Final Questions
How long is a rod? 12 inches 12 feet 16 1/2 feet 30 feet
16 1/2 feet
A homestead property owner has failed to pay their taxes by May 15th. What penalty will be assessed on June 1? 1% 2% 4% 8%
2%
According to the EPA, at what level does radon become a health concern requiring mitigation? 1.4 picocuries per liter of air 2.4 picocuries per liter of air 4.0 picocuries per liter of air .04 picocuries per liter of air
4.0 picocuries per liter of air Although there is no safe level of radon, once the level reaches above 4.0 picocuries per liter of air, the EPA recommends radon mitigation.
Test takers in Minnesota must score a minimum of ______ to pass each portion of the licensing exam. 65% 70% 75% 80%
75%
When the loan-to-value ratio for a conventional loan exceeds _______, private mortgage insurance is required. 22% 55% 80% 70%
80%
What's the definition of an encroachment? The right to occupy a property A building, shrub, fence, or other item that illegally crosses into another's property A shared wall between two properties A permanent right to use another's property
A building, shrub, fence, or other item that illegally crosses into another's property
Which of the following is the best example of a tie-in arrangement? Competing businesses agree to similar pricing strategies. Competing companies agree to not do business with a third. A business requires its clients to also purchase services from another business. A business offers add-on services for its best customers.
A business requires its clients to also purchase services from another business.
Martha makes an offer to buy Drake's home, and he accepts it. Under the terms of the agreement, Martha is supposed to put down an earnest money deposit of $10,000. However, she only puts down $5,000. Drake accepts the lesser deposit, and the sale ultimately is finalized. This is an example of ______. Rescinding the contract unilaterally Accepting partial performance Suing for damages Suing for specific performance
Accepting partial performance
Points are usually acquired at which stage of the property ownership life cycle? Acquisition Reversion Ownership Capital gains are not part of the property ownership life cycle.
Acquisition Points are acquired when a property owner finances a property in the acquisition stage of the property ownership life cycle and may be deducted all at once or over the entire ownership stage lifetime of the loan on the owner's taxes.
Who usually acts as a closing agent? An attorney or title company representative The lender The broker The seller
An attorney or title company representative
You're trying to locate the northwest corner of a recently surveyed 10-acre property you will be listing for sale. The deed tells you that this corner is marked with a monument. What are you looking for? A small copper sign labeled "monument" A rock with a surveyor's mark etched in it An iron rod with a surveyor's cap An "X" painted on the ground
An iron rod with a surveyor's cap Modern surveyors use an iron rod to mark a point of beginning, or monument, for the survey.
What's a cloud on a title? An issue or a fault on the title A good, marketable title A title commitment A title search that goes back as far as records will permit
An issue or a fault on the title
April and Wayne are the buyer and seller of a condo. Steve represents April, and Wanda represents Wayne. Name the principal(s) in this sales transaction. Steve and Wanda April, Wayne, Steve, and Wanda Wanda April and Wayne
April and Wayne
When is the mortgage loan commitment or title insurance contract signed? At the closing The day prior to closing The day after closing on the property to ensure proper transfer of title Weeks prior to closing
At the closing
Which of the following items is prohibited from being included in Minnesota listing agreements? Automatic extension Definite termination date Explanation of the terms under which a listing agreement can be canceled Information about when an override clause would be effective
Automatic extension
When must a Minnesota licensee disclose to the owner of real property that the licensee is a real estate agent salesperson, and in what capacity the licensee is acting, if the licensee, acquires, or intends to acquire, any interest in the owner's property? Before the negotiation or consummation of any transaction Upon closing of the transaction Upon request of the seller When purchasing the property through a trust
Before the negotiation or consummation of any transaction
Which of the following must be included in a deed? Signature of the grantee and consideration Consideration Signature of the grantor Consideration and signature of the grantor
Consideration and signature of the grantor
This is a renewal year in Minnesota and you're applying to renew your salesperson license. When does your license expire? March 15 June 30 September 15 December 15
June 30 All licenses expire in June 30 of the expiration year.
