Determine your answer, then click the arrow to see the correct response.
What Does "Net Operating Income" (NOI) Refer to in Real Estate Investment?
A) The total revenue from a property before expenses
B) The total revenue from a property after mortgage payments
C) The total revenue from a property after operating expenses but before taxes and debt service
D) The gross income from a property minus vacancy losses
Correct Answer: C) The total revenue from a property after operating expenses but before taxes and debt service
Explanation: Net operating income (NOI) is a measure of a property’s profitability that is calculated by subtracting operating expenses from gross income, excluding taxes and debt service.
What Is "RESPA" in Real Estate Transactions?
A) Real Estate Salesperson Agreement
B) Real Estate Settlement Procedures Act
C) Real Estate Security Procedures Association
D) Real Estate Services and Practices Act
Correct Answer: B) Real Estate Settlement Procedures Act
Explanation: RESPA stands for the Real Estate Settlement Procedures Act, which is a federal law designed to protect consumers by requiring transparency and disclosure of settlement costs and to eliminate kickbacks and referral fees that can increase the cost of settlement services.
What Is "Condemnation" in the Context of Real Estate?
A) The process of listing a property for sale
B) The process by which the government takes private property for public use, with compensation to the owner
C) The inspection process for determining property condition
D) The act of selling a property below market value
Correct Answer: B) The process by which the government takes private property for public use, with compensation to the owner
Explanation: Condemnation is the legal process by which the government exercises its power of eminent domain to take private property for public use, providing fair compensation to the owner. This can be for purposes like building roads, schools, or other public infrastructure.
What Does "Mortgage Amortization Schedule" Refer To?
A) A list of mortgage lenders
B) A detailed table showing each periodic payment on a mortgage over time
C) A chart of property values in an area
D) A record of all home sales in a neighborhood
Correct Answer: B) A detailed table showing each periodic payment on a mortgage over time
Explanation: A mortgage amortization schedule is a complete table of periodic loan payments, showing the amount of principal and the amount of interest that make up each payment until the loan is paid off at the end of its term.
A Homeowner in Oklahoma Refinances Their Mortgage to a New Loan Amount of $200,000 at an Annual Interest Rate of 4% Over a 20-Year Term. What Will Be the New Monthly Mortgage Payment (Principal and Interest Only)?
A) $1,200.33
B) $1,211.96
C) $1,276.28
D) $1,315.43
Correct Answer: B) $1,211.96
Explanation: Using the mortgage payment formula, P = $200,000, r = 0.04 / 12 = 0.003333, and n = 2012 = 240. M = 200,000[0.003333(1+0.003333)^240] / [(1+0.003333)^240 – 1] ≈ $1,211.96.
Sara, a Licensed Real Estate Broker in Oklahoma, Receives a Confidential Offer From a Buyer Who Is Willing To Pay More Than the Asking Price. What Must Sara Do With This Information?
A) Share it with other potential buyers to encourage higher offers
B) Keep the information confidential unless the buyer consents to its disclosure
C) Automatically disclose it to the seller
D) Discuss it openly during a property showing
Correct Answer: B) Keep the information confidential unless the buyer consents to its disclosure
Explanation: According to Oklahoma Statutes §59-858-353, brokers must keep confidential information received from a party, including details about a party’s willingness to pay more than the asking price, unless consent to disclose is given by the party or required by law.
A Buyer in Oklahoma Purchases a Property Without Performing a Title Search. After Closing, They Discover an Undisclosed Lien on the Property. What Is the Buyer's Legal Recourse?
A) None, as they waived the title search
B) Sue the seller for not disclosing the lien
C) Force the lender to remove the lien
D) Automatically nullify the sale
Correct Answer: B) Sue the seller for not disclosing the lien
Explanation: If a seller fails to disclose a lien and the buyer did not perform a title search, the buyer can take legal action against the seller for failing to disclose this information, as it affects the buyer’s ownership rights.
A Commercial Property in Oklahoma Is Valued at $1,500,000 and Has an Annual Net Operating Income (NOI) of $120,000. What Is the Capitalization Rate (Cap Rate) for This Property?
A) 6%
B) 7%
C) 8%
D) 9%
Correct Answer: B) 8%
Explanation: The capitalization rate is calculated by dividing the annual net operating income (NOI) by the property value. Cap rate = $120,000 / $1,500,000 = 0.08 or 8%.
An Oklahoma Real Estate Agent Provides a Certified Appraisal Report to a Client. What Must Be Included in the Report To Comply With State Regulations?
A) The appraiser’s home address
B) A statement of the appraiser's qualifications
C) Identification of the type of certification held by the appraiser
D) The appraiser's opinion on market trends
Correct Answer: C) Identification of the type of certification held by the appraiser
Explanation: When an appraisal report is identified as “certified” in Oklahoma, the appraiser must indicate the type of certification held (e.g., trainee, state licensed, state certified residential, or state certified general real estate appraiser) to ensure compliance with the Oklahoma Certified Real Estate Appraisers Act.
An Oklahoma Property Is Sold for $650,000. The Seller Pays a 6% Commission to Their Real Estate Agent. How Much Does the Seller Receive After Paying the Commission?
A) $599,000
B) $611,000
C) $617,000
D) $629,000
Correct Answer: C) $611,000
Explanation: The commission paid to the real estate agent is 6% of $650,000, which is $39,000. Therefore, the amount the seller receives after paying the commission is $650,000 – $39,000 = $611,000.