New Jersey Real Estate Practice Chapter 24 Flashcards

Questions and Answers

Which of the following is not considered an improvement to land?

Buildings

Roads

Crops (correct)

Fences

To the seller's agent, the buyer is properly described as a?

customer

Which appraisal approach computes the value of the land separately from the buildings?

Market Approach

Income Approach

Sales Comparison Approach

Cost Approach (correct)

A person who has absolute control of a parcel of real estate is said to own a?

fee simple Signup and view all the answers

If Jim Thomas lets his neighbor store her camper in his yard for a few weeks without charging rent, he has given her a?

license Signup and view all the answers

The HUD-1 statement will still be used for a mortgage secured by a?

reverse mortgage Signup and view all the answers

A legal description that defines the boundary lines is called?

metes and bounds Signup and view all the answers

Which of the following is considered dual agency?

Broker acting for both buyer and seller Signup and view all the answers

Which of the following is a lien that does NOT need to be recorded?

Real estate taxes Signup and view all the answers

Depreciation refers to?

a loss of value due to any cause Signup and view all the answers

Whether a salesperson is associated with a broker as an employee or as an independent contractor is important?

for income tax purposes Signup and view all the answers

A township contains?

36 sections Signup and view all the answers

A merchant signs a lease for $800 a month or 6% of gross sales, whichever is more. In July gross sales were $14,000. How much is the rent for July?

$840 Signup and view all the answers

Jane Smith gave the hospital a vacant lot for 'as long as it is used for hospital purposes.' The hospital owns a?

fee determinable Signup and view all the answers

The buyer moves in and pays expenses and loan payments but the seller retains title in a?

land contract Signup and view all the answers

A tenant's written, one-year lease expires on May 1. To obtain possession on May 1, the landlord must give the tenant?

no notice Signup and view all the answers

Which of the following situations will NOT delay closing under the TRID rules?

Escrow amount for taxes and insurance was changed Signup and view all the answers

The Jensons own property that the city wants to use to extend the airport runway. The Jensons refuse to sell. The city may acquire this property by its right of?

eminent domain Signup and view all the answers

Georgia Brown sold her listed home herself and didn't owe anyone a commission. The listing she had signed was probably?

an exclusive-agency listing Signup and view all the answers

Federal income tax regulations allow a homeowner to reduce taxable income by amounts paid for?

Property tax and interest Signup and view all the answers

A grantor becomes a lessee, and the grantee becomes the lessor, in a?

sale and leaseback Signup and view all the answers

Ben Wolfe has defaulted in payment of several debts, and a court has ordered his property sold to satisfy them. Which of the following would be considered the prior lien?

current real estate taxes Signup and view all the answers

A guarantee that the lender will commit to a certain percentage for the cost of the loan is called?

ratelock Signup and view all the answers

What is the function of Fannie Mae?

buys FHA loans Signup and view all the answers

Continuing education courses may be taken?

By mail, internet, or classroom Signup and view all the answers

As an agent for the seller, a real estate broker may?

solicit the buyer for an offer to purchase Signup and view all the answers

The new combined federal TRID requires a lender to provide a loan estimate within how many business days of a completed loan application?

three days Signup and view all the answers

The amount of money that would be paid by a buyer to a seller, both well-informed and neither under duress, is real property's?

market value Signup and view all the answers

Property is listed for $160,000 and sells for $150,000, in a town that reassesses at sales price on transfer. The tax rate is $1.93 per $100. How much is the tax bill?

$2,895 Signup and view all the answers

A real estate broker who received a commission for the sale of a home in a transaction in which neither the buyer nor the seller was a principal acted as a?

transaction broker Signup and view all the answers

Which of the following is NOT essential to an enforceable real estate sales contract?

Earnest money Signup and view all the answers

The lender has agreed to finance furnished condominium units. The lender has agreed to a?

packaged mortgage Signup and view all the answers

A married couple who meet the ownership and occupancy requirements may sell a principal residence with no federal capital gains tax on profit of up to?

