Real Estate Paper 55

The correct answer is (B).
$25,000 × 0.03 = $750
$1,800 – $750 = $1,050
$1,050 ÷ 0.075 = $14,000
$14,000 + $25,000 = $39,000

The correct answer is (C).
Choice (A) may seem like a good answer, but it’s a distracter. Choice (B) is the opposite of what is true; subprime mortgages are taken out by people with poor credit ratings. Choice (D) is incorrect because a subprime mortgage may be fixed or adjustable.

The correct answer is (B).
Choices (A), (C), and (D) are incorrect. The buyer’s lender wants the down payment in part to show the ability of the borrower to be able to make payments. The seller wants earnest money to show the commitment of the buyer because should the buyer default on the contract, the seller may be able to keep some or all of the earnest money.

The correct answer is (C).
Choice (A) violates the Fair Housing Act, but it’s not fraud. Choice (B) is a poor business practice, but in itself it is not fraud. Choice (D) is not a conscientious sales agent, but it’s not fraudulent behavior.

The correct answer is (D).
Choice (A) is not illegal; both agents work for the same agency. Choice (B) is not illegal because the brokers are not colluding to circumvent antitrust law. Choice (C) is illegal, but it’s price fixing, not market allocation.

The correct answer is (A).
Because real estate laws and regulations vary from state to state, a licensed broker or sales agent in one state may not sell real estate in another state without passing a licensing law. Choices (B), (C), and (D) are incorrect.

The correct answer is (B).
Choices (A), (C), and (D) are among the benefits that a franchise owner receives. Choice (B) may be true if the owner pays himself or herself a bonus, but it’s not a benefit that a franchise owner receives from the franchiser, so it’s the correct answer to the question.

The correct answer is (C).
$357,840÷0.63 = $568,000 Sometimes, the question will have more information than you need in order to answer it. Discard the unnecessary information like the millage for the county and the school district. This can’t be important information because the municipal tax rate is omitted, and you would need that if millage was important in finding the answer.

The correct answer is (A).
Credit extended for business, commercial, or agricultural purposes and nonmortgage loans in excess of $25,000, which are typically for business purposes, are exempt from Regulation Z. Choices (B), (C), and (D) are typically not exempt from Regulation Z, which are the regulations that implement the so-called Truth-in-Lending Act.

The correct answer is (B).
As required by Regulation Z, the MLDS must be delivered in less than 3 business days if the borrower is expected to complete the loan sooner than 3 days. Choice (D) refers to timing for delivering the statement of closing costs to a buyer who is financing with an FHA-insured loan. Choices (A) and (C) are distracters.