National Practice Exam - Tricky!
You're on a planning board that's discussing how to keep the city more livable by reducing building density. The subject of bulk zoning comes up. What is your response? "That applies to commercial areas only." "That's a great way to meet our objectives." "That's crazy. We're trying to reduce density, not increase it." "That will work for residential areas, but what about commercial?"
"That's a great way to meet our objectives." Your response should be, "That's a great way to meet our objectives." Bulk zoning can apply to both residential and commercial zones, and it doesn't increase density.
A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?
$1,335.67 First, find the square footage (5.5 x 43,560' = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400' = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95' = $1,335.67 per front foot.
A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly principal and interest payment totaling $2,042.71. What is the total amount of interest the borrower will pay over the course of the loan?
$117,687.80 First, multiply the monthly payment ($2,042.71) by the total number of payments (180 = 12 payments/year for 15 years). The total paid back is $367,687.80. Then subtract the original loan value: $367,687.80 ‒ $250,000 = $117,687.80.
Katherine purchased a property for $255,000, borrowing $242,250. The assessed value of the property is $249,700. The property appraisal came in at $257,000. Which of these amounts is used in calculating the transfer tax?
$255,000 Transfer tax is calculated based on the purchase/sales price ($255,000).
Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides? A bargain and sale deed does not come with any covenants of warranty. A bargain and sale deed may come with or without covenants of warranty. A bargain and sale deed provides the same covenants as a general warranty deed. The bargain and sale deed includes all covenants except the covenant of warranty.
A bargain and sale deed may come with or without covenants of warranty. A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties.
Which of these statements best represents what happens after a federal fair housing complaint is made? A fair housing specialist will review the complaint. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case. FHEO will contact the alleged perpetrator to gather information. HUD will review the complaint to determine if it's valid.
A fair housing specialist will review the complaint. After an initial complaint is made, a fair housing specialist will review it to determine if a violation has occurred. If there's a potential violation, the specialist will help the consumer file an official complaint.
What's the penalty for violating federal do not call rules? A fine of more than $40,000 for each day violations took place A fine of more than $40,000 for each violation Restrictions on all business telephone use Suspension of the violator's business license
A fine of more than $40,000 for each violation
Jerrica is set to close on the property she's buying on Friday. Because of other delays in the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing? A new Closing Disclosure must be issued at least three days before the closing date. A new Loan Estimate must be issued, so the closing date must be moved back. Jerrica will not be able to close until she re-applies for her loan. The closing date will remain the same, but Jerrica will need to bring additional funds to the closing.
A new Closing Disclosure must be issued at least three days before the closing date.
Your seller clients have received an offer, and the buyer has included a pre-approval letter. Your clients are a little confused and think a pre-qualification letter is necessary. What's true regarding pre-approval and pre-qualification? A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller. A pre-approval letter is based on buyer-provided information that isn't verified. Sellers should always insist on a pre-qualification over a pre-approval. The pre-qualification takes the buyer's complete financial picture into account.
A pre-approval letter comes with lender verification of buyer-provided data and provides more assurance to the seller.
Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place? An affidavit from the resident Approval from the current owner A public record of tenancy A tenant add-on insurance policy
A public record of tenancy
Your brokerage firm uses preprinted sales contract forms, but your seller, Marcus, wants to add some language about staying in the house and renting from the buyer for a month after closing. What should you use to add this information?
Addendum
Which of the following statements regarding reasonable accommodations and modifications is true? A landlord can freely question disabled individuals about their disability. An individual can make a request for accommodation or modification at any time. A property owner must always complete modification requests. The property owner is always responsible for paying for any reasonable modifications that are completed on the property.
An individual can make a request for accommodation or modification at any time.
The economic principle known as ______ means that the value of property today is impacted by the current value of the total expected future benefits. Anticipation Conformity Highest and best use Progression
Anticipation Anticipation says that the value of property today is impacted by the current value of the total anticipated future benefits.
