National Exam 2
Which of the following is a common chimney or fireplace problem? Creosote Damage around the fascia Holes in the soffit None of these
Creosote
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? $1,335.67 $2000 $363.64 $598.95
$1,335.67
Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.
$100,000 Value = income divided by cap rate. The value of a property is $100,000 ($15,000 ÷ .15 = $100,000).
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? $166,000 $174,000 $266,000 $274,000
$174,000 To estimate value, an appraiser adds the site value to the estimated cost to replace improvements then subtracts the estimated depreciation. So $50,000 + cost of improvements ‒ $4,000 = $220,000. Cost of improvements = $220,000 ‒ $50,000 + $4,000.
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 $220,000 $300,000 $312,000
$208,000 A 60% LTVR means that Heather is financing 60% of her purchase and putting down 40%. Forty percent of $520,000 is $208,000 ($520,000 x 0.40).
Juan purchased a property for $420,000, financing $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? $336,000 $387,000 $420,000 $432,000
$387,000
The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000. Using an assessment ratio of 25%, what is the assessed value of their new home? $21,246 $25,323 $46,750 $52,753
$46,750 Assessed value is based on the appraised value of the home. So, in this case, $187,000 X 0.25 = $46,750.
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 of interest he'll pay over the course of the loan? $1,108,292.40 $500,000 $608,292.40 $750,000
$608,292.40 First, multiply the monthly payment by the total number of payments. Then subtract the original loan value: $3,078.59 x 360 = $1,108,292.40 ‒ $500,000 = $608,292.40.
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? 1,200 1,425 2,400 2,850
1,425 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).
A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What's the GRM? 100 110 200 220
110 To find the GRM, divide the sales price by the gross monthly rent, remembering that there are two units, so a total monthly rent of $5,000. So, $550,000 ÷ $5,000 = 110.
How many acres are in a parcel described as, "The S 1/2 NW 1/4 Section 3, Township 4N, Range 2W of the 6th PM"?
80 This legal description defines half of a quarter section. A quarter section is 160 acres. Half of that is 80 acres. Alternatively, multiply the two fractions' denominators (2 × 4) and divide into 640 (640 ÷ 8 = 80).
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 does not come with any covenants of warranty. A bargain and sale deed may come with or without covenants of warranty. A bargain and sale deed provides the same covenants as a general warranty deed. The bargain and sale deed includes all covenants except the covenant of warranty.
A bargain and sale deed may come with or without covenants of warranty. A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties.
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. The act of conveyance when the seller turns over all property rights to the buyer with a clear, marketable title. The process by which the lender receives coverage under a title insurance policy the borrower has purchased. The process by which the title policy pays out any claims to the buyer or lender.
A covered party grants permission to the title company to pursue the party who caused a claim or loss.
Which of the following statements is true about zoning classifications? A home business would be considered an accessory use. A residential property may only have one use. Condos are always commercial property. Multifamily housing is zoned commercial.
A home business would be considered an accessory use.
Frontage (or front foot) refers to what? A property's boundary line that's adjacent to a road or waterway A property's cost per foot A property's depth (from the front to the rear) A property's perimeter
A property's boundary line that's adjacent to a road or waterway
Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions? A mechanic's lien recorded by A1 Siding and Windows A verbal lease agreement Martha has with her neighbor who leases Martha's garage Last year's unpaid property taxes The current year's unpaid property taxes
A verbal lease agreement Martha has with her neighbor who leases Martha's garage
What's it called when all parties sign a contract, but before the seller's acceptance is delivered to the buyer? Acceptance Binding acceptance Contract closing Exercise of an option
Acceptance
The Adams family is financing their loan through Acme Bank and their agent negotiated a great sales price on their new home. Smith Title Company processed the loan documents. The Adamses must purchase mortgage insurance. Who does the insurance protect? Acme Bank Smith Title The Adamses The realtor
Acme Bank Private mortgage insurance is protection for the lender in the event of buyer default; it is used when the borrower does not have a large enough (usually 20%) down payment.
