NATIONAL REAL ESTATE EXAM

To renew an active license, how many elective hours of continuing education do you need? A. 3 hours B. 6 hours C. 9 hours D. 12 hours

C

What are the main elements of the Rectangular Survey system?

Longitudes, latitudes, township grids, ranges, tiers, sections, fractions of sections

What protections might your state offer to a homeowner against the inadvertent loss of ownership for failure to pay property tax?

Many states have grace or redemption period, a notification process, and equitable or statutory right of redemption.

What are the three phases of land use planning?

Master planning Plan administration Plan implementation—zoning, codes, permits.

What happens to Joe's real estate in your state if Joe dies leaving: a wife and children, but no will?

after all claims have been satisfied (including life estates), the estate goes to the heirs according to the state's laws of descent and distribution

Name the aspects of real property interests that are regulated by the government.

the bundle of rights legal descriptions financing insurance inheritance taxation

Name the components of a description using the Recorded Plat method.

Lot number, block identifier, subdivision name, section location, township, county, state.

The _______: - Is made up of three attorneys who are admitted to practice before the Missouri Supreme Court - Work for the Attorney General's office - Review cases sent to them by the MREC - Holds hearings when requested by the MREC to: determine guilt or innocence. if innocent, case dismissed. if guilty, sent back to the MREC for punishment or dismissal. *A person who is refused a license by the MREC appeals that decision to the ______.

MAHC (Missouri Administrative Hearing Commission)

List the important reasons for creating and maintaining title records.

Maintain chain of title by listing previous owners and encumbrances; avoid ownership disputes; give notice of who owns the property and who has claims against it; reveal the marketability of the title; give notice of liens and establish lien priority.

An apartment building has $105,000 net income and sold for $1,450,000. What was the rate of return? A. 7.2% B. 13.8% C. 8.3% D. 9.1%

A

If an individual broker dies (there is no other broker in the company) who can be appointed as a "Temporary broker" and for what purpose? A. Anyone licensed or not can be appointed as a "Temporary broker" to "Terminate the existing transactions," close the company, and return all the salespersons' licensees to the MREC B. only a licensed broker from another company can become a "Temporary broker" C. only a salesperson who is licensed to the company can become the "Temporary broker" D. there is no such thing as a "Temporary broker" the company has to close immediately

A

In a time-share freehold, owners acquire: A. undivided interests as tenants in common. B. a tenancy from period-to-period for a portion of a year. C. a pro rata share of a leased fee. D. a tenancy in severalty for a portion of a year.

A

In the event of the death or incapacity of a licensed broker, the MREC may: A. Issue without examination or fee a temporary license to anyone the MREC wishes B. Appoint only a licensed person permission to become a temporary broker to wind up the transactions C. Allow the temporary broker to continue taking listings while winding up the affairs of the broker D. Allow for a temporary broker's license to be issued but only if the proper fee of $175.00 is paid

A

In wood framing, what are the members called that frame the structure? A. Studs B. Beams C. Joists D. Rafters

A

Jared is buying Victoria's house. The closing date (day belongs to seller) of the sale transaction is September 1 (day 244 of the year). Current year real estate taxes are $2,100 (will be billed to buyer next year). Use the 365-day method for prorating. What is the seller's share of the real estate taxes? A. $1,403 B. $2,100 C. $1,050 D. $702

A

Seller David requires a 4% deposit on all offers. Buyer Jack wants to offer $115,000 for the property. The property was appraised at $122,000. What must the earnest money deposit be if Jack presents his current offer? A. $4,600 B. $4,740 C. $4,880 D. $2,340

A

The right to zone land and the right to acquire ownership of land by eminent domain are both examples of: A. a public interest. B. a possessory interest. C. an encumbrance. D. an estate in law.

A

The subject has $8,000 pool and a $2,000 chimney but no porch. A comparable that sold for $199,000 has a $3,000 porch but no pool or chimney. Assuming all else is equal, what is the adjusted value of the comparable? A. $206,000 B. $186,000 C. $189,000 D. $192,000

A

To receive a real estate license, which of the following is true? A. must be 18 years of age or older B. must be a citizen of the United States C. must be a citizen of North America D. must be a resident of Missouri

A

Tom, a licensed salesperson for 20 years obtains his broker's license during the current licensing period. Which of the following will Tom have to take in order to renew his license? A. 3 hours of core - 9 hours of electives B. 6 hours of core - 6 hours of electives C. 24 hours of continuing education D. 24 hours - Missouri Real Estate Practices Course

A

Which of the following best defines the term procuring cause? A. Actions that demonstrate the unbroken efforts of an agent that are responsible for the buyer making a decision to complete the sale B. Being involved at some point in the transaction C. Scheduling and conducting open house tours D. Establishing a marketing plan for the listing

A

Which of the following duties best describes what an agent owes customers? A. Fairness, care, and honesty B. Obedience, confidentiality, and accounting C. Diligence, care, and loyalty D. Honesty, diligence, and skill

A

What is a judgment lien and how long does it last?

A judgment lien results from a lawsuit. It attaches to real and personal property as a result of a money judgment issued by a court in favor of a creditor. It lasts for ten years, unless the period is extended as provided within the code.

A house sells for $237,000. What would Jane's commission rate be as a percent if she received a check for $11,400? A. 4.6% B. 4.8% C. 6.2% D. 5.4%

B

A licensed broker may engage in all EXCEPT: A. Assist buyers of real estate in obtaining information on various mortgage loans B. Create and write leases without the approval of legal council C. Give an opinion of value of a property for the purpose of obtaining a listing from a prospective client D. Collect rental payments for others

B

A full legal description in a recorded plat must include: A. the lot's acreage. B. the subdivision's zip code. C. the subdivision's location within a section, a township, a county, and a state. D. the plat owner's legal mailing address.

C

A home buyer pays $1,800 / month for the interest-only loan on his new house. The loan's interest rate is 6%. If he obtained an 80% loan, what was the purchase price? A. $216,000 B. $275,000 C. $450,000 D. $360,000

C

A licensee attended three continuing education courses for the elective hours. Each course was 6 hours long. How can she apply these to her renewal requirement? A. use 9 for this period; carry 9 into the next licensure period B. use 12 hours for credit even though she only needs 9 elective hours C. use 9 hours for electives D. use all 18 hours for total accreditation this renewal period

C

A motel desk clerk gives the names of persons looking to purchase a home who are moving into town to a salesperson friend in exchange for a referral fee. Which BEST describes the situation? A. they would NOT need a license since their primary income comes from their salary B. they had a license, they could accept referral fees from the salesperson C. they would need a license and would only be able to accept compensation from their broker D. they could accept compensation without a license as long as it was not in money form

C

Adverse possession is a form of: A. constructive notice. B. estoppel. C. involuntary title transfer. D. title plant.

C

All of the following will terminate a contract EXCEPT: A. performance of the contract. B. mutual agreement to cancel the contract. C. assignment of the contract. D. abandonment of the contract.

C

All property in the United States is owned under the: A. alluvial system. B. effluvial system. C. allodial system. D. afeudal system.

C

Amy agreed to a contract price of $100,000 for a home and secured a mortgage loan for $80,000. If the appraised value is $110,000, what is the loan to value ratio? A. 100% B. 82% C. 80% D. 125%

C

An actor rented a house from May 15 to August 5 while she was working on location. What kind of estate does she possess? A. Tenancy from period to period B. Estate at will C. Estate for years D. Freehold estate

C

An investor paid $43,000 for a lot and $520,000 to have a strip mall constructed on it. He has depreciated the property for the past 15 years on a 39-year straight-line schedule. If he sells the property this year and realizes $710,000 after closing expenses, what is his capital gain? A. $233,000 B. $190,000 C. $347,000 D. $433,000

C

Can the MREC suspend a license while the salesperson is under investigation? A. Yes, the MREC can suspend a license anytime they want. B. Yes, a salesperson's license can be suspended, but a broker's cannot. C. No, a salesperson must have a hearing and be found guilty by the AHC before the MREC can suspend his license. D. No, once a license has been issued, it cannot be suspended for any reason other than a felony.

C

Chapter 339 of the Missouri Statutes is also known as: A. law of agency B. code of ethics C. license law D. administrative commission code

C

Christine has monthly loan payments of $1,857. Her loan is for $300,000 @ 6.3% interest. How much of her first payment goes towards interest? A. $1,757 B. $100 C. $1,575 D. $282

C

Dan is buying Jessica's house. The closing date (day belongs to seller) of the sale transaction is March 9th. Current year real estate taxes are $1,900 (will be billed to Dan next year). Use the 365-day method for prorating. What is Jessica's share of the real estate taxes for the current year? A. $364 B. $390 C. $354 D. $1,546

C

Debra wants to net $100,000 on her house. Her closing costs will be 15,000 plus a 6% commission. She owes $310,000 on her loan. What is the minimum listing price that Debra can agree to? A. $438,221.39 B. $425,000 C. $452,127.66 D. $452,100

C

How many broker members are there on the MREC? A. 4 B. 5 C. 6 D. 7

C

If Mary wants to sell her interest as a tenant in common but cannot find a buyer, what can she do to convert her interest to cash? A. Sue to convert her share to a tenancy in severalty B. Sell the property and pay the other owners their share C. Initiate a partition suit D. Nothing

C

If a borrower's monthly interest payment on an interest-only loan at an annual interest rate of 7.3% is $877, how much was the loan amount (rounded to the nearest hundred)? A. $120,100 B. $100,300 C. $144,200 D. $134,200

C

If a broker changes his company address, he must: A. Phone the MREC B. Notify the MREC by registered mail C. Give the MREC written notice within 10 days D. Give the MREC written notice within 30 days

C

If the roof a property cost $14,000 and its economic life is 18 years, what would its value be after four years using a straight-line method of depreciation? A. $13,222 B. $9,240 C. $10,889 D. $12,666

C

If you receive a "Certificate of Completion" on Feb. 1, what is the last date that you may apply for the license? A. July 1 B. July 20 C. August 1 D. August 20

C

The act of creating an agency relationship in which the principal accepts the conduct of someone who acted without prior authorization is called what? A. Revision B. Reaction C. Ratification D. Presumptive

C

Two parcels of land priced at $1,200 per acre were purchased. One parcel was 15 acres in size and the other was 1 mile square in size. How much did these two parcels cost together? A. $180,000 B. $640,000 C. $786,000 D. $1,020,000

C

Unlike a determinable estate, the grantor of a condition subsequent estate: A. has no control over how the property is used. B. automatically retakes ownership if restrictions are violated. C. may repossess the property within a limited time frame if restrictions are violated. D. is limited in the kind of restrictions that can be placed on the grantee.

C

Violet has a FHA loan for $90,000. The lender is requiring a 1% discount point to the lower the interest rate. What amount is the lender charging for the discount point? A. $600.00 B. $90.00 C. $900.00 D. $1,000.00

C

What form of limited agency is a good alternative to dual agency? A. Non-agency B. Undisclosed dual agency C. Designated agency D. Buyer brokerage

C

What is 75% converted to a decimal? A. 75.0 B. 7.50 C. 0.75 D. 0.075

C

What is a "block" in the Lot and Block system of description? A. An area defined by the intersection of parallel and perpendicular lines B. An individual plat of survey C. A group of lots in a subdivision D. A uniform, square lot

C

What is unregulated property use likely to jeopardize? A. The rights of developers to build new properties. B. The levels of income tax within the area. C. The value of properties within an area. D. The rights of owners to sell their properties.

C

When a broker closes his office, the salesperson must find a new broker. The broker who is closing the office and the salesperson must do all of the following EXCEPT: A. the broker must notify the commission immediately that the salesperson will no longer be associated with him B. the broker is obligated to return the salesperson's license with the (office) closing statement to the MREC C. if the broker does not notify the MREC, then the salesperson can never transfer to a new broker D. the salesperson must return all property to the broker, including listings, forms, signs, etc.

C

When a home is listed, what is the most limited agency that can be created? A. Agency coupled with an interest B. General agency C. Special agency D. Universal agency

C

Which foundation is a flat concrete pad poured directly on the ground? A. Fundamental foundation B. Joist framing C. Slab-on-grade D. Pitch foundation

C

Which of the following individuals would be required to have a real estate license? A. An attorney B. An auctioneer employed by the owner C. A friend of a licensee who receives compensation for referring a client to the licensee D. A developer selling Missouri land owned by the developer.

C

A broker who had several offices went about once a week to each office to check them out. Since he had no other broker on staff, is this legal? A. Yes, as long as he saw each office at least once per week. B. Yes, as long as he was readily accessible by telephone. C. No, a broker can only manage two offices at one time. D. No, because he was not in direct control of the salespersons' actions.

D

A building has 9 apartments generating annual potential rent of $1,500 each month. Vacancy = 6% and annual expenses are $84,000. Vending machines yield $1,800 per year. What is the NOI? A. $152,280 B. $79,800 C. $88,550 D. $70,080

D

A friend who was getting a divorce called the broker to ask the broker to complete a quit claim for the friend to deed the property to his ex-wife. Can the broker do this? A. Yes, because a broker is allowed to complete standardized forms even when he is not involved in the transaction. B. Yes, the broker may complete the form for a nominal fee. C. No, the broker can never complete a quit claim deed since it is not a standardized form. D. No, since he is not a party to the transaction, he would be practicing law if he completed the form.

D

A home seller wants to net $15,000. If he has agreed to pay a 5% commission, the loan payoff is $94,000 and closing costs are $16,000, what must the minimum listing price be? Round to the nearest $100. A. $125,000 B. $130,700 C. $136,300 D. $131,600

D

A management agreement between a property manager and an owner must include all of the following EXCEPT: A. identification of the property B. specify the terms and conditions on which the broker will remit income from the property C. specify whether security deposits will be held by the broker or the owner D. today's date

D

A new agent got permission from friends to put "for sale" signs in their yards. When buyers called in, she told them the house had sold, but she would be happy to help them find another. Is this permissible? A. Yes, it's simply a sales technique. B. Yes, as long as friends were justly compensated. C. No, since the properties were not really sold. D. No, since the properties were not really "for sale" and this is a misrepresentation.

D

A property's return on equity ratio is 28% and generates a cash flow of $70,000. How much equity does the owner have (to the nearest hundred)? A. $216,700 B. $18,900 C. $235,000 D. $250,000

D

A town has a tax base of $411,000,000 and a budget of $850,000. What is the tax rate in terms of mills? A. 21 mills B. 4.8 mills C. 48 mills D. 2.1 mills

D

Auctioneer Grant is negotiating to auction off some odds and ends for a farm family. In the course of the negotiation, the farmer asks Grant if he could also auction off the farm. Which BEST describes the situation? A. He would NOT have to have a real estate license as long as he sold the personal property and the farm together. B. He would NOT have to be licensed as long as he sold only the personal property and the land without any improvement on the land itself. C. He would have to have a real estate license to auction off the farm. D. He would NOT have to have a real estate license as he was auctioning it for the owner.

D

Broker A received an offer of $189,000 on a $200,000 listing. After the seller had given the offer to his attorney to review, another offer for $176,000 came in. What should the broker do? A. present the offer as a backup B. do not present because it was not for full price C. wait until the first offer is acted upon D. present the offer immediately

D

How many acres are there in the N ½ of the NE ¼ and the NE ¼ of the SE ¼ of a section? A. 20 acres B. 40 acres C. 80 acres D. 120 acres

D

If a borrower had an interest rate of 5 1/4 percent and refinanced, lowering the interest rate by 3/8 percent, what is the amount of interest after refinancing? A. 4 ½ percent B. 5 percent C. 4 ¾ percent D. 4 7/8 percent

D

If a life tenant purposely damages or misuses a property it is known as what? A. Pillage B. An act of contempt C. Vandalism D. An act of waste

D

If the MREC receives a complaint against a broker, they could subpoena: A. past clients and customers from out of state B. the broker's business and personal records C. people from out of state D. the broker's business accounts and records

D

If you owe $14,000 on a new loan and pay $880 of interest for the year, your interest rate is? A. 0.048 B. 0.123 C. 0.057 D. 0.063

D

In dealing with a potential customer, a salesperson may A. advertise a guaranteed profit on a property B. guarantee future profits which may result from the resale of real property C. both of the above D. neither of the above

D

In what kind of estate does ownership revert to the grantor of the estate if usage fails to conform to a stated condition in the grant? A. Fee simple absolute B. Land Trust C. Life estate with a remainderman D. Fee simple defeasible

D

In what type of foreclosure does a lender give a borrower a notice of default in a form prescribed by the state? A. Judicial foreclosure B. Strict foreclosure C. Standard foreclosure D. Non-judicial foreclosure

D

The MREC, believing a licensee has violated the law, may file a complaint: A. only in the U.S. District Court. B. only in the appeals court. C. only in a court of the county where the act was committed. D. in any court of competent jurisdiction.

