Study For final #1

A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest?

($250,000 x 0.055) ÷ 12 = $1,145.83

The doctrine of laches refers to the _______ of restrictive covenants/deed restrictions.

Enforcement

Where do legal descriptions appear?

Deeds

Which of the following statements best describes Megan's Law and disclosure requirements in Virginia?

In Virginia, sellers never need to provide a Megan's Law disclosure.

The transfer of land through eminent domain or condemnation is known as what?

Involuntary alienation

A legal notice that a lawsuit is pending that affects the title of a property is called a ______.

Lis Pendens

To compute a monthly principal and interest payment, you need to know which of the following?

Mortgage loan value, annual percentage rate, loan term, and payment frequency

Gregory is a widower who subsequently remarried. The couple lives in a large house Gregory owns in severalty. When they decide to downsize, Gregory grants an ordinary life estate in the property to his daughter from his first marriage, Giselle. He names Giselle's son Will as remainderman. When will the property revert to Gregory's current wife, Dora?

Never

Leverage

OPM

Debit

Owing money (Seller owes taxes) (Buyer pays for purchase price)

Credit

Receiving money (Seller receives prepaid taxes)

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Refuse to rent to a female tenant.

What is an attorney-in-fact?

Someone who acts for another under a power of attorney

What is the definition of a legally competent party?

Someone who has the legal and mental capacity to enter into a contract

Real estate licensees who want to uphold the Fair Housing Act should make a habit out of which of the following actions?

Tell potential clients in their initial meeting that they are committed to upholding fair housing laws.

If a consumer wants to file a deceptive ad complaint, which entity should be contacted?

The BBB

As a licensee, which of the following questions from a potential buyer could you answer while staying within your scope of expertise?

What are the property taxes for this property?

Partial amortization

You make one big payment that pays off everything

Fee Simple Absolute

Yours and yours alone.

A license is not

assignable or inheritable.

What type of relationship does a trust create between a trustor and a trustee?

fiduciary

Less than freehold estate

rents or leases

Which one of Gerry's statements to a client crosses the line into unauthorized practice of law?

"Most couples take ownership of property as joint tenants, so that's what I'd advise."

A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What's the total amount he'll pay back over the life of the loan?

$1,108,292.40

The Slathertons are looking at buying a $300,000 property with a 20-year loan at a 6% interest rate. How much would their monthly principal and interest amount be? Plug in the numbers using the amortization chart in your resources to see what the payment per month would be. (Use the amortization chart your lesson instructed you to print out.)

$2,149.30

Your buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase?

$208,000

Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?

$25,000

A buyer has a 30-year, $750,000 loan with a 5.75% interest rate. How much of the first monthly payment is interest?

$3,593.75

A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing?

$320,000

What's the purpose of a home inspection?

To paint a true picture of a property's condition

What's the purpose of a POA's restrictive covenants?

To preserve a community's overall aesthetic

How long must brokers retain deposits and other escrow funds?

Until either the transaction closes or terminates prior to the closing

Picture a drawing of a section of land. Where is Township 1 located?

Upper right (NE) corner Section townships are numbered beginning in the upper right (NE) corner and continue in a zigzag pattern.

Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that's otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship?

Use variance

Which factor that influences value considers the property's function?

Utility

Stacey's lengthy military service makes her uniquely eligible for a(n) ________.

VA loan

Fee Simple Defeasable

Voided if condition is violated...DEFEATED

When is a real estate license required in Virginia?

When performing real estate activities for others, for compensation of any kind

Victor buys a property from Yolanda for $200,000. Using a land contract, Victor agrees to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

Yolanda

As a part of a buyer's due diligence, which location-related issues should be researched?

Whether the property is insurable, located in a wetland, or located in an historic area

Qualified mortgages require debt-to-income ratios of no more than ______.

43% Although it seems generous, the 43% debt-to-income ratio is a firm limit.

How many feet are in a mile?

5,280

A buyer is purchasing a home for $400,000 and is financing $300,000. What is the loan-to-value ratio?

75%

Agency Agreement needs

A COLD Accountability, Confidentiality, Obedience, Loyalty, Disclosure

Jerome, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.

A broker

When is a lead disclosure required?

A lead disclosure is required for residential properties built before 1978 because paint manufacturers used lead in paint before it was banned that year.

If your license is suspended, it's only temporary. If your license is revoked, it is permanently removed and requires ______.

A new license application after the penalty period

Which of the following can hold a Virginia broker's license?

A person or an entity

Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.

Accepting partial performance

Which of the following is true regarding the definition of agency?

Agency describes the relationship between the real estate professional and the person or persons being represented

Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?

Alda tells Marge that she's hired an inspector to perform a property inspection.

Alluvion describes new deposits of land that are the result of what natural process?

Alluvion, or new deposits of land, is the result of the process of accretion.

Buyer Daphne and seller Kurt signed a sales contract with a definite closing date of May 15. Daphne then learned that she needs to move the closing date to June 15. She'll accomplish this with an ______ to the sales contract.

Amendment

Camille, a buyer, wants to change the price already agreed to in a sales contract. She should use a(n) ______.

Amendment

Simon is looking for a facility for a large grocery distribution operation. He found two options, one of which is offering him a triple net lease and the other an absolute net lease. Why is his attorney arguing against the latter?

An absolute net lease has no legal defenses if Simon fails to pay. Simon has absolutely no legal recourse with an absolute net lease. Simon is still on the line for payment, even if the building is damaged or destroyed through no fault of his own.

Which of these situations requires a dual agency disclosure?

An agent from firm A represents both the buyer and seller

Which of the following describes an appreciating asset?

An asset that is worth more today than the investor originally paid for it.

What does procuring cause refer to?

An uninterrupted series of events that results in a successful transaction

Macy's brokerage is in West Virginia, but more and more of her client base is in Virginia. Macy wants to do business there, too. What does she need to do?

Apply for a reciprocal license.

Easement appurtenant:

Attached to a specific parcel of land, transfers ("runs") with the land, and gives the "dominant tenement" rights to use adjoining property/servient tenement

Lowell used to own 17 acres of property on the bay. After last year's hurricanes, Lowell now owns 15.5 acres of bayfront property. Which natural process was responsible for Lowell's loss of acreage?

Avulsion is the loss of land by a sudden, large-scale change in water flow. A hurricane would create a sudden large change in water flow.

Rick, a builder, is using two properties as collateral for a loan. This is an example of a(n) ______ loan.

Blanket

Rebecca is her own boss. Not only does she manage her own schedule and clients, she doesn't have a supervisor and completely manages her own CE and license renewal. She also doesn't have to share commission with anyone. What type of Virginia real estate license does Rebecca hold?

Broker

Which of these is an incorrect disbursement of escrow funds?

Broker Nadia has an unconsummated contract with no escrow-related instructions. She decides to give half of the escrow funds to both parties.

You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?

Buyer agency You have a buyer agency relationship with the buyer in one transaction and a seller agency relationship with the seller in the other transaction.

Which of these agreement terms is already a standard part of the sales contract?

Buyer's option to purchase a home warranty

Murphey's farm has been in his family for generations, since his great-great-great-grandfather received it as a land grant in 1862. What's the beginning point of this property's chain of title?

Chain of title always begins with the current owner and goes back in time.

Putting your own money and escrow account money in the same account is called:

Commingling

_______ is the principle that the more similar properties there are on the market, the lower the price will be driven.

Competition

Sophie received title to her grandmother's farm last spring. For almost 100 years, Sophie's family has kept cows and goats on the 120-acre property. The deed came with a caveat: Sophie is never to raise pigs on the farm. If she does, then the property is transferred to her brother. What did Sophie's grandmother create?

Condition

Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own?

Condominium

Where would a purchaser find information about the characteristics of a condo, unusual and material circumstances and features that affect it, and the total number of units being offered?

Condominium public offering statement

Which agency duties survive termination of an agreement?

Confidentiality and accounting

What type of loan is neither guaranteed nor insured by government agencies?

Conventional

What purpose do restrictive covenants serve?

Covenants preserve a community's overall aesthetics, presentation, and its residents' way of life.

When it comes to earnest money, which one of the following statements is true?

Earnest money must be placed in a trust account.

The Virginia Fair Housing Office's list of protected classes includes these groups in addition to the federally protected classes.

Elderliness, sexual orientation, and veteran status

Another name for Listing

Employment contract

Which written statement is used to consider ways to minimize a project's negative impact on the environment?

Environmental impact statement

Which of these is a quality that differentiates escrow accounts from other accounts?

Escrow accounts can't be touched if the brokerage goes bankrupt.

Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent?

Finding properties to show to Fred and Regina

A borrower makes the same monthly mortgage payment for the entire term of the loan. At the end of the loan period, all of the interest and principal is paid off. This is known as a ______ loan.

Fully amortized

As part of her fiduciary duty of accounting, Donna must handle her clients' ______ and paperwork properly.

Funds

Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?

Gather and analyze data.

In Virginia what type of deed is used to convey property?

General Warranty deed

Juan has finalized his comparables and is ready to determine a property's appraised value. How does he do this?

He reviews his process and places more weight on the most similar comparables that he believes to be the most valid.

What is another term you might hear that is synonymous with 'condominium?'

Horizontal property

Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?

Housing providers may inquire as to the nature of the disability if it's not apparent, and they must permit assistance animals for tenants with documented disabilities without charging an additional pet deposit.

On the Virginia Fair Housing website, you can learn about all of the following EXCEPT:

How to retrofit a house for people with disabilities

Which of the following can have an extremely adverse effect on the time and cost of a development project?

If the EPA determines that hazardous contamination has occurred on a project site, it is authorized to shut down development and begin remedial action. This impacts development time and cost, and can negatively affect the investor's return.

Which of the following statements related to the power of taxation is true?

In most states, property tax liens take priority over any and all other liens that might be on the property. That means if the property is foreclosed upon, unpaid property taxes are paid first, and other creditors must wait their turn in line.

Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true?

Katrina must follow the more restrictive of federal or state law.

If your business is registered as Kelly Realty, what name may you use when you conduct business?

Kelly Realty

Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?

Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.

In Virginia, if a real estate contract isn't in writing, it isn't ______.

Legally enforceable

Broker Joseph tells his client that a property is zoned as residential, even though he knows it's zoned as commercial. This violation is an example of ______.

Making a substantial and willful misrepresentation

Which of these is an example of an agent NOT executing the duty of reasonable skill and care?

Marta agreed to list a commercial property even though her expertise is in residential real estate.

what does "north for 314 feet" represent?

Metes (measures) are the direction and distance of a line forming the boundary of the property.

"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Bethany Smith ..." is an example of what type of legal description?

Metes and bounds

They expected these plantings to be considered part of the real property because of the ________.

Method of annexation

What is the federal program that was created to help mitigate future flood losses across the country?

National Flood Insurance Program (NFIP)

Which of the following is an advantage of condominium ownership?

No yard work

Special Warranty Deed

Only covers current ownership

In the conveyance of real property after death, what trumps any terms specified in the deceased person's will?

Operation of law

Lease Option

Option to buy

A brokerage firm that hires licensees as employees instead of as independent contractors must ______.

Pay licensees a regular salary regardless of the revenue they generate

Straight note

Pay only interest, not paying principal.

Which of the following is true regarding property management agreements?

Property managers must have a written property management agreement with all clients.

Property managers must recognize the federally protected classes under ADA and the federal Fair Housing Act. Which list most accurately lists these classes?

Race, color, religion, national origin, sex, familial status, or disability

The beneficiary in a trust is the person who ______.

Receives the benefits of the trust

Which of these is an example of practicing within your area of competence?

Researching the property tax amount that a client will pay on the home he's purchasing.

If Mega Corporation owns real property, chances are it owns it in ______.

Severalty

Rhonda purchased an existing pet store in her neighborhood and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?

Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.

Why is it important to call 811 before any work involving excavation is performed?

So that underground utilities can be marked with flags

Which one of the following could be a clue that a property was formerly a waste disposal site?

Soft spots, mounds, and discolored soil

Mortgage lenders will ___________

Sometimes extend credit, even when a FICO® score is low

What type of police power allows cities to identify specific uses for an area?

Zoning

A loft lease is usually for

a large open space that may have few amenities.

The estate holder or another party with an interest in the property (for exam, heirs to the estate holder) may file

a lawsuit to stop the waste and/or seek damages.

What does the "T" in PITI stand for?

Taxes

Which act sets guidelines for public and common use areas at housing developments?

The Americans with Disabilities Act generally applies to commercial facilities and facilities with public accommodation, but does cover public and common spaces in residential housing.

Which of the following would NOT likely be a location issue of concern to buyers?

The house was built in 1985.

In Virginia, landlords may amend a rental agreement if ______.

The landlord and tenant agree to the changes

In a residential real estate sale involving a federally related loan, who's required to provide Real Estate Settlement Procedures Act disclosures to the consumer?

The lender must provide the borrower with a written disclosure of the estimated and final settlement costs.

When does an agent's fiduciary duty of loyalty to the client begin?

The moment both parties agree to an agency relationship

Jim is in the process of buying a condominium. He's financing the purchase with a mortgage. At closing, he can expect to pay ______.

The mortgage recording tax

Control:

The owner controls the use of the property.

What is an example of a gross lease?

The owner pays all property taxes, maintenance, and insurance costs. In a gross lease, the owner pays all property taxes, maintenance, and insurance costs.

One element of misrepresentation is that ______.

The person making the false statement knew it was false (or should have known).

When considering loan risk, which two items will lenders consider in equal measure?

The property's value (as underlying collateral) and the borrower's ability to repay the loan will be equal considerations for the lender.

According to the Virginia Property Owners Association Act which of the following is NOT one of POA member's rights?

The right to waive their POA fees during times of financial duress

Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have?

They should have a loan-to-value ratio of 80% or less.

Ramon and Bill are victims of fair housing discrimination. Which of the following must have occurred if their landlord violated specific terms of the Fair Housing Act?

They were refused an apartment because Ramon is from Nicaragua.

Which of these is illegal: disparate impact or disparate treatment?

They're both illegal.

What type of insurance protects a lender's collateral interest in a property that's being financed?

Title insurance

A right-of-way benefits

anyone who needs to use it.

A valuation of a property that adheres to USPAP is called what?

appraisal

A datum is a

horizontal point of reference from which surveyors measure the depth and height of various land elevations.

The sales comparison approach doesn't factor in any income a property may have generated; that's an aspect of the

income approach.

When homebuyers agree to open an escrow account for their mortgage, the mortgage lender uses that money to pay ______.

taxes and insurance

it's said that the servient estate suffers

the easement

What's a covenant between a lessor and lessee?

An agreement or promise made between the parties

What type of loan comes from the equity in the home?

Home Equity Loan

What type of agency exists because of the actions and behavior of the parties?

Implied agency

Molly is going over her disclosure responsibilities with her agent, Tim. "You know, I think I might be in a military aircraft noise zone," she tells him. "But I don't know. How can I find out?" What should Tim say?

"We can find this information in this area's official zoning map."

Gunther's gross monthly income is $3,800, and he has no monthly debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford?

$1,064

An acre of land costs $15,000. Jerry would like to purchase four acres. How much will this cost?

$60,000

A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month's mortgage payment is interest?

$2,333.33

If you sell a home for $143,000, and your commission rate is 5%, what is your commission on the sale of this home?

$7,150

Joyce just closed on a condo for $366,900 and put down 20% to obtain an 80% loan and avoid having to pay for private mortgage insurance. How much equity does she have in her condo?

$73,380 Joyce's equity is $73,380. The value of her condo is $366,900. She put $73,380 down ($366,900 x .20). Because she just closed, her equity is exactly the same as her down payment.

A seller you're working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?

$75,269

Which mortgage clause requires the lender to discharge the mortgage lien once the borrower has paid in full?

Defeasance

Which one of the following scenarios describes an adverse condition that would need to be disclosed?

A hail storm damaged some shingles last year.

A buyer is purchasing a property for $500,000. His lender's loan-to-value ratio is 90%. How much is the buyer financing?

A 90% LTV ratio means the buyer is financing 90% of the purchase price. This equates to $450,000.

Agency Agreement needs

A COLD Accountability, Confidentiality, Obedience, Loyalty, Disclosure

What is the MLS?

A database of real estate information

According to the VRLTA, within five days of the tenant taking occupancy, the landlord must provide what to the tenant?

A written report detailing any existing damage to the unit

Examples of penalties for lesser violations may include a reprimand, fine, repayment of commission, or _________.

Additional education

Millie is a buyer who has given her agent an earnest money check for $10,000 with an offer to purchase. When will the check be deposited?

After the seller accepts the purchase offer

When a prospective homebuyer isn't represented, what doesn't she have?

An agency agreement

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 these statements about this situation is true?

Bankruptcy of the broker (not the agent) or the principal terminates an agency agreement by force of law.

Which of these statements about the homeowner's rights of redemption is true?

Because of the length of time it takes to process a property after the foreclosure sale, the homeowner's redemption period may have expired before the lender puts the REO on the market.

Jenson signed a seller's agency agreement with Susan. A few weeks after that, right before closing, a hurricane destroyed the property. What happens to Jenson and Susan's agreement?

Because the property was destroyed, the listing agreement terminates by force of law.

Appurtenance

Belongs to the land (like a tree)

Which legislative act prohibits certain types of electronic communication?

CAN-SPAM

4 Essentials of a valid contract

CO-CA-CO-LA Consent (we both have to agree), Capable parties (can't be a minor), Consideration (doesn't have to be money), lawful object (not allowed to kill)

4 Essentials of a valid contract

CO-CA-CO-LA Consent (we both have to agree), Capable parties (can't be a minor), Consideration (doesn't have to be money), lawful object (not allowed to kill)

estate at will

Can be ended at any time

In the sales comparison approach, which of these are selected and evaluated both quantitatively and qualitatively against the subject property?

Comparables

Which economic principle pertains to how a change in a property affects its value as a whole?

Contribution

Which entity enforces subdivision covenants?

Covenants are enforced through the court system if an agreement can't be otherwise reached.

Shirley's lender discharged the mortgage lien placed on her property after processing her final payment. Which clause requires the lender to take this action?

Defeasance

The Common Interest Community Board operates under the ________ .

DPOR

In order to convey real property, what document would you use?

Deed

Shirley's lender discharged the mortgage lien on Shirley's property after processing her final payment. Which clause requires the lender to take this action?

Defeasance The defeasance clause means the lender may not pursue the borrower for additional funds when the loan balance is paid in full.

What Virginia regulatory authority protects wetlands through the Water Protection Permit program?

Department of Environmental Quality

Ryan has engaged Jaclyn as his real estate agent to purchase a property. According to statute, what does Jaclyn owe any sellers she encounters in the process?

Disclosing Ryan's intentions related to the property

What's the role of the mortgage contingency in a sales contract?

Document the type of and timeline for financing, and outlines what to do if financing falls through.

Seth is a licensee representing seller Dora. Which of these items is Seth required to disclose to prospective buyers about the property?

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

Fewer buyers in a higher price range would create what kind of pressure on housing prices?

Downward

Which of the following properties requires a lead disclosure?

Duplex built in 1959 A lead disclosure is required for residential properties built before 1978 because paint manufacturers used lead-based paint before it was banned that year.

Baxter enters into a contract to buy a home. Mutual agreement, which is required for the contract to be valid, won't be present if ______ exists.

Durress

How are principal meridians and baselines used in the rectangular government survey system?

Each legal description in this system originates at the intersection of a principal meridian and a baseline.

Seth owns a property on a small island with six other property owners. Recently, Seth built a fishing pier along the water's edge; however, the pier is actually on his neighbor's property, which Seth has no rights to. What might this be an example of?

Encroachment

Mr. Gray owns property in the city. He passed away, leaving no will, no heirs, and no creditors. The state can acquire the property through which process?

Escheat

Stu is buying Freddie's property. What must occur for the transfer of title to take place?

Freddie must intend to convey the property to Stu.The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.

Personal property includes which of the following?

Free-standing TV

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?

Group boycotting

The Office of Fair Housing and Equal Opportunity is a part of which federal department?

HUD

Gladys and her husband, Ralph, owned their home as joint tenants. After Ralph died, Gladys owned the home in severalty. When she dies, which of these will happen to her home?

Her heirs, as described in her will or according to state law, will receive the property.

Angela made an offer on a property that was accepted and the purchase contract was ratified. The seller provided the disclosure statement the day after contract ratification. The following day, Angela submitted her loan application, which includes a disclosure about the right to terminate. If she wishes to terminate the purchase contract, when must she do this?

Her right to terminate the contract ended when she submitted her loan application

Anita is a new buyer. Luckily, ______ will help her before the sale and can reimburse her after the sale if a title issue arises.

Her title insurance

When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

Highest and best use

When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

Highest and best use looks past the current use (if there is one) to determine if there is another use that provides a higher value.

When the Sidells moved into their new home in Shady Acres, they were given a copy of a covenant document that listed restrictions on roofing, siding, fencing, and other visual components on their property. This type of covenant is likely enforced by what entity?

Homeowners' association

Homestead Realty had a listing agreement with Gertrude. The listing expired, and Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer client who's interested in Gertrude's property. What restrictions are in place for Homestead Realty?

Homestead may represent the buyer, must disclose material facts about the property, and must maintain Gertrude's confidentiality

What is another term you might hear that is similar to 'condominium'

Horizontal property

Which of the following is a true statement about building code regulations?

If there's no state or local building code to cover a situation, the national code applies.

Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan?

In the first month, Juan pays $1,044.79 in interest ([$295,000 x .0425] ÷ 12). His monthly payment (stated in the question) is $1,750, so that means he paid the principal down $705.21 ($1,750 - $1,044.79). His new principal balance is $294,294.79 ($295,000 - $705.21). We use the new principal balance amount to calculate interest for the next month. Juan pays $1,042.29 in interest ([$294,294.79 x .0425] ÷ 12).

As interest rates fall, the number of buyers in the market is likely to ______.

Increase

Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?

Indestructibility

Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer's disease, where they're both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract.

Invalid

Which of the following is considered unauthorized practice of law?

Interpreting the legal consequences of a client's actions

What advantage does the 1031 tax-deferred exchange offer?

It allows investors to defer capital gains taxes when selling a property, provided they buy another property.

Which offer would be the most appealing to a seller?

It depends on the seller's needs and motivations.

Why might a licensee want a buyer to sign a buyer representation agreement?

It helps ensure buyer loyalty.

Why would the advertisement, including the words, "Home prices in your neighborhood are falling fast. Better call XYZ Brokerage at 555-255-1234," be prohibited?

It incites panic selling.

Loans available through the Farm Service Agency have which of the following characteristics?

Loan terms may be as long as 38 years.

What does a balloon payment represent at the end of a loan term?

It means that some principal remains at the end of the loan term.

Lily is considering signing a buyer representation agreement with you, but she's unconvinced. "What's in it for me?" she asks. What's one major benefit to her when she signs the buyer representation agreement?

It means you're representing her and not the seller.

What's the purpose of a firewall?

It prevents hackers from infecting your system with viruses, worms, and malware.

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

Purchase contract needs

MARIA Method, adaptability, relationship, intention, agreement

Purchase contract needs

MARIA Method, adaptability, relationship, intention, agreement

Most often, what's the first course of action for disputed home warranty claims?

Mediation Warranties will detail the course of action if a claim is disputed. Most often, mediation occurs first, then arbitration.

Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who's 16. Which of these must occur to make this transfer legal?

Meg must sign the deed and have her signature acknowledged. As the grantee, Christian doesn't have to sign the deed, and he doesn't have to be legally competent or of legal age. The property can be conveyed only if some consideration is in place, but it doesn't have to have a monetary value.

Which of these situations does the Americans with Disabilities Act address?

Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.

Which of these landlord actions would NOT be considered a reasonable accommodation?

Moving disabled tenants to units near an elevator Allowing a tenant to transfer to a more accessible unit (which is reasonable) is different than forcing a tenant to move to a different unit.

Gabe's home has an assessed value of $172,000, and his tax rate is .55%. What are the annual taxes?

Multiply the assessed value by the tax rate to calculate annual taxes: $172,000 × .55% = $946.

Sam entered into a contract to sell his home to Gina. After the inspection, Gina insisted that Sam replace the damaged roof. Sam refused, and the parties agreed to cancel the deal. This is an example of ______.

Mutually rescinding the contract

Chance and Lucky have an option agreement between them in which no consideration is provided. Is this enforceable?

No

What's the difference between an exclusive right-to-sell and an exclusive agency agreement?

No commission is earned if the seller locates the buyer with exclusive agency.

Bo's real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA?

Nothing. Under TILA, ads that mention general financing terms, such as "low down payment" or "easy financing," do not require additional disclosure. If Bo had gotten more specific (e.g., "10-year loan with 0% down") he would need to include more information.

Sheila, a salesperson, is changing brokerages. What does she have to do?

Notify the VREB of her transfer.

How do you change supervising brokerages?

Notify your current brokerage and file a transfer request with the VREB containing both your and your new broker's signatures.

This commercial lease is a special lease agreement in which the landowner receives a cash payment for executing the lease, with more to come if drilling is successful.

Oil or gas lease

What is an open listing agreement?

One in which only the person who finds the buyer gets paid

Consideration

One or more things of value that are exchanged in the contract (not necessarily money)

Margo is the potential buyer of the property in an option contract. Margo is the ______.

Optionee The potential buyer of the property in an option contract is known as the optionee.

Rescission, suit for specific performance, liquidated damages, and acceptance of partial performance are all ______.

Options a wronged party has to remedy a breach of contract

Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?

Ordinances must not be discriminatory.

In what way is a townhome similar to a single-family detached home?

Ownership includes both the structure and the land. Townhomes and single-family detached homes are similar because ownership includes both the structure and the land.

Which of the following examples describes a condominium?

Ownership of the pool, grassy areas, and walkways is shared, while units are privately owned.

Tiers in the rectangular government survey system are formed by ______.

Parallel township lines

______ occurs when one or both parties don't meet all terms of the contract.

Partial performance

How are fines assessed for violations of the CAN-SPAM Act?

