CE Shop National Exam
Juan secures a fixed rate amortized 30-year loan for $295,000 at 4.25%. If his monthly P&I payment is $1,750, how much interest does he pay in the second month of the loan? $1,038.59 $1,042.29 $1,044.79 $1,750
$1,042.29 (In the first month, Juan pays $1,044.79 in interest ([$295,000 x .0425] ÷ 12) and paid the principal down $705.21 ($295,000 - [$1,750 - $1,044.79]). The next month, he pays $1,042.29 in interest ([$294,294.79 x .0425] ÷ 12).)
A buyer has a 15-year, $250,000 loan with a 5.5% interest rate. How much of the first monthly payment is interest? $1,145.83 $13,750.28 $1,388.89 $916.67
$1,145.83 ($250,000 x 0.055) ÷ 12 = $1,145.83
Phyllis bought a beach townhouse for $475,000 and put down $50,000 in earnest money. At closing, she paid $150,000, the balance of her intended down payment. The mortgage tax in the area is $.35 per $100 (or portion thereof). Calculate what Phyllis will pay for the mortgage tax. $1,137.50 $1,662.50 $700 $962.50
$962.50 (A mortgage recording tax is based on the loan amount. Phyllis will pay a mortgage tax amount of $962.50 on her loan amount ($275,000 x .0035).)
Generally, what's the common range for loan origination fees? 1% to 3% 1% to 5% 2% to 5% 3% to 5%
1% to 3%
A buyer anticipates a house payment of $1,000 per month, with monthly homeowner association fees of $150. The buyer also has a car payment of $400 per month. If the buyer earns a monthly gross income of $5,000, what is the total debt ratio? 20% 23% 28% 31%
31%
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? $1,093.13 $1,126.25 $874.50 $901
874.50 (The loan amount is $254,400 ($318,000 x .8). The first month's interest is $874.50 ([$254,400 x .04125] ÷ 12).)
Lance purchased a home, but he won't own any real estate—just shares in a corporation. This is because his new home is ______. A condo A condominium A cooperative A triplex
A cooperative
Rennie owns a 240-foot by 130-foot lot. How do you calculate the perimeter? Add the length and width and divide by two. Add two times the length to two times the width. Multiply 240 by 130. Multiply 240 by 130, then multiply by two.
Add two times the length to two times the width. (The perimeter equals the sum of the lengths of each side of the shape (240 × 2) + (130 × 2).)
Johannes must obtain a permit for a construction project that he is doing right next to a wetlands. Which federal law or regulation requires him to get the permit? Army Corps Construction Regulations Clean Water Act Coastal Zone Management Act Rivers and Harbors Act
Clean Water Act The Clean Water Act protects wetlands and other waterways.
Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do? Create a contract addendum with the required language. Create a contract amendment with the required language. Create a counter-offer to present to the buyers. Terminate the contract on Becky and Don's behalf.
Create a contract amendment with the required language.
Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title? As long as the chain of title is traceable for at least the past 30 years, Mario will have marketable title. Depending on his state's laws, Mario may have marketable title. Mario will have to perform his own research to find information necessary for repairing the broken link. Unless the chain of title can be tracked back to its beginning, Mario won't have marketable title.
Depending on his state's laws, Mario may have marketable title.
Morgan has agreed to sell his home to Dierks, and they've signed a contract. Which of these actions moves the contract from executory to executed? Dierks delivers the earnest money to Morgan's broker. Dierks's lender approves the mortgage loan. Dierks's lender funds the loan and closing takes place. Morgan completes the inspection repairs that Dierks requests.
Dierks's lender funds the loan and closing takes place.
Which of the following is a common problem with roof shingles? Clean fascia Discoloration or curling Soffit without holes Water buildup and ice damming
Discoloration or curling
Which type of deed conveys real property from a decedent's estate to a buyer? Deed in trust Executor's deed Quitclaim deed Referee's deed
Executor's deed
Which entity services rural development loans? FNMA FSA GNMA HUD
FSA (The Farm Service Agency, an agency of the USDA, administers this program.)
Local authorities lack police power over which of the following? Budgeting Federal government construction projects Subdivision development Zoning
Federal government construction projects
A poor floor plan is an example of which type of depreciation? External depreciation Functional obsolescence Incurable depreciation Physical depreciation
Functional obsolescence (Functional obsolescence is a form of depreciation or loss in value caused by defects in design.)
