Real Estate Paper 87

c.
A percentage lease has a base rent plus a percentage (overage) of the gross sales after the retailer goes over a predetermined threshold in sales.

d.
Net listings, in which the agent keeps any part of the sale price above a given amount may subject a broker or associate licensee to license revocation or suspension.

b.
The cost approach requires the building and land to be valued separately.

b.
Mortgage insurance, which protects the lender from loss, should not be confused with mortgage life insurance, which pays off the loan in case of the borrower’s death.

b.
1/3 of 15 is 5 years depreciation, leaving 10 years remaining life; 2/3 × 15 = 10.

a.
An abstract reports the results of a title search of the public records.

d.
Property has value only if title can be passed.

d.
Students should memorize the size of an acre, which some estimate at “somewhat more than 200 feet by 200 feet.”

d.
Until the seller approves an offer, it is open for consideration.

c.
80% LTV is based on the lesser of the appraised value or the sale price; $135,000 × .80 = $108,000.