SOLUTION VERIFIED
◉ Which of the following abbreviations is associated with the FHA?
a. NAR
b. CPM
c. MIP/MMI
d. MBA Answer: c. MIP/MMI
MIP - Mortgage Insurance Premium/Mutual Mortgage Insurance.
◉ An investor group recently sold a parcel of land for $217,500,
which was 45% more than they paid for it. The land is described as
follows: N½ of the NW¼ of the SE¼ of Section 13 plus the W½ of
the NE¼ of Section 13. What was the original price they paid per
acre for the property?
a. $1,500
b. $1,200
c. $1,000
d. $750 Answer: a. $1,500
,$217,500 ÷ 145% (1.45) = $150,000 original price
Acreage: N½ of the NW¼ of the SE¼ = 20 acres
W½ of the NE¼ = 80 acres
Therefore, price per acre = $150,000 ÷ 100 = $1,500.
◉ Which of the following is NOT a lien?
a. Encumbrance
b. Homestead
c. Zoning
d. All of the above Answer: d. All of the above
A lien is a charge against property, whereby the property is made
security for payment of the debt, i.e., attachment.
◉ A property sells for $121,000. The purchaser gives $10,000 down
payment, agrees to place an additional $5,000 down, and ta ke over
an existing VA first loan of $100,000, with the remainder to be in the
form of a 2nd note and trust deed. For these cond itions, how much
would the documentary tax stamps be?
a. $1.10
,b. $5.50
c. $133.10
d. $23.10 Answer: d. $23.10
Do NOT pay on old existing loan being taken over. Therefore,
($121,000 - 100,000) ÷ 1,000 x ($1.10) = 21.0 x $1.10 = $23.10.
◉ If an appraiser were called upon to evaluate a public building,
which had unique and distinctive architecture, he would employ
which of the following methods of valuation?
a. Replacement (cost approach)
b. Comparison
c. Capitalization
d. None of the above Answer: a. Replacement (cost approach)
Since there is no income for capitalization and no means for
comparing sales, replacement cost is the only approach available.
◉ The members of the National Association of Real Estate Brokers
are called:
a. Realtors®.
, b. Consolidated Brokers.
c. Realtists.
d. None of the above. Answer: c. Realtists.
◉ If the taxes on a newly acquired property will amount to 1.25% of
the purchase price, what will the first installment (6 months) bill for
a home costing $125,500 be?
a. $765.35
b. $742.51
c. $784.38
d. $795.97 Answer: c. $784.38
$125,500 x (.0125) ÷ 2 = $784.38.
◉ The best source for establishing the age of a home would be the:
a. county tax assessor.
b. building and safety department.
c. county recorder's office.
d. either a or b. Answer: a. county tax assessor.