Prior to the ______, there was no legal protection for women who endured sexual harassment from landlords and sellers when they attempted to obtain housing. Civil Rights Act of 1866 Fair Housing Amendments Act of 1988 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974
Housing and Community Development Act of 1974
Christy found a property that was For Sale by Owner and made an offer. The seller accepted Christy's offer, but neither of them knew how to proceed. Licensee Zelda helped Christy complete the necessary purchase documents and walked her through the process. What kind of agency exists? Confirmed agency Express agency Implied agency Verbal agency
Implied agency
Which of these is an example of severability? Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force. Mark's contract with Reuben states that either party may sever the contract if any contract term is only partially performed. Misty's lease agreement with Thomas contains a provision that permits her to sever the lease if Thomas doesn't remodel the apartment as promised. Ricardo and Timothy are under contract in the sale of Ricardo's office building. Ricardo's tenant leases gives him the option to sever the lease agreements upon sale of the building.
Jules and Katrina are under contract for the purchase of Katrina's house. A dispute arises over some contract terms, and they end up in court. The court rules one of the terms invalid but leaves the remainder of the contract in force. (Severability refers to the concept that a court can strike down one or more contract terms whiile leaving the remainder in place.)
Joan and Martha are entering into an 18-month lease with landlord Roger. Which of these statements is true? All lease agreements must be in writing to be enforceable. An 18-month oral lease is enforceable. It's illegal for leases to cover terms of more than one year. Leases for periods of more than one year must be in writing.
Leases for periods of more than one year must be in writing.
Which of the following is a true statement about police power and public land use controls? Government agencies may exercise police power only when it does not restrict the freedom of its citizens. Local governments and their planning boards control budgeting, site-plan review, and building codes. Planning, zoning, and subdivision development are primarily controlled at the state level. Police power is citizens' rights to police themselves.
Local governments and their planning boards control budgeting, site-plan review, and building codes.
John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which? Market or sales comparison The capitalization method The gross income multiplier The gross rent multiplier
Market or sales comparison
Which of these is an example of bulk zoning? Greenville developers must adhere to specific design parameters for construction within the city's downtown area. Misty Falls restricts building any structure within 15 feet of a roadway. Oak City developers must include subdivision open space proportionate to the overall development acreage. Rushton city council members approved the location of a light industrial building within a currently-zoned agricultural area.
Misty Falls restricts building any structure within 15 feet of a roadway.
Taxes, insurance, and maintenance are property expenses that are sometimes covered in a tenant's lease payment. These are collectively referred to as the ________. Doubles Extras Nets Utilities
Nets
Maxine is purchasing a small craft shop, including the underlying real estate. She applies for a commercial loan from her federally insured bank to complete the purchase. Is Maxine's transaction covered by the Real Estate Settlement Procedures Act? No; commercial and business loans are exempt from RESPA requirements. No; RESPA only applies to loans obtained from private lenders. Yes; all loans secured by real estate are subject to RESPA requirements. Yes; because she obtains the loan from a federally insured financial institution, the loan is subject to RESPA requirements.
No; commercial and business loans are exempt from RESPA requirements.
Two essential elements of a deed are the ______. Habendum clause and the habeus corpus clause Signature of the grantee and the habendum clause Signature of the grantor and the habendum clause Signature of the grantor and the signature of the grantee
Signature of the grantor and the habendum clause (Only the grantor's signature is required, not the grantee's. The habendum clause is required only if the deed is conveying less than a fee simple estate.)
Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this? Specific time Statute of limitations Time is of the essence Time of performance
Statute of limitations
Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who's just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn't good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel's now stuck with a $400,000 mortgage. What type of scheme is this? Equity skimming Inflated appraisal Silent second Straw buyer
Straw buyer
Which amendment to CERCLA says that "innocent landowners" aren't responsible for clean-up of hazardous contamination? Environmental Responsibility Amendment Hazardous Contamination Amendment Superfunds Amendments and Reauthorization Act The Fair Housing Act
Superfunds Amendments and Reauthorization Act (The Superfund Amendments and Reauthorization Act, or SARA, says that innocent landowners aren't responsible for clean-up of hazardous contamination.)
Which type of pest may make mud tubes—tunnels that run along your walls—or shed tiny wings? Carpenter ants Fire ants Powder post beetles Termites
Termites
The federal Government in the Sunshine Act is part of what? The first amendment The Freedom of Information Act The Sarbanes-Oxley Act The SPEECH Act
The Freedom of Information Act
Marketo Building Designs is selling the air rights above its office building. The lot is 450 feet by 350 feet. How would you determine the air lot height in order to calculate the area? The area of an air lot can't be calculated because the height is unlimited. The city or other governing authority establishes the air lot's height. The height of all air lots is 500 feet above the existing structure. The height of the air lot is equal to the height of the structure under it.
The city or other governing authority establishes the air lot's height.
