Real estate law from exam smart
It is earned only if the option is exercised
$1,000 is paid for a 30 day option to buy. Which of the following BEST describes the listing agent's commission?
No, only the buyer can void the contract. In this case the buyer is the 16 year old
A 16 year old signed a contract to buy a piece of property. The seller, after realizing that the buyer was a minor, attempted to void the transaction. Is this permissible?
Securities agent
A __________ is needed in the sale of property involving stock.
Special performance
A buyer and a seller entered into a contract for the purchase of a property. Prior to closing, one of the parties breached the agreement. What would be the other parties BEST remedy?
Yes, under the Statute of Frauds as long as it is in writing, it is valid
A buyer and seller negotiated a sale by sending contracts through the mail. Would this result in a valid contract?
Mortgage contingency clause
A buyer made an offer on a property with earnest money being part of the contract. The buyer wanted to make sure the earnest money would be returned if the buyer could not qualify for a loan. The buyer would need to put which of the following clauses in the contract to make sure this would happen?
$ 8,500- Find the square footage of the property first by taking Find the square footage of the property first by taking 1,936 feet times 45 feet. This equals 87,120 square feet. Then find the total acres by taking 87,120 / 43,560. This results in a total of 2 acres. To find the cost per acre, take the total purchase price of $17,000 and divide by 2 to arrive at a cost of $8,500 per acre.
A buyer purchased a piece of property. The property purchased was described as follows: Beginning North of the lake at a tall spire, proceed South 1,936 feet, then proceed East 45 feet, then proceed North 1,936 feet, then proceed West 45 feet back to the point of beginning. If the buyer purchased the total property for $17,000, what was the cost per acre?
The optionee would lose the money paid if the option is not exercised within the option time period
A buyer purchased an option on a property. Which of the following statements BEST states the rights of the parties?
Enforceable
A buyer signed a contract to buy a piece of vacant ground for $350,000. The buyer planned on building a commercial building on the vacant ground. After signing the contract, the buyer found the zoning did not allow commercial properties to be built on that ground. The buyer had not told the seller the buyer's plans of building a commercial building on the property. This contract would be:
The offer was freely revocable until it had been accepted by the seller
A buyer signed an offer to purchase contract which was presented to the seller. There was a clause in the contract that said the offer was irrevocable for five days. There was no consideration in the contract for this statement. Which of the following statements is true regarding this contract?
The buyer can revoke the contract at any time before acceptance
A buyer signed an offer to purchase on a property listed for sale. The offer to purchase contract did not state any time period for which the offer was valid. In this case, which of the following statements is true regarding the offer to purchase contract?
HUD
A buyer who had been a victim of discrimination should file a complaint with:
It is permissible as long as it is agreed to by both parties
A buyer wrote an offer contingent on the buyer's spouse approving the property within 24 hours. Would this result in a valid contract?
all contract terms have been satisfied
A contract would be considered executed when:
10.5 acres - 530 times 430 equals 227,900 square feet per lot. 227,900 times two lots equals 455,800 total square feet. 455,800 divided by 43,560 equals 10.5 acres.
A corn field was bisected by a road dividing it into 2 equal lots measuring 530 feet by 430 feet each. What was the total acreage of these 2 lots?
An estate in severalty
A corporation took sole title to a piece of property. This would be:
1 year
A couple, in trying to buy a house, thought they had been discriminated against. Under the 1988 amendments to the Federal Fair Housing Law, how long does the couple have to file a complaint with HUD?
The landlord can require that it be restored as it was before the alteratio
A handicapped person asked the landlord for permission to alter the apartment. Which of the following is true regarding the costs of changing the apartment back after the termination of the lease?
Returning the doorway in the apartment to its original width
A handicapped person rented an apartment from a property manager. The handicapped person made several modifications to the apartment to enable the handicapped person easier living conditions. Under the 1988 amendments to the Federal Fair Housing Law, which of the following items would the handicapped person NOT have to restore to its original condition when the lease expires?
Accept or counteroffer only one offer or reject both offers
A husband and wife listed their home for sale with a real estate agent. The agent received two offers from two different buyers at the same time on the property. What is the best advice the agent can give to the seller regarding these two offers?
