National

special assessment

Tax or levy against only the properties that will benefit from a proposed public improvement like a sewer or paving a street

According to statute good funds include a:

Tellers check from the savings and loan institution

A lease has ended and the tenant refuses to move out. He is not paying any rent. At this time his interest in the property is called:

Tenancy at Sufferance.

When a holdover tenant refuses to leave and is not paying rent his interest in the property is called:

Tenancy at Sufferance.

A tenant rented an apartment, signing a 15-month lease. After the lease expired, the tenant paid 1 month's rent and got a receipt. What kind of leasehold does the tenant have?

Tenancy at will

Timeshare ownership programs MOST often use which of the following ownership forms?

Tenancy in common

Which tenancy does not involve a lessor-Lessee?

Tenancy in common

tenants at sufferance.

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are

A and b are joint tenants. B cells his interest to C. What is the relationship of A and C?

Tenants in common

In a gift of parcel of real estate one of two owners was given an undivided 60% interest and the other received an undivided 40% interest. The two hold their interest as:

Tenants in common

RESPA may apply to a loan assumption if:

Terms of the assumed loan are modified by the lender

D. Privately held mortgage debt

The $6 trillion total market value of commercial real estate can be broken into four quadrants. Which of the following sectors of the commercial real estate market accounts for the largest proportion of market value?

The sales contract identifies the agency relationships between the broker(s) and parties:

The Broker Information section

require the buyer to acknowledge disclosure of the presence of any known lead paint.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability

The Department of Housing and Urban Development.

A. Fannie Mae lends money directly to homebuyers.

The Federal National Mortgage Association (Fannie Mae) was originally established to provide a secondary market for FHA-insured and VA-guaranteed loans. All of the following statements regarding Fannie Mae are true EXCEPT:

Your company sends out a memo that there is a mandatory sales meeting this week for the sales agents.

The IRS rule on independent contractor status could be violated.

The appraisal approach for rental properties is:

The Income approach

DEED

The Official Document Transferring Ownership from Seller (GRANTOR) to Buyer (GRANTEE). The Final Step to a VALID DEED is DELIVERY When a Lot is Sold Outside of a Subdivision, No Egress and or Ingress Must Appear on the Deed.

A. Uniform Settlement Statement of HUD-1 Form

The Real Estate Settlement Procedures Act (RESPA) is a federal law that requires federally chartered or insured lenders to provide buyers and sellers with information on all settlement costs. According to RESPA, loan closing information must be prepared on a special form know as the:

What is the Seller's disclosure responsibility regarding the mold issue?

The Seller is required to disclose this situation on the Seller's Property Disclosure Explanation Mold is considered to be an environmental issue. In Colorado all environmental conditions/issues relating to the property must be disclosed. The Seller's Property Disclosure (Residential) requires the Seller to disclose if; any of the following conditions now exist or have they ever existed: "1. Hazardous materials on the Property, such as radioactive, toxic, or bio hazardous materials, asbestos, pesticides, herbicides, wastewater sludge, radon, methane, mill tailings, solvents or petroleum products.

If a seller wants to continue to occupy the property for two days after the closing and the buyer agrees:

The Seller's Temporary Residential Lease form should be used

TREC promulgated contract forms and addenda are written by:

The TREC Broker-Lawyer Committee

DEMISE

The Transfer of a LEASEHOLD Interest. The Use of the word DEMISE Automatically Triggers the Grantor's Liability for the Warranty of Quiet Enjoyment.

Truth In Lending Act -- Regulation Z

The Truth in Lending Act (TILA), Title I of the Consumer Credit Protection Act, is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs. In general, this regulation applies to each individual or business that offers or extends credit when the credit is offered or extended to consumers; the credit is subject to a finance charge or is payable by a written agreement in more than four installments; the credit is primarily for personal, family or household purposes; and the loan balance equals or exceeds $25,000.00 or is secured by an interest in real property or a dwelling.

ALIENATION

The VOLUNTARY or INVOLUNTARY transferring of property and possession of land or other things from one party to another.

The sales price may be adjusted based upon a survey. If the sales price is adjusted,

The amount financed can be adjusted; The cash portion can be adjusted;The cash portion and amount financed can be adjusted proportionately

Question: Why was the county assessed value below the value of the most recent appraised value?

The assessed value and the appraised value are used for different purposes. Explanation The assessed value is used by the counties for tax purposes and rarely is it equal to the comparative value of the property. From the information provided we can assume that the broker did a proper comparative market analysis. There is no historical approach to evaluating property.

Who is responsible for filling in the effective date of the contract?

The broker

If a broker's agents are independent contractors, there can be a policies and procedures manual for the agents, however,

The broker can not require mandatory compliance

Which of the following are elements of a listing?

The broker's fee

If an overage is incurred due to a change order, the excess is paid by

The buyer

In Paragraph 21, Notices, the licensee should enter the contact information of:

The buyer and seller

In the Third Party Financing Addendum for Credit Approval:

The buyer has a definite time to notify seller of the inability to obtain financing approval

suggest the buyer ask a lawyer to furnish the wording.

The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should

A tenant with disability would like to make reversible changes to the property that effect the structure. In this scenario:

The changes must be allowed as long as the tenant pays for it

C. General Partnership

The choice of ownership form for pooled equity investments can also depend on the desire to avoid personal liability. Which of the following ownership structures suffers from the major disadvantage of unlimited liability for all investors?

Earnest money is deposited in an escrow account after:

The contract is signed by all parties and acceptance is communicated

Smith owned a home subject to a bank loan. After living there a year his cesspool caved in and he contracted to have a new one dug and connected. About that time, he lost his job and couldn't pay his bill. The contractor filed a mechanic's lien. Then the bank foreclosed and sold the property for the amount the borrower owed them. Which of the following is true?

The contractor loses out; the bank's lien was recorded first Explanation The trust deed and note held by the bank has priority over the mechanic's lien because it was recorded first and there were no excess funds after foreclosing.

Quiet enjoyment

The covenant implied in a lease that ensures that the tenant will not be evicted by someone claiming ownership of the property prior to that of the lessor.

If a farm is sold and the crops are not ready for harvest, which of the following is not true?

The crops belong to the buyer as part of the sale

he is no longer the listing agent

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

A person must accept an offer to enter into a contract before:

The death of the offeror

A. Linkages

The demand for access between land uses is considered the "gravity" that holds a city together. These relationships between land uses are commonly referred to as:

D. Pension Fund Managers

The demand for real estate derives from the need that participants in the user market have for shelter and convenient access to other locations. The primary participants in the user market include all of the following EXCEPT:

Which of the following persons must have a real estate license?

The designated officer of a licensed real estate corporation.

Specific data example

The dimensions of the subject property

Integrity is best described as:

The duty of a licensee to avoid misrepresentation by omission or commission.

A. Mortgage banker

The emergence of mortgage securities propelled the development of mortgage companies, an entity significantly different from the thrifts and banks that previously dominated the mortgage landscape. Which of the following parties is responsible for providing mortgage origination services and initial funding within this new framework?

Actual eviction

The enforcement of a court order to remove a lessee

IRS

The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to

The listing that gives the broker the greatest protection and is most commonly found on the MLS is:

The exclusive right to sell listing

B. capital expenditures

The expected costs to make replacements, alterations, or improvements to a building that materially prolong its life and increase its value is referred to as:

Discrimination based on familial status was prohibited with the passage of:

The fair housing amendments act of 1988

Freehold estates

The fee simple estate is the most common type of freehold estate. Unless a deed or will specifically indicates a different type of estate, it is presumed that the owner has a fee simple estate. Fee simple is an estate of inheritance and is the maximum estate one may hold, as it is of indefinite and unlimited duration and is freely transferable to others. It may be absolute or qualified: If it is absolute, there are no conditions imposed on it. If it is qualified or determinable, certain conditions or qualifications attached to it create the possibility of automatic reversion (or return) of title to the grantor of the estate or the grantor's heirs, upon the occurrence of an event specified in the condition. Upon termination, all leases, encumbrances, and sales that had occurred or been placed on the property after creation of the qualified fee estate become invalid. A life estate is a noninheritable freehold estate, created in writing by deed or will. It is ownership for a definite time period that is measured by the life span of a particular person or persons. The deed or will creating the life estate establishes what will happen upon termination of the life estate. Two possibilities exist. One is reversion, which is the right to future possession by the creator of the life estate, called the grantor. In the case of reversion, the title will revert (go back) to the grantor or the heirs of the grantor who created the life estate. The second possibility is that a third party holds a remainder interest, or estate in remainder, during the entire term of the life estate. Upon termination of the life estate, the title passes to the third party, who is called a remainderman, specified by the grantor.

Three identical homes in a neighborhood were listed at the same time in a market where demand was constant. According to the law of supply and demand, which would have sold for the lowest price?

The first sold

C. It is analogous to the dividend yield on a common stock.

The going-in cap rate, or overall capitalization rate, is a measure of the relationship between a property's current income stream and its price or value. Which of the following statements regarding cap rates is true?

A. Industry economies of scale

The growth of the motion picture industry in Los Angeles, the petrochemical industry in Houston, the software industry in "Silicon Valley," are all examples of how the growth of an industry within a city can create cost advantages for future growth. Economists refer to this phenomenon as:

The listing agreement should contain:

The legal description of the property

If a lease does not specifically indicate who is responsible for making repairs to the premises, such repairs are usually paid by

The lessee

Leasehold estates

The lessee receives a leasehold estate, giving him the right of use, possession and quiet enjoyment of the property. His leasehold estate is: -inheritable (so he can will it or leave it to his heirs). -transferable by sale or assignment (so he can sell or assign it). -of certain duration, as it is either limited in time or by the desire of the parties.

The amendments in 1996 to the License Act state that an agent is not liable for a misrepresentation or concealment of material fact by a party if:

The licensee did not know of the falsity of the misrepresentation

A loan assumption might be desirable because

The loan assumption is generally less costly than a new loan

D. Apparel Store

The location of competitors within a particular land use area may be influenced by whether the types of services and products are convenience activities or comparison activities. Which of the following is an example of a comparison activity?

C. The less isolated the city is from other cities.

The magnitude of an economic base multiplier depends upon the amount of money that "leaks" out through expenditures outside of the city limits. The economic multiplier tends to be higher with each of the following EXCEPT:

D. Assembly plant building owned by a group of investors as part of a sale-leaseback agreement with an auto manufacturer

The market value of U.S. real estate held by non-real estate corporations is estimated to exceed $2 trillion. All of the following are examples of non-investable commercial real estate that are held by non-real estate entities EXCEPT:

C. metropolitan statistical area

The most common definition of a city used for government data collection and reporting, identified as a single labor market area centered around a city with a population of at least 50,000 people, is referred to as a:

Fee Simple estate (or Fee estate)

The most common type of freehold estate is the fee simple estate. This may also simply be called a fee estate. Unless a deed or will specifically indicates a different type of estate, it is presumed that the owner has a fee estate. A fee estate is the maximum estate and the greatest interest that a person may hold in land. This is because it is of indefinite and unlimited duration, the most freely transferable and inheritable estate. A person holding a fee hold estate: 1. holds title to the property. 2. has the right to dispose of it through sale or gift during his lifetime or through will or inheritance upon his death. 3. may impose conditions or restrictions on future use which would apply to all persons who later acquire the estate.

A. Metes and bounds

The most flexible method of land description, capable of describing even the most irregular of parcels, can be described as a very precise, compass-directed walk around the boundary of a parcel. this method is commonly referred to as:

The best definition of market value is:

The most probable price

How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and title commitment?

The negotiated number of days stated in the contract

When an earnest money promissory note is used for the earnest money deposit which additional condition is required?

The note must be identified in the sales contract including due date of the note

The number of days allowed for objections to title or survey is

The number of days entered in paragraph 6.

If a buyer makes an offer without having received the Seller's Disclosure Notice, how many days does the seller have to provide the notice?

The number of days negotiated in the contract

For a valid option to exist

The option fee must be paid directly to the seller or listing broker; All of the blanks in paragraph 23 must be filled in; The fee must be paid within two days of the effective date of the contract.

The Seller's Disclosure Notice should be prepared by:

The owner

A buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if:

The owner withdraws the counteroffer before it is accepted

Schedule of exceptions

The part of the title insurance policy that sets forth all of the encumbrances and defects that will not be insured against

The owner's policy of title insurance is paid for by

The part stipulated in the contract

The loan to value ratio is:

The percentage of the appraised value or sales price that the lender will lend, whichever is lower

A mentally disabled person who has been declared incompetent by a judge wishes to enter into a contract. Under what conditions can such a person do so?

The person appointed by the court to act for the disabled person must contract on his or her behalf.

blockbusting

The practice of inducing panic selling in a neighborhood for financial gain is

Base line

The primary survey line running east and west in the rectangular survey system

Principal meridian

The primary survey line running north and south in the rectangular survey system

is a legal implementation while planning is a process.

The principal difference between zoning and planning as they relate to land use control is that zoning

The principle of appraisal that states "price is affected by the expectation of future benefits and appeal" is:

The principle of anticipation

Land, improvements and accessories are collectively referred to as:

The property

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty?

The property may be returned to the original owner Explanation A deed restriction is a type of private agreement restricting the use of real estate. Such restrictions are usually listed within the written deed document relating to the property, and should be noted if the property is to be sold or transferred. A deed restriction can also place limitations on the title to the property, such as when a seller wishes to sell their property according specific conditions. Although deed restrictions can often be helpful for numerous parties, there are times when they cannot be enforced. These can include situations where:

A. $10,000; Yes

The purchase price of a piece of property is $70,000. After analysis of the cash flows, expected sales price, and expected yield, the investor decides the deal has a present value (PV) of $80,000. What is the net present value (NPV), and should the investor take the deal?

What cost would not be included as part of the development cost of a lot?

The purchase price of the land

nterest rates charged by lenders

The purpose of usury laws is to regulate

The deed that contains no warranties of ownership and gives the buyer the least protection is:

The quitclaim deed

The deed that contains no warranties or guarantees of ownership and gives the buyer the least protection is:

The quitclaim deed

B. Opportunity Cost

The rate that is used to discount expected future cash flows can be thought of as the return the investor is forgoing on an alternative investment of equal risk. In this framework, the discount rate is being thought of as which of the following?

the number of square feet in the building.

The real estate broker who is listing a house for sale should personally verify

impossibility of performance

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of

C. 5-6%

The recent emergence of discount brokerage services has had a modes effect on the price of brokerage services. The average commission that a broker could expect to receive today would most likely range between:

fiduciary

The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term

B. Capital Market

The required rate of return that an individual demands on a real estate investment is determined in the:

C. Eminent Domain

The right of government to acquire private property, without the owner's consent, for public use in exchange for just compensation is referred to as:

Right of rescission is part of

The right of rescission is a consumer protection law found within the Truth in Lending Act

Sale-Leaseback: Pros and Cons to seller and buyers

The sale-leaseback is used as a financing technique. It enables the seller to: -get cash for the value of the property to use for other purposes. -possess the property. -deduct the entire rental payment from his taxable income, if the property is used for business purposes. -improve the balance sheet by converting a fixed asset (real property) to a liquid asset (cash) and eliminate a major liability (the mortgage debt). CASH POSSESSION TAX DEDUCTION BALANCE SHEET The advantage of the arrangement to the buyer/lessor is that he is able to: -receive rent payments over a long term from a reliable tenant. -realize appreciation in the value of the property. -declare depreciation on the building for tax purposes. RENT RELIABLE TENANT APPRECIATION DEPRECIATION

In every real estate transaction, a legal description of the real estate MUST appear in the transaction documents. What kind of legal description should be used in MOST transactions?

The same one used in prior transfers of the parcel, verified by a surveyor

A salesperson sells a buyer property listed by another brokerage firm in the MLS. The salesperson has been working with the buyer for many months but does not have an agency contract with the buyer. The salesperson has fiduciary obligations to:

The seller

Which statements are true about VA guaranteed loans?

The seller cannot pay all the closings costs, the funding fee or pay off any of the veteran's debts The borrower cannot pay discount points There is a maximum loan amount VA will lend Correct -> None of the above Explanation With a VA loan the seller can pay all closing costs, the funding fee and pay off the veteran's debts. The maximum amount that the VA will guarantee varies by region of the country, but there is no maximum loan amount.

After moving in the buyers realized the Iris plants had been removed:

The seller is bound by the terms of the purchase contract, the listing broker might consider offering a financial concession to the buyer for damages

Based on the language of the exclusive right to sell listing contract what happens if a defaulting buyer forfeits an earnest money deposit?

The seller is entitled to keep the funds

$810.60

The sellers have agreed to give the buyers an allowance to recarpet the living room. They will allow $22.95 per square yard for carpet plus $6.00 per square yard for pad and installation. If the living room is 21 feet x 12 feet, how much will it cost the sellers (to the nearest cent)?

A. Less than one acre

The size of a single family residential lot is typically:

If a buyer is in default and the sellers remedy is specific performance

The specific performance box must be checked

B. potential Gross Income

The starting point in calculating net operating income is the total annual income the property would produce assuming 100 percent occupancy and no collection losses. This is commonly referred to as:

In a lease with a "right of first refusal" provision:

The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else

Lease

The term lease may be used to refer to: a conveyance of a leasehold estate in land to the lessee; an agreement to occupy property for a specified period; or any document or instrument that transfers possession and use of real property for specific consideration, but does not transfer ownership. The lessee's rights under the lease are contractual rights. Such rights are personal property, so the tenant has only a personal property interest or chattel interest in the real property. Since the lease conveys the right of possession to the tenant, there is a conveyance of an estate in the real property. Therefore, the lessee's interest in the leased property by virtue of the lease can be described as chattel real. An old-fashioned term used to indicate the conveyance of a leasehold estate is demise. Demise refers to an estate that will end. In any lease transaction there will exist at least two estates. The lessor will keep a freehold estate (or leased fee) in the property while giving the lessee a leasehold estate. This gives the lessor a reversionary interest in the property during the term of the leasehold, as he has the right to retake possession of the property when the lease expires. In addition, he has the right to receive rent while the leasehold exists.

B. Words of Conveyance

The type of deed offered by the grantor is communicated through a phrase such as :does hereby grant, bargain, sell and convey unto..." This clause is referred to as the:

Conventional loan

The type of loan that will most likely have the lowest loan to value ratio

Advantages to the veteran borrower under a VA loan include all of the following:

The veteran can usually buy with zero down payment based on qualifying guidelines; There is no monthly fee for the guarantee.

The IABS should contain:

The wording found in Senate Bill #489

The disclosure of agency should contain:

The wording found in Senate Bill #489

In an intermediary transaction:

The written consent of both parties is require

B. Mezzanine Loan

There are a number of alternatives when it comes to the capital structure for acquisitions of commercial real estate. Through which of the following lending relationships does the lender have the right to foreclose on the equity of the borrower's company in the case of default?

D. A REIT must distribute at least 75% of its taxable income to shareholders in the form of dividends

There are a set of restrictive conditions that REITs must satisfy on an ongoing basis in order to maintain their special tax status. All of the following statements regarding the main restrictions are true EXCEPT:

LIfe vs. Fee estate

There is always more than one estate existing in property owned by a life tenant: the life estate and either an estate in reversion or an estate in remainder. The estate in remainder or estate in reversion would exist only while the life estate exists. Once the life estate is terminated, the estate in reversion or estate in remainder will usually change to a fee simple estate; however, it is possible to give a remainderman a life estate.

Which of the following statements about discount points is FALSE

They are computed as a percentage of the selling price.

Which of the following statements about discount points is FALSE?

They are computed as a percentage of the selling price.

The most common form of financing used by buyers is:

Third Party Financing

The One to Four Family Residential Contract can be used for:

Third Party Financing, Loan Assumptions, Seller Financing

The closing date

This is negotiated between the seller and the buyer, is an on or before date, and may be extended if necessary

A property is listed with Rockwell Realty at $70,000. Rockwell Realty negotiates with Woods who is familiar with the property and who agrees to buy the property at that figure. Rockwell Realty prepares an agreement of sale, which is signed by Woods. Copies are then mailed to Downes, the owner, for signature on May 31, 2014. Downes receives the copies on June 3, 2014. He signs them and mails the signed copies to Woods on June 5, 2014. On June 4, 2014 Woods wired Downes, "Offer withdrawn." Under these circumstances:

This is not an enforceable contract and Rockwell is not entitled to a commission Explanation An offer can be withdrawn anytime prior to acceptance. Acceptance means the offer has been signed AND acceptance communicated to the other party. Since the postmark is the date of acceptance the offer had been withdrawn prior to acceptance.

The Information About Brokerage Services form:

This must be in at least 10 point type; must have the exact language prescribed in the License Act and must be provided to a buyer or seller at the first substantive discussion of a real estate transaction

The escrow agent is not:

This person is not a party to the contract; not liable for interest on the earnest money; not liable for performance or non performance of either party.

The right to or ownership of real property is the definition of:

Title

TITLE PLANT

Title Company Storage Facility for Accumulated / Completed Title Records of Properties in its Area. It is a Collection of Constructive Notice Information.

MARKETABLE TITLE

Title Free of Liens and Encumbrances, Defects, and Protects Buyer from Litigation. Convincingly Legally Significant. There is no such thing as "PERFECT TITLE"

The fair housing act of 1968 is contained in:

Title VIII of the civil rights act of 1968

ATTEST

To Bear Witness, Affirm to be True or Genuine

CONVEY

To Transfer Ownership or Title

B. Teaser Rate

To encourage borrowers to accept adjustable rate mortgages (ARMs) rather than level-payment mortgages, mortgage originators generally offer an initial short-term introductory rate that is less than the prevailing market mortgage rate. This rate is referred to as a:

Common purpose(s) for a "buydown" of an interest rate would be:

To help a buyer afford a more expensive home To help a buyer qualify for a home more easily Your Choice -> To help the seller make their home more attractive to a prospective buyer Correct -> All of the above Explanation A "buydown" is paying money to a lender in exchange for a lower interest rate. It reduces the the monthly payment for a homebuyer. The payment made to a lender is in the form of "discount points." One discount point is one percent of the loan amount, hence paying 2 discount points to a lender would be paying 2% of the loan amount for a negotiated reduction in the interest rate. As a marketing tool it is frequently used by builders and sellers to make properties more attractive to buyers

The primary purpose of the FHA is:

To insure loans.

The IABS form is used

To provide agency information to consumers

A. Residential mortgage debt, marketable U.S. government bonds, corporate bonds, consumer debt

To put into perspective the amount of residential mortgage debt outstanding, it is useful to compare this market to other prominent sources of available debt. Listing the issuer with the largest amount of debt outstanding first, which of the following choices best depicts the relative rank ordering amongst the major sources of outstanding debt in the U.S.?

All of the following are evidence of merchantability of title EXCEPT:

Torrens title certificate Title Insurance policy Correct -> A general warranty deed Your Choice -> A title insurance commitment Explanation A deed is not evidence of merchantability of title, it is only evidence of title. It is not title. Title is a bundle of rights, (a concept) not a document.

Not meant by the word improvement

Trade fixtures

C. Capacity

Traditional home mortgage underwriting is said to rest on three elements, the "three C's." The housing expense ratio is one tool that lenders will use to address concerns associated with which of the "three C's?"

PATENT DEED

Transfer SOVEREIGN or GOVERNMENT Property to Private Parties. 1st DEED in a CHAIN Of TITLE

GIFT DEED

Transfer of Ownership for LOVE and AFFECTION. Usually Between Relatives. Type of QUIT CLAIM DEED.

To assign a contract for the sale of real estate means to:

Transfer one's rights under the contract

The primary purpose of a deed is to

Transfer title rights

In a Farm and Ranch sale, the buyer will receive all of the following items except:

Trucks

Hey buyer does not have to be a veteran to assume a VA loan

True

If the buyer is allowed to select certain items in the new home that is under construction, the builder (seller) may reject a selection if it adversely affects the market value of the home.

True

In a loan assumption the buyer will be taking over the debt of the seller equal to the unpaid balance of one or more promissory notes described in the loan assumption addendum.

True

A fiduciary relationship is based upon:

Trust

Right of rescission is part of:

Truth in Lending Act

$1,125

Two buyers bought a house with a $178,000 mortgage. The interest rate is 6 1/2% per annum payable for 30 years. To the nearest dollar, what is their monthly principal and interest payment? (BE SURE TO USE THE AMORTIZATION TABLE

Situs

Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the price difference

D. Hospitality

Uncertainty of cash flows can vary significantly across property types. Which of the following property types is often considered to have the most uncertain expected cash flows?

The seller holds legal title to real property after the sale under a:

Under a land contract the seller retains legal title until it is paid in full, at which time, title should be conveyed to the purchaser.

Estate at Will

Under an estate at will or (tenancy at will) the tenant is in possession at the will of the owner. An estate at will is created when a person enters into possession of real estate with the consent of the owner and without the intention of creating a freehold interest. It is a leasehold estate that continues for an indefinite period of time, so long as both parties consent. There is no fixed period, and there are not even any renewal periods. For Example - An estate at will exists when a tenant agrees to occupy a property until it is sold or rented to another person, or until the owner constructs a new building, or until the owner needs the land for his own use, or until the tenant can find a new home, while a holdover tenant and landlord negotiate a new lease after an estate for years has terminated, or when an owner allows a relative to occupy a property. If there is no specific rent agreed upon, the tenancy may be terminated at any time by either party. The tenant however, must be given a reasonable time to relocate, following notice from the landlord. Unlike other tenancies, a tenancy at will is not assignable or inheritable. Therefore, it would terminate upon the death of either the landlord or the tenant.

"Catholics preferred."

Under the Federal Fair Housing Law, which of the following is considered discriminatory advertising?

If there is no Legal Description of a property in a Purchase and Sell contract, is the contract:

Unenforcable Explanation The property to be sold must be adequately described in the purchase and sale agreement. The mailing address is not an adequate description of the property. The purpose of a legal description is to describe a particular parcel of land in a unique and unambiguous manner that will survive forever. In the United States, this is done by reference to lots and blocks in a subdivision map, by metes and bounds, by aliquot (using the nomenclature of the U.S. Public Land Survey System, or by a combination of the above. Thus, it is necessary to include or attach the entire lengthy and convoluted legal description on the purchase and sale agreement for it to be enforceable.

When a husband and wife take title to a property as tenants in common, they have elected a form of ownership that allows for:

Unequal shares of ownership Explanation One of the features of tenancy in common is that you are allowed to have unequal shares and there is no right of survivorship.

A contract that binds one party but not the other is:

Unilateral

An option contract is:

Unilateral Contract

The agency which allows for the greatest range of authority is:

Universal Agency

The Seller generally has the right to harvest crops

Until delivery of possession

B. Commercial mortgage backed securities (CMBS)

Up until the market for these instruments collapsed in 2008, which of the following was the fastest-growing source of long-term commercial mortgage funds from 2002-2007?

If not using a temporary lease, the buyer is entitled to possession of the property:

Upon closing and funding

The buyer is generally given possession of the property:

Upon closing and funding

Rectangular survey

Uses townships ranges and sections

Charging a loan interest rate higher than the legal limit is:

Usury

Exceptions for coverage under title insurance policies include:

Utility Easement

VOLUNTARY ALIENATION

VOLUNTARY By Choice Transfer of TITLE of R.E. Property. Can either Sell or Gift the Property. PUBLIC GRANT - Government R.E. Sold or Given PRIVATE GRANT - Private R.E. Sold or Given

According to the exclusive right to sell listing the broker need not perform which duties?

Verify accuracy about property condition

If a 17 year old signs a contract is the contract:

Voidable

Jim, aged 16, signs a contract to sell property that he inherited. What kind of contract is this?

Voidable

SUBROGATION

Waive Rights for Something of Value. Injured Party Waives Rights to Sue for Money.

SPECIAL WARRANTY DEED

Warrants Time the GRANTOR Actually Owned the Property. Limited Liability. ALL COVENANTS And 1 WARRANTY - FURTHER ASSURANCE

TYPES OF DEEDS

What Makes DEEDS Different Are the Types of WARRANTIES They Offer: 1. PATENT DEED 2. CONVEYING OR GRANTING DEEDS a. BARGAIN and SALE DEEDS b. BENEFICIARY DEED - DEATH c. WARRANTY DEEDS 3. RELEASING DEEDS and OTHERS

Mortgage broker

What is the term used for the person or organization who acts as an intermediary for the purpose of obtaining financing?

C. Two-Thirds

What proportion of U.S. households own their home?

Contour map

What type of map is MOST useful for describing the terrain of a very hilly lot

C. Deed in lieu of foreclosure

When a borrower defaults on the payment requirements of a loan, there are several options that the lender has at its disposal. When the lender allows the borrower simply to convey the property to the lender, this is commonly referred to as:

B. purchase the property subject to the existing loan.

When a buyer acquires a property having an existing mortgage loan, a decision must be made as to whether or not the subsequent owner of the property can preserve the loan. If the buyer does not add his or her signature to the note, the buyer does not take on any personal liability. In this case, the buyer is said to:

B. Easement of necessity

When a landowner subdivides land in a way that causes a parcel to be landlocked, it is possible for property to be voluntarily conveyed without a deed. If the landlocked parcel has no prior path of access, which of the following types of easements will automatically be created to make the land useful?

Lis pendent

When a lien against a parcel of real estate may result from a lawsuit currently before the court one examining the public records should look for this

D. Sue for specific performance

When a party in a contract fails to perform the other party has a variety of remedies. All of the following are remedies that an aggrieved seller may pursue EXCEPT:

special agency

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

mortgagor

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the

C. Ordinary Annuity

When discussing time-value-of money it is necessary to understand some key terminology. Which of the following terms refers to a fixed amount of money paid or received at the end of every period?

D. Location

When employing the sales comparison approach, appraisers must consider numerous adjustments to convert each comparable sale transaction into an approximation of the subject property. Adjustments are divided into two groups: transactional adjustments and property adjustments. All of the following are transactional adjustments EXCEPT:

A. Level-payment mortgages

When fully amortizing loans call for equal periodic payments over the life of the loan they are known as:

A. The yield on the loan will increase

When lenders charge discount points (prepaid interest) on a loan, what impact does this have on the loan's yield?

D. Timeshare

When multiple individuals have use of a property, but their interests are not simultaneous, this type of co-ownership is referred to as:

statute of descent

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

A Seller's Disclosure Notice is not required

When the property being sold is a previously unoccupied new home

D. pro forma

When using discounted cash flow analysis for valuation, an appraiser will prepare a cash flow forecast, often referred to as a:

The real estate commission approved addendum " brokerage duties disclosure to seller" is used

When using listing contracts that have not been commission approved

Market data

Which of the following approaches MOST reliably estimates the sales price of a single-family residence

D. Habendum Clause

Which of the following clauses contained in a deed defines or limits the type of interest being conveyed?

A. Custom bookshelves

Which of the following items would most likely be considered a fixture?

Failure to display the equal housing opportunity poster at the broker's place of business.

Which of the following may be considered prima facie evidence of discrimination by a broker?

C. Building Codes

Which of the following tools of public land use control represents the earliest method of police power to regulate land use? (Hint: Standards for energy efficiency and sustainability are the most recent trends in the application of this land use control)

C. Condominium

Which of the following types of direct co-ownership combines single person ownership with tenancy in common?

C. Government sponsored enterprise

Which of the following types of institutions has historically been the largest purchaser of residential mortgages?

A. Property tax and assessment lien

Which of the following types of liens is automatically superior to any other lien?

A. Fee Simple Absolute

Which of the following types of ownership estates is the most complete bundle of rights, and therefore carries the greatest value?

D. Upgrade of insulation

Which of these is most likely to be regarded as a capital expenditure rather than an operating expense?

GRM

Which rule-of-thumb version is being offered to an investor who is told that a house renting for $900 a month should sell for about $90,000?

B. Interest Rate Risk

While balloon mortgage loan payments are typically based on a 30-year amortization schedule, the loan actually matures in either 3,5,7,or 10 years. The relatively short loan term on a balloon mortgage reduces the lender's exposure to which of the following risks?

A. They are considered ad valorem taxes

While most property taxes are levied in order to finance services that benefit the community, special assessments are levied to pay for specific improvements that benefit a particular group of properties. All of the following characteristics of special assessments are true EXCEPT:

A. Mortgage Conduits

While the development of the secondary market for mortgages focuses on funding provided by long-term holders of mortgage assets, loan originators still play an important role in the growth of the commercial real estate market. Historically, the most active commercial mortgage originators have been:

Grantee is to a deed as devisee is to a

Will

The inclusions and exclusions section of the residential contract to buy and sell calls for inclusion of all of the following except

Window coverings on the property on the date of the sales contract

A. Straight Debt

With respect to bearing the risk of future property price fluctuations, which of the following lending relationship is viewed as the most risky from the borrower's perspective?

IRS statutes require a buyer to

Withhold 10% of the sale proceeds in excess of $300,000. when a foreign person has no social security card or green card

How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay?

Write of execution

The Broker-Lawyer committee:

Writes TREC contract forms

The unlawful practice of law by a real estate licensee includes:

Writing legal documents; Advising buyers on how to take title; Giving legal advice

A broker must have _________ to act as an intermediary.

Written

For a broker to act as an intermediary there must be consent expressed as:

Written consent

Commission Rule e-35

Written disclosures of brokerage relationships shall be made to a buyer or tenant prior to engaging in licensed activities

Which of the following is a statutory defense for a lawsuit brought about by DTPA?

Written information obtained from a government record

Does the death terminate a listing agreement?

Yes

May a property manager have a single escrow account for several different properties and several different owners?

Yes but the manager must maintain a positive balance for each owner's account

Your company policy calls for transaction brokerage for one person transactions. Which is correct about your relationship with the parties?

You have sellers consent to also work with the buyer in the same transaction

A special warranty deed does not obligate the grantor to the warranties of:

Zoning

the answer is a

a

the seller accepts the offer

a broker has brought a ready willing and able buyer to a seller. in most listing contracts. the broker has earned his commission when

agency coupled with an interest

a broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. which of the following best describes this relationship

tell the seller that the buyer will pay more

a broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. the broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. when presenting the offer, the broker should

vendee

a buyer made an offer on a property that was listed at 350,000. she wanted to put 35,000 down and make payments to the seller, allowing the seller to retain title until the principal was paid off. the seller accepted, and the buyer became a:

A major reason for buying and owning a condominium rather than a detached single-family home is that

a condominium tends to be more affordable

A major reason for buying and owning a condominium rather than a detached single-family home is that:

a condominium tends to be more affordable

an exclusive agency listing

a couple listed their home with a broker. after 2 months. the seller found a buyer, and the sale closed. the seller was not obligated to pay a commission to the broker. this listing was most likely

all owners, present and future

a deed restriction is applicable to the activities of

A lawsuit for inverse condemnation may be brought by____________.

a homeowner

To which of the following would a temporary license be issued by the Director of the Real Estate Commission?

a licensee designated for a corporate broker's license when the prior designated person was refused a license, in order to prevent a hardship

An agency relationship between a property owner and a property manager is usually created by

a management agreement

A buyer wishes to purchase a home but must leave town. She gives Power of Attorney to her daughter to complete the transaction. Which of the following statements regarding the power of attorney would be false?

a power of attorney creates an attorney in fact a power of attorney must be in writing and recorded to convey real estate the daughter is a special agent of the mother Correct -> the daughter is a general agent in this transaction Explanation All the others are true but the daughter is a special agent not a general agent.

the second mortgagee receives nothing unless he forced the foreclosure auction

a property is encumbered by a first mortgage of 60,000 and a second mortgage of 23,5000. the property has just been sold at a foreclosure auction to a speculating investor for 88,000. assume that all costs of the foreclosure sale are included in these balances. which of the following statements is false regarding the distribution of funds

a competitive market analysis to determine the property's value

a prospective seller asks a salesperson to recommend a listing price for a property. the salesperson should suggest

A broker lists a property, with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as__________________.

a subagent of the seller

State laws differ on whether a buyer is entitled to know about

a suicide that occurred in the house last year

The buyer borrowed $85,000 to be repaid in monthly installments of $530.20 at 7% annual interest. How much of the buyer's first month's payment was applied to reducing the principal amount of the loan? a. $34.37 b. $40.00 c. $495.83 d. $530.20

a. $34.37 $85,000 x .07 = $485.83 interest due for first month. $530.20 - $495.83 = $34.37 applied to the principal. After the first month's payment, the borrower owes $84,966.63.

A fence with three strands of wire around a 40-acre square parcel requires how much wire? a. 3 miles b. 6 miles c. 1 mile d. 4 miles

a. 3 miles

If the property in question is intended to be the home of the buyer, the CAR deposit receipt liquidated damage clause limits the buyer's liability upon default. The maximum liability for the buyer is the lesser of the deposit or what percentage of the sales price? a. 3% b. 5% c. 10% d. there is no limit

a. 3%

under the Trustee's Sale procedure, after a Notice of Default has been recorded, a borrower has how long to reinstate by making up past payments, penalties, late charges, and trustee expenses? a. 5 days prior to trustee's sale date b. 90 days c. 3 months d. 1 year

a. 5 days prior to trustee's sale date

Salesperson Schmidt works for Broker Hassan. On May 1, Schmidt takes a listing on Home X for 90 days. Twenty days later Salesperson Schmidt transfers her license and becomes a salesperson for Broker Meeks. As of May 21, the listing on Home X belongs to: a. Broker Hassan b. Salesperson Schmidt c. Broker Meeks d. no one, as this cancels the agency with the seller

a. Broker Hassan

The law that contains the broadest liabilities for environmental cleanup is the a. CERCLA b. Resource Conservation and Recovery Act c. Clean Air Act d. Occupational Hazard Administration Act

a. CERCLA The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) was created in 1980 to address hazardous waste sites and provide process to identify those responsible for clean-up actions.

How might a restriction in a seller's deed be enforced? a. Court injunction b. Zoning hearing board c. Municipal building commission d. State legislature

a. Court injunction When a deed restriction has been violated, the party affected by the violation has the right to go to court and seek a court order, or an injunction, that will direct the violator to stop or remove the violation.

A landowner has divided much of his land into smaller parcels and has recently sold a tract near a nature preserve that is landlocked and cannot be entered except through one of the other tracts. What type of easement will likely be granted to the buyer of that property by court action? a. Easement by necessity b. Easement in gross c. Easement by prescription d. Easement by condemnation

a. Easement by necessity An easement by necessity is created by court order based on the principle that owners must have the right to enter and exit their land, they cannot be landlocked.

WILLS - TYPES OF WILLS

a. FORMAL or CONVENTIONAL b. HOLOGRAPHIC - Hand Written c. NUNCUPATIVE - Oral / Deathbed An Amendment to a Will is Called a CODICIL.

Lessor A leases to Lessee B who legally subleases to Sublessee C. Which of the following is correct? a. Lessor A looks to Lessee B for payment b. Lessor A looks to Sublessee C for payment c. Lessee B does not have a contract with Sublessee C d. There is only one contract in this transaction

a. Lessor A looks to Lessee B for payment

Chang deeds to Lopez and Lopez takes possession but does not record the deed. Chang then tells his friend Jones about the deed to Lopez. Chang then deeds the same property to Jones who records the deed. Based on this information, title probably vests in: a. Lopez b. Chang c. Jones d. both Lopez and Jones

a. Lopez

Which is a characteristic of an appurtenant easement? a. Runs with the land b. Terminates with the sale of the property c. Is a right-of-way for a utility company d. Is revocable

a. Runs with the land An appurtenant easement is said to "run with the land," in that it is binding not only on the current owner but also on future owners. The appurtenant easement can be terminated if one of the owners becomes the owner of both properties (merger) or if the servient tenement relinquishes the right.

In what time frame, if any, is a Pennsylvania contractor permitted to file a mechanic's lien? a. Within six months of completing the work b. Anytime before the transfer of title c. Up to one year after beginning the work d. Within six months of starting the work

a. Within six months of completing the work Under the Pennsylvania Mechanic's Lien Law, a contractor or subcontractor can file a claim with the court of common please in the county in which the property is located within six months after the work is completed.

Rescission is a. a contract to end a contract b. altering the terms of a legal contract by one party c. suing for damages d. when the buyer defaults on a contract

a. a contract to end a contract

A new zoning ordinance is enacted. A building that is permitted to continue in its former use even though that use does not comply with a new zoning ordinance is an example of a. a nonconforming use b. a variance c. a special use d. an inverse condemnation

a. a nonconforming use A use that was in place prior to the enactment or amendment of the zoning ordinance. Says that the property use does not conform with the current ordinances.

An instrument authorizing one person to act for another is called a. a power of attorney. b. a release deed. c. a quitclaim deed. d. an acknowledgment.

a. a power of attorney. Most states, including Pennsylvania, permit documents to be signed by an attorney-in-fact, the person designated by a power of attorney to act on behalf of the principal. The term power of attorney refers to the specific written authorization to act in that capacity.

Charles is purchasing a home with a VA loan. With a VA loan, the payment of $1200 in discount points could appear on the closing statement as all EXCEPT: a. a reduction in buyer's down payment b. a reduction in proceeds due the seller c. an addition to funds due from buyer d. half paid by buyer, half by seller

a. a reduction in buyer's down payment

The property owners on whose land the city recently installed sidewalks will pay for these sidewalks through a. a special assessment. b. an ad valorem tax. c. monthly billings. d. a municipal utility lien.

a. a special assessment Special assessments are special taxes levied to fund public improvements that benefit the property; such taxes can pay for the installation of paved streets, curbs, gutters, sidewalks, storm sewers, and street lighting.

The acquisition of land through deposit of soil or sand washed up by water is called a. accretion. b. avulsion. c. erosion. d. condemnation.

a. accretion The natural action of water can increase or diminish the amount of land owned. The increase, and hence the acquisition of land, by the water's action is accretion. The actual deposits of soil are known as alluvion or alluvium. Erosion diminishes the amount of land owned.

The disclosure regarding Real Estate Agency Relationship form must be signed at the time of the: a. agency appointment b. drafting of the loan papers c. appraisal approval d. issuance of the closing statements

a. agency appointment

What clause in many loans prevents the loan from being assumed by a future borrower? a. alienation clause b. acceleration clause c. defeasance clause d. foreclosure clause

a. alienation clause An alienation clause, also known as a due-on-sale or resale clause, permits the lender to declare the entire loan balance due immediately upon the sale of the property. Lenders include this clause to prevent a second borrower from assuming a loan that has a current lower interest rate.

