CE Shop Final Exam

Your clients, the Jamesons, are selling their lakefront property. They receive an offer, and the buyer has included a pre-approval letter. The Jamesons balk, saying, "We want a pre-qualification letter, or we're not selling." What do you tell them?

"A pre-approval letter is better than a pre-qualification letter."

What's the assessed value of a residential property in Tennessee that has an appraised value of $249,500?

$62,375

A seller you're working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?

$75,269

Gemma has been issued an affiliate broker license in Tennessee. How long is the license valid?

2 years

A property appraised for $257,000 and the buyer paid $249,000. Which value will a lender use when determining the loan-to-value ratio?

249,000

How many approaches to value do appraisers generally use?

3

What's the maximum the Real Estate Education and Recovery fund will pay out on behalf of a single licensee, regardless of the number of awards or transactions involved?

30,000

A complaint was filed against Regina, a real estate licensee. At the TREC hearing, her license was revoked. How many commission members must have agreed with that decision?

5

What score does an applicant need to pass the national and state exams for a real estate affiliate broker license in Tennessee?

70% or greater

What would the monthly rate be if annual taxes are $890? Round to the nearest cent.

74.17

Which of the following is an adverse material fact?

A colony of garter snakes hibernates under the garden shed every winter.

The Title and Conveyance paragraph of the TAR Purchase and Sale Agreement stipulates that the seller is conveying the property to the buyer with ________________.

A good and marketable title

Which of the following is a violation of federal fair housing law?

A private homeowner advertises a private house share using the phrase: "No minorities."

Katrina's business card has the REALTOR® logo on it because Katrina respects the National Association of REALTORS®, although she is not yet a member. This is _________.

A violation of real estate law

As required by the statute of frauds, every deed must have which of the following?

A written conveyance and specific elements

What's a real estate licensee's responsibility regarding radon?

Advise all buyers to have homes tested for radon, regardless of the location.

Per the TAR Purchase and Sale Agreement, when does the sales contract become a binding agreement?

After notice of acceptance of the final offer is received

Tennessee real estate professionals are limited agents. What is limited?

Agent powers and duties

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

Agreeing with your competition to not cooperate with another business

What's a covenant between a lessor and lessee?

An agreement or promise made between the parties

Per the EPA, what must be conducted before a project may be approved for development?

An environmental impact study

If a licensee is serving as a facilitator, rather than representing a buyer or seller, this must be disclosed to whom?

Any unrepresented parties

Buyer Penelope adores the house at 212 Maple Street, but two weeks after making her offer, she's discovered it's got some issues that weren't identified on the state-required seller disclosure form. She still wants to buy the house. Since the seller appears to have lied on the disclosure form, what can Penelope do?

Ask the seller to make the repairs needed, or ask for a credit to cover the cost of those repairs.

Which of these is an example of illegal market allocation?

Based on licensee expertise, Uptown Homes agrees with Country Cottage Realty to focus exclusively on suburban, rather than rural, homes.

When finding listings, which statement describes the farming approach?

Choosing a neighborhood and concentrating real estate activities there

Which one of the following statements regarding depreciation schedules is true?

Commercial income-producing properties are depreciated longer (39 years) than residential income-producing properties (27.5 years) are.

Which federal lending act was introduced to combat lending discrimination in low- and moderate-income neighborhoods?

Community Reinvestment Act

What regulation or regulatory authority identifies sites that have hazardous substances, and requires the responsible parties to clean them up?

Comprehensive Environmental Response Compensation and Liability Act

Which of the following is true about title to a property?

Constructive notice to the public of interest in a parcel of real estate occurs when the deed is recorded and physical possession of the property is taken.

Broker Alex learns that his friend Joann is frustrated with the broker who listed her home. Alex encourages Joann to break her existing agency agreement and sign with him instead. This violation is an example of ______.

Contractual interference

In Tennessee, one type of agency creates a relationship between a client and a single broker or affiliate broker. What's this type of agency called?

Designated agency

The owner-manager relationship is based on the property manager performing particular duties. This would include ______.

Duties that are designed to maximize the owner's net return

Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?

Federal Trade Commission Act

Which type of lien affects real and personal property?

General lien

A property manager is a ______ agent for the owner, and as such is authorized to perform all of the duties related to the property on the owner's behalf.

Genereal

In a typical real estate transaction, who is the seller?

Grantor

Your assistant, Brady, often answers client questions about offers and negotiation. What do we know about Brady?

He must be licensed for this to be legal.

