Course 2 practice

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Which decision stated that separate facilities for blacks and whites were constitutional as long as they were "equal"? Brown vs. Board of Education Buchanan vs. Warley Jones vs. Mayer Plessy vs. Ferguson

Plessy vs. Ferguson

Related to depreciation, what are the two types of physical deterioration? Curable and incurable Economic and material Internal and external Qualitative and quantitative

Curable and incurable

With the cost approach to value, what is the replacement cost? Cost of the materials used in construction Cost to build a functionally equivalent improvement Cost to build an exact replica of the subject, with the same materials and deficiencies Cost to buy the property

Cost to build an exact replica of the subject, with the same materials and deficiencies

Which of the following formulas can be used to calculate annual rent for a net lease? Base rent + percentage of gross sales (Base rent square feet + number of square feet leased) × 12 Rent per square feet × number of square feet leased (Rent per square foot + TIM expenses) x number of square feet leased

(Rent per square foot + TIM expenses) x number of square feet leased

Hernando, a real estate attorney, is preparing an option contract for his client, Wilma. Hernando asks Wilma what she and the seller have agreed upon for the option period. Wilma said the seller was leaving that up to her, and she wanted to get Hernando's opinion. What should Hernando put into the contract for the option period? "Indefinite" "N/A" "Negotiable" "Six months"

"Six months" The typical option period is often six months. Option periods cannot be "forever," or even extended indefinitely. A definite period of time should be stated.

What is the length of the statute of limitations to file a fair housing complaint with HUD? 10 years Five years One year Seven years

1

Over how many years is a residential income-producing property depreciated? 27.5 years 29 years 39 years 40 years

27.5 years

Which of the following items would be considered a truth in advertising violation according to FTC guidelines? An advertisement lists the square footage of the living area as 3,145 feet, which doesn't include storage outbuildings. An advertisement states "HVAC unit like new!" when in fact the unit is used but has had most of the parts replaced recently. An MLS listing shows a property as available even though the parties closed on the transaction three weeks ago. The licensee's name in an ad is followed by the designation REALTOR®. The licensee is a member of NAR.

An MLS listing shows a property as available even though the parties closed on the transaction three weeks ago.

Which of the following is/are illegal? Both disparate impact and disparate treatment Disparate impact Disparate treatment Neither disparate impact nor disparate treatment

Both disparate impact and disparate treatment

Which U.S. Supreme Court decision consolidated five cases involving the constitutionality of state-sponsored segregation in public schools? Brown vs. Board of Education Buchanan vs. Warley Jones vs. Mayer Plessy vs. Ferguson

Brown vs. Board of Education

ROI = ______ / initial cash investment Cash flow Effective operating income Gross operating income Principal payment and interest

Cash flow

Which of the following units of measurement are used when determining volume? Centimeters cubed Front feet Linear feet Square feet

Centimeters cubed

A property manager who _______ must have a license. Collects rent Manages multiple properties for one owner as an employee, but doesn't collect rent Manages personal rental properties Manages rental property for a single owner as an employee, but doesn't collect rent

Collects rent

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 has the highest priority? Conditions of sale Location Market conditions Physical characteristics

Conditions of sale

Which of these items around the fireplace could be a clue that there is a problem? Ash and soot in the firebox Cracked or sloping firebox or hearth Hole in the soffit Missing mantle

Cracked or sloping firebox or hearth

Which form, provided to the buyer, is required by Minnesota state law when the buyer is not represented by a non-dual agent licensee or licensed attorney? Disclosure Regarding Contract for Deed Financing Financing Addendum for Assumption Financing Addendum for Contract for Deed Minnesota Standard Residential Purchase Agreement

Disclosure Regarding Contract for Deed Financing

Sam is taking out a home loan, which states the offered price and includes other important information, like the payments, the loan term, and Sam's signature. What type of contract is this? Express Implied Unenforceable Void

Express

Which agency enforces fair housing law? FFA FHEO NFHA NHA

FHEO The Office of Fair Housing and Equal Opportunity provides administration and enforcement of federal fair housing laws.

