course 1 final practice exam: attempt 4

Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct?

Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.

which of the following statements about the Torrens System, which may be used in Minnesota, is true

The approach is only used in a handful of states

which of these parties is most likely to fill out an environmental assessment worksheet

A developer who wants to build a condo complex by the lake

Gunther's gross monthly income is $3,800, and he has no monthly debt payments. The lender's qualifying ratios are 28% for the housing ratio and 36% for the total DTI ratio. What's the maximum housing payment Gunther can afford?

$1,064

Marin was the victim of a Minnesota real estate licensee's dishonest practices. She received a final judgment in court but hasn't been paid, despite going through all legal proceedings, reviews, and appeals. She's seeking recovery from the Real Estate Education, Research, and Recovery Fund. What's the maximum she'd be paid?

$150,000

your client Michael feels like he's getting a great deal on the purchase of his home, since he is paying only $385,000 and the assessed value is $492,500. He asked you to estimate his monthly property taxes. You know The rate for his jurisdiction is .52%

$213.42

If the daily rate is $1.23 and closing is August 31, what will the seller owe at closing? Assume a statutory year and that the seller hasn't made any payments. Round to the nearest cent.

$295.20

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

$562.50

A four bedroom, four bath, 4875 square-foot house was listed at $445,000. Andreas, the seller, excepted an offer that was 95% of the listing price. What price per square foot did he get for the house

$86.72

you're working with buyers who are preapproved for a loan of as much as $200,000. Assuming they lock in a 5.25% interest rate at closing, how much of the first payment will go toward interest

$875

How is timeshare ownership typically split?

52 weeks

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%

Margie needs to know the square footage for the first floor of the condo her client is interested in buying. The kitchen is 10 feet by 15 feet, the living/dining combo is 20 feet by 25 feet, and the office and bedroom are each 10 feet by 10 feet. What's the total square footage?

850 square feet

which of the following would be considered an underground storage tank, according to Minnesota law

A 200 gallon tank that holds 20 gallons below the surface of the ground

which of the following is true about a home equity line of credit

A borrower can use the funds as needed, repay them, and borrow them again.

which of the following best describes a contract for deed

A legally binding, written contract between a property buyer and the seller that allows the buyer to pay for the property in installments

what happens when a document is recorded

A photocopy is registered, filed in chronological order, and bound in a book.

Gloria has an option to purchase the cottage she leases from her landlord. She can exercise the option within the next two years. To gain that right, Gloria paid the landlord $5,000. This is called ______.

An option fee

In Minnesota, when should you present the agency disclosure form to a potential client?

At first substantive contact

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.

Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own?

Condominium

Jamie wants to find the legal description for a property. What's her best bet

County recorders office, Registry of deeds, or a title company

The person named as the recipient of real property in a will is called the ______

Devisee

select the statement that accurately depicts property ownership income tax implications

During the ownership stage, both investors and homeowners may be able to deduct mortgage interest paid.

Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?

Encroachment

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

Environmental Impact Statement

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

Farrah and Troy

Billie (Wilhelmina) Silva was just licensed as a broker, and she plans to hang out a shingle and go into business for herself. As a sole proprietor, which of the following business names can she NOT use?

Happy Homes Realty

Ian is a buyer in Minnesota. He made an offer and supplied earnest money on a property, but the offer was rejected by the seller. What happens to Ian's earnest money?

It must be returned to Ian no later than the next business day after rejection.

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

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

Joint tenancy

which of these is the best definition of real estate

Land, plus all things permanently attached to it naturally or artificially

A valid contract must include which of the following elements

Legally competent parties

After Wynn and Lianne enter into a contract for Lianne to buy Wynn's house, Lianne finds out that there are serious problems with the foundation. Lianne has already signed the contract. Which of the following can she do, if anything?

Lianne can declare the contract void, since a possible misrepresentation of the property invalidated her consent.

which practice involves talking the consumer into refinancing over and over so a lender can charge fees

Loan flipping

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?

Lucas and Tom

which of the following is an example of commingling

Mixing earnest money with personal funds

which of these is an example of conversion of funds

Monica used funds from the firm's trust account to pay her firm's rent.

