National and State practice exam.
A licensee lists a 30 acre property for $10,000,000. The seller originally paid $5.50 per square foot for the property. How much per square foot has the property increased in value?
$2.15 - 30 acres X 43,560 sq. ft. per acre = 1,306,800 sq. ft. of land. 1,306,800 sq. ft. X $5.50 = $7,187,400 (original price of land). $10,000,000 (today`s price) - $7,187,400 (original price) = $2,812,600. $2,812,600 / 1,306,800 sq. ft. = $2.15 increase.
Sonja sells her home for $250,6000 what is the total amount of Illinois transfer tax due?
$376.50 - Illinois transfer tax is $.75 per $500 of sales price, or portion thereof and is paid by the seller. $.50 goes to the state and $.25 is retained by the county where the property is located. $250,600 divided by $500= 501.20 in this case, the .20 indicates we have a portion of the next $500 of sales price in addition to the 501 number. As the tax is$.75 per $500 of price, 502 x $.75= $376.50
A broker was paid commission of 5% of the first $50,000 of a sale price and 3% if all over $50,000. if the total commission was $3,475, what was the sale price?
$82,500 - $50,000 x 5% = $2500. $3,475(total commission)- $2,500= $975(3% of all over $50,000). $975/35= $32,00 (sales price over $50,000). $32,500 +$50,00= $82,500(total sales price)
A property with a value of $73,500 had a loan of $72,500. if the mill rate was 1 1/2 what were the monthly taxes?
$9.19 - $73,500 x .15% = 4110.25 FOR YEARLY TAXES / 12 MONTHS = $9.19 PER MONTH
An elderly person has recently made the last payment on a mortgage. This person would like to supplement their retirement income. The loan most likely to help in this situation would be a:
(RAM) reverse annuity mortgage - A reverse annuity mortgage allows for senior citizen to receive extra money from a lender to help in the retirement years. the lender receives a mortgage on the property.
CERCLA would normally apply to which of the following?
A residential property with a buried oil tank. - CERCLA (comprehensive environmental response, compensation and liability act) deals with prohibiting of dumping hazardous waste on property, such as a buried oil tank.
Improvements that benefit certain properties where only those improved property owners pay for the improvements are normally paid through a:
A special assessment tax. - A special assessment tax pays for improvements( sewers, sidewalks) that benefit certain properties.
A property was purchased for $92,000 putting $11,000 down. a few years later, the property appraised for $116,000 while the loan balance was down to $79,000 what is the owners equity in the property?
None of the above. - $116,000 - $79,000 = $37,000 of equity.
Which of the following acts would be permitted under the 1968 federal Fair housing act?
Not renting a house to someone because they have a poor credit history. -Credit is a valid reason for refusing a tenant.
Which of the following acts would be permitted under the 1968 Federal fair housing act?
Not renting a house to someone because they have poor credit history - Credit is a valid reason for refusing a tenant.
Y offers X $60,000 for X's property. Which of the following terms BEST describes the role of X?
Offeree - X is the one receiving the offer, thus making them the offeree.
A seller lists a property with broker A. However, The listing provides that if any other broker sells the property, Broker A dos Not receive a commission. This type of listing would be called a(n):
Open listing - Under an open listing, only the one who sells the property earns a commission. Here, all other brokers must have also other brokers must have also had an open listing.
A prospective buyer wanted too have the right to purchase a home at a set price within the next 90 days but did not want to be obligated to purchase it. which of the following documents would allow the buyer to do this?
Option - An option gives the optionee the RIGHT to buy at a specific price within a specific time period.
a contract that begins as uni-lateral but could end up being lateral is a(n);
Option contract - An option contract is where the seller promises to sell but the buyer has the option of purchasing or not. so initially, an option is a one way promise or uni-lateral but could end up bi-lateral if the buyer decides to purchase.
