Midterm Real Estate Exam

How would you respond if your seller makes the following request? "We've lived here 10 years and love our neighbors. They're really concerned about the changes happening to the blocks around us, so we want to be careful about who we sell this house to. You know what we mean. You'll help us find the 'right' kind of buyer, won't you?"

"It would be illegal to limit the search based on race or religion or anything like that, but I promise I'll find you the most qualified buyer I can, and we'll sell this house for the highest price possible."

A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what's the list price for this parcel?

$763,560

How many acres are in a square mile?

640

Margie needs to know the square footage for the first floor of the condo her client wants to make an offer on. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and sunroom are each 10 feet by 10 feet. What's the total square footage?

850 square feet The formula for area is length multiplied by width. First, find the area of each room to get its square footage, then add up the square footage measurements of all four rooms. Kitchen = 150 sq ft; living/dining = 500 sq ft; office = 100 sq ft; and sunroom = 100 sq ft. So, 150 + 500 + 100 + 100 = 850 square feet.

Rhonda, who's buying Tony's town home, is unrepresented. Gary, a real estate licensee, represents Tony in the sale of his property. What's Rhonda's relationship to Gary?

A customer

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

Someone who's been given the authority to act on behalf of someone else is a(n) ______.

Agent The term "agent," though often used to refer to a real estate licensee, means someone who's been given the authority to act on someone else's behalf in some capacity.

What's misrepresentation?

An intentional or inadvertent misstatement of fact Misrepresentation is a misstatement of fact—either intentional or inadvertent.

A deed may be best described as what?

An ownership document

The Federal Trade Commission is concerned with all ad claims, but is most likely to be most concerned with ______.

Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate

You should ______ before you affiliate with a broker.

Ask lots of questions

Where can an agent report an antitrust violation?

Citizens Complaint Center of the Antitrust Division After discussing the situation with their broker, agents should contact the Citizens Complaint Center of the Antitrust Division.

What protected class is involved when there is discrimination due to a person being lighter-skinned or darker-skinned?

Color Different skin colors exist, even within the same racial group, and some people may have been treated unfairly because of their skin color.

Which of these is an example of commingling? Jenson deposited his client's earnest money check into the firm's trust account. Cynthia deposited her client's earnest money check into the firm's operating account. Sean withdrew funds from the firm's trust account to pay the rent. Jessica deposited her commission check into her brokerage firm's operating account.

Cynthia deposited her client's earnest money check into the firm's operating account.

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

Department of Housing and Urban Development

How is the broker's commission usually paid out?

Escrow creates checks for both agents' brokerages, which in turn cut checks to the agents for their commission split.

You're attending a speech on the societal impact of fair housing and the speaker, who is an advocate for diversity in communities, begins the speech by asking who benefits from enforcement of fair housing law. Which of these is likely the answer the speaker is looking for?

Everyone, because diverse communities are stronger communities Diversity in communities creates stronger communities, which benefits everyone.

Jericho and Cindy, and unmarried couple, have three children, ages 3, 5, and 12. A seller's broker refuses to show them a house in a neighborhood of mostly retired couples. Which protected class status applies?

Familial status

Katy's home that was listed for sale is destroyed by fire. Under which of these methods will her listing agreement terminate?

Force of law

Lisa just had her license suspended for misrepresentation. What may happen to her broker, Jim?

He could be sanctioned as well

Dolcita is an unlicensed assistant for the Ace Team at Acme Realty. Which of the following best describes how Dolcita can be compensated for her work?

Hourly, salaried, or per activity

Which of these situations represents the illegal practice of redlining?

Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods.

Serious violations of the real estate license laws will typically result in which disciplinary action or actions?

License suspension or revocation

What's one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties? Obedience Loyalty Disclosure Accounting

Loyalty It's loyalty, which means putting your client's interests ahead of your own, and incorporates all of the other duties.

Joe signed a listing agreement with Marisa. A week later, Marisa's co-worker, Tina, showed Joe a property that he's interested in buying once his home sells. A week after that, Ross submitted an offer on Joe's property on behalf of his buyer client. Who is Joe's agent?

