Real Estate Practice 2

Trent is a licensed salesperson who currently lives and does business in Louisiana. If Trent wants to get a non-resident's license in Mississippi, what is the first thing he'll need to do?

Affiliate with a resident or non-resident Mississippi broker.

Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?

Against encumbrances

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

Basement leaks

If you fail to disclose dual agency, you may ______.

Be disciplined in a number of ways, ranging from a reprimand to financial penalties, jail time, and possibly a civil lawsuit

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

What type of notice results from publicly recording a title transfer?

Constructive notice

One of the following licensee's actions would constitute commingling. Which is it?

Cynthia deposited her client's earnest money check into the firm's operating account.

Which of the following statements best describes a listing that terminates by performance?

Roberto listed a property for Terrence. After two failed offers, the property made it to a successful closing.

Rusty received an acceleration letter from his mortgage lender. What is the most likely reason for receiving this letter?

Rusty is two or three months in default.

Which type of lender specializes in taking in savings deposits and then lending money out to consumers through mortgages and other loans?

Savings and loan

If a private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply?

Single-family housing sold or rented without the use of a broker

The economic principle that tells us that when supply goes up, price goes down is also called ______.

Supply and demand

In Mississippi, the sale and use of personal identifying information, such as Social Security numbers, geolocations, and internet activity, are protected under what legislative policy?

The Mississippi Consumer Data Privacy Act

Which of the following parties is taking an appropriate action to avoid misrepresentation?

The seller has an inspector verify the roof's condition, and performs repairs based on what the inspector recommends.

Which of the following statements about broker-salespersons in Mississippi is TRUE?

They must NOT act independently as brokers.

What's the capitalization formula used in the income approach?

Value = net operating income ÷ cap rate

Which of the following best describes a broker's supervisory requirements?

Varied

What type of measurement is used with three-dimensional shapes?

Volume

Are landowners ever permitted to use their property for a purpose inconsistent with zoning ordinances?

Yes, a variance or special use permit may be allowed.

What's an up front charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires?

Discount point

Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests?

Exclusion

Justin is representing the seller in a transaction. Which of the following tasks is he permitted to perform for the unrepresented buyer as a non-agent?

Explain to a buyer the purpose of the seller's property disclosure.

Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?

FHA, VA, or conventional

Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under what federal law?

Fair Housing Amendments Act of 1988

Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements.

Farm Service Agency

Brenda represents Tina in a real estate transaction. Brenda therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care.

Fiduciary

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?

Financing terms and cash equivalency

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

Finding properties to show to Fred and Regina

Sellers who are reluctant to fill out a property condition disclosure statement need to know that ______.

Full disclosure will offer more protection from liability lawsuits

In the Mississippi real estate industry, to what does the phrase, "money belonging to others," refer?

Funds handled on behalf of a client

Which one of the following applicants meets the experience requirements for a broker's license in Mississippi?

Holly has been working as a licensed salesperson for the last three years.

Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from familial status discrimination?

Housing for Older Persons Act of 1995

Victor is a listing agent and has received three offers for his client's home. In order to comply with his fiduciary duties, Victor must present the offers to his client ______.

In a timely manner

What does the parol evidence rule state?

In most cases, a written agreement is the final and comprehensive expression of the parties' agreement. It generally prohibits introducing oral or written evidence that contradicts that agreement.

You're a new licensee who's thrilled to be working with five different buyer clients. Under what circumstances is it appropriate for you to determine the earnest money amount for your clients?

In none of these circumstances

Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan's property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?

Legal descriptions of both properties

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

If your clients are in a competitive bidding situation and want to include multiple contingencies in their offer, what should you say to them?

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

The Simpsons are buying the Martins' 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.

$1,997.62

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

$3,200

A small duplex sold for $550,000. Each unit can gross $2,500 in monthly rent for the owner, and there are no additional income sources from the property. What's the GRM?

110

How many hours of pre-licensing education does Mississippi require broker applicants to complete?

120

Which of the following wouldn't need to be disclosed by the listing agent who noticed it when selling a home?

A kitchen cabinet that was installed at a slight angle

Samantha makes an offer to buy Dirk's home, and he accepts it. Under the terms of the agreement, Samantha is supposed to put down an earnest deposit of $15,000. However, she only puts down $10,000. Dirk accepts the lesser deposit, and the sale is ultimately finalized. Of what is this an example?

Accepting partial performance

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

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

In the rectangular survey system, what is a base line?

An east-west line used as a reference point

Which of the following refers to rights that come with the land?

Appurtenance

Among other things, what should a listing in the MLS always include?

At least one photo

Which one of these situations represents the illegal practice of redlining?

Based on the neighborhood's demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.

Which act was the first to prohibit any exceptions for discrimination based on race or color?

Civil Rights Act of 1866

Which of the following is a supervising broker responsible for monitoring?

Completion of continuing education requirements

Jerry is holding an open house for a property he has listed. He speaks to several visitors, but none of them discuss making an offer. What are these visitors called?

Customers

Woodrow helps his neighbor sell his home by assisting with negotiations. He receives no compensation for his assistance. Based on this one transaction, Woodrow ______.

Doesn't need a real estate license

Which of the following is a life estate in property held by a widow?

Dower

What is it called when one party has the right to use land owned by another party for a special purpose?