Per violation, which can be a single email Solicitors may be charged more than $40,000 for every email they send that violates the CAN-SPAM Act.

Because there were no deadlines specified in the contract, Myron didn't think there was a problem with his waiting to apply for a loan to help purchase the property. He was therefore a little surprised and not very happy when the seller sued him for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did Myron fail to do?

Perform his contractual obligations within a reasonable time.

When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract?

Performance must take place within a "reasonable time."

Fixture

Personal property that becomes real property (like a chandelier)

Which mortgage market comprises lending institutions that lend directly to the consumer?

Primary market

What's an advantage of submitting a successful audit report every licensing period?

Principal brokers receive immunity from any enforcement actions from the board, unless they're intentionally noncompliant.

Accretion:

Process by which water carries rock, sand, and soil and causes land build-up

What type of arrangement allows the buyer to retain title to the property but places a security interest in the property on behalf of the seller?

Purchase money mortgages allow the buyer to retain title to the property, but the seller has security interest in the property.

Virginia law requires that real estate transaction documents be _______.

Readily available upon Virginia Real Estate Board request

Property manager Wayne understands that he may only pay for certain items from funds deposited in a trust account. Which of the following is a legal use of funds from the account?

Repair of damaged wall after the tenant in 3B moved out

Lenders will require which type of fund for taxes and insurance?

Reserve fund

Christie has helped her client, Rufus, complete the ____________________, which documents Rufus's purchase offer to the seller for the property he is interested in buying.

Sales contract

Which of these property managers is violating fair housing law?

Sandra, who represents the owner of a multi-building complex, will only show families with children units available in the building closest to the park.

Subject to

Seller Liable

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?

September 18

What type of tenement do you have when you give the right to another to cross your property?

Servient tenement When you give the right to another to cross your property, you have a servient tenement.

Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers?

So borrowers can compare loans and make decisions regarding the affordability of loans offered

What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?

Substitution

The Lanham Act gives companies the right to ______.

Sue competitors that are using deceptive claims in ads

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

Survey

Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor's shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment?

Survey

What is typically used to prove there are no encroachments on the property?

Survey

Ken, a licensee, has published an ad claiming that he can sell homes for 25% more than any of his competitors. The Federal Trade Commission determined this to be a deceptive ad. What might the FTC require Ken to do as a penalty for his deception?

Take out new ads correcting the misinformation in his original ad

You demonstrate the fiduciary duty of accounting by ____________.

Taking care of your client's funds and paperwork

What is the name of the regulatory board for condominiums in Virginia?

The Common Interest Community Board

Which entity conducts an investigation when a complaint is filed against a licensee?

The Department of Professional and Occupational Regulations

Which of the following is true about VA loans?

The VA guarantees 25% of the home loan amount.

What's providing legal advice to a client considered?

The unauthorized practice of law

In what parts of Virginia does the Virginia Residential Landlord and Tenant Act (VRLTA) apply?

The entire state

Marge works for Morgan Realty as a transaction coordinator. Which of these factors may cause the IRS to classify an Marge as an employee?

The firm pays Marge a salary.

Which of these would void a deed intended to convey property?

The grantor must be mentally competent and of legal age.

What does an REO on a lender's assets mean?

The lender owns real estate after a foreclosure sale.

If there are only two joint tenants, the death of one dissolves the joint tenancy.

The remaining tenant becomes the owner of an estate in severalty.

Which of the following is true about limited agency relationships?

The written brokerage agreement needs to spell out what duties the agent won't perform.

What special concern do foreclosed properties often present?

There could be hidden title issues.

Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings?

These are indications of termite infestation.

Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the ________.

These three items together are known as the nets—or you can use the acronym TIM for taxes, insurance, and maintenance.

Which of the following is required of property management agreements?

They must be in writing

How many approaches to value do appraisers generally use?

Three

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

To detail all costs Jennings will owe at closing

Which of the following is a residential dwelling with attached walls, where the owner also typically owns the land on which the home sits?

Townhome

Property manager Wayne understands that he may only pay for certain items from funds deposited in a trust account. Which of the following is a legal use of funds from the account?

Trust accounts hold tenant security deposits, which can be used to make repairs if the tenant moves out without leaving the unit in good condition.

The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.

USDA Farm Service Agency

Unfulfilled contracts are also called _______.

Unconsummated contracts

Jay's new loan to purchase a property includes the seller's existing mortgage. What type of loan is this?

Wraparound

Open-end mortgage

ability to borrow additional money

Deed restrictions and covenants, conditions, and restrictions (CC&Rs) are encumbrances

affecting land use.

FAR, or floor-to-area ratio, includes ______.

all the habitable structures on a lot

Just as with tenancy in common, any owner's debt can

attach to the ownership interest of that owner.

A mortgage lien,

because the property owner chooses to have a mortgage, is voluntary.

Ownership in a planned unit development (PUD), a mixed-use development that has

both residential and commercial units, consists of a parcel of land, any improvements, and shared common areas.

A survey establishes the

boundary lines of a property and may help identify both encroachments and easements.

Assume

buyer liable

A tenancy in common owner's debts

can attach to that owner's ownership interest.

A condo association or homeowners association handles

common area and exterior maintenance issues. Owners pay HOA fees that go toward maintenance costs.

Developers manage the visual and aesthetic details of a given neighborhood through

covenants, conditions, and restrictions (CC&Rs)

An involuntary lien is one

created without the property owner's consent, like a property tax lien.

The property or individual who uses the easement holds the

dominant estate;

When a life estate ends, ownership of and interest in the property is

determined in one of two ways.

Mineral rights, aka subsurface rights, are the rights to

drill or dig for minerals on the property.

The property's deed and title history should list known

easements.

it's said that the dominant estate

enjoys the easement.

Joint tenancy is a form of co-ownership in which

equal ownership requires unity of time, title, interest, and possession.

Water rights are

especially important for agricultural use or in areas where a well is needed or water is scarce.

Hypothecation

estimate of value

A loss in value caused by an undesirable or hazardous influence offsite is which type of depreciation?

external depreciation

Liens are a

financial claim or encumbrance against a property.

A fee simple defeasible estate includes the

full bundle of legal rights, but ownership may be terminated if the required condition is violated.

Tenancy in common is

generally considered the default arrangement if the deed doesn't specify the tenancy of co-owners.

"Income received before expenses are deducted" is the definition for ______.

gross income

A property owner can't have an easement over

his or her own land.

Which of the following Internet addresses is secure?

https://www.google.com

JOInt tenancy

if tenant dies, other tenant inherits property. (Angelina Jolie)

Encroachments are always by definition

illegal.

When purchasing property, the buyer may or may not receive all the property rights

in the bundle of rights

Townships in a section are numbered beginning

in the upper right (NE) corner and continue in a zigzag pattern.

Right-to-use timeshares can't be

inherited since no actual ownership is involved.

A freehold estate is an

interest in real property where the owner's possession of the property isn't of fixed duration, as it would be in a lease (leasehold estate).

Timeshare ownership is typically split

into 52 weeks. A 1/13th interest means 1/13 of 52 weeks, or four weeks (52 ÷ 13 = 4).

Fee simple estate (aka fee simple absolute)

is a type of freehold estate that conveys the most rights available. Property held as a fee simple can be sold and is inheritable.

Indestructibility

is the physical characteristic that states that while improvements may deteriorate, land can't be destroyed.

Like other common-interest properties, shared common areas are

jointly owned.

Title Theory State

lender holds legal title to the mortgaged property until the mortgagor satisfies the terms and obligations of the loan

Compensation is the one factor in the requirement for

licensure

Pur Autre Vie is based on the

life of someone other than the holder of the life estate/life tenant. For example, Jarrod grants his ex-wife, Margo, a life estate pur autre vie in a house where Jarrod's mother Rose and Margo, who cares for Rose, both reside. The life estate stipulates that Margo's interest in the property will cease when Jarrod's mother dies.

Detached additional finished buildings are typically included in

livable area calculations only if they're attached to the main dwelling by a hallway or stairway.

A loft lease typically constrains the tenant from ______.

making structural changes

A legal description can contain ______.

metes and bounds

During the term of a life estate, the estate holder

must keep the property in good repair. Any act by the estate holder that significantly reduces the value of the property at the end of the life estate is called an act of waste.

With this type of commercial lease, if the option to drill isn't exercised within the stated time frame, the lease expires.

oil or gas lease

Survivorship takes precedence

over any devisees named in a will, as well as any heirs named by laws of descent and distribution.

Estate for years

period of time/definite termination date (January 1st - June 30th)

Prior appropriation says that the first party to

physically take water from a source and put it to beneficial household, agricultural, or industrial use will continue to have a claim to the water.

The protection clause

prevents buyers from reaching an agreement with a seller independent of the agent if the seller was identified during the term of of the representation agreement.

Fee simple estates must pass through the

probate process before legal distribution to heirs.

The typical priority of liens is

property tax lien, mechanic's liens (if work began before the mortgage lien was recorded), first mortgage lien, and all other liens by date of recording.

Co-op ownership doesn't involve owning real estate, but rather owning a

proprietary lease and shares in the corporation that owns the cooperative.

General liens affect

real and personal property and include judgment liens, federal and state tax liens, and decedent's debts.

When a life estate ends, the

remainderman or reversion holder holds the estate in fee simple.

Air rights refer to the

right to use the area in the sky above a property.

The three categories of water rights include

riparian rights, littoral rights, and the doctrine of prior appropriation.

The property on which the easement lies is the

servient estate;

Plat maps may also

show easements.

Timeshares may be

sold a couple of different ways.

Encroachments are

structures or objects built on another's land without permission.

Many states give HOA liens a statutory super lien status, meaning

that HOA liens take priority over all other types.

With a fee simple determinable estate,

the current property owner conveys ownership to a new owner as long as some event does or doesn't occur.

With a fee simple subject to condition subsequent estate,

the current property owner conveys ownership to a new owner on a specific condition

In order to remove an easement through abandonment,

the dominant estate owner must take some action that shows a clear intent to stop using the easement.

Norman, the seller's agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached?

the duty of disclosure

The Virginia Condominium Act regulates

the information in public offering statements as well as the information in disclosure packets, owners association annual reports and more.

Competition impacts value because

the more similar properties that are on the market, the lower the price will be driven. Competition is related to supply and demand.

Specific liens affect

the specific real property/properties to which they're attached by agreement or law and include mortgage liens, real property tax liens, mechanic's liens, special assessment liens, vendor and vendee liens, and HOA liens.

If co-ownership is terminated by partition,

then the property is divided into portions, called partitions, and each tenant owns a specific partition.

The fee simple ownership type of timeshare is called a

timeshare estate.

The right-to-use type of timeshare is called a

timeshare use.

A life estate is a type of freehold estate in which ownership is limited

to someone's lifetime. The future owner is determined based on the life estate's terms.

A mechanic's lien is one a

vendor of goods or services places on the property and creates a cloud on the property's title.

Another way to classify liens is as

voluntary or involuntary.

Riparian rights address

water that moves through a property, such a river or stream. Riparian rights are classified into one of two categories based on the type of water: navigable or non-navigable.

An attachment lien is

when the courts place an encumbrance on the property of a defendant in a lawsuit for monetary damages (also known as a judgment).

An estate at sufferance is one in

which a tenant (referred to as a holdover tenant) didn't leave when the lease expired.

Tenancy in common is a form of co-ownership in

which each co-owner is entitled to possession of the whole. An owner's ownership is inheritable and, upon the owner's death, doesn't necessarily pass to the other owners.

Joint tenancy includes the right of survivorship,

which means that the surviving co-owner(s) will own the property of a joint tenant who dies.

Licensees may charge a fee of ______ dollars per contract they prepare for a client.

zero

Samantha is selling her condo. A potential buyer has just asked for her Homeowners Association's (HOA's) disclosure packet. What should Samantha say?

"Great. I'll submit a written request for your packet to my HOA first thing tomorrow morning. How do you want it delivered?"

Your clients are looking at buying a $200,000 property with a 30-year loan at a 5% interest rate. How much would their principal and interest payment be per month? Plug in the numbers using the amortization chart in your resources see what the payment per month would be. Remember: The monthly payment multiplier is per $1,000 of the mortgage.

$1,073.64

The Gomez family just moved into their dream home. They purchased the home for $264,985, and it appraised at $272,402. The assessment ratio for their area is 25%, and the tax rate for their area is 2.8%. What is their annual tax bill?

$1,907 The Gomez family will pay $1,907 in annual taxes ($272,402 × .25 = $68,100 × .028 = $1,907).

An appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000, and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

$174,000 To estimate value, an appraiser adds the site value to the estimated cost to replace improvements then subtracts the estimated depreciation. So to solve the equation, you need to solve for cost of improvements. In order to do this, you have to move the given values to the other side of the equation - $50,000 + $4,000 . Here's the equation used to find the cost of improvements = $220,000 ‒ $50,000 + $4,000.

Helen is purchasing a home for $150,000 and provides a $2,500 earnest money check to the seller. She's financing the transaction, and her closing costs and down payment total $4,800. How much should Helen bring to the closing?

$2,300

A property generates $30,000 in net operating income and has a 15% cap rate. Using the income approach, what is its value?

$200,000

Which of the following is the best example of a tie-in arrangement?

A business requires its clients to also purchase services from another business.

What's a group home?

A facility where five or more adults who were once institutionalized live

The Hendersons don't have enough money to make the full 20% down payment their lender requires. To close the sale, the seller is willing to finance a loan for the gap between their down payment and the amount the institutional lender is willing to loan. What's this type of financing called?

A purchase money mortgage is the term for seller financing typically used to bridge the gap between the buyer's available down payment and the institutional loan, though it can also be used to finance the entire purchase price.

Brandon has a right-to-use timeshare. What can he NOT do with this type of timeshare?

A right-to-use timeshare conveys the right of possession, but it isn't ownership and therefore can't be sold or passed on to another individual.

Whats the size of a section?

A section is one square mile, or 640 acres. A hectare is a 100-acre measurement.

What's a password vault?

A security tool that stores logins and passwords

Avulsion:

A sudden loss of land by a swift, large-scale change in water flow

To which of the following borrowers might a lender be most likely to recommend an FHA loan?

A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores

What's it called when all parties sign a contract, but before the seller's acceptance is delivered to the buyer?

Acceptance occurs when all parties have signed a given contract. Binding acceptance occurs when the accepted offer is delivered.

Carlson presents a real estate purchase client to his clients. Along with the contract are several supplemental documents attached to it. What are these called?

Addendums

Which of the following is an example of single agency?

An agent from one firm acts as the agent for the buyer.

Soundproofing and decorative material, shingles, and siding may contain what hazardous material?

Asbestos

As a security precaution, when posting on social media, what should you do?

Assume that the information will be passed along.

Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______.

Avoid unauthorized practice of law Licensees must avoid unauthorized practice of law. Drafting contractual paperwork with uncertain terms would be a violation.

Ken, Barbie, and Trixie owned a property as a joint tenancy. When Trixie moved out of state, she sold her interest to Skip. Two years later, Ken died. How is the interest in the property divided?

Barbie owns two-thirds and Skip owns one-third. Joint tenancy includes the right of survivorship, so Ken's interest will pass to the other tenants. But because Skip bought in later than the others, he isn't considered a joint tenant. Ken's share will therefore pass entirely to Barbie.

Which of these is an example of illegal market allocation?

Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.

A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. How many payments will he make over the course of the loan?

360

According to the EPA, at what level does radon become a health concern requiring mitigation?

4.0 picocuries per liter of airAlthough there is no safe level of radon, once the level reaches above 4.0 picocuries per liter of air, the EPA recommends radon mitigation.

One square mile =

640 acres

A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?

7.9% The cap rate formula is: net operating income ÷ value = rate (I ÷ V = R). So $67,500 ÷ $850,000 = .079 or 7.9%. This formula can work in reverse as well: value (purchase price) × cap rate = net operating income (V × R = I).

A builder is selling a newly-constructed property. What are the seller's disclosure obligations related to this sale?

The builder must disclose all known material defects that are considered building code violations.

The Slathertons are looking at buying a $300,000 property with a 20-year loan at a 6% interest rate. How much would their monthly principal and interest amount be? Plug in the numbers using the amortization chart in your resources to see what the payment per month would be. (Use the amortization chart your lesson instructed you to print out.)

The estimated payment is $2,149.30. Remember to divide $300,000 by 1,000, then multiply the factor (7.16431) by 300

What's an encroachment?

The illegal building of a structure or object on another's property

Which of the following pieces of information does Linda, a Virginia real estate salesperson who works for Big Valley Realty, NOT have to include on her business cards?

The name and number of her sponsoring broker

The original sales agreement and any addenda to that agreement must be accurate.

They should clearly identify the property and all parties to the transaction.

Which term is defined as a tax that's applied when property changes ownership?

Transfer tax

Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this?

Unilateral

Upon a life estate holder's death, the estate either reverts to the original owner or to another person the original owner has named, known as a ______.

With an ordinary life estate, the ownership rights to the property either revert to the original owner (reversion), or to another person that the original owner has named (remainderman).

Mardee is representing Carol in the sale of her condo, and they've signed an exclusive agency listing agreement. If Carol finds her own buyer, does she owe Mardee a commission?

With exclusive agency, the seller retains the right to sell herself and not pay a commission. Exclusive right-to-sell agreements guarantee payment to the listing agent no matter who brings the buyer.

Harold is the sole owner of a timeshare development. He has just started advertising his timeshares when his circumstances change; he must move to the other side of the country to take charge of some family issues. He decides it is best to terminate the timeshare development. Can he legally do so?

Yes, as long as he is still the sole owner of the development.

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

Yes, because "exclusive right to sell" means Bernie gets paid no matter who finds the buyer.

Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?

Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit.

Marvin knows that three-bedroom properties with two bathrooms sell quickest in his market. In an ad for a new listing, he wrote, "Bonus room could easily be a third bedroom." Marla and Tom visit the property with their agent, and Tom, a construction supervisor, notes that the bonus room couldn't be easily converted to a bedroom because it's too small, it has no egress and no heat source, and it can only be accessed by walking through a bathroom. Is Marvin guilty of misrepresentation?

Yes, because he should have known there would be major issues converting that room to a bedroom.

Kris made an offer on Lincoln's townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?

Yes, because the offer to buy is the consideration.

Aldrich is conveying marketable title to a property buyer. Should he also furnish a title insurance policy?

Yes, because title defects not revealed in a title search can crop up even with marketable title.

Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?

Yes, but certain terms of the agreement may still be binding upon Ben.

Sam is renting out his single-family home. He wants to rent only to white couples. Can he do this without violating fair housing law?

Yes, but only if he doesn't own more than three single-family homes at once.

Can police power ever be used in a way that restricts citizens' freedom?

Yes, if it's for the public good.

Savvy's buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she'll ask the seller's agent for an extension on the inspection period "to gather more bids," and use that time to look at other properties to avoid losing out on the current property. Savvy's client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property's agent to terminate that offer. Is this wrong?

Yes, she did not treat the other party honestly, or act in good faith.

You represent a seller as a listing agent. Do you owe any duties to buyer agents?

Yes, the duty to cooperate on showings

The city of River Heights is experiencing a shortage of skilled workers in the construction trades. Is this likely to affect the real estate market, and if so, how?

Yes, this would impact the supply of homes on the market, potentially creating a seller's market. The availability of skilled labor to build homes is a factor that will affect the supply of homes on the market. Low supply can potentially create a seller's market.

Which of the following best demonstrates the fiduciary duty of disclosure?

You notify all parties of the existence of mold on the property.

Front foot (frontage) =

length of the property along a street, highway, or waterway

If one of essential elements is missing,

the new tenant is Tenancy in Common. '

Which of the following is an example of a metes and bounds description?

"Beginning at the iron pin 30 paces from the center of the brook that runs across the road Southwesterly from the dwelling ..."

Your client Kari manages a large condominium development. She wants to make sure that all of her condo owners are Christians. How should you advise her?

"Discriminating on the basis of religion breaks federal fair housing law."

Lora, a new licensee, has a landlord client named Gus who doesn't rent to smokers. "I'm not sure he can do that," she says. "Aren't smokers a protected class under fair housing laws?" How should you respond?

"Gus can choose not to rent to smokers, as long as he makes sure they're not protected under any local ordinance."

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?

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

Virginia licensee Grant is sitting down with his buyer client Zoe and the person who's selling the condo she wants: Brandon. Grant thought he did a good job explaining why Brandon needs to sign an agency disclosure form, but Brandon asks, "Well, what if I don't want to sign it? What will you do about it?" What should Grant say?

"I understand, but I won't be able to present an offer unless you sign it. It just says that you understand that I'm Zoe's agent."

Your clients want to include multiple contingencies in their offer. If you know it's a competitive bidding situation, you say, ______.

"Let's evaluate which contingencies matter most to you and consider omitting the rest."

Max is a condominium developer. For his new development, he is gathering documentation that he has to submit to the CIC board. Which of the following pieces of information is NOT likely to be included with this documentation?

"Marketing rules for real estate personnel are as follows:"

Someone called into Rolling Hills Realty with a complaint about an advertisement that agent Luellen has displayed on her seller client, Ron's, property. "I want to talk to the person who's ultimately responsible for this ad!" says the caller. Which of the following is the correct response?

"OK, I'll have you talk to our principal broker Gary McCann."

You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?

"That's a great way to meet our objectives." Your response should be, "That's a great way to meet our objectives." Bulk zoning can apply to both residential and commercial zones, and it doesn't increase density.

Jerry has completed 170 hours of online education and he has two years' experience as a real estate salesperson. He's wondering about the possibility of getting another license. What should you tell him?

"You could apply to be a broker after one more year of experience and 10 more education hours."

You're working as a buyer's agent for Neil and Sharon, who just found the home of their dreams. When they ask you about adding contingencies to their offer, what do you tell them?

"You definitely want to protect your interests, but let's make it as easy for the seller as possible to choose your offer."

After looking up his property on an official zoning map, Nathan sees that the house he's trying to sell is in a military noise zone of more than 65 average decibels. "It's never noisy here at all, though!" he tells his agent, Jamal. "I'm outside all the time and can only just barely hear the planes! Would it be okay if I didn't fill out this disclosure?" What should Jamal say?

"You must disclose this, because otherwise the buyer can take legal action against you."

Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?

$105,263.16 The seller's percentage of a sale is 100% - 5% commission = 95% (or .95). Take the amount the seller wants to net and divide it by that amount ($100,000 ÷ .95 = $105,263.16). Conversely, for a sales price of $105,263.16: $105,263.16 × .95 = $100,000.

What's the estimated value by cost approach for a property if the site value is $25,000, the new cost of improvements is $100,000, and the total depreciation estimate is $15,000?

$110,000 To estimate value using the cost approach, an appraiser adds the site value to the cost to replace improvements, then subtracts the amount of depreciation. Here, that gives us $100,000 + $25,000 - $15,000.

Edric owes $115,000 on his lakefront home, which he's selling for $350,000. He's spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he'll actually pocket at closing. What number does he come up with?

$162,000

Cheryl and Roberto just signed a contract for Cheryl to buy Roberto's house for $235,000. Roberto owes $48,750 on his current mortgage, he's going to replace the old furnace ($800), he's agreed to pay 3% toward closing costs, and he'll pay a 6% commission to his agent. How much in whole dollars will he have left to put down on the condo he wants to buy?

$164,300 Roberto's closing costs will be $7,050 ($235,000 x 0.03) and commission will be $14,100 ($235,000 x 0.06). Subtract those two amounts, the furnace cost ($800), and the mortgage loan payoff ($48,750) from $235,000 to get $164,300.

What is the maximum amount a consumer can recover from the Real Estate Transaction Recovery Fund?

$20,000

Finn wants to know how much he'll net on the sale of his property. His property sold for $385,000. He paid a real estate commission of 6%, his other closing costs totaled $3,837, and he must pay off a loan balance of $127,715. What's his net?

$230,348

What is the highest amount a licensee can be fined by the Department of Professional and Occupational Regulation for a serious violation of real estate license law?

$2500 The Department of Professional and Occupational Regulation can assign a fine up to $2,500 for serious violations.

Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?

$255,000

Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier's check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What's the condo's purchase price in whole dollars?

$265,000

A seller wants to net $10,000 after the broker's commission of 6% and a loan balance of $250,000 are paid. For how much does the property need to sell?

$276,596

Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account?

$285,000

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

A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. The lender also charges a one-point loan origination fee. How much is the loan origination fee?

$3,200

Almanzo is buying a horse farm for $695,000 and put down 15% in earnest money. His closing costs and down payment total $139,000. How much will he need to bring to closing?

$34,750

Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?

$345,103

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What's the total amount the borrower will pay back over the life of the loan?

$367,687.80

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

Hamish makes an offer on a loft in the city for $424,900 with a 10% earnest money deposit. The seller agrees, so Hamish secures an 80% loan. He needs to set aside funds for the mortgage tax as part of his closing costs. The rate in his area is $0.115 per $100. Calculate the mortgage tax Hamish will pay.

$390.91

Sandra is purchasing a home for $200,000 and provides a $3,000 earnest money check to the seller. Her closing costs and down payment total $7,000. Assuming that Sandra is financing the purchase, how much should she bring to the closing?

$4,000

Ezra's listing sold for $100,000. His commission rate was 4%, and the property appraised at $95,000. What's Ezra's commission before splits or sharing with the cooperating agent?

$4,000 Commissions are based on sales price, not appraised value or list price, and 4% of $100,000 is $4,000.

A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What's the amount of the loan origination fee if the lender charges one-and-a-half points?

$6,750

How would you calculate the transfer tax if it's $.35 per $1,000 of the sales price ($400,000)?

(400,000 ÷ 1,000) x .35 Divide the sales price by 1,000 (400,000 ÷ 1000= 400), then multiply by .35 (400 x .35 = 140).