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 ______. Acquisition and ownership only Acquisition and reversion only Acquisition, ownership, and reversion Ownership and reversion only
Acquisition, ownership, and reversion
The element of a deed that signifies the grantor's intention to transfer title to the grantee is the ______. Act of conveyance Consideration Evidence of title Transference clause
Act of conveyance
Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached? Against encumbrances Quiet enjoyment Right to convey Seisin
Against encumbrances
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? An easement runs across the property, permitting Jane's neighbors to access the neighborhood boat dock. Jane has given Moira 24 hours to accept delivery of the deed. Jane wants to limit her liability for any title defects that may occur. Moira's acceptance of the deed is subject to receiving her financing
An easement runs across the property, permitting Jane's neighbors to access the neighborhood boat dock.
Through the divorce process, Gail was granted ownership of the couple's vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband's name is still on the deed, creating a cloud on the title. What should Gail do? Ask Daniel to sign a general warranty deed so the new buyers enjoy all the deed covenants. Ask Daniel to sign a quitclaim deed to release his ownership share. File a quiet title suit against Daniel. Purchase a title insurance policy for the new owners to cover any eventual ownership issues.
Ask Daniel to sign a quitclaim deed to release his ownership share. The simplest alternative is to execute a quitclaim deed from Daniel to release his share of ownership. Title insurance won't cover clouds on title, and a general warranty deed isn't appropriate in this situation.
Why is a foreclosure more likely to have title issues than a non-foreclosure? Borrowers who are in foreclosure are permitted to acquire unrecorded liens. Borrowers who can't afford loan payments may have taken out other loans against the property. Lenders are permitted to place secondary liens on property that's entering the foreclosure process. Lenders don't take appropriate precautions to maintain clear title.
Borrowers who can't afford loan payments may have taken out other loans against the property.
Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting anything taller than a one-story building. Ronesha wants a three-story house. What should she do? Apply to the zoning board of appeals for a variance. Check to see if the building code will permit a larger house. Conform to the deed restriction. File a suit against Alice to have the restriction removed.
Conform to the deed restriction.
Sue is selling her house for $265,000. Closing is set for June 19, and Sue owns the day of closing. She has a loan balance of $78,000 at a 4.2% rate, and she's current on her payments. She prepaid the property taxes ($1,350) and insurance ($925). Using a calendar-year proration method for calculations, how will these amounts appear on Sue's closing statement? Credit of $1,059.10 Credit of $1,350 and debit of $484.04 Credit of $721.50 Debit of $1,214.85
Credit of $721.50 Tax daily rate: ($1,350 ÷ 365 = $3.70) 195 days (days from closing until year end) = a $721.50 seller credit. Any prepaid seller's homeowners insurance will be refunded to the seller outside closing, so this doesn't appear on the closing statements.
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? Closing costs Discount points Down payment Transfer fees
Discount points
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? Aesthetic zoning Downzoning Incentive zoning Spot zoning
Downzoning
How are principal meridians and baselines used in the rectangular government survey system? All legal descriptions in this system use a single principal meridian and multiple baselines. A principal meridian separates each township from the next and baseline separates each tier from the next. Each legal description in this system originates at the intersection of a principal meridian and a baseline. The boundary formed by two principal meridians and two baselines forms a township.
Each legal description in this system originates at the intersection of a principal meridian and a baseline.
Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would lie, it was determined that he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. What type of easement is this? Easement appurtenant Easement by necessity Easement by prescription Easement in gross
Easement appurtenant 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? Easement appurtenant Easement by necessity Easement by prescription Easement in gross
Easement in gross An easement in gross is granted to a specific individual or company—in this case, the gas utility company.
Which of the following is an example of a universal agent? Buyer's agent Conservator Escrow officer Listing agent
Escrow officer A universal agent has broad authority to act on behalf of the principal, such as a person with a power of attorney or a conservator.
Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use? Conventional FHA FHA, VA, or conventional VA
FHA, VA, or conventional
Which act created an agency to investigate antitrust practices? Attorney General Act Clayton Act Federal Trade Commission Act Sherman Antitrust Act
Federal Trade Commission Act
After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held? Fee simple Legal life estate Ordinary with remainder or reversion Pur autre vie with remainder or reversion
Fee Simple
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? Charged a fee for preparing legal documents Drafted an addendum Filled in the contract blanks Interpreted contract provisions
Filled in the contract blanks
Discoloration along walls and sagging or uneven floors can be signs of ______. Fire damage Flood damage Plumbing problems Wind damage
Flood damage
Which of these is an example of an agent exercising the duties owed to customers and other parties? Ari didn't present the buyer's offer to the seller, since it was a lowball offer. Francine disclosed information about the flooding basement to the buyer and buyer's agent. Mark complied with the buyer's agent's instructions to change the available times for showings so the potential buyer could see the property. With her client's permission, Missy shared the entire inspection report with the seller's agent.