The statute of frauds, which requires that a contract be in writing to be enforceable, applies to a. all real estate sales agreements b. all real estate contracts of any sort c. all contracts d. bilateral contracts only

a. all real estate sales agreements The statute of frauds requires certain types of contracts to be in writing to be enforceable. By statute, agreements of sale for real estate and certain lease agreements must be written.

If a real estate agent knowingly makes a substantial misrepresentation of the likely value of real property it is a : a. an agency violation b. an innocent mistake c. unethical, but not illegal d. an accepted practice in the industry

a. an agency violation

Which of the following is classified as a life estate? a. an estate per autre vie b. an estate held by lease c. an estate without condition d. a fee simple estate

a. an estate per autre vie While duration of a life estate can be determined by the duration of the life tenants life, it can also be measured against the life of someone other than the life tenant. Such an estate is known as an "estate pur autre vie" meaning "for the lifetime of another."

A title search of the public records may be conducted by a. anyone b. attorneys and abstractors only c. attorneys, abstractors, and real estate licensees d. anyone who obtains a court order under the Freedom of Information Act

a. anyone By entering documents into the public record, the information becomes available to anyone who may be interested in researching the title to a parcel of real estate. Access to public records is unlimited.

A man has an executory contract to buy property but would rather let his friend buy it instead. If the contract allows, the friend can take over the man's obligation by the process known as a. assignment b. substantial performance c. subordination d. mutual consent

a. assignment Unless the original contract prohibits it, a party to a contract may transfer his or her rights and/or duties under the contract. This is known as assignment. The man may transfer or assign his position to his friend.

What is a contract called where the seller agrees to pay a commission and the broker agrees to use diligence in finding a buyer? a. bilateral executory contract b. unilateral executory contract c. bilateral executory contract d. unilateral executory contract

a. bilateral executory contract

Before giving a listing to a broker, the owner informed the broker that the roof was in bad shape. The broker later showed the house and assured the buyer that the house was in excellent condition, without any known problems. After the first rain, the house suffered heavy water damage due to a leaky roof, The buyer is angry and will probably sue the: a. broker and the seller b. broker c. broker, seller, and escrow company d. title insurance company

a. broker and the seller

Zoning powers are conferred on municipal governments a. by state enabling acts b. through police powers c. by eminent domain d. through interstate laws

a. by state enabling acts State confers the authority to local municipalities to adopt zoning ordinances through enabling acts.

While moving into a newly purchased home, the buyer discovers that the seller had taken the ceiling fan that hung over the dining room table. The seller had not indicated that the ceiling fan would be removed, and the contract did not address this issue. Which statement is TRUE? a. ceiling fans are normally considered to be real estate b. ceiling fan belongs to the seller c. ceiling fans are considered trade fixtures d. ceiling fans are considered personal property

a. ceiling fans are normally considered to be real estate Once installed, ceiling fans become real property.

PA law requires the seller to provide notice to a purchaser about whether a structure on the land is entitled to support from underlying coal. This is known as the a. coal notice b. subsidence notice c. coal support d. subsistence support

a. coal notice Because of possibility of mine subsidence, PA law requires a notice be provided by the seller known as a coal notice.

A married couple are planning to purchase a home. If they want to take title in such a way as to be able to will their separate interest, they should take title as: a. community property b. joint tenants c. limited partners d. any of the above

a. community property

All of the following are powers of the government EXCEPT a. condemnation. b. police power. c. eminent domain d. taxation

a. condemnation condemnation is the process by which the government acquires ownership of private property. Condemnation is not a right, but rather the method by which the government exercises its right of eminent domain.

if a property owner decided not to put in a swimming pool because he feels it would cost more than it would increase the value of the property he would be applying the appraisal principal of: a. contribution b. balance c. anticipation d. highest and best use

a. contribution

The misappropriation and use of a a client's funds by an agent is called: a. conversion b. commingling c. secret profit d. misrepresentation

a. conversion

which of the following valuation approaches would generally be considered most reliable in the appraisal of a county court house a. cost b. income c. market data d. gross rent multiplier GRM

a. cost

Which of the following would not be a consideration when determining whether an item is real property? a. cost of item when purchased b. method of its attachment to other real property c. intended use of item by owner d. manner at which item is used with other real property

a. cost of item when purchased Tests done to determine if something is a fixture include intention, manner of annexation, adaptation of real estate, and existence of an agreement. Cost is irrelevant.

The point or surface from which elevations are measured is called a a. datum b. monument c. benchmark d. meridian

a. datum A point, line, or surface from which elevations are measured or indicated. Can be used to determine height of a building or the grade of a street.

To exercise this power, government must have a public use and pay just compensation: a. eminent domain b. police power c. planning d. zoning

a. eminent domain

Which of the following can protect a buyer from unexpected environmental problems after closing? a. environmental impact statement b. environmental site assessment c. seller property disclosure statement d. assurances from real estate licensees

a. environmental impact statement An environmental site assessment (ESA) is often performed on a property to show due care was exercised in determining if any environmental impairments exist. A seller disclosure is of limited value especially since it is not required for nonresidential properties.

Before a foreclosure sale, the borrower who has defaulted on the loan may seek to pay off the debt plus any accrued interest and costs under the rights of a. equitable redemption b. defeasance c. usury d. statutory redemption

a. equitable redemption Certain states, though not PA, allow defaulted borrowers a period of time during which to redeem their real estate after the foreclosure sale. This period is known as a statutory redemption period.

The passing of title to the state because of the lack of heirs: a. escheat b. eminent domain c. police power d. condemnation

a. escheat

A lease for a definite period of time at a flat rental rate is best described as an: a. estate for years, payable at a gross rate b. periodic tenancy, payable at a gross rate c. estate for years, payable at a net rate d. periodic tenancy, payable at a net rate

a. estate for years, payable at a gross rate

the seller is willing to enter into an exclusive listing with a principal broker. however, the seller insists on retaining the right to find a buyer himself whthout paying the broker a commission therefore they would enter into a9n0 a. exclusive agency listing b. exclusive right to sell c. exclusive right to sell with exclusions d. single party exclusive right to sell

a. exclusive agency listing

The highest form of ownership a person can have in a piece of property is: a. fee simple absolute b. fee simple qualified c. life estate d. testate estate

a. fee simple absolute

A purchaser of real estate learned that the ownership rights will continue forever and that no other person claims to be the owner or has any ownership control over the property. This person owns a a. fee simple interest b. life estate c. determinable fee estate d. fee simple on condition

a. fee simple interest The highest quality of ownership in real estate is fee simple ownership. The owner is entitled to all rights of ownership limited only by public or private restrictions. Owners rights last for an unlimited duration.

It is essential that every deed be signed by the a. grantor. b. grantee. c. grantor and grantee. d. devisee.

a. grantor. Only a grantor executes (signs) the deed. Title passes when the deed is delivered and accepted by the grantee.

A real estate sales agent may act as the direct agent of a. his/her principal broker b. several licensed brokers at any one time through a co-brokering arrangement c. sellers who listed their property d. buyers who make an offer which is accepted by the sellers

a. his/her principal broker

what effect does discounting a loan have? a. increases the secondary lender's effective yield b. it reduces the amount of the prepayment penalty that can be charged c. it increases the cost of the loan to the secondary mortgage market d. it decreases the secondary lender's effective yield

a. increases the secondary lender's effective yield

Which of the following is a physical characteristic of real estate? a. indestructibility b. permanence of investment c. location of area preference d. scarcity

a. indestructibility Indestructibility refers to physical characteristic not an economic characteristic like the others.

nonfactual or extravagant statements which would be recognized by a reasonable person as exaggeration or salesmanship a. intentional fraud b. puffing or puffery c. constructive fraud d. indemnification

a. intentional fraud

With a fully amortized mortgage loan, a. interest may be charged in arrears, meaning at the end of each period for which interest is due b. the interest portion of each payment remains the same throughout the entire term of the loan c. interest only is paid each period d. a portion of the principal will still be owed at the end of the term of the loan

a. interest may be charged in arrears, meaning at the end of each period for which interest is due A fully amortized mortgage loan requires fixed payments at regular intervals, usually monthly. Interest is paid in arrears and is calculated on the principal owed for that period. The amount attributed to principal and interest changes with each payment, with the entire debt and all interest having been paid in full at the end of the loan term.

Which of the following is TRUE about radon? a. it can be reduced in a building with proper ventilation b. it is commonly found in building materials c. it is easy to detect because of its odor d. it is commonly found in landfills

a. it can be reduced in a building with proper ventilation Radon is an odorless, tasteless radioactive gas that is produced by the natural decay of other radioactive substances. Levels can be reduced through proper ventilation.

Per the Real Estate Commissioner's regulations, a broker must: a. keep a formal cash receipts/cash disbursement journal b. maintain a trust fund account in a bank c. maintain a minimum balance in a trust account d. all of the above

a. keep a formal cash receipts/cash disbursement journal

Implied right of habitability means the: a. landlord guarantees the residential unit meets housing codes b. tenant agrees to maintain the residential unit c. government is responsible for the tenant's safety d. lender insists the property meets housing standards

a. landlord guarantees the residential unit meets housing codes

A landlord leased space in her shopping center to the owner of a dress store. However, the dress store failed and the owner sublet the space to a cigar store. Then the cigar store owner failed to make rental payments when they were due. The lease was breached. Therefore, the a. landlord has recourse against the dress store owner only b. landlord has recourse against the cigar store owner only c. landlord has recourse against both the dress store and cigar store owners d. cigar store owner has recourse against the dress store owner

a. landlord has recourse against the dress store owner only The original lessee (dress store owner) remains primarily liable for payment of rent. Original lessor has recourse against the dress store owner only but has no contractual relationship with the cigar store owner.

the process of a buyer using a small amount of his own money and a large amount of a lender's money is called: a. leverage b. compounding c. amortization d. defeasance

a. leverage

State legislation gives cities and counties some control over real property in all of the following matters, except: a. lien and attachment laws b. local planning and zoning laws c. land use regulations d. rent controls

a. lien and attachment laws

Utah is a(n): a. lien theory state b. title theory state c. intermediate theory state d. foreclosure theory state

a. lien theory state

The Subdivision Map Act requires the filing of a subdivision map with: a. local government b. state government c. federal government d. all of the above

a. local government

An FHA loan requires which of the following? a. mortgage insurance to protect the lender b. federal tax monies to guarantee the loan c. a prepayment penalty clause to protect the lender d. federal tax money to insure the loan

a. mortgage insurance to protect the lender

The person who obtains a real estate loan by executing a note and a mortgage is called the a. mortgagor b. beneficiary c. mortgagee d. vendor

a. mortgagor When a borrower pledges real estate to a lender as security for a debt, the borrower "gives" a mortgage to the lender. The borrower is the mortgagor; the lender is the mortgagee.

A voidable contract: a. must be rescinded if obligations are to terminate b. is absolutely unenforceable and may, therefore, be disregarded c. requires mutual agreement to rescind d. is against public policy

a. must be rescinded if obligations are to terminate

A listing contract given to several real estate brokers in which the commission is payable to the first broker who brings in an acceptable offer is what type of listing? a. open b. net c. multiple d. exclusive

a. open

The term real estate includes natural components of the land as well as a. permanent man-made improvements b. patents c. all of the rights conveyed by ownership d. any trade fixtures

a. permanent man-made improvements Broader than definition of land, because it also includes all permanent man-made improvements

A lessor can protect against a mechanic's lien for an unpaid construction work ordered by a lessee by: a. posting and recording a notice of non-responsibility b. filing a suit against the contractor for undertaking the work without authorization from the landlord c. serving the lessee with a notice of responsibility d. declaring a breach of contract and dispossessing the lessee

a. posting and recording a notice of non-responsibility

The date and time a document was recorded establish which of the following? a. priority of rights b. chain of title c. subrogation d. marketable title

a. priority of rights Priority refers to the order of rights in time. The date and time a document is recorded establishes the priority of the rights or interest.

The term encapsulation refers to a. process of sealing a landfill with three to four feet of topsoil b. way in which insulation is applied to pipes and wiring systems c. method of sealing disintegrating asbestos d. way in which lead-based paint particles become airborne

a. process of sealing a landfill with three to four feet of topsoil ALSO c. method of sealing disintegrating asbestos Encapsulation is the method of controlling environmental contamination by sealing off a dangerous substance.

To protect the public from fraudulent interstate land sales, a developer involved in interstate land sales of 25 or more lots must a. provide each purchaser with a report of the details of the land, as registered with HUD. b. pay the prospective buyers' expenses to see the property involved. c. provide preferential financing. d. include deed restrictions,

a. provide each purchaser with a report of the details of the land, as registered with HUD. The interstate sale of unimproved lots, with land being sold without having been seen by the purchaser, may be subject to the federal Interstate Land Sales Full Disclosure Act. This law requires registration of the details of the land with HUD and also requires that the purchaser be provided with a detailed property report.

For a homestead to be valid, it must be: a. recorded b. owner-occupied at all times c. placed on a conventional home, not on a mobile home d. two of the above are correct

a. recorded

Which statement BEST explains why instruments affecting real estate are recorded? a. recording gives constructive notice to the world of the rights and interests in a particular parcel of real estate b. the law requires that such instruments be recorded c. the instruments must be recorded to comply with the terms of the statute of frauds d. recording proves the execution of the instrument

a. recording gives constructive notice to the world of the rights and interests in a particular parcel of real estate Properly recording documents in the public record serves as constructive notice to the world of a party's right, claim, or interest in real estate.The info is available to and can be obtained by anyone through diligent inquiry.

If a seller offers to give a real estate agent a listing which contains an illegal discriminatory clause, the agent should: a. refuse the listing b. take the listing then tell the seller the clause is illegal c. take the listing and report same to the multiple listing service d. take the listing and follow the seller's wishes

a. refuse the listing

Susan owned a home prior to marriage to Carlos, Upon marriage, Susan's home: a. remains her separate property unless commingled b. automatically becomes community property c. is converted to joint tenancy d. must have a deed recorded showing her married name

a. remains her separate property unless commingled

Jones is a mortgagor. The defeasance clause included in his mortgage will take effect when and if Jones: a. repays the entire debt b. should miss a single payment on the debt c. defaults on the entire remaining debt d. sells the property and allows the buyer to assume the loan

a. repays the entire debt

A provision in a subdivision, declaration used as a means of forcing grantees to live up to the terms under which they hold title to the land is a a. restrictive covenant b. reverter c. laches d. conditional use clause

a. restrictive covenant Restrictive covenants are created by subdividers or developers to affect the use of parcels within a particular subdivision.

Zoning laws have the greatest impact on which "Right" in the Bundle or Rights? a. right to use b. right to dispose c. right to possess d. right to exclude

a. right to use

The right to a reasonable use of the surface waters upon which a property owner's land borders is called: a. riparian rights b. the right of correlative user c. the right of appropriation d. the right of emblements

a. riparian rights

What document is recorded by the mortgagee to show that the mortgage debt is completely repaid? a. satisfaction b. defeasance certificate c. deed or trust d. mortgage estoppel

a. satisfaction When a mortgage is recorded, this creates a lien on the title. To release the lien, the mortgage holder (mortgagee) must record a satisfaction or release of liens.

Real property can be converted into personal property through a. severance b. accession c. conversion d. inference

a. severance When an owner cuts down a tree the lumber becomes personal property.

If the seller refuses to sell after signing a valid purchase contract and the buyer wishes the property instead of money damages, the buyer will sue for: a. specific performance b. reversion of title c. damages d. rescission

a. specific performance

charles post and peter hollub enter into a contract where post agrees to sell his house to hollub. post thereafter changes his mind and defaults. hollub then sues post to force him to go through with the contract. this is a suit for: a. specific performance b. damages c. liquidated damages d. forfeiture

a. specific performance

The basic requirements for a valid conveyance are governed by a. state law. b. local custom. c. national law. d. law of descent.

a. state law Conveyance of title to real estate is governed by the laws of the state in which the property is located, regardless of whether title transfers by voluntary or involuntary alienation, will, or descent.

A loan that requires payments of interest only during the full term of the loan and the entire principal paid in a balloon payment at the end is called a(n) a. straight note b. partially amortized loan c. fully amortized loan d. open end loan

a. straight note

What characteristic of a fixed-rate home loan that is amortized according to the original payment schedule is TRUE? a. the amount of interest to be paid is predetermined b. the loan cannot be sold in the secondary market c. the monthly payment amount will fluctuate each month d. the interest rate change may be based on an index

a. the amount of interest to be paid is predetermined An amortized loan is characterized by regular payments for the entire term, with interest being charged on the remaining principle. As principal is reduced each month, the interest portion of the payment decreases and the amount applied to the principal increases.

A buyer bought a house, received a deed, and moved into the residence but neglected to record the document. One week later the seller died, and the heirs in another city, unaware that the property had been sold, conveyed title to a relative, who recorded the deed. Who owns the property? a. the buyer b. the relative c. the seller's heirs d. both the buyer and the relative

a. the buyer By taking physical, actual possession of the property, the buyer has given constructive notice of the buyer's interest. Even though the buyer did not record the deed, the buyer's interest would be superior to that of future purchaser.

Three people are joint tenants with rights of survivorship in a tract of land. One owner conveys her interest to a friend. Which of the following statements is TRUE? a. the first two owners remain joint tenants b. the new owner has severalty ownership c. they all become tenants in common d. they all become joint tenants

a. the first two owners remain joint tenants While a joint tenant is free to convey interest in the property, doing so destroys joint tenancy between 3 people. While 2 remaining people remain join tenants with regards to their 2/3 ownership interest, the friend becomes a tenant in common with regard to his 1/3 interest.

If a licensed salesperson violates a provision of the license law without consent or knowledge of the supervising broker, a. the salesperson's license may be revoked b. only the broker's may be lost c. both the salesperson and the broker may lose their licenses d. the broker will be fined for the salesperson's violation

a. the salesperson's license may be revoked Section 702 of the RELRA limits the disciplinary action that may be taken against an employing broker when a licensee is disciplined. If the broker had no knowledge and did not consent, the salesperson's license may be revoked without action against the broker.

The Residential Lead-Based Paint Hazard Reduction Act requires a. the seller or the seller's agent to distribute a federal lead-hazard pamphlet b. the seller to remove any known lead paint c. the buyer to purchase the property after inspections are performed d. a lead warning statement to be included in a listing agreement

a. the seller or the seller's agent to distribute a federal lead-hazard pamphlet The act imposes duties on landlords and sellers (and their agents) who have the duty to provide prospective buyers or renters with a lead-based hazard information pamphlet before a contract is entered into.

A tenant's written five year lease with monthly rental payments expired last month, but the tenant has remained in possession and the landlord has accepted his most recent rent payment without comment. At this point, a. the tenant is a holdover tenant b. the tenant's lease has been renewed for another five years c. the tenant's lease has been renewed for another month d. the tenant is a tenant at sufference

a. the tenant is a holdover tenant When a tenant remains in possession, or holds over, after the lease term expires, a holdover tenancy is created. The landlord's acceptance of rent indicates consent of periodic tenancy. A tenancy of sufference would be created if the tenant remained in possession without the consent of the landlord.

The term LAND refers not just to the surface of the earth but also to a. the underlying soil b. the fixtures attached to the land c. buildings d. the bundle of legal rights

a. the underlying soil land refers to surface of earth and underlying soils and things naturally attached to land as well as substances below earths surfaces and air above.

The right of an owner are referred to as the "Bundle of Rights." Which of these is not one of these rights? a. the unrestricted right to the use of riparian waters b. the right to possess c. the right to borrow against real property d. the right to use

a. the unrestricted right to the use of riparian water

The document(s) referred to as title evidence include a. title insurance b. warranty deeds c. security agreements d. abstract of title

a. title insurance Title evidence establishes proof of ownership. In Pennsylvania, a certificate of title or title insurance is used as proof of ownership.

Which of the following would automatically terminate a residential lease? a. total destruction of the property b. sale of the property c. failure of the tenant to pay rent d. death of the tenant

a. total destruction of the property A tenant who leases a part of a building such as a residential apartment is released from the lease when premises are destroyed. Sale of the property or death of the tenant does not terminate the lease.

In the U.S. Governments Survey System, which lines run parallel to the principal base line? a. township line b. meridian line c. range line d. survey line

a. township line

The borrower under a deed of trust is known as the a. trustor b. trustee c. beneficiary d. vendee

a. trustor In financing arrangements in which a deed of trust rather than a mortgage is used, the borrower transfers title to the property to a trustee, who then holds title for the lender as the beneficiary. The borrower is the trustor.

A datum is a. used in the description of an air lot. b. measured in new york only. c. a calendar method of measurement. d. all of these.

a. used in the description of an air lot. The term datum refers to a point, line, or surface from which elevations are measured. It is used for determining the height of buildings or the location of property lines in multistory condominium structures.

A landlord signs a lease and the lessee takes possession but never signs the lease. Under these circumstances the lease is: a. valid b. void c. voidable d. illegal

a. valid

Ad Valorem means according to: a. value b. appraisal c. assessment d. price

a. value

A landowner who wants to use the property in a manner prohibited by a local zoning ordinance can try to obtain which of the following from the municipality? a. variance b. downsizing c. occupancy permit d. dezoning

a. variance A variance provides relief for property owners who can demonstrate that a zoning ordinance that deprives them of reasonable use of the property.

While suffering from a mental illness that caused delusions, hallucinations, and loss of memory, a person signed a contract to purchase real estate. Under these conditions, what is the status of the contract? a. voidable b. void c. lacks consent d. fully valid and enforceable

a. voidable Mental capacity to enter into a contract is not the same as medical insanity. The question is whether the individual in question is capable of understanding her actions. In this situation, the contract is voidable, but experts should be consulted.

the cost basis is a. what you pay for a property b. what you pay, plus improvements c. what you pay, plus improvements, minus depreciation d. improvements minus depreciation

a. what you pay for a property

Buyer makes a written bonafide offer to purchase, and seller signs the acceptance. A contract is first created: a. when buyer receives proper communication of seller's acceptance b. immediately upon seller's acceptance c. when the buyer and seller sign escrow instructions d. when the broker presents the offer to the seller

a. when buyer receives proper communication of seller's acceptance

If a married person dies testate and leaves all community property, the decedent's interest passes to the: a. whomever is named in the will b. surviving spouse and children, if any c. surviving spouse d. surviving children, and not the surviving spouse

a. whomever is named in the will

A seller lends the entire amount required to purchase his home without disturbing the existing first mortgage. this loan is an example of a(n)? a. wraparound mortgage b. blanket mortgage c. package mortgage d. illegal form of financing

a. wraparound mortgage

The person who prepares an abstract of a title for a parcel of real estate a. write a brief history of the title after inspecting the county records for documents affecting the title b. insures the condition of the title c. inspects the property d. issues a certificate of title

a. write a brief history of the title after inspecting the county records for documents affecting the title I'm abstractor examines public records in the recorder of deeds and other government offices following the search. The abstractor prepares a summary report of the events and proceeding throughout the title history this report is an abstract of title.

A single parent of two preschool children makes an application to rent a condo in a develpment intended for older persons that is 90% occupied by people over the age of 55. In this case, the Federal Fair Housing Act protects the ____________________.

age of over 80% of the occupants of the development.

The amount of commission to be paid is

agreed upon by the seller and agent on the contract

straight-line method

all of the following are methods to calculate the reproduction or replacement cost of a building except

A deed restriction is applicable to the activities of

all owners, present and future

A managing broker can be held responsible for

all real estate activities of salespersons.

One common method for controlling the problems created by conflict of interest in dual representation is

allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients.

negative amortization

an adjustable rate load should include all of the following except

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is

an agent to the broker and a subagent to the principal

250,000

an appraiser must be licensed or certified to handle federally related work on residential property valued at more than

public health and safety

an environmental impact statement typically describes the effects of a proposed project on factors such as

her client

an example of a fiduciary relationship is one which exists between the listing broker and

A couple listed their home with a broker. After 2 months, the seller found a buyer, and the sale closed. The seller was not obligated to pay a commission to the broker. This listing was MOST likely

an exclusive agency listing

An agreement to purchase that has NOT yet closed is

an executory contract

FHA functions MOST like__________________.

an insurance company

The FHA functions MOST like

an insurance company

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called

an option contract

A licensee has a listing with a seller and has a buyer's representation agreement signed with a buyer who desires to purchase this agent's listing. How is the agent operating?

as a non-appointed associate in an Intermediary relationship

when two or more contiguous properties are purchased by one owner to increase the value of their combined areas, the process is called a. contribution b. plottage c. anticipation d. subdivision

b plottage

A person purchased a beach condo for $320,000, putting $100,000 down and obtaining a new loan for the balance at 8.4% payable $1,800 per month amortized for 30 years. What will be the loan balance after one payment? a. $218,200 b. $219,740 c. $221,000 d. $220,000

b. $219,740

A woman purchased 4.5 acres of land for which she paid $78,400. An adjoining owner wants to purchase a strip of her land measuring 150 feet by 100 feet. What should this strip cost the adjoining owner if the woman sells it for the same price she originally paid for it? a. $3,000 b. $6,000 c. $7,800 d. $9, 400

b. $6,000 4.5 acres consists of 196,020 square feet. (4.5 x 43,560). If 196,020 square feet cost $78,400, each square foot cost 40 cents. ($78,400/196,020). The adjoining owner wishes to purchase 15,000 square feet (150 x 100). 15,000 square feet at 40 cents per square foot would cost $6,000 (15,000 x 0.40).

A lot was sold for $89,500. The buyer pays $50,000 cash and gives the seller a mortgage for the balance. If the transfer tax is 1 percent of the consideration, what is the amount of state transfer tax? a. $500 b. $895 c. $3,950 d. $8,950

b. $895 If the amount of the state transfer tax is 1 percent of the consideration, the required tax is $895 ($89,500 x 0.01).

A purchaser of a lot in a rural land project can cancel the purchase contract and receive a full refund in how many days? a. 7 days b. 14 days c. 30 days d. 60 days

b. 14 days

For gross income purposes, most lenders want the borrower to have at least a: a. 1 year work history b. 2 year work history c. 3 year work history d. 4 year work history

b. 2 year work history

A real estate broker license is issued for: a. 2 years b. 4 years c. 6 years d. life

b. 4 years

An acre contains a. 160 square feet b. 43,560 square feet c. 640 square feet d. 360 degrees

b. 43,560 square feet An acre is an area of land containing 43,560 square feet.

Per the homestead law, an owner's equity within the statutory amount, is protected for how many months in the event the homeowner sells and purchases another home? a. 3 months b. 6 months c. 12 months d. 18 months

b. 6 months

An investor purchased 3 homes for a total of $360,000. Later the investor sold the same homes for a total of $600,000. Based on cost, what was the percentage of gross profit a. 50% b. 66.67% c. 33.3% d. 25%

b. 66.67%

A property contained ten acres. How many 50-foot-by-100-foot lots can be subdivided from the property if 26,000 square feet were dedicated for roads? a. 80 b. 81 c. 82 d. 83

b. 81 Ten acres consists of 435,600 square feet. (43,560 x 10). If 26,000 square feet are reserved for roads, 409,600 square feet are available for subdividing (435,600 - 26,000). Each lot consists of 5,000 square feet (50 x 100). 409,600 square feet divided by 5,000 square feet equals 81.92. Therefore, 81 lots can be created from the parcel.

a certain property was purchased for $84,000. the first mortgage was $68000 and the second mortgage was $2,560. What is the loan to value ratio? a. 80% b.84% c. 30% d. 119%

b. 84

A five unit apartment property rents for $820 per unit per month. Expenses and vacancies average $800 per month. The asking price is $440,000. What is the capitalization rate? a. 8% b. 9% c. 10% d. 11%

b. 9% $820 x 5 = $4,100, $4100 x 12 = $49,200 $800 x 12 = $9,600 $49,200 - $9,600 = $39,600 $39,600 / $440,000 = .09 or 9%

Which of the following BEST describe a net lease? a. An agreement in which the tenant pays a fixed rent, and the landlord pays all taxes, insurances, and so forth on property b. A lease in which the tenant pays rent in addition to some or all operating expenses c. A lease in which the tenant pays the landlord a percentage of the monthly income derived from the property d. An agreement granting an individual a leasehold interest in fishing rights for shoreline properties

b. A lease in which the tenant pays rent in addition to some or all operating expenses Under a net lease, the tenant pays all or some of the operating expenses in addition to the rent. These include taxes, insurance premiums, maintenance costs, and assessments.

Which of the following would probably NOT be included in a list of deed restrictions? a. Types of buildings that may be constructed b. Allowable ethnic origins of purchasers c. Activities that are not to be conducted at the site d. Minimum size of buildings to be constructed

b. Allowable ethnic origins of purchasers Restrictions on the right to sell, mortgage, or convey property based on ethnic origins limit the basic right of free alienation of property and are therefore unenforceable.

Which of the following is a lien on real estate? a. An easement running with the land b. An unpaid mortgage loan c. An encroachment d. A license

b. An unpaid mortgage loan All liens are encumbrances, but not all encumbrances are liens. Easements and encroachments are encumbrances, not liens. Liens are financial claims to enforce payment of a debt. An unpaid mortgage loan creates a specific, voluntary lien against the property.

To obtain a full homeowner's exemption, a new homeowner must file between March 1 and: a. December 10 b. April 15 c. January 1 d. March 15

b. April 15

Which deed merely implies but does NOT specifically warrant that the grantor holds good title to the property? a. Special warranty deed b. Bargain and sale deed c. Quitclaim deed d. Trustee's deed

b. Bargain and sale deed A bargain and sale deed contains no expressed warranties against encumbrances. It does, however, imply that the grantor holds title to the property.

Where are permitted land uses and set-asides, housing projections, transportation issues, and objectives for implementing future controlled development found? a. Zoning ordinances b. Comprehensive plans c. Enabling acts d. Land-control laws

b. Comprehensive plans A comprehensive plan sets forth the development goals and objectives for the community. Existing citizens and developers are aware of the permitted land uses, housing projections, transportation issues, and objectives for implementing future controlled development.

The grantee receives greatest protection with what type of deed? a. Quitclaim b. General warranty c. Bargain and sale d. Executor's

b. General warranty A general warranty deed binds the grantor to covenants or warranties that provide a grantee with the greatest protection of any type of deed.

Johnson and Moscowitz hold title as tenants in common. Upon Johnson's death, Johnson's interest passes to: a. Johnson's heirs without probate b. Johnson's heirs with probate c. Moscowitz without probate d. Moscowitz with probate

b. Johnson's heirs with probate

Which law requires the escrow officer to prepare HUD-1 closing statement? a. Truth in Lending b. RESPA c. Regulation Z d. ECOA

b. RESPA

A developer may establish which of the following to control and maintain the character and quality of a subdivision? a. Easements b. Restrictive covenants c. Buffer zones d. Building codes

b. Restrictive covenants Developers often use conditions, covenants, and restrictions (CC&Rs) to control and maintain the desirable quality and character of a property or subdivision.

Mr. Rhu deeds a life estate to Ms. Silva with the stipulation that upon her death the property comes back to him. If Rhu and Silva are killed together in an auto accident, who gets the property? a. it escheats to the state b. Rhu's heirs and devisees c. Silva's heirs d. the county where property is located

b. Rhu's heirs and devisees

Which of the following transactions would BEST be described as involving a ground lease? a. A landowner agrees to let a tenant drill for oil on a property for 75 years. b. With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner. c. A landlord charges a commercial tenant separate amounts of rent for the land and the trade fixtures. d. A tenant pays a base amount for the property, plus a percentage of business-generated income.

b. With the landowner's permission, a tenant builds and owns a shopping center on vacant land leased from the landowner. In a ground lease, the landowner leases uncontrolled land to a tenant who agrees to construct a building, which a tenant then owns. Generally a long term net lease, which provides certain tax advantages to the lessee.

Under the federal Lead-Based Paint Hazard Reduction Act, which statement is TRUE? a. all residential housing built before 1978 must be tested for the presence of lead-based paint before being listed for sale or rent. b. a disclosure statement must be attached to all sales contracts and leases involving properties built before 1978 c. a lead hazard pamphlet must be distributed to all prospective buyers, but not tenants d. purchasers of housing built before 1978 must be given five days to test the property for presence of lead-based paint

b. a disclosure statement must be attached to all sales contracts and leases involving properties built before 1978 The act requires owners and landlords of target housing (built before 1978) to disclose what they know about lead-based paint to potential buyers or renters. Law does not require testing or removal.

Another term describing an estate of inheritance or a perpetual estate: a. an estate for years b. a fee simple c. a life estate d. an estate at will

b. a fee simple

A man conveys ownership of his residence to his daughter but reserves for himself a life estate in the residence. The interest the daughter owns during her father's lifetime is a. pur autre vie. b. a future interest. c. a current interest. d. a leasehold.

b. a future interest the man has conveyed a future interest to his daughter, known as a remainder interest. During his life, the man owns the life estate and is the life tenant. upon his death, ownership passes to the daughter as the remainderman.

Real estate syndicates usually hold title as: a. joint tenants b. a limited partnership c. a corporation d. tenants in common

b. a limited partnership

the economic value of situs is directly related to a. the cost of land and improvements b. a personal preference for a certain location c. a method of calculating depreciation d. reproduction cost new

b. a personal preference for a certain location

which of the following is NOT required for an apprasial a. property description b. a real estate purchase contract c. a specified date d. the estimated date

b. a real estate purchase contract

When a title insurance policy is being issued, the public records are searched and the title company's record of title is continued to date. When the title examination is complete, the title company notifies the parties in writing of the condition of the title. This notification is referred to as a. a chain of title b. a report of title or commitment for title insurance c. a certificate of title d. an abstract

b. a report of title or commitment for title insurance After examining public records, the title insurance Company issued what may be called a preliminary report of title or a commitment to issue a title policy.

A lien on real estate made to secure payment for specific municipal improvements to a parcel of real estate is a. a mechanics lien b. a special assessment c. an ad valorem tax d. a utility lien

b. a special assessment Municipal improvements that benefit particular parcels of property are funded by special assessments levied against those properties

All of the following are true, except: a. a violation of a condition in a deed may cause loss of title b. a suit for removal of an encroaching fence must be brought within 10 years from the date of the encroachment c. easements can be eliminated when the dominant tenement deeds to the servient tenement d. to be valid, a Notice of Completion must be recorded within 10 days after the completion of construction

b. a suit for removal of an encroaching fence must be brought within 10 years from the date of the encroachment

A court order to force the sale of real estate to pay a judgment is called: a. an attachment b. a writ of execution c. a deficiency judgment d. a foreclosure

b. a writ of execution

A declaration before a notary or other official providing evidence that a signature is genuine in an a. affidavit. b. acknowledgment. c. affirmation. d. estoppel.

b. acknowledgment. A formal declaration made before a notary public or authorized public officer that verifies that the person is voluntarily signing a document and that the person's signature is genuine is an acknowledgement.

Taxes levied for the operation of the government are called a. assessment taxes. b. ad valorem taxes. c. special assessments. d. improvement taxes.

b. ad valorem taxes General real estate taxes are levied and assessed according to the value of the property subject to taxation. Ad valorem is the Latin term for according to value.

Contamination from underground storage tanks (USTs) is a. found only in petroleum stations b. addressed by EPA regulations c. only caused by tanks currently in use d. easily detected and eliminated

b. addressed by EPA regulations The federal underground storage tank program is regulated by the Environmental Protection Agency (EPA).

All of the following will terminate an easement EXCEPT a. nonuse of a prescriptive easement. b. adverse possession by the owner of the servient tenement c. abandonment of easement d. release of the right of easement to the dominant tenemant

b. adverse possession by the owner of the servient tenement An easement will not be terminated by adverse possession, a process that leads to ownership, not use, of the land. it may be terminated when the need no longer exists, when one of the two owners becomes the owner of both properties (merger), by the release of the servient tenement, by abandonment of the easement, or by nonuse.

A woman bought acreage in a distant county, never went to see the acreage, and did not use the ground. A man moved his mobile home onto the land, had a water well drilled, and lived there for 22 years. The man may become the owner of the land if he has complied with the state law regarding a. requirements for a valid conveyance. b. adverse possession. c. avulsion. d. voluntary alienation.

b. adverse possession. The law recognizes that the use of land is an important function of ownership. An individual who takes possession and uses the property for the time prescribed by state law may be able to take title away from an owner who fails to use or inspect the property. This is known as adverse possession.

A neighbor has the legal right to pass over the land owned by his neighbor. This is a. an estate in land. b. an easement. c. police power. d. an encroachment.

b. an easement a legal right to cross over the land of a neighbor would be classified as an easement. Typically it would be an easement in gross, which benefits a person rather than the land.

An owner has fenced his property. By mistake, the fence extends one foot over his lot line onto the property of a neighbor. The fence is an example of a. a license. b. an encroachment. c. an easement by necessity. d. an easement by prescription,

b. an encroachment If all, or part, of an improvement, such as a fence, extends beyond the property line, the fence becomes an encroachment on the property of the neighbor.

A licensee has found a buyer for the seller's home. The buyers has indicated in writing his willingness to buy the property for $1,000 less than the asking price and has deposited $5,000 earnest money with the broker. The seller is out of town for the weekend, and the licensee has been unable to inform the seller of the signed document. At this point the buyer has signed a. a voidable contract b. an offer c. an executory agreement d. an implied contract

b. an offer Offer and acceptance is essential for a valid contract. The seller has not accepted the terms of the offer made by the buyer. Therefore the buyer has only signed and made an offer to purchase, but the document has no legal standing as a contract.

A buyer is interested in a house that fits most of her needs, but it is located in a busy area where she is not sure she wants to live. Her concern about the property's location is called a. physical deterioration b. area preference c. permanence of investment d. immobility

b. area preference This is the most important economic characteristic of land.

A tenant who transfers all rights for the remaining term of the lease to a third party is a. a sublessor b. assigning the lease c. automatically relieved of any further obligation under it d. giving the third party a sandwich lease

b. assigning the lease A tenant who transfers all rights to a third party for the remainder of a lease term assigns the lease. An assignment does not automatically relieve the original lessee of all obligations under the lease.

All of the following are basic components of metes-and-bounds description EXCEPT a. tangible and intangible monuments b. base lines, principal meridians, and townships c. degrees, minutes, and seconds d. a point of beginning

b. base lines, principal meridians, and townships A rectangular survey references principle meridians, townships, and sections while a metes-and-bounds description starts from a point of beginning and reference monuments to describe the property.

The legal description in the documents for each transfer of property must a. be copied from a mortgage document b. be identical to the one used in prior transfers c. give a description in lots and blocks d. be certified by a title officer

b. be identical to the one used in prior transfers Ownership of land is transferred many times and must be identical to the description used in prior transfers.

Which of the following indicates the greatest progress toward completion of a sale? a. buyer advised broker that buyer would sign acceptance of seller's counter offer b. broker notified buyer of seller's signed acceptance of buyer's offer c. seller informed broker that seller would accept the lower price offered by buyer d. broker advises principal that broker has a signed offer to buy per the listing terms

b. broker notified buyer of seller's signed acceptance of buyer's offer

A sequential list of owners for a parcel of real estate is called: a. constructive notice b. chain of title c. notarized record d. deed of reconveyance

b. chain of title

A man owns one of 20 town houses in fee simple, along with a 5 percent ownership share in the parking facilities, recreation center, and grounds. What kind of property does he own? a. cooperative b. condominium c. time-share d. membership camping

b. condominium Real estate ownership that involves holding title to an individual unit and a specified share of the undivided interest in the common elements is a condominium.

A woman lives in an apartment building. The land and structures are owned by a corporation, with one mortgage loan securing the entire property. Like the other residents, she owns stock in the corporation and has a lease to an apartment. What type of ownership is this? a. condominium unit b. cooperative unit c. time-share d. leasehold

b. cooperative unit The woman lives in a cooperative. She has a possessory interest as evidenced by a proprietary lease. A corporation holds title to the land and building, with tenants owning shares of stock (personal property) in the corporation. The tenant-shareholder occupies a unit under the terms of proprietary (owner's) lease.

If a zoning law permits a use of a property that is prohibited by a valid deed restriction, the normal rule is that the: a. zoning will prevail b. deed restriction will prevail c. homeowner's association ruling will prevail d. owner's personal desire will prevail

b. deed restriction will prevail

Public land use controls include all of the following EXCEPT a. subdivision regulations b. deed restrictions c. environmental protection laws d. comprehensive plans

b. deed restrictions Deed restrictions are private restrictions created by property owners at the time they convey the ownership.

A home is purchased using a fixed-rate fully amortized mortgage loan. Which statement regarding this mortgage is TRUE? a. a balloon payment will be made at the end of the loan b. each mortgage payment is the same c. each mortgage payment reduces the principal by the same amount d. the principal amount in each payment is greater than the interest amount

b. each mortgage payment is the same Each month's mortgage payment is the same under an amortized loan. As the principal is reduced each month, the interest portion of the payment decreases and the amount applied to the principal increases

Which of the following is NOT one of the essentials of a valid contract? a. offer and acceptance b. earnest money c. legality of object d. consideration

b. earnest money The requirements of a valid contract include offer and acceptance, consideration, and legality of object. An earnest money deposit is not necessary for a contract to exist.

The type of easement that is a right-of-way for a utility company's power lines is an a. easement appurtenant. b. easement in gross. c. easement by necessity. d. easement by prescription.

b. easement in gross Many utility companies hold easements in gross. Under an easement in gross, the company has the right to cross over many servient tenement properties; however, there is no dominant tenement.

The right of a governmental body to take ownership of real estate for public benefit is called a. escheat b. eminent domain c. condemnation d. police power

b. eminent domain Under system of property law, the government retains right to take ownership of privately owned real estate for public good and owner receives just compensation. Right of power is called eminent domain and the process is called condemnation.

the difference between the price of a property and the balance owed on existing mortgages liens is called: a. profit b. equity c. discount rate d. loan to value ratio

b. equity

Most month-to-month rental agreements can be classified as an: a. estate for years b. estate from period to period c. estate at will d. estate at sufferance

b. estate from period to period

which of the following is not a logical step in the market data approach? a. obtaining the selling price of comparable properties b. estimating the value of the land of the subject property separate from the value of the improvements c. adjusting the price of comparables to the subject property d. reconciling the adjusted prices of the comparables to arrive a value for the subject property

b. estimating the value of the land of the subject property separate from the value of the improvements

which of the following would be considered creation of agency by the operation of law a. express b. estoppel c. ratification d. implication

b. estoppel

During the time after a real estate agreement of sale is signed but before the title actually passes, the status of the contract is a. void b. executory c. unilateral d. implied

b. executory Although the contractual relationship is created when the agreement of sale is entered into, the obligations of the contract will not be completed until settlement or closing. From the point when the agreement is created up to closing, the contract is classified as executory.

