Real Estate Paper 45

(B)
$3,760.90 ÷ 12 = $313.40
$313.40 ÷ 30 = $10.45
$313.40 × 6 = $1,880.40
$10.45 × 20 = $209.00
$1,880.40 + $209.00 = $2,089.40
$189 ÷ 30 = $6.30
$6.30 × 20 = $126
$2,089.40 + $126 = $2,215.4 to the seller

(D)
People who buy into co-ops buy shares in the underlying corporation and they get a stock certificate; the shares give them the right to a certain unit. Choice (A) is incorrect because it is the rental of unimproved land to a tenant with the intention that the tenant will build on the land. Choices (B) and (C) are incorrect because they are forms of ownership, not leases.

(D)
Choice (A) is incorrect because it is a net listing. Choice (B) describes a transactional agency. Choice (C) describes a dual agency.

(D)
Choice (D) is correct to the best of the seller’s knowledge. Choice (A) is incorrect because this is not a requirement of the federal law. Choice (B) is incorrect because an agent has a responsibility to disclose any material fact about a property. The presence of lead paint is such a fact. Choice (C) is incorrect because the seller must only disclose the information; it is up to the buyer to decide what to do about it. Removing it could become a condition of sale, especially if there are young children in the buyer’s family, or a contingency.

(D)
Choices (A), (B), and (C) are common elements of ownership in a condominium, so they are incorrect answers to the question. Choice (D) is a limited common element, that is, its ownership—and use—is limited to one owner.

(A)
Choice (B) is typically a credit to the buyer. Choice (C) is typically a debit to the seller. Choice (D) is typically a credit to the seller.

(B)
Choice (A) is incorrect because it would occur before any sale of a foreclosed property. The person in default of the mortgage transfers title to the property to the lender without any court proceedings. Choice (C) is incorrect because choice (B) is the way to recover additional money to satisfy the rest of the mortgage. Choice (D) is incorrect because it mixes up the right of equitable redemption (paying off the complete mortgage by the person in default before [or after] a foreclosure sale) and the process of returning an interest in a property back to the original owner after the interest that another has held in the property has ended.

(D)
Structural elements such as a home’s foundation, choice (D), are not covered under home warranty insurance, but might be covered by a regular homeowner’s policy depending on the cause of the problem. Choices (A), (B), and (C) are covered, so they are not the correct answer to the question. Choice (B) is an example of built-in appliances, which are typically covered. Choice (C) may have limits on the type or cost of repairs covered.

(D)
$743,257 – $587,000 = $156,257
$156,257 ÷ $743,257 = 0.266
2009 – 1975 = 34
0.266 ÷ 34 = 0.008, or 0.8% rate of depreciation

(D)
The more recent the dates of sale, the more accurate the CMA will be. Choices (A) and (B) are incorrect because a CMA includes both the homes that sold and those that did not. Choice (C) is not as good an answer as choice (D) because the idea is to use the most recent data available.