$500,000 Signup and view all the answers

The amount of commission due a salesperson is determined by?

agreement between broker and salesperson Signup and view all the answers

The practice of refusing to lend mortgage money in certain neighborhoods is called?

redlining Signup and view all the answers

In a real estate sale, transfer tax fees are usually paid by the?

seller Signup and view all the answers

Which of the following should you accept as evidence or proof of ownership of an estate in land?

Title insurance policy Signup and view all the answers

An appraiser would NOT generally use which of these items to determine the replacement cost of the building?

Original cost Signup and view all the answers

Which of the following hazards requires a federal disclosure form in a residential purchase?

Lead-based paint Signup and view all the answers

Franks rents an apartment under a two-year written lease. After one year, the building is sold. Which statement is TRUE?

The sale has no effect on Franks' tenancy Signup and view all the answers

In 1977, a family purchased their house and lot for $53,000. They made no major improvements. They recently sold it for $224,550. How much do they owe on their gain?

nothing Signup and view all the answers

A REALTOR is?

a member of a trade association Signup and view all the answers

A broker received two offers at once, one through a salesperson in his office and one from a competitor. The broker should?

Submit both offers at the same time Signup and view all the answers

The act by which all parties agree to the terms of a contract is known as?

meeting of the minds Signup and view all the answers

A refusal to rent to a couple because they are unmarried violates?

New Jersey Law Signup and view all the answers

Exemption from a portion of property taxes is available to?

qualified veterans, qualified senior citizens, and qualified nonprofit organizations Signup and view all the answers

Those who are entitled to inspect all documents recorded in the county clerk's office include?

bank employees, private individuals and tax assessors Signup and view all the answers

If a seller lists a home for $400,000 and the listing broker tells a prospective buyer to submit a low offer because the seller is desperate, the buyer offers $320,000 and the seller accepts. In this instance?

The broker violated the agency relationship Signup and view all the answers

When real property is sold at a foreclosure sale and not enough money is realized to pay the mortgage, the lender may?

seek a deficiency judgment Signup and view all the answers

Which of the following represents economic obsolescence?

Car lot next door Signup and view all the answers

The law that requires MOST real estate contracts to be in writing is known as the statute of?

Frauds Signup and view all the answers

Bart O'Malley is a licensed salesperson who completed a difficult transaction. Bart may accept a bonus from?

his own broker Signup and view all the answers

A custom-built house containing 2,320 square feet has been constructed on a $28,000 lot. Construction costs are $50.25 per square foot. Other fees and costs total $2,780. What is the total cost of the property?

$147,360 Signup and view all the answers

From whom does one obtains an FHA loan?

local FHA lender Signup and view all the answers

A broker may not act for both buyer and seller without?

obtaining prior written consent of both parties Signup and view all the answers

A building sold for $949,000. The total commission was $56,940. What was the rate of commission?

6% Signup and view all the answers

In the purchase of real estate, the buyer is held responsible for facts and information obtainable through actual notice and also through?

constructive notice Signup and view all the answers

The power of eminent domain is exercised through the court proceeding known as?

condemnation Signup and view all the answers

The gross income from a small office building is $73,500 and the annual expense total is $52,300. If the owner expects to receive an 11% return on her investment, what should she be willing to pay for the building?

$192,727 Signup and view all the answers

A home seller may avoid federal capital gains tax on profit from the sale of a principal residence only if?

the property has been owned and occupied as a principal residence for two of the preceding five years Signup and view all the answers

The selling landlord has collected the September rents from all five tenants: Two at $345 and three at $425. The sale is closed on September 20. How much credit should the buyer be allowed?

$655 Signup and view all the answers

Real estate brokers may protect themselves in case of professional lawsuits through a special type of insurance known as?

errors and omissions Signup and view all the answers

The amount of commission due on a sale is determined by?

agreement between broker and client Signup and view all the answers

No exceptions are permitted by federal law when the discrimination is based on?

