Real Estate National Exam #4
A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property? $1,335.67 $2000 $363.64 $598.95
$1,335.67
Michael paid $385,000 for his home, which now has an assessed value of $392,000. His tax rate is 0.51%. How much with his monthly taxes be? $163.62 $166.60 $186.52 $297.50
$166.60
The Slathertons are looking at buying a $300,000 property with a 20-year loan at a 6% interest rate. Using the amortization chart factor of 7.16431, how much would their monthly principal and interest payment amount be? $2,149.30 $2,421.65 $2,981.92 $3,1596.30 The estimated payment is $2,149.30. Remember to divide $300,000 by 1,000, then multiply the factor (7.16431) by 300.
$2,149.30
Henry submits an offer on a condo and includes an earnest money check for 10% of his offer, which the seller accepts. Later on at closing, he brings a cashier's check for $34,450 (comprising the remaining half of his 20% down payment and $7,950 in closing costs). What's the condo's purchase price in whole dollars? $132,500 $265,000 $344,500 $88,333
$265,000
Your seller client has an offer for $300,000. If the agreed-upon commission is 5%, what is net to seller before any other costs are taken into account? $280,000 $285,000 $290,000 $295,000
$285,000
The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn't made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar. $151 $242 $298 $449
$298
The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000. Using an assessment ratio of 25%, what is the assessed value of their new home? $21,246 $25,323 $46,750 $52,753
$46,750
If you sell a home for $143,000, and your commission rate is 5%, what is your commission on the sale of this home? $7,150 $7,500 $8,580 $9,440
$7,150
Gary has an 80% LTVR on his new $318,000 townhome with an annual interest rate of 4.125%. What's his interest payment the first month? $1,093.13 $1,126.25 $874.50 $901
$874.50
The assessed value for your buyer clients' new purchase is $209,000. They feel they got a great deal since they're purchasing the property for $175,000. They've asked you to estimate their monthly property taxes. You know the rate for their jurisdiction is .52%. What is the monthly tax amount your clients owe? $101.12 $121.98 $75.83 $90.57
$90.57
Related to real estate financing, how much is a point? $1 $10 1% of loan value 1% of sale price
1% of loan value
Jared has a 70/30 split with his brokerage firm, and his firm has a 50/50 split with cooperating brokerages. Last month, he was paid $12,239.50 in commissions from his home sales, which totaled $538,000. Assuming every transaction for the month was shared with a cooperating brokerage, what is Jared's brokerage's commission rate? 2.3% 3.8% 6.5% 7.6%
6.5%
Glenn is purchasing a home for $400,000. The property appraised at $415,000 and Glenn is financing $300,000. What's the loan-to-value ratio? 72% 75% 82% 96%
75%
Related to title insurance, what is "subrogation"? A covered party grants permission to the title company to pursue the party who caused a claim or loss. The act of conveyance when the seller turns over all property rights to the buyer with a clear, marketable title. The process by which the lender receives coverage under a title insurance policy the borrower has purchased. The process by which the title policy pays out any claims to the buyer or lender.
A covered party grants permission to the title company to pursue the party who caused a claim or loss.
Which of these statements best represents what happens after a federal fair housing complaint is made? A fair housing specialist will review the complaint. An official housing discrimination complaint will be filed, and a fair housing specialist will be assigned to the case. FHEO will contact the alleged perpetrator to gather information. HUD will review the complaint to determine if it's valid.
A fair housing specialist will review the complaint.
Which of these statements about frontage is true? A lot that's 75 feet wide by 30 feet deep has a frontage of 30 feet. Frontage is used in calculating property taxes. The frontage for a lot that's 120 feet by 85 feet is 120 feet. The frontage of a property on a corner is measured from the lot line on one side to the street's center on the other.
A lot that's 75 feet wide by 30 feet deep has a frontage of 30 feet
Which of the following statements about material facts is true? All material facts are related to physical conditions. All parties considering a property would regard each material fact in the same way. A material fact may have more or less effect on a buyer based on the buyer's needs and values. Material facts are only those that can be easily seen or discovered.
A material fact may have more or less effect on a buyer based on the buyer's needs and values.