D

The MREC, believing an unlicensed person has violated the law, may file a complaint in: A. only the U.S. District Court B. only the appeals court C. only the court in the county where the act was committed D. any court of competent jurisdiction

D

The broker changes his company address. He must A.phone the MREC B. notify the MREC by registered mail C. give the MREC written notice within 5 days D. give the MREC written notice within 10 days

D

The disbursements from an escrow account of a property manager must show all EXCEPT: A. check number B. indicate the related transaction C. indicate to whom the check was written and why D. balance of the account to the owner

D

The distinguishing feature of a leasehold estate is: A. ownership of an interest by a tenant. B. temporary ownership of the full bundle of rights in a property. C. unlimited ownership of one right in the bundle of rights in a property. D. duration limited by a lease term.

D

The period of delinquency allowed before a lender begins foreclosure proceedings is determined by: A. statute. B. the secondary mortgage market. C. investors. D. the lender.

D

The property manager must make a written statement of property income to the owners of rental properties how often? A. once a week B. once a month C. once every six months D. once a year

D

When does an offer become a contract? A. When the offer is presented to the offeree B. When the offeree gives the offeror notice of the acceptance C. When the offeree initials the details of the offer D. When the offeree signs the offer/counteroffer and delivers the signed copy to all parties.

D

Which is not true regarding listings? A. Listing agreements may NOT have automatic extensions. B. Listing agreements must have an expiration date. C. A copy of the listing agreement must be given to the seller. D. Both buyer and seller must sign the listing agreement.

D

Which of the following best describes "agency coupled with an interest?" A. When a licensee knows the seller in a property transaction B. When a licensee knows the buyer in a property transaction C. When a licensee has previously sold the property in a current transaction D. When a licensee holds interest in a property transaction

D

Which of the following does NOT receive revenues from property taxes? A. Parks B. Fire services C. School districts D. Private enterprises

D

Which is the most common type of framing for residential construction? A. Balloon B. Platform C. Stud D. Post and beam

B

Who decides how title to real estate will be held?

The grantee or buyer decides. The seller decides the type of estate transferred.

What are two reasons for making land the basis of taxation?

1) The usual stability of land values makes land taxes predictable. 2) The attachment of taxes to land makes enforcement reliable. 3) Land is traditionally related to productivity and wealth; government takes its share.

Jackie obtains a 60% LTV loan on her new $250,000 home with an annual interest rate of 5.5%. What is the first month's interest payment? A. $688 B. $1,146 C. $458 D. $750

A

"Real estate" includes such things as: A. fences, sidewalks, and piers on a parcel of land. B. mobile homes temporarily parked on a parcel of land. C. timber that has been cut and is lying on a parcel of land. D. business equipment an owner or tenant has placed on a parcel of land.

A

A 198-foot x 330-foot lot sold for $30,000. What was the price per acre? A. $20,000 B. $21,780 C. $30,000 D. $43,560

A

A broker opened a branch office. Who could have authority to manage the office? A. broker-salesperson B. salesperson C. any licensee so designated D. the broker

A

What is 0.0475 converted to a percentage? A. 4.75% B. 0.475% C. 47.5% D. 475%

A

How can the priority order of a junior lien be changed?

A lienor can change the priority of a junior lien by voluntarily agreeing to subordinate, or lower, the lien's position in the hierarchy.

What are the two types of heat pumps available?

Air source and ground source

What appraisal methods do tax assessors use to determine the assessed value of a property?

Assessors use any of the standard appraisal methods—Sales Comparison, Cost, Income—to assess properties, depending on the type of property. Agricultural land valuation is based on land productivity. The assessor uses whatever approach provides the best estimate of market value, which may then be modified according to formulas to arrive at an assessed value.

A Missouri broker: A. Shall keep all records for 10 years B. Shall retain for a period of at least three (3) years true copies of all business books C. Is NOT required by law to keep records for a certain time D. Can charge a separate fee related to retention of records

B

A borrower obtained a 70% loan for $600,000. What was the price of the home (to the nearest hundred)? A. $420,000 B. $857,000 C. $750,000 D. $769,000

B

Which of the following areas in the Rectangular Survey System run north and south? A. Base B. Range C. Township D. Section

B

Which type of pipe is typically found in drainage systems? A. Aluminum B. Cast iron C. Plastic D. Brass

B

What is the purpose of a deficiency judgment?

It enables a lienor to attach the personal and real property of a lienee when the foreclosure sale has not produced enough funds to pay what the lienor is owed.

A rented office space has a monthly income of $3,800. A suitable Gross Income Multiplier derived from market data is 11.1. What would the estimated value be? Round to the nearest $1,000. A. $380,000 B. $422,000 C. $506,000 D. $342,000

C

A sale transaction closes on April 15th. The day of closing belongs to the seller. Real estate taxes for the year, not yet billed, are expected to be $2,110. According to the 365-day method, what is the seller's share of the tax bill? A. $626 B. $675 C. $607 D. $721

C

An apartment complex generates $905,000 in effective rental income and $14,000 in other income. The same complex has $415,000 in operating expenses and $39,000 as reserves. What is the Net Operating Income of the complex? A. $490,000 B. $504,000 C. $465,000 D. $451,000

C

What is 25% converted to a decimal? A. 25.0 B. 2.50 C. 0.25 D. 0.025

C

Which of the following is included in surface rights? A. Air rights B. Subsurface rights C. Surface water rights D. Mineral rights

C

Land sells for $9,000 an acre. What will 750,000 SF of land sell for? Round to the nearest thousand. A. $105,000 B. $16,000 C. $129,000 D. $155,000

D

Name three types of pipes used in plumbing systems.

Cast iron Copper PVC

Which of the following statements about eminent domain is TRUE? A. It can only be applied in cases where the owner agrees with the government's superior claim. B. The government agency exercising the power is under no obligation to compensate the owner. C. The government may take a privately-owned property and use it for any purpose whatever, including reselling for a profit. D. No private property is exempt from the exercise of this power.

D

Which of the following would require a real estate license? A. an attorney transferring property for a client B. an auctioneer employed by the owner C. a property manager employed by a broker to only show apartments D. a person who negotiates or helps consumers consummate option to buy or sell real estate

D

What responsibilities does a seller's agent have as a result of the Lead-based Paint Act of 1992?

Disclose known lead problems in properties built before 1978; give the buyer or lessee a HUD booklet about lead; provide relevant records.

Which type of leasehold estate is commonly referred to as a periodic tenancy?

Estate from period to period.

What are the three types of frame construction?

Platform Balloon Post and Beam

What does a footing do?

Supports the entire weight of a structure.

Give some examples of when one might own equitable title rather than legal title.

The buyer, during the period of contract contingency; a mortgagee who has the right to execute a strict foreclosure of the mortgage property (in a lien-theory state); a mortgagor (borrower) in a title-theory state; the buyer under a contract for deed purchase until the contract is fulfilled; the holder of an option to buy.

What is the function of a deed?

The deed is a transaction document, not an ownership document. It conveys title, when properly delivered and accepted (and registered, in Torrens counties), then ceases to have any transfer function except as evidence that a conveyance occurred, and as evidence of the warrants the conveyor made.

Give some examples of materials that are regulated as being harmful to soil and water quality.

dioxins, lead, mercury, MTBE, PCB.

Name the five major rights included in the bundle of rights to real estate.

possess use transfer encumber exclude

Name four common types of zone.

residential commercial industrial agricultural public planned unit development (PUD)

The lender quotes closing costs of $800 plus 2 points on a $610,000 loan. How much will the borrower have to pay? A. $13,000 B. $6,100 C. $16,050 D. $11,400

A

The sellers, Mr. and Mrs. Hernandez, listed their property for $112,000 and agreed to an exclusive right to sell listing agreement at a 4% commission to be paid to Lucky Nines Estate Company at closing. The sellers sold the property themselves during the listing period for $106,000. How much commission, if any, would Lucky Nines Real Estate Company be entitled to at closing? A. $4,240 B. $4,480 C. $0 D. $4,360

A

In a cooperative, who pays the mortgage? A. The cooperative corporation B. The board of directors C. The shareholders D. The management

A

What is the policy of concurrency?

The policy requires subdivision developers, at the same time as they are developing their projects, to make improvements that will minimize the negative impact of the project on municipal infrastructure.

What are the primary differences between tenancy in severalty and co-ownership?

The primary difference is the number of owners—one vs. two or more. Secondarily, the treatment of the estate on the death of an owner. In a severalty, the estate passes to heirs by probate. In a co-ownership, the estate may pass to heirs (tenancy in common) or to surviving co-owners (joint tenancy, tenancy by the entireties, tenancy in partnership) or to a combination (community property).

A condominium unit had $30,000 net income and sold for $500,000. What was the rate of return? A. 0.05 B. 0.06 C. 0.075 D. 0.09

B

Seller Chris receives an offer of $130,000 on a property he listed at $142,000. How much is the offer as a percent of the listing price? A. 93% B. 90.2% C. 91.5% D. 89.7%

C

Which record would show you who owned a property back in 1940? A. Title of Ownership B. Title Record C. Chain of Title D. Chain of Ownership

C

By definition, personal property: A. is ownership of real property. B. is ownership of unimproved land. C. is ownership of anything that is not real estate. D. is tenancy of real property owned by another person.

C

A shopping mall grosses $625,000 / month. If the market value of this property is $52,000,000, what is its gross income multiplier (GIM)? A. 6.9 B. 10.4 C. 7.7 D. 83.2

A

A trust established for the benefit of a third party, but only for the lifetime of the grantor, is called a: A. living trust. B. testamentary trust. C. planned trust. D. beneficial trust.

A

How many owners can there be in a tenancy in severalty? A. One B. Two, if married C. Several D. Any number

A

If a rectangular office space is 72 feet wide and has a 410-foot perimeter, what is its area? A. 9,576 square feet B. 19,152 square feet C. 5,184 square feet D. 7,755 square feet

A

If a salesperson sells 3/4 of an acre for $80,000, what was the price per square foot rounded to two decimal spaces? A. $2.45 B. $3.00 C. $1.49 D. $1.50

A

If a subdivision has a restrictive covenant, it: A. must be adhered to by all subdivision owners. B. is an ordinance set by the local zoning board. C. means that the properties cannot be rented. D. supersedes public policy or law.

A

Give some examples of materials that are regulated as being harmful to air quality.

asbestos, carbon monoxide, formaldehyde, lead, mold, radon.

Describe the four principal forms of title evidence.

1. Torrens certificate—a type of title certificate that also acts as a deed of conveyance; title and encumbrances are recorded on the certificate. 2. title insurance policy—an insurance policy indemnifying the policy holder against losses from title defects; the insurer's "guaranty." 3. attorney's opinion of abstract—a written statement from an attorney stating an opinion of marketability based on examination of the title abstract. 4. title certificate—a statement of the condition of title as of the date of the certificate.

What is a "buffer zone?" A. A transitional zone between a residential zone and a commercial zone. B. An area zoned as a public park. C. A temporary zone created to allow users to come into compliance with a change in zoning. D. A zone around the boundaries of a municipality.

A

How many members are there on the commission? What are the qualifications to be on the commission?

7 members. U.S. citizen. appointed gov. with the consent of Missouri Senate. 6 members must be licensed for at least 10 yrs and 1 member must be from the general public. terms are 5 yrs. commissioners receive $75/day plus expenses when they are meeting. all members vote. must be MO residents for at least one year. may hold an inactive RE license during their employment.

A complaint has been filed against Broker Grant. The MREC has the power to: A. subpoena Broker Grant and his business records B. subpoena Broker Grant's personal accounts C. fine Broker Grant D. subpoena anyone in any state the commission chooses

A

A condominium owner can: A. sell or mortgage the condominium unit without hindrance from individual owners of neighboring units. B. sell the interest in the physical unit separately from the interest in the common elements. C. exclude non-owners from the unit owner's pro rata portion of the common elements. D. exclusively possess and use those portions of the common areas structurally or functionally necessary for the operation of the unit.

A

A corporation was entering the real estate business. It must be registered with: A. MREC B. HUD C. local county recorder D. the Board of Realtors

A

A farmer wants to net at least $10,000/acre on the sale of his 80-acre property. If he allows for a total of 10% for commissions and closing costs, what should his listing price be per acre? Assume the farmer has no mortgage. A. $11,111 B. $11,000 C. $10,000 D. $10,900

A

A fine jewelry store leased a space at the mall with a base rent of $1,800 a month, plus 4% of all sales over $200,000. If the gross sales were $325,000, what was the total amount of rent paid by Heinz Fine Jewelry at the end of the year? A. $26,600 B. $21,600 C. $125,000 D. $5,000

A

A homeowner receives a tax bill that includes an amount for the school district, taxed at $9.00 per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the taxpayer have to pay for these two items if the property's taxable value is $336,000? A. $4,032 B. $3,024 C. $8,064 D. $5,040

A

A house is sold for $105,500 and the commission rate is 6 percent. If the commission is split 60/40 between the selling broker and the listing broker, respectively, and each broker splits his share of the commission evenly with his salesperson, how much will the listing salesperson receive from this sale? A. $1,266 B. $2,532 C. $3,165 D. $1,899

A

A legal description of a property is one that: A. accurately locates and identifies the boundaries of the property and distinguishes it from all other properties. B. notes the perimeter size and square footage of the property. C. is accepted by a licensed surveyor as suitable for inclusion in a survey of the property. D. written by an attorney licensed to practice real estate law in the state in which the property is located.

A

A lender uses a 39% debt ratio. A borrower earns $40,000 / year and has monthly non-housing debt payments of $700. What housing payment can she afford? A. $600 B. $700 C. $900 D. $1,300

A

A licensed agent acting as a property manager deposits current rental money received into a: A. Property management escrow account B. Business account C. Management account D. Security deposit escrow account

A

A licensed broker acting as a property manager deposits current rental money into a(n): A. property management escrow account B. business account C. management account D. escrow account

A

A licensed salesperson wants to include her home phone number on a sign that she placed on one of her listed properties. The sign must also include her broker's: A. business telephone number B. beeper number C. home phone number D. business address

A

A mortgage lien is a type of: A. voluntary lien. B. involuntary lien. C. statutory lien. D. general lien

A

A potential buyer asked a broker to show him/her where the property lines are located. The broker gave a partial metes and bounds description by stating that the boundaries ran from a stone wall to a stake even though he knew that his description was not necessarily accurate. When the buyer attempts to put up a fence his/her neighbors inform him/her of the correct property lines. The buyer: A. May file a complaint based on misrepresentation to get the broker's license suspended or revoked B. May put up the fence anyway as the metes and bounds description takes precedence over the neighbor C. May do nothing as they could have had a survey D. May do nothing as the broker gave only a partial description

A

A property has sold for $185,000. The listing agreement calls for a commission of 6.5%. The listing broker and selling broker agree to share the commission equally. What will the listing agent receive if the agent is scheduled to get a 65% share from his broker? A. $3,908 B. $2,109 C. $4,209 D. $4,467

A

A property is being appraised by the Cost Approach. The appraiser estimates that the land is worth $17,000 and the replacement cost of the improvements is $235,000. Total depreciation from all causes is $23,000. What is the indicated value of the property? A. $229,000 B. $275,000 C. $252,000 D. $212,000

A

A property's taxes are $9,540 and are paid for in arrears. The property was sold, and closing took place on March 7. The seller was responsible for the day of closing. Using the 360 day method, how will taxes be prorated? A. Credit the buyer $1775.50 and Debit the Seller $1775.50 B. Credit the seller $186 and debit the buyer $186. C. Credit the buyer $1,590 and debit the seller $1,590. D. Credit the buyer $1,675.50 and debit the seller $1,675.50.

A

A salesperson working as an independent contractor for a broker may: A. List and sell 10 houses a year B. Accept compensation from another broker C. Accept compensation directly from the owner D. Pay compensation directly to another salesperson that assisted with the sale

A

A seller can agree to accept or reject which of these options when he or she signs the listing contract? A. Subagency B. Facilitator C. Disclosure D. Non-agency

A

A seller of a property, listed at $200,000, accepted a 90% offer. The home appraised at $185,000 and the buyers obtained a loan for 85% for 30 years at 5% interest. What is the first month's interest? A. $637.50 B. $7,650 C. $737.50 D. $6,750

A

A written complaint had been filed against a salesperson. However, the salesperson was in the process of transferring to another broker. Which of the following is TRUE regarding the situation? A. the new broker would usually be notified by the Real Estate Commission (MREC) of the fact that a complaint is pending B. the salesperson must wait 60 days to transfer to another company C. the salesperson must wait 45 days to transfer to another company D. the complainant would get a written record of the salesperson's answer to the complaint

A

A young couple is selling their first residence and would like a lawyer to check over the sale contract. The listing agent, who knows the contract is well written and that the contract used is approved by the attorney of their local association of REALTORS ®, advises them that a lawyer's services would be an unnecessary expense and would only serve to reduce their net proceeds from the sale. Which of the following statements is true? A. The salesperson should never advise against or discourage the use of an attorney in any transaction in which he/she is involved. B. The salesperson may advise against using an attorney, but only if it will save the sellers money. C. The salesperson's actions were correct because a lawyer must check sales contracts on commercial transactions only. D. The salesperson is to be commended for looking out for the best interest of his principals.

