LTM Exam 10

What is the age of legal competence in Massachusetts?

18

Neil has just entered into a contract to buy a zero lot line from a person who originally bought the unit from the developer and has lived there for 4 years. What is the length of time allowable for cancellation of the contract?

Neil cannot cancel the contract.

A broker listed an investor's $175,000 property which was owned free and clear. The investor wanted to carry the financing for the buyer. The agreement read that the owner would NOT take more than a 25% down payment. The broker produced a buyer who offered a full price, 100% cash offer. Would the broker be due a commission?

No, because the broker did NOT produce a buyer that fulfilled all the terms of the listing agreement.

In which of the following cases would an estoppel certificate be needed?

The holder of a mortgage loan sells it, and the buyer of that loan wants the mortgagor to acknowledge the full amount of the debt still owed.

Which of the following persons is usually NOT an agent?

a person who works for a multiple listing service

A property was assessed at 25% of market value. The rate was $5 per $1,000. If the homeowner actually paid $150 in taxes for the year, what was the total value of the property?

$120,000

After what period of time do unclaimed estates escheat to the state?

20 years

What is the statutory usury ceiling on loans secured by real estate in Massachusetts?

20%

A 3-year straight note was obtained at 10% per year. Interest paid the first two years was $4,200. The loan on the house was 75% of the value. What was the total value of the property?

28,000

Which is true regarding the Federal Fair Housing Law?

Aggrieved parties may appeal to HUD for assistance.

A Massachusetts broker was convicted on May 1st of possession and distribution of a controlled substance in another state. On June 15, the broker called to inform the Board of Registration. Which of the following are true

Both the conviction and the broker's failure to notify the Board within 30 days violates the Board regulations

A house was sold on an installment land contract. There was no mention in the contract about a counter top microwave oven. Can the seller take the microwave oven?

Yes, because it is personal property.

A buyer and seller entered into a contract for the sale of a house. The buyer applied for and was approved for a loan. At the last minute the seller backed out of the sale. Is the broker due a commission?

Yes, because the buyer was able to perform all of the requirements in the contract.

Rich put in writing that Rich would sell Mark a strip of land between the road and Mark's property line for $3.15 per square foot. Rich agreed to transfer the land in 6 months. The 6 months passed and Rich refused. Does Mark have any recourse?

Yes. If it is in writing it is enforceable.

Which BEST characterizes the difference between zoning laws and building codes?

Zoning laws deal with use; building codes deal with building materials.

When the amortized payment of a mortgage remains constant over the period of the loan but leaves an outstanding balance to be paid at the end, this payment is called:

a balloon payment

Which of the following is NOT necessary in order for a broker to be entitled to a commission?

a signed listing agreement

The process in which boundaries are measured and land areas determined is called:

a survey

A city council zoned a two-block area so that only Spanish style homes could be built because of the Spanish heritage in the area. What type of zoning would this be?

aesthetic zoning because of architecture

An estimate of the value of something, usually a property, is known as:

an appraisal

A claim or interest revealed by a title search is called a:

cloud on title

Which BEST describes the principle that a home maintains its highest value in a neighborhood with similar homes and similar type housing?

conformity

A tenant agreed to lease a commercial space for $2,000 per month. The tenant needed a sign to advertise the business and requested that the owner provide a sign. The owner agreed to erect a sign but required in return that the tenant sign a 5-year lease and pay rent of $2,200 per month until the cost of the sign was recovered. At the termination of the lease, could the tenant be allowed to take possession of the sign?

No, because it was installed by the owner and therefore it is the owner's real property.

A broker entered into an agreement with a buyer to find the buyer a piece of property, whereby the buyer agreed to pay $5,000 for the broker's services. The broker found a DESIRABLE lot for the buyer, which was listed with another broker on an exclusive basis. The sale was consummated. Can the buyer's broker collect the $5,000 in commission from the buyer and also share in the commission of the listing broker without the permission of all parties to the transaction?

No, because the broker had not obtained written prior permission from both the seller and buyer.

. Vicky is a real estate licensee whose friend Thomas is a home inspector with an excellent reputation. When Vicky has a buyer interested in a property, she sends them to Thomas, who pays her brokerage a $50 referral fee. Is this a legal practice?

No, in general this is not a legal practice.

Which of the following headings is required for a preprinted offer to purchase that will become a binding contract?

Real Estate Sale Contract

A salesperson did a CMA and listed a property for $68,000. Soon thereafter, another property that was comparable to the listed property sold for $75,000. Which of the following BEST describes what the salesperson should do?

Tell the owner that another had sold for $75,000.

Which would be a contributing factor toward functional obsolescence?

having no permanent indoor bathtub

Which of the following is NOT required of a broker in any real estate transaction that the broker negotiates?

inform the buyer of his or her personal opinion of the condition of the seller's title to the property

Which of the following is true relative to a broker's commission in a real estate transaction?

it must be stated in the listing agreement and is negotiated between the broker and seller

Which of the following items would MOST likely be enforced by the forced sale of a property?

judgment

The rights of a landowner to use waters of an adjacent lake or ocean are known as:

littoral rights

Which of the following is a requirement of every real estate office in Massachusetts?

maintain escrow account records for 3 years

A borrower who had repaid a portion of the original loan could again borrow the funds without rewriting the original terms of the note under which of the following types of mortgages?

open-end

When a city changes the zoning of a particular area to encourage the city to grow in that direction, the city is exercising the right of:

police power

The final process in appraising a duplex would be:

reconciliation.

A person owned a 4-plex and lived in one of the units. Which of the following would be allowed?

refusing to rent to a student from a different national origin

Which of the following items would be LEAST important in a property management agreement?

rental price of each unit

Which of the following covenants would NOT be found in a general warranty deed?

restrictive ownership

Which non-governmental organizations have their greatest investment in first mortgages on single family residences?

savings and loans

A single parent who receives child support payments is applying for a loan to purchase a house. The parent MUST disclose the child support to the lender if:

the child support will be considered as a basis for the payments.

Which of the following must be disclosed to be in compliance with Regulation Z (Truth in Lending)?

the cost of credit

Which is NOT a purpose of the Truth in Lending Laws (Regulation Z)?

to set the interest rates

A straight note for $13,400 was executed at 8% annual interest. If the borrower actually paid $3,752 in interest, how many months did he take to pay it off?

$42

A loan with a balance of $21,000 prior to the June 1 payment was figured with interest at 11% annually and monthly principal and interest payments of $571.80. There was a 1% pre-payment penalty. The owner paid the June 1 payment and then paid off the balance of the loan. What was the pre-payment penalty?

$206

A $100,000 property sustains $60,000 in fire damage, but is only covered for $40,000. Under the terms of the insurance policy's 80% coinsurance requirement how much will the insured receive?

$30,000

Under which of the following circumstances is the broker due a commission?

The broker procures a buyer who can meet the seller's terms and conditions.

A plumber did some work on a property and was NOT paid. He discovered that there were already several liens against the property. He then discovered that the owner had another piece of property, which was free from encumbrances. Which of the following would be true?

The mechanic's lien can only be placed on the property where the work was done.

A buyer purchased an option on a property. In this case:

The optionee would lose the money paid if he does NOT exercise the option within the option time period.

Which of the following is true regarding the useful life of a property?

The physical life is generally greater than the economic life.