To which of the following borrowers might a lender be most likely to recommend an FHA loan? An investor who intends to use equity in another investment property as his down payment A retired couple interested in downsizing from a large four-bedroom house they own free and clear to a condominium A single stockbroker with a $40,000 down payment and significant assets in a stock portfolio A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores
A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores
When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at? Addendum Amendment Annotation Appendix
Addendum
Your buyer, Billy, wants to make an offer on the craftsman house he saw today, but he wants the sellers to start the paperwork for a tax reassessment before closing. This isn't part of the standard sales contract in your area. What will you use to accomplish this request? Addendum Amendment Annotation Appendix
Addendum
Janice is extremely excited to have purchased her first home. She was able to lock in her monthly payment at a very low rate for the first five years. In year six, Janice's payments will become significantly larger based on the going market rates. What type of loan does Janice have? Adjustable rate mortgage A straight-term loan Purchase money mortgage Wrap-around mortgage
Adjustable rate mortgage
_______ is a standardized measure for interest rates and other costs of the loan. Annual percentage rate Discount rate Federal funds rate Prime rate
Annual percentage rate
Even though the Federal Trade Commission is concerned with all ad claims, what sort of ads would most likely concern the commission? Ads for products that don't offer any specific value to consumers Ads making exaggerated claims most reasonable consumers wouldn't believe Any ad that is demonstrably false Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate
Any ad that makes a health or safety claim or any claim that's difficult for the consumer to evaluate
REALTOR® Arnold was instructed by his client Sebastian to find a buyer who would "fit into the neighborhood." What is Arnold's responsibility in this situation? Arnold must comply with his client's instruction, regardless of his own feelings on the subject. Arnold must conduct his usual advertising strategies and find covert methods for selecting buyers that meet his client's desired profile. Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws. Arnold must explain to Sebastian that he cannot continue to work as his agent under the circumstances.
Arnold must explain to his client the responsibilities for fair treatment that they both have under fair housing laws.
Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario? Assignment Breach Novation Performance
Assignment
Bill is joining his inspector Hank for an inspection of the property he hopes to purchase. Hank notices that the dirt on the exterior of the home slopes toward the house. He explains that it should slope away from the home. When it doesn't, what problem might this create? Basement leaks Chimney issues Contamination of the home's water source Mosquito breeding
Basement leaks
Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have? Bilateral Executed Mutual Unilateral
Bilateral
Sue and Jim are hoping to expand their family, which means moving to a larger home. They're closing on their new home soon, but haven't yet sold their current one. Which type of loan will help them afford both homes for a short period of time? Bridge Lease with option to buy Purchase-money mortgage Wraparound loan
Bridge
In states where full disclosure isn't required, it's the ______ responsibility to perform due diligence on the property. Broker's Buyer's Salesperson's Seller's
Buyer's
If you see sawdust and can't explain its presence, it's probably a sawdust-like material called frass created by which pest? Carpenter ants Fire ants Fireflies Slugs
Carpenter ants
What does the metes and bounds system use to develop a property's legal description? Compass headings and directions Plat references Principal meridians and base lines Townships and sections
Compass headings and directions
Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own? Apartment Condominium Cooperative Townhouse
Condominium
Which of the following is an example of a universal agent? Buyer's agent Conservator Escrow officer Listing agent
Conservator
Which of these is a violation of the RRP Rule? A homeowner performs DIY work in a home built prior to 1978. A seller of a home built in 1952 doesn't make the appropriate lead disclosures. Contractors from a home improvement store install windows or doors. Contractors perform renovations that disturb lead-based paint without holding proper certification.
Contractors perform renovations that disturb lead-based paint without holding proper certification.
Which economic principle pertains to how a change in a property affects its value as a whole? Anticipation Conformity Contribution Substitution
Contribution
Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole? Contribution Impact on value Plottage Progression
Contribution
What should brokerages do with regard to using social networking sites to market real estate? Allow verbiage, but no pictures, in social network marketing. Ban their use until real estate-specific social networking is created. Create policies and procedures that address proper social networking use. Discourage salespeople from using social networking sites.
Create policies and procedures that address proper social networking use.
Jules is new to property management. Which of the following tasks may be one of her duties? Creating a budget for next year's projected maintenance costs Investing profits from the business Purchasing the apartments to be managed Representing the owner in court
Creating a budget for next year's projected maintenance costs
Chip is a residential and commercial agent. His friend asks him to list his cattle ranch for sale, but Chip's never listed an agricultural property before. How should Chip handle this listing so he can still work for his friend but also not work outside his area of expertise? Disclose to his friend that he's not an agricultural expert and ask his friend's permission to work with an agricultural expert in his firm. Refer the listing to an agricultural agent and ask his friend to keep him informed of the transaction's progress. Take the listing and apply commercial real estate practices, since agricultural sales are similar to commercial sales. Turn down the listing, citing his lack of experience in agricultural work.