Saul was unhappy after he and Janelle liquidated their business. Janelle sold some items for less than he'd initially agreed to and he wanted the full price to be included in the profit split. He wanted to sue, but he was required to pursue other options. What contract clause kept Saul from being able to sue? Arbitration Choice of law Damages block Liquidated damages
Arbitration An arbitration clause in a contract specifies that any contract disputes will be settled through arbitration, rather than through the court system.
When Gillian looked at the legal description of the property she was interested in purchasing, she read the following: "Beginning at the corner of State Route 61 and Hallowell Road, north for 314 feet, then southwest for 193 feet." In this description, what does "Beginning at the corner of State Route 61 and Hallowell Road" represent? A benchmark Bounds Metes Monument
Bounds Bounds are physical features that define the boundaries of the property. Combined with directions and distances (metes), these form the basis of a metes and bounds legal description.
Which department typically decides which development projects require a permit or approval?
Building department
According to the rule of thumb, how can a borrower lower the interest rate on a loan by 1%?
By paying four points up front
SARA is an amendment to which environmental act? CERCLA Clean Air Act Clean Water Act Environmental Responsibility Act
CERCLA SARA, the Superfund Amendments and Reauthorization Act, is an amendment to CERCLA, the Comprehensive Environmental Response, Compensation and Liability Act, which says that "innocent landowners" aren't responsible for clean-up of hazardous contamination. (SARA CERCLA, SARA CERCLA, SARA CERCLA ret set set)
Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? Compare it to the Loan Estimate. File it with her mortgage papers. Take it to the closing. Use the information to compare loan costs with those of other lenders.
Compare it to the Loan Estimate. Margaret should compare the Closing Disclosure figures with those on the Loan Estimate to ensure that no undisclosed changes in loan costs have been made.
Your buyer client, Percival, was pre-approved for the exact amount he needed to buy the home of his dreams, and he made an offer that was accepted by the seller. What's his next step? Complete a loan application. Obtain pre-approval from another lender. Review the underwriter's decision. Sign a purchase agreement.
Complete a loan application.
Which one of these is an example of the doctrine of estoppel? Corrie shows Marvin several properties and prepares CMAs for each. She assists him in making an offer on one. He becomes difficult to work with, and she then says she's not his agent because they don't have a signed agency agreement. Josie represents Carmine in his search for a rural property. Josie shows Carmine a property that's perfect, but she never hears from Carmine again. She then discovers that Carmine bought the property directly from the seller. Roark tells all his buddies at coffee that he's getting $600 a month rent out of his old barn. His best friend just shakes his head, knowing that Roark is only getting half that amount. Tonya tells Kinsey that she's a licensed agent and proceeds to represent Kinsey as a buyer's agent. Kinsey later discovers that Tonya isn't licensed.
Corrie shows Marvin several properties and prepares CMAs for each. She assists him in making an offer on one. He becomes difficult to work with, and she then says she's not his agent because they don't have a signed agency agreement.
Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn't ready in time. What can their listing agent do? Create a contract addendum with the required language. Create a contract amendment with the required language. Create a counter-offer to present to the buyers. Terminate the contract on Becky and Don's behalf.
Create a contract amendment with the required language. Once a contract is SIGNED, the document to use to alter the terms is a contract amendment.
Prudence just finished paying off the debt on her loan, so the lender released the property's title to her. What clause in her mortgage stipulates this? Acceleration Alienation Defeasance Due on sale
Defeasance
Which task is NOT the responsibility of an escrow officer? Determine how earnest money is to be distributed in case of a dispute. Manage transaction documents from all parties. Prepare closing documents and manage the closing meeting. Verify funding of the buyer's loan.
Determine how earnest money is to be distributed in case of a dispute. The escrow officer is responsible for distributing the earnest money as outlined by the parties or the courts in case of dispute but doesn't have the authority to determine HOW it should be distributed.
Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this? Easement by prescription Easement in gross Express easement Visible easement
Easement by prescription Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission.
