Salesperson Examination 1

You have a mortgage in which you make the same payment each month for principal and interest, with the principal payment increasing and the interest payment decreasing from month-to-month. This is called a(n)

amortized mortgage A term mortgage allows for payment of interest only with a lump-sum balloon payment at maturity. A partially amortized loan also involves a lump-sum or balloon payment at maturity/

A developer was able to buy two adjoining single-family lots for $20,000 each. He combined the lots into one parcel with a value of $90,000. The developer's action reflects the process of

plottage. Accession refers to acquiring title to real property through the annexation of a fixture. Attachment is the act of placing a lien upon a person's property by a court. An exchange is a transaction in which part or all of the consideration is the transfer of like-kind property.

Which of the following terms are NOT related

police power-deed restriction Police power is a public-land-use control; a deed restriction is a private-land-use control.

Brokers who violate the Sherman Antitrust Act may be punished by a maximum fine of

$1 million.

A sale is to close on June 23. Real estate taxes of $2,640 for the current year have NOT been paid. What is the amount of real estate tax proration to be credited to the buyer? (Use a 30 day month)

$1,268.66

Using $9.91 as a mortgage factor, what is the monthly payment for a $150,000 loan at 11.5% for 30 years?

$1,486.50

A home is valued at $92,000. Property in this city is assessed at 70% of its value, and the local tax rate is $3.40 per $100. What is the amount of owner's monthly taxes?

$182.47

A broker sold a home for $146,000. The broker charged the owner a 6% commission and will pay 25% of that amount to the listing salesperson and 30% to the selling salesperson. What amount of commission will the listing salesperson receive from the sale?

$2,190

Licensed or certified appraisers performing federally related transactions must comply with the Uniform Standards of Professional Appraisal Practice (USPAP). A federally related transaction is any transaction with a value greater than

$250,000.

You are selling your house and a buyer is assuming your outstanding mortgage, which has an unpaid balance of $58,700 after the last payment on August 1. If the annual interest rate is 9% and interest is paid in arrears each month, what is the amount of mortgage interest to be debited against you at closing, using a closing date of August 18th?

$264.15

You receive a monthly salary of $600 plus 3.5% commission on all your listings that sell, and 2.5% on all of your sales. None of the listings that you took sold last month, but you receive $8,460 in salary and commission. What was the value of the property you sold?

$314,400

A mother wants to know how much money her son owes on his mortgage loan. The mother knows that the interest part of the last monthly was $473.26. If her son is paying interest at the rate of 9%, what was the outstanding balance of the loan before the last payment was made?

$63,101.33

You bought a home one year ago for $83,500. Property in your neighborhood is said to be increasing in value at a rate of 6% annually. If this is true, what is the current value of your real estate?

$88,510

Which of the following statements concerning encumbrances is NOT true?

All encumbrances are liens. Encumbrances may be liens, which affect the title, or physical encumbrances, which affect the condition of the land. However, an easement is an example of an encumbrance that is not a lien. Therefore, not all encumbrances are liens, but it is true that all liens are encumbrances.

Which of the following is NOT a stage in the appraisal process?

Analyze the tax consequences of the property owner. Tax consequences would be analyzed in a feasability study exploring the potential for profitability in a proposed project.

An appraiser uses the cost approach in appraising a home. The appraiser should NOT use which of the following types of information?

Depreciation of land Depreciation generally is applied to a wasting asset, such as a building. Land is not considered a wasting asset.

All of the following agencies are included in the secondary mortgage market EXCEPT

FHA The FHA insures mortgages made in the primary mortgage market. FNMA, GNMA, and FHLMC are major warehousing agencies in the secondary mortgage market.

A four-bedroom house with one bathroom would be an example of

Functional obsolescence. Functional obsolescence is a loss in the value of a property resulting from a deficiency in the floor plan of a house. One bathroom would be inadequate in a four-bedroom house.

In theory, which of the following types of deeds gives a property buyer the MOST protection against problems that may arise with the title?

General warranty.

Which agency is involved in purchasing government-related loans?

Ginnie Mae Ginnie Mae purchases FHA insured, VA-guaranteed, and Rural Development loans in the secondary mortgage market.

If the Federal Reserve Board raises its discount rate, which of the following is likely to occur?

Mortgage money will become less available. Raising the discount rate would increase the interest rates and make mortgage money less available because of the increased cost of borrowing.

Using the information in question 76, what is the total interest paid over the life of the loan?

None of the above.