Disclose to his friend that he's not an agricultural expert and ask his friend's permission to work with an agricultural expert in his firm.
Fewer buyers in a higher price range would create what kind of pressure on housing prices? Downward Steady Strong Upward
Downward
Which of the following situations is an example of a non-agency relationship? Dutton was previously a licensee. He's selling his home, and he wants Wanda, who's currently licensed, to assist him with the paperwork. Kendra represents Steven in the sale of his home by helping him complete the necessary paperwork to make his offer. Licensee Alexa works closely with her buyer clients' lender to be sure the lender has all information needed to approve the loan. Licensee Ingrid helps her neighbor Jeremy spruce up his house before Jeremy's agent holds an open house.
Dutton was previously a licensee. He's selling his home, and he wants Wanda, who's currently licensed, to assist him with the paperwork.
Elvin owns 150 acres of prime hunting land. Every year, he gets requests from private groups that would like to use his land for a day or two during hunting season. He sometimes grants these requests, but this year, he's decided to only use it himself with his friends. Which right in the bundle of rights says that he can say no to these requests? Control Enjoyment Exclusion Possession
Exclusion
Farm families financing the purchase of properties in rural areas may be able to obtain financing through this government agency if they meet certain criteria, such as income requirements. Department of Veterans Affairs Environmental Protection Agency Farm Service Agency Federal Housing Authority
Farm Service Agency
Jenner purchased his first home, to which he'll have access forever, as far as he knows. Jenner owns a(n) ______. Estate for years Freehold estate Leasehold estate Ownership estate
Freehold estate
Which of these is NOT an example of agency coupled with interest? Carma agrees to list Tera's property for free if Tera signs an agreement to purchase her new home through Carma. Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller. Jeanine agrees to charge no commission from her buyer's purchase of a four-plex if the buyer agrees to pay Jeanine a 3% fee for each unit for which she finds a tenant after the sale. Rhoda loans Carl the money to catch up his mortgage payments in return for a listing agreement to sell Carl's home for a 4% commission.
Gene, a real estate professional, is purchasing a home for his personal use. He negotiates a reduction in the sales price in return for taking no commission from the seller.
Johnstone's Realty is a new discount, menu-based brokerage firm. Its approach usually results in a lower listing commission rate than other firms offer. Johnstone's also offers a lower cooperating brokerage split than most other firms. Business is booming for Johnstone's, and the remaining firms in town are concerned. These brokers agree to not show Johnstone's listings to their buyer clients. What is this an example of? Blockbusting Group boycotting Market allocation Steering
Group boycotting
A landlord has an available unit but refuses to show it to several applicants. These applicants are all single women with children. The applicants who are shown the apartment are all individuals or couples without children. In what way is the landlord violating fair housing law? He is advertising the unit in a restrictive way that discriminates against those with children. He is discriminating against people based on familial status by refusing to show available housing. He is discriminating by offering special terms for rental based on a protected class status. He is sexually harassing potential tenants.
He is discriminating against people based on familial status by refusing to show available housing.
Thad received multiple offers on his property and is reviewing them with his agent Nora. All of the offers have at least one contingency. Nora recommends that they reject the second offer, because it has a contingency that's generally the most risky. Which contingency is that? Appraisal Financing Home sale Inspection
Home sale
When is a cease and desist order effective? 30 days after issuance 90 days after issuance and for 120 days total Immediately upon issuance Retroactive from the first date of the prohibited activity
Immediately upon issuance
Charlie represents Sue, a buyer, in a transaction. A licensee from another firm represents the seller, Claude. Claude will pay a 6% commission to his listing firm, and that firm will split the commission with Charlie's firm. Charlie will be compensated through his brokerage. What's true about this situation? Charlie and the other licensee are engaging in undisclosed dual agency. Charlie's compensation comes from Claude, so Charlie is also Claude's agent. In this transaction, Charlie only represents Sue and the other licensee only represents Claude. Sue is now Charlie's customer because she's not compensating Charlie for his services as her buyer's agent.
In this transaction, Charlie only represents Sue and the other licensee only represents Claude.
Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed? Immobility Indestructibility Permanence of investment Uniqueness
Indestructibility
Estelle is representing seller Margaret. Which of the following tasks is one that Estelle is required to perform as Margaret's agent? Decide at which price to list the property based on comparables. Give the buyer's earnest money to Margaret to deposit into her personal checking account. Hire someone to market the property. Inform Margaret about required property condition disclosures.
