60 Hour Course Exam Attempt 2

Why was the Civil Rights Act of 1866 monumental among fair housing and anti-discrimination laws?

It provided no exceptions for discrimination based on race or color.

Which of the following is true about an attorney's opinion of title?

It uses public records to validate property transfers.

Which of the following best describes what an appraisal is?

It's an opinion of value.

Liz listed her property with an agreement end date of May 31. The property went under contract on May 12 and closed on June 2. When did the listing agreement officially terminate?

June 2

What may be found in paint in homes built before 1978?

Lead

What can a wet environment with little air circulation do?

Lead to mold growth

Bonnie, a property owner, is hiring Lester, a real estate licensee, to manage a property. The property is currently occupied by Henry, whose lease is set to expire at the end of the year. Which of these individuals are parties to the property management agreement?

Lester and Bonnie

Serious violations of the real estate license laws will typically result in what disciplinary actions?

License suspension or revocation

Which document provides an estimate of the costs a buyer is likely to pay at settlement?

Loan Estimate

The SAFE Act is intended to help consumers select which professionals, knowing that they are honest and competent?

Mortgage loan originators

Quentin, a licensee in Illinois, is performing ministerial acts for a buyer customer on behalf of his seller client. What type of agency relationship does Quentin have with the buyer?

No agency

Which of these property management situations is NOT an exception to the federal Fair Housing Act?

Owners of buildings with two or more floors and units available on the ground-level floor can restrict those ground-level units to disabled tenants.

Which of the following financing types involves the sale of personal property with the real property?

Package

This statement is part of a promissory note attached to a security instrument: "I have the right to make payments of Principal at any time before they are due." What's the name of the clause where this statement is included?

Pre-payment clause

Agreeing to a specific price, price range, or minimum or maximum charges among competing firms is an example of which type of antitrust violation?

Price fixing

During a residential transaction, when must an Illinois seller's agent deliver a completed Residential Real Property Disclosure Report to a buyer?

Prior to the parties signing a purchase agreement

When a higher-quality property is adjacent to a lower-quality property, it can increase the lower-quality property's value. What economic principle of value is this?

Progressiono

The tax associated with property taxes is relatively stable and a high revenue generator because ______.

Property values tend to remain stable over time

One type of seller financing is a(n) ______.

Purchase money mortgage

When banks have lots of funds available for lending, what tends to happen to interest rates?

Rates decrease.

Land, plus all things permanently attached to it naturally or artificially, is ______.

Real estate

Compared to working without a buyer agency agreement, a buyer who works under a buyer agency agreement ____________.

Receives a higher level of service

Janice's life tenant, Jacob, is currently living on her property. Once Jacob dies, Janice has made arrangements that the property will go to the School for the Gifted. What interest does the School for the Gifted currently have?

Remainder

Marvin purchased the right to use a resort unit for two weeks every year, although he doesn't own the property itself. What kind of timeshare is this?

Right-to-use timeshare

Cracks, holes, or rotten areas on a soffit are common ______ issues.

Roof

Which of these is an example of a rectangular survey system description?

S ½ SE ¼ NW ¼ Section 2, Township Clarkson

Sam Smith is a broker in Illinois. His sponsoring broker is Wendy White, whose brokerage business name is Wendy White Realty, Inc., and is located in Peoria, Illinois. Which of these describes the items that must appear on the home page of Sam's website, according to the Real Estate License Act of 2000?

Sam Smith, Broker at Wendy White Realty, Inc. Peoria, IL

What's the definition of a land contract?

Sellers provide funds or credit to buyers in order to close the transaction

Which term describes the process of real property becoming personal property by detaching it from the land?

Severance

Yuki is a shareholder in a cooperative building, where she lives. Which of the following is true about her situation?

She owns shares in the corporation that runs the building.

With regard to contingencies, what responsibility does licensee Wanda have when representing buyers?

She should use contingencies judiciously to protect her clients and the deal.

Jamilynn violated antitrust law by engaging in price fixing. Which of these actions did she most likely perform?

She told a consumer the commission rate is standard for the industry.

What type of agency relationship exists if an agent from ABC Realty represents a buyer and the seller is affiliated with Net Realty?

Single

_________ is when one party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.

Specific performance

In Illinois, if a listing agreement doesn't contain _________, it's no longer an exclusive agreement.

