National Broker exam

  1. What is the difinition of an appraisal?
    Estimate or opinion of market value
  2. What is a CMA?
    competitive market analysis
  3. What is the best way to determine the value of a property?
    do and appraisal
  4. What is market value described as?
    most probable price
  5. What is market price?
    The actual price paid in the transaction
  6. What are the essential elements or characteristics of value?
    • DUST
    • demand
    • utility- usefullness
    • scarcity
    • transferability
  7. What is not included in a CMA?
    • HABU
    • highest and best use
  8. Explain substitution?
    Lowest priced property has the best demand
  9. What are the two principals of conformity?
    • Regression- value of over improved declines
    • Pregression- value under improved increases
  10. Explain the sales comparision approch to value?
    Subject is the property being evaluated, use comparables within the last year
  11. GRM = value / rents
    TEST answer 150,000
  12. What is the final step in valuation process
  13. Explain title theroy vs lien?
    • Title - mortgage
    • Lien- judgment
  14. What is a promissory note?
    promise to repay and terms, evidence of the debt
  15. What is an acceleration clause?
    speeds up the note when the borrower is in default
  16. What is the difference between E and OR
    • E- recives
    • OR- gives
  17. Who records satisfaction or defeasance clause
  18. What is a deficiency judgment?
    Insufficient proceeds from a forclosure
  19. A foreclosure removes all liens from a property T or F
  20. What does a deed in lieu of foreclosure not take care of?
    secondary liens
  21. What happens to a lender if they accept a deed in lieu of foreclosure?
    take title jubject o any junior liens
  22. When does a short sale take place?
    prior to foreclosure
  23. What is a term/strait/interest-only(negative amortized loan?
    Interest only payment with balloon due at the end
  24. what is partially amortized?
    principal and interest with a ballon at the end
  25. what is a ARM?
    adjustable rate index+ margin
  26. What is negative about subprime laons?
    leads to preditory lending
  27. Explain seller financing?
    Contract for deed land contract or installment contract
  28. What is LTV?
    loan to value ratio sales price or appraisel whichever is less
  29. What is market value today?
    total debt today =equity
  30. What is a loan origination fee
    charged by the lender to process and issue the loan, its a percentage of the loan amount
  31. what is leverage?
    • can control a large asset with very little cash
    • disadvantage higher risk with less equity
  32. What is Usury?
    charging of interest in excess of what is permitted by law(set at the state local level)
  33. what is conventional insured loans?
    loans over 80% LTV require PMI private mortgage insurrance
  34. FHA?
    federal housing administration fully insurred, has to be an approved lender CREDIT UNIONS ARE NOT!
  35. What is the LTV that requires MIP
    Above 96.5
  36. Explain FNMA?
    Federal national mortgage association fanne mae
  37. Explain FHLMC?
    Federal home loan mortgage corporation freddie mac
  38. What is regulation Z?
    truth in lending Z-loan
  39. According to RESPA when is the good-faith estimate due?
    at time of application or no later than 3 days after
  40. Borrower has the right to inspect Unifor settlement statment A(hud-1) how many days befor closing?
    1 day
  41. What is the difference between truth in lending and RESPA?
    • TIL- true cost of credit and lender cost
    • RESPA- disclosure of all closing cost within 3 days
  42. What is the note rate?
    nominal rate
  43. When is there a three day right of recission?
    only applies to REFI
  44. WHY is there RESPA?
    to prohibit kickbacks on refferal and inspections
  45. typically who pays the commisions?
  46. In contracts what is the difference between Express and implied?
    • Express- can be oral or written
    • Implied- created by actions not in writing
  47. What is the difference between unilateral and bylateral contracts?
    • unilateral- one side (option)
    • bylateral- promise for a promise excutory contract
  48. what is the satute of limitations for a contrant
    4 years
  49. When will you not be covered by E and O
    for fraud
  50. what kind of title do you have with a Executory contract.
    equitable title
  51. What is novation?
    a new contract replaces the old one
  52. What are the four parts of a valid contract?
    • MCCL
    • M- mutual accent
    • C- consideration
    • C- competence
    • L- legal purpose
  53. What is an addenda?
    additional materal attaced to the initial aggrement offer
  54. What is a counter offer?
    A full rejection of initial offer
  55. Is ernist money consideration?
  56. according to statute of limitation or frauds do contracts need to be in writing?