You listed a home that was subsequently shown by six cooperating outside brokers. How many seller-agency relationships are involved in this transaction?

One. In the absence of state law, the six cooperating brokers are not agents of the seller. In 1996, the National Association of REALTORS eliminated the offering of subagency between cooperating brokers. Cooperating brokers may extend compensation and cooperation to outside brokers, but the offering of subagency is not sanctioned by the NAR

Which of the following types of clauses governs the right of a listing broker to collect a commission from an owner who waits until the listing period expires and then personally contracts to sell the property to a party the broker had shown the property to during the listing period?

Protection.

You are preparing a competitive market analysis on a house that you hope to list for sale. Which of the following approaches to value will be used in the development of the estimated value?

Sales comparison approach The cost approach is most applicable to the appraisal of special-purposes properties, such as a church. The gross rent multiplier is used as a substitute for the income approach in the variation of a single-income-family home. The income approach is, of course, used in the appraisal of an income-producing property.

You mortgaged your property and just made the final payment. Recording which of the following documents will provide notices that the mortgage lien has been removed?

Satisfaction of mortgage An alienation clause states that if the borrower sells the property, the lender has the choice of either declaring the entire debt due and payable or allowing the buyer to assume the loan. A re-conveyance clause is used to release the lien created by a trust deed. A reversion clause could be used in a deed and stipulates that if not complied with, the property reverts to the owner.

On July 1 an owner an a salesperson entered into a six month exclusive-right-to-sell agreement for a residential property. On July 15th, the owner rejected a low offer and fired the listing agent. On August 1st, there was a house fire that required extensive kitchen repairs. On September 12th, the owner entered into another exclusive-right-to-sell agreement with a salesperson from a different agency, On January 1st, the property was still unsold. On which dates was the first listing agreement MOST likely to terminate and why?

September 12th, because the owner breached the first listing agreement by signing a second Dismissal of the salesperson does not affect the listing, because the broker, not the salesperson, is a party to the contract. Material damage is not destruction Signing a second listing while the first listing is in effect is a clear breach of contract. (Note, though, that the first broker may have some recourse against the seller for expenses.) Expiration of the listing was too late, in light of the second listing having been signed.

Which of the following is NOT a category protected by federal fair housing laws against discrimination in housing?

Sexual orientation.

Which of the following is NOT a specific lien?

State inheritance taxes State inheritance taxes are a general lien and affect all the debtor's property.

A broker listed a residential property under a valid written listing agreement, After the sale was completed, the owner refused to pay the broker's fee. Which of the following can the broker do?

She can take the seller to court and sue for the commission. In most states, the broker has no lien on a property for a commission due on negotiating the sale of that property. Accordingly, the broker may not go to court to stop the transaction. The broker cannot collect the commission from the buyer, because the buyer is not in the agency relationship between the seller and the broker. In some states, a broker may place a lien on property if in compliance with the statute.

If a husband and wife own an apartment building and the husband owns an undivided three-fourths interest and the wife owns a one-fourth interest, what type of tenancy exists?

Tenancy in common Tenancy in common allows for percentage differences in ownership. A leasehold estate is a personal property interest. Joint tenancy and tenancy by the entirety requires equals percentages of interests in most states.

A broker listed an owner's home and later received an offer from another licensee that met all of the listing terms and conditions. After considering the offer, the owner informed the broker that the owner no longer wished to sell and asked to be immediately released from the listing agreements. Which of the statements BEST describes the broker's position in this situation?

The broker may succeed in collecting an earned commission from the owner. The owner has the power to terminate the listing contract but not necessarily the right; the broker may be able to sue the owner for damages. The offeror would not be able to sue for specific performance, because the offer was not accepted; the owner is not obligated to accept the offer. The broker would not be entitled to the earnest money because the offer was never accepted; the earnest money would have to be returned to the offeror. Finally, the point at which a commission is earned is not longer an absolute in all jurisdictions.

You have entered into an installment land contract for the sale of your home. Which of the following statements is FALSE?

The buyer will hold legal title during the terms of the contract.

Which of the following is a similarity between an exclusive-right-to-sell listing an exclusive-agency-listing?

The exclusive-agency listing allows the seller to sell his or her own house without paying the broker a commission. The broker, under an exclusive-right-to-sell listing, receives a commission regardless of who sells the property. Either type is given to only one broker.

A salesperson listed a home for sale and transferred to another brokerage firm two weeks later. Which of the following statements describes the status of the listing?