Developer A has a project planned that does not conform to the community zoning regulations of the community, and wants to make a change request. Which local land use group would the developer ask, and for what? City council for a special use permit Planning board for a special use variance permit The town board for a variance The zoning board of appeals for either a variance or a special use permit
The zoning board of appeals for either a variance or a special use permit
Your client, Darnell, is interested in buying a rental property that has current tenants. He plans to rent the property to friends the month after he buys it. Which of the following statements is true and could affect Darnell's decision to buy the property? As the new owner and landlord, Darnell has the right to terminate the lease so his friends can move in. As the new owner, Darnell can change the lease term so that the current tenants have to leave 30 days before his friends to move in. If the existing tenants pre-paid the rent for a year to the former owner, they will also have to pay rent to Darnell. Unless stated otherwise in the lease, the existing tenants usually have the right to retain possession of a property, even if it's sold during their lease term.
Unless stated otherwise in the lease, the existing tenants usually have the right to retain possession of a property, even if it's sold during their lease term.
Picture a drawing of a section of land. Where is Township 1 located? Lower left (SE) corner Lower right (SW) corner Upper left (NW) corner Upper right (NE) corner
Upper right (NE) corner
Which of these professional activities is NOT covered by the Fair Housing Act? Jonah's real estate firm provides single- agency brokerage services to clients. Marsha, a landlord, owns several multi-unit buildings and rents one or more units daily. Michael is in charge of marketing for his real estate brokerage firm. Vickie's staging company works with investor clients to stage vacant properties.
Vickie's staging company works with investor clients to stage vacant properties. (The federal Fair Housing Act doesn't impact third-party providers who don't engage in real estate, financing, or appraisal services, though other anti-discrimination laws prevent businesses from discriminating.)
Savvy's buyer client made an offer on a property but is having second thoughts. Savvy tells her client that she'll ask the seller's agent for an extension on the inspection period "to gather more bids," and use that time to look at other properties to avoid losing out on the current property. Savvy's client found a property she liked better, so they made an offer. The offer was accepted, so Savvy contacted the first property's agent to terminate that offer. Is this wrong? No, she acted in her client's best interest. No, she fulfilled her duty of loyalty to her client. Yes, she broke a contract. Yes, she did not treat the other party honestly, or act in good faith.
Yes, she did not treat the other party honestly, or act in good faith.
A buyer with a 20-year, $419,000 loan at a 4.25% interest rate has a monthly principal and interest payment totaling $2,594.59. If $1,483.95 is interest, how much is applied toward principal each month? $1,110.64 $1,246.10 $1,578.57 $1,780.75
$1,110.64
Nico is buying a home for $625,000. His earnest money deposit is 8%. He wants to avoid private mortgage insurance (PMI) on his conventional loan, and he owes 5% in closing costs. How much money should he bring to closing? $106,250 $156,250 $31,250 $81,250
$106,250 (Conventional loans often require 20% down to avoid PMI ($125,000), and Nico has paid a $50,000 deposit ($625,000 x .08). Closing costs are $31,250 ($625,000 x .05). He needs $106,250 to close ([$125,000 - $50,000] + $31,250).)
Edric owes $115,000 on his lakefront home, which he's selling for $350,000. He's spent $73,000 in major renovations, and he wants to take that expense into consideration when he calculates how much he'll actually pocket at closing. What number does he come up with? $162,000 $235,000 $277,000 $308,000
$162,000 (Once Edric's loan is paid off, he'll be left with $235,000 ($350,000 - $115,000). When he subtracts the cost of the renovations, he's left with $162,000 ($235,000 - $73,000).)
A buyer with a $250,000 loan has a monthly principal and interest payment of $2,042.71. If $1,145.83 is interest, what is the new principal balance after the first payment is applied? $247,957.29 $248,854.17 $249,103.12 $250,000.10
$249,103.12 (If $1,145.83 of the total payment is interest, that leaves $896.88 to be applied to principal: $250,000 - $896.88 = $249,103.12.)
Alison and Brent are financing their house purchase of $232,500 with an FHA loan. Their credit score qualifies them for the minimum down payment. What do they need to put down? $10,462.50 $11,625 $6,975 $8,137.50
$8,137.50 (The minimum down payment for an FHA loan is 3.5%, so Alison and Brent's down payment needs to be $8,137.50 ($232,500 x 0.035).)
Which of these statements best represents what happens after a federal fair housing complaint is made? A fair housing specialist will review the complaint. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case. FHEO will contact the alleged perpetrator to gather information. HUD will review the complaint to determine if it's valid.
A fair housing specialist will review the complaint. (After an initial complaint is made, a fair housing specialist will review it to determine if a violation has occurred. If there's a potential violation, the specialist will help the consumer file an official complaint.)
What's a monument? 43,560 square feet A permanent land marker sometimes used in legal descriptions A point from which elevations are measured The subdivision of air above the land
A permanent land marker sometimes used in legal descriptions (Monuments are permanent land markers and are often used in the metes and bounds system.)
