RE Practice Law Exam 1

Having _______ on file allows lenders to confiscate personal property pledged as collateral in the event of a borrower default. A chain of title A title insurance policy A UCC security agreement and financing statement Proof of ownership

A UCC security agreement and financing statement

Which of the following is true about a home equity line of credit?

A borrower can use the funds as needed, repay them, and borrow them again.

Which of the following is Fannie Mae most likely to purchase?

A conventional fixed-rate mortgage issued by a commercial bank

Vantagestar Ltd. would like to construct a high-end condominium complex. Where will they likely go for financing this project?

A life insurance company

When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent?

A mete

A foreclosure occurs January 1, 2016. Of the following, which lien takes priority? A junior mortgage filed January 1, 2015 A mechanic's lien filed February 15, 2014, where work commenced December 1, 2013 A property tax lien filed January 1, 2014 A senior mortgage filed October 15, 2013

A property tax lien filed January 1, 2014

In the rectangular government survey system, what is a base line?

An east-west line used as a reference point

Ava is borrowing money to buy some commercial property for her business. The loan agreement she signs includes a lock-in clause. What does that mean?

Ava will not be allowed to pre-pay the loan prior to the date specific in the loan agreement.

What is the name of the Colorado form that brokers must provide to an unrepresented buyer?

Brokerage Disclosure to Buyer

Which institution was created as the Federal National Mortgage Association in 1938?

Fannie Mae

Matilda granted her home to her son George, as long as he doesn't bring alcohol into the house. If he brings any alcohol into the home, the property title will revert back to Matilda. What type of estate is this?

Fee simple determinable

Under what circumstances might a non-resident seller be responsible for Colorado withholding on the proceeds of a sale?

If the property is an investment property

Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

In severalty

Colorado is a _____________ state.

Lien theory

What is the best definition for "the time value of money"?

Money gains or loses value over time.

Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?

No, because the listing agreement is contractually binding.

Anna and Cindy entered a contract to buy Jake's home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy's place as a co-buyer of Jake's home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example? Assignment Fraud Mutual mistake Novation

Novation

Mortgage bankers are mostly what type of enterprise?

Private

For residential property managers dealing with prospective tenants, their responsibilities include checking ______.

References

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

Special

Lincoln has been working with Kennedy, a buyer customer. What can Lincoln do for Kennedy if Kennedy hasn't signed a buyer agency agreement?

Submit Kennedy's offer on a listing.

Which of the following is something a licensee would typically do for a buyer customer?

Submit all offers to the seller promptly.

Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

The agency agreement only terminates if the broker or the principal declares bankruptcy.

Who does the agent assisting the buyer in a transaction represent if there's no buyer agency agreement? No one The buyer in a sub-agency capacity The customer The seller

The seller

How is the concept "time is of the essence" reflected in Colorado's Contract to Buy and Sell Real Estate?

Through a specific contract provision noting that time is of the essence.

In a case of lease abandonment, what's the landlord's responsibility? A landlord may pursue the former tenant for unpaid rent, but may not rent the vacant property until the situation has been resolved. Nothing. The tenant abandoned the property. The landlord may legally charge rent until the natural lease expiration. The landlord must find another tenant within 10 days and may not pursue the former tenant for unpaid rent. While the former tenant is financially responsible for any unpaid rent, the landlord is responsible for attempting to find another tenant.

While the former tenant is financially responsible for any unpaid rent, the landlord is responsible for attempting to find another tenant.

Which term describes the legal regulation of a property to the detriment of the owner, and must include reimbursement for the property owner?

taking

What type of professional must an investor use to conduct a tax-deferred exchange?

A qualified intermediary

When taking an analytical look at the area surrounding a proposed development, the traffic patterns—and their effect on local business—and the commute time for potential residents in the area are important factors to consider. These can all be determined by conducting _______________.

A time-distance study

Suzy has lost her job and wasn't able to make last month's mortgage payment. How is her lender most likely to help Suzy stay in her home? Agreeing to modify her loan Enrolling her in a home loan forgiveness program Foreclosing on her loan Giving her a job at its bank

Agreeing to modify her loan

Regional State Bank is a member bank of the Federal Home Loan Bank. In exchange for mortgage collateral, Regional State Bank received a loan from the FHLB so it can make additional loans to consumers. What is the loan called that Regional State Bank received? A collateralized mortgage obligation A mortgage-backed security An advance A real estate mortgage investment conduit

An advance

Johnstone Realty holds the earnest money for its transactions, but clients select a title company that conducts the closing. When must Johnstone execute and submit Closing Instructions?