A

An FHA-insured loan in the amount of $57,500 at a 6 ½% interest rate for 30 years was closed on March 17. The first monthly payment is not due until May 1. If the interest is paid monthly in arrears, how much pre-paid interest does the buyer owe at closing? (Use a 360-day year) A. $145.32 B. $311.52 C. $551.20 D. $3,737.50

A

An apartment building that sold for $780,000 had a monthly gross income of $8,000. What is its monthly Gross Rent Multiplier? A. 97.5 B. 62.4 C. 103 D. 158

A

An estate from period-to-period will continue as long as: A. the tenant makes, and the landlord accepts, regular rent payments. B. the term specified in the lease. C. the period is less than a year. D. the landlord has not given notice of termination.

A

An interest in real estate that includes the right to possess is considered: A. an estate in land. B. a freehold estate. C. a fee simple estate. D. an encumbrance.

A

An investment property generates a cash flow of $550,000 and has an ROI of 12%. What is the value of the property assuming the numbers above (to the nearest thousand)? A. $4,583,000 B. $66,000 C. $6,111,000 D. $2,619,000

A

Antitrust laws prohibit: A. market allocation. B. trade unions. C. market coops. D. volume discounting

A

Any licensee doing business under any name other than the exact name shown on his/her license: A. Shall furnish the commission a copy of the registration of the fictitious name as submitted to the Secretary of State B. Will not be issued a license under any circumstances C. Will only need to register with the secretary of state D. Will be fined $10,000 by the MREC and the AHC

A

Assuming that the listing broker and the seller broker in a transaction split their commission equally, what was the sales price of the property if the commission rate was 6 ½ percent the listing broker received $5,187? A. $159,600 B. $79,800 C. $119,700 D. $179,800

A

At the time of the listing, a broker noticed a large crack in the wall that was partially covered by boxes. In showing the property, the licensee should: A. inform the prospective buyer of the crack B. inform the prospective buyer of the crack only if asked C. not tell the buyer since the agent represents the seller D. move the boxes to allow the buyer to see for themselves

A

At what point must a listing broker FIRST disclose to a buyer the broker's agency relationship with the seller in a residential real estate transaction? A. before the buyer gives the broker personal or financial information B. when the broker writes the contract C. at the first written contact D. at the first oral contact

A

Broker Carr has taken a listing from Seller Dole, what must he do? A. He must give him a copy of all documents at the time of signing. B. He may send him a copy the next business day. C. He must give him a copy within 3 business days. D. He must give him a copy at the time of signing only if requested by Seller Dole.

A

Broker Carr has taken a listing from Seller Dole. Which is true? A. he must give him a copy at the time of signing B. he may send him a copy the next business day C. he must give him a copy within 3 business days D. he must give him a copy at the time of signing if requested by the seller

A

Dawn, a licensed salesperson, was at a party and a young couple expressed interest in buying a new home. Dawn mentioned that her own home was for sale and that she would be happy to show it to them. In this case, which of the following is true? A. The salesperson must disclose that she is licensed and the owner of the property. B. The salesperson must have the permission of her broker before showing her home to a prospective purchaser. C. Because this is the salesperson's own property, she need only disclose that she is the owner of the property. D. The salesperson is prohibited from selling her own property.

A

Dole is considering creating a real estate company as a corporation. If he does so, which license would be required of the corporation itself? A. a broker's license B. a broker-officer's license C. a salesperson's license D. a broker-associate license

A

Eager Edgar, a licensed salesperson, lists seller Sue's home. After Sue signs the listing agreement, what is the proper procedure for Edgar to take? A. He must leave a copy of the listing agreement with Sue at the time of signing. B. He may wait to send a copy of the listing agreement to Sue until after the broker reviews and signs the documents. C. He may wait to send a copy of the listing agreement to Sue until after the property is placed in MLS. D. He is not required to furnish a copy of the listing agreement at any time because it is an employment contract rather than a sale contract.

A

How is a lien terminated? A. Payment of the debt that is the subject of the lien and recording of the satisfaction B. Transfer of the property that has the lien C. Recording of another lien that is superior D. Death of the lienor or lienee

A

How long does a salesperson have to deliver earnest money to the broker? A. Immediately B. 2 banking days C. 5 banking days D. 7 banking days

A

If a sworn complaint is filed with the MREC alleging misconduct on the part of a licensee, the Commission: A. Shall investigate the actions of the licensee against whom the complaint is made B. Must investigate the complaint only if the commission thinks the violation is bad C. Will be limited in their investigation to only the business dealings noted in the sworn complaint D. Even if the commission does not receive the complaint in writing, they must proceed with an investigation

A

If a tenant occupies a leased property without the consent of the landlord after a lease expires, the type of estate that results is called: A. an estate at sufferance. B. a holdover estate. C. an adverse leasehold. D. a hostile leasehold.

A

If an owner gave a broker money for repairs on a rental property, where should the broker deposit the money? A. property management escrow account B. property management repair account C. broker's escrow account D. broker's operating account

A

If an owner of real property dies without leaving a will and with no legal heirs, what will generally happen to the property? A. It will revert to the state or county by escheat. B. It will transfer to the decedent's executor. C. It will be divided equally among adjoining property owners. D. It will become a public easement.

A

In a suit for damages by reason of default, the damaged party may claim liquidated damages if: A. the contract stated a specific amount due to a damaged party. B. the contract stated that a defaulting party could not profit from the contract. C. the defaulting party owns property that can be foreclosed to pay the damages. D. the contract stated that a damaged party could take legal action to enforce the contract.

A

In the event of a dispute over earnest money: A.the broker should release the money to whomever the contract calls for B. the broker should release the money to the seller due to the fiduciary situation C. the broker should hold the money until both parties sign a release D. the broker should hold the money until all parties to the contract sign a release, or within 365 days if the parties cannot come to terms, release the monies to the State Treasury.

A

Jerry recently obtained a 65% loan on his $295,000 home, and he had to pay $4,300 for points. How many points did he pay? A. 2.2 points B. 1.5 points C. 1.8 points D. 3.4 points

A

One of the negative features of foreclosure for the borrower is: A. the borrower's credit is damaged, making it difficult to purchase another home. B. the borrower loses any right to seek another mortgage for seven years. C. the borrower loses all equity, even if the sale yields more than the amount owed. D. the process happens so quickly that the borrower has no time to cure the problem.

A

Real property can be converted into personal property through the process of: A. severance. B. accession. C. affixation. D. inference.

A

Shelly bought a house five years ago for $150,000 and obtained an 80% loan. Now the home is worth $140,000 and her loan balance has been reduced by $12,000. What is Shelly's current equity? A. $32,000 B. $42,000 C. $44,000 D. $2,000

A

Testamentary trusts are distinct from other kinds of trust in that: A. they begin and end at specified times. B. they may be changed at any time. C. they may be used for real and personal property. D. they may name a bank or trust company as trustee.

A

The "bundle of rights" refers to a set of rights: A. enjoyed by the owner of a property. B. that is inseparable from a parcel of real estate. C. guaranteed to citizens by the Declaration of Independence. D. specified in a deed or land contract.

A

The MREC can appoint a temporary legal license in which case? A. upon the death of the broker to terminate all listing agreements and coordinate the closing of pending contracts between sellers and buyers B. a temporary salesperson's license may be issued in cases of extreme urgency C. if a broker could NOT obtain a partner D. to allow a licensee who has had a license revoked to reprove himself

A

The MREC received a formal, written complaint about Broker Grant's business conduct and intends to investigate the matter. In order to hold a hearing to decide the validity of the complaint, the MREC, may do which of the following? A. Subpoena Broker Grant to appear and give testimony. B. Subpoena any person in or outside the state of Missouri to produce records or other documentation which might have a bearing on the validity of the complaint in question. C. Close the broker's business until the issue is resolved. D. The MREC does not investigate -- only the AHC investigates.

A

The MREC, in investigating a licensee, may A. issue subpoenas for all records relevant to the complaint B. petition the attorney general for an injunction to keep the licensee from leaving the state C. make the licensee submit to a polygraph examination D. subpoena out of state residents who were involved in the transaction

A

The annual property taxes of $1,700 were paid in arrears by the buyer. If the closing took place on June 4th and the seller was responsible through the day of closing, how did this appear on the settlement sheet if the 360-day method is used? A. $727 DS, CB B. $727 DB, CS C. $973 DS, CB D. $973 DB, CS

A

The distinguishing feature of a condition subsequent estate is: A. the grantor must retake possession within a certain time frame if the grantee violates a restriction. B. the grantor automatically regains title if the grantee violates a restriction. C. the estate passes to a third party if the grantee violates a condition. D. the grantee can impose new restrictions on the grantee's use of the property even after title has passed.

A

To own an interest in real estate, a person must own: A. any combination of the bundle of rights. B. the right to use the real estate. C. legal title to the real estate. D. the complete bill of rights.

A

Two brokers are applying for a broker's license as a partnership. One of the two had been found guilty of embezzlement but has made full restitution. Which of the following is true? A. if the license is denied, they should contact the MAHC for a hearing B. one broker couldn't get the partnership licenses as long as she was a business associate of the other C. the MREC may never issue the license D. the brokers may apply to the MREC for a hearing if the license is denied

A

What is a tax deed? A. A conveyance instrument for a property that is sold to enforce a tax lien. B. A document recorded in title records showing that property taxes have been paid. C. A notice to a homeowner that a tax lien has been entered against the property. D. A document that gives a municipal authority the power to collect an individual tax bill.

A

What is a tax levy? A. The amount of money the municipality must raise through the property tax. B. A property's assessment of its fair market value. C. An automatic tax increase due to an increase in property assessments. D. A tax that is usually paid in installments over a number of years.

A

What is the volume of a 90' x 20' x 12' house? A. 21,600 cubic feet B. 1,800 cubic feet C. 3,750 cubic feet D. 36,000 cubic feet

A

What type of insulation is used for work on flat roofs, on basement walls, as perimeter insulation at concrete slab edges, and in cathedral ceilings? A. Rigid board insulation B. Spray foam insulation C. Batt and blanket insulation D. Reflective insulation

A

When a salesperson terminates his/her association with a broker, which of the following statements is true? A. The agent has six months to place his license with another broker or put his/her license on inactive status with the MREC. B. The agent may have friends' listings transferred to his/her new broker. C. The broker must return the salesperson's license to the MREC within 48 hours. D. The broker must give the agent his license when the agent submits a written notification of resignation.

A

Which must be licensed by the Missouri Real Estate Commission? A. the publisher of a magazine to aid "for sale by owners " in selling their homes B. a lake property developer registered with HUD C. an employee of a corporation selling corporate property D. an apartment manager representing the owner who shows rental units

A

Which of the following is a freehold tenant? A. The owner of a freehold estate. B. The lessee in a leased property. C. The lessee of a freehold estate. D. Any owner of an estate in land.

A

Which of the following would NOT terminate a joint tenancy? A. One of the tenants gets married. B. One of the tenants declares bankruptcy. C. The property forecloses. D. One of the tenants sells his or her interest.

A

What is the difference between a bargain and sale deed and a general warranty deed?

A bargain and sale deed covenants valid title but may not warrant against encumbrances or promise to defend against claims. A general warranty deed is a bargain and sale deed that includes assurances of valid title, no encumbrances, and willingness to defend against all claims.

John Junior, age 14, under duress from his father, signs a contract to buy a $75,000 sports car from his father, John Senior, for $10 a week plus a promise to "be a good boy" around the house, even though both father and son know that Junior intends to drive the car without license or insurance. Do you think a court would enforce this contract if either party decided not to go through with it?

A court might declare the contract void, voidable, or simply not a valid contract because Junior is a minor; the consideration is grossly insufficient or not clearly defined; Junior's signing is not entirely voluntary, nor is consent truly mutual; the purpose of the contract may not be legal, since Junior cannot legally operate the car, although it may be legal for him to own it.

Explain how a datum or benchmark is used to describe the elevation of a property in a legal description.

A datum or benchmark has an established elevation. A property description will state that the property is a number of feet above or below the datum or benchmark.

How are the two types of deed restriction created?

A deed condition is created in the transfer documents. A deed covenant is created by mutual agreement of the owner and others.

What is the most common type of heating system in North America and how does it work?

A forced-air heating system is the most common. It draws room air through ductwork and a filter into a furnace, where the air is heated. The warmed air is then blown back to rooms through ductwork.

How is a license different from a personal easement in gross?

A license may be informal and is revocable at any time. Revocation of a personal easement in gross may require the death of the grantee or express release of the easement by the grantee.

How is a life estate different from a fee simple estate?

A life estate is limited in duration to the life of the owner or other named person. When the life tenant dies, the estate passes to the original owner or another named party. The life tenant does not have the right to pass ownership to his or her heirs.

How does a special tax district differ from a permanent tax district?

A local government authority establishes a special tax district to pay for the cost of a specific improvement in a specific area. Special tax districts cease to exist once the costs of the specific project have been paid for, unlike permanent tax districts.

Most liens do not convey ownership. What is the one exception to that rule?

A mortgage lien conveys legal title to the lender.

What is a "homestead exemption?"

A portion of a property's value that is exempted from taxation because the property, or part of it, is owned and occupied as a family residence.

What is a sill plate and what does it do?

A sill plate is a wooden support member that is laid on top of and bolted to the foundation wall. This sill plate serves as the base for the wall framing.

What is a taxing district? Give several examples.

A taxing district is a governmentally-established entity, defined by a geographical boundary, that has the authority to collect taxes for specific purposes. Examples are school districts, library districts, and county bridge and highway departments.

What are some of the apparent advantages of a land trust as a way of owning property?

Anonymity; ease of transfer; ease of use as collateral; potential benefits in treatment of estate on death of beneficiary (grantor).

Define encroachment and give an example.

An encroachment is the unauthorized, physical intrusion of one owner's real property into that of another. An example would be a driveway extending beyond the lot line onto the neighbor's land.

What is the relationship between an executory contract and an executed contract?

An executory contract is waiting to be performed; once it has been performed, it is an executed contract.

The Statute of Frauds requires that most contracts that convey an interest in real estate be in writing. What does it mean to say under this doctrine that an oral contract may be valid, but not enforceable?

An oral contract to convey an interest may meet the five conditions for validity, but a court will not order a defaulting party to perform. However, if the parties do perform, the contract is executed and cannot be rescinded under the Statute of Frauds.

Describe the main features of the concept of community property.

Applies to legally married spouses; distinguishes between community property and separately-owned property; protects each spouse's ownership of the whole community property while spouses live; preserves half of community property for surviving spouse.

A branch office under a principal broker: A. would have to have its own set of licenses B. would operate under the principal broker's license C. would operate under a duly appointed salesperson D. would operate under its own broker's license

B

A broker had several branch offices. Which is true regarding the management? A. The broker would have to have direct supervision over the main branch and branch offices. B. A broker-salesperson can have direct supervision over the branch office. C. A salesperson must have direct supervision over the branch offices. D. Each branch office must have a full-time broker who does NOT sell or list.

B

A broker took earnest money from a friend and deposited it in the broker's personal account. This is: A. misrepresentation B. commingling C. waste D. a felony

B

A broker's branch office: A. would have all licensees licensed under the branch manager B. would operate under the same name and license as the parent office C. would operate under the same name, but under a different license than the parent office D. must have its own escrow account

B

A buyer secured a $125,000 loan at 4.5% interest rate. To receive a lower interest rate, the buyer was required to buy down three discount points. How much were the discount points? A. $3,550.00 B. $3,750.00 C. $4,250.00 D. $3,892.00

B

A buyer submits an offer to a seller and then dies in a car accident. Before learning of the buyer's death, the seller accepts the offer. Which of the following is true? A. The seller can force the buyer's estate to go through with the purchase. B. The buyer's death terminated the offer. C. The seller must make a new offer with the same terms to the buyer's heirs. D. The buyer's heirs have the option of enforcing the contract.

B

A buyer was told, by a licensed agent, that the second-story window air conditioner would remain with the house if the buyer paid the asking price. The salesperson had not confirmed this with the seller, and the seller removed the unit before closing. The buyer paid the full price for the house then discovered the unit missing and contacted the MREC to file a complaint. Which of the following statements is correct? A. The MREC will require the broker to buy an air conditioner for the buyers. B. The MREC may suspend the salesperson's license for making a misrepresentation. C. The MREC can only levy a fine against the salesperson equal to the cost of a new air conditioner. D. The MREC has no power or authority to take action.

