Questions and Answers
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?
Schools and cemetery.
What is an example of functional obsolescence?
Bathroom.
What is the definition of principal in real estate?
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What is the definition of capitalization?
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What is the salesperson's obligation to a buyer under single agency listing?
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Which is not considered real estate?
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What is homeowners insurance?
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What is the definition of a special agent?
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Which of the following is not used to determine the cost approach to estimate value?
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What is steering?
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When is a salesperson entitled to commission if the transaction is not consummated?
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Can a salesperson give legal advice?
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Who determines the commission in a listing contract?
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Which of the following is not a typical duty of a property manager?
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Who typically pays the transfer tax?
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What is the definition of blockbusting?
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What is the definition of a special agency listing?
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What is the definition of a net listing?
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What is the main factor a property manager should use to evaluate a prospective tenant?
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What are the examples of single agency disclosures?
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What is the most reliable method of appraisal for residential real estate?
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What is the definition of assemblage?
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What would not be considered a depreciation of value?
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What has the greatest effect on real estate value?
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What rules require fair housing laws to be in a listing contract?
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Who typically pays for title insurance?
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What is the transfer tax charged by the state of PA?
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What should you do about material defect disclosures?
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What is private mortgage insurance?
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What is the first step in the appraisal process?
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What is an example of external depreciation?
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Who does a selling salesperson represent under buyer agency?
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What is not an example of a real estate business violation of antitrust laws?
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What is the definition of equity?
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Who are the parties in a listing agreement?
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What are examples of fiduciary responsibilities under a single agency listing agreement?
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What is reconciliation in appraisal?
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What are typical property management operating expenses?
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Which of the following are examples of agricultural property?
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What is the definition of physical deterioration?
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What is the proper listing price of the property based on?
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What is the Exclusive Right to Sell Listing definition?
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What type of property would be most appropriate to use the cost approach method?
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What is the definition of appraisal?
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What is the PA law that prohibits discrimination in housing?
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Is special price setting allowed for certain categories of people?
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When is the consumer notice given?
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What are the conditions for an agreement of sale to become a binding contract?
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What does the 'C' stand for in fiduciary duties?
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What are the characteristics of sale and leaseback?
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What is a broker's obligation to a buyer without buyer agency?
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What is the definition of redlining?
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What is a way to terminate a listing agreement?
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What is a type of depreciation that is not curable?
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What are the disclosure requirements to a seller under a listing agreement?
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What is the definition of sale and leaseback?
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Which of the following are characteristics of a contract for a deed?
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Who is considered the lender in a purchase money mortgage?
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What is the purpose of RESPA?
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What is a purchase money order?
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What is the definition of balloon mortgage?
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What are the obligations of an owner in a listing agreement if they refuse to sell when presented with a full offer?
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Is undisclosed dual agency allowable by law?
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Who does the earnest money deposit credit?
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Convert 3 mills to a decimal.
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Who does the loan origination fee debit?
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What is prorated by day on a HUD-1?
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What is the source of money for an FHA loan?
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What is the role of a mortgage broker?
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What is true about the contract rules regarding printed form sales agreements?
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What is a shares appreciation mortgage?
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Determine the value by the Income Approach formula.
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What is fiduciary responsibility in a property management contract?
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What is the formula for the Gross Rent Multiplier?
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All are federal income tax deductions for a homeowner except...
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What is an example of an item that is prorated at settlement?
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Paid tax is a credit to whom?
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In a single agency listing agreement, who does the selling agent represent?
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What represents dual agency?
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In a comparison between a land contract and a purchase money mortgage, which is true?
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What is a characteristic of a VA mortgage?
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What is a mortgage that includes both real and personal property?
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What is a mortgage that will not fully amortize the loan?
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What does Regulation Z require lenders to do?
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What is a mortgage that encumbers several parcels of land?
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What is the mortgage amount relative to the property price called?
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What is a characteristic of negative amortization?
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What is the maximum profit a married couple can take on capital gain?
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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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Test your knowledge of real estate terminology and concepts with this set of flashcards. Each card features a term and its definition, along with practical examples related to the field. Perfect for students or professionals preparing for real estate exams.