Exam 2 part 2

Extinguishing a debt by equal payments of regular intervals over a specified period of time is called

amortization

The Pennsylvania Human Relations Act prohibits discrimination in advertising against persons of what minimum age?

persons 40 yers of age

Ann pays homeowner's insurance in advance for one year in the amount of $100. Ann sells her property to Bill and closes the sale on June 30th. Assuming that Ann paid the homeowner's insurance on January 1st of that year, how would the insurance be prorated between the buyer and seller?

$50 debit to buyer, $50 credit to seller

A rental property has a return rate of 8%. The monthly net rental is $600. What is the market value of the property?

$90,000

The amount of earnest money deposit in a real estate transaction is determined solely by

A negotiated and acceptable agreement between the parties

A disabled tenant was denied permission to install a handlebar in the shower. What law has the landlord violated?

ADA

Chemicals used in refrigeration, air conditioning, insulation, and aerosol propellants that drift into the upper atmosphere where their chlorine components destroy ozone are called

CFCs

What are known cancer causing agents called?

Carcinogens

In title theory states, what clause is unique to the mortgage?

Defeasance

If you own a property with riparian rights and no prior appropriation which of these could not be done

Damming

A broker acting as a transaction licensee would violate the license law by doing which of the following?

Disclosing that the buyer will agree to financing terms other than those offered

When a salesperson is working with a buyer client who enters into a contract to purchase a time-share interest in real estate, the salesperson should inform the buyer client that:

He/she has the right to cancel the contract within five days from the date the buyer and seller signed the contract

Kyle was on a showing appointment with a potential buyer who wanted to make an offer on the property. Kyle had a purchase agreement in his car. The buyer signed the offer and Kyle promised to send the buyer copies when he gets back to the office. Which statement best describes the situation?

Kyle and his broker may be subject to disciplinary action

The Real Estate Commission has the authority to conduct a hearing in response to an alleged complaint. As a result of a hearing, the Commission may do all of the following except:

Maintain records, even if no disciplinary actions were taken against a licensee

Mary has been working with her buyer client for several months when the buyer finally finds a property of interest. Mary shows the property and writes the offer, then calls the listing agent and leaves a message to be called back. Several hours later Mary still has not heard from the listing agent. Finally, Mary calls the seller directly to present the offer. The seller accepts the offer. What is the problem, if any?

Mary cannot negotiate directly with the owner

A broker, while in the process of obtaining a listing agreement, is informed by the seller that the seller does not want to sell her property to anyone of Middle Eastern descent. In this instance, the broker:

May not list the property under those circumstances and is not obligated to follow the seller's directions

An investor owns five properties and wants to sell two of them. According to the License Law, the investor:

May sell the properties without obtaining a real estate license

Listing agent Alex receives a fax from another agent of the same company. The fax is an offer on the Alex's listing. Alex presents the offer to the seller client. The seller changes the date of closing and initialed the change. The buyer refuses to initial the change and decides to walk away from the negotiation table. Is there a binding agreement?

No, the change was a counter offer

When a broker enters into an exclusive right-to-sell listing agreement with a seller client, the agreement binds the broker to do which of the following?

Provide full fiduciary duties to the seller

If a license is not renewed and remains inactive for more than 5 years, the license holder must:

Re-take the appropriate examination in order to be issued a license

All of the following would cause a broker's license to be revoked or suspended except

Refusing to present a verbal offer to purchase one of the broker's listings

An agent's duty to disclose all aspects of a real estate transaction to their client is:

Required in the agent's fiduciary obligations to the principal

In which of the following instances is a seller's property disclosure statement not required?

Sale of a single-office commercial property

All are true except, with a phase 1 environmental inspection?

Sampling and laboratory analysis

The brokerage fee charged to the seller is negotiated between which of the following people?

Seller and the broker in accordance with the broker's office policy

Occasionally, the Real Estate Recovery Fund may experience a shortfall due to payment of claims against the fund. This shortfall is made up by which of the following means

The Commission may assess each licensee an amount not to exceed $10 at the time of license renewal.

According to Pennsylvania License Law, a salesperson may be employed by:

The broker designated on the salesperson's current license

The exclusive right-to-sell listing agreement between the broker and the seller stipulates that:

The broker will use his/her best efforts to find a ready, willing and able purchaser

Which of the following must a broker disclose when advertising on his website?

The business name designated on their license

If the earnest money deposit is tendered by a buyer directly to the listing broker instead of the selling broker, which of the following is a correct statement?