Landon is the listing agent for Maury's property. Maury is moving out of state for a new job, so the house will be vacant for some time, depending on how long it takes to sell. Maury is pretty adamant about not having a sign in his yard, especially after he moves. Landon follows Maury's wishes, but a month after Maury moved, there hasn't been any movement on the property. Landon places a sign in the yard, hoping it will drum up some interest. Is this okay?

No, Landon shouldn't place a sign on Maury's property without Maury's written permission.

your seller client asks you not to mention to buyers that the basement leaked last year. Should you obey

No, because this is a material fact related to the property.

when does partial performance of a contract occur

One or both parties have completed only a portion of the terms agreed to in the contract.

Eileen enters into a contract to buy Peter's home. The contract specifies that Peter must leave the refrigerator with the home and he must replace the roof before closing. After closing, Eileen arrives at the home and sees the nice new roof, but Peter took the refrigerator with him. This is an example of ______ of the contract.

Partial performance

What might the government do if property owners fail to pay taxes on their property?

Place a lien on the property.

Drew and Hank were camping at Hank's riverfront cabin. Hank told Drew that he rarely used the cabin and was thinking of selling it. Drew said that he'd buy it from Hank for $80,000, which Hank agreed was a fair price. It's two months later, and Hank is upset that Drew now says he won't buy it. Why isn't this contract enforceable?

Real estate contracts must be in writing.

Petra is being subjected to domestic abuse. She has provided a signed, written notice of lease termination to her landlord that includes the date she intends to vacate the property and the address where her security deposit can be sent. What else can her landlord legally do?

Require Petra to pay the full month's rent for the month she intends to leave.

which of these statements about the home owners right of redemption is true

Rights of redemption window with REOs may have expired

Simon sold his house in Minnesota under a contract for deed arrangement to Garfield, but Garfield has failed to make the last three payments. Which of the following statements is true?

Simon can keep all of the proceeds received up to that point and repossess the property.

to whom should you refer your clients for specific advice about income taxes

Tax professional

when faced with an ethical dilemma, which of the following is true

The Golden Rule always points the way to the most ethical action.

what's another name for the homeowners protection act

The PMI act of 1998

The two real estate firms in one small town, Vineyard Realty and Homestead Homes, agree to charge the same commission rate to avoid the possibility of clients selecting a firm based simply on price. What specific federal legislation prohibits this?

The Sherman Antitrust Act of 1890

Alice listed a three bedroom home for her client, but before she finds a buyer, the home burns to the ground. What happens to the agency agreement that Alice has with her client

The agency agreement is terminated if the property is destroyed.

how long does the borrower have to rescind or cancel a new mortgage obtained for an already owned property

The borrower has three days after loan application to rescind or cancel.

Tom and Martha live in a neighborhood where lawn ornaments are prohibited. They want to put up a nativity scene at Christmas and argue that the covenant doesn't apply to temporary decorations but only to permanent ones. Their homeowners association disagrees. Which entity enforces subdivision covenants?

The civil court system

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

The client may owe a commission anyway.

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.

As a listing agent, when are you no longer obligated to present offers to your client?

The sale has closed.

Anika is short selling her home. This means ______.

The sale won't bring in enough to pay off her loan

A property owner stores commercially used petroleum in a tank on her property. The tank is registered with the Minnesota pollution control agency. What can we reasonably conclude based on this

The tank is underground and has a capacity of at least 110 gallons

what does the parol evidence rule say about contracts

The terms agreed to in a written contract are the only terms relating to that contract.

Jewel is planning to vacate the unit she's leasing in Greater Minnesota on November 30. What obligation does she owe the landlord?

To provide at least three days' notice so the landlord can take action to prevent plumbing or pipes from freezing, if needed

Limited liability companies and limited liability partnerships are favorable forms of business because _______

They don't require a general partner.

sergeant Johnson is an active member of the Marines. He's been serving for 10 years. He wants to buy a home with no money down. What loan options seems like the best fit

VA loan

which of these scenarios describes a voluntary specific lien

When Rob and Sue bought their house using a mortgage, the lender put a lien on the property.

Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17 years old. Can Sarah force Robert to sell?

Yes, Sarah can require that Robert fulfill the contract terms.

which of the following duties are still owed after a listing agreement expires

confidentiality

David is an active duty member of the U.S. Air Force. Assuming he and the property meet the qualifications, which type of mortgage may be the best option for him?

a VA guaranteed loan

Bradley is acting as a finder for Emma. He's introduced her to Rachel, the other party in the transaction. which fiduciary duties does Bradley owe Rachel

a finder doesn't owe any fiduciary duties

_____ is a fee that a lender charges for the processing of a loan

a loan origination fee

Orchards and ranches are examples of ____________ properties.

agricultural

Your neighbor bought rights that will prevent you from ever building above two stories. What type of rights are these?

air

when completing a loan application, applicants must list any items of value they own. What's another term for these items

assets

When are the mortgage loan commitment and title insurance contract signed?

at the closing

Jarvis, a designated broker, discusses antitrust scenarios at staff meetings and make certain his firm makes independent decisions about co-op fees. this is a great way for Jarvis to do what

avoid antitrust violations

who is the most vulnerable to lead poisoning and it's effects

children

A deed states, "For love and affection, the receipt and sufficiency of which is hereby acknowledged." What does this statement represent in the deed?

consideration

Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement.

consideration

which one of the following is true about ownership or title to a property

constructive notice to the public of real property ownership occurs when the deed is recorded

which of the following is not a characteristic of a corporation

corporations are tangible and non-taxable

which of the following is an allowed expenditure from MN's Real Estate Education, Research, and Recovery Fund

creating a university real estate department and a position to chair that department

An item that would most likely be considered a fixture because of agreement between buyer and seller is _____

draperies

Which of the following is an advantage of living in a PUD or MUD

easy access to amenities

A home equity line of credit (HELOC) is based on the homeowners available _______

equity

Property managers most often serve as which type of agent

general

with this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn't been paid off

home equity

which of the following is a general, involuntary lien against property created by filing a certificate of lien in the county where the property is located

income tax

Susie has opted out of opening an escrow account with her mortgage lender, which means she has a lower monthly payment. She still needs to save up, though, to make sure she can pay for taxes and ______.

insurance

Why was the refrigerant known as Freon® banned under the Clean Air Act?

it depletes the ozone

Brian is competing in a residential loan application. on the application, he lists his assets. what are assets?

items of value the borrower owns

Parker entered into a contract with seller Derek to buy derricks home. Before finalizing the sale, Parker had a change of heart and decided to renounce all worldly possessions. He no longer wanted to buy derricks home. With derricks approval, Parker is released and Parker's brother, Tom, takes Parker's place as the buyer in the purchase contract. Of what is this an example

novation

if a community isn't growing in an orderly fashion, which local land use group is likely at fault

planning board

a ________ is a limit placed on a private owner's use of land

restrictive covenant

Clara is a real estate sales person in Minnesota. She recently got married, changed her name, and moved to a new house with her spouse. Which of the following is true

she must notify the commission within 10 days of the name and address change

what is it called when the market value of a property that's for sale is less than what's owed on the mortgage by the seller

short sale

Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor's shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment?

survey

you're a buyers agent, meeting with the buyer and the buyers lender, Chuck, who is a ______ the transaction

third party to

what type of estate involves A piece of real estate that's owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit in 1 to 2 week intervals during the year

timeshare

tonya has been a real estate sales person in Minnesota for two years. She currently works for ABC Realty and represents clients buying or selling timeshares. However, Tonya is interested in associating with XZY brokerage so she can begin shifting toward more traditional real estate transactions. Which of the following is the best option for Tonya

tonya can decide to work for either ABC Realty or XZY brokerage, but can't work for both at the same time

Broker Jordan just helped Lucy purchase a new home. Because their agreement is completed, the brokerage relationship terminates. Should Lucy expect Jordan to send her title documents?

yes, because Jordan owes the duty of accounting until all documents and funds are accounted for

you don't need a license to sell subdivided lands if your sole job is to sell timeshares, you're supervised by a limited broker, and _______

your limited broker maintains a roster of all staff selling timeshares