Race Signup and view all the answers

Regulation Z would require full disclosure of all financing terms if an advertisement mentioned?

'Payment $1,500 a month' Signup and view all the answers

A purchaser in a cooperative usually receives?

a proprietary lease to one living unit Signup and view all the answers

A comparative market analysis?

helps a seller establish the right listing price Signup and view all the answers

A developer is planning a building containing 103,000 square feet. Construction costs are estimated at $42 per square foot; 90% financing is available. How much money must the developer put up to complete the project?

$432,600 Signup and view all the answers

Which of the following represents functional obsolescence?

Outmoded plumbing Signup and view all the answers

Mr. Martinez purchased a duplex for $300,000, paying $37,500 down and financing the balance. About two years later he sold the property for $345,000. He has realized?

capital gain Signup and view all the answers

When real estate is operated by a general partner who is fully liable for operating losses and is owned jointly with several passive partners who are liable only to the extent of their investment, this form of ownership is called a?

limited partnership Signup and view all the answers

Every deed in the subdivision has a restriction forbidding toolshed or doghouses. Mr. Appleton erects both in his backyard. His neighbors may?

go to court and obtain injunctive relief Signup and view all the answers

Estimating market value by considering sales of similar properties is used in which appraisal approach?

Sales Comparison Approach Signup and view all the answers

In a new subdivision, streets, sidewalks, and curbs are usually provided by the?

developer Signup and view all the answers

Amy holds a proprietary lease on her apartment and directs that shares of stock in the corporation that owns the building be registered in the name of Amy Martin. She owns a?

cooperative Signup and view all the answers

The appraiser estimates the replacement cost of a building at $560,000. The building has an estimated life of 40 years and a current estimated remaining life of 30 years. What is the current value of the building?

$420,000 Signup and view all the answers

The term condominium refers to?

A type of ownership Signup and view all the answers

What is radon?

a colorless, odorless gas Signup and view all the answers

A percentage test?

determines the suitability of soil for installing a septic system Signup and view all the answers

The current value of a piece of property is $350,000 and the assessed value is 40% of its current value. The tax rate is $4 per $100. What is the amount of the tax?

$5,600 Signup and view all the answers

In New Jersey, a lease for four years?

may be recorded Signup and view all the answers

A broker's license is suspended by the Real Estate commission. His salespeople must immediately?

stop listing and selling Signup and view all the answers

Although federal law does not mention it, New Jersey law forbids discrimination on the grounds of?

sexual orientation Signup and view all the answers

The real estate commission prohibits?

vague 'vicinity' advertisements Signup and view all the answers

Jefferson bought acreage in a distant county, never went to see it, and did not use it. Impson moved his mobile home onto the land, had a well drilled, and lived there for the past 22 years. A court might find Impson has become the owner of the land through?

adverse possession Signup and view all the answers

Commingling refers to?

mixing the broker's funds with escrow deposits Signup and view all the answers

A real estate broker must keep all documents relating to a real estate transaction for how long?

six years Signup and view all the answers

A duly licensed sales person may accept a bonus from?

own broker Signup and view all the answers

The New Jersey real estate commission is under the department of?

Banking and Insurance Signup and view all the answers

The Multiple Dwelling Reporting Rule is required by the?

attorney general of New Jersey Signup and view all the answers

A New Jersey real estate licensee may?

sell vacant land, sell mobile homes, negotiate rental contracts Signup and view all the answers

If the real estate commission wants to inspect a broker's office, how much notice must be given?

none Signup and view all the answers

The New Jersey real estate commission includes?

eight members Signup and view all the answers

Which of the following words must be conspicuously displayed by brokers?

Licensed real estate broker Signup and view all the answers

The real estate broker who also holds an insurance license is NOT allowed to?

