Since the issues in many transactions are similar, brokers often use standard preprinted
contract forms. Generally, the best standard form contracts are those prepared and
approved by which of the following parties?
A.Buyer
B.Seller
C.Local Board of Realtors
D.Broker
Violations of the requirements of a note that do not disrupt the payments on the loan
tend to be viewed as “technical” defaults. In practice, how many days must a payment
be overdue in order for lenders to treat a default as serious?
A.One day
B.30 days
C.60 days
D.90 days
In real estate markets, a transaction occurs only when the investment value of the buyer
exceeds the investment value of the seller. The buyer’s investment value is the
________ that he or she would be willing to pay for a particular property, while the
seller’s investment value is the _______ that he or she would be willing to accept.
A.minimum; minimum
B.minimum; maximum
C.maximum; minimum
D.maximum; maximum
In recent years, lenders have been unwilling to relieve borrowers from personal liability
in the event of fraud, environmental problems, or unpaid property tax obligations.
Therefore, some lenders include a clause that pierces the single-purpose borrowing
entity to hold the actual borrower liable in such instances. This clause is commonly
referred to as a:
A.habendum clause
B.lockout provision
C.defeasance
D.”bad boy carve-out” clause
Prior to determining the treatment of capital expenditures in the calculation of NOI, it is
important to distinguish these costs from operating expenses. In contrast to operating
expenses, capital expenditures:
A.add to the market value of the property.
B.are deductible for tax purposes in the year in which they are paid.
C.are necessary to keep the property operating and competitive in its local market.
D.may include minor repairs that do not add to the property’s useful life.
Different financing requirements usually are involved in the various phases of a
property’s life. Which of the following types of loans is used to finance improvements
to the land, such as sewers, streets and utilities?
A.Land acquisition loans
B.Land development loans
C.Construction loans
D.Bridge loans
Since investors prefer to have money now rather than later, money received next week,
instead of today, is not worth as much to those receiving it. Therefore an adjustment to
the prospective cash flows is required. This process is referred to as:
A.compounding
B.discounting
C.amortizing
D.hedging
Real estate professionals have long supported strict standards of ethics and practice.
Followed by all states and federal regulatory agencies, which of the following imposes
ethical obligations and minimum standards that must be followed by all real estate
professionals providing formal estimates of market value?
A.Uniform Standards of Professional Appraisal Practice (USPAP)
B.Multiple Listing Services (MLS)
C.Department of Housing and Urban Development (HUD)
D.Office of Federal Housing Enterprise Oversight (OFHEO)