30 Hr Affiliate Course

As a buyer's agent, which of the following duties are owed to all parties in a real estate transaction?

* Professional skill and care - Obedience and honesty - Disclosure and loyalty - Proper accounting and confidentiality

If a lender's debt ratio is 36% and a borrower has regular monthly debt payments of $500 against a monthly income of $5,000, what is the maximum monthly housing expense the lender can qualify for?

- $1,300 - $1,620 - $1,800 - $1,980

A lender uses a 36% debt ratio to estimate the maximum loan payment an applicant will qualify for. The applicant's annual income is $720,000. Significant monthly debt obligations amount to $10,000. What is the qualified monthly housing expense?

- $21,600 - $19,440 - $18,000 - $11,600

If a lender's income ratio is 28% and a borrower's monthly income is $3,000, what is the maximum monthly PITI payment the borrower can qualify for?

- $670 - $840 - $2,160 - $2,330

Which of the following documents is a Tennessee broker allowed to prepare without being charged with practicing law without a license?

- A deed of trust - A quitclaim deed - A listing agreement - An installment sale contract

Which report helps a licensee find the recommended list price to present to a seller?

- A net listing report - A profit and loss summary - A home loan report - A comparative market analysis

What is true in regard to fees, commissions and kickbacks?

- A real estate licensee may not agree to a reduced commission rate. - A real estate licensee may not receive fees or rebates from home inspectors for referring business to them. - A real estate licensee may pay a commission to an unlicensed individual or company. - A real estate licensee may not receive an earned commission after transferring to a new broker.

Which of the following is most likely to be the cause of involuntary termination of an agency agreement?

- An appraised value that comes in below the selling price in the agreement. - A change in the municipality's comprehensive zoning plan. - Destruction of the property which is the subject of the agreement. - The client's signing of an agency agreement with another agent.

What is a prorated item?

- An item whose cost is shared by buyer and seller. - An item that is paid over time. - An item that is paid in advance. - An item that is paid in arrears.

When is the latest an agent may obtain written confirmation of his or her agency disclosure from a seller who has no agent?

- Before executing a listing agreement or presenting an offer - Before providing any real estate services - Before showing the seller's property to a prospective buyer - On first contact with the seller

Which of the following is a contract "do"?

- Charge a reasonable fee for help with a form. - White-out original words or phrases when making alterations. - Have all changes initialed by all parties. - Create forms from scratch.

Which of the following is NOT a required disclosure (if applicable), either by the seller or by the agent?

- Confirmation of property measurement - Confirmation of agency - Lead-based paint - Property condition

In the condition disclosure, which of the following is something a seller may do, but is not required to do?

- Disclose the presence of certain diseases that have no effect on the utility of the structure - Disclose an obvious material defect - Disclose the payment of certain impact fees - Disclose the number of bedrooms permitted

___________________ terminates a contract and occurs when either one, or both, parties do not live up to the obligations set forth in the contract.

- Expiration - Validity - Revocation - Abandonment

A broker wants to deposit a buyer's earnest money deposit in an interest-bearing account. Which of the following is TRUE?

- He must obtain written permission from the director of the Real Estate Commission. - He must use a federal bank that is approved by the Real Estate Commission. - He can't do this, as interest-bearing escrow accounts are not legal in Tennessee. - He must obtain a written agreement with the buyer specifying how the interest will be disbursed.

In what sense is the use of standardized forms a risk management procedure?

- It eliminates the risk of being unable to draft a contract correctly. - It reduces the risk of losing a client by having to make a referral to an attorney. - It reduces the risk of committing an unauthorized practice of law. - It eliminates the risk of wasting valuable time in creating custom forms.

What does "imputed knowledge" mean in the context of agency?

- Knowledge an agent is expected to have as a professional. - Knowledge a principal is presumed to have because the principal's agent has the knowledge. - Confidential information that has been shared verbally, but not in writing. - Information that an agent does not know to be a fact but presumes to be true.

Which of the following activities would not normally be authorized by a listing agreement?

