Va Real Estate Exam 1
Real estate exam 1
- 1.Mortgage yield is best described as:
- A.
What the lender receives when a loan secured by a mortgage is paid off
- B.
All of the money received by a lender after deducting closing costs and loan fees
- C.
The effective interest return obtained from a first trust deed by an investor
- D.
An increase in value of a property which has a mortgage
- 2.Which of the following items could not be used by the owner of a hardware store as securityfor a loan, under the provisions of the Uniform Commercial Code?
- A.
A personal note endorsed by him
- B.
Accounts receivable
- C.
Stock for sale
- D.
Equipment and fixtures
- 3.A valid escrow requires which of the following:
- A.
Escrow instructions with no conditions
- B.
A binding contract between the buyer and seller and the conditional delivery of transfer instruments to a third party
- C.
The services of a licensed real estate broker
- D.
D) None of the above
- 4.If the loan-to-value ratio is low:
- A.
The equity in property is high
- B.
The equity is not affected
- C.
The equity in the property is low
- D.
D) None of the above
- 5.The Real Estate Commissioner would be prevented from proceeding with a formal actionagainst the license of a real estate broker by the:
- A.
Closing of the broker’s office
- B.
Broker moving to another state
- C.
Lapse of three years from the occurrence of the grounds of complaint
- D.
Expiration of the broker’s license
- 6.Sellers are usually reluctant to cancel an existing transferable fire insurance policy in theevent of a cash sale, due to the fact that:
- A.
The buyer may not properly cover the property
- B.
The higher short term cancellation rate will apply
- C.
It could result in cancellation of other policies
- D.
The elimination of a cash return in the proration
- 7.To minimize risk, a lender looks at:
- A.
Loan-to-value ratio
- B.
Divorce, personal problems, etc
- C.
Loan portfolio
- D.
None of the above
- 8.A minority purchaser enters your office and states they are looking for, and interested in,purchasing a particular property in a minority neighborhood. You could legally assume that:
- A.
This person is testing you
- B.
They are interested in that particular property
- C.
They are interested in owning a home in an all minority neighborhood
- D.
They cannot qualify to own property in a higher priced area
- 9.A subdivider and developer purchased considerable acreage and now plans to construct atract of 40 homes. In arranging the financing for the new construction, the lender has agreedto advance part of the funds immediately and will release a set amount of additional money aseach home is completed. The funds that will be forthcoming as construction progresses areknown as:
- A.
Obligatory advances
- B.
Reconveyance funds
- C.
Release monies
- D.
Open and mortgage payments
- 10.The lender’s first line of defense in making a loan is:
- A.
Loan-to-value ratio
- B.
Borrower’s income
- C.
Value of the property
- D.
None of the above
- 11.All of the statements below are true, except:
- A.
A grant deed may convey “after acquired” title even when such warranty is not actually written into the contents of the deed
- B.
A quitclaim deed may convey any right or title including fee simple title
- C.
A deed is of no effect unless delivered
- D.
A reconveyance deed is used to convey title to a new purchaser in connection with a “trust deed sale”
- 12.Which of the following is not a necessary element in the formation of a contract:
- A.
Offer
- B.
Acceptance
- C.
Consideration
- D.
Performance
- 13.Lender’s use the term “debt-income ratio” to refer to a:
- A.
Part of closing costs
- B.
Loan qualifying tool
- C.
Requirement of the Federal Government
- D.
Formula used in appraising property
- 14.A prospective client calls you and asks you to take a listing on his property. In review hispapers you discover he is purchasing the property on a contract of sale that has no accelerationclause, and that has no provision in the contract prohibiting a resale or an assignment. Whichof the following is the most nearly correct statement? Your client could:
- A.
Sell his interest in the property, but only if he pays off the contract first
- B.
Sell or assign his rights but not his duties under the original contract unless the contract seller’s approval was obtained
- C.
Property give the purchaser a warranty deed to the property providing the deed recited “subject to the existing contract of sale”
- D.
Properly give the purchaser a grant deed to the property, providing he took back a recorded purchase money second trust deed to cover the payments due on the original contract of sale
- 15.Many real estate contracts are in writing on forms. Parts of these contracts are written and parts are printed. In the interpretation of such contracts:
- A.
Printed parts take preference over the written parts
- B.
The written parts and the printed parts are given equal consideration
- C.
The written parts take preference over the printed parts
- D.
Any parts copied from the form take preference over those that are purely original
- 16.A lender possessing a chattel mortgage may:
- A.
Assess it
- B.
Hypothecate it
- C.
Alienate it
- D.
All of the above
- 17.Certain charges are prohibited by the Real Estate Settlement Procedures Act in selling ahouse. Buyer or seller may legally be charged for all of the following except:
- A.
Disclosure settlement statements
- B.
Credit reports
- C.
Appraisals necessary to make the loan
- D.
Preparation of loan documents
- 18.A real estate broker is usually:
- A.
A fiduciary to a person interested in buying a property the broker has listed
- B.
An attorney-in-fact
- C.
An agent serving the principal under a duly executed power-of-attorney
- D.
None of the above
- 19.The best definition of a straight note is:
- A.
Sometimes secured by a trust deed
- B.
Sometimes used to finance real property
- C.
Principle is all due at one time
- D.
All of the above
- 20.Where a broker show a client’s property to a prospective buyer that is listed with the brokerunder an open listing, the broker should:
- A.
Make up an office memorandum
- B.
Confirm the showing to the buyer
- C.
Notify the seller as to the prospect’s identity
- D.
Notify the local real estate board
- 21.A contract which, according to the Statute of Frauds, must be in writing in order tomaintain a court action for enforcement is:
- A.
The employment of a business opportunity broker to sell the stock, fixtures and goodwill of a business
- B.
The employment of a business opportunity broker to find a business to be purchased by his principal
- C.
The employment of a broker to exchange leases on properties zoned for retail business
- D.
Any agreement which is not to be performed within one year
- 22.A loan for which interest-only payments are made is:
- A.
A straight note
- B.
Amortized
- C.
Partially amortized
- D.
A graduated payment note
- 23.Concerning business opportunities:
- A.
The bulk sales law is contained in the Uniform Commercial Code
- B.
A bill of sale is used to convey title to business items
- C.
Sales tax is a tax on the sale of tangible personal property
- D.
All are true statements
- 24.A licensed real estate broker working under a typical exclusive listing incurs several expenses. He is not entitled to be reimbursed for these expenditures, unless:
- A.
The buyer has demanded that these expenses be incurred as a condition of continuing with the transaction
- B.
Such expenditures were authorized by the principal
- C.
It was necessary for him to incur the expenses in order to close the sale
- D.
The broker was representing the best interests of the principal in consummating the sale
- 25.Comparing an installment note to a straight note, the straight note will have:
- A.
A total effective interest rate greater than if the loan were an installment loan
- B.
Equal annual principal reduction payments
- C.
No principal payments during the term of the loan except on the last payment
- D.
None of the above
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