Derrick was thrilled to find out that the land he purchased includes several small caves. He's been spelunking for about three years and looks forward to exploring the caves on weekends. Which real property right allows him to do so? Disposition Enjoyment Exclusion Possession
Enjoyment The right of enjoyment gives the property owner the right to participate in any activities desired (as long as they are legal).
The state's claim to property when a property owner dies, leaving no will, heirs or creditors, is the power of ______.
Escheat
When working with a seller, you signed a listing agreement that ensured you'd receive a commission, provided the property sold during the listing term. What type of listing agreement did you sign?
Exclusive right to sell
The Nettles have accepted the Briars' purchase offer, and both parties have signed the sales contract. What type of contract do the Nettles and the Briars have? Executed Executory Unilateral Voidable
Executory The Nettles and Briars have a valid contract that's in the process of being completed. Because one or more terms of the contract must still be completed, they have an executory contract.
Your client submits an application to rent a condo unit. He has excellent credit and has had the same job for a long time. He uses a cane to help with his mobility. When his application is rejected, he feels it's due to his disability. He is protected under the _______. Civil Rights Act of 1866 Fair Housing Amendments Act of 1988 Federal Fair Housing Act of 1968 Housing and Community Development Act of 1974
Fair Housing Amendments Act of 1988
Roxanne just finished making a buyer presentation to Fred and Regina Jones. Now that they understand the difference between being customers and being clients, they're anxious to be represented. What is one of Roxanne's duties to them as their buyer's agent? Ensuring that she earns a commission Finding properties to show to Fred and Regina Notifying the Jones family of any material changes Sharing their motivations and pricing strategies with seller's agents.
Finding properties to show to Fred and Regina Under a buyer rep agreement, the agent's duties include showing properties, assisting in negotiations, and providing guidance.
The Office of Fair Housing and Equal Opportunity is a part of which federal department?
HUD
Marion gave her granddaughter Sheila the deed to a brand new home, on the condition that Sheila complete her PhD in astronautics. When Sheila dropped out of school and got a job as a greeter at a big box store instead, Marion ______ to regain ownership of the property. Had no recourse Had to purchase the property from Sheila Had to take legal action Wasn't required to take any action
Had to take legal action
Marge's broker, Geoffrey, told her that the lease on the property she wants to buy runs with the land. What does that mean? A new property owner can require tenants to relocate to a similar piece of land. If property ownership changes, the new owner must abide by the lease terms. The land area leased is fully described in the lease agreement. The lease terminates as soon as the land (property) changes hands.
If property ownership changes, the new owner must abide by the lease terms.
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______. By licensed real estate professionals By members of the Appraisal Foundation In the most expeditious and inexpensive way possible In writing, and in accordance with uniform standards
In writing, and in accordance with uniform standards FIRREA helps to regulate the ways that lenders value real property by requiring that appraisals be done by licensed, qualified personnel, and that the appraisal report be in writing.
Which one of these would NOT be an element of comparison an appraiser would use when applying the sales comparison approach to a property valuation? Financing terms and cash equivalency Income generated Market conditions at time of sale Physical characteristics of the property
Income generated
Which of these is essentially the same as fraud? A misstatement Fact bending Intentional misrepresentation Puffing
Intentional misrepresentation
Luci's client Kaden wants to purchase a new construction property, and he wants to get as much house as he can afford. Which of the following does Luci need to advise Kaden about regarding interest rates when purchasing a newly built home? If Kaden uses his builder's lender, he can get a better interest rate and won't have to worry about market fluctuations between now and closing. Kaden doesn't need to worry about interest rates for his long-term mortgage until 90 days prior to closing when he can lock in the best rate. Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing. Kaden needs to lock in the interest rate on his long-term mortgage now to avoid unexpected increases that could put his loan amount over his approval amount.
Kaden needs to allow for the possibility of an interest rate increase between now and closing because lenders aren't likely to lock in an interest rate for more than 90 days before closing. Because lenders won't lock in an interest rate for more than 90 days before closing, Kaden needs to plan for the possibility of a 1% interest rate increase between now and closing, or risk not qualifying for the loan when the time comes.