- Locating tenants - Showing a property - Signing contracts for clients - Communicating transaction terms

Why is it always advisable in taking over management of a property to review all existing policies?

- Market conditions and other factors may have changed since the policies were instituted. - The TREC requires an annual review. - New management needs to establish authority by throwing out old policies. - Existing policies will control how the property is managed.

A Kentucky real estate firm has a web site on a server in Tennessee. The web site states that the firm is a Tennessee real estate firm. Is this allowed under Tennessee law?

- No, it is a violation of the License Act and Commission rules. - Yes, as long as the server is operated by a Tennessee-owned company. - Yes, Kentucky firms are not subject to Tennessee law. - No, Kentucky firms may not advertise on the internet in Tennessee.

Lisa sells real estate and her husband Mike sells homeowner's insurance. Does Lisa face any risk by referring clients to Mike?

- No, they are in two different industries and there is no conflict of interest. - No, as long as she discloses the relationship to her clients. - Yes, because Lisa will benefit financially, she has a personal interest in the referral and should not make it. - Yes, it is unwise for any real estate agent to refer a client to other service providers.

How much is a discount point?

- One percent of the amount of a loan. - One-tenth of a percent of the amount of a loan. - A percentage of a loan amount based on a discount rate. - A percentage of a loan amount based on the lender's origination cost.

Who may revoke a contract?

- Only the party who first made the offer - Only the party who created the contract by accepting an offer - Both parties must agree to revoke the contract or revocation is not possible - Any party may revoke a contract, but the revoking party may be held liable

In real estate agency duty, what does "reasonable care and skill" refer to?

- Professional standards a reasonable person would find adequate. - Professional standards commonly maintained by other agents in an area. - The level of service required of a licensee in any profession. - The maximum level of competence a client can expect from an agent.

What is the principle behind "highest and best use"?

- The best use of a property is that which is for the greatest profit and public good. - There is a point at which continued improvements will not add to market value. - There is a particular use for a property that will generate the property's maximum value or income. - Zoning and other land use controls will optimize a property's value.

Why should a bill of sale for appliances the buyer would like to purchase be made an addendum to the sales contract?

- The bill of sale must be an addendum or the lender may find that the buyer is not qualified to purchase the property. - The bill of sale must be an addendum or it is reduced to a verbal agreement, which may violate the Statute of Frauds. - The bill of sale must be an addendum to be enforceable. - The bill of sale must be an addendum to be valid.

What happens to escrowed funds when the broker in charge of them files a "Petition to Interplead Funds?"

- The broker gives control of the funds to a court. - The funds are returned to the depositor's heirs. - The funds are released to the broker for disbursement. - The broker surrenders his claim on a commission.

If a licensee misrepresents facts about a listing without the owner's knowledge, who can be held liable for a violation under the Licensing Act?

- The owner and the managing broker - The owner and the licensee - The owner, the licensee, and the managing broker - The licensee and the managing broker

What is the "adjustment period" of an adjustable rate loan?

- The regular interval when the loan's interest rate may change - The number of days between payments - The loan term - The regular interval when the loan's index adjusts

How long does a person have after an alleged violation of Tennessee fair housing law to file a written complaint?

- Two years - One year - Six months - 180 days

What is a recommended method to keeping all principals informed during a transaction?

- Using a personal recording device - Recording all phone contacts - Maintaining a checklist for each transaction - Maintaining files for at least 3 years

__________ is the measurement of a property boundary along a river or other body of water.

- Width - Frontage - Depth - Length

A novation is

- a new contingency added to an existing contract. - an amendment to the contract made by making a notation in the margin. - an extension to a contract's termination date. - the contract that follows a contract terminated by mutual agreement.

The Fair Housing Act applies to all of the following EXCEPT

- advertising the sale or renting of housing. - the provision of real estate brokerage services. - the development of commercial real estate. the - the financing of housing.

In addition to being a contract between a licensee and a seller or buyer, a listing agreement is

- an independent contractor agreement. - an agency agreement. - a sales contract. - a contract for deed.

