TN Real Estate Exam

When a real estate affiliate broker license is issued in Tennessee, how long is it valid?

Two years

When is a real estate license required?

When performing real estate activities for others, for compensation of any kind

Which of the following options describes a subordination agreement?

An agreement between two lien holders to modify the order of lien priority

Which of the following is more likely to act as a closing agent?

An attorney or title company representative

Which of these statements is NOT true about a specific lien?

It's always involuntary. - A specific lien may be voluntary or involuntary.

What language may be included in a contract after the assignor's name to make it clear that the contract is assignable?

"And/or assigns" - The phrase "and/or assigns" helps make it clear that the contract is assignable.

You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response?

"That's a great way to meet our objectives."

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

$1,335.67 - First, find the square footage (5.5 x 43,560' = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400' = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95' = $1,335.67 per front foot.

A Tennessee license expired more than 120 days but less than one year due to failure to comply will be subject to an additional penalty fee of ______ .

$100 per 30 day period

Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.

$100,000 - Value = income divided by cap rate. The value of a property is $100,000 ($15,000 ÷ .15 = $100,000).

Your seller wants to net $100,000 after the 5% commission is paid. Assuming no closing costs, at what price does the home need to sell for the seller to net this amount?

$105,263.16 - The seller's percentage of a sale is 100% - 5% commission = 95% (or .95). Take the amount the seller wants to net and divide it by that amount ($100,000 ÷ .95 = $105,263.16). Conversely, for a sales price of $105,263.16: $105,263.16 × .95 = $100,000.

If Hal sold his client's listing for $230,000, but it appraised at $200,000 and the buyers agreed to put the extra $30,000 down, what will Hal's commission be if he charged 5%?

$11,500 - Sales price x commission rate = commission. $230,000 × 5% = $11,500.

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?

$117,687.80 - First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments /year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 $250,000 = $117,687.80.

Using a calendar year, what would the daily rate be if annual taxes are $4,662? Round to the nearest cent.

$12.77 - A calendar year is 365 days, so take $4,662 ÷ 365 days = $12.77.

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

$147,000 - This question asks you to find the value of a house based on the GRM of 147. The value of the home that rents for $820 monthly isn't relevant to your calculation, which is 147 x $1,000 = $147,000. Remember that GRM is just an estimate of value.

What's the maximum dollar amount the Real Estate Education and Recovery fund will pay out for a single transaction?

$15,000

Grant and Adela arrange a $150,000 loan at 4.5% annual interest with their lender. What's their monthly interest amount?

$562.50 - Grant and Adela's annual interest amount is $6,750 ($150,000 x 0.045). To get the monthly amount, divide $6,750 by 12. Their monthly interest amount is $562.50.

How much is the renewal fee for affiliate brokers in Tennessee?

$75 - License renewal fees are $75 for affiliate brokers every two years.

A homeowner has $80,000 of principal left to pay on her mortgage. Her home was recently appraised at $156,000, which is $13,000 more than what she purchased it for. How much equity does she have in her home?

$76,000 - To find how much equity she has, subtract the amount she still owes on her mortgage from the appraised value.

A buyer has a 30-year, $400,000 loan with a 7% interest rate. How much of the first month's mortgage payment is interest?

$2,333.33 - $400,000 × 0.07 = $28,000; then $28,000 ÷ 12 = $2,333.33

our buyer client Heather just signed a purchase agreement for a $520,000 home. The LTVR is 60%. How much is Heather putting down on the purchase?

$208,000 - A 60% LTVR means that Heather is financing 60% of her purchase and putting down 40%. Forty percent of $520,000 is $208,000 ($520,000 x 0.40).

Your clients sold their property for $500,000. Your commission rate is 5%. What's your commission (before splits or sharing with the cooperating agent)?

$25,000 - $500,000 × 5% = $25,000

Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?

$255,000 - Transfer tax is calculated based on the purchase/sales price ($255,000).

Bob and Mary are financing $180,500 for a new home. Their lender will approve an interest rate of 5% if Bob and Mary pay two discount points at closing. How much will this cost them?

$3,610 - A discount point is 1% of the loan amount. Bob and Mary are paying two points (or 2% of $180,500), which is $3,610.

Your clients Earnestine and Sammie Griffin are financing $180,970 for a $500,000 home. The Griffin's lender will approve an interest rate of 4.5% if they pay two discount points at closing. How much is this?

$3,619.40 - A discount point is 1% of the loan amount. Earnestine and Sammie are paying two points (or 2%) of $180,970, which is $3,619.40.

What's the maximum amount that can be awarded from the Real Estate Education and Recovery Account for all judgments against a single licensee?

$30,000

Using the straight-line depreciation method, calculate the total depreciation that would be taken on a commercial building valued a $619,000, not including the value of the land, over a two-year period.

$31,743.58 - Straight-line depreciation for a commercial building means that you should divide the building's basis ($619,000) by 39 years. The yearly depreciation is $15,871.79, and you'd multiply this by two to get the two-year depreciation total. Remember that land doesn't depreciate.

A buyer is purchasing a property for $400,000. His lender's loan-to-value ratio is 80%. How much is the buyer financing?

$320,000 - An 80% LTV ratio means the buyer is financing 80% of the purchase price. This equates to $320,000.

Giant Industries has a $674,232 gross operating income, operating expenses of $329,129, and other expenses totaling $38,719. What is the net operating income?

$345,103 The formula for finding net operating income is: gross income - operating expenses = net operating income. So, $674,232 - $329,129 = $345,103. Other expenses like loan interest and debt repayment aren't included in this calculation.

Maurice received an offer of $480,000 for his home. The commission on the sale is 6%. Maurice's mortgage payoff is $78,500. He has additional closing expenses totaling $2,200. What will Maurice net from the sale of his home, rounded to the nearest whole dollar?

$370,500 - Maurice will net $370,500. $480,000 × .94 = $451,200. $451,200 - $78,500 - $2,200 = $370,500.

Kelly is purchasing a property that has an assessed value of $160,000. If the tax rate is 2.5%, what will Kelly likely pay annually in property taxes?

$4,000 - To find the tax amount, multiply the assessed value by the tax rate ($160,000 x 0.025).

The lender will charge a one-and-a-half-point origination fee and two loan discount points. What will be the total due for points on a $115,000 loan?

$4,025 - A point is 1% of the loan amount. Three-and-a-half points (one-and-a-half and two) is 3.5% of $115,000, or $115,000 x .035 = $4,025.

What's the assessed value of a residential property in Tennessee if its appraised value is $365,000?

$91,250 - The assessed value for residential properties is 25% of appraised value ($365,000 x 0.25).

What two requirements does TREC have for licensees who keep business records in an electronic format?

- Must be accessible within 24 hours of a request from TREC - Must maintain the security and accessibility of the records

Within how many days of a firm changing locations must the licensees who are registered with that firm send written notification to the Tennessee Real Estate Commission of their change of address, along with the change-of-address fee?

10 - Licensees have 10 days to notify the real estate commission, in writing, of the move, and pay the required change-of-address fee.

Rachel is subject to court-ordered supervision due to an antitrust violation. This oversight may continue for as long as ______.

10 years - Court-ordered supervision may last as long as 10 years if a brokerage is guilty of violating antitrust law.

The Smithwicks, your buyer clients, obtained a 90% loan on their new $400,000 home. At closing, they paid $6,150 for points at closing. How many points did they pay?

1.71 - A point is 1% of the loan amount. The Smithwicks' loan is $360,000 ($400,000 x .90), and they paid $6,150 for points at closing. Divide the cost into points by the loan amount to get the number of points they paid: ($6,150 ÷ 360,000 = 0.0170833, or 1.71). Also, remember to round off calculations.

Brandi had to pay a $700 penalty fee to reinstate her license. That's likely because her license expired more than ______ ago.

120 days

Jason, your client, is developing a subdivision of 140 houses. He may place deed restrictions on as many as ______ properties.

140 (100%) - Deed restrictions can be placed on an individual property, an entire subdivision, or a neighborhood.

All lenders have different underwriting standards, but traditionally, the housing debt-to-income ratio has been ______%, with a total debt-to-income ratio of ______ %.

25 to 28; 33 to 36 - Although 25% to 28%, and 33% to 36% are often used, the qualifying mortgage rules set total debt-to- income ratio at no more than 43%. While this may seem generous, it's a hard and fast percentage that allows for little lender discretion.

A lot measuring three-fourths of an acre is for sale. How many square feet is this?

32,670 - An acre is 43,560 square feet. Three-fourths of an acre is 32,670 square feet.

A property is 330 feet long by 100 feet wide. How many square feet is the property?

33,000 - 330 x 100 = 33,000

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 - Investors who want to use the 1031 tax-deferred exchange must identify the new property within 45 days of closing and must close on that property within 180 days from the date of sale of the first property.

In the residential mortgage market, charging borrowers more than ______ over market rate for interest is considered a predatory lending practice.

5% - Subprime loans can have interest rates 1% to 5% over the current market rate. Anything over 5% is an indication of predatory lending.

Emma is ready to submit her renewal paperwork and fees to the commission. To avoid paying any extra fees, she must do this ___ days prior to her expiration date.

60 - Licensees may submit their renewal paperwork any time after the 60-day mark, but prior to the license's expiration date, but they will be assessed a penalty fee.

How many acres are in a square mile?

640 - One square mile is equal to 640 acres, which is the size of one section in the rectangular survey system, one method of a legal description of land.

For conventional loans in which the loan-to-value ratio is in excess of a certain percentage, lenders generally require private mortgage insurance. What's this percentage?

80% - Loans above 80% don't conform to Fannie Mae/Freddie Mac guidelines, so a lender may require PMI to offset the risk.

In Tennessee, how long after a contractor has completed work on a residential home does a direct lien claimant have to record a Notice of Lien in the register's office?

90 days

What's the pre-licensing education requirement for affiliate brokers in Tennessee?

90 hours - Affiliate brokers must complete 90 hours of approved real estate education, including 60 hours of principles and fundamentals.

In the world of appraisals, what does TAF stand for?

The Appraiser Foundation - TAF is the acronym for The Appraiser Foundation.

Which of the following best describes a tenant's right to quiet enjoyment?

A tenant has the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord.

Which of the following is most susceptible to a predatory lender?

A borrower with poor credit - Borrowers with poor credit are most susceptible to predatory lenders because these borrowers have fewer loan options for homebuying.

Broker commission fees in contract and real estate transaction forms are established by whom?

A broker - The broker will set commission fees in contracts and real estate transaction form as he and the parties negotiate. It's prohibited for any member of the commission to do this.

An abandoned or otherwise unused commercial or industrial site that contains suspected contaminants is known as a what?

A brownfield - A brownfield is an abandoned or otherwise unused commercial or industrial site with suspected contaminants.

Which of the following can indicate an electrical problem?

A burned or discolored outlet

What is a township?

A 36-square-mile square formed in the use of the rectangular government survey system

Recently retired Admiral Bongo and his wife, Lucy, contact you. They want you to help them purchase their dream house now that he's retired, but one that has the necessary accommodations for the admiral's disability. They also confide in you that they don't have a lot of money saved up for a down payment. Which type of financing may work best for them?

A VA loan, which requires no down payment. - Current and former members of the military may be eligible for a VA loan. Although the FHA 203K loan allows for renovation financing, VA loans require no down payment.

A central element of an antitrust violation is _______.

A contract - Antitrust involves a contract and conspiracy among competitors.

Lance purchased a home, but he won't own any real estate-just shares in a corporation. This is because his new home is ______.

A cooperative

Rhonda is an unrepresented buyer who's purchasing Tony's townhome. Gary represents Tony in the sale of his property. What's Rhonda's relationship to Gary?

A customer

What is a plat map?

A detailed map of a subdivision that includes boundaries, measurements, and distances between points

What is the best description of a deed?

A document to transfer ownership/interest in real estate - A deed is a method of conveying real property from one party to another. A deed should be recorded to protect the parties' interests.

Your buyers step outside to view the backyard of a property they're touring, but then they can't get the back door closed again. You recognize that this could be a symptom of ____, and realize that if they are interested in this property, they will want to discuss this issue with a home inspector.

