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Alabama Real Estate License Exam| Questions and 100% Correct Answers
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Alabama Real Estate License Exam| Questions and 100% Correct Answers
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Alabama Real Estate License Exam| Questionsand 100% Correct Answers
A builder is obtaining a construction loan of $95,000 for a single-family residence. Under
the Truth-in-Lending Act, disclosure of a prepayment penalty by the lender is-- - ✔✔--
not required for a business loan.
The Truth-in-Lending Act is applicable to individual home owners, but it does not apply
to a construction loan for a builder because the loan is for a business purpose.
To qualify as a tax-deferred exchange, a property must be-- - ✔✔--held for productive
use in trade or business.
To defer the gain on the sale of an income-producing property, a tax-deferred exchange
may be used.
An office building is valued at $800,000 when the annual net income is capitalized at a
rate of 20%. If the operating expenses and vacancy and rent loss total 40% of the gross
income, what is the approximate gross annual income? - ✔✔$266,667
The income approach to value is calculated as follows:
Annual net income divided by capitalization rate equals value.
Therefore, net income ÷ 0.2 $800,000.
The net income is $800,000 × 0.2 = $160,000.
,The net income is 60% (100% 40%) of the gross income.
The gross income is $160,000 ÷ 0.6 = $266,667.
AREC has ___ commissioners; each commissioner serves a ___ year term, with no more
than ___ consecutive terms. - ✔✔9 commissioners; 5 years per term; 2 consecutive
term max.
AREC commissioners are appointed by the ___ with the advice and consent of the ___. -
✔✔Governor; Senate.
Commissioners must have been an Alabama resident for ___ years, and licensed in real
estate for ___ years. - ✔✔10; 10.
AREC commissioners are paid ___. - ✔✔$300/month.
Salesperson applicants must pass State Exam within ___ months of finishing the pre-
license course. - ✔✔6 months.
After passing State Exam, candidate can apply for a Temporary License and pay a fee of
$___. - ✔✔$150.
After completing the post-license course, candidate can apply for an Original License
and pay a fee of $___. - ✔✔$85/year or $185/two years.
A broker other than the Qualifying Broker. - ✔✔Associate Broker
,A Company License must be obtained for each separate location or branch. -
✔✔True.
If a Qualifying Broker dies or becomes disabled, the company can designate a temporary
Qualifying Broker within ___ days, and that temporary Qualifying Broker can serve a
maximum of ___. - ✔✔30 days; 6 months.
A licensee shall notify AREC in writing of any change of business or residential address
within 30 days of the change. - ✔✔True.
The Alabama Center for Real Estate (ACRE) is supported by a $___ fee at the time of
licensure, then a fee of $5 per renew period afterward. - ✔✔$30
Licensees pay $___ to the Recovery Fund at the time of application for an original
license. - ✔✔$30
Recovery Fund maximums are $___ per transaction or $___ per licensee. -
✔✔$25,000/transaction; $50,000/licensee.
A ______ Misdemeanor is committed by any person or corporation (even non-licensees)
who violate any provision of AL license law or files false information with the
commission. - ✔✔Class A.
Licensee has ___ days to notify commission when an action BEGINS involving criminal
prosecution, civil complaint involving a real estate transaction, or goodwill of an existing
real estate business. - ✔✔10 days.
After passing state exam, you have ___ days to apply for a Temporary License, either on
an Active or Inactive basis. - ✔✔90
, Temporary Licenses are only valid for ___ year(s), and cannot be renewed. - ✔✔1
For an Original License, you must pass a ___ hour post-license course. - ✔✔30
If Temporary License is ACTIVE, the post-license course must be completed within ___
months. - ✔✔6.
If the post-license course is not completed within ___ year(s), the Temporary License
lapses. This period begins on the FIRST DAY of the month AFTER passing the state exam.
- ✔✔1
For Broker's License, applicant must have ACTIVE Salesperson License for ___ out of ___
years immediately preceding the application. - ✔✔2/3
The fee to transfer your Salesperson License to a new Qualifying Broker is $___. -
✔✔$25
An owner's mortgage includes a clause requiring a prepayment penalty. Three percent
of any outstanding loan principal would be charged by the lender if the owner paid off
the principal before the scheduled time. Payments were $296.88, due on the first of
each month, and included both principal and interest in arrears at 8% per annum. After
the owner's July 1 payment, her loan balance was $8,946.23. On August 1, after handing
her lender the check for her August 1 payment, the owner paid off the entire remaining
loan balance. What is the approximate prepayment penalty? - ✔✔The monthly house
payment, $296.88, includes both interest and principal. The prepayment penalty is
charged only on the principal, not on interest. Therefore, one must determine how
much the new principal loan balance will
be after the August 1st house payment is made. The calculations are as follows:
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