The Federal Truth in Lending Law:

(Regulation Z) 1 Requires a lender to estimate a borrower's approximate loan closing costs before accepting a loan. 2 regulates advertising that contains information regarding mortgage terms 3 prevents brokers from using a phrase like "FHA financing available" in any ad 4 Dictates that mortgage applications be made on specific government forms

Four types of POA

1. Limited - For specific purpose ex, sign a deed. 2. General - Same rights you have until incapacitation or death 3. Durable - Same as general but will remain during incapacitation unless rescind. 4. Springing - Does not come into effect until you are incapacitated.

Four types of POA

1. Limited - For specific purpose ex, sign a deed. 2. General - Same rights you have until incapacitation or death 3. Durable - Same as general but will remain during incapacitation unless rescind. 4. Springing - Does not come into effect until you are incapacitated.

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?

10 years

The lead based paint inspection section gives buyers who are purchasing a home built before

1978 the option to have their home inspected for lead-based paint hazards

What is the minimum amount of hours of appraisal experience required to be a licensed appraiser?

2,000 The lowest certification level is that of a licensed residential real estate appraiser, who must have 2,000 hours of appraisal experience in no fewer than 12 months. An appraiser trainee who works under supervision is not a licensed appraiser.

A lot measuring three-fourths of an acre is for sale. How many square feet is this?

32,670

How many acres are in a parcel described as, "The NE 1/4 SW 1/4 Section 3, Township 4S, Range 2W of the 6th PM"?

40

One acre =

43,560 square feet

One mile =

5,280 linear feet

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

75%

If a rectangular building were 40 feet by 20 feet, the area would be ______.

800 Square feet

Jane is purchasing a property for $310,000 and plans to finance $250,000. What is the loan-to-value ratio? (Round to the nearest percentage.)

81%

Your buyer client, Max, just signed a purchase agreement for a $520,000 home. He has a 60% LTV ratio, and his lender's charging a 1.5% loan origination fee. What loan origination fee can Max expect to pay at closing?

A 60% LTV ratio means that Max is financing 60% of his purchase of $520,000, which equals $312,000 ($520,000 x 0.60). The loan origination fee is 1.5% of the financed amount: $312,000 x 0.015 = $4,680.

What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act?

A Superfund site is a site identified by the EPA as requiring clean-up of hazardous waste under CERCLA.

Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them?

A VA loan, which requires no down payment.

Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides?

A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties.

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 cooperative

Related to title insurance, what is "subrogation"?

A covered party grants permission to the title company to pursue the party who caused a claim or loss. When the title company is forced to pay a claim against the policy, the covered parties give the title company permission to pursue the party who caused the loss. The covered parties are said to "subrogate" their rights to the title company.

Which of these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint. After an initial complaint is made, a fair housing specialist will review it to determine if a violation has occurred. If there's a potential violation, the specialist will help the consumer file an official complaint.

Which of these is NOT an example of a stigmatized property?

A fairly new townhouse which, upon inspection, has a bathroom full of black mold.

A burnt electrical outlet or light switch that's warm to the touch are signs of ______.

A fault or defect in the electrical system

Which statement regarding fee simple defeasible estates is true?

A fee simple defeasible estate includes the full bundle of legal rights, but ownership may be terminated if the required condition is violated.

Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?

A fee simple determinable has limitations as to what can or can't be done with a property. It uses phrases such as "so long as," "while," or "during" to describe the required condition.

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 home warranty covers things the inspection didn't address, like appliances, as well as structural issues that occur.

"Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues, which have now been fixed?" What's the agent's best response to Lamar's question?

A home warranty often covers items that weren't inspected. Also, even the systems that WERE inspected are subject to problems or failure.

Which of these Virginia transactions requires that the property disclosure be provided to the buyer?

A house for sale by owner

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 is this an example of?

A land contract

What's a power of attorney?

A legal document that allows a person to act as attorney-in-fact for another in a financial, business, or health matter

Which of these is an example of usury?

A lender charges a borrower an interest rate that is excessively high.

Which of the following statements is true of a material fact?

A material fact would cause a reasonable person to either act or not act, if that fact were known.

After an investigation by the DPOR, what comes next in the complaint process?

A meeting is held between the parties involved to determine the facts of the matter.

Rhonda and her husband filed for bankruptcy five years ago. They want to purchase a new house but don't have the best credit score. They've decided to buy the home using an FHA loan. Which of these is a true statement?

A minimum down payment of 3.5% is required.

Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?

A party can't promise to do something impossible in a contract. Doing so makes the contract void.

An example of this type of leasehold estate is a month-to-month lease.

A periodic estate automatically renews at the end of its lease term, such as at the end of a given month.

Your client Faye is buying a condo downtown for $565,000 and financing 60% of the purchase. Her lender is charging a one-point loan origination fee and two discount points. Can you help Faye calculate the dollar amount for points she's going to pay on her loan?

A point is 1% of the loan amount. Faye's loan amount is 60% of the sales price, or $339,000 ($565,000 x 0.60). Her lender is charging three points total, or 3% of the loan amount. That comes out to $10,170 ($339,000 x 0.03).

Which of these areas would be included in the livable area calculation?

A pool house connected to the house by a hallway

Right-of-way:

A right of way provides a pass-through to other property but doesn't allow usage of the land.

Melisa signed a six-month listing agreement with Greg on February 12. Her property is very specialized, and Melisa was adamant about the sales price. By September, the property still hadn't sold. Melisa expressed her displeasure with Greg for his inability to sell the property. What's the status of the listing agreement?

A six-month agreement signed on February 12 would expire in August.

Jeremy is an investor who's purchased a foreclosed property. He's nervous about building on it, though, in case there are former occupants "out there" who may lay claim to the property. What would best solve Jeremy's dilemma?

A suit to quiet title

The Simpsons are buying a five-acre tract that has always been part of a larger parcel. When the owners of the large acreage decided to subdivide it, they needed to have a legal description created for the five-acre lot. What was used as the starting point for creating that legal description?

A survey

What is a survey?

A survey is used to create, verify, or correct a legal description. It's a professional on-site measurement of the lot lines and dimensions of a property.

Marlon and Leah are interested in buying a home in a new homeowner opportunity area. The 100-year-old row house was renovated and is like new on the inside. The property taxes decreased by more than $5,000 last year. What's the likely reason for this?

A tax abatement program will lower the property taxes on a given property for a set amount of time. This is typically in response to some sort of improvement or rehabilitation, or for some new construction properties.

Which of the following is an example of constructive eviction?

A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater. A constructive eviction occurs if a tenant vacates the property because the landlord has failed to uphold the warranty of habitability.

Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions?

A verbal lease agreement Martha has with her neighbor who leases Martha's garage The title policy doesn't exclude property taxes (assuming they're properly recorded), though the taxes must be paid before the policy is issued. The verbal lease agreement is excluded since it's not shown in public records.

Walt and Ginger were informed by their landlord that their option to purchase the bungalow they're renting has just been terminated. Which of the following things that can occur is likely to terminate an option to purchase?

A violation of any of the lease terms could terminate the option to purchase. Of these four actions, the only one likely to violate the lease terms is subletting without permission since most leases have a clause requiring lessor permission to sublet.

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?

A voidable contract appears to be valid but because of legal principal, one or both parties have the right to rescind the contract. In this case Sylvia can enforce the contract against Marge but Marge cannot enforce against Sylvia.

As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this?

A voidable contract can be cancelled by one or more parties because it's missing an essential element. In this situation, Melanie, the buyer, has the right to cancel the contract and have her earnest money refunded.

Which of the following loans may require compliance with Appraiser Independence Requirements?

AIR apply to conventional loans used to purchase a single-family dwelling of one to four units. Federally insured or guaranteed loans (such as FHA or VA or commercial loans) are exempt.

After getting into a fender bender, Parker had to buy a new car. To make the down payment on the car, he had to skip a couple of his mortgage payments. He received a notice from his lender indicating the remaining amount of his loan is due immediately and in full. What clause in his mortgage stipulates this?

Acceleration The acceleration clause gives the lender the right to make all money owed immediately due and payable if the borrower defaults.

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.

Accepting liquidated damages All of the answer options are actual remedies to breach of contract, but in this scenario, Kenneth kept the earnest money, which is known as accepting liquidated damages.

According to the disclosure statement, what is a seller's disclosure requirement if they know that the parcel of land behind their property is being rezoned for commercial development?

According to the disclosure statement, what is a seller's disclosure requirement if they know that the parcel of land behind their property is being rezoned for commercial development?

Which of the following is an example of illegal market allocation?

Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half.

The element of a deed that signifies the grantor's intention to transfer title to the grantee is the ______.

Act of conveyance

Jansen and his listing agent just left the closing on Jansen's house. What kind of notice does Jansen, his agent, the buyer, and the buyer's agent have regarding the sale of Jansen's house?

Actual notice All these parties have actual notice of the property's sale because, even though they didn't witness recording of the documents, they attended the closing and observed the documents changing hands.

Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter?

Add two times the length to two times the width.

Which of the following is an addition to a sales contract that doesn't change its terms?

Addendum

Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn't part of the standard sales contract in your area. What will you use to accomplish this request?

Addendum

Your brokerage firm uses pre-printed sales contract forms, but your seller, Marcus, wants to add some language about staying in the house and renting from the buyer for a month after closing. What should you use to add this information?

Addendum An addendum is added before the contract is signed and becomes part of the original agreement.

What is a strict foreclosure?

After borrower default, the lender prepares and records paperwork with the court, the court sets a payment deadline for the borrower, and the lender is awarded title if the borrower doesn't pay. Strict foreclosures do not require a sale. Paperwork is prepared and recorded, the court sets a deadline for payment, after which the title is awarded to the lender.

Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step?

After his offer is accepted, he's ready to begin the loan application.

Which of the following best describes the process of reactivating your license after a one-year period of inactivity?

After you affiliate with a broker, the broker certifies your change in status application and submits it with a fee. You provide proof that you completed the required continuing education credits.

Marcy is found guilty of price fixing. This means she must have _______.

Agreed with a competitor to charge a specific amount

The property management ______ cements the agency relationship between the property manager and the owner.

Agreement

A former client has filed a formal complaint against Ajit, claiming he failed to properly disclose a material fact that the seller didn't disclose. Which of these statements about Ajit's liability is true?

Ajit may be liable if he operates in a state that requires licensees to make a reasonable effort to discover adverse material facts. Licensees must follow state laws regarding disclosure of all material facts, but typically there's no distinction between disclosure of material facts or adverse material facts. Ajit may be liable even if the seller didn't disclose the fact, depending on state law.

When you walk into the reception area of Happy Homes Realty, you see the licenses of ________ displayed on the wall.

All brokers, associate brokers, and salespersons affiliated with the brokerage

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent Jenner tells them that they're required to purchase a third-party home warranty. Which of the following conditions must be true?

All loans that are either FHA-insured or VA-guaranteed require a home warranty to protect both the buyer and the home's value.

Henry, a principal broker, has been found guilty of performing real estate transactions while his license is suspended. Which of the following statements about this situation is true?

All of the licensees Henry supervises could lose their licenses.

Your client, Cassandra, asks you at what stage in her property ownership life cycle she'll be impacted by income tax issues. You tell her that it's likely that she'll be affected at ______.

All three stages of homeownership—acquisition, ownership, and reversion—can be affected by income taxes.

Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

Alluvion describes new deposits of land that are the result of what natural process?

Harold's clients signed the real-estate contract a couple of days ago, but the seller wishes to change the amount they are going to contribute to closing. What type of contract addition will likely be used to convey the change?

Amendment

The appraisal on Jean's property came in at $22,000 less than the agreed-upon sales price, so the buyer, Thomas, wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this?

Amendment

Which of the following acts requires commercial buildings to be accessible to disabled individuals, such as those who use wheelchairs?

Americans with Disabilities Act

Which of these is NOT a likely features of a bridge loan?

Amortized loan paid back over a period of no more than five years. A bridge loan is usually a temporary, short-term interest-only loan secured by the borrower's existing home.

Esmerelda makes regular monthly payments on her loan. In addition to paying interest, she's slowly paying down the principal of the loan. With each payment she makes, more will go towards the principal and less to interest. What type of loan does she have?

Amortized mortgages are paid off in periodic regular payments of interest and principal. Over time, the portion of the payment made toward principal increases as the portion used to pay interest decreases.

Which of the following actions is representative of an agent's due diligence and ethical behavior?

An agent notices a discrepancy between what the homeowner says and what the property shows, so he investigates.

Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue?

An arbitration clause in a contract specifies that any contract disputes will be settled through arbitration, rather than through the court system.

What is a special flood hazard area?

An area where flood insurance is mandatory This is an area in which the National Flood Insurance Program's floodplain management regulations must be enforced and where the purchase of flood insurance is mandatory.

When an area uses its zoning powers, what must be followed?

An area's comprehensive plan outlines future development plans and goals of the area. Zoning decisions should follow this plan.

Will was sued for damages related to a car accident in which he was involved last year. As part of the proceedings, the court placed a lien against his primary residence. What type of lien is this?

An attachment lien is when the courts place on encumbrance on the property of a defendant in a lawsuit for monetary damages.

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?

An easement appurtenant is attached to a parcel of land and transfers with the land. It grants the right to use adjoining land.

Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?

An easement in gross is granted to a specific individual or company—in this case, the gas utility company.

A fence that's placed two feet onto a neighbor's property line meets the legal definition of _______.

An encroachment A physical intrusion onto another person's property is an encroachment.

What is an encumbrance?

An encumbrance is a defect on a property's title that can be monetary, such as a lien, or physical, such as an easement that limits the owner's use of the property.

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?

An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.

Which type of deed conveys real property from a decedent's estate to a buyer?

An executor is the person in charge of administering the estate according to the will of the deceased. An executor's deed conveys real property from a decedent's estate to a buyer.

How might the lengthy purchase process for a short sale or foreclosure impact a buyer's financing?

An existing interest rate lock may expire before the transaction is ready to close.

Who would be most likely to use a quiet title suit?

An investor of foreclosed properties

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?

An iron rod with a surveyors cap

Which of the following opinions can a real estate licensee provide?

An opinion regarding the listing price

Anna manages an apartment complex for her landlord, Katherine. Anna's friend Kevin is looking for an apartment, and without asking Katherine's permission, Anna rents him a two-bedroom apartment that she's had trouble renting for the one-bedroom rate. Which of these statements is true?

Anna has breached her fiduciary duties to Katherine. As a property manager, Anna is expected to work in the best interests of her client (Katherine). She's breached this duty.

The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?

Annual payment ÷ loan balance = interest rate. $1,830 x 12 to get the annual payment of $21,960. Then divide the annual payment by the loan amount: $21, 960 ÷ $349,000 = .0629, or 6.29%.

What does the Federal Trade Commission consider to be an unfair ad?

Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC's Unfairness Policy Statement.

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 The FTC is concerned with all ad claims, but it's most concerned by any ad that makes a health or safety claim or any claim that is difficult for the consumer to evaluate.

A trust involves a special relationship called a fiduciary relationship. Which of the following statements is true regarding trusts?

Any asset may be held in a trust. Trusts are very flexible and accommodating. Any asset may be held in a trust.

Which of the following types of buildings are affected by the Americans with Disabilities Act (ADA)?

Any buildings that house businesses that serve the public

Which of the following does the Virginia Antitrust Act make unlawful?

Any contract, combination or conspiracy resulting in the restraint of trade within the commonwealth.

Jerrica is set to close on the property she's buying on Friday. Because of other delays in the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?

Any interest rate change of more than 1/8 of a percent requires a new Closing Disclosure, triggering a new three-day waiting period.

Alberto is a real estate licensee. Assuming that none of the following are his clients but are parties to a potential transaction, to whom must he provide an agency disclosure form?

Any party

In which of these situations does the disclosure for unrepresented parties need to be provided?

Any time an agent is interacting with an unrepresented party and the discussion starts to become substantive

Which of the following provides everything a lender needs to know in order to value the property used as collateral for a loan?

Appraisal

Shannon doesn't understand why her agent wants her to add a contingency to her purchase offer. Her agent, Scott, explains that the property is in a transitional neighborhood, and it might be overpriced. What type of contingency is Scott recommending?

Appraisal An appraisal contingency gives the buyer the opportunity to renegotiate the price if the appraisal comes in less than the agreed-upon purchase price. This is an important contingency in an area where values are shifting.

Which of these items should real estate professionals help first-time buyers and buyers who have experienced recent credit issues to understand?

Appropriate financing

Which of the following questions can an agent in a dual agency transaction answer without breaching her duties to either client?

Are you aware of any structural issues with the property?

Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate?

Area preference Just remember the mantra "location, location, location!" A property's value is largely dependent on where it is and the desirability of that location.

REALTOR® Arnold was instructed by his client Sebastian to find a buyer who would "fit into the neighborhood." What is Arnold's responsibility in this situation?

Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws.

What are improvements with regard to property?

Artificial attachments to land that include items such as fencing, buildings, and walkways Improvements are artificial attachments to land that include items such as fencing, buildings, and walkways.

Your client, Eric, is interested in purchasing an industrial property to start a new business. You've recommended that soil, air, and water testing be done, but Eric is on a tight budget and doesn't feel these tests are necessary. What should you do?

As a licensee, it's your responsibility to recommend these tests. Since the client has declined, you should keep records of your recommendations and have a written response from the client. You're not obligated to follow through with testing on your own.

The fibers of ______ are dangerous when inhaled because they can lodge in the lungs and intestines, causing cancer.

Asbestos

What is the mechanism by which asbestos can cause cancer?

Asbestos is a fibrous material found in certain types of tile, insulation, and siding. These fiber particles are then inhaled and can damage the lungs over time.

Which of the following would a home inspector note as a defect in a report, due to its link to lung cancer?

Asbestos tiles in a basement

Margot and Steve owned several rental properties at the time of their divorce. The divorce decree gave ownership to Margot in return for a cash payment by Steve. Fast forward six years, and Margot is ready to sell the properties. She soon discovers, though, that Steve's name is still on the title. What's her best course of action?

Ask Steve to generate quit-claim deeds on the properties. Even though the divorce decree grants ownership to Margot, she can't convey the properties until Steve either produces quit claim deeds OR agrees to convey the properties with her.

Bill is joining his inspector Hank for an inspection of the property he hopes to purchase. Hank notices that the dirt on the exterior of the home slopes toward the house. He explains that it should slope away from the home. When it doesn't, what problem might this create?

Basement leaks Soil sloping toward a home means that rain runs off toward the home. This improper drainage can lead to leaks and moisture issues.

Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?

Because lenders won't lock in an interest rate for more than 90 days before closing, Kaden needs to plan for the possibility of a 1% interest rate increase between now and closing, or risk not qualifying for the loan when the time comes.

Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?

Because the broker has become incapacitated, the listing agreement terminates by force of law.

Olivia took out a 15-year loan secured with a deed of trust. She worked two jobs in order to pay the loan back and finally made her last payment this month. What happens now?

Because the property deed was held by a third-party trustee instead of the lender, the trustee grants a reconveyance deed to Olivia.

Licensee Wanda meets prospective home-buyer Shaleese on Monday for coffee and they discuss the kind of condo Shaleese is looking for. On Tuesday, they meet again so they can go over Shaleese's budget. And on Wednesday, they meet again and Wanda shows Shaleese five properties. When should Wanda have entered into an agency relationship with Shaleese?

Before Wanda shows Shaleese any properties.

Zoe, seller, and Darnell, buyer, signed their purchase contract on Monday. The contract allows for Darnell to move in to the property one week before settlement. The day before Darnell is to move in to the property, Zoe provides Darnell with the disclosure statement. If Darnell wishes to terminate the contract, by when must he provide Zoe with a written termination notice?

Before moving into the property

A metes and bounds legal description looks like this:

Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road southwesterly from the dwelling house of the late Jebediah Smith now occupied by the widow Callie Thornton and in the west line of the highway leading by the dwelling house now occupied by the widow Callie Thornton ...

Ben, a property owner, is hiring Cam, a real estate licensee, to manage a property. The property is currently occupied by Heidi, whose lease is set to expire at the end of the year. Which of these individuals are parties to the property management agreement?

Ben and Cam The property manager and the property owner are the parties to a property management agreement.

Why is a foreclosure more likely to have title issues than a non-foreclosure?

Borrowers who can't afford loan payments may have taken out other loans against the property.

Which of these statements about a conventional mortgage loan is true?

Borrowers with larger down payments and higher credit scores are most likely to select a conventional mortgage.

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value. A property's lot size, enjoyment, use, and value can be impacted by easements or encroachments.

What does "Beginning at the corner of State Route 61 and Hallowell Road" represent?

Bounds are physical features that define the boundaries of the property. Combined with directions and distances (metes), these form the basis of a metes and bounds legal description.

When Gillian 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 "Beginning at the corner of State Route 61 and Hallowell Road" represent?

Bounds are physical features that define the boundaries of the property. Combined with directions and distances (metes), these form the basis of a metes and bounds legal description.

Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.

Bracketing

In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?

Bracketing

Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.

Bracketing Bracketing determines a probable range of property values by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age and transaction price.

In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?

Bracketing is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison such as age, transaction price, etc.

Which of these brokers is providing adequate supervision and training for their new licensees?

Brannon reviews and discusses licensees' work to make sure it meets regulations, and provides training opportunities to all associates.

Which of the following is an example of improper escrow account maintenance?

Broker Odette deposits an escrow check seven business days after she receives it.

Which of the following licensees are allowed to work independently, without being sponsored?

Brokers

Which of these is a rule that governs how escrow money can be disbursed?

Brokers can disburse escrow money at the conclusion of the transaction to settle the agreement between the parties

Which of the following statements about independent contractors and taxes is true?

Brokers don't withhold income or Social Security taxes for independent contractors. Brokers don't withhold income or Social Security taxes from commissions paid to independent contractors. Independent contractors are responsible for paying these.

Jackson Elementary School is undergoing some major renovations during the summer while school is out of session. The renovation crew has a detailed list of requirements for the disposal and drainage of wastewater and sewage. These requirements are likely part of the ________ with which the renovators must comply.

Building code

Matt is a developer who's obtained a permit that he must post on the job site. Which entity inspects the various phases of his work and signs off on the permit?

Building department inspectors

Which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan?

Buydown

In states where full disclosure isn't required, it's the ______ responsibility to perform due diligence on the property.

Buyer's

Sam's kids talked him into putting up the basketball hoop that their grandparents got them for Christmas. On a quiet Saturday afternoon, Sam is busy nailing the backboard to the front of their garage facing the street when one of the officers of the homeowners association walks by. "I'm so sorry," she says, "but you'll have to take that down. Basketball hoops in direct view of the street are prohibited." What is in place in Sam's subdivision that would prohibit this?

CC&Rs

Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can't seem to determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?

CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund.

Eileen is preparing a monthly report pursuant to the terms of a property management agreement. This report details actual income received from rent and other fees, along with actual expenses paid. What report is she preparing?

Cash flow report The cash flow report is usually created monthly and shows the current financial status of a property. It accounts for income received (such as rent, late fees, etc.) and expenses (such as utilities, personnel, repairs, etc.) paid.

Which statement about the buyer's selection of the settlement agent is true?

Chapter 27.3 of Title 55 of the Code of Virginia gives the buyer the right to select the settlement agent.

Which one of the following people does NOT have to fill out the Virginia Property Disclosure form in order to sell his or her property?

Cindy has to sell her townhouse because she hasn't paid state taxes in more than 10 years.

Citytown officials know that they have an abandoned factory site that has been identified for cleanup under CERCLA. When city officials tried to trace the ownership of the property, they found several shell corporations but can't determine which individual or corporate entity actually owns the property. What is a likely outcome of this situation?

Citytown will apply to the CERCLA trust fund for cleanup costs. CERCLA established a trust fund to finance both cleanup and enforcement actions. This fund is sometimes called the Superfund.

Title VIII of which law prohibits discrimination in the sale, rental, and financing of housing?

Civil Rights Act of 1968 Title VIII of the Civil Rights Act of 1968 is also referred to as the Fair Housing Act of 1968, prohibits discrimination in the sale, rental, or financing of housing based on race, color, national origin, and religion.

Technology poses risks for everyone, but real estate licensees need to be especially careful. Which of the following is true about risks related to computer systems?

Client data can be exposed when a brokerage's computer system is compromised.

What agency/act is designed to "preserve, protect, develop, and where possible, to restore or enhance the resources of the nation's coastal zone"?

Coastal Zone Management Act

Which regulation establishes the Real Estate Board?

Code of Virginia Title 54.1 Chapter 21

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.

Color

Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage's escrow account and deposits it in her account for a few days before paying the developer. Which answer correctly identifies the violation(s) Jill has committed?

Commingling and conversion

Which of the following options describes a method by which a licensee can determine an appropriate listing price range?

Comparative market analysis

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it?

Compare it to the Loan Estimate. Margaret should compare the Closing Disclosure figures with those on the Loan Estimate to ensure that no undisclosed changes in loan costs have been made.

The Hendersons were hoping to list their home for $400,000; however, four other comparable homes in the neighborhood just went up for sale, and they now must list their property at $380,000 to sell quickly. Which economic principle is at work here?

Competition

Which economic principle is related to supply and demand?

Competition

What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?

Comprehensive Environmental Response Compensation and Liability Act This is required by CERCLA, the Comprehensive Environmental Response, Compensation and Liability Act.

To make valid computations of adjustments for the market comparison approach to value, elements of comparison must be applied in a specific order. Which of these elements has the highest priority?

Conditions of sale

Many of an agent's fiduciary duties to the client end upon termination of an agency agreement. Which fiduciary duty never ends?

Confidentiality

The fiduciary duty of ______ survives closing.

Confidentiality

What does an agent owe the client after their relationship terminates?

Confidentiality

Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?

Conform to the deed restriction.

Jamie enters an agreement to buy Yolanda's home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ________, which are required to make the contract valid.

Consideration

Dean and Michael have an oral contract. Dean said he would sell Michael his bike in return for Michael's vinyl album collection. What does the record collection represent?

Consideration, which is an essential element of a contract, is something of value which is given from one party to the other party in exchange for goods or services.

