Real Estate 2/3

Kathlene is explaining the termination option to her buyer client. How would she explain that "time is of the essence?"

"This means that all contract deadlines will be strictly enforced. You don't want to miss these deadlines."

A buyer asked Clifton why she would benefit from signing an agency agreement with him. Clifton answered: ______

"Without it, I work for the seller"

"I understand why you want a buyer representation agreement," your buyer tells you. "But what's in it for me?" You answer:

"Without it, you're unrepresented."

Curtis wants to do a 1031 exchange. He just closed on his property. How many days does he have to identify a new property?

45 days

Shelley is negotiating for a home in a hot market. Which of the following is a true statement? A larger earnest money deposit may help her get the home she wants. The amount of earnest money has nothing to do with whether or not an offer is accepted. The seller isn't allowed to ask for a specific amount of earnest money. The seller probably won't want any earnest money.

A larger earnest money deposit may help her get the home she wants

What's a brownfield?

An abandoned or unused commercial or industrial site with suspected contaminants

Which of the following statements about agents and the duty of obedience is true?

An agent should carry out the client's instructions as long as they are within the law.

Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?

An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.

Stealing listing photos and information and using them to fraudulently rent out a property is known as what?

An online rental scam

Which of the following phrases in a housing advertisement would comply with fair housing guidelines?

Apartment complex with temple

A clause that allows the parties to agree that they won't litigate if there are any contract disputes is a/n _________.

Arbitration clause

You're writing an offer for your buyer client in a cold market. What would be a good negotiation strategy?

Ask the seller to pay closing cost

Why is it important for a buyer to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

One of your seller clients, Jake, expresses concern about having to complete a property condition disclosure statement. You ease his fear by correctly advising him that ______.

By disclosing known defects, he will protect himself from liability lawsuits down the road

How can a seller correct inaccuracies in a property condition disclosure statement?

By drafting an addendum or amendment

Which of the following is an example of the duty of obedience?

Carrying out a clients instructions

Many of an agent's fiduciary duties to the client end upon termination of an agency agreement. Which fiduciary duty never ends?

Confidentiality

Which one of the following is true about title to a property?

Constructive notice to the public of interest in a parcel of real estate occurs when the deed is recorded and physical possession of the property is taken.

Which of the following could indicate a problem with the chimney flue or ventilation?

Drafts near the fireplace

In investments, each type of depreciation is defined by a particular event. Which of the following best describes a depreciation type and an event it's tied to?

Economic depreciation and physical deterioration

Under what type of police power is a property owner compensated for the loss of property?

Eminent domain

Derrick was thrilled to find out that the land he purchased includes several small caves. He's been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so?

Enjoyment

Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper's listing. What's true about the agency relationships in this situation?

Esther owes her loyalty to the seller

Enrique is in the midst of handling an ethical dilemma. He's checking his brokerage's code of ethics to see what it says about the situation and has also looped in his mentor. What step is Enrique currently completing?

Explore ethical choices.

Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?

Federal Trade Commission Act

While working with a buyer client, Jeffrey filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was "fully protected" and would get her earnest money back if the sale didn't close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was Jeffrey legally permitted to do?

Fill in the contract blanks

Penalties for antitrust violation may include ______.

Fines and/or prison sentence

Property ownership for an indeterminable length of time is an example of what form of estate?

Freehold estates

In the agency and ethics case study, why was the bus line location important to potential buyer Chris?

He was disabled and preferred to live close to the bus line.

Bob wants an open listing agreement. Why might this not be in Bob's best interest?

He wont get full representation from any one licensee

Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?

If the listing broker agrees in writing to the termination

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? If the buyer is a first-time buyer If the buyer is buying a second home If the buyer seems confused In none of these circumstances

In none of these circumstances

Which of the following is an example of deceptive advertising? Including the broker's name in an advertisement Including the listing price in an advertisement Intentionally misidentifying a property's square footage Promptly removing an ad after a transaction closes

Intentionally misidentifying a property's square footage

It's not a good idea to post photos of your clients' expensive belongings. Why is that?

It can attract the attention of theives

What's a major benefit to a buyer if she signs a buyer representation agreement?

It guarantees representation.

How does title insurance affect the lender?

It protects the lender from loss due to defective titles.

Which of these is an encroachment?

Jeff installed a sidewalk next to his driveway, six inches outside his property.