The listing broker shall assume the escrow duty

How are the amount of the real estate brokerage fees determined

They are the result of an agreement between the consumer and broker

With regards to operation of a real estate office, all of the following statements are correct except:

The office may not be located in a private residence under any circumstances

In Pennsylvania, a seller's property disclosure form is required in all of the following circumstances except

The sale of commercial real property

Licensed salespersons may receive compensation, bonus or commission from which of the following people?

Their employing broker

When must the Consumer Notice be given to every consumer of real estate services?

Whenever a substantive meeting occurs

An electronic network for handling loan applications through remote computer terminals linked to several lenders' computers that may be used by a real estate broker or salesperson to help a buyer select and apply for a loan, is called

a computerized loan origination

Real estate agent Nancy is showing a home to a prospective buyer. Nancy told the buyer that most of the homes on the street had water back up in the basements due to an overload to the storm drain system after an unusually severe storm. Nancy and the prospective buyer notice that there are only air fresheners in the basement and no other areas of the house. In this situation, the agent should recognize that this is

a red flag

A brief summary of a property's history, listing all recorded documents that may affect the title, is a(n)

abstract of title

Tommy Gee encounters an owner of a property who has no equity in the home because of a sharp decline in market values. The owner asks Tommy to market the property at market value but asks Tommy if he could negotiate with the bank and orchestrate a short sale. Who should Tommy recommend the owner consult with before making a decision?

accountant

Tommy asks his real estate agent to prepare a lease agreement instead of a purchase agreement now that he has decided to rent rather than buy. The agent should

advise Tommy to see his lawyer

An implied contract is a(n)

agreement not put into words, either written or verbal

What is an appraisal?

an opinion of value for the day of the appraisal only

During a phone call, a salesperson discusses showing a property to a prospect. Three days later, the agent shows the property; at that time the customer reveals her financial abilities and motivation. Three days after that, the agent prepares her offer and asks the buyer to sign an agency disclosure statement stating the agent represents the seller. When should the agent have disclosed this fact?

before showing the house

The mortgagor is the

borrower

An individual or entity that negotiates an option contract for another and receives a fee is known as a/an:

broker

When a city creates ordinances that restrict and maintain building standards, they are called

building codes

What approach to value would be most appropriate when appraising a vacant factory?

cost approach

A couple is engaged to be married. Any real estate they own at the time the marriage takes place remains that spouse's property in severalty, and property acquired after the marriage belongs equally to both of them. This type of ownership is referred to as

community property

What type of land use does NOT comply with the zoning restriction for its location, but is permitted because it benefits the public?

conditional use

What is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the trust fund for money spent during any clean up actions by the federal government?

cost recovery

Mortgages are recorded in order to

create a valid lien

A broker lists a home. Which CANNOT terminate this agreement?

death of a salesperson

Seller and buyer entered into an instrument of conveyance in which the buyer immediately received legal title. Which instrument would have been used by the parties?

deed

Cassie is a real estate agent who lists a property for an asset management company representing a bank. Cassie prepares a market analysis for the bank and the bank lists the property at the recommended price. Four agents from the MLS prepare offers for the listing and deliver them to Cassie. A fifth agent calls and asks the Cassie if there are any other offers. What can Cassie tell MLS agent number five?

disclose only at the direction of the seller if there are more offers

An unlicensed individual successfully negotiated a difficult real estate transaction. The sellers promised to generously compensate the individual for his work, but later changed their minds. As it relates to this fee, the unlicensed individual may:

do nothing to recover the promised compensation

In some states, the common law legal rights that a wife has in property owned by her husband during their marriage are best known as

dower

A man and woman sign a purchase contract, which is subsequently approved and signed by the seller. The couple now has

equitable title

Which is NOT a fiduciary responsibility of a real estate sales agent?

financing

What was the primary reason asbestos was used prior to our knowledge of the health risks?

fire resistance

Lance's seller client discloses there was a fatal shooting at the house in which a woman and her two children were the victims. Lance is licensed in a state that does not require the disclosure of the deaths. While showing the property, a potential buyer claims to be getting a strange vibe. Lance should

get the seller's written permission to disclose the incident

Effective gross income best describes

gross income minus a figure for vacancy and collection losses

Which item is classified as a fixture under the doctrine of constructive annexation?

house key

While determining the net operating income of an investment property, an appraiser will not take into account

interest expense

A real estate agent forms an LLC. While previewing the new listings on the market the agent sees a bank-owned listing priced to sell quickly. The agent writes an offer on the property in the name of the LLC. The bank addendum prohibits agents from purchasing bank-owned assets. The agent's LLC buys the property. The agent

is acting as an undisclosed principle

Which is a general lien?