A foundation problem

For which transaction would the seller have to provide property conditions to the buyer, according to the Tennessee Residential Property Disclosure Act?

A four-plex

Which one of the following scenarios describes an adverse condition that would need to be disclosed?

A hail storm damaged some shingles last year.

What determines TREC's course of disciplinary action when a licensee or license candidate violates license law?

A hearing - The hearing determines TREC's course of disciplinary action.

The local planning and zoning commission is reviewing multiple applications at this week's meeting. Which of the following new developments is likely to be reviewed relative to a mixed- use zoning ordinance?

A high rise with residential, retail, and entertainment space

April's mother is getting older, lives alone, and needs care. April's house is too small for both of them. She has a solid amount of equity in the home but isn't in a position to move. Instead, she decides to take out a loan to build an 800-square-foot addition onto the existing home for her mom. What type of loan might April likely consider to finance the addition?

A home equity loan - A home equity loan is based on the amount of equity the homeowners have in their home. These funds are received in one lump sum and are frequently used for large expenses, such as home renovations.

The contract that allows a tenant to live on the property is _______.

A lease - The contract that allows a tenant to live on the property is a lease.

Which of the following defines the term 'lis pendens'?

A legal notice that a lawsuit is pending that affects the title of a property

What is probate?

A legal process to determine a will's validity - Probate is the legal process to determine the validity of a will and to ensure the will accurately reflects the deceased person's wishes. It can also be used in situations where there is no will.

Tennessee affiliate brokers and timeshare salespersons must be sponsored by ______ in order to practice real estate.

A licensed real estate broker - Only one license type is allowed to act as a sponsor for other licensees.

Jon and Talia are artists who are looking for a home with a backyard that is big enough for them to build a studio. Which of the following properties might they want to stay away from?

A lot that is adjacent to or partially on wetlands

Who's entitled to reimbursement from the Real Estate Education and Recovery Account?

A member of the public who's been granted a judgment against a licensee - The account's purpose is for reimbursing a member of the public who's been harmed by a licensee's actions, or by a person misrepresenting themselves as a licensee, and who's been unable to collect on a court judgment.

Why is it important that the legal description in a sales contract be copied correctly?

A mistake in the legal description may lead to more or less land being conveyed to the buyer than was intended.

Which of these transactions is exempt from the disclosure requirements of the Tennessee Residential Property Disclosure Act?

A newly constructed home

What is a principal meridian?

A north-south line used as a reference point in the rectangular government survey system

Which of the following can hold a Tennessee broker's license?

A person or an entity - A broker's license can be held by a person or an entity, such as a corporation or partnership.

What is a bound?

A physical feature that defines the boundaries of the land - Bounds (boundaries) are physical features that define the boundaries or borders of the land.

In addition to a firm real estate license and a principal broker, what else must real estate firms have to meet Tennessee firm license requirements?

A physical location and facility that can adequately accommodate affiliated licensees - Tennessee law requires that each office have a real estate firm license, a principal broker, and a physical location and facility that can adequately accommodate affiliated licensees.

What's a datum?

A point, surface, or line used as a reference for measuring elevations - A datum is a point, surface, or line used as a reference for measuring elevations.

Which of the following statements about the promissory note is true?

A promissory note is a negotiable instrument and can be transferred to a secondary holder who has the right to enforce the note's terms. - The promissory note is evidence of the debt that specifies the borrower's financial obligations. Collateral for the note is typically the property on which the loan is made. It's a negotiable instrument.

Which of the following statements is true about zoning classifications?

A property that's zoned residential may be either single-family or multi-family.

Which of the following properties is exempt from the FIRREA federal appraisal guidelines?

A refinance of a property valued at $375,000 - Federal guidelines apply to financing, refinancing, and the use of real property as security for a loan when the property is valued above $400,000. If the property's value is $400,000 or less, it is exempt from federal appraisal requirements.

Henry died, and his property wasn't held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes ______ before the property is distributed.

A year or more - The probate process can take up to a year or longer before the property is disbursed to the beneficiaries.

Municipality XYZ created a document that regulates the permitted land uses and zoning classifications within the town boundaries, and does so while staying within the parameters of the comprehensive plan. Municipality XYZ has created _______.

A zoning ordinance - This is a description of a zoning ordinance.

In the rectangular government survey system, what is a base line?

An east-west line used as a reference point - Base lines run east-west, and principal meridians run north-south. Both are used in the rectangular government survey system.

What's the term for someone who's been given the authority to act on behalf of someone else?

Agent

Which of the following is a true statement about FHA financing?

An FHA loan is usually more attractive to borrowers who have lower credit scores and down payments.

Which of the following provides a summary of the title history?

Abstract of title - The abstract of title is a document that details the deeds and documents that prove an owner's right to transfer the land, along with any encumbrances that relate to the property.

Jenna is an affiliate broker in Tennessee. She recently helped a seller client close on a real estate transaction. Which of the following would it be illegal for her to receive as part of this transaction?

Accepting an undisclosed cash gift from the seller, thanking her for negotiating on his behalf

The duty of ______ that a licensee owes the client remains after the brokerage relationship terminates.

Accounting - The duty of accounting remains even after the brokerage relationship terminates until all documents and funds are accounted for.

Which one of the following is an example of group boycotting?

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide not to show any of Acme's listings and prohibit showings to Acme buyers to drive Acme out of business. - This is group boycotting because it involves a group of brokerages agreeing not to do business with another business.

Adam purchased the property at 125 Bay Lane. After the deed was recorded at the county courthouse, Adam notified all involved parties of the recordation by a certified letter. What kind of notice is this?

Actual notice - This is actual notice, because the notice was given to and received by the relevant parties. Had Adam recorded the deed but not informed anyone, this would have been constructive notice.

Which type of loan's interest rate fluctuates with the economic index to which it's tied?

Adjustable rate - The interest rate fluctuates in an adjustable rate mortgage. This fluctuation is based on the index to which the loan is tied.

Which of the following is within TREC's authority?

Adopt bylaws and create rules and regulations to carry out license law.

What are facts called when they would significantly affect the desirability or value of a property, and/or indicate to a reasonable person that one of the parties in a transaction can't or won't complete the obligations of the contract?

Adverse material facts - Adverse material facts are facts that would significantly affect the desirability or value of a property, and /or indicate to a reasonable person that one of the parties in a transaction can't or won't complete the contract's obligations.

Your clients are considering purchasing a home built in 1998. They're excited that it comes with a warranty plan because the furnace, central air system, and all of the appliances are original. Since the EPA has banned the use of Freon® in cooling systems, you need to advise your clients on this situation. What advice should you give them?

Advise them the EPA banned the use of Freon® in cooling systems in 2010, and that home warranty companies may not cover repair of the older systems. - You should advise them that the EPA banned the use of Freon® in cooling systems in 2010, and that home warranty companies may not cover repair of the older systems.

What are licensees prohibited from doing relative to agency termination?

Advising prospective clients who have agreements in place with other brokers how to terminate their existing agreement

Zoning that preserves the architectural style and cohesive appearance of an area is termed ______.

Aesthetic zoning

Represents a buyer or seller in a real estate transaction, under the supervision of a broker

Affiliate broker

One evening during their weekly card game, Cecilia and her group of retired friends are recounting the difficulty they had finding a place they could afford that was close to a hospital. Cecilia added that they were the lucky ones because she has a few other friends who have had to put their names on a waiting list to get into a low-maintenance condo development just down the street. What current market trend is this an example of?

Aging Baby boomers

Marge is a licensee in a dual agency transaction with seller Steven and buyer Alda. In which of the following situations can Marge share what she knows with all parties without compromising her duty of loyalty?

Alda tells Marge that she's hired an inspector to perform a property inspection.

The ______ clause is also known as a due-on-sale clause.

Alienation - The alienation clause allows the lender to make the loan due if the borrower sells or otherwise transfers the property.

Albert wants to sell his house to his cousin, who's willing to assume his FHA loan. What clause in Albert's mortgage requires him to obtain the lender's permission to do this?

Alienation clause - The alienation clause requires the property owner to obtain lender permission for a buyer to assume the loan, or risk having the loan accelerated.

Which of the following statements is true about affiliating with a broker?

All of the client engagement agreements you sign are done in the name of your principal broker.

FAR, or floor-to-area ratio, includes ______.

All of the habitable structures on a lot

Tennessee law requires that licensees disclose timely and accurate market conditions to whom?

All parties

What type of individual's property is affected by a general lien?

All real property and personal property - All real property and personal property owned by an individual are affected by a general lien.

James Sawyer evicted his tenant, Kate Abbot, for nonpayment. However, she didn't vacate the apartment after the required 72 hours and has yet to move out. This is an example of _______.

An estate at sufferance - An estate at sufferance is a type of possession in which a tenant stays after the right to possess has terminated. The tenant is then called a holdover tenant.

What is an appraisal?

An opinion or estimate of a property's value as of a specific date - An appraisal is an objective opinion or estimate of a property's value based on specific criteria.

Andrew just received a compensation check from his brokerage firm. Since Andrew is an independent contractor, what determines how he's paid?

Andrew's sales

What are improvements with regard to property?

Artificial attachments to land that include items such as fencing, buildings, and walkways

Which appraisal society was formed when two separate organizations-the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers -came together?

Appraisal Institute - The Appraisal Institute was formed in 1991 with the union of the American Institute of Real Estate Appraisers and the Society of Real Estate Appraisers, both of which were established in the 1930s.

Develops an estimate of the market value of the property, usually a requirement of the lender

Appraiser

Which of the following statements about appraisal activities is true?

Appraisers' activities are highly regulated, especially when a federally related transaction is involved. - Appraisers' activities are highly regulated, especially when a federally related transaction is involved.

Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate?

Area preference

Carol has been licensed for a few short months and has closed three residential transactions. Her uncle calls and informs her that he'd like to engage her as a buyer's agent. He's interested in purchasing some commercial investment property. Which part of the Code of Ethics prohibits Carol from helping her uncle unless she receives some assistance from someone experienced in commercial investment property?

Article 11, Standard of practice 11-12

What type of value is of interest to taxing authorities?

Assessed value - Local taxing authorities are interested in assessed values, which are used to determine property taxes.

Lorenzo just received a prestigious fellowship to study abroad for a year! However, he'd just signed a one-year lease on his apartment. With the landlord's permission, he substituted his sister's name on the lease, and Lorenzo's sister will pay rent directly to the landlord. Lorenzo may still be liable for the rent if she misses any payments. This is an example of ______.

Assignment

When must lenders deliver the Closing Disclosure form to buyers?

At least three days before closing

Ava is borrowing money to buy some commercial property for her business. The loan agreement she signs includes a lock-in clause. What does that mean?

Ava will not be allowed to pre-pay the loan prior to the date specific in the loan agreement. - The lock-in clause is a form of pre-payment penalty typically used only for high-yield loans.

Lisette is an employee at ABC Brokerage. She's not licensed and her role is to answer phones and process paperwork. She's supervised by broker Bob. Which of the following statements is true?

Bob can control the number of hours that Lisette works each day.

How does a title insurance company prove that a seller has ownership rights to a property?

By performing a title search to create a chain of title or abstract of title - The abstract of title is a summary of ownership, and the chain of title shows a history of ownership. Each assists in providing the buyer with proof of a marketable title.

Clark works for Acme Bank and asks for your assistance. He wants you to look at a property that's about to go into foreclosure and provide him with a report on its current marketability and an approximate market value. What's Clark most likely asking you to provide?

BPO - Broker's price opinions are estimates of price in case the lender must take over the property and sell it to an investor or on the market.

A ______ acknowledges that there is an existing offer and essentially says that if the first buyer cancels, then the new buyer is automatically in contract with the seller.

Backup offer

You're the listing agent representing Stacey, the seller. Barb is a potential buyer who's made an offer through her agent, Daniel. Who are the third parties in this transaction?

Barb and Daniel - Barb and Daniel are both your customers and third parties. You must treat them with honesty and fairness.

Bill is joining his inspector Hank for an inspection of the property he hopes to purchase. Hank notices that the dirt on the exterior of the home slopes toward the house. He explains that it should slope away from the home. When it doesn't, what problem might this create?

Basement leaks

Why would additional documentation and disclosures be required for the purchase of a condo?