B

A buyer will receive a power bill for an estimated $140 at the end of the month. At closing, the seller has used an estimated $67 in power. What should appear on the closing statement? A. Credit the buyer $73 and debit the buyer $67 B. Credit the buyer $67 and debit the seller $67 C. Credit the seller $73 and debit the buyer $73. D. Debit the power company $73 and debit the buyer $67

B

A contract between the buyer and seller failed. The buyer claimed the earnest money was his; the seller claimed the earnest money was his. After 60 days the broker sent a registered letter saying he would give the earnest money to the seller. Lacking response from either party when could the broker release the money? A. after 10 days B. after 15 days C. after the judgment of the court D. never, the broker must have a mutual release

B

A developer wants to develop a 20-acre subdivision. He figures that the streets and common area will take up about 25% of this overall area. If the minimum lot size is to be 10,000 SF, how many lots can the developer have on this property? A. 43 B. 65 C. 86 D. 66

B

A home costing $540,000 is worth $588,000 two years later. What is the one-year appreciation rate? A. 8.8% B. 4.4% C. 4.1% D. 5.0%

B

A homeowner bought a house one year ago for $250,000. Since then, the homeowner has spent $4,000 to pave the driveway and has added a screen porch at a cost of $3,000. Total depreciation has been $6,000. What is the homeowner's adjusted basis? A. $257,000 B. $251,000 C. $263,000 D. $237,000

B

A licensee negotiates the sale of a home intended for his fiancée and himself. He properly identifies himself as a licensee to the seller but neglects to disclose that he is getting married to the buyer. Do the actions of the licensee violate the license law? A. Yes, because a licensee cannot purchase or negotiate the sale of property in which the licensee will have a future interest. B. Yes, because the licensee did not disclose his possible future interest to the seller. C. No, because a licensee's marital plans do not require agency disclosure. D. No, because a licensee is simply required to give proper real estate company identification only.

B

A life estate is classified as which of the following? A. An estate in fee simple B. A freehold estate C. A defensible fee D. An estate for years

B

A listing agent who shows property to a ready, willing, and able buyer still has certain obligations to the buyer. Which of the following is not a true statement? A. An agent shall disclose to the buyer all material facts about the property and explain the term "AS IS" in any counter offers to purchase. B. An agent must disclose to the buyer all personal and financial facts regarding the seller's reasons for selling the property. C. An agent must not discourage the use of an attorney or require the buyer to use a specific lender, insurance company, title company, appraiser, survey company, or building inspection company. D. An agent must promptly tender to the buyer any contract offer that has been accepted, rejected, or countered by the seller.

B

A new broker is considering opening his office in his home. Which is true? A. He could only employ 2 salespersons. B. It must be open to the public during regular business hours or at regular stated intervals. C. A broker can never have his office in his home. D. He cannot have the office in his home unless it is separate from the living quarters.

B

If an investor wants to combine a 5/8 acre parcel with a 3.9-acre parcel, how big will the parcel be, expressed as a decimal? A. 4.675 acres B. 4.525 acres C. 3.2750 acres D. 4.58 acres

B

A new broker is considering opening his office in his home. Which of the following is true? A. he could only employ 2 salespersons B. it must be open to the public during regular business hours if he has salespersons licensed under him C. he could have the office in his home as long as he employs no more than four salespeople D. He could never employ salespeople while working out of his home

B

A person finished pre-license school on July 31, 2012. After taking the examination on December 15, the applicant received a passing score on December 31, 2012. The person applied for a license on January 15, 2013. Could this person receive a license? A. No, because the applicant had taken the school in a different calendar year from applying for a license. B. Yes, because the applicant applied for a license within six (6) months after completing the school. C. No, because it had been over six (6) months from the time of completing the school and applying for a license. D. Yes, because the applicant applied for a license within sixty (60) days after passing the examination.

B

A person sells a summer cottage appraised at $100,000 to a stranger for $50,000. The seller's family wants to challenge the validity of the sale contract. The most apparent weakness of the contract that they might be able to attack is the: A. illegality of the contract's intent. B. insufficiency of the consideration exchanged for the property. C. lack of consent on the part of the seller's family. D. lack of good faith on the part of the buyer.

B

A property currently valued at $450,000 is expected to appreciate 8% each year for the next 3 years. What will be its appreciated value at the end of this period? A. $524,880 B. $566,870 C. $474,000 D. $558,000

B

A property is being appraised by the Cost Approach. The appraiser estimates that the land is worth $33,000 and the replacement cost of the home is $110,000. A new $20,000 garage was recently added. Total depreciation from all causes is $7,000. What is the indicated value of the property? A. $170,000 B. $156,000 C. $136,000 D. $123,000

B

A property is being appraised using the Income Capitalization Approach. Annually, it has a Potential Gross Income of $40,000, vacancy and credit losses of $3,500, and operating expenses of $16,000. Using a capitalization rate of 8%, what is the indicated value (to the nearest $1,000)? A. $300,000 B. $256,000 C. $456,000 D. $500,000

B

A property is being appraised using the Income Capitalization Approach. Annually, it has an estimated gross income of $48,000, vacancy and credit losses of $3,600, and operating expenses of $15,000. Using a capitalization rate of 8%, what is the property's value (rounded up to the nearest $1,000)? A. $413,000 B. $368,000 C. $340,000 D. $600,000

B

A real estate office was located in a nice, residential neighborhood. The broker did not want to put up a large sign so he/she put up a small sign with his/her name and phone number on it. Is this permissible? A. Yes, as long as it was on the inside wall of the house B. Yes, as long as it is of sufficient size to be identifiable C. No, because it cannot be seen from the street D. No, the sign can only have the name not the phone number

B

A salesperson decides to transfer to another broker. He wants to take his listings with him. If he gets the consent of each seller to do this, is he within his rights to take these listings to another broker? A. Yes, because they were personally acquired by him all of the listings may be transferred to the salesperson's new broker. B. No, a listing agreement may not be transferred to another broker without the express written consent of the seller and the original broker. C. Yes, the seller's consent to have that specific agent market the seller's home allows the salesperson to assign, transfer, or sell the listing contract. D. No, a listing contract is canceled when the salesperson is transferred or terminates employment.

B

A salesperson pre-qualified a buyer and took personal information at that time. The salesperson then showed a buyer several homes. Prior to showing the homes, the salesperson had the buyer sign an agency disclosure form. Did the salesperson do anything wrong? A. yes, the salesperson should never show a house without qualifying the buyer B. yes, the salesperson should have disclosed his/her agency relationship prior to taking personal information C. no, the salesperson disclosed his agency prior to showing any properties D. no, the salesperson should disclose agency only if asked

B

A special assessment creates a voluntary tax lien if: A. all taxpayers in a taxing district have voted for it. B. the affected property owners have requested the improvement. C. a taxing entity initiates the assessment. D. the improvement to be funded is for the general good.

B

A standard owner's title insurance policy generally protects: A. the owner against loss of title in a foreclosure suit. B. the owner against liabilities and losses resulting from title defects. C. lien holders against loss of their collateral. D. the seller against liability for conveying title with unrecorded defects.

B

A violation of Hulse vs. Criger occurs when a broker: A. Does not charge a fee for completing a form in a transaction wherein s/he is the listing broker B. Makes a separate charge for completing any standardized form for persons in transactions in which s/he is not acting as a broker C. Fills in the blanks in any standardized form provided by the real estate association in which she/he is a member D. Recommends that a buyer seeks the assistance of an attorney to review an offer before submitting it to the seller

B

All of the following are guidelines usually provided by a state's Department of Health for the location of wells EXCEPT: A. location must allow access for inspection and maintenance. B. well must not be located where the water table is less than 10 feet below the surface. C. location must not be subject to seasonal flooding. D. well must be uphill from known sources of pollution.

B

All of the following are requirements for licensure of a salesperson EXCEPT: A. honesty and integrity B. citizenship C. complete an approved salesperson's course D. send in money by certified check or money order

B

All of the following may involuntarily terminate an agency relationship except which? A. Bankruptcy B. Expiration of the agreement term C. Agent abandonment D. Condemnation of the property

B

Cheryl rents a 1400 sf storefront where her rent is $2.00 a sf. per month. Her lease calls for a 5.5% additional rent for annual sales over $100,000. She made $145,000 last year. What is her annual rent? A. $45,000 B. $33,600 C. $36,075 D. $78,600

C

An agent fails to discover flood marks on the walls in the basement of a property. The agent sells the property, and the buyer later sues the agent for failing to mention the problem. Which statement best describes what can happen in this case? A. The agent may be guilty of intentional misrepresentation. B. The agent has an exposure to a charge of negligent misrepresentation. C. The agent has little exposure since the problem was not mentioned on the signed disclosure form. D. The agent is not vulnerable since the problem was not discovered.

B

An encroachment is: A. an easement that has not been recorded on the title of the burdened property. B. an unauthorized physical intrusion of one property into another. C. a right granted by a property owner to the owner of an adjoining property to build a structure that protrudes across D. the property boundary. a structure that does not comply with a zoning ordinance.

B

An implied contract may be deemed to exist if: A. the parties do not disavow an express contract that has expired. B. the parties act as if there is a contract. C. an offering party does not receive written notice that the offer has been rejected. D. the parties promise to perform their part of the agreement if the other party performs.

B

An improvement which crosses over the property line without permission is called a(n): A. easement. B. encroachment. C. license. D. right of way.

B

An unlicensed secretary is the only one in a residential real estate office when Broker Carr from another company calls requesting information on a property. The secretary may: A. give him the sale price and address B. take his name and have a licensee return the call C. give any information necessary since it is another broker and not a member of the general public D. mail the broker information

B

Anne obtains a new loan @ 80% of her home's price of $740,000. The loan constant is 5.645. What is Anne's monthly payment? A. $4,177 B. $3,342 C. $5,645 D. $2,883

B

Broker Carr has a 90 day listing on a property. One month after the listing had begun, Broker Dole contacted the seller and told him that he had a buyer moving in one month after the listing terminates and ask the seller to sign an agreement to take effect after the listing expires. This is: A. misrepresentation B. a violation of state real estate law C. allowable since the listing would have expired D. considered commingling of listings

B

Broker Carr has a 90-day listing on a property. One month after the listing began, Broker Dole contacted the seller and told him that he had a buyer moving in one month after the listing terminates and asks the seller to sign an agreement to take effect after the listing expires. This is: A. Misinterpretation B. A violation of the state law (going behind the sign) which is a class B misdemeanor C. Allowable since the listing would have expired D. Considered co-mingling of listings

B

Broker Falk has a listing. Broker Carr found a buyer for Broker's Falk's listing. A salesperson could close the transaction if: A. he was under the direct supervision of the listing broker B. he was under the direct supervision of the manager or broker with whom the salesperson is associated C. he was under the direct supervision of a broker who was not his broker D. a salesperson cannot close a transaction, only a broker can close them

B

Chloe wants to net $50,000 on her house. Her closing costs will be $8,000 plus a 7% commission. She owes $200,000 on her loan. What is the minimum contract price that she can accept for her property? A. $268,817 B. $277,419 C. $223,656 D. $286,654

B

During the noon hour, all of the licensees at Dream Home Realty were out to lunch. A secretary was left to answer the telephone and to take messages. At 12:30, Salesperson Sampson of New Homes Inc., called to ask for information concerning one of Dream Homes' residential listings. In this situation, the secretary should: A. give Sampson the information he needs but encourage him to get in touch with one of Dream Homes' agents as soon as possible. B. take Sampson's name and telephone number and tell him that a licensee from Dream Homes Realty will call him back when the licensee returns from lunch. C. reveal only the sale price and street address of the listing and get the contact information for Sampson so you can have the Dream Home agent call him back. D. tell Sampson that this information can only be given to a licensed broker and not a salesperson.

B

Fees and commissions must be removed from a property management escrow account unless otherwise stated in a written agreement how often? A. at least once a week B. at least once a month C. at least once a year D. whenever the broker wishes

B

How does a legal life estate differ from a conventional life estate? A. The legal life estate is created by a grant, while the conventional estate is created by custom. B. The legal life estate is created by statute while the conventional life estate is created by a grant. C. The conventional life estate focuses on protecting the rights of surviving family members while the legal life estate focuses on laws of descent. D. The conventional life estate does not have to be described in a written document, while the legal life estate does.

B

How many sections are there in a township, and what are their dimensions? A. Twelve sections of three miles in length. B. Thirty-six sections of one mile in length. C. Five sections of five miles in length. D. One section of thirty-six miles in length.

B

If a buyer purchases 25% of a lot in the spring and then purchases 50% more later in the fall, what percentage of the lot is still available for purchase? A. 20% B. 25% C. 50% D. 75%

B

If a corporate building has nine office suites that rents for $14,800 per month each, but suffers from a 14% vacancy rate and annual expenses of $21,100, what is the NOI of the building (round to the nearest $100)? A. $93,500 B. $1,353,500 C. $133,200 D. $84,600

B

If a house sold for $40,000 and the buyer obtained an FHA-insured mortgage loan for $38,600, how much money would be paid in discount points if the lender charged four points? A. $1,600 B. $1,544 C. $1,500 D. $385

B

If a square-shaped lot measures 125' on one side, what is the square footage of the lot? A. 250' B. 15,625 square feet C. 500' D. 1,855 square feet

B

If a tenant farmer's lease expired, but several months later he is able to go back and harvest the corn crop, the crops would be known as what? A. Trade fixtures B. Emblements C. Fructus naturales D. Fixtures

B

If an unlicensed person sells real estate for a fee, or accepts a referral fee for a real estate transaction, the MREC: A. May file a restraining order but has no other remedies against unlicensed individuals. B. May file a restraining order and assess a civil penalty of up to $2,500 per occurrence (based on the finding of the Missouri Administrative Hearing Commissioner (MAHC). C. May file a restraining order and assess a fine of $5,000 payable to the MREC. D. May require the individual to take a course on real estate law.

B

If the monthly rent of a property is $4,000, and the gross rent multiplier (GRM) is 91, what is the value of the property? A. $404,000 B. $364,000 C. $439,560 D. $324,000

B

In most states, in all residential transactions when must licensees give potential sellers or buyers a written disclosure form? A. At first contact B. At first substantive contact C. At a contract presentation D. At their first face-to-face meeting

B

In order to take a property by eminent domain, the government must show that: A. the owner is not putting the property to its highest and best use. B. the property will be used for the public good. C. the property has limited value on the open market. D. the owner agrees to part with the property.

B

In what year was the use of lead in paint banned? A. 1976 B. 1978 C. 1988 D. 1992

B

In which circumstances would a buyer most likely sue for specific performance? A. He found out that the property was a dominant tenement. B. The seller backed out of the original sales contract. C. The broker misrepresented the size of the lot. D. The broker misrepresented the value of the property.

B

James wants to make sure he is working with a licensed real estate broker when he is renting property. He asks to see the license of the agent and the broker with whom he is working. Which is true? A. James is nosey and does not need to see anything B. James is a member of the public and is entitled to see a license, or he may call the real estate commission and verify whether or not the individuals are licensed C. A real estate salesperson and/or broker should carry their licenses and display it upon request when involved in a real estate transaction D. Licensees are not required to tell the public that they are licensed

B

On which of the following written listings would the listing broker be entitled to compensation regardless of who sells the property? A. An open listing B. An exclusive right to sell C. An exclusive agency agreement D. Agency listing

B

Other than its categorization as inferior or superior, a lien's priority is generally determined by the: A. size of the amount that is the subject of the lien. B. date of recordation. C. date when the lienee signs the lien document. D. type of document used to establish the lien.

B

Persons with which of the following qualifications may apply for a broker's license? A. the sponsoring broker states that the salesperson has been active for 12 months B. the person has completed an approved course and has passed the state's examination and has been an active salesperson for at least two years. C. the person had 10 listings and 4 sales D. anyone who has been licensed 6 months and pays the fee

B

Phillip advised his clients they needed to paint their master bedroom before showing the property. The walls of this room were 11' high. The wall lengths were 13', 19', 13', and 17'. If a gallon of paint covers 180 SF, how many whole gallons would the home sellers have to buy? A. 3 gallons B. 4 gallons C. 5 gallons D. 8 gallons

B

Posting a " FOR SALE " sign on a residential property without the owner's permission could lead to: A. Criminal penalties by the MREC B. Disciplinary action by the MREC C. A fine by the MREC D. Civil penalties by the MREC

B

Revocation of a broker's license results in: A. reassignment of the relationship. B. termination of the relationship. C. extended agreement. D. open offer agreement relationship.

B

Salesperson Baird was born in Finland. He moved to Missouri, went to a pre-license school, took and passed the test, and was licensed. He then sold a property. Would Baird be eligible for a commission? A. Yes, since he passed the test. B. Yes, since he fulfilled the legal requirements of the law. C. No, because he was not a citizen. D. No, since he was born in Finland, and he studied too hard he should not be allowed to obtain a license.