To give notice of a security interest in personal property items, a lienholder must record which of the following? a, security agreement b. financing statement c. chattel agreement d. quitclaim deed

b. financing statement For a lender to create a security interest in personal property the UCC requires the borrower to sign a security agreement. A short notice of this agreement called a financing statement or UCC-1 must be filed with the recorder of deeds.

constructive fraud is a. sometimes known as puffing b. fraud that had no evil intention but, with reasonable care, could have been avoided c. a purposeful omission or concealment of information d. deliberate false representation of facts

b. fraud that had no evil intention, but with reasonable care, could have been avoided

Six separate co-buyers of a parcel of land signed a deposit receipt contract at different times and places. A copy must be: a. given to the first signer only b. given to each at the time they sign c. given to the first and last signers only d. sent to each one after the last one signed

b. given to each at the time they sign

Quite often a retail store owner will contract to pay rent under a percentage lease. This means the rent is based on: a. net receipts plus a base rental fee b. gross receipts with an established base rent c. net receipts with an established maximum d. a fixed amount for entire lease

b. gross receipts with an established base rent

If a property is held by two or more owners as tenants in common, the interest of a deceased co-tenant will pass to the a. surviving owner or owners b. heirs of the deceased c. state by the law of escheat d. trust under which the property was owned

b. heirs of the deceased In tenancy in common, each co-tenant holds interest in severalty. When the co-tenant dies, the undivided interest passes to heirs of the co-tenant or is passed to a devisee under the terms of a will.

A trust deed involves: a. money b. hypothecation c. amortization d. payments

b. hypothecation

a contract where the intentions of the parties are shown by conduct is a(n) a. express contract b. implied contract c. bilateral contract d. executory contract

b. implied contract

Which of the following are traditionally covered by a standard title insurance? a. unrecorded rights of parties in possession b. improperly delivered deeds c. changes in land use due to zoning ordinances d. unrecorded liens not known to the policy holder

b. improperly delivered deeds A standard title insurance policy usually covers improperly delivered deeds, defects found in public records, forged documents, incompetent grantors, and incorrect marital statements.

Both a mortgage lien and a judgment lien a. must be entered by the court. b. involve a debt. c. are general liens. d. are involuntary liens.

b. involve a debt A mortgage lien is a specific voluntary lien. A judgment is a general involuntary lien that results from a court decree. Both involve a debt incurred by the property owner.

which of the following is true of economic obsolesence? a. it is generally curable because the owner spends less money to fix it than what he/she loses in property value by not fixing it b. it is generally incurable because it results from factors that the owner of the subject property cannot control c. it can be cause by a deteriorating foundation under the subject property d. it can be caused by a poor floor plan in the subject property

b. it is generally incurable because it results from factors that the owner of the subject property cannot control

Kim received a life estate based on the life of Chong. Kim is killed while Chong is still living; what happens to the life estate? a. it vests in Chong for the duration of Chong's life b. it vests in the heirs or devisees of Kim c. it reverts to the remainder person d. it ceases to exist

b. it vests in the heirs or devisees of Kim

A corporation is not allowed to hold title as: a. tenants in partnership b. joint tenants c. tenants in common d. joint venture

b. joint tenants

When a tenant holds possession of a landlord's property without a current lease agreement and without the landlord's approval, the a. tenant is maintaining a gross lease b. landlord can file a suit for possession c. tenant has no obligation to pay rent d. landlord may be subject to a constructive eviction

b. landlord can file a suit for possession When a tenant remains in possession without a current lease and without landlord consent, the tenant is a tenant at sufference. Landlord regains possession by filing suit for possession.

the approach to value that is considered the most reliable in appraising a single family home is the a. cost approach b. market data approach c. income approach d. gross rent multiplier

b. market data approach

In the field of real estate most documents must be acknowledged before they can be recorded. Which document must be verified, not acknowledged, before it can be recorded? a. trust deed b. mechanics' lien c. listing agreement d. judgment

b. mechanics' lien

A homestead, within the statutory amounts, will not protect against: a. after recorded judgments b. mechanics' liens c. unsecured money debts that become secured by judgments d. after recorded attachments

b. mechanics' liens

A monument is used in which type of legal description? a. lot and block b. metes and bounds c. rectangular survey d. street address

b. metes and bounds The term monument refers to a fixed, unchanging reference point used to locate the point of beginning (POB) for a specific parcel of real estate. A monument is critical to create an accurate metes-and-bounds legal description.

In describing real estate, a system that uses feet, degrees, and monuments is a. rectangular survey. b. metes and bounds. c. government survey. d. lot and block.

b. metes and bounds. Metes and bounds legal descriptions utilize references to direction (degree readings) and distance (feet) to establish property lines for a parcel of real estate. A monument is a fixed reference point used to locate the point on the property line known as the point of beginning (POB).

Which of the following involves a release of liability? a. time is of the essence clause b. novation clause c. acceleration clause d. assignment of contract

b. novation clause

Where is urea-formaldehyde MOST often found in residential properties? a. lead-based paint b. off-grassing from pressed wood adhesives c. kitchen appliances d. furnace filters

b. off-grassing from pressed wood adhesives The largest source of formaldehyde in any building is likely to be off-grassing from pressed wood products made from using adhesives.

Priority of liens refers to the a. order in which a debtor assumes responsibility for payment of obligations b. order in which liens will be paid if property is sold by court order to satisfy a debt c. dates liens are filed for record; the lien with the earliest recording date will always take priority over other liens d. fact that specifically intended greater priority than general liens

b. order in which liens will be paid if property is sold by court order to satisfy a debt Priority refers to the order which claims against the property will be satisfied while the general rule is first in time is first in line. There are exceptions. For example, a real estate tax lien would take priority over a previously recorded lien for an unpaid debt

An owner gives ABC Realty an exclusive agency listing for 60 days. Thirty days later the owner finds a buyer and sells the property without the services of ABC realty. The: a. owner owes ABC Realty a commission b. owner does not owe a commission c. the sale is invalid d. two of the answers are correct

b. owner does not owe a commission Exclusive Agency not Exclusive Right to Sell

A real estate agent may legally refuse to show property available for sale to a person of a minority race if the: a. agent feels the home was not suited for the people b. owners were out of town and had left instructions the home was not to be shown to anyone during their absence c. owners had given specific instructions against showing the home to minority buyers d. agent felt the buyers would not like the location

b. owners were out of town and had left instructions the home was not to be shown to anyone during their absence

Elsie Linter obtained a loan for new, fully furnished home and used both the home and the furnishings as collateral for the loan. this loan would be a: a. purchase money mortgage b. package mortgage c. blanket mortgage d. wraparound mortgage (AITD)

b. package mortgage

The MOST common sources of lead poisoning in homes are a. auto emissions b. paint and plumbing c. flooring and insulation d. refrigeration equipment

b. paint and plumbing Lead can be encountered in a number of ways, but the most common sources are lead-based paint surfaces and old plumbing fixtures.

A homeowner is building an enclosed front porch on his home. A truckload of lumber that the homeowner purchased has been left at the driveway for use in building the porch. At this point, the lumber is considered a. real property because it will be permanently affixed to the existing structure b. personal property c. a chattel that is real property d. a trade or chattel fixture

b. personal property At time of delivery, it is considered personal property and becomes real property once it is actually used to construct the porch.

Which of the following two terms go together? a. taxes - voluntary lien b. police power - public restrictions c. eminent domain - private restrictions d. mechanic's lien - general lien

b. police power - public restrictions

lenders of conventional loans with an LTVR excess of 80% usually require the borrower to obtain: a. mortgage insurance premium (MIP) b. private mortgage insurance (PMI) c. federal mortgage insurance (FMI) d. conventional mortgage insurance (CMI)

b. private mortgage insurance (PMI)

Which term refers to anything that can be owned? a. chattel b. property c. underlying ownership d. residuals

b. property General term referring to anything that can be owned.

Which of the following is not correct? a. all real estate salespersons must have written employment contracts with their brokers b. real estate salespersons are able to contract directly in their own name as an agent with the seller c. the recovery fund may be used to reimburse qualified principals and buyers for damages suffered because of certain inappropriate acts by real estate licensees. d. most real estate agency agreements are between sellers and brokers, not buyers and brokers

b. real estate salespersons are able to contract directly in their own name as an agent with the seller

In disbursing funds from a foreclosure sale the highest priority would usually be given to a. a mortgage dated last year b. real estate taxes due c. a mechanics lien for work started before the mortgage was made d. a judgment rendered the day before foreclosure

b. real estate taxes due If a property is sold at a foreclosure proceeding outstanding real estate taxes and special assessments will be paid first tax liens take priority over other liens

In appraising a property using the income or capitalization approach, one of the most important steps is the selection of an appropriate capitalization rate. in this selection process, you will find that, as the capitalization rate increases the: a. Value goes up b. Risk goes up c. Value is unaffected d. Risk goes down

b. risk goes up

in an option negotiated through a real estate broker to purchase real property, the optionor is the a. buyer b. seller c. broker d. seller or buyer

b. seller

Which of the following is not an essential element in creating a real estate agency? a. fiduciary relationship b. size of the commission c. parties must be competent d. agreement between principal and agent

b. size of the commission

Consideration in a deed refers to a. gentle handling of the document. b. something of value given by each party. c. the habendum clause. d. the payment of transfer taxes.

b. something of value given by each party. Consideration is something of value exchanged between the parties. Generally, it is a stated dollar amount, but other forms of consideration are acceptable, such as "love and affection."

In which type of loan is the loan amount divided into two parts, to be paid off separately by periodic interest payments followed by payment of the principal in full at the end of the term? a. amortized b. straight c. ARM d. balloon

b. straight Under a straight, or term, loan, the borrower makes interest-only payments for the term and then pays the principal in one payment at the end of the term

An owner lists a home for sale with XYZ Realty, with instructions to submit the listing to the multiple listing service and invite other brokers to help find a buyer. This is an example of a: a. dual agency b. subagency c. implied agency d. buyer's agency

b. subagency

the right of a title insurance company to step into the shoes of an indemnified policy holder and assert all of the insured's legal rights against a claimant is called: a. subordination b. subrogation c. special endorsement d. satisfaction of title

b. subrogation

Under the negotiated terms of a residential lease, the landlord is required to maintain the water heater. If a tenant is unable to get hot water because of a faulty water heater that the landlord has failed to repair after repeated notification, all of the following remedies would be available to the tenant EXCEPT a. suing the landlord for damages b. suing the landlord for breach of the covenant of seisin c. abandoning the premises under constructive eviction d. terminating the lease agreement

b. suing the landlord for breach of the covenant of seisin If the landlord breaches terms of the lease, the tenant can sue and recover damages. The tenant can also abandon the property or terminate the lease agreement. The covenant of seisin refers to deeds, not leases.

The leasehold interest that automatically renews itself at each expiration is the a. tenancy for years b. tenancy from period to period c. tenancy at will d. tenancy at sufference

b. tenancy from period to period The key feature of tenancy from period to period is that it automatically renews itself under the original terms until one of the parties gives notice to terminate. May run for indefinite duration.

Two sisters and their brother were concurrent owners of a parcel of real estate. The brother died and the interest passed according to his will to become part of his estate. This brother was a a. joint tenant b. tenant in common c. tenant by the entirety d. severalty owner

b. tenant in common If a concurrent owner has the right to dispose of his interest under the terms of a will or the interest passes to heirs, the concurrent owner is a tenant in common. J's interest is that of a tenant in common.

A parcel of real estate was purchased by two friends. The deed they received from the seller at the closing transferred the property with no further explanation. The two friends most likely too title as a. joint tenants b. tenants in common c. tenants by the entirety d. community property owners

b. tenants in common If deed of conveyance does not stipulate the tenancy being created, PA law recognizes the concurrent owners as tenants in common.

A person who has died leaving a valid will is called a. a devisee. b. a testator. c. an escrow agent. d. intestate.

b. testator. From a legal perspective, a person dies wither testate (with a will) or intestate (without a will). The person who dies leaving a will is known as the testator.

While a transaction is in escrow, a property suffers $10,000 in fire damage. Per the CAR purchase contract and receipt for deposit: a. the seller may keep the entire deposit b. the buyer is entitled to the return of the entire deposit c. the broker is entitled to the entire deposit d. one-half the buyer's deposit will be retained by the broker

b. the buyer is entitled to the return of the entire deposit

Mr. Jackson, a buyer, enters into a contract to buy a home from Mr. Mills. Before the closing, Jackson assigns Harris into his contractual position without the approval of Mr. Mills. In this case: a. the contract is void b. the contract is valid c. the contract is voidable by mr. mills d. the contract is voidable by mr. harris

b. the contract is valid

Zoning hearing boards are established to hear complaints about a. restrictive covenants b. the effects of a zoning ordinance c. building codes d. the effects of public ownership

b. the effects of a zoning ordinance

an appraiser is hired to estimate the value of a parcel of vacant land. what is the most logical and proper thing for the appraiser to determine first? a. the listed price of the land b. the highest and best use of the land c. what the present owner paid for the land d. prices of properties comparable to the land

b. the highest and best use of the land

Which statement applies to both joint tenancy and tenancy by the entirety a. there is no right to file a partition suit b. the last survivor becomes a severalty owner c. a deed signed by one owner will convey a fractional interest d. a deed will not convey any interest unless signed by both spouses

b. the last survivor becomes a severalty owner Trusts may be created by agreement during a property owner's lifetime (a living trust) or established by the terms of a will (a testamentary trust).

A man conveys a vineyard in trust to his sister, with the instruction that any income derived from the vineyard is to be used for his daughter's medical care. Which of the following statements MOST accurately describes the relationship of these parties. a. the man is the trustee, the sister is the trustor, and his daughter is the beneficiary b. the man is the trustor, the sister is the trustee, and his daughter is the beneficiary c. the man is the beneficiary, the sister is the trustor, and his daughter is the trustee d. the man is the trustor, the sister is the beneficiary, and his daughter is the trustee

b. the man is the trustor, the sister is the trustee, and his daughter is the beneficiary The trustor (the man) is the party creating the trust. Title to the vineyard is held by the trustee (the sister) for the benefit of the beneficiary of the trust (the daughter).

A condominium is created when a. the construction of the improvements is completed b. the owner files a declaration in the public record c. the condominium owners' association is established d. all the unit owners file their documents in the public record

b. the owner files a declaration in the public record A condominium is created and established when the owner of an existing building or developer of unimproved property executes and records a declaration of condominium in public records.

The grantor of a deed may place effective restrictions on a. the right to sell the land b. the use of the land c. who the next purchaser will be d. who may occupy the property

b. the use of the land Any attempt to restrict free alienation (transfer) of the occupancy of the property is against public policy and unenforceable.

the statute of limitations refers to a. accord and satisfaction b. time periods for bringing legal action as specified by law c. the requirement that certain contracts must be in writing d. the upper limit of interest a lender can legally charge

b. time periods for bringing legal action as specified by law

If a person purchases the right to occupy a unit for a certain designated period each year, this is called: a. undivided ownership b. time share ownership c. cooperative ownership d. estate for years ownership

b. time share ownership

An owner purchases an interest in a resort property. The owner is entitled to the right of possession only between July 10 and August 4 of each year. The owner MOST likely purchased a a. condominium unit b. time-share estate c. cooperative unit d. membership camping interest

b. time-share estate A proprietary (owner's) lease is found in a cooperative. It creates the right for the cooperative tenant/shareholder to occupy a unit in the building.

All of the following involve a freehold interest EXCEPT a. a condominium b. time-share use c. tenancy by the entirety d. tenancy in common

b. time-share use Freehold interests are ownership interests. A time-share use interest refers to the contract right to use real estate owned by a developer for a specified time. It differs from a time share estate, which creates an ownership interest in property.

To have a valid joint tenancy, all the owner names must appear on the same document. This is known as the unity of: a. time b. title c. interest d. possession

b. title

A man executes a deed to a woman as grantee, has his signature acknowledged, and receives payment from the buyer. The man holds the deed, however, and arranges to meet the woman the next morning at the courthouse to deliver the deed to her. In this situation at this time, a. the woman owns the property because she has paid for it. b. title to the property will not officially pass until the woman has been given the deed the next morning. c. title to the property will not pass until the woman has received the deed and recorded it the next morning. d. the woman will own the property when she has signed the deed the next morning.

b. title to the property will not officially pass until the woman has been given the deed the next morning. Although the man executed the deed, had the signature acknowledged, and received consideration, title will not pass until the deed is delivered and accepted by the grantee the next morning.

A valid joint tenancy must have the four unities of: a. time, title, interest, remainder b. title, time, possession, interest c. interest, right, possession, time d. time, title, occupancy, possession

b. title, time, possession, interest

What is the primary function of Freddie Mac? a. to buy mortgages that are guaranteed by the full faith and credit of the federal government b. to buy and pool primarily conventional mortgages, selling bonds with such mortgages as security c. to work in tandem with Ginnie Mae to provide special assistance in times of tight money d. to buy and sell only VA and FHA mortgages

b. to buy and pool primarily conventional mortgages, selling bonds with such mortgages as security The Federal National Mortgage Corporation (Freddie MAC) was created to provide a secondary market for conventional loans. Freddie Mac pools the loans and sells bonds to investors with the mortgage loans as security.

The BEST reason for a buyer to obtain title insurance is a. that the mortgage lender requires it b. to ensure that the seller can deliver marketable title c. to ensure that the abstractor has prepared a complete summary of title d. to pay future liens that may be filed

b. to ensure that the seller can deliver marketable title Title insurance is considered the best defense of title; the title insurance company will defend any lawsuit based on an insurable defect and pay claims if the title proves to be defective.

An investor leases a building to a tenant who then opens a retail store. The tenant installs a cash register. The cash register is best described as: a. personal property b. trade fixture c. real property d. leased property

b. trade fixture

A lease in which the lessee is required to pay the property taxes, insurance, and maintenance is known as a: a. gross lease b. triple net lease c. percentage lease d. ground lease

b. triple net lease

The maximum security deposit for an unfurnished apartment is: a. one month's rent b. two month's rent c. three month's rent d. four month's rent

b. two month's rent

Laws that limit the amount of interest that can be charged to the borrower are a. established by the Federal Reserve b. usury laws c. established by the country's monetary policy d. illegal in PA

b. usury laws Many states, including PA, have enacted laws limiting the interest rate that may be charged on most consumer loans. These are known as usury laws.

a tenant farmer pays his landlord rent in the form of a share of the crops. this is an example of a. good consideration b. valuable consideration c. crops are not considered consideration d. good and valuable consideration

b. valuable consideration

A son forged his mother's signature on a listing agreement because he didn't want to bother her with details. What is the status of the listing agreement? a. valid, if she affirms her acceptance b. void c. voidable d. unenforceable

b. void One of the requirements for a valid contract is legal purpose; a forged signature renders the contract void

A real estate broker takes an exclusive right to sell listing from a seller for $200,00. A buyer makes an offer for $175,00 which the seller accepts. Before the sale closes the buyer discovers that the broker misrepresented the square footage of the home. Based on this information, the purchase contract is probably: a. void b. voidable c. illegal d. valid

b. voidable

Which of the following describes the process of creating a landfill site? a. waste is liquified, treated, and pumped through pipes to tombs under the water table b. waste and topsoil are layered in a pit, mounded up, and then covered with dirt and plants c. waste is compacted and sealed in a container, then placed in a tomb designed to last several thousand years d. waste is buried in an underground concrete vault

b. waste and topsoil are layered in a pit, mounded up, and then covered with dirt and plants A landfill is an enormous hole in which waste material is layered with topsoil until the landfill is full.

Which of the following BEST describes the secondary market? a. lenders who deal exclusively in second mortgages b. where loans are bought and sold after they have been originated c. the major lender of residential mortgage loans d. the major lender of government-sponsored loans

b. where loans are bought and sold after they have been originated Primary mortgage lenders conduct business directly with consumers/borrowers. The lenders, in turn, package and sell mortgage loans to secondary-market investors....

Most attorneys stress that the best will is a properly drafted: a. statutory will b. witnessed will c. holographic will d. oral will

b. witnessed will

The practice of inducing panic selling in a neighborhood for financial gain is..

blockbusting

The practice of inducing panic selling in a neighborhood for financial gain is______________.

blockbusting

When one of the parties to an agreement fails to perform one of its conditions, that contract is deemed to be

breached

To pre-qualify a buyer, a broker should obtain the following information from the buyer:

buyer's present occupation information (i.e. gross income, how long at present job) Explanation To pre-qualify a buyer the broker should obtain from the buyer their social security number and current address for the lender to pull a credit report; the buyer's present occupation and an approximate amount of cash they have to invest in the new home.

Under certain conditions, a single home owner may exempt up to how much in gains from the sale of his or her personal residence? a. $500,000 b. $300,000 c. $250,000 d. $125,000

c. $250,000

At $800 per acre, a lot that is 264 feet wide and 660 feet long would cost a. $1,320. b. $1,584. c. $3,200. d. $4,356.

c. $3,200. A lot measuring 264 feet by 660 feet is 174,240 square feet. If 43,560 square feet equals one acre, 174,240 square feet equals four acres (174,200/43,560). At $800 per acre, four acres would cost $3,200 (800 x 4).

A borrower obtains a $100,000 mortgage loan for 30 years at 6% interest. If the monthly payments of $575 are credited first to interest and then to principal, what will be the balance of the principal after the borrower makes the first payment? a. $99,425 b. $99,500 c. $99,925 d. $100,000

c. $99,925 $100,000 x .06 / 12 = $500 first month's interest payment. $575 - $500 = $75; the $75 reduces the principal. After the first payment, the borrower owes $99,925.

If a court proceeds to confirm a probate sale, the first additional bid must be what percent above the original bid? a. 5% on the first $10,000, 3% on the remainder b. 5% on the first $10,000 and any amount on the remainder c. 10% on the first $10,000, 5% on the remainder d. 10% on the first $10,000 and any amount on the remainder

c. 10% on the first $10,000, 5% on the remainder

two acres are being subdivided into 5 equal lots. Each lot has a front set back of 10 feet and is 198 feet wide. What is the buildable area of each lot? a. 18,524 sq. ft. b. 17,424 sq. ft. c. 15,444 sq. ft. d. 14,744 sq. ft

c. 15,444 sq. ft.

After obtaining a real estate salesperson license for the first time, a person who has not already done so must complete two broker-level courses within: a. 6 months b. 12 months c. 18 months d. 24 months

c. 18 months

A property valued at $94,000 is taxed based on an assessed rate of 20% and a mill levy of 108 mills. What is the amount of taxes due? a. $10,152 b. $18,800 c. $2,030.40 d. $203.04

c. 2030.40

A right of way 10 feet wide and 54 feet long is approximately what percent of a 1/4 acre? a. 1% b. 3% c. 5% d. 7%

c. 5% 10,890 sq ft = 1/4 acre

A lease on agricultural land cannot exceed: a. 15 years b. 37 years c. 51 years d. 99 years

c. 51 years

If an owner fails to file a proper Notice of Completion in the County Recorder's office, all unpaid mechanic's have how many days to file a lien? a. 30 days b. 60 days c. 90 days d. 180 days

c. 90 days

When is a certificate of occupancy issued? a. When the owner of a multifamilty residential property wishes to limit the number of individuals who may live in a single unit b. At the time a property owner applies for a building permit c. After a newly constructed building has been inspected and found satisfactory by the municipal inspector d. When an application for a variance or conditional-use permit has been granted by the zoning board

c. After a newly constructed building has been inspected and found satisfactory by the municipal inspector A certificate of occupancy is issued once a completed structure has been inspected and found satisfactory; the building is fit for occupancy and has not building code violations.

Broker Wildon took a listing. Wilson's salesperson brought in an offer. One hour later another offer on the same property came in from a different real estate company. The salesperson from Broker Wilson's office submitted the first offer first. Which of the following is correct? a. it's all right if the two offices decide on a commission split in advance. b. failure to submit the second offer is permitted if the brokers agree c. Broker Wilson must inform the seller of both offers or be subject to disciplinary action d. only the offer with the highest price need be submitted

c. Broker Wilson must inform the seller of both offers or be subject to disciplinary action

The state and federal government have institute laws prohibiting illegal discrimination in real estate transactions. Which of the following is a federal law that affects all states? a. Holden Act b. Rumford Act c. Civil Rights Act of 1968 and 1988 Amendments d. Unruh Civil Rights Act

c. Civil Rights Act of 1968 and 1988 Amendments

A, B, C, D are joint tenants to Section 24 in a standard township. D deeds her interest to E: a. E is a joint tenant with A, B, C b. E acquired 160 acres c. E owns a 1/4 interest in 640 acres d. E owns nothing because D cannot deed her interest as a joint tenant

c. E owns a 1/4 interest in 640 acres

Generally, where does a probate proceeding involving real property take place? a. Only in the county in which the property is located b. Only in the county in which the decedent resided c. In both the county where the decedent resided and the county in which the property is located d. In the county in which the executor or the beneficiary resides

c. In both the county where the decedent resided and the county in which the property is located Probate proceedings take place in the county in which the decedent resided; if the decedent owned real estate in another county, probate would occur in that county as well.

Which of the following is NOT a participant in the secondary market? a. Fannie Mae b. Ginnie Mae c. Local credit union d. Freddie Mac

c. Local credit union A local credit union participates in the primary market. The secondary market consists of Fannie Mae, Freddie Mac, and Ginnie Mae.

What system uses a property's physical features to determine boundaries and measurements? a. Rectangular survey system b. Lot-and-block recorded plat system c. Metes-and-bounds method d. Multiple listing service

c. Metes-and-bounds method Metes-and-bounds descriptions rely on physical features of the property to describe boundaries and is the oldest form of description.

Which statement MOST accurately describes special assessment liens? a. They are general liens. b. They are paid on a monthly basis. c. They take priority over mechanics' liens. d. They cannot be prepaid in full without penalty.

c. They take priority over mechanics' liens. Special assessments are tax liens affecting a particular property. They take priority over other types of liens, including mechanics' liens.

Method of annexation, adaptation to real estate, and agreement between the parties are the legal tests for determining whether an item is a. a trade fixture or personal property b. real property or real estate c. a fixture or personal property d. an improvement

c. a fixture or personal property These are tests to determine if it is a fixture or personal property.

A seller delivered title to a buyer at closing. A title search has disclosed no serious defects, and the title did not appear to be based on doubtful questions of law or fact or to expose the buyer to possible litigation. The seller's title did not appear to present a threat to the buyer's quiet enjoyment, and the title insurance policy provided was sufficient to convince a reasonably well-informed person that the property could be resold. The title conveyed would commonly be referred to as a. a certificate of title b. an abstract of title c. a marketable title d. an attorney's opinion of title

c. a marketable title A marketable title is one that does not have serious defects, will not expose the purchaser to litigation, and should convince a reasonably well informed and prudent buyer that the property could be sold or mortgaged at a later time.

A license is an example of a. an appurtenant easement b. an encroachment c. a personal privilege d. a restriction

c. a personal privilege A personal privilege or right to use land of another for a specific purpose is known as a license. Does not create an interest in the land but instead a temporary right of use.

An owner or developer of a newly built condominium building must provide each prospective unit purchaser with all of the following EXCEPT a. a public offering statement b. a two-year warranty against structural defects c. a resale certificate d. a property report

c. a resale certificate A resale certificate prepared by the owners' association and containing pertinent financial info must be provided to second and subsequent owners. First purchasers of newly constructed units must be provided with a public offering statement, a property report, and two-year warranty against structural defects.

which of the following is NOT true of a listing contract a. a corporation may be a principal b. a natural person may be an agent c. a sales associate may be an agent d. purchasers are not involved in the contract

c. a sales associate may be an agent

A legally enforceable agreement under which two parties agrees to do something for each other is known as a. an escrow agreement b. a legal promise c. a valid contract d. an option agreement

c. a valid contract A contract is a voluntary agreement or promise between legally competent parties to do or refrain from doing certain things. A contract is valid if it meets the essential requirements of contract law that make it legally sufficient to be enforceable in court.

An owner of real estate was declared legally incompetent and was committed to a state mental institution. While institutionalized, the owner wrote and executed a will. The owner later died and was survived by a spouse and three children. The real estate will pass a. to the owner's spouse. b. to the heirs mentioned in the owner's will. c. according to the state law of descent. d. to the state.

c. according to the state law of descent. An individual declared legally incompetent does not have capacity to execute legal documents. Therefore, the will would be considered void and title to the real estate would pass according to the state's laws of descent and distribution.

A tenant moves a pet into an apartment community that has a no-pets policy. The landlord wishes to remove the tenant because of this breach. The legal process to remove a tenant is known as a. constructive eviction b. eminent domain c. actual eviction d. partial eviction

c. actual eviction The landlord recovers possession of the property by filing for a court action called actual eviction.

Last Security Bank is making a loan which they do not want anyone to be able to assume without their approval or their right to increase the interest rates. Therefore, they insert what clause? a. release b. defeasance c. alienation d. prepayment penalty

c. alienation

A deeded easement of right-of-way over the land of another is considered to be: a. personal property b. an encroachment c. an appurtenance d. a lien

c. an appurtenance

An easement across another person's land is: a. a voluntary lien b. a general lien c. an encumbrance d. two of the above are correct

c. an encumbrance

the right to minerals that lie beneath the surface of the land, unless otherwise specified: a. cannot be conveyed apart from the real estate surrounding the minerals b. are kept by the original owner c. are automatically transferred with the sale of real property d. cannot be leased

c. are automatically transferred with the sale of real property

A properly signed exclusive right-to-sell listing agreement is an: a. implied contract b. unilateral contract c. bilateral contract d. purchase contract

c. bilateral contract

The police power allows regulation of all of the following EXCEPT a. the number of building b. the size of buildings c. building ownership d. building occupancy

c. building ownership Police Power refers to authority of government to adopt regulations necessary to protect the public health, safety and welfare.

A description meets the standard of being legally sufficient if a a. buyer can identify the property by the property address b. title company certifies the description c. competent surveyor can locate the parcel using the description d. real estate licensee can locate the parcel

c. competent surveyor can locate the parcel using the description Courts require that a description be legally sufficient (competent surveyor can locate). A street address is not adequate to indicate precise boundaries.

When attempting to discover environmental hazards in real estate transactions, licensees can do several things to minimize their professional liability. Which of the following is NOT advisable? a. using licensed environmental inspectors b. using environmental inspectors c. conducting their own environmental inspections d. encouraging buyers to have professional inspections conducted

c. conducting their own environmental inspections Real Estate licensees are not environmental experts and may incur legal liability if they conduct environmental inspections beyond the scope of their professional practice.

The tenant leases a heated apartment, but the landlord fails to provide heat because of a defective central heating plant. The tenant vacates the premises and refuses to pay any rent. This is an example of a. abandonment b. actual eviction c. constructive eviction d. lessor negligence

c. constructive eviction The tenant may claim constructive eviction if the premises are unusable.

the technical term for depreciation is: a. appreciation b. cost basis c. cost recovery d. price adjustment

c. cost recovery

Which of the following is not required for a deed to be valid? a. signature of grantor b. granting clause c. date d. must be in writing

c. date

What is the process known as friendly foreclosure, whereby a delinquent borrower can avoid foreclosure? a. voluntary alienation b. assignment of the mortgage c. deed in lieu of foreclosure d. nonjudicial alienation

c. deed in lieu of foreclosure As an alternative to foreclosure, the lender may accept a deed in lieu of foreclosure from the borrower. This is sometimes known as a friendly foreclosure because it is carried out by mutual agreement rather than by lawsuit.

When the property was sold after foreclosure, it did not sell for as much as was owed on the loan. What recourse does the lender have? a. no recourse b. alienation lien c. deficiency judgment d. mechanics lien

c. deficiency judgment A deficiency judgment is a personal judgment levied against a borrowed when a foreclosure sale does not produce sufficient funds to pay the mortgage debt in full

A percentage lease is a lease that provides for a a. rental of a percentage of the value of a building b. definite periodic rent not exceeding a stated percentage c. definite monthly rent plus a percentage of the tenants' gross receipts in excess of a certain amount d. graduated amount due monthly and not exceeding a stated percentage

c. definite monthly rent plus a percentage of the tenants' gross receipts in excess of a certain amount A percentage lease is a common form of lease used in retail businesses that require the tenant to pay rent based on a percentage of the gross or net income generated by the business.

Title to property transfers at the moment a deed is a. signed. b. acknowledged. c. delivered and accepted. d. recorded.

c. delivered and accepted. Title to real estate is transferred when the deed is delivered and accepted by the grantee. The grantor's signature, in and of itself, does not transfer title.

The first principle an appraiser should apply when appraising a property is: a. determine level of contribution b. obtain a list of comparables c. determine highest and best use d. define the problem

c. determine highest and best use

Deed restrictions that apply to all lots in a new subdivision are created by the: a. lender b. government c. developer d. broker

c. developer

Receiving a commission from both the buyer and seller without full disclosure and approval is called: a. dual agency b. single agency c. divided agency d. implied agency

c. divided agency

A couple is frantic because they cannot find their deed and now want to sell the property. They a. may need to file a suit to quiet title b. will have to buy title insurance c. do not need the original deed in order to sell, if it was recorded d. should execute a replacement deed to themselves

c. do not need the original deed in order to sell, if it was recorded If the deed has been recorded when S took title her interest is a matter of public record; he does not need the original document in order to transfer title to a purchaser.

According to real estate licensing law, for supervising purposes, the relationship between a salesperson and a broker is: a. fiduciary b. independent contractor c. employer-employee d. ostensible

c. employer-employee

When a non-occupying investor and an owner-occupant pool their resources to buy a home is is called: a. equity ownership b. equity occupancy c. equity sharing d. equity investing

c. equity sharing

Greene deeds a life estate to Blue and upon Blue's death title passes to Brown. This is an example of what type of life estate? a. estate in reversion b. estate in reservation c. estate in remainder d. estate in severalty

c. estate in remainder

Through negligence Blondell permitted Gildea to believe that Delgado was Blondell's agent when Delgado had not really been appointed by Blondell. If this created an ostensible agency it will be by: a. ratification b. expression c. estoppel d. specific action

c. estoppel

Which two terms do not go together? a. open listing - several brokers b. dual agency - written disclosure c. exclusive right to sell - unlimited time d. offer - acceptance

c. exclusive right to sell - unlimited time

The market (sale comparison) approach to value is most important for determining the value of: a. special purpose properties b. commercial property c. existing residential homes d. income producing property

c. existing residential homes

A person owned the fee simple title to a vacant lot adjacent to a hospital and was persuaded to make a gift of the lot. She wanted to have some control over the use, so her attorney prepared her deed to convey ownership of the lot to the hospital "so long as it is used for hospital purposes." After completion of the gift, the hospital will own a a. fee simple absolute estate b. license c. fee simple determinable d. leasehold estate

c. fee simple determinable One ownership interest that is subject to a special limitation on use for a specific purpose, is a fee simple determinable estate. The key phrase is "so long as...." If new owner does not comply, former owner reacquires full ownership.

A broker must keep records of all real estate transactions a. for at least one year following closing date b. for at least three years following the listing date c. for at least three years following the date of consummation or termination d. indefinitely

c. for at least three years following the date of consummation or termination Records of real estate transactions must be retained for three years following consummation or termination of the transaction.

The MOST important step involved in managing the risk of the environmental hazards is to a. cancel any listing with a potential environmental hazard b. purchase an umbrella coverage insurance policy c. gather and disseminate authoritative information d. have the seller sign a hold-harmless letter

c. gather and disseminate authoritative information Although sellers often carry the most exposure to environmental liability, real estate licensees could also be held liable.

A judgment is considered to be what type of lien? a. constructive b. voluntary c. general d. specific

c. general

A tenant signs a lease that includes a schedule of rent increases on specific dates over the course of the lease term. What kind of lease has this tenant signed? a. percentage b. net c. graduated d. index

c. graduated A graduated lease states specific rate increases at specific times.

Determination of the type of deed used in conveying title can be made by examining the a. grantor's name. b. grantee's name. c. granting clause. d. acknowledgment.

c. granting clause The granting clause states the grantor's intention to convey the property. By examining the wording in this clause, it is possible to determine the type of deed being used to convey title.

Under the statute of frauds, contracts for the sale of real estate must be a. originated by a real estate broker b. on preprinted forms c. in writing to be enforceable d. accompanied by earnest money deposits

c. in writing to be enforceable The statute of frauds requires contracts for the sale of real estate to be in writing to be enforceable. There is no requirement that preprinted forms be used, that the contract be originated by a broker, or that an earnest money deposit be given.

A deed need not be recorded in order to be valid, but must be delivered. Effective delivery depends on: a. valid acknowledgment by the grantor b. physical transfer c. intention of the grantor d. knowledge of it existence by the grantee

c. intention of the grantor

Title to real estate may be transferred during a person's lifetime by a. devise. b. descent. c. involuntary alienation. d. escheat.

c. involuntary alienation. Devise, descent, and escheat all refer to transfer of title subsequent to the death of the titleholder. Involuntary alienation occurs by operation of law, as in a foreclosure or condemnation action.

The buyer asked the real estate licensee to prepare an agreement to purchase because the buyer wanted to make an offer. With these instructions, the licensee a. must refer the buyer to an attorney b. should supervise the buyer filling out a preprinted form c. is permitted to fill in the blanks of a preprinted form d. reprints a previous contract and changes the details

c. is permitted to fill in the blanks of a preprinted form To avoid the unauthorized practice of the law, a real estate licensee is permitted to fill in the blanks of a preprinted form at the direction of the buyer

Which of the following is classified as a general lien? a. mechanics lien b. bail bond lien c. judgment d. ad valorem real estate taxes

c. judgment A judgment is a decree issued by a court that becomes a general involuntary lien on both real and personal property owned by the debtor

Which phrase best defines real estate? a. land and the air above it b. land and all things permanently attached by nature c. land and all things permanently affixed to it d. land and the mineral rights in the land

c. land and all things permanently affixed to it Includes things permanently attached either by man or nature.

If a lessee abandons a lease prior to the expiration date, the lessor may: a. leave the premises unoccupied and sue for the entire lease amount b. lease the property again and collect from two sources c. leave the premises unoccupied and sue for each installment as it becomes due d. either 'a' or 'b'

c. leave the premises unoccupied and sue for each installment as it becomes due

In an ARM loan, the distance between the borrower's rate and the index is called the: a. cap b. adjustment c. margin d. teaser

c. margin

The purpose of the laws concerning asbestos are to a. require that it be removed from public buildings immediately b. regulate its removal from apartment buildings with fewer than ten units c. minimize the release of asbestos fibers during construction and removal d. fine owners of buildings containing the mineral

c. minimize the release of asbestos fibers during construction and removal Asbestos laws apply to public school buildings, the rights of employees, indoor air quality in public commercial and apartment buildings with over ten units.

Which of the following is considered to be personal property: a. easement b. iron ore in the ground c. mortgage contract d. stock in a mutual water company

c. mortgage contract

Which of the following is a voluntary specific lien? a. IRS tax lien b. mechanics lien c. mortgage lien d. sellers lien

c. mortgage lien A mortgage lien is voluntarily given by a borrower to a lender it creates a specific lien against the property pledged as security for the debt.

According to the Statute of Frauds, a contract for the sale and purchase of real estate a. must be free of the elements of fraud and misrepresentation b. must not be induced through duress c. must be in writing to be enforceable d. must be acknowledged and recorded

c. must be in writing to be enforceable

Seller Biggs sells a property to sixteen-year-old Buyer Kidd. When Briggs learns that Kidd is not of legal age, Biggs wishes to void the contract. Can Biggs legally do this? a. yes, because buyer Kidd is not of legal age b. yes, because contracts with legally incompetent persons are automatically void c. no, because buyer kidd, but not seller biggs may dissaffirm the contract d. no, because discrimination on the basis of age is illegal

c. no, because buyer kidd, but not seller biggs may dissaffirm the contract

When an easement allows the servient tenement to use the land, the easement is called: a. prescriptive b. permanent c. non-exclusive d. dominant

c. non-exclusive

A tenant's lease will expire in two weeks, at which time, the tenant will move into larger quarters on the other side of town. To terminate the agreement, a. the tenant must give the landlord prior notice b. the landlord must give the tenant prior notice c. nothing needs to be done - the agreement will terminate automatically d. both parties must renegotiate the original agreement

c. nothing needs to be done - the agreement will terminate automatically The tenant will vacate the lease property at the expiration of the lease term. The lease is discharged and contractual relationship is terminated.

the sellers told the listing agent they were offering the property at a reduced price because the roof leaked, but they weren't going to fix it. it was listed with that problem. what should the agent writing the offer do? a. write an addendum stating the property is being sold as is b. nothing, since the roof condition was openly dealt with in the listing c. on the addendum, the note the roof leeks and section 10.2 (C) does not apply regarding the roof d. on an addendum, state that 10.2 (C) in the REPC does not apply in this transaction

c. on the addendum, the note the roof leeks and section 10.2 does not apply regarding the roof

Evidence of the kind of estate and all liens against a parcel of real estate can usually be proven by a. a recorded deed b. a court suit for specific performance c. one of the forms of proof of ownership d. a foreclosure suit

c. one of the forms of proof of ownership Proof of ownership is evidence that title to the property is marketable. The grantor's interest in the property , as well as proof of the condition of the grantor's interest at the time of conveyance, can be ascertained by a certificate of title or title insurance. Both are used as proof of ownership.

A subordination clause is the agreement in an junior lien which: a. provides for a balloon payment b. eliminates any previously allowed acceleration clauses c. permits a first lien to be refinanced without a loss of priority d. guarantees the allowance of funds for property maintenance even if mortgage payments need to be interrupted

c. permits a first lien to be refinanced without a loss of priority

A map illustrating the sizes and locations of streets and lots in a subdivision is called a a. grid. b. survey. c. plat. d. property report.

c. plat. A subdivision plat, which is essentially a map of the development, indicates the size and location of individual lots and streets. The plat serves as the basis for future conveyances.