The element of a deed that signifies the grantor's intention to transfer title to the grantee is the ______. Act of conveyance Consideration Evidence of title Transference clause
Act of conveyance (This is the act of conveyance, which "conveys" the intention to transfer title.)
Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for? Acceptability of the fixture and agreement of the parties Adaptability of item and accessibility to the property Adaptability of item to land's use and agreement of the parties Allowable use and acceptable use
Adaptability of item to land's use and agreement of the parties
What does the Federal Trade Commission regulate? Advertising Commission disbursements Federal real estate transactions Listing trades
Advertising
What does the Federal Trade Commission consider to be an unfair ad? Any ad or business practice that causes or is likely to cause injury Any ad that is likely to mislead consumers acting reasonably under the circumstances Any ad that makes a health claim Any ad with a claim that's difficult to evaluate
Any ad or business practice that causes or is likely to cause injury (Any ad or business practice that causes or is likely to cause injury is considered an unfair ad, according to the FTC's Unfairness Policy Statement.)
Which of the following scenarios describes an example of unilateral rescission? A sales transaction falls through when Nora, the buyer, doesn't qualify for financing. Bobby, the buyer, makes an offer on a house that doesn't meet the appraisal contingency. He cancels the sale. Buyer Alice decides to join the Peace Corps. She and the seller mutually agree to cancel the sale, and the seller keeps Alice's earnest money. Sally, the seller, sells her property to two different buyers. Both buyers sue Sally for specific performance.
Bobby, the buyer, makes an offer on a house that doesn't meet the appraisal contingency. He cancels the sale. (A contract is rescinded when both parties agree to cancel the agreement and return both parties to their pre-contract position.)
Why is a foreclosure more likely to have title issues than a non-foreclosure? Borrowers who are in foreclosure are permitted to acquire unrecorded liens. Borrowers who can't afford loan payments may have taken out other loans against the property. Lenders are permitted to place secondary liens on property that's entering the foreclosure process. Lenders don't take appropriate precautions to maintain clear title.
Borrowers who can't afford loan payments may have taken out other loans against the property. (Borrowers who are unable to pay the mortgage may also have been unable to make property tax and secondary mortgage payments.)
One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______. Bulk zoning Commercial zoning Density zoning Residential zoning
Bulk zoning (These requirements are all indicative of bulk zoning, which may be seen in both commercial and residential areas, and which decreases density.)
Which legislative act prohibits certain types of electronic communication? CAN-SPAM NO-SPAM SPAM-CAN SPAM-JAM
CAN-SPAM
Which of these is a potential title issue with a foreclosure? Clouds on title Delays due to internal title audit Homeowner's right of equitable redemption Lengthy closing process
Clouds on title (Potential clouds on the title from unpaid taxes or other types of liens are more common with foreclosure properties than standard sales. While the right of redemption, delays for audits, and a longer process are also issues, they're not title-related.)
_______ is the principle that the more similar properties there are on the market, the lower the price will be driven. Competition Conformity Contribution Plottage
Competition
Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own? Apartment Condominium Cooperative Townhouse
Condominium (Ownership of a condo is real property ownership, but only of the unit and the space inside the unit, as well as shared ownership of common areas.)
Daniel had a great experience with his apartment and landlord until about three months ago, when the plumbing in the unit above started leaking into his apartment. The landlord keeps saying he'll fix it but hasn't, and now Daniel has mold growing on two walls. Daniel is moving out before his lease has expired, due to ________. Actual eviction Constructive eviction Mutual agreement Termination
Constructive eviction
Which of these is a violation of the RRP Rule? A homeowner performs DIY work in a home built prior to 1978. A seller of a home built in 1952 doesn't make the appropriate lead disclosures. Contractors from a home improvement store install windows or doors. Contractors perform renovations that disturb lead-based paint without holding proper certification.
Contractors perform renovations that disturb lead-based paint without holding proper certification. (The federal Lead Renovation, Repair, and Painting (RRP) Rule requires firms that do renovation or repair work in homes built prior to 1978 to be properly certified in using lead-safe work practices, but it doesn't prohibit DIY work.)
Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing? Averaging Bracketing Conformity Correlation
Correlation (Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.)
With the cost approach to value, what is the replacement cost? Cost of the materials used in construction Cost to build a functionally equivalent improvement Cost to build an exact replica of the subject, with the same materials and deficiencies Cost to buy the property
Cost to build a functionally equivalent improvement (The replacement cost reflects the cost to build a functionally equivalent improvement, as opposed to the reproduction cost, which is the cost to build an exact replica of the subject, with the same materials and deficiencies.)
Which of the following is a common element of a buyer representation agreement? Closing date Description of the property being sought Method of financing Property address (including legal description)
Description of the property being sought
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 (The dominant estate (or tenement) is the one that receives the benefit from the other owner, also called the servient estate.)
