Real Estate Law

Under the federal fair housing laws, which of the following phrases would be illegal in advertising?

Adult building

Which of the following constitutes illegal commingling by a licensee?

Broker deposits payroll funds into the trust account

A seller of a property could NOT transfer marketable unencumbered title. What should the broker do with any earnest money involved in the transaction?

Give it to the buyer

If an owner tells a licensee not to show the property to minorities, which of the following statements BEST describes the obligations of the agent?

Inform the owner that the licensee cannot legally accept the listing

What is the purpose of earnest money being part of a real estate contract?

It establishes the intent of the buyer to carry out the contract

What is the best definition of good consideration?

Love and affection

An integrated club refused to sell a property to a person because of that person's race. The person then sued the club. Is the club justified in its actions?

No, because there are no exceptions to the fair housing laws regarding race

A buyer phoned a seller to inquire about a piece of real estate the seller had for sale. The buyer and seller agreed to the price and terms over the phone. Which of the following is the MOST LIKELY legal effect of this agreement?

Non-enforceable

Which of the following acts would be permitted under the 1968 Federal Fair Housing Act?

Not renting a house to someone because they have a poor credit history

Y offers X $60,000 for X's property. Which of the following terms BEST describes the role of X?

Offeree

A prospective buyer wanted to have the right to purchase a home at a set price within the next 90 days but did not want to be obligated to purchase it. Which of the following documents would allow the buyer to do this?

Option

Which of the following transactions is EXEMPT from the requirements of the Federal Fair Housing Act?

Owner renting one room in an owner occupied residence

A licensee received an offer on a house. While preparing to present the offer, another offer on the same house came into the office. Which of the following statements BEST describes what the licensee should do?

Present both offers at the same time

Under the federal fair housing laws, which of the following would NOT be discriminatory?

Requiring a tenant to remove a ramp from the deck of an apartment at the end of a lease

When a contract is signed between a buyer and a seller, the buyer is known to have received equitable title upon the happening of which of the following events?

Signing of the agreement by the buyer and seller

A buyer and seller negotiated a sale whereby the seller was to include all the kitchen appliances. Upon moving in, the buyer discovered that the seller had taken all the kitchen appliances. What would be the buyer's best remedy?

Sue the seller for specific performance

Which of the following statements would be the BEST example of puffing?

Telling a buyer this home has the most beautiful view overlooking the lake

A corporation who purchased a piece of real estate as a co-owner with an individual would usually take title in which of the following manners?

Tenancy in common

Which of the following statements BEST describes the usual legal effect of a contract signed between an adult and a minor?

Voidable by the minor

Under the federal fair housing laws, which of the following advertisements would be allowed?

Wheelchair accessible

When does a sales contract become legally binding for the buyer?

When the seller's acceptance is communicated back to the buyer

A buyer contacts a listing broker about writing an offer on a property the broker has listed. The buyer wants to make an offer $40,000 below the list price. What should the listing broker do?

Write the offer as instructed by the buyer

A buyer made an offer on a property a broker had listed. The broker presented the offer to the seller. While the seller was still considering the offer, the buyer contacted and informed the broker that the buyer wanted to withdraw the offer. The broker should:

continue to market the property for the seller

In order for a real estate sales contract to be valid, it must include a:

property description

An agent is working with a married couple in the purchase of a home. The couple asks the agent how they should take title to the property. The agent should say:

see an attorney

In the process of preparing to present an offer to the seller, a broker receives another offer. The broker:

should present both offers together

In doing a survey, monuments are sometimes used:

to legally describe a piece of real estate

How long does a person have who has been discriminated against to file a complaint with the Department of Housing and Urban Development (HUD)?

1 year

Carpeting costs were $19.95 per square yard plus an extra $5.00 per square yard for padding. If a room measured 22.5' by 15', what would be the total cost to install the carpet?

22.5` x 15' = 337.50 square feet / 9 = 37.50 square yards x $24.95 = $935.63

A licensee lists a 30 acre property for $10,000,000. The seller originally paid $5.50 per square foot for the property. How much per square foot has the property increased in value?

30 acres X 43,560 sq. ft. per acre = 1,306,800 sq. ft. of land. 1,306,800 sq. ft. X $5.50 = $7,187,400 (original price of land). $10,000,000 (today`s price) - $7,187,400 (original price) = $2,812,600. $2,812,600 / 1,306,800 sq. ft. = $2.15 increase.

