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hello everybody it's Zach here from real estatewizer.com how's it going today hopefully pretty fantastic today we're
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doing part two of our 2023 real estate practice exam video series this is for
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the national portion of your real estate exam which means yes guys it's good in all 50 states Florida California
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Pennsylvania Colorado it all applies now a couple things I want to go over before we get started this is part two if you
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haven't watched part one the first half of this video series I highly encourage that you do because I'm going to be referencing things in this video that we
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covered in that first video secondly check out our website real estate licensewizard.com not only do we offer a
0:33
completely free version of the exam like the one I'm covering today but we also have completely free state specific
0:40
practice exams to ensure you feel confident and prepared on exam day and if you really want to help out this
0:45
channel you can check out one of our premium prep packages anyways without further Ado let's get started alright so
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question 51 which of the following would not apply to the income approach in the
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evaluation process and it gives us four options a tape depreciation B
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capitalization C the gross income multiplier or D the gross rent multiplier so like always I'm going to
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give you guys an opportunity to pause here reread it all that good stuff and come up with your answer so go ahead and do that right now
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all right so hopefully you came up with your answer and hopefully it's correct uh if you need time throughout this
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series you know feel free to pause you can also speed up or slow the time YouTube has that feature as well I just
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you know I like to mention that in case you guys want to adjust things anyways so what is the correct answer for this
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one well it's going to be a that's right depreciation
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depreciation only the cost approach valuation process uses depreciation and
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that makes sense right uh because remember remember if if you're familiar with the cost approach you should be
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um kind of how how it's derived and how the value is is you know derived or created or found really depends on the
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key concept of depreciation when we're talking about the income approach that's really not applied at all the main focus
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there is obviously the ink come and you know how that Associates and and derives
2:25
the value for that property there all right next one 52 what type of ownership
2:30
model is used for vacation real estate in which multiple purchasers own allotments of usage typically one week
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increments for the same property is it a condo B timeshare C condominium or D
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ownership in severalty so take a moment to think that one over and come with your answer
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alrighty so for this one our answer is B that's right time share
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so a timeshare is a property divided form of ownership use rice where these
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properties are typically in Resort building units but the big thing is is it's allotted per time they differ from
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regular Condominiums as they typically are exclusively you know for vacations and things like that all right next one
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53 an individuals seeking to be excused from the requirements of a zoning ordinance needs a and gives us four
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options a variance B building permit certificate of exclusion or D
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certificate of alternative usage so take a moment think that one over and comb your answer
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alrighty so an individual seeking to be excused from requirements of a zoning ordinance needs a and the correct answer
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is variance a variance so an individual seeking to be excused
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from a chronicism ordinance needs a variance a variance is a request to deviate from current zoning requirements
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if granted it permits the owner to use his or her land in a way that is ordinarily not permitted by the zoning
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ordinance an example would be let's say you were in a residential neighborhood
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and you wanted to uh let's say maybe open up a golf course
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uh you know typically you know that's not zoned properly so you'd need to get
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a variance to create the golf course to make sure that um you know it would be following the
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code essentially pretty straightforward but again it's one of those things that you just need to be familiar with uh
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when it's talk when we're talking about zoning all right question 54. Josh agrees to represent Susan in the sale of
5:16
her home the listening contract states that Josh will receive a fee of fifteen thousand dollars from Susan at closing
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regardless of the sales price is this a legal and a valid form of compensation it gives us four options a no flat fees
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are illegal B no the fee has to be given before closing otherwise it's voided see
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yes since the fee is lower the United States regulated minimum it is legal or D yes compensation can be determined in
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different ways as long as the seller and broker agree already take a second moment uh time to figure it out
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alrighty what is the correct answer for this one well it is d That's right yes
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yes competition can be determined in different ways competition is negotiated between the broker and the seller and
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maybe transferred and distributed in a variety of ways as long as the seller and broker agree to compensation no
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matter how much when or really any Avenue it is it is legal
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alrighty next one 55 during your time as an agent you will run into many
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different types of people from across the world closing is called many names depending on which region of the US you
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are from which of the following is not a legal name for closing alrighty there's four options a settlement transfer B
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exchange and transfer C passing papers or D closing so take a couple moments
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think that one over and come with your answer
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alrighty the correct answer for this one is B exchange and transfer so yeah guys
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this is uh one of those ones um super important because you need to be aware of all the different types of
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terms or phrases that associate with a similar word and this is one of those instances so obviously closing is known
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by tons of different names textbook name obviously is closing however things like
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exchange and transfer is is not that that wouldn't be the case however settlement transfer and passing the
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papers um those are some terms that are associated with that so keep that in
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mind all right next one 56 an example of an Anti-Trust violation is a selling
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more than 100 houses in a taxable year B buying a house in another state C and
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equity loan or D price fixing so take a moment to think that one over
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alrighty so what's the answer for this one well it is D price fixing so we did talk about that a little bit I think in
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in the first video just those Anti-Trust violations um but fixing is the practice of setting
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the price of a good of service to make a particular price a standard so in our terms real estate fixing is when
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competing agents meet up and agree to the same commission rates uh any agreement even if it's just implied
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again is a violation of antitrust laws so you need to be aware of that all
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right 57 an agent took a listing and later discovered that our client had previously been declared incompetent by