Include instance placement in a real estate sales contract Signup and view all the answers

A salesperson sold a house. When her broker received the commission check, he asked her to wait for the shared until the check had cleared the bank. The broker must pay her the agreed-on split within?

ten days Signup and view all the answers

A salesperson left a real estate firm to work at a bank. The broker must account for all commissions due to the former salesperson within?

30 days Signup and view all the answers

The real estate guaranty fund?

receives funding from license applicants Signup and view all the answers

The real estate commission does NOT allow?

Price fixing Signup and view all the answers

Broker John Bloomfield dies. A temporary broker's license to carry on the work of the office may be granted to?

a salesperson who could qualify to be a broker Signup and view all the answers

Study Notes

Real Estate Concepts

Improvements to land exclude crops.
A buyer is considered a customer from the seller's agent's perspective.
The cost approach appraises value by evaluating land and buildings separately.
Absolute ownership of real estate is characterized as fee simple.
A license allows storage or use of someone else's property without a fee.

Legal and Regulatory Framework

The HUD-1 statement remains applicable for reverse mortgages.
Metes and bounds is a legal description of property boundaries.
Dual agency occurs when a broker represents both buyer and seller.
Real estate taxes do not require recording as a lien.
Depreciation signifies a loss of property value due to various causes.

Financial and Tax Implications

Salespeople's relationships with brokers impact income tax requirements.
A township comprises 36 sections.
Rent calculation can involve a minimum monthly amount or percentage of gross sales, e.g., $840 for $14,000 gross sales at 6%.
Fee determinable applies to property given for specific use, such as a hospital.
Under a land contract, a buyer may assume responsibilities while the seller retains the title.

Closing and Property Transactions

Notice is unnecessary to obtain possession after a lease expires.
TRID rules outline that changes in escrow amounts don’t delay closing.
Eminent domain permits cities to acquire private property for public use if owners refuse to sell.
Exclusive-agency listings allow homeowners to sell independently without owing commissions.

Financing and Investment

Homeowners can deduct interest and property taxes from federal income tax.
Sale and leaseback transactions involve a grantor becoming a lessee.
Prior liens include current real estate taxes despite other unpaid debts.
Rate lock guarantees lenders a commitment to a specific interest rate.
Fannie Mae primarily buys FHA loans, facilitating mortgage financing.

Continuing Education and Licensing

Continuing education for real estate licenses can be completed by mail, internet, or in-person.
Real estate brokers are allowed to solicit buyers on behalf of sellers.
TRID requires lenders to provide a loan estimate within three business days.
Market value indicates the price a knowledgeable buyer would pay for property without pressure.

Property valuation and taxes

A property selling for less than listed price may still incur transfer taxes calculated on the sale price.
A real estate broker’s commission depends on the agreement between broker and salesperson.
Economic obsolescence is caused by external factors, such as neighboring properties.
Redlining refers to refusing mortgage money based on neighborhood demographics.

Tenancy and Lease Agreements

Tenants must not be discriminated against based on marital status in New Jersey.
Tax exemptions are available to eligible veterans and senior citizens.
Current value assesses property in accordance with its market value, taxes are based on the assessed value.
The landlord must credit tenants for rent collected at the time of property sale.

Real Estate Practice Standards

Brokers should maintain transaction records for a minimum of six years.
Commingling involves mixing personal and client funds, which is prohibited.
The New Jersey Real Estate Commission consists of eight members overseen by the Department of Banking and Insurance.
Price fixing in commission agreements is not permissible; commissions must be determined by agreements.

Miscellaneous

Adverse possession is a legal route to obtaining ownership through occupation.
Salespersons may receive bonuses only from their own brokers.
FHA loans are secured from local FHA lenders.
The Multiple Dwelling Reporting Rule is mandated by the New Jersey attorney general.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Test your knowledge with these flashcards from Chapter 24 of the New Jersey Real Estate Practice license examination. This quiz covers essential concepts like land improvements, agent roles, and appraisal methods. Perfect for students preparing for the exam!