Missed Exam questions

What grants zoning authority to municipal governments?

Police Power The constitution grants all local governments the power to make and enforce laws. This is called police power. Think of the government as Uncle Pete: Police, Power, Environment ,Taxation ,Escheat, Eminent domain

What law requires lenders to limit the amount of funds that can be held in reserves?

RESPA

Salesperson Kevin receives a phone call from Louis, an buyer interested in one of his listings. Kevin makes an appointment for that Saturday to show Louis three of his listings. The following Tuesday, Louis makes an offer on Kevin's most expensive listing. Kevin submits Louis's offer to his seller and 30 days later, title transfers. Sixty days later, Kevin gets a citation from the Division for failing to give the buyer a Consumer Guide to Agency at the first substantive contact. When should Kevin have provided this to Louis?

Saturday When working with a buyer, a buyer's agent must give the buyer a Consumer Guide to Agency at the first substantive contact, which in this case would have been before showing the property on Saturday.

Joe, a salesperson from Happy Days Real Estate, sold a house listed by Better Days Real Estate. What part of the Agency Disclosure Statement would Joe and Better Days Real Estate fill out?

Section I A transaction involving two brokers is a Section I transaction. An in-company transaction is a Section II type. A transaction where one licensee is selling his own listing would require filling out Section III. There is no section IV.

If seller Adam simply decides not to go through with the closing on a sale to buyer William, what can William do about it?

Sue for specific performance and for damages A successful lawsuit for specific performance may compel Adam to perform his responsibilities under the contract, including transferring title to William. In addition, if William can prove other damages due to Adam's refusal to perform, William may also sue to recover those damages. If the contract was executed (completed), William would have obtained equitable title, and it would not matter that closing had not occurred

What is the difference between the Code of Ethics and the Canons of Ethics?

The Code of Ethics is administered by the National Association of REALTORS(r) and was adopted in 1913. There were little Licensing Laws at the time and creating the Code was a way to "clean up" the industry's reputation for being unethical, swindlers, and cheats. The NAR regularly reviews and modifies the Code to meet the challenges of new business concepts developed over its history.

An owner of a condominium wishes to sell her unit. When a bad storm hit earlier in the year several units sustained wind damage to the rooftops. The homeowners association levied an assessment of $1,000 per unit for the roof repairs. Which statement is TRUE?

Title cannot transfer unless the seller pays the assessment In a condominium, a homeowners association has the power to levy special assessments to the owners for repairs to common elements (e.g., the roof). Everyone in the condominium owns the roof so everyone pays for the repair of the roof. Title cannot transfer until the owner pays her assessments.

Identify the agency relationship formed when a listing salesperson receives a telephone call from a prospective purchaser, shows the listed property to the prospective customer, helps the prospective purchaser write an offer to purchase, and then delivers the offer to the seller/client?

With timely agency disclosure, assisting a customer does not form an agency relationship

John, the buyer, signs a contract that would give the seller 48 hours to accept or reject the offer. The seller has had the offer for 24 hours, but no decision has been reached. Aware the offer has not yet been accepted, John instructs the real estate agent to withdraw the offer. Can this be done legally?

Yes, John can rescind the offer at any time prior to the seller's acceptance without any penalty whatsoever

After a sale has closed, does an agent have any duties to the client? If so, what are they?

Yes, the agent must provide an accounting of client's funds related to the transaction

An agent has entered a written agreement with a buyer to search for a home, that also has a beginning date and an ending date. What agreement would be used?

a buyer broker relationship

Discounts or "points" on mortgages are

a charge by the lender to increase the yield on money invested Don't forget who the mortgagor and the mortgagee are. The bank is the mortgagee and does not pay interest. The purchaser is the mortgagor. A fee charged by the lender for processing the mortgage is called the loan processing fee, and is charged in addition to any points.

An electronic network for handling loan applications through remote computer terminals linked to several lenders' computers that may be used by a real estate broker or salesperson to help a buyer select and apply for a loan, is called

a computerized loan origination

Roberta wishes to build her garage two feet from her side lot line. City code calls for all side setbacks to be at least five feet. In order to legally proceed, Roberta needs to get

a variance

A salesperson gives a close friend a $100 gift card every time the friend brings a lead to the salesperson that converts into a transaction. This is considered

a violation of license law ORC 4735.18(11) makes it against the law for a salesperson to share commissions with non-licensees.

Buyer Brent signs a Purchaser Agency Agreement with a broker. The buyer decides to have a house built by a builder in the area. The builder wants to negotiate his own contract with the buyer and does not want the real estate agent to be involved in that process other than to be paid a commission. What document must the buyer sign to acknowledge that the agent will not be negotiating on his or her behalf?

a waiver of duties statement

The hazardous material used to make insulation for heating ducts in houses is called

abestos

A seller places his home on the market on Tuesday. On Wednesday, his agent calls and says there are four offers on the property and he would like to present them at 7 p.m. After looking at all the offers and comparing them, what should the seller do?

accept one offer or counteroffer one offer

The offeree is the person who

accepts the offer

A buyer is found for a seller/client of a broker. How did the agency relationship terminate?

accomplishment of purpose Agency ends by accomplishment of purpose (the correct answer) when the listing sells during the listing period. Expiration is when the listing expiration date arrives. Mutual release is when broker and seller agree to end the relationship before it expires. Operation of law is when the broker or seller becomes incapacitated or dies, or if the building is destroyed.

Tommy Gee encounters an owner of a property who has no equity in the home because of a sharp decline in market values. The owner asks Tommy to market the property at market value but asks Tommy if he could negotiate with the bank and orchestrate a short sale. Who should Tommy recommend the owner consult with before making a decision?

accountant

What best describes personal property transformed into real property

actual annexation Constructive annexation occurs when property is so closely related to real property that the law treats it as such, even though it is not physically attached. The fixture is the item that was transformed. Actual annexation is a physical attachment of personal property to land. Trade fixtures are equipment a tenant can remove and, thus, not real property.

An elderly man in a nursing home dies intestate. Who will now distribute his estate according to the laws of intestate succession?

administrator When one dies intestate (without a will), there can be no executor as that person would be appointed in a last will and testament. A grantor is alive and would use a deed to transfer property. When one dies without a will, the court will appoint an administrator who will distribute the assets according to the law.

Acquiring title to someone else's land by open and notorious use for a specified period of time is known as

adverse possession

Gross income best describes income

after expenses

A broker supplies the financing for a condominium project under the condition that the broker gets the listings. Which of the following best describes the relationship?

agency coupled with an interest When the broker has a financial interest in the subject property, he or she has an interest in the property, and is entitled to the listing.

When a property owner lists property with a licensee, their relationship is one of client and

agent

Agent Wendy met potential buyer, Suzie, at a trade show and made an appointment to meet to talk about exclusive buyer representation. At the meeting, Suzie signed a purchaser Agency Agreement and a Consumer Guide to Agency with Wendy. After several weeks of searching, Wendy found a house for Suzie and closed the deal. At closing, Suzie was surprised to see on the Settlement Statement that she was paying a $700 broker fee in addition to the agreed upon commission of 3.5%. Which of the following best describes the situation?

agent Wendy had a duty to explain all of her fees

An implied contract is a

agreement not put into words, either written or verbal

An owner of a property enters into a purchase money mortgage with a buyer whereby the buyer will make payments to the seller and the seller will continue making payments to the mortgagee. Which clause does the lender enforce when sending a notice to the seller that the loan is due and payable?

alienation

Discount points on a mortgage are computed as a percentage of the

amount financed Discount points represent the percentage by which the face amount of a mortgage loan is discounted or reduced when sold to an investor to make its interest rate yield competitive in the current money market. Each discount point equals 1% of the loan amount and is charged as prepaid interest at closing.