In case of default, a Trust Deed conveys to the trustee the: a. right to repossess the secured property b. authority to call upon the courts to order the sale of the property c. power of sale d. exercise of each of these alternatives, as directed by the beneficiary

c. power of sale

If a real estate loan is paid off in advance of the due date, some lenders are legally allowed to charge a penalty. This is called what type of penalty? a. acceleration b. alienation c. prepayment d. balloon

c. prepayment

The right to possess, encumber, use, and enjoy a piece of property to the exclusion of all others, would be an accurate description of: a. a life estate b. real property c. property ownership d. an equitable position

c. property ownership

The purpose of a building permit is to a. override a deed restriction b. maintain municipal control over the volume of the building c. provide evidence of compliance with municipal construction regulations d. show compliance with deed restrictions

c. provide evidence of compliance with municipal construction regulations Permits pertain to compliance with codes/ordinances relating to construction, renovation, etc.

in order to complete the sale of his property, Ernie Easterbrook carried back a third mortgage. This mortgage would be called a: a. blanket mortgage b. package mortgage c. purchase money mortgage d. wraparound mortgage

c. purchase money mortgage

A type of deed, with non warranties, frequently used to remove "clouds" from title is known as: a. grant deed b. quiet deed c. quitclaim deed d. gift deed

c. quitclaim deed

Which people do NOT have liability under the environmental law? a. real estate licensees selling properties b. mortgage lenders c. real estate educators d. appraisers

c. real estate educators Parties involved in some way in the transaction process have potential liability under current environmental laws.

The bundle of legal rights is included in the definition of: a. land b. real estate c. real property d. trade fixtures

c. real property Real Property includes interests, rights and benefits associated with ownership.

The cost of public services is distributed among real estate owners through a. personal property tax b. sales tax c. real property tax d. special assessment

c. real property tax Municipalities and other taxing bodies fund the cost of public services by levying taxes on real property. These are commonly known as ad valorem taxes because the amount is based on the value of the property being taxed.

A mechanics lien claim arises when a general contractor has performed work or provided material to improve a parcel of real estate on the owners order and the work has not been paid for. Such a contractor has a right to a. tear out the work b. recording notice of the lien c. recording notice of the lien and file a court suit within the time required by state law d. have personal property of the owner sold to satisfy the lien

c. recording notice of the lien and file a court suit within the time required by state law In Pennsylvania a contractor can record a notice of the lien and enforce the lien by court action (a foreclosure) to collect the debt from the sale of the real estate.

as used in real estate financing the term 'impounds' most nearly means: a. moratorium b. escalation c. reserves d. penalities

c. reserves

A title insurance policy with standard coverage generally covers all of the following EXCEPT a. forged documents b. incorrect marital statements c. rights of parties in possession d. incompetent grantors

c. rights of parties in possession A standard coverage title insurance policy normally ensures the title as it is known from public records. The coverage does not include the rights of the parties in possession, but it does include such defects as forged documents, conveyances by incompetent grantors, incorrect marital statements and improperly delivered deeds.

which of the following is NOT part of the cycle associated with the Principal of change or neighborhood cycle? a. integration b. equilibrium c. segregation d. disintegration

c. segregation

Which of the following is the best definition of the term "zoning"? a. joining together non-harmonious land uses b. a deviation from subdivision rules and regulations c. separating non-harmonious land uses d. enforcing the process of eminent domain

c. separating non-harmonious land uses

when agent wilson of happy realty discovers that one of her listings consisting of a house and lot has been rezoned to industrial, which of the following statements would NOT be true? a. she must disclose the zoning change to the owner of the affected house and lot b. she must disclose the zoning change to any prospect who tours the listed property c. she must disclose the zoning change only to those prospects perparing to sign written offers for the property d. she must note that the change in the listing given to the MLS

c. she must disclose the zoning change only to those prospects preparing to sign written offers for the property

which of the following reports is most frequently used by lending institutions for an appraisal of a personal residence. a. letter form report b. narrative form report c. short form report d. crv form

c. short form report

The LEAST acceptable method for identifying real property is a. rectangular survey b. metes and bounds c. street address d. lot and block

c. street address A street address is not precise or unique to a particular parcel, nor does it permit a surveyor to define the exact boundaries of the property.

The LEAST specific method for identifying real property is a. rectangular survey b. metes and bounds c. street address d. lot and block

c. street address A street address is usually not deemed accurate or sufficient as a legal description because a surveyor would not be able to determine the boundaries based on the address alone.

An owner lists a property with Broker A. Prospective buyer is found by cooperating Broker B. Broker B is a: a. dual agent b. general agent c. subagent d. power of agent

c. subagent

A buyer purchased a parcel of land and immediately sold the mineral rights to an oil company. The buyer gave up which of the following? a. air rights b. surface rights c. subsurface rights d. occupancy rights

c. subsurface rights Mineral rights are subsurface rights to the natural resources lying below the earth's surface.

A property owner sells the rights to minerals located in the ground to an exploration company. After selling the mineral rights, the owner no longer owns which of the following? a. air rights b. surface rights c. subsurface rights d. air and subsurface rights

c. subsurface rights Rights to natural resources lying below the earth's surface are classified as subsurface rights.

The death of either the landlord or the tenant will terminate the lease and the parties' heirs will NOT be bound by its terms under a a. tenancy for years b. periodic tenancy c. tenancy at will d. tenancy at sufference

c. tenancy at will The death of either party terminates an estate at will.

In PA, a conveyance made, "to Arnold and Julia Haber, Husband and Wife," without further elaboration, creates a a. joint tenancy b. tenancy in common c. tenancy by the entirety d. partnership

c. tenancy by the entirety When property is conveyed to grantees or devisees who clearly identified as husband and wife, PA law recognizes the estate created as tenancy by the entirety.

The mortgagee received a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE? a. the policy is issued for the benefit of the buyer b. the policy guarantees that the buyer's equity will be protected c. the amount of coverage is commensurate with the loan amount d. the amount of coverage increases as the borrower's equity increases

c. the amount of coverage is commensurate with the loan amount The lenders title insurance policy is issued for the benefit of the mortgage company, and the amount of coverage depends on the amount of the mortgage loan.

The tenant of a single-family home installs an awning over the buildings front windows to keep the sun away from some delicate hanging plants. Which of the following is TRUE? a. the tenant must remove the awning before the rental period is over b. because of its nature, the awning is considered personal property c. the awning is considered a fixture d. because of the nature of the property, the awning is considered a trade fixture

c. the awning is considered a fixture Once the awning is attached, it becomes a fixture. The fact that it is attached by the tenant instead of the owner is irrelevant.

in which of the following situations has the broker placed the sellers' interest in extreme jeopardy? a. the broker delegates certain responsibilities b. the broker will not give opinions on legal matters when asked c. the broker acts as an undisclosed dual agent d. the broker reveals to the buyer defects in the property

c. the broker acts as an undisclosed dual agent

Many states determine water use by allocating water to users who hold recorded beneficial use permits. This type of water use privilege is called a. riparian rights b. littoral rights c. the doctrine of prior appropriation d. the doctrine of highest and best use

c. the doctrine of prior appropriation In states that subscribe to the doctrine of prior appropriation, the right to use water is controlled by the state. To secure water rights in these states, a landowner must secure a permit to use a specified amount of water for a beneficial use.

There are implied warranties made by the grantor in a grant deed. One of the following is not implied? a. property has not been encumbered by grantor except as disclosed b. the interest held by grantor is being transferred to the grantee c. the grantor holds a certificate of title to the property d. the interest being deeded has not been conveyed to others

c. the grantor holds a certificate of title to the property

A homestead is considered terminated when: a. the home is rented to a tenant b. a final decree of divorce is granted c. the home is sold d. an abstract of judgment is recorded

c. the home is sold

Broker Albertson is hired to sell Harmon's house Harmon admits to being anxious to sell because of a job transfer to another city. Seller Harmon also tells broker Albertson that the listed house is connected to the city's natural gas line. Broker Albertson knows that city gas lines have not been extended to the subdivision where the listed house is located. which of the following should broker Albertson tell all prospective buyers? a. the listed house is not connected to city gas lines; and therefore, Seller Harmon may sell for less than the listed price b. the house has possibly been connected to city gas lines, and seller harmon may sell for less than the listed price c. the listed house is not connect to city gas lines d. seller harmon may sell for less than listed price

c. the listed house is not connected to city gas lines

the appraisal of a property, what is the difference between market data approach and the cost approach and cost approach a. the market data approach capitalized the income, the cost approach uses direct sales comparisons b. the market data approach uses direct sales comparisons; the cost approach capitalizes the income. c. the market data approach uses direct sales comparisons, the cost approach uses projected replacement expenditures d. the market approach uses projected replacement expenditures; the cost approach uses direct sales comparisons

c. the market data approach uses direct sales comparisons, the cost approach uses projected replacement expenditures

the primary money market does NOT include: a. first mortgages b. second mortgage loans c. the purchase of existing loans d. loans made directly to a home purchaser

c. the purchase of existing loans

A purchaser went to the county building to check the records, which showed that that the seller was the grantee in the last recorded deed and that no mortgage was on record against the property. The purchaser may assume which of the following? a. all taxes are paid and no judgments are outstanding b. the seller has good title c. the seller did not mortgage the property d. no one else is occupying the property

c. the seller did not mortgage the property Recording a mortgage serves constructive notice of the claim to the property by the mortgage holder. Because there was no mortgage in the public record, the purchaser may assume that the seller did not mortgage the property.

In PA, a lease for more than three years must be in writing because a. either party may forget the terms b. the tenant must sign the agreement to pay rent c. the statute of frauds requires it d. it is the customary procedure to protect the tenant

c. the statute of frauds requires it In PA, the statute of frauds requiring contracts conveying interests in real estate to be in writing in order to be enforceable applies to leases of more than three years' duration.

when the principal takes the role of being partially disclosed a. the buyer knows who the agent and the principal are b. the buyer knows who the agent is but thinks he/she is the principal c. the third party or other party knows who the agent is, knows there is a principal but does not know the principals name. d. the buyer doesn't know who the agent or the principal are

c. the third party of other party knows who the agent is, knows there is a principal but does not know the principals name

The maximum time allowed an applicant to take the salesperson's examination is: a. five hours b. one and one-half hours c. three hours and 15 minutes d. as long as the applicant wishes to take

c. three hours and 15 minutes

Ownership that allows possession for a specific time each year is a a. cooperative b. condominium c. time-share d. trust

c. time-share When a party owns a time-share estate, the party owns the right to use a property for a period specified, possibly a special week (or weeks) of each calendar year.

Which of the following is considered a correct match? a. mortgage, non judicial foreclosure b. trust deed, forfeiture c. uniform real estate contract, forfeiture d. trust deed and note, judicial foreclosure

c. uniform real estate contract, forfeiture

functional obsolescense of a house may result from: a. construction of a super highway two blocks away b. a leaking roof c. uninsulated walls d. zoning restrictions

c. uninsulated walls

The term nonhomogeneity refers to: a. scarcity b. immobility c. uniqueness d. indestructibility

c. uniqueness Another way of saying land is unique.

The legal action in court to remove a tenant is called: a. unlawful tenancy b. unlawful occupancy c. unlawful detainer d. unlawful possession

c. unlawful detainer

PA's Plain Language Act requires that many consumer contracts a. be written in English b. be written in English and another language commonly spoken in that area c. use short words and be written in the active voice d. include explanatory footnotes to explain the "legalese."

c. use short words and be written in the active voice PA's Plain Language Consumer Contract Act promotes the use of plain language and requires that many consumer contracts be written with short words, sentences, paragraphs, and in the active voice to avoid confusing the consumer

john barnes obtained a loan which was guaranteed by the government against loss. the loan was a(n): a. FHA b. Conventional loan c. VA loan d. Privately insured loan

c. va loan

A contract for the sale of real estate that does not state the consideration to be paid for the property and is not signed by the parties is considered a. voidable b. executory c. void d. enforceable

c. void A definite statement of consideration must be included in a contract to evidence that something of value was given in exchange for the promises made. If there is no consideration, the contract is void.

Courts frequently have to make a decision as to whether some item does or does not go with the real property when it is sold. In making their decision they use the "Five tests of a fixture." These include all of the following except: a. method by which property is attached b. whether the property is considered adaptable c. whether the property is being taxed d. relationship of parties involved

c. whether the property is being taxed

Home inspectors:

can enter the business without qualifications or training Explanation Home inspectors are not required to be licensed; therefore they can enter the business without training or qualification.

Which of the following would be an example of chattel? a. Cattle B. Fence C. Fixures D. River

cattle

Another term for the owner of a property listed with your firm is the

client

A judgement has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given______________.

constructive notice

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

constructive notice

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

contract

Depreciation is calculated based on the

cost of the building only

Seller is giving the buyer a contingency but doesn't want to be stopped from selling forever. The seller should consider:

countering with an escape clause

Interest on the loan assumed is shown as:

credit to the buyer

Jan Green lists her property for sale with Dale, a broker. in the listing contract it is stipulated that Jan will receive 62k all proceeds over 62k will be the broker's commission. this type of listing would be a(n) a. open listing b. exclusive agency listing c. exclusive right to sell d. net listing

d

A specific parcel of real estate has a market value of $180,000 and it's assessed for tax purposes at 25% of market value the tax rate for the county in which the property is located is 30 mils the tax bill will be a. $450 b. $650 c. $900 d. $1350

d. $1350 Market value $180,000 times the tax ratio of 25% equals the assessed value $45,000 a tax rate of 30 Mills is expressed as .030 therefore $45,000 times .030 equals a tax bill of $1350

What is the annual real estate tax on a property valued at $135,000 and assessed for tax purposes at $47,250 with an equalization factor of 125% when the tax rate is 25 mills a. $945 b. $1181 c. $1418 d. $1477

d. $1477 Equalization factors are applied to achieve uniformity by raising or lowering assessments the assessed value of the property is multiplied by the equalization factor and then the tax rate is applied to the equalized assessment. A property assessed at $47,250 within equalization factor of 125% would be taxed at a value of $59,062.50 ($47,250 x 125%). With a tax rate of 25 mills the tax would be $1477 ($59,062.50 x .025).

A property was valued at $200,000 for property tax purposes. According to Proposition 13, what would be the maximum value for property tax purposes in two years, assuming the owner did not make capital improvements a. $202,420 b. $204,010 c. $206,220 d. $208,080

d. $208,080

A lease calls for a minimum rent of $1,200 per month plus 4% of the annual gross business over $150,000. If the total rent paid at the end of one year was $19,200, how much business did the tenant do during the year? a. $25,200 b. $159,800 c. $169,200 d. $270,000

d. $270,000 Base rent paid for a year would be $14,400 ($1,200 x 12). Total paid was $19,200, which means $4,800 ($19,200-$14,400) was paid additional. If $4,800 equals 4% of gross business over $150,000, then $120,000 ($4,800 / 4%) equals the amount over $150,000. Therefore total volume is $270,000 ($150,000 + $120,000).

An owner sold a property for a $100,000 profit. The $100,000 represents a 25% profit. What was the selling price? a. $250,000 b. $300,000 c. $375,000 d. $400,000

d. $400,000

A borrower obtains a $76,000 mortgage loan at 7.5% interest. If the monthly payments of $531.24 are credited first to interest and then to principal, what will the balance of the principal be after the borrower makes the first payment? a. $70,300 b. $75,468.76 c. $75,525 d. $75,943.76

d. $75,943.76 At a 7.5% interest rate, a $76,000 loan would result in $5,700 interest per year ($76,000 x .075). Interest for one month would equal $475 ($5,700/12). If the principal and interest payment was $531.24, the amount attributed to principal is $56.24 ($531.24 - $475). After that payment, the remaining principal balance would be $75,943.76.

Sales price $298,500, buyer to put $86,500 down and to assume seller's loan of $230,000. The documentary transfer tax is: a. $330.15 b. $328.35 c. $253.00 d. $95.15

d. $95.15

The minimum time allowed for depreciation on a personal residence is a. 20-25 years b. 26-30 years c. 10-19 years d. 0 years

d. 0 years

Determine the annual GRM of an income property that recently sold for $132,480 and has monthly gross rents of $960. a. 138 b. 114.6 c. 73 d. 11.5

d. 11.5

The E 1/2 of the NW 1/4 of the NW 1/4 of the SE 1/4, and the SW 1/4 of Section 10 contains: a. 2 1/2 acres b. 5 acres c. 45 acres d. 165 acres

d. 165 acres

A general contractor will soon file a suit against a homeowner for nonpayment. The contractor just learned that the homeowner has listed the property for sale with a real estate broker. In this situation, to protect the contractor's interest, the contractor's attorney will use a. a seller's lien. b. a buyer's lien. c. an assessment. d. a lis pendens.

d. A lis pendens The general contractor would protect his interest or claim by recording a notice of lis pendens (litigation pending). This serves as notice of a possible future lien against the property.

The second installment of real property taxes is delinquent if not paid by: a. November 1 b. December 10 c. February 1 d. April 10

d. April 10

Sohal owns a home and has an easement over 20 feet of Lightfoot's land. Sohal sells to Carter. Based on this information: a. Carter is the servient tenement b. the easement is terminated c. Lightfoot has a lien d. Carter has an appurtenance

d. Carter has an appurtenance

Which of the following is a way in which title to real estate may be transferred by voluntary alienation? a. Eminent domain b. Escheat c. Erosion d. Deed

d. Deed Eminent domain, escheat, and erosion are involuntary transfers. A deed is an intentional, voluntary transfer of title by the grantor.

Which deed would be MOST likely to recite the full, actual consideration paid for the property? a. Gift deed b. Trustee's deed c. Deed in trust d. Deed executed pursuant to court order

d. Deed executed pursuant to court order Deeds executed pursuant to court order recite the full, actual consideration paid for the property. When a court authorizes the sale of a property for a specific amount of consideration, this amount must be exactly stated in the document.

Which of the following best refers to the type of lien that affects all real and personal property of a debtor? a. specific lean b.voluntary lean c. involuntary lien d. general lien

d. General lien The terms voluntary and involuntary referred to the manner in which A lien is created not what property the lien affects. specific liens affect only one particular property. a general lien affects all property real and personal owned by a debtor.

A person has permission from a property owner to hike on the owner's property during the summer. The hiker has a. an easement by necessity. b. an easement by condemnation. c. riparian rights. d. a license.

d. Permission to enter upon or use property of another for a specific purpose creates a personal privilege or license, which may be unilaterally revoked by the licensor.

Which of the following BEST describes the covenant of quiet enjoyment? a. The grantor promises to obtain and deliver any instrument needed to make the title good. b. The grantor warrants that no mortgages, mechanics' liens, or easement affect title to the property being conveyed. c. The grantor warrants that the grantor is the owner and has the right to convey title to it. d. The grantor guarantees that the title will be good against the title claims of third parties.

d. The grantor guarantees that the title will be good against the title claims of third parties. Of the five covenants in a general warranty deed, the covenant of quiet enjoyment establishes that the grantee's claim to title will be defended against third parties who bring court action in an attempt to establish superior title to the property.

A person approaches an owner and says "I'd like to buy your house." The owner says, "Sure," and they agree to a price. What kind of contract is this? a. Express b. Implied c. Bilateral d. Unenforceable

d. Unenforceable An oral agreement is valid between the parties, but not enforceable in a court of law.

A mechanic's lien would be available to all of the following EXCEPT a. suppliers who provided materials used in construction. b. subcontractors employed by a general contractor. c. a surveyor who prepared a survey of a subdivision. d. a broker employed by a builder to market homes in a new subdivision.

d. a broker employed by a builder to market homes in a new subdivision. A mechanic's lien right is based on the enhancement-of-value theory and may be awarded to those who perform labor or furnish material to improve real property. A broker employed to market homes is not entitled to a mechanic's lien.

A seller sold a buyer a parcel of real estate. Title has passed, but to date the buyer has not paid the purchase price in full, as originally agreed on. To force payment, the seller should seek a. an attachment. b. a mechanic's lien. c. a lis pendens. d. a judgment.

d. a judgment. The seller of the real estate can sue the purchase in court. if the suit is successful, the court issues a decree establishing the amount the debtor owes and provides for money be awarded. This decree is known as a money judgment.

A tenant in an apartment holds a. an easement. b. a license. c. a freehold interest. d. a leasehold interest.

d. a leasehold interest A tenant occupying an apartment under a lease acquires a leasehold interest in the property. A leasehold is less than an ownership or freehold interest.

A broker may pay a commission to a. a developer b. a licensed salesperson who works for another broker c. an attorney d. a licensed salesperson employed by the broker

d. a licensed salesperson employed by the broker A licensed real estate broker is prohibited from paying a commission or any valuable consideration to anyone other than the individuals licensed with the broker or another broker.

If the owner of real estate doesn't take action against a trespasser before the statutory period has passed, the trespasser may acquire a. an easement by necessity b. a license c. an easement by implication of law d. a prescriptive easement

d. a prescriptive easement If a party uses real estate owned by someone else, does so without owner's consent, and continues to do so for a period of time established by state law, that using party may be able to successfully claim an easement by prescription.

Chain of title is MOST accurately describe as a. a summary or history of all instruments and legal proceedings affecting a specific parcel of land b. a report of the contents of the public record regarding a particular property c. an instrument or document that protects the insured parties (subject to specific exceptions) against defects in the examination of the record and hidden risks such as forgeries, undisclosed heirs, errors in the public records, and so forth d. a record of the property's ownership

d. a record of the property's ownership The term chain of title refers to the record of a property's ownership over a period of time. Each owner is linked to the next, and then to the next and so on, so that a "chain" is formed.

the ultimate determiner of value is a. what the buyer is willing to pay b. what the seller is willing to accept c. an official apprasial by a certified appraiser d. a willing buyer and willing seller neither under duress

d. a willing buyer and a welling seller neither under duress

Te clause in a mortgage which states that if the borrower defaults, the lender has the right to declare the entire debt due payable is called the: a. defeasance clause b. subordination clause c. escalation clause d. acceleration clause

d. acceleration clause

The clause in a note that gives the lender the right to have all future installments become due upon default is the a. escalation clause b. defeasance clause c. alienation clause d. acceleration clause

d. acceleration clause When a borrower is delinquent in making payments or breaches other conditions of the mortgage, the lender may declare the entire debt due and payable immediately. This right is provided in the acceleration clause.

When possession of land includes open and notorious use for 5 years, hostile to the owner's wishes, and payment of property taxes this best describes: a. intestate succession b. accession title c. alluvion ownership d. adverse possession

d. adverse possession

under which of the following circumstances can a listing contract be assigned with the brokers permission? a. if another broker can better handle the principal's listing b. if the listing sales agent has moved to an new brokerage c. if the principal wants the benefits of a multiple listing service d. agency contracts cannot be assigned

d. agency contracts cannot be assigned

A contract is said to be bilateral if a. one of the parties is a minor b. the contract has yet to be fully performed c. only one party to the agreement is bound to act d. all parties to the contract are bound to act

d. all parties to the contract are bound to act A bilateral contract is one in which all parties (both sides of the contract) promise to do something. The basis of the contractual relationship is an exchange of promises: "I will do this, and in return you will do that."

What do UFFi, lead-based paint, and asbestos have in common? a. all propose a risk to humans because they may emit harmful gases b. all were banned in 1978 c. all three were used in insulating materials d. all were used in residential houses built in the 1970's

d. all were used in residential houses built in the 1970's After health risks with these products became known, their use became curtailed or eliminated.

All of the following would probably be exempt from real estate taxes EXCEPT a. a medical research facility. b. a public golf course. c. a community church. d. an apartment building.

d. an apartment building. In Pennsylvania, the general theory is that property used for certain public purposes is tax exempt. Apartment building owned by private individuals or entitles are generally not exempt from real estate taxes.

After a tenant's lease expired, the tenant neither vacated nor negotiated a renewal lease. The landlord has declared that she does not want the tenant to remain in the building. The tenant holds a. an estate for years b. a periodic estate c. an estate at will d. an estate at sufference

d. an estate at sufference An estate at sufference is created when a tenant who lawfully possessed property remains in possession without consent of the landlord after the lease expires.

Among the MOST common sources of carbon monoxide in a house a. are malfunctioning air conditioners b. is crumbling insulation c. are leaking heating fuel tanks d. are malfunctioning furnaces

d. are malfunctioning furnaces Fuel-burning appliances, such as furnaces, produce carbon monoxide as a natural by-product of combustion.

When would a broker be legally required to reveal the amount of commission under a net listing? a. when the property is listed b. after the close of escrow c. whenever the seller asks d. before the seller accepts the buyer's offer

d. before the seller accepts the buyer's offer

A brass marker that surveyors use to mark local datums is called a a. monument b. meridian c. keystone d. benchmark

d. benchmark A benchmark is typically an embossed brass market set into solid concrete and is typically used in marking datums.

If a real estate sales contract states that time is of the essence and the stipulated date of transfer comes and goes without a closing, the contract is a. binding for only 30 more days b. novated c. still valid d. breached

d. breached "Time is of the essence" means that the contract obligations must be performed within the specific time frames stated in the contract. A party who fails to perform on time is liable for breach of contract.

What environmental problem is often the cause of decline of urban values? a. lead-based paint b. underground storage tanks c. adhesives in pressed wood d. brownfields

d. brownfields These are defunct, derelict, or abandoned commercial or industrial sites suspected to contain toxic waste - often contributing to decline in urban property values.

buyer stamp submits an offer to buy the home of seller stan the earnest money deposit is $8,000. should buyer discover the need to recover the 8k an hour later, and before seller has accepted the offer, which of the following would be true about the situation a. buyer would be unable to obtain his money until closing b. buyer must obtain an injunction to prevent seller from spending the money c. buyer may obtain the money without revocation of the offer d. buyer must withdraw the offer before seller accepts it

d. buyer must withdraw the offer before the seller accepts it

If a property has encumbrances, it a. cannot be sold b. can be sold only if title insurance is provided c. cannot have a deed recorded without survey d. can be sold if a buyer agrees to take it, subject to encumbrances

d. can be sold if a buyer agrees to take it, subject to encumbrances An encumbrance is a right, claim, or interest held by someone other than the landowner. The fact that the title is encumbered does not prevent that title from being transferred, but the new owner's title would be subject to those existing encumbrances.

A colorless, odorless gas that is a significant health hazard that occurs as a natural byproduct of combustion is a. ethanol b. oxygen c. hydrochloric acid d. carbon monoxide

d. carbon monoxide Malfunctioning or improperly ventilated equipment can allow CO into the indoors causing a health hazard.

Green has offered to sell her house for 100k with a 50k down payment. Berry wants to consider the purchase of that house on those terms, and ask Green for a week-long option. Which of the following is NOT necessary to make the option valid? a. consideration for the option b. a date of expiration c. a proposed purchase price d. closing date and date of posession

d. closing date and date of possession

The type of development where an owner obtains an individual deed to their living unit and has an undivided interest in all the land and common areas: a. planned unit development b. community apartment c. stock cooperative d. condominium

d. condominium

Which of the following would NOT be acceptable evidence of ownership? a. attorney's opinion b. title insurance policy c. abstract d. deed signed by the last seller

d. deed signed by the last seller A deed is not acceptable evidence of ownership, because it does not contain other encumbrances such as liens, judgments, taxes, assessments and more. Attorneys opinion, title insurance policy, and/or an abstract are acceptable.

Which of the following are legal in PA? a. contracts written in Spanish, if the participants are native Spanish speakers b. only contract written in English on paper c. electronic documents, but not signatures d. electronic signatures, records, and writing

d. electronic signatures, records, and writing The PA Electronic Transaction Act permits electronics signatures, records, and writings. It does not address the issue of foreign languages.

The purpose of the license law is to a. prevent convicted criminals from engaging in the real estate business b. generate license and renewal fees for the state treasury c. authorize the PA real estate commission to promulgate Rules and Regulations d. ensure the public interest is protected

d. ensure the public interest is protected The purpose of laws, including licensing laws, is to provide for the good, safety, and welfare of the public.The rationale supporting the validity of the law is the government's responsibility to ensure that the public interest is protected.

The listing agreement stated that the existing loan was to be assumed. The broker received an offer per the exact terms of the listing ex ept that the buyer wanted to put on a new loan. The seller refused the offer. The broker would be: a. entitled to a one-half the commission b. entitled to no commission c. entitled to a reimbursement for expenses d. entitled to a full commission

d. entitled to a full commission

All of the following would be considered real estate EXCEPT a. fences b. buildings c. growing trees d. farm equipment

d. farm equipment This is considered personal property.

Property deeded to a school "for educational purposes only" conveys a a. fee simple absolute. b. fee simple on condition precedent. c. leasehold interest. d. fee simple on condition subsequent.

d. fee simple on condition subsequent Property conveyed "for educational purposes only" or some other condition creates a fee simple estate qualified by a "condition subsequent." If the condition is broken, the former owner can initiate legal action to reclaim ownership.

according to agency law, a real estate broker does NOT owe the principal the duty of: a. exercising reasonable care b. acting in good faith c. conforming with the principal's instructions d. giving legal advice

d. giving legal advice

If an owner deeds a property encumbered by an existing lease, the new owner is best described as the: a. grantor-lessee b. grantee-lessee c. grantor-lessor d. grantee-lessor

d. grantee-lessor

In filling out a contract, someone crossed out several words and inserted others. To eliminate future controversy about whether the changes were made before or after the contract was signed, the usual procedure is to a. write a letter to each party listing the changes b. have each party write a letter to the other approving changes c. redraw the entire contract d. have both parties initial or sign and date the margin near each change

d. have both parties initial or sign and date the margin near each change All changes and additions to preprinted forms are initialed and dated in the margin to eliminate future controversy as to the agreement between the parties and the date the changes or additions were actually made.

All of the following are acceptable ways to terminate an easement, except: a. express release b. abandonment c. merger d. if created by deed, it may be extinguished by non-use

d. if created by deed, it may be extinguished by non-use

A buyer and seller agree to the purchase of a house for $200,000. The contract contains a clause starting that time is of the essence. Which statement is TRUE? a. the closing must take place within a reasonable period before the stated date b. a "time is of the essence" clause is not binding on either party c. the closing date must be stated as a particular calendar date, and not simply as a formula, such as "two weeks after loan approval." d. if the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date

d. if the closing date passes and no closing takes place, the contract may be rescinded by the party who was ready to settle on the scheduled date "Time is of the essence" means that the contract obligations must be performed within the specific time frames stated in the contract. A party who fails to perform on time is liable for breach of contract.

When a development increases the traffic flow on existing streets and highways, the municipality can fund the cost of transportation improvements that are needed because of this development through a. fees for building permits. b. fees for variances. c. subdivision filing fees. d. impact fees.

d. impact fees. When development takes place in a municipality, the municipality is responsible for off-site improvements, such as highways, roads, and streets. The Pennsylvania Municipalities Planning Code permits the local governing body to charge impact fees to fund off-site public improvements.

CERCLA regulations for administration of the Superfund, which helps pay for cleanup of uncontrolled hazardous waste sites. a. include listed exemptions from responsibility for those sites that contaminate neighborhood properties b. release from liability those owners of contaminated property who did not actually cause the contamination c. make no provision for recovering the Superfund expenses incurred in cleanup operations d. impose strict, joint and several, and retroactive liability on potentially responsible parties

d. impose strict, joint and several, and retroactive liability on potentially responsible parties CERCLA established the Superfund to clean up uncontrolled hazardous waste sites and to respond to spills. Liability under the Superfund is said to be strict, joint and several, and retroactive.

A corporation may own real estate in all of the following manners EXCEPT a. in trust b. in severalty c. in partnership d. in joint tenancy

d. in joint tenancy A corporation is a recognized legal entity that can hold title to real estate. It may be a sole owner (severalty); it may own real estate in trust (as a trustee); or the corporation may hold title with others as a partner in a partnership. A corporation may not be a joint tenant, it never dies.

Requires a certain number of units to be set aside for people of low and moderate income. a. Holden Act b. Fair Housing Act c. comprehensive zoning d. inclusionary zoning

d. inclusionary zoning

A tenant signs a lease that includes the following clause: "The stated rent under this agreement will be increased or decreased every three years based on percentage increase in the consumer price index (CPI) for that period." What kind of lease has this tenant signed? a. percentage b. net c. graduated d. index

d. index An index lease allows rate changes (up or down) based on the consumer price index or other indicator.

An executory contract is a contract that: a. has been recorded b. is in writing c. has been fully performed d. is yet to be completed

d. is yet to be completed

Which of the following is TRUE about a second mortgage? a. it has priority over a first mortgage b. it cannot be used as a security instrument c. it is not negotiable d. it is usually issued at a higher rate of interest than a first mortgage

d. it is usually issued at a higher rate of interest than a first mortgage A second mortgage creates a junior lien, which is subject to the first lien. Because it represents a greater risk to the lender , second mortgage loans are usually issued at higher interest rates.

Which best describes the function and purpose for the required mortgage insurance on an FHA or conventional loan? a. it gives protection in case of fire b. the loan will be paid off if the borrower dies c. it ensures there are no hidden claims on the title d. it protects the lender in case of default

d. it protects the lender in case of default

The right of survivorship is associated with a. severalty ownership b. community property c. tenancy in common d. joint tenancy

d. joint tenancy The "right of survivorship" refers to a key characteristic of joint tenancy. When a joint tenant dies, that party's interest belongs to the remaining (surviving) joint tenants. A joint tenant's interest does not pass to the heirs of the deceased joint tenant, nor may the joint tenant will the interest to a devisee.

Two people are co-owners of a small office building with the right of survivorship. One owner dies without a will and leaves nothing to be distributed to his heirs. Which of the following would explain why the second co-owner acquired the deceased's interest? a. adverse possession b. foreclosure c. reversionary interest d. joint tenancy

d. joint tenancy The co-owner was a joint tenant with right of survivorship. With or without a will, his interest passes to the remaining co-owner, and nothing goes to the deceased's heirs.

The four unities of possession, interest, time and title are associated with a. tenancy by the entirety b. severalty ownership c. tenants in common d. joint tenancy

d. joint tenancy The distinguishing feature of joint tenancy is unity of ownership. In order to form the unity of ownership four key elements must be present - possession, interest, time and title (PITT). Owners hold title as through they were one unit.

Real property can be most completely defined as: a. land, buildings b. land, fixtures, minerals c. land, items affixed to land, immovable by law d. land, affixed to land, appurtenances, immovable by law

d. land, affixed to land, appurtenances, immovable by law

Interest in real property held by a tenant: a. freehold estate b. fee estate c. rental estate d. less-than-freehold estate

d. less-than-freehold estate

The law that sets the time period in which a legal action must be filed by the wronged party, is called the statute of: a. frauds b. time c. contracts d. limitations

d. limitations

It is illegal to screen and eliminate potential tenants based on: a. income levels b. credit rating c. past delinquent rental history d. marital status

d. marital status

A licensed real estate broker states that a lot is 1/3 of an acre, when in fact the lot is 1/4 of an acre. The agent is guilty of: a. false promise b. divided agency c. secret profit d. misrepresentation

d. misrepresentation

Owners of landlocked parcels may be able to obtain an easement by: a. government decree b. privileged need c. constructive receipt d. necessity

d. necessity

substitution is a principal which states that a. when demand increases value increases b. a change in the highest and best use increases the value c. homes are somewhat uniform and harmonious in design and value d. no prudent person pays more than she has to, to get what she wants

d. no prudent person pays more than she has to, to get what she wants

Under an option agreement, the grantor/owner of the property is the: a. optionee b. option holder c. option owner d. optionor

d. optionor

The buyer asked the seller to leave the washing machine. The seller said yes, but because the agreement of sale said nothing about the seller's leaving the washing machine,the seller took it with her. The buyer has no right to legal recourse because of the rule of a. partial performance b. novation c. undue influence d. parol evidence

d. parol evidence Written agreements take precedence over oral agreements by the parol evidence rule. Because the written agreement of sale did not include the obligation to leave the washing machine, the seller may take it with her.

The major difference between obtaining an easement by prescription or title by adverse possession would involve the: a. time of continuous use b. permission of the owner c. claim of right/color of title d. payment of property taxes

d. payment of property taxes

Soil absorption and drainage are measured by a a. land survey. b. plat of subdivision. c. density test. d. percolation test.

d. percolation test The purpose of a percolation test is to measure soil absorption or drainage capacity. Percolation tests are often used to determine whether the soil being tested will support a septic system.

The goals of a municipal planning commission include all of the following EXCEPT a. formulation of policy b. determination of land uses c. conservation of natural resources d. preventing variances from being issued

d. preventing variances from being issued Zoning issues are handled by the Municipality's Zoning Hearing Board

which of the following is NOT one of the four essential elements of value a. transferability b. scarcity c. utility d. price

d. price

In a listing agreement, the relationship of the seller to the principal broker could best be described as: a. customer and principal b. third party and trustee c. agent and customer d. principal and agent

d. principal and agent

Analyzing results obtained by the three appraisal approaches in order to determine the final estimate of value of a property is known as: a. ad valorem b. capitalization c. averaging d. reconciliation

d. reconciliation

All of the following are forms of concurrent ownership EXCEPT a. tenancy by the entirety b. community property c. tenancy in common d. severalty

d. severalty Concurrent ownership exists when 2 or more parties hold title to real estate. Ownership in severalty exists when a sole or singular owner holds title to the real estate and has complete direction over its transfer.

Which of the following best describes the role of a broker in a real estate agency? a. employee b. independent contractor c. general agent d. special agent

d. special agent

A map that shows the location, size, and shape of buildings located on a lot is called a a. survey sketch. b. legal description. c. plat map. d. spot survey.

d. spot survey A spot survey shows not only the location and dimensions of the parcel of land but also the location, size, and shape of buildings located on the lot.

All of the following are common interest developments, except: a. condominiums b. PUD's c. stock cooperatives d. standard tract homes

d. standard tract homes

When a claim is settled by a title insurance company, the company acquires all rights and claims of the insured against any other person who is responsible for the loss. This is called a. escrow b. abstract of title c. subordination d. subrogation

d. subrogation Subrogation is used by the title insurance companies to acquire from the insured party the rights to initiate legal action to recover any claims that have been paid to the insured.

Which of the following forms of ownership may be created by operation of law? a. joint tenancy b. tenancy by the entirety c. joint tenancy with right of survivorship d. tenancy in common

d. tenancy in common "Operation of Law" refers to creation by a legal mechanism, such as a statutory law or legal proceeding such as probate, marriage and so on. While tenancy in common may be created by operation of law, a joint tenancy can only be created by deed or by will.

If a tenant moved out of a rented store building because access of the building was blocked as a result of the landlord's negligence, the a. tenant might not have any legal recourse against the landlord b. landlord may be liable for the rent until the expiration date of the lease c. landlord may have to provide substitute space d. tenant may be entitled to recover damages from the landlord

d. tenant may be entitled to recover damages from the landlord If the property becomes uninhabitable for the purpose intended in the lease, a tenant has the right to abandon the property. The tenant may be able to recover damages from the landlord.

A person who makes a will is the: a. executor (trix) b. administrator (trix) c. devisor (ee) d. testator (trix)

d. testator (trix)

which of the following will NOT terminate an agency contract? a. death of either party b. destruction of the property c. performance of the terms of the contract d. the principal moves to another city

d. the principal moves to another city

Which of the following is TRUE regarding asbestos? a. all asbestos-containing materials must be removed in all commercial buildings b. asbestos causes a health problem only when ingested c. the level of asbestos in a building is affected by weather conditions d. the removal of asbestos can further contaminate a building

d. the removal of asbestos can further contaminate a building Health problems arise when asbestos materials deteriorate or are disturbed, thus releasing particles into the air that can be inhaled. Thus encapsulation may be more preferable than removal in some cases.

In a Uniform Real Estate Contract or Land Contract, which of the following is NOT possibility in the event of default? a. past payments can be considered as rent and an unlawful detainer suit can be initiated b. the seller may h ire an attorney to bring suit for delinquent payments and other incurred damages c. the seller can foreclose d. the seller can physically evict the owner and return the money paid

d. the seller can physically evict the owner and return the money paid

Your neighbors use your driveway to reach a garage located on their property. Your attorney explains that ownership of the neighbors real estate includes an easement appurtenant, giving them the right to do this. Your property is a. the dominant tenant b. a defeasible estate c. a leasehold interest d. the servient tenement

d. the servient tenement In an easement appurtenant, the parcel over which the easement runs is the servient tenement - meaning that it serves the other property. The one owning the garage is the dominant tenement.

A landlord signs a 3-year binding residential lease with a tenant. Six months later, the landlord wishes the tenant to move so the landlord's father can occupy the apartment. The tenant will be forced to move after the landlord serves a: a. three-day notice b. thirty-day notice c. sixty-day notice d. the tenant cannot be forced to move

d. the tenant cannot be forced to move

A buyer and seller sign a contract to purchase. The seller backs out, and the buyer sues for specific performance. What is the buyer seeking in the lawsuit? a. money damages b. new contract c. deficiency judgment d. transfer of the property

d. transfer of the property Specific performance is the legal remedy by which an aggrieved party asks the court to force the other party to perform the obligation or fulfill the promise agreed to in the contract. The buyer is asking the court to require the seller to convey title to the property.

The bundle of legal rights includes all of the following EXCEPT a. possess the property b. enjoy the property within the framework of the law c. sell or otherwise convey the property d. use the property for any purpose, legal or otherwise

d. use the property for any purpose, legal or otherwise There is no legal right to use property for illegal use.

The real estate commission may take disciplinary action against a licensee for all of the following EXCEPT a. violating the Real Estate Licensing and Registration Act b. violating the Rules and Regulations c. violating the PA Human Relations Act d. violating Blue Sky Laws

d. violating Blue Sky Laws Violation of the blue sky laws would result in prosecution by federal and state authorities, but not the state real estate commission (SREC). The SREC has jurisdiction over violations of the RELRA and its rules and regulations, which include Sec. 604 of the rules for violations of the PA Human Relations Act.

A 15-year-old boy recently inherited many parcels of real estate from his late father and has decided to sell one of them to pay inheritance taxes. If the boy enters into a deed conveying his interest in the property to a purchaser, such a conveyance would be a. valid. b. void. c. invalid. d. voidable.

d. voidable. A deed executed by a minor is voidable, not void. Minors can disaffirm a conveyance until they reach majority age and for a reasonable time thereafter.