The listing will stay with the former brokerage firm of the salesperson. The salesperson's listing of the home created an agency relationship between the seller and the salesperson's brokerage. The listing belongs to the broker.

Two unrelated people own a three-unit apartment building as tenants in common. One wants to sell but the other does not. Which of the following statements describes the legal rights of the party who wants to sell?

The party may request a court to partition the building. Tenants in common may partition the property by agreement and, if no agreement, by judicial agreement.

A state wants to build a publicly owned convention center to attract private development in its largest city. Can the state use eminent domain to acquire the land?

Yes, if just compensation is paid to the owners of the land. The government has the right to acquire private property for public use while paying just compensation to the owner. The convention center would attract private developments of hotels and retail establishments. The type of estate held by owners would not prevent the state from acquiring land.

A listing broker is considered to have earned a commission from a principal when which of the following events occur?

a "ready, willing, and able buyer" signs a noncontingent or cash offer that meets the terms of the listing contract.

All of the following would be considered real property EXCEPT

a leasehold estate. A leasehold estate is a non-freehold estate involving the tenants right to occupy the real estate during the term of the lease.

An option, prior to being exercised, is an example of

a unilateral contract. An option is an example of a unilateral contract. An option is a promise to keep open for a specified period an offer to sell or purchase property. When the optionee exercises an option, it becomes a bilateral contract.

The movement of land caused by an earth quake would be an example of

avulsion.

Personal property is generally conveyed by a

bill of sale.

Salesperson Alvarez for broker Brooks has listed a home. Salesperson Cooke for broker Davidson is acting as a buyer's agent and is trying to sell the same home to his buyer. Salesperson Cooke is primarily responsible to

broker Davidson Salesperson Cooke is primarily responsible to his broker Davidson. As an exclusive buyer's agent, a vicarious agency relationship would exist between the broker and the buyer, because all exclusive buyer-agency agreements are the property of the broker.

A restaurant opened in a neighborhood and was enjoying substantial profits. Within a year, another restaurant was built across the street and resulted in the first restaurant losing, in the next year, 30% of its profits. This is an example of the principle of

competition. The principle of competition states that excess profits create ruinous competition.

When property transfers from one party to another, recording the deed provides what is called

constructive notice.

Riparian rights would exist in a

cooperative on a river. Riparian rights are water rights granted to owners along a river and stream.

In the appraisal of a public building, an appraiser would use the

cost approach. The cost approach is considered most reliable in the appraisal of special-purposes buildings, such as churches and schools.

All loans subject the the Real Estate Settlement Procedures Act (RESPA) require lenders to

deliver a Uniform Settlement Statement (HUD-1) form to both buyer and seller. RESPA provides for use pf a HUD-1 form.

Your aunt died intestate and you inherited her house. The way in which you acquired the title to her house is by

descent. When a person dies intestate, the decedent's real estate and personal property pass to his or her heirs according to the statutes.

A person who receives real property by will is called a

devisee A testator is a person who makes a will. Devise refers to a transfer of real property under a will.

All of the following statements correctly describe a legal life estate EXCEPT

during his or her life estate, the life tenant is generally answerable to the holder of the future interest. The life tenant generally is not answerable to the holder of the future interest holder.

A meatpacking plant has just been built one block from your house, The strong odors are lowering property values in your neighborhood . The loss in value would be classified as

external obsolescence. Functional obsolescence and physical deterioration refer to a loss of value within the property, while external obsolescence refers to a loss of value outside the property.

The highest form of the ownership interest a person may hold in real estate is

fee simple. A fee simple is the highest form of interest. A base fee is subject to certain limitations imposed by the owner. A life estate is limited to the life of an owner or some other person. Legal life estates are created by state law.

A salesperson presented an offer that was accepted and received an earnest money payment for $2,000. The salesperson should

give the earnest money to his broker. Earnest money must be placed in the brokerage firm's trust account.

A commercial lease that allows rent to be increased or decreased periodically based on changes in economic indicators is a(n)

index lease.

Your neighbor has given you revocable permission to go hunting on his farm. You have a(n)

license. License is permission to enter the land of another for a specific purpose, and the owner of the property may revoke it at any time.

All of the following correctly describes how real estate licensees should handle the possibility of hazardous substances on a property being sold EXCEPT

licensees should not disclose the problem, because it might harm the seller.

A broker acting as the agent of a seller

must report all offers to the principal unless instructed otherwise. Unless instructed otherwise, the broker is responsible for submitting all offers to his or her principal.