Which of the following could indicate a problem with the chimney flue or ventilation? Damage around the fascia Doors that won't open Drafts near the fireplace Holes in the soffit
Drafts near the fireplace
How are principal meridians and baselines used in the rectangular government survey system? All legal descriptions in this system use a single principal meridian and multiple baselines. A principal meridian separates each township from the next and baseline separates each tier from the next. Each legal description in this system originates at the intersection of a principal meridian and a baseline. The boundary formed by two principal meridians and two baselines forms a township.
Each legal description in this system originates at the intersection of a principal meridian and a baseline.
Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would lie, it was determined that he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. What type of easement is this? Easement appurtenant Easement by necessity Easement by prescription Easement in gross
Easement appurtenant
Gregory and Dianne are American citizens of Cuban origin, and when their home loan is denied, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin? Community Reinvestment Act Consumer Credit Protection Act Equal Credit Opportunity Act Home Mortgage Discrimination Act
Equal Credit Opportunity Act (The Equal Credit Opportunity Act prohibits lender discrimination on the basis of an applicant's protected class status, such as national origin.)
If downzoning occurs in one area, reducing property values in adjacent areas, what can the homeowners in those adjacent areas do? File a claim for inverse condemnation. Require a zoning change to their own property. Sell at a loss and file a claim. Sue their neighbors.
File a claim for inverse condemnation.
Stu is buying Freddie's property. What must occur for the transfer of title to take place? Freddie and Stu must sign the deed. Freddie must intend to convey the property to Stu. Stu must convey the deed. Stu must sign the deed.
Freddie must intend to convey the property to Stu. (The seller (grantor) must deliver a marketable title. The grantee isn't required to sign.)
Which of these would most likely be an implied contractual condition in a real estate sales contract? Buyer and seller names Freedom from fraud and misrepresentation Property location or description Purchase price
Freedom from fraud and misrepresentation (Contracts should specifically define the purchase price, the property being sold/purchased, and buyer and seller names. It likely won't spell out that the contract should be free from fraud or misrepresentation as this is implied under contract law.)
Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA? 10% down payment 30-year fixed rate with no points A monthly payment of $900 Get a low 4.925% APR
Get a low 4.925% APR (An ad can show the APR without disclosing all the other credit terms. But if certain other "trigger" terms are included, such as down payment, payment amount, number of payments, or interest rate (other than APR), this would require full disclosure.)
Brittany has a small office in a professional building. She has a set monthly lease payment that has been calculated to include maintenance of the common areas in the building, such as the restroom and small kitchen, and all nets, utilities, and janitorial charges for her space. The payment also includes taxes and insurance. The landlord takes these payments and pays the individual expenses himself. What type of lease does Brittany have? Graduated lease Gross lease Net lease Percentage lease
Gross lease (In a gross lease, all expenses related to the property, such as taxes, insurance, and maintenance, are part of the lease payment.)
Nathan was painting the siding on his home when he was interrupted by a neighbor who informed him that he had to have the paint color approved before using it. Nathan lives in a neighborhood with ________. Conditions Environmental regulations HOA regulations Police power
HOA regulations (HOA regulations are often used to enforce a certain visual or aesthetic style in a neighborhood.)
Which statement best describes the criteria that would permit Tristan to legally engage in dual agency? His firm and the state permit it. His firm and the state permit it and he obtains the proper consent. His firm permits it and it's an inadvertent dual agency situation. The state permits it and he discloses the dual agency to all parties.
His firm and the state permit it and he obtains the proper consent. (Tristan must be practicing in a state that permits dual agency; his brokerage firm must allow it, and he must obtain informed consent from all parties to the contract (buyers and sellers).)
Homestead Realty had a listing agreement with Gertrude. The listing expired, and Gertrude moved the listing to another firm. Another licensee at Homestead Realty has a buyer client who's interested in Gertrude's property. What restrictions are in place for Homestead Realty? Homestead may not represent a buyer for the previously listed property. Homestead may represent the buyer but may not disclose any information about the property or previous offers on it. Homestead may represent the buyer, must disclose material facts about the property, and must maintain Gertrude's confidentiality. No restrictions are in place since the previous property listing expired.
Homestead may represent the buyer, must disclose material facts about the property, and must maintain Gertrude's confidentiality. (Homestead must adhere to its fiduciary duties of confidentiality (to Gertrude) and disclosure (to all parties).)
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______. By licensed real estate professionals By members of the Appraisal Foundation In the most expeditious and inexpensive way possible In writing, and in accordance with uniform standards
In writing, and in accordance with uniform standards
Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property? Immobility Improvements Indestructibility Uniqueness
Indestructibility (Indestructibility is the physical characteristic that states that while improvements may deteriorate, land can't be destroyed.)