Shaw offers to purchase Anderson's lot, but before Anderson responds, Shaw cancels his offer. Shaw's action constitutes a: a. rejection b.lapsed offer c. counteroffer d. withdrawl of the offer

d. withdrawl of the offer

To determine whether a locations can be put to future use as a retail store, one would examine the a. building codes b. list of permitted nonconforming uses c. housing codes d. zoning ordinances

d. zoning ordinances Zoning ordinances divide land use into residential, commercial, industrial and agricultural classifications with further subclasses under each classification.

broker morse has fifteen days to sell Mcclouds house under an exclusive right to sell listing which of the following events would automatically terminate the agency before the contract expires a. owner mccloud tries to sell the house herself and broker morse finds out about it b. owner mccloud discovers that broker morse has a family history of mental illness c. broker morse office records are destroyed by fire d. owner mccloud and broker morse agree to end the listing arrangement prematurely

d.owner mccloud and broker morse agree to end the listing agreement prematurely

A statement in a mortgage or trust deed to the effect that when a debt has been paid the lien will be canceled is a(n):

defeasance clause

Title to real property usually passes to the grantee when the deed is

delivered and accepted.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

demand immediate payment of the entire note

A seller tells the listing agent that her home was treated for termintes 10 years ago, so there are no termites now. Before listing the property, the agent should tell the seller to_________________.

disclose the termite treatment on the property disclosure

If a licensee is receiving compensation from a residential service company, the compensation must be

disclosed to the parties using the appropriate TREC form

Payment of the broker's commission:

does not establish agency Explanation 19. A contract establishes an agency, not a commission.

A licensee might be guilty of the unlawful practice of law if

drafted a lengthy and complex provision in special provisions; advised the buyer regarding title issues; the wrote a will for a client

A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of

economic or external obsolescence

A mechanic's lien is properly classified as a(n):

equitable lien involuntary lien specific lien all of the above

A property owner died, having willed his real property to his two daughters. There is still a chance that they could lose the land for a variety of reasons, but it CANNOT be taken through

escheat

commission sales

even if a loan applicant's current income seems adequate to qualify for a certain load, the equal credit opportunity act allows a lender to refuse the loan as a high risk if the applicant's main source of income is

A contract that is binding on the parties but not closed is known as a(n)

executory contract

A father and son own land as joint tenants. The father conveys one half of his interest to his daughter. Ownership would now be held by:

father, son and daughter as tenants in common Explanation Ownership is now held by father, son and daughter as tenants in common (unity of equal interest is broken between father and sonTenants in common do not have a right of survivorship. In a tenancy in common, persons may sell or give away their ownership interest. Joint tenants do have a right of survivorship, but a joint tenant may sell or give away her interest in the property. If a joint tenant sells her interest in a joint tenancy, the tenancy becomes a tenancy in common, and no tenant has a right of survivorship. A tenancy by the entirety cannot be reduced to a joint tenancy or tenancy in common by a conveyance of property. Generally, the couple must Divorce, obtain an Annulment, or agree to amend the title to the property to extinguish a tenancy by the entirety.

The relationship in which the agent is placed in the position of trust and confidence to the principal is known by the term

fiduciary

The characteristic of being unique means that:

geographically, all parcels of real estate are different

A landlord may legally refuse to rent to a prospective tenant if the tenant

has ever been convicted of selling illegal drugs

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that

he is no longer the listing agent

Which of these statements is true with respect to the appraisal of a one family home?

he reproduction cost method is valid on new property

An example of a fiduciary relationship is one which exists between the listing broker and_______________.

her client

What should be done when mold problems are found?

identify and remedy the cause of the problems.

return of the property to the original owner

if conditions for purchase are included in a deed and these conditions are violated, what is the penalty?

The real estate contract for a specific property for use as an unlicensed petroleum sales operation was forced to terminate. The termination was the result of:

impossibility of performance

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of____________________.

impossibility of performance

Earnest money should be deposited into a trust account

in a timely manner, according to state laws

the same one used in prior transfers of the parcel, verified by a surveyor

in every real estate transaction, a legal description of the real estate must appear in the transaction documents. what kind of legal description should be used in most transactions?

The purpose of usury laws is to regulate

interest rates charged by lenders

Mr. Brown and Mrs. Brown held title as tenants in common to the family home. Mrs. Brown wanted a niece to inherit her share of the property when she died, but did not want to tell her husband. So she made out a proper grant deed conveying her interest to her niece, with her signature duly acknowledged, and gave it to a close friend who agreed to hand it over to the niece after Mrs. Brown's death. Mrs. Brown died, and the friend carried out the instructions. The deed was:

invalid for lack of proper delivery

the principal difference between zoning and planning as the relate to land use control is that zoning

is a legal implementation while planning is a process

Sally is an unlicensed assistant to Agent Bill at ABC Realty. In her role as a transaction coordinator, Sally recently called a buyer and discussed some minor title issues that turned up in the title search. She also mentioned to the buyer that rates are down, and that, considering the buyer's situation, an FHA loan might be more attractive than a conventional loan. Based on this conversation, we can say that Sally:

is dealing with issues that should only be discussed by a licensed assistant

According to the principle of progression, a three-bedroom, one story home is MOST likely to bring the highest sale price if located in a neighborhood in which most homes are________________.

larger than the sale home

If a licensee prepares legal documents such as wills and deeds that transfers an interest in land, the penalty for such act might include:

license suspension or revocation

An amount of money, agreed to in writing by the buyer and seller, that will serve as full compensation if one party does not live up to a sales contract is called______________.

liquidated damages

If the buyer has a specific use of the property, that use should be:

listed in Paragraph 6: Objections

Usual expenses of the buyer as stated in the contract include:

loan application fees

Building Ordinances may specify & regulate:

materials used in plumbing

According to RESPA, lenders must provide to applicants:

maximum amounts that could be collected at time of closing

A legal easement can be created by any of the following EXCEPT

merger of the titles

Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are amonth the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of_________.

misrepresentation

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the

mortgagor

An adjustable rate loan should include all of the following elements EXCEPT

negative amortization

The title company is

not a party to the transaction

Acceptance of a written offer to purchase real estate requires the signature of the:

offeror and offeree

allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients

one common method for controlling the problems created by conflict of interest in dual representation is

If conditions for purchase are included in a deed and these conditions are violate, the penalty is the return of the property to the_____________.

original owner

Ownership of common stock in a corporation gives an interest that is classidied as______________.

personal property

If the buyer has no earnest money:

prepare a promissory note to submit with the offer

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

prepayment penalties and rebates

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

prior appropriation

An Environmental Impact Statement (EIS)

projects the impact on the environment of a proposed project.

The purpose of requiring an earnest money deposit in a real estate sales contract is to

provide evidence of the buyer's intention to carry out the contract.

In most states, foreclosed property is sold through

public auction

An environmental impact statement typically describes the effects of a proposed project on factors such as

public health and safety

The statement "this property has the most beautiful views in the neighborhood" is an example of

puffing

The activities of Fannie Mae include:

purchasing mortgages originated by others Explanation Fannie Mae purchases mortgages originated by others. The most popular insuror of loans is FHA.

Real estate transactions may require the services of:

real estate attorneys, title companies, and accountants

John Jones owned a parcel of land around his copper mine. He sold the mine and the property for $ 230,000, with the verbal understanding that copper already mined before the date of the sale would not be included in the sale. The copper that is not mined is considered by law as:

realty

Antitrust laws prohibit competing brokers from all of the following EXCEPT

receiving compensation from both the buyer and the seller

When more than one approach to value is applied to a property and different indications of value are produced, the final estimate of value should be determined by________.

reconciliation

Under the 1988 amendment to the Civil Rights Act of 1968, an apartment owner would be acting within the law by

refusing to pay for modifications to an apartment that would allow a handicapped person the full enjoyment of the unit Explanation Disabled individuals are allowed to make modifications but it must be at their expense and they must bring the property back to its original condition.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA

require the buyer to acknowledge disclosure of the presence of any known lead paint

Moe, Joe and Curly are joint tenants. Curly sells his interest to Charles Chaplin. This conveyance:

results in Moe and Joe being joint tenants with each other and tenants in common with Charles Explanation When Curly sold his interest that terminated the joint tenancy with Moe and Joe, and Charles has tenancy in common with Moe and Joe, and Moe and Joe continue to be joint tenants.

The economic characteristics of land are

scarcity, location, and durability

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property

seller

An example of a contract terminated due to inability to perform would be one in which the

seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

A broker keeps one or more trust accounts in order to:

separate funds belonging to others from brokers operating funds

a competitive market analysis is MOST often used for

setting a listing price

Real property can be converted to personal property by

severance

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a

special agency

New sidewalks installed only on one particular street will probably be paid for by

special assessment

A competitive market analysis takes into consideration

square footage of the subject property

The Equal Credit Opportunity Act addresses all of the following except

standardization of interest rates

When someone has living heirs but dies without leaving a will, the estate is distributed according to the

statute of descent

A minority couple come to a salesperson looking for a house. The salesperson has some properties for which the couple qualify but avoids showing or mentioning these listings. Instead, the salesperson shows only properties in low-priced and integrated neighborhoods. This practice is known as

steering

All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the

straight-line method

The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should

suggest the buyer ask a lawyer to furnish the wording

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should

tell potential buyers about the parties

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should

tell the seller to disclose the termite treatment on the property disclosure

tenants at sufferance

tenants are still in their rental property even though their lease has expired. the landlord has given them written notice to quit and refused to accept rent. They are:

an insurance company

the FHA functions most like

During the listing presentation, the seller questions the amount of commission to be paid and is told

the amount of commission is negotiable

Concerning a VA loan, all of the following are true except

the borrower must sign a statement of intent to live on the property Correct -> the loan is fully guaranteed by the government in the event of a foreclosure the sale price of the property cannot exceed the CRV. the buyer is allowed to pay discount points Explanation Despite the VA guaranty, a borrower still has personal liability for a VA loan. If a foreclosure sale results in a loss, the borrower may be liable to the VA for the amount of the loss if the foreclosure involved fraud or bad faith. And even if there was no bad faith, the borrower's guaranty entitlement can't be restored until he reimburses the VA for the full amount of the guaranty.

A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with_____________.

the builder

The Third Party Financing Addendum For Credit Approval can be used when

the buyer is obtaining any kind of third party financing

In the Farm and Ranch contract, the Sales Price may be adjusted based upon a survey. If the sales price is adjusted,

the cash portion and amount financed can be adjusted proportionately; the amount financed can be adjusted; the cash portion can be adjusted

An agent is not liable for a misrepresentation or concealment of material fact by a party if:

the licensee did not know of the falsity of the misrepresentation

The real estate broker who is listing a house for sale should personally verify____________________.

the number of square feel in the building

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if

the owner withdraws the counteroffer before it is accepted.

interest rates charged by lenders

the purpose of usury laws is to regulate

the number of square feet in the building

the real estate broker who is listing a house for sale should personally verify

RESPA

the real estate licensee who accepts an undisclosed fee for referring a buyer to a specific title company may be in violation of

MOST closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name(s) and social security number(s) and

the sale price

Most closed real estate transactions should be reported to the IRS. REQUIRED information includes seller name, social security numbers and_________________.

the sale price

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker ha earned his commission when__________________.

the seller accepts the offer

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when

the seller accepts the offer.

It is always a good idea to have:

the seller fill out the Seller's Disclosure Notice

water rights

the terms littoral, riparian, and appropriative refer to

Which of the following is an element of a listing agreement?

the terms of sale, such as the sales price and financing terms acceptable to the seller.

A charge of violation of Federal Fair Housing laws can be heard by an administrative law judge within the Department of Housing and Urban Development (HUD) or by a Federal district court judge in Federal court. The advantage of a Federal court hearing to the complaining party is that

there is no dollar limit on damages paid

the first sold

three identical homes in a neighborhood were listed at the same time in a market where demand was constant according to the law of supply and demand, which would have sold for the lowest price

situs

two lots of the same size are sold on a street. the lot on the corner sells for 20,000 more than the lot in the middle of the street. which of the following characteristics most likely explains the price difference

Errors and Omissions insurance covers the broker for___________.

unintentional misrepresentations

A buyer made an offer on a property that was listed at $350,000. She wanted to put $35,000 down and make payments to the seller, allowing the seller to retain title until the principal was paid off. The seller accepted, and the buyer became a

vendee

Under a land contract for deed, who retains fee ownership of the property?

vendor

A company agrees to lease a property to be used as a gambling casino. State laws prohibit gambling. This particular contract would be legally defined as

void

when compiling a competitive market analysis,a broker would look for comparable properties that

were located near the property being listed

Requirements of the ADA include:

wheelchair access, Braille markings on elevator control keys, flashing alarm lights for the hearing impaired.

mechanic lien

when a person contracts for labor, services, or materials to be furnished for the purpose of making improvements on real property but does not immediately pay for the improvement

were located near the property being listed

when compiling a competitive market analysis a broker would look for comparable properties that

when the property is located in a flood hazard zone

when is flood insurance required in order to obtain a loan

market data

which of the following approaches most reliably estimates the sales price of a single family residence

garden apartments located between a single family residential neighborhood and a shopping center

which of the following best illustrates the concept and intent of a buffer zone

property owner's death

which of the following events would automatically cancel a listing agreement

buyer and seller must agree to appraised value

which of the following is not a consideration in the definition of market value

identify and remedy the cause of the problems

which of the following is the first action to take when mold problems are found

they are computed as a percentage of the selling price

which of the following statements about discount points is false

HABENDUM CLAUSE

"TO HAVE AND TO HOLD". DEFINES or LIMITS the Extent of OWNERSHIP in the Estate Granted. e.g.: FEE SIMPLE or LIFE ESTATE

Monthly rents for an apartment complex total $24,500. Annual expenses for the property are $142,000. The investor's rate of return is 9%. What is the market value of the property?

$1,688,889.

The sale of a home closed on October 16. Homeowners association fees of $500 for the current calendar year had already been paid. How much does the buyer owe the seller for these fees if the buyer pays for the day of closing? Use a 30-day month and a 360-day year, and round to the nearest cent

$104.17

The assessed value of a property is $386,500. The tax rate is $3.02 per hundred. What are the annual taxes on the property?

$11,672

Property taxes are based on an assessed value of $132,000 and the tax rate is 8.5 mills. The property closes on Jun 14. On a basis of the banker's calendar, the seller owes how much in taxes?

$132,000 X .0085 = $1,122 / 360 = $3.1166 X 164 = $511.13

The property tax bill for 406 Sterling Street is $17,596.90 for the year. The property is sold and closing is set for October 19th. Calculate the tax proration and debits and credits.

$14,077.32 debit seller/credit buyer

The listing broker's half of a commission was $4392. The commission rate was 5%. What was the sale price of the property?

$175,680

If the loan factor is $4.49 and the loan amount is $257,500, taxes are $6900/year and the insurance is $2740 per year, what is the monthly PITI payment?

$1959.51

A house sold for $100,000. The loan amount was $80,000. The borrower paid 3 points. How much did the borrower pay for points?

$2,400

Mr. Davis negotiated for a $30,000 loan with $200 monthly principal payments, in addition to a 9% percent interest. What is the monthly interest?

$225 First, take $30,000 and multiply it by 9% for the total annual interest paid, or $2,700. Divide that by 12 (months) for a total of $225 per month interest payment. The $200 payment on principal does not factor into this calculation.

The assessed value of a property is $90,000. The tax rate is $3.42 per hundred. What are the annual taxes?

$3,078

A buyer had a construction loan of $275,000.00 at an interest rate of 7%. The lender is requiring payment for 3 months. How much does the borrower have to pay?

$4,813

A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.)

$409.20

A broker needs $5950 to pay her IRS tax lien. She has the opportunity to list a property at fair market value of $85000. What would her listing commission rate need to be in order to pay her debt assuming she will pay 2.8% to the selling broker?

$5950 / $85000 = 7% + 2.8% = 9.8%

A buyer wants to purchase a home for $60,000. The lender appraises the home for $58,000 and offers to finance it with an 80% loan to value loan, charging a loan origination fee of 1.5 points. how much will the buyers loan origination fee be?

$696

Bob and Betty Brown have just applied for a new loan in the amount of $80,000. The interest rate of the note is 10.25%. The debt service is $708 per month. The note is a 30-year loan. What is the total interest, which will be paid by the borrower over the 30-year term?

$708 X 360 payments = $254,880 - $80,000 = $174,880 This is one of those questions where it is best not to over think it. Since they have a 30 year loan of $708 a month, the total amount they are going to pay is 708 x 360 (months) = $254,880. They bought the property for $80,000. To determine the amount of interest they are paying over the life of the loan, all you need to do is deduct the purchase price from the total amount paid - 254,880 - $80,000 = $174,880.

On January 15, a seller paid $960 in annual property tax for the current calendar year. A buyer is purchasing the house with the closing set for March 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month.

$800

Roberto and Maria Martinez have a new loan in the amount of $80,000. The interest rate is 10%. The monthly payments are $710, principal and interest. What is their loan balance after the they make two month's worth of loan payments?

$80k x 10% = $8,000 / 12 =$666.67; $710 - $666.67 = $43.33; $80,000 - $43.33 = $79,956; $79,956 x 10% = $7,995 / 12 = $666.30; $710 - $666.30 = $43.70; $79,956 - $43.70 = $79,912.8 ^ $79,913.00

A listing broker's half of a commission is $22,670.The commission rate was 5.5%. What was the sales price of the property?

$824,364

Which of the following statements is not correct?

**A mortgage's priority is determined by the date on which it was executed A mortgage instrument pledges the real estate as security for the loan A deed of trust, is usually conveyed by the trustor to the trustee In Colorado a deed of trust and a promissory note are executed at the same time Explanation The key word making A the correct answer was the word "executed". A mortgage is "executed" on the date it is signed by both parties. Yet its priority, should the loan go into default, is determined by the date it was "recorded" at the County Clerk's office. Since nobody does closings at the Clerks office, the recording date is almost always after the date upon which it was signed. Therefore A was the correct answer as the only statement that was wrong.

The least important part of a CMA is:

...

WARRANTIES - THERE ARE 2 WARRANTIES

1) WARRANTY OF FURTHER ASSURANCE 2) WARRANTY FOREVER GUARANTEES made by a SELLER that an Article, Good or Service will Conform to Certain Standard or Operate in a Certain Manner.

RESPA requires the use of the HUD-1 closing statement for closings on:

1-4 family residential properties

The sellers have agreed to give the buyers an allowance of $16.95 per square yard to retile the kitchen. If the kitchen is 10 feet x 14 feet, how much will it cost the sellers (to the nearest dollar)? 1. $264. 2. $791. 3. $2,373. 4. None of the above.

1. $264.

A lender will make an 80% loan-to-value loan on a property that is appraised for $72,250 and sells for $73,500. How much can the purchaser borrow? 1. $57,800. 2. $58,400. 3. $58,800. 4. None of the above.

1. $57,800.

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship? 1. Agency coupled with an interest. 2. Specific agency. 3. General agency. 4. Exclusive agency.

1. Agency coupled with an interest.

What type of map is MOST useful for describing the terrain of a very hilly lot? 1. Contour map. 2. Assessor's map. 3. Recorded map or plat. 4. Conic projection map.

1. Contour map.

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing? 1. Credit buyer $110,000; debit seller $110,000. 2. Credit seller $110,000; debit buyer $110,000. 3. Credit buyer $110,000; no adjustment to seller. 4. Credit seller $110,000; no adjustment to buyer.

1. Credit buyer $110,000; debit seller $110,000.

DESCENT

1. DIED INTESTATE - WITHOUT WILL. Court Determines Who Receives the Estate. a. ADMINISTRATOR (Personal Representative) b. STATUTE OF DESCENT and Distribution set by A.R.S. c. PROBATE - Court Action to Settle Estate 2. TITLE TRANSFERS AT DEATH - Subject to PROBATE

WILL

1. DIED TESTATE - WITH A WILL Succession of TITLE a. TESTATOR - Party Who Makes The Will b. EXECUTOR - PERSONAL REPRESENTATIVE c. PROBATE 2. TITLE TRANSFERS AT DEATH - Subject to PROBATE a. Real Property - DEVISE b. Personal Property - BEQUEST or LEGACY

CLOUDS ON TITLE

1. Encumbrances / Outstanding Claims that Could Affect Owner's TITLE. 2. A QUIT CLAIM DEED is typically Used to Remove CLOUDS ON A TITLE.

Four types of Leasehold estates

1. Estate for years (fixed period) 2. Periodic Estate (period to period) 3. Estate at Will 4. Estate at sufferance

TITLE INSURANCE OWNERS POLICY

1. Insurance Protecting the BUYER - VENDEE from Potential TITLE Issues after Closing 2. Paid for by the SELLER - VENDOR 3. Paid Only Once - At the Beginning 4. Issued in the Amount of the Purchase Price 5. VALID as long as BUYER or HEIRS Own the Property 6. VOID when BUYER Sells the Property

TITLE INSURANCE LENDER'S POLICY ALTA / EXTENDED COVERAGE / BROAD FORM COVERAGE

1. Insures LENDER's Enforceable Lien on Property. 2. For Lender's Benefit - MORTGAGEE / or BENEFICIARY 3. Paid by Borrower - MORTGAGOR or TRUSTOR 4. Paid Once - at Beginning of Loan 5. Issued in the Amount of the Loan 6. Valid if Property is COLLATERAL, even if ASSUMED 7. VOIDED when Loan is Paid Off

TITLE INSURANCE LENDER'S POLICY WHAT IS AND IS NOT COVERED

1. LENDERS Title Insurance DOES Insure Against: a. Rights of Parties in Possession b. Unrecorded Documents i.e. Unrecorded Mechanics Liens c. Questions in Survey - Encroachments 2. It DOES NOT Insure Against: a. Items in Public Record b. Gaps in CHAIN OF TITLE - Should've known

What is the term used for the person or organization who acts as an intermediary for the purpose of obtaining financing? 1. Mortgage broker. 2. Bank loan officer. 3. Finance company. 4. Investment banker.

1. Mortgage broker.

TITLE INSURANCE OWNERS POLICY WHAT IS AND IS NOT COVERED

1. OWNERS Title Insurance DOES Insure Against: a. Errors by Title Company b. Incorrect Given Marital Status c. Hidden Undiscovered Defects - Forgery 2. It DOES NOT Insure Against: a. Items in Public Record b. Rights of Parties in Possession c. Unrecorded Documents i.e - MECHANICS LIEN, ADVERSE POSSESSION d. Questions in Survey - Encroachments e. Gaps in CHAIN OF TITLE - Should've known f. Easements Obtained by Prescription

In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers? 1. One. 2. Two. 3. Three. 4. Any number.

1. One.

BASIC REQUIREMENTS IN WRITING OR TRANSFERRING A DEED

1. PARTIES - GRANTOR and GRANTEE 2. COMPETENT GRANTOR 3. IDENTIFIABLE GRANTEE 4. GRANTING CLAUSE 5. LEGAL DESCRIPTION 6. LEGAL CONSIDERATION - Give in Exchange 7. SIGNATURE of GRANTOR - Must Have! 8. ACKNOWLEDGEMENT 9. DELIVERY to GRANTEE

RELEASING DEEDS

1. QUIT CLAIM DEED 2. GIFT DEED 3. DISCLAIMER DEED 4. CORRECTION DEED 5. FIDUCIARY DEED

QUIT CLAIM DEED

1. Release ALL Interest or Claim to a Property 2. To Remove "CLOUDS ON TITLE" (Interest) Requires QUIET TITLE SUIT (Court Action). 3. MAY CONVEY but not Designed To Do So. 4. COLOR OF TITLE NO COVENANTS or WARRANTIES

TITLE INSURANCE SPECIAL TERMS

1. SUBROGATION 2. TITLE EXAMINER 3. TITLE PLANT 4. SCHEDULE A 5. SCHEDULE B

INVOLUNTARY ALIENATION OPERATION OF LAW

1. TREASURER'S DEED - PROPERTY TAX 2. TRUSTEE'S DEED - BANKRUPTCY 3. SHERIFF'S DEED - FORECLOSURE 4. TRUSTEE'S DEED - TRUSTEE'S SALE 6. ESCHEAT - Die INTESTATE. Property to State. 7. EMINENT DOMAIN - CONDEMNATION 8. ADVERSE POSSESSION - PRESCRIPTION SUIT

Personal property taxes and general real estate taxes for the year of closing are based on

1. Taxes for the calendar year immediately preceding the closing or 2. Most recent mill levy and assessed valuation

The Tax Equity and Fiscal Responsibility Act has which of the following tests for independent contractor status?

1. The salesperson must hold a real estate license. 2. The salesperson must be paid on a commission basis. 3. The salesperson must have a written contract with the broker specifying the salesperson is not an employee.

Which of the following statements about discount points is FALSE? 1. They are computed as a percentage of the selling price. 2. They are used to buy down interest rate. 3. They are a function of the marketplace. 4. They are paid by either the buyer or the seller.

1. They are computed as a percentage of the selling price.

TRANSFER OF TITLE TO REAL ESTATE THERE ARE 4 METHODS

1. VOLUNTARY ALIENATION a. Public GRANT b. Private GRANT 2. INVOLUNTARY ALIENATION 3. WILL 4. DESCENT

Under a land contract for deed, who retains fee ownership of the property? 1. Vendor 2. Vendee 3. Grantor 4. Grantee

1. Vendor

How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay? 1. Writ of execution. 2. Notice of default. 3. Notice of lien. 4. Unlawful detainer.

1. Writ of execution.

A major reason for buying and owning a condominium rather than a detached single-family home is that 1. a condominium tends to be more affordable. 2. a condominium requires no maintenance. 3. a condominium is easier to resell. 4. condominium ownership has more tax advantages.

1. a condominium tends to be more affordable.

A major difference between freehold and nonfreehold estates is that all freehold estates 1. are of indeterminable duration. 2. terminate upon the death of the person on whose life they are based. 3. are inheritable by the holder's heirs. 4. are estates for a fixed term.

1. are of indeterminable duration.

When one of the parties to an agreement fails to perform one of its conditions, that contract is deemed to be 1. breached. 2. void. 3. executed. 4. canceled.

1. breached.

Depreciation is calculated based on the 1. cost of the building only. 2. value of the land only. 3. total purchase price. 4. assessed valuation.

1. cost of the building only.

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should inform the caller that 1. he is no longer the listing agent. 2. he will set up an appointment for showing the home. 3. he will leave the key under the door mat. 4. the house is currently off the market.

1. he is no longer the listing agent.

Earnest money should be deposited into a trust account 1. in a timely manner, according to state laws. 2. upon removal of all contingencies. 3. at the broker's discretion. 4. according to MLS rules.

1. in a timely manner, according to state laws.

The purpose of usury laws is to regulate 1. interest rates charged by lenders. 2. loan origination fees charged by lenders. 3. loan prepayment penalties. 4. lender collusion to fix interest rates.

1. interest rates charged by lenders.

When a property owner uses his home as collateral for a loan and creates a lien in favor of the lender, title is held by the 1. mortgagor. 2. lender. 3. mortgagee. 4. beneficiary.

1. mortgagor.

An environmental impact statement typically describes the effects of a proposed project on factors such as 1. public health and safety. 2. zoning regulations. 3. highest and best use of the land. 4. mapping requirements.

1. public health and safety.

The statement "this property has the most beautiful views in the neighborhood" is an example of 1. puffing. 2. disclosure. 3. misrepresentation. 4. fraud.

1. puffing.

A broker, acting as agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down the offer. When presenting the offer, the broker should 1. tell the seller that the buyer will pay more. 2. not disclose that the buyer will pay more to ensure fair treatment of all parties. 3. try to negotiate a fair compromise between what the seller is asking and what the buyer is offering. 4. encourage the seller to delay accepting the offer.

1. tell the seller that the buyer will pay more.

How many days notice required to terminate a month-to-month rental agreement

10 days

If the sales priced is adjusted based upon a survey, either party may terminate the contract if the sales price varies by more than

10%

In the Farm and Ranch contract, if the Sales Priced is adjusted based upon a survey, either party may terminate the contract if the Sales Price varies by more than

10%

The Broker - Lawyer Committee is comprised of`

13 Members

TREC was established in:

1949

When handling escrow funds for clients, the License Act requires that funds be deposited in a "reasonable time". A reasonable time is defined as:

2 Business days

The following are samples of advertisements placed by a broker on some of his listings. Which would be subject to the provisions of the Truth In Lending Law?

2 bedrooms, large lot, nothing down Since nothing is an exact amount and the down payment is one of the trigger items.

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than 1. $100,000. 2. $250,000. 3. $500,000. 4. $1,000,000.

2. $250,000.

A buyer is getting a fully amortized loan for $220,000. The bank will give the buyer the loan for 15 years at 5 1/2% or for 30 years at 6 1/2%. To the nearest cent, what is the difference between the monthly payments for these two loans? (BE SURE TO USE THE AMORTIZATION TABLE.) 1. $309.20. 2. $409.20. 3. $550.80. 4. None of the above.

2. $409.20.

Which of the following may be considered prima facie evidence of discrimination by a broker? 1. Failure to show property in certain neighborhoods. 2. Failure to display the equal housing opportunity poster at the broker's place of business. 3. Failure to keep appointments with minority customers even though the broker was unaware of the minority status. 4. Failure of a minority buyer to qualify for a loan arranged by the broker.

2. Failure to display the equal housing opportunity poster at the broker's place of business.

Which of the following approaches MOST reliably estimates the sales price of a single-family residence? 1. Appreciation. 2. Market data. 3. Cost. 4. Mortgage value.

2. Market data.

Which of the following events would AUTOMATICALLY cancel a listing agreement? 1. Property owner's marriage. 2. Property owner's death. 3. Salesperson's relocation to another agency. 4. Salesperson's retirement.

2. Property owner's death.

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes maintenance of value over profitability? 1. An individual entrepreneur who owns several apartment buildings. 2. The Department of Housing and Urban Development. 3. The investment division of a bank. 4. A corporate Real Estate Investment Trust.

2. The Department of Housing and Urban Development.

A managing broker can be held responsible for 1. all actions of associated salespersons. 2. all real estate activities of salespersons. 3. only those real estate activities the broker is aware of. 4. no activities of independent contractors.

2. all real estate activities of salespersons.

One common method for controlling the problems created by conflict of interest in dual representation is 1. prohibiting dual representation altogether. 2. allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients. 3. requiring that disclosures of dual representation include a strong warning to buyers that no listing broker can represent them effectively because of the broker's prior commitment to the seller. 4. permitting brokers, for the first time, to enter into brokerage agreements with buyers.

2. allowing a broker to designate separate salespeople within the company as legal representatives of each of the clients.

An agreement to purchase that has NOT yet closed is 1. an executed agreement. 2. an executory contract. 3. a unilateral contract. 4. voidable.

2. an executory contract.

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called 1. a buy-sell agreement. 2. an option contract. 3. an installment contract. 4. a vendor's lien interest.

2. an option contract.

Even if a loan applicant's current income seems adequate to qualify for a certain loan, the Equal Credit Opportunity Act allows a lender to refuse the loan as a high risk if the applicant's main source of income is 1. alimony. 2. commission sales. 3. pension fund. 4. child support payments.

2. commission sales.

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to 1. confiscate the borrower's personal assets. 2. demand immediate payment of the entire note. 3. report the borrower to the Federal Housing Administration. 4. force the borrower to vacate the premises.

2. demand immediate payment of the entire note.

The PRIMARY purpose of zoning ordinances is to 1. control the quality of building materials. 2. implement a local master plan. 3. establish appropriate boards for appeal. 4. regulate business districts.

2. implement a local master plan.

The real estate contract for a specific property for use as an unlicensed whiskey sales operation was forced to terminate. The termination was the result of 1. operation of law. 2. impossibility of performance. 3. novation. 4. breach of contract.

2. impossibility of performance.

Without checking the facts, a broker who is the seller's agent tells a buyer that the property taxes in a particular neighborhood are among the lowest in the area. The buyer relies on the broker's statement and makes an offer on a house in the neighborhood. Before closing, it is determined that the taxes are actually among the highest in the area. The buyer could seek to rescind the contract on the basis of 1. puffing. 2. misrepresentation. 3. lack of care and diligence. 4. nothing; property taxes are a matter of public record and it was the buyer's responsibility to check them.

2. misrepresentation.

A deed restriction is applicable to the activities of 1. the current owner only. 2. present and future owners. 3. future owners only. 4. mortgagors.

2. present and future owners.

In MOST states, foreclosed property is sold through 1. sealed bids. 2. public auction. 3. deficiency judgment. 4. right of redemption.

2. public auction.

A competitive market analysis is MOST often used for 1. estate tax purposes. 2. setting a listing price. 3. divorce proceedings. 4. property tax assessment.

2. setting a listing price.

Real property can be converted to personal property by 1. annexation. 2. severance. 3. accession. 4. extension.

2. severance.

When a principal authorizes an agent to perform a particular act or transaction, it is an example of a 1. universal agency. 2. special agency. 3. general agency. 4. common agency.

2. special agency.

The buyer wants to make the purchase offer contingent on a complex mortgage arrangement. The buyer's agent who is drawing up the contract should 1. include the provision for the mortgage as the buyer requests. 2. suggest the buyer ask a lawyer to furnish the wording. 3. consult the supervising broker for advice. 4. refer the matter to the seller's agent.

2. suggest the buyer ask a lawyer to furnish the wording.

A seller tells the listing agent that her home was treated for termites 10 years ago, so there are no termites now. Before listing the property, the agent should 1. tell the seller not to disclose, because the statute of limitations has run out. 2. tell the seller to disclose the termite treatment on the property disclosure. 3. talk to neighbors to see if there are termites in the neighborhood. 4. talk to the planning and zoning department for local termite eradication ordinance.

2. tell the seller to disclose the termite treatment on the property disclosure.

The real estate broker who is listing a house for sale should personally verify 1. whether radon is present in the basement. 2. the number of square feet in the building. 3. that the electrical wiring is up to code. 4. how much the seller originally paid for the property.

2. the number of square feet in the building.

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer. The owner can accept the second offer if 1. it satisfies or exceeds all terms included in the counteroffer. 2. the owner withdraws the counteroffer before it is accepted. 3. the owner gives the first buyer notice that another offer was received and an opportunity to revise the bid. 4. the first buyer is informed, in writing, of the owner's intent to accept another offer.

2. the owner withdraws the counteroffer before it is accepted.

A broker has brought a ready, willing, and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when 1. any offer is delivered to the seller. 2. the seller accepts the offer. 3. all contingencies are removed. 4. the sale closes.

2. the seller accepts the offer.

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. Either riparian and littoral rights are automatically conveyed with property, or all water rights are controlled by the state under the doctrine of prior appropriation. The doctrine of prior appropriation is MOST likely to be followed in states where 1. water is plentiful. 2. water is scarce. 3. waterways are important to commercial traffic. 4. there are severe water pollution problems.

2. water is scarce.

The title company must furnish the title commitment within how many days?

20

f the loan factor is $5.53 on a $200,000 loan, taxes are $2400/year and insurance is $1800/year, what is the monthly PITI payment?

200,000 divided by 1,000=200 X 5.53= 1106 (2,400/12=200 in Taxes) 1800/12=150 in Insurance 1106+200+150=Monthly PITI payment of $1456

An appraiser must be licensed or certified to handle Federally related work on residential property valued at more than__________.

250,000

Federal income tax law excludes gain realized on the sale of a primary residence for singles and couples the amount of the exclusion is

250,000/500000

A lender may hold how many months of tax reserve in an escrow account?

3

The condominium resale certificate must have been prepared within the previous

3 Months

A realty company received an $8,400 commission for the sale of a house. The broker's commission was 6% of the sales price. What was the sales price of the house? 1. $50,400. 2. $89,362. 3. $140,000. 4. None of the above.

3. $140,000.

A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? 1. An easement by necessity. 2. A variance. 3. A license. 4. A life estate.

3. A license.

If all other factors are equal, in which location is a parking lot likely to bring the highest sales price? 1. Residential district zoned for two-story apartments. 2. Business district zoned for a two-story commercial building. 3. Business district zoned for a six-story office building. 4. The price for the parking lot will be the same regardless of area and zoning.

3. Business district zoned for a six-story office building...

The escrow officer or closing agent MUST give information regarding the sales price and seller's social security number to 1. HUD. 2. FIRPTA. 3. IRS. 4. OSS.

3. IRS.

Which of the following is the first action to take when mold problems are found? 1. Spray the affected areas with bleach. 2. Repaint with waterproofing material. 3. Identify and remedy the cause of the problems. 4. Notify the Environmental Protection Agency promptly.

3. Identify and remedy the cause of the problems.

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called 1. an agency. 2. an assessment. 3. a contract. 4. a fiduciary obligation.

3. a contract.

A lawsuit for inverse condemnation may be brought by 1. the police. 2. the city. 3. a homeowner. 4. the zoning board.

3. a homeowner.

Ownership of common stock in a corporation gives 1. co-ownership in any real property held by that corporation. 2. the right to order the sale of any corporate real estate. 3. an interest that is classified as personal property. 4. assurance that a decline in land values will not affect the value of the stock.

3. an interest that is classified as personal property.

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given 1. actual notice. 2. prescriptive notice. 3. constructive notice. 4. exculpatory notice.

3. constructive notice.

The purpose of laws that provide for property to escheat to the state or county when a landowner dies with no will and no heirs is to 1. save the cost of a judicial claims process. 2. provide an additional source of revenues to the state or county. 3. prevent property from being ownerless. 4. increase the amount of land available for public use.

3. prevent property from being ownerless.

The purpose of requiring an earnest money deposit in a real estate sales contract is to 1. ensure that the broker will receive some compensation if either party defaults. 2. ensure that the seller will not be bothered by offers from buyers who are unable to qualify for appropriate financing. 3. provide evidence of the buyer's intention to carry out the contract. 4. set aside funds to cover the buyer's closing costs and mortgage insurance premiums.

3. provide evidence of the buyer's intention to carry out the contract.

An example of a contract terminated due to inability to perform would be one in which the 1. purchaser had suffered financial reverses so that she could not make payment as required by the contract. 2. seller had died after the contract became binding but before the closing. 3. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant. 4. property had been severely damaged by fire after the contract became binding but before the closing.

3. seller had contracted for sale of the entire property without the knowledge or consent of the other joint tenant.

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should 1. suggest talking to the neighbor about being quiet. 2. schedule only daytime showings. 3. tell potential buyers about the parties. 4. do not tell anyone about the parties.

3. tell potential buyers about the parties.

During the listing presentation, the seller questions the amount of commission to be paid and is told 1. the amount is set by law. 2. everyone charges the same amount. 3. the amount of commission is negotiable. 4. the agent that charges a lower commission will not do as good a job selling the property.

3. the amount of commission is negotiable.

Errors and Omissions insurance covers the broker for 1. title defects. 2. intentional misrepresentations. 3. unintentional misrepresentations. 4. commission losses.

3. unintentional misrepresentations.

The sales price in 3.C. is always:

3.A + 3.B; The loan amount plus the cash portion; The amount borrowed plus the down payment

Use the included Amoritization Chart (also called a mortgage factor chart) to find the shortest term for a $275,000 loan at 6.5% interest that keeps the monthly payment under the $1,800 the borrowers can afford.

30 years Explanation Amoritization charts are posted on the wall by your computer for use while taking the real licensing exam. This question is to give you some experience. The chart is easy, the factors shown for each interest rate and term are the amount of mortgage payment (principal and interest) charged per $1000 of loan. In this question - $275,000 has 275 $1000's in it. If you multiply 275 x 8.71 (the 15 year term factor) you get a monthly payment of $2395.25. That is too much! The 30 year factor of 6.32 x 275 = $1738 - well below the $1,800 amount the borrowers can afford.

How long must the supervising broker maintain a failed transaction files

4 years

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE? 1. The contract on the first house is not enforceable. 2. Neither contract is enforceable. 3. Only the first contract is valid. 4. Both contracts are valid.

4. Both contracts are valid.

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing? 1. Credit seller $300; credit buyer $300. 2. Debit seller $300; debit buyer $300. 3. Credit seller $300; debit buyer $300. 4. Debit seller $300; credit buyer $300.

4. Debit seller $300; credit buyer $300.

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term? 1. 30 days. 2. 60 days. 3. 90 days. 4. No notice is required.

4. No notice is required.

On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing? Use a 360-day year and a 30-day month. 1. $285. 2. $380. 3. $760. 4. None of the above.

4. None of the above.

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty? 1. A court order enforcing compliance. 2. Penalty charges. 3. An injunction against further use of the property. 4. Return of the property to the original owner.

4. Return of the property to the original owner.

Two lots of the same size are sold on a street. The lot on the corner sells for $20,000 more than the lot in the middle of the street. Which of the following characteristics MOST likely explains the price difference? 1. Permanence of investment. 2. Uniqueness. 3. Indestructibility. 4. Situs.

4. Situs.

The FHA functions MOST like 1. a bank or savings and loan association. 2. a mortgage company. 3. an investment group. 4. an insurance company.

4. an insurance company.

A couple owns an older home in a neighborhood that is becoming a commercial area. Because of the change in the use of the land, the couple can expect the value of their parcel to increase at some future time. This is an example of the principle of 1. substitution. 2. contribution. 3. conformity. 4. anticipation.

4. anticipation.

The practice of inducing panic selling in a neighborhood for financial gain is 1. antitrust. 2. steering. 3. redlining. 4. blockbusting.

4. blockbusting.

Another term for the owner of a property listed with your firm is the 1. customer. 2. prospect. 3. consumer. 4. client.

4. client.

A landlord may legally refuse to rent to a prospective tenant if the tenant 1. has a history of serious mental illness. 2. is unable to live alone without assistance. 3. has ever been convicted of using illegal drugs. 4. has ever been convicted of selling illegal drugs.

4. has ever been convicted of selling illegal drugs.

An adjustable rate loan should include all of the following elements EXCEPT 1. margin. 2. life-of-the-loan cap. 3. index. 4. negative amortization.

4. negative amortization.

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the 1. cash price or amount of the loan. 2. amount of down payment required. 3. number, amount, and frequency of payments. 4. prepayment penalties and rebates.

4. prepayment penalties and rebates.

Antitrust laws prohibit competing brokers from all of the following EXCEPT 1. boycotting other brokers in the marketplace. 2. dividing the market to restrict competition. 3. agreeing to set sales commissions and management rates. 4. receiving compensation from both the buyer and the seller.

4. receiving compensation from both the buyer and the seller.

The Department of Housing and Urban Development estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some Federal agencies, such as FHA, 1. will no longer lend or guarantee loans on these older properties. 2. require evidence of testing for and disclosure of any type of lead contamination before they will lend or guarantee loans on such properties. 3. require funds to be escrowed for lead abatement as a condition of lending or guaranteeing loans on such properties. 4. require the buyer to acknowledge disclosure of the presence of any known lead paint.