  57. What is the diff between gross net and percentage lease?
    • Gross- rent no expences
    • Net- rent plus expences
    • percentage- percentage of income as rent
  58. Actual eviction is what kind of eviction?
  59. What are the two remidies for default?
    • specific performance
    • Liquidated damages
  60. If personal property appears to match it could be what?
  61. Land can be a fixture T or F
    F! never
  62. How is personal property and dirt conveyed?
    • Dirt= deed
    • Personal property= bill of sale
  63. What are the three pysical characteristics of land?


  64. Economic characteristics of land
    • SIPL
    • s- scarce
    • I- improvements
    • P- permanance of investment
    • L- location
  65. Explain the metes and bounds description?
    Uses compass degrees has a POB mesure clockwise and oldest system in use
  66. Explain rectangular survey/ government
    • uses meridians townships ranges tiers
    • township- 36 sections 36 square miles
    • perimiter- 24 miles
    • section= 640 aceres
    • section 16= school taxes
  67. How do you find a township within a section?
    1-6 right to left down left to right so and and so forth
  68. When does the plat need to be recorded?
    befor the isuance of a building permit
  69. what is the diff between dedication and patemt?
    • didication= land to government
    • patent= land to people
  70. what is a freehold estate?
    indefinate duration of ownership
  71. what is a fee simple estate?
    ownership as long as deed condition is met
  72. what is Pur autre vie?
    life estate on the life of someone other than the holder of the life estate
  73. What is a non-freehold estate?
  74. If a non freehold estate is sold what happens to the tennant?
    retains possession until the end of the lease term
  75. what is periodic estate/tenancy?
    month to month
  76. what is an encumbrance?
    a nonpossessory interest in the lands of another
  77. what is an easement?
    • right to use anothers land
    • runs with the land
    • not revocable once givin
  78. What two things does a Appurtenant easement have?
    Dominant and servient
  79. What is an encroachment?
    unauthorized use of anothers land
  80. What is the first recorded lien?
  81. What lien is firs in line?
    property tax
  82. How does a license differ from an easement?
    License is revocable
  83. What is lis pendens?
    recorded document that hives constructive notice of a pending lawsuit regarding title
  84. When property is owned by one person/entity it is called?
    estate in severalty
  85. Can an LLC entity own property?
  86. What is the diff between general and limited partnership?
    • General- shares liability
    • limited- unequil liability
  87. limited partnership is prespnsible for what liability?
    only the amount invested
  88. What is tennants in common?
    co-ownership with no right of survivorship
  89. what is jount tenants?
    with right of survivorship passes without probate and overides a will
  90. What are the four unities of title?
    • PITT
    • P- possession
    • I- interest
    • T- time
    • T- title
  91. What is tenancy by the entirety?
    applies exclusively to married couples in some states
  92. A deed does not what?
    prove ownership
  93. What are the five covenants of a waranty deed?
    • Sezin- right to convey
    • quiet enjoyment- no disturbances
    • against encumbrances-
    • furthur assurance-
    • waranty forever
  94. what is limited warranty deed?
    only the grantors period of ownership
  95. who signs a deed?
    grantor and must be 18
  96. If a person dies without a will that is stated as what?
    without a will
  97. does a will have to be signed prior to death?
  98. What is adverse possession?
    ownership granted for use of for 10 years
  99. who governs the spesifics for recordings of deeds?
    state law
  100. do signatures have to be notorized?
    in most states
  101. what is an abstract of title and how long does it go back?
    historical summary of conveyances encumbrances and forever
  102. standard title insurance protects what?
    defects discoverd after closing
  103. for national what is escrow?
    closing process
  104. A new loan is a what?
    credit to the buyer
  105. when would capitol gains tax be pertenant?