Daniel had a great experience with his apartment and landlord until about three months ago, when the plumbing in the unit above started leaking into his apartment. The landlord keeps saying he'll fix it but hasn't, and now Daniel has mold growing on two walls. Daniel is moving out before his lease has expired, due to ________.

Constructive eviction

Which of the following is true about ownership or title to a property?

Constructive notice to the public of real property ownership occurs when the deed is recorded. Recording and possession give the public constructive notice that ownership has changed hands. It also protects the buyer from others' claims on the property.

Real estate licensee William is preparing a sale agreement that will include an unusual circumstance. What's his best course of action?

Consult an attorney. It's possible that William could still use an existing form, but it won't cover the unusual circumstance. William should not write an addendum that covers it. His best bet is to consult an attorney.

The Baxters are looking at a $425,000 home. They have $90,000 in savings to use as a down payment. What loan type(s) would likely be the best option for them?

Conventional

Broker Adam takes $500 from an escrow account to cover his rent for the month; he'll pay it back in a week. Which misdeed has he committed?

Conversion

How would you calculate a transfer tax of .04% on a $350,000 property?

Convert .04% to a decimal (.0004), then multiply by the sales price of $350,000 ($350,000 x .0004 = $140).

Which of these situations represents the illegal practice of blockbusting?

Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.

In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight.

Correlation

As part of its penalty for violating antitrust law, Homes4Cheap, Inc. has been ordered to undergo court-ordered supervision. How long can this supervision last?

Court-ordered supervision may last as long as 10 years if a brokerage is guilty of violating antitrust law.

Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn't apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?

Covenants are enforced through the court system if an agreement can't otherwise be reached.

General Warranty Deed

Covers history of ownership

Which of the following could be an indication of a foundation problem?

Crack in a basement wall

Which of these items around the fireplace could be a clue that there is a problem?

Cracked or sloping firebox or hearth

Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do?

Create a contract amendment with the required language. Once a contract is signed, the document to use to alter the terms is a contract amendment.

A small condominium building has five units. Two of the units are for sale. The remaining units are owned by Rory, Dawn, and John, respectively. As a group, they decide they'd like to change the status of the building from condominium and instead make it an income-producing apartment complex that they will manage, after purchasing the two units that are for sale. How can they change the status of the condominium?

Create and sign, as a majority of the owners, a termination agreement.

What should brokerages do with regard to using social networking sites to market real estate?

Create policies and procedures that address proper social networking use.

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, capacity, and collateral Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

Security Interest

Creditor's interest in debtor's property

What's the biggest security issue with using social networking sites to market your listings?

Criminals may use social networking sites to identify properties that are vacant or have high-end possessions.

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?

Darren and Natalie are using an FHA-insured loan. All loans that are either FHA-insured or VA-guaranteed require that the builder provide a one-year home warranty to protect both the buyer and the home's value.

In an amortized loan, the interest portion of the mortgage payment generally ______ over the life of the loan.

Decreases The interest portion of the payment generally decreases over the life of the mortgage loan as the principal portion increases.

When a property owner wishes to convey her property to a new owner, she will generally use a ______.

Deed

Which of the following is an instrument of conveyance?

Deed

A ______ is a method of conveying real property from one party to another.

Deed A deed is a method of conveying real property from one party to another. A deed should be recorded to protect the parties' interests.

Shemar owns a starter home a few miles outside of the city center, and he wants to deed it to his grandson, Tyler. According to the paperwork Shemar had drawn up, Tyler will own the property as long as he continues to pay the property taxes on time. After the second missed property tax payment, ownership would revert to Shemar. What did Shemar place on the deed?

Deed condition

A trustee is holding the title to Cassandra's house until the loan is paid in full. Which type of security instrument was used?

Deed of trust

Which of the following is a private agreement that impacts the use of the land?

Deed restriction

Which of the following is a private agreement that impacts the use of the land?

Deed restriction A deed restriction involves a private agreement.

Broker Malcolm submits his client's purchase offer, then goes on vacation. When he returns two weeks later, he learns that a counter-offer was submitted and the response date had expired. His client's offer was terminated because he failed to respond on time. This violation is an example of ______.

Demonstrating untrustworthiness or incompetency to act as a real estate broker

When some activities are conducted in wetland areas, permits are required. In Virginia, what regulatory authority issues these permits?

Department of Environmental Quality

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

Depending upon the contract's terms, a potential disadvantage for a buyer who enters into a lease with an option to buy is that he could lose any funds credited to the purchase price if he breaches the terms of the lease.

Real property ownership may have significant tax advantages. Which of the following is a potential advantage?

Depreciation

Bethany has agreed to purchase Derrick's property using a land contract. Who holds legal title to the property during the term of the loan?

Derrick

Which of the following is a common element of a buyer representation agreement?

Description of the property being sought

Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of these actions changes the contract from executory to executed?

Dierks' lender funded the loan, and closing took place.

Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip's never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise?

Disclose to his friend that he's not an agricultural expert and ask his friend's permission to work with an agricultural expert in his firm. Chip could turn down the listing or refer the listing to a more experienced agent. If he wants to work the listing for his friend, he should disclose his lack of experience to the client and ask permission to partner with an ag expert at his firm.

A home owner is selling her property located in a property ownership association (POA) What must be provided to buyers?

Disclosure Packet

A home owner is selling her property located in a property owner's association (POA). What must be provided to buyers?

Disclosure packet

Derrick just bought his first condo, and he's ready to crack the champagne. Which of the following will Derrick be able to deduct from his income for tax purposes?

Discount points

The Amarals are purchasing the house of their dreams and have plans to stay in it for at least the next three decades while they pay back their conventional 30-year loan. Their primary focus, over the life of the loan, is to reduce their payments as much as possible. What is something that could help them achieve this?

Discount points

Home inspector Murray is explaining to first-time buyers what he looks for during a home inspection. What is his primary goal?

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

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 be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement.`

Dominant The dominant estate (or tenement) is the one that receives the benefit from the other owner, also called the servient estate.

Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?

Downzoning

What is the difference between dual agency and dual representation?

Dual agency means the licensee is acting as a standard or limited service agent. Dual representation means the licensee is acting as an independent contractor.

You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

Dual-license dual agency

Reggie has a buyer client who is purchasing a home built before 1978. Which two documents must reggie ensure that his client receives as part of the residential Lead Based Paint Hazard Reduction Act?

EPA lead based paint brochure and state-specific lead paint disclosure

A part of your property is used by the local utility company to maintain its power lines. What's this an example of?

Easement

Eric didn't have direct access to the small lake in his subdivision; he had an easement arranged with his neighbor. Ten months ago, the developer built a public access road to the lake, so Eric stopped using the easement. What type of easement termination is this?

Easement abandonment is when the dominant estate owner takes action that shows a clear intent to stop using the easement.

Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?

Easement by prescription Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission.

Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?

Easements are a type of encumbrance that can affect a property. Which of the following is true about easements?

Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he's working with the homeowners to make some decisions that weren't identified in the blueprints he's working from. Which of the following details will be guided by local building codes?

Electrical safety standards are typically a component of building codes in almost any location.

Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?

Encroachment Elsie's fence is an encroachment on Lawrence's property. An encroachment is a fixed intrusion onto another person's property.

Ted is in foreclosure but has some equity in his property. An investor suggests that Ted enter into a sales contract with him for a substantially higher price than the investor would actually be paying. The investor pockets the cash and allow the house to be foreclosed on. What sort of scheme is this?

Equity skimming Equity skimming occurs when an investor receives title to a property, usually rents out the home but doesn't make the mortgage payments. When types of equity skimming fraud like this occurs, houses usually end up in foreclosure.

Erin, a contractor and licensee, is selling one of a group of homes she built this year. Which of the following is true about her disclosure responsibilities?

Erin only needs to disclose any known defects that are considered building code violations.

The state's claim to property when a property owner dies, leaving no will, heirs or creditors, is the power of ______.

Escheat

In which of the following situations would the state be able to use its power of escheat?

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

Which of the following statements about escrow accounts is correct?

Escrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits.

Which type of closing is conducted with a neutral third party holding the funds, and the buyer and seller may never meet?

Escrow closing

What type of leasehold is characterized by possession of a property without the express permission of the property owner, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?

Estate at sufferance Estate at sufferance is so called because the landlord is suffering the tenant's presence without the landlord's permission.

A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.

Estate at will

Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs?

Exclusive agency It's easy to confuse exclusive agency and exclusive right to sell. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission, but the seller's listing will likely receive more attention from the agent than it would with an open listing.

When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?

Exclusive right to sell It's easy to confuse these types of agency. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission. Exclusive right to sell agreements prohibit the seller from selling the property without paying the listing agent.

Under what listing agreement is an agent owed a commission no matter who secures the buyer for the transaction?

Exclusive right-to-sell

The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?

Executed

Jerry and Lewis have entered into a sales contract. They're about three weeks into the transaction, with several terms of the agreement yet to be met. What type of contract do Jerry and Lewis have?

Executory

Leases can end in several key ways. Mutual agreement and eviction are two. What is another way that a lease can terminate?

Expiration

Which of the following would most likely be regulated by a POA?

Exterior paint for all POA residences

The secondary market is comprised of _________________________.

FNMA, GNMA, FHLMC, and lending institutions that buy loans from other lenders

Which entity services rural development loans?

FSA

Chloe focuses her marketing efforts on a specific neighborhood. This is known as her ______.

Farm areaA farm area is an area that a licensee "farms" consistently over time, such as a neighborhood or association.

Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?

Federal Trade Commission

Your client is purchasing a single-family home with a conventional loan. The listing price is $150,000. Does this situation require a licensed or certified appraiser?

Federal law exempts this property from the certified appraisal requirement because the sales price is less than $250,000. However, it's always a good policy to pay for the best available service or product, regardless of the lender's legal obligation.

What does the Financial Institutions Reform, Recovery, and Enforcement Act require?

Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state.

Select the statement that accurately describes an abstract of title.

Few states require an abstract of title when conveying property. The abstract of title process is costly and lengthy; only a few states require this process when conveying property.

If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do?

File a claim for inverse condemnation. Because downzoning is a reduction in use and can impact property values even in adjacent properties, homeowners in the adjacent areas can file a claim for inverse condemnation.

Your clients, the Harpers, live in Area B that's adjacent to Area C; Area C was recently downzoned. If the Harpers believe the rezoning has harmed their property values, what can they do?

File a claim of inverse condemnation. The Harpers can file a claim of inverse condemnation. They may have rights, and they don't have to sell or move to claim them.

While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and invoiced her for a nominal $15 fee to prepare transaction documents. Which of these tasks would NOT be considered unauthorized practice of law?

Filling in the contract blanks

Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What's the total square footage?

Find the area of each room to get its square footage, then add the square footage of all four rooms. Kitchen = 150 sq. ft.; living/dining = 500 sq. ft.; office = 100 sq. ft.; and bedroom = 100 sq. ft. = 850 square feet.

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

First, find the square footage (5.5 x 43,560' = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400' = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95' = $1,335.67 per front foot.

Heather received the disclosure statement from the seller after their contract was ratified. Turns out there are septic issues that Heather doesn't want to deal with. She works with her agent to write up a termination notice to be mailed to the seller. By when must this be done?

Five days

Stu is buying Freddie's property. What must occur for the transfer of title to take place?

Freddie must intend to convey the property to Stu. The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.

Which of these would most likely be an implied contractual condition in a real estate sales contract?

Freedom from fraud and misrepresentation

Frieda is practicing dual agency and neither party seems to mind, even though she didn't obtain written informed consent. Is this legal?

Frieda needs to obtain informed consent in writing in order to practice dual agency legally.

A poor floor plan is an example of which type of depreciation?

Functional obsolescence Functional obsolescence is a form of depreciation or loss in value caused by defects in design.

A form of depreciation or loss in value caused by defects in design is called _______.

Functional obsolescence is a form of depreciation or loss in value caused by defects in design.

Which of these is NOT an example of agency coupled with interest?

Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller. Agency coupled with interest is an agency relationship in which a licensee is given some sort of interest in or right to a principal's property. A standard commission-based transaction isn't agency coupled with interest.

As a residential property manager, Finn can independently make decisions regarding the day-to-day operations of the apartment building he manages. He can hire contractors, screen tenants, pay bills, and enforce lease provisions. What kind of agent is Finn?

General

Rogers has been given power-of-attorney over his sister's affairs while she's out of the country in case someone needs to take care of personal or business affairs and she's out of contact. What kind of POA does Rogers likely have?

General

Who is able to apply for concurrent licensure?

George is a licensed broker at a small backwoods real estate firm.

How do you become a member of the Virginia Real Estate Board?

Get appointed by the governor

Which of these describes a bridge loan?

Gina is moving across the country to be closer to her family. Her existing home hasn't sold, but she is ready to purchase her new home.

You need to perform a sales comparison for your clients. Comparable A's adjusted sales price is $277,000. Comparable B's adjusted sales price is $255,000. How might you use this data to determine a list price range for the clients' home?`

Give more weight to the list price on the comparable that's most similar to the property.

Magda, a property manager, wants to enter each of the dwellings to change the furnace filters. She should ______.

Give tenants proper advance notice

A Virginia landlord has an available unit, but refuses to show it to several applicants. These applicants are all single women with children; the applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law?

He is discriminating against people based on sex and familial status by refusing to show available housing.

A landlord has an available unit but refuses to show it to several applicants. These applicants are all single women with children. The applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law?

He is discriminating against people based on sex and familial status by refusing to show available housing.

Wendell just listed Barb's home. Barb told him that there weren't any easements on the property, and Wendell hasn't seen a copy of the survey. What is Wendell's responsibility relative to the disclosure of any easements?

He only needs to disclose easements if they're known. Sellers and listing agents must only disclose easements of which they have actual knowledge. If neither are aware of any easements, then the buyer will typically discover them during due diligence.

Celia was obtaining a conventional loan, and she put $50,000 down as a down payment. Why might her lender also require her to obtain private mortgage insurance?

Her down payment of $50,000 isn't at least 20% of the purchase price. When loan-to-value ratios exceed 80% on a conventional loan, lenders may require private mortgage insurance.

Thad received multiple offers on his property and is reviewing them with his agent Nora. All of the offers have at least one contingency. Nora recommends that they reject the second offer, because it has a ______ contingency, which is generally the most risky.

Home sale contingencies are typically thought of as the riskiest. By accepting a home sale contingency, sellers essentially remove their home from the market and wait for the buyer's current home to sell before their transaction can close.

What does housing debt-to-income measure?

Housing cost vs gross income

In a mortgage, the property is pledged as collateral. This type of pledge is referred to as ______.

Hypothecation Pledging a property for a mortgage is known as hypothecation. If it helps, think "Hypothetically, if I didn't pay my mortgage, you could take my house."

Buyer Tony is interested Seller Rilla's property. Tony's agent provides him with the Residential Property Disclosure Statement and Tony makes an offer which Rilla accepts. 2 weeks later, Tony discovers that there are plans to build a school next door to the house. He wants to terminate the contract because this wasn't disclosed. Which of the following is INCORRECT?

If Rilla know about the school and failed to disclose it, Tony may terminate.

Virginia is finally living her dream—she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she'll have to meet. Virginia was surprised to learn that her five-table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse?

If a business in a constructed building that serves the public, then it falls under the ADA.

Which statement about the role of the settlement agent is true?

If a settlement agent is also a licensed Virginia attorney, the agent may give legal advice regarding the sales transaction if he has been specifically hired to do so.

Intention in placing:

If an item was intended to be temporary, then it's less likely to be considered real property.

Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?

If the listing broker agrees in writing to the termination

Agreement of the parties:

If the parties have agreed whether an item will stay or go, this is the simplest and first test.

Virginia requires some property managers to disclose some very specific things. Which of the following must be disclosed by property managers in Virginia?

If the property is in a military air zone.

Because of the topography of Elise's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What is Elsie's fence?

Illegal. Elsie's fence is an encroachment on Lawrence's property. An encroachment is a fixed intrusion onto another person's property.

When is a cease and desist order effective?

Immediately upon issuance A cease and desist order is effective immediately.

Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

Immobility

You just sold your first house! You decide to cash the commission check directly and then give the remainder to your affiliate broker. What type of violation have you just committed?

Improper brokerage commission

Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?

Improvements

_______ are artificial attachments to land that include items such as fencing, buildings, and walkways.

Improvements

Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank has indicated that it is going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?

In a lien theory state, the mortgage becomes a lien on the property, but title remains with the buyer. Foreclosure proceedings in a lien theory state may be more difficult for the lender.

Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?

In both open listings and exclusive agency listings the seller doesn't have to pay a listing agent commission if the seller finds a buyer herself.

Relationship of the parties:

In general, the courts tend to favor a tenant's take on an item over the landlord's and a buyer over a seller.

You're a new licensee who's thrilled to be working with five different buyer clients. Under what circumstances is it appropriate for you to determine the earnest money amount for your clients?

In none of these circumstances.

Betty hires a contractor to replace her gutters. Within days, the gutters leak and flood her basement. She complains to the contractor, who replaces the gutters again. The next time it rains, the gutters leak and flood Betty's basement a second time. Frustrated, Betty decides to file a lawsuit against the contractor in an attempt to recover the money she's lost. This is an example of ______.

In this example, Betty is suing for damages as a means of remedying the breach of contract caused by the contractor's failure to adequately address the repairs.

The town is considering rezoning that parcel because the developer plans to also include a public park and a walking trail. What kind of zoning is this?

Incentive zoning occurs when a municipality allows a property owner to proceed with an otherwise-prohibited type of construction in return for improvements that will benefit the community.

With which approach to value does the appraiser analyze a property's ability to earn future income?

Income approach

Which approach to value is typically used for investment property of two- to four-family units?

Income approach The income approach to value analyzes a property's ability to earn future income and is typically used for single-family houses (where the primary use is as a rental property) and for two- to four-family units.

Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation?

Income generated

Cityville administrators are trying to control urban sprawl, but they still need to plan for the growing population. They've revamped zoning laws to allow residential units to be built on smaller lots, and multi-family housing to be built in areas once zoned for single-family housing. Which real estate trend does this describe?

Increased Density

Which of the following is an example of a development cost?

Increased demand on infrastructure

Joseph has entered into an agreement with Annabelle, a real estate licensee. Annabelle is performing only a few duties for Joseph and is not representing him as an agent. In what capacity is Annabelle acting?

Independent contractor

Jason is the seller's agent. His seller has a leaky roof he'd rather keep secret from buyers. What should Jason do?

Inform the seller that the roof leak is a material fact that he is obligated to disclose to buyers.

Ashish is purchasing a bank-owned property. His real estate agent tells him the bank is offering insurable, not marketable, title. What does this mean to Ashish?

Insurable title is one that may have known defects but is still insurable. Ashish should carefully review the title policy. An insurable title may be acceptable to a buyer, depending on any known defects that are outlined in the policy.

Susie has opted out of opening an escrow account with her mortgage lender, which means she has a lower monthly payment. She still needs to save up, though, to make sure she can pay for taxes and ______.

Insurance

The Johnsons have owned a small restaurant for more than 20 years. It's open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.

Inverse condemnation

How does title insurance affect the lender?

It protects the lender from loss due to defective titles. The property is used as collateral (security) for the loan. Title insurance protects a lender against the loss of security as a result of a title problem.

Which of the following are true statements about development in water bottoms?

It requires a Joint Permit Application.

Virginia is finally living her dream—she bought a coffeehouse in a charming college town. After she closed on it, her attorney sat down with her to discuss various business licensing and legal requirements she'll have to meet. Virginia was surprised to learn that her five-table establishment is affected by the Americans with Disabilities Act. What must be true about the coffeehouse?

It's a commercial enterprise that's open to the public. If a business in a constructed building serves the public, then it falls under the ADA.

Which of these situations addresses the fiduciary duty of confidentiality?

Jeanette, a seller's agent, tells the buyer's agent that her client must sell his home because of an illness. The fiduciary duty of confidentiality prohibits licensees from disclosing confidential information about a client, even after the agency relationship ends.

Which of these is an encroachment?

Jeff installed a sidewalk next to his driveway, six inches outside his property. An encroachment occurs when someone illegally places a structure or object on another person's property. Jeff's installation of a sidewalk off of his property is an example.

In which of these situations is Ronna's fiduciary duty of reasonable skill and care at odds with her duty of obedience?

Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer. Ronna's duty of reasonable skill and care prohibits her from providing legal advice and supersedes her duty of obedience to Jefferson, her client.

Jennifer plans to sell her rental property to Eliot, a buyer. What obligation, if any, do Jennifer and Eliot have to the tenants of the property?

Jennifer must notify the tenants of the change in ownership.

Which of the following are examples of noncompliance that an audit could uncover?

Jerry, the brokerage's unlicensed assistant, has been signing contracts for Nita, a salesperson.

Which of the following is an example of noncompliance an audit could uncover?

Jerry, the brokerage's unlicensed assistant, has been signing contracts for Nita, a salesperson.

In which of these scenarios would the Virginian need a real estate license?

Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

In which of these scenarios would the consumer need a real estate license?

Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

Jessie, the buyer's agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller's agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?

Jessie should disclose this to her buyer.

Jim represents Joel in the sale of Joel's country acreage and house. Jim's business partner, Rolly, informed Jim that he wants to put an offer in to purchase the property, with the intention to subdivide it. Which statement best represents the disclosure requirements regarding this transaction?

Jim must disclose that Rolly is his partner and that Rolly intends to subdivide the property. Jim must disclose all material facts of which he has actual knowledge. This includes the conflict of interest presented because Rolly is his business partner, and the fact that Rolly and intends to buy the property and then subdivide it, as that may affect Joel's decision.

Which ownership type is defined by four unities: time, title, interest, and possession

Joint tenancy

______ is co-ownership without inheritance rights.

Joint tenancy Joint tenancy is co-ownership without inheritance rights. When one joint tenant dies, the other joint tenant(s) receive the benefit of that share of the estate.

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

Joint tenancy provides equal ownership shares with undivided possession rights and requires four ownership unities: time, title, interest, and possession. Joint tenancy includes the right of survivorship.

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom. Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?

Joint tenants are allowed to sell their interests, so Tom became a property owner when Ivan sold his interest. However, joint tenancy is not inheritable but instead includes the right of survivorship. Trace's and Chad's interests passed to Lucas and Tom.

A lien due to a court decree resulting from a lawsuit is called a ______.

Judgement lien'

It's 12,280 feet from Missy's house to the nearest coffee shop. Approximately how far is this?

Just over two miles

Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home?

Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing.

Voluntary alienation includes which of the following?

Kali intentionally transfers her property to Sandy.

Kennedy tells Matthew she'll perform all the tasks she'd perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?

Kennedy and Matthew have an express verbal agreement. The agreement isn't implied because Kennedy agreed to perform all the tasks she'd perform for any listing.

Which of the following is NOT an example of a misrepresentation or omission?

Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."

Which of these is an example of puffery?

Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay." Kevin's ad is the best example of puffery. Katherine's ad is fraudulent, and Kim's is in poor taste but probably true.

Lacey is preparing an offer for her buyer clients, and it's time to enter the amount of earnest money they're going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?

Lacey should allow her clients to determine the amount of the earnest money offered.

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?

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.

Which body of law contains the rules governing the relationship between a real estate professional and the person being represented?

Law of agency Law of agency covers items such as an agent's duties to the client, handling of trust funds, etc.

Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he's interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn't said that she will continue to look for homes for Marcus, Marcus believes she'll do just that. Which of these statements about this situation is correct?

Layla's actions may have created an implied agency agreement with Marcus.

When negotiating the purchase of a property that's subject to an existing lease, it's critical for your client to clearly understand the lease terms, including the property management responsibilities, rent amount, renewal/purchase options, and the ______.

Lease duration

Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do?

Leave clients unattended in the office.

What type of insurance will protect a lender's collateral interest in a property that's being financed?

Lender's title insurance policies protect the lender's collateral investment in a given property.

Which of the following is the price a lender believes the property will bring at a foreclosure sale?

Lenders won't lend on what they can't recoup. Therefore, a loan will be based on what a lender would hope to recoup, should a foreclosure sale be necessary.

Lenore makes a 95% offer on a townhouse that's listed at $285,000 and includes an earnest money deposit for 10% of her offer, which the seller accepts. She brings to closing a cashier's check for $35,025 comprising the balance of her 20% down payment and closing costs. What's the amount of her total down payment?

Lenore's offer is $270,750 which is 95% of the list price ($285,000 x .95 = $270,750 ). Her total down payment is 20% of her accepted offer of $270,750, which is $54,150 (or $270,750 x .2).

Leon's client is looking for a property with at least 2,500 finished square feet. He finds a 2,200-square-foot property with all the other features the client is looking for and purposely fails to mention the square footage. His client agrees to look at the property, falls in love with it, and wants to make an offer. Which of these statements accurately represents Leon's level of misrepresentation in this situation?

Leon obviously knew about the square footage and intentionally didn't mention it. He's guilty of intentional misrepresentation.

Virginia licensee Leslie represents Mr. and Mrs. Connelly. The three of them just met with Mick, and Mick signed an agency disclosure form. Which of the following is true about this situation?

Leslie can now legally facilitate a real estate transaction between these two parties.

Which of these is a recommended strategy for a real estate professional who wants to avoid being asked to violate fair housing laws?

Let consumers know up front that you adhere to fair housing laws.

The Perfect Home brokerage firm was found guilty of running deceptive ads. The Federal Trade Commission might require all of the following EXCEPT ______.

Letters of apology to all affected consumers The Federal Trade Commission may require The Perfect Home to run corrective ads, notify consumers of deceptive claims it made, include specific disclosures in future ads, or provide consumers with other information.

Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.

License

Which of the following transactions demonstrates a designated agency?

Licensee Benny represents seller Carmine, and licensee Boyd represents buyer Cassandra. They both work for New Days Realty.

Which of the following transactions demonstrates designated agency?