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the court the listing is now a unaffected because the agent was acting as good faith see owners agent be
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unaffected because her client took the listing making it a verbal contract C of
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no value to the agent because the contract is void or D renegotiable by both parties
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so take a moment to think that one over come with your answer
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alrighty what's the correct answer for this one so what is this listing well this listing is of no value to the agent
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because the contract is void so remember guys in order for a contract to be valid
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the party must be at least 18 years or older and of sound mind obviously the
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contract must be legal for example there can't be a contract to kill or steal or do anything illegal and then of course
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the contract must hold a clear and definite consideration and then obviously yeah mutual consent so for
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this instance since the clients has been declared competent by the court the listing is now void so again that is
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void C is our answer all right question 58 which of the following contracts would be best described as a contract in
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which only one party makes a promise to perform an action a implied contract B
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bilateral contract C unilateral contract or D in implied in fact contract so take
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a moment to think about that one and come up with your answer
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alrighty so what is the correct answer for this one well it's going to be C unilateral
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a unilateral contract is a contract in which only one party makes a promise to perform an action an insurance contract
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or award contract those are both examples of unilateral contracts unilateral contracts appear more often
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than you may think one of the most common instances is a reward contract imagine you floss your cat Coco you
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place an advertising online offering a 250 reward to the person who returns cocoa by providing a reward you're
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offering a unilateral contract so for this one key hint there is just
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again one party when you're reading these ones um you know see it says one party
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where's the bilateral is two or more that's best way to remember them all right next one
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59 under release for a commercial property at 1000 degrees to pay three thousand dollars per month plus four
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thousand of the gross monthly sales this type of lease is called a and it gives
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us four options a single net lease b double net lease C triple net lease or d a percentage lease so take some time to
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think about that one come with your answer
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alrighty what is the correct answer for that one D percentage lease is our
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correct answer so that is when uh which all or part of the rental is specified
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uh percentage of the gross income from the total sales made upon the property is included in that lease agreement so
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pretty straightforward uh you know again just look at the percentage you should be able to put it together that it's a
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percentage lease all right question 16. Mrs Thompson hired a broker to find her
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a 100 unit apartment complex for sale upon finding when she liked she made an
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offer for 2.5 million dollars to include all the personal property as well in order to include all the personal
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property Mrs Thompson needs a slash and gives us four options a an investment
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unit loan B an amortized loan C package loan or d a balloon loan so take your
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time to come up with your answer on this one
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alrighty so Mrs Thompson what does she need she needs a c package loan so since
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the offer includes all the personal properties well Mrs Thompson is required to do a package loan a package loan is a
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real estate loan used to finance the purchase of both real and personal property such as in the purchase of a
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fully furnished condominium so if they want all the furniture they would want a
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package loan all right next one 61 what is the proper procedure for changing a
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contract that already has become binding is it a sign a separate Amendment
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B replace the old contract with a new one C write the changes in the original contract D write the changes in the
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original contract date and initial the changes so take a moment to think that one over come with your answer
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alrighty so do you guys know your contract procedures
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what is the correct answer for this one so read it again what is the proper
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procedure for changing the contract that has already become binding so the correct answer for this one is a sine a
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separate Amendment proper procedure for changing a contract that is already become binding is to assign a separate
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Amendment remember separate amendments are used to modify or change executory contracts secretory contracts means they
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are already a contract they're signed they're executed or they're in the
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process of being I guess that would fit in both both boxes for this example but
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the point is again this kind of gives us if you read this this kind of gives the answer what is the proper procedure for
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changing a contract list already already has become binding that's that's a hint
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there because because it's already binding we didn't we wouldn't want to replace the old contract that's not
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necessary and again we can't change the contract because it's already become
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binding so we can't do these changes like that so we would need a separate amendment in that case
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all right 62 when a home is purchased using an adjustable rate mortgage or arm
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the monthly loan payment on the mortgage will and there's four options b or I'm
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sorry A B adjusted automatically to ensure that probability occurs B rise
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slightly in each adjustment period until the cap is reached C be based on a very low interest rate but will rise to the
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market rate at the first adjustment or D very over the time of the loan depending on fluctuations in the interest rate to
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which the loan is referenced so take a moment to think about this one and come up with an answer
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all right hopefully you guys are familiar with uh adjustable rate mortgages so for the correct answer for
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this one it's going to be D that's right d very over the time of the loan depending on fluctuations in the
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interest rate to which the loan is referenced so when a home is purchased using an adjustable rate mortgage the
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monthly loan payment on the mortgage will vary over the time depending on the interest rate so a variable rate
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mortgage adjustable rate mortgage or tracker mortgage is a mortgage loan with the interest rate on the Note uh
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periodically adjusted based on an index which reflects the cost to the lender borrowing on the credits Mark so pretty
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much if you ever see these um adjustable rate mortgages or any question that pertains to that on the
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exam you just need to remember that it's not your standard mortgage these interest rates vary and they're going to
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fluctuate they're going to adjust unless the market is like you know in a strange strange time like 98 of the