The Johnsons have owned a small restaurant for more than 20 years. It's open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____. Condemnation Eminent domain Escheat Inverse condemnation
Inverse condemnation (Inverse condemnation occurs when a property's value is negatively affected by government regulation, but the owner is not offered just compensation according to the requirements of the Takings Clause.)
Which of these statements about a deed's habendum clause is true? It describes any easements or liens against the property. It's a description of the act of conveyance. It's required in all deeds. It's the full legal property description.
It's a description of the act of conveyance.
Max has a written agency agreement with Rufus in which Max will receive all of the listings in the subdivision that Rufus purchased (with Max's representation) and is developing. One day when Rufus is visiting the site of the subdivision, a work truck accidentally runs him over and he's seriously injured. Rufus can no longer run the development of the subdivision. What happens to Max's agency coupled with interest? It's still in place because it doesn't terminate on the death or incompetence of the principal. Max has no recourse; the agency relationship is terminated and he receives no compensation. Max now owns the subdivision as a result of the principal's death or incapacity. Rufus must now pay Max the commission that he didn't get from the original listing, and the agency relationship is terminated.
It's still in place because it doesn't terminate on the death or incompetence of the principal.
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have? Joint tenancy Tenancy by the entirety Tenancy in common Tenancy in severalty
Joint tenancy
Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description? Map Metes and bounds description Monument Plat book
Metes and bounds description (The lot and block system always begins with one of two types of land descriptions as a reference point: either a metes and bounds description or an rectangular government survey system (RGSS) description.)
Which of these is an example of a sub-agency relationship? Aldrich accepts a designated agency appointment from his broker so his firm can represent both the buyer and the seller. Blaine represents the buyer in a transaction with an unrepresented seller. Greta refers a buyer client to a more experienced colleague, asking for a referral fee from the colleague. Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Morris, who's licensed independently, finds a buyer customer for Greg's listing with Marvel Homes and is obligated to act in the best interest of Marvel Homes' client.
Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he's working with the homeowners to make some decisions that weren't identified in the blueprints he's working from. Which of the following details will be guided by local building codes? Material used for shingles Number and type of electrical breakers Number and type of windows per square foot Placement of gas range in the kitchen
Number and type of electrical breakers (Electrical safety standards are typically a component of building codes in almost any location.)
Following all of the client's lawful instructions describes which fiduciary duty? Disclosure Loyalty Obedience Reasonable skill and care
Obedience
Brynn's listing agent told potential buyers that all offers on Brynn's property would be considered at 5 p.m. on May 3. By that date and time, there were four offers. The persons making these offers are the ______. Examiners Executors Offerees Offerors
Offerors (The party or parties making an offer is or are known as the offeror or offerors.)
An example of this type of leasehold estate is a month-to-month lease. Estate at sufferance Estate at will Estate for months Periodic estate
Periodic estate (A periodic estate automatically renews at the end of its lease term, such as at the end of a given month.)
Which group ensures that community growth is controlled and orderly? HOA Master commission Planning board Zoning board of appeals
Planning board
Which of the following situations may result in inverse condemnation? Property taxes rise because of an increase in property value. Property values decrease because adjacent property was rezoned. Property values decrease because the property was rezoned. The government takes private property for public use.
Property values decrease because adjacent property was rezoned. (With regard to zoning, inverse condemnation is related to a loss of value due to downzoning of adjacent property.)
Governments like property taxes as a revenue source because ______. Everyone has to pay property taxes Property owners are easy to find Property taxes always increase, creating ever greater revenue Property values, and therefore taxes, tend to remain stable
Property values, and therefore taxes, tend to remain stable
What type of arrangement allows the buyer to retain title to the property but places a security interest in the property on behalf of the seller? A straight-term loan Land contract Purchase money mortgage Wrap-around mortgage
Purchase money mortgage (Purchase money mortgages allow the buyer to retain title to the property, but the seller has security interest in the property.)
Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded? He can't legally make any improvements to the property until the deed is recorded. He doesn't legally own the house until that occurs. Recording provides actual notice that he owns the property. Recording provides constructive notice that he owns the property.
Recording provides constructive notice that he owns the property. (Ownership officially transfers when the grantor delivers the deed to the grantee, but recording provides constructive notice that Conrad owns the property, thereby permitting anyone who does a public records search to see the ownership information.)
Which statement most accurately describes the type of notice provided by recording a change of ownership document? Recording the deed provides actual notice of the property sale. Recording the deed provides constructive notice of the property sale. Recording the new owner's title policy serves as constructive notice of the sale. Recording the promissory note provides constructive notice of the property sale.
Recording the deed provides constructive notice of the property sale. (Recording a document provides constructive notice; recording the deed provides constructive notice of property ownership.)