Licensee Benny represents seller Carmine, and licensee Boyd represents buyer Cassandra. They both work for New Days Realty.

In caveat emptor states, whose responsibility is it to notify sellers of their duty to disclose required items?

Licensee representing the seller

Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______.

Licensees must avoid unauthorized practice of law. Drafting contractual paperwork with uncertain terms would be a violation.

Which of these statements about cooperating with other licensees is true?

Licensees must cooperate with other licensees, but only if it's in their client's best interest, and there's no obligation to compensate cooperating licensees.

Sebastian owns a country house and vacations there every summer and on holiday weekends. As much as he'd like to will it to his niece when he passes, his ownership of the house ends when he dies. What type of estate does Sebastian own?

Life estate

Emily is selling her home. Although she doesn't have a real estate license, she's fairly knowledgeable about the process and doesn't need much assistance. Really, all she'd like is for her property to be listed on the MLS. Which of the following relationships may be best for Emily?

Limited service agent

Once placed in a deed, restrictions are binding on current and future owners.

Litigation or zoning board appeals won't change or remove them.

The Underground Utility Damage Prevention Act was established to protect underground utilities and save

Lives

Talking the consumer into refinancing over and over so a lender can charge fees is ______.

Loan flipping

Mariel is buying a home and is looking forward to the tax deductions. She may deduct which of the following?

Loan origination fee The loan origination fee is deductible for homeowners.

Local authorities lack police power over which of the following?

Local authorities have police power over budgeting, zoning, and subdivision development, but they lack police power over federal government construction projects.

Which of the following is a true statement about police power and public land use controls?

Local governments and their planning boards control budgeting, site-plan review, and building codes. Local governments and planning boards handle community planning.

Dean's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a ________ lease for the office space.

Loft

Dean's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean most likely has a _______ lease for the office space.

Loft A loft lease is usually for a large open space that may have few amenities.

Which of these is an example of a lot and block description?

Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds

What does the lot and block system use to develop a property's legal description?

Lot and block uses plat references to develop a property's legal description.

Which type of legal description is this: "Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office"?

Lot and blockThis is an example of a lot and block legal description, which is also called a plat reference system.

Which of these is NOT an example of improper escrow account handling?

Lou maintains all account-related records for three years after the transactions close.

Which of the following could be a sign of a plumbing problem?

Low water pressure

Putting clients' interests ahead of all others describes which fiduciary duty?

Loyalty

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

Loyalty

While hosting an open house, Liza speaks with prospective buyers. They're interested in the house, but think the listing price is a little high. They ask her what other incentives they could include in their offer to get the seller to come down on their price. If Liza helps them, what duty may she be breaching?

Loyalty

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?

Lucas and Tom Joint tenants are allowed to sell their interests, so Tom became a property owner when Ivan sold his interest. However, joint tenancy is not inheritable but instead includes the right of survivorship. Trace's and Chad's interests passed to Lucas and Tom.

Lyle is a developer who placed a number of restrictions on the Happy Valley subdivision when he built it in 2003. Sara bought a home in Happy Valley in 2009 and was surprised to learn that storage sheds weren't allowed. Now Sara has noticed that sheds are popping up here and there throughout the neighborhood, and she puts up a shed of her own feeling no concern about a penalty. Which of the following is most likely to be true?

Lyle set up the restriction to expire after a certain number of years.

Which of the following scenarios best describes a net listing?

Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount.

When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.

Making an application for a loan

All of the following are common property manager duties EXCEPT ______.

Making mortgage payments While property managers handle a plethora of duties, certain tasks, including making mortgage payments, should be conducted by the property owner.

Marcus, a listing agent, told a potential buyer that his seller client's property had no flooding issues, though the seller had mentioned water in the basement a few years back when there was a particularly heavy rainy season. Which of these statements is true?

Marcus committed intentional misrepresentation because he knew his statement was false.

Margo's accountant tells her that she's eligible to deduct the property taxes she paid last year. Select the statement about this deduction that's true.

Margo is in the ownership stage of the property ownership lifecycle. Both homeowners and investors may be eligible to deduct annual property taxes paid, depending on the circumstances.

In which of these situations did the licensee breach the fiduciary duty of loyalty?

Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale. Margo should have given Troy an accurate estimate of his property's value and let him decide if he wanted to sell it at a lower price to achieve a quick sale.

Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend's neighborhood. It's listed for $400,000; however, just down the street another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?

Margot knows paying $50,000 more for a nearly identical substitute property isn't the smart choice.

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

What's the price at which a willing buyer and a willing seller would strike a deal, given normal market conditions?

Market Value

A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there's an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What's this an example of?

Market allocation

Which type of antitrust violation occurs when real estate firms agree to divide their market so they don't compete with one another?

Market allocation

A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, "You take the north side of town and I'll take the south, so we aren't stepping on each other's toes." You stop their conversation to tell them they're committing an antitrust violation. Which one is it?

Market allocation An agreement to segment the market between competing firms is illegal market allocation.

A new real estate professional is getting to know licensees at his new firm, Tremont Homes. One licensee tells him there's an unwritten agreement with a neighboring firm that Tremont serves the mid-town area, and everyone who has prospective clients in that area refer their leads to Tremont. What's this an example of?

Market allocation This agreement is a market allocation antitrust violation, and it unfairly limits consumers' options.

Marney, a Virginia licensee, just wrote a contract for a client. Which of the following statements about this situation is true?

Marney can only do this if the contract is incidental and if she doesn't charge her client for it.

Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions?

Marsha's second mortgage on the property, which was properly recorded in January. Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.

Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?

Metes and bounds

Which legal description method uses compass headings and directions?

Metes and bounds uses compass headings and directions. The rectangular system divides land into townships and further divides those into sections.

The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?

Method of annexation

The MARIA acronym helps to identify the five tests of a fixture. Which of the following tests refers to how and whether the item is attached to the property?

Method of annexation refers to how and whether the item is attached to the property. This is the M in MARIA.

Real PropertyMARIA =

Method, adaptability, relationship, intention, agreement. Real property goes with real estate

Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?

Misleading ads

Business is slow and you've decided to pull in some more clients with a marketing campaign claiming you're the top-producing real estate agent in town. What type of violation are you committing?

Misrepresentation

The listing agent for a house promises the seller $500,000, but then assists the buyer in negotiating a better deal without letting the seller know. What violation has the listing agent committed?

Misrepresentation

Which of the following best explains the difference between misrepresentations and omissions?

Misrepresentations can be intentional or unintentional. Omissions are one type of misrepresentation.

Which of the following is an example of commingling?

Mixing earnest money with personal funds

Claire rents 1,100 square feet of office space in a new professional building. Her rent payment includes all utilities and property taxes, but she pays separately for custodial services. What kind of lease does Claire have?

Modified gross lease

Which of these is an example of conversion of funds?

Monica used funds from the firm's trust account to pay her firm's rent. Conversion means that a licensee or brokerage firm uses trust funds for personal or operating purposes.

Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?

Nate owes Timothy the duty of disclosure. A licensee owes all parties the duty of disclosing material facts, as well as honesty, fairness, and accounting. Only a client would be owed obedience, loyalty, and confidentiality.

With which type of commercial lease does the tenant pay some or all of the expenses?

Net lease

In which of the following situations would an agent be representing a customer in a real estate purchase?

Never

Alluvion:

New deposits of land that are the result of accretion

Your buddy in the next county gave you a referral fee. The check came to your office in your name. You deposit it. Is this okay?

No, because all compensation must come through your broker.

When licensees follow through on what prospects have asked, arrive for meetings on time, and come prepared, what trait are they exhibiting?

Competence

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title?

Depending on his state's laws, Mario may have marketable title.

Negative Amortization

Don't cover interest, pay more each month

Which of the following could indicate a problem with the chimney flue or ventilation?

Drafts near the fireplace

What does Aesthetic zoning regulate?

Ensure the architectural and/or visual integrity and cohesiveness of a given area.

What is estate at sufferance?

Estate at sufferance is when a tenant remains on the property after the lawful authority has expired (a holdover tenant), after which the landlord may evict.

Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper's listing. What's true about the agency relationships in this situation?

Esther owes her loyalty to the seller.

Which agency enforces federal fair housing laws?

FHEO

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?

First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments/year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 ‒ $250,000 = $117,687.80.

Real Estate Board members serve terms that are how long?

Four years

Erosion:

Gradual loss of land due to a natural force

Ostensible Agency

Implied Agency (Actions were performed)

When property changes hands, the deed is recorded. There's a fee for recording. What is the benefit to the grantee of having the deed recorded?

It puts the public on notice regarding ownership.

What are paint, soil, pipes, dust, and drinking water all potential sources of?

Lead contamination

Which of the following activities requires an agency agreement to be in place before performing it?

Licensee Ben helps his client Clint negotiate a better deal on the house he wants to buy.

Which term would you most likely see associated with a lake?

Littoral

A lot and block legal description looks like this:

Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds

When agents put their clients' interests ahead of their own, this describes the duty of ______.

Loyalty

Real Property

MARIA = Method, adaptability, relationship, intention, agreement. Real property goes with real estate

periodic tenancy

Not bound to a lease with a fixed period. Follows Week to Week. Month to Month. Year to Year.

A property management agreement is between a property manager and a ______.

Property owner

Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first?

Property taxes

When a buyer finances a newly built home with a Federal Housing Administration loan, FHA requires the builder to ______.

Purchase a third-party home warranty to protect the buyer

What type of arrangement allows the buyer to retain title to the property but places a security interest in the property on behalf of the seller

Purchase money mortgages allow the buyer to retain title to the property, but the seller has security interest in the property.

Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.

Real property

Compared to working without a buyer agency agreement, a buyer who works under a buyer agency agreement

Receives a higher level of service

When property changes hands, the deed is recorded. There's a fee for recording, so why would anyone choose to pay this fee?

Recording and possession give the public constructive notice that ownership has changed hands. It also protects the buyer from others' claims on the property.

The ______ isn't used in states that were part of the original 13 colonies, or in Texas, West Virginia, and Kentucky.

Rectangular government survey system

Which of the following does Virginia's Condominium Act NOT do?

Regulates the kind of mortgages that buyers can get

Lenders will require which type of fund for taxes and insurance?

Reserve fund A reserve fund, also called an escrow or impound account, is used to pay property tax and insurance.

Merv knows that three-bedroom properties with two bathrooms sell quickest in his market. In an ad for a new listing, he says, "Bonus room could easily be a third bedroom." Marla and Tom visit the property with their agent, and Tom, a construction supervisor, notes that the bonus room couldn't be easily converted to a bedroom because it's too small, it has no egress and no heat source, and you must walk through a bathroom to get to it. Is Merv guilty of misrepresentation?

Yes, because he should have known there would be major issues converting that room to a bedroom.

Buyer Arlene has received the disclosure packet and resale certificate from the HOA associated with the property she was interested in, but now she's thinking of backing out. Can she do so without penalty?

Yes, if she does so within three days of receiving the materials.

Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy's cousin decided to purchase the house during the listing period. Is Barbara owed a commission?

Yes, if she has an exclusive right-to-sell agreement.

Imagine that you're an active real estate licensee as well as an architect, and you'd like to partner with a builder who's just beginning a development. Which of these creates agency coupled with interest?

You agree to design the houses for this builder in return for getting the listings when the properties are finished. By providing architectural design services in return for the listings, you've gained an interest in the properties being developed that will pay off when the properties are sold.

As a Virginia licensee, what is the maximum outcome if you're convicted of having committed a serious violation and your broker is found to have knowledge of it?

You and the broker may both be fined, and you may both have your licenses suspended or revoked.

You represent the buyer, and another licensee from your brokerage represents the seller in the same transaction. What type of agency relationship do you and the other licensee have with your clients?

You and the other licensee from your firm are in a dual-licensee dual agency relationship. The broker is the dual agent and has designated you to represent the buyer and the other licensee to represent the seller.

John's property is shaped like a triangle. The street side is 185 feet, and from the street to the longest point of the triangle is 225 feet. How do you calculate the square footage of John's property?

You can calculate the area of a triangle in several ways. One way is to multiply the triangle's base measurement by .5, then multiply that answer by the triangle's height [(185 × .5) x 225].

It's the end of the day and you're running late for dinner, so you decide to go to the ATM and deposit your client's earnest money check into your own account, and then transfer it to an escrow account the next morning. Why is this wrong?

You can't commingle escrow funds with your own funds.

Imagine that you're an active real estate licensee, and you have a neighbor whose house is about to be foreclosed on. You want to help your neighbor and your neighborhood. How could agency coupled with interest help you and your neighbor?

You could advance her some money to stop the foreclosure. In exchange, she'd let you represent her in listing her home.

You represent the buyer in one transaction and the seller in a different transaction. What type of agency relationship do you have with the buyer?

You have a buyer agency relationship with the buyer in one transaction and a seller agency relationship with the seller in the other transaction.

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?

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

You're the listing agent for a property where an unfortunate series of deaths took place. Which action best demonstrates good faith related to the disclosure of these events?

You tell prospective buyers the truth about the events when asked.

You're representing Crystal in the purchase of a house. Crystal has a trust fund and can more than afford the house on which she's made an offer. Which of the following statements is true?

Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.

If you're convicted of a lesser crime, why might your real estate license still be revoked?

Your offense demonstrates a lack of trustworthiness.

Zach wants to purchase a property that's subject to an existing lease agreement, which includes the tenant's right to renew the lease. What is Zach's obligation, if any, to uphold the terms of the lease agreement?

Zach must honor that right and allow the tenant to renew at the end of the term.

A twist on timeshares is

a vacation ownership. Buyers agree to a one-time purchase price and an annual maintenance fee, and in return get a selected accommodation time and have the right to use the unit for a specified number of years.

Often, these types of ownership require

additional documentation and disclosures so it's clear to purchasers what is owned and any responsibilities individual owners share in regards to the property and common areas.

Timeshares or vacation memberships may sometimes

allow owners or members to exchange their specified time slot for another.

An easement

allows a person the right to use or cross over another's property for a specific reason.

Some of the common sources of liens

are mortgages, unpaid taxes, unpaid services, and judgments.

Borrowers who are unable to pay the mortgage may also have

been unable to make property tax and secondary mortgage payments.

Timeshares, condominiums, and cooperatives are primary examples of

common-interest ownership.

The Code of Virginia states that _______ does not imply a brokerage relationship.

compensation

A contingency in which a property may be won or lost if violated is a ______.

condition

Termination of a tenancy in common can occur by

conversion to tenancy in severalty or by sale or partition.

If a licensee has violated advertising rules, the Federal Trade Commission may impose which of the following penalties?

corrective advertising

A leasehold estate is an

estate in which the holder has a possessory interest in a property but no ownership.

JOInt tenancy

if tenant dies, other tenant inherits property. (Angelina Jolie) - Right of Survivorship - Cannot will a joint tenant. - 4 Essential elements of Joint tenancy: Time, title interest, possession (PITT) (brad pitt) If one of essential elements is missing, the new tenant is Tenancy in Common. '

If there are more than two joint tenants, a deceased tenant's ownership transfers

in equal parts to the remaining joint owners.

Virginia real estate licensees may prepare contracts when they are ____________ to real estate transactions they are a part of and they are not charging a separate fee to prepare the contracts.

incidental

Children and pregnant women are especially vulnerable to poisoning caused by what hazard?

lead

A periodic estate (aka estate from period to period) is a

lease that automatically renews at the end of its term (such as a month-to-month lease).

An estate for years is a

lease that ends on a specific date and must be renewed by mutual agreement between the landlord and tenant.

An estate at will is a

lease without an established ending that can be terminated by either party.

Fee simple estates may be

limited by both public and private restrictions, such as zoning ordinances or restrictive covenants. The owner holds rights to the property on the surface of the land, above the land, and below the land (unless those rights have been separated from the property and conveyed to a different owner).

With ownership in severalty,

one person owns the property with no joint interest by any other person.

Fee simple defeasible is a type of freehold estate in which

ownership is subject to either the occurrence or non-occurrence of a particular event. The two categories of fee simple defeasible estates are fee simple determinable and fee simple subject to condition subsequent.

Condominium ownership typically involves

ownership of a unit within a building and not the structure itself or any land. It also includes undivided shared interest in the common spaces. Each unit has a separate legal description and each owner gets his/her own tax bill.

Developers who are building PUDs must often submit

plat maps for their developments.

Which of the following is a key consideration and starting reference for a metes and bounds description?

point of beginning

A benchmark is a

point where the exact elevation is known and marked with a brass or aluminum plate. Surveyors can use this as a starting point to measure other elevations.

A timeshare is owned by

several joint owners, each of whom has the right to use the property under the specific terms of a time-sharing agreement.

Cooperative (co-op) members own

shares in a corporation that owns the building. Members don't own real estate. Each owner's right of possession of his/her individual unit comes from a proprietary lease. The corporation that owns the real estate pays the single property tax bill.

Townhomes are

single-family homes but typically share walls with neighbors. An owner owns both the structure and the land.

Timeshare estates may be

sold or inherited.

Easements are

specific to the person or persons to whom the easement is granted.

Survivorship and inherited rights vary according to

state and local laws and by how the title is held.

Littoral rights address

static water, such as a pond, lake, or ocean. Owners with littoral rights have the right to use and enjoy the static water but not divert or contain it.

A license is

temporary permission for one person, at the discretion of the property owner, to do something on another's land without actually possessing any interest or ownership in the land.

If a joint tenant sells his or her interest,

the buyer doesn't become a joint tenant with the other owners; the buyer is a tenant in common with the remaining joint owners. That's because the unities of time and possession don't apply.

With the death of an estate owned in severalty,

the estate passes either according to instructions in the owner's will or according to state law.

The Code Of Virginia Title 54.1 Chapter 21 covers

the licensing and regulation of real estate brokers

An ordinary life estate is based on

the life of the estate holder/life tenant. For example, Christine gives her son an ordinary life estate in a property, and the estate lasts until her son's death.

Easement termination by merger occurs when

the owner of either the servient or dominant estate purchases the other property.

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.

Fee simple ownership is more

widely used than the right-to-use format, which simply provides rights to occupy the property during a specified time frame.

Zack represents a seller, and receives an offer through another agent. The offer is higher than the listing price. The property is already listed at a very high price, and no other offers have been received. Is Zack obligated by his duties to the other party to disclose that the offer is too high?

No, his fiduciary duty is to his own client. The buyer's agent must be responsible for advising on a fair price for the property.

Anna engaged Christopher as her listing agent. During the relationship, Anna shared information about her motivations for selling and the price she'd be willing to accept. The termination date listed on her agreement with Christopher has come and gone without a sale. Anna decides to re-list her property with a new agent. Christopher has a new buyer client interested in Anna's property. Can he use the information shared by Anna when he was her agent?

No, the duty of confidentiality survives the relationship.

Joyce has just found the BEST apartment. The rental agreement states that she waives her rights and remedies under the VRLTA. Is this legal?

No, this is prohibited by the law.

Stacey's home has been sold as a result of foreclosure proceedings. Does she need to provide the purchaser with a property disclosure statement?

No, transfers resulting from foreclosure sale are exempt.

Jan is in default. She received a notice from her lender with mediation and foreclosure alternatives, but her situation doesn't change. The lender proceeds with a public sale of the property, as permitted by the power-of-sale clause in her deed of trust. What is this an example of?

Non-judicial foreclosure Non-judicial foreclosures require notice to the borrower and the public, but do not have to go through the court system. The power-of-sale clause protects a lender's right to foreclose.

POAs are most commonly formed as which kind of organization?

Non-profit

Jim would like to sell his own home. What is the minimum real estate license he must possess?

None

Physical characteristics of land include its immobility, indestructibility, and ______.

Nonhomogeneity is a unique characteristic of land. Even within a single subdivision, two identically sized parcels will have their own unique characteristics: views, access, proximity to other amenities, etc.

A person performing real estate activities under the judgment or order of a Virginia court, such as a trustee in a bankruptcy, is ______.

Not required to have a real estate license

Brynn's listing agent told potential buyers that all offers on Brynn's property would be considered at 5 p.m. on May 3. By that date and time, four offers had been made. The persons making these offers are the ______.

Offerors

Bonnie is calculating the square footage of a listing. The upper level of the home is 450 square feet. The main floor is 1,200 square feet, including an unfinished laundry area that's 225 square feet. The 1,200-square-foot basement is finished. Bonnie's MLS system disregards below-grade square footage. What square footage will Bonnie mention in her MLS listing and marketing materials?

Only finished above-ground space should be counted in Bonnie's MLS listing. That means the square footage of the upper floor plus the main floor (minus the unfinished laundry area). Bonnie should report 1,425 square feet (450 + 1,200 - 225).

Who can enforce an option contract?

Only the optionee Only an optionee (buyer) can enforce an option contract. Because an option contract is a unilateral contract, only the optionor (seller) is bound by it.

James, a seller, signed a listing agreement that allowed him to contract with multiple agents but only pay a commission to the agent who located a buyer. This type of listing agreement is called ______.

Open

Which type of buyer agency offers the flexibility to work with multiple agents but results in buyers acting on their own behalf since no agent owes fiduciary duties?

Open agency

Under which types of agency agreement may a buyer and agent operate?

Open, exclusive right to represent, and exclusive agency

Community property

Owned by husband and wife regardless of what is on the title.

Which exemption to the Fair Housing Act is commonly known as the "Mrs. Murphy" exemption?

Owner-occupied buildings with no more than four units

Freehold

Ownership for an undefined length of time

Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded?

Ownership officially transfers when the grantor delivers the deed to the grantee, but recording provides constructive notice that Conrad owns the property, thereby permitting anyone who does a public records search to see the ownership information.

Remainder:

Ownership will pass to a remainderman instead of the party who established the life estate.

Reversion:

Ownership will revert to the life estate originator (or the originator's successors and heirs).

A life estate can best be described as ______.

Ownership, possession, and control for someone's lifetime Life estate involves ownership, possession, and control for someone's lifetime.

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.

Partial Performance

Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

Partition is the term used to describe a specific, divided portion of property that's created as part of a co-ownership termination.

Your seller client has listed a beautiful piece of land on the water. You know this property would be a great investment if it were subdivided and developed, but you don't mention the potential investment value to the seller because you want the property for yourself. You also don't market it or present any offers. After several months, you buy the property at a deep discount. Not so fast! If you do this, you're guilty of ______.

Passive fraudYou not only should have known better, but you did know better and intentionally remained silent, so you're guilty of passive fraud.

A closing agent has several duties to perform both before and after the closing. Which of the following is a task the closing agent must complete after the closing?

Pay the existing loan off The title search, closing statement preparation, and title insurance purchase must all be completed prior to closing. After closing, the closing agent makes arrangements to pay off the seller's existing loan with the proceeds from the buyer. "We're recorded and funded" is music to a licensee's ears.

Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. One of the key determinants, she explained, was whether the items were _______.

Permanently affixed to the property

_______ can be defined as everything that's not real property.

Personal property

Which of the following could indicate the presence of an underground storage tank?

Pipe or vent sticking out of the ground

What might the government do if property owners fail to pay taxes on their property?

Place a lien on the property.

Whose role is it to develop the comprehensive master plan?

Planning board members

What does the lot and block system use to develop a property's legal description?

Plat references

_______ is an increase in property value caused by the joining of two neighboring parcels of land.

Plottage

combining the two parcels into one would dramatically increase the land's value, he jumped at the opportunity. What's this an example of?

Plottage is the economic principle that the joining or assemblage of two neighboring land parcels increases the property value.

Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?

Point of beginning is common with metes and bounds descriptions.

Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?

Police power

Rohit bought 31 acres of undeveloped and mostly forested land. He is planning a weekend with friends where they'll camp on the property while scouting good locations to place a cabin. Which right in the bundle of rights allows Rohit to do the camping weekend on undeveloped land?

Possession

Which of the following items go into the seller's credit column and the buyer's debit column?

Prepaids

Ellen has only been licensed for two weeks, but she's already booked a listing presentation appointment with potential clients, the Birds. What should she do to prepare?

Prepare a CMA

Upon examination of his mortgage document, Jared finds a clause stating he will owe additional interest if he pays off his loan within one year of the loan origination date. What type of penalty does this describe?

Prepayment

When representing the seller, what duty do you owe a buyer?

Present offers from the buyer to your seller.

Which of these terms can be defined as what a buyer has paid for a property and what the seller has accepted?

Price

At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?

Price fixing

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which?

Properties that rely heavily on rental income often use the income approach to estimate their value. Three ways to estimate value are the capitalization method, the gross income multiplier, and the gross rent multiplier.

An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A?

Property A is the servient estate. It serves the dominant estate, Property B.

Tanner, a property owner, wants Gina, a real estate licensee, to manage the property he owns while he's living out of state for a few years. In return, Tanner will pay Gina a flat monthly fee. What type of agreement must be in place between Tanner and Gina?

Property management agreement

Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City's property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

Property managers owe fiduciary duties to their clients (the landlord) and the community as a whole, not to individual residents.

Who is responsible for testing private wells for water safety?

Property owners

Nellie and Victor own a suburban ranch home and fell behind on paying their property taxes when Victor lost his job last year. Victor is working again, but they still haven't saved enough to pay their back taxes. They're worried that the county may begin foreclosure proceedings. What type of lien is this?

Property tax liens are specific, because they represent a lien against a specific piece of property.

What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement?

Property taxes Prepaid items—such as prepaid taxes—would be a seller credit and buyer debit. Taxes owed but not yet paid wouldn't be prepaid items.

Which of the following situations may result in inverse condemnation?

Property values decrease because adjacent property was rezoned. With regard to zoning, inverse condemnation is related to a loss of value due to downzoning of adjacent property.

Governments like property taxes as a revenue source because ______.

Property values, and therefore taxes, tend to remain stable

The purpose of the Underground Damage Prevention Act is to _________ utility lines.

Protect

Many buyer agency agreements contain a provision which comes into play if the buyers let the agreement expire and then try to contact a seller directly. What is this provision called?

Protection clause

Henry is a real estate licensee representing Ginger, a buyer. Henry recommended Ginger obtain a professional home inspection. Ginger asks Henry for a referral. What should Henry do?