This property is equal to 1/2 of a township - 1/2 of a township is 18 square miles. This describes only 2 square miles. It does contain 1,280 acres (1 sq. mile = 640 acres)
A legal description is as follows: "Beginning at the intersection of Route #7 and Boone County Road proceed South 2 miles to the old oak tree, thence 1 mile West to the well by the old farm house, thence North 2 miles to an iron post at the corner of the Johnson farm, thence East 1 mile back to the point of beginning." Which of the following would NOT be true?
No, because the commission should have been paid to the managing broker
A licensee, under a managing broker, directly collects a commission from a seller on an option. Is this legal?
Present second offer immediately
A managing broker had a listing on a property for $200,000. An offer of $180,000 was presented to the seller which the seller took to his accountant to review. In the meantime, another offer then came in to the managing broker on the same property for $175,000. What should the managing broker do?
No, this was just an offer from the buyer to negotiate a possible contract
A managing broker listed a new home for sale that was nearly complete. The garage on the house was still under construction. A buyer approached the managing broker and said they would buy the house only when and if the garage was completely finished. Was this a contractual obligation for the buyer?
Present the second offer immediately
A managing broker presented an offer to the seller for $80,000. While the seller is considering the offer, another offer for $100,000 for the property from another brokerage firm comes in. What should the managing broker do with the second offer?
No, it is imperfect as it does not end at the point of beginning
A metes and bounds description is given as follows: "A piece of property beginning at the cross section of highways 32 and 7, thence South 355 feet, thence West 280 feet, thence North 260 feet, thence East 315 feet." Is this a valid description?
Take all necessary steps to consummate the sale
A minority couple wanted to move into a neighborhood composed mostly of non-minorities. Which of the following statements BEST describes the obligations of the agent?
must give a parking space near the door to the handicapped person if one is available and a need is demonstrated
A mobility impaired person was renting a unit in an apartment complex. Half of the units have assigned parking spaces near the door. The other half do not. The owner:
No, because he is only liable for his initial investment
A person invested $5,000 in a limited partnership. One of his concerns was the amount of his liability. Since he is one of the limited partners, can he be held liable for more than his initial investment?
Refusing to rent to a student from a different national origin
A person owned a 4-plex and lived in one of the units. Which of the following would be allowed?
tell the seller to contact a securities agent regarding this sale
A person owned a retail establishment. The seller was considering selling the retail business through a stock exchange. The seller contacted a licensee about this idea. The licensee should:
Refinance the existing home mortgage
A person with a large amount of equity in a home would like to obtain a new loan using the equity in the home for investments. The existing mortgage on the home is 3% less than what is currently available. Which of the following steps would BEST accomplish this?
$1200 - 249 feet times 140 feet equals 34,860 square feet. 34,860 divided by 43,560 equals .80 acres. .80 acres times $1,500 per acre equals a price of $1,200.
A property described as follows sold for $1,500 per acre. "Beginning at a boulder go 249' north; then 140' east; then 249' south; then 140' west to the point of beginning." What was the sale price?
270 ft - 920 square yards times 9 equals 8,280 square feet. 8,280 divided by 40 feet equals a depth of 207 feet.
A property had an area of 920 square yards with a 40 foot frontage. What was the depth of the lot?
return the space to its original condition at the lessee's expense
A property manager leased a space to a handicapped person. The handicapped person wanted to make some modifications to the space. The property manager can require that the handicapped person:
Check the background of a tenant regarding the tenant's financial status
A property manager was leasing units in an apartment complex. Which of the following activities would the manager be allowed to do?
164 ft - 820 square yards times 9 equals 7,380 square feet. 7,380 divided by 45 feet equals 164 feet for the depth.
A property totaled 820 square yards. If it was in a rectangular position and the front footage was 45 feet, what was the depth?
No, the agreement was not in writing
A seller and buyer agreed in writing to buy and sell a piece of real estate. The seller and buyer also agreed orally that the seller would leave the refrigerator for the buyer. After closing, the buyer discovered that the seller had not left the refrigerator. The buyer then sued the seller in court for the refrigerator. Would the buyer likely prevail in this lawsuit?
Buyer
A seller's home was listed for sale by a managing broker. A buyer made an oral offer for the property which the seller accepted. The oral agreement between seller and buyer called for the seller to pay all closing costs. When the contract was put in writing for all to sign, the contract read that the buyer would pay all closing costs. Both seller and buyer signed the contract. Who would MOST likely be responsible for paying the closing costs?