Because the unit is governed by a homeowners' association

In the eyes of the law, why do people under age 18 lack contractual ability?

Because they're minors. - A minor doesn't have contractual ability due to not being of legal age.

Do the listing presentation

Before signing listing agreement

At what point in the sales transaction process should an attorney review the contract?

Before the attorney's clients sign the contract - Each party should have its attorney review the contract prior to signing the agreement.

Which of the following statements about zoning ordinances is true?

Before zoning ordinances are changed, they must be examined for fairness and reasonableness.

What's the permanent marker used primarily for marking datums when measuring elevation?

Benchmark

All trusts have three parties: the trustor, the trustee, and the ______.

Beneficiary - The parties to a trust include the trust creator (commonly called the trustor), the trustee (the person established as being in charge of carrying out the terms of the trust), and the beneficiary (the person who receives the benefits of the trust).

The Tennessee Real Estate Commission (TREC) enacts rules addressing professional conduct and standards of practice for real estate licensees in the state. You'll need to know these rules and follow them as a licensee. You'll be subject to disciplinary action from TREC if you're found in violation of these rules of conduct.

Beyond simply avoiding violations, following a professional standard of behavior makes it possible for consumers to place their trust in licensees. So let's practice using those standards.

Licensee Renaldo is working with a client who's selling a home that's been on the market for some time. Eventually the seller agrees to take an offer lower than the listing price. But just a week later, another offer is made, this time at the price the seller had originally wanted. The seller asks Renaldo, "Where do I stand legally if I break the purchase agreement with the first buyer and accept this new offer?" Does the NAR Code of Ethics or TREC allow Renaldo to offer an opinion on the seller's question?

Both TREC and the NAR Code of Ethics prohibit Renaldo from the unauthorized practice of law, which he would be doing if he offered an opinion on the result of breaking a contract.

Which of the following statements is true regarding community property rights and property ownership?

Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally. - Community property rights apply to any property purchased during the marriage, whether that property is in one or both spouses' names. Properties purchased before the marriage can continue to be owned in severalty.

Which paragraph of the TAR Purchase and Sale Agreement states how the brokers in the sales transaction will be compensated?

Brokerage - The Brokerage paragraph states that the seller pays the brokers' compensation to the listing broker at closing, and the listing broker directs the closing agency to disburse the selling broker's fee.

Which of these is the Tennessee Real Estate Commission specifically prohibited from regulating?

Brokerage fees - The commission is not allowed to set or regulate brokerage fees.

Which of the following is an action borrowers take to temporarily lower the interest rate on their mortgage loan?

Buydown - A buydown is when buyers voluntarily pay points to temporarily bring interest rates down. For example, a 3-2-1 buydown would reduce the interest rate by 3% the first year, 2% the second year, and 1% the third year.

Who is usually responsible for ordering and reviewing the survey of the property?

Buyer - It generally falls upon the buyer to ensure there are no encroachments and to determine the property's boundaries.

Who or which of the following entities uses the appraisal to determine how much to pay for the property?

Buyer - The buyer wants to pay no more than necessary. The appraisal presents an unbiased opinion of the value of the property.

If a seller asks a buyer to waive the inspection contingency, how could the transaction process transpire and still protect the buyer?

Buyer has inspection, buyer makes offer, seller accepts offer - If the seller won't accept an offer with an inspection contingency, a buyer could have a professional inspection done before submitting the offer and waive the inspection contingency if the buyer still wanted to make an offer.

Which of these is most likely to be the list of individuals who attend a closing meeting?

Buyer, seller, licensees who represent the buyer and seller, lender, closing officer

Why has buyer representation increased since the late 1980s?

Buyers have become more aware of who works for whom.

You're working with buyers who are interested in trying to get a bargain in the form of a foreclosure. What should you tell them?

Buyers should take special care to ensure that any title issues are addressed.

Some groups of people are more vulnerable to lead poisoning and its effects than others. Of those listed, who is most vulnerable?

Children

Which area of real estate law governs the use of contracts, explains the elements required to make a contract valid, and describes what happens if a breach of contract should occur?

Contract law - Contract law governs the use of contracts and the required elements to make a contract valid, as well as what happens if a breach of contract should occur.

Under ______, landowners can be held responsible for the cleanup costs of hazardous waste, even if they did not cause the waste.

CERCLA - Under CERCLA, landowners can be held responsible for the cleanup costs of hazardous waste, even if they did not create or cause the waste.

Clint was looking for alternatives to the traditional vacation condo rental for his family. He purchased the right to use a given set of facilities at any point throughout the year. What did Clint purchase?

Campground membership

If you see sawdust and can't explain its presence, it's probably a sawdust-like material called frass created by which pest?

Carpenter ants

What's another term for a trade fixture?

Chattel - Trade fixtures are personal property, which is also called chattel.

Andie doesn't need to take out a loan to purchase the property she wants to buy. How should she indicate this in the financing contingency section of the TAR Purchase and Sale Agreement?

Check the Financing Contingency Waived box

Your buyer clients are excited because the property they made an offer on provides a home warranty. What should you tell them?

Check the coverage at the time of purchase. - A home warranty covers items that may fail before or after closing.

TREC can't be held legally responsible for damages if a consumer sues the commission. This gives TREC immunity from ______.

Civil liability - TREC and its employees are granted immunity from civil liability and therefore can't be held legally responsible for damages if a lawsuit is filed against its members or employees.

In which section of the TAR sales contract does the buyer specify the closing date?

Closing, Prorations, Special Assessments and Warranties Transfer

Property with ownership by more than one person is known as ______.

Co-ownership - Property with ownership by more than one person is known as co-ownership.

Safeguarding the public's best interests is TREC's priority. What will the commission look for in a licensing candidate?

Competence - TREC will look for licensing candidates who have the competence to transact the business in a manner that safeguards the public's best interests.

When prices go down because there are too many homes on the market and too few buyers, what economic principle is at work?

Competition

Specifically, what does the fiduciary duty of disclosure relate to?

Conflicts of interest, material facts, and adverse material facts

Carl and Sadie, who are neighbors, got into a disagreement about early-morning noise on the weekends. The two came to an agreement: Carl promised to not mow the lawn before 10 a.m., and Sadie promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement.

Consideration - Consideration is the giving of something of value in exchange for something of value.

Which of the following elements is always required for a real estate contract to be valid?

Consideration - In addition to consideration, a contract needs to be in writing and have legally competent parties, offer and acceptance, and a legal purpose.

What agency administers the Interstate Land Sales Full Disclosure Act?

Consumer Financial Protection Bureau

Which agency administers the Interstate Land Sales Full Disclosure Act?

Consumer Financial Protection Bureau

When finding listings, which statement describes the referral approach?

Contacting prospective clients through previous clients, co-workers, networks, etc.

The three types of finance instruments that can be used when financing a real estate purchase are the note with mortgage, note with deed of trust, and ______.

Contract for deed - The contract for deed is used by a seller who extends credit to a buyer.

Which economic principle pertains to how a change in a property affects its value as a whole?

Contribution

Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?

Contribution - The principle of contribution says that a change to a portion of a property impacts the overall value. For example, adding a swimming pool could add to the value for some buyers and detract from the value for others.

The right to determine how the property is used, and who may enter the property, is known as _____________.

Control - Control is the right to determine how the property is used, and who may enter the property.

Which type of life estate is created by the property owner?

Conventional - A conventional life estate is created by the property owner who grants the property to an individual for a lifetime.

Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______.

Cost approach - The cost approach is the best method to determine the cost of acquiring the land and constructing the homes.

Your buyer client, Nikki, offered $220,000 on seller Stephen's home, listed at $235,000. Stephen responded in writing to ask for $225,000. What's the term for Stephen's response?

Counter-offer

Which of the following could be an indication of a foundation problem?

Crack in a basement wall

To avoid misrepresentation, what should brokerages do?

Create and implement a written office policy on agency - Brokerages should have written agency policies that outline the distinctions between types of representation they offer.

What acronym can be used to remember factors that influence real property value?

DUST - DUST is an acronym used to remember the four significant factors influencing real property value: demand, utility, scarcity, and transferability.

In order to convey real property, what document would you use?

Deed - A deed is a method of conveying real property from one party to another. A deed should be recorded to protect the parties' interests.

A new business moves into town, significantly increasing the availability of good paying jobs. How is this likely to affect the town's housing market?

Demand will go up, creating a seller's market.

Landlords may protect themselves from having to pay for damages to the property caused by the tenant by collecting a security ______ from the tenant.

Deposit

Which of the following is an example of commingling?

Depositing trust funds into a general business account - Commingling is mixing trust funds with non-trust funds. Using those funds would be conversion, another serious violation.

Malcolm purchased an old convenience store, and after renovations will open a small vegan grocery. He paid $517,000, of which $417,000 was for the building, and renovations cost him $107,000. What does the amount $524,000 represent?

Depreciable basis

Bethany has agreed to purchase Derrick's property using a land contract. Who holds legal title to the property during the term of the loan?

Derrick

Which task is NOT the responsibility of an escrow officer?

Determine how earnest money is to be distributed in case of a dispute.

In local land use, the connection of utilities is considered a ______.

Development cost - The connection of utilities is viewed as a development cost.

Gerard has been offered a 4% interest rate on a $300,000 mortgage. His monthly mortgage payment would run about $950 per month. He plans to pay $2,000 up front to drop his interest rate to 3.75% and his payment to $920 per month. What is this upfront charge called?

Discount point

What's an up front charge to make up for the difference between the interest rate the borrower is paying and the rate the lender normally requires?

Discount point

Leonard is offered a loan at 5.75%. Because he plans to be in his home for several years, he chooses to pay points up front to have the rate reduced to 5.25%. What's this an example of?

Discount points - Buyers may make a one-time payment of discount points to permanently reduce the mortgage loan interest rate they'll pay.

Without this easement-usually involving access to a road-the owner requiring the right of passage would be landlocked.

Easement by necessity - This describes an easement by necessity. One way to remember this type of easement is by thinking of the importance of getting access to a road.

The Tennessee Real Estate Broker License Act allows the Tennessee Real Estate Commission to ______.

Establish continuing education requirements for licensed real estate brokers and salespersons - The Tennessee Real Estate Broker License Act allows the commission to establish continuing education requirements for real estate licensees.

Ben and Leslie received their finalized TAR Purchase and Sales contract just moments after the sellers put their final signatures on it. Since the home they're buying was built in 1920, how should the Lead-Based Paint Disclosure section be completed?

Does apply (property built prior to 1978)

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

Drafts near the fireplace

Three days ago, there was a severe thunderstorm in Shirley's town. Today, there's still a large puddle of water on her property, but it doesn't appear the neighboring properties have any puddles. This could indicate a(n) ______ problem.

Drainage

Which of the following situations is an example of a non-agency relationship?

Dutton was previously a licensee. He's selling his home, and he wants Wanda, who's currently licensed, to assist him with the paperwork. - A non-agent, also referred to as a transaction broker, may assist a customer with ministerial tasks.

Roger has a buyer client in Lexington who is purchasing a home built before 1978. Which two documents must Roger ensure that his client received prior to signing the TAR Purchase and Sales Agreement related to lead-based paint?

EPA lead-based paint pamphlet and Lead-Based Paint Disclosure form - Roger must ensure that his client received a copy of the EPA lead-based paint pamphlet and the Lead- Based Paint Disclosure form.

In which paragraph of the TAR Purchase and Sales Agreement do buyers indicate the amount of earnest money they are putting down?

Earnest Money/Trust Money

To prevent commingling and accidentally using the funds from one income property to pay for the expenses of another, a broker should ______.

Establish a separate escrow account for each property.

Eloise is interested in buying a bungalow on the outskirts of the city. Her agent is reviewing the property details and informs her that there are several easements on the property. In particular, the gas company has a right of way because the natural gas line for the neighborhood runs through the back of the lot. What type of easement would this be?

Easement in gross - An easement in gross is granted to a specific individual or company-in this case, the gas utility company.

Interest rates, availability of credit, and employment trends are examples of which force that influences property value?

Economic

Your friend Ed tells you that he's just entered into a designated agency relationship with his seller clients. What does this mean in Tennessee?