Provide several names for Ginger to contact, ultimately letting her decide who will perform the inspection.

Which of the following is a task that a licensee could perform for a customer in a transaction?

Providing the opposing party with signed copies of paperwork

A developer cannot advertise or sell timeshare property until the ______ is approved.

Public offering statement

A licensee says, "This is a dream home with the best views in town." This is an example of _______.

Puffery

What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?

Purchase money mortgage Purchase money mortgages allow the buyer to retain title to the property, but the seller has security interest in the property.

What can buyers do to protect themselves from title issues when purchasing property?

Purchase title insurance.

In many cases, property managers must get explicit permission in order to disburse funds from a trust account. What is one common way to do so without this explicit permission?

Put it in the property management agreement.

When real estate licensee Brian discovered that Arnold was using a 'Choose Your Neighbor' letter to market a property without also listing the property in the MLS, in the local paper, or even putting a for sale sign in the yard, what charge could he bring against Arnold to the National Association of REALTORS®?

REALTOR® Brian could charge Arnold with violating Article 10 of the Code of Ethics, which prohibits REALTORS® from agreeing to discriminate against people belonging to a protected class.

What's it called when a property is owned by the bank after failing to receive an acceptable bid at foreclosure?

REO

Which act ensures a buyer in a residential transaction financed by a federally related mortgage loan has knowledge of all settlement costs?

RESPA RESPA is the act that ensures the buyer in a residential transaction has knowledge of all settlement costs.

Which of the following is an example of single agency?

Randolph from ABC Realty represents Cindy, a buyer for Carol's listing. Carol is affiliated with Net Realty.

What factors affect an adjustable rate mortgage?

Rate, index, and margin

The buyer you're working with 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! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?

Ratify the implied agreement by getting a signed agency agreement.

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

Real estate

The duty of reasonable skill and care assumes that agents can provide expert advice to their clients in which area?

Real estate

Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, which Hank agreed was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

Real estate contracts must be in writing.

In Virginia, what is the definition of a common interest community?

Real estate that is subject to a declaration containing lots and common areas

Which of these is a NOT a reason why agency disclosure is mandated?

Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections. Real estate transactions are covered by consumer protection laws; agency law and agency disclosure provide additional protections.

What's the best definition of real property?

Real property includes real estate, plus all of the interest, benefits, and rights included in ownership.

Cambridge Apartments provides an open parking lot for their residents. There is adequate parking and all spaces are available on a "first-come, first-served" basis. Alton has MS and uses a motorized wheelchair. Must Cambridge reserve a parking place specifically for Alton if he requests?

Reasonable accommodation requirements preserve Alton's right to a reserved parking space that fits his needs.

Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Reasonable skill and care and obedience

Your buyer client, Christine, asks you when she'll have to pay the transfer tax. What do you tell her?

Record the deed in his name. Recording provides constructive notice of Jericho's purchase. Failure to record makes it possible for others to record interests in the future. Title insurance protects Jericho from claims from the past, but the title search limits that concern

Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property?

Recording provides constructive notice of Jericho's purchase. Failure to record makes it possible for others to record interests in the future. Title insurance protects Jericho from claims from the past, but the title search limits that concern.

Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded?

Recording provides constructive notice that he owns the property. Ownership officially transfers when the grantor delivers the deed to the grantee, but recording provides constructive notice that Conrad owns the property, thereby permitting anyone who does a public records search to see the ownership information.

When predominantly white neighborhoods were considered least risky and black neighborhoods were considered the highest risk for mortgage money, the Federal Housing Administration in 1934 was practicing ______.

Redlining In 1934, the FHA adopted the practice of redlining by crossing off cities and neighborhoods it considered risky. Because this risk was based on the presence or absence of minorities, this was discrimination.

When a lower-quality property is adjacent to a higher-quality property, it can diminish the value of the higher-quality property. What economic principle is this?

Regression

When a property's value is dropping because the neighboring property's yard is filled with trash, it's an example of ______.

Regression

If a buyer makes an offer that the seller finds lacking, which of the following actions is the seller most likely to take?

Respond with a written counter-offer.

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?

Review the inspection report with her and discuss options.

Greta is working with agent Brandon to sell some property. Nelson represents the buyer, Rigby. Of these four parties, who will pay the earnest money?

Rigby

What type of timeshare conveys the right to occupy a property for one or two weeks a year, continuing for a specified number of years, but does not convey ownership?

Right-to-use timeshare

Which of these statements about the homeowner's right of redemption is true?

Rights of redemption window with REOs may have expired. Because of the length of time it takes to process a property after the foreclosure sale, the homeowner's redemption period may have expired before the lender puts the REO on the market.

What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways?

Riparian water rights may apply to one of two sub-classifications: navigable or non-navigable waterways.

Which of the following statements best describes a listing that terminates by performance?

Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

Ron's company leased a building so that they could build an escape room experience. After operating for two years, their attendance (and thus their profits) started to drop significantly, so they decided it was time to close the location. When they started taking down the installation, they realized that some of the structures they built will damage the walls if they try to remove them. Which of these is true about these trade fixtures?

Ron may take the fixtures as long as he repairs any damage caused by removal.

Which of the following activities when done for compensation requires a real estate license to be legal?

Rosanna's friend Bert negotiates the closing costs on her new house for her.

What is the primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?

SARA says landowners aren't responsible if they didn't know the property was contaminated when purchased, if they did their due diligence when investigating the property, and if they acted responsibly when the contamination was discovered.

Which of the following misdeeds is something that the DPOR or VREB CANNOT investigate?

Sabra, an assistant broker, claims that her client Rob defrauded his mortgage company by providing false information.

Which of these is NOT an example of a group boycott?

Sean and the associated brokers in his firm agree to purchase their marketing materials from a single supplier so they get a quantity discount.

Eleanor is moving from a starter home into something a little larger. Her agent has cautioned her against making the offer on the new place contingent on the sale of Eleanor's starter home. Why the caution?

Sellers would view an offer without a contingency as a stronger offer.

What is the VREB authorized to do?

Set requirements and standards of conduct for real estate licensees as well as enforce Virginia's real estate laws

When a local planning board is reviewing density, it would consider ______.

Setbacks and boundaries

When a local planning board is reviewing density, it would consider ______.

Setbacks and boundaries When reviewing density, the local planning board would take setbacks and boundaries into consideration.

Who is responsible for collecting documents and funds at closing and ensuring all recorded closing documents and information are given to the lender, buyer, and reported to the IRS?

Settlement Agent

2 Kinds of ownership

Severalty = Yourself Concurrent = With someone else

2 Kinds of ownership

Severalty = Yourself Concurrent = With someone else

Evan bought into a housing cooperative that's focused on cultural exchange. Each month the co-op residents have dinner meetings and share food and culture from their respective regions. When Evan made his purchase, he received a proprietary lease for his unit. What else did he receive?

Shares in the cooperative corporation

Which of these tasks that Jenna performs does NOT represent the fiduciary duty of accounting?

She discloses the terms of the listing agent's compensation to her client. The fiduciary duty of accounting means that the licensee properly handles all funds, paperwork, and property.

Liz is a property manager who is screening applications from prospective tenants. Which of these reflects an acceptable way to perform this task?

She looks at each tenant's employment, rental, and credit history in exactly the same order each time she performs a review.

Which of the following actions should Cora, a principal broker, take after her brokerage has been audited?

She should keep a copy of the report at her brokerage in case the VREB wants to see it.

Janine wants to meet with her potential buyer clients face-to-face in her office. What's her reason for doing this?

She wants to make sure the buyers are serious about purchasing.

Henry, a licensee, has worked long and hard to find a buyer for his seller client Maxine. The help of the brokerage's unlicensed assistant Bart has been invaluable. Henry's principal broker Simone has provided advice and encouragement, but hasn't been directly involved in the transaction. Now, the buyer, Celia, has given Henry an earnest money check for $3,000. Who's responsible for opening this escrow account?

Simone

Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities?

Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building. There is no required minimum for existing buildings; instead, each business must make a reasonable effort to resolve usage barriers for people with disabilities.

An attorney receives a request to have an appraisal performed on a property inheritance that she is transferring from her deceased client's estate to his heir. Which of these statements is true?

Since this isn't a federally related transaction, federal law doesn't require a licensed or certified appraiser. However, state law may be more stringent.

If the private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

Single-family housing sold or rented without the use of a broker Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.

If the private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.

You represent the buyer and seller in the same transaction. What type of agency relationship do you have with your clients?

Single-licensee dual agency You are in a single-licensee dual agency relationship with your clients because you represent both the buyer and the seller.

When conducting any activities that involve excavation, it is necessary to call 811. Why is that?

So that flags can be placed to mark utility lines

Steve is preparing a market analysis for the Joneses and has selected three comparable (competitive) properties. What's the maximum number of adjustments Steve should make to the Joneses' property?

Steve won't adjust the subject property. Only the comparable sales price is adjusted. If it is inferior, adjust upward. If it's superior, adjust downward.

Archie signed a contract to buy Pam's home. The deal eventually closed, but Pam failed to hand over the home's keys to Archie. A week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys. This is an example of ______.

Suing for specific performance

Which act introduced the "innocent landowner" defense that states that a landowner isn't responsible for clean-up of contamination that occurred prior to their ownership, provided they have not tried to cover up the contamination and can prove due diligence in investigating the property when it was purchased?

Superfund Amendments and Reauthorization Act (SARA)

With a triple net lease, the tenant pays ______.

Taxes, maintenance, and insurance In a triple net lease, the tenant pays for taxes, insurance, and maintenance. The first letter of each expense spells out TIM.

Manny has a client who wants to purchase a commercial building. Manny doesn't have any experience negotiating commercial purchases. Which action should Manny take to demonstrate his good faith and most ethical behavior toward his client?

Tell the client about his inexperience, but say that he'd like to continue the relationship and will consult with a professional commercial broker throughout the transaction.

Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you're not an appraiser, what should you do?

Tell them you're not an appraiser, but you can provide them with a comparative market analysis, which can be useful for determining an appropriate list price.

3 Kinds of concurrent ownerships

Tenancy in Common, JOInt tenancy, Community Property

A property is located in Planning District 15. Which facts must be disclosed?

That either mining activities took place on the property or that it contains abandoned mines.

Which of these statements most accurately represents existing federal antitrust legislation?

The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.

Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true?

The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren't required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.

Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure?

The Closing Disclosure isn't required for a HELOC. Home equity lines of credit aren't subject to TRID disclosures, so Trinity's lender isn't obligated to provide a Closing Disclosure, though other disclosure forms may be required.

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?

The Department of Housing and Urban Development (HUD) enforces Title II when it relates to state and local public housing, housing assistance, and housing referrals.

Which section of the Residential Contract of Purchase specifies that the seller will provide the buyer and the buyer's representatives reasonable access to the property to comply with the terms of the contract?

The Equipment Condition and Inspection section

Which of these statements accurately describes finance- and housing-related legislation?

The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin. The Fair Housing Act of 1968 made race, color, national origin, and religion protected classes and prohibits housing and housing financing discrimination. The ECOA prohibits discrimination based on any protected class.

Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn't meet the bank's normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______.

The Farm Service Agency

Tim and Tammie Sheldon are selling their home, which is a spacious, single-family dwelling built in 2010 and located in an affluent development—a mere 15-minute drive from downtown. The home is part of a very active homeowners' association. The Sheldons have never had any construction work done on the home; they believe it is perfect as is. Which of the following must Tim and Tammie provide to the buyers?

The Sheldons must disclose if the property is subject to the Virginia Property Owners' Act.

Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination?

The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for clean-up of hazardous contamination.

You're explaining to your client that using electronic documents and signatures simplifies the home buying process. Your client is skeptical about these signatures. You describe the Uniform Electronic Transactions Act (UETA) and tell your client ______.

The UETA gives electronic signatures the same legal weight as "wet" signatures The UETA is an attempt to standardize acceptance of electronic documents and signatures, but state laws govern the use of these electronic items. In states that have adopted UETA (or similar laws), an electronic signature is considered equally valid as a wet signature.

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. What agency offers guaranteed loans?

The USDA Farm Service Agency offers guaranteed loans to agricultural lenders.

Derek, a real estate licensee, has had a fair housing complaint filed against him with the Virginia Fair Housing Office. Which group is responsible for either dismissing the complaint or issuing a charge of discrimination?

The Virginia Real Estate Board

Frank had been talking about getting a will for a while now, but he never got around to it before he passed away unexpectedly. His wife and two kids were very distraught and the family got together with his only living relative, a cousin, and friends at the funeral for the first time in years. Frank's wife is now concerned about who will get the farm where she and her children live. According to the laws of intestacy, can you figure out who will get the land?

The Wife

Which of these statements about the Virginia Residential Landlord and Tenant Act is true?

The act establishes both landlord and tenant obligations and remedies.

Procuring Cause

The actions by a broker which result in the owner being able to make a sale.

When the listing agreement's purpose has been fulfilled, what happens to the agency agreement?

The agency agreement terminates by completion.

Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing?

The agent and client don't agree on the best way to price, maintain, and market the property.

Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?

The agreement terminates by operation of law.

What forms the boundaries of a township?

The boundaries of townships are township lines, which run parallel to baselines meridian, and range lines, which run parallel to principal meridians.

In Virginia, who or what entity must keep records of all funds deposited into the custodial or trust account that indicate the date and from whom the broker received the funds, the date deposited, the date any withdrawals are made, and other necessary information?

The broker

Who must be designated as trustee of escrow funds in custodial or trust accounts?

The broker

You and the other licensee from your firm are in a dual-licensee dual agency relationship.

The broker is the dual agent and has designated you to represent the buyer and the other licensee to represent the seller.

What should a client who has hired a limited service agent reference to understand the duties their agent will and will not perform for them?

The brokerage agreement they signed with the limited service agent

Which entity ensures that contractors perform their work according to code by inspecting their job sites?

The building department

Which of these situations would result in the earnest money being disbursed to the seller?

The buyer includes hard money in the purchase offer, then terminates the sale when the appraisal comes in low.

When might an additional provision be needed in an agreement of sale?

The buyer requests terms of sale that aren't part of the standard contract. Additional provisions are used to communicate terms of an offer that aren't part of the standard 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?

The buyer's agent

What is put at risk if a buyer misses a contingency deadline?

The buyer's earnest money

Which of the following is a potential disadvantage for a buyer who enters into a lease with an option to buy contract?

The buyer/lessee could lose any funds credited to the purchase price if he breaches the lease's terms.

Moira has delivered a counter-offer to some potential buyers for her property. Which of these best states the time frame for the buyers' acceptance?

The buyers must respond by the time and date specified in the counter-offer.

A strip mall valued at $850,000 has a $67,500 annual net operating income. What is the capitalization rate for the strip mall?

The cap rate formula is: net operating income ÷ value = rate (I ÷ V = R). So $67,500 ÷ $850,000 = .079 or 7.9%. This formula can work in reverse as well: value (purchase price) × cap rate = net operating income (V × R = I). 7.9%

Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?

The chandelier in the foyer The chimenea, area rug, and banker's lamps are all free-standing and easily removed. The chandelier, however, is not a free-standing light fixture and should be considered real property.

The Fair Housing Board of Virginia has just issued a charge of discrimination. What is true about this situation?

The charge is referred to the attorney general's office.

A client terminates a listing agreement before its expiration date. What happens now?

The client may owe a commission anyway. The listing agreement may not be canceled by only one party. It's possible the client will owe the agent the commission.

In order for you to earn compensation for brokerage activities, you must be employed as the agent of the client. How is this employment accomplished?

The client must make an express agreement to pay a commission to your broker.

Which individual is responsible for ordering, preparing, and reviewing closing-related documents, such as the title policy and settlement statement?

The closing agent

Why does the closing agent review the purchase contract?

The closing agent uses the purchase contract to be sure that the closing process and prorations follow the parties' wishes as agreed to in the contract.

Shira bought a condominium in a planned unit development. The development has a small playground, tennis and basketball courts, and a putting green. Who owns these recreational facilities?

The condo owners A condo owned inside a PUD is similar to a condo owned outside a PUD. All common areas are jointly owned and maintained by the condo owners or the HOA.

John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent?

The covenant against encumbrances assures the grantee that no encumbrances exist other than those that are publicly recorded or noted in the deed.

Which covenant requires the grantor to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing?

The covenant of further assurances requires grantors to take necessary steps (within their scope of power) to perfect the title conveyed.

Henrietta is 17 years old. She wants to sell the property given to her by her grandmother. Which covenant provided by the general warranty deed may prevent her from doing so?

The covenant of the right to convey

The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it's not a Leap year), how much of the pre-paid property tax was the Davises' responsibility?

The daily tax rate is $5 ($1,825 ÷ 365). The Davises owe taxes for January 1 through July 31 (212 days), minus the closing day (paid by buyers). Therefore, the Davises owe for 211 days, which is $1,055 ($5 x 211).

What is the doctrine of estoppel?

The doctrine of estoppel prevents individuals from making an assertion or claim, even by actions or behavior, and later denying it.

Which fiduciary duty may continue even after the transaction closes?

The duty of accounting continues even after the transaction closes. For instance, any money the agent holds after a transaction closes must be accounted for until it's delivered to the appropriate party.

Antje's clients closed on their property yesterday, but Antje still has some paperwork that she needs to deliver to them as soon as possible. Under which fiduciary duty is Antje acting?

The duty of accounting may continue even after the transaction closes. The agent must account for any documents or money belonging to the client until it is delivered to the appropriate party.

After the closing, Donna ensures that her client has keys to the property and copies of all the transaction paperwork. Which fiduciary duty is Donna performing?

The duty of accounting refers to accounting for funds, property, and paperwork related to the transaction.

What's the best definition of land?

The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects Land is defined as the earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects.

Which task is NOT the responsibility of an escrow officer?

The escrow officer is responsible for distributing the earnest money as outlined by the parties or the courts in case of dispute but doesn't have the authority to determine how it should be distributed.

Marion gave her granddaughter Sheila the deed to a brand new home, on the condition that Sheila complete her PhD in astronautics. When Sheila dropped out of school and got a job as a greeter at a big box store instead, Marion ______ to regain ownership of the property.

The estate granted to Sheila describes a fee simple subject to a condition subsequent, since it uses the phrase "on condition that." Marion's right of reentry requires her to take legal action to regain ownership if the condition is violated.

The appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?

The first step in the appraisal process is to state the problem. This includes a description of the rights associated with the property.

You're working with buyers who are pre-approved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of their first payment will go toward interest?

The formula is loan balance × interest rate ÷ months per year. Loan balance is: $200,000 × .0525 = $10,500; $10,500 ÷ 12 = $875

Which of these statements about frontage is true?

The frontage for a lot that's 120 feet by 85 feet is 120 feet. When reading lot dimensions, if the frontage isn't identified, it's the first number stated.

Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result?

The house is probably not required to meet the current code. Most municipalities permit existing construction to be sold and occupied without meeting current code, although there are exceptions for some safety considerations

A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what's the housing ratio?

The housing ratio is 23%: ($1,000 + $150) / $5,000 = .23 x 100 = 23%.

Which of the following statements about the number of contingencies in a sales contract is true?

The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.

What happens to a joint tenant's share of property when the joint tenant dies?

The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty.

The elevator at Morningside Apartments is broken. Who is responsible for making sure it's repaired?

The landlord

Carly's closing on an REO property was suddenly delayed due to an internal audit. What does this mean?

The lender has requested a title audit to ensure that the foreclosure was properly handled. Lenders may request a title audit to ensure that the bank that owns Carly's property performed the foreclosure correctly.

A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what is the mortgagee?

The lender has the mortgage on the property, so the lender is the mortgagee.

When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?

The lender holds the mortgage and the note. The note and mortgage are the lender's leverage to foreclose in the event of default.

Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?

The listing agent stops working on the listing. The only valid reason listed here is listing agent abandonment, which is when the listing agent stops working on the listing.

Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?

The listing expires and is automatically terminated.

Which of these situations would be exempt from most provisions of the federal Fair Housing Act?

The local Elks club owns a property that's rented only to Elks club members. Housing operated by religious organizations and private clubs that limit occupancy to members are exempt from the provisions of the Fair Housing Act.

Who is responsible for testing community wells?

The local health department

John's home is up for sale. He originally bought it five years ago for $300,000. Its current value is $350,000. His real estate agent notified him that a buyer just made an offer on his home for $365,000, which is the price other similar homes in the neighborhood are selling for and John accepts. What does the price of $365,000 represent?

The market value Market value is the price at which a willing buyer and a willing seller would strike a deal, given normal market conditions.

Phoebe's gross monthly income is $4,200, and she has $360 in monthly non-housing debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment she can afford?

The maximum house payment is the lesser of the amounts calculated using both ratios. DTI: $4,200 x .36 = $1,512. $1,512 - $360 = $1,152. Housing ratio: $4,200 x .28 = $1,176. Phoebe's maximum payment is $1,152.

Sondra thinks the new business contract she's signed with her business partner is valid. Both parties are legally competent, the purpose is a business transaction so it's a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?

The only element Sondra hasn't considered is whether the consent to enter into the contract was voluntarily given. Only real estate contracts have to be in writing, and parties are legally competent to enter into contracts from the age of 18.

Harini had a lease with an option to buy on her condo since she wasn't financially stable enough to purchase the condo when she first signed the lease. Two years later Harini was in great financial shape, but she found out that the owner legally sold the condo to another buyer. Harini has to move out next month. What must have happened?

The option expired.

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

The original sales agreement and any addenda

What is the overarching theme addressed by statutory duties in most states?

The overarching theme of statutory duties is that licensees can't take any action that would adversely impact the client's legal interests.

Disposition:

The owner has the right to sell or convey the property.

Exclusion:

The owner may decide who may or may not access the property.

Enjoyment:

The owner may use the property in any legal matter.

Which of the following is an example of easement termination by merger?

The owner of a servient estate buys the property of the dominant estate. An example of a merger that terminates the need for an easement is when the owner of a servient estate buys the property of the dominant estate, thereby making the easement unnecessary.

Quentin Jones brought an application before city council to build a shopping mall on 17 acres south of town that is currently not zoned. The council referred him to the planning commission, which will review the application in light of the city's ________.

The parcel isn't currently zoned. Zoning should be established in alignment with an area's comprehensive plan.

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 a metes and bounds land description. From there, they divided the land into numbered lots and blocks. This output is known as a ________.

The plat map is a detailed map of the given land, including streets, access roads, and measurements between features.

Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened?

The previous owners redeemed the property by paying all mortgage payments and fees. Some states have a statutory redemption period after a foreclosure sale within which the homeowners can pay all funds owed to the lender to retain ownership.

In pricing a property, what might expired listings tell the real estate professional?

The price at which a property won't sell

Which option is true if a deed is not recorded after closing?

The property's legal ownership can be challenged. If a deed isn't recorded after closing, the property's legal ownership can be challenged. Recording isn't required, but it's difficult for a property owner to prove ownership without public recordation of the deed.

According to the Virginia Property Owners' Association Act, which of the following is NOT one of POA members' rights?

The right to waive their POA fees during times of financial duress

According to custom, who pays the costs on the day of closing for property taxes, utilities, etc.?

The seller Although traditionally paid by the seller, some local practices provide that beginning with the day of closing, all expenses are the buyer's, and all income goes to the buyer.

Why do short sales usually occur?

The seller is experiencing financial hardship.

If you're in a caveat emptor state, which statement about property condition disclosures is true?

The seller isn't obligated to proactively disclose property defects.

According to the disclosure statement what is a seller's disclosure requirement if they know what the parcel of land behind their property is being rezoned for commercial development

The seller makes no representations

According to the disclosure statement, what is a seller's disclosure requirement if they know that the parcel of land behind their property is being rezoned for commercial development?

The seller makes no representations.

Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now?

The seller may not be required to clear the defect before closing; depending on the type of defect (e.g., an easement) it may not impact closing. Other types of defects may require action before closing.

What is a seller's disclosure obligation if her property is located in a property owners association?

The seller must provide the buyer with a POA disclosure packet.

Victor buys a property from Yolanda for $200,000. Using a land contract, Victor agrees to pay Yolanda in monthly installments of $4,000 over the course of 50 months. Until Victor pays Yolanda the $200,000, who retains the title?

The seller retains the title in a land contract. When the loan balance is paid in full, the seller gives the buyer title.

Which of the following best describes a net listing?

The seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price.

Which of these guarantees is offered by a general warranty deed but not a special warranty deed?

The seller will defend against all claims against the property's title.

The seller and ______ must approve a short sale.

The seller's lender Both the seller and the seller's lender must approve a short sale, because the lender will be receiving less than the amount owed.

Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he so rarely used the cabin that he was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, and Hank agreed that was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

The statute of frauds requires that real estate contracts be in writing. Drew's offer was oral, and thus didn't create an enforceable contract.

The MARIA acronym helps to identify the five tests of a fixture. In MARIA, what do the two As stand for?

The two As in MARIA stand for adaptability of the item to the land's use and agreement of the parties.

Two competing firms are found guilty of illegal market allocation. Which of the following scenarios must be true?

The two firms have agreed not to compete in one another's markets.

The Shores are in the process of buying a beautiful 3,000-square-foot home from the Bishops. They've completed all the required paperwork on their loan application. Mary's analyzing the package to determine their ability to repay the loan. She examines the property's value, the property type, and the loan-to-value ratio, among other things. Her recommendation is that the Shores' loan application be approved. What is Mary's role?

The underwriter

What happens when a married couple who owns a property as tenants by the entirety divorce?

Their ownership automatically becomes a tenancy in common.

Why would buyers want to know whether a property is currently experiencing a tax abatement?

Their taxes are likely to increase when the abatement period ends.

What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?

There are two categories of comparison: elements, which look at physical and locational characteristics, and units, which look at the numbers.

Jamison, the seller, is closing on his property with Conrad, the buyer. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?