4. require the buyer to acknowledge disclosure of the presence of any known lead paint.

All of the following are methods to calculate the reproduction or replacement cost of a building EXCEPT the 1. quantity survey method. 2. unit-in-place method. 3. square foot method. 4. straight-line method.

4. straight-line method.

Tenants are still in their rental property even though their lease has expired. The landlord has given them written notice to quit and refused to accept rent. They are 1. periodic tenants. 2. tenants by reversion. 3. tenants in common. 4. tenants at sufferance.

4. tenants at sufferance.

When compiling a competitive market analysis, a broker would look for comparable properties that 1. were sold for all cash. 2. had been extensively advertised. 3. were offered by owner with no broker. 4. were located near the property being listed.

4. were located near the property being listed.

How many square feet in an acre?

43,560

A 6 foot wide sidewalk is to be poured on the inside of a corner lot that measures 50 feet by 100 feet. If the cost of the sidewalk is $0.68 per sq. ft., how much will the sidewalk cost?

50 X 6 = 300 + (94 X 6 =564) = 864 sq ft X $.68 = $587.52

Data used for a CMA should be no older than:

6 months

The rectangular survey system section contains:

640 acres

Lenders must seize charging PMI when the LTV is:

78%

An FHA loan for $80,000 at 10.5% requires discount points paid at closing in the amount of 3%. Find the cash value of the discount points.

80,000 x 3 % = 2,400

The Buyer and Seller Temporary Residential Lease forms are good for any period up to:

90 Days

The TREC buyer and seller temporary lease agreements are for periods:

90 days or less

The TREC buyer's temporary lease agreement, or seller's temporary lease agreement is for periods of time not to exceed:

90 days or less

A broker signed a 60-day exclusive right-to-sell listing contract with an owner. After one week of advertising and showing, the property was not sold and the owner listed the property with another broker. The second broker found a buyer one week later. Which statement about this situation is probably correct? A. the owner owes two full commissions, one to each broker because both contracts are enforceable B. the owner owes a full commission to the first broker only; since the owner already had a contract, the contract with the second broker is void. C. the owner must give the commission to the second broker only, because the broker selling the property earns the commission no matter how many contracts are involved

A

A competitive market analysis is MOST often used for A. listing price B. appraisals C. value D. none of the above

A

A loan for the sale of a property would probably be covered by the federal Real Estate Settlement Procedures Act (RESPA) if the A. loan was from a federally insured savings and loan association B. loan was of the type not purchased by the Federal National Mortgage Association C. property was part of a 45 acre farm D. property was an eight unit apartment building

A

A managing broker can be held responsible for A. all real-estate activities of salespersons B. breach of contract with principal C. seller's misrepresentations D. seller's refusal to disclose latent defects

A

A primary purpose of the Real Estate Settlement Procedures Act (RESPA) is to A. inform the buyers and sellers of all settlement costs in real estate transactions B. control the number of non federally-related mortgage loans in the country C. standardize the amount of all settlement costs in real estate closings D. standardizes settlement procedures in all parts of the country

A

A property management plan may serve different purposes for different owners and generally has to strike a balance between preservation of the properties value and generation of income. Which of the following owners would most likely prefer a property manager that emphasizes maintenance of value over profitability? A. The department of Housing & Urban Development (HUD) B. An owner of a cooperative housing unit C. A builder D. Fair housing association

A

A property owner died, having willed his two properties to his two daughters. There is still a chance they could lose the properties for a variety of reasons, but it CANNOT be taken through A. escheat B. survivorship C. intestate D. None of the above

A

A real estate broker who is listing a house, should personally verify... A. number of square feet in the building B. number of bedrooms and baths C. condition of the property D. whether or not the property is located in a flood hazard area

A

A seller had his property listed with a broker. During the listing period, the seller found his own buyer and refused to pay the broker a commission. The broker successfully sued the seller. What type of listing did the broker most likely have? A. exclusive right-to-sell listing B. exclusive agency listing c. net listing d. open listing

A

A seller has offered to provide financing for a buyer. What type of financing would most likely be used? A. purchase-money mortgage B. growing equity mortgage C. package mortgage D. a mortgage assumption

A

A tenant's lease has expired and landlord has refused to renew the lease because he will offer the property to his adult daughter and her two children to help them out. The tenant had been provided with sufficient notice but has not yet secured a new resident. If the landlord does not holdover the tenant nor does he accept any payment from the tenant, the situation can now be considered... A. Estate at sufferance B. Estate at will C. Trepass D. Estate from period-to-period

A

At the time of listing, the seller informs the agent they are moving because the neighbor has loud parties almost every weekend. The agent should... A. tell potential buyers about the parties B. keep silent about the weekend parties C. refuse the listing D. none of the above

A

Can the holder of a life estate sell the property to a neighbor? A. Yes, although the duration of the estate remains governed by the length of the holder's life B. Yes, as long as the neighbor is aware that the original owner is entitled to any income from the land C. No, because a life estate can never be transferred, but must revert to the original owner. D. No, because a life estate can only be inherited.

A

How does a creditor who has obtained a judgement get satisfaction against a debtor who who will not pay? A. A writ of execution B. File another claim. C. Take them back to court for contempt of court D. None of the above

A

If a manufacturing plant that employs 20% of the local labor force closes, the likely effect on the area's real estate values will reflect the principle of A. supply and demand B. transferability C. substitution D. utility

A

In an exclusive right to sell listing, an owner lists the property for sale with how many brokers? A. one B. two C. multiple D. none of the above

A

Licensed salespersons who sell real estate for brokers fall into two categories. They are either... A. employees or independent contractors B. office staff or field workers C. employees or consultants D. agents or sales staff

A

Mr. & Mrs Smith have listed their home for sale. A buyer's agent submits an offer that is well below their asking price. The Smiths decide to provide a counter offer with an expiration date which has been received by buyers. While waiting for a response, a new offer is submitted by another broker at their asking price. Can the Smiths accept the second offer and pull out of their counter offer? A. No, once it's been delivered to buyers, offer remains irrevocable for the specified term. They must wait for a reply from buyers or allow the expiration date to pass. B. Yes, seller can submit a revocation at any time, essentially canceling the counter offer in favor of a better offer. C. Yes, so long as the buyer's agent still holds the counter offer and has not yet delivered it to their principle. D. None of the above.

A

The Equal Credit Opportunity Act addresses all of the following EXCEPT A. standardization of interest rates B. credit card regulations C. regulations for credit approval processes D. regulations on application process

A

The purpose of usury laws is to regulate A. interest rates charged by lenders B. mortgage amounts C. advertising by lenders D. redlining by lenders

A

Truth-in-lending legislation applies to which of the following real estate loans? A. a loan for a single family personal residence with 120 installment payments B. a loan on a duplex to be used as an investment with 60 installment payments C. a loan on a single family personal residence with no finance charge and only three installment payments D. a loan on a duplex to be used as an investment with 30 installment payments

A

Which of the following approaches most reliably estimates the sale price of a single family residence? A. Market Data Approach B. Cost Approach C. Income Approach D. None of the above

A

Which of the following refers to the right of a defaulted mortgagor to recover his real property? A. redemption B. rescission C. encumbrance D. survivorship

A

What is the difference between a CMA and an appraisal?

A CMA gives a range of value and an appraisal gives an exact amount; A CMA compares the property to recent sales and current listings but an appraisal only compares the property to recent sales; A CMA is prepared by a real estate licensee, but an appraisal is prepared by a licensed appraiser

DEED OF TRUST

A DEED to Real Property. Serves Like a MORTGAGE. Involves 3 Parties Instead of 2. The 3rd Party Holds Bare Naked Title for the Benefit of the LENDER. BENEFICIARY (Lender), TRUSTOR (Borrower), TRUSTEE (Third Party)

DEED IN LIEU OF FORECLOSURE

A Deed From Property Owner to Lienholder, Given to Avoid Foreclosure Proceedings. Unlike Foreclosure, it May Not Wipe Out Junior Encumbrances.

BEQUEST OR LEGACY

A Gift of Personal Property Given in a WILL. BEQUEATH - Give or Pass on as an Inheritance BEQUESTOR - Person who Gives or Leaves something by WILL

BILL OF SALE

A Receipt Serving as Formal Evidence of the Transfer of Ownership of Personal Property

A builder failed to follow the agreed landscaping plans. The purchaser decided to accept the variance and pay the full contract price. This is know as

A WAIVER

DEVISE

A WILL Disposing of REAL Property DevisEE - One who Inherits Real Property DevisOR - Person giving gift of Real Property

demand immediate payment of the entire note

A borrower has defaulted on the mortgage. The mortgage contains an acceleration clause. This permits the lender to

a subagent of the seller

A broker lists a property, with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as

An intermediary is:

A broker representing both the seller and the buyer in a single transaction

an expression of opinion, or puffing, which could lead to misrepresentation.

A broker says, while showing a rural property, "This property has the world's purest well water." This would be an example of

Agency coupled with an interest

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

A buyer usually establishes a relationship with a broker by signing a:

A buyer usually establishes a relationship with a broker by signing a:

10,020

A buyer wants to purchase a home for $60,000 with a 15% down payment. The lender charges 2 points. How much money does the buyer need up front to make the purchase?

The buyer may sue the seller for specific performance.

A buyer was negotiating the purchase of a house for himself. During a conversation with the seller, the seller agreed to include all kitchen appliances in the sale, and this fact was included in the sales contract. In this situation, if the seller takes the appliances with him, what recourse does the buyer have?

At the closing the buyer should bring

A cashier's check or wire transfer for the amount of closing costs and down payment

An offer by a prospective purchaser can be terminated prior to acceptance due to:

A change in the law that renders the contract illegal; Bankruptcy of either party; Expiration of a specified time period

The appraiser will use the cost approach to value:

A church.

an option contract

A contract has been drawn which obliges the sellers to convey title to their land to the buyers if the buyers come up with $22,000 on or before December 31st. This is called

$225.00

A couple bought a rental house for $195,000. Its assessed value was $180,000. If the tax rate is $1.50 per $100 of assessed value, what is the monthly contribution the lender will REQUIRE for taxes? Round to the nearest cent.

all owners, present and future

A deed restriction is applicable to the activities of

the identity of the legal owner is kept confidential

A distinguishing characteristic of owning property by land trust is that

The Lead-Based Paint Disclosure is:

A federal requirement for residential property built prior to 1978

Devise

A fee estate is an estate of inheritance. It has no restrictions as to inheritance of the estate. It may be transferred by will; such a transfer is referred to as a devise, and those receiving the estate by devise are called devisees. The estate may pass to the estate holder's heirs upon his death, even if he leaves no will, through the laws of descent. As a result, the estate may pass on in perpetuity (forever).

Fee Simple Absolute Estate

A fee simple estate may be absolute or it may be qualified. A fee simple absolute estate is the most complete form of ownership our law recognizes today. The term "absolute" indicates that the estate cannot be taken from the estate holder due to the occurrence of any event other than the death of the estate holder without any living heirs. In other words, there are no conditions imposed on the estate. Unless there are words to indicate that there are conditions placed on the estate, a fee estate would be absolute. Therefore, the terms fee estate or fee simple estate could be used to refer to a fee simple absolute estate.

lender wants to sell the mortgage to the secondary market.

A formal appraisal will ALWAYS be REQUIRED when the

Legal life estate

A homestead estate

constructive notice

A judgment has been properly recorded. Any subsequent purchasers, whether they have actually examined the record or not, have been given

Which of the following rules would a court consider in resolving a contractual ambiguity?

A later document takes precedence over an earlier Document An amend/extend to a purchase and sale contract would be an example of the rule

A. Statute of Frauds

A law requiring any contract conveying a real property interest to be in writing in order to be enforceable is a modern application of the:

a homeowner

A lawsuit for inverse condemnation may be brought by

An exemption to using the Information About Brokerage Services form is:

A lease for not more than 1 year with no sale anticipated

The estate that gives a party legal possession of real property without ownership is:

A leasehold estate.

A homeowner is willing to let his neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor

A license

involuntary lien

A lien placed on property without the consent of the property owner.

specific lien

A lien that attached to one or more specific properties (ex. Mortgage).

All of the following will create an agency relationship.

A listing agreement with a seller; A buyer representation agreement with a buyer; A property management agreement

a condominium tends to be more affordable

A major reason for buying and owning a condominium rather than a detached single-family home is that

cost approach

A method of estimating value based on the economic principle of substitution; the value of a building cannot be greater than the cost of purchasing a similar site and constructing a building of equal utility.

A person who brings a borrower and a lender together for a fee is called:

A mortgage broker.

Period estate (periodic tenancy)

A periodic estate or (periodic tenancy) is a tenancy which automatically renews itself on the last day of the term for another term of the same duration until it is terminated by either party with proper notice. It does not have a fixed termination date, as it automatically renews at the end of each term. Periodic tenancies typically run from month to month, week to week, day to day, or year to year. A periodic tenancy is automatically created when premises are rented for an indefinite time, with monthly or other periodic rent reserved. The tenancy would be considered a month-to-month tenancy if rent is payable monthly. When rent is payable at any other interval, the tenancy is from period to period in which the rent is payable. For Example - A lease states that the lessee will pay the lessor $20,000 a year to rent his property. This is not an estate for years, as the agreement does not state that the lease will end after one year. This is an estate from year to year. It would continue for a year and automatically renew for another year and for each year thereafter. To terminate the tenancy, either the landlord or the tenant would have to give advance notice to the other. While a month-to-month tenancy may be oral, a year-to-year tenancy must be created by express written contract. Often a periodic tenancy can be terminated by either party giving written notice a statutory number of days prior to the expiration of the period for which rents are to be paid, unless the rental agreement is one to which a residential landlord and tenant law were to apply. For Example - In some states, if a commercial tenant has paid rent the 1st of every month and wishes to terminate the month-to-month tenancy, the tenant may be able to terminate as of October 31 if he gave written notice to the landlord by the 1st of October. If he gave notice on October 2, the earliest he would be able to terminate the tenancy would be November 30.

A lease that automatically renews itself is called:

A periodic tenancy.

B. It typically has larger individual lots with extensive side-yards on the property

A planned unit development (PUD) is a residential development that differs from traditional residential subdivisions in all of the following ways EXCEPT:

D. Proximity to modes of public transportation

A popular adage in real estate is that property value is all about "location, location, location." However, for most property types in nonresidential realms, non locational requirements are equally or even more important. All of the following are examples of non locational factors EXCEPT:

Which building is exempt from the ADA?

A private club

An individual entrepreneur who owns several apartment buildings.

A property management plan may serve different purposes for different owners, and generally has to strike a balance between preservation of the property's value and generation of income. Which of the following owners would MOST likely prefer a property manager who emphasizes cash flow or income over the maintenance of value?

a competitive market analysis to determine the property's value.

A prospective seller asks a salesperson to recommend a listing price for a property. The salesperson should suggest

Before the government can exercise it's right of eminent domain the use of the property must be

A public use for which the property owner will be fairly compensated

Qualified fee estate (conditional fee, defeasible fee)

A qualified fee estate (also called a conditional fee, a defeasible fee, or fee simple defeasible estate) is an estate of potentially unlimited duration and does not terminate upon the death of the owner. However, the estate has certain qualifications (conditions). The term "defeasible" is used to indicate that, if the event specified in the conditions were to occur, the estate would or could be defeated. For Example - The conveyance of title with the condition that the land not be used for any purpose other than a nature preserve would create a fee simple defeasible estate. If the land were used to create an owner's residence, the estate may be terminated.

Title insurance policy does not include:

A record of all of the previous owners of the property

Seller

A seller mentions to his agent that the previous owners of his property may have dumped hazardous waste on the site. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), who is liable for damages from the dumping prior to the sale of the property?

Vicarious liability is best defined as the liability:

A seller or buyer might have for your conduct as their agent

C. London Interbank Offered Rate (LIBOR)

A significant number of mortgage loans use adjustable interest rates, in which the interest rate of the loan is tied to an index rate that fluctuates over time. For income-producing property, the most common index rate is the:

novation

A three-way agreement in which the obligor transfers all rights and duties to a third party.

D. Performance Standards

A traditional zoning ordinance includes all of the following EXCEPT:

If a broker sells a property on behalf of a seller without a signed listing agreement, the courts will most likely declare that the broker is:

A volunteer; An agent in a listing agreement that is un-enforceable against the seller; Unable to enforce payment of the commission

a contract

A written agreement in which a purchaser agrees to buy and a seller agrees to sell is called

The current market value of a property is $35,000. For tax purposes, it is assessed at 40 percent of market value. The tax rate is $4 per $100 of assessed value. What is the amount of the tax due? A) $560 B) $625 C) $705 D) $740

A) $560

James, a 16 year old high school sophomore, entered a written agreement to buy 30 acres of land from Farmer Frank. Which of the following statement is TRUE about this contract? A) It is a voidable contract as to James. B) Farmer Frank does not have to sell because James is underage. C) The contract is void. D) This is a unilateral contract that Farmer Frank must honor but James, because he is underage, is not obligated to buy.

A) It is a voidable contract as to James.

Which of the following is a voluntary lien? A) Mortgage lien B) Estate tax lien C) Real estate tax lien D) Judgment lien

A) Mortgage lien

A statute which requires certain contracts to be in writing to be enforceable is called a A) Statute of Frauds. B) Statute of Writings. C) Statute of Memorandum. D) Statute of limitations.

A) Statute of Frauds.

Darlene accepted an offer to purchase her house and pursuant to the terms of the offer delivered the acceptance by mail to the buyer. Later she changed her mind. Before the buyer received the the acceptance, she called the buyer and told her she was revoking her acceptance. What is the legal status of negotiations? A) The buyer has a binding contract to purchase Darlene's house. B) There is no contract because the buyer did not receive the acceptance yet. C) There is no contract because Darlene did not revoke the acceptance in writing. D) There is no contract, because Darlene revoked the acceptance.

A) The buyer has a binding contract to purchase Darlene's house.

The history of all owners of a specific parcel of real estate is the property's A) chain of title. B) certificate of title. C) title insurance policy. D) abstract of title.

A) chain of title.

Documents affecting real estate are recorded or filed in the county in which the property is located to A) enable interested parties to know where to look to discover the various interests of other parties to the transaction. B) give actual notice of the grantee's interest in the property. C) comply with the terms of the statute of frauds that all transfers for more than one year be in writing and signed. D) prove the validity of the execution of the document.

A) enable interested parties to know where to look to discover the various interests of other parties to the transaction.

The right of a deliquent taxpayer to redeem his or her property before it has been sold at a tax sale is known as a(n) A) equitable right of redemption B) statutory right of redemption C) common law right of redemption D) statutory forgiveness

A) equitable right of redemption

Normally, the priority of general liens is determined by the A) order in which they are filed or recorded. B) order in which the cause of action arose. C) size of the claim. D) court.

A) order in which they are filed or recorded.

All of the following are correct about contingencies EXCEPT A) they create a contract that is unenforceable. B) they must specify what is required to satisfy the contingency. C) they must identify who will pay for any costs involved. D) common contingencies include mortgage and inspection contingencies.

A) they create a contract that is unenforceable.

Under the Torrens system A) title passes when the grantee's application for registration has been approved and the real estate has been registered. B) the Torrens official performs exactly the same functions as the recorder of deeds. C) the original deed is mailed to the buyer after it has been registered. D) the registration of a title can be canceled by the owner at any time.

A) title passes when the grantee's application for registration has been approved and the real estate has been registered.

Mary entered an oral contract to buy an apartment building from Carrie. In most states this contract is A) unenforceable B) implied contract C) voidable D) unilateral

A) unenforceable

A fixture is: A. considered real estate B. considered personal property C. Attached to a business D. sometimes real property and sometimes personal property, depending upon how it is attached

A. Considered Real Estate

Moss leased a lakeside lot from Mayes. Upon arriving at the lot to begin sunbathing, Moss found Mayes there, selling hotdogs and attracting a constant crowd. Under which of the following justifications could Moss move and refuse to pay rent on this lot? A. Constructive eviction B. Unlawful Detainer C. Tenancy in common D. Zoning variance

A. Constructive eviction

When a lessor is in default, the lessee's legal right to vacate is called? A. Constructive eviction B. Unlawful detainer action C. Defeasance D. Injunctive Action

A. Constructive eviction

a person voluntarily gives up private property for public use by: A. Dedication B. Accession C. Adverse possession D. Escheat

A. Dedication

the right to use another person's land without the existance of an adjacent or dominant estate, and which will exist during the life of the grantee, or the need for which it was created is called an: A. Easement in gross B. Easement appurtenant C. Easement by prescription D. Encroachment

A. Easement in gross

A purchaser of real estate learned that his ownership rights would continue forever and that no other person had any ownership or control over the property. Therefore, this persons a: A. Fee simple interest B. Life Estate C. Determinable fee estate D. Fee simple estate subject to a condition subsequent

A. Fee simple interest

The 1988 Federal Fair Housing Act added the following protected classes: A. Handicapped and familial status B. Age and marital status C. Handicapped and marital status D. Sex and familial status

A. Handicapped and familial status

A type of project in which zoning allows for ownership of units with higher density than usual, possibly having zero lot lines, would be a(n) A. Planned Unit Development (PUD) B. Stock cooperative C. Areal planned for and restricted to retired senior citizens D. areal restricted to apartment buildings

A. Planned Unit Development (PUD)

Mr. Moore's Property was not condemned when a freeway was built near his home. However, he feel that because of the freeway his property has been damaged. Perhaps Mr. Moore should: A. Sue for inverse condemnation B. Just forget because he has no chance to win C. Initiate a condemnation action D. Realize a private individual cannot sue the government

A. Sue for inverse condemnation

Harlow signed a three-year lease to occupy a house. When the lease expired, Harlow continued to live in the house without the owner's consent. Harlow now holds: A. Tenancy at sufferance B. Tenancy at will C. Tenancy in common D. An estate in remainder

A. Tenancy at sufferance

if a cabinet in a house is a fixture, which of the following is true? A. Title to it passes to the buyer upon the sale of the house. B. It is not pledged as security for any mortgage loan C. It is NOT part of the assessed value of the property for tax purposes D. it will pass to the new owner only if the Real Estate Purchase Contract says it will

A. Title to it passes to the buyer upon the sale of the house

which of the following best describes a life estate? A. an estate conveyed to Abel for the life of Abel and upon Abel's death to Baker B. an estate held by Abel and Baker in joint tenancy with full rights of survivorship. C. An estate that reverts to the grantor if a certain covenant is disregarded D. An estate given by law to a wife under Uniform Probate Code

A. an estate Conveyed to Abel for the life of Abel and upon Abel's deth to Baker.

When a lessee assigns his lease, he: A. gives up the remaining rights of the lease, but retains liability if the assignee defaults B. gives up the remaining rights of the lease, and is released from all liability C. gives up the remaining rights of the lease, but the asignee is responsible to the lessee. D. a lease cannot be assigned

A. gives up the remaining rights of the lease, but retains liability if the assignee defaults

Which of the following is true concerning a property management company owned by the broker of a real estate company? A. it can have a different name than the real estate company. B. it must have an associate broker as the manager C. owning a real estate company and property management company is considered a legal conflict of interest D. it must have a separate property management trust account only if it has six clients

A. it can have a different name than the real estate company

In a deed, the habendum clause is a(n): A. to have and to hold clause B. Exclusive right of possession clause C. Personal Property inclusion clause D. Corporate ownership clause

A. to have and to hold clause

DELIVERY OF DEED to GRANTEE

ACTUAL - GRANTOR Gives DEED to GRANTEE ESCROW - Neutral 3rd party With Instructions - Payment, Terms to Deliver to GRANTEE

INVOLUNTARY ALIENATION BY NATURAL CAUSES

ALIENATION / DEPLETION 1) EROSION - Gradual Wearing Away of the Soil 2) AVULSION - Violent Sudden Loss of Land - Act of God ACQUISITION / ADDITION 1) ACCRETION - River or Stream Soil Deposits 2) ALLUVIAL DEPOSITS - Soil left by ACCRETION 3) RELICTION - Non-navigable stream, water Recedes Exposing Land. Land Belongs to Owner.

COLOR OF TITLE

APPEARANCE of TITLE or Ownership. May or May Not in fact Provide TITLE.

A seller's agent must provide the sellers copy of all except

Abstract or title commitment

A buyer defaults on a contract and the seller chooses to receive the earnest money. This is an example of:

Accepting liquidated damages

prepayment penalties and rebates

According to the Truth-in-Lending Act, if any "trigger terms" are used in an ad, all of the following disclosures MUST appear in the ad EXCEPT the

D. A doctor at the city hospital who must walk to work.

According to the bid-rent model, which of the following individuals would be the one most likely to live closest to the central business district (CBD)? (Hint: Assume that work locations are located adjacent to each other at the center of the CBD)

A. Disclosure

According to the law of agency, real estate brokers are required to observe several duties as they act as an agent for an individual trying to buy or sell a property. Which of the following duties refers to a broker's obligation to be completely open and honest with the principal?

most homes are larger than the sale home

According to the principle of progression, a three-bedroom, one-story home is MOST likely to bring the highest sales price if located in a neighborhood in which

The duties of a broker in a fiduciary relationship do include:

Accounting, Loyalty, Care

When comparing/analyzing CMA, these are the factors that would be NOT be taken into consideration:

Accrued Depreciation Explanation Accrued Depreciation is used by businesses to reduce their taxes. It is not a factor in determining market value. For tax purposes only, a building is considered to lose value each year to reflect its reduced functional life even if real estate market values are increasing.

CONVEYANCE

Act of Transferring Property Title from One Person to Another

TREC may suspend or revoke a license if

Acting in the undisclosed dual capacity of broker and seller within a single transaction; Commingling broker funds with client funds, Selling real property by lottery

If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should

Add the Environmental Assessment Addendum to the contract

TACKING

Adding a Previous or Multiple Owner's Use To Satisfy the Statutory Period of Use for an EASEMENT by PRESCRIPTION or a TITLE BY ADVERSE POSSESSION.

B. The transaction price of the comparable property should be adjusted upward.

Adjustments for physical characteristics are intended to capture the dimensions in which a comparable property differs physically from the subject property. If the only physical difference between the subject property and the comparable is that the comparable does not have a fireplace, which of the following adjustments should take place?

Which may an agent do?

Advise one party of the other parties inability to perform the contract

A buyer, upon reading the title commitment, is concerned about an easement on the property that might affect the use of the property. In response to this concern, the agent should:

Advise the buyer to retain the services of an attorney

Activity which causes a third-party to believe that an agent has authority which in fact was not granted by a principal to the agent is known as:

Agency by Estoppel

A broker supplies the financing for a project to build condominiums with the stipulation that he has the exclusive right to sell the completed condos. Which of the following BEST describes this relationship?

Agency coupled with an interest

MORTGAGE

Agreement to Repay a Loan Over A Certain Period of Time by the MORTGAGOR (Borrower) of a Property to the MORTGAGEE (Lender).

Which of the following is appropriate when A licensee wants to extend the effective period Listing agreement?

Agreement to amend/extend contract with the broker

B. Real estate commission

All 50 states have licensing laws that regulate persons and companies that engage in the brokerage business. Interpreting and enforcing state licensing laws falls under the responsibilities of which of the following parties?

If a broker receives more than one offer on a property

All must be presented to the seller unless the seller has instructed the broker otherwise

If the seller's parents were cosigners on the original purchase loan and are on the deed even though the loan was paid off:

All owners of record should sign the listing

SCHEDULE B ON TITLE REPORT

All the BAD STUFF. 1. Standard Exceptions: a) Government Rights, Easements, Encumbrances, CC&R's, Property Taxes 2. Special Exceptions: Against Specific Property, Gap in Title

SUBORDINATION

Allowing Someone Else to Have a Higher Lien Position. Lien Holder Agreement Changing Mortgage, Judgment and Other Liens Priority

prior appropriation

Although states make specific laws governing water rights and the rights in land that borders water, most states generally follow one of two basic doctrines regarding water rights. In many states, the common law doctrine of riparian and littoral rights dictates that water rights are automatically conveyed with property. In others, all water rights are controlled by the state under the doctrine of

B. The parties in commercial mortgage transactions are typically less knowledgeable than those in residential transactions.

Although the function of commercial brokerage is the same as that of residential brokerage, the activities of commercial brokers usually differ considerably from those of residential brokers due to fundamental differences in these two markets. All of the following statements regarding commercial brokerage are true EXCEPT:

CODICIL

Amendment or Supplement to a WILL

The law requiring the removal of barriers and ease of access is:

Americans with Disabilities Act

A written history of all instruments and happenings that may affect title is called:

An abstract of title

negative amortization.

An adjustable rate loan should include all of the following elements EXCEPT

If an individual dies without a will:

An administrator will be appointed by the courts to settle his estate; He is said to have dies intestate; His heirs have title by descent.

When one person acts for another on their behalf it is known as:

An agency relationship

One who represents another from whom he has derived authority is called:

An agent

an executory contract.

An agreement to purchase that has NOT yet closed is

B. Joint Venture

An alternative vehicle for financing commercial property involves having the lender acquire an ownership (equity) interest in the property by supplying a portion of the required equity capital in addition to providing the permanent debt financing. This type of financing arrangement is commonly referred to as a:

$250,000

An appraiser MUST be licensed or certified to handle Federally related work on residential property valued at more than

B. A zone of transition containing warehousing and other industrial land uses exists between the downtown area and the residential area.

An early model of land use is the concentric ring model of urban form developed by E.W. Burgess. Which of the following is closest to the downtown area of the central business district (CBD)?

merger of titles

An easement can be terminated by

A. Affirmative easement appurtenant

An easement is the right to use land for a specific and limited purpose. Which of the following easements involves a relationship between tow parcels of land, is a permanent feature of both parcels involved, and gives the dominant parcel some intrusive use of the servient parcel?

Regarding the use of commission approved forms, which of the following would not be accurate under rule f?

An employing broker may hire legal counsel to prepare contracts to be used in all common transactions

A title insurance policy will protect a buyer from financial losses that are caused by:

An encumbrance to which the policy has not taken an exception. Explanation Title Insurance will protect the buyer from an encumbrance which the policy has not taken an exception.

Estate at Sufferance

An estate at sufferance (or tenancy at sufferance) is created when a person retains possession of premises without the consent of the owner or any other person having the right to give possession. In other words, if a tenant stays after expiration of a lease without the consent of the landlord, the tenant is considered a holdover tenant and holds a tenancy at sufferance. For Example - Noah Count had a one-year lease on a residence that expired on July 31. When he stayed on after that date without the consent of the landlord and did not pay rent, he held a tenancy at sufferance. If he had paid the rent but the landlord refused it, he would still hold an estate at sufferance. A tenancy at sufferance is created when a tenant remains wrongfully. If a tenant were to pay rent and the rent was accepted, the tenant would not be a tenant at sufferance. For Example - Al Packer had a one-year lease on an apartment, which expired on January 1. He stayed on after this date with the consent of the landlord and began to pay rent on a monthly basis. He then held a month-to-month tenancy. A tenant at sufferance is legally liable to pay reasonable rent for the actual time he occupied the premises and must, on demand, surrender the possession to the owner. His right to possession terminates immediately upon such demand, without prior notice. From the point of view of a lessee, a tenancy at sufferance is the weakest possible tenancy, as no notice is required to terminate the tenancy, and the tenant has no right to remain. The tenant can be evicted immediately.

Estate for years

An estate for years, despite its name, has nothing to do with years. This estate is a tenancy of definite duration. It may run for any length of time (e.g., a day, a week, a month, a year, or any number of days, weeks, months or years). The distinguishing feature of an estate for years is that it is for a definite and fixed period of time. It has a fixed and definite termination date that can be clearly established at the beginning of the tenancy. For Example - If Chad agreed to lease a beach house to Molly for the summer months of June, July and August, Molly would have an estate for years. If a tenant rented a building from April 1 to March 31 of the following year, he would have an estate for years. Unless the lease provides otherwise: an estate for years will not terminate on the death of either the lessor or the lessee. If either dies, his rights and obligations pass to his heirs. if the lessor sells the property, the new owner must continue to honor the lease. If a lease contains a termination date, no advance notice of termination is needed to terminate it. The lease would automatically terminate on the stated expiration date. Generally, an estate for years is referred to as a lease, while any other tenancy may be referred to as a rental agreement.

Estate basics

An estate is a possessory right or ownership interest in real estate. This includes owning or leasing property. It does not include the interest created by an easement or by a lien, such as property taxes or a mortgage. The estate held by the owner signifies the degree, quantity, nature, and extent of his title, right, or interest in the real property. Estates are divided into two broad classes based on their duration: freehold and nonfreehold. Freehold estates, that last indefinitely for a lifetime or forever, involve ownership of property and are considered real property interests in real property. Nonfreehold estates last for a specified or temporary period of time, involve the lease or rental of real estate, and are considered personal property interests in real property.

Estate

An estate is a possessory right or ownership interest in real property. A person has an estate when he has a possessory right or ownership interest in real estate. Therefore, a person has an estate when he owns or leases property. In either instance, the holder of the estate would have the right to use and possess (control) the property and the right to dispose of his interest in the property. More than one person may hold an estate in a particular property at the same time. Other persons or entities may hold interests in real estate that give them rights, but these rights do not include the right to possess the property. These interests would then be short of an estate. Interests: 1. Estate -Own: Owner - Lease: Lessee 2. Lien 3. Easement

Creation of estate

An estate may be created in a number of ways, including the following: Grant to another Reservation Operation of law An estate in real property (other than a lease for one year or less) can only be created by operation of law or by a written instrument, such as a deed, a will or a lease. Contracts containing an agreement to create an estate in real property, such as a real estate purchase contract, need to be in writing.

Taxation on capital gains can be deferred with

An exchange

A. Is revocable by the grantor

An important distinction both practically and conceptually is the difference between an easement and a license. In contrast to an easement, a license:

D. $680

An individual works downtown and pays $600 per month in rent for an apartment located 10 miles from her office. She has calculated that she spends 30 minutes per day driving each way to the office and it costs her $4 per day in gas and lost productivity. Using the framework of the bid-rent model, how much would she be willing to pay for an apartment downtown, assuming a 20 workday month?

C. 9%

An investor originally paid $22,000 for a vacant lot 12 years ago. If the investor is able to sell the lot today for $62,000, what would his annual rate of return be on this investment?

express agreement

An oral or written contract in which the parties state the contract's terms and express their intentions in words.

None of the above

An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000?

A lease with a specific starting and ending date is called:

An state for years.

Emblements are:

Annually cultivated crops, attached to the land, and are personal property.

Children in the Fair Oaks neighborhood must ride a school bus three miles to the nearest elementary school. Next August a new school will open right in the neighborhood and bussing will no longer be necessary. Listing agents in the neighborhood have already begun taking the new school into consideration in helping sellers to determine a list price. This is an example of the appraisal principal of:

Anticipation.

If the box is checked to provide buyer with extended coverage:

Any additional premium may be paid by the buyer or seller

D. Written Form

Any contract, whether it is for the sale of real estate or some other entity, must contain five basic elements. However, any contract for the sale of real estate must adhere to two additional requirements. Which of the following contract elements is an additional requirement that must be satisfied in a contract for sale of real estate that isn't necessarily a part of other contracts?

Where can an FHA insured mortgage loan be obtained from?

Any qualified lending institution

TREC will investigate the actions of a licensee if they receive:

Any written, signed complaint submitted no later than the fourth anniversary of the date of the incident

Which of the following would not need to be licensed when acting for another person in the sale or lease of real estate

Anyone acting under a power of attorney

A lender can withdraw the approval of a property

Anytime prior to closing

An agent in ABC Realty has a listing that is being sold by a buyer's agent whose license is also with ABC Realty, the agents are acting as:

Appointed associates in an intermediary situation

Property Taxes

Are according to value; Create the highest priority lien on real property; are always paid first at a foreclosure sale.

Issues relating to community property and homestead:

Are determined by the title company

The TREC promulgated contract forms

Are drafted by the Broker-Lawyer Committee

C. Syndicate

As of 2008, nearly 88% of private commercial real estate equity was owned by "non-institutional investor." Which of the following investor categories represents the most common form of non-institutional ownership?

D. greater than the market value of corporate, foreign, and U.S. Treasury debt securities combined

As of December 2008, the market value of outstanding real estate mortgage debt was:

C. No financially limits are considered when determining the property's best use.

As part of the data analysis step in the appraisal process, it is necessary to consider the highest and best use of the property in question. In regards to determining highest and best use, all of the following statements are true EXCEPT:

Official property value for tax purposes is called:

Assessed Value.

When considering an investment in real estate the perspective investor should consider all of the following except:

Assessed valuation of the property

A Colorado real estate license may provide a broker price opinion for all except:

Assist a buyer for the purpose of obtaining a loan

For which of the following actions would a real estate brokers license be required?

Assisting a telecommunications company in acquiring rights of way

B. 7.07%

Assume that an industrial building can be purchased for $1,500,000 today, is expected to yield cash flows of $80,000 for each of the next five years, and can be sold at the end of the fifth year for $1,625,000. Calculate the internal rate of return (IRR) for this transaction.

A. Greater than

Assuming all else the same, the future value of an annuity due will be _____________ that of an ordinary annuity.

B. $6,372.62

Assuming that an investor requires a 10% annual yield over the next 12 years, how much would she be willing to pay for the right to receive $20,000 at the end of year 12?

The purpose of the Colorado real estate commission approving a variety of standard forms for use by licensees is to:

Assure the brokers compliance with the Conway Bogue decision by the Colorado Supreme Court

A licensee who represents a party must disclose this representation:

At first contact

When can a broker rebate a portion of the commission to a seller?

At the brokers option as part of the negotiated price of services.

B. Hazard Insurance Premiums

At the closing, the buyer will be credited for a number of costs that have been paid up front as well as a number of prorated expenses that account for the period of time during which the seller occupied the house. All of the following items detailed in the closing costs involve credits that are commonly passed on to the buyer EXCEPT:

B. Devise

At the death of a property owner, property will convey either in accordance with a will or without a will. If a will dictates the distribution of the decedent's real property, the property is said to be conveyed by:

A licensee must present the Information About Brokerage Services form:

At the first substantive discussion of a real estate transaction

tell potential buyers about the parties

At the time of listing, the seller tells the listing agent they are moving because the neighbor has loud parties every weekend. The agent should

If a broker deposits the buyers earnest money in a trust account at what time is the seller entitled to receive it

At the time of the settlement

CERTIFICATE OF TITLE

Attorney's Opinion Regarding Interest in Real Property. Not Necessarily Valid.

PARTIES WHO MAY PREPARE A DEED

Attorney, Broker, Attorney in Fact (POA) and Self. A CPA may Not Prepare A Deed.

The TAR Buyer Representation Agreement in our textbook:

Authorizes intermediary; Is limited to the market area designated in the agreement; Authorizes the agent to show properties to competing buyers

A broker described the boundaries of a property to a prospective buyer without informing her that the boundaries described were not exact. After purchasing the property, the new owner extended a fence within the described boundaries. A neighbor then brought an injunction against the new owner because the fence extended beyond the actual property boundaries. Can the broker be held accountable for misrepresentation? A. Yes, because the broker must present a lot and block survey before closing B. Yes, because the broker knew the boundaries she cited could be false C. No, because the broker's description was oral D. No, because the prospective buyer is responsible for obtaining a survey before closing.

B

A broker has brought a ready, willing and able buyer to a seller. In MOST listing contracts, the broker has earned his commission when... A. the sale closes B. the seller accepts the offer C. upon transfer of title D. when an offer is presented

B

A broker lists a property with a listing contract allowing subagency and dual agency. One of the broker's salespersons shows the property. The salesperson would be classified as A. dual agent B. subagent C. special agent D. None of the above.

B

A broker orally informed the prospective buyers of a house in a rural subdivision that the developer would be paving the streets. The broker had not verified this, but assumed it. The buyers relied on the broker's statement in deciding to buy the house. If no contract exists spelling out paving responsibilities, who can be held accountable for damages? A. the developer, because it is a developer's responsibility to pave streets up to existing arteries B. The broker, because his unverified statement was a misrepresentation C. The county because it has jurisdiction over roads in rural areas D. No one, because no written promise of street paving was made by either the broker or the developer.

B

A broker, acting as an agent for the seller, presents an offer to buy from the broker's former college roommate. The broker knows that the buyer will increase the amount of the offer if the seller turns down this offer. When presenting the offer, the broker should... A. simply present the offer to the seller and let it play out B. tell the seller that buyer is willing to pay more C. encourage seller to accept the offer D. encourage the seller to counter-offer

B

A buyer made an offer on a property listed for $350,000. She wanted to put $35,000 down and make payments to the seller, allowing the seller to retain title until the principal was paid off. The seller accepted and the buyer became a A. vendor B. vendee C. lessor D. lessee

B

A couple are moving to a new city. They have decided to rent temporarily before buying a house to see which part of the city they would like to live in. What type of lease would BEST suit the couple's needs? A. A year to year lease B. Month-to-month lease C. Tenancy at will D. Land lease

B

A deed restriction in a subdivision had created a community playground that used a few square feet from the rear of every owner's lot. An owner has begun making plans to convert the rear half of his lot to a garden. The plans would require the removal of park equipment. A neighbor objects to these plans. The neighbor should: A. do nothing since an individual landowner has no authority to enforce deed restrictions B. apply for a court injunction against the owner's plans C. Inform the owner that the playground is community property D. File a lis pendents as as soon as possible.

B

A landlord may legally refuse to rent to a prospective tenant if the tenant... A. based on national origin B. if tenant was previously convicted of selling drugs C. if tenant is of foreign decent D. if tenant has more than 4 children

B

A major reason for buying and owning a condominium rather than a detached single family home is that A. a condominium requires no maintenance B. a condominium tends to be more affordable C. multiple units in one location D. easier to manage

B

A realty firm has just entered into an agreement to represent a home builder in the sale of a new subdivision. The firm has located several potential buyers and five homes have been sold to purchasers that the firm's agents have contacted. The realty firm has an agency relationship with.. A. the buyers B. the builder C. the builder's sales manager D. none of the above

B

A salesperson lists a property with a contract that allows for subagency and dual agency. The salesperson is ... A. an independent contract to the broker and an agent to the principal B. an agent to the broker and a subagent to the principal C. an special agent to principal and employee of broker D. a subagent to the broker and a special agent to principal

B

A seller is selling his only house. He will neither advertise the property, nor us a broker's services. Can the seller legally refuse to sell the property to a member of a racial minority? A. Yes, because the seller has not used the services of a real estate broker. B. Yes, because the seller has not used racially discriminatory advertising or a broker's services. C. No, because such discriminatory action is prohibited D. No, because the seller owns fewer than three houses.