Which form of real property ownership requires four unities to create, gives owners the right of survivorship, and allows co-owners to transfer the equal undivided interest owned to another?

Joint tenancy

Carlton listed his property with an agreement end date of August 31. The property went under contract on May 12 and closed on July 2. When did Carlton's listing agreement officially terminate?

July 2

Licensee Kyle has had a few casual meetings with a potential client, Mary. Mary told Kyle the type of home and area she's interested in, and Kyle mentioned a few homes he thinks Mary might be interested in. Although Kyle hasn't said he will continue to look for homes for Mary, Mary believes he'll do just that. Which of the following statements about this situation is correct?

Kyle's actions may have created an implied agency agreement with Mary.

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?

Lucas and Tom

Margo's accountant tells her that she's eligible to deduct the property taxes she paid last year. Select the statement about this deduction that's true.

Margo is in the ownership stage of the property ownership lifecycle.

One of a seller's agent's duties is to ______.

Market and sell the property

When people are treated differently because they were born in another country or are from a specific part of the world, this is discrimination based on _______.

National origin

REALTOR® Daniel's seller client confides to him that the reason he and his wife are selling their home is because they hate their neighbor, who has a large and boisterous family. As soon as Daniel discovers this information, he adds it to the listing published in the MLS. Has Daniel correctly followed Article 2 of the NAR Code of Ethics?

No, because Article 2 prohibits him from disclosing facts that are considered confidential under his agency relationship with the client.

The essential elements of a contract are ________.

Offer and acceptance, consideration, legal capacity, consent, and legal purpose

Why is it important for a buyer to know if an underground storage tank is present on a property?

Older tanks may leak and cause contamination

Certain properties are exempt from fair housing law requirements. Which of the following properties is NOT exempt?

Owner-occupied buildings with fewer than four units being marketed by a real estate licensee

What occurs when one or both parties met some, but not all, of the terms of a contract?

Partial performance

Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, the written contract must name the contracting parties, identify the subject matter of the contract, and ______.

Present the essential terms and conditions of the contract

At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?

Price fixing

Governments like property taxes as a revenue source because ______.

Property values, and therefore taxes, tend to remain stable

Tristan refused to let Marla list his property on the MLS, even though Marla told him that more exposure to the property would generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Reasonable skill and care and obedience

In 1934, when the Federal Housing Administration was created, it adopted the practice of crossing off cities and neighborhoods it considered risky and withheld mortgage funds from those areas. What is this action called?

Redlining

Jim is meeting with a client at a listing. Outside the basement window, there are wood shavings. The client asks Jim if they mean there are termites in the home. What would be an appropriate response?

Refer client to a qualified pest professional

Based on the duty of reasonable skill and care, if clients ask agents for advice in areas outside of an agent's scope of expertise, what should agents do?

Refer their clients to a competent professional in that field.

As a licensee, you'll have several tasks you must perform for your buyer client. One of these tasks is to ______.

Review transaction documents with the buyer, clarifying anything that could be confusing, without stepping outside the scope of your license

Margaret isn't ready to buy Jill's property, but she pays Jill a fee that guarantees she'll be notified if another buyer appears. If another buyer does make an offer, Margaret has the opportunity to purchase at the price and terms of the offer. Margaret has a(n) ______ on Jill's property.

Right of first refusal

Agatha helped her client Rufus complete the form that documents Rufus's purchase offer to the seller for the property he'd like to buy. What is this form?

Sales contract

Which one of the following is used to document a buyer's offer to a seller?

Sales contract

Why would a buyer want to know whether any additions or alterations were made to a property?

So the buyer can determine if permits were pulled

Stacey, a buyer, is working with Rebecca, a licensee, in a state that doesn't recognize or permit implied agency. Rebecca doesn't represent Stacey, however, and is performing only ministerial tasks for her. Which of the following statements about this situation is correct?

Stacey is Rebecca's customer

Tina is in the midst of handling an ethical dilemma with her seller client. To help her client understand why she chose the action she did, which step should she complete?

State the reasoning behind her choice

You demonstrate the fiduciary duty of accounting by ____________.

Taking care of your client's funds and paperwork

Co-ownership with inheritance rights is what kind of real property ownership?

Tenancy in common

This phase of an environmental site assessment is only conducted when necessary. If a problem is found during the investigation phase, this phase is put into action next.

Testing

Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?

