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Questions and Answers
What is the definition of brokerage?
What is the definition of brokerage?
The business practice of bringing together the parties in a practice.
What are two examples of special use property?
What are two examples of special use property?
Schools and cemetery.
What is an example of functional obsolescence?
What is an example of functional obsolescence?
Bathroom.
What is the definition of principal in real estate?
What is the definition of principal in real estate?
What is the definition of capitalization?
What is the definition of capitalization?
What is the salesperson's obligation to a buyer under single agency listing?
What is the salesperson's obligation to a buyer under single agency listing?
Which is not considered real estate?
Which is not considered real estate?
What is homeowners insurance?
What is homeowners insurance?
What is the definition of a special agent?
What is the definition of a special agent?
Which of the following is not used to determine the cost approach to estimate value?
Which of the following is not used to determine the cost approach to estimate value?
What is steering?
What is steering?
When is a salesperson entitled to commission if the transaction is not consummated?
When is a salesperson entitled to commission if the transaction is not consummated?
Can a salesperson give legal advice?
Can a salesperson give legal advice?
Who determines the commission in a listing contract?
Who determines the commission in a listing contract?
Which of the following is not a typical duty of a property manager?
Which of the following is not a typical duty of a property manager?
Who typically pays the transfer tax?
Who typically pays the transfer tax?
What is the definition of blockbusting?
What is the definition of blockbusting?
What is the definition of a special agency listing?
What is the definition of a special agency listing?
What is the definition of a net listing?
What is the definition of a net listing?
What is the main factor a property manager should use to evaluate a prospective tenant?
What is the main factor a property manager should use to evaluate a prospective tenant?
What are the examples of single agency disclosures?
What are the examples of single agency disclosures?
What is the most reliable method of appraisal for residential real estate?
What is the most reliable method of appraisal for residential real estate?
What is the definition of assemblage?
What is the definition of assemblage?
What would not be considered a depreciation of value?
What would not be considered a depreciation of value?
What has the greatest effect on real estate value?
What has the greatest effect on real estate value?
What rules require fair housing laws to be in a listing contract?
What rules require fair housing laws to be in a listing contract?
Who typically pays for title insurance?
Who typically pays for title insurance?
What is the transfer tax charged by the state of PA?
What is the transfer tax charged by the state of PA?
What should you do about material defect disclosures?
What should you do about material defect disclosures?
What is private mortgage insurance?
What is private mortgage insurance?
What is the first step in the appraisal process?
What is the first step in the appraisal process?
What is an example of external depreciation?
What is an example of external depreciation?
Who does a selling salesperson represent under buyer agency?
Who does a selling salesperson represent under buyer agency?
What is not an example of a real estate business violation of antitrust laws?
What is not an example of a real estate business violation of antitrust laws?
What is the definition of equity?
What is the definition of equity?
Who are the parties in a listing agreement?
Who are the parties in a listing agreement?
What are examples of fiduciary responsibilities under a single agency listing agreement?
What are examples of fiduciary responsibilities under a single agency listing agreement?
What is reconciliation in appraisal?
What is reconciliation in appraisal?
What are typical property management operating expenses?
What are typical property management operating expenses?
Which of the following are examples of agricultural property?
Which of the following are examples of agricultural property?
What is the definition of physical deterioration?
What is the definition of physical deterioration?
What is the proper listing price of the property based on?
What is the proper listing price of the property based on?
What is the Exclusive Right to Sell Listing definition?
What is the Exclusive Right to Sell Listing definition?
What type of property would be most appropriate to use the cost approach method?
What type of property would be most appropriate to use the cost approach method?
What is the definition of appraisal?
What is the definition of appraisal?
What is the PA law that prohibits discrimination in housing?
What is the PA law that prohibits discrimination in housing?
Is special price setting allowed for certain categories of people?
Is special price setting allowed for certain categories of people?
When is the consumer notice given?
When is the consumer notice given?
What are the conditions for an agreement of sale to become a binding contract?
What are the conditions for an agreement of sale to become a binding contract?
What does the 'C' stand for in fiduciary duties?
What does the 'C' stand for in fiduciary duties?
What are the characteristics of sale and leaseback?
What are the characteristics of sale and leaseback?
What is a broker's obligation to a buyer without buyer agency?
What is a broker's obligation to a buyer without buyer agency?
What is the definition of redlining?
What is the definition of redlining?
What is a way to terminate a listing agreement?
What is a way to terminate a listing agreement?
What is a type of depreciation that is not curable?
What is a type of depreciation that is not curable?
What are the disclosure requirements to a seller under a listing agreement?
What are the disclosure requirements to a seller under a listing agreement?
What is the definition of sale and leaseback?
What is the definition of sale and leaseback?
Which of the following are characteristics of a contract for a deed?
Which of the following are characteristics of a contract for a deed?
Who is considered the lender in a purchase money mortgage?
Who is considered the lender in a purchase money mortgage?
What is the purpose of RESPA?
What is the purpose of RESPA?
What is a purchase money order?
What is a purchase money order?
What is the definition of balloon mortgage?
What is the definition of balloon mortgage?
What are the obligations of an owner in a listing agreement if they refuse to sell when presented with a full offer?
What are the obligations of an owner in a listing agreement if they refuse to sell when presented with a full offer?
Is undisclosed dual agency allowable by law?
Is undisclosed dual agency allowable by law?