Which act created the Office of Fair Housing and Equal Opportunity under the Department of Housing and Urban Development? Americans with Disabilities Act of 1990 Equal Credit Opportunity Act of 1974 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974

Federal Fair Housing Act of 1968

Bob the Builder is quite proud of the 600-square-foot garage he's included in his new home. According to national standards, how can he include the garage square footage in his total? He cannot. He can only include it as unfinished square footage. He can only include it if it cost more than $50,000 to construct, including labor. He can only include it if its value is more than 33% of the home's value.

He can only include it as unfinished square footage.

Which of the following scenarios accurately describes the similarities between an open listing and an exclusive agency listing? In both types of listings, sellers are required to pay a commission to all of the brokers who list the home. In both types of listings, the broker owes the commission regardless of who sells the property. In both types of listings, the seller may work with multiple brokers to sell the property. In both types of listings, the seller who finds the buyer won't owe a commission.

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

Errors and omissions insurance is an important way to do what? Increase commissions Manage cash flow Manage risk Prevent risk

Manage risk

Which of the following classes was added to the Minnesota Human Rights Act? Familial status Marital status National origin Sex

Marital status

What does a CMA determine? Availability of funding Cost of replacement Cost per square foot Market price range

Market price range

The smallest property on the block is also priced lower than any others, but the higher-priced properties that surround it help to drive the property's market value up. What economic principle is at work here? Anticipation Contribution Progression Regression

Progression

Consideration is one element of a valid contract. In a lease, which of the following does the lessee give as consideration? Possession Rent Term Use

Rent

The National Fair Housing Alliance has voiced concerns that programs designed to address the financial and mortgage lending crisis have increased instances of ______. Debt Foreclosure Pyramid schemes Segregation

Segregation

If a private individual owner doesn't own more than three single-family homes at one time, which exemption from the Fair Housing Act could apply? Housing designated for senior use "Mrs. Murphy" exemption Owner-occupied buildings with no more than four units Single-family housing sold or rented without the use of a broker

Single-family housing sold or rented without the use of a broker

A licensee can __________ perform a BPO in Minnesota. Always Generally Never Sometimes

Sometimes

On which principle of value is the sales comparison approach based? Anticipation Competition Conformity Substitution

Substitution

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. Correlation Substitution Supply and demand Under-bidding

Substitution

What is the name of the federal law that sets forth guidelines regarding telephone solicitation? Bitphone Telecommunication Device Act of 2003 Telecommunications Information Act Telephone Consumer Protection Act

Telephone Consumer Protection Act

Which form is used as the actual contract for deed in Minnesota? The Addendum to Purchase Agreement: Contract for Deed Financing The Contract for Deed Disclosure Document The Minnesota Uniform Conveyancing Blank Contract for Deed The Purchase Agreement

The Minnesota Uniform Conveyancing Blank Contract for Deed

Marcy's offer on a home was accepted! Which party will be contacting her about arranging an appraisal? The closing attorney The lender The seller's agent The title insurance representative

The lender

What is a reliable, national source of vacancy rate data? Department of Commerce Department of Housing and Urban Development Office of Fair Housing U.S. Census Bureau

U.S. Census Bureau

ylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this? Bilateral Executed Mutual Unilateral

Unilateral

Julian is glad that the property owner at the townhouse community he manages established a substantial capital reserve budget for unexpected expenses, like the new roofs needed after a hail storm. What are these types of expenses called? Fixed Operating Stable Variable

Variable

Janine, a professional home inspector, notices a lot of small holes burrowed in a home's attic beams. This could indicate the presence of which pest? Fire ants Slugs Wood-boring beetles Wood wasps

Wood-boring beetles

Are mobile home parks subject to fair housing laws? It depends on whether they are privately or government-owned It varies from state to state No Yes

Yes

After you've made a professional listing presentation and the seller has declined to use you as a listing agent, what's the best practice? You should accept the outcome either way. You should ask the sellers for a second chance. You should call the competing salespersons to discuss the matter. You should pursue the sellers with questions about their decision, even if they tell you they don't want to talk about it.

