Real Estate Broker Pre-Assessment

Under the Federal Fair Housing Act, who would not be included under the umbrella of the disabled?

A person abusing controlled substances

A salesperson was informed that the heat exchanger in the furnace was cracked. The agent did not inform the seller. The agent showed the house to a customer and said nothing about the furnace. A couple of weeks after the buyer moved in, 3 out of the 4 family members died of carbon monoxide poisoning. What could happen to the salesperson?

All of the answers - Under an agent's duty of disclosure, latent defects must be disclosed to any interested buyer. The surviving family member can sue for negligence. The agent could also be criminally prosecuted for negligent homicide, and the state can revoke the agent's license.

What is an appraisal?

An opinion of value for the day the appraisal only Because market conditions can change (as can the property itself) the appraisal is only an opinion of value as of the day of appraisal.

Which of the following is not a protected class under the Federal Fair Housing Act?

Ancestry

Which lien attaches to a property to prevent the transfer of title when there is a pending lawsuit that may affect the title?

Attachment - Lis pendens is the publicly recorded notice of the lawsuit. To prevent the transfer of title for property that may be affected by pending litigation, one would file with a court for an order of attachment, creating an attachment lien.

What type of land use doesn't comply with the zoning restriction for where it is located, but is permitted because it benefits the public?

Conditional use Conditional uses (hospitals, schools etc) usually do not comply with zoning limitations.

What event will create an involuntary life estate?

Dower interest becoming cohate "Inchoate" means "not active," which is the status of dower when a married couple is both alive and together. When a spouse dies or sells the property without dower release, dower becomes cohate, or active.

What power does the government exercise when it takes private property for public use?

Eminent domain

The leasehold estate that has a specified termination date best describes a/an:

Estate for years - An estate for years has a specified termination date. If landlord and tenant agree to continue the tenancy after termination, it converts to tenancy at will.

Which of the following is not part of the secondary market?

Federal Universal Mortgage Association The Federal Universal Mortgage Association is not a real association.

A person who has been discriminated against under the Civil Rights Act of 1866 must file a lawsuit in which court?

Federal district court

Which of the following is not true of the Federal Housing Administration?

Guarantees mortgage loans - The only entity that guarantees mortgages is the VA; FHA insures loans.

During a listing appointment, a salesperson recommends to a young married couple that they take title in the form of joint tenancy with the right of survivorship. The agent:

Has committed the unauthorized practice of law Questions about title to land are more of a legal nature than of a real estate nature. The agent should recommend that legal counsel be obtained.

Broker Bert is driving home and sees an owner placing a for sale by owner sign on a lot he has eyed for years. Bert has always thought this was an ideal commercial site. The owner, who lives out of state, inherited the parcel from his Great Aunt and knows nothing about real estate or the value of such parcel. Bert feels the parcel is worth at least $750,000 and is surprised to see the seller is asking only $149,900 for it. As Bert discusses the lot with the seller, he is required to do which of the following?

Inform the seller of his status as a licensee licensees always disclose their status as a licensee, but only owe clients their insight and opinion as to such things as value. But if the owner asks Bert what hi thinks the property is worth, what should Bert Say? he can't say $149K if he thinks the property is worth $750K Bert may not lie in this situation.

Of the following, which is not an encumbrance?

License Since a license is revocable, it cannot burden the property owner's title. A license does not create an interest in another's land.

Licensee A lists 123 Main St. and is asked by the next door neighbor at 125 Main to list his property. Licensee A may list 125 St. if:

Licensee A wants to list the property IN license law expressly allows brokers to list competing properties and requires no special permission or disclosure. Though the law doesn't require it, the practical side may suggest brokers discuss this situation with both sellers.

Betty Broker enters into a written listing contract with Sam Seller without any reference to advertising. Upon signing Betty may:

Listing a property makes you the agent of the seller, but no advertising may be placed without the express written permission of the owner. Even though most listing contracts include advertising provisions, written permission for each form of advertisement must be obtained.

An unlicensed property manager can do all of the following except:

Negotiating lease terms Most states require anyone who lists, sells, leases, exchanges or otherwise negotiates in the real estate of others must be licensed.

Which of the following is not a feature of an FHA-insured loan?

No MIP insurance - FHA loans use a mutual mortgage insurance plan.

What is a holder in due course?

One who acquires a negotiable instrument in good faith and for consideration A secondary market investor will only buy negotiable instruments as a holder in due course.

A residential tenant with a month-to-month lease enjoys which leasehold estate?

Periodic tenancy - Periodic tenancy is a lease that automatically renews itself from period to period.

A real estate investment business organized as a trust best describes a/an:

REIT Corporations, partnerships, and LLC ownership interest are not required to have a specified number of individuals. The REIT must have at least 100 investors.

Refusing to make loans based on racial composition of a neighborhood is called:

Redlining - Redlining is the illegal lender practice of denying loans to landowners based on the racial composition of the neighborhood.

Which of the following activities require licensure?

Telemarketing by an assistant telemarketing to obtain business requires licensure; the others are specifically stated exemptions from licensure.

The leasehold estate that can be terminated by either party and can not be assigned is:

Tenancy at will - Tenancy at will can not be assigned; it is based on the wishes of the parties.

At a weekly business meeting, two agents from two different firms discover that they are both trying to list the same house. In the argument that follows, one agent scolds the other for offering to take the listing at 6%. Their broker's policy is to take 7% listings. Which law, if any, have the agents violated?

The Sherman Antitrust law

What is market value?

The price the property is likely to bring in an "arm's length" transaction

"The subject property" best describes:

The property for which the value is sought

A seller accepts an offer to purchase; one week later the listing agent learns the seller has filed bankruptcy. The listing agent should disclose this information to which of the following?

The selling agent and the buyer immediately The bankruptcy is a material fact that could and likely will affect the property and any sale as the court will now take control. Once filed it becomes public information. Even though the agent represents the seller, material facts such as this must be disclosed much like a leak in the roof.

What is assessment value?

The value the property taxes are based on

To legally represent both the buyer and seller in the same transaction, a licensee must have which of the following?

The written informed consent of the buyer and the seller.

For a broker company to participate in a referral service and refer business to other brokers, certain requirements must be met. Which of the following best describes these requirements?

There are written agreements with the client and with the cooperating brokerage regarding fees. Brokers may refer business for fees but must have written consent of the clients and have written agreements with the cooperating brokers detailing the arrangement and specifically fees. express consent is not enough it must be in writing.

What is the body of law that governs negotiable instruments?

Uniform Commercial Code- The UCC sets out certain requirements for negotiable instruments.

Broker B receives her real estate license in August of the 3rd year of a 3 year license cycle. Broker B completes the 30 hours of post license education that fall. In addition to the post license education hours, how many hours of CE will B needed to be eligible for her first renewal?

Zero The 30 hours of post license education fulfills the CE requirements for the first two years of licensure. In this example B would have fulfilled the CE requirements for the last license year of the three year cycle she became licensed in and the first license year of the next three year license cycle.

Real estate brokers may participate with securities brokers when their activities:

are limited to the sale and lease of real property. Real estate brokers assist in the purchase, sale and lease of real property. REIT's, real estate investment trusts, are investment vehicles made up primarily of real estate holdings. Shares of these investments are sold by stock brokers. Real estate brokers can assist the REIT's with purchase, sale and leasing of these real property holdings, but can't sell securities or shares of the investment.

A broker's ad for a listing property must not:

include only a P.O. box, telephone number or street address ads for listing property must not appear to be a FSBO, for sale by owner or in any way appear to be offered by a private party not in the real estate business. all ads must include the name of the broker company the size of the names, i.e. company vs agent, is not an issue so long as the name of the broker company is clearly visible.

Licensee D is associated with managing broker Q 5 weeks after closing the sale of several distressed properties for seller S licensee D receives a check directly from S to reimburse D for some out of pocket expenses such as snow removal. In this case D.

may accept this as it is not compensation Brokers may only be paid or compensated by their managing brokers for regulated services. Reimbursement of expenses is not compensation soit may be paid directly to the licensee and requires no disclosure.

A broker must include the mane of the managing broker or broker company he or she is affiliated with in all advertisements except:

no exceptions, as all advertisements of property or services must clearly reference the brokerage.

To be eligible for a brokers license, an applicant must have completed or obtained all of the following except?

90 hours of approved pre-license and 30 hours of post license education Applicants must complete an approved 90 hour pre-license course, but the 30 hours is a post license requirement, which must be completed within the first two y ears of licensure. The other items are specifically stated pre-license requirements.

Which of the following would require an IN real estate license?

A friend helps an ailing friend sell her condo in exchange for a week's use of another condo. Receiving anything of value (use of condo) in exchange for a regulated service (selling an ailing friends condo) requires licensure. The others are all specifically stated exemptions from licensure.

How long does a claimant have to file a complaint based on Title VIII with the HUD Office of Equal Opportunity?

1 year - Filing a lawsuit based on the Federal Fair Housing Act must be done within 2 years. A complaint would be filed with the HUD Office of Equal Opportunity within 1 year.

The Indiana Real Estate Commission is made up of:

12 members serving 4 year terms

A listing broker may offer a portion of the commission paid by the seller as inducement to selling brokers:

Without creating limited agency IN license law expressly allows this as a normal part of cooperative marketing, and compensation has nothing to do with loyalty or fiduciary duty.

Broker Y is associated with managing broker R. Six weeks after closing a difficult transaction, the seller sends Y a $250 bonus check for all her exemplary work. In this situation:

Y may not accept compensation from anyone other than her managing broker.