MD Real Estate Asssessment

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?

$1335.67 = (5.5 acres x 43,500 sqft)/ 400 ft = roughly 598 ft then divide $800k by 598 ft.

What is the highest amount you can be fined by the Maryland Real Estate Commission for a serious violation?

$25,000 for third and subsequent offenses

Lorena and Julio purchased a home for $205,950. Their loan amount was $164,760, and the assessed value is now $200,500. Their tax rate is 1.5%. How much will their monthly taxes be?

$250.62 = (assessed value x tax rate)/ 12 months $250.62 = ($200,500 x 0.015)/12

A seller wants to break even after the broker's commission of 5% and loan balance of $300,000 are paid. At what price must the house sell?

$315,789 = $300,000/0.95

A local buyer is purchasing a property for $120,000. What will the seller pay in transfer tax if the rate is $.37 per $100?

$444

Janice is the victim of misrepresentation in the sale of her home. Her listing agent gave her poor advice that cost her $62,000. She has tried to recover the cost through several other means, but to no avail. If she files a claim against the Guaranty Fund, what is the maximum amount she could hope to recoup?

$50,000

John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage?

10 years

Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. Assuming every transaction for the month was shared with a cooperating brokerage, what is Jared's brokerage's commission rate?

6.5%

Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio?

75%, lender uses the lesser of the sales price or appraised value. So in this case, sales price is lower. Therefore, 300k/400k is 75%

What is the best description of a deed?

A document to transfer ownership/interest in real estate.

According to Article 7 of the NAR Code of Ethics, which of these statements is most accurate when accepting compensation from parties to a transaction?

A licensee shall not accept compensation from more than one party to a transaction without the full knowledge and consent of all parties.

With whom may Maryland broker Ruthe NOT share her commission?

Adesha, a broker in a state with which Maryland does not allow interstate compensation sharing, once the arrangement is disclosed to both state's commissions

A buyer and a seller signed a sales contract with a definite closing date of May 15. If the buyer needs to move the closing date to June 15, what document would the buyer use to make this change?

Amendment

When must an agent disclose an agency relationship to an unrepresented transaction party?

At first substantive contact

When should a prospective buyer receive a copy of the Maryland Residential Property Disclosure and Disclaimer Statement?

Before or at the time the buyer makes a written offer to the seller.

Which of these incentives would be legal according to Maryland license law?

Ben runs a "Spring into Summer" ad offering sellers a reduced commission rate for the next three months.

Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have? Bilateral, Executed, or Mutual?

Bilateral A contract involving an exchange of promises or other consideration between two parties is a bilateral contract.

Which of these statements about a conventional mortgage loan is true?

Borrowers with larger down payments and higher credit scores are most likely to select a conventional mortgage.

Damon lives in Frederick but is affiliated with a broker in downtown Baltimore. He'd like to affiliate with a broker closer to home but doesn't want to sever his relationship with his current broker. What needs to happen in order for Damon to be able to work for both brokerages?

Both brokers need to send a letter to the commission stating that their approval of the arrangement and that there is no conflict of interest

Which of the following features is most likely to be the cause of an adjustment to a comparable when preparing a CMA? Busy street, color, demographics?

Busy street

Chrissy lives in Lake Ridge Estates, a neighborhood in which vinyl siding may not be used on homes. This HOA regulation is what kind of private land control?

CC&R- Covenants, Conditions, and Restrictions

Alice owned a double lot on the waterfront. She sold the lot to Ronesha and included a deed restriction prohibiting construction of any building taller than one story. Ronesha wants a three-story house. What should she do?

Conform to the deed restriction.

Which of these situations represents the illegal practice of blockbusting?

Corbin tells homeowners in Five Points that an impending influx of Asian immigrants will reduce property values.

Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______.

Cost approach

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, Capacity, and Collatteral

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar

Credited $1207

In addition to your name, what must be included in any advertising?