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time these interest rates are going to adjust so keep that in mind and again
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this is just one of those ones where you need to be familiar through and through with mortgages and things like that so
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hopefully you got that all right question 63 which of the following real estate contract Clauses is typically
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seen in blanket mortgages and allows for the freeing of all or par part of the property from a claim through a
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proportional or full amount of the mortgage being paid off a the release Clause B the defecence
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class C the alienation clause or D the pre-payment penalty Clause so take some
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time to think about this one
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alrighty so what is the correct answer for this one well is going to be a the
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release Clause the release Clause is a contract provision typically in a blanket mortgage that allows for the
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freeing of all or part of a property from a claim through proportional or full amount of the mortgage being paid
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off when you guys see this here when you guys see blanket mortgage I want you to
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think release Clause these things go hand in hand they're pretty much much always associated with each other it's a
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great way of remembering that so again blanket mortgage release class playing mortgage release class
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all right next one 64. restrictive covenants are also known as gives us
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four options a d restrictions bccrs c bonds or D cdos so take some
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time to think about this one and comb through answer
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alrighty so restrictive covenants are also known as what the correct answer is B ccrs
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so CCR stands for conditions covenants and restrictions the main purpose of CCR
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is to maintain the look and feel of a community ccrs limit the use of a
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particular property condominium or subdivision such restrictions are either written in the Deeds to the property or
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into the bylaws for the subdivision which the deeds will reference real estate transactions restrictive
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covenants are binding legal obligations written to the deed of a property by the seller so pretty much you just need to
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be familiar with restrictive covenants as well as you know its other names ccrs
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pretty straightforward there all right 65. a property owner enters into a listing agreement with an agent
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another agent obtains a buyer for the house and the first agent does not receive a commission the listing
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agreement between the first agent and the property owner was probably a an open listing b a closed listing see
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an exclusive agency listing or D an exclusive Freight to sell listing so take some time to think about this one
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and come with your answer
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alrighty so what is the correct answer for this one well it's going to be a an open listing open listings are truly
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open sellers might consider an open listing if there are a lot of buyers in the marketplace and open listing is when
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an agent or broker can participate in the listing and is entitled to a commission if they produce the sale
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since the listing agreement between the first agent wasn't met had to be an open listing because another agent obtained a
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buyer so again these are just listings got to be aware of the different listing type and how they operate
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all right 66 which of the following enforces all Federal Environmental rules and regulations a circla
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b s a r a c s d w a or d e p a so think
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that one over
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alrighty so when you think of all enforces all for these you know
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environmental related laws and acts think of EPA when you think of
24:00
everything and you know that's the EPA because that is the federal agency that deals with these environmental issues
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the EPA was established in 1970 by an executive order of President Richard
24:12
Nixon and the agency enforces all Federal Environmental rules and regulations
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all right 67 which of the following best describes a balloon payment a package mortgage b a small monthly
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payment c a variable mortgage cost or d a large payment during the term or at the end of
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payment schedule so think that one over
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all right so in this one we're talking about d a large payment during the term or at
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the end of the payment schedule that would describe a balloon payment it's pretty much the definition there not
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really too much to explain so I'm just going to move on but yeah you got to be familiar with balloon loans and balloon payments all right next one 68. when you
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borrow money to buy real estate you give the lender a blank against the property a tax lien B mortgage lien C judgment
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lean D deed so take a moment to think that one over
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alrighty so what is the correct answer for this one well it's going to be B that's right a mortgage lien when you
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borrow money to buy real estate you give the lender a mortgage lien against property a mortgage lien is a voluntary
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specific lien in fact obviously it's the most common type of voluntary real estate lien
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all right next one 69 title 3 of The Americans with Disability Act impacts
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which type of property a residential B industrial C privately owned housing or
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D commercial and public accommodations so think that one over and come with your answer
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alrighty so title 3 of The Americans with Disability Act what does that have
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to deal with D commercial and public accommodation
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title III prohibits discrimination on the basis of disability in the activities of places of public
27:27
accommodations public accommodations are businesses that are generally open to the public such as restaurants theaters
27:33
schools and it also prohibits discrimination for commercial facilities like privately owned non-residential
27:40
facilities such as factories warehouses Office Buildings point being title III impacts commercial and public
27:47
accommodation and makes sure they comply with Ada standards so it's not just one or the other it's commercial and public
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accommodations all right question 17 which of the following would not be covered under a
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builder's new home warranty a public workmanship B disheveled masonry C
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dysfunctional commentary or D structural damage caused by flooding so take a
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moment to think that one over
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alrighty so when we're talking uh what's not covered with these Builders new home
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warranties uh we would say d structural damage
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caused by flooding um why well weather related issues and normal wear and tear are generally not
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included in a home warranty other items that a builder's home warranty may not
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cover would be household appliances defects resulting from work conducted by
29:21
the homeowner no warranty covers damages caused by natural disasters so again when we're
29:28
looking at these you know just need to be familiar with the style the type of
29:34
warranty home warranty even homeowners insurance things like that you just need to be aware of it how it operates the
29:41
exceptions exemptions I mean to these things and obviously when we see caused
29:46
by flooding we know you know obviously there is such thing as like you know flood insurance but again when we're
29:52
talking about no home warranty that's not going to be the case because you can't buy a house and just be like oh
29:57
yeah you know by the way you know I want to to be protected by this you know from
30:02
from past instances like that just doesn't exist so all right next one question 71.