The Equal Credit Opportunity Act does NOT prohibit lenders from discriminating against potential borrowers on the basis of

amount of income The Equal Credit Opportunity Act prohibits discrimination against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant is of legal age), or dependency on public assistance. The Act does not prohibit lenders from discriminating against potential borrowers on the bases of amount of income.

An association applying for a real estate license has three members, one of whom is licensed as a real estate broker. The association must submit what document concerning the unlicensed members in order to be issued a real estate license in the association's name?

an affidavit stating the members will not Act as real estate brokers for the association

What is an appraisal?

an opinion of value for the day of the appraisal only

Which is NOT a protected class under the Federal Fair Housing Act?

ancestry

When one party lets the other parties know, before the time limit of performance, that the one party is not going to perform as agreed, the action is called

anticipatory repudiation When a party repudiates a contract, the other party can then sue for performance or damages. The non-breaching party does not have to wait for a specified closing date to begin litigation.

A landowner needs water. His land has no access to a water source. However, the landowner is granted the right to use water from a nearby river, to irrigate his land. What right grants this permission?

appropriative right Appropriative rights are permits, granted by the government, allowing an individual to use water from land he does not own. Eminent domain is the right of the government to take private property for public use. "Littoral" and "riparian" refer to the rights of landowners to use either flowing or lake water on their own property for their own use.

The transfer of rights under a contract without the release from obligation is known as

assignment

Emily had signed a one-year lease, but after living in the apartment for three months, she transferred her right of possession for the remainder of the lease to her friend. Which type of arrangement does Emily have with her friend?

assignment A gross lease describes the arrangement between landlord and tenant. In a sublease the tenant will regain possession before the tenancy ends. A novation would require the consent of the landlord and the withdrawing tenant would be relieved of liability. In an assignment the tenant will not regain possession of the lease before it ends.

During a phone call, a salesperson discusses showing a property to a prospect. Three days later, the agent shows the property; at that time the customer reveals her financial abilities and motivation. Three days after that, the agent prepares her offer and asks the buyer to sign an agency disclosure statement stating the agent represents the seller. When should the agent have disclosed this fact?

before showing the house

A broker informs a homeowner that a member of a minority group may be moving into the neighborhood. The broker sees that the homeowner is very upset, and offers to buy his house at a low price. The broker is guilty of

blockbusting

Broker Bob is representing a buyer. In doing so, he has written an offer which a seller has accepted. The offer called for the buyer to submit $1,000 to the broker as an earnest money deposit. The check the buyer gave Broker Bob is returned for insufficient funds. Who must Broker Bob notify after being notified by the bank?

buyer and the listing agent Rational; Broker Bob will not only notify the buyer so they can replace the insufficient check, but he must also notify the listing agent so she may notify the seller who has a right to know that so far, the buyer is not fulfilling his side of the agreement.

The agreement whereby a broker is entitled to be paid a commission by a buyer is a(n)

buyer broker contract

A lead-based paint disclosure form is required for all residential dwellings built before January 1, 1978. When applicable, who must sign the form?

buyer, seller and both agents

What would be considered evidence of the agency relationship between broker and buyer?

buyer-broker contract

How is a licensee notified that a broker no longer wishes to hold his or her license?

certified mail

A counteroffer constitutes a

change

A licensee must notify the Division if what happens?

change of address

In most states, the listing broker has a fiduciary duty to the

client A broker has a fiduciary duty to the client, while the broker's salespeople have a duty to the broker.

The real estate laws of the State of Ohio set forth the permissible types of agency in a real estate transaction. The duties of agents, however, are derived from

common law

A couple is engaged to be married. Any real estate they own at the time the marriage takes place remains that spouse's property in severalty, and property acquired after the marriage belongs equally to both of them. This type of ownership is referred to as

community property Joint tenancy is the ownership of real estate by two or more people with the right of survivorship. In a cooperative, the purchaser is a stockholder and receives a proprietary lease to the apartment for the life of the cooperative. Tenancy in common refers to real estate owned by two or more people and each owns an undivided fractional interest in the property. Community property consists of all property, real and personal, acquired by either spouse during the marriage

Fee simple absolute estates are not

conditional If a condition exists in the deed, the estate is fee simple conditional. Fee simple absolute implies there are no conditions in the deed.

What type of land use does NOT comply with the zoning restriction for its location, but is permitted because it benefits the public?

conditional use Conditional uses (hospitals, schools, etc.) usually do not comply with zoning limitations. Nonconforming uses are properties that were in compliance with an old zone. Inverse condemnation is a court action by a private landowner against the government, seeking compensation for damage to property that resulted from government action. Spot zoning refers to an illegal rezone that favors a particular property owner without justification.

Besides the names of the buyer and seller, the name of the brokerage, licensee, and the identification of the property, what important information must be included in the Agency Disclosure Statement?

consent of the buyer and seller to the relationships.

Under which clause in a contract must the seller give the buyer notice to remove the condition in the contract that stipulates the buyer has to sell her own property before performing the term of the current purchase agreement?

contingency

When a broker received an unexpected bill, he deposited a client's earnest money check into his personal account to cover the expense. This best describes

conversion Commingling is the broker mixing his funds with other peoples' funds. In this instance, the broker is using someone else's money. This would be conversion, which is a crime.

Salesperson Mike takes an earnest money deposit from a buyer client. The client gives Mike $1,000 in cash. On the way home Mike has car trouble and needs a tow. Mike's credit card is maxed out so he uses some of the cash to pay for the tow-intending to replace the money before anyone notices. Mike is guilty of

conversion Mixing a broker's money with a client's is commingling. When an agent uses money that belongs to others it is called conversion.

What is the legal process by which potentially responsible parties who contributed to contamination at a Superfund site can be required to reimburse the trust fund for money spent during any clean up actions by the federal government?

cost recovery

Prorated taxes are shown on the settlement statement as a

credit to the buyer and debit to seller Prorated taxes are a credit to the buyer and a debit to the seller. The seller is responsible for taxes payable through the date of closing. Since (in most states) homeowners pay taxes in arrears of one year, the seller would have to bring the taxes current and give that money to the buyer as a credit.

Seller and buyer entered into an instrument of conveyance in which the buyer immediately received legal title. Which instrument would have been used by the parties?

deed An offer cannot become a contract until the offer is accepted. An option may never be exercised. A land contract only conveys equitable title. A deed is the instrument that conveys legal title.

In the state where Bob lives, someone who receives a loan from a lender must transfer his property to the bank's holding company while the loan is outstanding. The document used to accomplish this is a(n)

deed of trust

A borrower pays off his loan. However, the lender refuses to cancel the mortgage. What mortgage clause has the lender violated?

defeasance A defeasance clause states that when the loan is paid, the mortgage is void. The bank's failure to cancel the mortgage of record is a violation of this clause. The habendum clause is the "to have and to hold" clause found in a deed. The conveyance clause states that the property is being conveyed in a deed, not a mortgage. The notarial clause is signed by the notary, stating the mortgage was signed freely and voluntarily by the borrower.