B

Salesperson Baird was born in Finland. He moved to Missouri, went to a prelicense school, took the test, passed and was licensed under a broker. He then sold a property. Would Baird be eligible for a commission? A. yes, since he passed the test B. yes, since he fulfilled the legal requirements of the law C. no, because he was not a citizen D. no, since he was born in Finland

B

Salesperson Bird, has been licensed as a salesperson for at least two years. He has just passed the state broker examination and would like to apply for a broker-salesperson's license. In order to meet the requirements, he must include which of the following with his application? A. His personal affidavit stating that he has been actively engaged in the real estate business for at least one year. B. A certificate from an accredited school stating that within 6 months prior to the date of application that he had successfully completed a broker's license course offered by that school. C. A letter of proficiency from his broker stating that Bird has procured at least ten listings and at least ten closed sales. D. A statement from his broker indicating that Bird has finished management training and has been assigned as a branch manager for one of his broker's branch offices.

B

Salesperson French presents a written offer for $189,000 to seller Dutch. The listed price is $200,000. Dutch reviews the offer and seeks further advice from her accountant. Salesperson French receives a second written offer, this one for $175,000. Which of the following is true about this situation? A. French must wait until Dutch accepts or rejects the first offer before he presents the second offer to Dutch. B. French must present the second offer promptly. C. French cannot present the second offer at any time because it is 90% lower than the list price. D. French must present the second offer as a backup contract.

B

What is the primary purpose of agency disclosure? A. To ensure that compensation is paid to the right agent B. To remove any confusion about whom the agent is working for C. To assign which party is required to maintain a file of the transaction D. To allow the customer to work with various brokers

B

Seller Joe Needy lists his home for $40,000, and the broker tells the prospective buyer to submit a low offer because the seller is desperate. The buyer offers $38,000, and the seller accepts. Which statement is TRUE about this situation? A. The broker was unethical, but because no one was hurt, it is not improper. B. The broker violated the agency relationship. C. The broker's action was proper in obtaining a quick offer. D. Any broker is authorized to encourage bidders.

B

Seller Jones signed an exclusive right to sell listing on her home with Muller Realty for $155,000 at a commission rate of 5% to be paid to broker Muller at closing. As part of the agreement, broker Muller will split the commission equally with any other broker that can bring a buyer for Jones' property. If another broker sold the property, how much will broker Muller receive? A. $0 B. $3,875 C. $7,750 D. $1,550

B

States that do not have dower and curtsey usually have: A. Community property laws and full share laws. B. Community property laws and elective share laws. C. Community property laws and election decree laws. D. Community property laws and final decree laws.

B

The Administrative Hearing Commission will: A. Arbitrate commission disputes between salespersons and brokers B. Make a final ruling of the acts of a licensee regarding finding of facts and ruling of law C. Make decisions concerning the actual punishment of salespersons and brokers who have violated the rules and regulations D. Fine a salesperson or broker up to $10,000 for violation of MREC rules and regulations

B

The MREC has heard rumors that a broker is violating the law. Can the MREC investigate? A. yes, but they are limited in the investigation of the incident that sparked the rumors B. yes, no complaint is necessary for the MREC to investigate C. no, because there has not been any allegation of criminal conduct D. no, because there has not been a complaint filed by either a licensee or the public

B

The authorities are investigating a violation of the law by a licensee. Which could happen? A. the Administrative Hearing Commission could revoke or suspend his license B. the Missouri Real Estate Commission could revoke or suspend his license C. the Missouri Real Estate Commission could impose criminal penalties D. the Administrative Hearing Commission could impose criminal penalties

B

The broker, who has listed a property for sale, has an obligation to: A. do whatever the broker believes to be in the best interest of the owner. B. do whatever the owner has instructed him to do legally. C. discriminate at the owner's instructions. D. accept and sign offers in the name of the owner.

B

The buyer wants to have his earnest money placed in an interest bearing account. Can the broker do this? A. Yes, if the interest goes to the broker. B. Yes, if all parties to the transaction agree to the interest-bearing account and who will receive the interest. C. No. Regardless of what the buyer wants, the broker can never put the money in an interest-bearing account because it is a violation of the Missouri License Law. D. No, because this is the seller's money and he has to make the decision.

B

The legal description of a recorded plat is incomplete if it lacks: A. a point of beginning and ending. B. the subdivision's location in a section and township. C. a calculation of each lot's acreage. D. a description of landmarks.

B

The license law is known as: A. Chapter 11 B. Chapter 339 C. Chapter 7 D. Chapter 12

B

The lienee in a lien is the: A. party who initiates the lien. B. owner of the property that is subject to the lien. C. party who has a claim against the owner of the property subject to the lien. D. property that is given as security for a debt.

B

The subject property does not have a pool or a screen porch. A comparable that sold for $205,000 has a $1,000 screen porch, one more $2,500 half-bathroom, and a $6,000 pool. Assuming all else is equal, what is the adjusted value of the comparable? A. $200,500 B. $195,500 C. $214,500 D. $207,500

B

The taxes on a property were $4,800. The closing took place on June 15th. What is the seller's share of the taxes? Use the 30-day/12 month method to derive your answer and assume the seller owns on the day of closing. A. $2,617 B. $2,200 C. $2,600 D. $2,183

B

The two documents that create a condominium are the: A. declaration and by-laws. B. declaration and master deed. C. incorporation statement and management agreement. D. master deed and individual unit deeds.

B

Upon renewal of his license, a broker must disclose certain information concerning his branch office to the MREC, which would include: A. The name of the office only B. The address of the branch office and the name of the licensee in charge of that office C. The name and address of all licensees D. Only the name of the licensee in charge

B

What do you call a licensed real estate salesperson, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction? A. Subagent B. Designated agent C. Dual-agent D. Single agent

B

What does a tax certificate do? A. Certifies to tax collectors that a property owner has paid all ad valorem taxes on the property for the calendar year. B. Entitles its holder to apply for a tax deed after a certain period. C. Exempts its holder from paying taxes on the particular property referenced by the certificate. D. Waives a property owner's rights of redemption in a foreclosure.

B

What has replaced most dower and curtsey laws? A. Estate laws and non-estate laws. B. Community property laws and elective share laws. C. Eminent domain laws and freehold laws. D. County laws and civil laws.

B

What is the GRM of a gas station with a monthly rent of $8,700 and a value of $970,000? A. 89.7 B. 111.5 C. 124.4 D. 99.9

B

What is the number one rule of adjusting properties when using the Sales Comparison Approach to value? A. Always use assessed value, not market value B. Never adjust the subject property C. If the comparable is superior to the subject, add value to the comparable. D. If the comparable is inferior to the subject, subtract value from the comparable.

B

What type of pipe is inexpensive, lightweight and utilized in areas where hard water is a problem? A. Brass B. PVC C. Cast iron D. Copper

B

When Susan listed a home for the Smiths, she was told by the sellers that the lot measured 75' x 150'. Susan told the buyers this information and the house sold. After taking possession, the buyers had the lot surveyed and discovered that the lot was only 75' x 130'. Which best describes this situation? A. Susan was in no way responsible as she was acting as an agent for the principal B. the buyers may sue Susan and her broker for damages C. if the MREC learns of this they will automatically revoke Susan's license D. the AHC can suspend or revoke Susan's license if they feel she should have been more careful

B

When the real estate agent has produced a buyer who is ready, willing and able, the agent has generally done what? A. Accounted to the principal B. Earned a commission C. Consummated the sale D. Established personal competence

B

Which best describes a tenancy at sufferance? A. When the tenant has received oral permission to stay. B. When the tenant stays beyond her lease without consent. C. When the tenant has received a notice to terminate a lease. D. When the tenant's lease has a definite termination date.

B

Which is NOT a conveyance clause? A. A granting clause. B. A habanero clause. C. A reserving clause. D. A tenendum clause.

B

Which is NOT one of the four main types of leasehold estate? A. Estate for years B. Estate in holding C. Estate from period to period D. Estate at will

B

Which is NOT one of the three channels of probate deliberation? A. Testate proceeding. B. Interstate proceeding. C. Intestate proceeding with heirs. D. Intestate proceeding without heirs.

B

Which is true when a corporation receives a broker's license? A. All brokers licensed under the corporation must be officers of the corporation. B. All corporate officers involved in the management of the brokerage business must have active broker-officer licenses. C. All corporate officers must have active salesperson license. D. When the license is issued to the corporation, the individual officers will no longer require individual licenses.

B

Which is true when a corporation receives a broker's license? A. all brokers licensed under the corporation must be officers of the corporation B. all corporate officers involved in the brokerage business must have active broker-officer licenses or a salesperson's license, but the salesperson cannot participate in the supervision of the office C. all corporate officers must have active salesperson licenses D. when the license is issued to the corporation, the individual officers will no longer require individual licenses

B

Which of the following best describes constructive notice? A. It is notice published in a newspaper. B. It is knowledge one could have or should have obtained. C. It is notice explicitly stated in a legal document. D. It is knowledge received or imparted through direct experience.

B

Which of the following is NOT a necessary condition for claiming title by adverse possession? A. Occupy the property without concealment B. Occupy an unpermitted structure on the property C. Occupy the property without permission D. Occupy the property for a statutory period

B

Which of the following is NOT one of the means of enforcing a lien against real estate? A. Operation of the law B. Direct takeover C. Court action D. Powers granted in the loan document

B

Which of the following is an executory contract? A. An expired lease. B. A sale contract before closing. C. A recorded sale contract. D. An option to buy after it is exercised.

B

Which of the following is not needed on a current Listing Agreement? A. the price B. a provision requiring an owner to notify the broker of intent to cancel the listing after the expiration date C. a definite beginning date D. an expiration date

B

Which of the following was an important result of the National Environmental Policy Act of 1969? A. Money was provided for hazardous waste disposal. B. The Environmental Protection Agency was created. C. Lead was banned in the manufacture of plumbing materials. D. Transportation-related noise was banned.

B

Which type of foreclosure involves a court-ordered transfer of the mortgaged property to the lender? A. Non-judicial B. Strict C. Peremptory D. Judicial

B

Who is usually responsible for site plans, subdivision plans, building permits, and ruling on zoning issues? A. The state legislature B. The planning commission C. The zoning board of appeals D. The city manager

B

Why do zoning authorities create different types of zones? A. To ensure that a variety of construction types is available in the community. B. To separate different types of uses so that they do not interfere with each other. C. To preserve low density land uses. D. To encourage industrial and commercial users to relocate.

B

Brendan's property taxes are being calculated for county and school taxes. School taxes are 6 mills and county taxes are 5 mills. How much will Brendan pay in taxes if his property's taxable rate is $350,000? A. $38,500 B. $2,100 C. $3,850 D. $3,500

C

In the Rectangular Survey method, why is it necessary to have guide meridians, standard parallels, and quadrangles?

Because of the curvature of the earth, a rectangle drawn on the earth's surface using longitudinal lines as sides will be narrower on the side farther from the equator than on the side nearer the equator; thus, townships would become smaller and smaller as one moved farther north of the equator. The guide meridians, standard parallels, and quadrangles limit this variance caused by the earth being round.

A $150,000 loan has monthly interest-only payments of $1,000. Its annual interest rate is A. 3 percent. B. 6.5 percent. C. 8 percent. D. 12.5 percent.

C

A broker arranges a purchase agreement with the financing being part of a "first time buyer" bond program. However, the buyer is still $2,000 short of having enough for the down payment. The broker decided to write 2 contracts. One would be taken to the lender showing the $2,000 down as part of the loan. The real contract would NOT be changed. This is: A. Allowable as all parties would be part of both contracts B. Allowable as long as it is in the form of a contract C. A violation of Missouri law (dual contracts) as you cannot change contracts to borrow extra money D. A violation of Missouri law as you cannot write " first time buyer" bond financing

C

A broker dies, and his company is placed in receivership. A. all sales contracts are canceled by the death of the broker B. the MREC can appoint a "receiver" to handle the existing sales contracts C. the MREC can appoint a temporary broker to finish the existing sales contracts D. the court would receive all contracts

C

A broker had so many lawsuits that he decided to change the name of his branch offices to avoid further problems. Could he do this? A. Yes, he may do so with the approval of the MREC. B. Yes, but all advertising must be done with both names. C. No, all branch offices must have the same name as the parent office. D. No, the MREC assigns the names for each branch office.

C

A broker with one salesperson is retiring and moving to Florida to run a grocery store. He wants the salesperson to continue to have her job. Can he still do this? A. yes, but both he and the salesperson would have to get both Missouri and Florida licenses B. yes, as long as he retained his Missouri broker's license C. no, because he would NOT be in control of the salesperson's actions D. no, because his license is automatically terminated when he moves from the state

C

A broker-salesperson acting as a sales manager cannot: A. act as a sales manager and supervisor at a branch office B. act as a salesperson working under a broker C. hold all the licenses of the salespeople working under him/her D. sell and list property

C

A building generates $103,000 in effective rental income and $900 in vending machine income. The same complex has $40,700 in operating expenses and $36,000 in debt service payments. What is the pre-tax cash flow of the complex? A. $26,300 B. $67,900 C. $27,200 D. $62,300

C

A buyer has signed a contract to purchase a property but is uncertain of the condition of the title. Who is legally responsible for knowing the condition of the title? A. The County Recorder B. The seller's agent C. The buyer D. The mortgage lender

C

A commercial property sold for $564,000 and its GIM ratio was 8.7. What was the annual income of the property (rounded to the nearest $100)? A. $154,300 B. $47,000 C. $64,800 D. $56,400

C

A developer wants to develop an 18-acre subdivision. He figures that the streets and common area will take up about 20% of this overall area. If the minimum lot size is to be 10,000 SF, how many lots can the developer have on this property? A. 78 lots B. 18 lots C. 62 lots D. 48 lots

C

A homeowner receives a tax bill that includes an amount for the library district, taxed at $2.00 per $1,000, and the fire protection district, taxed at $3.00 per $1,000. How much does the taxpayer have to pay for these two items if the property's taxable value is $78,000? A. $546 B. $1,560 C. $390 D. $234

C

A homeowner wants to give a neighbor seasonal permission to cross her yard to reach a public basketball court. What kind of lien or encumbrance should she use? A. Encumbrance B. Easement C. License D. Covenant

C

A parcel's street address is an insufficient legal description because: A. street addresses do not contain a lot and block. B. it does not contain a POB. C. it lacks permanence and sufficient data for a surveyor to locate it. D. it creates a cloud on title.

C

A partition suit is used for which of the following? A. Determination of party fences B. To allow the construction of party walls C. To force a division of property without all the owner's consent D. To change a tenancy by the entireties to some other form of ownership

C

A person owned her own company specializing in negotiating sales for buyers and sellers. She had incorporated her business but does not get listings or sell properties. Does she need a real estate license to do this? A. no, she does NOT need a license because she was not listing property B. no, she does not need a license because she was not selling property C. yes, she would need a broker-officer's license and her corporation would need a broker's license D. yes, she needs a broker's license, but her corporation is exempt since it will not list or sell property

C

A property has a net income of $40,000, interest payments of $17,000, and annual cost recovery of $9,000. The property's tax rate is 25%. What is the property's annual tax liability? A. $5,750 B. $8,000 C. $3,500 D. $10,000

C

A range is defined by: A. two consecutive guide parallels. B. two consecutive common tiers. C. two consecutive meridians. D. a parallel and a meridian.

C

A sale transaction on rental property closes on December 10th. The landlord received the December rent of $4,400 on December 1. Assuming the closing day is the seller's, and that the 360-day method is used for prorating, how much will the seller owe the buyer? A. $1,419 B. $1,467 C. $2,933 D. $2,981

C

A salesperson associated with Rainbow Realty decides to purchase one of the company's listed properties and submits an offer to purchase. The agent did not disclose to the seller that she/he is an agent with Rainbow Realty. This agent may be charged with which of the following license law violations? A. Undisclosed Dual Contracts B. Undisclosed Dual Listings C. Undisclosed Dual Agency D. Undisclosed Commingling

C

A salesperson did not renew his/her license, or take twelve (12) hours of continuing education. Three (3) months later, he/she decides to renew. What must a salesperson do to renew a license under these circumstances? A. Pay the fee and take the continuing education courses. B. Pay the fee and take the 48-hour prelicensing course. C. Pay the fee and take the 24-hour Missouri practices course. D. Take the 48-hour prelicensing course, take and pass the state examination and apply as an original applicant.

C

A salesperson is transferring to a new broker. What must be done before he/she can list or sell real estate? A. A salesperson must give his/her license to his/her broker to send to the MREC. B. Have the old broker call the new broker and set a date when the salesperson can start work. C. The new broker must obtain the salesperson's work permit from the MREC. D. No action is necessary to continue to list and/or sell real estate.