Prepayment penalties

- are standard on conventional loans. - are not allowed on conforming loans. - are required with assumable loans. - are prohibited if there is also a private mortgage insurance requirement.

In Tennessee, implied agency

- arises by the parties acting as if they have an agency agreement. - occurs when an agreement expires without being terminated. - is not allowed; agency agreements must be explicit and in writing. - occurs when a seller deals directly with a buyer.

If a buyer does not make inspections during the inspection period, the standard purchase and sale agreement

- automatically extends the inspection period unless the seller objects - requires the buyer to accept the property "as is." - requires the seller to have the inspections performed at the buyer's expense. - states that the closing date will be postponed subject to negotiation.

Of the following risk management strategies, the one that aims at minimizing both the severity and the likelihood of loss is

- avoidance. - reduction. - transference. - retention.

In practice, to be a seller's agent a licensee must also

- be a facilitator. - be a designated agent. - have a signed agency agreement. - have a written or verbal listing agreement.

A landlord can evict a tenant for failure to pay rent, but may not

- change locks, intending to lock out the tenant. - sell the building. - enter the premises during the tenancy. - charge a late fee for the past due rent.

If you detect vandalism to a property you are showing, it would be good etiquette to

- conceal the damage. - leave the premises immediately. - call 911. - report the damage to the listing agent.

Real estate in Tennessee is NOT designated as commercial if it

- consists of shops. - contains offices. - is held by its owners as an investment. * consists of one to four residential units.

The sales comparison approach is based on the principle of

- contribution. - substitution. - conformity. - anticipation.

The best way to minimize the risk of violating fair housing laws is to

- deal only with consumers who do not belong to a protected class. - obtain education in the content and intent of the laws. - make sure there is always a witness present at all meetings with consumers. - stay away from transactions involving public housing.

The term "facilitator" may be used synonymously with the term

- designated agent. - managing broker. - transaction broker. - sub-agent.

Title VIII rules do NOT apply to

- facilities owned by private clubs and leased non-commercially to members. - privately owned single-family homes where a broker is used to find a buyer. - 5-unit apartment buildings with a non-resident owner. - facilities owned by religious organizations and leased commercially to the public.

Even after giving buyer and seller the required information about property condition disclosures, the licensee may still be subject to legal action for

- failing to detect customer misrepresentations. - failing to disclose known adverse facts. - relying on publicly available market information. - advising the purchaser to exercise due diligence.

The standard E & O policy in Tennessee covers damages resulting from

- failure to disclose an environmental condition. - antitrust violations. - mishandling of earnest money deposits. - negligence, error or omission in carrying out professional services.

A landlord may undertake to evict a tenant for all of the following reasons EXCEPT

- failure to pay rent. - violating the lease agreement. - failing to leave after lease termination and delivery of proper notice. - deducting the cost of services landlord failed to provide from a rental payment.

Buyer Marc asks a Broker Buell to create a custom purchase offer. Broker Buell should

- follow Marc's instructions. - inform Marc that custom forms are forbidden by the Tennessee Real Estate Commission. - advise Marc to seek legal counsel. - advise Marc against creating a custom form, but if he insists comply; the customer is always right.

The purpose of creating an environment of business trusts is to

- increase competition. - foster commerce. - segment competition. - substantially lessen competition.

If an offeree presents a counteroffer, the original offer

- is amended. - is killed. - is accepted. - is modified.

An affiliate broker may only work in an office where a principal broker

- is engaged primarily in the real estate business. - has no more than ten affiliates under his supervision. - provides Errors and Omissions insurance for all employees. - is accessible around the clock.

When a counteroffer is presented

- it may never be revoked by the offeror. - the original offer is still valid until the licensee gives approval. - it nullifies the original offer. - it amends the original offer.

To reduce risks inherent in reporting transaction progress to a client, the licensee should

- make reports orally only, never in writing. - leave progress reporting to the inspectors and other experts. - advise the client that it is company policy to make no progress reports until the contingency period is over. - avoid statements of opinion and speculation in all reports.

