If real estate property taxes are paid in
arrears, what would the seller be debited on
a September 14 closing with annual taxes of
$2,700.00? (Use statutory method, taxes
accrue from January 1 through closing date,
seller responsible for day of closing.)
Detailed Answer
c. $2,700.00 divided by 360 days equals
$7.50 per day, times 254 days equals
$1,905 debit to the seller. January 1
through September 14 equals 254 days
(statutory method).
2
John Fitzpatrick holds $800 in security
deposits from the six tenants in his apartment
building when he sells the building to
Helen Baker. The tenants can expect a
return of their security deposits from
Detailed Answer
b. The new landlord is responsible for the
return of the security deposits, which
should have been credited to her when the
sale was settled.
3
An income approach appraisal would
include which of the following information?
Detailed Answer
a. Annual net operating income results after
operating expenses are deducted from
gross income. Annual net operating
income divided by appraiser capitalization
rate equals property value.
4
Which method of foreclosure is used in a
deed of trust mortgage lien?
Detailed Answer
a. A deed of trust mortgage permits the
trustee/fiduciary to sell the property at
public auction to protect the lender’s/beneficiary’s
lien position without a judicial
court hearing.
5
The entity that loses ownership through a
deed of trust mortgage foreclosure is the
Detailed Answer
d. The mortgagor (borrower) who deeds the
property into trust for the mortgagee
(lender) will lose ownership through
foreclosure.
6
The four unities required for the creation of
a joint tenancy are
Detailed Answer
d. The four unities required for the creation
of a joint tenancy are time, title, possession,
and interest.
7
After a purchase contract is accepted, the
parties may later make additional agreements
without changing the original document
by use of
Detailed Answer
b. Any provision later added to a contract is
known as an addendum. It identifies the
original contract and must be signed by
all parties.
8
A property manager should do all of the following
EXCEPT
Detailed Answer
a. People with HIV/AIDS are members of a
protected class (disability) and cannot be
discriminated against.
9
When a property owner leases his property,
at the end of the lease he has
Detailed Answer
a. A lease is a temporary condition. Ownership
remains with the owner. Revert
means to “bounce back†to the owner.
10
Office space rents for $700 per month. The
tenant has a three-year lease. Your commission
is 7% of the gross lease, what is your
fee?
Detailed Answer
a. $700 per month × 12 (1 year) = $8,400 ×
3 (3-year lease) = $25,200 × 7% = $1,764.