Who does the earnest money deposit credit?
Who does the earnest money deposit credit?
Convert 3 mills to a decimal.
Convert 3 mills to a decimal.
Who does the loan origination fee debit?
Who does the loan origination fee debit?
What is prorated by day on a HUD-1?
What is prorated by day on a HUD-1?
What is the source of money for an FHA loan?
What is the source of money for an FHA loan?
What is the role of a mortgage broker?
What is the role of a mortgage broker?
What is true about the contract rules regarding printed form sales agreements?
What is true about the contract rules regarding printed form sales agreements?
What is a shares appreciation mortgage?
What is a shares appreciation mortgage?
Determine the value by the Income Approach formula.
Determine the value by the Income Approach formula.
What is fiduciary responsibility in a property management contract?
What is fiduciary responsibility in a property management contract?
What is the formula for the Gross Rent Multiplier?
What is the formula for the Gross Rent Multiplier?
All are federal income tax deductions for a homeowner except...
All are federal income tax deductions for a homeowner except...
What is an example of an item that is prorated at settlement?
What is an example of an item that is prorated at settlement?
Paid tax is a credit to whom?
Paid tax is a credit to whom?
In a single agency listing agreement, who does the selling agent represent?
In a single agency listing agreement, who does the selling agent represent?
What represents dual agency?
What represents dual agency?
In a comparison between a land contract and a purchase money mortgage, which is true?
In a comparison between a land contract and a purchase money mortgage, which is true?
What is a characteristic of a VA mortgage?
What is a characteristic of a VA mortgage?
What is a mortgage that includes both real and personal property?
What is a mortgage that includes both real and personal property?
What is a mortgage that will not fully amortize the loan?
What is a mortgage that will not fully amortize the loan?
What does Regulation Z require lenders to do?
What does Regulation Z require lenders to do?
What is a mortgage that encumbers several parcels of land?
What is a mortgage that encumbers several parcels of land?
What is the mortgage amount relative to the property price called?
What is the mortgage amount relative to the property price called?
What is a characteristic of negative amortization?
What is a characteristic of negative amortization?
What is the maximum profit a married couple can take on capital gain?
What is the maximum profit a married couple can take on capital gain?
What is a fair housing exemption?
What is a fair housing exemption?
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Study Notes
Real Estate Definitions and Concepts
- Brokerage: Business practice connecting parties for transactions.
- Special Use Property Examples: Schools and cemeteries are categorized as special use properties.
- Functional Obsolescence: A term signifying reduced value due to outdated features, exemplified by bathrooms.
- Principal: A client who engages a broker through an agency relationship.
- Capitalization: A method to determine property value based on future income projections.
Real Estate Agency Practices
- Salesperson's Obligation under Single Agency Listing: Duty to inform the buyer about relevant information.
- Special Agent: Represents a principal in a specific transaction.
- Commission Determination: Established through an agreement between the property owner and the broker.
- Steering: Illegal act of directing buyers to or away from certain neighborhoods based on demographics.
Financial Aspects and Legal Concepts
- Homeowners Insurance: Protects against risks like fire and damage.
- Transfer Tax: Typically paid by both buyer and seller during property transactions.
- Net Listing: A type of listing ensuring sellers receive a minimum amount while brokers earn commission on any excess sale price.
- Private Mortgage Insurance: Protects lenders in case of borrower default.
Property Management and Appraisal
- Property Manager Duties: Typical responsibilities excluding profit investment.
- Sales Comparison Approach: Most reliable appraisal method for residential properties.
- Reconciliation in Appraisal: Process of comparing values from different methods to derive a final property value.
Real Estate Violations and Regulations
- Blockbusting: An illegal practice that foments fear within communities through discriminatory tactics.
- Redlining: Illegal denial of services based on property location, often by lenders or insurers.
- PA Human Relations Act: Law prohibiting discrimination in housing.
Contract and Lending Principles
- Earnest Money Deposit: A credit allowed to the buyer during transactions.
- Balloon Mortgage: A mortgage requiring a large balloon payment at maturity.
- Loan Origination Fee: A cost incurred by the buyer for securing a mortgage.
- Shares Appreciation Mortgage: A loan structure allowing lenders to benefit from capital gains.
Mortgage and Financing Terms
- Loan to Value: Ratio expressing the loan amount relative to property price.
- Negative Amortization: Occurs in adjustable rate mortgages where payments do not cover interest, increasing overall debt.
- VA Mortgage Characteristics: Requires occupants to sign an affidavit of intent to occupy.
Disclosure and Settlement Obligations
- Material Defect Disclosures: Obligations to inform buyers/sellers of any known issues.
- HUD 1 Settlement: Lists prorated costs, including interest on assumed mortgages.
- Disclosure Requirements: Brokers must disclose critical details, excluding irrelevant health information about buyers.
Appraisal and Taxation
- Appraisal Process: Begins with defining the objective of the valuation.
- Tax Deductions for Homeowners: Excludes property management costs from federal benefits.
- Proration at Settlement: Commonly prorated items include rental income and taxes.
Property Transactions and Agency Relationships
- Exclusive Right to Sell Listing: A contract allowing one broker to earn commission regardless of who sells the property.
- Dual Agency: Represents a broker having both listing and buying agreements; requires informed consent.
- Consumer Notice: Must be provided during initial discussions of a buyer's and seller's needs.
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