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a contract that legally binds two or more parties together to specific
30:15
obligations that create a legally binding contract between the buyer and the seller a equity agreement B escrow
30:22
agreement C purchase agreement or D settlement and transfer agreement so
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think about that one and come up with your answer
31:10
all right for this one the correct answer is C purchase agreement purchase
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agreement is a contract that legally binds two or more parties together to specific obligations to create a legally
31:23
binding contract between the buyer and the seller plain terms purchase agreement is the document buyers and
31:30
sellers sign with all the terms and conditions their transaction on it so you might be thinking
31:35
um you know why is this not a bilateral contract you know why isn't that an option well technically this is a
31:41
bilateral contract but again it's including the second part contract between buyer and the seller we know
31:47
that we see that here we notice it has to be a purchase agreement next one 72
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according to the Do Not Call list an established business relationship rules how many months does a company have to
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call the customer if they made an inquiry with the company is it a 18 months b six months c three months or D
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indefinitely so take a moment to come up with your answer on this one
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alrighty so the Do Not Call list or the
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established business relationship rules remember uh in the first video we talked
32:49
a little bit about this so you need to be aware of these months these specific how long it takes and for this one if a
32:56
customer made an inquiry with a company that would be three months so if you remember the first one was indefinitely
33:03
when we were talking about uh if you were previous if you had a previous business relationship or they're one of
33:09
your clients obviously it's indefinitely here it's going to be three months so established business relationship means
33:16
a relationship between a seller and a consumer the consumers inquiry or application regarding a product server
33:23
service would be three months so again this one's three months
33:28
um if they're your previous client that's indefinitely and then there is one for 18 months and six months as well
33:36
um and we might discuss those a little bit later stay tuned for that if not all right next one
33:42
73 the fact that land has a number of important uses is the basis for what
33:47
essential element of value a demand B utility
33:52
C scarcity D transferability so take a moment to think that one over and come up with
33:59
your answer
34:28
alrighty so 73 what is the correct answer for 73 well a number of important
34:36
uses is the basis for B utility that's right utility not scarcity not
34:44
transferability not demand it is utility remember dust and your essential
34:50
elements of value demand means the desire to buy an ability to pay utility again kind of what we're talking about
34:56
here uh or it is what we're talking about here at this item satisfies a human need or desire so it's shelter
35:03
income Recreation scarcity uh limited Supply Supply diminishes
35:09
value increases we've talked about that scarcity is something that we've talked about numerous times on this channel
35:14
it's super important to understand but really again all of these including the last one I didn't mention you have a
35:20
transferability so again you need to remember dust which I'll say one more time is demand utility scarcity and then
35:27
of course transferability alrighty next one 74. what is the total quantity
35:34
that buyers are willing to buy at a given time at certain prices a price B
35:40
Supply C demand or D buyers total so take some time think that one over
36:13
already 74 what is the answer to 74 what is the total quantity the buyers are willing to
36:19
buy at a given time at certain prices that is C demand demand is the economic
36:27
principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a
36:33
specific good or service holding all other factors constant also in Latin
36:40
cetiras paribus probably butchering the pronunciation I apologize but that just means holding all other factors constant
36:46
so essentially again that is what demand is a it is when the buyers are willing
36:53
they're they're willing to uh buy something at a given time certain prices that would be demand
36:59
next one 75 a property owner wishes to build a Neighborhood Grocery Store in an area
37:05
zoned for residential use which of the following would most likely be used to obtain permission to build
37:12
the store is it a Innovation B an amendment C approval of surrounding
37:18
Property Owners or d a conditional use permit or zoning variants so take a moment to think about this one and come
37:24
with your answer
37:48
all right we talked a little bit about this one already we had a question that was a bit similar so I'm not going to
37:53
really get too much into this but the correct answer for this one is going to be d a conditional use permit or zoning
37:59
variance so again um once some you want to be excused from
38:04
these requirements of zoning you need a zoning variance essentially
38:10
you need that to pretty much you know do what you want to do so again I'm not
38:15
going to explain too much into that because we already talked about that but next one 76 Which business structure
38:21
traditionally features a board of directors is it a partnership B sole proprietorship C Cooperative or D
38:28
Corporation so take some time and think about that one
38:53
alrighty so business structures super important you need to be aware of all of them for the exam business structure
39:00
traditionally featuring a board of directors when you hear board of directors we know it's the corporation
39:07
so again it could be performed or formed I mean for profit non-profit but the big
39:13
thing that you need to know is again that they are you know what what is that
39:20
