Tingnan ang lahat ng mga set ng pag-aaral

Real Estate

Pataasin ang iyong marka sa homework at exams ngayon gamit ang Quizwiz!

Which agency oversees the protection of wetlands in Minnesota? a. Board of Water and Soil Resources b. Department of Natural Resources

Which of the following is true about a home equity line of credit? a. A borrower can use the funds as needed, repay them, and borrow them again. b. Any amount used must be repaid before additional funds can be accessed. c. It's a lump sum payment. d. It takes priority over the original financing for the home.

Seller Garrett has a closing date of October 11. He's responsible for closing costs up to but not including the day of settlement, but has already paid his annual taxes of $1,820. Using a calendar year proration, Garrett will be ______ on the closing statement. a. Credited $409 b. Credited $422 c. Debited $409 d. Debited $422

A Garrett will be debited $1,416, because $1,820 ÷ 365 = $4.99, and $4.99 × 82 days = $409.19. That's $409 if rounded to the nearest whole dollar.

What is a special flood hazard area? A basement A high-risk flood area Areas that have flooded in the last two years

A high-risk flood area

Corrine is selling her home in a short sale transaction. What's her likely situation? a. She got a promotion. b. She has a balloon payment coming up that she can't pay. c. She took a second job.

In contract law, partial performance occurs when a party ______. a. Acknowledges receipt of the contract b. Does some, but not all, of what the party has agreed to do c. Meets all terms of the contract d. Rejects all terms of the contract

What is the legal effect on the purchase agreement if one of the contract contingencies is rejected or not met? a. The agreement has to be renegotiated. b. The contract is voidable.

Which of the following describes a modular home? a. Always one story high b. Built using precise pieces and very energy efficient c. Comes in single-wide, double-wide, and triple-wide varieties d. Traditional financing is difficult to obtain

Which of the following is true about radon? a. It's a man-made chemical. b. It's a naturally occurring gas. c. It's a problem outdoors. d. It's safe at any level.

Your cousin Steve has asked you to use your expertise to help him market and advertise his house, even though you don't yet have your Minnesota real estate license. He'll pay you a 1% commission if you help him. Can you do this? a. No, because the minimum commission allowed by law is 2%. b. No, because you must have a license to provide real estate services for another person for compensation. c. Yes, because he's a relative. d. Yes, because he's selling FSBO like you did.

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? a. $105,163.16 b. $105,263.16

Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice's mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar? a. $289,850 b. $370,500 c. $374,930

B Maurice will net $370,500. $480,000 × .94 = $451,200. $451,200 - $78,500 - $2,200 = $370,500.

A lot measuring three-fourths of an acre is for sale. How many square feet is this? a. 10,890 b. 14,520 c. 32,670

Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty's basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______. a. Accepting partial performance b. Rescinding the contract unilaterally c. Suing for damages and breach of contract

How does drinking water become contaminated by lead? a. Ceiling tiles discarded in land fills b. Insulation around water pipes c. Lead water pipes d. Plastic adhesives discarded in landfills

When does partial performance of a contract occur? a. Both parties fully meet the terms of the contract. b. Due to circumstances out of their control, the parties cannot legally or practically do what they've agreed to do. c. One or both parties have completed only a portion of the terms agreed to in the contract.

Whitney and Justin are about to close on their refinance, and their loan amount is $362,000. They are paying a 1.5% origination fee. How much will their origination fee be? a. $1,500 b. $5,100 c. $5,430 d. $6,200

C Maurice will net $370,500. $480,000 × .94 = $451,200. $451,200 - $78,500 - $2,200 = $370,500.

How do you calculate the monthly rate for annual taxes using a statutory year? Divide by 12 Divide by 360

Before appraising a specific property, Minnesota appraisers must disclose whether they've evaluated the same property within the last _______ years. 10 Five Three Two

Leon and Beth own 1/13 of a timeshare estate. How many weeks each year do they get to use the timeshare unit? 10 13 16 Four

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form? a. To detail all costs Jennings will owe at closing b. To disclose the distribution of commissions that will occur at closing c. To estimate closing costs d. To estimate the seller's net proceeds

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? a. When conditions are met at closing b. When her mortgage is approved c. Within 10 days of the home inspection d. Within six months of closing

The landlord of a building in Greater Minnesota has failed to maintain the building in a habitable condition or warn tenants of electrical problems. What recourse do tenants have? a. Tenants may have the right to abandon their leases. b. Tenants may stop paying rent. c Tenants must continue to occupy their units, but can sue the landlord for damages.

What is the maximum civil penalty that can be imposed for a license law violation in Minnesota? a. 10,000 b.2,500 c. 25000 d. 5000

What's the purpose of the title search? a. To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances b. To ensure the current owner has the title to give to the buyer c. To ensure the title is on the record d. To insure the owner against any financial loss due to a defect in the title

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? Enforceable Unilateral Void Voidable

Void

Sandra retired from a career in the Navy and is ready to buy her first home, a small bungalow in a quiet neighborhood, for $169,900. Her military service gives her the benefit of Veterans Affairs (VA) loan. What's her required down payment? $0 $1,699 $2,548.50

What's the longest sentence someone can serve in prison for an antitrust violation? 10 years 30 days Antitrust violations do not lead to prison sentences, merely fines. One year

10 years

Georgia received her initial license as a residential appraiser in Minnesota 21 months ago, and the renewal deadline is approaching. How many continuing education hours must she submit with her renewal application? 15 hours 30 hours 50 hours Seven hours

15 hours

In Minnesota, a party to a contract has ________ from the date of a contract breach to sue the other party. Eight years Four years Six years Two years

6 years

Billy buys Randy's home, and specifies in the sales contract that the outdoor grill must stay with the home. Randy ends up taking the grill when he moves out. If Billy wants to sue Randy for taking the grill, Minnesota's statute of limitations states that he must do so within ________. Six days Six hours Six weeks Six years

6. years

For conventional loans in which the loan-to-value ratio is in excess of of a certain percentage, lenders generally require private mortgage insurance. What's this percentage? 75% 80% 85%

Jane's offer of $310,000 was accepted, but the appraisal just came in at $300,000. Jane plans to finance $250,000. What's the loan-to-value ratio? 81% 82% 83% 97%

Before closing, who should get an appraisal of the property if the transaction's being financed? a. Buyer b. Homeowner's insurance company c. Seller

Curtis is completing a residential loan application. Which of the following would he include in the assets section? a. Amount on deposit at his bank b. Car loan c. Credit card balance

Part of the underwriting and loan approval process is verifying that borrowers have adequate ______. a. Homeowners and flood insurance b. Home warranty policies

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? a. The agreement between the two firms b. The dollar amount the competitors lost c. The marketing efforts the two firms used d. The size of the two brokerage firms

What's one reason a borrower would choose a split—or piggyback—loan option? a. To avoid going over the conforming loan limit b. To avoid paying too much interest c. To give business to two preferred banks

Who closes on the mortgage loan commitment at closing? a. The buyer and the lender's attorney b. The buyer and the seller

Your buyer client gave you a treasury bill to use as earnest money. As a Minnesota licensee, what should you do with it? a. Deposit it with an escrow agent and get a receipt for its value. b. Keep it in the office safe deposit box until transaction closes. c. Return it to the buyer, because you can't deposit it into your trust account. d. Take it to your bank to convert it to cash.

Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan is $927.86, and $871.86 will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing? a. $842.74 b. $871.80 c. $896.97

A Calculate the daily interest rate for 30 days ($871.86 ÷ 30 = $29.06). Because Doug owns the closing day, Maria will pre-pay interest for 29 days, June 2 - 30, so $842.74 ($29.06 x 29).

A central element of an antitrust violation is ______. A contract Customer relationships High stakes Interstate dealings

A contract

If a private individual tries to lay claim to someone else's property because he has been living on and using the property as his own for an extended period of time, the individual may acquire the property through _______. Adverse possession Conveyance Descent Escheat

Adverse possession

Gloria has an option to purchase the cottage she leases from her landlord. She can exercise the option within the next two years. To gain that right, Gloria paid the landlord $5,000. This is called ______. A deposit A down payment An option fee Earnest money

An option fee

Which of the following refers to rights that come with the land? Adverse possession Appurtenance Lis pendens Servient

Appurtenance

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 Improvements Permanence Scarcity

Area preference

Police power is the government's authority at what level(s)? At any level Federal only Local only State only

At any level

Bradley is acting as a finder for Emma. What's Bradley's role? A. To help buyers and sellers locate agents B. To introduce the buyer and seller, but not provide representation C. To investigate title issues D. To try to locate the prior owners of a specific property

By when must Minnesota sellers disclose to buyers how sewage is handled on the property? a. Anytime before closing b. Before accepting the buyer's offer

Five competing licensees in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation? a. Boycotting b. One in which no intent needs to be proven to establish a violation has occurred c. One in which the parties colluded d. Price fixing

Gabi owns one parcel measuring one square mile and another parcel measuring one mile x half a mile. She combined the parcels and sold them for $2.5 million. What price per acre did she receive for the land? a. $1,953.13 b. $2,604.17 c. $3,125.00

How does the term "break-even point" relate to percentage leases? a. Sales proceeds must exceed last year's total before the percentage applies. b. The landlord doesn't charge a percentage of sales until the tenant's sales exceed a break-even point.

If the daily rate is $1.23 and closing is August 31, what will the seller owe at closing? Assume a statutory year and that the seller hasn't made any payments. Round to the nearest cent. a. $14.76 b. $295.20

In order to receive federal flood insurance, communities must adopt and enforce a _______ in Special Flood Hazard Areas. a. Floodplain drainage ordinance b. Floodplain management ordinance c. Floodplain recognition ordinance

The part of the floodplain associated with moving water is considered the most dangerous area. In Minnesota, this area is known as the ____________. a. Flood fringe b. Floodway

Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing? a. A buyer approached the seller with a much higher offer than the current listing price. b. The agent and client don't agree on the best way to price, maintain, and market the property. c. The client has found a buyer and wants to avoid paying a commission. d. The client's cousin just became licensed and needs her first listing.

What's a quiet title action? a. A lien placed against a potential land owner for property purchased by another b. An action to locate and notify all who may have some claim on the title, and determine the validity of all claims c. A type of title insurance that reimburses the policyholder if the neighborhood is noisier than normal d. A way to anonymously purchase property without filing the title or transfer on record

What's one of the required elements of a valid option contract? a. A range of sale prices for the property from which the optionee can choose b. The amount of consideration the optionee is paying the optionor c. The optionee's promise to buy the property

What's the most common ratio for borrowers who use split, or piggyback, mortgages? a. 75/15/10 b. 80/10/10 c. 80/20 d. 90/10

Which of the following statements related to the power of taxation is true? a. If the property is foreclosed upon, property taxes are paid after all other creditors. b. Property tax liens take priority over any and all other liens on the property in most states. c. Property tax liens take the lowest priority after all other liens on the property. d. Taxation is an unstable source of income.

Which of these statements about earnest money is true? a. A portion of earnest money goes to the seller's agent as commission. b. Disbursal of earnest money depends on the terms of the contract. c. The buyer always gets the earnest money back if the contract falls through. d. The seller always retains the earnest money if the contract falls through.

Why are new condominiums an issue with FHA loans? a. FHA doesn't loan on condominiums. b. FHA requires 50% of the units to be under contract c FHA requires HOA boards to submit monthly reports to the lender.

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? a. $105,163.16 b. $105,263.16 c. $105,363.16 d. $105,463.16

Ezra's lease on his condo includes an option to purchase. He told his landlord, Sherm, that he's ready to purchase the condo, and they've negotiated a purchase price and closing date. What kind of contract is this? Bilateral Executed Unilateral Voidable

Bilateral

If your real estate investment is considered a security, what must you do? A. Insure it for more than face value B. Pay special taxes on it C. Register it as a security D. Send notarized letters to all investors

Limited liability companies and limited liability partnerships are favorable forms of business because ______. a. Owners of the LLC or LLP are personally liable for LLC/LLP obligations. b. They aren't taxed as partnerships. c. They don't require a general partner. d. They're considered temporary and can be quickly dissolved.

Lorraine, a Minnesota broker, was engaged as a listing agent for a property. The home didn't sell during the contract period, and upon expiration Lorraine and the property owner went their separate ways. How long must she retain the listing agreement? a. Listing agreements don't need to be retained. b. She doesn't need to retain the listing agreement since the transaction never closed. c. She must keep listing agreements for six years, regardless of whether the transaction closed. d. she needs to keep the listing agreement for six months, since the transaction didn't close.

Mortgages may still, but only rarely, contain which of the following clauses? a. Alienation clause b. Amortization clause c. Prepayment penalty clause d. Underwriting clause

Petra is being subjected to domestic abuse. She has provided a signed, written notice of lease termination to her landlord that includes the date she intends to vacate the property and the address where her security deposit can be sent. What else can her landlord legally do? a. Disclose Petra's new address to other tenants who request it. b. Keep Petra's security deposit because of the early lease termination. c. Require Petra to pay the full month's rent for the month she intends to leave.

Samantha is a real estate licensee. She's showing her client a property. The client asks about some spots on the ceiling and wonders if they're an indication of a roof leak. What should Samantha do? a. Climb on the roof and perform an inspection. b. Hire a home inspector to physically inspect the property. c. Suggest that her client contact a roofing expert to make a determination. d. Tell her client that the spots indicate a roof leak.