Charles is selling his property to Seth. Charles is financing part of the transaction for Seth, who will make payments to Charles while Charles retains the property title. What's this an example of? Purchase money mortgage Wrap-around mortgage Land contract A straight-term loan
Land contract With a land contract, the seller agrees to provide credit to the buyer for a portion (or sometimes all) of the funds required to close the transaction. The buyer makes payments directly to the seller.
In contract law, a "legally competent" party is a party who has the ______ to enter into a contract. Financial resources Motivation and means Legal background Legal and mental capacity
Legal and mental capacity
A ______ is used to accurately identify property for transfer. GPS coordinate designation History of ownership Property address Legal description
Legal description Property transfers require a legal description that accurately identifies the property.
Permission to do something on another's land without actually possessing any interest or ownership in the land is called a ______. License Covenant Grant Easement
License A license is permission to do something on another's land without actually possessing any interest or ownership in the land.
Which of the following statements about licensee compensation is true? Licensees may only receive compensation for real estate services through their broker. Licensees may only receive compensation for real estate services through the listing agent's broker. Licensees may only receive compensation for real estate services from consumers. Licensees may receive compensation for real estate services through their broker, through the listing agent's broker, or from consumers.
Licensees may only receive compensation for real estate services through their broker
Which type of antitrust violation occurs when real estate professionals agree to divide their market so they don't compete with one another? Group boycotting Market allocation Price fixing Tie-in arrangements
Market allocation
In a real estate transaction, which of the following is established when parties enter into an agreement voluntarily with full understanding of the contract terms? Legal competency Legal purpose Offer and acceptance Consideration
Offer and acceptance-Offer and acceptance occurs only when the parties enter into the agreement voluntarily with full understanding of the contract terms.
Eileen enters into a contract to buy Peter's home. The contract specifies that Peter must leave the refrigerator with the home and he must replace the roof before closing. After closing, Eileen arrives at the home and sees the nice new roof, but Peter took the refrigerator with him. This is an example of ______ of the contract. Performance Partial performance Voiding Reinforcement
Partial performance
What's the term used to describe a specific, divided portion of property that's created as part of a co-ownership termination? Severalty Partition Bifurcation Parcel
Partition
To calculate the down payment, subtract the loan amount from the ______. Purchase price Interest rate Appraised value Loan commitment fee
Purchase price
What can be done to protect your buyer clients from title issues when purchasing property? File a lis pendens claim at the court before buying the property. Ensure the seller's name is on the deed. File a security agreement at the county clerk's office. Purchase title insurance.
Purchase title insurance.
What's it called when a property is owned by the bank after failing to receive an acceptable bid at foreclosure? Short sale Foreclosure REO Granted release sale
REO
Janet gives Warren, the buyer of a condominium in her new Minnesota development, a copy of the public offering statement two weeks after he enters into a contract to buy the unit. Minnesota law permits Warren to cancel the contract within 15 days of ______. First looking at the condominium Closing on the condominium Entering the contract Receiving the statement
Receiving the statement
Hank is a real estate licensee working for an investor. Which of these actions is he prohibited from performing? Search the MLS, auctions, advertisements, etc. for investment properties. Recommend a specific investment. Crunch numbers for the client. Prepare an offer for an investment property.
Recommend a specific investment. Licensees can perform actions to find and evaluate properties, but should not recommend a specific investment. Ultimately, this needs to be the client's decision, but you can provide the data needed to make the decision.
What's a charge that state and local government agencies assess for legally recording deeds, mortgages, and documents related to a home loan? Deed fees Recording fees Mortgage charges Agency fees
Recording fees
Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called ______. Restrictive covenants Developer standards New build standards Restrictive standards
Restrictive covenants Think of the limits that are placed on the use of a property so that the value and enjoyment of nearby properties will be preserved. This is the purpose of restrictive covenants.