Before the title deadline on the purchase contract

Who is usually responsible for ordering and reviewing the survey of the property?

Buyer

When sites with hazardous substances are identified, which one of the following provides the mandate that the responsible party cleans them up? CERCLA EPA HUD SARA

CERCLA

Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?

Civil Rights Act of 1866

Which type of insurance can property managers carry to cover accidents that occur in the office?

Commercial general liability

In Colorado, the informational form that explains the different types of brokerage relationships available is known as the _______.

Definitions of Working Relationships Form

If Carol and Doug Shields died intestate, their estate would be conveyed to their heirs through which method of alienation?

Descent

Roger has a buyer client who is purchasing a Colorado home built before 1978. Which two documents must Roger ensure that his client receives related to lead-based paint?

EPA lead-based paint brochure and Lead-Based Paint Disclosure form

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would lie, it was determined that he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. What type of easement is this?

Easement appurtenant

_________ is the power of the government to take private land for public use. Eminent domain Encumbrance Escheat Foreclosure

Eminent domain

Jake, who was leasing a house, retained possession even after his right to possess had terminated. Jake has a(n) ______.

Estate at sufferance

Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests?

Exclusion

The income approach section of the Uniform Residential Appraisal Report (URAR) form asks the appraiser to show an estimate of property value using the ______ method.

GRM

Appraiser Jerry is looking past how a property is being used to determine a more optimal function. What is he determining? Cost to replace Highest and best use Market value Value in use

Highest and best use

A tenant who continues to occupy property after lawful authority has expired is known as a _______.

Holdover tenant

Sonya's lease expired, but she hasn't yet moved out and she's not paying rent. Walt has started eviction proceedings. Sonya is considered a(n) ______.

Holdover tenant

What's a key feature of the Federal Housing Administration's loan program?

Insures lenders against loss from borrower default

With a straight mortgage, what type of payments are made up until the end of the loan term?

Interest

Jessica hasn't paid the roofing company that replaced the roof on her home. The contractor placed a mechanic's lien on her property, which is a(n) ______ lien.

Involuntary and specific

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?

Joint tenancy

The term "taking" describes the legal regulation of a property to the detriment of the owner. According to the U.S. Constitution, what must the property owner receive when private property is taken? An apology A replacement property Just compensation Tax exempt status

Just compensation

Which of the following describes a right-of-way easement?

Land that a railroad company runs its track through

Which of these is the best definition of real estate?

Land, plus all things permanently attached to it naturally or artificially

Which of the following is an example of an involuntary, specific, statutory lien?

Materialman's lien

What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?

Novation

The primary mortgage market operates to _____. Avoid inflation Create favorable economic conditions Originate loans Service loans

Originate loans

Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold? Through the parties' actions Alluvial Littoral Prior appropriation Riparian

Prior appropriation

What can a transaction broker do for a customer?

Process paperwork.

The document that describes the loan amount and the terms for repaying and is attached to a security instrument is called the ______.

Promissory note

You were just given information that the buyer found some issues during the walk-through. You immediately phone your seller client and let her know. This is an example of ______.

Reasonable skill and care

On which principle of value is the sales comparison approach based? Anticipation Competition Conformity Substitution

Substitution

Which amendment to CERCLA says that "innocent landowners" aren't responsible for the cleanup of hazardous contamination?

Superfunds Amendments and Reauthorization Act

The owner's covenants section of the property management agreement between manager Fred Baines and owner Lilian James contains three key pieces of information. First, Fred is named as the person responsible for managing the building. Secondly, Lillian is identified as the property's legal owner. What's the third key piece of information? That Fred is indemnified from any illegal acts of the tenants The duration of the contract and its start and end dates The fact that the owner is not facing foreclosure The fee that Lillian will pay Fred for his property management services

The fact that the owner is not facing foreclosure

According to Colorado's warranty of habitability, who is responsible for keeping a rental property safe, clean, and well-maintained?

The lessee

Which title insurance policy does the seller usually purchase?

The owner's policy for the buyer

In a seller-financed real estate transaction in Colorado using a land installment contract, what's the role of the public trustee? To collect property taxes from the borrower and hold them in escrow To ensure that all parties understand their rights in case of foreclosure To hold title to the property until the debt is repaid To record the Real Estate Transfer Declaration

To collect property taxes from the borrower and hold them in escrow

Which type of fee simple estate doesn't go into effect until a specific event occurs? Defeasible Determinable Subject to a condition Upon condition precedent

Upon condition precedent

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

Use variance

Which of the following is considered an ineligible property type for which a loan to purchase or refinance wouldn't be purchased by Fannie Mae?

Vacant lot