Ed's broker appointed him to represent only the sellers in a transaction.

Justin decided to build a privacy fence around his yard. He thought the fence was along the property line, but it turns out he built it one foot inside his neighbor's property. What will an inspector document as existing on the neighboring property?

Encroachment

The secondary mortgage market buys loans from the primary market. How does this aid the lending market?

Ensure funds are available to borrowers - By purchasing mortgages, secondary mortgage market players provide money to primary lenders so they can continue to offer loans to consumers.

Which one of the following tasks must licensees perform for seller clients?

Ensure that the buyer's earnest money is deposited.

A licensee must perform which of the following tasks for a buyer client?

Ensure the buyer understands the importance of due diligence, including a professional inspection of the property.

Which of the following best describes a marketable title?

Ensures the title to property is free and clear of liens and only subject to loan payoff and any taxes owed. - A marketable title provides assurance that there are no unrecorded liens or claims on the property.

Which written statement will be used to consider ways to minimize a project's negative impact on the environment?

Environmental impact statement

Your buyer clients, the Thompsons, told you about a problem they ran into with the lender that handled their mortgage. The Thompsons, who are African American, were given less favorable loan terms than a white couple they know who used the same lender. You know the Thompsons have excellent credit. Which act should you make them aware of?

Equal Credit Opportunity Act - The Equal Credit Opportunity Act lists protected classes against which lenders may not discriminate when making credit available. You should be aware of the rules and notify your clients if the rules have possibly been broken.

What type of insurance covers licensees who are sued by consumers for inadvertent mistakes in a real estate transaction?

Errors and omissions - Errors and omissions insurance covers licensees who are sued by consumers for inadvertent mistakes in a real estate transaction.

Being a retail property manager includes responsibility for ______.

Establishing some leases as percentage leases where a base rent per square foot is augmented by a percentage share in the tenant's gross

What type of leasehold is characterized only by possession of a property, such as a situation in which a tenant continues to occupy an apartment after the lease has terminated?

Estate at sufferance

Cedric is opening a model railroad shop, but he knows that he'll only run the store until his partner finishes law school. He signed a three-year lease, after which the lease will terminate. What kind of leasehold is this?

Estate for years - An estate for years is a lease with a fixed termination date. It may be for one month, three months, or three years, but at the end of the lease period it automatically terminates.

Eric and his wife, Silvia, made an offer on a home and specified in the sales contract the items on the property they wanted the seller to remove prior to their taking possession. These items are commonly referred to as _____________________.

Exclusions

A seller is represented by everyone at your brokerage, but you're providing assistance to the seller at this time. What type of agreement did the seller sign?

Exclusive Right to Sell (Seller Agency) - A representation relationship with an entire firm, rather than a single licensee, is traditional seller agency.

Janice wanted to sell her townhome, and her neighbor was considering buying it. She wanted to put it on the market while she waited to find out if her neighbor was going to buy. In order to receive the best possible representation but avoid paying a commission if her neighbor buys the property, which type of listing agreement would best suit Janice's needs?

Exclusive agency - It's easy to confuse exclusive agency and exclusive right to sell. With exclusive agency, the seller retains the right to find a buyer and avoid paying the commission, but the seller's listing will likely receive more attention from the agent than it would with an open listing.

Before applying for relief from the recovery fund, what must consumers do when they receive a judgment against a licensee for wrongdoing?

Exhaust other legal remedies. - The recovery fund is to be used only after other legal remedies have been tried, and have failed.

Marc's neighbor told him that he plans to sell his house by owner sometime in the next six months. Marc wants Craig to serve as his buyer agent during his house hunt, but if he decides to buy his neighbor's house, he'd like to exempt this property. Craig agrees, and they attach this notice to the agreement. In what section of the buyer representation agreement will they indicate that there's an attachment?

Exhibits and Addenda - Marc would list his any attachments in the Exhibits and Addenda section of the agreement.

Contacting homeowners whose listing contracts have ended without a sale describes the ______ approach to finding listings.

Expired listings

Commander Halfback retires after 25 years of service in the Coast Guard. He is looking to buy a home. What type of loan should he use?

FHA, VA, or conventional - The fact he was in the military doesn't mean he has to take a VA loan. There isn't enough information to determine the best loan, so at this point all loans mentioned are viable options to consider

The Arbor Heights community passed a zoning ordinance that requires group homes designated for disabled citizens to be situated outside of city limits. This is a violation of the ______.

Fair Housing Act

What's the most common indicator of illegal property flipping?

Falsely inflated appraisal - Fraudulent appraisal information makes property flipping illegal. In addition, the frauds may alter loan documentation, offer kickbacks, or misrepresent the buyer's income.

Which of the following entities generally acts in the secondary market?

Fannie Mae - Traditional secondary market players are national institutions, such as Fannie Mae, Freddie Mac, Ginnie Mae, and the Federal Home Loan Bank.

Chloe focuses her marketing efforts on a specific neighborhood. This is known as her ______.

Farm Area

Choosing a neighborhood and concentrating real estate activities there is an example of the ______ approach to finding listings.

Farming

Terry represents seller Farrah, and Michael represents Troy, the buyer. Who is (or are) the principal(s) in this transaction?

Farrah and Troy - Farrah and Troy are the principals (parties) to the transaction. Farrah is the principal in her agency relationship with Terry, and Troy with Michael.

Which agency prohibits unfair acts, practices, or methods of competition, and enforces federal antitrust and consumer protection laws nationally?

Federal Trade Commission

Which act created an agency to investigate antitrust practices?

Federal Trade Commission Act - The Federal Trade Commission Act created the FTC. This agency investigates practices and will stop companies and individuals from committing antitrust violations.

What does the Financial Institutions Reform, Recovery, and Enforcement Act require?

Federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state. - FIRREA states that federally related appraisals must be conducted by an appraiser who's either licensed or certified by the state.

After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?

Fee simple - At the end of a life estate, the reversionary owner or remainderman hold a fee simple estate.

Which type of fee simple estate provides ownership but with conditions?

Fee simple defeasible - A fee simple defeasible estate conveys ownership with conditions. If the conditions are violated or not met, the ownership will revert to the original owner, or to a named third party.

In general, what is the term for a person who's been placed in a position of loyalty and trust?

Fiduciary

How many TREC members must be present in order for the commission meetings to be valid?

Five

What length of term do the members of the Tennessee Real Estate Commission serve?

Five years

______ around pipes, vents, or other protrusions is a prime spot for roof damage or water leaks.

Flashing - Flashing is a material that goes around pipes, vents, and other protrusions on a roof. Improper installation or damage to the flashing can lead to water leaks and other roof damage.

Homes in a new home development have been built with a floor plan that doesn't appeal to today's buyers. In a cost approach valuation of the houses, what sort of depreciation will the appraiser apply?

Functional obsolescence

A form of depreciation or loss in value caused by defects in design is called _______.

Functional obsolescence - Functional obsolescence is a form of depreciation or loss in value caused by defects in design.

Property managers most often serve as which type of agents?

General - Property managers often serve as general agents because they are given the authority to act on the property owner's behalf, and are responsible for handling all details regarding the owner's property.

Which area of real estate law covers the government's rights and authority under eminent domain?

General property law

Which of the following describes a census tract?

Geographic area developed in a community and identified by number

Historically, what do property values tend to do over long periods of time?

Increase

When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.

Give the proceeds to the beneficiary - When a land trust term expires, the trustee must either extend the trust term or sell the real estate and provide the proceeds to the beneficiary.

Which item in the Other Provisions paragraph of the TAR Purchase and Sale Agreement states that the contract will be interpreted and governed by the laws of the State of Tennessee?

Governing Law and Venue - Item C, Governing Law and Venue, states that the purchase and sale of the property will be governed by and interpreted in accordance with the laws of the State of Tennessee.

Which of these choices represents a specialization for which a real estate licensee may pursue an NAR designation?

Green buildings

Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer agents showing her listings to not do business with this company, either. What is this an example of?

Group boycotting - This is group boycotting because it involves a group of agents agreeing to not do business with another group.

The FHA loan program is designed for borrowers who ______.

Have a minimal down payment and less-than stellar credit - FHA insures lenders against borrower default for accepting higher risks due to lower down payments and lower qualifying standards.

Before an individual can perform real estate services for others for a fee, what's required of that individual?

Have a real estate license issued by the state's licensing authority

Whoa-this market is hot, hot, HOT! You've had five offers come in since you listed your seller client's home yesterday. Of the options listed, which is the best strategy?

Have all buyers submit their "highest and best" offer, then help the seller decide which offer is most appealing.

William is interested in a property he just listed with Ben, the seller. After listing the property, William realized this would be the perfect home for his growing family. In accordance with TREC's rules of conduct, what must William do?

He must disclose his interest to Ben. - According to TREC's personal interest rule, William must disclose his interest in the property to Ben, the seller.

Donald and Martina decided to purchase a newly built home, and their agent, Ed, recommended that they get a professional home inspection done. The couple tell Ed that they thought inspections were only for older homes. How should Ed respond to that?

He should remind them that every dwelling, no matter the age or size, should have a home inspection.

Appraiser Jamie is looking past how a property is being used to determine a higher value. What is Jamie determining?

Highest and best use - The highest and best use looks past the current use to determine if another use provides a higher value.

A tenant who continues to occupy property after lawful authority has expired is known as a _______.

Holdover tenant - A tenant who continues to occupy property after lawful authority has expired is known as a holdover tenant.

Performs a visual inspection of the property and reports to the buyer about any safety hazards or repairs that are needed

Home inspector

Waiving inspection, waiving appraisal, and offering the seller possession after closing are all terms buyers may offer a seller to make their offer more appealing in a _________ market.

Hot - In hot markets, sellers may have multiple offers on the table. Buyers will look for ways to make their offer more appealing than others by waiving contingencies.

Jamie is looking to purchase a home. He is hesitant to ask for repairs and risk the seller accepting a different offer. In what type of market is this concern most valid?

Hot - In hot markets, there may be competing offers. Buyers will be reluctant to ask sellers to make repairs, pay closing costs, or perform other actions that may benefit the buyer, as the seller could reject the buyer's offer and accept a competing offer.

Which of the following is NOT information an appraisal provides?

Identifies the source of the buyer's earnest money funds

Sara, a principal broker in Tennessee, is selling her downtown Nashville loft. If she wants to stay on the right side of the law and TREC's rules of conduct, what must she do with prospective buyers?

Identify herself as a real estate licensee - Licensees must disclose license status when buying or selling property.

Jerry is appraising a five-bedroom home in the suburbs. After identifying the purpose of the appraisal, what does he need to do next?

Identify the data that is needed. - The first step is to state the problem so the appraiser can then identify the data that is needed.

Per the Seller's Additional Obligations paragraph of the TAR Purchase and Sale Agreement, which of the following is a seller obligated to disclose to the buyer?

If any single family residence on the property has been moved from one foundation to another - The Seller's Additional Obligations paragraph requires the seller to disclose if any single family residence on the property has been moved from one foundation to another.

How does earnest money encourage the buyer not to breach the agreement of sale?

If the buyer breaches the contract, the seller may remedy the breach by keeping the earnest money, as well as the property. - If the buyer breaches the agreement of sale, the seller can accept liquidated damages, which would be the buyer's earnest money. And, of course, the property would remain in the seller's possession.

Which of these must Tennessee licensees disclose relative to specific real estate transactions handled by their brokerages?

Immediate family relationships - Immediate family relationships must be disclosed.

Which type of contract is the opposite of an express contract?

Implied - An express contract is an agreement between parties where the terms are specifically outlined in words (either written or oral). An implied contract is an agreement that is understood but not specifically stated verbally.

Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?

Improvements

What's NOT true of an easement appurtenant?

It's an encumbrance on the dominant property. - An easement appurtenant involves adjoining property, and it runs with the land. The encumbrance is on the servient property.

Under what circumstances should real estate licensees advise buyers to have listed homes tested for radon?

In all circumstances, regardless of location - Licensees should advise all buyers to have homes tested for radon, regardless of location.

Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing?

In both types of listings, the seller who finds the buyer won't owe a commission.

Which of the following describes community property rights?