Simon sold his house in Minnesota under a contract for deed arrangement to Garfield, but Garfield has failed to make the last three payments. Which of the following statements is true? a. Garfield must pay an additional three installments. b. Simon can begin foreclosure proceedings. c. Simon can keep all of the proceeds received up to that point and repossess the property.

The education requirement for initial licensing as a trainee appraiser includes six hours of ________. a. Fair housing and lending course b. Minnesota real estate coursework c. Supervisor/trainee education d. Uniform Standards of Professional Appraisal Practice coursework

The owner of ABC Construction entered into a contract to build two homes for brothers Jack and John. The contract specified that the homes must be completed by April 1. ABC finished the homes on March 30. This is an example of ______ of the contract. a. Non-performance b Partial performance c. Performance

The process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights, is ______. a. Assignment b. Execution c. Novation

What's the best definition of legal purpose? Aa. Attorney consideration b. Mentally capable of entering into a contract c. Written for a lawful objective d. Written for an illegal purpose

When homebuyers agree to open an escrow account for their mortgage, the mortgage lender uses that money to pay ______. a. Escrow fees b. Insurance and principal c. Taxes and insurance d. Taxes and principal

Which program helps homeowners in flood hazard areas obtain insurance? a. Federal Emergency Management Act b. Flood Alleviation Program c. National Flood Insurance Program

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? a. Charging a fee for preparing legal documents b. Drafting an addendum c. Filling in the contract blanks d. Interpreting contract provisions

Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. This is an example of ______. a. Buyer misrepresentation b. Partial performance of the contract c. Performance of the contract

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? a. $1,093.13 b. $1,126.25 c. $874.50

C The loan amount is $254,400 ($318,000 x .8). The first month's interest is $874.50 ([$254,400 x .04125] ÷ 12).

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? Abatement Condition Covenant Restriction

Condition

Darnell sold his Minnesota home to his friend Kari using a contract for deed. What are Darnell and Kari in this scenario? a. Darnell is the landlord, Kari is the tenant. b. Darnell is the mortgagee, Kari is the mortgagor. c. Darnell is the mortgagor, Kari is the mortgagee. d. Darnell is the vendor, Kari is the vendee.

How does a title insurance company prove that a seller has ownership rights to a property? a. By creating a settlement statement and having the seller sign the document b. By getting an appraisal of the property c. By performing an inspection of the property d. By performing a title search to create a chain of title or abstract of title

Kendrick bought into a cooperative housing project. When Kendrick purchased his unit, he received a proprietary lease. What else did he receive? a. A deed to the property b. A fixed-term lease c. A plat map of the property d. Shares in the cooperative corporation

Many real estate contracts contain the phrase ______, reminding the parties to avoid unnecessary delays to the transaction, and to adhere to all contract dates. a. Haste makes waste b. Patience is a virtue c. Seek the advice of an attorney d. Time is of the essence

Sondrine's beach cottage has a right of way that allows nearby residents to get to the beach. What is the primary difference between a right of way and an easement? a. A right of way always has a defined expiration date. b. A right of way is always for an indefinite time period. c. A right of way offers the right to use the property for some function, as compared to just as a pass-through. d. A right of way provides a pass-through, but not a right to use the property.

The commissioner of the Minnesota Department of Commerce has the authority to perform all of the following EXCEPT: a. Conduct investigations related to the commissioner's duties and responsibilities b. Deny, suspend, or revoke licenses as needed in order to protect the public interest c. Examine licensees' records, accounts, and files for compliance with recordkeeping law d. Sentence license law violators to jail time and fines

What can buyers do to protect themselves from title issues when purchasing property? a. Ensure the seller's name is on the deed. b. File a lis pendens claim at the court before buying the property. c. File a security agreement at the county clerk's office. d. Purchase title insurance.

When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics? a. A licensee shall not accept compensation directly from more than one party to a transaction. b. A licensee shall not accept compensation from anyone. c. A licensee shall not accept compensation from more than one party to a transaction without consent from the client. d. A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.

A real estate licensee is acting as what type of agent when assigned by the broker to represent one party in an in-house transaction? Designated General Special Universal

Designated

What can borrowers "buy" to help lower their loan's interest rate? Discount point Interest point Loan origination point Volume point

Discount point

What type of easement is created when the government exercises its right of eminent domain? Easement by condemnation Easement by grant Easement by implication Easement by prescription

Easement by condemnation

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

A middleman is another term for a _______. Finder Keeper Universal agent Wholesaler

Finder

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this? Group boycotting Market allocation Price fixing Tie-in arrangement

Group boycotting

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 Indestructibility Situs (location) Uniqueness

Immobility

Which of the following would be a description used for real property? Above-ground Free-standing In-ground Movable

In-ground

Conveyance of property by escheat is an example of _______ alienation. Hereditary Involuntary Unlawful Voluntary

Involuntary

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights? Joint tenancy Tenancy by the entirety Tenancy in common Tenancy in severalty

Joint tenancy

A ______ is used to accurately identify property for transfer. GPS coordinate designation History of ownership Legal description Property address

Legal description

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 ______. Covenant Easement Grant License

License

Which of the following involves permission to do something on another's land without actually possessing any interest or ownership in the land? Grant License Permission Reserve

License

Regular mortgage financing is available for this type of housing. Manufactured home Mobile home Modular home Triple wide

Modular home

Who is most vulnerable to lead poisoning and its effects? Children Men Pets Women over age 70

Children

What's an antitrust violation's central element? Conspiracy Fraud Greed Profit

Conspiracy

A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what's the list price for this parcel? a. $1,527,273 b. $752,066 c $756,000 d. $763,560

In which of the following situations can you sell timeshares without a real estate license? a. When the timeshare was constructed more than five years ago b. When the total value of the property is under $1 million c. When you're selling them for a friend or relative d. When you're selling your own timeshare

Minnesota brokers can use personal funds in trust accounts for which reason? a. To earn more interest for the housing fund b. To earn more interest personally c. To offer commission rebates d. To pay administrative service fees

Regarding documentation, which of the following actions can help a licensee avoid being accused of unauthorized practice of law? a. Disclosing in writing to all parties in a transaction that the licensee isn't a licensed attorney, so there's no licensee liability b. Having a designated broker review and notarize all completed contracts c. Having a designated broker write all contracts from scratch to make them specific to each transaction d. Using approved fill-in-the-blank forms

Which of the following is price fixing? a. A brokerage requires all licensees to offer a fair cooperative brokerage fee. b. Three brokerages agree to purchase office supplies together to obtain a bulk discount. c. Twelve brokerages discuss compensation of associated independent contractor licensees. d. Two brokerages determine a standard commission rate.

When a property owner wishes to convey her property to a new owner, she will generally use a ______. Deed Lease Mortgage Title abstract

Deed

The Clean Water Act and the Rivers and Harbors Act are both enacted at what governmental level? Federal Local

Federal

What form of ownership is inheritable and includes the entire bundle of rights, not subject to any conditions or qualifications? Fee entire Fee on condition Fee simple absolute Qualified fee

Fee simple absolute

With this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn't been paid off. Bridge Home equity Reverse mortgage

Home equity

Anna and Cindy entered a contract to buy Jake's home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy's place as a co-buyer of Jake's home. Everyone agreed to the substitution of Sally for Cindy on the contract. This is an example of ______. Assignment Fraud Mutual mistake Novation

Novation

What acronym can licensees use to recall the fiduciary duties an agent owes to a client? ARMOR CANDOR FARMOR OLD CAR

OLD CAR

There are three types of listing agreements. They are exclusive right to sell, exclusive agency, and _______. Closed listing Full listing Open listing

Open listing

Chevy is an optionee. What's his sole responsibility? Exercise the option. Make an offer. Make monthly payments. Pay the option fee.

Pay the option fee.

Mary has a contract to buy her mother's house when her mother is finally ready to move to a senior living community. This way, the house stays in the family. After her mother finds a suitable senior apartment and moves, Mary writes a check for the agreed-upon amount, and her mother transfers the deed to Mary. What is happening in this scenario? Assignment Breach Novation Performance

Performance

What type of language should be used to write contracts? Boilerplate language Legal phrases in Latin where necessary Plain language Precise real estate jargon

Plain language

Property owners may keep, sell, or lease their rights. Those rights include which of the following? Collusion Encroachment Profit and license Tax-free status

Profit and license

Rachel loves convenience. As you can imagine, she was thrilled when she was able to finance her mortgage through the same institution where she deposits her payroll checks. Which of these most likely financed Rachel's mortgage? Insurance company Investment group Mortgage broker Savings and loan

Savings and loan

When you're involved in a transaction, lenders, appraisers, and other service providers are all ______. Clients Customers Financial representatives Third parties

Third Parties

A listing broker in Minnesota received a commission check from the seller at closing. The broker would be committing a license law violation if he were to deposit the check in a ______ account. Business Operating Personal Trust

Trust

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? Enforceable Unilateral Valid Voidable

Voidable

Marin was the victim of a Minnesota real estate licensee's dishonest practices. She received a final judgment in court but hasn't been paid, despite going through all legal proceedings, reviews, and appeals. She's seeking recovery from the Real Estate Education, Research, and Recovery Fund. What's the maximum she'd be paid? $0 $150,000 $250,000 Three times the actual monetary loss she suffered

$150,000

How large is this area of a rectangular survey: The SE 1/4 of the NW 1/4 of the NE 1/4 of Section 6 in a township? 10 acres 160 acres 40 acres

10 A

What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form? Five Four Three

In Minnesota, how many continuing education hours are required for licensed salespeople and brokers? 10 hours every year 20 hours every two years 20 hours every year 30 hours every two years

30 hours every 2 years

A buyer in Minnesota is making an offer on a property and handed over an expensive piece of jewelry as earnest payment. What should the licensee do? a. Deposit the jewelry with an authorized escrow agent. b. Have the jewelry appraised to ensure its value equals the amount of earnest money documented in the purchase agreement. c. Hold the jewelry in a safe deposit box. d. Return the jewelry to the buyer in exchange for cash, check, or other depositable item.

As a Minnesota real estate licensee, in which of these situations would you need to provide a consumer with the Agency Relationships in Real Estate Transactions form? a. To a couple considering listing their home for sale b. To an open house attendee who asks about the home's square footage c. To a prospective buyer to whom you're showing commercial properties d. To a prospective tenant looking to lease an apartment for six months

Belinda is a licensee whose client asked her to draft an addendum containing complicated terms that even Belinda doesn't fully understand. Belinda should ______. a. Avoid unauthorized practice of law b. Hire an attorney c. Refuse to work with this client d. Use legalese

Bradley is a real estate licensee acting as a finder for Emma. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal? A. An agency relationship is created. Bradley can face disciplinary action if an agency is formed without proper agency disclosures. B. Bradley is guilty of misrepresentation. C. He can get in trouble for acting as a dual agent. D. Nothing. He has a real estate license so he can perform other duties as needed.

Bradley is a real estate licensee acting as a finder for Emma. What happens if he performs duties beyond just introducing the buyer and seller, such as negotiating a deal? a. An agency relationship is created. Bradley can face disciplinary action if an agency is formed without proper agency disclosures. b. Bradley is guilty of misrepresentation. c. He can get in trouble for acting as a dual agent. d. Nothing. He has a real estate license so he can perform other duties as needed.

Bradley is acting as a finder for Emma. He's introducing her to Rachel, the other party in the transaction. Which fiduciary duties does Bradley owe Emma? A. A finder doesn't owe any fiduciary duties. B. He owes only the duties of confidentiality and loyalty. C. He owes only the duty of confidentiality. D. He owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

Bradley is acting as a finder for Emma. He's introducing her to Rachel, the other party in the transaction. Which fiduciary duties does Bradley owe Emma? a. A finder doesn't owe any fiduciary duties. b.He owes only the duties of confidentiality and loyalty. c. He owes only the duty of confidentiality. d. He owes the duties of obedience, loyalty, disclosure, confidentiality, accountability, and reasonable skill and care.

Brian is completing a residential loan application. On the application, he lists his assets. What are assets? a. Items of value the borrower owns b. Obligations the borrower owes c. The difference between a borrower's items of value and obligations d. Wages earned from employment

Buyers may provide assurance they won't back out of the sale by offering to deposit _______ money that will be kept in escrow until the conditions are met at closing. a. Earnest b. Principal c. Soft d. Spending

Contingencies normally include the responsible party's name, the deadline for the contingency removal, and _______. a. The actions required for removal b. The date the contingency was added

Contracts may use the terminology ______ after the assignor's name to make it clear that the contract is assignable. a. "And/or assigns" b. "Buyer beware" c. "Spouse or partner"

Dwight tells his buyer Jamie that a nearby stream could possibly flood the basement, though it's never happened to him. After signing the contract, Jamie's home inspector shows proof that the basement flooded last year, when Dwight was still living in the home. What's true about this situation? a. Dwight has committed fraud, which has invalidated Jamie's consent. b. Jamie can't invalidate the contract; his only course of action is to sue Dwight. c. Jamie can't invalidate the contract, since this information was discovered after the contract was signed. d. This is a clear case of misrepresentation by the home inspector.

Emilio wants out of his contract, because he doesn't believe his buyer agent is working hard enough to find him a property that meets his criteria. What must happen before the buyer agency agreement can be terminated? a. Emilio and his agent must mutually agree in writing to terminate their agreement. b. Emilio must notify the agent and give the agent 10 days to locate a suitable property.