These taxes have already been paid, so are a prepaid item. They'll appear as a buyer debit and seller credit at closing.

The VREB has cause to believe that the escrow accounts at Green Valley Brokerage are being mismanaged. Which of the following is an action they can take?

They can petition the court to appoint a receiver to oversee the escrow accounts.

Why are galvanized pipes a problem in older homes?

They can rust and cause leaks and low water pressure.

Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?

They must take the dispute to court. When legal descriptions conflict, it will be up to the courts to decide the matter.

Which of the following is true about net listings?

They often involve a conflict of interest.

James, a seller, signed a listing agreement that allows him to contract with multiple agents but only pay a commission to the agent who locates a buyer. This type of listing agreement is called ______.

Think of an open listing agreement as a free-for-all. Only the licensee who locates the buyer will be paid. If the seller locates the buyer, no commission is owed.

Picture a drawing of a section of land. Where is Township 16 located?

Third row, third from left

Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Shakira should leave the discussion because _______.

This conversation sounds like it might become an antitrust violation This conversation sounds like it could lead to group boycotting, an antitrust violation.

Easement by prescription:

This easement isn't legal, and is created through the continued, uninterrupted, obvious, exclusive, and adverse use of someone's property without permission.

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?

This is a use variance. In contrast, an applicant for a special use permit doesn't have to show hardship, simply that the proposed use meets the conditions already contained in the ordinance (e.g., change in setback).

When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.

This is all part of the application process.

A buyer, hoping to beat out all other offers, included a clause in the offer that reads, "Buyer to beat all competing offers by $1,000 up to a price of $700,000. Seller to provide copies of competing offer to buyer on acceptance." What type of offer is this an example of?

This is an example of an escalator offer.

When Stacy's clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act?

This is illegal under RESPA because it's considered a kickback between settlement service providers.

In order for her house to accommodate her inability to hear, Angela has made a request for the house to be equipped with a doorbell that also alerts occupants with a flashing light. Which statement is correct?

This is likely to be considered a reasonable accommodation, and Angela should be permitted to install it at her own expense.

Which department typically decides which development projects require a permit or approval?

This is the building department's domain.

The best way to start comparative market analysis data collection is to use properties that sold in the last ______.

Three to six months Properties that sold in the last three to six months are your best bet.

How many parties does a deed of trust involve?

Three: borrower, lender, and trustee

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.

Which type of antitrust violation occurs when the providing of one service is made dependent on the customer or client obtaining another recommended service?

Tie-in arrangement

An agent is trying to drum up business for a friend's mortgage company. She offers to charge a lower commission rate to clients who use her friend's mortgage company for their financing. What's this an example of?

Tie-in arrangement Tie-in arrangements are antitrust violations that involve predicating one service on the consumer's business with a recommended company.

Which of these is an example of antitrust violations common to real estate?

Tie-in arrangements, market allocation agreements, and group boycotting

Gail was supposed to close on her new home by the end of May, but she kept asking the sellers if they could push the closing date back. Soon the summer was over and she still hadn't closed. Gail was guilty of not adhering to which aspect of the contract?

Time is of the essence

Garrett wanted to move his real estate closing so that he can get through his wedding first. His broker and attorney encouraged him not to do it because of which contract clause?

Time is of the essence

Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and 40 and 41. These weeks are inheritable. What type of ownership is this?

Timeshare estates are owned as fee simple estates. They convey all rights of ownership and can be sold or passed down to heirs.

Which of the following statements is true regarding timeshare estates?

Timeshare estates can be sold or passed down to heirs.

Which statement correctly identifies a federal fair housing law and what it addresses?

Title VIII of the Civil Rights Act of 1968 prohibits housing discrimination based on race, color, national origin, and religion.

What protects the buyer before the sale and can reimburse the buyer after the sale if a title issue arises?

Title insurance

Which of the following protects the owner against financial loss if the real estate title has defects?

Title insurance

Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her?

Title insurance

Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.

Title insurance

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.

Why is it important to publicly record a deed?

Title representatives and attorneys who perform title searches look for documents that are publicly recorded. During a title search, title company representatives look specifically for items that are publicly recorded, and the schedule of exceptions will exclude items that aren't recorded.

Ned is a listing agent who has learned of a material fact related to the transaction. To whom and when must he disclose this information?

To all parties as soon as possible Material facts must be disclosed as soon as possible to all parties involved in the transaction.

What is the purpose of the Real Estate Transaction Recovery Fund?

To allow a consumer to be paid when they've been awarded a judgment for fraud, deceit or misrepresentation in a real estate transaction and have exhausted all other remedies to collect the award.

What's the purpose of the fixed/adjustable rate note?

To convert the interest rate from fixed to adjustable The note converts the interest rate in an ARM from fixed to adjustable. It's part of the mortgage package.

What is the purpose of the Common Interest Communities Law?

To create a policy board and regulations to administer the Virginia Property Owners' Association Act, Cooperative Act, Condominium Act, and Time-share Act.

Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document?

To detail the estimated closing costs for Lawrence's loan

What's the purpose of a buyer representation agreement?

To establish an exclusive agent/buyer relationship

Which of the following best describes the purpose of a sales contract?

To identify the terms of a real estate sales transaction between the seller and the buyer

A town has just assigned a lower-density use zone to an area that previously allowed higher density. What's one reason the town may have done this?

To limit overgrowth The town may have implemented downzoning to limit overgrowth. Downzoning serves many purposes, but these don't include increasing density, taxes, or property values.

Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up?

To preserve the chain of title, Melisa needs to record the signed deed. Then future records will show an unbroken chain of title.

What is the purpose of the Virginia Underground Utility Damage Prevention Act?

To prevent damage to underground utilities

What is the purpose of providing the disclosure to unrepresented parties?

To prevent misunderstandings and lawsuits by informing the consumer the agent does not represent them

Which of these statements describes the purpose of Virginia agency disclosures?

To protect consumers by keeping them informed

What's the primary purpose of bulk zoning?

To reduce density

Ryan has engaged Jaclyn as his real estate agent to purchase a property. According to statute, which of these duties does Jaclyn owe Ryan?

To seek a property at a price and terms acceptable to Ryan

What's the purpose of the earnest money deposit?

To show the seller that the buyer is serious and intends to go through with the purchase

What is the purpose of earnest money?

To show the seller that the buyer is serious and intends to go through with the sale

Managing broker Todd is often extremely busy supervising his brokerage and training new licensees. He doesn't have time for his own clients, so he frequently sends his wife Cindy to meet with clients to sign transactional paperwork. Cindy doesn't hold a real estate license but she does have a power of attorney (POA) for Todd. All fees are paid to Todd. What is the issue with Todd doing this?

Todd is prohibited from allowing anyone to use his principal broker's license in order to perform real estate activities.

Regina closed on the sale of her house to Tom on Thursday, then went to a second closing on Friday and sold it to Martin. How could the title company in Martin's transaction have missed the fact that Tom had purchased the property?

Tom's title company didn't have time to record Tom's deed before Regina closed with Martin.

The ease with which the property can be conveyed to another describes which factor that influences value?

Transferability is how easily a property can be transferred to another.

Which of the following is an example of price fixing?

Two brokerages determine a standard commission rate.

What are the two types of physical depreciation?

Two types of physical depreciation are curable and incurable depreciation.

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

Two-and-a-half

Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?

Under the Housing for Older Persons Act of 1995, housing must have one person who is 55 or older residing in at least 80% of its occupied units to be exempt from charges of familial status discrimination by age preference.

In contract law, undue influence differs from duress in that duress includes ______.

Undue influence differs from duress because duress includes the use or threat of force, such as blackmail or bodily harm. Undue influence uses persuasion to overcome free will, and usually involves a position of trust.

Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who's just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn't good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel's now stuck with a $400,000 mortgage. What type of scheme is this?

Unfortunately, Samuel was a straw buyer. His credit was used to purchase a property and secure financing, so when Yoshi skipped town, Samuel was left with the responsibility of paying the mortgage.

It's January, and the pool at Roger's listing has been prepped for winter for several weeks. The homeowner assures Roger that it's in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn't work, and the pool drain appears to be clogged. What best describes what Roger has done?

Unintentional misrepresentation

It's January, and the pool at Roger's listing has been prepped for winter for several weeks. The homeowner assures Roger that it's in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn't work, and the pool drain appears to be clogged. What did Roger commit?

Unintentional misrepresentation

Tenancy in Common

Unity of possession but separate titles. If tenant dies, title passes to heirs, not other tenant. (Allowed to will a tenancy in common)

Casey signed a contract form offering a purchase price of $309,000 on Karen's home, and gave his agent a $5,000 earnest money deposit. Karen's out of town, though, and her agent can't reach her. At this point what does Casey have?

Until the terms are negotiated and the contract signed by both parties, acceptance hasn't occurred and the sales contract is considered an offer.

Violators of the Sherman Antitrust Act may be subject to fines. For what amount may corporations and individuals be liable?

Up to $100 million for corporations and $1 million for individuals

When does a transfer tax become payable?

Upon recording of the deed

Which of the following defines when a lender charges a borrower more than the highest allowable interest rate?

Usury Usury rates vary by state and set the maximum interest rate that may be charged.

Starla, 35, and Gwen, 32, are going into business! Gwen is buying a share of Starla's franchise. Their attorneys drew up a contract that had Gwen providing $45,000 to Starla in return for 50% ownership. Gwen and Starla happily signed the contract, Gwen paid Starla the $45,000, and Starla presented Gwen with a notarized certificate showing Gwen's 50% ownership in the company. What type of contract is this?

Valid

Kevin and Regina sold their property to Vickey using a general warranty deed. Which of these statements is true?

Vickey is the grantee. The grantor is the former owner, and grantee is the new owner. Property may only be conveyed if both (all) owners agree to convey it.

Which of these professional activities is NOT covered by the Fair Housing Act?

Vickie's staging company works with investor clients to stage vacant properties.

Which of these is NOT a duty that licensee Violet owes her landlord client Tony?

Violet agrees to not take on any other landlord clients while she's helping Tony.

Which regulation describes how the VREB must carry out its responsibilities and defines the regulations that it enforces?

Virginia Administrative Code Title 18, Agency 135

Which regulation sets forth the Virginia Real Estate Board's licensing regulations?

Virginia Administrative Code Title 18, Agency 135, Chapter 20

Which agency is authorized to promulgate and enforce licensing laws in Virginia?

Virginia Real Estate Board

Which Act requires a seller to disclose the condition of the property but states that the owner makes no representations or warranties as to the condition of the property and that the property is being sold "as is"?

Virginia Residential Disclosure Act

Rex needs to handle some money he acquired during an "unsavory" business deal. He agrees to sign his boat over to his colleague, Ben, if Ben can launder the money and return it to Rex as part of a legal business dealing. What kind of contract do Rex and Ben have?

Void

You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this?

Void

Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?

Void A party can't promise to do something impossible in a contract. Doing so makes the contract void.

As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this?

Voidable

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable

Wayne is selling his house, which is in a flood hazard area, to Ayisha, who doesn't have an agent. Does Wayne have any disclosure responsibilities toward Ayisha, and if so, what are they?

Wayne needs to fill out the Disclosure Statement and give it to Ayisha.

Elaina and Allen just purchased a home using a deed of trust. Which of the following is most likely true about their home loan?

When a deed of trust secures a loan, a trustee holds the title until the loan is paid. Because the right to sell in the event of a default is part of the deed of trust's language, a non-judicial foreclosure may be used.

What's usury?

When a loan's interest rate is higher than the maximum allowable rate. Usury rates vary by state.

You're a broker writing MLS policy for your firm. You'll probably want to include ______.

When and if listing data should be submitted to you for approval Some brokers require that MLS listing information crosses their desk for approval before licensees post it to the MLS.

What is the most common way that asbestos enters the body?

When asbestos fibers decay or are disturbed, the friable particles can be inhaled.

When does offer and acceptance occur?

When both parties sign a contract with a full understanding of the terms. Offer and acceptance, which is also known as mutual agreement, occurs when the parties enter into the agreement with a full understanding of the contract terms. When both parties sign the contract, they are indicating they understand and agree to the terms.

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?

When conditions are met at closing

Interest rates determine buying power. Which of the following is a true statement?

When interest rates are high, buyers are often priced out of the market.

Travis has made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

When the note has been paid off, the holder must sign the note, mark it as paid in full, and return it to the maker. The satisfaction of mortgage is recorded with the county land office, removing the associated lien from the property.

Reliction:

When water gradually recedes and uncovers new land

Which of these might bring a charge of illegal steering against a licensee?

When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe. Licensees must take care to screen properties only on the basis of clients' expressed housing preferences and without providing information about neighborhood demographics that might bring a charge of steering.

As Brandon's listing agent, Lily must disclose all known material facts relative to Brandon's property. Which of the following is a zoning-related fact that Lily might have to disclose to prospective buyers?

Whether or not a subdivision used to be agricultural land isn't material to a transaction today. However, the historic preservation district designation is material in that it may affect any renovations the buyer wishes to make.

Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?

Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?

Which entity typically enforces the code restrictions and licensing and insurance requirements for contractors, thereby enforcing the building code?

While builders and developers self-regulate to some degree, they're not responsible for enforcing the building code. This is the local building department's responsibility.

All of the homes on Elm Street are currently on septic systems. However, the county plans to extend the sewer lines to Elm Street within the next two years. What's the biggest reason why it's important for your buyers to know this?

While construction traffic may be an annoyance, the real reason it's important for prospective buyers to know about the sewer extension is that it could be costly for residents. Localities may charge up to $10,000 for a home to tie into the sewer system—and in many cases, it's required, not optional.

Which of these guarantees is offered by a general warranty deed but not a special warranty deed?

With a general warranty deed, the seller will defend against all claims on title; with a special warranty deed, the seller warrants only those claims that stem from when he owned the property.

Seller Gina feels awful that Martha, who was going to buy her property, lost her job. Gina decides to ______ Martha from the purchase contract.

With a release, one party to a contract can agree (in writing) to not hold the other party responsible for the contract terms and obligations.

Jay's new loan to purchase a property includes the seller's existing mortgage. This type of loan is called a ______ loan.

Wrap-around

Manuel is selling his home to Selena. He has an existing loan that he'll continue to make payments on, and he's extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?

Wrap-around loan

Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800. He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue?

Xavier is guilty of commingling and conversion.

First Baptist Church in Norfolk owns two apartments next door to the church, which used to be housing for their ministerial staff. It does not rent to non-Baptists. Is this legal?

Yes, as long as it does not discriminate based on race, color, national origin, or familial status.

When a comparable property has a feature that the subject property doesn't have, what should the licensee preparing a CMA do?

Adjust the comparable's price down To determine the value of a subject property, start with the comparable's value (selling price) and adjust from there. If the comparable has a feature the subject property doesn't have, that feature's "value" needs to be deducted.

What does the Federal Trade Commission regulate?

Advertising

In addition to undivided loyalty what other duty does a client give up when agreeing to a dual agent relationship?

Advocacy

Jeffersontown has a zoning ordinance that requires all properties in a designated historic district to have brick or wood plank facades. No aluminum, cement board, or vinyl siding is allowed. What type of zoning is this?

Aesthetic zoning

The town planning and zoning board is considering some new zoning regulations to ensure that one of the neighborhoods maintains its designation on the National Register of Historic Places. What type of zoning are they likely to enact?

Aesthetic zoning Aesthetic zoning regulations ensure the architectural and/or visual integrity and cohesiveness of a given area.

Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank's property?

$4,375 One acre = 43,560 square feet. Figure his lot acreage first (54,450 ÷ 43,560 = 1.25 acres). Since the two lots are comparable, calculate the price of the comp ($3,500 x 1.25 = $4,375), which is a good list price for Frank's lot.

Dale and Barbara, your buyer clients, aren't thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They're financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?

$4,700

Amy is purchasing a $500,000 property, financing $400,000. Assuming a mortgage recording tax rate of $0.115 per $100, what's the mortgage recording tax amount?

$460

A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home?

$76,000 To find how much equity she has, subtract the amount she still owes on her mortgage from the appraised value.

A buyer with a 30-year, $750,000 loan at a 5.75% interest rate has a monthly principal and interest payment totaling $4,376.80. If $3,593.75 is interest, how much is applied to principal?

$783.05

Alison and Brent are financing their house purchase of $232,500 with an FHA loan. Their credit score qualifies them for the minimum down payment. What do they need to put down?

$8,137.50 The minimum down payment for an FHA loan is 3.5%, so Alison and Brent's down payment needs to be $8,137.50 ($232,500 x 0.035).

A 4-bedroom, 4-bath 4,875 square feet house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?

$86.72

Gary has an 80% LTVR on his new $318,000 townhome with an annual interest rate of 4.125%. What's his interest payment the first month?

$874.50

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. If $1,145.83 is interest, how much is applied to principal?

$896.88

The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe?

$90.57 Multiply the assessed value by the tax rate and divide by 12 to calculate monthly taxes: $209,000 × .52% = $1,086.80, and $1,086.80 ÷ 12 = $90.57.

The Federal Truth in Lending Law: (Regulation Z)

1 Requires a lender to estimate a borrower's approximate loan closing costs before accepting a loan. 2 regulates advertising that contains information regarding mortgage terms 3 prevents brokers from using a phrase like "FHA financing available" in any ad 4 Dictates that mortgage applications be made on specific government forms

Which statement best describes a trade fixture?

A fixture or item installed by a commercial tenant that's considered personal property of the tenant

Margi and Scott are making an offer on a timeshare unit. They receive a public offering statement from the developer. What information will this statement provide?

A full disclosure of the timeshare project, characteristics of the project, any material circumstances that affect it, and the specific timeshare being offered.

Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira?

A great example of deed limitations is the restrictions that may be placed on a property by an owners association. A subject to clause may refer to an easement held by a neighboring property to get to a road or water source.

Which of the following statements is true regarding Virginia's licensing requirements?

A person who receives a $100 gift certificate for performing real estate activities on behalf of a friend must have a real estate license.

Which of the following statements best describes a mortgage broker?

A person who works with multiple lenders to find the product that works best for the client

Which of these statements about fair housing for people with disabilities is true?

A person with a disability should not be prevented from making reasonable accommodations, and may also request accessibility accommodations.

Which of these photo descriptions may be a potential MLS violation?

A photo of the master bedroom, including the bed, dresser, and jewelry armoire

What's a bound?

A physical feature that defines the boundaries of the land

Eric didn't have direct access to the small lake in his subdivision; he had an easement arranged with his neighbor. Ten months ago, the developer built a public access road to the lake, so Eric stopped using the easement. What type of easement termination is this?

Abandonment Easement abandonment is when the dominant estate owner takes action that shows a clear intent to stop using the easement.

Stacy has gone into default on her mortgage. Her lender is demanding that the entire loan balance be paid in full. Which mortgage clause permits her lender to do this?

Acceleration

Another term for a valuation is ______.

Another term for a valuation is a formal appraisal. This is a professional appraiser's unbiased opinion of value.

Jeanetta leases an apartment from Quad City Leasing. Jeanetta has filed a complaint with the state real estate licensing division stating that Marissa, Quad City's property manager, breached her fiduciary duty of loyalty to Jeanetta. Which of these statements about this situation is true?

As a property manager, Marissa owes fiduciary duties to her client and the apartment community.

Condominium _______ set forth the rules and regulations for the condominium owners associations. They govern how the associations manage and spend cash reserves, for example.

Bylaws

The ______ protects consumers from unwanted email solicitations.

CAN-SPAM Act of 2003

When prices go down because there are too many homes on the market and too few buyers, this is an example of ______.

Competition Competition is related to supply and demand. Multiple similar properties on the market creates competition, causing a value decrease (lower prices) because the supply exceeds demand. Fewer homes on the market means less competition, increasing demand and driving prices upward.

Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step?

Complete a loan application.

What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?

Comprehensive Environmental Response Compensation and Liability Act

Virginia licensee Dale has just presented an offer to buy a condo on behalf of his buyer client Nelson. He files the written offer in his brokerage and sends copies to the seller, the Greason family, and their broker Gary. What, if anything, has he done wrong?

Dale has done nothing wrong; he's handled the paperwork properly.

The ______ can offer direct loans to farmers and ranchers. The loans are funded by congressional appropriation.

Direct loans are available to farmers and ranchers through the USDA Farm Service Agency, funded by congressional appropriation.

Tommy and Quinn are buying their first home together. All seems to have gone well, and they are conducting their final walk-through before closing. But wait ... nothing has been done to fix those electrical issues that the sellers agreed to fix. And the sellers removed the beautiful chandelier that was supposed to stay, per the contract. Can Tommy and Quinn walk away from the deal at this point?

Yes, the sellers have breached the contract, so Tommy and Quinn have the option of unilateral rescission.

What is the difference between designated agency and designated representation?

Designated agency means the licensee is acting as a standard or limited service agent. Designated representation means the licensee is acting as an independent contractor.

What do buyers provide to the seller as an indication that they are serious and intend to go through with the purchase?

Earnest money deposit

Jarod bought a home in which he has all the rights of ownership, including the right to sell and to convey the property to heirs at his death. What type of fee simple estate is this?

Fee simple absolute

Joe gave land to a school, but still wanted to have some control over its use, so a deed was prepared that gave the school title as long as the land is used for educational purposes. What type of interest does the school have?

Fee simple determinable

The house that Rhema is considering purchasing is on a perfectly level lot, which is what attracted her to the home after years of living on a hill. It also has a lovely creek at the back of the 60-foot yard. What might Rhema have to purchase if she buys this home?

Flood insurance

The part of the floodplain associated with moving water is considered the most dangerous area. In Virginia, this area is known as what?

Floodway

Theodore is the listing agent for a Virginia seller who's completed a property disclosure form. For how long must this form be retained?

For three years, whether the sale happens or not.

Rico is an appraiser who is performing a valuation on a property. What's another term for what Rico is doing?

Formal Appraisal

What can brokerages do to ensure licensees use technology properly?

Have a solid policies and procedures manual in place.

Which of these activities requires that licensee Jake have a brokerage relationship before he performs it?

He shows a property to an interested buyer.

What is true about a material fact that a licensee must disclose?

Information is material if it affects a buyer's decision to buy a given property. Different information will be weighed differently based on the buyer.

Which of the following is an example of the duty of disclosure?

Informing parties to the transaction of material facts related to the transaction

Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?

Inspection contingency

Jeremiah reviews the floor plan of the house he's going to sell. It's 3,800 square feet. In his advertising, he bumps that number up to 4,000 square feet to better justify its asking price. What has Jeremiah done?

Intentional misrepresentation

Which of these is essentially the same as fraud?

Intentional misrepresentation

You're showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?

It's important to find out whether the work was permitted, because if it weren't, there may be major repercussions.

What happens to an initial offer from the buyer after a seller counters?

It's no longer in play.

Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?

It's owned as an estate in severalty.

Tom and Rosanne are interested in a property, but before making an offer, they want to make sure there aren't any registered sex offenders living in the neighborhood. Which statement is most accurate?

It's up to the buyer to perform due diligence and research whether sex offenders live in the area. Licensees can direct clients to the state's registry.

The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently-attached natural objects, is called ______.

Land

Which of these is the best definition of real estate?

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

A licensee who's received a threat of violence after refusing to violate fair housing law should report the threat to ______.

Law enforcement officials

Which of the following statements about acts performed by licensees is true?

Licensees can perform services for others in the transaction without representing that party, but only if the acts are ministerial.

Which of the following strategies would help to make a "Choose Your Neighbor" marketing letter non-discriminatory in its effect?

Listing the property on the MLS

Janie's got an open house on Sunday but lets her friend in on Saturday to preview it. It's love at first sight! With the owner out of town, Janie decides to cancel the open house so there won't be any other offers. Her friend makes an offer and it's accepted on Monday. What fiduciary duty or duties has Janie breached?

Loyalty and disclosure

Which of these scenarios is a violation of federal fair housing laws?

Miguel follows his client's request to only show him properties where the neighborhood is mainly Hispanic. Buyers are free to select properties based on demographics as long as licensees don't use demographics as a basis for showing properties. Landlords may refuse to rent to individuals on the basis of creditworthiness.

Lena's buyer Mindy is making an offer on Leo's house. Which party decides how much earnest money to offer?

Mindy

Routine acts that do not involve judgment, advocacy, or negotiation are called ______.

Ministerial duties

Google and "if this, then that" alerts can assist you with which of the following?

Monitoring your online listings for rental scams

Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $201,500. Their tax rate is 0.63%. How much will their monthly taxes be?

Monthly taxes are calculated by multiplying the assessed value by the tax rate and dividing by 12: $201,500 × .63% = $1,269.45 ÷ 12 = $105.79.

Which term describes the temporary halting of new property development with the community's best interests in mind?

Moratorium

Lien Theory State

Mortgage becomes a lien while title remains with the buyer.

Which of the following is the price a lender believes the property will bring at a foreclosure sale?

Mortgage value

A requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property is an example of a _______,

Restrictive covenant

Felicity has been found guilty of practicing real estate without an active license. Which of the following statements about her situation is true?

She's subject to a VREB investigation.

Examples of real property include which of the following?

Shelves attached to the wall with brackets

The Clayton Act of 1914 supports the

Sherman Antitrust Act of 1890 by prohibiting mergers or acquisitions that would result in an unreasonable reduction in competition or the creation of monopolies.

Which of these scenarios is an example of two parties rescinding a contract?

Sherman, the seller, decides not to sell his condo after all. Fortunately, his buyer, Alice, decided to join the Peace Corps. They mutually agree to cancel the sale with no penalty on either side, and each signs paperwork to this effect.

In which form of co-ownership is a person's ownership inheritable?

Tenancy in common With tenancy in common, if one owner dies, that person's ownership is inheritable. It doesn't automatically pass to the other owners as it would with joint tenancy.

estate at sufferance

Tenant does not pay rent

Termination of co-ownership by partition is the same as?

Termination of tenancy in common by partition

Which of these is a TRUE statement regarding truth in advertising violation penalties?

The Federal Trade Commission determines the severity of the penalty based on the severity of the violation.