In some states, it's a form of property ownership for married couples with equal ownership and possession of any property acquired during the marriage. - Community property is a form of ownership used in some states for married couples to own property that's purchased during the marriage, regardless of which spouse's name is on the title.

Which one of the following statements is true about a sales contract that's been signed by both parties, and both parties have been notified of its acceptance?

It's a legally binding contract. - Once signed by both parties, and their acceptance of the sales contract has been communicated to both parties, the sales contract is a legally binding agreement.

In which section of the Tennessee Residential Property Condition disclosure form can sellers provide information that a garbage disposal will be include with the property?

Inclusions

Real estate licensees may be classified as ______ for tax purposes, even though they're subject to supervision from a more experienced broker.

Independent contractors

Because these types of properties have both specific physical and complex operational requirements, they are usually handled by more experienced real estate professionals.

Industrial

What's the term for notice a reasonable person would obtain by inquiring into a property?

Inquiry notice - Inquiry notice is what a reasonable person would obtain by inquiring into a property.

Funds the loan for a home buyer

Institutional lender

Applying a capitalization rate to the net operating income is one way to determine a property's ______ value.

Investment - Applying a cap rate to the NOI is one way to determine a property's investment value.

Which of the following defines an income tax lien?

Involuntary lien placed against a property owner's property for due and unpaid taxes

TREC is a judicial body, which means ______.

It can hold hearings, hear facts presented, and impose penalties for violations of rules - TREC is a judicial body and therefore has the authority to determine if the facts of a case violate established rules and, if so, to impose penalties for those violations as it deems necessary.

From an agent's perspective, what's one benefit of a buyer representation agreement?

It defines how and how much the agent will be paid.

Which option best describes what an environmental impact statement is?

It describes and analyzes a proposed action that may have a significant effect on the environment. - It describes and analyzes the effects that a proposed action may have on the environment and identifies any significant effects.

Karen's house was recently foreclosed on to pay off a lien on her home. What happens to any extra money after the lien and expenses of the sale are paid?

It goes to Karen. - Once all liens and sale expenses have been covered, any extra funds from a foreclosure sale are given to the former owner.

Which of the following is a true statement about the term of an exclusive buyer designated agency agreement?

It has a definite end date.

What purpose does the promissory note serve?

It's a promise the buyer makes to the lender that the note will be repaid in full. - The promissory note is evidence of the debt that specifies the borrower's financial obligations. Promissory notes back both mortgages and deeds of trust.

Which of the following statements is true about radon in Tennessee?

It's a serious environmental problem. - Not only does radon cause lung cancer, it's present no matter where you live in Tennessee.

What role does the Brownfields Law play in the assessment and cleanup of unused commercial /industrial sites that may contain hazardous waste?

It provides funds. - The Brownfields Law was enacted in 2002 to provide funds that help assess and clean brownfields.

What's the purpose of the Equal Credit Opportunity Act?

It requires lenders to make credit equally available to all creditworthy applicants, regardless of the applicant's protected class status. - The Equal Credit Opportunity Act prohibits creditors from discriminating against protected classes and requires that credit be equally available to all creditworthy applicants.

Which of the following is true about discussing or implying a standard commission for the industry?

It's an example of price fixing and is an antitrust violation. - Discussing or even implying that there is a standard commission in the industry amounts to price fixing, which is an antitrust violation.

Which of the following statements about the fiduciary duty of disclosure is true?

It's owed to the licensee's clients only.

Which of the following is true of a brokerage having a pricing policy for its associated licensees?

It's permissible. - Brokerages may independently set a price policy for their associated licensees.

What's one benefit of a rural development loan?

Its optional longer term means a lower monthly payment. - The longer payback period of these loans reduces the monthly payment.

Jasmine just received written notice from her buyers that they have been unable to obtain financing. What option does Jasmine have?

Jasmine can notify the buyer in writing that she is declaring the contract null and void.

Jessica feels it is only fair to any prospective buyers that she reveals any and all defects about the condition of her property. After all, if the roles were reversed and she were the buyer, she would want the seller to be honest with her. Based on this information, which of the following statements is true?

Jessica should complete the Tennessee Residential Property Condition Disclosure form.

In which of these scenarios does the consumer need a real estate license?

Jessie is searching for a new home for a friend moving into town, who will compensate her 2% of the sale price for her time and effort.

Jessie, the buyer's agent, decides to informally inspect the property while she waits for the professional inspection. She notices a small puddle of water in the basement behind a stack of boxes. Later, Jessie calls the seller's agent and tells him what she found. The agent tells her not to worry; the seller is aware of the leak and plans to have it fixed within the week. Which one of these statements about this situation is true?

Jessie should disclose this to her buyer.

Which ownership type is defined by four unities: time, title, interest, and possession?

Joint tenancy - This is joint tenancy. Tenancy by the entirety requires a fifth unity (person). If one joint tenant dies, that tenant's interests go to the remaining joint tenants. If only one tenant is left, that tenant owns the property in severalty.

Which of these lenders would be least likely to approve a short sale?

Junior lenders

Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.

License - A license is permission to do something on another's land without actually possessing any interest or ownership in the land.

How is the Real Estate Education and Recovery Account funded?

License fees

Shawna is a licensee from Florida who's moving to Tennessee. When she applies for her affiliate broker license in Tennessee, she's allowed to skip the national portion of her exam based on the ______ rules.

License recognition - This describes license recognition. Tennessee waives the national portion of the licensing exam for candidates who prove they've passed it before in another state.

Which classification of appraiser can perform appraisals of simple residential one- to four-unit properties with a value less than $1 million, but not of properties with greater value?

Licensed appraiser - A licensed appraiser can perform appraisals of simple residential one- to four-unit properties with a value of less than $1 million. Certified residential appraisers may appraise one- to four-unit properties regardless of value, and certified general appraisers may appraise any property, regardless of difficulty or value

Buyer Kristin has a buyer agency agreement with Carlotta, a licensee. Kristin's brother, Dalton, is going to showings with Kristin and helping her decide which house is the best fit. Who is/are Carlotta's client(s)?

Kristin - Kristin is Carlotta's client because they have a signed agency agreement.

The doctrine of "use it or lose it" is known as the doctrine of ______.

Laches

Which one of the following statements is true about land trusts?

Land trusts generally continue for a specified term, such as 10, 20, or 30 years.

Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint?

Lead

Selma and Richard have the temporary right to live at 123 Elm Street. They can come and go and use the property as they see fit, but they can't do so indefinitely. They must vacate the property at the end of next year. What sort of interest do they have in 123 Elm Street?

Leasehold estate - Richard and Selma have a leasehold estate. Leaseholds are created with a contract between the owner of a given property and a tenant who is given the rights of possession and enjoyment for a specified period of time.

Shannon is reading through paperwork related to her upcoming home purchase, and she comes across the following: "Southwest quarter of Southwest quarter (SW 1⁄4 of SW 1⁄4) and West Half of Southeast quarter of Southwest quarter (W1⁄2 SE1⁄4 SW1⁄4) of Section Eleven (11), Township Four (4) North of Range Eight (8) West." What did Shannon just find?

Legal description - This is a legal description, which provides a more complete description of a property than a street or postal address. This particular legal description uses the rectangular government survey system.

What could be a consequence if there were no secondary mortgage market?

Lenders might not have funds available to make new loans to the public. - Purchases made on the secondary market provide primary lenders with funds to continue making loans. Without this market, lending funds might become scarce.

The landlord/owner is the _______ in a lease agreement.

Lessor - The landlord/owner is the lessor.

Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time.

Limitations - The statute of limitations is a law that states that if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time.

Which type of agent is an escrow officer?

Limited agent

Hold open houses

List and market

What information does the Loan Estimate provide to buyers under required disclosures law?

Loan payment schedule

A calculation that describes the amount being borrowed compared to the value of a property is called ______ ratio.

Loan-to-value - LTV ratio describes the amount being financed or borrowed compared to property value (sales price or appraised value), whichever is less.

Under what conditions is a VA loan assumable?

Loans are assumable with VA approval (if the loan were made after 1988). - VA loans made after March 1, 1988 are assumable with VA approval.

Which of the following entities commonly acts in the primary market?

Local credit union - The primary mortgage market typically consists of local banks, credit unions, and insurance companies. Generally, these are lenders that work directly with borrowers who are obtaining a loan.

Jen, a TREC commissioner who is a broker, has been disheartened to see brokerage fees fall over the years. She would like to see the industry set a standard brokerage fee of no less than 5%. As a member of TREC, Jen can ______.

Lose her license for even suggesting a standard fee

Which type of legal description do courts prefer?

Lot and block

What's one of the most fundamental of all fiduciary duties, and is the one that underlies all other duties?

Loyalty

Which of the following scenarios best describes an illegal net listing in Tennessee?

Maeve wants to get at least $350,000 when she sells her property and tells her listing agent, Stan, that he can keep anything above that amount. - A net listing commission involves commission of an indeterminate amount and depends on the sales price. Net listings are illegal in Tennessee.

When the lender gathers all kinds of information about the borrower's assets, debts, income, employment history, and pulls their credit report, the buyer is ___________________.

Making an application for a loan - This is all part of the application process.

Negotiate offers and counter-offers

Manage the transaction

Which type of antitrust violation occurs when real estate firms agree to divide their market so they don't compete with one another?

Market allocation

What is the value a buyer and a seller agree upon?

Market value

Which type of lien is filed by a supplier of products that were used in construction or improvement of a property?

Materialmen's lien

Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description?

Metes and bounds description

Which paragraph of the TAR Purchase and Sale Agreement gives notice to the parties that signatures may be provided in a number of formats and will be treated as originals?

Method of Execution - The Method of Execution paragraph states that the parties' signatures and initials may be provided in a number of formats, including electronic, and will be treated as originals.

The violation of access to housing and accommodation laws in Tennessee is considered a ______.

Misdemeanor

Robert and Jill purchased a single-family home in the suburbs for $50,000 nearly 40 years ago. Considering historical property value fluctuations, what is the likely value of the property today?

More than $50,000

Mick focuses on originating mortgage loans at a company that has in-house loan processors and underwriters. The options he offers consumers are limited to the products his company offers. What's Mick's position?

Mortgage banker - Mortgage bankers work for institutions that have in-house processors and underwriters, allowing them to lend money fairly quickly, but their lending options are generally limited to their own suite of products.

Matches borrowers with the loan that meets their needs

Mortgage broker

Home inspector Maura was walking Thad through a property inspection. The frame house, on a slab foundation, had mulch piled up about 18 inches next to the house. Why was Maura noting this as a concern?

Mulch next to wood siding may lead to wood rot. - Too much dirt, mulch, or other material up against wood frame siding is problematic because it can hold moisture against the siding for long periods of time, leading to wood rot.

Which of these is generally a commercial property manager's responsibility, but not a residential property manager's responsibility?

Negotiating leases

Four brokerage firms operate in the same small city as Jackson's firm. All the firms charge approximately the same listing commission and pay approximately the same cooperating commission to the selling broker. The commission splits within each firm are also similar. Is this an antitrust violation? Why or why not?

Not necessarily. The fact that the firms' commission rates and splits are similar doesn't necessarily mean they agreed to fix those values.

The best way to start comparative market analysis data collection is to use properties that sold within which timeframe?

No later than three to six months ago - Properties that sold no later than in the last three to six months are your best bet.

Mary and Shawn are both Tennessee affiliate brokers working under Lawrence at Broker One. Mary represents the buyer and Shawn represents the seller as designated agents in a sale that's scheduled to close in two weeks. Who's the dual agent in this transaction?

No one - A designated agency relationship doesn't create dual agency with the managing broker who supervises the affiliates.

Bo's real estate ad states: "Custom homes for sale with scenic mountain views. Easy financing and low down payments." What else must be included in the ad in order for it to comply with TILA?

Nothing - Under TILA, ads that mention general financing terms, such as "low down payment" or "easy financing," do not require additional disclosure. If Bo had gotten more specific (e.g., "10-year loan with 0% down") he would need to include more information.

Barney is selling his home and wants to handle all of the marketing and paperwork himself. Is he required to have a real estate license?

No, because it's his own home

Jim would like to sell his own home. What is the minimum real estate license he must possess?