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not? a. No. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values. b. No. The similarities between commission rates may be suspect, but the similarity between commission splits doesn't matter. c. Yes. The fact that the firm's commission rates and splits are so similar is a restraint of trade. d. Yes. The firms' internal commission splits can be the same, but they can't all charge the same commission rate.

Francis collected an earnest money check from her client, but didn't have an opportunity to deliver it to the escrow agent before close of business on Friday. For safekeeping, she deposited it into her personal checking account over the weekend and wrote the escrow agent a new check on Monday morning. Which of these statements is true? a. Francis is guilty of commingling. b. Francis is guilty of commingling and conversion. c. Francis is guilty of conversion. d. Francis is guilty of fraud.

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 ______. a. Accepting partial performance b. Mutually rescinding the contract c. Rescinding the contract unilaterally

Greater Lakes Townhome Association was formed in June 2004. Which statement best describes their participation in the Minnesota Common Interest Ownership Act? a. Based on the date the association formed, participation is automatically required. b Based on the date the association formed, the association must opt in to participate. c. Based on the type of association, participation is automatically required. d. Based on the type of association, participation isn't required.

Jamie wants to find the legal description for a property. What's her best bet? a. County recorder's office, registry of deeds, or a title company b. Motor vehicle department c. Neighborhood notice d. Real estate flyer

Jarvis, a broker, discusses antitrust scenarios at staff meetings and makes certain his firm makes independent decisions about co-op fees. This is a great way to ______. a. Avoid antitrust violations b. Eliminate the competition c. Get in trouble with the DOJ d. Inadvertently violate antitrust law

Jeff has filed a quiet title suit against Roger. What's the purpose of this suit? a. To clear up a cloud on title b. To clear up a property line dispute c. To exercise his right to quiet enjoyment of the property d. To prohibit the seller from releasing the buyer's name

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now? a. An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied. b. Her agent will hold the check in the firm's operating account until Jeung's offer is accepted. c. Jeung's agent will transfer the funds to the seller. d. The seller's agent will deposit the funds in his operating account until closing.

Johnnie and Mary each own a unit in a new condominium complex. According to Minnesota law, in which element do they NOT have an undivided ownership interest? a. Condo units b. Lobby and elevators c. Parking lot d. Pool and recreational areas

Lisa is holding an open house for her client, Tim. Several couples stop by. Aarthi and Ram don't interact with Lisa at all. Gina and Reggie talk with Lisa about the property; they're not working with another licensee. Marcus and Marvin stop by and talk with Lisa about the property; they're working with another licensee. Which parties are considered only consumers at this point? a. Aarthi and Ram b. Gina and Reggie c. Marcus and Marvin d. Tim

Marcy is found guilty of price fixing. This means she must have ______. a. Agreed with a competitor to charge a specific amount b. Charged a fixed commission price her broker asked her to use c. Charged a separate co-op fee for different brokerages d. Deviated from the standard commission rate

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? a. Compare it to the Loan Estimate. b. File it with her mortgage papers. c. Take it to the closing. d. Use the information to compare loan costs with those of other lenders

Minnesota brokers should provide trust account status change details to whom? a. Commerce commissioner b. Commissioner of management and budgets c. General service administration d. Internal revenue service

Minnesota law requires sellers to provide prospective buyers with a written disclosure of material facts related to the property's condition. Which of the following requires disclosure? a. A homicide occurred on the property. b. An accidental death occurred on the property. c. An occupant of the home is infected with HIV. d. The property is in a neighborhood containing a community-based residential facility.

One of the following licensee's actions would constitute commingling. Which is it? a. Cynthia deposited her client's earnest money check into the firm's operating account. b. Jenson deposited his client's earnest money check into the firm's trust account. c. Jessica deposited her commission check into her brokerage firm's operating account. d. Sean withdrew funds from the firm's trust account to pay the rent.

Real estate licensee William is preparing a sale agreement that will include an unusual circumstance. What's his best course of action? a. Consult an attorney. b. Create his own forms. c. Use an existing form and write an addendum that covers the unusual circumstance. d. Use existing forms but modify the language to address the unusual circumstance.

Sam grants Steve a license to hunt deer on his property. Which of the following statements about the license is true? a. Sam can revoke the license at any time. b. The license is a permanent privilege. c. The license is assignable. d. The license is inheritable.

Select the statement that accurately depicts property ownership income tax implications. a. During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid. b. First-time home buyers can deduct closing costs paid. c. Homeowners can deduct depreciation during the ownership stage; investors can't.

Sheila is unable to use her designated timeshare week this year. What will happen? a. She can exchange the week for another. b. She won't have to pay the annual maintenance fee this year. c. The owners association will reimburse her for the week. d. There is nothing she can do if she can't use the week.

The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost? a. $21,780 b. $43,560 c. $500 d. $5,000

Todd and Susan are a married couple living in Minnesota. Susan purchased their homestead shortly before they married and only her name appears on the property's title. They are planning to sell this property and purchase a condo. Whose signatures are required to sell their current property? a. Because this is a homestead property and Susan is married to Todd, both Susan and Todd's signatures are required. b. Because Todd and Susan are married, both of their signatures are required. c. Only Susan's name appears on the title, so only her signature is required to convey the property. d. Susan purchased the property prior to the marriage, so only her signature is required.

Tonya has been a real estate salesperson in Minnesota for two years. She currently works for ABC Realty and represents clients buying or selling timeshares. However, Tonya is interested in associating with XYZ Brokerage so she can begin shifting toward more traditional real estate transactions. Which of the following is the best option for Tonya? a. Tonya can decide to work for either ABC Realty or XZY Brokerage, but can't work for both at the same time. b. Tonya can keep a salesperson license and work for ABC Realty, but apply for a limited broker license to work for XYZ Brokerage. c. Tonya can work for ABC Realty and XYZ Brokerage at the same time, as long as she splits her time equally between the two brokers. d. Tonya must terminate her current license, wait two years, then apply for a new real estate license.

What does it mean if a property falls in a floodplain? a. Experts believe it is likely to be flooded sometime in the next 100 years. b. It has been the site of a recent flood. c. Soil tests show elevated moisture content.

What happens if a real estate licensee acting as a finder performs duties beyond just introducing the buyer and seller? A. An agency relationship is created. The licensee can face disciplinary action if an agency is formed without proper agency disclosures. B. Nothing. The person has a real estate license and can perform other duties as needed. C. The licensee can get in trouble for acting as a dual agent. D. The licensee is guilty of misrepresentation.

What happens if a real estate licensee acting as a finder performs duties beyond just introducing the buyer and seller? a. An agency relationship is created. The licensee can face disciplinary action if an agency is formed without proper agency disclosures. b. Nothing. The person has a real estate license and can perform other duties as needed. c. The licensee can get in trouble for acting as a dual agent. d. The licensee is guilty of misrepresentation.

What is a watershed? a. A land formation that directs water from higher elevations into b. lakes and other bodies of water A manmade system that diverts flood water away from residential areas

What must a licensee do regarding property the licensee holds directly or indirectly if it becomes the subject of a real estate transaction? a. Disclose the interest to all parties to the transaction. b. Offer cooperating broker compensation. c. Offer the property for sale within the firm before offering it to the general public. d. Reduce the commission by half.

What's true of all appraiser license classifications in Minnesota? a. They must complete a 15-hour USPAP course. b. They must re-license every year. c. They must take and pass the same exam. d. They need a special endorsement to appraise agricultural property. Return to Unit 5: Minnesota Appraiser Licensing Law View Exam Results

What's true of all appraiser license classifications in Minnesota? a.. They must complete a 15-hour USPAP course. b. They must re-license every year. c. They must take and pass the same exam. d. They need a special endorsement to appraise agricultural property.

When considering loan risk, which two items will lenders consider in equal measure? a. Borrower and property b. Credit and employment c. Debt and income

When it comes to protective lists in Minnesota, who bears the burden of demonstrating those on the list made an affirmative showing of interest during the listing agreement period? a. The broker or salesperson b. The prospective buyers on the list c. There is no burden to prove affirmative showing of interest d. The seller

Which Minnesota homebuyer assistance program allows first-time homebuyers to claim 35% of their annual mortgage interest as a federal income tax credit? a. Mortgage Credit Certificate Program b. New Homebuyer Credit Program c. Start Up d. Step Up

Which of the following best describes a Minnesota condo owner's interest in the facility's common areas? a. Condo owners have an undivided interest in common areas of equal scale to their unit's size compared to the whole property's size. b. Condo owners have no interest in common areas. c. Condo owners share a divided interest of common areas of equal scale their unit's size compared to the whole property's size. d. Condo owners share equal, undivided interest in common areas.

Which of the following describes a homestead in Minnesota? a. The house owned and occupied by a debtor as the debtor's dwelling place, and the land upon which it is situated b. The house owned and occupied by a debtor as the debtor's dwelling place, but not the land upon which it is situated c. The house owned and occupied by a debtor as the debtor's secondary dwelling, and the land upon d. The land upon which the house owned and occupied by a debtor as the debtor's dwelling place is situated, but not any improvements upon the land

Which of the following describes community property rights? Ia. n some states, it's a form of property ownership for married couples with equal ownership and possession of any property acquired during the marriage. b. It's a form of ownership used for property that is made available for public use, such as parks or streets. c. It's an option for married couples in any state to take ownership of real estate so that if one spouse dies, the property may not be transferred away from a surviving spouse. d. It's the federal law that allows the government to designate a married couple's property as property owned by the community at large.

Which of the following duties are still owed after a listing agreement expires? A. Confidentiality B. Disclosure C. Loyalty D. Reasonable skill and care

Which of the following has the legal effect of preventing a person from making a claim based on her prior behavior or statements? a. Estoppel b. In rem proceeding c. Ratification d. Reaffirmation

Which of the following is an easement? a. A path providing neighborhood access to a pond cuts through part of Bill's property. b. Jeff installed a sidewalk next to his driveway, six inches outside his property. c. The city seized a formerly private parcel of land for public use. d. The state took ownership of Dawn's property when no heirs could be located following her death.

Which of the following is an example of a government-sponsored enterprise (GSE)? a. Fannie Mae b. Federal Housing Finance Agency Fc. ederal Reserve d. Ginnie Mae

Which of the following is an example of commingling? a. Mixing earnest money with personal funds b. Mixing two earnest money deposits c. Paying licensee bonuses from forfeited escrow deposits d. Using escrow funds to pay business expenses

Which of the following is more likely to act as a closing agent? a. An attorney or title company representative b. The broker c. The lender

Which of the following items is prohibited from being included in Minnesota listing agreements? a. Automatic extension b. Definite termination date d. Explanation of the terms under which a listing agreement can be canceled d. Information about when an override clause would be effective

Which of the following must be provided by owners of existing buildings or developers of new, unimproved land in Minnesota who want to create a condominium project? a. A legal description of the units and the common elements, including any elements that serve a single unit b. Assistance for low-income buyers c. Discounted units for senior citizens d. Interior paint swatches and carpet samples

Which of the following scenarios meets the definition of a timeshare in Minnesota? a. Alex owns interest along with others in a unit in a resort community. He's permitted to occupy the unit for two weeks in October every year. b. Bob and Brian are brothers who co-own a cabin near the lake. They each stay at the cabin any time they want. c. Eleanor owns a property in Greater Minnesota that she occupies every spring, summer, and fall. The property sits vacant during the winter. d. Tina rented a lake house for a week this summer for a family vacation. This is the fifth year in a row that she's rented the same property.

Which of the following statements best describes "module training" related to Minnesota continuing education requirements? a. Licensees must take 3.5 or 7.5 hours of module training every license year. b. Licensees must take 3.5 or 7.5 hours of module training every renewal period. c. Licensees must take 3.75 hours of module training every license year. d. Licensees must take 7.5 hours of module training every license year.

Which of the following statements best describes a lease agreement's purpose? a. It identifies the terms of a lease transaction between the landlord and the tenant. b. It identifies the terms of a sales transaction between the seller and the buyer. c. It identifies the terms of the buyer agent/buyer agency relationship.

Which of these is NOT one of the ways in which an agency relationship may be terminated without penalty for either the agent or the principal? a. Delaney signed a buyer's representation agreement with b. Martha. After Delaney made an offer on a house, she changed her mind and terminated the agency agreement. b. Martha listed Sonja's home for sale. Martha helped Sonja negotiate an offer and performed the other tasks required of her. The closing has taken place. c. Phyllis listed her home with Brad. Brad put the property on the MLS, but Phyllis hasn't heard from him in more than two months. d. Richard listed Ole's ski chalet for sale. Two weeks later, an avalanche destroyed the property.

Which of these questions can an agent in a dual agency transaction answer without breaching her duties to either client? a. Are you aware of any structural issues with the property? b. How much should my counter-offer to the buyer be? c. What repairs or concessions should I ask for from the home inspection? d. What should I agree to fix from this list the buyer sent?

Which statement describes a code of ethics? a. Guidelines for conduct b. Laws that licensees must abide by c. Rules used by law enforcement officers d. Something licensees don't need to worry about unless they join the NAR

You're the listing agent for the Browns, so you have a duty of obedience to them. They've noticed moisture in the basement but only after very hard rains. They've asked you not to disclose that to any potential buyers. What should you do? a. You must always disclose all material facts, even if your client doesn't want you to. b. You must not disclose because clients are owed obedience. c. You must not disclose because of the duty of confidentiality. d. You should ignore their request because customer duties always outweigh client duties.