In title theory states, what clause is unique to the mortgage?

defeasance In title theory states, a defeasance clause is found in the mortgage. There must be language that cancels the mortgagee's right to the land title on the payment of the debt.

A buyer gives an earnest money deposit check to a sales agent. What must the sales agent do with the earnest money deposit check?

deposit the earnest money according to the terms of the contract

Which would NOT result from the exercise of police power?

developers restrictive covenants All are government restrictions on land use, except for choice B, developer's restrictive covenants, which are imposed by a developer of land.

Upon arrival, the listing agent dealing with an elderly lady realizes she would be happy receiving an offer for much less than market value. The agent decides to make a cash offer for the list price the seller chose. The agent then sells the property for market value. What duty has the agent breached?

disclosure

Tom has his driver's license suspended for not paying a speeding ticket. The Superintendent will

do nothing until notified by Ohio's Bureau of Motor Vehicles Current Division of Real Estate policy is to allow you "reasonable time" to notify the Division of the suspension. Failure to notify them within that time frame will mean a potential suspension of your real estate license. They have suspended the license of a few licensees who have had other professional licenses suspended. They have also suspended or revoked the real estate licenses of individuals who are in arrears on paying child support or alimony payments.

Eric and Sue purchase a new home and lot that is accessible only through a 12-foot-wide easement across Mr. Wilson's property. In this situation, the land owned by Eric and Sue is referred to as the

dominant tenement The land benefited by an appurtenant easement is called the dominant tenement. The land burdened by the appurtenant easement is called the servient tenement. The appurtenance is the right the appurtenant easement provides the dominant tenement. The beneficiary is the owner of the dominant tenement.

Which event will create an involuntary life estate?

dower interest becoming choate Inchoate means "not active," which is the status of dower when a married couple is both alive and together. When a spouse dies or sells the property without dower release, dower becomes choate, or "active."

What title insurance policy insures the holder of the right to use someone else's land?

easement

Which gives a government the right to take private property for public use provided the owner is given just compensation?

eminent domain

A man and woman sign a purchase contract, which is subsequently approved and signed by the seller. The couple now has

equitable title

An owner's interest or value in property, over and above the mortgage debt, is known as

equity

All of the following sellers are required to fill out the Ohio Residential Property Disclosure Statement EXCEPT

estates

How often are appointments to the Real Estate Commission made and by whom?

every year, by the governor

The title company

examines and researches title

The seller lists her house with New Age Realty. The next day, the seller goes to work and mentions listing her house. A co-worker expresses interest in the listing. What kind of listing would make the broker entitled to a commission if the co-worker makes an offer acceptable to the seller?

exclusive right to sell

What would a licensee NOT be permitted to do?

extend a listing The owner is the only person who can extend the listing. Showing property and cold canvassing are two of the many licensee activities. Procuring an exclusive right to sell listing for any duration is the method of creating agency with a seller.

What type of title insurance coverage protects the holder from damage due to a secret lien?

extended coverage

A person discriminated against under the Civil Rights Act of 1866 must file a lawsuit in what court?

federal district court

One reason licensees must provide disclosures up front to prospective clients is to avoid unintended or undisclosed

fiduciary relationships

A seller agrees to list his personal residence with a broker. After finding a buyer, the seller refuses to pay the broker a commission. What remedy would be available to the broker?

file a lawsuit against the seller for commission

The Superintendent of the Ohio Division of Real Estate sites a sales agent for an advertising violation. The Superintendent may

fine the agent $200 per violation

Plants and trees cultivated for harvest best describes

fructus industriales

What type of agency relationship exists when a broker manages real property for the owner?

general

What type of deed would a buyer of real property prefer?

general warranty deed A general warranty deed provides the most protection for the buyer. It has the strongest and broadest forms of guarantee (covenants) of any type of deed. A quitclaim has no guarantees and a special warranty deed covers only title defects while the seller was in title. A sheriff's deed makes no promises or guarantees.

Lance's seller client discloses there was a fatal shooting at the house in which a woman and her two children were the victims. Lance is licensed in a state that does not require the disclosure of the deaths. While showing the property, a potential buyer claims to be getting a strange vibe. Lance should

get the seller's written permission to disclose the incident Some states require an agent to disclose a death on the property While other states do not require the disclosure. The best course of action is to get the seller's written permission to disclose so that if an agent encounters a buyer who is concerned, the agent can disclose.

Johannsen signs a contract to sell his home to Smithson. At the closing, Johannsen gives Smithson a general warranty deed. In this situation, Johannsen is the

grantor The seller is the grantor and the buyer is the grantee. A trustee is a third party, and the mortgagee is the lender.

Which item is classified as a fixture under the doctrine of constructive annexation?

house key Constructive annexation is when personal property is so closely related to the real property that the law treats is as a fixture (e.g., a key to a house).

If a married couple intends to sell their homestead, owned as community property, who must sign the deed for it to be valid?

husband and wife

What clause pledges property as security for a loan without giving up possession of it?

hypothecation The hypothecation clause in a mortgage literally states that the real property is being pledged as security for repayment of a promissory note/loan. The habendum clause literally transfers real estate in a deed, not a mortgage; it is often referred to as the "to have and to hold" clause. The defeasance clause in a mortgage says that once the promissory note is paid, the mortgage is void. There is no such clause as the collateral clause.

When a real estate broker discharges a salesperson for being dishonest or for any other reason, the broker must return the salesperson's license to the Ohio Division of Real Estate

immediately

The local utility company holds an easement to install power lines on a vacant lot. This is what type of easement?

in gross

A brokerage operates under an approved "trade name" and it should use that name, as it appears on its license, in its advertising. Abbreviated words indicating the legal structure of the organization, such as "Inc." or "Co." are not required on the advertisement, but the advertisement must indicate that the individual or entity is a real estate broker or salesperson. What other words, though not a part of the name, does the law permit on the advertising?

independent contractor The words "Realty," "Real Estate," or the authorized use of trade names or insignia indicating membership in a real estate organization may be used by brokerages in advertising. Independent contractor is just a status for purposes of taxation.

When using the cost approach to appraise a property, the appraiser is most likely working for the

insurance company trying to obtain a replacement cost on the property A cost approach is used for cost replacement (e.g., insurance claims). The income approach would be used by an investor to evaluate an income-producing property. A broker's listing is in competition with other like houses on the market, so the comparison approach is best. The tax auditor is interested in market price (what a property sold for) to determine property tax.

While determining the net operating income of an investment property, an appraiser will not take into account

interest expense Although tax deductible, the amount of interest an owner pays is not used to calculate the net operating income. Remember, anything related to debt service is an owner's expense.

What would be a prudent action for a broker to take if a transaction collapses and the seller refuses to allow the listing broker to release the earnest money from the brokerage trust account back to the purchaser?

interplead the money to the court If the broker cannot get both parties to agree on final disposition of the earnest money, it would be prudent to interplead the earnest money to the court and ask the judge to decide.

Which statement regarding prorating is TRUE?

it allocates expenses between buyer and seller

What is NOT an example of a specific lien?

judgement Judgment liens are general; they can attach to any property a debtor owns.

