagee gives a mortgagor a document that declares that the debt has been paid in full this document is commonly referred to as a deed of complete release and revision.
Is this malarky true or false ?
Please take your time on this tough question. The solution is posted below the wildlife photo.
 
A. False (wasn't that tough ?)
The document the mortgagee gives to the mortgagor when the debt has been satisfied and completely paid in full is known as a satisfaction of mortgage document or a certificate or discharge of mortgage.
It may also … (0 comments)

Real Estate Practice : Lesson 767 - 08/09/10 01:10 PM
                                                          #767
When a foreclosure sale is held following judicial foreclosure an execution or Sheriff's sale is held.
Once the sale has been completed and the foreclosed property sold the former owner or the mortgagor has a certain or specified period of time in which to redeem the property from foreclosure.
This period of time is commonly referred to as the statutory right of redemption period.
Is this true or false.?
Please take your time. The solution is posted below the wildlife photo.

A. True
A statutory redemption period is the period of time which immediately follows the foreclosure sale which … (0 comments)

Real Estate Practice : Lesson 766 - 08/09/10 01:09 PM
                                                #766
Anytime a buyer works out an arrangement that will allow the seller to assume the mortgage rather than a traditional lender this type of arrangement is known as a partnership.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The type of arrangement that allows the seller to assume the mortgage for the buyer rather than a traditional lender is known as a purchase money mortgage.
The seller is extending credit to the buyer in this type of mortgage arrangement.
The seller has the option of accepting a mortgage … (0 comments)

Real Estate Practice : Lesson 765 - 08/09/10 01:07 PM
                                                          #765
When we talk about a budget mortgage we're talking about a mortgage that allows for the greatest discount level possible given the size of the loan and other variables.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
A budget mortgage is a type of mortgage that not only contains the principal and interest payments but also includes the taxes and insurance on the property as well.
How about that ?
 
… (0 comments)

Real Estate Practice : Lesson 764 - 08/09/10 01:06 PM
                                                   #764
A developer has seven parcels of land and found out that he needs some more money to finish the project.
In order to secure a loan and the additional resources needed to finish the project the developer offers all seven parcels of land as collateral for the loan.
This type of loan secured by more than one parcel of land is commonly referred to as a wraparound loan.
Is this fact true or false ?
Take your time. The solution is nposted below the wildlife photo.

A. False
When a mortgage is secured by more than one parcel … (0 comments)

Real Estate Practice : Lesson 763 - 08/09/10 01:04 PM
                                                     #763
If a provision is included in a mortgage that will permit the lender to declare an entire loan balance due and payable if the property is sold this provision is commonly referred to as a prepayment penalty.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The provision in the mortgage is known as an alienation clause.
This is a clause in the mortgage that will give the lender the right to accelerate the loan if the borrower on the mortgage sells or transfers the property without securing … (0 comments)

Real Estate Practice : Lesson 762 - 08/09/10 01:02 PM
                                                    #762
If there is a provision in a mortgage that allows the lender to declare the entire loan balance due upon default of the loan by the borrower this provision is known as an exculpatory clause.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.
 
A. False
The clause described in the question is known as an acceleration clause and it will allow the lender to declare the entire balance of a debt due and payable instantly if the borrower defaults on the loan.
An exculpatory clause is a clause written into … (0 comments)

Real Estate Practice : Lesson 761 - 08/02/10 09:14 PM
                                                    #761
When one is considering an installment note they also have to consider the fact that only the interest is being paid if this type of note has been assumed by the buyer.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
Installment notes include principal and interest and are periodically paid
… (0 comments)

Real Estate Practice : Lesson 760 - 08/02/10 09:12 PM
                                                     #760
When funds are sought for single family mortgage loans those funds are usually provided by secured collateral in the form of treasury notes or existing equity in residential  or commercial property.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
Funds for mortgage loans for single-family residences comes from the primary mortgage market and includes savings deposits and deposits in savings and loan associations and from Fannie Mae, which is the secondary mortgage market which obtains capital from investors who invest in pools of mortgages.
The capital … (0 comments)