None

Which item in the Other Provisions paragraph of the TAR Purchase and Sale Agreement explains how communication between the parties will be conducted?

Notices - Item G, Notices, states that all notices between the parties must be in writing and delivered either in person, via overnight delivery, by fax, via certified mail, or via email. Notice is considered given upon receipt.

What is the name of the process of substituting one party to an existing contract with a new party, releasing the original party from all contractual obligations and rights?

Novation - Novation is the substitution of one or more of the parties to a contract, creating a new contract.

In most markets, in which month would a real estate downcycle typically start?

November

Prepare comparative market analysis

Obtain the listing

At which point in the residential selling process does the real estate professional prepare a comparative market analysis?

Obtaining the listing

Syndicates

Organizations with many participants with the common purpose of making a profit from a real estate investment

TREC can hold as many meetings as it deems necessary throughout the year, but it must have a minimum of three meetings. Where must these meetings take place?

One in each of the divisions - TREC must hold at least one meeting annually in each of the three grand divisions of Tennessee.

A license that's expired for longer than ______ may not be renewed or reinstated.

One year

Jeremy's seller clients have completed closing and moved out of their house, and are just waiting for Jeremy to send them a copy of the final transaction documents. Which fiduciary duties does Jeremy still owe them?

Only confidentiality and accounting - Two duties survive the agency termination: confidentiality and accounting.

Which type of buyer agency offers the flexibility to work with multiple agents but results in buyers acting on their own behalf since no agent owes fiduciary duties?

Open agency - Open agency offers buyers with the most flexibility to work with multiple agents.

In states where they're legal, for which type of listing or listings may a net listing be used? Select the most complete answer.

Open, exclusive agency, or exclusive right-to-sell - Net listings are only related to the amount of compensation received and may be used with many types of listing agreements.

Under which types of agency agreement may a buyer and agent operate?

Open, exclusive right to represent, and exclusive agency

In what type of life estate does property ownership return to the original owner when the life estate holder dies?

Ordinary with reversion - With an ordinary with reversion life estate, upon the life estate holder's death, the estate reverts to the original owner.

This type of leasehold involves a possessory interest that's automatically renewed at the end of each period specified in the lease.

Periodic estate

Manufactured homes are generally considered _______.

Personal property - Manufactured homes are considered personal property. They may be converted to real property through the removal of transportation-related items (chassis and wheels) and by following the steps the state requires.

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed is applied last?

Physical characteristics

Janson Industries worked with architects and engineers to draw up plans for a planned community that will include residential, shopping, dining, and entertainment uses within the community itself. As a property that falls under mixed-use zoning, what does the company have to provide to the planning commission?

Plat map - PUD developers have to file detailed plat maps with their planning boards, and the maps should show all of the uses desired for the development.

What is the term for an increase in property value caused by the joining of two neighboring parcels of land?

Plottage - Plottage is an increase in property value caused by the joining of two neighboring parcels of land. It's usually more than the sum total of its parts (where 1+1 = 3, 4, or even 10).

Mark is trying to set up a face-to-face meeting with potential buyers the Tomlins, but the Tomlins have refused. What should Mark do next?

Politely insist on a meeting.

The ______ clause allows the borrower to pre-pay principal on the loan at any time without penalty.

Pre-payment

When working with new buyers, it's important to qualify the buyers before devoting too much time to them. What type of qualifying is important?

Readiness

Schedule photography

Prepare for the listing

At what stage of the residential sales process would the listing agent typically obtain tax and property boundary information?

Preparing the listing

At which point in the residential selling process does scheduling a photographer take place?

Preparing the listing

Sandra enters a contract to sell her home to Paul. Under the statute of frauds, 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 - The statute of frauds requires a written agreement that presents the essential terms and conditions of the contract.

Three brokers meet and agree that all of their listing contracts will have one-year terms. Of which type of antitrust violation is this an example?

Price fixing - Besides commissions and discounts, price fixing may also apply to contract terms.

According to the Department of Justice, an agreement between competitors to establish or adhere to uniform price discounts is a type of which antitrust violation?

Price fixing - Price fixing may include an agreement to establish or adhere to uniform price discounts.

In a hot market, what pricing strategy may incite bidding wars?

Pricing at or just below market value - In a hot market, pricing below market may incite bidding wars, fetching more than pricing it at market rate. Bidding wars can occur in a hot market no matter the pricing strategy, however. Always discuss pricing strategy with the sellers; it's their call.

What often comprises the sum total of a buyer's mortgage payment?

Principal, interest, taxes, and insurance - Often, the insurance and taxes are rolled into the mortgage payment, along with the principal and interest owed.

Tammy and Reginald bought a house with a gas line easement on the property. An easement like this one placed by the utility company is an example of a ______.

Private land control

Before the heirs can inherit, a legal process determines the will's validity and ensures that it accurately reflects the deceased person's wishes. This is known as ______.

Probate - Probate is the legal process to determine the validity of a will and to ensure the will accurately reflects the deceased person's wishes.

Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?

Promissory note - A promissory note (often called a "note") is the borrower's documented promise to repay the loan.

Which of the following fiduciary duties is owed to both clients and customers?

Prompt presentation of all written offers and counter-offers - A licensee owes the fiduciary duty of promptly presenting all written offers and counter-offers to both clients and customers.

Which term means "for another's life"?

Pur autre vie - Pur autre vie is a legal term that means "for another's life."

When a buyer finances a newly built home with a Federal Housing Administration loan, what does the FHA require the builder to do?

Purchase a third-party home warranty to protect the buyer - The FHA requires builders of new homes to provide a third-party warranty to buyers.

The Hendersons don't have enough money to make the full 20% down payment their institutional lender requires. To close the sale, the seller is willing to finance a loan for the amount between the home's list price and what the institutional lender is willing to loan. What's this type of financing called?

Purchase money mortgage - A purchase money mortgage is the term for seller financing that's typically used to bridge the gap between the home's list price and the institutional loan, though it can also be used to finance the entire purchase price.

What type of arrangement allows the buyer to retain title to the property, but places a security interest in the property on behalf of the seller?

Purchase money mortgage - Purchase money mortgages allow the buyer to retain title to the property, but the seller has security interest in the property.

A broker has two affiliate brokers who each represent an opposing side in the same transaction. What could the broker do to ensure the affiliate brokers don't unwittingly share confidential information?

Put policies and procedures in place to address this situation.

In the real estate business, which professional's primary role is to provide brokerage services to their clients and to supervise licensees who work for them?

Real estate broker

Responsible for the actions of affiliated licensees

Real estate broker

Which area of real estate law covers what's required of a licensee when performing real estate activities within the state, including license law, continuing education requirements, supervisory requirements, and prohibited conduct?

Real estate license law

You were just given information that the buyer found some issues during the walk-through. You immediately phone your seller client and let her know. This is an example of ______.

Reasonable skill and care - This is an example of reasonable skill and care: staying on top of what needs to be done.

Reggie has thoroughly reviewed the sales contract with his clients, the Arnolds, and has confirmed that they understand all of the terms and provisions. What should Reggie do next?

Recommend that the Arnolds review the sales contract with an attorney before signing it. - It's always a good idea for licensees to recommend that their clients review the sales contract with an attorney before signing it.

As a licensee, you're helping a couple buy a new home when you come across issues that could mean there's a cloud on the title. What should you do?

Recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale. - You should recommend the couple find another property to purchase, or ask the seller to settle the title through a quiet title action to clear any cloud before moving forward with the sale.

Which classification of appraiser is the first step to obtaining a license or certification in Tennessee?

Registered trainee - The first step in the process of becoming a licensed or certified appraiser is becoming a registered appraiser trainee.

Thinking about the five legal tests of a fixture, what does the R in MARIA stand for?

Relationship of the parties

Buyer Essie wants to make sure the property she's interested in purchasing is free of sinkholes. What's the best way for her to determine this?

Rely on a survey of the home

Deed restrictions imposed by a developer who wants to maintain specific standards in a subdivision under development are often called _______.

Restrictive covenants

Any agreement between competing firms that restricts trade, discourages competition, or _______ is a violation of antitrust law.

Restricts choices for consumers - Any agreement that restricts trade, discourages competition, or restricts choices for the consumer is a violation of antitrust law.

George has closed a transaction. Which final step must he complete as part of the typical residential sales process?

Retain copies of transactional paperwork

This type of buyer lives on a fixed income and is looking for a smaller property that requires little to no maintenance. Accessibility is an appealing feature this buyer type

Retiree

________ have a fixed income, but they may have large down payments from selling prior homes. Accessible properties with little to no maintenance tend to be attractive to these buyers.

Retirees

A RAM is a type of equity financing. What does RAM stand for?

Reverse annuity mortgage - RAM is an acronym for reverse annuity mortgage. This is a loan made from the homeowner's equity where the funds are drawn over time and the bank gains corresponding property ownership.

Which of these statements about the homeowner's right of redemption is true?

Rights of redemption window with REOs may have expired.

Water buildup, ice damming, and a fascia damaged by moisture are common ______ issues.

Roof

Which appraisal approach will likely weigh most heavily during the reconciliation step when appraising a single-family residence?

Sales comparison - The sales comparison approach is most commonly used for residential properties. The income approach may be best for income-producing properties (such as rentals). The cost approach is often used for unique or newly constructed properties.

Offer to purchase, sales agreement, contract of purchase and sale, and purchase agreement are other names for the ______.

Sales contract - A sales contract, also known as a purchase agreement, sales agreement, and offer to purchase, is the agreement that documents the agreement between a buyer and seller in a real estate sales transaction.

TREC won't allow a pre-licensing candidate on parole or on probation to be _________________________.

Scheduled for the licensing exam - A person on parole or probation is prohibited from taking the licensing exam.

Ned represents Sofia in the sale of her townhome. Luciana represents Sofia's buyer, Arturo. What is Sofia's relationship to Luciana?

Sofia is Luciana's customer. - Sofia is Luciana's customer and Ned's client. Arturo is Ned's customer and Luciana's client.

Topography depicts the physical features and contours of a project, including rocks, trees, and other vegetation, as well as ______.

Soil types - Soil types are part of an area's topography.

The mortgage and the deed of trust are ______ that pledge property as collateral for a loan.

Security instruments - The security instrument pledges the property as collateral for the loan, which is described in the promissory note.

In full seller disclosure states, whose responsibility is it to complete the seller disclosure form which will be reviewed by prospective buyers?

Seller - In full disclosure states, the seller is responsible for completing a disclosure form.

Which of the following is a true statement regarding the Tennessee Residential Property Disclosure Act?

Sellers of commercial properties are exempt.

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?

September 18 - Lenders must provide the Closing Disclosure three days before closing (September 18).

Insurance claims might not appear on a CLUE report for a property if the claims were made more than ______ years ago.

Seven - A CLUE report will only contain information about insurance claims within the last seven years, and only for those insurance companies that participate in the CLUE program.

Larry Lister is holding an open house for a house listed by Brooke Sales. Brooke told Larry the house was "move-in ready!" A fellow licensee stops by during the open house and has a chat with Larry. He says, "You know, I sold this house a few years ago. The basement floods every time there's heavy rain." What should Larry do?

Share the basement problems with anyone who asks about the cracks in the basement, and notify Brooke about the problem.

Mavis is a buyer's agent working with Blaine, an unrepresented seller. Mavis's buyer, Cintra, makes an offer on Blaine's property. Mavis assists Blaine with the paperwork. What's Mavis's relationship to the parties?

She's an agent to Cintra, and the seller is her customer.

Which of these situations represents a unilateral contract?

Sherry promises to give Brent a ride home from work, and then doesn't show up. - A promise is a unilateral contract if there's no reciprocal promise. Breaching a contract in which one party performs isn't a unilateral contract.

What's one reason that buyers might need additional cash at closing for a short sale?

Short sales don't clear liens from the title, so buyers may have to pay debts at closing.

Simon and his partner Hank were unable to obtain financing within the time specified in the sales contract. They have sent the seller written notice (including evidence from the lender that they were unable to qualify for a loan) declaring the contract null and void. Which of the following statements regarding this situation is true?

Simon and Hank's deposit will be returned to them.

