CE Shop Final Exam

an appraiser used the cost approach to estimate a property's value at $220,000. The site value was $50,000 and the total depreciation estimate was $4,000. What was the estimated cost of improvements?

$174,000

An appraiser must be licensed or certified to handle federally related work on residential property valued at more than: ________

$250,000

If a farm that's for sale measures one and three-quarter square miles, how many acres is it?

1,120

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. What are those two?

1. Common law doctrine of riparian 2. Littoral rights

What are the 4 characteristics of value?

1. Demand 2. Utility 3. Scarcity 4. Transferability

How long must continuous and uninterrupted use of a property be before it can be claimed by adverse possession in DC?

15 years

How many feet are in a mile?

5,280

Which of the following consumers would be able to derive the most benefit from a reverse mortgage?

A couple in their late 60's who need to tap their home equity to help cover their expenses but do not want to sell their house

Which restrictive covenant would be considered illegal?

A covenant that restricts selected parcels within a defined subdivision

What is a plat?

A detailed survey map of the subdivision indicating where buildings, driveways, etc., will go

What is a lien?

A financial claim

A lawsuit for inverse condemnation may be brought by: _______________

A homeowner

What must a developer get approved before building houses in a new subdivision?

A plat

Which of the following is a role of an agent who's assisting the buyer, but representing the seller?

Advise the buyer on an appropriate price

What is an assessment?

An actual charge against the property owner to cover the cost of an improvement made by a municipality

A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely

An exclusive agency listing

A couple owns an older home in a neighborhood that is becoming a commercial are. Because of the change in the use of land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of:

Anticipation

A trust involves a special relationship called a fiduciary relationship. Which of the following statements is true regarding trusts?

Any asset may be held in a trust

A major difference between freehold and non-freehold estates is that all freehold estates:____________

Are of indeterminable duration

What is the duration of a home warranty's coverage?

As disclosed in the contract that offers the warranty

To be valid, every deed must:

Be executed by the grantor

When does performance of a contract occur?

Both parties have fully met the terms of the contract

A valid exercise of the government's police power to restrict an owner's use and enjoyment of property includes_____________

Building Codes

The process of the government obtaining the property is called______________

Condemnation

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given_________________

Constructive notice

In DC, in order for adverse possession to be claimed, an individual must have what type of use of the property for at least 15 years?

Continuous and uninterpreted

What approach to value measures the cost to produce a property, including land acquisition and construction costs?

Cost approach

Special restrictions to all properties within a subdivision would be found in the______________

Covenants, conditions and restrictions (CC&R's)

Chester is interested in becoming a real estate licensee in DC. After completing the requirements for obtaining the license for a real estate salesperson, which agency will administer Chester's license?

DC Real Estate Commission

The mishandling of escrow funds can result in_______________.

Disciplinary action and fines for the real estate licensee

An equal housing opportunity notice MUST be:

Displayed in the brokerage office

Under which doctrine of law can a person lose claim to title of the land for waiting too long to stake the claim?

Doctrine of laches

The government's right to take private property is called_____________

Eminent Domain

Non-lawful possession after the expiration of a lease is called_____________.

Estate at sufferance

Which rule of thumb formula for estimating property value is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?

GRM (gross rent mulitplier)

Fred is buying Gary's property, which is listed with Sara. Who are the parties to the listing agreement?

Gary and Sara

Which is a claim against a person and all of his property?

General lien

What is abatement?

Government reduces property tax to stimulate development; a decrease in assessed value

What economic principle is related to a property's most profitable use that is both legal and economically feasible?

Highest and best use

Which act states that communities and facilities that meet certain criteria for providing housing to older persons are legally exempt from the familial status discrimination?

Housing for Older Persons Act of 1995

Unrepresented buyers ask the licensee who listed the home whether they should order a property inspection as a part of their due diligence for the purchase of the home. Which of the following would be the most appropriate way for the listing agent to respond?

If you feel it is in your best interest, please do so

Immobility of land does what?

Increases the value of land in a good market

Which of the following is true about asbestos?

It is not safe at any level

Larry, an associate broker, received an earnest money check from his buyer client. Which of the following actions is appropriate and would be in compliance with real estate law?

Larry turns the check over to his broker for deposit into the firm's escrow account

A legal easement can be created by any of the following EXCEPT:

Merger of the titles

In helping a buyer to select a lender, if the buyer believes he has good credit and his income is documentable as a salary and by tax returns, the licensee might recommend a mortgage banker, instead of a mortgage broker, for all of the following reasons EXCEPT

More variety of loan programs available

A gross lease can be best defined as one where the tenant pays, as a part of the rent:

No operating expenses of the leased space

In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes and the seller is unable to finish painting the house before closing. This is an example of ___________.

Partial performance

Which local land use group has the dual focus of livability and quality of life?

Planning Board

Whose role is it to develop the comprehensive master plan?