What would not be determined by a location survey?

land use A location survey is not concerned with land use. A survey would be concerned with land size and boundary. A location survey would show if the property's buildings encroach on neighboring land.

The type of title insurance issued in the name of the property owner, where coverage runs from the time of purchase until the owner sells the property, is a(n) ______ policy.

leasehold Mortgagee's policies protect the lender's interest, while leasehold policies deal with tenants. Easement policies protect the rights of an easement holder. Owner's fee title insurance policies are issued in the name of the property owner.

The mortgagee is the

lender

The money to fund FHA loans is provided by

lending institutions Lending institutions provide the money for all loans. The FHA insures that a loan will be repaid to a lending institution, while the VA guarantees the fact that a loan will be repaid to a lending institution.

Which is NOT an encumbrance?

license

A broker is selling a piece of commercial property. The broker finds a ready, willing, and able buyer on the seller's terms. However, the seller refuses to give the broker the agreed upon commission as stated in the listing contract. The broker can file a

lien against the seller's property under Ohio's Broker Lien Law

According to the Statute of Frauds, what does NOT have to be in writing?

listing agreement A listing agreement is classified as an employment agreement, not a real estate contract. Therefore, the Statute of Frauds does not require that it be in writing, even though Ohio license law requires that it be in writing to be enforceable. All of the others are classified as real estate contracts and are subject to the Statute of Frauds requirements.

A salesperson went on a listing appointment and negotiated an Exclusive Agency agreement with the seller. What documents did the seller sign?

listing agreement waiver of duties statement consumer guide lead paint disclosure residential disclosure

An example of a subagent includes the

listing salesperson A subagency relationship is one formed between a licensee and the client of another licensee. Therefore, in a listing obtained by a salesperson in the name of her broker, the broker would be the agent of the seller/client and the salesperson would be both an agent of the broker and a subagent of the broker's seller/client.

An agent is showing a house to a customer. The agent tells the buyer that the seller is desperate for an offer. Which duty has the agent breached?

loyalty

After listing a property that the agent believes is overpriced, the agent returns to the office and vents his frustration to a fellow licensee at the brokerage. Which duty has the agent breached?

loyalty If an agent decides to take the listing at the price indicated by the seller, the agent must be loyal to the seller and not imply that the list price is unreasonable.

An agent is explaining his broker's policy on agency and asks the buyer to sign a consumer guide to agency. The buyer refuses to sign. What must the agent do?

make a statement on the form that the buyer will not sign and ask the buyer to initial

A title free from defects that an owner has the right to convey is a(n) _______ title.

marketable A buyer expects to receive marketable title, and the seller is expected to convey a title free of defects. Inequitable title is not a real term. The difference between legal title and equitable is that equitable title is not the buyer's yet, but he will get it at a future date (the closing). Legal title exists when there has been a closing.

An offer to purchase

may be revoked at any time prior to acceptance

An offer to purchase that states the offer will remain open for 72 hours

may be withdrawn by the offeror at any time before the offer is accepted

A non-interest-bearing trust account maintained by the brokerage for the purpose of depositing clients' and customers' funds

may have some of the brokers own funds in it

Encumbrances on real estate

may include easements, liens, and deed restrictions

Who uses the term REALTIST?

members of the National Association of Real Estate brokers

A buyer is about to make a written offer on a listing. The sales agent says that, under Ohio law, $1,000 in earnest money must accompany the offer. The sales agent is guilty of

misrepresentation In all likelihood, the sales agent is guilty of misrepresentation. Even though many sales agents believe the law requires earnest money with all offers, this is not true. If the sales agent knew that such a law did not exist, then he would have been lying, and guilty of fraud.

Taking measures to reduce adverse impacts on the environment is known as

mitigation

A legatee is a person who receives

money as a git through a will

A debit is

money owed

What document uses legal title to real property to secure debt?

mortgage

Which is a voluntary lien?

mortgage The mortgage is the only voluntary lien that would be placed on property. IRS taxes, mechanic's lien, judgment liens, etc., are liens involuntarily taken against a property owner.

A lender who receives a mortgage contract as security on a mortgage loan is known as the

mortgagee

What expenses would NOT be found on a Loan Estimate?

moving costs The Loan Estimate provides the buyer with the costs that will be incurred to take title to the land.

A salesperson goes on a listing appointment where the owner informs the agent that he has missed a couple of mortgage payments. The property values have declined and now the owner owes more for the property than it's worth. In order for the owner to sell without needing to bring money to the closing table, the agent should suggest that the seller

negotiate a short sale with his bank

Harvey enters into a lease where he must pay 30 percent of the landlord's expenses. Which type of lease did Harvey sign?

net lease

What type of license does an individual need to sell a cemetery plot?

no license there is no such thing as a limited license

Based on the Civil Rights Act of 1866, what is the maximum amount of punitive damages that can be awarded?

no limit

What is the maximum number of DBA (Do Business As) names a broker is allowed to operate under?

no more than 5

John has an open listing on his home with Company X. Paul has an exclusive right to sell listing with the same company. Their contracts have a 30-day protection period. Both listings expire on March 31st. On April 15th, Paul and John view each other's properties for the first time, and decide to swap homes. How much commission is Company X due?

none No commission is due Company X. Protection periods will protect an agency only in regard to purchasers who have viewed the property during the listing period.

As an agent is showing a house to a customer, the agent notices a large vertical crack in the basement wall. What is the agent's duty?

nothing The crack on the wall is obvious and falls into the category of patent defects. The agent has no duty to disclose patent defects. The buyer operates under the doctrine of caveat emptor.

Chelsea is a listing agent working for the listing broker and encounters a customer at the open house. The customer asks Chelsea if she could recommend an offering price. Chelsea should recommend that the customer

offer list price

Complaints based on Title VIII should be filed with the

office of equal opportunity

How many trust accounts may a broker/brokerage have?

one for the main office and one for the branch

A listing broker receives a commission check from the title company immediately after a transaction closes. One of the broker's agents handled the sale and is due a share of the commission check. How long can the broker delay before paying the agent?

one month

When can a property manager use a self-help eviction?

only in non residential tenancies

Meetings of the Ohio Real Estate Commission are

open to the public

Tina is the listing agent for a bank-owned listing. She drives by the listing to check on the vacant house. When she arrives it is obvious that the structure has burned down. How did this agency relationship terminate?

operation of law Operation of law (the correct answer) is when the broker or seller becomes incapacitated or dies, or if the building is destroyed.

Jane is a salesperson in Derek's brokerage. Jane decides to work for another broker, just prior to one of her listings going into contract. Derek receives the commission check for Jane's listing. Now that Jane is with another broker, Derek should

pay jane her share of the commission

Peter thought he would try his hand at property management and so he talked an old friend into letting him manage his apartment building for him. Six months after Peter took over the apartment building, the owner asks Peter to furnish him with a copy of the ledger sheet and bank statement for the property. Peter requests an additional month to prepare these documents for the owner. Which of the following best describes the situation?

peter should have been providing quarterly accounting to the owner

A licensee who will be working with a seller must make sure that the state-mandated Consumer Guide to Agency Relationships is provided to the seller before

placing a sign in the sellers yard

Real estate agent Lori is showing a buyer client a house. The house is full of antique furniture, fixtures, and decorations. In the largest bedroom is a wall-sized wardrobe which covers the wall between the bedroom and the bathroom. A slow leak behind the bathtub has caused chronic moisture in the plaster of this wall. To which potential hazard should Lori alert the buyer?

potential toxic mold on the wall

When counseling sellers/clients, an agent should NOT

prepare a market analysis that shows a high price for the property, because one never can tell what a buyer might pay

The salesperson will have a buyer sign an Ohio State Agency Disclosure Form

prior to writing an offer

What occupation would need an Ohio real estate license in order to legally obtain a commission as compensation for work done?

property manager

Which clause allows a broker to sue for a commission if the owner waits until expiration of the listing to contract with a buyer to purchase without the broker?

protection Alienation, defeasance, and hypothecation clauses are all found in a mortgage. A protection period would be in a listing agreement.