You should accept the outcome either way.

Steve is preparing a market analysis for the Joneses and has selected three comparable properties. What's the maximum number of adjustments Steve should make to the Joneses' property? One Three Two Zero

Zero

Jennifer is the owner of the single-family residence in which she resides. How long can she take to depreciate her property? 27.5 years 39 years Indefinitely Zero years (personal residences cannot be depreciated)

Zero years (personal residences cannot be depreciated)

Timothy and his wife, Thelma, are buying a house. Having found the perfect home, they make an offer without first having seen the seller's property disclosure statement. The statement arrived two days after they entered into the contract with the seller. How many days do Timothy and Thelma have to cancel their offer if they find something in the disclosure that makes them uncertain about the property? 10 days Five days Seven days Three days

10 days

Which of the following is true of agency agreements? A landlord and an agent will sign an exclusive-right-to-sell listing agreement. A listing agreement is an express agreement. An open listing agreement provides the highest form of protection for the listing agent. A property management agreement is an agreement between a landlord and a tenant.

A landlord and an agent will sign an exclusive-right-to-sell listing agreement.

An exclusive right-to-sell agreement must include ______. A protection clause A start and end date for the listing period The name of the attorney who drafted the agreement The seller's requested closing date

A start and end date for the listing period

As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this? Implied Incomplete Valid Voidable

A voidable contract can be cancelled by one or more parties because it's missing an essential element. In this situation, Melanie, the buyer, has the right to cancel the contract and have her earnest money refunded.

What does the Federal Trade Commission regulate? Advertising Commission disbursements Federal real estate transactions Listing trades

Advertising

What's required in order to call an auction? A four-year degree in broadcasting An auctioneer's certification An auctioneer's license A professional accreditation from a two-year college

An auctioneer's license

What's the definition of appreciation? A decrease in property value An increase in property value A refinancing strategy Paying off a loan over time

An increase in property value

How does an umbrella policy work with other insurance policies for the insured? An umbrella policy covers the insured before the primary policy is used. An umbrella policy covers the insured for everything, so there isn't a need for primary coverage. An umbrella policy doesn't kick in until the hazard is abated. An umbrella policy doesn't kick in until the primary policy is exhausted.

An umbrella policy doesn't kick in until the primary policy is exhausted.

Which of the following is a true statement about how adjustments are made in the sales comparison approach? Adjustments are made to the subject property, not the comparables. Appraisers adjust downward when a comparable is missing a feature found in the subject property. Appraisers adjust upward when a comparable is missing a feature found in the subject property. Only three adjustments per comparable property are allowed; otherwise it's not considered sufficiently similar.

Appraisers adjust upward when a comparable is missing a feature found in the subject property.

In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what? Bracketing Bridging Substituting Surrounding

Bracketing

In case history regarding fair housing, which case involved an ordinance that prohibited blacks from living on a block where the majority of the residents were white? Brown vs. Board of Education Buchanan vs. Warley Jones vs. Mayer Plessy vs. Ferguson

Buchanan vs. Warley

When you're putting together a listing presentation, which of these is a key point to address? Buyers won't pay more for a home than the market dictates. Everything you talk about with the seller will change in six months. The house needs work before you can sell it for the right price. Your credentials are the best in the market.

Buyers won't pay more for a home than the market dictates.

Specifically, what does the fiduciary duty of disclosure relate to? Adverse material facts and publicly recorded facts only Conflicts of interest and confidential information only Conflicts of interest, material facts, and adverse material facts Material facts and adverse material facts only

Conflicts of interest, material facts, and adverse material fact

If, after seeing your carefully prepared comparative market analysis, a seller doesn't agree with the price range you prepared in your listing presentation, your best practice would be to ______. Decline the listing if the seller's price and your price analysis are too far apart List the property at the seller's price and hope to reduce the price later Offer to purchase the property at the list price you think is best if it doesn't sell at the seller's price Split the difference

Decline the listing if the seller's price and your price analysis are too far apart

Area vacancy rates have historically been around 15%, but have increased to 25%. Which of the following is a true statement? Both supply and demand for rental space have increased. Demand for rental space has decreased. Demand for rental space has increased. Vacancy rates will soon return to the 15% average.