B

A seller tells the sales agent that her home was treated for termites 10 years ago so there are no termites now. The agent should... A. disregard the information as irrelevant now B. encourage seller to disclose that information on the seller's disclosure form C. tell the seller not to worry about disclosing it since it happened 10 years ago D. None of the above.

B

A two year tenant of a SF home has decided to purchase his own home. During his time as a tenant he has maintained the property well inside and out as well as adding some improvements, making repairs and installing custom blinds and replacing some light fixtures. He kept all the original fixtures. Can he remove the new fixtures for the original ones prior to his move? A. No, according to accession, all fixtures and improvements become part of the property. B. Yes, unless the lease stipulates that all fixtures and improvements must remain on premises. C. Yes, common law dictates that property must be reverted back to landlord in same condition less wear and tear. D. Yes, unless landlord is willing to provide compensation for those fixtures and improvements made.

B

A veteran has paid in full her VA guaranteed mortgage initiated in 1976 and has sold the originally mortgaged property. The veteran now holds no interest in any real property, mortgaged or unmortgaged. Can the veteran obtain another VA-guaranteed mortgage at this time? A. Yes, because a veteran can receive only two VA guaranteed mortgages in her lifetime, receiving the second one only after the first one has been paid in full. B. Yes, because a veteran's entitlement is fully restored if that veteran has paid off all prior VA mortgages. C. No, because a veteran can use her VA entitlement only once, regardless of whether the veteran ever amortizes that mortgage loan. D. No, because a veteran can use her VA entitlement only once, regardless of whether the veteran ever sells the mortgaged property.

B

According to the Truth in Lending Act, if any trigger terms are used in an ad. All of the following disclosures must appear in the add EXCEPT A. number, amount and frequency of payments B. prepayment penalties and rebates C. the amount and percentage of downpayment D. annual percentage rate

B

After a purchase contract has been drawn up, buyer requests some additional provisions listing items of personal property to be included in the sale and seller agrees to them. The title agency must ... A. Include an Amendment B. Attach an Addendum C. Rewrite an entirely new contract D. None of the above

B

An adjustable rate loan should include all of the following elements EXCEPT A. Index B. negative amortization C. caps D. margins

B

In the assessment of property taxes, a mill is equal to what amount? A. $0.00001 B. $0.001 C. $0.01 D. $0.10

B

Kim Grant purchased property under the name Kim Howe. Later, Grant using the name Howe, sold the property to Lange. Does Lange hold legal title to the property? A. Yes, because Grant conveyed to Lang an equitable interest in the property B. Yes, because Grant's use of an assumed name did not invalidate the deed C. No, because Grant's use of an assumed name invalidated the deed D. No, because Grant should have used both the names Grant and Howe in the deed to convey title.

B

Mr. Jones owns a rental property with a long term tenant. He has provided the tenant with an option agreement offering the sale of the property for $125,000 if he purchases by December 31, 2015. An option contract is considered... A. A bilateral agreement holding both parties to a promise within a specific time frame. B. A unilateral agreement holding only one party to a promise within a specific time. C. A binding agreement once it has been delivered to the tenant. D. None of the above.

B

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counter offer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they like better and made an offer on it, which was accepted. Which of the following is TRUE? A. Only first offer of acceptance is valid B. Both contracts are valid C. Both contracts invalidate each other D. First contract is terminated

B

Seller and buyer have entered into a purchase agreement with a closing date of 30 days. Seller remodeled home shortly before listing it. During that time an inspection was conducted and although there were no visible signs in the walls, there was some evidence of water damage and moisture along the foundation. Buyer referred to the seller's disclosure which stated house was NOT located in a flood zone, nor was there any flood damage reported. When buyer called for a property insurance estimate, he was informed that the location was in fact considered a flood plain. What recourse does the buyer have? A. Buyer can request an amendment but is still obligated to perform purchase under the law. B. Buyer can rescind the contract based on the facts. C. Buyer can do nothing and let the 30 days expire. D. None of the above.

B

The Department of Housing and Urban Development (HUD) estimates that most private homes built before 1978 contain potentially dangerous levels of lead. Because of this, some federal agencies, such as FHA, A. require the seller to disclose all B. require the buyer to acknowledge disclosure of the presence of any known lead paint. C. requires the agent/broker to disclose all lead paint D. none of the above

B

The buyer wants to make the purchase offer contingent on a complete mortgage arrangement. The buyer's agent who is drawing up the contract should A. ask buyer to clarify mortgage arrangement B. suggest the buyer ask an attorney to furnish wording C. ask broker to provide the wording D. work with buyer to type up language

B

The day after a broker's listing on a house expired, it was listed with another broker and offered in the MLS. Several days later, a third licensee called the first broker and asked for the key to show the home. The broker should A. give caller the key lock number B. inform caller that he/she is no longer the listing agent C. refer caller to one of his sales agents D. None of the above

B

The real estate contract for a specific property for use an an unlicensed whiskey sales operation was forced to terminate. The termination was the result of ... A. breach of contract B. impossibility of performance C. liquore licensing requirements D. zoning violations

B

Timeshare ownership programs MOST often use which of the following ownership forms? A. Cooperative ownership B. Tenancy in Common C. Tenancy by Entireties D. None of the above

B

Which of the following best represents the economic characteristic of land known as scarcity? A. Land available for sale or development is currently rare B. The amount of land that is available in a specific area is fixed C. The supply of land has a direct effect on the price it commands on the market D. The majority of land in the U.S. is owned by private enterprises as business assets.

B

Which of the following is NOT directly or indirectly involved as a loan package purchaser in the secondary mortgage market? A. Government National Mortgage Association B. Federal Housing Administration C. Federal National Mortgage Association D. Federal Home Loan Mortgage Corporation

B

Which of the following is NOT usually pro-rated at closing? A. transfer home owners insurance B. special tax assessments C. mortgage principal D. none of the above

B

Which of the following statements about discount points is FALSE A. They are a function of the marketplace B. They are computed as a percentage of the selling price C. They represent pre-paid interest on a mortgage loan D. They can be tax deductible

B

Which of the following subdivision restrictions imposed by a developer would *add directly to the cost* of building a house in that subdivision? A. requirements for membership in the development association B. restrictions concerning the minimum living area of the house C. rules against locating outbuildings in certain areas D. prohibitions against signs and parking on roadways

B

Why was Jones vs Mayer decision of 1968, important? A. addresses the issue of discrimination based on religion B. removes all exceptions to racial discrimination in housing C. prevents discrimination based on nationality D. addresses the issue of reverse discrimination in housing

B

The assessment rate in Nevada is: A) 25% B) 35% C) 45% D) 50%

B) 35%

The purpose of recording a deed is to: A) Obtain title to the property B) Give constructive notice, to the world, of the grantee's interest in the property C) Give constructive notice, to the residents of the county in which the property is located. D) Provide jobs for people who work at the recorder's office.

B) Give constructive notice, to the world, of the grantee's interest in the property

A man has defaulted in the payment of several of his debts, and the court has ordered his property be sold to satisfy them. A title search revealed several outstanding liens against the property. Which of the following liens has highest priority? A) Outstanding first mortgage lien dated and recorded one year ago B) Real estate tax lien for the current year C) Judgment lien rendered and recorded last month D) Mechanic's lien for work started two months before the mortgage was recorded

B) Real estate tax lien for the current yea

Which of the following is true about a state with a Torrens property registration system? A) Registering the deed in a Torrens system has exactly the same effect as recording B) Registering the deed is necessary to transfer title. C) Nevada uses a Torrens system D) The Torrens system is actually a method of describing property.

B) Registering the deed is necessary to transfer title.

What action returns a contract's parties to their positions before the contract, including return of any deposit? A) Cancellation B) Rescission C) Substitution D) Subordination

B) Rescission

Sponge Bob bought some property from Gary but Sponge Bob did not record the deed. Which of the following statements is TRUE A) Sponge Bob does not own the property because recording is necessary. B) Sponge Bob owns the property. C) Gary owns the property until Sponge Bob records his deed. D) Sponge Bob has equitable title to the property but will not have legal title until he records his deed

B) Sponge Bob owns the property.

The priority of liens is usually determined by A) The date the lien was created B) The date the lien was recorded C) The amount of the lien D) The type of lien

B) The date the lien was recorded

General real estate taxes are also known as A) special assessments. B) ad valorem taxes. C) appropriation funds. D) general, voluntary liens.

B) ad valorem taxes.

The amount of earnest money deposit is determined by A) real estate licensing statutes. B) agreement between the parties. C) the listing broker's office policy on such matters. D) meeting the acceptable minimum of 5 percent of the purchase price

B) agreement between the parties.

The broker receives an earnest money deposit with a written offer to purchase that includes a ten-day acceptance clause. On the fifth day, before the offer is accepted, the buyer notifies the broker that she is withdrawing the offer and demands the return of her earnest money deposit. In this situation, the A) buyer cannot withdraw the offer because it must be held open for the full ten days. B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money. C) seller and the broker have the right to each retain one-half of the deposit. D) broker declares the deposit forfeited and retains it for his services.

B) buyer has the right to revoke the offer at any time until it is accepted and recover the earnest money.

A buyer took delivery of the deed to his new house but neither recorded the deed nor took possession of the property. Under these circumstances, the A) transfer of the property from the seller is ineffective. B) buyer's interest is not fully protected against third parties. C) deed is invalid after 90 days. D) deed in invalid after six months.

B) buyer's interest is not fully protected against third parties.

All of the houses in Don Quixote Estates have been using septic tank systems but now must hook into the public sewage system. It will cost approximately $5,000 per hour for the hook up. The county will probably recover this cost by A) raising taxes on the houses in Don Quixote Estates B) charging a special assessment C) using an equalization factor D) holding several bake sales

B) charging a special assessment

All of the following are generally exempt from paying real estate taxes EXCEPT A) cities. B) for-profit assisted living facilities. C) hospitals. D) schools.

B) for-profit assisted living facilities.

The recordation of a warranty deed A) gives actual notice of the grantee's rights. B) gives constructive notice of an individual's interest. C) prevents claims of parties in possession. D) provides defense against adverse possession.

B) gives constructive notice of an individual's interest.

When properly recorded in the county where the real estate of the defendant is located, a judgment becomes a(n) A) voluntary lien. B) involuntary lien. C) specific lien. D) statutory lien.

B) involuntary lien.

A specified sum of money that serves to compensate a seller in the event of a buyer default is known as A) actual damages. B) liquidated damages. C) escrow funds. D) earnest money.

B) liquidated damages.

A void contract is one that was A) not in writing. B) never legally enforceable. C) rescindable by agreement. D) voidable by only one of the parties.

B) never legally enforceable.

A broker took a listing and later discovered that the client had been declared legally incompetent before signing the listing. The listing is now A) binding because the broker was acting as the owner's agent in good faith. B) of no value to the broker because it is void. C) the basis for the recovery of a commission if the broker produces a buyer. D) renegotiable.

B) of no value to the broker because it is void.

The type of title insurance that will protect the owner and heirs is called a(n) A) lender's policy. B) owner's policy. C) leasehold policy. D) certificate of sale policy.

B) owner's policy.

The essential elements of a contract include all of the following EXCEPT A) offer and acceptance. B) signatures of the parties. C) competent parties. D) consideration.

B) signatures of the parties.

Priority of mechanics' liens is based on A) federal law. B) state law. C) common law. D) case law.

B) state law.

The BEST reason for a buyer to obtain title insurance is A) that the mortgage lender requires it. B) to ensure that the seller can deliver marketable title. C) to ensure that the abstractor has prepared a complete summary of title. D) to pay future liens that may be filed.

B) to ensure that the seller can deliver marketable title.

At the time a buyer was negotiating the purchase of a lot on which to build a new home, the seller represented that the soil was firm enough to support the construction of a building when, in fact, he knew it was not. This contract is A) void. B) voidable by the buyer because of fraud. C) voidable by the seller because of the mistake. D) voidable by neither party because no harm was done yet.

B) voidable by the buyer because of fraud.

the fewest number of general partners that could exit in a limited partnership would be: A. 0 B. 1 C. 2 D. Unlimited

B. 1

Each commissioner serves a: A. 3 year staggered term B. 4 year staggered term C. some serve 3 year and others 5 years as specified D. 2 year term

B. 4 year staggered term

Water rights can only be lost through abandonment if they are abandoned for the statutory period of time. In Utah that length of time is: A. 3 Years B. 7 Years C. 10 Years D. 20 Years

B. 7 Years

Which of the following is an economic rather than a physical characteristic of real property? A. indestructibility B. Area Preferences- Situs C. Immobility D. Monhomogeneity

B. Area preferences _Situs

a non-resident broker must: A. maintain an office in Utah B. Be subject to prosecution in the Utah courts C. Hold a Utah sales person's license D. Pay for the annual non-resident permit.

B. Be subject to prosecution in the Utah courts.

In Utah under prior appropriation, the most basic element used to determine who gets what water is: A. Ownership of real property B. beneficial use C. Tides D. Riparian Rights

B. Beneficial Use

the major difference between Eminent domain and Police Power is: A. right of legal encroachments B. Compensation C. level of government authority involved D. eminent domain is only exercised at the state level of government

B. Compensation

which of the following would represent a "less than freehold interest"? A. Condominium B. Cooperative C. Home in a Planned Unit Development PUD D. Home in a Planned Urban Development

B. Cooperative

which of the following describes the Real Estate Commission? A. Five members, one of whom is the director B. Five members, one of whom is the chairman C. Five members plus a chairman D. Five members, plus a director

B. Five members, one of whom is the chairman

In Utah, a principal broker CANNOT do which of the following? A. Manage a property management office and a real estate office at the same time B. Manage a branch Office. C. open a property management trust account D. Keep his books available for inspection by the Real Estate Division during normal business hours

B. Manage a branch office

The land description method of using monuments and measurements to establish boundaries is called: A. townships and sections B. Metes and bounds C. Rectangular Survey D. Meridian measurement

B. Metes and Bounds

which of the following is NOT TRUE concerning condominiums as given in the condominium ownership act? A. Each unit is subject to as valorem (property) taxes to be paid by the individual owner B. property taxes of individually owned units and the common areas are paid from the fee collected by the HOA C. The HOA has the right to utilize any normal means to collect delinquent fees including foreclosure D. A lien placed to collect unpaid fees would not take precedence over existing mortgages

B. Property taxes of individually owned units and the common areas are paid from the fee collected by the HOA

A principal broker must give which of the following types of supervision to associate brokers and sales agents in his/her company A. strict supervision B. reasonable and active supervision C. no supervision required D. Occasional Supervision

B. Reasonable an dActive supervision

Which of the following best describes the covenant of Quiet Enjoyment? A. The grantor is the owner and has the right to convey title. B. the grantee will not be disturbed by someone else claiming an interest in the property C. the grantor guarantees the title has no easements, restrictions or liens other than those specified before the sale D. the grantor will bear the expense of defending the grantee's title if other person or persons make a claim against the property

B. The grantee will not be disturbed by someone else claiming an interest in the property

Which of the following best explains the difference between trade fixtures and fixtures? A. trade fixtures require installation, and fixtures do not. B. trade fixtures are transferred by Bill of Sale, fixtures transfer with the Deed. C. Trade fixtures always belong to the owner of the property, fixtures do not D. trade fixtures are considered amenities, fixtures are not

B. Trade fixtures are transferred by Bill of Sale, Fixtures transfer with the deed

when a garage is built by a few inches onto a neighbor's property, it is: A. an easement B. an encroachment C. a violation of deed restriction D. a pumpkin temporarily adapted for going to balls but good only until midnight

B. an encroachment

when one person owns a property as sole owner, it is legally known as: A. an estate in trust B. an estate in severalty C. a life estate D. tenancy by entirety

B. an estate in severalty

if a secretary is assisting her broker at an open house which of the following is true? A. she can fully represent him in any way B. she can only act as a secretary--not quoting prices C. she can show the house and answer questions about prices terms, etc. but not fill out legal forms D. the secretary can not legally be at the open house

B. she can act only as a secretary--not quoting prices

TRUSTEE'S DEED

BANKRUPTCY - TRUSTEE Sale Court Supervised Disposition of Property ALL COVENANTS / NO WARRANTIES

All of the following are necessary to obtain a real estate

Be 18 years old or older; Submit fingerprints to TREC; Comply with legal residency requirements

Unlicensed assistants may:

Be a transaction coordinator

The rule regarding square footage requires a buyer's broker to

Be responsible for indications of obvious mis- measurement

A purchaser of property seaward of the Gulf Intracoastal Waterway must be given a disclosure notice that

Beach erosion and movement of the vegetation line could cause an owner to lose the property

D. City's economic base

Because a city's output capacities change slowly over time, it is important to understand the supply side (long-run) factors affecting urban growth. Which of the following would NOT be considered a supply-side factor that impacts a city's economic growth?

LIfe tenant= exclusive right of possession of property

Because a life tenant has a freehold estate, he has an exclusive right of possession in the property. Unless there exists a deed restriction to the contrary, he may rent or lease the property, use the property to earn profits, or encumber the property, such as by using it as security for a loan. He can even sell his life interest in the property. If he does, the buyer's interest will be a life estate for the same life as the seller's life estate was. For Example - Merle, who had a fee simple estate, sold it to Art but kept a life estate in the property based upon his own life, and remained in possession. Merle then sold his interest to Gwen and gave her possession. When Art heard of the sale, he demanded possession of the property. But he is not entitled to possession. Gwen may possess the property until Merle dies, since Gwen has a life estate for the life of Merle. Why might a person buy a life estate, give a loan secured by a life estate, or lease property from a life tenant? A person who wants the use of the property for an indefinite period could buy or lease the property for less than it would cost if the owner had a fee estate. In addition, he could obtain life insurance on the life measuring the life estate so that he could get his money back when the estate was over. A lender whose loan was secured by the estate could have the borrower purchase life insurance that would pay off the loan upon termination of the life estate. There are a number of limitations on the bundle of rights held by a life tenant, which exist in order to protect the rights of the person who will acquire the title when the life estate is terminated. The person holding a life estate for his life could not devise (will) the estate. The only time a life tenant could devise his interest would be when he holds the estate for the lifetime of another person and he dies before that person does. Even this is a limited action, as the devisees would hold the estate only until it was terminated. A life estate holder cannot make any changes or alterations in the property that could create waste or damage to the property. In fact, he is responsible for maintaining the property and paying all taxes and assessments on the property. Finally, he can convey only those rights he has. If he sells, mortgages, or leases the property, the transaction is effective only to the end of the term of the life estate, and the sale, mortgage or lease would terminate automatically upon termination of the life estate. For Example - Willow, a life tenant, could sell her estate to Laurel. However, when Willow dies, Laurel will lose her interest in the property, since it exists only so long as Willow is alive. Willow, who has a life estate, can lease her property to Aspen for five years. If Willow were to die prior to the expiration of the five-year lease, upon her death the lease would be invalid, because Willow only had a life estate in the property. The lease would be valid only so long as Willow was alive. A person may determine the estate an owner has, so he does not unknowingly buy a life estate, by reviewing the owner's deed or by having the owner provide: a title report that will show the estate he has. a title insurance policy that will guarantee the accuracy of the title report. A life estate may be created by deed or will. The deed or will would establish what would happen upon termination of the life estate. There are two possibilities. One possibility is that title will revert (go back) to the grantor who created the life estate in the deed, or to his heirs, or to the heirs of the devisor who created the life estate in a will. Title will revert if the deed or will states that the title will revert, or if nothing is mentioned. When nothing is stated, the implication is that the title will revert. For Example - A deed from Angio Gramm states, "to Polly Gramm for her life." This implies that the title will revert to the Angio, the grantor, upon Polly's death. During the entire period of the life estate, Angio has an interest in the property known as reversion or as an estate in reversion.

C. Escrow clause

Because the mortgage conveys a complex claim for a long period of time, clauses are included in anticipation of possible future complications. Which of the following clauses requires a borrower to make monthly deposits into an account in order to pay obligations such as property taxes, community association fees, or causality insurance premiums?

When should a licensee advise a party to a contract to consult an attorney?

Before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement

In a Deed of Trust the lender is called:

Beneficiary.

A sales licensee is going door to door to secure residential listings. His marketing strategy includes a suggestion that an impending change in the racial composition of the neighborhood will result in a drop in values and therefore owners should list and sell now. This is an example of:

Blockbusting

PROMISORY NOTE

Borrower's Personal Promise to Repay a Debt According to Agreed-on Terms. The MORTGAGOR Executes Promissory Notes to Total the Amount of the Debt.

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE

Both contracts are valid

Prospective buyers made an offer on a property. The seller did NOT accept, but made a counteroffer. The prospective buyers signed the counteroffer and the real estate agent delivered their acceptance to the seller. In the interim, the same buyers had found another house that they liked better and made an offer on it, which was accepted. Which of the following is TRUE?

Both contracts are valid

A mortgage broker generally offers which of the following services?

Bringing the borrower and lender together

Listings are the property of the:

Broker

The borrower's monthly payment includes principal and interest plus one-twelfth of the annual property tax assessment and one-twelfth of the annual insurance premium. This is a:

Budget.

Building ordinances

Building ordinances, also called building codes, are a set of standards established and enforced by local government that specify the minimum standards for construction. The main purpose of building codes are to protect public health, safety and general welfare as they relate to the construction and occupancy of buildings and structures.

Who usually pays loan closing fee?

Buyer

Which of the following is Not a consideration in the definition of market value

Buyer and seller must agree to appraised value

Which would not be a major difference between a co-op and a condo?

Buyer is not concerned with the operating budget

All of the following apply to a single party listing except

Buyer is required to pay the commission in the event of a sale

According to the contract to buy and sell section dealing with association governing documents

Buyer may terminate by written notice

If a buyer is assuming a loan and the loan balance turns out to be less than the assumption balance provided by the seller the residential contract to buy and sell provides that:

Buyer may terminate the contract by written notice if the difference causes the buyers cash at closing to increase by a stated amount

Federal law provides that, when selling a home built before 1978

Buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home"

When a valid purchase contract is signed by the seller and the buyer

Buyer receives equitable title

Earnest money is first applied to the

Buyer's Down Payment

A buyer took delivery of the deed to his new house but forgot to record the deed. Under these circumstances the:

Buyers interest is not fully protected against third parties

PUBLIC REPORT

By Law, This Document Must be Provided Prior to Purchase Contract Signature. The Public Report Discloses the Following: 1) Title Condition 2) Flooding and Drainage Disclosure 3) Description of Adjacent Land and Uses 4) Utility Providers 5) Common Community and Recreation Facilities 6) Assurances for Completion of Improvements 7) Local Services Including Schools, Shopping, Transportation, Fire and Police, Garbage Services 8) Taxes and Assessments 9) Property Owners Association "HOA" Details It DOES NOT Provide - MARKET VALUE

TREC promulgated contracts allow the buyer to have the property inspected

By inspectors licensed by TREC or otherwise permitted by law

A broker provides financing for a project to build condominiums with the stipulation that he has exclusive rights to sell the completed condos. Which of the following best describes this relationship? A. general agency B. exclusive agency C. an agency coupled with an interest D. None of the above.

C

A commercial property lost value because a recently constructed highway moved traffic away from the property. This is an example of ... A. physical deterioration B. functional obsolescence C. economic obsolescence D. construction disfunctionality

C

A couple leased a waterfront bungalow. The lease began on June 15, 1994, and continued through July 31, 1994. The couple had... A. a tenancy at will B. a tenancy by the entireties C. an estate for years D. a holdover tenancy

C

A homeowner is willing to let a neighbor park an RV in his backyard. He does NOT want to make the permission permanent in case he dislikes others who might move next door in the future. What should he give his neighbor? A. promissory note B. lease C. a license D. an easement

C

A mortgage company makes a number of loans to be assembled into one package and sold to permanent investors. This process is an example of interim financing to the mortgage company and is called A. blanket financing B. package financing C. warehousing D. discounting

C

A property has a deed restriction forbidding use of the property for commercial purposes. The zoning ordinance for the area would permit a business on the property. Can a business be operated on the property? A. Yes, because deed restrictions can only apply to the type of building or construction and not for its use. B. Yes, because zoning ordinances take precedence over the deed restriction since it's less restrictive. C. No, because the deed restriction takes precedence over the zoning ordinances since it's more restrictive. D. No, private deed restrictions always take priority over public zoning ordinances.

C

A prospective buyer made an offer to purchase a property. The owner responded with a counteroffer. While the buyer was reviewing the counteroffer, the owner received a better offer from another buyer. The owner can accept the second offer ... A. only if the first offer is rejected B. can only accept second offer as a back-up offer at this point C. only if seller withdraws the counter offer BEFORE it's accepted D. cannot accept the second offer unless buyer pulls out

C

A prospective buyer submits an offer to purchase a property for $83,500. The seller signs the offer, changes the price to the original listing price of $83,750, and initials that change. When the original offer has again been delivered to the buyer, it A. has been legally accepted B. Is a bilateral contract C. has been terminated D. is executable

C

A seller is planning to travel for three months; but also wants to sell a rental property. In giving her real estate broker a written power of attorney to sell only this property, the seller would be establishing which kind of agency? A. dual B. universal C. special D. general

C

An offer is "silent" when... A. An expiration date has been reached B. A rejection of offer C. No expiration date is provided D. No response to offer is made

C

Anti-trust laws prohibit competing brokers from all of the following EXCEPT... A. conspiracy to fix prices B. conspiracy to boycott C. receiving compensation from buyer & sellers D. imbalanced commission splits

C

Buyer's made an offer to purchase a 3BD/2BA home. Seller's countered the offer. During that time, buyer's were still looking around and found another property they preferred and made an offer on that property which was accepted by the seller. Which contract will stand as valid? A. The first offer because the sellers responded with a counter offer to the buyer's during that time B. The first offer because once buyer submits an offer he/she has to follow through and reply to the counteroffer C. The second offer because the buyer/seller agreed on a purchase price making the offer legally binding. Buyer is not obligated to reply to any counter offer. D. An offer remains open until it is revoked by the offeror or accepted by the offeree.

C

Earnest money should be deposited into a trust account A. after closing B. after offer is accepted C. in a timely manner according to state laws D. none of the above

C

Joe has entered into a written contract with his bookie to pay off his gambling debts in monthly installments. The written contract stipulates monthly payments plus interest over the course of six months. Should Joe break the contract, what recourse is available to the bookie. A. The bookie can place a lien on Joe's assets equal to the outstanding amount. B. Since its a written contract signed by both parties of legal consent and capacity, the bookie could enforce the contract legally. C. The contract is legally unenforceable. D. Break both of Joe's legs.

C

Real property can be converted to personal property by A. acquisition B. accession C. severance D. execution

C

Statute of Limitations is a law enacted by a legislature, establishing maximum time periods during which certain actions can be brought or rights enforced. In Michigan, this time period is often limited to... A. 3 yrs B. 5 yrs C. 6 yrs D. 7 yrs

C

The FHA functions MOST like A. regulatory authority B. supervisory organization C. an insurance company D. oversight committee

C

The document used in a real estate sale that establishes the legal rights of the buyer and seller is the A. lease agreement B. buyer's agreement C. purchase contract D. none of the above

C

The economic characteristics of land are: A. transferability, scarcity, location B. location, transferability, utility C. scarcity, location, durability D. none of the above

C

The escrow officer or closing agent must give information regarding the sales price and seller's social security number to A. title agency at closing B. broker prior to closing C. the IRS D. none of the above

C

The following elements must be present to create a valid and enforceable contract... A. Offer and acceptance B. Acceptance and consideration C. Offer, acceptance and consideration D. Acceptance and consideration

C

The land description TN3, R4W Principal Meridian refers to what method of property description? A. Lot and block B. Legal description C. Rectangular survey D. Monument survey

C

The owner of a 10 unit apartment building has received complaints regarding one particular tenant. The complaints are of the smell of marijuana from tenants above and below as well as smell in the corridor. It seems the tenant is elderly and suffering from constant pain and has been approved for the use of medical marijuana. Tenant has admitted to the management company that he is using this drug to help him cope with the pain. What options does the landlord have? A. None. Because tenant has a medical Rx and is using it solely for that purpose, he has every right to continue. B. Landlord must tell other tenants to put up and shut up. C. Landlord can evict tenant for using medical marijuana based on the fact that it is an imposition to other tenants in the immediate area. D. So long as tenant continues to pay rent and oblige by the lease, landlord has to wait until lease expires and then may choose not to renew.

C

The owner of an apartment building has just signed a management contract with a real estate firm. In this situation, has an agency been formed? A. No, because an agency formed only with a listing agreement between a seller and a real estate broker. B. No, because an agency with a broker is formed only in situations of buying and selling, not managing real estate. C. Yes, because an agency is formed when one party delegates to another the right to act on his behalf in certain business transactions. D. Yes, because the agreement between an property owner and a manager creates a universal agency.

C

The role of real estate brokers and salespersons includes one of the following... A. Draft contracts B. Provide legal advice regarding contracts C. Act as scriveners D. Act as appraisers

C

The terms "attoral", "riparian" and "appropriative" refer to A. air rights B. land rights C. water rights D. mineral rights

C

Which of the following events would automatically cancel a listing agreement? A. Listing agent moves to another broker B. Listing agent dies C. Seller dies. D. Seller moves out of state.

C

Which of the following should be most important to apartment building owners who are considering extensive modernization plans for older buildings? A. design of improvements B. rate of depreciation on current tax return C. effect of improvements on net income D. potential increase in real property taxes

C

Which of the following statements about options is FALSE? A. the option's fulfillment can be made conditional upon chafes in zoning. B. the option must be in writing to be enforceable. C. The option may be revoked by the optionor. D. The optionee is not usually obligated to purchase or lease the property.

C

Which of the following terms on a mortgage loan of $60,o00 would reduce the principal balance due by the largest amount each month? A. 10% amortized over a period of 30 years B. 11% amortized over a period of 20 years C. 13% amortized over a period of 15 years D. 14% amortized over a period of 20 years

C

While a licensee is showing an apartment to a prospective tenant, the licensee tells the prospective tenant that the property being shown has "the best view in the city." Could the prospect ever use that statement as the basis for a legal complaint? A. Yes, because it would be considered a misrepresentation B. Yes, because it is illegal for a licensee to make nonfactual, extravagant statements, or any statements that cannot be proven C. No, because such a statement is nonfactual and merely an opinion D. No, because as long as prospect has seen a property, there are no ground for any later complaint.

C

What is the difference between a general lien and a specific lien? A) A general lien cannot be enforced in court, while a specific lien can be enforced. B) A specific lien is held by one person, while a general lien is held by at least two persons. C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property. D) A specific lien covers real estate, while a general lien covers personal property.

C) A general lien affects all of a debtor's property, while a specific lien affects only a certain piece of property.

Which of the following is a type of unilateral contract sometimes used in large real estate transactions? A) Purchase contract B) A reward contract C) An option to purchase contract D) Any contract between a single buyer and a single seller.

C) An option to purchase contract

The buyer agreed to purchase certain property, if he could first sell some property he already owned. This is known as a(n) A) Covenant B) Illusory promise C) Contingency D) Void contract

C) Contingency

Which of the following BEST describes a voidable contract? A) Contract that has no legal effect and never had any B) Oral contract with no witnesses to the agreement C) Contract that may be either enforced or declared void by one of the parties D) Contract that has been accepted but the acceptance has not been communicated to the offeror

C) Contract that may be either enforced or declared void by one of the parties

Which of the following gives the BEST evidence of the buyer's intention to carry out the terms of the real estate purchase contract? A) "Subject to" clause B) Agreement to seek mortgage financing C) Earnest money deposit D) Provision that "time is of the essence"

C) Earnest money deposit

A mechanics lien would be properly classified as A) Voluntary, statutory, general B) Involuntary, statutory, general C) Involuntary, statutory, specific D) Voluntary, statutory, specific

C) Involuntary, statutory, specific

Under which of the following types of liens can both the real property and the personal property of the debtor be sold to pay the debt? A) Real estate tax lien B) Mechanic's lien C) Judgment lien D) Assessment lien

C) Judgment lien

Tonya made an offer buy Emily's house for $200,000. Emily said no, but offered to sell the house for $210,000. Tonya said no thank you. Emily then told Tonya she would accept her original offer for $200,000. All communications took place in writing and neither of them has had an appraisal conducted. Do Tonya and Emily have a contract? A) Yes, Emily accepted Tonya's offer for $200,000. B) Yes, both parties have clearly expressed a willingness to buy and sell for $200,000. C) No, there is no accepted offer. D) No, without an appraisal it cannot be determined if the price is fair.

C) No, there is no accepted offer.

The mortgagee received a title insurance policy on the property a buyer is pledging as security for the mortgage loan. Which of the following is TRUE? A) The policy is issued for the benefit of the buyer. B) The policy guarantees that the buyer's equity will be protected. C) The amount of coverage is commensurate with the loan amount. D) The amount of coverage increases as the borrower's equity increases.

C) The amount of coverage is commensurate with the loan amount.

An option A) requires the optionee to complete the purchase. B) gives the optionee an easement on the property. C) binds the optionor for a specified time. D) makes the seller liable for a commission.

C) binds the optionor for a specified time.

All of the following would be considered evidence of marketable title EXCEPT a(n) A) abstract of title with a legal opinion. B) title commitment or title insurance policy. C) certificate of title by a real estate broker. D) certificate of title by a real estate attorney.

C) certificate of title by a real estate broker.

All of the following are true regarding public records EXCEPT they A) give notice of encumbrances. B) establish priority of liens. C) guarantee marketable title. D) provide constructive notice about interests in the property.

C) guarantee marketable title.

After real estate has been sold by the state or county to satisfy a delinquent tax lien, the defaulted owner usually has a right to A) have the sale canceled by paying the back taxes and penalties. B) pay his or her creditors directly and have their liens removed. C) redeem the property within the time specified by law. D) record a notice of nonresponsibility for the unpaid taxes.

C) redeem the property within the time specified by law.

A property owner contracted to have a swimming pool installed on her property. When the pool was completed, she refused to pay for the improvement, and the contractor filed a lien for nonpayment. This lien was most likely a A) general lien. B) special lien. C) specific lien. D) voluntary lien.

C) specific lien.

If a buyer defaulted some time ago on a written contract to purchase a seller's real estate, the seller can still sue for damages if he is not prohibited from doing so by the A) statute of frauds. B) law of agency. C) statute of limitations. D) broker-attorney accord.

C) statute of limitations.

To assign a contract for the sale of real estate means to A) record the contract with the county recorder's office. B) permit another broker to act as agent for the principal. C) transfer one's rights under the contract. D) allow the seller and the buyer to exchange positions.

C) transfer one's rights under the contract.

the definition of the term "real property" includes: A. Items of personal property included in the Real Estate Purchase Contract B. Emblements C. Airspace and subsurface rights D. Chattels

C. Air space and subsurface rights

Which of the following would be considered a duty of a property manager that would require him/her to have a real estate license? A. Be the bookkeeper B. Be the secretary C. Execute or negotiate lease or rental agreements D. Maintain the grounds

C. Execute or negotiate lease or rental agreements

Once a license has been revoked, the individual cannot reapply for a license for A. one year B. three years C. five years D. they can never hold a license again

C. Five yeara

which of the following is NOT part of the Bundle of Rights? A. use or control B. quiet enjoyment C. interest D. disposition

C. Interest

which of the following is NOT true about real estate branch office? A. It must have the same name as the real estate company B. It must have an associate broker as the manager C. It must have a separate real estate trust account D. Its agents can engage in any legal form of property management

C. It must have a separate real estate trust account

The rights of an owner along a coastline are called: A. Datum Rights B. Riparian Rights C. Littoral Rights D. Accessory Rights

C. Littoral Rights

by law, every principal broker's records are subject to examination by the: A. Real Estate Commission B. State Auditor C. Real Estate Division D. State Tax Commissioner's Office

C. Real Estate Division

for a deed to be valid, it must be: A. Dated B. Acknowledged C. Signed by the grantor D. Recorded

C. Signed by the grantor

In Utah to receive the right to use water, one must apply to the: A. Real Estate Division B. Office of Prior Appropriated Right (OPAR) C. State Engineer D. State Water Commission

C. State Engineer

what penalties can the Commission administer against a real estate licensee who violates its rules and regulations? A. Fines, imprisonment and revocation of license B. suspension, revocation of license only C. suspension revocation of license and fines D. suspension or revocation of license and imprisonment

C. Suspension, revocation of license and fines

Dick Richardson, a private individual, wants to enter into co-ownership with UGO corporation. By law, this arrangement would have to be: A. Joint Tenancy B. Severalty C. Tenancy in Common D. Tenancy by the entirety

C. Tenancy in Common

Alison held fee simple title to a vacant lot adjacent to a hospital. she was persuaded to make a gift of the lot to the hospital. she wanted to have some control over its use, so her attorney prepared her deed to vconvey ownership of the lot 'as long as it is used for hospital purposes' After conveyance of the gift the hospital would own: A. a fee simple estate B. a license C. A determinable fee estate D. A leasehold estate

C. a determinable fee estate

Which of the following persons would file a Quiet Title Action in order to obtain an official recorded title to a property? A. A subdivider B. A developer C. An adverse possessor D. A buyer in a transaction involving a life estate

C. an adverse possessor

Real Estate licenses expire: A. in even-numbered years on the licensee's birth date. B. in odd-numbered years on the licensee's birth date C. every two years from the month licensee obtained his license D. every two years on the licensee's birth date

C. every two years from the month licensee obtained his license

The lessor collects rent and pays all the operating expenses. This would be an example of: A. net lease B. percentage lease C. gross lease D. proprietary lease

C. gross lease

if a person wanted to build a small convenience store in a residentially zoned area and was granted a change in zoning classification for that specific property it is likely an example of: A. a variance B. an illegal non-conforming use C. spot zoning D. legal non-conforming use

C. spot zoning

which of these is the largest in area? A. The NE 1/4 of the SW 1/4 of a section B. The SE 1/4 of the SW 1/4 of a section C. the NE 1/4 of a section D. the NE 1/4 of the SW 1/4 of the NW 1/4 of a section

C. the NE 1/4 of a section

which of the following is NOT an EXCEPTION to the rule that a property manager must have a real estate license A. The manager is an on site manager B. the manager is employed by a licensed property management company, but does not negotiate or execute contracts C. the manager is hired as property manager for several employees D. the manager is hired by a single employer, but manages several large apartment projects

C. the manager is hired as property manager for several employees

When can a mechanics lien be recorded? A. before work begins B. as soon as work begins C. when work is complete and payment is not made D. one year following the completion of work

C. when work is complete and payment is not made

what is the complete definition of real property? A. land and the air above it B. land, the buildings thereon, and anything permanently affixed to the land and/or the buildings C. Land and its appurtenances, all the air space to infinity and everything below the surface to the earth's center D. Land and the mineral rights

C.Land and its appurtenances, all the air space to infinity and everything below the surface to the earth's center

EMINENT DOMAIN

CONDEMNATION. Government Acquisition of Private Property for Public Use. Fair and Just Compensation.

COVENANTS AND WARRANTIES

COVENANTS Are PROMISES WARRANTIES Are GUARANTEES

"Days" in all TREC contracts and forms refers to:

Calendar Days

A lease that will terminate within one year of its inception

Can be verbal

According to the Third Party Financing Addendum for Credit Approval of a VA loan, if the purchase price or cost exceeds the reasonable value of the property as determined by the Department of Veterans Affairs the Buyer:

Can negotiate with the seller to have the seller lower the sales price to an amount equal to the VA reasonable value; Can terminate the transaction without penalty; Can pay the excess amount in cash from a source which Buyer agrees to disclose to the VA

Damage or destruction of a property under contract prior to closing:

Can result in termination of the contract

A. Real Property

Capital markets can be divided into four main categories: private equity, public equity, private debt, and public debt. An example of a real estate asset that trades in the private equity market is:

Granting clause

Clause in the deed that conveys the rights and privileges of ownership

A party to a transaction who is represented by a broker is:

Client

The real estate agent works for or on behalf of a:

Client

Commission rates are set by?

Client and Broker

A broker is obligated to treat which of the following honestly?

Client, Customer, Seller

The Real Estate Commission may issue a temporary "hardship" license when the employing broker of a corporate brokerage is unable to continue in that role. This "hardship" license may be issued to:

Colorado licensee approved by the corporate board of directors.

A real estate agent generally gets paid:

Commission

The report used to give a seller or buyer an indication of market value is called:

Comparative Market Analysis

Which of the Canons of Professional Ethics and Conduct describes the obligation of a licensee to be knowledgeable as a real estate brokerage practitioner?

Competency

A. User Market

Competition in the ______________, where households and firms compete for the currently available supply of locations and space, determines the level of rental income for each submarket and property.

A landowner wishes to build a neighborhood grocery store on a busy street in an area zoned for residential use. Which of the following would MOST likely be used to obtain permission for this store?

Conditional use permit or zoning variance

D. Quitclaim deed

Considered a "questionable conveyance of title" by most courts, which of the following types of deeds is worded to imply no claim of title, but rather only convey what interest the grantor actually has? (Hint: This type of deed may be used by a developer to convey certain lands of a subdivision to the local government through dedication.)

Area preference

Considered to have the greatest impact on value of a property

RESPA is enforced by:

Consumer Financial Protection Bureau (CFPB)

C. Contract with contingencies

Contracts for sale may contain sections that cause implementation of the contract to depend on the successful completion of some prior action such as the buyer's ability to obtain financing on specified terms. This type of contract is commonly referred to as a:

A broker has placed client funds in his trust account. He has also placed $1,000 of his operating funds in the account. He has used money from the trust account to pay his monthly rent for his office of $1500. The broker while commingling is guilty of:

Conversion

The unauthorized spending of client funds is called

Conversion

By default, TREC Promulgated contract forms

Convey all of the mineral estate owned by the seller

In order to establish in court that you, an agent, are entitled to a commission, which of the following could you exclude?

Correct -> establishment of agency procurement of a ready, willing and able buyer existence of an Exclusive Right to Sell Listing contract either consummation of the sale or defeat of the sale by refusal or neglect of the seller Explanation Establishment of agency does not entitle you to a commission.