Under what circumstances may a seller legally terminate an exclusive right-to-sell listing agreement before its listing term has passed?

If the listing broker agrees in writing to the termination

Which of the following is an example of a development cost?

Increased demand on infrastructure

Which scam, as described by the FBI, involves an appraiser working secretly with a borrower and providing a fraudulent appraisal report to the lender?

Inflated Appraisal

Octogenarians Gertie and Frank met in Sunset Living, a skilled nursing center for people with advanced Alzheimer's disease, where they're both residents. They fell in love and get hitched, signing a marriage certificate. This is an example of a(n) ______ contract.

Invalid

What is the purpose of a deed?

It's used to transfer real property from one party to another.

If Kathy wants to sell her property "as is," which of the following statements is true?

Kathy must complete the Tennessee Residential Property Condition Disclaimer Statement.

Jason is a broker in Tennessee. He helped his client make an offer on a house, but the offer was rejected and the home sold to another party. Jason is required to _____________.

Keep the rejected offer to purchase for three years

Lacey is preparing an offer for her buyer clients, and it's time to enter the amount of earnest money they're going to offer. Which of the following statements is true regarding what earnest money the buyers should offer?

Lacey should allow her clients to determine the amount of the earnest money offered.

In real estate contracts, which are required: legal descriptions or street addresses?

Legal descriptions are required, because they provide less ambiguous and more complete descriptions of properties than street addresses provide.

The price for which an owner offers to sell a property is called the ______.

List price

Loans available through the Farm Service Agency have which of the following characteristics?

Loan terms may be as long as 38 years.

Broker Regina tells her client that a property is zoned as residential, even though she's pretty sure it's zoned commercial. This violation is an example of _________.

Making a substantial and willful misrepresentation

How can a licensee earn commission from a seller who has not listed the property through an agent?

Negotiate a commission using the Agreement to Show Property contract

A consumer has just sued TREC for its role as an administering authority of license law. What will the likely outcome be?

No civil lawsuit can prevail.

What's the difference between an exclusive right-to-sell and an exclusive agency agreement?

No commission is earned if the seller locates the buyer with exclusive agency.

To what properties does the Tennessee Residential Property Disclosure Act apply?

One- to four-family residential properties

Proposed zoning ordinances must undergo tests to determine their validity. These tests include which of the following?

Ordinances must not be discriminatory.

Sandra enters into a contract to sell her home to Paul. Under the statute of frauds, in order to be legally enforceable, 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

Which choice correctly identifies the seven protected classes according to the Fair Housing Act?

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

Based on the duty of reasonable skill and care, if clients ask agents for advice in areas outside of an agent's scope of expertise, what should agents do?

Refer their clients to a competent professional in that field.

For a deed to be valid, which two elements are required?

Signature of the grantor and consideration

Brendon is obtaining a loan to buy a home. When reviewing his loan documents, he sees one called a note and one called a mortgage. What is the role of the note?

States who owes money to whom, how much, and how it will be repaid

Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?

Sue and Carl

Your clients, the Samsons, ask you to provide them with an appraisal in order to determine a list price for their property. Since you're not an appraiser, what should you do?

Tell them you're not an appraiser, but you can provide them with a comparative market analysis, which can be useful for determining an appropriate list price.

In matters where the common law of agency conflicts with Tennessee agency law, how is the conflict resolved?

Tennessee agency law always takes precedence.

Which of these pieces of legislation work together to prevent discriminatory lending practices?

The Equal Credit Opportunity Act, the Community Reinvestment Act, and the Home Mortgage Disclosure Act

What law governs the rules and regulations that tenants and landlords must adhere to in counties with 75,000 residents or more?

The Uniform Residential Landlord and Tenant Act

From whom or what entity do licensees receive compensation for brokerage services once a transaction is closed?

The brokerages for both sides receive their share of brokerage fees and disburse licensee shares to them.

The cost approach to finding an appraised value measures _______.

The cost to acquire land and construct a reproduction

Which of the following statements about covenants is true?

The full covenant and warranty deed contains the strongest and broadest form of guarantee of title.

Once signed, the listing agreement is a legally binding contract between _______.

The listing broker and seller

Which document is used to protect the buyer from title defects after closing?

Title insurance policy

From a real estate professional's point of view, what's the purpose of qualifying buyers?

To determine the buyer's readiness to buy

What's the purpose of the Interstate Land Sales Full Disclosure Act?