Which of these is an example of puffery? Kari's ad boasts that the property is "just blocks from the proposed metro light rail station." Katherine's ad for her newly renovated home states, "New from the studs up." Her carpenter might tell you a different story. Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay." Kim notes that the property "overlooks a serene, peaceful green space." It's next to a cemetery.
Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay." Kevin's ad is the best example of puffery. Katherine's ad is fraudulent, and Kim's is in poor taste but probably true.
Sondra, a buyer, signs all the required mortgage documentation, promising to make all payments to her lender. Unfortunately, Sondra falls on hard times and misses multiple payments, and the bank indicates that it's going to foreclose on her. The foreclosure proceedings are more difficult for the lender because Sondra holds the title to the land. What kind of state does Sondra live in?
Lien theory state
Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time.
Limitations
Which of the following is a true statement about police power and public land use controls? Government agencies may exercise police power only when it does not restrict the freedom of its citizens. Local governments and their planning boards control budgeting, site-plan review, and building codes. Planning, zoning, and subdivision development are primarily controlled at the state level. Police power is citizens' rights to police themselves.
Local governments and their planning boards control budgeting, site-plan review, and building codes.
All of the following are common property manager duties EXCEPT ______. Accepting rental applications Making mortgage payments Re-keying a property Showing vacant units
Making mortgage payments
Margo's accountant tells her that she's eligible to deduct the property taxes she paid last year. Select the statement about this deduction that's true. Margo can only deduct the property taxes charged back to her at closing. Margo has to be an investor to be eligible to deduct property taxes. Margo is in the ownership stage of the property ownership lifecycle. Margo is in the reversion stage of the property ownership lifecycle.
Margo is in the ownership stage of the property ownership lifecycle. Both homeowners and investors may be eligible to deduct annual property taxes paid, depending on the circumstances.
In which of these situations did the licensee breach the fiduciary duty of loyalty? Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale. Michael submits all offers he receives on Jarrod's property. Steven postponed his vacation so he could attend his seller client's closing. Tanaka refuses to encourage his seller client to lower his asking price.
Margo tells her seller client Troy that his property is worth less than it really is so he will get a quick sale.
Datums and benchmarks are used for ______. Calculating area Determining land acquisition costs Measuring distance Measuring elevations
Measuring elevations
New Day Corporation's application to build a new mixed-income housing development was denied, because the town of Springfield has halted all new development until after city elections. What did Springfield enact?
Moratorium
Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed? Each licensee owes all fiduciary duties to both clients. Katherine owes Elena the duty of loyalty. Nate owes no duties to Timothy, and Katherine owes no duties to Elena. Nate owes Timothy the duty of disclosure.
Nate owes Timothy the duty of disclosure. A licensee owes all parties the duty of disclosing material facts, as well as honesty, fairness, and accounting. Only a client would be owed obedience, loyalty, and confidentiality.
Select the situation that correctly represents a true conflict of fiduciary duties. Kai learns that her buyer clients' inspector will be reporting a furnace issue to the buyers. She doesn't want to break the news to them. Her duty of confidentiality to the seller and her duty of loyalty to her buyers are in conflict. Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience. Renee's clients don't want showings on weekends. Renee knows this may reduce market exposure and she feels it's not in her client's best interests. This is a conflict of her duty of loyalty and her duty of obedience. Terrance's buyer clients don't want him to share with the seller that they're having trouble coming up with the down payment. Terrance's duty of loyalty to his clients is in conflict with his duty of disclosure.
Nikki's seller client has instructed her not to present offers that are less than the listing price. This is a conflict of Nikki's duty of disclosure, which requires her to present all offers, and her duty of obedience. The duty of disclosure requires that licensees present all offers to their clients, but Nikki's client has asked that she not present all offers, creating a conflict between her duties of disclosure and obedience.