What's does an REO on a lender's assets mean? The lender received proceeds from a foreclosure sale. The lender owns real estate after a foreclosure sale. The lender has agreements with real estate listing agents. The lender prepares property management agreements.
The lender owns real estate after a foreclosure sale.
A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a ______. Single-family home Timeshare property Rental property Condop
Timeshare property
Which of the following protects the owner against financial loss if the real estate title has defects? Deed Chain of title Abstract of title Title insurance
Title insurance
Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______. Seller guarantees Litigation Title insurance Buyer Trust Fund
Title insurance
What's another name for an escrow agent? Special agent Trustee Mortgage representative Confirmation party
Trustee Escrow agents are also called trustees, just like escrow accounts are also called trust accounts.
Duke is a legal guardian for his mother, who suffers from a mental illness. His mother would like to buy a luxury condo, but Duke tells her she can only afford a cheap condo. In reality, his mother could easily afford a luxury condo, and Duke hopes to transfer her excess money into his personal account. Duke's mother trusts his word, and enters into a contract to buy a cheap condo. This is an example of ______. Innocent misrepresentation Undue influence Mutual mistake Duress
Undue influence
Physical characteristics of land include its immobility, indestructibility, and ______. Scarcity Uniqueness (nonhomogeneity) Location Permanence of investment
Uniqueness (nonhomogeneity)
You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. What type of contract is this? Void Voidable Enforceable Unilateral
Void
Sylvia, 15, and her neighbor, Marge, 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this? Valid Voidable Unilateral Enforceable
Voidable This contract is voidable by Sylvia, because she is a minor without the legal capacity to enter into a contract. A voidable contract is one that's missing an essential element, and thus may be cancelled by one or more parties.
As a sole proprietor, in what name may you conduct your business? You must use a different company name that cannot be confused with your own name. There is no requirement regarding names of sole proprietorships. You must use a separate business name which cannot be confused with your own name. You must use your own name or your own name in combination with a registered business name.
You must use your own name or your own name in combination with a registered business name
Not wanting to cause the sellers or mortgage lenders unnecessary concern, Gwen, the buyer's agent, wasn't exactly forthcoming about a slight change in her client's financial status that her client had shared with her in confidence. Which fiduciary duty to the customer is Gwen violating? Loyalty Obedience Confidentiality Honesty and fair dealing
Honesty and fair dealing
Which of the following is true about radon? It's a naturally occurring gas. It's a man-made chemical. It's a problem outdoors. It's safe at any level.
It's a naturally occurring gas.
Which of the following statements is true about groundwater? It's easy to decontaminate. It's not regulated because it is hard to contaminate. It's a source of drinking water. It's not affected by severe weather.
It's a source of drinking water.
Which of the following statements is true about groundwater?
It's easy to decontaminate. It's not regulated because it is hard to contaminate. It's a source of drinking water. It's not affected by severe weather.
The agent owes the client the duty of ______, even after agency is terminated. Loyalty Reasonable skill and care Disclosure Confidentiality
Confidentiality
A listing brokerage received a $25,000 check from a property sale, which was the brokerage's 2.5% split. The total commission was 5%. How much did the property sell for? $1 million $10 million $100,000 $2 million
$1 million
A buyer purchase a property at a price of $350,000. The buyer had a down payment of $70,000 and financed $280,000. How much deed tax is owed for the purchase? $1,155 $924 $805 $644
$1,155 Deed tax is the value of the property multiplied by .0033. So, $350,000 x .0033.