    $250,000 single $500,000 married for principal residence
  106. how long must you have lived in a property to be exempt from capitol gains tax?
    2 out of the past 5
  107. what is the form for investment property and what is it used for?
    1031 defer payment of capitol gains tax
  108. What items are tax deductable for propertys?
    • POIT
    • points
    • origination
    • interest
    • taxes
  109. What is the depreciation tax deduction for investment property
    • residential- 27 1/2¬† years straight line
    • commercial-39 years straight line
  110. what is the indentify and closing period to deffer in like and kind property?
    • indentify-45 days
    • close- 180 days
  111. what are points?
    prepaid interest
  112. what method would you use for property bought before 1987?
    accelerated cost recovery method
  113. What would you use after 1987?
    straight line
  114. What are the government right in land?

    • P- police power
    • E- eminint domain
    • T- taxes
    • E- escheat
  115. What is eminint domain and condemnation?
    • Eminint domain- right
    • condemnation- process
  116. What is and example of police power?
    building codes
  117. what is ad valorem?
    at assessed value not current market value
  118. Can u appeal assessed value of your property and if so with who?
    yes assessors apeals board
  119. What is escheat?
    die with no hiers governments gets property
  120. Where are zoning controls set at ?
    local level
  121. what are building code and standards?
    material plumbing electrical etc
  122. Environmental impact issues may effect what?
    value must disclose even if its not finalized
  123. What are 3 important facts about water rights?
    • Riparian- river
    • Littoral- lake
    • Doctrin of prior appropriation
  124. Deed restrictions or coventants are?
    privately created controls on land use and must not violate fair housing laws
  125. indapendant contractors must?
    set their own work hours
  126. agent ows pricinciapal who employes him what?
    fiduciary duties
  127. listing are the property of whom?
    the brokerage
  128. What is a sub-agent?
    agent of the agent
  129. what do we as agents owe a third party?
    honesty and fair dealing
  130. as a listing agent you can not disclose what?
    the sale price
  131. What are the fiduciary responsiblities?
    • OLD CAR
    • O-obedience
    • L-loyalty
    • D-disclosure

    • C- confidentiality
    • A-accounting
    • R-reasonable care skill
  132. What is reasonable care?
    activley applying skill/ expertise
  133. What is special agency?
    perfom acts without the ability to bind principal(limited)
  134. What is general agency?
    EX property manager employed by property owner
  135. What is universal agency?
    bigest kind has Power of attourney
  136. What must all agreements for commision be?
    in writing not implied
  137. What is express agency?
    what is Implied agency?
    • Express- writing
    • Implied- not
  138. Who is not liable for the actions of the QB?
  139. Who is responsable for creating propery disclosures?
    the seller never the broker
  140. Who must disclose all material facts?
    the seller and the broker
  141. What are stigmatized property requirements?
    State law (seek legal advice)
  142. If you know about a lie it is?
  143. What is puffing?
    exaggerated opinion
  144. Brokers are liable to take ______ steps to protect others?
  145. Enviornmental issues are regulated by who?
  146. Which environmental issue is best abated with encaplulation?
  147. What are the lead baised paint disclosures?
    • EPA pamphlet prior to 1978
    • 10 option to test
    • seller is not required to conduct an inspection
  148. Explain radon?
    • mitigated with ventilation
    • cheap to test for
  149. Mold regulations are what?
    if found must be remediated per EPA and state regulations
  150. What is an exclusive right to sell listing?
    agent gets paid regardless who sells the proptery
  151. commissions are ______ in all cases
  152. What is a express agreement?
    in writing and signed
  153. How listings terminate?
    if listing expires while under contract listing broker will close to get paid
  154. does the death of the selling broker terminate a listing?