Licensees are required to carry Errors and Omissions insurance to cover liability for licensed activities and/or they

- may deposit $100,000 with the Commission in lieu of purchasing an insurance policy. - must obtain the E&O insurance from an independent agent in Tennessee. - may obtain the insurance independently as long as it meets or exceeds the coverage of the Commission's policy. - must obtain the E&O insurance from the Commission.

A buyer who signs an exclusive buyer representation agreement with a licensee

- may not be represented by any other agent during the agreement period. - may not speak with any other licensee until a purchase is completed. - may not make an offer to purchase except in the presence of the licensee. - may not look at any properties the licensee has not introduced him to.

If a licensee signs a listing contract with a home seller and then the seller has a disabling car accident, the contract:

- may terminate for infeasibility. - is automatically assigned to another licensee in the same firm. - is automatically extended for a longer listing period. - is invalidated.

Tennessee fair housing law is _____ federal law in granting exemptions.

- more restrictive than - less restrictive than - the same as - completely unlike

Regarding relationships with other real estate professionals, it is a general standard to

- praise all professionals. - share clients with other licensees. - help other licensees find clients. - refrain from disparaging competitors.

Mortgage lenders provide borrowers with a 1098 form to include with the borrower's federal income tax return to

- report the amount of the borrower's remaining untaxed loan balance. - show the amount of tax deductible interest and principal the borrower has paid. - show the lender's tax deductible expenses for servicing the loan. - show the amount of tax deductible interest and property taxes the borrower has paid.

It is important to consider the reputation of local schools in collecting information for a comparative market analysis because

- sellers often have inaccurate ideas about local schools and need help learning the facts. - school quality is one of the market factors the seller and seller's agent will be required to disclose to a buyer. - school quality is just one of many bits of information buyers need to know about. - school quality is the top priority for some home buyers; good schools raise property values in the district.

The illegal practice of scaring owners into selling by saying their neighborhood is changing racially is called

- steering. - redistricting. - blockbusting. - peddling.

The standard "Exclusive Right to Sell" form promulgated by the Tennessee Association of REALTORS®

- supersedes the proprietary agreements once used by brokers. - is required in the state of Tennessee. - is widely used in Tennessee but not required. - is a sample form not to be used in an actual transaction.

If a loan has a due-on-sale clause

- the loan cannot be assumed without lender permission. - the loan is fully assumable if it is a conforming loan. - the borrower must pay a premium for paying off the loan early. - the lender cannot sell the loan to another loan servicer.

If you have a signed buyer agency agreement with a client, your managing broker is also the buyer's agent in a transaction unless

- the managing broker appoints a designated agent for the seller if the property is listed by your firm. - you also have an exclusive agency agreement with the seller. - the buyer agrees not to look at any properties listed with your firm. - you are an independent contractor, and not an employee, of the broker.

The best predictor of a property's market value would be

- the national average of comparable homes. - comparable homes sold within the past 6 months. - comparable homes sold in a similar school district. * comparable homes sold in the last 30 days.

An option contract conveys

- the right to purchase at a future time. - the right to exclusive possession and use for a period. - the right to encumber. - the right to sell.

Complaints over possible violations of the Code of Ethics are filed with

- the state attorney general. - the local REALTOR® board. - the state legislature - the TREC.

Retail properties are often classified according to

- their height. - the size of the area they are designed to draw customers from. - the quality of their construction. - the number of tenants.

According to the level of authority delegated to the agent, the usual real estate agency is a(n)

- universal agency. - general agency. - unlimited agency. * limited or special agency.

If a contract requires one of the parties to perform illegal activities, the contract would be

- void. - voidable. - unenforceable. - caveat emptor.

If there is a dispute over whether a commission is due, one of the determining factors is

- who has the listing agreement with the earliest date of signing. - who can document the most time spent on marketing the property. - who was first to find the customer. - who is demanding the smallest commission amount.