national exam pt 2
An abandoned or otherwise unused commercial or industrial site that contains suspected contaminants is known as a what? 1 A brownfield 2 A Brown Zone 3 A space that cannot be used 4 A special use landfill
1 A brownfield A brownfield is an abandoned or otherwise unused commercial or industrial site with suspected contaminants.
Rescission can be ______ agreement to cancel a contract. 1 A mutual 2 An ill-advised 3 An unlawful 4 A tenuous
1 A mutual Rescission is a definitive end of the parties' commitments under an agreement-one in which the parties are returned to their pre-contract status.
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 preapproval and pre-qualification? 1 A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller. 2 A pre-approval letter is based on buyer-provided information that isn't verified. 3 Sellers should always insist on a pre-qualification over a pre-approval. 4 The pre-qualification takes the buyer's complete financial picture into account.
1 A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller. A pre-approval letter provides more assurance of the buyer's ability to financing than a prequalification letter do
Carlson presents a real estate purchase contract to his clients. Along with the contract are several supplemental documents attached to it. What are these called? 1 Addendums 2 Amendments 3 Pro-rata 4 Querries
1 Addendums Additional documents added to a contract before ratification are addendums.
What type of value is of interest to taxing authorities? 1 Assessed value 2 Insured value 3 Investment value 4 Value in use
1 Assessed value Local taxing authorities are interested in assessed value, which is used to determine property taxes
What type of loan is neither guaranteed nor insured by government agencies? 1 Conventional 2 Federal Housing Administration (FHA) 3 U.S. Department of Agriculture (USDA) 4 U.S. Department of Veterans Affairs (VA)
1 Conventional Conventional loans aren't insured or guaranteed by federal government agencies.
Which approach to value measures the cost to produce a property, including land acquisition and construction costs? 1 Cost approach 2 Income approach 3 Indirect approach 4 Sales comparison approach
1 Cost approach The cost approach to finding appraised value measures value as a cost of production, including acquisition of the land and the construction costs.
What's the biggest security issue with using social networking sites to market your listings? 1 Criminals may use social networking sites to identify properties that are vacant or have high-end possessions. 2 It may not be effective since you're casting a wide net rather than targeting potential buyers. 3 People may misinterpret your listing information and hold you responsible for their misunderstanding. 4 People you don't know will have your name and contact information.
1 Criminals may use social networking sites to identify properties that are vacant or have high-end possessions. While the other choices may be somewhat true, the biggest security problem is unknowingly exposing your clients to someone with bad intentions.
In an amortized loan, the interest portion of the mortgage payment generally ______ over the life of the loan. 1 Decreases 2 Has no bearing on the total 3 Increases 4 Remains the same
1 Decreases The interest portion of the payment generally decreases over the life of the mortgage loan as the principal portion increases.
Fewer buyers in a higher price range would create what kind of pressure on housing prices 1 Downward 2 Steady 3 Strong 4 Upward
1 Downward Fewer buyers creates downward pressure on housing prices.
Which of the following is an example of sub-agency? 1 Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller. 2 Kermit is represented by Bert, an agent with Street Realty. Today they're seeing Oscar's house, which has been listed by Oscar's agent, Ernie, from Energy Realty. 3 Rita is a licensee with Hawthorne Realty. She has a client, Dinah, who's selling her condo. Rita thinks Dinah's house will be perfect for Ruby, a customer. 4 Tim and Tom are both licensees with Acme Realty. Tim is the listing agent on a home where Tom represents the buyer.
1 Kayla is a licensee with ABC Realty and lists a property for seller Devon. Maurice is a salesperson with XYZ Realty Group and brings a buyer to the table, but owes fiduciary duties to the seller. Only the agent working with a buyer customer on behalf of another firm's listing is an example of subagency. In this case, that would be Maurice.
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? 1 The covenant against encumbrances 2 The covenant of further assurances 3 The covenant of quiet enjoyment 4 The covenant of seisin
1 The covenant against encumbrances The covenant against encumbrances assures the grantee that no encumbrances exist other than those that are publicly recorded or noted in the deed.
Which fiduciary duty requires agents to handle their clients' funds and paperwork properly? 1 The duty of accounting 2 The duty of confidentiality 3 The duty of disclosure 4 The duty of obedience
1 The duty of accounting The duty of accounting requires agents to account for any funds or paperwork received on the clients' behalf.
What's an example of a gross lease? 1 The owner pays all property taxes, maintenance, and insurance costs. 2 The tenant and owner split the property taxes, maintenance, and insurance costs equally. 3 The tenant pays all property taxes, maintenance, and insurance costs. 4 The tenant pays property taxes and splits maintenance costs with the owner.