Francine disclosed information about the flooding basement to the buyer and buyer's agent.
Which of the following is an acceptable ad based on Regulation Z? et a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points. Get a low interest rate of 4.75% on a monthly payment of $900. Get a low interest rate of 4.75%, with 85% loan to value. Get a low interest rate of 4.75% with as little as 3% down.
Get a low interest rate of 4.75% (4.925% APR) with as little as 10% down payment and a 30-year fixed rate with no points.
Gerald practices real estate in a state that recognizes sub-agency. Which of these is true of Gerald's authority to appoint a sub-agent? He can independently appoint a sub-agent at any time during the transaction. He must seek the principal's permission, in writing, to appoint a sub-agent. Only Gerald's broker can appoint a sub-agent. Only the principal can appoint a sub-agent.
He must seek the principal's permission, in writing, to appoint a sub-agent.
Simon recently passed away. He owned title to his property in severalty, as a fee simple absolute estate. What will happen to his property? His heirs, as described in his will or the state law of descent, will get the property. His property will transfer to a colleague. The property will have no owner and must be sold at auction. The property will revert to a remainderman.
His heirs, as described in his will or the state law of descent, will get the property.
Which of these situations represents the illegal practice of redlining? Arlo, a licensee, distributed a flyer in several neighborhoods warning of impending commercial developments that would negatively impact property values. Eunice refuses to allow her agent to show her house to families with children. Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods. Jaime is working with Korean clients. He's focusing on homes in Korean communities because he thinks his clients will be more comfortable there.
Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods.
Which of the following would be a description used for real property? Above-ground Free-standing In-ground Movable
In-ground
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? Financing terms and cash equivalency Income generated Market conditions at time of sale Physical characteristics of the property
Income generated The sales comparison approach doesn't factor in any income a property may have generated; that's an aspect of the income approach.
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. It means that the loan has been fully amortized. It refers to the entire principal due over the course of the loan. It refers to the lump sum of the total amount of interest due on the loan.
It means that some principal remains at the end of the loan term.
Why is proof of ownership required when transferring real property? It places the new owner's name on the deed. It provides evidence that the title is marketable. It provides proof that property taxes have been paid for the property. It verifies the property address.
It provides evidence that the title is marketable.
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 buyer client asked her to keep his financial situation confidential. Ted, Ronna's broker, insisted that she teach a contracts class, even though she's a new agent. Though her customer was adamant, Ronna turned down a commercial listing because it was outside her area of expertise.
Jefferson insists that Ronna interpret the implications of him breaching his contract with a buyer.
Andrea and Jim were planning to list their home with Cheryl, but just let her know that they no longer wish to work with her. When she mentioned that the listing agreement is legally binding, they reminded her that their agreement isn't. What would be the reason the listing agreement wasn't legally binding? It wasn't notarized. Jim didn't sign it. They changed their minds about the asking price. They want to list it for 90 days, not 60.
Jim didn't sign it.
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 can follow either the federal or the state law as long as she is consistent. Katrina is permitted to follow whichever law is least restrictive. Katrina must follow federal law for any federally-related transaction. Katrina must follow the more restrictive of federal or state law.
Katrina must follow the more restrictive of federal or state law.
Joan and Martha are entering into an 18-month lease with landlord Roger. Which of these statements is true? All lease agreements must be in writing to be enforceable. An 18-month oral lease is enforceable. It's illegal for leases to cover terms of more than one year. Leases for periods of more than one year must be in writing.
Leases for periods of more than one year must be in writing.
What's the relationship between the Loan Estimate and the Closing Disclosure? Lenders issue the Loan Estimate to verify the figures detailed on the Closing Disclosure. Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the loan estimate. Loan Estimate figures should match Closing Disclosure figures exactly. The Closing Disclosure outlines the lender's responsibilities to the borrower.
Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the loan estimate.
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 New ads to correct previous misinformation Notification to consumers about deceptive ad claims Specific disclosures to consumers
Letters of apology to all affected consumers
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. Which of the following is most likely to be true? Lyle set up the restriction to expire after a certain number of years. The homeowners have all applied for waivers to the existing restrictive covenant. The homeowners so desperately need storage that they're willing to face fines or legal action. The sheds are made of a new material that hadn't been invented or prohibited in 2003.
Lyle set up the restriction to expire after a certain number of years.
Tiers in the rectangular government survey system are formed by ______. Parallel baselines Parallel principal meridians Parallel range lines Parallel township lines
Parallel township lines
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? Karen has an unrecorded lease on the property. Marsha's second mortgage on the property, which was properly recorded in January. Smith and Martin Building and Rehab files a mechanic's lien on June 18. The local cable company's easement through the property for underground wiring. Marsha disclosed this to the title company.
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.
When Shauna looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "north for 314 feet" represent? Benchmark Bounds Metes Monuments
Metes Metes (measures) are the direction and distance of a line forming the boundary of the property.
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? Murphey's grandfather, the previous owner Murphey's great-great-great-grandfather Murphey, the current owner The federal government that originally granted the land
Murphey, the current owner Chain of title always begins with the current owner and goes back in time.
In which of these situations has the licensee compromised the duties of loyalty and disclosure? Diana failed to present the most recent offer to the seller because it was under list price. Hillary, in working with the seller, told the buyer about a material defect the seller hadn't disclosed. Josia, in listing Rob's property, failed to disclose to Rob that he represents the seller. Nate didn't tell his client about a conflict of interest related to the sale of the client's property.
Nate didn't tell his client about a conflict of interest related to the sale of the client's property.
Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. May he do so without penalty? No, because listing agreements may not be terminated until they expire. No, because sellers may not sell their own listings. No, because the listing agreement is contractually binding. No, because this would be a conflict of interest.
No, because the listing agreement is contractually binding.
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? A full disclosure, including the APR and other loan terms Nothing The number of payments and APR The specific down payment amount and APR
Nothing
A client has asked her agent for a 24-hour notice on showings. The agent knows this will have a negative impact on the number of showings. Which duty is in conflict with reasonable skill and care? Accounting Confidentiality Disclosure Obedience
Obedience
When buyers haven't spoken to their bank or another lender, how should you handle the situation? Ask questions about their income, assets, and debts to determine their buying power. Ask them to come back when they have spoken to a banker or broker. Inform them that they must be pre-qualified before you can show them any houses. Offer to refer them to a lender and prepare them for the meeting.
Offer to refer them to a lender and prepare them for the meeting.
Angelo's aging mother needs a place to live out her remaining years. Angelo conveys a home to her, but only for her lifetime. This is an example of what type of life estate? Dower and curtsey Homestead Ordinary Pur autre vie
Ordinary
According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to set contract terms for a certain length of time? Group boycotting Market allocation Price fixing Tie-in arrangement
Price fixing
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? A straight-term loan Land contract Purchase money mortgage Wrap-around mortgage
Purchase money mortgage
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? Ensure the bank has a signature card for the property manager. Give the property manager a power of attorney. Have all who supply trust funds sign waivers. Put it in the property management agreement.
Put it in the property management agreement. The property manager may disburse funds from a trust account if the property management agreement states that the manager may do so without getting explicit permission each time a disbursement is made.
Which of these is a NOT a reason why agency disclosure is mandated? Before buyer representation came into being, buyers were often unaware that the agent they worked with actually represented the seller. Consumers may compromise their bargaining position if they're not aware how agency relationships work. Consumers often don't realize that the agency relationship guarantees that they benefit from the agent's fiduciary duties. Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.
Real estate transactions aren't covered by consumer protection laws; agency law and disclosures provide the only protections.
The Housing and Community Development Act of 1974 added which protected class to federal fair housing law? Color Disability Religion Sex
Sex
Which of these statements best describes a listing that terminates by performance? Evan performs all required fiduciary duties and tasks in listing Von's house, even though it didn't sell before the listing expired. Greg listed a property that failed to sell during the term of the listing agreement. Aside from that, he performed all the tasks promised to the seller. Marty lists Todd's condo. With Marty's efforts they get almost to closing only to have the buyer's financing fall through. Roberto lists a property for Terrence. After two failed offers, the property makes it to a successful closing.