Designated name of your brokerage firm

Fewer buyers in a higher price range would create what kind of pressure on housing prices?

Downward

What must sellers provide prospective buyers of homes built prior to 1978, in addition to the federally required disclosure form?

EPA lead safety pamphlet

Which of the following statements about earnest money deposits is true?

Earnest money must be placed in an escrow account within no more than seven business days after the formation of the contract of sale.

Bobbi received a notice from the Maryland Real Estate Commission that she was being investigated for failure to properly supervise her affiliated licensees. At her hearing next month, she needs to present evidence to the contrary. Which of the following is NOT considered evidence of reasonable and adequate supervision, as defined by the commission?

Employee Time Cards

Your client and you just successfully closed on a home. Early on in the transaction you collected an agency disclosure notice. How long do you have to keep the notice on file?

Five years

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?

Get a low 4.925% APR

Nancy just hired her sister, real estate licensee Grace, to list her property. Jason schedules a showing for his client, who's interested in Nancy's property. What needs to take place?

Grace needs to disclose in writing to Jason and his client that the property is owned by a family member.

What special concern do foreclosed properties often present?

Hidden title issues

Related to reasonable accommodation of being allowed to have an assistance animal, which statement is true?

If the disability for which the tenant is making the request is obvious, the landlord may not ask why it is needed.

Which of these is NOT a power of the Maryland Real Estate Commission?

Impose jail sentences of up to six months on licensees who commit multiple serious license law violations

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 ______.

In writing, and in accordance with uniform standards. FIRREA helps to regulate the ways that lenders value real property by requiring that appraisals be done by licensed, qualified personnel, and that the appraisal report be in writing.

Which approach to value is typically used for investment property of two- to four-family units?

Income Approach

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?

Joint tenancy

To be an effective property manager, a licensee must be familiar with a variety of ___?

Lease agreements

Maryland licensee Clint operates as an independent contractor associated with Red Hat Properties and its broker, Margaret. Which of these statements is true about Margaret's supervisory responsibility and liability for Clint's actions?

Margaret is responsible for and can be disciplined based on Clint's actions.

Which choice correctly identifies the classes that Maryland protects in addition to the seven federally protected classes?

Marital status, sexual orientation, gender identity, and source of income

Which of these parties WOULD need a real estate license in Maryland?

Marsha, an attorney who is selling a client's home, as this is something she typically does as part of her practice An attorney providing brokerage services oustide his or her regular law practice does not need a real estate license, but if the attorney engages regularly in real estate business, a license is required.

Which of these situations does the Americans with Disabilities Act address? The Golden Gate senior housing center has no exercise or activity center for its residents Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs.

Meridian Apartments provides a gym and pool area for residents, but it's not accessible to residents who use wheelchairs. The Americans With Disabilities Act prohibits discrimination against those with disabilities in the delivery of programs, services, and activities, so Meridian Apartments is violating the law.

What is an example of commingling?

Mixing earnest money with personal funds

In which of the following situations can the state use its power of escheat?

Nadine died with no heirs and no debt.

Which of the following scenarios depicts the illegal handling of trust funds in Maryland?

On Friday, Shanice deposited her client's earnest money check in her personal account to keep it safe until she could transfer it to her brokerage's escrow account on Monday.

Monique received four offers on her client's listing. Offer A is a written offer that the buyer's agent dropped off at Monique's office. Offer B is an offer that the buyer's agent communicated to Monique over the phone. Offer C is a written offer that Monique received via email. Offer D is a written counter-offer from a buyer that Monique's client countered earlier in the week. Which offers must Monique present to her client?

Only offers A, C, and D, since they're in writing Licensees must present all written offers and counter-offers to their clients in full, in hard copy or electronic format. Since offer B isn't in writing, monique isnt required to present it.

Under what conditions can licensees contact sellers who are under an exclusive listing agreement with another agent?

Only to arrange a a showing to a buyer.