1 The owner pays all property taxes, maintenance, and insurance costs. In a gross lease, the owner pays all property taxes, maintenance, and insurance costs.
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? 1 To all parties as soon as possible 2 To the seller and buyer as soon as possible, provided his firm represents both parties 3 To the seller as soon as possible; to the buyer prior to closing 4 To the seller prior to closing
1 To all parties as soon as possible Material facts must be disclosed as soon as possible to all parties involved in the transaction
Which of these lands is NOT a special type subject to government regulations or restrictions? 1 A historical building or landmark 2 A residential community with a pool 3 Shorelines 4 The habitat of an endangered specie
2 A residential community with a pool Special land types may include wetlands, floodplains, shoreline or waterfront property, protected habitats, historic landmarks, and land contaminated with hazardous waste.
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? 1 Addendum 2 Amendment 3 Inspection 4 Pro-rat
2 Amendment An amendment is a modification made later to the terms of an already-accepted, or ratified, contract.
Which of the following statements regarding reasonable accommodations and modifications is true? 1 A landlord can freely question disabled individuals about their disability. 2 An individual can make a request for accommodation or modification at any time. 3 A property owner must always complete modification requests. 4 The property owner is always responsible for paying for any reasonable modifications that are completed on the property.
2 An individual can make a request for accommodation or modification at any time. An individual can make a request for accommodation or modification at any time. Management should respond in a prompt and timely manner, because failure to respond could lead to a fair housing complaint.
Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______. 1 Appraisal process 2 Cost approach 3 Income approach 4 Sales comparison approach
2 Cost approach The cost approach is the best method to determine the cost of acquiring the land and constructing the homes.
Which of the following is a common problem with roof shingles? 1 Clean fascia 2 Discoloration or curling 3 Soffit without holes 4 Water buildup and ice damming
2 Discoloration or curling Discolored or curling shingles mean roof repairs may be needed soon
Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law? 1 Civil Rights Act of 1866 2 Fair Housing Amendments Act of 1988 3 Federal Fair Housing Act of 1968 4 Housing and Community Development Act of 1974
2 Fair Housing Amendments Act of 1988 In 1988, the Fair Housing Amendments Act provided consumers with remedies if they became victims of discrimination in housing and also added familial status and disability to the list of protected classes.
When you're using the sales comparison approach to value a property, which of the following is considered a category of adjustment? 1 Area demographics 2 Financing terms and cash equivalency 3 Seller motivation 4 Types of obsolescence
2 Financing terms and cash equivalency Categories of adjustment include financing terms and cash equivalency, conditions of sale, market conditions at time of contract and closing, location, and physical characteristics.
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? 1 He is advertising the unit in a restrictive way that discriminates against those with children. 2 He is discriminating against people based on familial status by refusing to show available housing. 3 He is discriminating by offering special terms for rental based on a protected class status. 4 He is sexually harassing potential tenants.
2 He is discriminating against people based on familial status by refusing to show available housing. This landlord's action discriminates by refusing to show available housing to prospective tenants based on protected class status.
Select the situation that correctly represents a true conflict of fiduciary duties. 1 Kai learns that her buyer clients' inspector will be reporting a furnace issue to the buyers. She doesn't want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict. 2 Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience. 3 Renee's clients don't want showings on weekends. Renee knows this may reduce market exposure and she feels it's not in her client's best interests. This is a conflict of her duty of loyalty and her duty of obedience. 4 Terrance's buyer clients don't want him to share with the seller that they're having trouble coming up with the down payment. Terrance's duty of loyalty to his clients is in conflict with his duty of disclosure.
2 Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience. The duty of disclosure requires that licensees present all offers to their clients, but Nikki's client has asked that she not present all offers, creating a conflict between her duties of disclosure and obedience.
Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission? 1 No, because Carol is not a real estate licensee. 2 No, because Carol procured the buyer. 3 Yes, because they have an exclusive agency listing agreement. 4 Yes, but she only owes the listing commission.
2 No, because Carol procured the buyer. It's easy to confuse the types of listing agreements. With exclusive agency, the seller retains the right to sell the property and not pay a commission. Exclusive right to sell agreements guarantee payment to the listing agent no matter who brings the buyer.
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? 1 Obtain title insurance 2 Pay the existing loan off 3 Perform a title search 4 Prepare a closing statement
2 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.
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? 1 Because the listing agreement is with the brokerage firm, the agreement continues. 2 The agreement terminates by operation of law. 3 The brokerage firm can agree to terminate the agreement if the Tolsons choose to not work with another agent. 4 The Tolsons may choose to terminate the agency agreement.
