unit 2 exam

Tom sold his home to Joe and is closing on May 17. The insurance for the property is $1,950. What is Joe's share of the insurance?

$1,207.86

The total amount that can be paid out of the Indiana Real Estate Recovery Fund for claims is

$20,000 per judgment and aggregate lifetime limit of $50,000 per licensee

In an agency relationship, which of the following is prohibited?

A licensed broker agreeing to compensate a subagent in the real estate transaction

A person who performs the acts of a real estate broker without a broker's license commits

A person who performs the acts of a real estate broker without a broker's license commits

A real estate license is required for which of the following?

A real estate broker listing a property for sale

What is an REIT?

A security that sells like a stock on the major exchanges and invests in real estate directly either through properties or mortgages.

_________ is a measurement of how much is invested in the property for tax purposes.

Basis

The building envelope does not include

Below grade

Which of the following is a renewable energy source?

Biomass

The principal purpose of ___________ is to obtain site clean-up by government contract or orders to responsible parties (often referred to as "RPs"), until one or more of the RPs can be found to reimburse the government for their handling of the matter and for damages to natural resources.

CERCLA

A detailed cash accounting of a real estate transaction prepared by an escrow officer regarding a transfer of property ownership is called what?

Closing statement

Why can an unlicensed attorney perform transactions requiring a broker license?

Closings where the client or the client's authorized representative does not attend

There are various types of architecture, each of which can be distinguished by certain features. One characteristic that is not considered a distinguishing feature is

Color

A property inspection determines the property's ___________ while a property appraisal determines the property's __________.

Condition, value

A windowed structure with its own roof that projects from the main roof of a building is called a

Dormer

Which real estate offices are required to be supervised and managed by one individual broker?

Every real estate office

What is one type of coverage that is ALWAYS excluded from a property insurance policy.

Flood

Indiana specifically requires certain documents at closing. Which of the following is one of those specific documents?

Flood zone statement

Where can the supervisory broker conduct business?

For all broker companies located at the same address

When must a broker provide a detailed summary of an escrow account to an authorized representative of the Indiana Real Estate Commission if requested?

For investigative purposes

The Indiana property insurance policy that is specifically for owners of condominiums is the

H0 6

The settlement statement is also referred to as the

HUD Settlement Statement.

The name for the use of water as the heat-transfer medium in heating and cooling systems is called

Hydronics

What is the main shortcoming of a property inspection?

It does not identify everything that might be wrong with the property.

RESPA does NOT apply to

Land contracts

Which of the following statements is TRUE regarding RESPA/TRID requirements?

Lenders must provide a Loan Estimate of settlement costs within 3 business days of loan application.

A __________ insurance policy contains only one type of coverage.

Monoline

Which of the following is a requirement for obtaining a real estate license in Indiana?

Must be free of criminal convictions

What federal law regulates housing construction?

National Electric Code

Which style of house is referred to by critics as McMansions?

Neo-Eclectic

To whom must the owner of a psychologically affected property disclose that fact?

No one

Which style of house was conceived by architect Frank Lloyd Wright because he believed homes should have low horizontal lines and open interior spaces?

Prarie

Which of the following statements is FALSE regarding property disclosure forms?

Property disclosure forms serve as a substitute for agent-initiated information disclosure.

A multi-story, wood-framed and (usually) clapboarded style featuring turrets, towers, verandahs, wrap-around porches, gazebos, scrollwork, and varied shingle patterns is what style of house?

Queen Anne

Under what system are tracts of land subdivided into lots?

Recorded Plat

___________ would exceed standard inspections and would typically be considered an additional inspection service.

Septic tank inspection

Which of the following is one of the classifications of agency confined to a single transaction??

Special

In Indiana, who is the only agency who can impose license requirements?

The Real Estate Commission

What is a real estate referral?

The act of recommending a sales lead to a licensed broker

If an aggrieved person files a claim against a real estate licensee and is awarded payment from the Indiana Real Estate Recovery Fund, what may be included in that payment?

The amount of actual loss that remains unpaid upon judgment plus court costs

Which of the following must be included in a real estate listing agreement?

The amount of commission to be paid

What must the broker do after the termination of an agency relationship?

The broker must account for any money or property received during the relationship.

Which of the following statements is TRUE regarding provisions that govern the actions of a dual agent?

The broker must not knowingly say anything that would place one party at a disadvantage.