Severalty
A situation where one person only owns the property; also, how corporations take title
Lease/purchase
A tenant leased a space from a landlord with the provision that the tenant would purchase the property at a set price in the future. This type of arrangement would BEST be described as a:
No, discrimination based upon race is unlawful in all cases
A woman lived in a 4 family house and rented rooms to young college students. She advertised that she would only rent to single white women but she did not care about their religion. Was this permissible?
Severalty
ABC Incorporated was organized with five stockholders. How would ABC Incorporated take title to the property?
Evicting for playing loud music (excessive noise) at night
According to the 1988 amendments to the Federal Fair Housing Law, which of the following would be allowed regarding a handicapped person in an apartment complex?
Contingency clause
All of the following items are required for the validity of a contract EXCEPT:
General
All partnerships must have at least one ____________ partner as the general partner is the one who makes management decisions.
No because there was no acceptance letter from the seller
An out of town buyer writes to a seller agreeing to pay the list price of the property and also agreeing to all other terms laid out by the seller. The seller, however, does not receive the letter until after the listing has expired. Would this result in a valid contract?
Yes, because $150 is considered valuable consideration
An owner gave a buyer an option on a piece of property for 6 months for $300,000, receiving $150 for the option. Was this a valid option?
Yes, because it was a 12 unit apartment
An owner of a 12 unit apartment building lived in one of the apartments. The owner refused to rent to a person because of their national origin. Does the person have a valid complaint?
The salesperson did nothing wrong as the seller's orders were being followed
An owner told a licensee not to present offers below $50,000. An offer came in for $40,000. Following orders, the licensee did not present it. Several months later the seller had financial troubles and had to sell for less than $40,000. Which of the following statements is NOT true about this situation?
a rejected offer and a counter-offer by the seller
Buyer Baird wrote a letter to Seller Carr offering to purchase Carr's home for $85,000 and asked Carr to sign a general warranty deed. Seller Carr wrote back agreeing to sell for $85,000 but would only sign a special warranty deed. This represents:
illegal because of Fair Housing Laws regarding familial status
A "For Sale By Owner" placed an advertisement on their property which read, "couples only - no children, please." This advertisement is:
6.6 - To find the total square footage, multiply 400 by 720. This gives you a total square footage of 288,000. Then, take 288,000 square feet and divide by 43,560 to arrive at a total acreage for both lots of 6.6.
One rectangular piece of property was divided by a stream, separating the property into two equal triangular lots. The frontage of the entire parcel measured 400' and the depth of one of the triangles measured 720'. What was the total acreage of both triangular lots?
10.5 acres - 500` times 920' equals 460,000 total square feet. 460,000 square feet divided by 43,560 equals 10.5 acres.
One rectangular piece of property was divided by a stream, separating the property into two equal triangular lots. The frontage of the entire parcel measured 500' and the depth of one of the triangles measured 920'. What was the total acreage of both triangular lots?
1-4 plex
Only a _____________ might be exempt under the 1968 Fair Housing Laws, not a 12- plex. If one is exempt, the person can discriminate based on national origin. However, even if exempt, one can NEVER discriminate based on race.
No, as there was no consideration given, the agreement was not enforceable
Q agreed in writing to give a neighbor the piece of land between the rose bush and the neighbor's property line. The transfer was to take place within 6 months. After the 6 month period had passed, Q refused to transfer the property. Would the neighbor have any recourse?
It applies only to discrimination involved in the acts of selling or renting property
Regarding Fair Housing Laws, which is true?
Securities license
Required if one sells investments to the general public, such as REIT`s (Real Estate Investment Trust)
10 acres - 1/8 times 1/8 equals 1/64 of a section of ground (640 acres). 640 divided by 64 equals 10 acres.
The area of a property that was 1/8 mile x 1/8 mile is:
Put real estate transactions in writing
The intent behind the Statute of Frauds is to:
No, this would not be allowed as discrimination based on sex is prohibited by the fair housing laws
The owner of an apartment complex hired a managing broker to rent six of the units. The owner further requested that the managing broker do everything possible to find women tenants only as the owner did not want the units rented to men as they are prone to have loud parties. Can the managing broker follow these instructions?
All metes and bounds
These descriptions must begin and end at the same point (point of beginning). It may begin anywhere
Blockbusting
Trying to obtain listing by saying certain groups of people are moving into the neighborhood is __________ and therefore illegal under Fair Housing Laws.
60 - 18` times 15' equals 270 square feet. 12' times 22.5' equals 270 square feet. Both rooms added together total 540 square feet. 540 square feet divided by nine gives the answer of 60 square yards. Remember, square feet divided by nine gives square yards.
