CRES Connecticut Real Estate Salesperson - Set 3 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: An appraiser evaluating a Bridgeport apartment building wants a single figure that expresses the relationship between the property's annual net operating income and its value, letting her compare its earning power against other similar investments. Which rate captures that relationship?

The loan-to-value ratio

The capitalization rate

The gross rent multiplier

The debt coverage ratio

Question 42: At closing, the buyer's cash requirement drops because the good-faith deposit he placed when the offer was accepted is applied toward what he owes. On the settlement statement, how is that earnest money deposit normally treated for the buyer?

As a debit to the buyer

As a credit to the seller

As a credit to the buyer

As a seller closing cost

Question 43: A buyer purchasing a New Haven Cape Cod asks his agent for the total amount of money he must bring to settlement after his loan, earnest money deposit, and any seller credits are applied. Which term names that bottom-line figure?

The seller's net proceeds

The gross sale price

The loan-to-value ratio

Buyer's cash to close

Question 44: An investor holding a Greenwich income property notices her ownership stake keeps rising even though she has made no improvements, partly because tenants' rent covers the mortgage and partly because prices in the area climb. Which two forces are building her equity?

Principal paydown and appreciation

Depreciation and market decline

Refinancing and cash-out draws

Rising taxes and maintenance

Question 45: A seller preparing an estimated settlement wants to identify which items her closing agent will subtract from the sale price when computing her net proceeds. Which of the following belongs on that list as a genuine seller expense reducing her cash?

The buyer's new loan amount

The property's appraised value

The unpaid mortgage balance

The lender's origination charge

Question 46: A homeowner in Stamford wants to know the portion of her property she truly owns free of debt, found by comparing the home's current market value against the unpaid balance of every loan secured by it. Which term names that owned portion?

Appreciation

Equity

Amortization

Leverage

Question 47: At the closing table a Hartford seller wants to know the amount of cash she will actually walk away with once her mortgage payoff, brokerage commission, and settlement charges are subtracted from the sale price. Which figure answers her question?

The gross sale price

The buyer's cash to close

The loan payoff amount

Seller's net proceeds

Question 48: At a Norwalk closing, one charge covers the town clerk's act of entering the new deed and mortgage into the public land records, and it is customarily assigned to the party taking title. Which charge and payer does this describe?

Transfer tax paid by seller

Commission paid by buyer

Recording fee paid by buyer

Origination fee paid by seller

Question 49: A buyer decides to increase her down payment on a Fairfield condominium, contributing more of her own cash toward the price. Holding the purchase price steady, what happens to the loan-to-value ratio the lender will calculate as a direct result?

It increases

It decreases

It stays unchanged

It becomes negative

Question 50: An owner already carrying a first mortgage takes out a second loan on the same Danbury home, and the lender adds both balances together before comparing them to the property's value. Which ratio results from combining every lien this way against value?

The combined loan-to-value ratio

The simple loan-to-value ratio

The debt-to-income ratio

The capitalization rate

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