To prevent the fraudulent sale of property across state lines

Brenda, a new licensee, wants to impress her buyer clients, the Changs, who are practically royalty in China, their country of origin. Her responsibility is to _________.

Treat them no differently than any other clients

Which entity guarantees loans?

U.S. Department of Veterans Affairs

Jorge is a dual agent. He owes his clients all of the following fiduciary duties except ______.

Undivided loyalty

What effect will a property's utility have on the value if it's currently uninhabitable?

Value will be pushed downward.

Under which of the following conditions is it unacceptable to disclose confidential information?

When you are disclosing the information after your agency relationship with the client has ended

An affiliate broker may perform brokerage duties under what circumstances?

While affiliated with and supervised by a broker

Kris made an offer on Lincoln's townhouse. However, Kris offered no earnest money. If Lincoln accepted her offer, would it be binding?

Yes, because the offer to buy is the consideration.

Kevin, a real estate licensee, works independently instead of under a sponsoring broker. This means that he is licensed as ________.

a broker

Which type of real estate license requires successful completion of a 90-hour course and passing the licensing exam before a license is issued?

affiliate broker

When a prospective homebuyer isn't represented, what doesn't she have?

agency agreement

Which type of property manager works mostly with real estate developers and investors?

asset

Before closing, who is generally responsible for obtaining an appraisal, completing the loan application, ordering a home inspection, and securing homeowner's insurance?

buyer

Mary, who's suffering from Alzheimer's disease, signs a contract to buy Edgar's home. Before the deal closes, it's determined that Mary lacks legal capacity to enter into a contract. Which party is permitted to void the contract?

buyer

Caveat emptor means ________.

buyer beware

What is a primary factor a lender reviews when determining if a borrower is a good credit risk?

buyers income

What type of real estate market occurs when supply is high and demand is low?

buyers market

______ is when the buyer and seller settle all terms of their agreement.

closing

Which document is provided to borrowers no fewer than three days prior to closing and provides details about the costs of the transaction?

closing disclosure

A(n) ________ is a set of guidelines for ethical conduct.

code of ethics

What must a license applicant demonstrate to minimize the chance of license denial?

competence

When is a transfer tax payable?

deed is recorded

With local land use, the stress placed on the community's infrastructure is an example of ______.

development impacts

You represent a seller as a single agent. What's it called when you're simultaneously working for the buyer's best interests in the transaction without the seller's knowledge?

dual agency

Cultivated crops are considered personal property even though they're part of the soil, and they're known as _______.

emblements

Which of the following is an example of a limited agent?

escrow officer

A month-to-month lease agreement is considered to be this type of leasehold estate, in which the total duration is unknown.

estate at will

What type of listing agreement provides the most protection for the listing agent's commission?

exclusive right to sell

The Emery family, along with 20 other families, purchased a timeshare estate that will enable them to share a condominium in a resort community. A timeshare estate involves a ______ type of ownership.

fee simple

Which type of buyer tends to know little about the homebuying process and has limited funds?

first time buyer

If Elizabeth is a property manager, she is acting as what of type of agent?

general

In a deed, this person is referred to as "the party of the first part."

grantor

What's used to calculate the housing debt-to-income ratio and total debt-to-income ratio?

gross income

Michael doesn't have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?

heartful thank you

In what type of market might an agent ask the multiple buyers who have submitted offers to submit their highest and best?

hot

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

increase

What may be found in paint in homes built before 1978?

lead

Which type of estate conveys possession and control, but not title?

leasehold estate

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

licensees

Uh-oh. You failed to present an offer on behalf of your client in a timely manner. As a result, the seller accepted a lower offer from another buyer. For which of the following could your buyer sue you?

negligence

When does the licensee's duty of confidentiality to the client end?

never

When preparing the sales contract, when is it acceptable for a licensee who is not an attorney to offer legal advice to the client?

never

At its most basic level, which type of antitrust violation is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point?

price fixing

When a higher-quality property is adjacent to a lower-quality property, it can increase the lower-quality property's value. What economic principle is this?

progression

Which type of buyer usually has a fixed income and is looking for a home with little to no maintenance?

retiree

Dominique purchased a timeshare that conveys the right to occupy the property for two weeks each year, continuing for 20 years. However, the timeshare does not convey ownership. This is an example of a ______ timeshare.

right to use

If Mega Corporation owns real property, chances are it owns it in ______.

severalty

What type of real estate market occurs when both supply and demand are low?

stagnant

Co-ownership with inheritance rights is what kind of real property ownership?

tenancy in common

Does Tennessee have a radon problem?

yes