Inform Margaret about required property condition disclosures.
Mortgage, homeowners, and flood ______ may be included the mortgage payment. Addenda Fees Insurance Waivers
Insurance
Jordan works as a property manager for several residential property owners. When she receives security deposits from tenants, how long does she have to deposit them into an escrow account? It depends on her state's requirements. She has seven business days. She has three business days. There is no deadline.
It depends on her state's requirements.
Which offer would be the most appealing to a seller? A full-price offer waiving inspection, conventional financing with 20% down, closing in 45 days. An all-cash offer $15,000 below list price, closing in two weeks. An offer $10,000 over list price, contingent upon appraisal and inspection, conventional financing with 20% down, closing in 30 days. It depends on the seller's needs and motivations.
It depends on the seller's needs and motivations.
Why might a licensee want a buyer to sign a buyer representation agreement? It helps ensure buyer loyalty. It provides the agent with bragging rights. It's required by law. It will ensure that he'll receive the standard commission rate.
It helps ensure buyer loyalty.
Jennifer plans to sell her rental property to Eliot, a buyer. What obligation, if any, do Jennifer and Eliot have to the tenants of the property? Eliot must notify the tenants once he takes over as landlord. Eliot must notify the tenants that the lease will be terminated when he takes over. Jennifer has no obligation to inform the tenants of the change in ownership, provided Eliot intends to keep them as tenants. Jennifer must notify the tenants of the change in ownership.
Jennifer must notify the tenants of the change in ownership.
Which of these is an example of puffery? Kari's ad boasts that the property is "just blocks from the proposed metro light rail station." Katherine's ad for her newly renovated home states, "New from the studs up." Her carpenter might tell you a different story. Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay." Kim notes that the property "overlooks a serene, peaceful green space." It's next to a cemetery.
Kevin's MLS remarks note that the condo has the city's "most beautiful twilight view of downtown and the bay."
The primary purpose of the Real Estate Settlement Procedures Act is to ensure that buyers ______. Can get federally guaranteed loans Get favorable interest rates Have mortgage options to choose from Know all settlement costs up front
Know all settlement costs up front
Which of these is the best definition of real estate? Everything that's not real property Land, plus all things permanently attached to it naturally or artificially Real property, plus all of the interests, benefits, and rights included in ownership The earth's surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Land, plus all things permanently attached to it naturally or artificially
Your buyers love the 1891 Victorian they have under contract, but they want to get both the water and the paint tested as soon as possible. What are they testing for in both water and paint? Asbestos Lead Mold Radon
Lead
Everything in your office is potentially at risk from thieves and other criminals. Because of this, what should you never do? Invite clients to the office. Leave clients unattended in the office. Lock your computer. Use a computer.
Leave clients unattended in the office.
A mortgage is a legally binding document that creates a lien on a piece of property and gives the lender the right to foreclose on the property if the borrower defaults. Who or what entity is considered the mortgagee? Borrower Lender Loan Property
Lender
John is considering purchasing an office building and is trying to determine whether or not it's a good investment. The methods of income approach he may use when estimating the value are all of the following EXCEPT for which? Market or sales comparison The capitalization method The gross income multiplier The gross rent multiplier
Market or sales comparison
Lena's buyer client Mindy is making an offer on Joe's house. Which party decides how much earnest money to offer? Joe Joe's agent Lena Mindy
Mindy
Which of these is an example of bulk zoning? Greenville developers must adhere to specific design parameters for construction within the city's downtown area. Misty Falls restricts building any structure within 15 feet of a roadway. Oak City developers must include subdivision open space proportionate to the overall development acreage. Rushton city council members approved the location of a light industrial building within a currently-zoned agricultural area.
Misty Falls restricts building any structure within 15 feet of a roadway.
Corinne is 68 years old and employed full time. She's of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, Katherine. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination? Age, employment status, national origin, familial status, and sexual identity Age, race, familial status, sexual identity, and disability National origin, sex, disability, and familial status Religion, familial status, and disability
National origin, sex, disability, and familial status
Which of the following statements is true about conventional loans? Originators usually package and sell the loans on the secondary market. They're guaranteed by the U.S. Department of Veterans Affairs. They're insured by the Federal Housing Administration. They're provided by the U.S. Department of Agriculture.
Originators usually package and sell the loans on the secondary market.
Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. What is one of the key determinants that show that something is real property (also known as a fixture)? Internal or external to the house Made of the same material as an interior or exterior wall Over or under a certain value Permanently affixed to the property
Permanently affixed to the property
The government's authority at all levels to ensure the health, safety and welfare of its citizens, which includes the control of public land use is the definition of ______. Condemnation Eminent domain Police power Sovereignty
Police power
Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold? Alluvial Littoral Prior appropriation Riparian
Prior appropriation
Subdivision regulations imposed by developers in an effort to maintain control of the development of the subdivision are an example of ______. Eminent domain Private land use control Profit limitations Taxation
Private land use control
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this? Lot and block Metes and bounds Monument and benchmark Rectangular government survey
Rectangular government survey
Homebuyer Nancy has made an offer to purchase a house and has plans to schedule a home inspection. How can her agent assist her in relation to the home inspection? Negotiate a kickback from the home inspector. Pay for the home inspection. Require the buyer to use the agent's favorite home inspector. Review the inspection report with her and discuss options.
Review the inspection report with her and discuss options.
In states where full disclosure isn't required, whose responsibility is it to disclose any items required by law and respond honestly to any questions about the property's condition? Appraiser Buyer Lender Seller
Seller
Frank owns a property on which there is walkway to the beach shared by his neighbors on either side. What is Frank's property? Dominant estate Gross estate Prescriptive estate Servient estate
Servient estate
Sheldon and Jean retired and bought a townhome in a community about 30 minutes from their children and grandchildren. They're excited about their new living situation because Sheldon's arthritis is getting worse and he'll no longer have to handle ________. Cleaning the townhouse Parking their cars Shoveling snow Washing windows
Shoveling snow
Rhonda purchased an existing pet store in her neighborhood, and she's so excited! Her animal-loving aunt is thrilled for Rhonda but disappointed that she won't be able to visit the store in her wheelchair, as the aisles are narrow and there isn't enough room to move around. What is true about Rhonda's responsibilities to her aunt and other people with disabilities? At a minimum, Rhonda is required to add an accessible bathroom. At a minimum, Rhonda is required to add an accessible entrance to the building. Because Rhonda purchased a retail business, she must meet the same ADA requirements as new construction buildings. Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.
Since Rhonda purchased an existing building and business, the ADA requirements aren't as strict as with new construction and vary by building.
According to the process appraisers follow, what action is taken first upon being assigned a property for appraisal? Determine the highest and best use. Gather and analyze data. Identify the data that's needed. State the problem.
State the problem.
In many areas of the country, Marcellus shale has become a hot commodity. This type of rock produces gas, which can be mined, stored, and sold. Abe learned that his family farmstead sat over a rich deposit of Marcellus shale. What type of rights does Abe have relative to this shale? Air rights Sub-surface rights Surface rights Water rights
Sub-surface rights
Brent and Kathy recently bought a property in a gated community. While doing some landscaping they noticed that their neighbor's shed seems to be over the lot line and on their property. What should they consult to determine if the shed is an encroachment? Deed HOA covenant Mortgage Survey
Survey
What is TRID? Terminating and Reducing Inappropriate Disclosures TILA-RESPA Integrated Disclosures Timely and Rapid Integrity through Disclosures Truth In Disclosing
TILA-RESPA Integrated Disclosures
Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this? Estate in severalty Joint tenancy Tenancy by the entirety Tenancy in common
Tenancy in common
Marla's excited about closing on a cute lakefront cottage. But when she reads the report from the home inspection, she learns that the chimney leaks and that there is water damage in several places. This wasn't on any of the seller's disclosures. Which of these is the best option for Marla? Complete the purchase and plan to spend a lot of money trying to make her cottage leakproof. Complete the purchase, then sue the seller for fraud. Find a lawyer and file a class action suit against the chimney mason. Terminate the agreement and ask for a refund of her earnest money.
Terminate the agreement and ask for a refund of her earnest money.
Mark works at Farm and Country Bank, and has arranged an agricultural loan for Josh, a local organic farmer. Josh didn't meet the bank's normal underwriting standards, but Mark made the loan because he was able to arrange for a guarantee from ______. Farmer Mac The Farm Credit System The Farm Service Agency The Federal Agricultural Housing Authority
The Farm Service Agency
A fire destroyed Meredith's house. Meredith contacted her insurance company, and she was shocked to learn her insurance policy didn't fully cover what she paid for the property. How does the insurance company determine the replacement value of her home? Its current market value The amount it appraised for The amount it would cost to completely replace her home The original sales price when it was first constructed
The amount it would cost to completely replace her home
In which of the following listing agreement terminations is there LEAST likely to be a penalty for terminating the agreement? The agent abandons the listing. The client and agent mutually agree to terminate the listing. The client revokes the listing agreement to sell the property to a family member. The seller withdraws the listing, deciding instead to stay in the property.