The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn't made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar. $298 $151 $449 $242
$298
Whitney and Justin are about to close on their refinance, and their loan amount is $362,000. They are paying a 1.5% origination fee. How much will their origination fee be? $1,500 $5,430 $5,100 $6,200
$5,430
Lance purchased a home, but he won't own any real estate—just shares in a corporation. This is because his new home is ______. A triplex A cooperative A condominium A condo
A cooperative
Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ______, so it's void. A lawful objective A purpose A mutual agreement Two parties
A lawful objective
What is an eviction? A legal action by the courts to remove the tenant and the tenant's belongings from the premises The gradual wearing away of land A legal action by the courts allowing a lien holder to auction a property A building or improvement that impedes on another property owner's land rights
A legal action by the courts to remove the tenant and the tenant's belongings from the premises
The fee a lender charges for processing a loan is called ______. Interest A discount point Usury A loan origination fee
A loan origination fee
Which of the following could qualify for a Minnesota homestead exemption? 100 acres of vacant land A primary residence that sits in 200 acres of land A cabin used as a secondary dwelling that sits on 10 acres of land A primary dwelling situated upon 150 acres of land
A primary dwelling situated upon 150 acres of land Remember, the exemption applies to a primary dwelling and the quantity of land can't exceed 160 acres.
When a tenant voluntarily leaves a lease before it expires, this is known as ______. Corrective eviction Holdover Mitigation Abandonment
Abandonment
Which of the following statements is true regarding community property rights and property ownership? All property purchased before the marriage and owned individually must be sold. The profits are divided equally between the partners. Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally. Any property purchased before the marriage must have the spouse as the beneficiary should the owning partner die. All property purchased before the marriage automatically comes under the community property rights requirement.
Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally.
Which of the following are required disclosures in Minnesota? Brokerage disclosure, financial disclosure, sex offender disclosure Financial disclosure, nonperformance disclosure, sex offender disclosure Financial disclosure, stigmatized property disclosure, nonperformance disclosure Brokerage disclosure, financial disclosure, nonperformance disclosure
Brokerage disclosure, financial disclosure, nonperformance disclosure
In Minnesota, what's the one difference between broker and salesperson requirements for continuing education? Brokers must take a longer legal update. Brokers need five additional hours per year. Brokers must take one hour per year of broker-specific CE. Brokers need additional fair housing hours.
Brokers must take one hour per year of broker-specific CE. Brokers must complete one hour per year of education specifically designed for brokers.
In a buyer agency relationship, who's the licensee's client? The broker The seller The buyer Both the seller and the buyer
Buyer
Which document replaced the HUD-1 settlement statement and the final Truth in Lending disclosure? TRID RESPA Loan Estimate Closing Disclosure
Closing Disclosure The Closing Disclosure (CD) replaced the HUD-1 for most residential real estate transactions.
Minnesota brokers should provide trust account status change details to whom? Commerce commissioner Commissioner of management and budgets General service administration Internal revenue service
Commerce commissioner
Which of the following is true about real estate commissions in Minnesota? Individual brokers can handle commissions any way they'd like. Commission is highly regulated by law and must be well documented. Licensee commissions may be paid by whoever desires to pay. Brokers can't share commissions under any circumstances.
Commission is highly regulated by law and must be well documented. Compensation in Minnesota is highly regulated and must be documented.
Quinn is a licensed broker in Minnesota. She's getting ready to submit a salesperson licensing application for Rachel. Which pre-licensing courses must Rachel have completed to get to this point? Completion of Course 1 Completion of Courses 1 and 2 Completion of Courses 1, 2, and 3 Completion of Courses 1, 2, and 3 plus 30 hours of continuing education
Completion of Courses 1, 2, and 3
If Susie borrows money from her brokerage's escrow fund to pay advertising expenses, she's guilty of what violation? Capping Conforming Conversion Commingling
Conversion Conversion is the use of trust funds and is even more serious than commingling (though both are illegal). Funds put into escrow are put there for safekeeping. They're not there for anybody to use for any reason, even as a loan.
What could be a consequence if there were no secondary mortgage market? Interest rates would fall. There wouldn't be any institutions available to service loans. Unemployment would rise. Lenders might not have funds available to make new loans to the public.
Correct Answer: Lenders might not have funds available to make new loans to the public. Purchases made on the secondary market provide primary lenders with funds to continue making loans. Without this market, lending funds might become scarce.