Roberto lists a property for Terrence. After two failed offers, the property makes it to a successful closing.
In full seller disclosure states, whose responsibility is it to complete the seller disclosure form which will be reviewed by prospective buyers? Home inspector Licensee representing the buyer Licensee representing the seller Seller
Seller
In states where full disclosure isn't required, whose responsibility is it to disclose any items required by law and respond honestly to any questions about the property's condition? Appraiser Buyer Lender Seller
Seller
Sheila is unable to use her designated timeshare week this year. What will happen? She can exchange the week for another. She won't have to pay the annual maintenance fee this year. The owner's association will reimburse her for the week. There is nothing she can do if she can't use the week.
She can exchange the week for another.
Which of these statements about statutory duties and fiduciary duties is true? Statutory duties are typically imposed in addition to fiduciary duties. Statutory duties spring from common law and include six duties that licensees owe clients. Statutory duties spring from state statutes and tend to be more specific than fiduciary duties. Statutory duties tend to be more broad than fiduciary duties.
Statutory duties spring from state statutes and tend to be more specific than fiduciary duties. Fiduciary duties are based in common law, and statutory duties arise from state statutes. Designed to be more specific than fiduciary duties, statutory duties may make it easier for licensees to understand their responsibilities.
How is net operating income calculated? Add income to tax deductions. Multiply annual return by .05 of the property's value. Multiply monthly income by 12. Subtract operating expenses from effective gross income.
Subtract operating expenses from effective gross income.
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? Deed HOA covenant Mortgage Survey
Survey
Ann Marie is a tenant with a triple net lease. Per her lease, she pays for which of the following expenses related to the property? Insurance, utilities, maintenance Maintenance, insurance, debt service Taxes, debt service, lease payment Taxes, maintenance, insurance
Taxes, maintenance, insurance
Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings? Carpenter ants Fire ants Powder post beetles Termites
Termites
Trinity has applied for a home equity line of credit (HELOC) to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure? At closing The CD isn't required for a HELOC. Three days before closing Three days from her loan application date
The CD isn't required for a HELOC.
Which of these statements accurately describes finance- and housing-related legislation? As a stipulation of the Housing and Community Development Act, lenders must offer reasons when rejecting loan applications and must respond to all applications within 30 days. The Americans with Disabilities Act added familial status and disability (both physical and mental) to the existing protected classes. The Civil Rights Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, religion, national origin, or sex. The Equal Credit Opportunity Act of 1974 required lenders to provide consumers with equal access to credit and prohibited credit discrimination based on just the three protected classes of race, color, or national origin.
The Civil Rights Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, religion, national origin, or sex.
The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid clients selecting a firm based simply on price. What specific federal legislation prohibits this? The Clayton Act of 1914 The Federal Trade Commission Act of 1914 The Restraint of Trade Act of 1894 The Sherman Antitrust Act of 1890
The Sherman Antitrust Act of 1890
An agent, Alice, has listed a three-bedroom home for her client. Before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client? The agency agreement continues as created unless Alice and her client can mutually agree to terminate it. The agency agreement is terminated upon destruction of the property. The agency agreement must be extended until the home is rebuilt, or for six months, whichever is longer. The agreement must continue, but it can be modified due to the changed value of the property.
The agency agreement is terminated upon destruction of the property.
Two large local brokerage firms agreed to lower their commission rates to the same amount, approximately 1% lower than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation? The agreement between the two firms The dollar amount the competitors lost The marketing efforts the two firms used The size of the two brokerage firms
The agreement between the two firms
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 listing agreement is with the brokerage firm, the agreement continues. The agreement terminates by force of law. The brokerage firm can agree to terminate the agreement if the Tolsons choose to not work with another agent. The Tolsons may choose to terminate the agency agreement.
The agreement terminates by force of 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 homeowner's association disagrees. Which entity enforces subdivision covenants? The civil court system The homeowners association The municipal code enforcement agency The original developer of the neighborhood
The civil court system
In which of these listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement? The agent abandons the listing. The client and agent mutually agree to terminate the listing. The client revokes the listing agreement to sell the property to a family member. The seller withdraws the listing, deciding instead to stay in the property.