Mardee represented condo owner Carol, and they signed an exclusive agency listing agreement. If Carol found her own buyer, would she owe Mardee a commission? No, because Carol is not a real estate licensee. No, because Carol procured the buyer. Yes, because they have an exclusive agency listing agreement. Yes, but she only owes the listing commission.
No, because Carol procured the buyer.
The property manager for a senior living community refuses to show a rental to a family with a young child. Does this violate fair housing law? No, senior communities may exclude prospective renters belonging to any of the otherwise protected classes. No, senior communities may refuse to sell or rent properties to families. Yes, the couple is being discriminated against on the basis of age. Yes, the couple is being discriminated against on the basis of familial status.
No, senior communities may refuse to sell or rent properties to families. Senior housing facilities or communities may refuse to sell or rent properties to families with minor children or those younger than 55. Discrimination on the basis of race is always prohibited.
A brokerage firm that hires licensees as employees instead of as independent contractors must ______. Advise the state licensing regulators of the non-traditional working relationship Avoid controlling their activities too closely to ensure proper worker classification Offer incentive bonuses to ensure a motivated workforce Pay licensees a regular salary regardless of the revenue they generate
Pay licensees a regular salary regardless of the revenue they generate Brokerages that hire licensees as employees must factor in the expense of a regular payroll, even when the sales volume is low.
Eileen is preparing a quarterly report pursuant to the terms of a property management agreement. This report shows the property owner whether this property operated at a surplus or deficit during the reporting period. What report is she preparing? Budget comparison statement Cash flow report Operating budget Profit and loss statement
Profit and loss statement
What's the best definition of real property? Artificial attachments to land that include things such as fencing, buildings, and walkways Earth, soil, and air Land, plus all things permanently attached to it naturally or artificially Real estate, plus all of the interests, benefits, and rights included in ownership
Real estate, plus all of the interests, benefits, and rights included in ownership
A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do? Advertise for a tenant of a specific race. Move out of the property and rent both portions of it, relying on the "Mrs. Murphy" exemption to permit renting only to single females. Refuse to rent to a female tenant. Use the services of a real estate professional to advertise for a male tenant.
Refuse to rent to a female tenant. The "Mrs. Murphy" exemption applies to owner-occupied buildings with no more than four units. The owner may choose to rent only to a like-sex tenant but may not discriminate on any other basis.
Jerry and Simon signed a contract so that Jerry could purchase all of Simon's restaurant equipment for one price after Simon closes his restaurant next month. The contract contains a provision that states Jerry has one year from the purchase date to file a suit relative to the purchase. After the year is up, Jerry forfeits the right. What kind of contract clause is this? Specific time Statute of limitations Time is of the essence Time of performance
Statute of limitations
What is the term for sites identified by the EPA under the Comprehensive Environmental Response, Compensation, and Liability Act? CERCLA site Hazardous Environment Community Clean-up (HECC) site Superfund site Waste Remediation Environmental Need (WREN) site
Superfund site
The Telephone Consumer Protection Act is overseen by _______.
The Federal Communications Commission
A "homes for sale" magazine contains the following ad: "Cozy two-bedroom starter home, neat and clean, ready for move-in. $140,000. Low down payment and easy financing!" Which of these statements is true? The ad is in compliance with TILA because it doesn't contain any of the trigger terms that require full disclosure of all financing terms. The ad is in compliance with TILA because the sales price is below the minimum that triggers full disclosure. The ad is not in compliance with TILA because financing terms must be provided on any residential real estate ad. The ad is not in compliance with TILA because it mentions financing without including all of the terms of the financing.
The ad is in compliance with TILA because it doesn't contain any of the trigger terms that require full disclosure of all financing terms. Regulation Z requires all financing terms to be included in an ad only if certain trigger terms are present, but "low down payment and easy financing" are not triggers.
Which of the following statements is the best definition of "yield" in the mortgage industry? The amount of interest the borrower pays up front The amount of money a loan makes over time The money the borrower must pay in closing fees The ratio of the down payment to the loan amount
The amount of money a loan makes over time
Who is responsible for following up on issues identified in the inspection report to ensure that they are addressed? The buyers The buyer's agent The listing agent The sellers
The buyer's agent The licensee representing the buyers is responsible for tracking any issues the inspection uncovers and the sellers agree to repair, to ensure that they are repaired prior to closing.
