Real Estate State Exam- Agency

A seller of a rental property had collected monthly pre-paid rent of $600.00 on the first of the month. Closing was to take place on the 17th of the month with the seller being responsible for the closing date. Assuming a 30 day month, what would be the amount of the rent proration?

$600 divided by 30 days = $20 per day of rent. Since the seller is responsible for the closing date, the 30th of the month minus the 17th of the month leaves 13 days that the buyer should receive of the pre-paid rent money. $20 per day times 13 days = $260.

A closing was to take place on June 15th. The sales price was $150,000. The seller's current loan balance was $115,000 with an 8% interest rate while the buyer was obtaining a 90% loan at 7%. The taxes of $600, paid in arrears, were to be prorated to closing with the seller being responsible for the closing date. What would be the amount of the tax proration?

$600 divided by 360 = $1.67 per day for taxes x 165 days = $275.

Which of the following persons is usually NOT an agent?

A person who works for a multiple listing service

A person owned several apartment houses. She hired an agent to sell only two of her apartment houses. What type of agency relationship was established?

A special agent is hired on a one-time basis. This person was hired to sell two properties. However, there was no on-going relationship as in a general agency

Which of the following obligations does a managing broker owe to a third party in a real estate transaction?

Accuracy

Which of the following can a property manager legally do?

Ask questions of potential tenants to determine if they have the ability to pay the rent. Financial questions about tenants are allowed in property management.

Which of the following items would be a debit to the seller on a closing statement?

Contributions to buyer's closing costs

A buyer and seller entered into a contract for the sale of a house. The buyer applied for and was approved for a loan. At the last minute the seller backed out of the sale. Is the managing broker due a commission?

Yes, because the buyer was able to perform all of the requirements in the contract. As a general rule, if the managing broker has procured a ready, willing and able buyer and the seller defaults, the managing broker is due a commission. It appears that the buyer DID meet the requirements of the seller.

A managing broker had an agreement with a buyer to find a home for a flat fee of $5,000. The managing broker found a special home listed by another brokerage firm that the buyer liked and purchased. Is the buyer's managing broker entitled to receive a commission from both the buyer and the seller?

Yes, if disclosure was made to all parties in writing

A managing broker had a listing with a seller that expired on July 5th. The managing broker brought a buyer to the property on July 8th. If a deal was consummated, how much commission would the managing broker be legally entitled to?

Zero, as the buyer was procured after the listing expired

A managing broker listed a property with a seller on an exclusive right to sell basis. The managing broker would NOT be due a commission if the property was sold by:

a sheriff. this would be at a foreclosure sale. Foreclosure on a property normally terminates a listing.

A buyer and seller entered into a contract for the purchase of a house. The seller purposely did not disclose the fact that the roof leaked. The buyer has recourse under what body of law?

Latency defects

A managing broker had a listing that expired. 50 days after the protection period had ended, the managing broker brought a ready, willing and able buyer. Is the managing broker due a commission?

No, because the managing broker performed after the listing expired

A seller had a house listed with a managing broker for $86,000. The managing broker was working with a buyer who told the managing broker that the buyer would start by offering $85,000 but would pay $86,000 for the property. What should the managing broker do?

Present the offer as is and inform the seller of the possible increase. Agents must present all offers. However, the agent also must disclose to the client any information obtained that may help the client.

A licensee received an offer in which the buyer asked the seller to carry a second mortgage for $3,000. The licensee suggested the seller check out the buyer's credit. Which of the following duties was the licensee fulfilling?

Reasonable Care. Being careful by doing a thorough search of the buyer`s credit is part of a licensee's fiduciary obligation, specifically if the buyer is asking the seller to finance the buyer personally through a second mortgage

An agent had a listing which would expire on July 5th. On July 1st the agent showed the property to a buyer. The seller plotted with the buyer and sold it to him a few days after the listing expired. Who would the managing broker sue for the commission?

Seller for the entire commission

A buyer was purchasing a lot through a real estate licensee. The buyer asked the licensee to recommend a builder. What would be the licensee's best course of action?

Suggest the buyer contacts at least three builders and have the buyer make the choice on the builder

An agent obtained a 4 month listing on a restaurant at 6% commission. Two weeks later the restaurant burned down. Which of the following actions BEST describes what the agent should do in this situation?

The agent should do nothing since the agency is now terminated. Substantial damage usually terminates the listing since it is generally assumed that the managing broker should not be required to attempt to fulfill the agency obligations of marketing a property for which there would be few (if any) potential buyers.

A licensee could be an agent for:

the licensee's own managing broker only.

A seller wanted to net $20,000 on the sale of property. The seller had a first mortgage on the property of $61,800. The managing broker charged a 7% commission with the seller also having to pay $2,000 in closing costs. What would the sale price have to be?

$20,000 net plus $61,800 mortgage plus $2,000 closing costs equals $83,800. $83,800 divided by 93% equals $90,107.53.

A seller sold a commercial property with a closing date of November 20, 2003. The seller had pre-paid $3,224 for an annual hazard insurance policy which began on August 13, 2003. The buyer assumed the hazard insurance policy with the seller being responsible for the closing date. Assuming a 360 day year, what would be the amount for the insurance proration?

$3,224 divided by 360 days equals $8.96 per day. The buyer owes from November 21st to August 12th, which is a total of 262 days (using 30 day months). 262 times $8.96 = $2,347 that the buyer owes to the seller.