Marisa

Which lien is an example of a specific lien (lien against a single property)?

Mechanic's lien

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing they did when they surveyed the new neighborhood was to reference what type of description first?

Metes and bounds description

In which of the following situations would the state be able to use its power of escheat? Maury died, and his three children are upset because his estate isn't large enough to settle all of his debts. Hannah passed away with no children and no debt, other than $83,000 left on her mortgage. Nadine died with no children and no debt. Sam died with no will, and his son lives overseas.

Nadine died with no children and no debt. Escheat occurs when a property owner dies without a will in place, and no heirs or creditors can be found.

Eliza is an unlicensed assistant for the Ace Team at Acme Realty. Tom is an associate broker on the team. Jerry is a sponsoring broker. Which of these activities must be performed by either Tom or Jerry?

Negotiating a commission with a client

Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately? Percentage Net Gross Graduated

Net A net lease is one in which the tenant pays some extra expenses—such as taxes, maintenance, or insurance—for the property.

Carrying out a client's instructions describes the duty of ______.

Obedience

What might the government do if property owners fail to pay taxes on their property? Evict those living on the property. Place a lien on the property. Take ownership of the property. Do nothing.

Place a lien on the property.

Which of the following actions is against the NAR Code of Ethics?

Preparing a written agreement that falsely states a purchase price

As a licensee, you're helping a couple buy a new home when you come across issues that could meant there's a cloud on the title. What should you do?

Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

What discriminatory lending practice by lenders resulted in the destruction of whole neighborhoods, with perfectly good housing left abandoned?

Redlining

______ is the gradual receding of water, which uncovers new land.

Reliction

Which of the following that limits the use of the property and may be included in the deed itself is usually placed on the land by the owner when the property is sold?

Restriction An owner might place a restriction on a property to preserve the use of the property or to preserve the quality of the neighborhood.

The Housing and Development Act of 1974 added which protected class to federal fair housing law? Color Disability Religion Sex

Sex The Housing and Development Act of 1974 added sex as a protected class, which helped prevent discrimination and sexual harassment for individuals seeking housing.

When working with a client on a real estate sale, a real estate licensee is usually which type of agent?

Special Real estate licensees most often serve as special or specific agents. They have a limited scope of authority when compared to a general agent.

A professional, on-site measurement of the lot lines and dimensions of a property is known as a(n) ______.

Survey

______ is most often used by married couples and includes co-ownership with survivorship rights. Tenancy in common Tenancy in severalty Joint tenancy Tenancy by the entirety

Tenancy by the entirety This is tenancy by the entirety, where each has an undivided interest in the entire property. If one dies, the other owns the entire property. If they divorce, their ownership automatically becomes a tenancy in common.

Two large local brokerage firms agreed to lower their commission rates to the same amount, approximately 1% lower than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?

The agreement between the two firms

Which entity decides the matter when two different legal descriptions conflict?

The courts

How is the grid that's used in the rectangular government survey system laid out?

The numbers start in the northeastern corner and follow a zigzag pattern. The numbers on the grid start in the northeastern corner and follow a zigzag pattern.

Susan is a real estate licensee. Her mother is moving to a facility for active seniors and has asked Susan to sell her home. What information does Susan need to disclose to prospective buyers?

The property is her mother's.

Marcy listed her property with Jennings Homes in March. The market is slow, and Marcy's property isn't in great condition—though she's sure she can get top dollar for it because of its location. Her agent encourages her to either reduce the price or fix the property up, but she refuses. Both Marcy and her agent are frustrated. What's the best option for both of them?

They can mutually agree to terminate the listing.

A ______ is a piece of real estate owned by multiple, unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in one- to two-week intervals during the year.

Timeshare estate

What's the primary purpose of the federal Fair Housing Act?

To protect buyers' and renters' right to have choices in housing without discriminatory limitation

A lot measuring 108,900 square feet is for sale. How many acres is this?

Two-and-a-half

In general, a person in a position of loyalty and trust is a(n) ______.

fiduciary