Specific services the listing agent must provide, at a minimum

Sue, the seller, and Carl, the buyer, are preparing to close on their transaction. Who is responsible for reviewing the settlement statement before closing?

Sue and Carl

Archie signed a contract to buy Pam's home. The deal eventually closed, but Pam failed to hand over the home's keys to Archie. A week passed, and Archie filed a lawsuit in an attempt to force Pam to give him the keys. This is an example of ______.

Suing for specific performance

With which type of government power can a lien be placed on a property, giving the government a claim to the property?

Taxation

In Illinois, a married couple's ownership of land is assumed to be by ______________.

Tenancy in common

In order for you to earn compensation for brokerage activities, you must be employed as the agent of the client. How is this employment accomplished?

The client must make an express agreement to pay a commission to your broker.

What is a capitalization rate?

The expected rate of return on investment

What happens to a joint tenant's share of property when the joint tenant dies?

The joint tenant's interest goes to the remaining joint tenants. If only one joint tenant is left, that joint tenant owns the property in severalty.

Which of the following statements is true regarding title and foreclosure in Illinois, which is a lien theory state?

The lender must file a lawsuit to initiate foreclosure proceedings.

You're working with buyers who have found their dream home, but it's almost more than they can afford. When the appraisal comes in, it's lower than the agreed-upon sales price. Now what?

The parties can renegotiate.

What does a chain of title document establish?

The path of title ownership over time

Edgar is in the process of selling his home as a short sale. What's a short sale?

The sale of a property at an amount less than is owed, not including closing costs

Why don't mortgage brokers service loans beyond placement?

They don't originate loans. Instead they match borrowers with lenders who service the loans.

When licensee Linda asks potential seller clients about their reasons for selling, what's her purpose?

To help her gauge the seller's motivation as part of her qualifying process

What's the purpose of a suit to quiet title?

To remove or modify clouds on a title

Which of the following is a residential dwelling with shared walls where the owner also typically owns the land on which the home sits?

Townhome

In a life estate, all of the following apply during the term except ______.

Transferability

The ease with which the property can be conveyed to another describes which factor that influences value?

Transferability

How much real estate practice experience must an Illinois broker have to become a managing broker?

Two years

Which term refers to a permitted deviation from current zoning restrictions that allows an owner to use land for a purpose that's otherwise prohibited, and requires the owner to prove the zoning creates an unnecessary hardship?

Use variance

Karissa is financing her home through a lender and is offering no money as a down payment. What type of loan is she most likely using?

VA loan

What effect will a property's utility have on the value if it's currently uninhabitable?

Value will be pushed downward.

Which of these may be covered by a builder-backed home warranty?

Workmanship

Cameron had a listing agreement with a client named Ben. Ben got mad at Cameron and said he was terminating the agreement. Can Ben do this?

Yes, but certain terms of the agreement may still be binding upon Ben.

Seller Randy signed a listing agreement with Barbara, who worked very hard to find him a buyer. Randy's cousin decided to purchase the house during the listing period. Is Barbara owed a commission?

Yes, if she has an exclusive right-to-sell agreement.

Licensee Larry is speaking with a potential seller client. In order to qualify the seller, he should ask which of these questions?

"Do you have a price range in mind?"

Bob and Mary are financing $80,500 for a new home. Their lender will approve an interest rate of 6.5% if Bob and Mary pay three-and-a-half discount points at closing. How much is this?

$2,817.50 A discount point is 1% of the loan amount. Bob and Mary are paying three-and-a-half points (or 3.5% of $80,500), which is $2,817.50.

Sally and John both own a five-acre property that's registered as a homestead in Illinois. Unfortunately, a lien has been placed on their property. What amount of the property is exempt from the lien?

$30,000

A seller you're working with still owes $50,000 on his mortgage but wants to net $20,000 after the mortgage and 7% commission are paid. What is the minimum for which the house must sell?

$75,269

What affordable housing programs are offered in Illinois?

1stHomeIllinois and the USDA Rural Development Single Family Housing Guaranteed Loan Program

George just applied for a conventional loan on a cottage he wants to buy. What percentage of the loan can he expect to submit as a down payment?

20%

Your client has an income-producing property that generates $30,000 per year. The property is valued at $400,000. What is your client's capitalization rate?

7.5

Michael doesn't have a real estate license, but he helps his friend, Nancy, sell her home. What can Michael legally receive as compensation?