2 The agreement terminates by operation of law. Because the broker has become incapacitated, the listing agreement terminates by operation of law.
Brenda represents Tina in a real estate transaction. Brenda therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care. 1 Consumer 2 Customer 3 Fiduciary 4 Universal
3 Fiduciary Fiduciary duties include obedience, loyalty, disclosure, confidentiality, accounting, and reasonable skill and care.
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. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists? 1 Confirmed agency 2 Express agency 3 Implied agency 4 Verbal agency
3 Implied agency 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.
What happens to an initial offer from the buyer after a seller counters? 1 It becomes the back-up offer. 2 It's accepted by the seller until the buyer accepts the counter. 3 It's no longer in play. 4 Sellers cannot counter a buyer's initial offer
3 It's no longer in play. If a seller (or buyer, for that matter) wants to counter an offer, it should be related to a significant term because it essentially takes the original offer out of play.
Which of the following scenarios best describes a net listing? 1 Carmel is selling her condo for $280,000 and is offering 6% commission to the listing broker. 2 Jason is listing his duplex for $400,000 but reserves the right to find his own buyer and not have to pay a listing commission. 3 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. 4 Ralph is selling his townhome for $225,000 and is paying a brokerage fee of $25,000.
3 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. A net listing commission involves commission of an indeterminate amount and depends on the sales price. Net listings are illegal in several states.
Even though the laws are different in every state, sellers must typically disclose ______, information that would be important to a person in deciding to purchase a home. 1 Buyer evidence 2 Case law 3 Material facts 4 Physical matte
3 Material facts Material facts about a home for sale provide information that would be important to the buyer in deciding to purchase the home.
Jayne was tired of waiting for her subcontractor to get his part of the deal done. The agreed-upon deadlines came and went, and Jayne lost money waiting for the subcontractor to come through. She decided that if the subcontractor weren't going to honor his commitments, neither was she, so Jayne consulted with her attorney and then terminated the contract. This is an example of ______. 1 Accepting partial performance 2 Mutually rescinding the contract 3 Rescinding the contract unilaterally 4 Suing for damages
3 Rescinding the contract unilaterally In this example, Jayne rescinded the contract unilaterally as a means of remedying the breach of contract
The legal description of the project, easements that run with the land, and street and traffic patterns are all under consideration when a local planning board ______. 1 Calculates the developer's project application fee 2 Considers granting a special use permit to a developer 3 Reviews a developer's project plat 4 Reviews the zoning for a developer's project
3 Reviews a developer's project plat These factors are under consideration when a local planning board reviews a developer's project plat.
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? 1 CERCLA 2 EIS 3 SARA 4 Wetlands Conservation Act
3 SARA SARA, or the Superfund Amendments and Reauthorization Act, created an innocent landowner defense. Often, the courts will review a SARA case and determine liability.
What is the definition of a legally competent party? 1 A minor who enters into a contract with an adult 2 Someone who has experience writing contracts 3 Someone who has the legal and mental capacity to enter into a contract 4 Someone who knows how the legal system works
3 Someone who has the legal and mental capacity to enter into a contract A legally competent party is a party who has the capacity (legal and mental) to enter into a contract.
Your buyer Clint loves older homes and wants to make an offer on a beautiful Craftsman. He doesn't like the yellow brick and has plans to paint it a lovely Williamsburg blue. You tell him that he may not be able to change the color or, even if he can, he may have to get the color approved first. What did you see on the property disclosure form that hinted at this? 1 The house borders a wetlands. 2 The house has a tax abatement. 3 The house is in a historic preservation district. 4 The house was built prior to 1978.
3 The house is in a historic preservation district. Most seller disclosures include whether or not the house is in an identified historic preservation district. If it is, district guidelines may govern the external aesthetic choices.
What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form? 1 Five 2 Four 3 Three 4 Two
3 Three Lenders must provide the Closing Disclosure form to borrowers a minimum of three business days before closing on the mortgage loan so that borrowers have time to compare the final terms and closing costs to the Loan Estimate they received at application
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 is the total debt ratio? 1 20% 2 23% 3 28% 4 31%
4 31% The buyer's total debt ratio is 31%. Debt to income ratio equals the total of monthly debt obligations ÷ monthly gross income x 100 (($1,000 + $150 + $400) / $5,000 = .31 x 100 = 31%).