Your client, Jimmy, is a man who likes to take risks: he eats expired lunch meat and thinks extreme sports are for toddlers. It's no wonder that he's the type of buyer who puts bids on several different properties at once, getting himself into a(n) ______ situation.

Simultaneous offer

Nan, who's selling her home to Moses, promises in writing to have a licensed professional repair the home's leaky roof. After closing, Moses discovers that the roof was poorly patched by the homeowner and leaks whenever it rains heavily. Under the statute of limitations in Tennessee, if Moses wishes to sue Nan, he must do so within _____ of the contract breach.

Six years - Under Tennessee's statute of limitations law, the party filing suit must do so within six years of the contract breach.

In a contract, consideration is the giving of ______.

Something of value in exchange for something of value - Consideration is the giving of something of value in exchange for something of value.

In which paragraph of the TAR Purchase and Sale Agreement can the parties add contingencies to the agreement that aren't covered elsewhere or that conflict with other statements made in the contract?

Special Stipulations - The Special Stipulations paragraph provides a place for the parties to write in terms in the form of contingencies that aren't already accounted for in the sales contract or addenda, or that conflict with preceding paragraphs.

Samuel and Yoshi have worked at the same firm for a few months and get along well. Samuel mentions he has a credit score in the low 800s. Yoshi, who's just starting out, persuades Samuel to sign for a loan to help Yoshi buy a property, since his credit isn't good enough. Yoshi promises to make the mortgage payments, but two months after the deal closes, Yoshi moves across the country. Samuel's now stuck with a $400,000 mortgage. What type of scheme is this?

Straw buyer - Unfortunately, Samuel was a straw buyer. His credit was used to purchase a property and secure financing, so when Yoshi skipped town, Samuel was left with the responsibility of paying the mortgage.

Angela is real estate broker Rene's buyer customer. What can Rene do for Angela?

Submit Angela's offer to the seller.

You are representing Buyer Helen in a multiple-offer situation. Which of the following pieces of advice should you refrain from giving Helen?

Submit a small earnest money deposit.

A lot in a new subdivision is finished and ready to be sold. The developer needs a clear title in order to transfer the property. Which of the following clauses must be included in a loan agreement?

Subordination - A subordination clause allows the security instrument's lien position to be placed in a lower priority to a new loan that's using the same property as collateral.

Borrowers with B, C, and D credit ratings are ______ borrowers.

Subprime - Borrowers with B, C, and D credit ratings are subprime borrowers. As such, they would not qualify for the most favorable rates and terms.

On which principle of value is the sales comparison approach based?

Substitution - The sales comparison approach is based on the principle of substitution. It compares similar properties to the subject property and makes adjustments to determine value based on the sales price of the comparables.

The economic principle of ______ says that when there are two houses in the same neighborhood with the same size, appeal, and utility, the lower-priced one will tend to sell first.

Substitution - This is called the economic principle of substitution, which states that the lower-priced option of two properties of equal quality will likely sell first.

After closing, a buyer discovers the seller wasn't honest about the property condition on the state's required disclosures. What can the buyer do?

Sue the seller for fraud or breach of contract.

What's something you can do in a buyer client relationship that you can't do in a buyer customer relationship?

Suggest negotiation terms. - You can't suggest negotiation terms to a buyer customer because you represent the seller.

The economic principle that tells us that when supply goes up, price goes down is commonly referred to as what?

Supply and demand - Supply and demand says that when supply goes up, prices go down because there is less demand.

In Tennessee, which of the following documents must a general contractor send to the property owner after completing the job and receiving payment for the improvements that were contracted to be done?

Sworn Affidavit to Owner

What entity is responsible for ensuring the Real Estate Education and Recovery Account maintains a $500,000 minimum balance?

TREC

Charles just learned that the master bath addition on the home he purchased was built without obtaining permits. It's actually situated too close to the lot line. What might Charles have to do to his master bath?

Take the addition down.

In investments, there are two types of depreciation, and each is defined by a particular event. Which of the following most accurately pairs the depreciation type with the event it is tied to?

Tax depreciation and cost recovery

Ted is an affiliate broker in Tennessee. Which of the following statements about Ted's E&O coverage is true?

Ted can obtain his E&O independently. - Licensees can obtain E&O insurance independently or through the insurance program administered by the real estate commission, as long as an independent policy meets or exceeds the commission's minimum requirements for terms and conditions of coverage.

______ is the form of ownership used by married couples in certain states. It includes automatic survivorship rights.

Tenancy by the entirety - This is tenancy by the entirety, where each has an undivided interest in the entire property. If one dies, the other owns the entire property. If they divorce, their ownership automatically becomes a tenancy in common.

In which form of co-ownership is a person's ownership inheritable?

Tenancy in common - With tenancy in common, if one owner dies, that person's ownership is inheritable. It doesn't automatically pass to the other owners as it would with joint tenancy

In Tennessee, the ______ offers a down payment assistance program for first-time homebuyers called the Great Choice Loan Program.

Tennessee Housing Development Agency - In Tennessee, THDA's Great Choice Loan Program provides qualified homebuyers in the state with up to 4% down payment assistance.

Grace, who is licensed in and lives in another state, wants to obtain an affiliate broker license in Tennessee. She's completed the nonresident application worksheet and attached her license certifications. What other form must she complete as part of her application?

Tennessee Nonresident Applicant Consent to Suits

Which entity is given authority to regulate the professional conduct of real estate licensees in Tennessee?

Tennessee Real Estate Commission

Tennessee real estate rules and regulations are enforced by the ______.

Tennessee Real Estate Commission - The Tennessee Real Estate Commission administers and enforces laws regarding licensed real estate activities for both residential and commercial transactions.

Which entity determines violations for real estate license law in Tennessee?

Tennessee Real Estate Commission - The Tennessee Real Estate Commission outlines violations for which licensees can be disciplined, and determines penalties.

Which authority administers the Tennessee Real Estate Broker License Act?

Tennessee Real Estate Commission - This nine-member body is known as the Tennessee Real Estate Commission.

Which type of pest may make mud tubes-tunnels that run along the walls-or shed tiny wings?

Termites

Buyer Jolene wants to make sure her new house doesn't have elevated radon levels. What's the best way for her to determine this?

Test for it.

Which of the following agreements does NOT have to be written down in order to be legally binding?

The Lees rent out their basement to some college students for three months. - While it's a good idea to get these kinds of agreements in writing anyway, an agreement to rent or lease property for less than a year doesn't have to be in writing to be enforceable.

Article 11 of ______________ requires REALTORS® to act only within their area of competence, unless they receive assistance from someone who is competent in the area.

The NAR Code of Ethics

Which association is credited with laying the foundation for many states' real estate license law?

The National Association of Real Estate Brokers (NAREB)

Who or which entity is prohibited from setting brokerage commission fees?

The Tennessee Real Estate Commission

Who or what entity investigates complaints of license law violations in Tennessee?

The Tennessee Real Estate Commission - The Tennessee Real Estate Commission investigates complaints of license law violations made by consumers or licensees.

TREC and any committee created under TREC is entitled to whose legal services?

The Tennessee attorney general

TREC must operate in accordance with what act?

The Uniform Administrative Procedures Act - TREC must operate within the laws of The Uniform Administrative Procedures Act. The Tennessee Real Estate Broker License Act is law covering real estate licensees.

Which of the following is true about loan assumptions under the VA program?

The VA must approve loan assumptions on loans made after 1988. - VA loans made after March 1, 1988 are assumable with VA approval.

Two large local brokerage firms agreed to lower their commission rates to the same amount- approximately 1% less than any other firm in town. After extensive marketing of their new lower rate, these two firms began to see a big increase in the number of listings they received, costing their competitors substantial amounts of money. What about this situation makes it a per se antitrust violation?

The agreement between the two firms

If a buyer makes the purchase of the property contingent upon the appraisal, what must occur for the transaction to continue?

The appraised value of the property must meet or exceed the purchase price. - An appraisal contingency means that if the appraised value of the property doesn't meet or exceed the purchase price, the buyer may terminate the agreement.

Before closing, who should provide evidence of a lender's and owner's title insurance policy?

The buyer

In a buyer agency relationship, whom does the licensee represent?

The buyer - In a buyer agency relationship, the licensee represents the buyer. This may seem simple, but it's crucial to understand. As a buyer's agent, you represent only the buyer.

Per the TAR Purchase and Sale Agreement, what happens if the buyer defaults?

The buyer must forfeit the earnest money deposit to the seller as damages. - If the buyer defaults, the buyer must forfeit the earnest money to the seller as damages. In addition, the seller may also terminate the contract and pursue all legal rights and remedies.

Which of the following is NOT a valid way to terminate a listing agreement?

The buyer requests it

Whose responsibility is it to ensure that a prospective buyer receives a copy of the Tennessee Residential Property Condition Disclosure prior to the buyer making a written offer to the seller?

The buyer's agent

Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?

The chandelier in the foyer - The chimenea, area rug, and banker's lamps are all free-standing and easily removed. The chandelier, however, is not a free-standing light fixture and should be considered real property.

In a residential real estate sale involving a federally related loan, what entity is required to provide Real Estate Settlement Procedures Act disclosures to the consumer?

The consumer's lender - The lender must provide the borrower with a written disclosure of the estimated and final settlement costs.

If the sale of a property that includes soybean fields occurs before the crops are ready for harvest, which of the following is the best option for the parties to the transaction to take?

The contract between the parties should clarify the disposition of the crop.

Who or what entity determines whether or not a will is valid as part of the probate process?

The court - As part of the probate proceedings, the court holds a hearing to determine the validity of the will and/or the order of descent, if a valid will does not exist.

What's true about the draw period on a home equity line of credit (HELOC)?

The draw period varies. - The draw period for HELOCs varies and is established at the loan's outset.

Which fiduciary duty may continue even after the transaction closes?

The duty of accounting

Your clients closed on their property yesterday, but you still have some paperwork that you need to deliver to them as soon as possible. Under which fiduciary duty are you acting?

The duty of accounting

Simone can't believe that her client won't let her put a lockbox on the property. How does he expect other agents to be able to show the home? Oh well, it's not as if he's asking her to do something illegal. The client's wish is her command. What fiduciary duty is this an example of?

The duty of obedience

If there's no state or local building code to cover a specific situation, what code must the builder abide by?

The federal building code - The national codes apply unless stricter local or state building codes exist.

In pricing a property, what might expired listings tell the real estate professional?

The price at which a property won't sell - Knowing the prices at which similar properties didn't sell can help a licensee show sellers what might be an unreasonable sales price expectation.

An unlicensed assistant at ABC Brokerage conducts a showing of one of the firm's listings. Because showing property is an activity that requires a license, which of these statements is true?

The principal broker may be sanctioned.

Which of these best describes a home equity loan?

The funds are often used for home renovations or to fund a college education. - A home equity loan is made based on the amount of equity the homeowners have in their home. These funds, which are received in one lump sum, are frequently used for large expenses, such as home renovations or funding a college education.

Members of the Tennessee Real Estate Commission are appointed by ______.

The governor

In Tennessee, whose license or licenses must be prominently displayed at a firm's main place of business?

The principal broker's and all affiliate brokers' - The broker's license and the licenses of all affiliate brokers who work with the broker must be prominently displayed in the broker's main place of business.

Kelly is closing on the house she's purchasing on Wednesday. Which of these statements is true?

The lender must provide the Closing Disclosure by Friday of the week before closing.

When calculating loan-to-value ratios, which of the following will be used by the lender?

The lesser of the sales price or appraisal value - Lenders use the lesser of the sales price and appraised value.

Which of the following is a legitimate and legal way that an exclusive right-to-sell listing agreement may terminate without the seller owing a commission?

The listing agent stops working on the listing. - The only valid reason listed here is listing agent abandonment, which is when the listing agent stops working on the listing.

Shalonda is looking to purchase a home for $325,000 using a conventional loan. She has $49,000 to place as a down payment on the house. Which of the following statements is true?

The loan-to-value ratio exceeds 80%. - The $49,000 down payment is 15% of the sales price ($49,000 ÷ $325,000), making her LTV 85%. This means she'll need to purchase PMI. PMI is required for conventional loans that have an LTV greater than 80%. MIP is used for FHA loans.

Marshall is a home inspector who is walking the lot of the property he's inspecting with a survey in hand. Which of the following will he note as an encroachment on the inspection report?

