MN Real Estate Salesperson Course I Final
What does a title search reveal?
-The legal description of the property -The owners of record -Any outstanding liens or encumbrances on the property
Which pages of the Closing Disclosure will look the same regardless of the loan type the consumer is getting?
2 and 3
Fire Prevention inspects buildings on a
2 year cycle
Closing agents and lenders typically use one of two methods when calculating items that need to be prorated. These are the 12-month/360 day method and the
365 day method.
What do real estate closing companies use to make sure all details of the closing have been covered and all pertinent documents are in house ready for the buyers and sellers to sign?
A checklist
If the seller will remain on the property for some period of time after the closing what will the buyer need to provide to cover that period?
A lease
What refers to a legal document that pledges a property to the lender as security for payment of a debt?
A mortgage
What describes a lien placed on a property by the lender when granting a mortgage for a property?
A property lien
What might an owner need to remove a cloud from a title to clear the title record of any unrecorded claims?
A suit to quiet title
When is the title insurance policy issued to the purchaser?
After recording of the grant deed and security instrument
What briefly summarizes the various activities that affect the ownership of a parcel of land?
An abstract of title
Who conducts a search for abstract of title?
An abstractor
What can a lender require a borrower to maintain for property taxes and insurance so that money is available for payments?
An escrow account
According to the TRID Rule, the Closing Disclosure must be delivered to the buyer how long before closing?
At least three days
A mechanic's lien is an example of a
Cloud on the title
What insurance clause requires that a homeowner have insurance that is equal to 80% of the home's replacement value?
Coinsurance clause
Which agency publishes the booklet, "Your home loan toolkit"?
Consumer Financial Protection Bureau (CFPB)
Mike has Title Insurance that covers legal action based on claims that are not covered by the public record. What type of coverage did Mike get?
Extended Coverage
What type of closing describes where all parties and their representatives meet to exchange documents and to ensure that all necessary steps have been taken so that the buyer can receive marketable title and the seller receives the money?
Face to face closing
Which document notifies the borrower of the total amount of interest and property taxes paid in the previous year?
Form 1098
After a closing, all real estate sales must be reported to the Internal Revenue Service on a
Form 1099
What system is the creation of an index based on the names of the grantors and of the grantees?
Grantor/Grantee system
In order to protect their interest in a property, lenders typically require title insurance and
Homeowner's insurance
Which of the following would be an example of a licensee specializing in business type? a) Jim specializes in clients who want to buy restaurants. b) Alice knows everything about the exclusive east side neighborhoods. c) Tom specializes in options. d) Chris is a buyer's agent.
Jim specializes in clients who want to buy restaurants.
On what document would a consumer find information regarding a good-faith estimate of credit costs and transaction terms for a property loan mortgage?
Loan estimate
What is an organization of member brokers who share listing?
MLS
Which type of property title is most desirable?
Marketable
What association is primarily made up of Hispanic members who meet and work towards real estate goals that are beneficial to the Hispanic population?
NAHREP (National Association of Hispanic Real Estate Professionals)
What is the oldest and largest minority trade association in the United States?
NAREB (National Association of Real Estate Brokers)
What is one defining characteristic of a tenancy in common?
No survivorship
A salesperson may receive compensation for performed activities from
Only their employing broker.
When an offer to purchase contract is accepted and signed by the seller, the licensee should change the status in MLS to
Pending
Which entity recommends changes to articles in the NAR Code of Ethics?
Professional Standing Committee
What term describes a person licensed to perform any of the acts of a real estate broker but while associated with and supervised by a broker?
Real Estate Salesperson
When a chain of title is performed what is the last grantee found called?
Record title holder
What is the foremost method of constructive notice?
Recording ownership documents in public records
Amounts collected by the lender and held in a trust or impound account for future payment are called what?
Reserves
What is defined as land or improved property with buildings designed for humans to live in, such as single-family homes, multifamily homes, apartments, vacation homes or condominiums?
Residential property
In what category do real estate sales persons spend the bulk of their time and effort?
Sale or transfer
What is a credit to the seller on the settlement statement?
