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NH RE Exam 2
| Question | Answer |
|---|---|
| What type of estate is an interest in real or personal property that is limited in duration to the lifetime of its owner or some other designated person or persons? | A life estate The type of estate that is based on the lifetime of its owner or designated third party is called a life estate. |
| A limit on the amount that payments can increase or decrease during any one adjustment period is called: | A period rate cap A period rate cap is a limit on the amount that payments can increase of decrease during any one adjustment period. |
| What provides separate housing units for more than one family, although they secure only a single mortgage? | Multi-dwelling units Multi-dwelling units are housing units that provide housing to more than one family but are secured by only a single mortgage. |
| David, a broker, has recently finalized a deal for the purchase of one of his listings. The buyer has given him earnest money. What must David do next with the earnest money? | Deposit the money in an escrow account All earnest money must be placed in an escrow account. Earnest money cannot be mixed with personal accounts, business operating accounts, or other locations. |
| The terms “mortgage banker” and “mortgage broker”: | Means a mortgage banker originates and funds a loan while a mortgage broker does not. A mortgage banker is generally assumed to originate and fund their own loans which are then sold on the secondary mortgage market. |
| A person who is required to reside on the property and to sign a claiming statement is most likely referring to this: | A homestead In order to file a valid homestead, the person must reside on the property at the time of recording the homestead and also sign a statement that claims the property as a homestead. |
| If land is acquired by accretion, who is the beneficiary of such acquisition? | The land owner The land owner is the beneficiary of land acquired through accretion. Accretion, remember, is the addition of land by formation of gradual build up over time. |
| When an adjustable rate mortgage has a limitation of how much adjusting it may do over a period of time and for the life of the loan, this is called a(n): | Cap A cap is a limitation on how much an adjustable rate mortgage may adjust over a six-month period, annual period, and over the life of the loan. |
| The person to whom an interest in real property is conveyed is called the: | Grantee The grantee is the person to whom an interest in real property is conveyed. |
| Adjustable rate loans are loans in which: | Interest rates vary over the term of the loan When interest rates vary over the term of the loan this is called an adjustable rate loan. |
| The first step of a jurisdiction attempting to enact eminent domain is to: | Attempt to purchase the property in question The first step of the jurisdiction would be to attempt to purchase the property at a fair market rate. |
| If Greta’s potential home purchase lies within a flood zone and she wishes to receive any type of federal mortgage loan, she must also purchase: | Flood insurance available from the federal government Flood insurance must be carried if the property lies within a flood zone. This type of insurance is available from the federal government. |
| If a loan officer is looking into the current assets and current liabilities of a borrower, the loan officer is generally looking at the borrower’s: | Liquidity The liquidity of a buyer is often found by looking at the current assets and current liabilities of a prospective borrower. This is a test to determine the potential borrower’s ability to pay off current bills. |
| What is sales tax considered? | A tax on tangible personal property Sales tax is a tax on tangible personal property. Typically sales tax is not charged on electronic media products, delivery of products, and other related items. |
| If a contract is not expressed in words, but through either action or inaction is understood by both parties, this type of contract: | Is implied An implied contract does not need to be written or expressed in words, but merely through the action or inaction of the parties as long as the action or inaction is understood by both parties. |
| In real estate, the offer to perform on the terms agreed is called: | Tender An offer by one of the parties to a real estate transaction to carry out that party’s part of the contract is called the tender. This typically takes place at the end of the transaction. |
| The appraised value of a property is intended to estimate the: | Market value of a property The appraised value of a property is the value placed on a property by an appraiser and is usually intended to estimate the market value of the property. |
| If a contractor intends to sell 10 properties in a calendar year, he/she will need: | A real estate license Because the contractor is selling 8 or more in a single calendar year, it is required that they obtain a real estate license. The can hire an agent. |
| Personal property is a term that means: | Any property that is not part of the real property Property that is not part of the real property is considered personal property. Real property is anything that is permanently attached to the land and the land itself. |
| A provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before it is offered for sale or lease to others is known as: | Right of first refusal A right of first refusal is a provision in an agreement that requires the owner of a property to give another party the first opportunity to purchase or lease the property before it is offered for sale or lease to others. |
| The effective rate of interest is: | The rate of interest that is actually being paid The actual interest rate paid by the borrower is known as the effective interest rate. The nominal interest rate is the rate of interest that is specified in the note. |
| Loan origination is best described as: | A process by the lender in getting new loans Lenders typically call the process of getting new loans as “loan origination.” |
| Functional obsolescence is best exemplified by: | Dated equipment Dated equipment is an example of functional obsolescence. |
| What is the function of the FHA in regards to loans? | The FHA insures loans The FHA insures loans but does not issue loans. |
| In New Hampshire, in addition to censure and revocation of licenses, the New Hampshire Real Estate Commission can fine a licensee up to x for a single violation. | $2,000 The New Hampshire Real Estate Commission can fine a licensee a maximum of $2000 for a single violation. |
| When referring to eminent domain, the government: | Has the right to take private property for public use after the payment of its fair market value Eminent Domain is the right of the government to take private property for public use upon the payment of the fair market value to the property owner. |