Planning board members

According to the Truth in Lending Act (TILA) if any trigger terms are use in an ad, all of the following disclosures MUST appear in the ad EXCEPT the________________

Prepayment penalties and rebates

Sherman Anti-Trust Act applies to:

Price fixing and market fixing

What insurance coverage applies when a disaster occurs, and a governmental authority denies homeowners access to the dwelling, even if no damage has been incurred to the dwelling itself?

Prohibited use coverage

A deed that releases any of the grantor's rights to the property to the grantee and clears any clouds on a title, but does not offer any warranties to the grantee, is known as a(n)______________.

Quitclaim deed

What does the Federal Fair Housing act cover?

Race, color, creed, sex, national origin, familial status and disability

What federal law regulates the advertisement of a lender's credit terms?

Regulation Z

What is a prime example of an ad valorem tax?

Sales tax

As defined in local zoning ordinances, the distances between lot lines and improvements are known as________________

Set back

Building codes_________________

Set the standards builders must abide by when building houses in a subdivision

When a street gets new storm drains, what will the land owner pay in addition to the property taxes?

Special assessment

What does the term ad valorem mean?

Tax to be paid based on a value set by the government

A broker, acting as an agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should:

Tell the seller that the buyer will pay more

While an agent is showing a listed property, the seller and the buyer enter into an oral agreement for the purchase of the home. If a dispute over the terms arises later, the agreement may be unenforceable because:

The agreement does not comply with the Statute of Frauds

A realty firm just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contracted. The realty firm has an agency relationship with:

The builder

Frontage is______________

The distance along a lot's boundary with the road; the first measurement given in a property description

To what party or parties does the broker owe the fiduciary duty of care?

The party or parties employing the broker

A system used by state and local governments to monitor compliance with and enforce building codes and other regulations can be described as?

The permit system

The term dedication refers to__________

The transfer of real property by a private owner to a public agency

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

There is no dollar limit on damages paid

Lola and Rick's offer on a property is contingent upon financing. What happens if the financing falls through?

They'll have to terminate the contract

Escheat is when______________

Title passes to the government because a person died without a will and without heirs

Which environmental hazard sends spores into the air that, when inhaled, can cause respiratory illness?

Toxic mold

An assignment of a contract means to__________.

Transfer rights, but not necessarily obligations to a new party

Which of the following can be defined as what a property is worth?

Value

Aside from paint, where else might lead be found?

Water pipes

Interest rates determine buying power. Which of the following is a true statement?

When interest rates are high, buyers are often priced out of the market

When is property partitioned?

When two or more people hold ownership of a property and one wants to sell his/her portion

Wallace is beside himself He spent the last five months raising enough money to purchase the property that he has an opinion on, and now, a month before the end of his option period, the seller refuses to sell him the property. The seller's actions are ____________.

a breach of contract

what's involuntary lien?

a lien created without a property owner's consent

The FHA functions most like: _____________

an insurance company

Among other things, a listing in the MLS should always include ____________.

at least one photo

which one of the following statements describes informed consent as it relates to dual agency?

both the buyer and the seller understand what dual agency is and agree in writing to allow the agent to represent both parties

Rhonda and Jade both consider themselves African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on__________

color

Jim is a listing agent. What offers must he present to his client and when?

he must present all offers as soon as practicable

Obviously, you can't lawfully convey something unless the parties agree on what's being conveyed. How is that determined?

legal description

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

which of the following is the price a lender believes the property will bring at a foreclosure sale?

mortgage value

Following all of the client's lawful instructions describes which fiduciary duty?

obedience

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

open, exclusive right to represent, and exclusive agency

If a community isn't growing in an orderly fashion, which local land use group would most likely be at fault?

planning board

Joint tenancy requires unities of time, interest, and___________.

possession

which term is defined as the addition of one possessor's years of use to another's continuous use of the same property in an adverse possession claim?

tacking

what must a homeowner in DC disclose about a property built before 1978 if they have never tested it for lead paint?

that the home is presumed to have lead-based paint

Common law doctrine of riparian and littoral rights dictates________________________

that water rights are automatically conveyed with property

A client terminates a listing agreement before its expiration date. What happens now?

the client may owe a commission anyway

With an option contract, which of the following constitutes a breach of contract?

the optionor sells the property without the option contract to someone other than the optionee

What's the purpose of the title search?

to collect evidence that the title is a marketable title, meaning its clear and free of encumbrances

What would be an altruistic reason for a municipality to accept a land dedication?

to use the land for public benefit

which of the following factors would play a role in an IRS determination as to whether a licensee should be classified as an employee or an independent contractor?

whether the licensee receives benefits from the brokerage firm

Burt terminated his exclusive right-to-sell listing agreement with Scott, his listing broker. Burt may legally do this as long as he's ________

willing to pay Scott's commission anyway