What document serves as escrow instructions?

purchase agreement

Agent Bill got a call from his cousin, Sara, who stopped at an open house where she met Agent James, the listing agent. When Bill met Sara to talk about the house she saw, Sara showed Bill the copies of the document she was asked to sign by Agent James. Bill then told Sara he could not help her buy the property she saw at the open house because of one of the document she signed for Agent James. What did Sara sign that made it impossible for Bill to work with Sara?

purchaser agency agreement

What deed is most preferred from the seller's point of view?

quitclaim deed A seller wishes to give a deed that has absolutely no warranties in it (quitclaim deed), so the seller is subject to the least liability. The general warranty deed is the deed the buyer would most desire, as it contains the four basic warranties of ownership, no liens, quiet enjoyment, and warranties forever. The limited warranty deed and special warranty deed are the same in that they give very limited or "special" warranties to the buyer for the time period during which the seller owned the property.

What type of legal description is based on a base line and principal meridian

rectangular survey system

The leasehold estate with a specified termination date best describes a(n)

reprimands

Which of the following is not under the jurisdiction of the Division of Real Estate?

reprimands Auditing, investigations, and complaints are under the jurisdiction of the Division of Real Estate. Reprimands are issued by the Commission.

When a buyer changes his mind and withdraws his offer to purchase before it has been accepted by the seller, what should that broker do with the earnest money?

return it to the buyer

A broker is representing buyer/client Dorothy in the search for a home. Dorothy decides to end the relationship after missing several opportunities to purchase due to the broker's unavailability to view properties at times and days convenient to her. How did this agency most likely end?

revocation Agency ends by accomplishment of purpose when the listing sells during the listing period. Revocation (the correct answer) is when the client ends the relationship before it expires. Mutual release is when broker and seller agree to end the relationship before it expires. Operation of law is when the broker or seller becomes incapacitated or dies, or if the building is destroyed.

What duty must a licensee fulfill in representing a buyer client?

seek a property at a price and with terms acceptable to the purchaser

The listing agent is informed by the seller that the basement gets wet when it rains. The agent says nothing to the buyer. Who is liable for the failure to disclose the latent defect?

seller The client is always liable for the acts of her agent. The agent may be liable to the seller for breaching a fiduciary duty.

A listing agreement is an agreement between

seller and broker The listing agreement is an agreement between broker and seller; the broker is entitled to a commission when a ready, willing, and able buyer makes an offer acceptable to the seller.

A corporation is a legal entity (an artificial person); therefore, real estate owned by the corporation is owned in

severalty Real estate ownership by a corporation is an ownership in severalty. Tenancy in common occurs when two or more people own a parcel of real estate. Joint tenancy is the ownership of real estate by two or more people with the right of survivorship. A partnership is an association of two or more people who operate a business as co-owners and share in the business's profits and losses.

The Smiths purchase a cooperative on the Gold Coast. What will they receive at closing?

shares of stock and a proprietary lease A cooperative is not real estate, but the purchase of stock shares in a corporation. With the stock comes a proprietary lease, or the right to occupy a specific unit.

A buyer signs a buyer-broker contract creating an agency relationship with agent Travis. The buyer indicates that she struggles some months to pay the bills but the lender said she was qualified for the loan. She is a first-time buyer and believes that if she gives up a few extras she should be able to make the payments. Agent Travis

should advise the buyer to look over the consumer information about responsible financing before she decides how much to borrow

Which term best describes value being attributed to a property because of its desirable location?

situs

What determines eligibility for a loan from the Education Research Special Fund?

size of the applicants family

Which is not a specific lien?

state income tax State income taxes can become general liens that can attach to any property owned by the debtor. A mortgage is specific to the property that will be collateral for a debt. Real estate taxes are specific to one property. A mechanic's lien can attach only to the property that was the subject of the work being done.

The rule that says a buyer will not pay more for a property than a comparable substitute is the rule of

substitution Buyers ultimately determine the value of a property. A buyer will not pay more for a property than for a comparable substitute, which is why comparing is the most accurate determining factor of value.

The law regarding a licensee whose check (payment of a fee) is returned to the Superintendent for insufficient funds states that the licensee is

suspended, unless the fee, plus $100, is submitted within 15 days of notice being sent

Real estate agent Sue is showing a buyer client a house. The house is full of antique furniture, fixtures, and decorations. In the largest bedroom is a wall-sized wardrobe which covers the wall between the bedroom and the bathroom. A slow leak behind the bathtub has caused chronic moisture in the plaster of this wall. Sue should

tell the buyer about the latent defect

The leasehold estate that can be terminated by either party and can not be assigned is:

tenancy at will

ABC Remodeling, Inc. buys a new warehouse for its trucks and excess building materials. How will it take title?

tenancy in severalty Since it is the sole owner, and the law regards it as a single entity, the owner would take title in severalty.

A wife and husband may not hold title to their home as

tenants at will

A husband and wife own an apartment building. The husband has a 3/4 interest in the property whereby the wife owns a 1/4 interest. What type of tenancy exists?

tenants in common

Cindy Agent wishes to leave her company, ABC Real Estate, owned by Bob Broker. She currently has three sales pending and four active listings. What will happen to these?

the active listings belong to Bob, and Cindy will be paid for pending sales as per her contract with the office

A broker has 10 listings, 5 of which are in contract for sale, and the other 5 were listed but are not yet under contract for sale. The broker dies, and the sales agent applies to the Superintendent for the appointment of an ancillary trustee. What statement is true?

the ancillary trustee can take over only the 5 listings that are in contract for sale An ancillary trustee will be appointed by the Superintendent and approved by the probate court. The ancillary trustee can take over only those listings that are in contract for sale. All other listings are void.

While his broker was in his last week of suspension, salesperson Ned took a listing on behalf of his broker and put the listing up on his website. Which of the following best describes the situation?

the broker could be punished again Practicing during a time when the broker is under a suspension violates license law, and so the broker may be punished again as a result. The broker must make sure no business is being conducted during the entire time of suspension.

While walking through a home, a buyer notices a large crack in the wall. The seller does not disclose this item on any property disclosure statement. After the sale is completed, the buyer sues the seller for the necessary repairs of the crack in the wall. Which statement is TRUE?

the buyer has no claim, under the doctrine of caveat emptor Under the doctrine of caveat emptor "let the buyer beware", the buyer must examine goods or property and buy at his own risk. Any patent defect does not need to be disclosed by the seller, as it is readily viewable by the buyer, and the buyer takes the property subject to the defect. A latent defect needs to be disclosed by the seller either directly to the buyer or on the property disclosure form. As this is a patent defect, there is no liability on behalf of the seller.