| One of the three broad categories of real property is: | Things affixed to the land Real property, as included in the three broad categories of real property, includes things affixed to the land. |
| An escrow analysis is performed by the lender to ensure: | The correct amount of money is being collected An escrow analysis is performed by the lender to make sure the correct amount of money is being collected. |
| Bernice is a buyer that wants to purchase the home owned by Gregory. If Bernice and Gregory sign a written contract that states the terms and conditions under which the property will be sold, they have both signed a: | Purchase agreement A purchase agreement is a written contract between the buyer and seller that states the terms and conditions under which the property will be sold. |
| Which of these is a congressionally chartered organization? | Both Fannie Mae and Freddie Mac Both Fannie Mae and Freddie Mac are congressionally chartered organizations. They are not owned by the government but by shareholders. Ginnie Mae is fully owned by the government. |
| If land is utilized in a range of ways in balanced proportions, this can potentially: Correct | Increase land value As long as the land use is in “advantageous” proportions, this can increase the value of the land. |
| If another offer is introduced to an agent on the sale of a home, the agent: | Must submit the offer to the seller immediately All offers on a property for sale must be submitted to a seller immediately. |
| Private mortgage insurance is required when: | A loan-to-value percentage is in excess of 80% When a loan-to-value percentage is in excess of 80%, private mortgage insurance is required. |
| If a real estate agent is acting as an agent to all principal parties to a transaction, he/she is entitled to earn a commission from each party. Before this can happen, what must be procured? | An exchange agreement An exchange agreement is an agreement that states a real estate licensee is acting for both parties. Under this type of agreement, the licensee could earn a commission from each party to the transaction. |
| This will cover repairs to certain items like air conditioning or heating during the coverage period: | Homeowner’s warranty A homeowner’s warranty will cover repairs to certain items such as major appliances. This type of warranty is loosely regulated and is not required. |
| When are MILS most often used? | In the assessment of property taxes Mils, each one-tenth of a cent, are sometimes used to express the tax rate per dollar of assessed value. |
| When a lender guarantees a specific interest rate for a specific time and at a certain cost to the buyer, this is referred to as a: | Lock-in rate When a lender guarantees a specific interest rate for a specific time and at a certain cost to the buyer, this is referred to as a lock-in rate. |
| An income property for $240,000, which was returning 8% per annum on the gross investment. He paid $20,000 down, the balance on a long term straight loan on which he paid interest annually at 6%. Disregarding other expenses, the return on his equity was: | 30%. Divide his net return by his equity. $240,000 x .08 = $19,200 gross. $240,000 - $20,000 = $220,000 x .06 = $13,200 expense. $19,200 - $13,200 = $6,000 net divided by $20,000 = .3 (30%). |
| When a mortgage is said to be in “first place”, this usually means that: | The mortgage is a first mortgage When a mortgage is in “first place”, it typically means that the mortgage is a first mortgage. It most cases it refers to the date in which loans are recorded against a property, but there are exceptions to this. |
| A property’s bundle of rights can include which of the following: | Any of these When a person becomes an owner of a property, the property includes a “bundle of rights” that may include the right to possess, enjoy, use, sell, encumber, and exclude from others. |
| As a buyer in a cooperative apartment, you will not receive: | A deed A co-op apartment is personal property, not real property or real estate, and therefore no deed is given. |
| In certain cases where damage to the value of a property from strict adherence of zoning ordinances would far outweigh any benefit to be derived from enforcement, a person would likely apply for a: | Variance Variances are given out, for minor departures from zoning requirements: building height, parking. In some cases a structure was built prior to the current zoning law, and would require remodeling to conform |
| Ito wishes to have a broker represent him in the purchase of a new piece of property. This type of arrangement would be called: | Buyer Broker Agreement Of the listed answers, Buyer Broker Agreement is the correct answer. This type of agreement can also be called an Exclusive Right to Represent Agreement. |
| If a farm is sold that has a full crop of annual vegetables ready to be harvested, what conveys as real property? | All of these The annual crops are considered personal property of the person who planted them. The trees, air rights, and mineral rights convey with the sale of the property. |
| Ginnie Mae is owned by: | The Government Ginnie Mae, or also called the Government National Mortgage Association, was created by Congress in 1968 as part of the Housing and Urban Development Act of 1968 and is owned by the Federal Government. |
| A 1031 exchange is: | A tax-deferred exchange A 1031 exchange is a tax-deferred exchange of like kind property that is held for productive use. A 1031 exchange is NOT a tax-free exchange. |
| If the government is building a highway that is planned to pass directly through an individual’s private property, the government can enact eminent domain. However, the government must: | Make a payment to the property owner equal to the fair market value of the property The government must make a payment to the property owner that is equal to the fair market value if utilizing eminent domain to seize property for public use. |
| An agent given power of attorney to act on behalf of a principal for an unlimited range of legal matters is called: | A universal agent A universal agent is an agent that is given the power of attorney to act on behalf of a principal for an unlimited range of legal matters. |
| A charge that usually is applied after fifteen days past due on a first mortgage is called: | A late charge In simple terms, a late charge is a fee that is usually applied after fifteen days past due on a first mortgage. |
| The pledging of something as collateral or security for payment of a loan is known as: | Hypothecation Hypothecation is the pledging of something as collateral or security for payment of a loan. |
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