Sales price
The title report on a property shows there is a lien on the property. Who is responsible for removing the lien to clear the title?
Seller
Typically, when does a purchaser receive the original deed and title insurance policy?
Several weeks after the closing
What refers to taxes that are imposed on homeowners and landowners to cover the cost of improvements that will benefit all those upon whom the tax was imposed?
Special assessments
What type of property is described as one having a unique use to the persons who own and use it such as churches, hospitals, schools and government buildings?
Special-purpose property
Three people have identical rights but unequal shares in a property, share an indivisible interest, and may sell or transfer their interest without consent of the others. This type of ownership is this?
Tenancy in common
What type of document transfers the property from the seller to the buyer?
The deed
If a title has defects, who deducts the amount necessary to remove the liens from the seller's money?
The escrow agent
When dealing with properties and titles, what is the name of the person who conveys whatever title he or she has to a property?
The grantor
During the escrow period who is the appraisal sent to?
The lender
What document provides evidence of the borrower's debt to the lender, a description of the loan terms and a means for the lender to transfer or collect the debt?
The note
In a 100% commission plan, who is typically responsible for the costs of advertising?
The salesperson
Which of the following is used to indicate a marketable title?
Title Insurance
Which person in a closing reviews documents and answers questions about the title?
Title company representative
What guarantees the validity and accuracy of a title search?
Title insurance
When the abstracting process is combined with an insurance program, the result is
Title insurance
Who are the essential parties involved in an estate in trust?
Trustor (borrower), trustee (neutral 3rd party), and beneficiary (lender)
Mortgage lenders are required to disclose financing costs and annual percentage rate to the borrower under which law or regulation?
Truth in Lending Act
What Law/Act set a standardized explanation of the financial terms of a loan?
Truth in Lending Act
Alice has decided that she will specialize in selling farm land. Which area of specialization would she fall into?
Type of property
How long does title insurance stay in effect?
Until the property sells again
How often are the NAR Code Articles reviewed?
Yearly
Any item that is prorated is shown on the settlement statement as
a debit to one party and a credit to the other party for the same amount.
If an area has an overabundance of lower priced homes with more buyers than homes available, the location is considered
a sellers' market.
Which of the following will a title policy NOT cover? a) Problems with the title that occur after the date the owner purchased the policy b) A lease on the land wasn't recorded in the public records and disclosed to the owner c) Failure of the title policy to disclose legal restrictions on how the owner can use the property d) Improper signature on the chain of title
a) Problems with the title that occur after the date the owner purchased the policy
Which statement is TRUE regarding working as an independent contractor? a) The contractor will pay Social Security and Medicare taxes. b) The broker can dictate the number of hours per week the agent spends in the office. c) The broker will withhold income tax. d) The contractor must attend weekly sales meetings.
a) The contractor will pay Social Security and Medicare taxes.
Which of the following statements best describes the term "consummation" as defined under Regulation Z? a) The time that a consumer becomes contractually obligated on a credit transaction b) The window of time that a consumer has to accept or reject a credit transaction c) The amount of time that a mortgage loan is viable d) Three business days prior to acceptance of the loan
a) The time that a consumer becomes contractually obligated on a credit transaction
Real estate licensing regulations on the state level deal primarily with
agency issues and disclosures.
A historical summary of all consecutive grants, conveyances, wills, records and judicial proceedings that affect the title to a particular property is
an abstract and opinion.
Unrecorded liens, mining claims, and water rights are examples of what is covered by
an extended coverage title insurance policy.
Which of the following is NOT an example of a cloud on a title? a) Encroachment b) Change in property's mailing address c) Property tax lien d) Zoning violation
b) Change in property's mailing address
RESPA applies to all of the following EXCEPT which? a) Condominium purchase b) Seller-financed loan c) Loan involving a second mortgage d) Federally-insured loan
b) Seller-financed loan
Broker Alice has hired several independent contractors in her firm. Which of the these activities does she have control over? a) What the licensees wear b) What percent of commission the licensees can charge c) How much time the licensees must spend in the office d) Whether or not the licensees attend staff meetings
b) What percent of commission the licensees can charge
Unlike tenants in common, joint tenants a) own distinct portions of the physical property. b) cannot will their interest to a party outside the tenancy. c) may own unequal shares of the property. d) cannot sell their interest to outside parties.
b) cannot will their interest to a party outside the tenancy.