Your client, a builder, is considering buying three adjacent lots. They each have the same depth, 275 feet. Lot A is 35,750 s.f., Lot B 53,900 s.f., and Lot C is 33,000 s.f. If your client buys all three lots, what total street frontage will he have? a. 446 feet b. 462 feet c. 464 feet

Your seller clients, the Jones family, complain that the buyer's financing fell through. "The buyer was pre-qualified! How can this happen?" they ask. You answer, "______." a. Pre-qualification does not equal pre-approval. b. The lender must have used the wrong formula.

n what state agency or department is Minnesota's Licensing Unit situated? a. Department of Commerce b. Department of Professional Licensing c. Economic Development Agency d. Housing and Development Department

The Simpsons are buying the Martin's house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing. a. 1,997.62 b. $3,113.46 c. $604.95 d. $792.54

A Calculate daily rates for taxes to be prorated: $2,506 ÷ 365 = $6.87. The Martins pay the first 74 days (January 1 through March 15): 74 x $6.87 = $508.38. $2,506 - $508.38 = $1,997.62 owed by the Simpsons. Homeowner's insurance isn't prorated between the buyer and seller. A homeowner's insurance policy is an agreement between the insurance company and the policyholder, so any refund due to the seller/homeowner will be handled between those two parties.

A Calculate the daily interest rate for 30 days ($871.86 ÷ 30 = $29.06). Because Doug owns the closing day, Maria will pre-pay interest for 29 days, June 2 - 30, so $842.74 ($29.06 x 29).

A Garrett will be debited $1,416, because $1,820 ÷ 365 = $4.99, and $4.99 × 82 days = $409.19. That's $409 if rounded to the nearest whole dollar.

Cynthia loves her apartment and would like to have the option to buy it once her lease is up. Who's the best person to help Cynthia prepare a lease option? A real estate attorney A real estate investor A real estate licensee

A real estate attorney

Marie's brokerage relationship with the Clarks has terminated. She has some paperwork she needs to send to them. When she provides this paperwork to them, what is this an example of? Accounting Loyalty Obedience Reasonable skill and care

Accounting

Sherman, who owns property in a life estate, neglects the property, significantly diminishing its value. This is called ______. A lease option An act of waste An estate at sufferance A possessional prerogative

An act of waste

Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario? Assignment Breach

Assignment

Shannon and Rene are sisters who entered into a contract to buy an income property. The sisters got into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. This is an example of ______. Assignment Fraud Mutual mistake

Assignment

A Minnesota homeowner has just learned her property will receive a special assessment. This is likely because she ______. a. Failed to pay her taxes last year b. Lives in a district that just had community improvements c. Recently purchased, prompting a reassessment d. Recently remodeled

A closing that doesn't require the parties to actually meet is called _________________. a. A face-to-face closing b. An escrow closing c. A real estate closing

A plat book can be defined as ______. a. A collection of subdivision regulations and ordinances b. A public record of subdivision plats held at the county clerk's office c. The recorded legal description of a lands lot dimensions d. Zoning map

After a few meetings, the Stinsons sign a listing agreement with broker Vera so she can sell their house. The house has already generated interest from a potential buyer named Sergei, who has spoken with Vera about the house's square footage and potential as an investment. Which of the following is true about this situation? a. Because Vera now has a sub-agency relationship with the Stinsons, she shouldn't talk to Sergei until the house is officially on the market. b. The Stinsons and Vera have an agency agreement. c. Vera has an agency agreement with Sergei. d. Vera should encourage the Stinsons to talk to Sergei about the property's selling points.

All of the following are true regarding implied agreements EXCEPT which one? a. An implied agreement is based on actions or behaviors. b. An implied agreement is based on a formal agreement. c. With an implied agreement it is possible that the other party did not intend to be bound. d. With an implied agreement there is an increased chance of confusion.

Amanda leases a unit in a building that Elroy owns in St. Paul. They have a signed, written lease agreement between them. Which of the following MUST be true? a. The lease is for at least six months. b. The lease is for a unit in a building that has at least 12 residential units. c. The lease is for commercial real property. d. The lease is for residential real property.

Benji is a landlord in Minnesota. In which of these situations could he charge a late fee for rent? a. A 10% fee that's disclosed and agreed to in writing by Benji and the tenant b. A 5% fee that's disclosed and agreed to in the lease agreement between Benji and the tenants c. After 11:59 p.m. the date the rent is due

Bradley is acting as a finder for Emma. What's Bradley's role? a. To help buyers and sellers locate agents b. To introduce the buyer and seller, but not provide representation c. To investigate title issues d. To try to locate the prior owners of a specific property

Brandon has a right-to-use timeshare. What can he NOT do with this type of timeshare? a. Allow a friend to use his week. b. Pass the timeshare on to an heir. c. Purchase an additional week if it becomes available. d. Try to exchange weeks with another timeshare holder.

Channing is a licensed corporate officer at a brokerage with multiple locations. What does Channing need to do to be in compliance with the law on supervision? a. He must assign one overarching supervisory broker to handle all locations. b. He must designate a supervisory broker at each location. c. He must set up a reporting structure at each location with multiple levels of management and supervision. d. He must supervise all locations himself.

Consuela is a Minnesota real estate licensee, and she has three other licensees working under her supervision. What type of license does Consuela hold? a. Associate broker b. Broker c. Office manager d. Salesperson

Henry plans to convert an apartment building he owns to condominiums. Brenda is a tenant in the building. Under Minnesota law, what right does Brenda have? a. The right to occupy the unit for at least 180 more days b. The right to purchase her unit c. The right to renew her lease for another year d. The right to sell her unit to Henry

Ian is a buyer in Minnesota. He made an offer and supplied earnest money on a property, but the offer was rejected by the seller. What happens to Ian's earnest money? a. Ian forfeits the earnest money to the seller. b. . It must be given to the seller no later than the next business day after rejection. c. It must be returned to Ian no later than the next business day after rejection. d. The seller needs to provide written instructions to return the earnest money to Ian

In Minnesota, what's the one difference between broker and salesperson requirements for continuing education? a. Brokers must take a longer legal update. Brokers must take one hour per year of b.broker-specific CE. c. Brokers need additional fair housing hours. d. Brokers need five additional hours per year.

In Minnesota, which one of these scenarios would require a real estate license? a. Henry is selling his own home and isn't using the services of a listing agent. b. Janice is searching for a new home for a friend moving into town. After the friend buys a property, Janice will receive 2% of the sales price for her time. c. Peter is helping his sister Kristen find a new apartment. He's searching listings and calling property management companies, but won't receive anything in return. d. Ron is acting as executor of his uncle's estate, which includes selling his uncle's property.

In a buyer agency relationship, what relationship does the seller have to the licensee? a. The seller is the licensee's client. b. The seller is the licensee's customer. c. The seller is the licensee's fiduciary. d. The seller is the licensee's nemesis.

In which of the following scenarios is impossibility of contract performance occurring? a. Both parties fully meet the terms of the contract. b. Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do. c. One or both parties have completed only a portion of the terms agreed to in the contract.

It's closing day! Which of the following is likely to happen at this time? a. A preliminary title report will be issued to the buyer. b. The buyer's loan funds will be transferred. c. The buyer will receive loan approv

Jerome just finished working on a remodel for the Simmons family. If the Simmons refuse to pay him, what's the most drastic measure Jereome can legally take in Minnesota? a. File a complaint with the homeowners' association b. Foreclose on the property c. Refuse to work for the Simmons anymore d. Turn the matter over to a collection agency

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 to pay the developer. Which answer correctly identifies the violation(s) Jill has committed? a. Commingling b. Commingling and conversion c. Conversion and fraud d. Deceptive business practice

Joey is a Minnesota real estate salesperson with the Geller Team, which works for Exceptional Realty. When creating advertisements, what must he keep in mind? a. "Exceptional Realty" and "Geller Team" must be displayed more prominently than Joey's name. b. "Exceptional Realty" must be clearly and conspicuously. c. "Geller Team" must be displayed most prominently. d. Joey's name must be displayed most prominently.

John and Mattie are a married couple in Minnesota who are currently going through a divorce. How will their marital property be handled? a. Minnesota is a community property state, so their marital property will be split equally (50/50). b. Minnesota is an equitable distribution state, so their marital property will be divided fairly as determined by a court, but not necessarily equally. c. Minnesota is an equitable distribution state, so their marital property will be split equally (50/50). d. Minnesota is an equitable property state, so their marital property will be split fairly and equally (50/50), as determined by a court.

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? a. The CFPB provides forms similar to the Closing Disclosure and Loan Estimate for seller/financers to use. b. The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction.

Lake Side Homeowners Association was formed in May 1994. Which statement best describes their participation in the Minnesota Common Interest Ownership Act? a. Based on the date the association formed, participation is automatically required. b. Based on the date the association formed, the association must opt in to participate. c. Based on the type of association, participation is automatically required. d. Based on the type of association, participation is not required.

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? a. To detail the amount Lawrence needs to bring to closing b. To detail the estimated closing costs for Lawrence's loan c. To disclose the interest rates available on this lender's various loan programs

Licensed residential appraisers in Minnesota can appraise properties with which of the following limits? a. Complex property transactions valued at less than $1 million b. Complex property transactions valued at less than $250,000 c. Property transactions of any value, provided they don't require a net capitalization analysis d. Property transactions of any value, provided they're not complex

Louellen is about to take out a mortgage loan from her credit union. The contract includes the following information: Louellen is offering her house for consideration and that the credit union is offering $350,000; Louellen will pay the loan back over a certain number of months at a certain rate; and Louellen's signature, along with that of a credit union representative. What, if anything, is this contract missing in order for it to be legally binding, according to the statute of frauds? a. Louellen's credit history needs to be included. b. Nothing is missing. c. The condition and size of the house needs to be included. d. The credit union's physical address needs to be included.

Margot doesn't really want to include Friend and Lend on the list of mortgage companies she gives to buyers because the owner is a Syrian immigrant and a Muslim. If she doesn't, what is she guilty of? a. Collusive bidding b. Discriminatory acts and agreements c. Production control d. Refusal to deal

Oscar is a buyer in Minnesota who provided a promissory note to his real estate agent as earnest payment. Did his agent violate license law by accepting this as earnest payment? a. No, as long as the broker provides written permission for the licensee to accept a promissory note. b. No, as long as the licensee deposited the item with an authorized escrow agent. c. Yes, since licensees can only accept cash, checks, or other depositable items as earnest payment. d. Yes, since licensees must first get commissioner permission before accepting nondepositable items.

Piper just passed her Minnesota real estate licensing exam. When does her application need to be submitted to the commission? a. Within the next 10 days b.Within the next 12 months c. Within the next 30 days d. Within the next six months

Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical? a. No, it's never ethical for a licensee to accept compensation from more than one party. b. Yes, but only if all of the involved parties have full knowledge and provide consent. c. Yes, but only if the Matt has full knowledge of the compensation arrangement and provides consent. d. Yes, licensees can receive compensation from multiple parties in the transaction.

Seller Tad has found a buyer, Minnie, for his property. The two of them are about to enter into a contract when Tad receives an email from Minnie. Turns out that Minnie's co-worker used to date Tad and told Minnie he'd cheated on his construction contractor licensing exam. Minnie threatens to spill the beans unless Tad comes down $10,000 on the sales price. Tad reluctantly agrees and they sign the contract. What is true about this situation? a. Minnie used duress against Tad, but the contract is valid because Tad agreed to sign. b. Minnie used duress against Tad, so the contract is invalid. c The contract is invalid because it lacks a legal purpose. d. The contract is valid because Minnie made an offer and Tad accepted.

Serena, a Minnesota broker, represents a seller client. A buyer made an offer on the seller's property, which was accepted contingent upon a home inspection. After the inspection is performed, the buyer's agent provides a copy of the report, which doesn't include any mention of the roof leak Serena's client told her about. What obligation does Serena have? a. Serena doesn't need to disclose this fact because the buyer had an independent inspection performed. b. Serena has a duty to disclose material facts she's aware of, including facts that contradict the inspection report. c. Serena must receive written permission to disclose this fact to the buyer. d. Serena owes her seller client the duty of confidentiality and shouldn't disclose this fact to the other buyer.

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 ______. a. Inspections b. Insurance c. Late fees d. Repairs

The client owes the agent the primary duties of compensation, information, ______, and availability. A. Immunity B. Indemnification C. Ingenuity D. Initiative

What's inverse condemnation? a. It occurs when a property owner dies without a will, heirs, or creditors. b. It occurs when government actions deprive a property owner of the value of the property without offering just compensation. c. It occurs when municipalities pass enabling acts. d. It occurs when the government places a lien on a property due to failure to pay taxes.

What's the chief function of licensing laws? a.Create career paths for real estate professionals b. Ensure that consumers are protected c. Generate funding for professional education and research d. Grow the economy through a pipeline of professionals

When you're representing a client in a real estate transaction, what's your responsibility regarding tax advice? a You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale. b. You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.