Florence lives in a planned community with an HOA regulation that prohibits flagpoles. As a veteran, she feels strongly about displaying the flag on Independence Day, Flag Day, and Veteran's Day, so she put up a pole for that purpose. How can the regulation be enforced?

The HOA has the power to enforce the regulation through fines or by taking Florence to court.

Rhonda hasn't paid her HOA dues in two years. Her attorney recently informed her that her state grants HOA-related liens a super lien status. What does this mean?

The HOA lien takes priority over all other liens. Super lien status means that the lien is granted higher priority than all other liens, including mortgages, deeds of trust, or property taxes.

Prior to the ______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing.

The Housing and Community Development Act of 1974 included gender or a person's sex in the list of protected classes.

Which act gives companies the right to sue a competitor for making deceptive ad claims?

The Lanham Act

Which section of the Residential Contract of Purchase gives buyers who are purchasing a home built before 1978 the option to have their home inspected for lead-based paint hazards?

The Lead-Based Paint Inspection section

The amount and disposition of security deposits for commercial tenancy are defined by ______.

The Lease

In which section of the Residential Contract of Purchase can buyers request that the seller provide them with a copy of the Residential Property Disclosure form?

The Notice of Disclosure Pursuant to Virginia Residential Property Disclosure Act section

Which section of the Residential Contract of Purchase is required by Virginia law to be included in any contract for the purchase of real estate that has between one and four residential dwelling units?

The Notice to Purchaser Regarding Settlement Agent and Settlement Services section

Stella owns a building in an area of town that's being revitalized. Local property owners believe property values will increase considerably over the next 10 years. Stella wants to entice long-term tenants with a low initial rent but have the flexibility to increase rent as her property's value increase. What type of lease should she consider?

Graduated Graduated leases permit an increase in rent during the lease period. The increase can be based on a number of factors, such as changes to appraised value, index, or time.

Grant and Adela arrange a $150,000 loan at 4.5% annual interest with their lender. What's their monthly interest amount?

Grant and Adela's annual interest amount is $6,750 ($150,000 x 0.045). To get the monthly amount, divide $6,750 by 12. Their monthly interest amount is $562.50.

Easement in gross:

Granted to a specific individual or business rather than attached to the property itself

Which option best describes a delivery and acceptance of a deed as required?

Grantor has acknowledged and voluntarily signed the deed in front of a public notary and delivered it in person to the grantee or an agent of the grantee

Which of these situations represents an illegal tie-in arrangement?

Grayson tells his seller client, Geneva, that he'll reduce the listing commission if Geneva uses MBS Title Services to close her transaction.

What's income received before any operating expenses are deducted?

Gross income

What's used to calculate the housing debt-to-income ratio and total debt-to-income ratio?

Gross income

What does the income approach to value rely on when valuing properties that are five or more units?

Gross income multiplier

In what type of lease does the landlord pay taxes, maintenance, and insurance?

Gross lease

What hazard do mining activities, landfills, or agricultural pesticides contribute to?

Groundwater contamination

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide to not show any of Acme's listings and to prohibit showings from Acme buyers to drive Acme out of business. This is an example of ______.

Group boycotting This is group boycotting because it involves a group of agents agreeing not to do business with another group.

Which loan type is a fixed-rate mortgage where the monthly payments increase over time, according to a set schedule?

Growing equity

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Guaranteed loans

If Gus has the kind of license that requires 16 hours of continuing education, what else is true about his situation?

Gus has to affiliate with a licensed broker.

Nathan was painting the siding on his home when he was interrupted by a neighbor who informed him that he had to have the paint color approved before using it. Nathan lives in a neighborhood with ________.

HOA regulations

Which statement regarding fee simple defeasible estates is true?

The estate includes the full bundle of legal rights, but ownership is based on a condition.

A property has a septic system that's subject to certain maintenance requirements by the state health board, and the owner's obtained a waiver for them. What is the owner's obligation related to this?

The owner must provide the buyer with the septic disclosure and outline the maintenance requirements.

Your clients, Bill and Stacey, are interested in purchasing a piece of land that has several acres of wetlands. Which of the following is a true statement?

The presence of wetlands affects use of the property and should always be noted on appraisal reports. Wetlands are a complex category of land valuation. Their monetary value incorporates both public and private interests, and should always be noted on appraisal reports. Because wetlands are highly regulated areas, their value comes with added baggage.

Agency may be legally terminated in which of the following ways?

The principal broker becomes incapacitated.

Virginia's Big Valley Brokerage was just audited and the auditor found several instances of noncompliance. What happens next?

The principal broker must address the noncompliance or create a plan to do so.

Annexation:

The process of converting personal property to real property.Trade fixture: This is anything that's attached to leased land or structures that's used in conducting business

Lance is a property manager who receives his management fees on a bi-monthly basis. He draws them from a trust account set up in the property owner's name. What gives him the authority to take these disbursements as his fee?

The property management agreement

Who can obtain a copy of a CLUE report for a given property?

The property owner

Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this?

The statute of limitations states the time frame in which a party can file a lawsuit relative to the contract.

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______.

Willing to pay Scott's commission anyway

The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?

With fee simple determinable, the property holder owns the property subject to a condition. If the condition is breached, then the property will go back to the original owner.

Escrow funds must be deposited within how many days?

Within five business days of receipt and ratification of contract.

In Virginia, a landlord must provide a copy of the written rental agreement. When must this be provided?

Within one month of the agreement's effective date

Doug is a real estate licensee. He is a property manager for Julie. He is approached by Jessica to manage one of her new properties. Can Doug do this?

Yes, licensees can perform property management activities for multiple owners.

Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay?

Yes, licensees can use standard forms originally created or approved by an attorney. Licensees can use standard forms provided by their brokerage firm without involving an attorney.

Jody is purchasing a condo in a complex that is offering units for the first time. After she signs the contract, she discovers another condo for sale in a different complex that more closely meets her needs. Can she cancel her purchase?

Yes, she has five calendar days to cancel.

_______ pay earnest money to solidify their commitment to completing a real estate transaction.

Buyers

Asbestos can be identified in what way?

By looking at it with a polarized light

A lot has a length of 10 rods. How many feet is this?

165 A rod is 16-1/2 feet in length, so 10 rods equal 165 feet.

How many hours of post-licensing education are salespersons required to take in the first year as a licensee?

30

Chattel

= cattle = cattle MOOOves = Personal property

Release clause

A clause often found in a blanket loan allowing the borrower to obtain partial releases of specific lots by making required lump sum payments

Which of the following is true about condominium ownership?

A condo is a single-family dwelling.

Which of the following best describes a bilateral contract?

A contract that involves an exchange of consideration between two parties

Michael doesn't have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?

A heartfelt thank you

Which of the following may be considered a stigmatized property?

A home where a homicide, suicide, or haunting occurred

What is a seller representation agreement also known as?

A listing agreement

Dean's new business venture is a software services firm where IT professionals handle programming and customer service tasks for a number of business clients. His employees all work at tables in an open office space. Dean has a ________ lease for the office space.

A loft lease is usually for a large open space that may have few amenities.

Three of these situations fall into the category of being exempt from Virginia fair housing law, and one does not. Which is NOT exempt?

A man rents a room in his single-residency home to another tenant and owns and rents three additional single-family houses.

Fran is a seller's agent. In which of these Virginia scenarios is she breaking a federal law?

A potential buyer asks, "Do you know if anyone who lives here has HIV?" Fran answers, "Yes. The current owner's son does."

Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification?

A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.

What's a survey?

A professional, on-site measurement of the lot lines and dimensions of a property

Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place?

A public record of tenancy

Which of the following pieces of information is principal broker Ken NOT required to maintain as part of his recordkeeping duties?

A record of his past client's credit history

Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest?

Agency coupled with interest is irrevocable.

Which clause in a contract states that one or more parties won't be held liable if there are losses or expenses related to the contract?

An indemnification clause is a contractual shift of liability and obligations off of a given party.

Which of the following is true of an independent contractor?

An independent contractor does not enter into an agency agreement with a client.

A CMA or a BPO is an example of ______.

An informal estimate of market value A CMA or a BPO is an example of an informal estimate of market value. Remember, it's good practice to never call anything you'll produce as a real estate professional an "appraisal."

The economic principle known as ______ means that the value of property today is impacted by the current value of the total expected future benefits.

Anticipation says that the value of property today is impacted by the current value of the total anticipated future benefits.

What does the FTC consider to be a deceptive ad?

Any ad likely to mislead consumers acting reasonably under the circumstances is considered a deceptive ad, according to the FTC's Deception Policy Statement.

Which of the following would make the "Choose Your Neighbor" flyer an allowable strategy for finding prospective buyers?

As part of a comprehensive marketing strategy that doesn't limit or restrict potential buyers

At what point must a listing agent disclose material facts to all parties involved in the transaction?

As soon as possible

Yolanda provided the purchaser of her property in Virginia with a disclosure statement before the purchase contract was signed by both parties. Today, she learned her property is partially located in Planning Zone 15 and mining activities took place on the property. When does Yolanda need to provide the buyer with this material change?

At or before settlement

Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct?

Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.

You're performing a market analysis for the Swansons. Comparable A has an adjusted sales price of $251,250. Comparable B has an adjusted sales price of $265,000. What would be a good way to use this data to arrive at a suggested list price range?

Base list price on the comparable most similar to the subject property.

Seller Alec provided the Virginia Disclosure Statement to buyer Kelly two days before they ratified the contract. Three days after ratification, he learned that there was mining done on his property and he needs to disclose this. When does he need to make this additional disclosure?

Before closing

Yolanda is selling her property in Virginia. Several buyers showed interest in the property at a recent open house. When does Yolanda need to provide a buyer with the disclosure statement?

Before contract ratification

Which of the following is/are illegal?

Both disparate impact and disparate treatment

Eileen is preparing a report pursuant to the terms of a property management agreement. This report shows actual results from operating the property versus what had been projected. What report is she preparing?

Budget comparison statement

What is bulk zoning?

Bulk zoning regulates density by mandating setbacks as well as limits on building heights and lot widths.

You're showing a house when you notice piles of what looks like sawdust outside near the basement windows. This may be evidence of which pest?

Carpenter ants

Which of the following is an example of the duty of obedience?

Carrying out a client's instructions

What types of penalties can the Federal Trade Commission impose for violations of truth in advertising laws?

Cease-and-desist orders, civil and monetary penalties, and corrective advertising or disclosures

Christy found a property that was for sale by owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency has been created?

Christy and Zelda never signed a formal agency agreement, but through Zelda's actions in her attempt to help Christy, she created an implied agency agreement.

Which of the following is true about the security of your clients' information?

Client data can be compromised if the brokerage's computer system is compromised.

A developer constructing a new condominium must submit a ____________ to the Common Interest Community Board.

Declaration

What instrument is generally used to convey property?

Deed

Informing parties of material facts related to a transaction describes the duty of ______.

Disclosure

Property owner Craig likes to sunbathe in the nude in his nice, private backyard. What part of the bundle of rights allows him to do this legally?

Enjoyment

Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.

Farm Service Agency

Before conducting any work that involves ______________, the worker should call 811 so that flags can be put out to mark utility lines and avoid damage.

Excavation

Under what listing agreement is an agent owed a commission no matter who secures the buyer for the transaction?

Exclusive right to sell

Which of the following is the most common type of buyer representation agreement?

Exclusive right-to-represent agreement

Brenda represents Tina in a real estate transaction. Brenda therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care.

Fiduciary

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?

Financing terms and cash equivalency

Your client exchanged one property for a similar property and did not have to pay capital gains taxes that year. How did he do this?

He did a tax-deferred exchange.

It's March 25, and new salesperson Travis is about to renew his license. Travis was first licensed one year ago on March 3. He's taken 30 hours of post-licensing education, paid his fees, and filled out his renewal application on the VREB website. What, if anything, has he forgotten or done wrong?

He hasn't forgotten anything or done anything wrong.

Bob wants an open listing agreement. Why might this not be in Bob's best interest?

He won't get full representation from any one licensee.

Jillian has a loan-to-value ratio of 90/100. This means __________.

Her loan is 90% of the value of the real estate used as collateral and she is putting 10% down.

Marta and Kim are excited because Marta received a prestigious fellowship, and she'll be studying in Spain for a year! Kim is taking a leave of absence from her job to accompany Marta. They don't want their home in a gated community to sit empty, so they'd like to rent it out for the year. What might prohibit them from doing so?

Homeowner regulations

A buyer with a $242,000 loan has a monthly principal and interest payment of $1,317.66. If $1,033.54 is interest, what's the new principal balance after the first payment is applied?

If $1,033.54 of the $1,317.66 is interest, that leaves $284.12 for principal. Subtract $284.12 from $242,000 for a new principal balance of $241,715.88.

A buyer with a $350,000 loan has a monthly principal and interest payment of $2,102.36. If $1,801.23 is interest, what's the new principal balance after the first payment is applied?

If $1,801.23 of the $2,102.36 is interest, that leaves $301.13 for principal. Subtract $301.13 from $350,000 for a new principal balance of $349,698.87.

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

Indemnification

Broker Sam has extended an offer to licensee Jane, who has accepted the offer. Jane will work as an independent contractor for Sam. Based on this, which of the following statements is true?

Independent contractors are required to fill out a W-9 for IRS reporting purposes. Only actual employees are required to complete the W-4.

In addition to fines, individuals who violate antitrust laws may face imprisonment for up to what length of time?

Individuals who violate state antitrust law may be liable for $100,000 and up to 10 years of imprisonment.

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

Turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?

In strict liability, the owner is responsible for cleanup, regardless of who created the initial problem.

Hannah wasn't able to get the financing to open her boutique, so her mother came on as a silent partner and provided additional cash. Hannah and her mother have an agreement that states Hannah's mother can't be held financially or legally liable if there are any problems with the store. What type of contract clause is this?

Indemnifying one of the contract parties releases that party from all liability or loss.

To protect your commission, a listing agreement should be ______.

In writing

A municipality will allow a developer to proceed with an otherwise-prohibited type of construction based on ______.

Incentive zoning

What's a subordination agreement?

It's an agreement that a previous lender signed allowing a later lender to take over the primary, or first, loan position.

What's one benefit of a rural development loan?

Its optional longer term means a lower monthly payment.

Jane is selling her home to Micah. What must occur for Jane to effect a transfer of title to Micah?

Jane must deliver the deed to Micah.

Licensee Kyle has had a few casual meetings with a potential client, Mary. Mary told Kyle the type of home and area she's interested in, and Kyle mentioned a few homes he thinks Mary might be interested in. Although Kyle hasn't said he will continue to look for homes for Mary, Mary believes he'll do just that. Which of the following statements about this situation is correct?

Kyle's actions may have created an implied agency agreement with Mary.

Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result?

Most municipalities permit existing construction to be sold and occupied without meeting current code, although there are exceptions for some safety considerations

Which of the following is a type of listing agreement that is not permitted in Virginia?

Net listing

Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the _______.

Nets

Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act?

No; commercial and business loans are exempt from RESPA requirements. Commercial and business loans are exempt from RESPA.

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

Office of Fair Housing and Equal Opportunity

The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on _______.

Religion

Candice is selling her condo, and Dwayne, who is really interested in purchasing it, wants to see the Property Owners Association's (POA) disclosure packet. What should Candice do?

Request the packet from her POA in writing.

Bob signed a contract to purchase Ingrid's apartment building. Bob decided he didn't want to be a landlord, and Ingrid decided she didn't want to sell and move to Maui. They mutually agreed to cancel the contract and Ingrid returned Bob's earnest money. This is referred to as ______.

Rescission

Regina purchases a farm with 80 acres and owns her property in severalty. What does this mean for the company that purchased the mineral rights from the previous owner?

Regina didn't purchase the mineral rights, which have been severed from the property by the previous owner. Since the previous owner severed the mineral rights from the property, they aren't included in her purchase. This doesn't affect her ownership of the property in fee simple absolute or her ability to hold title in severalty.

According to the VRLTA, a copy of the written rental agreement must be provided to the tenant within ______________ of the agreement's effective date.

One month

Which of these instances does NOT allow a broker to disburse escrow funds?

One of the principals to the transaction demonstrates, in writing, a clear financial need

What does the rectangular government survey system use as the basis for legal descriptions?

Principal meridians, base lines, and sections

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?

Prior appropriation

Gabi owns one parcel measuring one square mile and another parcel measuring one square mile x half a square mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land?

One square mile is 640 acres. The area of the second parcel is 5,280' x 2,640' = 13,939,200 sq. ft. Divide that by 43,560 (sq. ft. in an acre) to get 320 acres. 640 + 320 = 960 acres. $2.5 million divided by 960 acres = $2,604.17 per acre.

When does a designated agency disclosure need to be provided?

Prior to a designated agency situation occurring

Two essential elements of a deed are ______.

Only the grantor's signature is required, not the grantee's. The habendum clause is required only if the deed is conveying less than a fee simple estate.

Two essential elements of a deed are the ______.

Only the grantor's signature is required, not the grantee's. The habendum clause is required only if the deed is conveying less than a fee simple estate.

Tyne entered a contract to buy Fred's home. Per the terms of the contract, Tyne agreed to pay $20,000 for the earnest money deposit by this coming Wednesday and have the property inspected within seven days. She submitted the earnest money deposit on time and had the property inspected within five days. This is an example of ______.

Performance of this part of the contract When all the terms of the contract have been met, there's been performance of the contract.

Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?

Permanence Permanence of investment means that some improvements will remain stable long term, with stable returns over time.

A real estate professional in Virginia is legally permitted to take which of these actions?

Prohibit a family of 10 from renting a unit with a capacity of two people.

Which of the following is one of your duties as a listing agent?

Promote your client's interests throughout the entire transaction.

Quitclaim deed

Quickly transfer interest without warranty

Quiet Title Action

Quiet any challenges or claims to the title. Remove clouds.

Which of these is an example of a rectangular survey system description?

S ½ SE ¼ NW ¼ Section 2, Township Clarkson

Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?

SARA

Wendell just listed Barb's home. Barb told him that there weren't any easements on the property, and Wendell hasn't seen a copy of the survey. What is Wendell's responsibility relative to the disclosure of any easements?

Sellers and listing agents must only disclose easements of which they have actual knowledge. If neither are aware of any easements, then the buyer will typically discover them during due diligence.

Which of these is an example of severability?

Severability refers to the concept that a court can strike down one or more contract terms whiile leaving the remainder in place.

Travis made the final payment on his loan according to the loan terms. What must the note holder do to acknowledge that the debt has been repaid?

Sign the note, mark it "paid in full," and return it to Travis.

The UETA makes it legal and binding for contracts to be ______.

Signed electronically

In most transactions involving a buyer or seller, real estate agents have limited authority to act on behalf of their clients. Therefore, which type of agency relationship are they in?

Special

_________ is when one party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.

Specific performance

Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this?

Spot zoning allows a specific property to be rezoned within an existing zoning area. Spot zoning is illegal in some states.

The question, "What's the purpose of this appraisal?" can be answered by this first step of the appraisal process.

State the problem. The first step is to state the problem so the appraiser can identify what data is needed. After that, the appraiser will identify the data needed, gather it, and analyze it.

In Virginia, the wronged party in a real estate transaction has a limited time period to initiate a court action. This is known as the ______.

Statute of limitations

On average, how many years does a home warranty cover structural damage?

Structural damage can take a while to appear, so homeowners will want to file a claim if it's a decade or less.

Which of these is a potential drawback to a real property exchange?

Taxable gains

Allentown sits on the river, and its many bridges need repair. Which police power is Allentown likely to use in order to fund improvements to its bridges?

Taxation

Ad Valorium

Taxes

Which one of the following statements about testamentary trusts is true?

Testamentary trusts don't avoid probate. Property held within a testamentary trust must go through probate.

Which of these regarding the impact of the Brownfields Law is true?

The Smiths have discovered chemical contamination on the property deed to them by their late parents. The Brownfields Law may provide funds to help them clean up the site.

The Virginia Condominium Act is concerned that condo owners and potential buyers have the information they need to make informed decisions. To that end, which of the following does this act regulate?

The information that must be included in public offering statements

According to the Virginia Residential Landlord and Tenant Act, who's responsible for ensuring that residential dwellings have locks on the sliding glass doors?

The landlord

Alistair bought a townhouse for $285,900. He got a 90% loan and the lender charged him 3-1/2 discount points. How much did Alistair pay in discount points?

The sales price is $285,900, and 90% of that (aka our loan amount) is $257,310. The discount amount is 3-1/2 points, (.035) multiplied by $257,310 = $9,005.85.

With the cost approach to value, what is the replacement cost?

The replacement cost reflects the cost to build a functionally equivalent improvement, as opposed to the reproduction cost, which is the cost to build an exact replica of the subject, with the same materials and deficiencies.

Jane and Micah are seller and buyer of Jane's property, respectively. What must occur for Jane to effect a transfer of title to Micah?

The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.

Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract that Tom and Jim sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?

The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.

Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?

The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.

Which of the following describes the appropriate capital gains exclusion for a taxpayer's primary residence?

The taxpayer lived in the home at least two of the five years immediately preceding the sale, with an exclusion of up to $250,000 for single taxpayers, $500,000 for couples filing jointly.

Which of the following actions would result in the legal termination of an agency agreement?

The term specified in the agency agreement expired.

Assuming that dual agency is legal where these scenarios occur and that the licensees' brokerages permit it, which of these situations demonstrates illegal dual agency?

Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax?

The total transfer tax is $587.40 ($178,000 x .0033), so they each pay $293.70 ($587.40 ÷ 2).

Alexandra sells her house to Clark for $178,000. They negotiate to split the transfer tax, which has a rate of $0.33 per $100. What do they each pay to cover the transfer tax?

The total transfer tax is $587.40 ($178,000 x .0033), so they each pay $293.70 ($587.40 ÷ 2). $293.70

If individuals want to use their property in a way that's not permitted by a zoning ordinance, they must submit a request for a variance or special use permit to which one of the following groups?

The zoning board of appeals Requests for variances and special use permits must be submitted to the zoning board of appeals.

Licensees from other states can practice real estate in Virginia if ______.

They meet Virginia's requirements apply for licensure by reciprocity, and take and pass the Virginia exam.

Which of the following is true about for sale signs in Virginia?

They must include the firm name and primary or branch office phone number.

In contract law, undue influence differs from duress in that duress includes ______.

Use or threat of force

Hope's mortgage created a lien against the property she purchased with the mortgage. What kind of lien is this?

Voluntary

Easement by necessity:

This easement type can only be created for the purpose of ingress and egress.

Danette hasn't paid the first quarter water bill on her property. It was due on April 1. She's closing with the buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement?

This is an accrued expense, and will appear as a seller debit and a buyer credit.

How many acres are in a parcel described as, "The E 1/2 SE 1/4 NE 1/4 Section 3, Township 4 North, Range 2 East of the 6th PM"?

This legal description defines half of a quarter-quarter section. A quarter-quarter section is 40 acres; half of a quarter-quarter section is 20 acres. Alternatively, multiply the three fractions' denominators (2 × 4 × 4) and divide into 640 (640 ÷ 32 = 20).

An encumbrance may be monetary or physical. It limits

the owner's use of the property and can affect marketability and value.

Possession:

This means that the titleholder may possess (be on) the property.

Which of the following terms means the price a property is worth to its owner as currently enjoyed?

Value in use

Adaptability for use:

This refers to how an item is adapted to the real property. If removing an item would change or eliminate the use of the property, it's likely real property.

bundle of rights.

This refers to the rights extended to a property owner to use the physical components of land, such as the surface, sub-surface, and air rights.

Method of annexation:

This refers to whether the item is attached to the property and how permanent the attachment is.

Which of the following can be defined as what a property is worth?

Value means worth. It is different from cost and price.

What effect will a property's utility have on the value if it's currently uninhabitable?

Value will be pushed downward.

Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________.

This would be a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.

How many approaches to value do appraisers generally use?

Three Appraisers use three approaches: sales comparison, cost to reproduce, and income.

Julio's lender presents him with a loan for $275,000 for 30 years at a 4.75% interest rate. How many discount points does Julio need to pay upfront to lower the interest rate to 4%?

Three Lowering the interest three quarters of 1% requires three points, since each point is worth one quarter of 1%.

- 4 Essential elements of Joint tenancy:

Time, title interest, possession (PITT) (brad pitt)

What is the purpose of the Common Interest Community (CIC) Board?

To develop and regulate the CIC manager licensing program

Which statement best describes the criteria that would permit Tristan to legally engage in dual agency?

Tristan must be practicing in a state that permits dual agency; his brokerage firm must allow it, and he must obtain informed consent from all parties to the contract (buyers and sellers).

Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account?

Trust funds, which include security deposits, must be deposited within the length of time outlined in each state's laws and regulations. This is typically one, two, or three business days from receipt, but may be longer in some cases.

How many board members are appointed to the Virginia Real Estate Board?

Two citizens and seven real estate professionals

Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures?

Uniform Electronic Transactions Act

Sondra thinks the new business contract she signed with her business partner is valid. Both parties are legally competent, the contract has a legal purpose, an offer was made and accepted, and a fee has been negotiated and documented. Which essential element of a valid contract has Sondra not yet considered?

Whether consent was voluntary

Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?

Whether the licensee receives benefits from the brokerage firm

Can a condominium include commercial owners?

Yes, as long as some of the condo's units are residential or occupied for recreational purpose.

Kennedy tends to be rather informal about her real estate business. Her daughter's teacher, Matthew, tells Kennedy that he'd like her help selling his house. Kennedy agrees and tells Matthew she'll perform all the tasks she'd perform for any listing, though she has no written agency agreement with Matthew. Do Matthew and Kennedy have a legal agreement?

Yes. Express agreements may be verbal or written. Kennedy and Matthew have an express verbal agreement. The agreement isn't implied because Kennedy agreed to perform all the tasks she'd perform for any listing.

Purchase Money Mortgage (Take back mortgage)

extension of credit by the seller to the buyer