Select the statement that correctly exemplifies the covenant term. The covenant against encumbrances is the grantor's guarantee that he or she owns the property being conveyed. The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property. The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on. The covenant of warranty promises that the grantor has the capacity to convey title.
The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on. The covenant of quiet enjoyment promises that the grantee won't have his enjoyment of the property hampered by claims against the title.
Katelyn wants to include an inspection contingency in her purchase offer. Her agent explains that the inspection contingency will document which of the following? How much money the sellers will spend on fixing inspection issues The date by which all inspection issues must be addressed The name of the inspector Katelyn will use Whether Katelyn will ignore some of the inspection issues
The date by which all inspection issues must be addressed
Reuben purchased a property from a seller who gave him a general warranty deed. What's true of Reuben's deed to this property? Reuben's deed is a court-ordered deed. Reuben's property was likely a foreclosure purchased through a lender. The deed likely doesn't include a covenant of warranty. The deed provides the greatest protection available from a grantor to a grantee.
The deed provides the greatest protection available from a grantor to a grantee.
Which statement regarding fee simple defeasible estates is true? A fee simple absolute estate becomes fee simple defeasible when the owner dies intestate. A fee simple defeasible estate is granted upon the completion of a court-ordered condition. The estate includes only some of the bundle of legal rights; inheritability isn't included. The estate includes the full bundle of legal rights, but ownership is based on a condition.
The estate includes the full bundle of legal rights, but ownership is based on a condition. A fee simple defeasible estate includes the full bundle of legal rights, but ownership may be terminated if the required condition is violated.
Which of these statements about frontage is true? A lot that's 75 feet wide by 30 feet deep has a frontage of 30 feet. Frontage is used in calculating property taxes. The frontage for a lot that's 120 feet by 85 feet is 120 feet. The frontage of a property on a corner is measured from the lot line on one side to the street's center on the other.
The frontage for a lot that's 120 feet by 85 feet is 120 feet. When reading lot dimensions, if the frontage isn't identified, it's the first number stated.
Aidan accepted a contract for the sale of his home. The home inspection report reveals that certain aspects of the house don't meet the current building code. What's the most likely result? Aidan and the purchaser will negotiate the expense of bringing the house up to code. Aidan must bring the house up to code. The contract will fail to close because of code violations. The house is probably not required to meet the current code.
The house is probably not required to meet the current code. Most municipalities permit existing construction to be sold and occupied without meeting current code, although there are exceptions for some safety considerations
When a licensee is working with a property located near a Superfund site, what does that mean? A portion of the sale price must go to the EPA to fund clean-up of the site. The licensee is required to disclose potential health threats to anyone in the area when showing the property. The licensee must disclose the existence of an environmental hazard in the area. The property cannot be sold until the site is removed from the NPL.
The licensee must disclose the existence of an environmental hazard in the area.
Harini had a lease with an option to buy on her condo since she wasn't financially stable enough to purchase the condo when she first signed the lease. Two years later Harini was in great financial shape, but she found out that the owner legally sold the condo to another buyer. Harini has to move out next month. What must have happened? Harini and the seller had a falling out. Harini exercised her right of first refusal. The option expired. The seller breached the contract.
The option expired. Because options are unilateral contracts, they leave a seller hanging until the optionee exercises the option. Thus, they typically have an end date. If the optionee doesn't exercise the option before the expiration date, the owner is free to sell.
Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud? Agency disclosures Buyer representation agreement The original sales agreement and any addenda The title
The original sales agreement and any addenda
What's the meaning of "good faith" in relation to contract law?
The parties agree that they'll execute the contract to the best of their ability and without any fraud or misrepresentation.