Demand for rental space has decreased.

What is one of the reasons that illegal discrimination still occurs? Discrimination is human nature. Discrimination is often not visible to the public. Discrimination makes good business sense. Not all laws make sense.

Discrimination is often not visible to the public.

Seth is a licensee representing seller Dora. Which of these items is Seth required to disclose to prospective buyers about the property? Dora doesn't use the back door because the steps leading to the yard are rotted. Dora keeps sunflowers planted in the back yard because the local birds can eat the seeds. The neighborhood kids like to ride their bikes in Dora's driveway. The pink geraniums in the window boxes are fake.

Dora doesn't use the back door because the steps leading to the yard are rotted.

Which of the following could indicate a problem with the chimney flue or ventilation? Damage around the fascia Doors that won't open Drafts near the fireplace Holes in the soffit

Drafts near the fireplace

Gregory and Dianne are American citizens of Cuban origin, and when their home loan is denied, they suspect discrimination. Which of the following acts prohibits lender discrimination on the basis of the protected class of national origin? Community Reinvestment Act Consumer Credit Protection Act Equal Credit Opportunity Act Home Mortgage Discrimination Act

Equal Credit Opportunity Act

Natalie is a single mother of twins and receives government assistance to help make ends meet. She's been living with her mother for the last few years but really wants to buy her own home to gain some independence. She's got a little in savings and has good credit, but when a lender turns her away because she receives public assistance she worries that she'll never be able to get a loan. What act prevents automatic discriminatory practices by lenders and protects individuals like Natalie? Community Reinvestment Act Consumer Credit Protection Act Equal Credit Opportunity Act Home Mortgage Disclosure Act

Equal Credit Opportunity Act

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? Community Reinvestment Act Consumer Credit Protection Act Equal Credit Opportunity Act Home Mortgage Disclosure Act

Equal Credit Opportunity Act

Who or what entity enforces the Telephone Consumer Protection Act? Federal Trade Commission National Association of REALTORS® National Security Agency State attorney general

Federal Trade Commission

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first? Conditions of sale Financing terms and cash equivalency Market conditions Physical characteristics

Financing terms and cash equivalency

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

Flashing

hat do you divide cash flow by to determine the return on investment? Debt service Initial cash investment Mortgage balance Principal payment and interest

Initial cash investment

Which of the following is true about errors and omissions insurance? It covers deliberate fraud. It covers licensees sued by consumers for inadvertent mistakes. It covers violations of real estate regulations. It doesn't assist with managing risk.

It covers licensees sued by consumers for inadvertent mistakes.

What's the purpose of the Community Reinvestment Act? It requires financial institutions to maintain, report, and publicly disclose information about their mortgages. It requires lenders to make credit equally available to all creditworthy applicants, regardless of the applicant's protected class status. It requires that lenders disclose all credit terms in any advertisement that offers credit, allowing consumers to make informed comparisons. It requires that lenders invest in development and rehabilitation efforts that enable low- and moderate-income individuals and families to afford a home.

It requires that lenders invest in development and rehabilitation efforts that enable low- and moderate-income individuals and families to afford a home.

Your local building department has noted that the number of multi-family construction building permits issued have skyrocketed in the past two months. What conclusion can you logically draw from this? Competition for renters will be less intense in the coming months. It's a good time to review your own offerings to be sure you can compete with the newly constructed units. More people are interested in buying than in renting. Rental units are in low demand.

It's a good time to review your own offerings to be sure you can compete with the newly constructed units.

Jasmine is selling her property using a contract for deed. What does it mean when her lender informs her that she's triggered the due-on-sale clause in her existing mortgage? Jasmine must pay the entire remaining loan balance at once in order to enter into a contract for deed with a buyer. Jasmine must transfer the property to the bank so the bank can enter into the contract for deed agreement with the buyer. Jasmine must turn over the legal title to the new buyer once the contract for deed is executed. Jasmine must turn over the legal title to the property to the bank before she can enter into a contract for deed agreement with a buyer.