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this? Lot and block Metes and bounds Monument and benchmark Rectangular government survey
Rectangular government survey (Legal descriptions that use the RGSS usually include the state, name of the principal meridian, township, and range designations with compass directions and section numbers.)
Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management? Governmental Lot and block Metes and bounds Rectangular government survey
Rectangular government survey (The U.S. Department of the Interior's Bureau of Land Management regulates the rectangular survey system.)
What classification of water rights includes the two smaller sub-classifications of navigable and non-navigable waterways? Groundwater Littoral Riparian The doctrine of appropriation
Riparian
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. Alluvial Erosion Littoral Riparian
Riparian (Riparian rights are granted to property owners whose property is adjacent to flowing water, like a river.)
Rusty received an acceleration letter from his mortgage lender. What is the most likely reason for receiving this letter? Rusty failed to pay his property taxes. Rusty has paid off his mortgage. Rusty is two or three months in default. Rusty's mortgage is being sold on the secondary market.
Rusty is two or three months in default. (Before filing a foreclosure against a homeowner, a lender must send an acceleration letter. Lenders can do this immediately when a borrower falls behind, but they usually don't until the borrower is two to three months in default.)
Jean is a licensee for At Home Realty. She chooses her own schedule, sets her own sales goals, and is compensated based on commission. She must complete three training courses each quarter and the required number of CE hours to maintain her license. She must belong to the local REALTORS® association. The firm doesn't pay for employment taxes for Jean. She receives no insurance or other benefits. Which of these factors might cause the IRS to classify Jean as an employee instead of an IC? She must belong to the local REALTORS® association. She must take a required number of continuing education hours. She must take three training classes through the firm. She receives no benefits from the firm.
She must take three training classes through the firm.
David lost his job and can no longer afford the payments on his home. His sister suggested a short sale. Since you were his real estate agent when he bought the house, he called you to find out as much as he can about short sales. Which of the following is a true statement? A short sale will help improve his credit rating. He can proceed with a short sale without the lender's approval. He will receive the full amount due on the loan as a result of the sale. Short sales are sometimes used as an alternative to foreclosure, but could negatively impact his credit rating.
Short sales are sometimes used as an alternative to foreclosure, but could negatively impact his credit rating.
If the private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply? Housing designated for senior use "Mrs. Murphy" exemption Owner-occupied buildings with no more than four units Single-family housing sold or rented without the use of a broker
Single-family housing sold or rented without the use of a broker (Single-family housing sold or rented without the use of a broker is exempt, provided the owner doesn't own more than three single-family homes at one time.)
Tres owns a warehouse in an area that is zoned light industrial. With an increased demand for housing in the area, Tres wants to create loft-style condos and have his property designated as residential, even though the surrounding buildings will remain light industrial. What type of zoning is this? Aesthetic zoning Downzoning Incentive zoning Spot zoning
Spot zoning
The question, "What's the purpose of this appraisal?" can be answered by this first step of the appraisal process. Determine highest and best use. Estimate land value. Identify data needed. State the problem.
State the problem. (The first step is to state the problem so the appraiser can identify what data is needed. After that, the appraiser will identify the data needed, gather it, and analyze it.)
Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn't perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this? Joint liability Retroactive liability Several liability Strict liability In strict liability, the owner is responsible for cleanup, regardless of who created the initial problem.
Strict liability (In strict liability, the owner is responsible for cleanup, regardless of who created the initial problem.)
The ______ is the federal act that deals with telephone solicitation. Bitphone Telecommunication Device Act of 2003 Telecommunications Information Act Telephone Consumer Protection Act
Telephone Consumer Protection Act (The federal act dealing with telephone solicitation is known as TCPA, or the Telephone Consumer Protection Act.)
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 (This is a form of shared ownership, but only tenancy in common provides for inheritability—the other forms share the rights of survivorship (the existing tenants assume the deceased's share of the property).)
Trinity has applied for a home equity line of credit (HELOC) to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure? At closing The CD isn't required for a HELOC. Three days before closing Three days from her loan application date
The CD isn't required for a HELOC. (Home equity lines of credit aren't subject to TRID disclosures, so Trinity's lender isn't obligated to provide a Closing Disclosure, though other disclosure forms may be required.)
Kenneth plans to shop around for his mortgage loan to be sure he's getting the best interest rate and terms. What document from his lender gives him the loan rates and fees him to make comparisons? Kenneth's settlement statement details all closing costs, so he can use it to compare lender loan products. The buyer's net sheet provides all the figures necessary for comparing loan products. The Closing Disclosure discloses all loan costs, so he can compare costs between lenders. The Loan Estimate permits Kenneth to comparison shop.
The Loan Estimate permits Kenneth to comparison shop. (The Loan Estimate, issued three days after loan application, permits borrowers to compare loan terms between various lenders and loan programs.)