judgment lien

In what type of installment agreement does the buyer make payments for the right to possession, but does NOT receive the title until most or all of the terms have been met?

land contract

Which would be considered evidence of the agency relationship between broker and seller?

listing agreement

The offeror is the person who

makes the offer

Who uses the term REALTIST?

members of the National Association of Real Estate Brokers

The type of legal description that references monuments and landmarks best describes

metes and bounds

What document uses legal title to real property to secure debt

mortgage

A salesperson goes on a listing appointment where the owner informs the agent that he has missed a couple of mortgage payments. The property values have declined and now the owner owes more for the property than it's worth. In order for the owner to sell without needing to bring money to the closing table, the agent should suggest that the seller

negotiate a short sale with his bank

A seller tells an agent, "Get me $100,000 for my house, and you can keep anything over that amount." What type of listing is this?

net listing

As an agent is showing a house to a customer, the agent notices a large vertical crack in the basement wall. What is the agent's duty?

nothing

A salesperson has received a very attractive offer to work with a competing firm and wants to immediately change employing brokers. In this situation, the salesperson will need to:

notify the Commission in writing and surrender her current license

A mechanics lien is of:

of indeterminable duration

According to the law of agency, a real estate broker does NOT owe the principal the duty of

offering legal advice

A seller receives an offer and makes a counteroffer. The seller wants to hold the earnest money. The listing agent should

present the counteroffer to the buyer or buyer's agent

Any statements by a real estate salesperson or broker exaggerating the amenities of a property is known as:

puffing

What deed is most commonly used to clear up clouds on a title?

quitclaim

If, upon receipt of an offer to purchase under certain terms, the seller makes a counteroffer, the prospective buyer is

released from his original offer

When a contract is terminated and each party gives back to the other party anything they have received, what occurs?

rescission

The listing agent is informed by the seller that the basement gets wet when it rains. The agent says nothing to the buyer. Who is liable for the failure to disclose the latent defect?

seller

A salesperson has listed a property for $175,000. A few days later, at an open house, a potential buyer asks the salesperson what other houses have sold for in the last 4 months. The salesperson shares the comparable market analysis which was prepared solely for the seller when the property was listed. The analysis indicates a property much like the salesperson's new listing had sold for the highest price in the neighborhood, at $165,000. In this case, the salesperson:

should not have disclosed this information and has created a conflict of interest

Which term best describes a piece of land that is enhanced and ready for a building or structure?

site

What type of relationship best describes how a real estate broker represents her principal in the sale of the principal's single-family home?

special or specific agency

The rule that says a buyer will not pay more for a property than a comparable substitute is the rule of

substitution

If, at the last minute, a seller decides he does not want to complete a sale, but the buyer wants to proceed, the buyer's best remedy would be to

sue for specific performance

Bob and Jerry take title together. Both Bob and Jerry own one-half of the same property. What form of co-ownership does the law presume?

tenancy in common

Cindy Agent wishes to leave her company, ABC Real Estate, owned by Bob Broker. She currently has three sales pending and four active listings. What will happen to these?

the active listings belong to Bob, and Cindy will be paid for pending sales as per her contract with the office

The listing agent told the seller she can guarantee a sale within two weeks of listing. The seller signed a listing agreement based on that fact. Which best describes the situation?

the agent has violated the law

What scenario best describes the process of novation?

the buyer and seller agree to substitute a new contract for a previous one

According to USPAP, what is the definition of market value?

the most probable price a property will bring

The heirs of an estate are selling their deceased father's home. They remove a bedroom set, an organ bench that matches a built-in organ, a television, and various famous paintings. What would be considered real property?

the organ bench

Which would be considered exempt under the Civil Rights Act of 1866?

there are no exemptions

Ed makes an offer to buy William's house for $45,000. William counters that he wishes to receive $47,000 for the house. Ed rejects William's counteroffer. William later says he will accept Ed's original offer of $45,000. Which statement is TRUE?

there is no contract between Ed and William

To inherit is to receive title

through a last will and testament

What insulating material was pumped into houses until its ban in the 1970s?

urea-formaldehyde insulation

The listing agent discriminates against a minority buyer. If the seller were to be held responsible for the actions of the agent, it would be an example of

vicarious liability

A prospective buyer who has previously always lived in the city is looking at a rural property with a real estate agent. The buyer admits that she doesn't know anything about rural properties. The buyer likes the back yard because it is very large but remarks that a small patch of the yard seems to grow more, and much healthier, grass than any other part of the yard. The agent should recommend a

well and septic inspection