IRES Iowa 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: When measuring a property's return, an analyst begins with the income that remains after subtracting vacancy losses and all operating expenses, but before deducting any mortgage payment or the owner's income taxes. Which of the following terms names this particular figure?

Gross scheduled income

Net operating income

Cash flow before taxes

Effective gross income

Question 42: At a closing, a recurring expense that covers a period spanning the sale date is divided fairly between seller and buyer so that each pays only for the days he or she actually owns the property. Which term names this division?

Amortization

Reconciliation

Proration

Capitalization

Question 43: An appraiser explains that a single percentage figure captures the relationship between a property's annual net operating income and its value or price, letting investors compare income properties at a glance. Which of the following terms names this widely used figure?

The loan-to-value ratio

The gross rent multiplier

The debt coverage ratio

The capitalization rate

Question 44: A buyer paid a good-faith deposit when the offer was accepted, and the closing agent now applies it on the settlement statement. Which of the following best describes how that deposit affects the cash the buyer must bring to closing?

It reduces cash to close

It increases the sale price

It raises the loan balance

It is refunded entirely

Question 45: At the settlement table, the closing agent adds up everything the buyer owes, subtracts the credits already in the buyer's favor, and states the amount the buyer must deliver by certified funds. Which term names that amount the buyer must bring?

The purchase price

The down payment

Cash needed at closing

The loan principal balance

Question 46: A longtime owner in Cedar Rapids wants to borrow against the accumulated ownership value in her paid-down home rather than sell it, using that value as security for a new second loan. Which feature of the property makes this borrowing possible?

Her mortgage interest deduction

Her built-up equity

The home's assessed value

The remaining loan balance

Question 47: As a borrower makes each scheduled monthly payment on a fully amortizing mortgage, a portion goes toward interest and a portion steadily reduces the balance owed, gradually enlarging the owner's stake. Which process is chiefly responsible for this steady growth in equity?

Market appreciation

Depreciation deduction

Rate adjustment

Principal reduction

Question 48: When the settlement agent prepares the seller's side of a closing statement, one substantial charge is deducted because the listing brokerage earned it for marketing and successfully selling the property to a ready buyer. Which of the following is subtracted from the seller's proceeds?

The buyer's earnest deposit

The buyer's loan amount

The brokerage commission

The lender's origination fee

Question 49: An instructor explains that a homeowner's stake in a property is the current market value reduced by everything still owed against it, representing the portion the owner truly holds free and clear of debt. Which of the following terms names this stake?

Appreciation

Equity

Amortization

Leverage

Question 50: At a Des Moines closing table, the settlement agent totals the seller's credits, subtracts every charge the seller owes, and arrives at the cash figure the seller will actually walk away with. Which term names that final figure the seller receives?

Seller's net proceeds

Gross sales price

Adjusted cost basis

Total closing costs

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