what is a corporation and obviously if they can own property and things like that but because a corporation is a
39:27
legal entity it can purchase property super super important to know all right
39:33
next one 77 typically a trust is a blank party relationship A1 B2 C3 D4 so it
39:43
takes some time think about that one come with your answer
40:08
alrighty so when we're talking about trusts what do we need to know well they
40:13
are a three so letter C is our answer C3 3 is our answer trust can be typically
40:22
um or trust are created during an individual's Lifetime and they could be established following someone's death it
40:29
doesn't really matter there but what does matter is they are a three-party relationship in which the first party
40:34
trustor or settler transfers a property under the second party for the benefits
40:40
of the third party the best beneficiary so again just need to be aware that you
40:47
know each trust has three parties it's a three-party relationship and obviously you need to be aware of which is which
40:54
all right 78 which of the following are the main participants in real estate markets a users owners renters
41:00
developers Renovators and facility facilitators excuse me sorry I don't
41:06
have a little drink of water in between this question because I am after going through all these questions it gets a little bit too much but
41:11
anyways all right bihi players buyers sellers Renovators and facilitators see
41:18
buyers sellers investors and facilitators or D buyers Sellers and investors so which of the following are
41:25
the main participants in real estate markets so which one of those are the main participants go ahead and think
41:31
that one over and I'm going to get a drink of water
41:55
alrighty so the correct answer for this one the main participants in real estate markets is a users owners renters
42:03
developers Renovators and facilitators you just need to know that you need to know that they're the main participants
42:08
and obviously you need to be able to distinguish which is which which we might talk about later if not we do have
42:15
more videos and articles on that as well all right next one 79 which of the following is a private land use control
42:21
a zoning B building codes c d restrictions or D taxation so think
42:28
about that one and come up with your answer
42:44
alrighty so when you see private land use control you know that's going to be
42:51
C that's right deed restrictions so the primary public land use control is
42:57
zoning which we did talk about I believe in the first half of this big exam in the first video
43:03
um and then the second uh or the private land use control is obviously deed
43:08
restrictions so there's public and then private and you need to be able to distinguish Witcher switch and then obviously you know which which the
43:16
following that they um you know have essentially so all right next one 80 traditionally real
43:23
estate agents are paid through a fee for performing a transaction called a and there's a wage B salary C commission or
43:31
D earnest deposit so take a couple seconds think that one over
43:51
all right what's going on with question 80. so traditionally real estate agents
43:56
are paid through a fee for performing a transaction called a and that's going to be C commission don't overthink this one
44:02
pretty straightforward I see so many people mess this one up they think it's earnest deposit
44:08
um but again guys that's different uh the earnest deposit is just you know that that first chunk the promised
44:15
promise to purchase property that the buyer gives the seller as you know an
44:21
Earnest to show to show their trust that they're willing to purchase that property that has nothing to do with the
44:27
commission that is being paid out so just keep that in mind those are completely separate things all right
44:33
next one 81 a lender's refusal to lend money to potential homeowners attempting
44:39
to purchase property located in predominantly minority neighborhoods is and it gives us four options a steering
44:46
B redlining C price fixing or D blockbusting so think about that one and
44:52
go up with your answer
45:28
alrighty so when you see lenders refusal
45:34
you want to narrow these down a little bit and our correct answer for this one is B
45:41
redlining so why is it redlining well lenders refusal to lend money to
45:46
potential homeowners attempting to purchase property in a minority neighborhood is redlining now steering
45:52
is the illegal practice of channeling homesickers to particular areas and essentially that is a form of
46:00
redlining it's worth mentioning that because people often get these two confused steering is a form of redlining
46:07
and they are not exactly the same thing so again sure you guys have heard the story hundreds of times if not we do have
46:13
videos and articles on this but Again The Story Goes uh back in the day
46:19
these Banks they would literally take a map and they would just write Red Lines
46:24
and they would say okay this area we're not we're not going to lend money to the people that are trying to purchase home
46:30
in that area and again it was predominantly minority neighborhoods so that is redlining and again it's one of
46:38
those um you know fair housing violations that you need to be aware of fair housing
46:43
Fair lending um that you need to just you know be aware of all right 82 the fifth and 14th
46:49
amendments of the US Constitution permit the government to exercise the power of eminent domain eminent domain is
46:55
commonly used for a infrastructure B property tax deflation C financing loans
47:01
and parenthesis mortgages D development of privately owned property so take a
47:06
couple moments to think about that one
47:31
all right when we think of eminent domain what do we think of we need to be thinking of a infrastructure
47:39
eminent domain is a term to describe the right of the government to take over privately owned real estate usually
47:45
despite the owner's wishes this often happens for land that is required for infrastructure like
47:51
highways pipelines railroads the 5th and 14 amendments of the U.S Constitution permit the government to exercise its
47:57
power of eminent domain all right next one 83 at the very minimum advertising property or Services
48:04
by real estate professionals should include what a the license number of the
48:10