Who provides the Equal Opportunity Information Bulletin?

the commission The Commission provides the Equal Opportunity in Housing Information Bulletin. The Department of Housing and Urban Development (HUD) provides the poster based on federal law.

Building codes can be enforced by

the issuance of permits

In preparing to advertise another broker's listing on a website, a licensee, while talking with the graphic designer, decides that the ad would read better if she made a few changes to the property description and some of its features. The deadline is at hand and there is no time to consult the seller's agent. If the licensee makes changes to the advertisement, what statement would be true?

the licensee is violating the Commission's rules concerning advertising real estate A licensee may not advertise or alter an informational part of a property listing that is not listed with her broker or brokerage, unless she gets written permission from the owner or the owner's authorized agent and fully discloses the name of the listing broker or brokerage in the advertisement. She must also note, in a larger typeface, that the advertising agent is not the agent of the owner.

Which statement regarding revocation of a license is TRUE?

the licensee may submit a reapplication, which may be denied by the Ohio Real Estate Commission

A salesperson takes a call at the office. The caller is a buyer who says he has a trust fund and wants to buy a house. The house the caller is interested in is a house personally owned by the real estate agent. Which situation is not possible?

the salesperson can represent both himself and the buyer

After notification by the Division of Real Estate, failure to resubmit an incomplete or incorrect application within the required 12-month period means what?

the superintendent may declare the application fee forfeited

A salesperson is asked to list a property with a tenant living in the home. A buyer's agent calls and asks to show the property later that same afternoon. The listing agent calls the tenant and informs her that there will be a showing today. The tenant informs the salesperson that there is a sick child in the house and asks the agent to reschedule. The salesperson insists on allowing the showing and agrees to tell the showing agent not to go into the sick child's bedroom. Which statement is TRUE?

the tenant is entitled to have reasonable notice before showings

Which would be considered exempt under the Civil Rights Act of 1866?

there are no exemptions

A buyer makes an offer to purchase a home, which has been listed by agent X. Agent X calls the sellers, who are out of town, and reads them the offer. The sellers state over the phone that they accept the offer and will sign when they return to town. At that point in time

there is not a valid real estate purchase contract

Which is a requirement for a valid deed?

there must be words of conveyance The grantor, not the grantee, signs the deed. The consideration does not have to be in dollars. A subordination clause would exist in a mortgage, not a deed. A deed must have a granting clause, which will have words of conveyance like "give," "grant," "bargain," "sell," and "convey."

At the closing table, the sales agent instructs the title officer to make the commission check out to the agent personally, since the broker is out of town and would not be able to deposit the check until sometime next week. What statement is true?

this a violation of Ohio licensing law Ohio Revised Code 4735.18(13) prohibits a sales agent from receiving a direct commission. The commission belongs to the broker and under no circumstance should the check be made payable to the sales agent.

How many members of the Commission are required to be present in order to conduct business at a regularly scheduled meeting?

three

To emphasize the timely performance as an essential part of the contract, a contract would use the words

time is of the essence If the words, "time is of the essence," are included, the lack of timely performance can be a material breach of contract.

What is the body of law that governs negotiable instruments?

uniform commercial code

What is NOT required of a veteran to obtain a VA-guaranteed loan?

upfront MIP premium paid at closing

A copy of a real estate purchase contract must be given to the involved parties

upon signing

What insulating material was pumped into houses until its ban in the 1970s?

urea-formaldehyde insulation

An appraiser has selected three comparable sales for the property she is appraising. After making adjustments, she has adjusted sale prices of $100,000, $107,000, and $110,000. How does she reconcile these three different numbers?

use a weighted average, giving the most weight to the most similar property

What is NOT considered when determining whether an item is a fixture or personal property?

value of the annexed item The value of the item is not considered. Most often the item is valuable. Intention and manner of annexation are the most heavily weighed factors in this decision.

When does a "customer" become a "client?"

when she enters into an agency relationship with a licensee

When does an agent working for the seller have a fiduciary duty to the buyer?

when the agent is legally acting as a dual agent

When could the subject of an investigation and the results become a matter of public record?

when the licensee appeals the decision If no appeal is filed, then the investigation, the results, and any documentation are kept confidential. When the licensee files the appeal, the appellate contest is filed in the courts, therefore becoming a matter of public record.

In becoming an agent, a licensee becomes a fiduciary and owes clients the duties of accountability, reasonable skill and care, loyalty, obedience, confidentiality, and full disclosure. When might other licensees in the same brokerage become involved in that agency relationship?

when the other licensees receive confidential information from the agent of the client

Plottage can best be defined as

when the property is joined to increase value

For the income approach to appraisal, value is a reference to the

worth of the investment The income approach involves one of two possible methods of calculation: 1. the capitalization using income divided by rate equals value, or 2. value divided by income equals gross rent multiplier.

Ann, a salesperson, is contacted by a buyer who wants to write an offer on a property previously viewed with an agent from another firm. When Ann asks the buyer why he did not ask the agent who showed him the property to write the offer, the buyer discloses that the first agent who showed him the house seemed to be intoxicated when showing the property. Ann suggests the buyer may want to choose another agent from that firm to represent them, but the buyers indicate the agent was the broker. Ann should

write the offer and represent the buyer

With regard to agency, what must an Ohio real estate brokerage give to prospective sellers and purchasers?

written brokerage policy on agency Each brokerage must maintain on file, available upon request to all customers and clients, a written policy on agency. The policy must, among other things, detail the types of agency practiced by the brokerage and how the brokerage will safeguard confidential information obtained from clients.

Real estate agent Keith calls the owner of an expired listing to try to get a listing appointment. When the seller lists her home with the Keith, she gives him the flyer that features her home. On the flyer the seller notes that the house is on three acres. A buyer makes an offer and a few days before closing finds out from the neighbor that the lot is just over two acres. Is real estate agent Keith responsible?

yes he should have verified the information on the flyer Real estate salespeople have a duty to avoid misrepresentation or omission of material facts. A real estate agent should rely on public record rather than relying on the seller's statements.

A lender takes a loan application from a potential borrower. The borrower is at the very limit of income and debt ratio requirements. The lender suggests that with an adjustable rate mortgage the buyer's initial interest rate will be 4% with a cap rate of $10%. The lender says the odds of the rate ever reaching the cap is nil to none. The buyer has just a high enough credit score to qualify and signs the mortgage contract. Has the lender done anything wrong?

yes the lender cannot predict future rates of interest as they are driven by a free market

A buyer mails an offer to an out-of-town seller. The seller accepts the offer by signing it, puts the accepted offer in an envelope addressed to the buyer, and places it in a U.S. mailbox. Is there a contract between the buyer and seller?

yes there was a contract when the seller mailed the offer

You have an inactive real estate license. You and another agent in your old real estate office have decided to buy a property out of foreclosure. You will furnish the down payment and the other agent will handle the property management. What must be disclosed in the purchase contract?

your licensure status

The fee for transferring a license from one broker to another is

$ 25

The subject property is a three-bedroom ranch with two full baths and a two-car garage. In the same neighborhood, a nearly identical home with only one bath just sold for $102,000. The appraiser estimates the value of the second bath at $2,000. Based on just this information, what would the subject's value be?