Commissions and fees paid by the seller to a listing agency are determined by

negotiations between the seller and the listing licensee. The broker is not required to charge a commission; the commission is negotiable.

You have entered into a lease that requires you to pay 20% of the owner's expenses. Your lease would be an example of a

net lease. A tenant in a net lease pays rent plus all or part of the property charges. A tenant in a gross lease pays a fixed rent, while the landlord pays all his or her own expenses.

You sign an agreement to purchase a home. The contract requires that the seller replace the damaged living room carpet. The carpet you have chosen costs 16.95 per square yard, plus $4.50 per square yard for installation. If the living room dimensions are displayed below how much would the seller have to pay for the job?

none of the above.

A buyer has entered into an agency agreement with more than one buyer's agent but only owes compensation to the one who puts an actual transaction together. This arrangement is known as a(n)

nonexclusive agency agreement. The buyer-nonexclusive agency agreement is similar to an open listing-seller agreement.

According to the law of agency, a real estate broker owes the principal all of the following duties EXCEPT

offering legal advice The broker may not offer legal advice - only a licensed attorney may do so.

The servient estate in an easement appurtenant is the property

on which the easement is placed. A servient estate also is referred to as a servient tenement. The property that benefits from the easement is known as the dominant tenement.

The city in which you live has a zoning ordinance. The basis for the city to have such an ordinance is

police power. Police power is the power of the state to establish legislation to protect public health and safety and promote general welfare.

You wrote an offer on a house for $214,000. The seller gave you a counteroffer for $218,000. The seller may withdraw the counteroffer any time

prior to the buyer's acceptance.

A house that is the least expensive in its neighborhood has nevertheless grown significantly in value over the years because of an increasing number of larger, more expensive houses being built nearby. This growth in value is an example of the principle of

progression. The answer is progression. The principle of regression states that the value of the most expensive home in a neighborhood will be lessened by the presence of less expensive homes being built nearby. The principle of competition states that excess profits create ruinous competition. Highest and best use states that each parcel of land should be developed to its most profitable use subject to legal constraints, such as zoning.

The Civil Rights Act of 1866 prohibits discrimination based on

race.

Sources of groundwater contamination do NOT include

radon. Radon is an odorless radioactive gas released from rocks under the earth's surface that finds its way to the surface; it usually is released into the atmosphere,

A competitive market analysis reflects the use of

sales-comparison-approach The sales-comparison approach relies on a comparable sales, as well as sales that involve willing buyers and sellers, with neither under abnormal pleasure.

A claim based on adverse possession of property must NOT be

secretive A claim based on adverse possession must be notorious, open, and hostile.

Broker Xavier is showing buyer Yang, an Asian, homes only in Asian neighborhoods. The broker may be guilty of

steering.

First Bank holds a lien on a home on which Second Bank already had a lien. The lenders subsequently entered into an agreement in which First Bank moved into a first lien position. This is an example of

subordination agreement Hypothecation refers to the pledging of property as security for a loan in which the borrower retains possession of the property pledged as security

You signed a lease for one year and took possession of an apartment. When the lease expired, you continued to live in the apartment without the owner's consent. our tenancy would be considered to be

tenancy at sufferance.

A broker was employed by an owner, as an agent, to sell her home. All of the following statements correctly describe the broker's relationship to the owner EXCEPT

the broker is a general agent. A real estate broker is a special agent authorized to represent the principal in one specific transaction.

Strict liability under Superfund means that

the owner is responsible to the injured party without excuse. Joint and several liability means that each owner is personally responsible for the damages in whole; if only one owner is financially able to handle the total damage, that individual owner will have to pay all and attempt to collect from the other owners their proportionate shares. Retroactive liability means that liability also extends to people who have owned the site in the past.

In MOST states, the listing broker has a fiduciary duty with

the principal. The fiduciary relationship of trust and confidence exists between the agent and the principal (client). The listing broker does not automatically have a fiduciary duty to the buyer or the customer.

A salesperson desires to advertise a property without including the brokerage name. This situation is allowed when

the salesperson is the actual owner and advertising as a for sale by owner.

All of the following are examples of a leasehold estate EXCEPT

time-share estate. A time-share estate may include a fee-simple interest in a condominium ownership

You are working as a buyer's broker for a client. All of the following would describe your role as buyer's broker EXCEPT

you should show the buyer properties only in which your commission is protected. The buyer's broker has a fiduciary relationship with the buyer.