Two rooms in a house measure 18' by 15' and 12' by 22.5'. If the owner was going to carpet both rooms, how many square yards of carpet would be needed?
Reversion
Upon expiration of a lease, the property goes back to original lessor (landlord); also, a life estate in reversion is where once a grantee (life tenant) dies, the property goes back to original grantor
Equitable title
What a buyer receives upon buyer and seller signing a contract to purchase a property; allows buyer to receive deed (or legal title) at a later date, usually at closing
Plat map
What is the name of the map that shows the individual lots in a subdivision?
sue for specific performance
When a buyer receives an equitable title to a property, this entitles the buyer to:
In the event of a discrepancy, the distances in the deed prevail over the actual distances between monuments
Which is NOT true about a metes and bounds description?
Aggrieved parties may appeal to HUD for assistance
Which is true regarding the Federal Fair Housing Law?
Rectangular survey system
Which method of survey includes meridians and base lines?
Activities of an owner-occupant of a duplex
Which of the following activities is NOT covered under the Fair Housing Law?
luxury condominium - singles only"
Which of the following advertisements is a violation of federal law?
Unlike general partnerships, limited partnerships must have limited and general partners
Which of the following best describes the difference between general and limited partnerships?
Topographical Survey -
Which of the following methods would NOT be a legal description?
A void contract can not be enforced legally; a voidable contract could remain in force until one of the parties involved decided to void it
Which of the following statements BEST describes the difference between a void and a voidable contract?
Limited partnerships also must have general partners
Which of the following statements BEST distinguishes general from limited partnerships?
The possibility of buying at a set price at a later date
Which of the following statements BEST identifies an option?
The performance obligation of the parties
Which of the following statements BEST illustrates the difference between a bilateral and unilateral contract?
Puffing is an exaggeration, not concealing material facts; misrepresentation is unjustly harming a person by concealing material facts
Which of the following statements BEST illustrates the difference between puffing and misrepresentation?
A broker goes around to neighbors advising them of the fact that people from a protected class are moving into the neighborhood
Which of the following statements BEST illustrates the practice of blockbusting?
It ha all of the elements as a sales contract
Which of the following statements is true regarding an option to purchase real estate?
Rescission
Which of the following terms describes a court action to bring both parties to a contract back to their original position?
Metes and Bounds description
Which would have enough different types of measurements to accurately describe an irregularly shaped parcel of land?
Metes and bounds
can use rods, feet and inches (down to 1/100 of a foot) an is ideal for identifying irregular shaped parcels.
Topographical survey
deals with the lay of the land and is NOT a legal descriptions
Deed restrictions
private land use controls, such as minimum acreage, minimum square footage, certain type of roofs, etc.
Rescission
returns both parties to the status quo, or the way they were before - back to square one.
Plat map
shows how the individual lots are platted (drawn) out. Record of lots
Contingency
something written into the contract that allows a party to "opt out" of the contract should something happen or fail to happen.
Mortgage contingency clause
states that a buyer will only buy if the buyer is able to obtain financing. If the buyer cannot, typically the earnest money will be returned to the buyer.
Lease option
Each of the following contracts would be bi-lateral EXCEPT a:
Pay consideration
For an option to be valid, an optionee must:
When the option is initially entered into
If a buyer purchases an option on a property for 30 days, when would the sale price be established?
Inform the seller that the managing broker must show the property to all qualified buyers
If a seller instructed a managing broker NOT to show a house to buyers with children, what should the managing broker do?
No, because race, color, religion, national origin, and sex are not material
If the seller asked the managing broker what race the buyers were, would the managing broker have violated the fiduciary relationship by respectfully refusing to answer?
Blockbusting
In an effort to obtain listings, a real estate agent was handing out fliers in a neighborhood telling people that communes were coming into the neighborhood. This would be:
An investment in a real estate transaction involving stock
In which of the following transactions would a securities license be needed?
Deed restrictions
Lots were being sold in a subdivision that required all building lots contain a minimum of .5 acres. This would be an example of:
inform the buyer that only bona fide retirement communities can legally restrict children
Managing Broker Dole was showing a buyer different apartments for rent in a specific area of a city. The buyer asked Dole to find an apartment that did not allow children as the buyer desired peace and quiet and felt that children would destroy their privacy. Managing Broker Dole should: