Section 15 Unit 1

Your buyer clients Josie and Terry made an offer that was accepted on a cute bungalow in a city neighborhood. They just received the inspection report and were delighted to see only minor condition issues. They'd like the sellers to replace two windows that have broken seals. In response, the sellers asked for a copy of the inspection report. What must you do? a. You can copy the pages related to the windows and provide those. b. You can only provide a copy if you get permission from Terry and Josie. c. You must request permission from the inspector, who holds the copyright. d. You're required to provide a copy of the report to the sellers.

. You can only provide a copy if you get permission from Terry and Josie.

Seth is a licensee working for a buyer, Britney. Britney wants to make sure the seller accepts her offer on a charming Cape Cod, so she tells Seth she wants to make a full-price, non-contingent offer right away. How should Seth respond? a. "I highly recommend a home inspection contingency with your offer to protect yourself in the event there are major defects with the house." b. "Since you love this house, this is the best way to make sure you get it. Let's write up the offer and send it over right now." c. "Your offer may be more attractive if we come in at $5,000 over the list price." d. "Your offer would be more attractive if it were all cash."

a. "I highly recommend a home inspection contingency with your offer to protect yourself in the event there are major defects with the house."

John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage? a. 10 years b. Five years c. One year d. Three years

a. 10 years

Which one of the following scenarios describes an adverse condition that would need to be disclosed? a. A hailstorm damaged some shingles last year. b. The county offers a homestead exemption. c. The furnace is three years old. d. The school across the street is adding full-day kindergarten next year.

a. A hailstorm damaged some shingles last year.

Shane's buyers learned during the inspection that there was water damage around the fireplace and that the chimney needed new flashing and to be repointed. To whom must Shane disclose that information? a. Any party to the transaction b. Only the listing agent c. Only the sellers d. Only the sellers and the lender

a. Any party to the transaction

Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step? a. Arbitration b. A second round of mediation c. Condemnation d. Litigation

a. Arbitration

In full seller disclosure states, whose responsibility is it to review disclosures, ask questions, and obtain a home inspection? a. Buyer b. Licensee representing the buyer c. Licensee representing the seller d. Seller

a. Buyer

______ is a Latin term that means "let the buyer beware." a. Caveat emptor b. Cave venditor c. Emptor scriptor forum d. Vacua spatia cave

a. Caveat emptor

Your buyer clients are excited because the property they made an offer on provides a home warranty. What should you tell them? a. Check the coverage at the time of purchase. b. Check the coverage if an appliance breaks. c. It protects brokers too. d. They're getting a great deal.

a. Check the coverage at the time of purchase.

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal? a. Document health and safety issues that may affect both the cost and enjoyment of the home. b. Estimate how much cosmetic upgrades may cost the buyers. c. Verify lot lines and acreage calculations. d. Verify the presence of any easements or encroachment on the property.

a. Document health and safety issues that may affect both the cost and enjoyment of the home.

Seth is a licensee representing seller Dora. Which of these items is Seth required to disclose to prospective buyers about the property? a. Dora doesn't use the back door because the steps leading to the yard are rotted. b. Dora keeps sunflowers planted in the back yard because the local birds can eat the seeds. c. The neighborhood kids like to ride their bikes in Dora's driveway. d. The pink geraniums in the window boxes are fake.

a. Dora doesn't use the back door because the steps leading to the yard are rotted.

Why is a home inspection recommended? a. It gives the buyer a snapshot in time of the home's condition. b. It helps the buyer identify cosmetic changes that must be made. c. It's free to the buyer. d. It's required by law for most residential transactions.

a. It gives the buyer a snapshot in time of the home's condition.

Which of the following statements about the duty to disclose adverse material facts is true? a. Licensees are required to disclose only those material facts of which they have actual knowledge. b. Licensees don't have to communicate adverse material facts if a property is being sold with any kind of "as-is" or "where-is" clause. c. Licensees must disclose adverse material facts either before or after closing. d. Licensees owe this duty to their clients only.

a. Licensees are required to disclose only those material facts of which they have actual knowledge.

In a caveat emptor state, who or what entity has the burden to prove that a seller was dishonest about a property's condition? a. The buyer b. The court c. The listing agent d. The seller

a. The buyer

Lamar closes on his new home next week. It's a 37-year-old split level, so his agent asked if he's interested in purchasing a home warranty. "Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues?" What's the agent's best response to Lamar's question? a. A home warranty will cover all problems that come up in the future. b. A home warranty will cover things like appliances and major systems. c. Buying a home warranty almost guarantees you won't have any issues! d. If you purchase a home warranty and something breaks, you can sue the seller.

b. A home warranty will cover things like appliances and major systems.

What information about a property is the licensee required to disclose to potential buyers? a. Any known or assumed information about a property b. Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property c. Only information that the seller wants the licensee to share with prospective buyers d. Only information that would make the property sell more quickly

b. Any material, adverse information that the licensee has actual knowledge of concerning the physical condition of the property

In states where full disclosure isn't required, it's the ______ responsibility to perform due diligence on the property. a. Broker's b. Buyer's c. Salesperson's d. Seller's

b. Buyer's

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. Which of the following conditions is most likely true? a. Darren and Natalie are getting a USDA rural development loan. b. Darren and Natalie are using an FHA-insured loan. c. Darren and Natalie are using conventional financing. d. Darren and Natalie made an all-cash offer.

b. Darren and Natalie are using an FHA-insured loan.

Amira's seller Tom just received the news that his buyers are walking away from the sale. They weren't willing to proceed after they saw the inspection report. Neither Amira nor Tom has requested a copy of the report. What's the most likely reason for that? a. Amira doesn't trust this particular inspection company. b. If they see the report, they'll be required to disclose any adverse findings. c. They are unwilling to pay for the report as the buyer requires. d. Tom wants to pay for his own inspector so that he can question the inspector.

b. If they see the report, they'll be required to disclose any adverse findings.

Regarding information that licensees must disclose, what does the pneumonic MAAP stand for? a. Mandated, Ambiguous, Actual, Prohibited b. Material, Adverse, Actual, Physical c. Misrepresentation, Attainable, Affiliated, Performance d. Mobile, Artificial, Absolute, Protected

b. Material, Adverse, Actual, Physical

Eleanor is working as a buyer's agent for Luis in a state without full disclosure requirements. What is her responsibility relative to property disclosures? a. She must line up a home inspector to review the disclosure forms. b. She must obtain the disclosures, provide them to Luis, and review them with him. c. She must remind the seller to complete the disclosures and send them to Luis. d. She must verify all of the noted conditions with third parties.

b. She must obtain the disclosures, provide them to Luis, and review them with him.

After closing, a buyer discovers the seller wasn't honest about the property condition on the state's required disclosures. What can the buyer do? a. Ask for a refund of his earnest money. b. Sue the seller for fraud or breach of contract. c. Terminate the contract. d. The buyer has no options after closing.

b. Sue the seller for fraud or breach of contract.

When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed? a. The buyers b. The buyer's agent c. The listing agent d. The sellers

b. The buyer's agent

Your buyer clients Sylvie and Daryl reviewed their inspection report and decided that they would address small repairs themselves, but they want the seller to have regrading done to direct water away from the house. What is your responsibility at this point? a. You must identify three potential contractors from whom the sellers can select. b. You need to communicate to the listing agent that the buyers are requesting regrading. c. You need to send the report to the sellers and ask them what they'd be willing to fix. d. You should help the buyers gather tools and materials for the small repairs.

b. You need to communicate to the listing agent that the buyers are requesting regrading.

You've listed a 1918 Craftsman with some significant foundation issues—so significant that the buyers walked away after the inspection. They provided you and your sellers with a copy of the inspection report, which also points out some wiring concerns. At today's open house, a prospective buyer asks to see a copy of any inspections done on the property. What should your response be? a. You should ask the buyers who walked away whether you can provide a copy. b. You should disclose any adverse material facts, but you don't have to provide the report. c. You should provide an inspection report, but only if specifically asked. d. You should provide an inspection report to all prospects, along with seller disclosures.

b. You should disclose any adverse material facts, but you don't have to provide the report.

Which of the following statements about material facts is true? a. All material facts are related to physical conditions. b. All parties considering a property would regard each material fact in the same way. c. A material fact may have more or less effect on a buyer based on the buyer's needs and values. d. Material facts are only those that can be easily seen or discovered.

c. A material fact may have more or less effect on a buyer based on the buyer's needs and values.

Roy purchased a newly constructed home with a warranty that covers major structural defects for 10 years, and systems (HVAC, electrical, plumbing) for three years. After living in the home a few months, Roy notices the following defects and submits them all. Which one will likely be covered by the warranty? a. A baseboard with paint drips b. A light fixture that doesn't match other light fixtures in the home c. A split ceiling joist in the basement d. A tear in the carpet

c. A split ceiling joist in the basement

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tells Ed that they thought inspections were only for older homes. How should Ed respond to that? a. Ed needs to inform his clients that home inspections are most important for newer properties. b. Ed should let them know that lenders for new construction loans require inspections. c. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection. d. Ed should tell him that he doesn't trust the builder.

c. Ed should remind them that every dwelling, no matter the age or size, should have a home inspection.