$104,000 The comparable sold for $102,000 with only one bath. The subject has two baths, so it will sell for more. Adjust the comparable up by $2,000. Remember, when inferior add and when superior subtract.

Jamie wants to sell her home. She must pay off her existing $97,500 mortgage and pay $5,000 in closing costs. Rounding your answer to the nearest dollar, if she pays a 7% commission, what is the minimum offer she can accept?

$110,215 Two steps are required to solve this problem. First, add the expenses: $97,500 + $5,000 = $102,500. This is the whole/base cost. Now, factor in the broker's commission fee. The Sale Price = 100% and the Commission = 7%; thus, net to Matt equals 93% (100% - 7% = 93%). Now, use the net to owner/seller pricing formula, Whole (Total/Gross Sale price) = Part (Net amount + Expenses) / Percent (100% minus deductions) and plug in the known values: $102,500 / 0.93 = $110,215.05. Rounded, Matt should sell his home for a minimum of $110,215.

If a loan amount is $160,000 and the borrower is paying two points, and the rate of interest is 6%, and the loan will be amortized for 30 years, how much will the monthly payment be if the annual taxes are $6,400 and the insurance is $850 per year?

$1564 Using the amortization chart a factor of 6 is what you would take 160 x 6 = 960 + 1/12th of the taxes $533.33 = 1/12th of the insurance $70.83 = $1564.

Mr. & Mrs. Buyer are approved for a $72,000 loan. Their monthly payments will be $9.35 per $1,000 for 30 years. How much interest will they pay over the life of the loan?

$170,352 First, determine the amount on which the interest rate will be applied by dividing by 1,000: $72,000 / $1,000 = $72. Then, multiply that amount by the interest per 1,000: $72 x $9.35 = $673.20. Multiply that number by the total number of months the loan is for to get the total payment amount: $673.20 x 360 months (30 years) = $242,352 P & I. Finally, subtract the loan amount to determine how much of the total payment is interest: $242,352 - $72,000 = $170,352 in interest.

A property is appraised at $150,000 and assessed for tax purposes at 35% of value. Calculate the semi-annual tax bill if the mills total is 80.

$2,100 Take the appraised value of $150,000 and multiply it by the assessed rate of 35%, which will yield the assessed value. Next, take the assessed value and multiply it by the millage of 80 and divide the answer by 1,000 (as mill means $1 per $1,000). This will give an answer of $4,200, but remember to divide by two, since the question asks for the semi-annual tax bill: $4,200 / 2 = $2,100.

In the sale of a 100' x 150' property at $1.50 per square foot, if the broker's commission is 6%, how much does the owner realize from the transaction?

$21,150 To determine the square footage of property, multiply the base times the height: 100' x 150' = 15,000 square feet. The owner is to sell the property for $1.50 per square foot, so multiply 15,000 by $1.50 to come up with a sale price of $22,500. The broker takes a 6% commission: $22,500 x 6% (0.06) = $1,350. $22,500 (sale price) minus the broker's commission of $1,350 leaves the seller a net of $21,150.

If a property sells for $240,000 and two brokers participated in the sale, how much is the selling salesperson be paid if the rate was 7% and the broker and salespersons shared commissions equally?

$240,000 x .07 / 4 = $4200

A buyer has obtained a mortgage in which the LTV is 95% of the first $40,000 of the sale price and 90% of the remainder of the sale price. What are the buyer's costs on a $185,000 sale if the lender charges a 2% loan origination fee and 2 points?

$3,370 There are several steps in calculating the answer to this question. First, determine the amount by which the first $40,000 is reduced; $40,000 x 0.05 = $2,000 (100% - 95% = 5% not covered). Next, determine the remainder of the loan; $185,000 - $40,000 = $145,000. Now, calculate the amount by which the remaining $145,000 is reduced; $145,000 x 0.10 = $14,500 (100% - 90% = 10% not covered). Next, determine the amount to apply toward the loan origination fee and discount points; $185,000 - $2,000 - $14,500 = $168,500. Now, calculate the origination fee; $168,500 x 0.02 = $3,370. Next, calculate the points charged; $168,500 x 0.02 = $3,370. Finally, add the origination fee and points together to calculate the buyer's total cost; $3,370 + $3,370 = $6,740

If a property sells for $350,000 at a cap rate of 9.75%, what should Meghan offer if she wants a cap rate of 10%?

$341,250 Net income divided by cap rate equals value; $350,000 x 9.75% (0.0975) = $34,125. $34,125 / 10% = $341,250.

If the property taxes are $5960, and the date of closing is May 10, how much of the annual taxes will be paid by the buyer?

$3837.26 Count the days. # of days x price per day = sellers share. Taxes - sellers share = buyers share. 5960 / 365 = 16.32 x 130 days = 2122.74. $5960 - 2122.74 = $3837.26

The fee for renewing a salesperson's license per year is

$45 The fee for renewing a salesperson license every three years is $135, equal to $45 each year.

Ann pays homeowner's insurance in advance for one year in the amount of $100. Ann sells her property to Bill and closes the sale on June 30th. Assuming that Ann paid the homeowner's insurance on January 1st of that year, how would the insurance be prorated between the buyer and seller?

$50 debit to buyer, $50 credit to seller

A property has been renting for $750 per month. Based on comparables, the GRM is 110. What is the indicated value of the property?

$900,000 The indicated value using a GRM (Gross Rent Multiplier) is the (monthly rent x 12 (months)) x GRM. In this case, ($750 X 12) x 110 = $990,000.

Bill was thinking of purchasing an apartment building. He wanted an 11% return on his investment and asked to see the books for this building. There are four apartments on each floor of the five-story building. The rent for an apartment on the first floor is $400 a month, and each floor's rent increases $50 per month, per apartment. Bill noticed a loss of rent through vacancy and collection losses of 9%, and when he figured the operating expenses, they averaged $720 a month. With all of this information, what is the most that Bill should pay for this building (round your answer to the nearest thousandth).

$914,000 The size of the numbers means nothing! Just remember the formula from a capitalization problem. Figure the gross income (the ideal income): $1,600 (4 x $400) + $1,800 (4 x $450) + $2,000 (4 x $500) + $2,200 (4 x $550) + $2,400 (4 x $600) = $10,000 per month. Multiply $10,000 by 12 to get an annual income of $120,000.@@ The second step reminds us that the income we are showing is ideal, not real. We have to take away rent losses to find out just how much effective gross income is really generated by this building. Subtract the 9% vacancy and collection loss rate from the projected income: $120,000 x 91% (100% - the 9% vacancy and collection loss rate) = $109,200 real income (effective income). Once the investor pays his operating expenses, he'll know how many net dollars his building brings in. $109,200 - $8,640 ($720 x 12 months) = $100,560 net dollars. @@Now the last step: Divide the net income ($100,560) by the rate of return that Bill wants this money to represent, 11% ($100,560 divided by 11% = $914,181.81). Rounded to the nearest thousandth, if Bill pays more than $914,000, he will not make 11% on his investment.

FRESH CORN

- Familial Status - Race - Equal - Sex - Handicap - Color - Opportunity - Religion - National origin

Sandy, an apartment manager in Florida, meets the owner of an apartment building in Cleveland, Ohio at a vacation hot spot in Miami. Sandy gets the owner to hire her to manage the apartment building in Cleveland for a flat fee. After several months, Sandy receives a Cease and Desist order from the Ohio Real Estate Commission but Sandy ignores it. How much per day can Sandy be fined by the Ohio Real Estate Commission?