Jasmine must pay the entire remaining loan balance at once in order to enter into a contract for deed with a buyer

Which of these scenarios is basically the same as fraud? Frank noted that his listing is in a city-approved urban renewal district. Jeannie's ad read "all new fixtures," when most of the fixtures were just cleaned up and re-installed. Margo's listing read, "This is the most beautiful home you'll find in this price range!" Terrance's ad mistakenly noted a property's square footage as 2,575 instead of 2,775.

Jeannie's ad read "all new fixtures," when most of the fixtures were just cleaned up and re-installed.

Which fair housing case tested discrimination in a private sale? Brown vs. Board of Education Buchanan vs. Warley Jones vs. Mayer Plessy vs. Ferguson

Jones vs. Mayer

Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true? Katrina can follow either the federal or the state law as long as she is consistent. Katrina is permitted to follow whichever law is least restrictive. Katrina must follow federal law for any federally related transaction. Katrina must follow the more restrictive of federal or state law.

Katrina must follow the more restrictive of federal or state law.

Which of these is an example of puffery? Kari's ad boasts that the property is "just blocks from the proposed metro light rail station." Katherine's ad for her newly renovated home states, "New from the studs up." Her carpenter might tell you a different story. Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay." Kim notes that the property "overlooks a serene, peaceful green space." It's next to a cemetery.

Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."

Marcus, a listing agent, told a potential buyer that his seller client's property had no flooding issues, though the seller had mentioned water in the basement a few years back when there was a particularly heavy rainy season. Which of these statements is true? Marcus committed intentional misrepresentation because he knew his statement was false. Marcus committed unintentional misrepresentation. Marcus didn't commit misrepresentation, because the property current has no flooding issues. Marcus is guilty of puffery.

Marcus committed intentional misrepresentation because he knew his statement was false.

What does MLS stand for? Market listing service Maximum listing service Membership listing service Multiple listing service

Multiple listing service

Which of the following is a disadvantage for a seller in a contract for deed agreement? Collecting a steady stream of monthly income In the case of a defaulting buyer, needing to return all monies collected. Needing to evict a defaulting buyer The potential to attract many buyers

Needing to evict a defaulting buyer

Millie and Gary are searching for a home in a great school district. If the public school isn't highly rated, then options such as charter schools and private schools should be plentiful. Some states don't include school district information on the seller disclosure form, so how might they learn about school options? County records office Deed HOA documentation Neighborhood website

Neighborhood website

The best way to start comparative market analysis data collection is to use properties that sold when? 18 to 24 months ago Between two and three years ago In the last 12 to 18 months No later than three to six months ago

No later than three to six months ago

Licensee Cheryl has included a picture of a local church within a posting she just listed on the MLS. She also noted the home's proximity to the church in the description. Is this allowed? No, because Cheryl has to show pictures of all the local churches and not just that one. No, because Cheryl is showing preference toward a religious group. Yes, because Cheryl is telling the truth about the property. Yes, because it will bring in more prospective buyers who want to live by the church.

No, because Cheryl is showing preference toward a religious group.

Last year, Dana purchased a home in Minnesota with a flat backyard, perfect for her dream pool. When she breaks ground to start installing it, she discovers an abandoned—and more importantly, undisclosed—concrete septic system. Is she out of luck? No, for up to two years after closing, the seller is liable for both the costs of sealing the system and reasonable attorney's collection fees for failing to disclose the known presence of the system. No, the pool contractor is required to take care of it. Yes, as the owner Dana must pay to seal the system. Yes, Dana must leave the septic system as it is.