An owner of an 8-plex wants to advertise for seniors only. The building does not have any special facilities for older persons. In order for the owner to do this, at least 80% of the units must be occupied by a person who is at least:

55 years old

Which of the following would be a good example of a person being protected under the federal fair housing laws?

A blind person with a seeing eye dog being able to rent an apartment that has a no pets policy

Which of the following transactions would be governed by securities laws?

A broker selling shares in a Real Estate Investment Trust (REIT)

Which of the following elements must be in a contract to have a valid contract?

A clear description of the land

Which of the following terms BEST describes the practice of encouraging owners to move from an area due to minorities moving in making the neighborhood more integrated?

Blockbusting

Which of the following items would NOT always be part of a real estate purchase contract?

Earnest money

What is true when a counter-offer is made?

It voids the previous offer

Which legal description would use the following verbiage; "Starting at the southernly side of Victoria Street, proceed 100 feet Easterly from the corner that was formed by the stone and tree stump...?

Metes and Bounds

A listing agent presents two offers to a seller that are close to the list price. The listing agent advises the seller to take the higher priced offer. The seller is leaning toward accepting the higher priced offer when the listing agent learns of another offer from a third buyer on the same property. This new offer is a lot lower than the other two offers. What should the listing agent do?

Present the offer from the third buyer because the listing agent must present all offers regardless of how low the price might be

A person has had a mental disability in the past but has recovered and is now mentally competent. Which statement is true under the 1988 Fair Housing Amendments Act?

This person would be covered as the 1988 Act applies to any disability whether a person is recovered or not

When a change is needed in a contract, the best way to accomplish this would be with a(n):

amendment

A licensee in trying to list a property, tells the seller that minorities are moving into the area and property values might devalue. This would be:

blockbusting

A listing broker, in an effort to obtain a listing, tells a property owner that the owner's home is located in a racially changing neighborhood. This is:

blockbusting

The Americans With Disabilities Act (ADA) would NOT apply to a(n):

church

A person with a mental impairment would like to enter into a contract for the purchase of a piece of real estate. Which of the following statements would be true?

A person appointed by the court as a guardian can sign the contract on behalf of the mentally impaired person

Which of the following would NOT be a protected class under the federal fair housing laws?

A person currently using illegal substances

Under the Federal Fair Housing Law, which of the following items qualifies as a handicap?

A person who is mentally or physically handicapped

Which of the following would be an example of an impossibility of performance regarding a sales contract?

A seller had signed the contract without the consent and knowledge of the other owners who were joint tenants

An offer to purchase contract was contingent upon the buyer receiving a loan. The buyer was not able to obtain financing. The buyer informed both the seller and the broker of the loan denial. Which of the following statements is true?

The broker must return the earnest money to the buyer

Knowingly misrepresenting a material fact in a deliberate way so that someone else suffers a loss in an attempt to make money is:

fraud

A good example of a unilateral contract would be a(n):

option contract

A broker has a property listed for $110,000. A buyer tells the listing broker she would like to make an offer of $90,000. What should the listing broker do?

Tell the buyer that the broker will present the offer to the seller

A broker had a piece of property listed for $90,000. A buyer submitted an $89,000 offer. Which of the following statements is correct regarding this situation?

The buyer can revoke the offer until it is accepted

A buyer writes a contract with a contingency that says if a certain thing does NOT happen, the buyer does NOT have to purchase the property. The contract does not close due to this contingency. Normally, any earnest money should be given to the:

buyer

A property has had termite problems in the past. A broker tells a buyer that the termite problems have been taken care of knowing that the problems actually still exist. The broker is guilty of:

deceptive and fraudulent conduct

A violation of the federal fair housing laws:

may be a criminal act

A mortgage contingency usually includes all of the following items EXCEPT:

name of the lending institution

A legal description included Range 2 East and Tier 1 North of a principal meridian. This is an example of a:

rectangular survey system description

A sales contract must be in writing to be enforceable due to the:

statute of frauds

A contract where one or more of the parties can rescind is called:

voidable

When is a purchaser said to have "equitable title?"

At the signing of the sales contract by both buyer and seller

A sales contract is accepted by both parties with earnest money being involved in the transaction. What should the broker do with the earnest money?