broker B the broker firm's name c the office phone number or indeed the service listed
48:15
oh this is a good one all right take a couple moments think about this one
48:48
alrighty so what is the correct answer the very minimum advertising property or
48:54
services but real estate professionals should include what correct answer is B The Brokerage firm's
49:03
name States may require additional information but federally at the minimum all advertising for property must
49:10
include the broker firm's name this is for all advertising social media
49:15
included so this is super important to understand in in all of your state portions
49:22
um of the exam they're going to ask you about these advertising rules especially what needs to be included and again
49:29
almost always The Brokerage firm's name needs to be included and sometimes
49:34
depending on the state it can be nicknamed but if it is a nickname then it needs to be registered with that State's Real Estate Commission or real
49:41
estate Authority or Department of Commerce whatever it might be but almost always always The Brokerage firm's name
49:48
needs to be included all right next one 84. what specific formula would be used
49:54
to estimate the value of property using the income approach a net operating income divided by cap
50:01
rate equals market value B net operating income multiplied by cap rate equals mark value
50:08
c cap rate minus net operating income equals market value or D cap rate
50:15
divided by net operating income Ecom net operating income equals market
50:22
value I I never was good at like math formulas so saying them also applies I'm
50:29
not really great that's why I apologize if I stumbled a little bit on that one all right so take some time and figure
50:34
out uh the answer for that one
50:55
I'm ready do you know your formulas so what is the correct answer for this
51:01
one is going to be net operating income divided by capitalization rate equals market value so a is our answer the
51:09
income approach is the real estate valuation method that uses the income the property generates to estimate fair
51:15
value calculated just as we said here net operating income divided by
51:21
capitalization rate equals market value so you might be thinking sitting there
51:26
thinking like oh like do we really need to know this um you know for for my real estate career you know uh and you know the
51:34
answer is it depends um more than likely no uh depending on
51:39
if you you know you you work with you know a commercial do a lot of commercial real estate or you're involved with you
51:46
know the appraisal process but the exam likes to quiz you on these types of things they do they want you to be aware
51:54
of how the different appraisal approaches work which is why we've talked about a couple of them today and
51:59
you know within that you need to be aware of how um you know the approaches are done and
52:05
even the math behind it so again we do have a crash course on this on the channel I highly encourage you guys to
52:12
check it out if if like the appraisal approaches completely confuse you please check that out because I go pretty in
52:18
depth into that all right next one question 85 Steve a real estate agent of five years was at his local coffee shop
52:25
with some Agents from other offices the subject of commissions came up and agents began to compare their commission
52:31
rates what should Steve do a excuse himself from the discussion as this
52:36
would constitute a violation of the Equal Credit Opportunity Act B excuse himself from the discussion as this
52:43
would constitute a violation of the fair housing act C advised the other agents this would constitute a violation of the
52:48
Sherman Antitrust Act or D listen carefully so you can be more competitive in the market so take a moment to think
52:54
about Steve and what he should do in the situation
53:16
foreign so what should Steve do so Steve should see he should advise the
53:25
other agents this would constitute a violation of the Sherman Anti-Trust Act
53:31
so listen Sherman Antitrust Act prohibits price fixing real estate agents and Brokers
53:38
should understand that any discussion about commission could constitute a violation of the loss even if only
53:44
implied so again uh you know this is one of those ones where
53:51
you know theoretically right you know you could leave this conversation but
53:57
is that the safest thing to do no because again you know let's say there's
54:03
a client there and they see that you're you know you were standing there and maybe you didn't do anything
54:10
um anything like that that could put you at risk so uh the it's best to advise
54:16
the other agents hey this is not right um you know that way it's on record that
54:22
you said something um and that's the safest thing and the most correct thing to do so that's the
54:28
answer there all right next one 86. generally speaking what happens when
54:33
the supply of available houses in an area increases significantly a the
54:39
average cost of housing goes down B the average cost of housing goes up C commission rates are raised decommission
54:45
rates are lowered so take a moment to think about that one
55:25
alrighty so this is a pretty simple supply and demand problem it's asking us when the supply of
55:33
available houses in an area increases significantly what happens well the
55:38
average cost of housing would go down so remember if it increases it goes down if it
55:45
decreases it goes up so it's the opposite so our correct answer is a so
55:51
again think of supply and demand like a scale one side raises the other will lower vice versa generally speaking low
55:57
Supply and high demand increase price in contrast the greater Supply and the lower the demand the price tends to fall
56:04
so in our terms for Real Estate when the supply of available houses in area increases the average cost passing goes
56:11
down all right next one what is an item on a property that is installed by the tenant
56:18
and is related to the Ten's business classified as a fixtures B trade fixtures C easements or DM limits so
56:26
take some time think about that one
56:56
alrighty so an item on a property that is installed by the tenant and is
57:01
related to the tens business would be classified as B trade fixture so fixture
57:07
is any physical property that is permanently attached to the real property trade fixtures refer to items
