IRES - Iowa Real Estate Salesperson

Question 21: A Davenport owner spent a large sum installing an in-ground pool and insists the home's worth rose by exactly that amount. The appraiser explains that money spent on an improvement does not automatically equal added worth. Which appraisal truth is she illustrating?

Cost does not equal value

Price always equals value

Value always equals assessment

Cost always exceeds value

Question 22: An appraiser is asked to estimate the most probable price an Ottumwa bungalow should bring in a competitive, open market where buyer and seller each act knowledgeably, without undue pressure, and a reasonable exposure time is allowed. Which type of value is being sought?

Market price

Assessed value

Insurance value

Market value

Question 23: Preparing to list a home, a salesperson gathers recently sold, currently active, and expired listings that are similar to the seller's property to help the seller settle on a realistic asking price. Which valuation tool is this salesperson actually preparing?

A formal appraisal

A comparative market analysis

A broker's price opinion

An automated valuation model

Question 24: In a fast-growing Johnston neighborhood, few homes are listed while many buyers compete to purchase, and prices climb steadily; when listings later flood the market, prices soften. Which principle of value explains these swings driven by availability and buyer interest?

Supply and demand

Anticipation

Contribution

Plottage

Question 25: A lender needs an independent, unbiased opinion of a property's market value, prepared under the Uniform Standards of Professional Appraisal Practice by a state-licensed or certified professional working for a fee. Which of the following valuation products does this best describe?

A comparative market analysis

A broker's price opinion

An automated valuation model

A formal appraisal

Question 26: A closing coordinator sorts entries into those split between buyer and seller by the ownership period and those charged wholly to one party. Which of the following is BEST classified as an item customarily prorated between the parties at closing?

The brokerage commission

Loan origination fee

Property taxes

The deed recording fee

Question 27: An investor asks her broker to distinguish the return measure that relates net operating income to a property's total value from the one that relates the annual pre-tax cash flow to the actual cash invested. Which measure fits the first description?

The cash-on-cash return

The gross rent multiplier

The debt coverage ratio

The capitalization rate

Question 28: A borrower agrees to pay discount points at closing, and in exchange the lender offers a note carrying a lower interest rate over the loan's entire life. Which of the following BEST describes what the borrower is doing by paying those discount points?

Buying down the interest rate

Paying for title insurance

Prepaying the property taxes

Increasing the loan principal

Question 29: A buyer confuses two separate county charges at the closing and asks which one specifically pays to enter the deed and mortgage into the public land records, rather than taxing the conveyance itself. Which charge correctly answers the buyer's question?

The transfer tax

The recording fee

The origination fee

The title search fee

Question 30: An instructor points out that a property owner's equity position and the loan-to-value ratio tend to move as mirror images of one another over the life of a mortgage. As the loan-to-value ratio steadily falls, what happens to the owner's equity?

The owner's equity also falls

Equity stays exactly the same

The owner's equity rises

Equity disappears entirely

Question 31: An examiner asks a candidate to identify the base upon which a real property transfer tax is normally computed, distinguishing it from figures used for lending or for local levies on ownership. On which figure is the tax normally based?

The outstanding loan balance

The sale price or consideration

The assessed value for taxes

The appraised replacement cost

Question 32: A buyer agrees to a price higher than the amount the appraisal supports. When setting the loan-to-value ratio for the mortgage, the lender bases the value figure on the smaller of the two numbers. Which reasoning BEST explains this conservative choice?

It limits the lender's collateral risk

It raises the borrower's interest rate

It increases the seller's net proceeds

It reduces the appraiser's liability

Question 33: A conventional borrower puts down only a small amount, leaving a high loan-to-value ratio on the new mortgage. Because of that elevated ratio, the lender requires an extra monthly charge protecting the lender against default. Which requirement does the high ratio typically trigger?

A prepayment penalty

A discount point rebate

A larger capitalization rate

Private mortgage insurance

Question 34: At closing a borrower sees a charge the lender describes as compensation for processing, underwriting, and preparing the new mortgage loan rather than a payment made to lower the interest rate. Which of the following terms names this particular charge?

A discount point

A prepayment penalty

A loan origination fee

A mortgage insurance premium

Question 35: A lender collects one part of the monthly payment in advance and holds it aside so that, when the local government's annual bill arrives, enough money is on hand to pay it. Which PITI component is being accumulated this way?

Principal

Interest

Points

Taxes

Question 36: Within a monthly PITI payment, one portion is applied directly against the amount still borrowed, gradually shrinking the debt the homeowner owes on the mortgage over the full life of the loan. Which component of the payment does this describe?

Principal

Interest

Taxes

Insurance

Question 37: A lender tells a borrower that each unit charged at closing to adjust the loan equals one percent of the loan amount, a common way of quoting certain up-front mortgage charges. Which of the following terms names one such unit?

A basis lot

A point

A margin

An index

Question 38: In most jurisdictions, including Iowa, long-standing custom assigns the tax on the conveyance of real property to the party who is giving up ownership and delivering the signed deed, unless the purchase contract states otherwise. Which party customarily pays it?

The buyer

The lender

The seller

The county recorder

Question 39: At an Iowa closing, the county collects a charge imposed on the conveyance of real property itself, generally figured on the sale price and required before the deed can be entered into the public record. Which charge does this describe?

A real property transfer tax

A private mortgage insurance premium

A loan origination charge

A homeowners association assessment

Question 40: A lender describes a ratio that measures the amount of a requested mortgage loan against the appraised value or sale price of the property serving as collateral, using whichever of those two figures is lower. Which of the following terms names this ratio?