The client and agent mutually agree to terminate the listing.
Which of these statements accurately represents one of the required elements in a deed? The deed includes an act of conveyance and may include a habendum clause. The grantee must be legally competent. The grantee must be of legal age. The grantee must sign the deed and provide consideration.
The deed includes an act of conveyance and may include a habendum clause.
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. $1,001.32 $1,073.64 $1,296.21 $1.347.91
The estimated payment is $1,073.64. Remember to divide $200,000 by 1,000, then multiply the factor (5.36822) by 200.
Which of the following statements about the number of contingencies in a sales contract is true? Every sales contract should contain a minimum of three contingencies. The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted. The more contingencies, the better, from the seller's perspective. The number of contingencies is directly related to the cost of the home. The higher the asking price, the greater number of contingencies.
The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted.
Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true? Kelly must receive the Loan Estimate at least three days before closing. The closing officer must deliver the Closing Disclosure at closing. The lender must provide the Closing Disclosure by Friday of the week before closing. The Loan Estimate amounts must be within 1/4 of a percent of the final settlement costs.
The lender must provide the Closing Disclosure by Friday of the week before closing.
Your investor client Julia wants to buy a three bedroom, one bath, income-producing property for $125,000. It rents for $820. Comparable three-bedroom, two-bath homes in the area rent for around $1,000 and are valued an average of $20,000 more. The area's gross rent multiplier (GRM) is 147. You use the capitalized value method to calculate the loss in income due to depreciation based on functional obsolescence. Calculate this loss. $11,111 $13,605 $26,460 $98,540
The monthly rental difference between a one-bath property and a two-bath property is $180 ($1,000 - $820). Multiply that by the area's GRM to find the loss in income due to the subject property's functional obsolescence ($180 x 147 = $26,460).
Which of these guarantees is offered by a general warranty deed but not a special warranty deed? The property is free of debt or other claims taken on by the grantor during the ownership period. The seller is legally allowed to sell the property. The seller owns the property (title). The seller will defend against all claims against the property's title.
The seller will defend against all claims against the property's title. 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.
Which of the following is true about net listings? The listing agent is guaranteed at least some commission. They don't include compensation for the buyer's agent. They often involve a conflict of interest. They're legal in all 50 states.
They often involve a conflict of interest.
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? Ginger put up new curtains. They sublet the bungalow for a month without permission. They went on vacation and left the house empty for 12 days. Walt lost his job.
They sublet the bungalow for a month without permission.
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).
Which of the following can help a licensee avoid being accused of unauthorized practice of law? Disclosing to all parties in a transaction that the licensee isn't a licensed attorney Having a designated broker review all completed contracts Keeping an attorney on retainer to write all contracts for you Using approved fill-in-the-blank forms
Using approved fill-in-the-blank forms
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? Enforceable Unilateral Valid Voidable
Voidable
When does offer and acceptance occur? When both parties sign a contract with full understanding of the terms When one party makes an offer on a property and the seller turns it down When one party makes an offer to a second party, and the second party makes a counter-offer When one party signs a contract voluntarily with full understanding of the terms
When both parties sign a contract with full understanding of the terms
Aldrich is conveying marketable title to a property buyer. Should he also furnish a title insurance policy? No. Marketable title isn't insurable. No. Marketable title is perfect title, so there's no need for title insurance. Yes, because marketable title may have known defects that buyers could find unacceptable; title insurance will cover these defects. Yes, because title defects not revealed in a title search can crop up even with marketable title.
Yes, because title defects not revealed in a title search can crop up even with marketable title.
Can a listing agreement be terminated without penalty? Only by the seller Only if it expires Yes, at any time, since listing agreements aren't binding Yes, with both the listing broker and the seller's agreement in writing
Yes, with both the listing broker and the seller's agreement in writing
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 ask the buyers who walked away whether you can provide a copy. You should disclose any adverse material facts, but you don't have to provide the report. You should provide an inspection report, but only if specifically asked. You should provide an inspection report to all prospects, along with seller disclosures.
You should provide an inspection report to all prospects, along with seller disclosures.