Which of the following situations must be disclosed to the parties in a Minnesota transaction? A prior occupant who had AIDS Data that contradicts an inspection report Registered sex offenders in the neighborhood Reported ghost sightings
Data that contradicts an inspection report
Which document is used to establish proof of ownership and to transfer the title? Survey Deed Abstract of title Title insurance policy
Deed
You're working with a buyer who doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! How can you clean up this mess? Estoppel Ratification Termination Disclosure
Disclosure
To determine the ______ that a buyer is paying, subtract the loan amount from the purchase price. Down payment Closing costs Loan commitment fee LTVR
Down payment
Buyers may provide assurance they won't back out of the sale by offering to deposit ______ money that will be kept in escrow until the conditions are met at closing. Soft Earnest Spending Principal
Earnest
What is the term that describes the section a floodplain where water escapes? Property within a one-mile radius Floodway Flood fringe Surrounding community
Floodway
Nancy just hired her sister, real estate licensee Grace, to list her property. Jason schedules a showing for his client, who's interested in Nancy's property. What needs to take place? Grace must terminate her contract with Nancy, since she can't represent a family member. Grace needs to keep the fact that the property is owned by her sister confidential. Grace needs to disclose in writing to Jason and his client that the property is owned by a family member. Grace doesn't need to do anything special, since she doesn't own the property.
Grace needs to disclose in writing to Jason and his client that the property is owned by a family member.
Which type of lease is one in which the landlord pays all expenses related to the property, as may be the case with a heated garage? Gross lease Net lease Triple net lease Percentage lease
Gross lease
Which of the following is a contract that exists based on an understanding or assumption, rather than specifically defined terms? Express contract Unilateral contract Implied contract Invalid contract
Implied contract
How does a corporation own property? In trust In partnership In severalty In joint tenancy
In severalty Corporations are legal entities and hold property similar to the way a sole proprietor or an individual does: in severalty.
What must a licensee do when preparing a CMA (or opinion of price) for a consumer? Hire a home inspector to physically inspect the property. Hire an appraiser to value the property. Include a statement that the opinion isn't an appraisal. Have an appraiser sign off on the price before it's presented.
Include a statement that the opinion isn't an appraisal.
The Bransons have a conventional loan for which they were required to obtain private mortgage insurance. Their local real estate market has been going like gangbusters, and their house is now appraised at twice their loan balance! Will their PMI be automatically cancelled? Yes, because their equity is over 20% No, because PMI lasts for the life of the loan Yes, because their equity position is at least 50% Maybe, but they'll have to petition their lender
Maybe, but they'll have to petition their lender Cancellation of PMI happens once the borrower reaches a 22% equity position. This is determined by loan-to-value ratio at the time of the purchase. Unless loan-to-value ratio is now 78% or lower, the Bransons would have to petition to get PMI cancelled.
What must you do to convert a percentage to a decimal number? Move the decimal point right two spots and add a percent symbol. Divide the top number by the bottom number. Move the decimal point two places to the left and remove the percent symbol. Divide the smaller number by the larger number.
Move the decimal point two places to the left and remove the percent symbol.
Which one of the following statements about community property rights is true? All 50 states have community property rights. Only nine states out of 50 do not have community property rights. Community property rights are illegal in all 50 states. Nine states have community property rights.
Nine states have community property rights.
What acronym can be used to remember an agent's fiduciary duties? FAR GONE OLD CAR DUE CARE CARE OF
OLD CAR
As a licensee, you'll have several tasks you must perform for your buyer client. One of these tasks is to ______. Explain to the buyer why it's unnecessary to have a professional inspection done on a new home Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license Show properties the buyer might qualify for if he would put down more earnest money Coach the buyer on how to negotiate the terms of the sales contract to be completely in the buyer's favor
Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license
A leA length of 16 1/2 feet is equal to one ______. Rod Hectare Yard Meter
Rod
Who retains the title to the property in a land contract? Seller Trustee Buyer Beneficiary
Seller-
Sheila is unable to use her designated timeshare week this year. What will happen? The owner's association will reimburse her for the week. She can exchange the week for another. There is nothing she can do if she can't use the week. She won't have to pay the annual maintenance fee this year.