The agreement terminates by operation of law.

How does the building department ensure that a builder who has obtained a permit builds according to code?

The building department sends inspectors to inspect the work.

When a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed?

The buyer's agent

Aside from price, which of the following is a legitimate reason to counter an offer?

The closing date is unacceptable to one party.

Henry wants to submit an offer for Lacy's house. Under the statute of frauds, which of the following is NOT a requirement Henry must meet for his offer to become an enforceable purchase agreement?

The contract must be notarized.

What happens to a joint tenant's share of property when the joint tenant dies?

The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty.

Stan is a home inspector who's evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report?

The lack of air circulation in a moist room can lead to mold growth.

In a buyer agency relationship, what relationship does the seller have to the licensee?

The seller is the licensee's customer

Where can you find out what's not covered by a title insurance policy?

The title insurance policy's schedule of exceptions

Why are galvanized pipes a problem in older homes?

They can rust and cause leaks and low water pressure.

Monica meets a colleague from another firm, Kate, for lunch, and discovers that a former seller client, Reuben, is now Kate's buyer customer. Monica tells Kate, "You know Reuben inherited a bunch of money right before he sold his house, right?" Which of these statements is true?

This is a breach of confidentiality because confidentiality survives forever.

A ______ is a piece of real estate owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit based on the specific terms of a timeshare agreement, usually in one- to two-week intervals during the year.

Timeshare estate

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

Timeshare use

You know that a title search will need to be performed before a title insurance policy will be issued and your buyer's loan can be funded, but who or what entity can your client expect to conduct the title search?

Title insurance company

All funds entrusted to a licensee on behalf of another party in the practice of real estate are by definition ______.

Trust funds

Which one of the following property features could contaminate the soil?

Underground storage tanks

Darcy and her buyer client Josh are reviewing Josh's offer before they submit it to the seller. Which of these actions may Darcy take without potentially crossing into the unauthorized practice of law?

Use standard, approved language in contingencies, addenda, and additional provision areas.

Regarding documentation, which of the following actions can help a licensee avoid being accused of unauthorized practice of law?

Using approved fill-in-the-blank forms

If a seller is concerned about an appraisal, what can a buyer do to address this need when structuring the offer?

Waive the appraisal

Brandon's home has been foreclosed on. He had an outstanding loan balance of $145,000, which he owed to his lender, XYZ Lending for a loan taken out in 2009. There's also a lien against the property recorded in 2014 for an unpaid student loan of $25,000, and a HELOC established in 2012 of $30,000, of which he'd used $10,000. If his foreclosure nets $150,000, how much will each creditor be paid?

XYZ Lending will receive $145,000, the HELOC lender will receive $5,000, and the lien holder for his student loan will not be repaid.

Mary is preparing a purchase offer for her buyer client. It's a fairly standard offer: a little less than list price, with the seller paying a little toward the buyer's closing costs. Mary fills in the blanks on a standard form used in her brokerage firm based on the current situation. Is this okay?

Yes, Mary can use the standard forms that her brokerage uses (assuming these forms were originally created or approved by an attorney).

Which term refers to the division of community land into designated districts on a map that includes a text description defining the uses permitted under each classification?

Zoning ordinance

Which of the following is a private agreement that impacts the use of the land?

a deed restriction

A sub-agent serves the _______.

buyer as a customer

Rhonda is interested in putting money toward a timeshare estate, which would allow her to use a condominium for two weeks each year. Timeshare estates ______.

can be sold or passed down to heirs.

Which fiduciary duty goes beyond closing?

confidentiality

After consulting with his mentor and the brokerage's code of ethics, Enrique is ready to plan how to implement his next step. This planning step is ______.

determining what action to take

What type of listing agreement provides the most protection for the listing agent's commission?

exclusive right to sell

The lender will require flood insurance if the home is ______.

located in a flood plain

Emblements are considered to be ______.

personal property

Which entity is responsible for deciding the general layout of a specific municipality —a city, town, or village—and mapping the zones and the uses allowed within each zone?

planning board

Real estate, plus all of the interests, benefits, and rights included in ownership, is also known as ______.

real property

In most transactions involving a buyer or seller, real estate agents have limited authority to act on behalf of their clients. Therefore, which type of agency relationship are they in?

special

Which of the following is an example of single agency?

whenever dual agency doesn't exist, its single agency