Which act was created to safeguard the consumer in the use of credit by requiring full disclosure of the terms and conditions of that credit? a. Community Reinvestment Act b. Consumer Credit Protection Act c. Equal Credit Opportunity Ac

Which fiduciary duty requires agents to keep any confidential information their clients share with them confidential? a. Accounting b.Confidentiality c. Disclosure d. Reasonable skill and care

Which of the following actions can a broker in Minnesota legally take? a. Depositing earnest money in the broker's personal account b. Depositing personal funds in a trust account to pay account service fees c. Depositing property management fees in a trust account d. Depositing rent collections in the building operating account

Which of the following actions can licensees take related to signs? a. They can only place signs on property they own. b. They can place signs on an owner's property with the owner's written consent. c. They can place signs on properties for which they are the listing agent, with or without the owner's permission. d. They can't place signs anywhere.

Which of the following associations is automatically required to participate in the Minnesota Common Interest Ownership Act? a. A common interest ownership association created in January 1994 b. A condo association formed in January 1993 c. A homeowners association of single-family homes formed in January 1993 d. A townhome association formed in 1993

Which of the following best describes a marketable title? a. Conveys ownership of the property. b. Ensures the title to property is free and clear of liens and only subject to loan payoff and any taxes owed. c. Protects the buyer from defects in the title. d. Provides a title commitment or abstract of title via a search of public records.

Which of the following best describes the purpose of a buyer agency agreement? a. To identify the terms of a sales transaction between the seller and the buyer b. To identify the terms of the buyer agent/buyer agency relationship c. To identify the terms of the landlord/tenant relationship

Which of the following is NOT a characteristic of a corporation? a Corporations are recognized legal entities. b. Corporations are tangible and nontaxable. c. Corporations are taxable. d. Corporations have tax rates separate from individual tax rates.

Which of the following is an example of a prime lender, as compared to a subprime lender? a. Offers higher interest rates b. Offers lower fees c. Refuses to work with minorities d. Targets low credit scores

Which of the following is an included covenant(s) in a warranty deed? a. Covenant of encumbrances b. Covenant of right to convey c. Covenant of seizure d. Covenants of seizure, encumbrances, and right to convey

Which of the following is considered unauthorized practice of law? a. Explaining a clause in a contract to a client b. Interpreting the legal consequences of a client's actions c. Using existing forms an attorney has reviewed d. Using standard language for addenda

Which of the following is the best example of a tie-in arrangement? a. A business offers add-on services for its best customers. b. A business requires its clients to also purchase services from another business. c. Competing businesses agree to similar pricing strategies. d. Competing companies agree to not do business with a third.

Which of the following is true about the statute of frauds? a. All types of written contracts, with the exception of email or other online communication, may be considered "in writing" and binding. b. Any form of written contract, including email communication, may be considered "in writing" and binding. c. Only contracts that are handwritten are considered to be "in writing" and binding. d. Only pre-printed contracts, the blanks of which have been filled in in ink, are considered to be "in writing" and binding.

Which of the following situations entitles Gary to commission with a 30-day protection clause? A. Buyers view the property 15 days after the listing expires and make an offer that's accepted. B. Buyers who viewed the property while listed with Gary make an accepted offer 10 days after the listing expires. C. Gary tells his overseas cousin about the property, and his cousin returns to the U.S. 35 days after the listing expires to make an offer. D. The seller is talking about the house with colleagues 20 days after the listing expires, and one eventually comes to see the house, which leads to a contract.

Which of the following situations entitles Gary to commission with a 30-day protection clause? a. Buyers view the property 15 days after the listing expires and make an offer that's accepted. b. Buyers who viewed the property while listed with Gary make an accepted offer 10 days after the listing expires. c. Gary tells his overseas cousin about the property, and his cousin returns to the U.S. 35 days after the listing expires to make an offer. d. The seller is talking about the house with colleagues 20 days after the listing expires, and one eventually comes to see the house, which leads to a contract.

Which of these actions would cause a property to become an REO? a. A rental property was deemed not up to code, and was sold to a developer. b The bank doesn't get an acceptable bid at a foreclosure sale and takes ownership of the property. c. The lender stops waiting for payments and forces the sale of the property.

Which of these conditions would qualify a victim of domestic violence for early release from a lease? a. The victim has abandoned the property. b. The victim has secured a restraining order against the perpetrator. c. The victim is a member of protected class.

Which of these is an encroachment? a. A path providing neighborhood access to a pond cuts through part of Bill's property. b. Jeff installed a sidewalk next to his driveway, six inches outside his property. c. The city seized a formerly private parcel of land for public use. d. The state took ownership of Dawn's property when no heirs could be located following her death.

Which of these is an example of conversion of funds? a. Marcus converted a CD to cash and deposited it in the firm's operating account. b. Monica used funds from the firm's trust account to pay her firm's rent. c. Soo Min transferred funds from her firm's trust account to the closing company's trust account in time for settlement. d. Tristan deposited a client's earnest money check into the firm's operating account.

Which one of Gerry's statements to a client crosses the line into unauthorized practice of law? a. "I'd encourage you to have an expert look at the exceptions on your title insurance commitment." b. "Most couples take ownership of property as joint tenants, so that's what I'd advise." c. "The contingency clauses in your contract give you options to terminate the contract if, for example, your financing falls through." d. "We can add the brokerage firm's standard language into the 'additional provisions' section to cover what you're suggesting."

Which one of the following tasks must a licensee perform for seller clients? a. Assist the seller in finding someone who can effectively market the property. b. Inform sellers of their responsibility to make all required property condition disclosures. c. Set the listing price of the property based on comparables. d. Tell the sellers how to deposit the buyer's earnest money into their personal checking account.

Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively? a. Termination by division b. Termination of co-ownership by partition c. Termination of estate in severalty d. Termination of joint tenancies

Which one of these is the best example of single agency? a. A broker acts as a dual agent to one party only b. An agent from one firm acts as the agent for the buyer c. Two agents from different firms, where one acts as a sub-agent for the other d. Two agents from one firm, where one acts as an agent for the buyer and the other is the agent for the seller

Why are lenders required to provide the Loan Estimate and Closing Disclosure forms to loan applicants and borrowers? a. Because interest rates may rise if the buyer doesn't close on time b. So borrowers can compare loans and make decisions regarding the affordability of loans offered c. So government entities can track the numbers of borrowers who decline certain types of loans

Why would a code of ethics provide minimum ethical expectations? a. Ethics are minimally applicable to real estate. b. It sets a baseline for ethical standards. c. Licensees are minimally ethical. d. Only minimum expectations apply.

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? a. Xavier is guilty of commingling. b. Xavier is guilty of commingling and conversion. d. Xavier is guilty of conversion. c. Xavier is guilty of theft.

You've just purchased a rural property, and the attorney at the closing tells you, "You have a dominant estate." What does that mean to you? a. The property comes with an easement in gross granted to the utility company. b. You'll be using an easement across your neighbor Jim's property. c. Your property has an easement granted to your neighbor Jim, allowing him to cross your property to access his land. d. Your property has direct access to a road and doesn't require an easement.

Your buyer client, Percy, wants to start searching for his dream house and knows he needs to obtain financing to accomplish that. What's his first step? a. Complete a loan application. b. Obtain a pre-qualification letter. c. Sign a purchase agreement.

Your buyer purchases a property for $120,000. It has an assessed value of $130,000. The annual rate for property taxes is $2.10 per $100 of the property's tax value paid on a semi-annual basis. On the next tax bill, what amount is due? a. $1,260 b. $1,365 c. $2,100

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 Deed restriction Safety laws Zoning regulation

Building code

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? a. $45.64 b. $82.15 c. $86.72 d. $93.00

A client terminates a listing agreement before its expiration date. What happens now? a. The agent must send the client a notice of release form. b. The agent must sue. c. The client may owe a commission anyway. d. The listing is cancelled.

A real estate broker in Minnesota collected rent from several properties. Into which of the following accounts must those rents be deposited? a. Broker's business account b. Broker's personal account c. Broker's trust account d. Operating accounts for each of the properties

According to the Minnesota statute, which piece of advertising information must be clearly and conspicuously displayed in all advertising? a. Licensee name b. No one item must be clearly and conspicuously displayed. c. Real estate brokerage name d. Team or group name

Adrian is the developer of a new condominium project. Under the Minnesota Uniform Condominium Act, she must do which of the following? a. Assist first-time buyers in obtaining loans. b. Complete the landscaping installation before selling any of the units. c. Create and record a declaration of condominium. d. Offer discounted units for low-income buyers.

Avoiding antitrust violations is critical. Which of the following actions will help you avoid price fixing allegations? a. Consult with competitors to determine competitive pricing b. Engage in discussions about fees with agents from other companies c. Establish fees independently or as a company d. Promote "industry rates" in conversations with consumers.

Avoiding antitrust violations is critical. Which of the following actions will help you avoid price fixing allegations? a. Consult with competitors to determine competitive pricing b. engage in discussions about fees with agents from other companies c. Establish fees independently or as a company d. Promote "industry rates" in conversations with consumers.

Bethany has several clients who've used Jerrica, a local mortgage broker, for their mortgage loans. Jerrica recently had an opportunity to return the favor, and she referred a buyer client to Bethany. Through her broker, Bethany sent Jerrica a $200 gift card as a referral fee. Which of these statements best represents this transaction? A. Because Jerrica holds a mortgage broker's license, Bethany can pay her a referral fee. B. Because she paid the referral fee through her broker, Bethany didn't violate any laws. C. Bethany and her broker violated federal (and perhaps state) laws prohibiting referral fees to certain third-party vendors. D. Bethany should have sent the referral fee directly to Jerrica to avoid violating RESPA.

Edna leased her house to Joan with a right of first refusal. Edna's cousin, who knows that she needs liquid assets, just offered her $250,000 for the house. What does Joan have to do if she wants to buy the house? a. Get into a bidding war with Edna's cousin. b. Make an all-cash offer. c. Match the offer on the table. d. Offer more than $250,000.

Genevieve performs real estate activities in Minnesota on behalf of Vern, a real estate broker. What type of license does she have? a. Limited broker b. Primary broker c. Real estate salesperson d. She doesn't need a license.

Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true? a. If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission. b. If the transaction closes, she'll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing. c. If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law. d. If the transaction doesn't close, Georgina will refund the earnest money to the buyer.

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? a. Harini and the seller had a falling out. b. Harini exercised her right of first refusal. c. The option expired. d. The seller breached the contract.

Homeowner Shaun loves DIY projects and decided to build some bookshelves for his home office. He bolted the shelves to the wall and installed trim around them so they became an integral part of the room. When he sells his home, the bookshelves will be considered ______. a. Personal property because Shaun installed them himself b. Personal property because they're not an original part of the building c. Real property because of the method of annexation d. Real property because Shaun conveyed them to the buyer

If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract? a. Both parties b. The broker c. The party lacking legal capacity d. The party possessing legal capacity

Jamie and Pat are interested in purchasing property near a lake. Which ownership type is NOT recognized in Minnesota? a. Jamie and owning the property as tenants in common. b. Jamie and Pat owning the property as joint tenants. c. Jamie and Pat owning the property as tenants by the entirety. d. Jamie or Pat owning the property in severalty.

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 wasn'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 ______. a. Accepting partial performance b. Mutually rescinding the contract c. Rescinding the contract unilaterally

Jenna is licensed to appraise all property types in Indiana. She's involved in the purchase of a Minnesota manufacturing facility by a federal agency that intends to transform it into a training and testing facility. She's been asked to appraise the factory. What type of license should she apply for? a. Certified general appraiser b. Licensed general appraiser c. Temporary practice appraiser d. Trainee appraiser

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? a. No. There's no signed agreement. b. No. Verbal agreements are illegal. c. Yes. Express agreements may be verbal or written. d. Yes. They have a verbal implied agreement.

Nicholas is working with a buyer client who wants a special clause added to his purchase contract. How should Nicholas handle this? a. Ask the client to draft the clause, then insert it into the contract. b. Draft the clause himself and have the client run it by his attorney. c. Instruct the client to hire an attorney to draft the clause. d. Tell the client that he doesn't need that particular contract clause.

Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay? a. No, because he's not an attorney, he shouldn't prepare contracts. b. No, he should have his client complete any forms. c. Yes, licensees can use standard forms originally created or approved by an attorney. d. Yes, real estate licensees may draft contracts and fill in blanks on existing contracts.

Sally signed a lease for a unit in a new apartment building in Minneapolis. Her landlord, Jamal, deposited Sally's security deposit on August 4. When will the security deposit begin accruing interest? a. August 5 b. Security deposits can't be deposited into interest-bearing accounts. c. September 1

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 ______. a. Accepting liquidated damages b. Accepting partial performance c. Mutually rescinding the contract d. Unilaterally rescinding the contract

Simpson is a buyer in Minnesota. He made an offer and supplied earnest money on a property on Thursday. That offer was rejected by the seller on Friday. What happens to Simpson's earnest money? a. It must be deposited in a trust account by Tuesday. b. It must be deposited in a trust account by Wednesday. c. It must be returned to Simpson by Monday. d. It must be returned to Simpson on Frida

The Wilsons hired Gary to build an addition onto their house in Minnesota. Gary subcontracted out the electrical work to Oliver. Within how many days must Gary and Oliver deliver lien notices to the Wilsons? a. Both Gary and Oliver have 10 days from the original contract date. b. Both Gary and Oliver have 45 days from the original contract date. c. Gary has 10 days from the original contract date, and Oliver has 45 days from the date he first provides labor or materials. d. Gary has 45 days from the original contract date, and Oliver has 120 days from the date he first provides labor or materials.

