CE Course 2 DK
if a consumer wants to file a deceptive ad complaint, which entity should be contacted?
BBB
Which option is of the most concern to licensees and advertising when it comes to the Federal Trade Commission?
Misleading ads
______ is when the seller must relinquish the house to the buyer, and when the buyer may move in.
Possession
Which is not one of the lender requirements under the Community Reinvestment Act?
Providing School loans to low income families. The CRA directs lenders to offer home, small business, and farm loans in low- and moderate-income areas.
What well-known economic principle says that a property's value is determined by what it would cost to purchase a similar property?
Subsistution
Which entity offers the Resort and Second-Home Property Specialist (RSPS) certification?
The National Association of REALTORS®
How many cubic meters are in a container measuring 5.5 meters by 3.7 meters by 5 meters?
101.75 You need to find the volume for this problem using this formula: volume = length x width x height, or 5.5 x 3.7 x 5 = 101.75.
A vacant parcel of land is two square miles. How many acres is this?
1280-One square mile is 640 acres. Two square miles is 1,280 acres.
Jenna was surprised that the charming Tudor she was touring was still on the market. "I don't see anything bad on the disclosure," she told her agent, "and the price seems fine. Why do you think it hasn't sold?" Her agent Louise responded, "Well, I heard that UPS was opening a new air hub two miles away early next year." Why might this affect Jenna's or other buyers' interest in the property?
A UPS hub would mean many more flights overhead each day.
Rather than be foreclosed on, Jarod turned his deed over to his bank. This is called a ______.
A deed in lieu of foreclosure is also called a voluntary conveyance.
Which of the following is true of agency agreements?
A listing agreement is an express agreement.
An appraiser is most likely to use the cost approach for which of the following properties? Condo, Fire Station or single family from 1950?
Fire Station-The cost approach is not used for condos or coops and is not used as often with older properties, because there is difficulty in accurately estimating depreciation. Out of the options, the fire station appraisal would most likely use the cost approach.
If a contract is valid and will stand up in court, what kind of contract is it?
Enforceable
An investor is analyzing a property by looking at its ability to produce future income. The property is a 10-unit apartment building. Which of the following would be used to determine this value?
Gross income multiplier
Jackson, a first-time homebuyer, is researching the benefits of the contract for deed. Which of the following might he consider an advantage?
He won't have to pay loan origination fees.-Since he wouldn't be going through a third-party lender to secure financing, Jackson will avoid paying lender fees, such as underwriting and documentation preparation costs.
Bob wants an open listing agreement. Why might this not be in Bob's best interest?
He wont get full representation from one licensee
Jillian has a loan-to-value ratio of 90/10. This means ______.
Her loan is 90% of the value of the real estate used as collateral and she's putting 10% down.
The Nettles have accepted the Briars' purchase offer, and both parties have signed the sales contract. The funds, and the title, should transfer in a matter of days, but otherwise all elements and terms of the contract have been met. What type of contract do the Nettles and the Briars have?
Executory
When it comes to landlord-tenant relations, a property manager needs to know ______.
Fair Housing Laws
Dean is an experienced licensee whose career has focused on such things as mineral, oil, gas, and water rights, and hunting and gaming licenses. Based on this, you can deduce that Dean's real estate niche is in which of the following?
Farm and Ranch properties
Millie and Gary are searching for a home in a great school district. If the public school isn't highly rated, then options such as charter schools and private schools should be plentiful. Some states don't include school district information on the seller disclosure form, so how might they learn about school options?
Neighborhood website
A husband and a wife own a home together, but they're getting a divorce. They agree the husband will keep the house and assume the loan they signed together. Will the alienation clause in their security document prevent the assumption?
No, because lenders may not enforce an alienation clause if the assumption is part of a divorce settlement.
A mortgage with a clause that prohibits the lender from suing the borrower for unpaid amounts if foreclosure occurs is called a ______ mortgage.
Non-Recourse
An affidavit regarding hazardous waste disposal property includes a legal description of the property as well as which three declarations?
That the property was used for hazardous waste disposal or is contaminated by a hazardous substance, that its use may be restricted, and full details of the disposal or contamination
Which legislation, along with the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act, works to prevent discriminatory lending practices?
The Community Reinvestment Act
How does the Office of Fair Housing and Equal Opportunity support real estate consumers?
The FHEO provides support for protected classes through the fair housing complaint process.
Which of the following best describes market price?
The amount that a buyer has paid and a seller has accepted for a property.
What's a downfall to a first-time buyer securing financing through a contract for deed in Minnesota?
The buyer may not utilize state first-time homebuyer incentive programs.
What must the seller provide to the buyer at least five business days before a contract for deed agreement goes into effect?
The contract for deed notice
If a seller knowingly fails to provide the contract for deed disclosure to a buyer, what's the limit to the damages the buyer may sue the seller for?
Three times the actual amount of damages- Buyers may sue for up to three times the amount of actual damages incurred if they can prove that a seller knowingly failed to provide the contract for deed disclosure.
What's the purpose of a home inspection?
To paint a true picture of a property's condition
Which type of buyer tends to look for a home with less space, with a similar or better quality of living?
Trade down buyer
A buyer has signed an option agreement, which is an offer to purchase a specific piece of real estate without the obligation to buy it. Until the buyer exercises the option to buy, only the seller is bound by the option agreement; the seller may not sell the property to anyone else during the option period. What type of contract does this describe?
Unilateral
What effect will a property's utility have on the value if it's currently uninhabitable?
Value will be pushed downward- Low utility, Low Demand
As part of a sales contract, the seller was supposed to provide a copy of the seller's disclosure to the buyer, but the seller failed to do so. What type of contract is this?