57:13
installed Connection in connection to the business such as a stove refrigerator in a restaurant that would
57:21
be those would both be considered trade fixtures all right next one 88 what is
57:26
it called when parties have fully performed the terms of the contract is it a executory b executed C finalized or
57:35
de-closed so take a moment to think about that one and come with your answer
58:07
alrighty so what is it called when parties have performed the terms of a
58:13
contract fully that would be be executed not executory when Contracting parties
58:20
have signed a contract and both parties have done all they promised to do it is called an executed contract or executed
58:26
agreement all right next one 89 a collection of federal and state government laws that
58:33
regulate the conduct and organization of business corporations normally to promote Fair competition for the benefit
58:38
of consumers a the Civil Rights and business laws B business and ethics laws
58:43
C civil rights laws or D antitrust laws so take some time think about that one go with your answer
59:30
alrighty so what is the correct answer for 89 it's going to be D it's the
59:35
Anti-Trust loss Anti-Trust loss are a collection of federal and state government laws that regulate the
59:42
conduct and organization of business corporations normally to promote Fair competition for the benefit of consumers
59:48
in retrospect antitrust laws protect the consumer and are healthy first stable economy it's important to know out and
59:55
understand the ones that deal with real estate as they directly relate how you function as an agent
1:00:00
alrighty question number 90 a non-licensed buyer negotiated the
1:00:05
purchase of a house during a conversation with the seller the seller agreed to include both the washer and
1:00:11
the dryer in the sale and this was included in the sales contract in this situation if the seller takes the
1:00:17
appliances what recourse if any does the buyer have a the buyer can declare the
1:00:23
principle of performance and trade any assets he has for the assets he wants B
1:00:28
the buyer has no recourse because he negotiated the sale himself C the buyer May sue the seller for specific
1:00:34
performance or B the buyer may sell the seller for partial performance
1:00:40
so take some time think about this one and come up with your answer
1:01:24
alrighty so what's going on here a non-licensed buyer negotiate the
1:01:29
purchase of a house during a conversation with the seller the seller agreed to include both the washer and
1:01:34
the dryer essentially it didn't go through or I'm sorry in this situation
1:01:39
the seller takes the appliances so so again the contracts didn't really go through all the way what recourse if any
1:01:46
does the buyer have well correct answer is see the buyer May sue the seller for
1:01:51
specific performance specific performance is an equitable renovate remedy in the law of contract whereby a
1:01:58
court issues in order requiring a party to perform a specific act such as to complete performance of the contract in
1:02:05
our instance since the buyer and dryer buyer and dryer since the washer and
1:02:10
dryer were included in the contract the buyer May sue the seller for specific performance
1:02:15
all right next one 91 the cost of Public Services is
1:02:21
distributed among real estate owners through what a personal property tax be
1:02:27
real property tax c special assessment or D cell Stacks so take some time think about this one
1:03:07
already so this would be real property tax Public Services issued
1:03:15
among real estate owners that's the key thing they're real estate owners now property tax is an ad valorem tax
1:03:21
assessed on real estate by local government and paid by the property owner public services for Real Estate
1:03:28
owners are paid by real property tax now again it's important distinction
1:03:33
there basically because it says real estate owners we know real property tax all right 92 majority of homes before
1:03:41
blank used lead paint a 1950 B 1972 C
1:03:46
1978 or D 1993. so take some time think about that one
1:04:10
alrighty you guys should know this one this is 1978. you should remember that
1:04:16
remember that year um because the residential lead-based
1:04:21
painting reduction Act was established in 1996 and then the law which ages must
1:04:28
be aware of was made in 1904 1978 so you need to know those two to 1996 and then
1:04:35
1978. yes so that is a correct answer for that one let's move on 93 altering a written
1:04:43
document by improperly signing someone else's name to an instrument is called what a forgery the usury
1:04:51
C altercation or D puffing all right take a moment think that one over
1:05:22
alrighty altering a written document that is going to be a forgery
1:05:29
forgery refers to the false making or material alteration of a legal
1:05:34
instrument with a specific intent to defraud someone or anyone is illegal and real
1:05:41
estate agents must be aware of the action all right 94. appraiser Larry has a set
1:05:46
of specifical or I'm sorry special purpose and public service buildings like schools churches and post offices
1:05:53
which he needs to appraise which approach to Value would Larry the appraiser choose to complete the task a
1:05:59
cost approach b a state approach C Income approach or summation or D Market
1:06:05
data approach or sales comparison approach so think about this question and come up with your answer
1:06:47
foreign already appraiser Larry what should he use he should use a the cost
1:06:54
approach for special purpose and public service buildings like schools churches
1:07:00
post offices the cost approach is the best choice the reasoning is because
1:07:06
these types of buildings usually do not have income so the income approach is out and there's not enough comparables
1:07:13
to do a sales comparison approach so the cost approach is the best answer
1:07:19
next one 95 after smoking this is the second leading cause of lung cancer in
1:07:25
the United States a naturally occurring gas that forms in rocks Soil and Water a
1:07:31
radon B chlorine C lead paint D carbon monoxide so take a moment to think about
1:07:38
that one
1:08:04
alrighty so 95 what is the correct answer here what is the second leading
1:08:10
cause of lung cancer in the United States it's going to be a radon so you might be
1:08:16