A heartfelt thank you

The Knolls are purchasing a property and are concerned about the title. They want to have a title search performed. Who can perform a title search?

A title insurance company

Gloria is a buyer's agent. Which of the following is part of her role?

Advocate for the interests of the buyer.

What is the definition of an appraisal?

An estimate of value for a specific purpose, party, and property as of a specific date

What's an MLS?

An online database of active, under contract, sold, expired, and withdrawn listings

Frank had been talking about getting a will, but he never got around to it before he passed away unexpectedly. His wife Angie and two kids were very distraught, and the family got together with his only living relative, a cousin, and friends at the funeral for the first time in years. Angie was concerned about who will get the farm where she and her children live. According to the laws of intestacy, can you figure out who will get the land?

Angie and the children will split the land.

Homeowners can take several actions related to pest infestations, but which of the following actions should be left to licensed pest management professionals?

Applying pesticides

What's a certified opinion or estimate of value of a particular property as of a particular date?

Appraisal

The legal concept of parens patriae gives which state position the authority to sue on behalf of citizens?

Attorney general

In Illinois, when must licensees obtain consent for dual agency representation?

Before entering into a dual agency transaction.

Home to Hearth Brokerage has an in-house transaction situation and has appointed one of its licensees to represent the buyer client and one to represent the seller client. The two licensees are acting as what type of agents?

Both are acting as designated agents.

______ is a process in which an appraiser determines a probable range of values for a property by comparing a group of comparable sales to the subject. The appraiser attempts to include both superior and inferior units of comparison, such as age, transaction price, etc.

Bracketing

What is a primary factor a lender reviews when determining if a borrower is a good credit risk?

Buyer's income

When finding listings, which statement describes the farming approach?

Choosing a neighborhood and concentrating real estate activities there

As a licensee in Illinois, to whom will you owe the duty not to disclose confidential information?

Clients

What form should be provided to borrowers no fewer than three days prior to closing?

Closing Disclosure

Robert has met with prospective clients who say they want him to represent them in an exclusive buyer representation capacity. However, they are tired and want to leave and complete the form at home. What should Robert do?

Complete what he can, and send it to them for their signatures that night.

Jamie enters an agreement to buy Yolanda's home. Per the agreement, Jamie promises to provide a $5,000 earnest money deposit, whereas Yolanda promises to sell her home to Jamie. These promises represent forms of ________, which are required to make the contract valid.

Consideration

In Illinois, ______ are directly responsible for the supervision and adequate training of affiliate (sponsored) licensees.

Designated managing brokers

What practice did the Fair Housing Act of 1968 attempt to eliminate?

Discrimination through blockbusting, steering, and redlining

Which agent role in Illinois is assumed by a designated agent who represents both the seller and buyer clients in the same transaction?

Dual agent

Illinois law states that sponsoring brokers aren't considered ________ when their affiliates serve as designated agents.

Dual agents

What are the two categories of comparison when evaluating comparables to a subject property in the market comparison approach?

Elements and units

Jasper has a new listing, and he appoints Esther as his sub-agent. Esther brings Julie, a buyer customer, to the transaction, and Julie buys Jasper's listing. What's true about the agency relationships in this situation?

Esther owes her loyalty to the seller.

Gross rent multiplier (GRM) and gross income multiplier (GIM) are used to ______.

Evaluate the value of income-producing property

Niko has decided to move somewhere else when his lease ends on April 30. This would be considered termination through ______.

Expiration

Which agency enforces federal fair housing laws?

FHEO

Which act encourages fair, truthful, non-deceptive, and evidence-supported claims in advertising?

Federal Trade Commission Act

Which of the following is an example of a deed restriction?

Fence height

In accordance with the Illinois Real Estate License Act, sponsoring brokers must keep copies of all disclosures on file for ____________________.

Five years

Which type of antitrust violation involves two or more businesses conspiring against another business?

Group boycotting

Jamal is a real estate licensee. What's his responsibility regarding household lead hazards?

He must remind the sellers to disclose the possible presence of lead-based paint to a buyer if the home was built prior to 1978.

Joe and Emma Parsons begin informally working with their neighbor Kyle, who's a real estate licensee, to find a bigger house. The parties have not signed any agreements or discussed the arrangements. This is an example of a(n) ______ agency agreement.

Implied

What type of agency exists because of the actions and behavior of the parties?

Implied agency