What would happen if you bought a house and later found out that there were unpaid liens against the property? Nothing. The former owner owes the money on the liens. The lien claimants would lose their liens against your property. The unpaid liens could trigger a foreclosure on your property. You would have to assume a loan to pay off the liens.
The unpaid liens could trigger a foreclosure on your property.
In which of these situations would the property most likely be conveyed with a trustee's deed? Karla is the executor of her father's estate and is selling his farm. Marvin and Tricia are selling their house. Tim's property will be sold at auction in a foreclosure action. TLC Lending is selling an REO property.
Tim's property will be sold at auction in a foreclosure action. In states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee's deed.
What type of insurance protects a lender's collateral interest in a property that's being financed? Collateral insurance Hazard insurance Mortgage insurance Title insurance
Title insurance Lender's title insurance policies protect the lender's collateral investment in a given property.
It's January, and the pool at Roger's listing has been prepped for winter for several weeks. The homeowner assures Roger that it's in good working order. Roger has no reason to disbelieve the homeowner, so he tells prospective buyers that the pool is fine. The property sells, spring comes, and the new owners call to complain that the pump doesn't work, and the pool drain appears to be clogged. What did Roger commit? Fraud Negligent misrepresentation Puffery Unintentional misrepresentation
Unintentional misrepresentation
The federal Fair Housing Act includes protections for people with disabilities. It requires multi-family buildings constructed for occupation after March 13, 1991 to have seven special features. Which of the following is one of those features? Bathtubs with low sides for easier access Emergency call buttons in all units Ramps at all exterior doors Unit and internal doors that are usable by persons in wheelchairs
Unit and internal doors that are usable by persons in wheelchairs Unit entrance doors and interior doors should be built to accommodate a wheelchair.
Damien and Sandy bought a lot with a condemned house. They want to tear it down and build a duplex, so that they can live on one side and rent out the other. Unfortunately, the property is zoned single-family residential. If they can make a case for economic hardship, they may apply for and be granted a ________. Area variance Moratorium Special use permit Use variance
Use variance This is a use variance. The existing zoning only allows single-family homes, so a duplex represents a use other than the originally intended use.
You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this? Enforceable Unilateral Void Voidable
Void A party can't promise to do something that's actually impossible in a contract. This contract is void because the seller of the machine literally can't perform his side of it.
Corinne, an escrow agent, is preparing for the Thomas/Trenton closing in four days. Which of these documents will Corinne prepare? She'll prepare a seller net sheet to disclose the seller's net profit on the sale. Working with the lender, she'll prepare the Loan Estimate, which details the costs the buyer and seller will pay at closing. Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. Working with the title company attorney, she'll prepare the preliminary title commitment.
Working with the lender, she'll prepare the settlement statement, which details the costs the buyer and seller will have at closing. Just prior to closing, the closing agent will prepare all the closing documents, including settlement statements that detail all the money changing hands on closing day.
Esmerelda makes regular monthly payments on her loan. In addition to paying interest, she's slowly paying down the principal of the loan. With each payment she makes, more will go towards the principal and less to interest. What type of loan does she have?
amortized
Another term for a valuation is ______.
formal appraisal
The Druid Hills neighborhood sits firmly within a single-family residential zoning area. Most of the lots are one-third of an acre or larger. A 20-acre parcel on the edge of the neighborhood sold recently. The buyer wants to build condominium flats since multi-family housing is in short supply in the area. The town is considering rezoning that parcel to allow this development because the developer plans to also include a public park and a walking trail. What kind of zoning is this?
incentive zoning
What does a municipality do to verify that new construction meets building codes?
issue building permits
The government's authority at all levels to ensure the health, safety and welfare of its citizens, which includes the control of public land use is the definition of ______.
police power
The fewer properties on the market, the greater the scarcity. What's the effect on prices?
prices are pushed upward
Sylvan, the seller, and Eric, the buyer, have signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until Eric exercises his option to buy, only Sylvan is bound by the option agreement; he may not sell the property to anyone else during the option period. What type of contract is this?
unilateral
Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?
void