Two competing firms are found guilty of illegal market allocation. Which of the following scenarios must be true? a. The two firms are located in different parts of the state. b. The two firms are owned by the same umbrella company. c. The two firms have agreed not to compete in one another's markets. d. The two firms have agreed to set commission rates and/or co-op fees at a specific amount.

Valerie is converting an existing building into a new condominium project. Under Minnesota law, she must ______. a. Give all current tenants at least 180 days to vacate the premises b. Offer at least 20% of the units to existing tenants c. Provide blueprints showing the size, boundaries, and location of each unit d. Provide consumers with a public offering statement at least seven days before signing a sales contract

What is the difference between ethics and the law? a. Ethics are about personal values, and the law is just about the rules. Both are legally enforceable. b. Ethics are personal values and the law is society's values, but they are both legally enforceable. c. Laws are legally enforceable. Ethics aren't legally enforceable until they become law. d. There is no difference.

What is the federal program that was created to help mitigate future flood losses across the country? a. Federal Flood Loss Prevention Program (FFLPP) b. Federal Flood Loss Program (FFLP) c. National Flood Insurance Program (NFIP)

What's meant by "minimum ethical standards"? a. Commission levels should not ethically rise above the minimum standards. b. Commissions set below these standards would be unethical. c. Licensees should strive to act at least at that level, and more if possible. d. Licensees should strive to do no more than the minimum required.

What's the main point of the statute of frauds? a. Anyone caught committing real estate fraud will be prosecuted. b. Fraudulent behavior won't be tolerated in the real estate profession. c. Real estate purchase and sale contracts must be in writing to be enforceable. d. There's a limitation for how long someone can sue for fraud.

When Mark and Chrissy discovered that the seller of their recently purchased home had committed title fraud, they were told their title insurance policy wouldn't cover the legal costs to clear the title to their property. What's the most likely reason for this? a. The title company was a scam organization. b. They didn't purchase lender's title insurance. c. They didn't purchase owner's title insurance. d. They failed to make payments on their title insurance.

When a Minnesota salesperson transfers or terminates a license with the primary broker, what action must the broker take? a. Inform all the licensee's clients of status change b. Nothing; the licensee has the notification responsibility c. Notify the commissioner within 10 days d. Notify the commissioner within 3 days

When faced with an ethical dilemma, which of the following is true? a. Doing the "right thing" isn't always ethical. b. The easiest choice is always the most ethical. c. The Golden Rule always points the way to the most ethical action. d. You should do what's easiest for you under the circumstances.

When must lenders deliver the Closing Disclosure form to buyers? a. At least 48 hours before closing b. At least one week before closing c. At least three days before closing

When the listing agreement's purpose has been fulfilled, what happens to the agency agreement? a. Agency continues for future transactions. b. Agency continues until the agreement's expiration date. c. The agency agreement terminates by completion. d. The agent can renounce the listing agreement to terminate it.

Which Minnesota homebuyer assistance program offers first-time homebuyers low interest rates, low down payments, and up to $10,000 for down payments and closing costs? a. Homebuyer Mortgage Credit Program b. Mortgage Credit Certificate Program c. Start Up d. Step Up

Which of the following agreements does NOT have to be written down in order to be legally binding? a. Sierra sells her car to her cousin for $2,500. b. Sloane agrees to pay the $400 in credit card debt that her sister owes. c. The Lees rent out their basement to some college students for three months. d. Tyrone and Alaya are getting married.

Which of the following defines a subdivision? a. A map showing the location of districts throughout the municipality b. A survey of the social and economic statistics of the land c. A tract of land divided into lots or plots and used for building purposes d. A transition area between uplands and aquatic habitats

Which of the following individuals is considered a loan broker in Minnesota? a. A real estate broker who recommends several lenders to buyer clients b. A real estate licensee who negotiates loans for real and personal property for an advanced fee c. A real estate licensee who negotiates loans for real property for an advanced fee d. A real estate salesperson assisting a buyer with financing while acting and being compensated as a buyer's agent

Which of the following is a buyer's agent's task or duty? a. Advocating for the seller b. Negotiating for the seller c. Representing the buyer's interests d. Reviewing transactional documents with the seller

Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law? a. The brokerage may be required to place 10% of its profits into the Sherman Act Foundation for a period of three years. b. The brokerage may have to sell its assets to its nearest competitor at below-market rates. c. The brokerage may have to undergo court-ordered supervision for up to 10 years. d. The brokerage's listing fees may be limited to 80% of its former charges

Which of the following is a true statement about federal antitrust penalties? a. Real estate brokers are immune from prosecution. b. The first offense results in a warning only. c. The maximum fine may be increased to twice the gain or loss involved. d. They cannot involve prison sentencing.

Which of the following is true about development in a floodway in the state of Minnesota? a. It should be avoided. b. It's not regulated. c. It's permitted.

Which of the following is true of professional codes of ethics? a. They aren't applicable to individual actions. b. They cover every imaginable ethics-related situation. c. They're broad, but they can't possibly cover every ethics-related situation. d. They're open to personal interpretation.

Which of the following lists items that likely contain asbestos, if manufactured before 1970? a. Pipe and furnace insulation materials b. Shingles, siding, and roofing, pipe and furnace insulation materials c. Soundproofing and decorative material, pipe and furnace insulation materials, shingles, and siding.

Which of the following statements best describes Minnesota agency disclosure requirements? a. A real estate broker or salesperson shall provide to a consumer in the sale and purchase of a commercial real property transaction at the first substantive contact with the consumer an agency disclosure form b. A real estate broker or salesperson shall provide to a consumer in the sale and purchase of any real property transaction at the first substantive contact with the consumer an agency disclosure form c. A real estate broker or salesperson shall provide to a consumer in the sale and purchase of a residential real property transaction at the first substantive contact with the consumer an agency disclosure form d. A real estate broker or salesperson shall provide to a consumer in the sale and purchase of a residential real property transaction at the first substantive contact with the consumer an oral or written agency disclosure

Which of these actions is allowed but avoids the licensee illegally practicing law? a. Advising a landlord client of his legal rights and responsibilities b. Charging a $10 scrivener's fee for preparing transaction documents c. Filling in blanks on an association-approved purchase contract d. Striking provisions in a contract that don't apply to a transaction

Which of these groups of protected classes is included in the NAR Code of Ethics' definition of discriminatory behavior? a. National origin and religion only b. Race and color only c. Race, color, religion, sex, handicap, familial status, national origin, sexual orientation, or gender identity d. Sex, age, and marital status only

Which of these is most likely to be the list of individuals who attend a closing meeting? a. Buyer, seller, licensees who represent the buyer and seller, lender, appraiser, home inspector, attorney, closing officer B. Buyer, seller, licensees who represent the buyer and seller, lender, appraiser, lender, closing officer c. Buyer, seller, licensees who represent the buyer and seller, lender, closing officer

Which of these statements about selling mobile homes is true? a. Mobile homes can't be listed on the MLS b. You can't sell mobile homes c. You need a broker or sales person license to sell mobile homes d. You need a special license to sell mobile homes

Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned? a. It's a joint tenancy. b. It's held as a tenancy in common. c. It's owned as an estate in severalty. d. There isn't enough information given to tell.

anjeev leases a house from Clara, and the lease has an option contract attached that permits Sanjeev to buy the house if he chooses to exercise the option within three years. How large does the option fee need to be in order to be legally binding? a 10% of the purchase price b. 1% of the purchase price c. Any amount agreed to by the parties

Jamal is selling his townhome for $242,000, and closing is set for July 20. He has a loan balance of $193,000 at a 3.7% interest rate, and he's current on his payments. Jamal has prepaid the property taxes ($1,165) and insurance ($745). Using a calendar year proration method for calculations, how will these amounts appear on Jamal's closing statement? A - $798.89 seller credit B - $831.92 seller debit C - $857.72 seller credit D - $872.45 seller credit

C First, calculate tax and insurance daily rates: ($1,165 ÷ 365 days per year = $3.19) and (745 ÷ 365 = $2.04). Combine the daily rates ($3.19 + $2.04 = $5.23). Then multiply $5.23 × 164 days from closing until year end = a $857.72 seller credit. Remember that insurance is typically repaid by the insurance company, rather than the buyer, as the buyer would get their own, new policy, but the total amount repaid to the seller would still appear on the statement as a seller cred

Jamal is selling his townhome for $242,000, and closing is set for July 20. He has a loan balance of $193,000 at a 3.7% interest rate, and he's current on his payments. Jamal has prepaid the property taxes ($1,165) and insurance ($745). Using a calendar year proration method for calculations, how will these amounts appear on Jamal's closing statement? a. $798.89 seller credit b. $831.92 seller debit c. $857.72 seller cred

ames is the buyer's agent. A property sold for $450,000. The total commission rate is 5%, with the listing agent receiving 3% and the buyer's agent (the cooperating broker) receiving 2%. James has a 75/25 split with his broker (meaning he'll receive 75% of the commission paid to his broker for the sale). What commission does James receive? a. $16,875 b. $22,500 c. $6,750 d. $9,000

C For this scenario, the buyer's agent's broker receives 2% of the sales price, or $9,000. The buyer's agent (James) receives 75% of this amount, or $6,750.

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? a. Credit of $1,059.10 b. Credit of $1,350 and debit of $484.04 c. Credit of $721.50 d Debit of $1,214.85

C 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.

James is the buyer's agent. A property sold for $450,000. The total commission rate is 5%, with the listing agent receiving 3% and the buyer's agent (the cooperating broker) receiving 2%. James has a 75/25 split with his broker (meaning he'll receive 75% of the commission paid to his broker for the sale). What commission does James receive? A - $16,875 B - $22,500 C - $6,750 D - $9,000

C the buyer's agent's broker receives 2% of the sales price, or $9,000. The buyer's agent (James) receives 75% of this amount, or $6,750.

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? A. Credit of $1,059.10 B. Credit of $1,350 and debit of $484.04 C. Credit of $721.50 D. Debit of $1,214.85

C. 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.

Clint was looking for alternatives to the traditional vacation condo rental for his family. He purchased the right to use a given set of facilities at any point throughout the year. What did Clint purchase? Campground membership Condo estate Timeshare estate Timeshare use

Campground membership

Someone who has agency representation with the licensee is a ______. Client Consumer Customer Fiduciary

Client

Which type of zoning classification regulates the intensity of use in an area that has retail shops and other similar businesses? Agricultural Commercial Industrial Residential

Commercial

It's Friday afternoon, and Lori can't make it to the bank in time to deposit an earnest money check in the brokerage's escrow account, so she uses her mobile app to deposit it into her personal checking account for safekeeping. What violation did Lori just commit? Capping Commingling Conforming Conversion

Commingling

Which one of the following says that real estate acquired by either spouse during a marriage (in most cases) is considered community property? Community property rights Joint tenancy Tenancy in common Tenancy in severalty

Community property rights

Mariah was appointed to a two-year term on Garden City's planning board. She's looking forward to meeting her fellow board members and working collaboratively on issues that affect their town. She's been told that the first order of business is a revision of the document that outlines the community's long-term needs and provides guidance on capital budgeting for those needs. What is this document called? Comprehensive master plan Environmental impact study Special use permit Zoning ordinance

Comprehensive master plan

Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement. Consideration Flaw Legal competency Undue influence

Consideration

Philip owns land in a state where growing marijuana is illegal. He wants to set up a small marijuana growing operation and export to states where marijuana has been legalized. He asks his attorney about the possibility. "No," his attorney explains. "It's not possible. Although you own the property outright, the right of ______ only allows you to manage the property in ways that are legal in this jurisdiction. Control Disposition Exclusion Possession

Control

A licensee sells a property for $325,000. The total commission rate is 6%, which is split evenly with the cooperating agent. What amount goes to the listing broker? a. $0 b. $19,500 c. $4,875 d. $9,750

A licensee wishes to place a sign in the yard of a new listing he's pursuing. What must be in place before that sign hits the ground in Minnesota? a. An independent contractor agreement b. A signed agency disclosure c. A signed buyer agency agreement d. A signed listing agreement

According to the EPA, at what level does radon become a health concern requiring mitigation? a. .04 picocuries per liter of air b. 1.4 picocuries per liter of air c. 2.4 picocuries per liter of air d. 4.0 picocuries per liter of air

Bartholomew was a practicing real estate licensee in Minnesota, but spent some time dabbling in other careers for a few years before deciding to get back into real estate. He's studying to take the licensing examination again. Which of the following is most likely true? a. Bartholomew kept his license active even though he wasn't practicing real estate. b. Bartholomew was a real estate salesperson and is now applying for a broker license. c. Bartholomew was unlicensed for less than one year. d. It's been at least two years since Bartholomew's last renewal deadline.

Both parties have to sign the agreement in order to demonstrate that ________. a. An attorney has reviewed the contract b. Their agents have agreed to the terms and conditions c. The very first offer was accepted d. They understand the terms

Darcy and her buyer client Josh are reviewing Josh's offer before they submit it to the seller. Which of these actions is Darcy safe to take without potentially crossing into unauthorized practice of law? a. Draft her own offer form. b. Strike through any paragraphs Josh doesn't like, even the ones required by federal or state law. c. Tell Josh that hiring an attorney to review the contract would be a waste of money, since Darcy is perfectly qualified to explain the legal ramification of the contract terms. d. Use standard, approved language in contingencies, addenda, and additional provisions areas.