Deposit it into an escrow account immediately

Which of the following items would NOT always be a part of a contract for the sale of personal property?

Written agreement NOTE:All contracts do not have to be in writing. The Statute of Frauds says that to be "enforceable" all real estate sales contracts, deeds and leases over one year must be in writing. However, this question calls for the sale of "personal property", not real estate.

A single mother with two elementary children wants to lease a space in a condominium. The condominium rents primarily to the elderly and does not lease space to people with children. Ninety percent of the units are occupied by persons 55 years of age or older. Would the condominium be allowed to deny the space to this family?

Yes, as the condominium was protected under the 80% of the units occupied by persons 55 or over fair housing law exception

A contract whereby either party is not able to sue the other party would be classified as:

unenforceable

A contract where one party is bound to perform but the other party is not would be referred to as:

uni-lateral

An agent is working with buyers wishing to purchase an older home in a deteriorating neighborhood. Both of the buyers have good incomes and are well qualified. The buyers have been turned down by three lenders for a loan on the property. The lenders may be guilty of:

redlining

An agent brought an offer to a seller with the seller counteroffering back to the buyer. In the meantime, another offer was brought to the seller with terms more favorable to the seller. The seller's best option would be to:

rescind the first counteroffer before acceptance and then accept the better offer

A broker found a ready, willing and able minority who offered full price for a house. The seller refused to sell because the buyer was a minority. The broker could legally do all of the following EXCEPT:

show the property only to non-minorities

Which of the following would be exempt under the Federal Fair Housing Law of 1968?

An individual selling a personal residence who does NOT discriminate in advertising

In advertising for prospects, all of the following terms could be used EXCEPT:

national origin

A contract is not completed and binding until it is signed by the:

offeree

A licensee has been accused of steering. Which of the following would HUD LEAST consider?

Considering that the licensee thought he was doing what was in the buyers best interest

A seller and buyer have agreed to a sales contract. The buyer backs out of the agreement. Which of the following could the seller NOT do?

File for a writ of execution

An offer to purchase contract has been presented to a seller. Which of the following statements is true regarding the offer?

It could be withdrawn anytime prior to conveyance of an acceptance or rejection NOTE: An offer or counteroffer can be withdrawn up until acceptance and communication back of the acceptance.

Two brothers wanted to purchase a property for their parents to live in during their retirement years. The brothers wanted to take title in a manner that limited their tax liability. As an agent helping the brothers in this purchase, what would you recommend?

That the brothers seek advice from an attorney

H had a property for sale for $129,000. B made an offer for $123,000. H made a counter-offer of $127,000. Which of the following statements is NOT true regarding this situation?

The counter-offer would be binding on B

A handicapped person asked the landlord for permission to alter the apartment. Which of the following is true regarding the costs of changing the apartment back after the termination of the lease?

The landlord can require that it be restored as it was before the alteration

R made a promise to sell the property to T. T, however, was only obliged to purchase the property if a certain condition was met. Which of the following statements would be true?

This is a unilateral contract where T does not have to perform

False information was given to induce a person to enter into a contract. Which of the following legal effects BEST describes this contract?

Voidable by the misrepresented party

A legal description that uses directions, distances and monuments is called:

a metes and bounds description

A seller told a broker, "If you find me a buyer, I'll pay you a commission. However, I don't want to sign a formal agreement." This type of agency would be classified as an:

expressed

A seller and buyer enter into a sales contract on a property. The seller breaches the agreement causing the buyer to sue for specific performance. If the buyer wins this lawsuit, the seller will have to:

follow through with the original contract

A seller's agent has a property listed. A buyer would like to make an offer on the property but wants to include an inspection contingency. In order to protect the seller, the listing agent should:

make the inspection contingency for the shortest time frame possible

S owns a property and lists the property for sale with a broker. The broker finds a buyer who makes an offer on the property. S is considered to be the:

offeree

A contract that begins as uni-lateral but could end up being bi-lateral is a(n):

option contract

A right to buy a property for a definite sale price with a definite time period is referred to as a(n):

option contract

A listing agent has received several offers on a listed property all at the same time. The listing agent should:

present all offers together at the same time NOTE: an agent must present all offers together at the same time to allow the seller to choose which one is best

A broker tells a buyer that the broker thinks a particular house is the best in the neighborhood. The buyer purchases the property only to find another property later on that is more desirable. The broker is guilty of:

puffing