Voidable
Which should be included in an MLS policy for your firm?
When and if listing data should be submitted to you for approval
When does the purchase agreement become a legally binding contract?
Once both parties sign it
Which of these photos would be a potential MLS violation?
A view of the master bedroom, including the bed, dresser, and jewelry armoire
The Acceptance Deadline section of the purchase agreement gives the seller a deadline for ____________.
Accepting the Offer
Which of the following provides an opinion of list price range by looking at recently sold properties, comparing current competing properties and properties that didn't sell, and estimating buyer appeal regarding the style, location, and size?
Comparitive Market Analysis
What 3 things must you disclose to be in full compliance with an agent's fiduciary duty to disclose?
Conflicts of interest, material facts, and adverse material facts
Which one of the following is a common chimney or fireplace problem?
Creosote
One alternative to foreclosure is a voluntary conveyance of ______.
Deed
In Minnesota, what is used to secure real estate transactions?
Deed of Trust
When reviewing her mortgage documents, Reva learns that should she miss scheduled payments, fail to pay property taxes, or allow the property to fall into disrepair, she may be in ______.
Default
What's the annual interest on a $150,000 loan with an interest rate of 7%?
$10,500-You can find the annual interest owed by multiplying the total loan amount by the interest rate (total x rate = interest).
A buyer is purchasing a property for $500,000. He has a down payment of $50,000 and is financing the rest. What's the amount of the loan origination fee if the lender charges one-and-a-half points?
$6,750
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?
(Replacement Cost) =The amount it would cost to completely replace her home
Generally, what's the common range for loan origination fees?
1-3 percent
Jim is meeting with a client at a listing. Outside the basement window, there are wood shavings. The client asks Jim if they mean there are termites in the home. What would be an appropriate response?
Refer the client to a qualified pest professional.
Which type of loan's interest rate fluctuates with the economic index to which it's tied?
Adjustable Rate Mortgage (ARM)
What information is included in the Broker Information section of the TREC One to Four Family Residential Contract (Resale)?
Both the listing and selling agents' brokers' information
Appraiser Niles uses ______ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some comparables that lack features of his subject property, and others that have even more desirable features, to balance out the comparison.
Bracketing
Monica received a promotion at work that requires her to relocate. Because of the timing of her promotion, she'll need to buy a new house in her new city before her current one is sold. So, she won't have any equity from her current home to make a down payment on the new house. What loan option would allow her to make the purchase before selling the old house?
Bridge Loan
In which form of price determination does the real estate professional often just drive by the property and take photos, then complete paperwork for the lender?
Brokers Price Opinion (BPO)
Which of the following would be prohibited in Minnesota, but would not be prohibited by federal law?
Refusing to rent to a gay person
In the sales comparison approach, the appropriateness of the various comparable sales in relationship to the subject is considered in a process known as ______, where certain factors may be given more weight.
Reconciliation
A Minnesota home warranty vendee notified the vendor of a defect with a window 10 months after moving into the property. What does the vendor need to do next?
Inspect the defect within 30 days of the notification.
The Community Reinvestment Act requires federal ______ for compliance.
Intervention-The CRA requires federal oversight for compliance. Lenders are required to prepare an annual statement and are periodically reviewed by federal financial agencies such as the FDIC and the Comptroller of the Currency.
Which of the following is a true statement about the date of buyer possession, as specified in the purchase agreement?
It can vary, depending on the agreement between the parties.
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.
What type of emails are prohibited by the CAN-SPAM Act?
Junk Emails- In addition to junk emails, the CAN-SPAM Act also prohibits misleading or false headers or subject lines.
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?
Lender
The Community Reinvestment Act (CRA) was introduced to combat discriminatory lending practices against individuals and business in what type of neighborhoods?
Low-Middle Income
Anthony lives in a two-story apartment building. What type of building is it?
Low-Rise
According to the Minnesota Department of Health (MDH), two out of every five homes have levels of what that should be addressed?
Radon
A mortgage that allows the lender to sue the borrower for damages if foreclosure occurs is called a ______ mortgage.
Recourse
What's the definition of a land contract?
Seller financing in which the seller retains legal title.
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.
Percy is losing his house because he can't make his payments. He owes more than it's worth and just wants to get out from under it. He decides to put it on the market and hope for the best. Percy will likely sell his home through ______.
Short Sale
Why would a buyer want to know whether any additions or alterations were made to a property?
So the buyer can determine if permits were pulled- If additions or alterations were made, a buyer will want to know whether permits were pulled. Unpermitted work may not be up to code and could lead to problems down the road for the buyer.
Why might a buyer want to assume a loan?
The existing loan has a lower interest rate than current market rates.
Sandy and Jared will be charged a prepayment penalty on their home loan because it's not a prime loan, and they are paying it off after only three years. Which of the following is a true statement?
The lender can only charge a prepayment penalty if it was disclosed at least twice to the borrower.
Declan has a mortgage on his property, but allows the property to fall into disrepair. Which of these is a possible consequence of this action?
The lender can put Declan's loan in default.
Why do lenders care so much about property condition?
The property is collateral for the mortgage.
When a Minnesota seller sells a home using a contract for deed and the buyer defaults on payments, which of the following is a true statement?
The seller doesn't have to initiate a court action or formal foreclosure process.
Buyer Peter is eager to make an offer on the two-story home you just showed him, but you're concerned about the back bedroom, since it looks like a relatively recent addition. When Peter asks you why it's an issue, how do you respond?
You recommend that Peter check on the permits for it, so that he doesn't buy the house and then have to correct or even remove the addition because it wasn't built to code.