Debra's listing agent, Raj, just called to tell her that he'd received an offer on her house and an earnest money check for $4,500. "I'm on my way over to go through the offer with you. I think you'll like it!" Debra's excited, and she knows exactly what she wants to spend that $4,500 on. What's wrong with Debra's thought process? a. Debra's forgetting that she owes part of these funds to her listing agent. b.She can't cash the earnest money check until the transaction closes. c. She hasn't seen the offer, so she doesn't know if she'll accept it and get the earnest money check. d. The earnest money doesn't belong to Debra. It will be held in an escrow account.

DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______. a. Accepting partial performance b. Rescinding the contract unilaterally c. Suing for damages d. Suing for specific performance

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? a. The lender received another offer higher than the one Farquhar made at the auction. b. The lender revised the previous owners' loan and permitted them to remain in the property. c. The other lien holders protested the auction sale, so the lender retained the property. d The previous owners redeemed the property by paying all mortgage payments and fees.

Harriet, an out-of-state licensee, is friends with Tonya, a licensee with Perfectly at Home. Harriet referred one of her buyer friends to Tonya, so Tonya plans to pay Harriet a referral fee. Which statement about this fee is true? a. It's illegal for Tonya to pay an out-of-state licensee a referral fee. b. Referral fees have no disclosure requirements. c. Tonya must pay the fee directly to Harriet since Harriet is an out-of-state licensee. d. Tonya must pay the referral fee through her brokerage firm to Harriet's brokerage firm.

In a typical transaction, which of these title defects is unlikely to cause a problem for the buyer? a. A faulty survey b. An unrecorded lien c. A past error in recording title transfer d The seller's existing mortgage

Janet gives Warren, the buyer of a condominium in her new Minnesota development, a copy of the public offering statement two weeks after he enters into a contract to buy the unit. Five days after receiving the statement, Warren decides to cancel the contract. Can he do this? a. No, Warren has already signed a sales agreement. b. No, Warren is past the three-day period permitted to cancel a sales agreement. c. Yes, Warren can cancel the contract but may be required to forfeit any earnest money he submitted. d. Yes, Warren can cancel the contract without penalty within 15 days of receiving the public offering statement.

Jared is a buyer in Minnesota who is working with an agent. He's made an offer on a property owned by Byron, who is also working with an agent. Byron accepted Jared's offer. Assuming there are no specific instructions in the purchase agreement, what happens to Jared's earnest money? a. The buyer must deposit the earnest money within three business days. b. The buyer's agent must deposit the earnest money within three business days. c. The seller must deposit the earnest money within three business days. d. The seller's agent must deposit the earnest money within three business days.

Jim and Tammy are selling their farm in Minnesota, which has a private well. What information about the well must they provide to potential buyers prior to entering into an agreement of sale? a. A suggestion that the water should be tested b. A verbal assurance that the water is safe to drink c. Evidence that the water source is public d. The well's location and status

Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided? a. Barbie and Midge each own 50%. b. Barbie and Skipper each own 50%. c. Barbie, Midge, and Ken's heirs each own one-third. d. Barbie owns two-thirds, and Midge owns one-third.

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? a. Because Layla doesn't know if Marcus is working with another agent, she's just inadvertently created a dual agency situation. b. Because Layla has performed some agency tasks for Marcus, she has an express agency agreement with him. c. Layla and Marcus have no agency agreement, either express or implied, until Layla begins showing Marcus homes. d. Layla's actions may have created an implied agency agreement with Marcus.

Lead is a highly toxic metal that may cause a range of health problems, especially in young children. Which of the following is true? a. Lead can be traced to senioritis. b. Lead causes blindness on contact with the eyes. c Lead is associated with coronary heart disease. d. Lead may cause behavioral problems, learning disabilities, seizures, and, in extreme cases, death.

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 the following statements about this situation is true? A. Bankruptcy has no impact on agency agreements. B. Marcus can choose whether or not to continue the listing agreement with Ron. C. The agency agreement is terminated because the agent filed for bankruptcy. D. The agency agreement only terminates if the broker or the principal declares bankruptcy.

Minnesota law requires sellers to provide prospective buyers with a written disclosure of material facts related to the property's condition. Which of the following scenarios requires disclosure? a. A foreclosed property has a leak in the roof. b. A newly constructed home had to be repaired after it suffered minor smoke damage when a wastebasket caught fire after a contractor threw a lit cigarette into it. c. An investor is selling a property on which a suicide occurred to his grandson. d. A person is selling his property, which has a septic system, to a newly married couple.

Monty retired 10 years ago and would like to see the world, but his retirement account won't support his desire to travel. Monty heard of a loan that would allow him to take advantage of the equity in his home by getting monthly payments from the bank by using his house as collateral. What is this type of loan called? a. Adjustable rate mortgage (ARM) b. Home equity line of credit (HELOC) c. Home equity loan d. Reverse annuity mortgage (RAM

Parker entered into a contract with seller Derrick to buy Derrick's home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy Derrick's home, but his brother, Tom, agreed to take Parker's place as the buyer in the purchase contract. This is an example of ______. a. Assignment b. Fraud c. Misrepresentation d. Novation

Paula is bidding on a property that's being sold at a foreclosure auction. She's excited about the great deal she's getting on the property after she finds out she submitted the winning bid. What could cause Paula's great deal to turn into a nightmare? a. The lender has the option to refuse her bid and revoke the deed transferring ownership to Paula. b. The previous owner may redeem the property by paying Paula at least 50% of the property's market value. c. The title insurance company may charge her additional fees after closing to continue the title policy. d. The title to the property may have hidden issues that could cost her a lot of money to clear.

Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17 years old. Can Sarah force Robert to sell? a. No, because Sarah can't legally enter into a contract. b. No, she can purchase the house if Robert doesn't object, but can't do so if he objects. c Yes, as long as she gets a legally competent party to co-sign the contract with her. d. Yes, Sarah can require that Robert fulfill the contract terms.

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? a. If Ron leaves them in place and the lease expires, he has three months to remove them. b. Ron is required to leave the fixtures if they're attached. c. Ron is required to take the fixtures and return the premises to its original condition. d. Ron may take the fixtures as long as he repairs any damage caused by removal.

Sandra enters a contract to sell her home to Paul. Under the statute of frauds, the written contract must name the contracting parties, identify the subject matter of the contract, and ________. a. Achieve a result that is fair to all parties b. Be handwritten c. Be signed by two or more attorneys d. Present the essential terms and conditions of the contract

Stephanie and Carter are married owners of a Minnesota property that they wish to claim as a homestead. Which of these statements is true? a. Both Stephanie and Carter must jointly claim the homestead. The exemption would apply to either or both of their debts. b. Both Stephanie and Carter must jointly claim the homestead. The exemption would apply to joint, but not individual, debts. c. Either Stephanie or Carter can claim the homestead. The exemption would apply only to the debts of the spouse who made the claim. d. Either Stephanie or Carter can claim the homestead. The exemption would apply to either or both of their debts.

Unauthorized practice of law and acting outside the scope of one's expertise are similar issues. Which of the following circumstances specifically relates to the unauthorized practice of law? a. Predicting a specific tax increase or decrease b. Predicting the return on investment for a rental property c. Recommending specific investments d. Writing contract addenda or additional provisions that cover unfamiliar circumstances

What is the key difference between assignment and novation of a contract? a. Assignment releases the original party from all obligations, while novation does not. b. Individual contracts must specifically allow novation, but not assignment. c. Novation is disallowed in many states, while assignment is not. d. Novation releases the original party from all obligations, while assignment does not.

What is true of dual agency disclosure in Minnesota? a. It isn't needed since the agency disclosure form explains dual agency. b. It isn't required since dual agency isn't allowed. c. It's only required if the transaction is more than a certain amount. d. It's required for all parties to a potential dual agency residential transaction.

What must you do to convert a percentage to a decimal number? a. Divide the smaller number by the larger number. b. Divide the top number by the bottom number. c. Move the decimal point right two spots and add a percent symbol. d. Move the decimal point two places to the left and remove the percent symbol.

What problems can a VA loan pose in the approval process? a. Hefty down payment requirements b. High interest rates c. Mortgage insurance requirement d. Prohibition against buyer-paid repairs

What special concern do foreclosed properties often present? a. Buying the property at a discount may have tax implications. b. The homeowners may or may not have property insurance. c. The property sale may be subject to additional fees that will be passed to the new buyer. d. There could be hidden title issues.

What's a marketable title? a. A title that a relative has gifted b. A title that has been granted by public grant c. A title that is about to go on the market d. A title that is clear and free of encumbrances

What's another name for an escrow account? a. Closing fund b. Locked account c.Savings account d. Trust account

What's the purpose of PMI? a. Insure the dwelling in the case of fire, flood, or other natural disasters b. Prevent the lender from having to provide the property insurance itself c. Protect the borrower from being defrauded d. Protect the lender in case of borrower default when the borrower has put down less than 20%

When can a Minnesota licensee deposit personal funds into a trust account? a. Never; this would be a trust fund commingling violation. b. When the amount of personal funds deposited is the exact amount of the minimum balance. c. When the amount of personal funds deposited is the exact amount of the service charge owed. d.When the personal funds deposited are explicitly identified as either paying a service charge or maintaining a minimum balance.

Which Minnesota law protects its dwindling wetlands? a. The Minnesota Environmental Policy Act b. The Minnesota Pollution Control Act c. The Minnesota Right to Farm Act d. The Wetland Conservation Act

Which of the following actions concerning tenant rights should real estate licensees take? a. Advise landlords on their rights and responsibilities under law. b. Advise tenants on their rights and responsibilities under the law. c. Ignore tenant rights. d. Learn and understand tenant rights

Which of the following actions would violate the Minnesota statute related to trust account requirements? a. Disbursing trust funds upon cancellation of a residential purchase agreement b. Disbursing trust funds upon court order c. Disbursing trust funds upon written agreement between the parties d. Disbursing trust funds upon written request of the buyer

Which of the following best describes a listing agreement? a. A legally binding, oral contract between a property seller and a listing agent b. A legally binding, oral contract between a property seller and a listing broker c. A legally binding, written contract between a property seller and a buyer broker d. A legally binding, written contract between a property seller and a listing broker

Which of the following best describes a sales contract? a. A legally binding, oral contract between a property's potential buyer and a listing agent b. A legally binding, oral contract between a property's potential buyer and seller c. A legally binding, written contract between a property's potential buyer and a listing agent d. A legally binding, written contract between a property's potential buyer and seller

Which of the following best describes the listing agreement's purpose? a. To identify the terms of a sales transaction between the seller and the buyer b. To identify the terms of the buyer agent/seller agency relationship c. To identify the terms of the landlord/tenant relationship d. To identify the terms of the listing agent/seller agency relationship

Which of the following definitions best describes a consumer? a. Someone who is involved in a transaction but represents neither party b. Someone who's hired to act on behalf of a client c. Someone who's in a position of trust and loyalty d. Someone who uses or purchases a product or service

Which of the following fiduciary duties is owed to both clients and customers? a. Accounting b. Confidentiality c. Obedience d. Prompt presentation of all written offers and counter-offers

Which of the following is true about easements appurtenant? a. Only the dominant estate may terminate an easement. b. Parcels with easements may not be joined. c. The necessity of an easement by necessity could be terminated even if the reason for the necessity still exists. d. They can be terminated if dominant and servient lands are merged into one parcel.

Which of the following statements about escheat is true in Minnesota? a. The city has the right to exercise the power of escheat. b. The county has the right to exercise the power of escheat. c. The state does not exercise the power of escheat. d. The state has the right to exercise the power of eschea

Which of the following statements about escrow accounts is correct? a. An escrow account is a temporary account that's opened for use with a single transaction and closed after the transaction closes. b. An escrow account is held by either the buyer or seller, and houses the buyer's earnest money until closing. c. Escrow accounts are managed by brokerage firms, and hold funds used to pay operating expenses and agent commissions. d. Escrow accounts are managed by escrow agents, and are used to hold funds belonging to others, such as earnest money deposits.

Which of the following statements best describes a listing that terminates by performance? A. Evan performed all required fiduciary duties and tasks in listing Von's house, even though it didn't sell before the listing expired. B. 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. C. Marty listed Todd's condo. With Marty's efforts they got almost to closing only to have the buyer's financing fall through. D. Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

Which of these actions violates the NAR Code of Ethics? a.Including the brokerage name and main phone number, in addition to a licensee's own name and phone number, on an advertisement b. Making a reasonable effort to ensure all parties to a written agreement have a copy of the agreement c. Preparing a written agreement that accurately states a purchase price d. Preparing a written agreement that falsely states a purchase price

Which of these is an example of antitrust violations common to real estate? a. Fraud, concealment, and misrepresentation b. Profiteering, racketeering, and domineering c. Puffery, hyperbole, and exaggeration d. Tie-in arrangements, market allocation agreements, and group boycotting

Which one of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements? a. The contract can't close. b. The contract is unenforceable in court. c. The contract is void. d. The contract is voidable.

Which statement most accurately describes a licensee's responsibility related to written offers on their listing, according to the NAR Code of Ethics and Standards of Practice? a. A licensee is only required to present formal written offers that are equal to or more than the listing price. b. A licensee is only required to present formal written offers within a certain range of the listing price of the property. c. All formal written offers received by the licensee must be presented to the owner, unless the owner has accepted a previous offer. d. All formal written offers received by the licensee must be presented to the owner until closing or execution of a lease, unless the client waives this obligation in writing.

Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student's mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation? a. Because a minor can't enter into a contract, the student's parents are legally obligated to uphold the student's obligation under the contract. b. Because a minor can't enter into a contract, this contract is void and the neighbor could be subject to legal action if the authorities were alerted. c. Because this contract binds the student to an obligation that's legal for a minor to perform (mowing lawns), the contract is valid and enforceable. d. If the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter.

You've just helped Maribella and Antonio Vega purchase a new home. Which of the following should be recorded to ensure that someone else doesn't try to claim ownership of the same property? Certificate of occupancy Deed Purchase agreement Title

Deed

A ________ is a limitation on the use of land that appears in the deed itself. Building permit Deed restriction Doctrine of laches Restrictive covenant

Deed restriction

According to the Minnesota standards of conduct, which of the following is a requirement for any guaranteed sale program? Brokerages must have a minimum number of licensees to participate. Details about profit disbursement must be disclosed up front. It should last no longer than six months. Property sales can't legally make a profit.

Details about profit disbursement must be disclosed up front.

Which of the following actions would violate the Minnesota statute related to trust account requirements? Disbursing trust funds upon cancellation of a residential purchase agreement Disbursing trust funds upon court order Disbursing trust funds upon written agreement between the parties Disbursing trust funds upon written request of the buyer

Disbursing trust funds upon written request of the buyer

Of the fiduciary duties an agent owes to a client, which one was left out of the following string: loyalty, care, obedience, confidentiality, accounting? Disclosure Disobedience Lawfulness Skill

Disclosure

LaTonya's aunt left her a bungalow on the outskirts of the city. For many years, it was the place for family holiday gatherings, and LaTonya's sister was even married there. That's why her family is so upset to learn that she plans to sell the bungalow as soon as she gets it cleaned out. Which real property right allows her to sell the property? Control Disposition Exclusion Possession

Disposition

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 Gross Prescriptive Servient

Dominant

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

Which of the following is an advantage of living in a PUD or MUD? Easy access to amenities Higher density of people No nearby businesses Reduced noise, compared to the suburbs

Easy access to amenities

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? Easement in gross Encroachment Servient estate Visible easement

Encroachment

Sam decided to build a swimming pool in his yard. He built it one foot inside his neighbor's property. What is this an example of? Easement Eminent domain Encroachment Necessity

Encroachment

Real estate sales contracts must be valid, express, bilateral, ______, and executed or executory. Enforceable Oral Unenforceable Voidable

Enforceable

A home equity line of credit (HELOC) is based on the homeowner's available ______. Cash Credit Equity

Equity

Which power is used by the government upon the death of a property owner when no will, heirs, or creditors can be found? Eminent domain Escheat Police power Taxation

Escheat

Non-lawful possession after the expiration of a lease is called ______. Estate at sufferance Estate at will Estate for years Leasehold estate

Estate at sufferance

Which of the following describes an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other? Estate at will Estate for years Leasehold estate Life estate

Estate at will

In which of the following types of contracts has one or more of the contract's terms yet to be completed? Bilateral contract Executed contract Executory contract Unilateral contract

Executory contract

Which type of easement is created with a specific written agreement between two landowners, often through a deed? Easement by condemnation Easement by necessity Easement by prescription Express easement

Express easement

Lauren obtained a loan that's insured and that only required a down payment of 3.5%. Which of these is most likely the type of loan Lauren has? Conventional FHA Home equity line of credit VA

FHA

Lydia put the minimum 3.5% down on her $210,000 home. She'll have to pay an MIP. What type of loan does Lydia have? Conventional FHA Standard

FHA

Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and also weeks 40 and 41. These weeks are inheritable. What type of ownership is this? Estate for life Fee simple Leasehold estate Periodic estate

Fee simple

In general, a person in a position of loyalty and trust is a(n) ______. Attorney-in-fact Client Fiduciary Mortgage lender

Fiduciary

Bob and Sandy want to build a small retirement home with water views. They've identified several large tracts of land for sale that are adjacent to the river. They reviewed surveys that were done when the property was placed on the market earlier in the year. One area of the property is prohibited from any residential construction. This area is likely a ________. Coastal zone Flood plain Floodqway

Floodway

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 buyer's agent Her title insurance Seller credits Seller disclosures

Her title insurance

Which of the following describes a contract that exists based not on words, but on the parties' actions or behaviors? Executed Executory Express Implied

Implied

If you sell mineral rights to your land, which easement type describes the assumption that you'll grant the company access to your land, allowing it to bring in equipment and excavate the minerals? Easement by necessity Easement by prescription Express easement Implied easement

Implied easement

The client owes the agent the primary duties of compensation, information, ______, and availability. Immunity Indemnification Ingenuity Initiative

Indemnification

Which of the following is a possible title issue with a real estate owned transaction? Evictions of existing tenants Foreclosure process delays Internal audit delays

Internal audit delays

Katherine is a buyer in Minnesota. She made an offer on a property and provided earnest money payment on Tuesday. The seller accepted the offer on Wednesday. What happens to Katherine's earnest money? It must be deposited by Friday. It must be deposited by Monday. It must be deposited by Thursday. It must be returned to Katherine by Thursday.

It must be deposited by Monday

What is true about group or team advertising in Minnesota? It's allowed with broker approval. It's illegal in all situations. It's limited to once per quarter. It's permitted in certain fonts.

It's allowed with broker approval

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? Estate in severalty Joint tenancy Tenancy by the entirety Tenancy in common

Joint tenancy

Which ownership type is defined by four unities: time, title, interest, and possession? Freehold estate Joint tenancy Tenancy by the entirety Tenancy in common

Joint tenancy

Obviously, you can't lawfully convey something unless the parties agree on what's being conveyed. How is that determined? Acknowledgment Consideration Conveyance Legal description

Legal description

There are several essential elements to a deed. Which of the following must be included in a deed? Both the grantee's signature and the legal description Grantee's signature Haberdasher clause Legal description

Legal description

What type of rights to the property does a Minnesota seller have during the contract for deed process? Equitable title rights Legal title rights Partial title rights Restricted title rights

Legal title rights

Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time. Efficiency Fairness Limitations Timeliness

Limitations

What's the term for a title examination that searches title history going back fewer than 60 years? Correction deed Limited search Title examination Title report

Limited search

Which practice involves talking the consumer into refinancing over and over so a lender can charge fees? Loan flipping Poison lending Premeditated lending Turnover lending

Loan flipping

Which fiduciary duty requires agents to put their client's interests ahead of all others? Confidentiality Disclosure Loyalty Reasonable skill and care

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 Lucas and Tom Lucas, Monique, and Amy Lucas, Tom, Amy, and Monique

Lucas and Tom

Regular home financing is not available for this type of dwelling. Condominium Manufactured home Modular home Single-family home

Manufactured home

Which type of antitrust violation occurs when real estate firms agree to divide their market so they don't compete with one another? Group boycotting Market allocation Price fixing Tie-in arrangements

Market allocation

What type of zoning applies to MUDs and PUDs? Agricultural Commercial Mixed-use Residential

Mixed-use

Adam lives in an apartment above his friend's café. Adam lives in a ________. Converted apartment Duplex Mixed-use development Planned unit development

Mixed-use development

Which method of involuntary alienation involves accession, accretion, reliction, or avulsion? Adverse possession Descent Natural processes Regulatory taking

Natural processes

Which type of lease is one in which the tenant pays the rent and some expenses related to the property (e.g., maintenance) separately? Graduated Gross Net

Net

How are real estate-related prorations usually calculated? On a 12-month basis On a 360- or 365-day basis On a 52-week basis On a quarterly basis

On a 360- or 365-day basis

In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. This is an example of _______. A void contract Contract execution Legal purpose Partial performance

Partial performance

If a community isn't growing in an orderly fashion, which local land use group is likely at fault? Downtown business association Planning board PTA Zoning board of appeals

Planning board

Subdivision development is often guided by how the land is zoned, and also by the subdivision regulations set forth by the ______. County clerk Department of health Department of state Planning commission

Planning commission

A consumer is moving to a new area and uses social media to try to line up a real estate professional to help him find a new home. He asks how much he'll need to pay his licensee. One firm he contacts tells him that all licensees in the area charge at least 2%. What antitrust violation does this imply? Group boycotting Market allocation Price fixing Tie-in arrangements

Price fixing

According to the DOJ, an agreement to establish or adhere to uniform price discounts is a type of which antitrust violation? Group boycotting Market allocation Price fixing Tie-in arrangements

Price fixing

According to the U.S. Department of Justice, which type of antitrust violation is an agreement between competitors to eliminate discounts to all customers or certain types of customers? Group boycotting Market allocation Price fixing Tie-in arrangement

Price fixing

Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first? Credit card balance Medical bills Property taxes Student loan

Property taxes

An inheritable freehold estate that's a fee simple defeasible (where the grantor can reclaim ownership) is also known as ______. Fee absolute Fee simple Qualified fee Tenancy at will

Qualified fee

The fiduciary duty of ______ requires licensees to provide both clients and customers with quality, knowledgeable, and prudent service, and live up to the trust placed in them. Confidentiality Loyalty Obedience Reasonable skill and care

Reasonable skill and care

What's a charge that state and local government agencies assess for legally recording deeds, mortgages, and documents related to a home loan? Agency fees Deed fees Mortgage charges Recording fees

Recording fees

A ______ is a limit placed on a private owner's use of land. Building permit Deed restriction Doctrine of laches Restrictive covenant

Restrictive covenant

A requirement that all property owners in a subdivision have a six-foot privacy fence surrounding their entire property is an example of a _______, Deed Doctrine of laches Restrictive covenant Setback

Restrictive covenant

Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______. Developer standards New build standards Restrictive covenants Restrictive standards

Restrictive covenants

A loan that's offered based on a homeowner's equity in which funds are drawn over time and the bank gains corresponding property ownership is called a ______. Home equity line of credit Home equity loan Renewed annual mortgage Reverse annuity mortgage

Reverse annuity mortgage

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? Brandon Greta Nelson Rigby

Rigby

In a seller agency relationship, whom does the licensee represent? Both the seller and the buyer The broker The buyer The seller

Seller

With a land contract, who retains the title to the property? Beneficiary Buyer Seller

Seller

When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent? Designated General Special Universal

Special

Which option describes a real property tax lien? General and involuntary General and voluntary Specific and involuntary Specific and voluntary

Specific and involuntary

Loans made to high-risk borrowers, at higher interest rates and with higher fees, are ______. Highly qualified loans Prime loans Secondary loans Subprime loans

Subprime loans

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

A Minnesota homeowner decides to homestead his property. What's the advantage? Additional services Historic registry Increased value Tax benefits

Tax benefits

When homebuyers agree to open an escrow account for their mortgage, the mortgage lender uses that money to pay ______. Escrow fees Insurance and principal Taxes and insurance Taxes and principal

Taxes and Insurance

Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. The most likely form of co-ownership under which they would make this purchase is ______. Estate in severalty Joint tenancy Tenancy by the entirety Tenancy in common

Tenancy by the entirety

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? Estate in severalty Joint tenancy Tenancy by the entirety Tenancy in common

Tenancy in common

In reference to a real estate transaction, which of these terms does NOT refer to the process in which title is actually conveyed and proceeds disbursed? Closing Consummation Settlement Termination

Termination

The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of 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

If there's no state or local building code to cover a specific situation, what code must the builder abide by? The Builder Code of 1912 The builder's own The Development Code of 1986 The federal building code

The federal building code

Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract? The parol evidence rule The statute of frauds The statute of limitations The statute of oral evidence Question 4

The parol evidence rule

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? Legal purpose Offer and acceptance The law of contracts The statute of frauds

The statute of frauds

A licensee is trying to drum up business for a friend's mortgage company. She offers to discount her commission rate if her clients use her friend's mortgage company for their financing. What is this an example of? Group boycotting Market allocation Price fixing Tie-in arrangement

Tie-in arrangement

A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a _______. Co-op Foreclosure unit Rental property Timeshare property

Timeshare property

Vicky and Lee vacation in Cancun, Mexico, every year. They purchased the right to stay in a beach condo for the first two weeks in May, and their agreement continues for the next 10 years. They don't actually own the unit. What did they purchase? Condo estate Cooperative unit Timeshare estate Timeshare use

Timeshare use

Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______. Buyer Trust Fund Litigation Seller guarantees Title insurance

Title insurance

Hank leases 150 acres from Sara and Jesse. He has an option contract attached to his lease, with an option to purchase that can be exercised within the next two years. What type of contract is this? Bilateral Executed Unilateral

Unilateral

You receive an offer in the mail that says you're eligible to win a cash prize if you place some stickers on a form and return it to the sender. What type of contract is this? Implied contract Invalid contract Unenforceable contract Unilateral contract

Unilateral contract

Sgt. Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a home with no money down. What loan option seems like the best fit? Conventional FHA FHA, VA, or conventional VA

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it? Executed Illegal Void Voidable

Voidable

What's true about getting a real estate license to sell subdivided lands in Minnesota? A. A special subdivision sales license process is in place. B. Licenses are only needed to sell timeshare interests. C. Subdivision developers can distribute a limited number of licenses to employees. The normal real estate license process applies.

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 When her mortgage is approved Within 10 days of the home inspection Within six months of closing

When conditions are met at closing

Victor bought a property from Yolanda for $200,000. Under the terms of a land contract, Victor agreed 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? A trustee Victor Victor's beneficiary Yolanda

Yolanda

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