Andrew carpenter has constructed a new deck on a home in Heyworth, Illinois. The owners have refused to pay the final $500 due to andrew. To assure he is paid, he must do which of the following?
Place a mechanics lien on the property within 120 days - Mechanic Liens in illinois must be recorded within 120 days of the completion of the work. They then become a priority lien and are paid out first.
Which of the following items would automatically transfer with the sale of property?
Plumbing fixtures - Plumbing fixtures would be considered fixtures or real property and would transfer with the sale of property.
What does a person have who can sign legal papers for another person?
Power of attorney - Power of attorney is what a person has who can sign legal documents for another person.
A deed restriction would apply to the:
Present and future owners. - A deed restriction is recorded on the public record and is binding on all current and future owners.
An out of state real estate broker wishes to apply for an illinois license. which of the following statements is true in regard to license reciprocity?
Reciprocity is granted to licensees in states with similar licensing requirements. - Illinois has reciprocity with several states, not necessarily neighbors, which have similar standards and have entered into an agreement to reciprocate. generally agents will be required to study and pass the illinois portion of the exam.
Under Illinois real estate law, it is required that all clients be given written disclosure of who is their:
Designated agent - On both the listing and the selling side, all clients must get a written disclosure of what agent will be serving as their "designated agent" within the office. in cased of sales teams or licensed personal assistants, there may be more than one agent named.
a seller of a property could not transfer marketable unencumbered title. what should the broker do with any earnest money involved in the transaction.
Give it to the buyer. - If the seller cannot transfer title, then the seller is in default and any earnest money should be returned to the buyer.
a seller has been in a nursing home for the lass 14 moths. with regards to the illinois real property disclosure act this fact:
Has no effect as they still must complete the form - They must still complete the form, but will check "no" to question #1. there is never a requirement to do an inspection to complete the form.
In appraising a property, which of the following items would have the greatest impact on value?
Local economic conditions - Local economic conditions play a major factor in property value as people go where there are jobs.
a potential tenant walks into a property management company looking to rent one of their apartments. is any type of agency disclosure required.
Yes, there should be written disclosure that the tenant is not being represented. - Tenants should be given written notice that they are not being represented, and that the property manager represents themselves. (or the landlord).
A potenital tenant walks into a property management company looking to rent one of their apartments. Is any type of agency disclosure required?
Yes, there should be written disclosure that the tenant is not being represented. - tenants should be given written notice that they are not being represented, and that the property manager represents themselves(or the landlord)
A contract where one or more of the parties can rescind is called:
voidable - Contracts that can be voided are "voidable"
The commercial Broker Lien Act covers which of the following properties?
warehouse
Agent A is currently working with Buyer B, showing B a variety of homes. Agent A then decides to list their own personal residence. Buyer B is interested in the home and wished to make an offer. what should agent A do ?
refer buyer B to another agent to write the offer - referring them to another agent is the best step. Illinois does not allow agents to be a dual agent on their own transaction. the fact that agent A was showing them homes created an agency relationship with the buyer. although Answer B is a possibility, both parties would have to agree to terminate the buyer/agent relationship first. It would still be a risky proposition.
A title insurance policy lists:
All recorded defects against the title. - A title insurance policy does list any defects against title that have been recorded.
Illinois leasing agent licenses may be obtained with how many classroom hours and must be completed within how many days of beginning leasing agent activity?
15 hours within 120 days - The class is 15 hours and a candidate must successfully complete the course and pass the state exam within 120 days of actually working.
Which of the following elements must be in a contract to have a valid contract?
A clear description of the land - the land must be clearly described in order for the contract to be valid.
a Person with a mental impairment would like to enter into a contract for the purchase of a piece of real estate.. Which of the following statements would be true?
A person appointed by the court as a guardian can sign the contract on behalf of the mentally impaired person. - A person with a mental handicap is still a protected class and cannot be discriminated against in real estate transactions. However, a guardian would have to sign the contract.