The client and agent mutually agree to terminate the listing.
A client terminates a listing agreement before its expiration date. What happens now? The agent must send the client a notice of release form. The agent must sue. The client may owe a commission anyway. The listing is cancelled.
The client may owe a commission anyway.
Norman, the seller's agent, notices a significant crack in the foundation that the inspector failed to note in the inspection report. Norman decides to keep this information to himself. He really needs to close this deal. Which fiduciary duty has Norman breached? The duty of accounting The duty of disclosure The duty of obedience The duty of reasonable skill and care
The duty of disclosure
Morris needs to pay for some repairs made to one of the units in his apartment complex. Which bank account should he use? He can use either the trust account or the operating account The firm's operating account The operating account for that specific unit The trust account for that specific unit
The firm's operating account
Your buyer Clint loves older homes and wants to make an offer on a beautiful Craftsman. He doesn't like the yellow brick and has plans to paint it a lovely Williamsburg blue. You tell him that he may not be able to change the color or, even if he can, he may have to get the color approved first. What did you see on the property disclosure form that hinted at this? The house borders a wetlands. The house has a tax abatement. The house is in a historic preservation district. The house was built prior to 1978.
The house is in a historic preservation district.
Stan is a home inspector who's evaluating a home for potential buyers. He pointed out that neither of the two bathrooms had vent fans installed. Why is this a potential problem that will be noted on the inspection report? Bathroom fans can mitigate lead paint particles. Bathroom fans vent radon to the exterior of the home. The lack of air circulation in a moist room can lead to mold growth. Unseemly smells located that close to the kitchen are a problem.
The lack of air circulation in a moist room can lead to mold growth.
Your clients, Bill and Stacey, are interested in purchasing a piece of land that has several acres of wetlands. Which of the following is a true statement? The presence of wetlands affects use of the property and should always be noted on appraisal reports. The presence of wetlands doesn't affect use or value. The presence of wetlands means the site has significantly less overall value. The presence of wetlands means the site will have a higher appraisal value.
The presence of wetlands affects use of the property and should always be noted on appraisal reports.
What special concern do foreclosed properties often present? Buying the property at a discount may have tax implications. The homeowners may or may not have property insurance. The property sale may be subject to additional fees that will be passed to the new buyer. There could be hidden title issues.
There could be hidden title issues.
In what way is a townhome similar to a condominium? They are both detached structures. They are both multi-family dwellings. They both typically have detached garages. They both typically have HOA dues.
They both typically have HOA dues.
Sophia and Antonio are expecting twins. They want to sell their old house and buy a larger home using a conventional loan. In order to be sure they'll get the PMI waived, what will they need to have? They'll need a 90% loan-to-value ratio. They'll need to put down at least 25%. They should have a loan-to-value ratio of 80% or less. They will need to qualify for an FHA loan.
They should have a loan-to-value ratio of 80% or less.
Which of the following clauses directs the parties to a real estate sales contract to proceed in good faith, and not unduly delay the process? Acceleration clause Indemnification clause Severability clause Time is of the essence clause
Time is of the essence clause
What is the purpose of earnest money? To encourage the seller to come down in the asking price for the property To provide the seller with funds to make required repairs to the property before selling it To retain the services of a licensee To show the seller that the buyer is serious and intends to go through with the sale
To show the seller that the buyer is serious and intends to go through with the sale
Roberto, a licensee, filled in the blanks on a standard form used in his brokerage firm. Is this okay? No, because he's not an attorney, he shouldn't prepare contracts. No, he should have his client complete any forms. Yes, licensees can use standard forms provided by the brokerage or approved by an attorney. Yes, real estate licensees may draft contracts and fill in blanks on existing contracts.
Yes, licensees can use standard forms provided by the brokerage or approved by an attorney.
You're representing Crystal in the purchase of a house. Crystal has a trust fund and can more than afford the house on which she's made an offer. Which of the following statements is true? Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller. Your duty of disclosure to customers and third parties requires that you disclose Crystal's financial status to the seller. Your duty of honesty and fairness to customers dictates that you must share with the seller Crystal's ability to pay more for the property than she offered. Your duty of working in your client's best interests means you should be showing her properties that are in a higher price range since she can afford it.
Your duty of confidentiality to your client dictates that you not disclose your client's financial situation to the seller.