No, for up to two years after closing, the seller is liable for both the costs of sealing the system and reasonable attorney's collection fees for failing to disclose the known presence of the system

Madeline is a property manager who's calculating the vacancy rate for the apartment building she manages. What formula would she use to do this? Number of vacant units ÷ total units Number of vacant units x total units Period of time ÷ number of vacant units Total units ÷ number of vacant units

Number of vacant units ÷ total units

Which type of real estate property can be divided into classes A, B, and C? Industrial Mixed-use Office buildings Retail

Office buildings Office buildings can be divided into Class A, which is prestigious, Class B, which is fair to good, or Class C, which is functional with below-average rent.

Where do live auctions typically take place? At a real estate licensee's office At the auctioneer's home At the property being auctioned On the steps of the local courthouse

On the steps of the local courthouse

When does a breach of contract occur? A buyer refuses to make a counter-offer. A seller fails to accept a buyer's initial purchase offer. Both parties of a contract cannot legally or practically do what they've agreed to do due to circumstances out of their control. One party fails to meet the obligations of the contract.

One party fails to meet the obligations of the contract.

What kind of budget serves two primary purposes: to help property managers maximize profitability and to avoid unforeseen major expenses? Cash reserve Expense Operating Stabilized

Operating

Your neighbors build a high-quality addition to their home, increasing its value compared to your own home's value. Because of this, you notice a bump in your property value. Which economic principle is at work here? Conditional value Price bump Progression Regression

Progression

Which of the following is a potential disadvantage for the buyer when it comes to the contract for deed agreement? A lower down payment A potential increase in credit Property tax payment The deduction of interest on income taxes

Property tax payment

What factor is a primary concern to the fix-and-flip investor? Finding quality renters Generating long-term positive cash flow Obtaining top dollar when selling Selling quickly for fair market value

Selling quickly for fair market value

What's one of the required elements of a valid option contract? A range of sale prices for the property from which the optionee can choose The amount of consideration the optionee is paying the optionor The optionee's promise to buy the property The optionor's verbal assurance that the optionor won't sell the property to anyone else during the option period

The amount of consideration the optionee is paying the optionor

Which one of the following is a description of economic depreciation? Investors can take a business deduction for annual depreciation. The asset is worth less because the economy took a downturn. The asset is worth more because of capital improvements. The owner/investor is making less income from the property than previously.

The asset is worth less because the economy took a downturn.

en a buyer is represented by a licensee, who is responsible for following up on issues identified in the inspection report to ensure that they are addressed? The buyers The buyer's agent The listing agent

The buyer's agent

Which one of the following elements does a valid option contract contain? A list of the optionee's financing options An opt-out option for the optionor should the optionor be offered a better deal during the option period A statement by the optionee of why the optionee wants to purchase the land The sales price of the property or the way in which the price will be determined

The sales price of the property or the way in which the price will be determined

What's the definition of area? A piece of land that lies next to the ocean The number of linear feet that the property has on the street The size of a three-dimensional shape The size of a two-dimensional shape

The size of a two-dimensional shape

When state and federal laws differ, as they sometimes do with fair housing and/or human rights, which of these statements is true? State and local law override federal law. State lawmakers decide which law prevails. The conflicting law is invalidated, effectively removing the law's requirements. The state law may not remove rights granted to citizens under the federal law.

The state law may not remove rights granted to citizens under the federal law.

You're measuring the square footage of a single-family home you've just built. What national requirements apply to your measurements? There are no national requirements. You must measure from the inside out. You must measure from the outside in. You must measure from the top down.

There are no national requirements.

Why did the Civil Rights Act of 1866 fail to have an immediate impact on practice? It was unconstitutional. Nobody understood the Civil Rights Act. The protected classes had to be approved. There was no agency put in place to enforce the laws.

There was no agency put in place to enforce the laws.

In which situation might a property management market strategy analysis be unnecessary? The last analysis was performed fewer than six months ago. The last analysis was performed less than a year ago. There's a high vacancy rate in the area. There's a low vacancy rate in the area.

There's a low vacancy rate in the area.

Why are net listings illegal in some states? The commission can't be split. The commission is confidential. There's potential for a conflict of interest. They can't be guaranteed.

There's potential for a conflict of interest.


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