When a government entity exercises its powers to create zoning ordinances, what must be followed? Federal zoning codes The area's comprehensive plan The state's zoning codes Universal design standards
The area's comprehensive plan An area's comprehensive plan outlines future development plans and goals of the area. Zoning decisions should follow this plan.
Which of the following statements about the number of contingencies in a sales contract is true? Every sales contract should contain a minimum of three contingencies. The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted. The more contingencies, the better, from the seller's perspective. The number of contingencies is directly related to the cost of the home. The higher the asking price, the greater number of contingencies.
The inclusion of numerous contingencies makes it less likely that the buyer's offer will be accepted. (While contingencies provide important safeguards, buyers should bear in mind that the inclusion of numerous contingencies makes it less likely that their offer will be accepted, especially in a competitive bidding situation.)
The elevator at Morningside Apartments is broken. Who is responsible for making sure it's repaired? The city The landlord The previous building owner The tenant
The landlord (Per URLTA, the landlord has a duty to keep all provided appliances and systems in good and safe working order, including heating, plumbing, electrical, ventilation, and elevators.)
Which of these situations is addressed by the fiduciary duty of disclosure? The buyer fails to disclose to the seller his need to close on the property quickly. The buyer's home inspector refuses to share the inspection report with the seller. The seller refuses to complete a property disclosure form. The seller's agent fails to disclose a conflict of interest.
The seller's agent fails to disclose a conflict of interest. (The fiduciary duty of disclosure relates to the licensee's responsibility to disclose material facts and conflicts of interest.)
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 The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.
Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have? They'll need a 90% loan-to-value ratio. They'll need to put down at least 25%. They should have a loan-to-value ratio of 80% or less. They will need to qualify for an FHA loan.
They should have a loan-to-value ratio of 80% or less. (Primary mortgage insurance may kick in when the loan-to-value ratio exceeds 80%; that is, the borrower is borrowing more than 80% of the property's value. To be sure they can avoid paying PMI, Sophia and Antonio need to put at least 20% down.)
When Stacy's clients ask her if she can recommend a mortgage broker, she promptly gives them the name of the best mortgage broker she knows, Gary Jones. Later, she always receives a check from Gary as payment for the referral. Is this legal or illegal under the Real Estate Settlement Procedures Act? This is illegal under RESPA because it's considered a kickback between settlement service providers. This is illegal under RESPA because it's considered a referral. This is legal under RESPA because Stacy has proven experience with the mortgage broker she referred, so it's an honest transaction. This is legal under RESPA because the referral fee didn't involve the grantor of credit.
This is illegal under RESPA because it's considered a kickback between settlement service providers.
A town has just assigned a lower-density use zone to an area that previously allowed higher density. What's one reason the town may have done this? To improve property values To increase density in surrounding areas To increase taxes To limit overgrowth
To limit overgrowth
Because Shelby has a high prepayment penalty on her high-interest loan, she is ________. Able to pay off the loan early without penalty Able to refinance whenever she wants without incurring any penalties Eligible for additional tax deductions Unable to refinance her high-interest subprime loan without paying a stiff penalty
Unable to refinance her high-interest subprime loan without paying a stiff penalty
What property feature could lead to soil contamination? Brick pavers Irrigation system Multi-car garage Underground storage tanks
Underground storage tanks (Underground storage tanks could contaminate property soils when they leak.)
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this? Bilateral Executed Mutual Unilateral
Unilateral (A contract in which consideration is only offered by one of the parties is a unilateral contract. In other words, the consideration only goes one way.)
Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he sees how ownership of the common areas is shared among the ________. Association officers Developers Investors Unit owners
Unit owners (Condominium ownership includes ownership of an individual unit as well as a share of the common areas.)
Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission? Area variance Moratorium Special use permit Use variance
Use variance
Which of the following terms means the price a property is worth to its owner as currently enjoyed? Appraisal Insured value Investment value Value in use
Value in use
If a contract is for an illegal purpose, it's ______. Enforceable Legal Valid Void
Void
You're showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers? How much the seller's heating and cooling bills went up after the addition was put on Whether or not a licensed general contractor did the work Whether or not the addition was permitted Whether or not the materials used match the original construction
Whether or not the addition was permitted (It's important to find out whether the work was permitted, because if it weren't, there may be major repercussions.)
Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker, without cause. Burt may legally do this as long as he's ______. A real estate licensee Unhappy with Scott's services Willing to find his own buyer Willing to pay Scott's commission anyway
Willing to pay Scott's commission anyway
Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare? She'll prepare a seller net sheet to disclose the seller's net profit on the sale. Working with the lender, she'll prepare the Loan Estimate, which details the costs the buyer and seller will pay at closing. Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. Working with the title company attorney, she'll prepare the preliminary title commitment
Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing.