1,000

What is the cost to reserve a business name with the Division of Real Estate & Professional Licensing?

10

According to the Lead-Based Paint Hazard Reduction Act, what can happen to a licensee if she fails to give a buyer the lead-based paint pamphlet and disclosures?

10,000 fine Jail time

Dave wishes to sell a piece of land at a 15% net profit. He purchased the land for $95,500. Rounding your answer to the nearest dollar, what will he have to sell the land for to receive a 15% profit after paying the selling broker a 7% commission on the sale price?

118,091 This is a two-part calculation. First, determine the 15% profit on $95,500 ($95,500 x 0.15 = $14,325; $14,325 + $95,500 = $109,825, or $95,500 x 1.15 = $109,825). Next, factor in the commission fee of 7%: 100% - 7% = 93% net to owner. Now, use the percent formula: Whole (Total/Gross Sale price) = Part (Net amount + Expenses) / Percent (100% minus deductions) and plug in the known variables. $109,825 / 0.93 = $118,091.39. Rounded, Scott should sell his piece of land for $118,091 to make a 15% profit.

What is the square footage of an irregular lot that has 200 front feet by 80 feet by 150 back feet?

14,000 Divide 80 feet in half = 40 next take 40 x 200 front feet = 8000 then take 40 x 150 back feet = 6000 6000 + 8000 = 14,000

If a broker or salesperson has knowledge of a fellow broker or salesperson who is convicted of a crime, felony, crime of moral turpitude, or violation of any federal, state, or municipal civil rights law, how long do they have to notify the Superintendent?

15 days

The most common type of FHA-insured mortgage is called Section

203 (b)

Within what time period must a broker return the license of a salesperson when requested by the division?

3 days

Copies of contracts and listing agreements must be kept for at least three years. How long must copies of Agency Disclosure Statements be maintained?

3 years Agency Disclosure Statements are an important part of the transaction records, and auditors from the Division of Real Estate will expect to review complete files up to three years old.

How many hours of Continuing Education are required by an Ohio licensee over a 3-year reporting period?

30

When an applicant for a real estate license submits an incomplete or incorrect application, and is notified of the error or incomplete status by the Division, how much time does the applicant have to resubmit the corrected/completed application?

30 days

After issuing a bad check, the Division requires the licensee to send certified funds for all subsequent payments for a period of

5 years For a period of five years, the Division will only accept certified checks or money orders from individuals who submitted an NSF check in the past.

The fee for renewing a broker's license per year is

60

How far in advance can a licensee turn in proof of continuing education compliance?

60 days

A consumer is harmed by three licensees at the same brokerage. The judgment in favor of the consumer is $60,000 in compensatory damages. How much can be paid out of the Real Estate Recovery Fund?

60,000 The Fund would pay the whole $60,000-$20,000 on behalf of EACH of the three licensees.

Bob purchased an investment property for $187,000 and later sold it for $173,000. What percent of loss did Bob have on this property?

7.5% This is a two-part calculation. First, determine what was lost: $187,000 - $173,000 = $14,000. Then plug these numbers into the correct formula. Percent Loss = Lost / Cost; Percent Loss = $14,000 / $187,000 or 142,000 / 187,000 = 0.0749. The percent of loss is 7.5%

If it is the policy of the broker to prohibit non-management-level licensee dual agency, what CANNOT happen?

A buyer's agent can also represent the seller in the same transaction When the broker does not allow an agent to represent both parties in the same transaction, the only option to the agent is for one side of the transaction to be a customer, or the broker can designate an agent to represent the interests of the separate clients. In that instance, the broker must be a dual agent.

What is market price?

A price a property actually sold for

A disabled tenant was denied permission to install a handlebar in the shower. What law has the landlord violated?

ADA

Chemicals used in refrigeration, air conditioning, insulation, and aerosol propellants that drift into the upper atmosphere where their chlorine components destroy ozone are called

CFCs DES (Diethylstilbestrol) is a synthetic estrogen used as a growth stimulant in food animals. PBS is the public broadcast station. MSG (monosodiumglutimate) is a food additive. CFCs are chlorofluorocarbons, an inert chemical used in refrigeration and aerosol cans.

When the appraiser looks at the home Sandy just purchased, he notices it has a fireplace and the comparable homes do not. He makes a $3,000 upward adjustment on his sales comparison approach worksheet. The $3,000 adjustment is based on what appraisal principle?

Contribution This is the amount the fireplace "contributes" to the value. It is not necessarily the cost to install the individual item.

How would we see the assumption of a mortgage for $150,00 on a closing disclosure?

Debit to the seller, credit to the buyer

Who oversees all sales activity in the State of Ohio?

Department of Commerce The Department of Commerce oversees sales activity in the State of Ohio. The Division of Real Estate investigates, the Ohio Real Estate Commission educates, and the governor appoints.

The Superintendent of the Ohio Division of Real Estate is appointed by the

Director of the Department of Commerce

What is NOT part of the secondary market?

Federal Universal Mortgage Association

What document lets a buyer and seller see the costs involved with closing the transaction?

HUD-1 Settlement Statement The good faith estimate is for buyers. The escrow and purchase agreements illustrate only the agreement between the parties. A purchase agreement is often referred to as an escrow agreement. The HUD-1 lets the buyer and seller see the costs involved with closing the transaction.

Net income best describes

Income after expenses

Which statement regarding suspension of a license is TRUE?

It is for a set period of time with reactivation after the suspension is lifted

John works for a new-home builder, selling homes to be built on the buyers' own land. What does John need in order to sell these homes?

John does not need a license

Kyle was on a showing appointment with a potential buyer who wanted to make an offer on the property. Kyle had a purchase agreement in his car. The buyer signed the offer and Kyle promised to send the buyer copies when he gets back to the office. Which statement best describes the situation?

Kyle and his broker may be subject to disciplinary action A party is entitled to receive copies of everything he signs at the time of signing.

Marc enters into an agreement to buy Sam's house. Two weeks later, Marc celebrates his 18th birthday. If this agreement can be voided by one of the parties, which party could void it?

Marc Marc was only 17 when he entered into the agreement. He did not have contractual capacity at that time. The party without capacity is the only party that can void the agreement.

Julie is the new owner of a house and decides to remove the carpet. After doing so, she discovers there is significant pet damage to the hardwood floor beneath the carpet. Julie cuts most of the center of the floor out and replaces it with subfloor. Julie then places a Persian rug over the subfloor. When the Julie sells, can she remove the Persian rug?

No, anything that covers subflooring becomes real property

Tim makes an offer to buy Becky's house. Becky accepts the terms of the offer and evidences her acceptance by signing the offer. Is there a valid real estate purchase contract?

No, the acceptance has not been delivered back to the buyer

May a consumer who has been harmed by a licensee acting under her license as a real estate salesperson or broker immediately file a claim for payment from the Real Estate Recovery Fund?

No, the consumer must file a lawsuit, get a final judgment, and attempt to collect

If a licensee has a private website listing properties for sale, and other agents and individuals take information from the website and use it for their own advertising, is the licensee responsible for the accuracy of the information originating on his website and disseminated by others?

No, the licensee cannot be held responsible for information that is beyond his control