Which one of the following options best describes the purpose of a sales contract? 1 It identifies the buyer's agent/buyer agency relationship's terms. 2 It identifies the landlord/tenant relationship's terms. 3 It identifies the listing agent/buyer agency relationship's terms. 4 It identifies the terms of a real estate sale between the seller and the buyer
4 It identifies the terms of a real estate sale between the seller and the buyer The sales contract identifies the terms of a real estate sales transaction between the seller of the property and the buyer.
Which of the following statements about the fiduciary duty of disclosure is true? 1 It only applies to the seller's agent. 2 It requires licensees to disclose everything to all parties. 3 It's owed to other parties, not just to the licensee's clients. 4 It's owed to the licensee's clients only.
4 It's owed to the licensee's clients only. In most states, licensees are required to disclose material facts to all parties to the contract. However, the FIDUCIARY duty of disclosure is due only to the licensee's clients.
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? 1 Negotiate a kickback from the home inspector. 2 Pay for the home inspection. 3 Require the buyer to use the agent's favorite home inspector. 4 Review the inspection report with her and discuss options.
4 Review the inspection report with her and discuss options. The real estate licensee would want to review the report with her client and suggest options based on the findings.
Which of these property managers is violating fair housing law? 1 Cheri, who represents a religious organization that sponsors housing, will only show the available rental unit to members of the religion. 2 Clyde, who represents the owner of a senior living facility, refuses to rent a unit to a family with minor children. 3 Dwayne, who represents the owner of property that only rents to members of its private club, refuses to show a rental property to someone who isn't a member of the club. 4 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
4 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 It sounds like Sandra is steering prospective renters on the basis of familial status. The other property managers fall under the permitted exceptions.
Which one of the following could be a clue that a property was formerly a waste disposal site? 1 Birds constantly on the property 2 Plate covering an oil fill area 3 Scorch marks on trees surrounding the area 4 Soft spots, mounds, and discolored soil
4 Soft spots, mounds, and discolored soil Clues to locating a waste disposal site include soft spots, mounds, and discolored soil. Site research and soil tests can provide a definite answer.
Your 15-year-old son just signed a contract joining a health club, which costs $50 a month. Which of the following best describes this contract? 1 The contract is missing a legal object. 2 The contract is missing offer and acceptance. 3 The contract is void. 4 The contract is voidable.
4 The contract is voidable. While legal capacity includes whether or not all parties are of legal age, contracts signed by minors are voidable by the minor.
Which of the following is a reason for a tenant remedy to be applied? 1 The tenant had a party, and a window got broken. After two days, the window was still not fixed. 2 The tenant hadn't informed the landlord about the issue. 3 The tenant had the issue repaired without telling the landlord and deducted the cost of repair from the next month's rent. 4 The tenant informed the landlord of the problem, and it's still not fixed more than 30 days later.
4 The tenant informed the landlord of the problem, and it's still not fixed more than 30 days later. The Uniform Residential Landlord Tenant Act provides for tenants to remedy the situation only after first notifying the landlord in writing and allowing reasonable time for the landlord to correct the issue.
Marcy listed her property with Jennings Homes in March. The market was slow, and Marcy's property isn't in great condition-though she's sure she can get top dollar for it because of its location. Her agent encouraged her to either reduce the price or fix the property up, but she refused. Both Marcy and her agent are frustrated. What's the best option for both of them? 1 Bring in another agent to help price the property. 2 Let the listing expire. 3 One party or the other should terminate the listing. 4 They can mutually agree to terminate the listing.
4 They can mutually agree to terminate the listing. Since Marcy and her agent don't agree on what to do to get the house sold, it's likely best for them to mutually agree to terminate the listing.
While walking around the exterior of a rural home she's inspecting, Juanita noticed a metal vent pipe sticking out of the ground 25 feet from the house. She documents this because it may be a sign of what potential environmental hazard? 1 Capped well 2 Radon vent system 3 Septic system 4 Underground storage tank
4 Underground storage tank A pipe or a vent sticking out of the ground, or a metal cap plate, are clues that there may be an underground storage tank on the property.
Which of these was enacted to give electronic signatures, records, and contracts legal recognition equal to that of paper records and signatures? 1 Federal Real Estate License Act 2 Statute of frauds 3 Statute of limitations 4 Uniform Electronic Transactions Act
4 Uniform Electronic Transactions Act The UETA was brought about by the efforts of the National Conference of Commissioners on Uniform State Laws (NCCUSL) to harmonize state laws regarding the validity of these records and to set more comprehensive rules regarding their use.
If a contract is for an illegal purpose, it's ______. 1 Enforceable 2 Legal 3 Valid 4 Void
4 Void If a contract is for an illegal purpose, it's void because it's missing an essential element.