C

A salesperson licensed in another state but NOT in Missouri comes into Missouri and refers her brother to a real estate company in Missouri to assist him in the purchase of a home. The salesperson did this with the knowledge and permission of her broker, and the salesperson's broker cooperated with a Missouri broker in the sale of the property. What commission is she due? A. the full commission since she is licensed in another state B. half the commission since the other half would go to her company C. her commission would be based on her agreement with her broker D. no commission since she is NOT licensed in Missouri

C

A salesperson told a buyer that the air conditioner would stay with the house. However, he had not checked it with the seller. After closing the seller took the air conditioner. Which would happen? A. the salesperson would have to pay for the air conditioner B. the MREC would automatically revoke his license C. the MREC can take disciplinary action D. the buyer would have to look to the seller for action

C

A seller leaves a buyer approximately one half of a tank of heating oil at the closing. If the tank measures 4' x 2' x 3', how many cubic feet did the buyer receive? A. 8 cubic feet B. 24 cubic feet C. 12 cubic feet D. 24 square feet

C

A seller wants to net $55,614 from the sale of her house after paying a 7% commission. Her minimum sales price will have to be? A. $55,341 B. $59,506 C. $59,800 D. $63,000

C

A strip mall generates $215,000 in effective rental income and $3,000 in other income. The same mall has $102,000 in operating expenses and $15,000 as reserves. What is the Net Operating Income of the strip mall? A. $113,000 B. $99,000 C. $101,000 D. $116,000

C

A tax rate on a building with a $530,000 taxable value is 4.5 mills per thousand dollars of assessed valuation. What is the annual tax liability? A. $23,850 B. $1,590 C. $2,385 D. $15,900

C

A town has a budget of $775,000 and has a tax rate of 13 mills. What is the tax base of this town (to the nearest thousand)? A. $81,579,000 B. $258,333,000 C. $59,615,000 D. $37,843,000

C

A unlicensed secretary employed by a broker in a residential sales office may: A. Take property listings by telephone but may not go to the client's home to take a listing B. Show a listed property to a prospective buyer if the secretary does not claim to be a salesperson or broker salesperson C. Not solicit or accept listings or show listed properties D. Do anything a licensed salesperson can do as long as the broker supervises the activities

C

A woman passed the salesperson examination and is eager to begin listing and selling homes. What can she do? A. She will automatically receive a license. B. She can list homes, but cannot sell them. C. She must apply for a license on the forms provided by the MREC. D. She must first take her broker's sales training before she can begin work.

C

Agent Paul is bound to inform his client of all facts that might affect the client's interests - both what Paul knows and what he "should have known." Which of these situations would not be something Paul "should know?" A. There is a crack in the basement wall. B. The air conditioner does not work. C. The owner of the property is HIV positive. D. The casement windows have broken seals.

C

All of the following are violations of Missouri License Law except: A. Telling a potential buyer that the property will definitely appreciate in value and that a substantial profit will be made on the resale of this real estate investment. B. Advising a young married couple to take title as tenancy by the entirety; explaining their rights in the event the seller breaches the contract, and helping them to rewrite a better offer to purchase. C. Placing the buyer's $2,000 earnest money deposit in an escrow account after acceptance of a contract by the seller. D. Preparing a special sales contract to suit the needs of a new home buyer who disagrees with the terms of a standard form and who intends to fill in the blanks after the contract is accepted.

C

An encumbrance is most broadly defined as: A. another's right to use a property without the permission of the property owner. B. another's right to claim the sale proceeds of a property that has been used as collateral for a loan. C. another's interest in a real property that limits the interests of the freehold property owner. D. another's right to control how the freehold owner of a real property uses the property.

C

An out of state owner calls a broker wanting to sell his property for $50,000. The broker knows that zoning has recently been changed and the property is now worth $75,000. The broker does not inform the seller. Is this legal? A. yes, as the broker bought it himself and did NOT put it on the market. B. yes, as the broker got the price the seller was asking C. no, the broker must inform the owner of the zoning and increased value D. no, the broker can NOT buy listed property as this would be a conflict of interest

C

Any change to a listing agreement or other written authorization must contain: A. a notary seal B. the signatures of two impartial witnesses C. the initials or signatures of all parties D. a full documentation of the reason(s) for the change(s)

C

Assuming the FHA qualifies borrowers based on a 31% debt ratio, if a borrower's monthly gross income is $4,400, what monthly payment for housing expenses can this person afford based on this ratio? A. $3,036 B. $4,400 C. $1,364 D. $1,244

C

Before a buyer broker shows a property, what must he or she disclose to the seller? A. Seller agency relationship B. Subagency relationship C. Buyer agency relationship D. Dual agency relationship

C

Foreclosure is: A. a court-ordered acceleration of loan payments. B. the final step in a bankruptcy filing. C. a proceeding to enforce a lien by forcing sale or transfer of a secured property. D. a proceeding to take equitable title to a property that was liened as security for a mortgage loan.

C

How does Planned Unit Development zoning differ from ordinary zoning? A. It applies only to industrial and office parks. B. It incorporates a number of different zones within a single property boundary. C. It requires that multiple tracts of land be developed according to a single design for efficient use of space. D. It requires developers to obtain a separate building permit for every structure.

C

If a hotel has an annual Net Operating Income of $812,000 at a 9.35% cap rate, what is its current value (to the nearest thousand)? A. $7,592,000 B. $9,350,000 C. $8,684,000 D. $6,767,000

C

If a lot contains 48,000 square feet and is 240' wide, how deep is the lot? A. 480' B. 240' C. 200' D. 720'

C

If one discount point costs the borrower 1% of the loan amount, and increases the lender's yield by 1/8th of one percent, how many discount points must be purchased to lower the interest rate by 1%? A. 1 B. 4 C. 8 D. 16

C

If the MREC denies a salesperson's license to any applicant, the Commission must do all of the following except: A. notify the applicant, in writing, stating the reasons for the denial of licensure. B. inform the applicant, in writing, of his right to file an appeal with the AHC. C. notify the applicant of this denial within ten (10) days of receipt of license application. D. send all notifications by certified mail.

C

In applying for a real estate license: A. you must make 70% on the state examination B. you must complete a sales training course C. you must enclose the license fee as a cashier's check, money order, or personal check D. you may apply for the broker's license before passing the salesperson's exam

C

In the Torrens System of recording, A. public records must be searched to discover the status of title. B. title insurance is not required. C. title passes when the conveyance is registered on the title certificate. D. encumbrances are not recorded.

C

John Grant, known to all as a man of integrity and honesty is 19 years old. Seven months ago, John finished and passed his salesperson examination. Why can John NOT receive a license? A. John lacks a high school diploma. B. John is less than the age 21. C. John did not apply for license within six months after finishing the salesperson's class. D. John did not apply for license within 60 days after passing the exam.

C

Larry, Moe and Curly own an investment property as tenants in common. Because of a recent business disagreement, Curly wants to divest himself of the property. If the three owners cannot mutually agree on a plan to settle the matter, Curly may seek an equitable distribution of the property by filing what? A. Lis pendens B. Partnership agreement C. Partition suit D. Declaration of severalty

C

Licensee Jim listed a property and Licensee Sally sold the property to her client. Jim and Sally work for the same brokerage. This type of sale is known as what? A. Single-agency sale B. Principal sale C. In-house sale D. Net sale

C

Mr. Baird was the sole proprietor of a commercial real estate company. He died. His son, Jim Baird did not have a real estate license, but he was named executor of the estate. Jim Baird: A. can continue the real estate company in his name as he is the executor of the estate B. can transfer listings to another broker C. can be appointed to finish only the business in process D. must purchase all the listings

C

Natalie wants to make a 25% profit on her $70,000 land investment (there is no mortgage). She figures agents charge a 6% commission, and that closing costs will be an additional $1,200. What should she accept as a final sale price (to the nearest hundred)? A. $87,500 B. $100,500 C. $94,400 D. $106,700

C

On February 6, John Grant finished and passed a salesperson's pre-license class. On August 25, John passed the salesperson's examination. Can John receive a license? A. yes, because he took a pre-license course B. yes, because he passed a pre-license course C. no, because he did Not apply for license within 6 months of the date on his class certificate C. no, because he did Not apply for license within 60 days after passing the exam

C

Once the life tenant dies, the life estate portion reverts back to whom? A. Grantee B. Life tenant C. Grantor D. Revisionary

C

Ownership of real estate by a single party is called: A. individual ownership. B. solitary possession. C. tenancy in severalty. D. simple tenancy.

C

Rich, a licensed salesperson, took 12 hours of continuing education courses during the current licensing period. How many of those hours had to represent "Core" courses? A. 12 B. 9 C. 3 D. 6

C

Ronald defaulted on his home mortgage payments. The lender obtained a court order to foreclose on the property. At the foreclosure sale, Ronald's house sold for $29,000 and the unpaid balance of his loan is $40,000. What must the lender do to recover the $11,000 Ronald still owes? A. Sue for damages. B. Sue for specific performance. C. Seek a deficiency judgment. D. Seek a lis pendens.

C

Salesperson Falk lists the home of Seller Spence. It has been a very rainy spring and the basement has had a considerable amount of water in it, which Seller Spence readily discloses to Salesperson Falk. Which of the following statements is true? A. Salesperson Falk is NOT legally required to mention this fact to the prospective purchasers as the situation only happens occasionally. B. Salesperson Falk should inform prospective purchasers of this fact but add " it's no problem, we rarely have a lot of rain in this part of the country." C. Salesperson Falk should inform a prospective purchaser of this fact and include the disclosure in writing with the sales contract. D. Salesperson Falk is NOT legally required to mention the facts regarding the fact of the condition of the property since he is the agent of the seller.

C

Sean, age 37, sold the home he purchased three years ago and now rents an apartment. He had originally purchased his home for $86,500 and sold it for $115,300. What is Sean's capital gain? A. $11,320 B. $16,980 C. $28,800 D. $0

C

The basic intent of zoning ordinances is to: A. establish the basis for public ownership of land for the common good. B. establish subdivision rules and regulations. C. specify usage for every parcel within the zoning authority's jurisdiction. D. restrict development in unincorporated areas.

C

The grantor of a life estate names a third party to receive the title when the life tenant dies. What will the third party hold? A. A less-than-freehold estate. B. A third party estate. C. A remainder estate. D. A pass-along estate.

C

The license fees are payable by: A. cash by certified mail B. personal check only C. cashier's check, personal check, or money order made payable to Missouri Real Estate Commission D. cashier's check only

C

The principal of Notice is sometimes called what? A. Openness B. Honesty C. Disclosure D. Diligence

C

The valuable consideration necessary to make a contract valid must be: A. money. B. something tangible. C. something specifically offered in exchange for something else. D. something of equal value with whatever is received in exchange.

C

To ensure that a proposed construction project will not have a negative impact on the environment, developers may be required to: A. comply with the Minimum Property Standards code. B. obtain a building permit from HUD. C. file an environmental impact statement. D. hire a federal environmental engineer as project foreman.

C

What action must the lender take when a notice of reinstatement occurs? A. The lender must declare a moratorium on mortgage payments. B. The lender must pay all fees and renegotiate the mortgage. C. The lender must dismiss the suit and continue the mortgage. D. The lender must dismiss the lien and continue the suit.

C

What are the three primary areas of disclosure? A. Limits, conditions, and funding B. Relationships, performance history, investment value C. Agency, property condition, and environmental hazards D. Fiduciary, accounting, and feedback

C

What date is used to establish lien priority for a mechanic's lien? A. The date of recording the lien B. The date of contracting between the mechanic and the lienee. C. The date of beginning or ending the mechanic's work, per state law D. The date the lienee borrows money to pay the debt

C

What is a short sale? A. A lender forces the sale of a mortgaged property without first giving notice of default. B. A deficiency judgment forces a defaulted borrower to sell personal property to settle a debt. C. A borrower sells the mortgaged property for less than what is owed on the loan balance. D. A foreclosed property is sold quickly at a public auction instead of through a standard sales process.

C

What is an ad valorem tax levy? A. The total of the assessed values of all real properties within a taxing jurisdiction B. The sum of all the taxes a local taxing jurisdiction collects in a tax year C. The part of a taxing body's budgeted expenses that must come from real property taxes D. The number of dollars per thousand dollars of assessed value that a real property owner must pay in property taxes

C

What is the difference between a fee simple determinable estate and a fee simple condition subsequent estate? A. There is no reversion of ownership in determinable estate. B. There is no reversion of ownership in condition subsequent estate. C. Reversion of ownership is automatic in the determinable estate. D. Reversion of ownership is automatic in the condition subsequent estate.

C

What is the purpose of an equalization factor in ad valorem taxation? A. It modifies a local tax rate to bring it into conformity with statutory tax rates. B. It changes the assessed value of an individual property to make it reflect the assessed values of other properties in the same neighborhood. C. It adjusts assessments in a locality to make them more consistent with an average level for the state or other higher-level jurisdiction. D. It adjusts the amount of the homestead exemption in a certain area to make it proportionally equivalent to the average homestead exemption in other areas.

C

What type of lease does a cooperative stockholder have? A. Short term lease B. Net lease C. Proprietary lease D. Month to month lease

C

Which is TRUE regarding a broker's escrow account? A. it must be an insured account B. it must be in the state of Missouri C. it can be in any state as long as it is properly registered with the MREC D. it must be in an interest bearing account

C

Which is true of license forms? A. you will be sent a renewal notice by certified mail B. if you do NOT receive a renewal notice, you will receive a 30 day grace period C. you must send in the appropriate application and renewal fee D. renewal is automatic unless you are notified

C

Which of the following contracts can be assigned to another party? A. An exclusive listing agreement B. An exclusive agency agreement C. A contract for the sale of a house D. An employment contract between a broker and a salesperson

C

Which of the following is TRUE of a successful eminent domain proceeding? A. It cancels the property owner's mortgage loan balance. B. It leaves the property owner with equitable title in place of legal title. C. It extinguishes leases, liens, and other encumbrances on the property taken. D. It eliminates the "chain of title" by canceling the original grant.

C

Which of the following is a benefit to the local taxing authorities to taxing property? A. Property tax revenue is not predictable. B. Property taxes are higher than income taxes. C. Property tax revenue is predictable. D. Property tax can be raised at any time.

C

Which of the following is not grounds for the MREC to refuse to issue a license? A. conviction of obtaining money under false pretenses B. fraud on application C. bankruptcy D. revocation of an earlier license

C

Which of the following tax liens is a junior lien? A. Special assessment tax lien B. Inheritance tax lien C. Income tax lien D. Ad valorem tax lien

C

Which of the following would NOT count for continuing education credit in Missouri? A. A course concerning updates of Chapter 339 B. A course all about the Fair Housing Laws C. Training in business skills such as typing, personal motivation, salesmanship, sales psychology, or time management D. A review of contract and agency law (Law of Agency)

C

Which statement about a deed in lieu of foreclosure is TRUE? A. It gives the borrower an opportunity to change the loan terms. B. It is a deed to the lender in exchange for a reduction in the loan payoff. C. It avoids public notice of the foreclosure. D. It is always accepted by the lender since it reduces the costs of foreclosure.

C

Which type of foreclosure involves sale of the mortgaged property under court supervision? A. Non-judicial B. Strict C. Judicial D. Equitable

C

Which would require a license? A. an attorney transferring real estate for a client B. an auctioneer employed by an owner C. a property manager actively leasing and selling for a real estate company D. an owner transferring his own property

C

Why are volatile organic compounds (VOCs) considered an environmental hazard? A. They make groundwater unsafe for consumption. B. They cause decomposition of any material they are applied to. C. They emit toxic fumes. D. They are known to cause cancer if eaten.

C

What are the primary differences between a condominium and a cooperative as forms of ownership?

Condo owner actually owns real property-- airspace and share in common elements-- while co-op owner owns shares in a corporation and proprietary lease; condo unit can be transferred, encumbered or foreclosed as an entity, while co-op interest cannot be so handled, but only as an interest in the corporation; entire property is endangered by default of co-op shareholder, but only individual unit is endangered by default of a condo owner.