What does "caveat emptor" mean? a. Beware of empty spaces b. Buyer's market c. Let the buyer beware d. Let the seller beware

c. Let the buyer beware

In non-full-disclosure states, whose responsibility is it to notify sellers of their duty to disclose required items? a. Buyer b. Licensee representing the buyer c. Licensee representing the seller d. Transactional broker

c. Licensee representing the seller

Most often, what's the first course of action for disputed home warranty claims? a. Arbitration b. Condemnation c. Litigation d. Mediation

d. Mediation

Marilyn is reviewing the inspection report with her buyer clients. Which of the following issues in the report should Marilyn flag as most significant? a. Broken dishwasher b. Lack of deadbolts c. Non-working sump pump d. Presence of mold

d. Presence of mold

When a buyer finances a newly built home with a Federal Housing Administration loan, what does the FHA require the builder to do? a. Create a fund equaling 20% of the home's cost set aside to cover construction defects for the next 10 years b. Provide a builder-backed home warranty c. Provide the buyer with a 30% discount on materials and labor for home repairs d. Purchase a third-party home warranty to protect the buyer

d. Purchase a third-party home warranty to protect the buyer

Homebuyer Nancy has made an offer to purchase a house and has plans to schedule a home inspection. How can her agent assist her in relation to the home inspection? a. Negotiate a kickback from the home inspector. b. Pay for the home inspection. c. Require the buyer to use the agent's favorite home inspector. d. Review the inspection report with her and discuss options.

d. Review the inspection report with her and discuss options.

In full seller disclosure states, whose responsibility is it to complete the seller disclosure form which will be reviewed by prospective buyers? a. Home inspector b. Licensee representing the buyer c. Licensee representing the seller d. Seller

d. Seller

In full seller disclosure states, whose responsibility is it to fully disclose all items on a seller disclosure form and any known material defects not listed on the form? a. Appraiser b. Buyer c. Lender d. Seller

d. Seller

In states where full disclosure isn't required, whose responsibility is it to disclose any items required by law and respond honestly to any questions about the property's condition? a. Appraiser b. Buyer c. Lender d. Seller

d. Seller

Insurance claims might not appear on a CLUE report for a property if the claims were made more than ______ years ago. a. 10 b. Four c. Nine d. Seven

d. Seven

A buyer who discovers after closing that a seller wasn't honest about the property condition on the required disclosures can ______. a. Cancel the agreement and locate another property b. File a claim with the state commission c. Get a refund of the earnest money d. Sue the seller

d. Sue the seller

Marla's excited about closing on a cute lakefront cottage. But when she reads the report from the home inspection, she learns that the chimney leaks and that there is water damage in several places. This wasn't on any of the seller's disclosures. Which of these is the best option for Marla? a. Complete the purchase and plan to spend a lot of money trying to make her cottage leakproof. b. Complete the purchase, then sue the seller for fraud. c. Find a lawyer and file a class action suit against the chimney mason. d. Terminate the agreement and ask for a refund of her earnest money.

d. Terminate the agreement and ask for a refund of her earnest money.

Which of the following scenarios describes information that a licensee must disclose? a. The licensee heard a rumor that the city may buy houses on the street next year to build a freeway ramp. b. The licensee learned that the property had a tax reassessment last year. c. There are community-wide rumors that the property in question is haunted. d. The seller didn't disclose any leaks, but the licensee sees moisture on the basement floor.

d. The seller didn't disclose any leaks, but the licensee sees moisture on the basement floor.

Assuming licensee Shannon has actual knowledge of all of the following property issues, which of these issues should she disclose to prospective buyers? a. The nearby school system is one of the worst in the area. b. The neighbors like to throw a lot of parties. c. The tree in the front yard is at least 50 years old. d. The upstairs bathroom has a leaky toilet.

d. The upstairs bathroom has a leaky toilet.

The benefits of a home warranty for buyers are clear. Why might sellers want to offer a home warranty to buyers? a. To allow the buyer the option to customize features of the home. b. To allow the buyer to customize certain items. c. To keep from having to buy new appliances before putting the home on the market. d. To protect themselves from any claims after closing.

d. To protect themselves from any claims after closing.

When may a home warranty be purchased? a. Only at the time the property is listed b. Right after closing c. When something breaks d. When the property is listed or at the time of closing

d. When the property is listed or at the time of closing

What does the MAAP method help licensees determine? a. What their gross commission will be b. When to report another licensee for an ethics violation c. Whether a fair housing violation has occurred d. Which property facts they need to disclose

d. Which property facts they need to disclose