XYZ listed a property for sale and put the listing in the multiple listing service (MLS). ABC, working with a prospective buyer, cooperated through the MLS and showed the property. What is true?
Abc is a subagent of XYZ - ABC(selling agent) is working as a subagent of XYZ(listing agent) and the seller.
What does a standard title insurance policy insure against?
Any recorded title defects or liens - A standard title insurance policy does protect against any recorded title defects or liens.
What is true about both FHA and VA loans?
Both require owner occupancy - FHA and VA do require owner occupancy of the property being purchased.
A sales person has been accused of steering. which of the following would HUD least consider?
Considering that the salesperson thought he was doing what wass in the buyers best interest. - The least thing HUD would consider is that the agent thought he was doing what was best for the buyer- that is really irrelevant.
A property was in an area with a lot go smoke and soot from nearby factories. it suffers from:
Economic (external) obsolescence - The factory is outside the property lines, therefore it is economic or external obsolescence.
A property that contains Asbestos insulation wrapped around pipes would be best remedied by:
Encapsulation - The best way to solve pipes wrapped with Asbestos (which may be a health hazard) is to encapsulate.
a property appraised for $42,000. if the buyer borrowed $28,000, what is the difference between the two amounts called?
Equity - Equity is the difference between what is owed on a property and the current value. in this case, equity is $14,000 ($42,000-$28,000).
What is the purpose of earnest Money being part of a real estate contract?
It established intent of the buyer to carry out the contract. - Earnest money is considered to be good faith money showing sincerity on the part of the buyer.
What is always true about a real estate commission?
It is always negotiable. - A real estate commission is always negotiable.
a blanket mortgage is usually designed to cover;
More than one piece of property - A blanket mortgage (usually used by developers) covers more than one piece of property. It has a partial release clause allowing each lot to be released as it is sold to a buyer.
a mortgage is recorded to project the :
Mortgagee - The mortgagee is the lender. the lender wins to be sure the mortgage is recorded properly as the mortgage is the security for the loan.
In Illinois, a real estate agent:
Must have a written contract with their broker. - Illinois salesperson must have a written contract with their employing broker. Theye
a mortgage contingency usually included all of the following items except;
Name of the lending institution - A contingency allows a party to void a contract upon some event happening or failing to happen.
Jon works for Builder Bob, selling his new construction home in Illinois. Does Jon need a real estate license ?
No, as long as Jon is Bob's regular employee. - Regular employees of the owner of the property are exempt from licensing in Illinois. a regular employee must work at least 20 hours a week and be classified as an employee by IRS guidelines.
Sandy was an active agent for many years. she has decided to cut back on her work schedule and just work for a top agent at all star realty as a personal assistant. Not wanting to pay MLS dues and fees, she puts her license with ABC referral company. Is this legal in Illinois?
No, your license must be with he company where you work. - Licensed personal assistants in illinois must have their license with he sponsoring broker of the company where they are employed, regardless of what kind of activities they perform.
a blanket mortgage usually contains which of the following clauses?
Release - a blanket mortgage (covering more than one property) has a partial release clause allowing each lot to be released from the mortgage as it is sold.
Under the federal fair housing laws, which of the following would not be discriminatory?
Requiring a tenant to remove a ramp from the deck of an apartment at the end of a lease. - One can require a tenant to put the property back in the original condition( the exception being a handicapped tenant can widen doorways without having to put them back narrow at the end of a lease).
A tenant was in possession of leased property. The landlord gave a written notice to the tenant to quit. The tenant, however remained in the property and continued to send rent payments to the landlord. the land lord refused to accept the rent checks. This situation would be described as a:
Tenancy at sufferance - A tenancy at sufferance is when the tenant stats over without permission and the landlord has to evict. here, since the landlord refused the rent checks the tenant did stay over without permission.
The common areas in a condominium are owned by the unit owners under:
Tenancy in common - Common areas are owned under tenancy in common, which is inheritable to the heirs.