  155. What is the protection clause?
    broker can collect commision fr a certian length after termination of listing
  156. What is the obligation of the listing broker with the property disclosure statment?
    buyer must recive prior to making an offer
  157. Brokers must do what even if the seller thinks they know the value of the property?
    Complete a CMA
  158. Warranty's terms and length are determined by?
    the contract with warranty company
  159. what is the implied habatability warranty?
    covers roof colapse on a new home liability would fall on the builder
  160. when was the civil rights act?
  161. Federal fair housing act of _____ covers what?
    • 1968
    • race
    • religion
    • color
    • national origin
    • sex
    • family status
  162. When does the federal fair housing act not apply?
    retirement communities 80 perecent are occupied by 55 and older
  163. under federal law what classes are not protected?
    • age
    • sexual orientation
    • marital status
    • occupation
  164. What are prohibited actions by brokers?
    • steering- showing only some areas
    • Blockbusting- panic peddling
    • redlining-lenders limiting loans based on location
  165. complaints can be filed when?
    • with HUD within one year
    • Civil within two years
  166. HUD will not consider what in regards to a complaint?
    Brokers intentions or feelings
  167. Equil credit opportunity act (ECOA) prohibits discrimination baised on what?
    • Age
    • marital status
    • recipt of public assistance
  168. Megan's law is what?
    state law regards to sex offenders
  169. Real estate professional i required to disclose what?
    • if they are a principal to the transaction
    • and enviornmental material or other issue requiring disclosure that might impact the property
  170. is a licensee allowed to give legal advice?
  171. How long does a broker have to contact a client that is on the do not call list after an inquiry?
    3 months
  172. How long to contact a client after sale that is on DNCR
    18 months
  173. Who signs the managment agreement?
    employing broker
  174. Property managers renting industrial property would be concerned with what?
    environmental issues
  175. In condominiums common elements are owned by all tenants as what?
    tennants in common
  176. In a cooperative buyers recieve what?
    shares of stock
  177. what is the time share right of recission?
    7 days
  178. What is TAM
    T=A x M
  179. current value- loans =?
    answer 2 is correct
  180. a CMA is mot similar to what?
    Market data approach
  181. What is market value?
    what someone thinks the property will sell for
  182. What is market price?
    what the property sold for
  183. When doing a CMA keep the comparables within how long?
    6 months
  184. Highest and best use is not a factor im completing what?
  185. written offer contingent upon eviornment impact statment not showing a decrease in value that infact does would make the contract what?
  186. Line 101 would be?
    sale/contract price(dibit buyer)
  187. what is an open listing?
    only the procuring cause would be compensated
  188. persons reciving section 8 money what are they protected from being descriminated against in regareds to a loan?
  189. Before a counter is accepted and a better offer comes in what must the seller do?
    withdraw the counter befour accepting the new offer
  190. What should a broker do befour commencing managment duties on a new property?
    sign a managment agreement
  191. investor purchasing investment property would most likely use?
    1031 exchange
  192. a stigmatized property might also be called what?
    psychologically impacted property
  193. If the seller and broker knows there is a leak and said there is not this is?
  194. If a house has been treated with pestacide and the broker only puts call on the listing and buyer now has issues related to the pestacide is the broker liable?
    Yes did not take reasonable steps to notify
  195. A high degree of leverage is what?
    high degree of risk due to higher ratio of borrowed money
  196. alienation clause=?
    due on sale clause, seller does seller financing and wants to make sure he gets paid.
  197. When would PMI be required?
    Conventional loan with %80 or greater LTV
  198. laws that regulate how much interest may be charged are?
    USURY laws
  199. Tiltle insurance covers?
    events that occur prior to the policy being issued but show up after
  200. What section is directly south of section 14
  201. An agrement between brokers to charge a spesific rate is a violation of what?
    anti trust laws
  202. a covenant is?
    deed restriction or cc&r
  203. What are the four elements of value?
  204. the type of listing where the seller brings the buyer and the broker is not compensated is?
    Exclusive agency
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National Broker exam