If an inspection finds that a home does not have enough smoke detectors and it is determined that it is the seller's obligation the seller must
buy and install additional detectors.
Which of the following statements is FALSE? a) A broker may require licensees to carry high levels of automobile insurance. b) It's a good idea for brokers to carry workers' compensation coverage. c) A broker is not responsible for the acts of independent contractors. d) Employee status versus independent contractor status is an IRS issue.
c) A broker is not responsible for the acts of independent contractors.
Which of the following statements best defines joint tenancy? a) In a joint tenancy, three or more persons collectively own a property as if they were a single person. b) In a joint tenancy, two or more persons collectively own a property as if they were husband and wife. c) In a joint tenancy, two or more persons collectively own a property as if they were a single person. d) In a joint tenancy, two or more persons collectively own a property under the ownership of a company.
c) In a joint tenancy, two or more persons collectively own a property as if they were a single person.
The escrow holder will need information about all items except a) the terms of the loans. b) commissions. c) back up offers on the property. d) instructions about inspections.
c) back up offers on the property.
Regulation Z applies to which of these situations? a)$35,000 farm loan b)$50,000 restaurant loan c)$75,000 condominium loan d)$85,000 warehouse loan
c)$75,000 condominium loan (regulation z is residential)
Bob wanted to know the succession of property owners of record dating back to the original grant of title. Bob would request a
chain of title.
Investor Bob was contracted to purchase a piece of property when Agent Jill called and said a defective conveyance to the title was found. This would create a/an
clouded title to the property.
Knowledge of a fact that a person could have or should have obtained is defined as
constructive notice
Accepting referral fees from other service providers in the transaction
could be a violation of RESPA (Real Estate Settlement Procedures Act)
Which of the following is NOT a condition of the safe harbor test? a) Person must be properly licensed. b) Gross income must be based on production. c) Clearly written contractor agreement must exist. d) Gross income must be based on hours worked.
d) Gross income must be based on hours worked.
Which of the following circumstances would concern you about working for Broker John? a) John offers weekly training seminars. b) There are several successful agents at John's office. c) John's office has a selection of books, CDs and tapes for agent use. d) John expects his agents to spend 5 hours a week on unsupervised telephone duty.
d) John expects his agents to spend 5 hours a week on unsupervised telephone duty.
For purposes of the TRID rule, a business day is a:
day on which the creditor's offices are open to the public for carrying out substantially all of its business functions.
Under settlement charges, buyers generally do not pay
deed preparation fees or costs to clear a title
One goal of the National Association of REALTORS® Code of Ethics is to:
encourage the highest standard of ethical business practice by all of the members.
All of the documents that relate to a transfer of property or an interest in property must be
in writing
Willful violation of Regulation Z is a
misdemeanor
Flood insurance is
not included in a homeowner's policy.
Title insurance for the lender protects the lender's interest in the
property
ABC Mortgage Lenders requires all borrowers to open an escrow account and deposit funds to cover real estate taxes. These funds are
reserves
Laws tend to set:
set the minimum standards for acceptable behavior.
The Truth in Lending Act exists
so lenders disclose to buyers the true cost of obtaining credit.
When a single individual or entity owns a fee or life estate in a real property, the type of ownership is
tenancy in severalty.
If a seller pays for an item in advance,
the buyer will receive a debit and the seller will receive a credit.
The formal Code of Ethics and Standards of Practice set forth by NAR calls for professionals to observe
the golden rule.
The Minnesota purchase agreement has no provision for naming the escrow company so the parties will make this decision at
the time the contract becomes valid.
A mortgage Loan Estimate must be delivered within:
three business days of loan application.
Good ethical practices have to do with:
trustworthiness, honesty, and competence.