A borrower has a monthly payment of $1,980 on a loan with a monthly constant of 6.45. What is the loan amount (to the nearest hundred)? A. $354,800 B. $283,300 C. $198,000 D. $307,000

D

A borrower obtains a 30-year $210,000 amortized loan at a 6% interest rate. If his monthly payment is $1199.10, how much is applied to the principal balance in the first month? A. $143.54 B. $144.94 C. $169 D. $149.10

D

A branch office under a principal broker: A. would have to have its own set of licenses B. would operate under its own broker's license C. would operate under a duly appointed salesperson D. would operate under the principal broker's license

D

A broker desires to keep an escrow account in an interest bearing checking account. Would this be legal? A. yes, if both buyer and seller agree in writing that it goes into an interest-bearing escrow account B. yes, if the buyer agrees in writing that the buyer's funds may go into an interest-bearing escrow account C. yes, if the seller agrees in writing that the seller's future funds go into an interest-bearing escrow account D. yes, if all parties to the transaction agree, in writing, that the money is to go into an interest-bearing account and who is to receive the interest

D

A broker lists a property, but fails to indicate an expiration date. When questioned about this by the owner, the broker states that the listing contract is for 180 days but that the property will be sold by then. Is this a legal listing agreement? A. Yes, as long as the broker sells it within 180 days as promised. B. Yes, as long as there is a commission determined at the listing interview. C. No, it is illegal because a listing cannot be for more than 90-days. D. No, it is illegal because there was no expiration date indicated.

D

A buyer asked Broker Carr to find a house for a flat fee of $5,000. The buyer and broker signed a buyer's agency agreement in which the buyer agreed to pay the $5,000 fee. Carr found a special home listed by Broker Baird. The buyer agreed to purchase the home. Broker Carr never mentioned anything about the buyer's agency agreement or the fee to the cooperating broker, nor was it disclosed in writing in the contract. Can Broker Carr retain the $5000 and share in the seller's commission with Baird? A. yes, since both brokers had agency agreements B. yes, because brokers can decide to split commissions as the brokers see fit C. no, it is illegal to receive commission from more than one party to a transaction D. no, as Broker Carr had not obtained written, prior permission from both the seller and buyer in the contract between the parties

D

A citizen phoned the MREC with a complaint on a licensee. The MREC sent him a form to fill out. However, he never followed up with the complaint in writing. What would the MREC do? A. the MREC must follow up on an oral complaint B. the MREC can NOT act on an oral complaint C. the MREC must ignore the complaint D. the MREC can investigate on its own volition

D

A disclosure to the buyer from a subagent working as a seller's agent must include all the following EXCEPT: A. a statement that the agent is acting on behalf of the seller B. the source of the commission that is to be made C. a statement that any information given to the subagent may be disclosed to the seller D. a statement that the seller is facing bankruptcy

D

A five-sided lot has the following dimensions: side A = 44', side B = 67', side C = 91', side D = 18', and side E = 55'. What is the perimeter of the lot? A. 257 feet B. 220 feet C. 320 feet D. 275 feet

D

A home sells for $150,000 and has a mortgage loan balance of $100,000 at closing. If the commission is 5% and other closing costs are $6,000, what is the seller's net? A. $44,000 B. $40,000 C. $32,250 D. $36,500

D

A home sells for $330,000 and has a loan balance of $260,000 at closing. The commission is 6%, and other closing costs are $14,000. What is the seller's net? A. $50,200 B. $70,000 C. $56,000 D. $36,200

D

A lender determines that a homebuyer can afford to borrow $220,000 on a mortgage loan. The lender requires an 85% loan-to-value ratio. How much can the borrower pay for a property and still qualify for this loan amount (to the nearest $1,000)? A. $187,000 B. $243,000 C. $254,000 D. $259,000

D

A lender offers an investor a maximum 85% LTV loan on the appraised value of a property. If the investor pays $160,000 for the property how much will the investor have to pay as a down payment? A. $16,000 B. $32,000 C. $136,000 D. $24,000

D

A new agent obtained permission from her friends to put up "for sale" signs in their yards. When buyers called, she told them that the house was sold, but that she would be happy to help them find another. Is this permissible? A. Yes, it is simply a sales technique. B. Yes, as long as the friends were justly compensated. C. No, since the properties were not really sold. D. No, since the properties were not really for sale, this technique would be considered by the MREC to be a misrepresentation.

D

A person walks into Urban Realty and asks to be shown some homes in the area. Regarding agency disclosure, the agent must inform the potential buyer of specific facts. Which of the following is required by the License Law? A. The agent must inform the potential buyer that the agent always represents the seller of any listed property and that agent will not represent the buyer at all. B. The agent must inform the buyer that any information received from either the buyer or seller will be fairly communicated to the both sides. C. The agent must inform the buyer that an agency disclosure form must be signed by the buyer prior to any property being shown. D. The agent must inform the buyer that if the buyer wishes representation, he must sign a Buyer's Agency Agreement before seeing any property.

D

A person who hires an agent to represent his or her interests is known as what? A. Customer B. Referral C. Advocate D. Principal

D

A person with a broker's license who wishes to operate as a salesperson for another broker could do all EXCEPT: A. Apply to the MREC for a broker-salesperson's license B. Send his broker's license with the proper fee to the MREC for safekeeping C. Act as a sales-manager in a branch office and continue to take listings and sell property D. Act as the broker in a corporation

D

A principal residence is bought for $190,000. A new porch is added, costing $9,000. Five years later the home sells for $261,000, and the closing costs are $21,000. What is the homeowner's capital gain? A. $50,000 B. $62,000 C. $71,000 D. $41,000

D

A property is purchased for $480,000. The land is valued at 10% of the initial purchase price of the property. Given a 39-year depreciation term, what is the annual depreciation expense? A. $12,308 B. $5,333 C. $18,720 D. $11,077

D

A property sells for $140,000 two years after it was purchased. If the annual appreciation rate is 6%, how much did the original buyer pay for it? A. $122,500 B. $125,000 C. $121,740 D. $124,600

D

A salesperson is asked to take a promissory note from the buyer. What should he do? A. The salesperson should go to his broker for help. B. The salesperson should do nothing: the salesperson cannot accept non-money items as earnest money. C. The salesperson should make the buyer get real cash or a check instead of a promissory note. D. The salesperson should write the offer and explain to the seller in the offer that the earnest money is a promissory note.

D

A salesperson, licensed in another state (not in Missouri), is visiting St. Louis and helps her father sell his listed property. The agent finds a buyer through a local church group and successfully negotiates the sale of the St. Louis residence. The salesperson is entitled to which of the following considerations from the listing broker of her father's property? A. A finder's fee. B. The buyer's agency commission offered in MLS. C. The normal commission offered by the broker under the sub-agency clause of the listing contract signed by the agent's father. D. No commission is due to the agent because she is not licensed in MO.

D

Agent Daisy agrees to a 5% commission to list a home at $330,000. The property is sold through another cooperating brokerage with that firm to receive 50% of the total commission on the $330,000 sale. If Daisy receives 55% of her broker's commission and does not bring the buyer, how much does Daisy's broker receive from the sale? A. $16,500 B. $8,250 C. $4,537.50 D. $3,712.50

D

Agent Fred fronts his cousin Norm money to buy a client's house. Shortly after the closing, Agent Fred flips the house and realizes a substantial profit. Agent Fred's actions might be described as: A. across the table. B. arms length. C. direct intent. D. self-dealing.

D

Al offered seller Tim $60,000 for a parcel of land, but Tim never responded to Al's offer. Two weeks later Tim sold the land for $58,000 to an out-of-state buyer. Neighbor Al has sued for breach of contract. What can be said about Al's actions? A. Al has legal rights due to his being the first offer. B. Al has legal rights due to his offer being higher than the out-of-town buyer's amount. C. There is a contract because there was a good faith offer by Al. D. There is no contract unless both parties have an agreement.

D

All are true regarding listings EXCEPT: A. listing agreements may NOT have automatic extensions B. listing agreements must have an expiration date C. a copy of the listing agreement must be given to the seller D. both buyer and seller must sign the listing agreement

D

All of the following are accepted methods of legal description EXCEPT: A. Lot and Block. B. Metes and Bounds. C. Rectangular Survey. D. Block and Tackle.

D

An adhesion contract: A. binds parties who have contracted with each other repeatedly. B. establishes terms of the agreement between an employer and a contract employee. C. imposes exclusivity on both parties. D. offers one party only the option of accepting or rejecting the contract.

D

An estate is transferred with the stipulation that alcohol will never be consumed on the premises or the seller will take back the property. This kind of estate is a: A. fee simple absolute. B. pur autre vie. C. conventional remainder. D. fee simple defeasible.

D

An inactive licensee refers his brother as a buyer to an out-of-state broker. How much money can he receive for a referral fee? A. He will receive a referral fee directly from the out-of-state broker since he does not have a broker in Missouri. B. He will get 50% of the commission from the out-of-state broker. C. He will get whatever is called for in the referral agreement. D. He will get nothing.

D

An office building sells for $979,000 at a cap rate of 8.3%. What is its NOI? A. $97,900 B. $85,173 C. $92,772 D. $81,257

D

An out of town owner, Seller Carr, writes Broker Falk asking him to sell her residential property. They communicate with several more letters. Can Broker Falk sell Seller Carr's property? A. No, this is a violation of the Statue of Frauds. B. No, since they have never met face to face. C. Yes, this is a listing by implication. D. No, there must be a written listing, which contains all of the terms and conditions under which a residential property is to be sold to show or advertise the property.

D

As a condition of license renewal, all active salespeople must complete the following: A. Three hours of required core curriculum by June 30th and nine hours of elective courses by September 30th. B. Attend at least 1 hour of a continuing education lecture every other month throughout the licensing period. C. Attend 6 hours of core curriculum courses and 6 hours of elective courses during the renewal period. D. Attend 12 hours of certified continuing education courses, 3 hours of core credit and 9 hours of elective credit, by September 30th of even years.

D

Bill, a licensed real estate salesperson places an ad in the newspaper for a buyer of a property he has listed for sale. His ad reads: "Come and see this wonderful lake lot located on beautiful Lake Scenic. If you purchase one lot, we will give you a second lot free and also enter your name in our lottery sweepstakes." Which is true of this advertisement? A. The ad is well written and should attract many buyers B. The ad should give the property address C. The ad should list Bill's address D. The ad is a violation of the license law because it offers free inducements

D

Deed restrictions generally concern: A. the form of ownership in which a property may be held. B. how long a property must be owned before it can be legally transferred. C. what groups of people are legally excluded from future ownership of a property. D. how a property may be used and what structures may be built on it.

D

How can a junior lien's priority be changed? A. The lienee can "promote" one lien above another at the request of a lienee. B. A lienor can sue to have its lien reclassified as superior. C. If the holder of a superior lien dies, an inferior lien holder automatically moves up on the schedule of priority. D. A lienor can voluntarily agree to subordinate its lien to another lien.

D

How does the judicial system influence real estate ownership? A. By levying property taxes. B. By enforcing zoning ordinances and building codes. C. By ensuring tenants' rights are greater than landlords' rights. D. By making decisions based on case law and common law.

D

If an individual broker's license is revoked or suspended, all of the following are true EXCEPT: A. the broker must remove all advertising signs from all properties B. the broker must arrange for all pending contracts to close. The broker must notify the MREC who will handle the closing of these transactions C. the broker must notify the MREC where all the records will be stored for the term of the suspension D. if the broker's license is suspended, a salesperson can continue to operate the company until the suspension is over

D

If you are turned down for a license, what would be your most reasonable course of action? A. Request a hearing before the MREC (Missouri Real Estate Commission). B. Request an investigation by the attorney general. C. Request a hearing before the local Board of Realtors. D. Request a hearing before the AHC (Administrative Hearing Commission).

D

In _____________ construction, exterior wall studs continue through the first and second stories. First floor joists and exterior wall studs both bear on the anchored sill. A. advanced B. post and beam C. platform D. balloon-frame

D

Jamie Jones tried to renew his license, but he failed to complete the continuing education requirements. Three months later Jamie wanted to reinstate his license. Jamie would have to do which of the following? A. pay a late fee of $150 only B. pay a late fee and take the continuing education he had missed C. pay a late fee, take the pre-license class and pass the real estate test D. pay a late fee of $50 a month not to exceed $200, and take the Missouri Practices course.

D

Jim and Larry who are not licensees form a company to deal in exchanges of property. After completion of a deal, the parties refuse to pay them a commission. Can they sue for the commission? A. yes, as they had performed according to the agreement B. yes, no license is required as the properties were exchanged rather than sold C. no, since the properties were exchanged no valuable consideration was given D. no, they were unlicensed; therefore, they were in violation of state license law

D

John bought an odd-shaped lot that was 100 feet deep, but the front footage was 160 feet and the length of the back side of the lot was 80 feet. What is the square footage of his lot? A. 16,000 SF B. 8,000 SF C. 24,000 D. 12,000 SF

D

Margaret King is a licensed salesperson. She is selling her property as a FOR SALE BY OWNER (FSBO). What must she disclose in her advertisement in the newspaper? A. For Sale-Call Margaret King 728-3434 B. For Sale-Call Big Realty, Margaret King 728-3434 C. For Sale-Owner D. For Sale-Owner-Salesperson

D

Misrepresenting facts to a buyer might result in: A. an extended contract and protracted compensation B. federal sanctions C. loss of a business license D. voided contract and loss of commission

D

One limitation on deed restrictions is that they may not: A. prohibit commercial activities. B. prohibit construction of buildings. C. require minimum setbacks. D. restrict ownership on the basis of race or religion.

D

Ralph is buying Terry's house. The buyer's loan amount is $105,580. If the buyer has agreed to pay 3 points at closing, how much will he pay for the points? A. $4,223 B. $1,584 C. $396 D. $3,167

D

Salesperson Dole took an offer to a seller and the seller looked it over for an hour and then signed it. What should the salesperson do at the time of final acceptance? A. Notify the seller that final acceptance was obtained B. Note the date the buyer made the offer C. Note the date it was presented to the seller D. Note that all signatures and initials of the parties are present in the contract

D

When a tenant in common dies, what happens to the tenant's interest in the estate? A. It is divided equally among the surviving tenants in common. B. The surviving tenants must buy the interest from the deceased tenant's heirs or sell their interests to the heirs. C. It becomes a joint tenancy. D. It passes by probate to the deceased tenant's heirs.

D

Salesperson Karr negotiated a purchase contract with a prospect who met the conditions of a special first time buyer bond proposal, except for the fact that the negotiated sale price was $2,000 higher than the authorized limit set in order to qualify for the bond monies fully. Karr arranged another agreement with the seller, whereby the sale contract indicated a price within the limit, and another contract covered the $2,000 excess. Which of the following statements about this situation is true? A. This arrangement is considered creative financing and is perfectly legal. B. Although such arrangements are discouraged, Karr acted legally because he was carrying out the direct orders of the seller in order to sell the property for the list price. C. If the AHC (Administrative Hearing Commission) finds out about this arrangement, it will automatically suspend Karr's license. D. Karr is subject to disciplinary action by the MREC for violating the law against dual contracts.

D

Salesperson Link brings an offer to the seller of a listed property. After considering the offer for an hour, the seller accepts and signs the offer without changing any of the terms presented. Link then presents the buyer with a copy of the accepted contract. Which of the following must be included in this contract for sale? A. The date the property was shown to the buyer. B. The date the buyer signed the offer and instructed Link to present it to the seller. C. The date the offer was presented to the seller. D. The date of final agreement between the parties.

D

Seller Trevor receives an offer of $181,000 on a property he listed at $193,000. The property has been appraised at $198,000. How much is the offer as a percent of the listing price? A. 91.4% B. 97.5% C. 95.2% D. 93.8%

D

Six years ago a commercial property owner paid $490,000 for her complex which included 10 acres of land valued at $100,000. Using a 40-year straight-line depreciation method, what would be the current value of the apartment complex? A. $330,000 B. $390,000 C. $400,000 D. $431,500

D

Stacey owns a lot that has 180 feet of front footage and contains 36,000 square feet. He purchases two identically-sized lots adjacent to each side of his lot. These side lots are each 200 feet deep and each side lot contains 19,000 square feet. What is the total front footage of all three lots? A. 190 B. 200 C. 275 D. 370

D

Stacey owns a lot that has 180 feet of front footage and contains 36,000 square feet. She purchases two lots adjacent to each side of his lot. These side lots are each 200 feet deep and contain 19,000 square feet. What is the total front footage of all three lots? A. 190 B. 200 C. 275 D. 370

D

The right of a property owner to redeem his or her property after a tax sale is called: A. a legal right of rescission. B. an equitable right to acquire title. C. a right of homestead exclusion. D. a statutory right of redemption.

D

The right to build a taller structure on top of an existing structure is an example of: A. the right to encumber. B. surface rights. C. the right to liquidate. D. air rights.

D

Title to a certain real property is being held in a trust as collateral for a loan. What kind of deed will the trustee use to convey the title to the borrower when the loan terms are satisfied? A. Deed of trust B. Deed in trust C. Guardian's deed D. Reconveyance deed

D

To renew a salesperson's inactive license, how often must the licensee pay? A. Once -- when the license goes inactive. B. Once a year to the MREC. C. Never. An inactive licensee never has to renew. He/she is inactive for life. D. By Sept 30 of even years.