Real Estate Practice : Lesson 759 - 08/02/10 09:10 PM
                                                           #759
If the Federal Reserve Board buys government securities from investment securities groups on the open market the supply of available money will decrease.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The supply of available money will increase.
The most important way the Fed can control the supply of money is through open market operations through buying and selling government securities.
Whenever the Fed takes steps to purchase securities from the investment community the supply of money tends to increase because the money the Fed pays for the … (0 comments)

Real Estate Practice : Lesson 758 - 08/02/10 09:09 PM
                                                     #758
Whenever you see borrowing activity slowing and interest rates falling the banks are facing a period of slowdown that causes them to lend less.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
When interest rates start to fall banks start lending money because of the lower cost of borrowing.
This is especially true when the Fed lowers interest rates.
… (0 comments)

Real Estate Practice : Lesson 757 - 08/02/10 09:07 PM
                                                #757
A guy is seeking a loan to buy a parcel of land.
He also wants a construction loan after the land has been acquired.
When the mortgage for the land is taken out the purchaser need to include a wraparound clause in the mortgage for the land.
Is this fact true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
The buyer wants a subordination clause in the mortgage for the parcel of land due to the fact that new constructiuon loans usually seek the first lien position in the order … (0 comments)

Real Estate Practice : Lesson 756 - 08/02/10 09:05 PM
                                                     #756
The main reason licensing is required to practice real estate is because of the fact that a substantial amount of revenue can be raised for the state and reduce the tax liability among it's citizens.
Is this true or false.
Take your time. The soultion is posted below the wildlife photo.

 
A. False
Licensing is required in order to create a measure of safety for the public and attempts to insure competency and ethical conduct within the industry.
… (0 comments)

Real Estate Practice : Lesson 755 - 08/02/10 09:04 PM
                                                    #755
If you forget to renew your real estate license your violating a state law and can be fined.
Is this true or false ?
Take your time. The solution is posted below the wildlife photo.

A. False
Your not violating the law if you don't renew your real estate license.
If your practicing real estate without a license your in trouble, however.
… (0 comments)

Real Estate Practice : Lesson 754 - 08/02/10 09:02 PM
                                                     #754
During a title search the attorney discovered that an heir to an estate had not properly signed a deed before the property was transferred.
This defect of title could most likely be cured by a letter of estoppel.
Is this true or false ?
Take your time. The solution is posted below the royalty free wildlife photo.

A. False
The defect could be cured by a quitclaim deed which will convey an interest in a property that the grantor had at the time the quitclaim deed was executed.
A letter of estoppel, or estoppel certificate, is a legal document that will … (0 comments)

Real Estate Practice : Lesson 753 - 08/02/10 09:01 PM
                                                          #753
A home was built several years ago and was actually constructed without a functioning heat or air conditioning system.
If an appraiser were to use the cost depreciation approach he would refer to this exclusion of heat and air in the buildiong construction as external obsolescence.
Is this fact true or false ?
Take your time. The solution is posted below the royalty free wildlife photo.

A. False
The absence of heat and air is considered functional obsolescence whicch would result in loss of value because of outdated construction or design.
External obsolescence is a loss of value … (0 comments)

Real Estate Practice : Lesson 752 - 08/02/10 08:59 PM
                                                          #752
An appraiser was contacted an asked to appraise a home.
There have been quite a few sales in the area due to the recent economic climate and the lower of prices.
The best type of appraisal for the appraiser to use in this situation is an income capitalization approach to the appraisal.
Is this true or false ?
Please take your time. The solution is posted below the wildlife photo.

A. False
The type of appraisal method best served in this example is the 'sales comparison approach' which is also a market data approach or a comparable sales … (0 comments)

 
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David Saks

Broker

Memphis, TN

More about me…

The Real Estate Mart of Tennessee, Inc.

Address: 4040 North Watkins, Suite #4, Memphis, TN, 38127

Office Phone: (901) 357-4663

Cell Phone: (901) 217-4114

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The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

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