Agent Andrew has scheduled an open house for saturday afternoon. Because of a death in the family, he will not be able to hold it himself. In illinois, who may legally hold it for him?
The owner of the property. - Holding an open house is a licensed activity in Illinois, but the owner of the property is an exception. They may hold their own home open.
The owner of a vacant tract of land lists it for $350,000 . several weeks later the listing broker became aware of a buyer who would pay as much as $500,000 for the property. the broker thereupon submitted a full price offer to the owner and purchased the property. The broker then resold the property to the buyer and pocketed a tidy profit. Which one of the following statements is correct?
The broker violated the law by not promoting the best interest of the client. - The broker must represent the sellers best interest and not his own. this is a serious breach of the law and would subject the broker to serious punishment.
Which of the following is true regarding the residential real property disclosure act?
The form should be completed by the seller and not the agent. - The form should be completed by the seller and never the agent.
An Illinois real estate contract has typed print that indicates that all heating and cooling systems shall meet local building codes. Handwritten words on the contract indicate that the buyer will take the property "as is" with no warranties on equipment. Which statement is correct?
The handwritten words take precedence- the seller not warrant those systems. - Illinois law allows for handwritten words to take precedence over pre-printed ones.
A seller called a salesperson asking the salesperson to list the seller's home for sale. The salesperson did so and submitted the listing to the MLS after the salesperson's broker approved the listing. Another Broker within the MLS cooperated with the listing broker and found a buyer for the house. Which of the following best describes the relationship of the parties involved?
The selling broker is an agent of the listing broker - In a cooperative sale, when there is no buyer agency involved, we can assume there is subagency.
What is the purpose of zoning regulations?
To implement the master land plan - The master land plan is a plan for a city's future growth. the master land plan lays out areas fro residential, commercial,e tc. which is why there are zoning regulations to make sure this comes to reality.
A contract where one party is bound to perform but the other party is not would be referred to as:
Uni-lateral - A uni-lateral contract is one way promise- a promise for an action. one party is bound but the other is not
In a land contract or contract for deed: the seller who retains the fee simple title is referred to as the :
Vendor - a seller is always called a vendor.
Riparian, littoral and prior appropriation all relate to:
Water rights - Riparian( owning land next to a flowing water way) Littoral (owning land next to a lake or ocean) and prior appropriation ( having rights to the usage of water) all relate to water rights.
Which of the following would one normally depreciate?
a building only - Only improvements depreciate, such as a building.
a person may depreciate property for tax purpose when the property is:
a rental property held for investment. - Only investment property (rentals) can be depreciated for tax purposes.
Which of the following are required documents for an illinois sponsoring broker to receive from each sponsored agent?
a signed copy of their employment agreement - Every agent must have a signed contract with their sponsoring broker.
Six miles of curbs and gutters were installed to improve the properties in a certain area. the properties that were improved would most likely pay for the improvements through a;
a special assessment tax - A special assessment tax is assessed on properties to pay for things such as sewers, sidewalks and gutters
When a change is needed in a contract, the bets way to accomplish this would be with a(n);
amendment - an amendment is used to change an item in a contract.
What document would be a condensed history of all records that affect the title?
an abstract - an abstract is a history of all recorded documents that affect the title.
When posting listings on the company web page, one of the requirements that a broker must comply with is that each listing must have the:
city or geographic area of the property. - The is one difference between print ads and internet advertising
A buyer made an offer on a property a broker had listed. The broker presented the offer to the seller. While the seller was still considering the offer, the buyer contacted and informed the broker that the buyer wanted to withdraw the offer. The broker should:
continue to market the property for the seller. - An offer can always be withdrawn up until acceptance; therefore, the broker will continue to market the property for other possible buyers.
a buyer was considering purchasing a new home that the listing broker was aware had been built on a toxic waste dump. what duty does the listing broker owe to the buyer?
disclosure. - Disclosure of the toxic waste dump is required.