D

Two brokers got into a dispute over who was due what part of a commission. One of the brokers filed a complaint with the MREC to get it settled. Which is true? A. the MREC will settle the dispute at the next monthly meeting. B. the MREC will make recommendations as to who should get the commission but will NOT make the final decision C. the MREC may revoke the license of the broker who withheld the commission falsely D. the MREC will NOT enter into any dispute over commissions between licensees.

D

Tyler Holdlong owns a small retail property that he inherited from his father. There are no mortgages or interest expenses connected with the property. Tyler takes an annual cost recovery expense of $3,000. The property has a monthly gross income of $3,500 and monthly operating expenses of $1,100. Tyler's taxable income from this property will be taxed at a rate of 25%. What is the tax liability for the year? A. $10,500 B. $7,950 C. $7,200 D. $6,450

D

Under what conditions can an agent provide advice and counsel to the customer? A. Upon a verbal request by the customer B. Upon a written request by the customer. C. When the request benefits the agent's client D. Never

D

Violations of the Sherman Anti-Trust Act can include prison terms and fines of up to how much per violation? A. $50,000 B. $250,000 C. $500,000 D. $1,000,000

D

What are riparian rights concerned with? A. Properties within a 3-mile radius of a seaport. B. Properties used for grazing livestock. C. Properties that are in designated drought areas. D. Properties adjacent to flowing bodies of water.

D

What can a broker-salesperson who is a branch office manager for a large real estate company do? A. The office manager cannot continue to sell and list property because he/she would be in direct competition with the salespeople. B. As a principal broker, the office manager must manage. C. The office manager may not list or sell. D. Missouri law does not prohibit branch managers from listing or selling.

D

What does the salesperson have to disclose? A. There was a previous/recent fire in the house. B. The house was not fumigated. C. The owner is getting a divorce. D. There is a septic system.

D

What is "escheat?" A. The principle that gives governments the right to levy real estate taxes. B. The process by which a squatter can obtain legal title to real estate. C. The process by which a municipality condemns land and takes it for public use. D. The process by which ownership of real estate reverts to the state when there are no legal owners.

D

What is the GIM of a strip mall with an annual income of $547,500 and a value of $6,345,000? A. 8.6 B. 139.1 C. 103.2 D. 11.6

D

When Brokers' Licenses are renewed, they are issued for a period ending: A. one-year period on June 30 B. one-year period on Jan 1 C. two-year period on Jan 1 D. two-year period on June 30

D

Which of the following best describes actual notice? A. It is notice published in a newspaper. B. It is knowledge one could have or should have obtained. C. It is notice explicitly stated in a legal document. D. It is knowledge received or imparted through direct experience.

D

Which of the following is NOT a feature of a living trust? A. Can be revoked B. Any competent adult can be trustee C. Provides benefits while the trustor is alive D. Takes effect when the trustor dies

D

Which of the following is TRUE of a nuncupative will? A. It is in the testator's handwriting. B. Generally, it does not need to be signed in order to be valid. C. It is valid for the transfer of real property, even if it is not witnessed. D. Generally, it is not valid for the transfer of real property.

D

Which of the following is a true statement about a salesperson who violates the Missouri Real Estate License Law? (Chapter 339-250) A. The agent could be charged with a class B felony. B. The agent may not be subject to criminal prosecution under the general laws of the state. C. The agent may not incur civil liability under the general laws of the state. D. The agent could have his license revoked for violation of the law. Violation of MREC rules is a Class B Misdemeanor.

D

Which of the following is an example of involuntary termination of agency? A. Expiration of the agreement B. Contract fulfillment C. Termination of the relationship by mutual agreement D. Bankruptcy

D

Which of the following is legal advertising? A. A broker who owns a building with a sign that reads, "For Sale, 555-1224." B. A broker who owns a building with a sign that reads, "For rent by Owner, 555-1234." C. A broker listing his own property with a sign that reads, "For Sale by Owner, 555-1234." D. A broker has a listing on his own property with a sign that reads, "For Sale, call ABC Realty."

D

Which of the following is true about a net listing in Missouri? A. It may be in oral form only. B. It must be in writing according to the Statute of Frauds. C. It is the only type of listing allowable in Missouri that can be canceled without notice to the broker. D. It is illegal and prohibited in Missouri.

D

Which of the following statements about real estate licenses is true? A. each license is issued for a one-year period and expires on June 30. B. the real estate commission must send a renewal application to the licensee's last known address by certified mail at least 30 days in advance of the license expiration date. C. if a licensee does not receive a renewal notice, the real estate commission rules provide an automatic 30 day grace period. D. a new license will be issued only upon receipt of the fee and properly completed application.

D

Which of these is not a way a buyer's agent might receive compensation? A. Seller pays the compensation. B. Buyer pays a flat fee. C. The agent receives a retainer. D. Agent gets everything above the net price set by the seller.

D

Which type of compensation is more likely to be used in a commercial rather than a residential transaction? A. Kick-back B. Percent of sale C. Margin payment D. Retainer

D

Which would NOT be considered real property? A. House B. Mineral rights C. Air rights D. Trade fixtures

D

Why would a property owner file a quiet title suit? A. To force the grantor to defend the title against a third party claim B. To terminate a co-ownership estate when one co-owner is unwilling C. To keep the owner's name out of the title records D. To have an encumbrance removed if the lien holder cannot prove its validity

D

What do deed restrictions do?

Deed restrictions place limits on how the property may be used.

What five economic characteristics affect the value of land in the marketplace?

Demand Utility Scarcity Transferability Situs

What is the primary distinction between a freehold estate and a leasehold estate?

Duration of the owner's rights. A leasehold is temporary, even if there is no specific term, while a freehold has an indeterminate duration.

What are the two basic types of easement and what is the difference?

Easement appurtenant -- attaches to the estate and transfers with it unless specifically stated otherwise in the transaction documents Easement in gross -- a personal right to use that does not attach to the grantor's estate.

What does eminent domain allow a government to do?

Eminent domain allows a government entity to purchase a fee, leasehold, or easement interest in privately owned real property for the public good and for public use, regardless of the owner's desire to sell or otherwise transfer any interest. In exchange for the interest, the government must pay the owner "just compensation."

What are the differences between the two kinds of right of redemption and the right of reinstatement?

Equitable right of redemption gives the borrower the right to pay off loan amounts and reclaim a foreclosed property up until the completion of the foreclosure sale. Statutory right of redemption allows the borrower to pay the debt and reclaim the property for a statutory period which may go beyond the completion of the sale (up to a year, in some states). Statutory right of reinstatement allows the borrower to cure the default and reinstate the loan during a statutory period before the law suit is concluded.

Describe the kinds of interests regulated at each level of government.

Federal: broad standards of usage, natural disaster, environment, discrimination, land description, lending State: licensing, regional usage, ownership and inheritance Local: specific land use control, taxation Judicial: case law and common law applications to ownership and use

What is the highest form of ownership interest one can acquire in real estate and why?

Fee simple estate. It includes the complete bundle of rights, and the tenancy is unlimited.

What are the primary differences between tenancy by the entireties and joint tenancy?

Tenancy by the entireties requires co-owners to be married; tenancy by the entireties can have only two owners; a tenant by the entireties cannot convey his or her interest separately to an outside party.

What are some of the assurances about construction quality provided to home buyers by federal laws and regulations?

HUD's Minimum Property Standards provide minimum standards for HUD-regulated single-family and multi-family construction projects. The Interstate Land Sale Full Disclosure Act guards consumers against fraud by requiring developers to disclose relevant information about subdivisions before purchase. The National Electric Code provides standards for wiring and electrical equipment. The Americans with Disabilities Act ensures that accessibility standards will be observed in certain types of residential construction.

What is a mechanic's lien?

If a property owner fails to pay for work performed or materials supplied, a worker or supplier can file a mechanic's lien to force the sale of the property and collect the debt.

Discuss how the right of possession determines what kind of estate or interest a party has in real estate.

If the interest-holder enjoys the right of possession, the estate is an estate in land. If the interest-holder does not have the right of possession the interest is an encumbrance in the case of a private interest-holder, or some form of public interest in the case of a non-private (i.e., governmental) interest-holder.

What are the three physical characteristics of land?

Immobile or permanent Indestructible Non-homogeneous or unique

What are some circumstances that typically trigger a reassessment of a property?

Improvements to the property in general. Specifically, basement finishing, garage additions, swimming pool construction.

What is a contract?

In the simplest terms, a contract is the intangible agreement that was made in "the meeting of the minds" of the parties to the contract.

What is the function of a deed in lieu of foreclosure?

It avoids foreclosure by transferring legal title to the mortgagee.

Is a special assessment a voluntary tax lien or an involuntary tax lien?

It can be either, depending on whether the citizen has asked for the improvement which is to be paid for by a special assessment (voluntary) or whether the taxing entity has initiated the assessment (involuntary).

What happens to the title to a foreclosed property in a strict foreclosure?

It transfers immediately to the lienholder.

What are the basic differences between the three types of foreclosure?

Judicial foreclosure: sale under court supervision Non-judicial foreclosure: sale without court supervision Strict foreclosure: no sale; immediate transfer to lienholder.

Explain the differences between the legal concepts of land and real estate.

Land encompasses the surface of the earth, whatever is below the surface, whatever is above extending into space, and every natural thing that is permanently attached to the earth. Real estate includes all this plus all man-made things permanently attached to the earth.

Give an example of a legal and illegal nonconforming use.

Legal: A motel is situated in a residential area that no longer allows commercial activity. The zoning board rules that the motel may continue to operate until it is sold, destroyed or used for any other commercial purpose. Illegal: That same motel is sold, and the new owner continues to operate the property as a motel.

What basically happens in a foreclosure?

Lienors force a property owner to give up title. This may involve either the lienors' forcing the owner to sell and pay off the creditors, or taking title directly.

What is the difference between littoral rights and riparian rights?

Littoral rights concern properties that border bodies of water that are not moving. Riparian rights concern properties that border moving water such as streams and rivers.

What do subdivision regulations usually cover?

Location, grading, surfacing, alignment and widths of streets and highways. Sewer and water main installation Minimum dimensions of property lots Setback lines for structures Areas reserved for public use, such as parks and schools Public utility easements

What are the legal tests that determine if an item is a fixture?

Method of annexation (attachment) Adaptability Intention Existence of an agreement

What are the conditions necessary for an involuntary transfer by adverse possession to occur?

The adverse possessor must show: a claim of right; possession without concealment; possession without consent; possession for a statutory period; possibly, payment of taxes.

Describe the main differences between deeded time-share ownership and vacation interval ownership as forms of ownership.

The deeded time-share owner owns real property; the interval owner owns personal property; the deeded owner acquires the rights to use (a unit at a specific time), rent, sell, exchange or bequeath the interest; the interval acquires a right-to-use (no particular unit, at a specific time) and may have other rights to sell, exchange, etc., if allowed by the resort owner.

Why is "notice" important in determining who holds title to real estate?

Ownership is a function of evidence. The best evidence is a combination of actual and constructive notice. Actual = direct knowledge; constructive = "could-have-should-have-known" knowledge (especially, public records).

What are a tenant's primary obligations when leasing a property?

Pay the rent on time. Maintain the property's condition. Comply with the rules and regulations of the building.

List at least three goals of land use control.

Preserve property values Promote highest and best use Balance property rights with public good Control growth Involve community in planning process.

Why is it necessary for a complete legal description to include the county and state?

Principal meridians and base parallels extend through more than one county and state; naming the county and state in the description provides extra protection against misreading a description as applying to two different properties.

What happens to the sale proceeds in a judicial sale?

Proceeds are used to pay 1) costs of the sale; 2) special assessment and ad valorem taxes; 3) first mortgage; 4) other mortgages and liens in order of recording; 5) remainder to the borrower.

Define special purpose real estate and give an example.

Property that has a unique use to the persons who own and use it, such as churches, hospitals, schools and government buildings.

Name some of the primary uses of legal descriptions.

Public recording, creating deeds and leases, mortgage documents, other legal documents

What type of lien takes priority over all other liens?

Real property tax lien

What are some of the typical requirements for well and septic systems?

Requirements for wells typically concern placement—for access, freedom from flooding, away from sources of contamination. Requirements for septic systems typically concern proper design, construction, and maintenance; suitable soil; adequate land area.

Describe the legal remedies a damaged party has when another party to a contract breaches the contract.

Rescission - cancel the contract and return all monies. Forfeiture - the breaching party has to give up something. Suit for damages - the breaching party is required by a court to pay an amount specified in the contract (liquidated damages) or an amount determined in the suit (unliquidated damages). Suit for specific performance - the breaching party is required by a court to go through with the contract.

Give a simple description of the Metes and Bounds method of description.

Starting at a point of beginning, it traces an enclosed space by following measured lines around an area and returning to the point of beginning.

The high school district in your town needs operating funds. How does it regularly obtain them?

The district determines how much of its budget must be paid for from property taxes. Tax officials calculate the tax base and a tax rate for the school district by dividing the tax base into the revenue required. This tax rate is applied to the taxable value of each property and billed to the homeowners at the proper time. The taxing agency (usually the county) collects the revenues and distributes the earmarked portion to the school district.

What power does a lender have if a mortgagor defaults in a state that allows non-judicial foreclosure and the mortgage document includes a "power of sale" clause?

The lender can give the borrower notice of the default and a chance to cure it, after which the lender may auction the property.

What factors determine lien priority?

The lien's categorization as superior or junior The date the lien was recorded

What is a common example of an easement by necessity?

The need for access to a property so that it is not landlocked.

What happens to an offer made to a seller if the seller changes one of the terms, signs the offer, and returns it to the buyer?

The original offer becomes void. The changed offer is a new offer, or counteroffer, from the seller to the buyer.

What are the essential characteristics of fee simple defeasible estates?

The property must be used for a certain purpose or under certain conditions. If the use changes or if prohibited conditions are present, the estate reverts to the previous grantor of the estate.

What conditions are necessary for a special exception to a zoning regulation?

The requested use must be beneficial or essential to the public welfare and may not materially impair other uses in the zone.

Define the "right to use" and describe its limitations.

The right to use a property refers to the right to use it in certain ways, such as mining, cultivating, landscaping and building on the property. The right is subject to the limitations of local zoning and the legality of the use. One's right to use may not infringe on the rights of others to use and enjoy their property.

What is the Doctrine of Laches?

This doctrine states that if a property owner is lax in protecting his or her rights, the property owner may lose those rights.

What are the primary differences between tenancy in common and joint tenancy?

Title-- only one title in a joint tenancy, multiple titles in tenancy in common; ownership share-- equal shares in joint tenancy, electable in tenancy in common; transferability-- tenant in common may sell, encumber, etc., his or her share, but joint tenant's interest becomes a tenancy in common interest if sold; survivorship-- joint tenant's interest goes to other joint tenants on death, but tenant in common's interest goes to heirs; creation-- joint tenancy requires the four unities, otherwise a tenancy in common results.

Why do communities care about growth trends?

Too much growth of the wrong type or in the wrong place can overwhelm services and infrastructure.

What is the difference between voltage and amperage?

Voltage is a measure of how much pressure the electrons in a circuit are under. Amperage is a measure of a number of electrons moving through the circuit.

How are easements created?

Voluntary action Necessity Prescriptive operation of law Grant or reservation Implication Government power of eminent domain (condemnation)

When does an offer or counteroffer become a contract?

When the parties, purpose, consideration and good faith requirements have been met and the offeree communicates acceptance to the offeror without changing the offer in any way.

Define "undivided interest" in real estate.

When two or more owners share ownership, the interest of an individual owner is undivided and indivisible in the sense that it pertains to a fractional part of the entire estate, not to a physical portion of the real property.

What primarily distinguishes freehold estates from leasehold estates?

Whether an estate in land is a freehold or leasehold estate depends on the length of time the holder may enjoy the right to possess the estate, the relationship of parties owning the estate, and specific interests held in the estate. The duration of the owner's rights in a freehold cannot be determined: they may last for a lifetime, for less than a lifetime or for generations beyond the owner's lifetime. In a leasehold, they have a specific duration, as represented by the lease term.

The fee simple freehold estate is called the highest form of ownership interest, even though a fee simple defeasible carries some restriction on usage. Why are other estates less desirable?

With all other estates in land-- life, leasehold-- the holder of the estate cannot control what happens to the estate in the future. The life estate reverts or is remaindered; the leasehold terminates when the lease expires.

Describe the four types of will.

Witnessed—written, two witnesses; holographic-handwritten or typed, signed by testator; approved-on a pre-printed form approved by the state; nuncupative-written by a witness from testator's oral statement; generally not valid for real estate transfer.

What happens to Joe's real estate in your state if Joe dies leaving: no legal heirs, and no will?

after all claims have been satisfied (here, there can be no life estate), the estate goes to the state by escheat

What happens to Joe's real estate in your state if Joe dies leaving: a wife, children, and a will?

after all claims have been satisfied (including those of legal life estates), the estate goes to the heirs according to the will.