The neighbor installed a basketball hoop next to his driveway, six inches over the property line. - An encroachment occurs when someone illegally places a structure or object on another person's property, like a basketball hoop.

Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?

The parol evidence rule - The parol evidence rule states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract

Per the TAR Purchase and Sale Agreement, who is bound to terms and conditions of the sales contract?

The parties, their heirs, successors, legal representatives, and assigns - The parties, their heirs, successors, legal representatives, and assigns are all bound to the terms and conditions of the contract.

What's loan-to-value ratio?

The ratio of the amount of a loan to the value of the property - LTV is a ratio of the loan to the value of a property. Value is determined by the lower of the sales price or appraised value.

Who usually pays the broker commission?

The seller

Licensee Randy is in a seller agency relationship with Brent, a seller. The buyer is Tim. Who is Randy's client?

The seller (Brent)

Which of the following best describes a net listing?

The seller specifies a price desired for the property and agrees to pay the broker any amount received that's more than that price

Which of the following statements about an assumption is NOT true?

The seller's credit score may improve although he's not making any mortgage payments. - A seller's credit score may improve in a sale subject to the existing mortgage lien, not an assumption.

Darren set up a land trust so that his children could benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust. Darren is the ______.

Trustor - The trustor is the person who creates the trust. The trustee is the person who carries out the person's wishes.

Who or what entity would defend TREC in court if a lawsuit is filed against its members or employees?

The state's attorney general - If a lawsuit were filed against commission members or employees, it would have the full legal support of the Tennessee attorney general.

Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?

The statute of frauds - The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.

When a borrower has paid off the loan, how is the release handled if the security instrument is a deed of trust?

The trustee executes and records a deed of reconveyance and the lender returns the note to the borrower. - When a borrower has paid the loan in full, it is the trustee's responsibility to execute and record a deed of reconveyance.

If there is some kind of defect on a property's title, what effect does this level of transferability have on the property's value?

The value falls. - If a property can't be easily transferred, its value falls.

Why should you ask potential buyer clients if they need to sell their home before purchasing a new one?

Their current home might be a potential listing for you. - If potential buyer clients need to sell their home before purchasing a new one, they may agree to list it with you. If they don't, there are further questions you will need to ask to make sure they are ready and qualified.

What must pre-licensing candidates submit to the FBI and the Tennessee Bureau of Investigation?

Their fingerprints - Pre-licensing candidates are required to submit their fingerprints to the FBI and TBI for a criminal background check.

Lola and Rick's offer on a property is contingent upon financing. What happens if they cannot obtain financing?

They must let the seller know. - If Lola and Rick can't get a loan, they must notify the seller in writing.

Woody wanted to work for the new broker in town, so he filed the paperwork necessary to affiliate with a new broker. What will happen to his three listings and two buyer clients?

They remain with Woody's original broker, unless the broker agrees to other arrangements in writing.

Which of the following is true about for sale signs?

They require the seller's written permission to post.

Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have?

They should have a loan-to-value ratio of 80% or less. - Primary mortgage insurance may kick in when the loan-to-value ratio exceeds 80%; that is, the borrower is borrowing more than 80% of the property's value. To be sure they can avoid paying PMI, Sophia and Antonio need to put at least 20% down.

Shakira is attending an association meeting when, in a small group breakout, her group begins discussing how to deal with the new kid in town: a real estate firm that charges a flat $500 to list properties, then lets the sellers fend for themselves. Why should Shakira leave the discussion?

This conversation sounds like it might become an antitrust violation - This conversation sounds like it could lead to group boycotting, an antitrust violation.

Which paragraph of the TAR Purchase and Sale Agreement gives buyers the right to withdraw their offer prior to receiving a counter or acceptance?

Time Limit of Offer - By completing the Time Limit of Offer paragraph, buyers can exercise their right to withdraw their offer before acceptance with notice.

Handles the financial details and paperwork at closing

Title agent

Thomas is applying for an affiliate broker license. What type of written examination requirement does this type of license have?

Thomas must pass the national and state exams with a score of 70% or greater.

In Tennessee, how long must electronic real estate forms be kept with the broker?

Three years - In Tennessee, all completed real estate forms, both hard copy and electronic, must be kept with the broker for a minimum of three years.

When working with a developer who's purchasing undeveloped land for a new subdivision, ABC Realty stipulates in the contract that in order to purchase the undeveloped land, the developer must purchase grading services from Bulldozers-R-Us. Which antitrust violation is this?

Tie-in arrangement - The brokerage is requiring the developer to use another firm's services as a condition of working with the brokerage. This is an example of a tie-in arrangement.

Which paragraph in the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with a good and marketable title?

Title and Conveyance - The Title and Conveyance paragraph stipulates that the seller is conveying the property to the buyer with a good and marketable title by general warranty deed.

What's the purpose of a buyer presentation?

To build rapport with the buyer - A sit-down meeting helps the buyer invest in you as a professional and helps to establish rapport.

When pricing a property, which of the following is a reason a licensee would consider expired listings?

To determine the price at which a property won't sell - Knowing the prices at which similar properties didn't sell can help a licensee show sellers what might be an unreasonable sales price expectation.

Why does a lender require title insurance from the borrower for a mortgage?

To ensure the collateral for the loan is secure and free of encumbrances

What's the purpose of licensing?

To protect the public by requiring certain education, training, and standards of licensees - The purpose of licensing is to protect the public by requiring certain education, training, and standards of licensees.

The benefits of a home warranty for buyers are clear. Why might sellers want to offer a home warranty to buyers?

To protect themselves from any claims after closing. - Home warranties protect sellers from any claims after closing if appliances or systems need to be replaced.

Considering where pipelines and utilities can be located and their impact on the overall look in the subdivision are factors of ______.

Topography - Topography can involve considering where pipelines and utilities are located and their impact on the overall look in the subdivision.

Which agency agreement creates a relationship between a buyer or seller and all affiliates in a brokerage firm?

Traditional agency agreement - Traditional agency creates a relationship between a client and a broker. This includes the broker and all licensees in the firm.

What's one benefit to affiliating with a broker?

Training

What's another name for a facilitator?

Transaction broker - Facilitators are also known as transaction brokers and non-agents.

Which of these types of transactions require disclosure under the Tennessee Residential Property Disclosure Act?

Transfers of a single-family residence

Failing to account for ______ is considered a license law violation in Tennessee.

Trust funds - Failing to account for trust funds is a violation of license law in Tennessee.

All trusts have three parties: the trustor, the beneficiary, and the ______.

Trustee

Of the nine TREC members, how many are members of the public who don't have real estate licenses or any interest in real estate?

Two - The governor appoints two members of the public to serve on behalf of the general public.

How long must a person on parole or probation wait before taking the licensing exam?

Two years - A pre-licensing candidate must be off of parole or probation for at least two years before scheduling a licensing exam.

What standards do appraisers follow?

Uniform Standards of Professional Appraisal Practice - The Uniform Standards of Professional Appraisal Practice (USPAP) provides standards for appraisers to follow.

Which physical characteristic of land addresses the concept that land isn't interchangeable and one piece of land isn't exactly like another?

Uniqueness - One piece of land isn't exactly like another. This is the concept of nonhomogeneity.

Until what point in a timeshare transaction is the contract considered voidable by the buyer?

Until the buyer receives the public offering statement

The Tennessee Real Estate Commission will only grant licenses to those people who have good reputations. Which trait would be inconsistent with a good reputation?

Untrustworthiness - Untrustworthiness isn't part of a good reputation. Trustworthiness is a trait that the commission would be looking for when issuing a real estate license.

Blake is allowed to use his property in a way that's prohibited under current zoning ordinances, because those ordinances would cause undue hardship for him. What gives him this permission?

Use variance

Which factor that influences value considers the property's function?

Utility - Utility looks at the property's use or function.

Stacey's lengthy military service makes her uniquely eligible for a(n) ________.

VA loan - Individuals eligible for VA loans include military members who have served 181 days on active duty or three months during war time.

What type of timeshare involves a buyer agreeing to pay a one-time purchase price and an annual maintenance fee, and in return selecting an accommodation time and having the right to use the unit for a specified number of years?

Vacation - Vacation ownership is basically a way to prepay for a vacation rather than renting it.

There are a lot more sellers than buyers in the current market. How does this demand influence value?

Value is pushed downward. - More sellers than buyers = low demand = downward pressure on value.

Snidely is a real estate licensee who regularly misrepresents himself to clients, provides opinions of property value that he calls appraisals, and frequently advises his clients about the legal ramifications of the clauses they'd like to include in their contracts. Snidely is _____________.

Violating multiple articles of the NAR Code of Ethics

A real estate contract written for an illegal purpose is ______.

Void - Contracts must be written for a lawful objective. A contract for an illegal purpose is void.

Sylvia, who's 15 years old, and her neighbor Marge, who's 24, agree that Sylvia will babysit Marge's toddler for the summer for $10 an hour. What type of contract is this?

Voidable - A voidable contract appears to be valid, but one or both parties have the right to rescind the contract. In this case Sylvia can enforce the contract against Marge but Marge cannot enforce against Sylvia.

When preparing a buyer presentation, what should you keep in mind?

Ways to build trust

When may a home warranty be purchased?

When the property is listed or at the time of closing - A home warranty is a type of insurance that can be bought either when it's listed or at closing.

You're showing your buyers a house that clearly has a second-story addition. What important thing do you need to find out from the sellers?

Whether or not the addition was permitted

Which of the following factors helps the IRS determine whether a licensee is classified as an employee or an independent contractor?

Whether the licensee receives benefits from the brokerage firm

In a case of lease abandonment, what's the landlord's responsibility?

While the former tenant is financially responsible for any unpaid rent, the landlord is responsible for attempting to find another tenant.

How is priority determined in cases where more than one judgment lien is filed against a property?

Whoever filed their claim first receives priority.

Janine, a professional home inspector, notices a lot of small holes burrowed into a home's attic beams. This could indicate the presence of which pest?

Wood-boring beetles

Julian and Clara want to leave their real estate holdings to their children. If at all possible, they'd like those holdings to avoid the probate process after they're deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?

Yes, a living trust would avoid probate.

Gus has applied for a home equity line of credit from his federally insured bank so that he can make some renovations to his kitchen. The same bank is his lender for his home mortgage. Will this loan be subject to Real Estate Settlement Procedures Act requirements?

Yes, because RESPA applies to any residential loan transaction from a federally insured financial institution, including equity lines of credit. - RESPA regulations apply to loans on one- to four-family residential properties, including assumptions, refinances, home improvement loans, and equity lines of credit.

Barry has always had an interest in real estate. He's helped a few friends to determine the asking price for their properties, and now he's considering going into business doing this kind of work, for a fee. Does Barry need a real estate license?

Yes, he does.

Tommy and Quinn are buying their first home together. All seems to have gone well, and they are conducting their final walk-through before closing. But wait ... nothing has been done to fix those electrical issues that the sellers agreed to fix. And the sellers removed the beautiful chandelier that was supposed to stay, per the contract. Can Tommy and Quinn walk away from the deal at this point?

Yes, the sellers have breached the contract, so Tommy and Quinn have the option of unilateral rescission. - The sellers are legally required to abide by the terms of the contract, so they have breached the agreement of sale. Tommy and Quinn can choose the remedy of unilateral rescission and walk away from the deal.

The city of River Heights is experiencing a shortage of skilled workers in the construction trades. Is this likely to affect the real estate market, and if so, how?

Yes, this would impact the supply of homes on the market, potentially creating a seller's market.

You're working with Angela, your buyer customer. Since there's no agency relationship in place, it's important for her to understand which of the following?

You represent the seller.

Which of the following is a true statement regarding working with buyers?

You should pre-qualify buyers before deciding to work with them.

A sole proprietor is a familiar business model. If you practice real estate as a sole proprietor, which of the following is a true statement?

You're an independent contractor. - Sole proprietors are independent contractors.

Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property?

Zero years (personal residences cannot be depreciated)

A lis pendens serves as...

a warning to prospective buyers that a pending lawsuit could impact the title.

A downcycle is a...

period of stagnation in real estate, during which no one's buying and no one's selling.