A face-to-face closing resolves what issue?

The promises made in the listing agreement are fulfilled.

___________ usually indicates who will provide an owner's title insurance policy for the buyers.

The purchase and sale agreement

If the amount in the Indiana Real Estate Investigative fund exceeds $650,000 at the end of the fiscal year, what happens to the excess funds?

There are no excess funds at that dollar amount.

The Indiana Real Estate Commission was established by whom or what?

Title 876 of the Indiana Administrative Code

What is the purpose of FIRPTA?

To eliminate the problem of collecting delinquent taxes from foreigners

What is one requirement of a broker in an agency relationship?

To immediately present all offers to purchase to the seller

What was the purpose of establishing the FAIR Plan in regard to property insurance?

To make property insurance available to applicants who have not been able to secure such insurance through the normal insurance market.

What is the purpose of the Good Funds Act, HEA 1374?

To provide secure funds in real estate transactions to assure homeowners the check deposited from a real estate transaction is actually good

What is one purpose of the Indiana Real Estate Recovery Fund?

To recover funds used to impose sanctions against real estate practitioners

What must a broker do when he/she terminates association with a broker company?

Turn over listings the broker obtained during the association with the broker company.

Wells should be located in an area where the ground surface immediately surrounding the well is not graded in such a way as to divert surface water away from the well.

Wells should be located in an area where the ground surface immediately surrounding the well is not graded in such a way as to divert surface water away from the well.

Commission splitting occurs when

a broker in an agency relationship with the seller offers a portion of the commission to another broker who actually sells the property.

A cause of loss on a property insurance policy is called

a peril.

A broker who is not an agent for either party but instead acts as a neutral party between both sides is called

a transaction broker.

A lease is not terminated as a result of

alterations.

An escrow account is:

an account used by a real estate broker for expenses incurred during the listing of a property.

When __________ becomes old, starts to disintegrate, and enters the air, it can cause lung cancer.

asbestos

_________ can kill a person before he/she is even aware it is present.

carbon monoxide

The essence of the agency relationship is NOT

compensation

A legal description is typically not necessary for

completing a listing agreement.

When applying sanctions against offending practitioners, the Commission is required to be

consistent

The most important document at closing is the

deed because it conveys the title

The term metes refers to

distance and direction.

What is the purpose of the Indiana Real Estate Investigative fund?

fraud investigations

Regarding a contaminated site, CERCLA does not hold __________ liable for the contamination and its cleanup.

future owners of the site

A licensed broker who represents both the buyer and seller in a real estate transaction is

in an agency relationship with both the buyer and seller.

Property taxes cannot be deducted on a personal income tax return for

inherited property.

Which of the following is NOT an item that typically must be prorated?

insurance

Any home can earn the ENERGY STAR® label if it has been verified to meet EPA's guidelines and

is three stories or less.

The parties to an agency relationship do not include a

lender

One accepted method of legally describing parcels of real estate is

metes and bounds, rectangular survey system or government survey, and recorded plat or lot and block.

Which of the following factors are considered when sanctions are imposed on a practitioner for violating the Professional Standards for real estate practitioners?

mitigating circumstances

A broker who has an inactive license

must pay any fees a licensee is required to pay.

A broker representing the seller or landlord in an agency relationship

must tell the buyer or tenant any adverse facts the broker knows about the property's physical condition.

The type of construction most generally used in home building is

platform frame

A(n) ___________ may identify the need for major repairs or builder oversights, as well as the need for maintenance to keep the house in good shape.

property inspection

The commission investigates complaints against

real estate licensees.

Tall mansard roofs with additional living space due to their height and often seen in government buildings is what architectural style?

second empire

The most complex of the required documents for a closing is

settlement statement

In a standard exterior inspection, the inspector would not inspect the

sprinkler system.

Prior to the Securities Act of 1933, who or what governed the regulation of securities?

state laws

If a real estate practitioner is incompetent, the practitioner must

stop practicing real estate.

If the broker fails to comply with the continuing education requirements,

the Commission will demand proof of compliance from the broker.

The entity that performs administrative duties for the Indiana Real Estate Commission is

the Professional Licensing Agency.

According to the Professional Standards, a real estate practitioner must stop practicing if

the practitioner undertakes professional activities he/she is not qualified to do.

In today's homes, the most significant sources of formaldehyde are likely to be

wood products