An example of this type of leasehold estate is a month-to-month lease

Periodic Estate

Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______.

Private land use control

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Promissory note Often called a note, is the borrower's documented promise to repay the loan

Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, which Hank agreed was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

Real estate contracts must be in writing per the Statue of Frauds.

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?

Reconciliation- through this process the most weight can be given to one or two comparables or equal weight may be given to all.

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Refuse to rent to a female tenant.

Stan and Margo want to redevelop an old industrial site in order to create a microbrewery and event space. However, an environmental review found that hazardous chemicals were once used on site, and there is a possibility they will be released during redevelopment. Stan and Margo may not be liable for cleanup, under what federal law?

SARA

An easement dictates that property owner A gives the right to property owner B to use a portion of the property. Which term describes property A? Dominant or Servient?

Servient Estate

Which of these licensees is correctly following MREC guidelines for hosting an open house?

Shawna displays the MREC notice informing consumers that she represents the seller.

Which of the following fixture is an example of real property? Above ground pool or shelves attached to the wall with brackets?

Shelves attached with brackets would be considered real property, since they're permanently affixed to the wall.

Eva, Stella, and Lynn owned a vacation home two blocks from the beach. Sadly, Stella passed away over the winter, so when summer arrived, Eva and Lynn shared the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?

Tenancy in common

Alice listed a three-bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client?

The agency agreement is terminated if the property is destroyed.

Which of the following is a true statement about possible penalties imposed by the commission for a violation of the Maryland Code of Ethics?

The commission may reprimand, impose fines, and suspend and/or revoke licenses, but it may not impose prison sentences.

Which of the following is NOT cause for the Maryland Real Estate Commission to summarily suspend a licensee's real estate license? Licensee fails to disclose personal interest in a transaction? Licensee fails to provide trust fund account records to the commission?

The licensee fails to disclose personal interest in a transaction MREC may summarily suspend a license if the licensee is convicted of a felony, or if the licensee fails to: promptly account for trust funds, provide trust fund records, or disclose to the commission that the licensee has been convicted of a felony.

Seller Jamison is closing on his property with buyer Conrad. Jamison paid the current year's property taxes already. Is this a prepaid or accrued expense, and how will it be represented on the settlement statement?

The taxes are a prepaid expense, and will appear as a buyer debit and a seller credit.

Which of the following is an example of price fixing?

Three brokerages determine a standard commission rate.

Maryland salesperson's license: She's completed three hours of agency, three hours of legislative updates, 1.5 hours of fair housing, and three hours of electives. What other coursework does she need to complete in order to renew her license?

Three hours of ethics (including professionalism) and 1.5 more hours of electives

Assuming that dual agency is legal where these scenarios occur and that the licensees' brokerages permit it, which of these situations demonstrates illegal dual agency?

Tom is holding an open house for his client. Ruby, a buyer, says she wants to make an offer. She details her situation; Tom waits until she finishes and then suggests that she offer a non-refundable earnest money deposit to strengthen her offer.

In a real estate transaction in which you represent the seller, what are your duties to other parties in the transaction?

Treat them honestly and fairly.

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?

Use variance

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, sign an agreement that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable

Hope's mortgage created a lien against the property she purchased with the mortgage. What kind of lien is this?

Voluntary- a mortgage is a voluntary lien

Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?

Whether the licensee receives benefits from the brokerage firm

Chelsea's mother owns several rental properties and intends to keep them to pass on to the family. Chelsea holds a special power of attorney to manage the rental properties, including working with the property manager to place and evict tenants as necessary. Which of these would violate the POA?

Without consulting her mother, Chelsea decides to completely refurbish one of the properties.

Bernie represented Oscar in the sale of Oscar's home. They signed an exclusive right-to sell-listing agreement. If Oscar were able to find his own buyer, would he owe Bernie a commission?

Yes, because "exclusive right to sell" means Bernie gets paid no matter who finds the buyer.