thinking oh maybe it's carbon monoxide because there's you know carbon monoxide and like cigarettes but no it is uh
1:08:24
radon that is the uh naturally occurring gas that forms in rocks Soil and Water
1:08:30
it's one of those you know environmental things that we need to be aware of for
1:08:35
that section of the exam all right next one 96 which of the following real estate contract Clauses establishes
1:08:42
order of priorities of Financial claims in parentheses liens a the release Clause B that Venom Clause C
1:08:50
acceleration clause or D subordination clause so think that one over
1:09:22
alrighty so when we're looking at order of priorities of Financial claims we
1:09:29
know it's D subordination clause subordinate remember it's subordinate
1:09:35
subordination clause in real estate establishes priorities of Financial claims the subordination clause
1:09:41
effectively makes the current claim number one to any existing claims that have already been recorded way that I
1:09:48
was saying earlier which is about how a lot of people remember it is you think subordination it's subordinate it's you
1:09:54
know it is the it essentially makes the other claim subordinate to itself it becomes number one it's a good way to
1:10:02
remember it all right next one 97 commingling is the opposite of what a
1:10:09
separation B contribution C combination or D transformation so commingling is
1:10:17
the opposite of what take some time to think about that one
1:10:49
alrighty so what is the opposite of commingling well that is a separation
1:10:56
commingling refers to the mixing of Brokers funds with clients funds the opposite of commingling is separation
1:11:03
which is just separating the funds it's worth mentioning commingling can be illegal depending on what state you are
1:11:11
in but it is something that you need to be aware of and know how it works and operates because again it can be illegal
1:11:18
depending on the state and even if it is legal on the circumstance so keep that
1:11:24
in mind all right 98 a parcel of real property that has an easement over another piece
1:11:31
of property is best described as a serving the state B dominance State C in
1:11:38
a state and sufferance or D and a state and tenement so take some time think about that one
1:12:11
alrighty so a particle of real property that has an easement over another
1:12:16
property or piece of property is best described as what well that's going to be a or I'm sorry b in a state a
1:12:24
dominant state so by definition a dominant state is a personal property it is an easement over another piece of
1:12:30
property so remember guys if it's dominating if it's over so again it kind
1:12:36
of tells us here an easement over another it's dominating you know it's it's the big thing it's going to be the
1:12:43
dominant State whereas the other one serves it serves it's the Lesser it's a sir servian estate
1:12:50
alrighty next one 99 find the annual grm a nine unit Building
1:12:56
in Cleveland Ohio the asking price of 500 000 in gross annual rents of 75 000.
1:13:02
a 5.66 B6 c66
1:13:07
uh D 7.66 so again four numbers there a
1:13:12
quick little math problem to end this for you guys when we do this last two questions but yeah so think that one
1:13:18
over and come up with the answer
1:13:45
alrighty so you either know how to do the math or you don't unfortunately that's just the way it is with with a
1:13:51
lot of these math ones on the exam so hopefully you are aware of it um so what is the correct answer for
1:13:56
this one well it's going to be C it's 6.66 so again
1:14:02
um essentially it's property price property price divided by gross rental income equals rent multiplier so in our
1:14:08
case we would take that five hundred thousand dollars and then divide it by 70 000 and that equals 6.66 so it's the
1:14:18
math itself is easy I know a lot of you guys get worried about the math problems on the real estate exam you're concerned
1:14:24
um but really guys it's the math the arithmetic is not hard it's just being aware of the formula being where the
1:14:31
term Associated to the formula the terms how the formula Works how the practice Works things like that that's more
1:14:37
important so occasionally you're going to see maybe one or two maybe three you
1:14:42
know math problems on the exam obviously it varies depending on the state and I do a video on that answering how many
1:14:48
questions that you are going to see but chances are you're probably going to see at least one or two questions on the
1:14:53
exam with math so just be prepared for that but again it's it's simple math it's not hard you just need to be aware
1:14:59
of how to do it don't be scared alrighty next one question 100 final question
1:15:06
what is the document that defines the relationship between the broker and the seller a listing agreement B exclusive
1:15:13
agency contract C purchase contract or D disclosure statement so take some time
1:15:18
think about that one
1:15:51
alrighty so question 100 what is the answer it's going to be a the listing
1:15:56
agreement so disclosure statements purchase contracts inclusive agency contracts are all legal documents but is
1:16:04
it is the listing agreement that clearly defines a relationship between the broker and seller so you must you must
1:16:11
understand that and really you should be familiar with all four of these documents and and what they do but
1:16:18
obviously guys we just scratched the surface so there we did 100 questions but there's so many more to do and
1:16:24
they're all all featured on our website so if you guys want to head there real estate license wizard.com check out our
1:16:32
free exam again it's completely free again there's tons more questions there and then of course if you want our
1:16:37
premium packages and stuff like that we do provide that as well if you like this
1:16:42
video click here for more real estate exam prep related content if you want to subscribe click here I really appreciate
1:16:49
you spending the time with me today this last year has been pretty crazy and I know I've personally gone through a lot
1:16:55
so here's to a fantastic year I wish the best for everybody who watched this video and again thank you so much for
1:17:02
spending some time with me today I really appreciate it as always see you guys next time make today magical bye
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