Easement

Regarding restrictive covenants/deed restrictions, to what does the doctrine of laches refer?

Enforcement

Non-lawful possession after the expiration of a lease is called ______.

Estate at sufferance

Why is the buyer usually responsible for the largest portion of closing costs?

Expenses related to the mortgage loan and down payment make up the majority of the closing costs.

Basement wall cracks and leaks can be indicators of ______ problems.

Foundation

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He's able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Guaranteed loans

Which economic characteristic of land contains the concept that a land's value can be affected by the changes made to it, such as construction of buildings or fences?

Improvements

Which approach to finding value would licensed appraiser Christina probably weigh most heavily when appraising a three-unit rental property?

Income

In the early years of a mortgage loan term, which portion of the payment is likely to be the largest?

Interest

If the land is described as "Lot 6 of Block 3 of the East Subdivision plat as recorded in Map Book 18, Page 11 at the Recorder of Deeds," what type of legal description is being used?

Lot and block

Which of the following is prohibited under federal fair housing laws?

Offering different terms, conditions, or privileges based on protected class status

Henry is Monica's listing agent. As Monica's agent, Henry has a duty to account for and properly handle her funds and ______.

Paperwork

Adams County implemented a 10 p.m. curfew for youths under age 18 because of the high number of fights that have been occurring late at night in public places. Which of the following gives Adams County the right to restrict the movements of its minor citizens?

Police power

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Preliminary report

When representing the seller, what duty do you owe a buyer?

Present offers from the buyer to your seller.

Sellers in Mississippi must complete which disclosure form that is divided into nine sections and addresses the property's condition?

Property Condition Disclosure Statement

Kyle owns six acres of land with 400 feet of river frontage. He wants to build a beach along the river bank to make it easier to swim in the river. He can do this because as the owner of river frontage, he has ________ rights.

Riparian

Your buyer client Christine asks you when she'll have to pay the transfer tax. What do you tell her?

She'll pay it at closing.

Salesperson Dahlia is representing a seller on behalf of her broker, Leo. Salesperson Ken is representing a buyer on behalf of his broker, Stefani. Dahlia's listing agreement provides for compensation to the buyer's agent in the transaction. From whom will Ken receive his compensation?

Stefani

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?

Termination

When the listing agreement's purpose has been fulfilled, what happens to the agency agreement?

The agency agreement terminates by completion.

Marcy's offer on a home was accepted! Which party will be contacting her about arranging an appraisal?

The lender

What type of agreement accounts for commission to be paid and includes the seller's permission for marketing the property?

The listing agreement

Caitlin needs to pay for some routine maintenance to one of the units in her apartment complex. Which bank account should she use?

The operating account for that specific apartment complex

Mark and his wife, Amy, were looking to purchase a new construction home in a subdivision outside Biloxi. Mark asked their agent when they can expect to receive the initial property condition disclosure statement. What should the agent tell Mark?

The statement should be provided to Mark and Amy prior to when they submit an offer.

What is the purpose of the title search?

To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances

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 one purpose of this document?

To provide the estimated closing costs for Lawrence's loan

Physical characteristics of land include its immobility, indestructibility, and ______.

Uniqueness

In contract law, when does partial performance occur?

When a party does some, but not all, of what the party has agreed to do

What is the most common way that asbestos enters the body?

When asbestos fibers decay or are disturbed, the friable particles can be inhaled.

Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare?

Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.

Maria would like to sell her own home. What's the minimum level of real estate licensure she must possess?

none

Cheryl wants new carpeting for her rectangular dining room. Her dining room is five yards by 10 yards. How much carpeting does she need to buy to cover her entire dining room?

50 square yards

What's the area of a triangle with a base of 14 cm and a height of 10 cm?

70 centimeters squared

If a buyer purchases real property that includes the unit in a building, all of the space in the unit, and shared ownership of the common areas in the building, what type of real estate did the buyer purchase?

A condo

Who may apply for a non-resident license in Mississippi?

Any licensee from another state

A property is co-owned by W, X, Y, and Z. When W dies, W's interest passes to co-owners X, Y, and Z. What type of co-ownership is described in this scenario?

Joint tenancy

Karen's house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?

It goes to Karen.

Adrian is a nonresident broker, and Kelly is a Mississippi resident broker. They signed a cooperative agreement to complete a transaction together. Where should any earnest money related to the transaction be kept?

It must be deposited into Kelly's trust account.

What's the purpose of the Community Reinvestment Act?

It requires that lenders invest in development and rehabilitation efforts that enable low- and moderate-income individuals and families to afford a home.

Avery, who holds a life estate with remainder interests, dies without heirs. When this happens, what happens to the property?

It reverts automatically to the person holding the remainder interest.

Jessie, the buyer's agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller's agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?

Jessie should disclose this to her buyer.

Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here?

Progression

The buyer you're working with doesn't want to enter into an agency relationship. However, the buyer begins to rely more and more on your advice and, indeed, implied agency has begun! You could have avoided this issue by providing appropriate disclosures, but now that you've created implied agency, what should you do?

Ratify the implied agreement by getting a signed agency agreement.

Performing brokerage services for the client means that agents can provide expert advice to their clients in which area?

Real Estate

Many E&O insurance policies have ownership exclusions. What does that mean?

The policy doesn't cover claims related to property that the insured or a related party owns or has a financial interest in.