She can exchange the week for another.
Corrine is selling her home in a short sale transaction. What's her likely situation? She got a promotion. She has a balloon payment coming up that she can't pay. She was married. She took a second job.
She has a balloon payment coming up that she can't pay. Typically, sellers who opt for short sales do so in order to avoid a foreclosure because of some financial problem—such as job loss or a balloon payment—that makes them unable to afford their mortgage payment.
When working with a client on a real estate sale, a real estate licensee is usually which type of agent? General Special Universal Designated
Special
Lenders examine a variety of documents to determine whether the buyer is a good risk for a loan, such as ______. Tax returns Marriage certificate Resume Genealogy report
Tax returns
When faced with an ethical dilemma, which of the following is true? The "Golden Rule" always points the way to the most ethical action. The easiest choice is always the most ethical. You should do what's easiest for you under the circumstances. Doing the "right thing" isn't always ethical.
The "Golden Rule" always points the way to the most ethical action.
Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law? The brokerage may have to undergo court-ordered supervision for up to 10 years. The brokerage's listing fees may be limited to 80% of its former charges. The brokerage may be required to place 10% of its profits into the Sherman Act Foundation for a period of three years. The brokerage may have to sell its assets to its nearest competitor at below-market
The brokerage may have to undergo court-ordered supervision for up to 10 years.
Which of the following actions occurs prior to closing? The buyer obtains a binder for insurance coverage on the new home. The buyer's check is handed over to the seller. The seller is paid the balance of the purchase price. A number of contracts are signed by the parties in attendance at the closing, such as the sale agreement, the mortgage loan commitment, and the title insurance contract.
The buyer obtains a binder for insurance coverage on the new home. A buyer should obtain homeowner's insurance before closing. That way, the property is protected the moment ownership (title) changes hands.
It's closing day! What's likely to happen? A preliminary title report will be issued to the buyer. The buyer's loan funds will be transferred. The buyer will receive loan approval. The seller will receive the buyer's pre-approval letter.
The buyer's loan funds will be transferred.
If a contract is void, which of the following is true? The contract is enforceable. The contract is only enforceable if it's executory. The contract is only enforceable if it's an implied contract. The contract is unenforceable.
The contract is unenforceable.
Which of the following facts about a property in Minnesota would a licensee need to disclose? The property is or was occupied by an owner or occupant who is or was suspected to be infected with human immunodeficiency virus or diagnosed with acquired immunodeficiency syndrome The property was the site of a suicide, accidental death, natural death, or perceived paranormal activity The property is subject to an easement which could adversely and significantly affect an ordinary purchaser's use or enjoyment The property is located in a neighborhood containing any adult family home, community-based residential facility, or nursing home
The property is subject to an easement which could adversely and significantly affect an ordinary purchaser's use or enjoyment Licensees are required to disclose material facts related to the property. In general, if something limits enjoyment of the property, it should be disclosed. However, some facts aren't considered material and don't need to be disclosed. Some of these items fall under the stigmatized property definition.
In a seller agency relationship, who does the licensee represent? The seller The buyer The broker Both the seller and the buyer
The seller
Why do short sales usually occur? The owner needs a quick sale. The market is hot. The seller is experiencing financial hardship. Inventory is low.
The seller is experiencing financial hardship.
In Minnesota, what's true about written offers to purchase or lease a property? They can never be orally conveyed to the seller or owner. They are unacceptable under Minnesota law. They must be presented promptly to the seller or owner. They require a written response.
They must be presented promptly to the seller or owner. Written offers must be promptly presented in writing, unless the seller requests a verbal presentation.