On a service property, (i.e. church, school), which approach to value is most reliable?

Cost approach

BARGAIN AND SALE DEEDS

Court Action CONVEYING DEEDS - INVOLUNTARY ALIENATION ALL THE COVENANTS NONE OF THE WARRANTIES 1) SHERIFF'S DEED - Foreclosure 2) TREASURER'S DEED - Tax 3) TRUSTEE'S DEED - Bankruptcy / Not Paying Mortgage 4) EXECUTOR'S DEED - Died / In Probate

PROBATE

Court Determines the VALIDITY of a WILL and WHO will Inherit the Deceased's Property and Assets

QUIET TITLE SUIT

Court Procedure to Correct or Cure a Defect or Cloud on the TITLE.

B. conforming conventional loans

Created by Congress to promote an active secondary market for home mortgages, Fannie Mae and Freddie Mac purchase loans that meet specific underwriting standards such as loan size, documentation, and payment to income ratio. The loans that Fannie Mae and Freddie Mac are eligible to purchase are referred to as:

equitable lien

Created when justice and fairness would require a court of equity to declare such a lien exists or when conduct of parties would imply that a lien was intended.

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing

Credit buyer $110,000; debit seller $110,000

The buyer is assuming a mortgage presently on the property in the amount of $110,000. What is the adjustment made at closing?

Credit buyer $110,000; debit seller $110,000.

A buyer is bringing $100,000 cash to closing to purchase a property. How will this be shown on the HUD-1?

Credit to the buyer and no entry to the seller

D. If a contract is contingent upon the buyer obtaining financing and the buyer is unable to do so.

Critical to any listing contract is the question of when the broker becomes entitled to a commission. Traditionally, the broker is still entitled to a commission in all of the following scenarios EXCEPT:

A Lutheran church owns a retirement home and restricts the rental of units to Lutherans of any age, sex, race, color or national origin. Is this policy a violation of federal fair housing laws? A. Yes, because all discrimination on the basis of religion is illegal B. Yes, because only owners of single family homes may discriminate on the basis religion C. No, because nonprofit organizations are not subject to federal housing provisions D. No, because religious organizations may limit occupancy of dwelling units they own to persons of the same religion

D

A couple signed a lease on an apartment for a period of one year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease terms? A. 30 day notice is required B. 3 month notice C. 10 day notice D. no notice is required

D

A landlord of a multi-unit residential apartment is told by a neighboring tenant that another tenant is using his unit as an illegal methamphetamine lab. All of the following statements are true EXCEPT. A. The lease must have a provision dealing with eviction under such circumstances. B. The landlord can bring a summary proceeding if the tenant fails to vacate within 24 hrs after being served a notice to quit. C. The tenant can be evicted, but only if he is the person directly responsible for manufacturing the illegal drugs. D. The landlord must first file a police report with the local authorities before evicting the tenant.

D

A lawsuit for inverse condemnation may be brought by A. a tenant B. an agent C. a mortgagor D. a homeowner

D

A metes and bounds description must contain which of the following? A. at least one artificial monument B. a baseline from which measurements are taken C. a lot and block number assigned to it in the county recorder's office D. a point from which the description begins and at which it ends

D

A property is considered "demised" when... A. A tenant wrecks the place before vacating the premises B. Property is listed as "blight" by township C. Property is in foreclosure D. Property is tenanted.

D

A prospective buyer makes an offer on a property that includes the following provision at the seller's request. "This offer will remain open and cannot be revoked for five days from the date of receipt by the seller." Three days later, the buyer sees a new listing that he finds more to his liking. The buyer immediately contacts the seller to withdraw his prior offer. Upon hearing from the buyer, the seller refuses to release him from the five day provision. Which of the following statements best describes the buyer's options? A. The buyer may not withdraw the offer because the seller has a binding promise to leave the offer open for five days. B. The buyer may not withdraw the offer according to the statue of frauds. C. The buyer may withdraw the offer due to the mandatory nine day cooling off period. D. The buyer may withdraw the offer since there was no consideration exchanged to bind him to the five day period.

D

A salesperson sold a property. In the sales contract, the buyer agreed to assume the obligation to pay the commission involved. From whom should the salesperson collect her commission? A. seller B. buyer C. seller and buyer, equally D. her broker

D

A signed written contract between an adult and a minor is considered... A. Valid and enforceable because it is in writing B. Unenforceable and has no legal effect. C. Void because one party is not of legal age D. Voidable because minor cannot be obligated to fulfill contract.

D

After an owner has accepted an offer, a licensee should tell a second offeror that A. there is a contract on the property and the second offer cannot be presented B. she will present the second offer and try to get the owner to cancel his existing contract C. she will present the second offer for consideration since the title has not yet been transferred D. the second offer can be presented as a back-up offer only

D

Alex, 14 and Kent, 17, inherited a piece of property. The next year, Kent deeded the whole property to Alex, who immediately put in on the market. An adult buyer made a written offer which was accepted by Alex. Which of the following is TRUE? A. The contract is void B. Alex had no right to sell C. Alex cannot accept the buyer's money D. The buyer cannot legally compel Alex to sell.

D

All EXCEPT which trigger terms in advertisement promoting closed-end credit for real estate will require disclosures in accordance with the Truth in Lending Act: A. the amount of any payment expressed as a percentage or dollar amount B. the number of payments C. total time required to pay D. annual percentage rate

D

All of the following activities could result in a salesperson's real estate license being suspended or revoked EXCEPT A. paying a portion of his commission to someone who provided a valuable lead, but who is not yet licensed B. being convicted of a felony C. not disclosing a dual agency to a principal D. declaring personal bankruptcy

D

All of the following are used to calculate the reproduction or replacement cost of a building EXCEPT A. cost approach B. square footage approach C. unit in place approach D. straight-line method

D

An owner builds a recreation room onto her house. Her neighbor feels the new addition will violate setback lines established in city building codes. Does the neighbor have the right to request an injunction to stop construction? A. No, an injunction may be obtained only by the city planning and zoning commission. B. No, the neighbor forfeited this right when the owner began construction. C. Yes, but only if a majority of homeowners in the neighborhood sign a petition supporting the neighbor's actions. D. Yes, under these circumstances the neighbor may justifiably ask for an injunction.

D

As used in Regulation Z, the term "finance charge" includes all of the following EXCEPT A. loan fees and loan-finders' fees B. insurance premiums for mortgage protection insurance C. discount points and service charges D. recording fees and title insurance premiums

D

During the listing presentation, the seller questions the amount of commission to be paid and is told... A. the commission is non-negotiable B. everybody charges the same commissions C. we're cheaper than XYZ broker... D. the commission is negotiable

D

Errors and omissions insurance covers the brokers for A. fraud B. deliberate misrepresentation of the facts C. breach of contract D. unintentional misrepresentations

D

In which of the following instances may a principal be liable to a broker for damages? A. The broker misrepresents the property to a prospective buyer B. The principal allows a broker other than the listing broker to show the property C. The broker terminates the listing contract after the contract has been signed D. The principal revokes the agency formed by an exclusive right-to-sell listing contract before the termination date

D

Which of the following CANNOT make a direct loan to a home buyer? A. Farmer's Home Administration B. Federal Land Bank C. Veteran's Administration D. Federal Housing Administration

D

Which of the following is NOT required to be present for a mortgage to exist? A. debt B. lien C. pledge of property D. receiver clause

D

Which of the following is a provision of an alienation clause? A. the note may be prepaid in whole or in part at any time without penalty. B. if the mortgagor does not abide by this mortgage or the accompanying note, the mortgagee may declare the entire unpaid balance on the note immediately due and payable C. should default be made in payment of any installment when due, the entire principal plus accrued interest shall immediately become due at the option of the holder of the note. D. if the mortgagor (owner/seller) sells or otherwise conveys title to the mortgaged property, the mortgagee (bank) may declare the entire unpaid balance on the note immediately due and payable.

D

Which of the following requires that contracts for the sale of land be in writing and signed to be enforceable in a court of law? A. valuable consideration B. novation C. contractual interest D. statute of frauds

D

Which of the following statements about FHA-insured loans on single family homes is FALSE? A. Interest rates on FHA loans are negotiable between borrower and lender B. The borrower has a prepayment privilege on the mortgage C. The maximum loan amount is set by FHA D. The borrower might not be required to make a down payment

D

Which of the following would LEAST influence the market value of a vacant piece of property? A. utility B. plottage C. land contours D. replacement costs

D

Which term is most widely used in Michigan describing the document often used in the sale/purchase of a property? A. Mortgage and note B. Lease contract C. Purchase Agreement D. Service Provision/Agency Agreement

D

What should someone do to create a security interest in personal property? A) Publish a notice in the newspaper B) Advertise on the radio C) Put a sticky note on the personal property D) File a financing statement, also known as a UCC-1.

D) File a financing statement, also known as a UCC-1.

John is involved in a lawsuit. He owns a rental home that is free of any mortgage. What can a creditor obtain to prevent John from selling the rental home before the lawsuit is settled? A) Judgment B) Foreclosure notice C) Seizure notice D) Writ of attachment

D) Writ of attachment

Angelina has real property which has recently been appraised at $3,500,000. Misty has persuaded her to sell it in exchange for her broken down car. Is this legally sufficient consideration? A) No, it is obvious that the so called friend is taking advantage of Angelina. B) It depends on other circumstances not specified in the question. C) No a car is not legally sufficient consideration for the sale of real property. D) Yes

D) Yes

An abstract of title does NOT provide evidence of title unless it is accompanied by a(n) A) copy of the title insurance policy. B) letter of insurance coverage. C) letter of warranty. D) attorney's opinion of title.

D) attorney's opinion of title.

When a prospective buyer makes a written purchase offer that the seller accepts, then the A) buyer may take possession of the real estate. B) seller grants the buyer possessory rights. C) buyer receives legal title to the property. D) buyer receives equitable title to the property.

D) buyer receives equitable title to the property.

The part of the title insurance policy that sets forth all of the encumbrances and defects that will NOT be insured against is called the A) schedule of defects. B) citation clause. C) nonexclusionary clause. D) exclusions.

D) exclusions.

When a company furnishes materials for the construction of a house and is subsequently not paid, it may file a(n) A) deficiency judgment. B) lis pendens. C) estoppel certificate. D) mechanic's lien.

D) mechanic's lien.

All of the following are essential to the formation of a contract EXCEPT A) offer. B) acceptance. C) consideration. D) performance.

D) performance.

All of the following would be acceptable as evidence of marketable title EXCEPT a(n) A) Torrens certificate. B) title insurance policy. C) abstract and legal opinion. D) property owner's warranty deed.

D) property owner's warranty deed.

If upon receipt of an offer to purchase subject to certain conditions the seller makes a counteroffer, the prospective buyer is A) bound by his or her original offer. B) bound to accept the counteroffer. C) bound by whichever offer is lower. D) relieved of his or her original offer

D) relieved of his or her original offer

Taxes levied on a property owner to pay for installation of sidewalks or sewers are called A) ad valorem taxes. B) general property taxes. C) special excise taxes. D) special assessments.

D) special assessments.

A mechanic's lien would be properly classified as a(n) A) equitable lien. B) voluntary lien. C) general lien. D) specific lien.

D) specific lien.

A suit to quiet title refers to A) a title insurance company's search of the title. B) a mortgagor relinquishing title after foreclosure. C) the deposit of a title with an escrow agent. D) the removal of a cloud on the title by court action.

D) the removal of a cloud on the title by court action.

A document that protects against hidden risks such as forgeries and loss due to defects in the title, subject to specific exceptions, is called a(n) A) chain of title. B) abstract of title. C) certificate of title. D) title insurance policy.

D) title insurance policy.

An appraiser MUST be licensed or certified to handle federally related work on residential property valued at more than A. $50,000 B. $100,000 C. $200,000 D. $250,000

D. $250,000

The Real Estate Recovery Fund is to begin the fiscal year with a balance of: A. 10,000 B.60,000 C. 50,000 D. 100,000

D. 100,000

When was the first civil rights legislation passed? A. 1966 B. 1868 C. 1968 D. 1866

D. 1866

How many feet of wire would be required to build a three-strand fence around the NW 1/4 of any section? A. 7,921 B. 15,840 C. 3,840 D. 31,680

D. 31,680

According to the Utah Marketable Record Title Act, most liens will be unenforceable and can be removed from recorded notice if they have not been acted upon for: A. 5 Years B. 20 Years C. 7 Years D. 40 Years

D. 40 Years

a lot 1780 Feet square is how many acres? A. 2.78 B. 25 C. 4,950.6 D. 72.74

D. 72.74

How many acres are there in the SW 1/4 of the S 1/2 of any section? A. 10,800 B. 5,760 C. 10 D.80

D. 80

an important characteristic of land is that it can be improved. these modifications become a part of and tend to increase the value of the real property. which of the following is such a modification? A. Crops B. Chattels C. Trade fixtures D. Access Roads

D. Access Roads

According to the Utah Timeshare & Camp Resort Act, a person selling timeshares must meet the following requirements: A. Have a conditional real estate license B. Pay a $100 registration fee to the Real Estate Division C. Have a regular real estate license as a sales agent D. Be registered with the Real Estate Division

D. Be registered with the Real Estate Division

According to Regulation Z, if you include the monthly payment in your newspaper ad, which of the following does NOT have to be revealed in the advertisement? A. Loan Term B. Down payment C. APR D. Construction Cost

D. Construction Cost

Which of the following is NOT a requirement for becoming a licensed broker? A. a log of real estate transactions B. meeting a point requirement C. Have brokers verify transactions. D. Having four years of full time experience

D. Having four years of full time experience

when a salesman transfers to another principals broker's office: A. he must pay a transfer fee B. he cannot begin work for 30 days C. his wall and pocket licenses must be returned to the commission D. he continues work taking his wall license to the new broker

D. He continues work taking his wall license to the new broker

Which of the following is NOT TRUE about the Real Estate Settlement Procedures Act? A. It requires the lender to give a 'good faith estimate' of the cost of the loan B. It is known as a RESPA C. It is administered by HUD D. It allows the borrower to see the closing statement at least three days before the closing

D. It allows the borrower to see the closing statement at least three days before the closing.

The distribution of water rights in Utah is based upon: A. Common Law rights B. Riparian Rights C. Accretion rights D. Prior Appropriation

D. Prior Appropriation

Ellis bought a service station from Grant and received an Quit Claim Deed for it. A court ruling later decreed that Grant never had a valid interest in the property. What interest does Ellis now have? A. Since he paid for it, Ellis now has a fee simple estate B. It's not what he wanted, but Ellis now has a fee defeasible estate C. He can't own it, but the court will likely grant Mr. Ellis a life estate D. Sorry, Mr. Ellis you have no interest in the property

D. Sorry, Mr. Ellis you have no interest in the property

A person guilty of acting as a real estate agent without a license would be prosecuted by: A. The Real Estate Division B. The Attorney General C. Department of Commerce D. The County Attorney

D. The County Attorney

Sax owns a car, a boat, a house, and a farm. When the court decrees a judgement against Sax for his debts, which of the following will be covered by the judgement? A. The car only B. The car and the boat only C. The house and farm only D. The car, the boat, the house, and the farm

D. The car, boat, house, and farm

Which of the following describes Tenancy at Will? A. it automatically renews itself B. Possession is given for a stated period of time C. An unwanted lessee is in illegal possession D. The lease is of uncertain duration

D. The lease is of uncertain duration

real property includes all of the following except: A. Buildings affixed to the land B. Water Courses appurtenant to the land C. Minerals, oil and gas D. trade fixtures

D. Trade fixtures

A Variance is: A. a form of spot zoning B. An unusual change in zoning C. A legal non-conforming use created prior to a change in zoning classification D. a legal non-conforming use granted after a zoning classification has been established

D. a legal non-conforming use granted after a zoning classification has been established

When a life estate is based on the life of someone other than the holder of the life estate it is said to be: A. a life estate in remainder B. a life estate in reversion C. a life estate caveat emptor D. a life estate pur autre vie

D. a life estate pur autre vie

A leassee signs a leasehold agreement for six months from Feb. 1 to July 31. This would be an example of: A. periodic tenancy B. tenancy at sufferance C. tenancy at will D. tenancy for years

D. tenancy for years

the holder of a life estate can do all the following except: A. lease the life estate B. Borrow against the life estate C. Sell the life estate D. Will the life estate

D. will the life estate

the definition of an emblement includes which of the following? A. Mineral Rights if mined in the year of the transfer of the property B. the air above the ground sold separately from the land C. Swimming pools, tennis courts and other amenities D. Crops nurtured in the year of the sale of the property

D.crops nurtured in the year of the sale of the property

WARRANTY DEEDS

DEEDS that Carry WARRANTIES of CLEAR TITLE and the Grantor's Right to CONVEY TITLE 1. GENERAL WARRANTY 2. SPECIAL WARRANTY

Listings may be terminated by:

Death, either party - broker or client, or mutual agreement

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing

Debit seller $300; credit buyer $300

At the closing on June 15, the buyer is assuming a mortgage presently on the property, on which the monthly interest charge is currently $600. The seller has made the payment due on June 1. Assuming a VA mortgage, what is the adjustment made at closing?

Debit seller $300; credit buyer $300

A yearly tax bill is $8788 and has not been paid. The property has sold and closing is May 30th. How much will be owed at closing for taxes? (Use a 365 day year, round to the nearest dollar and seller pays for closing day.)

Debit seller, credit buyer $3612.

Real property is closing on May 14. The buyer is assuming the seller's mortgage. As of closing the balance is $65,325. The annual interest rate is 8%. How should the interest on the loan be prorated based on a banker's year(360 days in a year, 30 days in a month) .

Debit the seller $203.23 Explanation Debit the seller $203.23 $65,325 x 8% / 360 days = $14.5167 x 14 days = $203.23. On the national test the Seller is responsible for the day of closing, on the State test the Buyer is responsible for the day of closing The seller is debited because this is an assumption, which means the buyer is taking over payments. Since the closing is mid-month the buyer and seller need to split the payment for that month. Remember that mortgage interest is paid in arrears. This means the June 1 payment is for the month of May. That is the month they have to split. Since the payment has not been made - the seller is debited for htier part of the bill.

Operating expenses include all the following except:

Debt service

Title insurance will protect the buyer for all of the following:

Defects missed in the title search; Forged deeds; Human error in copying or recording documents

When preparing an appraisal, the appraiser will:

Define the problem, Apply the cost approach, Prepare his report .

A termination date in a listing agreement must be:

Definite

A. Standby forward commitment

Despite the risks that are inherent in the mortgage lending process, mortgage bankers have various tools at their disposal to hedge risk exposure. For example, since mortgage bankers know that only part of the loan commitments that they issue will be taken down by borrowers, they can purchase the right to sell a certain dollar amount of a certain loan type in the secondary market through what is commonly referred to as a:

D. the greater the amplitude of real estate cycles

Development of subdivisions, apartments, offices, or other commercial structures can have a lead time of two years or more. In general, the longer the construction lead time:

B. Land Development Loans

Different financing requirements usually are involved in the various phases of a property's life. Which of the following types of loans is used to finance improvements to the land, such as sewers, streets and utilities?

A. Tenancy in common

Direct co-ownership implies that each co-owner holds a titled interest in the property, but without exclusive possession with respect to the other co-owners. Which of the following types of direct co-ownership is considered the closest to the fee simple absolute estate?

Dorothy is a licensed agent wanting to buy property your company has listed. She must:

Disclose that she is a licensed agent

Jerome is a licensed agent who desires to sell his mother's home. Jerome has the property listed with his brokerage firm and finds a buyer himself to buy moms' home. Jerome should:

Disclose to the buyer in writing that the seller is his mother.

If an agent sells their own property, acting as a principal, the agent must:

Disclose to the party in writing that they are a licensed agent

FORMAL OR CONVENTIONAL WILL

Document Having Written Instructions of Property ‎Disbursements upon the Death of the Owner. Signed and Witnessed by 2 people NOT HEIRS. Least Challenged of all WILLS.

CORRECTION DEED

Document Used to Correct an Error in a PREVIOUSLY Recorded DEED

In the purchase price and terms section of the residential contract to buy and sell the entry for cash at closing:

Does not include buyers loan costs

An agent shows a home to a couple and mentions that is has a lovely fireplace in the living room. After buying the home the buyers and agent discover that the brick fireplace is just a decorative fireplace and is not "wood burning". Which of the following would best protect the agent from financial loss?

E and O Coverage

INVOLUNTARY ALIENATION - NATURAL CAUSES

EROSION - Gradual Wearing Away of Soil AVULSION - Violent and Sudden Loss of Land ACCRETION - Soil Deposits Onto Land ALLUVIAL DEPOSITS - Soil Floats Downstream RELICTION - On Non-navigable streams, Water Receeds Owner Has More Land

EXECUTOR'S or ADMINISTRATOR'S DEED

ESTATE SALE and PROBATE - EXECUTOR or ADMINISTRATOR, Transfers Ownership of Real Property to a DEVISEE or Natural HEIR. ALL COVENANTS / NO WARRANTIES

EXCEPTIONS OR RESERVATIONS TO A DEED LIMITATIONS AND RESTRICTIONS

EXCLUSIONS To Parts of the Property e.g.: EASEMENTS, LIENS, Mineral, Air, Water Rights

Which of the following is not an element of a joint tenancy with right of survivorship

Each joint tenant may pass on his interest to the heirs

in a timely manner, according to state laws.

Earnest money should be deposited into a trust account

The developer grants the rights to install transmission lines to the gas company this right is called a

Easement in gross

John owns a gas station at the end of a highway exit ramp. Business is booming. The state closes the exit ramp and sales plummet. This is an example of:

Economic Obsolescence

Disclosure of representation may be:

Either Written or Oral

TITLE EXAMINER

Employee who Examines Documents - Title Company

Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller remain in the Property for 7 days after closing and funding." In this case, Elmer can be said to have

Engaged in the unlawful practice of law

Fee estate

Ensures that the ownership of real property can be willed to their children

______________projects the impacton the environment of a proposed project.

Environmental Impact Statement

Judgment liens are

Equitable liens

if no box is checked in the sellers remedy section of the contract to buy and sell in the event of buyer defaults the:

Ernest money will be retained by the seller as the seller's only remedy

unintentional misrepresentations.

Errors and Omissions insurance covers the broker for

C. Location attributes

Especially in terms of retail properties, which of the following attributes is considered the most likely to result in drastic value differences between otherwise similar properties?

Freehold vs. nonfreehold

Estates are divided into two broad classes based on their length of duration. These classes are freehold and nonfreehold: Freehold estates are estates that last indefinitely for one or more lifetimes or in perpetuity. These estates involve ownership of the property. They are considered real property interests. They include fee simple, life, reversion and remainder estates. Nonfreehold estates are estates which last for a lesser and temporary period of time. These estates involve the lease or rental of real estate. They include an estate for years, periodic estate, estate at will and estate at sufferance.

In the cost approach to value, the appraiser makes use of the:

Estimated replacement cost of the building

The buyer may terminate the contract and receive a refund of earnest money if lender required repairs:

Exceed 5% of the Sales Price

When a seller wishes to retain certain fixtures or accessories, these items are called:

Exclusions

TRUSTEE

Executor of an Estate who Holds the DEED on behalf of both the Borrower and Lender in a DEED of TRUST.

When a lease agreement comes to the end of the term it is called:

Expiration

A licensee failed to renew his license but paid the fee 30 days later what is the license status during those 30 days?

Expired

The written document is evidence that the agency relationship exists and provides the agent with:

Express Authority

Loss of value of real property due to off-site factors is:

External Obsolescence

C. Public assistance facilities such as homeless shelters

Externalities can play an important role in determining a property's price, either by adding value through positive externalities or by diminishing value through negative externalities. Which of the following is most likely to be considered a negative externality?

SHERIFF'S DEED

FORECLOSURE - Court Order in Connection with Sale of Property to Satisfy a Judgment. ALL COVENANTS / NO WARRANTIES

Freehold vs. Non Freehold

FREEHOLD: 1. Free a. Absolute b. Determinable - condition - reverter 2. Life a. Reversion or remainder NON FREEHOLD: (leasehold, less than freehold, Chattel real) 1. For years 2. Periodic 3. At Will 4. At sufferance

The special provisions paragraph of the contract allows licensees to insert:

Factual business details; Statements not addressed in the contract; Information for which there is no TREC promulgated addendum, lease or mandatory form

Which of the following may be considered prima facie evidence of discrimination by a broker

Failure to display the equal housing opportunity poster at the broker's place of business

Which of the following may be considered prima facie evidence (legally sufficient to establish a fact or a case unless disproved) of discrimination by a broker?

Failure to display the equal housing opportunity poster at the broker's place of business Explanation According to the Fair Housing Act - A fair housing poster shall be posted and maintained at any place of business where the dwelling is offered for sale or rental

A new survey is always required for all transactions

False

A new survey is always required for all transactions:

False

A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form.

False

Lender required repairs usually stem from the buyer's inspection reports on the property.

False

Paragraph 3.B. of the contract includes the PMI or MIP in the loan amount.

False

Paragraph 3.B. of the contract includes the appraisal fee in the loan amount.

False

The deed of trust securing seller financing is always assumable by a future buyer without approval.

False

All written notices between the parties are effective when:

Faxed or emailed; Hand-delivered; Mailed

C. FHA loans require higher credit scores than are needed for prime conventional loans.

Federal Housing Administration (FHA) loans differ from conventional loans in a number of ways. All of the following statements regarding FHA loans are true EXCEPT:

A. Refusing to sell or rent to a person because of race.

Federal and state laws prohibit discrimination in housing. However, exemptions do exist depending on the particular type of property that is being considered. All of the following activities could be considered exempt in specific scenarios EXCEPT:

RESPA is a regulation of the

Federal government

The Federal home loan mortgage corporation was established to assist

Federal savings and loans

A relationship based on trust is known as:

Fiduciary relationship

TREC has subpoena power. If a licensee fails to respond to a subpoena, TREC may:

File suit with the Attorney General to enforce the subpoena

Truth in Lending laws are primarily for the regulation of:

First mortgages Explanation Truth in Lending in relationship to real estate is primarily for the regulation of first mortgages. NOT RESPA

When real property is sold:

Fixtures remain with the property.

Right of possession vs. Possession

For Example - A lienholder would have an interest in a property, but would not have an estate. A lender may hold a mortgage or trust deed as security for a loan. This gives the lender a lien against the property, but not a right of possession. Therefore, the lender (called a mortgagee if he holds a mortgage, or a beneficiary if he holds a trust deed) does not have an estate. A person holding an easement or a license to use somebody else's land would not have an estate, since the right to use the land is not the same as the right to possess the land. A right to possess is not the same as possession. If a person has possession, but does not have the right of possession, he would not have an estate. Therefore, a trespasser who has adverse possession of property with no legal right to possess it, does not have an estate. Also, a person does not have to have actual possession in order to have an estate, as long as he has the right of possession.

Mortgage loan interest, local property taxes, mortgage loan origination fees.

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

What is the primary difference between the commission approved deed of trust forms

Forms contain different provisions for assumption of alone in the event of the sale of the property

UFFI

Found in insulation foam

Life Estates

Freehold estates might also be noninheritable. Noninheritable freehold estates are called life estates. A life estate is a freehold estate, since it is an ownership estate. However, it is not a fee estate, since it is not inheritable. A life estate may be measured by the life of the holder of the life estate (the life tenant). For Example - Wilson willed his widow, Willow, the use of the family home for the rest of her natural life, with the provision that the title would go to their children upon her death. Willow is the life tenant, holding the life estate. Willow's estate will exist only as long as she is alive. After Willow remarried and had two more children, she went to her attorney to have a will drafted leaving the home to her spouse and their children. When she learned she had no right to pass the estate to her heirs or devisees upon her death, Willow wept. When a person holds a life estate for his life, his heirs would have no estate or interest in the property. For Example - Dell conveyed a house to Meadow for life, then to Lea. Meadow's heirs would have no estate or interest in the property. Once Meadow dies, the property passes to Lea, and not to Meadow's heirs. Not all life estates are for the life of the life tenant. A life estate may be measured by the life of someone other than the holder of the life estate. In such a situation, the life estate could extend beyond the life of the life tenant. For Example - Basil deeds Blackacre Ranch to Rosemary for the life of Sage. Rosemary is the life tenant and holds the life estate for as long as Sage remains alive. Sage has no interest or estate at all in the property. However, when Sage dies, Rosemary's life estate is terminated, and she loses the right of possession. If Rosemary were to die before Sage does, the estate would vest in Rosemary's heirs until Sage died. A life estate may be measured by the life of more than one person. For Example - Heather may give her parents a life estate in property she owns, measured for both of their lives, so that the estate will not terminate until both have died. Mel and Bea Lowe, who hold a fee estate, decide to change their ownership to a life estate in order to avoid probate. To change ownership, they deed the property from themselves to themselves to hold as a life estate for both their lives, with the provision that the title will pass to their children upon their death. They retain ownership while either remains alive, and the children acquire the title upon their death without probate.

D. Earnest Money

From the borrower's perspective, the effective borrowing cost is often viewed as the implied internal rate of return (IRR), since it takes into consideration costs that the borrower faces, but which are not passed on as income to the lender. Included in this calculation are closing costs, which may consist of all of the following EXCEPT:

After closing and managing broker should pay commissions teach the company associates:

From the company operating funds

At closing, the contract is:

Fully Executed

Loss of value due to lack of modernization is called:

Functional obsolescence.

WARRANTY OF FURTHER ASSURANCE

GRANTOR Agrees to Perfect or Correct the Title if Necessary During the GRANTOR'S Lifetime. Contained in Both SPECIAL and GENERAL WARRANTY DEEDS

GENERAL WARRANTY DEED

GRANTOR Fully Warrants CLEAR TITLE. Used in Most Real Estate DEED Transfers. Offers Greatest Protection to the BUYER ALL COVENANTS AND ALL WARRANTIES. VOLUNTARY TRANSFER of Property.

COVENANT OF SEIZIN

GRANTOR Has the Right to Convey / Sell

COVENANT OF QUIET ENJOYMENT

GRANTOR PROMISES No One Has Superior Title to that of the GRANTOR. Assures GRANTEE of Peaceful Possession W/O Fear of 3rd Party Claims. Also Covers Leases LessOR and LessEE

COVENANT AGAINST FURTHER ENCUMBRANCES

GRANTOR PROMISES the Title Causes No ENCUMBRANCES Except Those Set Forth in Deed. There Are NO LIENS Against the Property Other Than Those Revealed. Note: There are No Perfect Titles: Property Taxes

FIDUCIARY DEED

GRANTOR Transfers Interest in the Property Who Holds the Property For Someone Else. To Hold and Manage Property. CONTAINS NO COVENANTS OR WARRANTIES

In Colorado residential properties are usually conveyed by:

Gen. warranty deed

Jeffrey wants to see property that your company has listed; he does not want to be represented. The agent must:

Give Jeffrey the IABS form

Appointed associates under an Intermediary may:

Give advice and opinions to their respective parties.

C. $164,402

Given the following information on a 30-year fixed-payment loan, determine the remaining balance that the borrower has at the end of seven years. Interest Rate: 7%, Monthly Payment: $1,200.

C. $73,103

Given the following information, calculate the balloon payment for a partially amortized mortgage. Loan amount: $84,000, Term to maturity: 7 years, Amortization Term: 30 years, Interest Rate: 4.5%, Monthly Payment:$425.62

C. 8.5%

Given the following information, calculate the effective borrowing cost (EBC). Loan amount: $166,950, Term: 30 years, Interest rate: 8%, Payment: $1,225.00, Discount points: 2, Other Closing Expenses: $3,611.

C. 1.65%

Given the following information, compute the effective tax rate for the particular piece of property in percentage terms. Market value of property: $325,000, Assessed value of property: $250,000, Exemptions: $50,000, Taxes paid: $5,363.

B. $375,000

Given the following information, compute the taxable value for the particular piece of property in dollar terms. Market value of property: $500,000, Assessed value of property: 85% of the market value of the property, Exemptions: $50,000, Taxes paid: $8,250.

At the closing the buyer should bring:

Good funds

FHA and VA loans are in the category of:

Government loans

VESTED

Granted or Endowed Interest with a Particular Authority, Right, or Property.

Gen. warranty deed

Granting clause states "grant" bargain and sell or "convey and warrant"

When compared with a 30 year payment period, Taking out a loan with a 20 year payment period Would not result in

Greater impound amounts

B. Concurrency Requirement

Growth management laws at the state level require local jurisdictions to plan for and meet certain requirements. One such requirement prohibits local development unless adequate infrastructure, schools, police/fire protection, and social services have been put in place first. This requirement is referred to as the:

HOLOGRAPHIC WILL

Handwritten and Dated WILL, Written Entirely by the TESTATOR. Does Not need Witnesses to be Valid. Can Pass Both Real and Personal Property.

And in company transaction is not one in which a broker:

Has an agency listing and the cooperating broker is a transaction broker

An example of compliance with the Federal Fair Housing Act would be:

Having a standard office procedure for working with customers; Displaying the equal housing poster; Signing VAMA

Fiduciaries are:

Held to the highest amount of good faith; Required to exclude selfish interest; Make disclosures of all relevant facts

When a dispute is submitted to mediation, the mediator will:

Help the parties resolve their differences

Some of the advantages of investment in real estate include all except:

High liquidity

A Colorado broker associate may collect compensation from

His or her employing broker

ABSTRACT OF TITLE

History of TITLE / Ownership of a Parcel of Land Listing Transfers, Rights, and Liabilities as Shown by the Public Records. Weakest Form of Ownership.

If a buyer and seller have a disagreement over earnest money earnest money holder may:

Hold the money in escrow account until the parties come to an agreement

Writ of execution.

How does a creditor who has obtained a judgment get satisfaction against a debtor who will not pay

An exception to a licensee using a TREC promulgated contract form would be

If an attorney prepared form is used

Return of the property to the original owner

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty

When is the listing company responsible for a guaranteed buyout agreement under the licensee buyout addendum to contract to buy and sell

If employing broker signs at the bottom of the addendum

C. Defeasance

If mortgage rates decline significantly, borrowers may decide to prepay the principal on their loan even if they face prepayment penalties. One way that lenders protect themselves from prepayments in such circumstances is by requiring the borrower who prepays to purchase for the lender a set of U.S. Treasury securities whose coupon payments replicate the cash flows the lender will lose as a result of the early retirement of the mortgage. This process is referred to as:

The Third Party Financing Addendum For Credit Approval is used when

If paragraph 4.A(2)(a) is checked in the contract

For Tax Prorations:

If taxes are not paid at or prior to closing the buyer shall pay for the current year; If taxes for the current year vary from the amount prorated at closing, the parties shale adjust the prorations when tax statements for the current year are available; The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes

When are facsimile signatures acceptable on a contract to buy and sell?

If the parties agree and indicate that choice on the contract form

The inspection provision of the Colorado contract to buy and sell allows the buyer to terminate the contract:

If the property is unsatisfactory in the buyer's sole subjective discretion

The licensee is responsible for delivering closing documents to be employing broker

Immediately after closing

Paul, an agent at a local real estate company receives a call from a prospective buyer, who is inquiring about a property at 815 Euclid. To comply with the license act, Paul must:

Immediately disclose to the potential buyer that his firm represents the seller

B. Financial Institutions Reform, Recovery, and Enforcement Act

In 1989, Congress took major steps to establish depository institution accountability by requiring these institutions to hold more capital as they take on riskier assets. Which of the following Congressional acts imposed these capital standards on depository institutions?

D. mortgagee

In a mortgage agreement, the borrower conveys to the lender a security interest in the mortgage property. The lender, i.e. the individual who receives the mortgage claim, is known as the:

A. 3 business days

In accordance with RESPA, whenever a buyer obtains a new first mortgage loan from a chartered or insured lender, when the loan is insured by the FHA or guaranteed by the VA, or when the loan will be sold to one of the federally related secondary mortgage market agencies, a good-faith estimate of the settlement costs must be provided by the lender within:

C. Fiduciary relationship

In acting as an agent for another person, the broker carries several special responsibilities, which by law must be adhered here to throughout the transaction process. These responsibilities constitute what is commonly referred to as a:

One

In an exclusive right-to-sell listing, an owner lists the property for sale with how many brokers?

A. One of the parties is under duress

In certain circumstances, mutual assent between the contracting parties may be broken, thus invalidating the contract. Which of the following defects to mutual assent involves compelling a person to act by the use of force?

C. the U.S. Bureau of the Census: County Business Patterns

In collecting data for nonresidential property analysis, it is helpful to understand the business community that currently exists in the specific area in question. A preliminary approach for ascertaining the number of firms by size, industry, and location is to obtain data from:

C. Three years

In considering a three-year-one-year adjustable-rate mortgage (ARM), the interest rate will be fixed for how many years?

B. 5-7 years

In contrast to conventional home loans, the interest-only balloon loan requires the borrower to pay off the loan with a "balloon" payment equal to the original balance after:

B. Multiple listing

In determining the appropriate listing contract to be used, it is important to know whether a multiple listing service (MLS) will be employed. A MLS only accepts which of the following types of listing contracts?

C. transaction brokerage

In dual agency, conflicts of interest may arise since a single broker has both the listing contract with the seller and a buyer agency agreement with the purchaser. One way that states have attempted to deal with this issue is to develop a new type of brokerage relationship in which the broker assists the buyer and seller, but does not represent either party. This type of brokerage relationship is commonly referred to as:

B. Loan-to-Value Ratio (LTV)

In order to better understand a borrower's probability of default, lenders have a number of tools at their disposal. The ratio that measures the percentage of the price (or value) of a property that is encumbered by the first mortgage is referred to as the:

D. "Bad Boy Carve-Out" Clause

In recent years, lenders have been unwilling to relieve borrowers from personal liability in the event of fraud, environmental problems, or unpaid property tax obligations. Therefore, some lenders include a clause that pierces the single-purpose borrowing entity to hold the actual borrower liable in such instances. This clause is commonly referred to as a:

Two people own a building as joint tenants with the right of survivorship. one of the tenants dies intestate the other tenant now owns the building:

In severality

A. University City did not traditionally provide occupancy to tenants interested in office space.

In the Palm Grove Office Complex example, the project was destined to be ill-fated venture from its inception for all of the following reasons EXCEPT:

B. Government National Mortgage Association (Ginnie Mae)

In the late 1960's, Congress created a number of agencies designed to address a struggling secondary market for residential mortgages. Which of the following organizations was developed primarily to guarantee mortgage-backed securities based on pools of FHA, VA and Rural Housing Service loans, rather than issue, buy or sell mortgages?

When an employing brokers license has been revoked suspended or has expired without proper renewal, An associate brokers license will be

Inactivated

The agency information form that must be presented at the first substantive dialogue is the:

Information About Brokerage Services

Which of the following are TREC forms?

Information About Brokerage Services

ACTUAL NOTICE

Information Directly Given to Someone. Hand Delivery, Registered Mail, Courier.

Imputed knowledge

Information known by all members of the team on a listing contract taken in the name of the team

C. Government rectangular survey

Initially used to survey the Old Northwest Territory in 1789, which of the following methods of land description relies on townships and section numbers as essential units of identification?

When one party defaults under a contract, the other party is known as the

Injured party

Another name for Contract for Deed is:

Installment Land Contract

Broker Steve, having no agents, is a solo practitioner. He has a client buyer that wants to purchase one of his listings. The process that Broker Steve must use is:

Intermediary without appointments

By will, Calhoun devises (gives in his will) his property to his daughter, Mary Calhoun for her life, and at her death to "her children." At Calhoun's death, Mary, 30 years of age and childless, deeds a fee simple estate (sells it outright) to Davis. The deed transfering the title to Davis is:

Invalid Explanation A land owner of an estate, in this case Mary, cannot give a "greater interest" in the estate than he or she owns. Her ownership was limited to her life span, she cannot sell it permanently to another.

PRESCRIPTION SUIT ADVERSE POSSESSION

Involuntary - Not Government Owned Property. To Acquire Property by Statutory Means. Non-Permissive Use of Land - 10 Year Trigger 1. OPEN 2. HOSTILE - Without Permission 3. NOTORIOUS 4. BY CLAIM OF RIGHT 5. CONTINUOUS - 1 or Subsequent Users - Tacking Most Common Use - Fence Disputes TITLE vs RIGHT

The certificate of taxes

Is assurance from the county of taxes due

A counteroffer:

Is best described or defined as a rejection

Regarding blank feelings and commission approved form, this:

Is the practice of law specifically permitted in Colorado

If a broker dies what happens to the listing with the seller?

It automatically terminates

What is the purpose of the HUD-1?

It is a closing statement showing expenses and charges for the buyer and seller.

A commercial property is listed with Rockwell Realty at $ 70,000. Rockwell Realty negotiates with Woods who is familiar with the property and who agrees to buy the property at that price. Rockwell Realty prepares an agreement of sale which is signed by Woods, the buyer. Copies are then mailed to Downes, the owner for signature on May 31, 2007. The copies are received by Downes on June 3, 2007. He signs and mails the signed copies to Woods the same day. The copies are received by Woods on June 5, 2007. On June 4, 2007, Woods wired Downes, "Offer withdrawn, property not for sale". Under these circumstances:

It is an enforceable contract and Rockwell Realty is entitled to a commission.

The appraisal principle of conformity tells us that a house is worth the most when:

It is in a neighborhood of similar priced homes.

Normally a deed will be considered valid even if:

It is signed by an attorney in fact rather than the Seller

A. Income approach

It may be appropriate for a real estate professional to utilize different approaches for estimating the market value of a property depending upon the particular property type and use. Which of the following approaches would be most appropriate when considering the valuation of retail office space?

What would you say is the real basis for value of the average property; i.e. the economic characteristic of value?

Its relative scarcity and the demand for it Explanation This is an example of supply and demand. All other matters affecting the property's value revolve around its usefulness and scarcity.

Which of the following is a proper method for two or more owners of a single property in Colorado to hold title

Joint tenancy with right of survivorship

Confidential information between client and agent should be:

Kept confidential forever

Actual awareness of a falsity, deception, or unfairness of an act under DTPA is known as:

Knowingly

What is the main disadvantage of investing in real estate?

Lack of liquidity

INCORPOREAL RIGHT

Lacking Body / Body of Rights - Easements

Einstein bought a property from Plato. Einstein agreed to pay Plato $1615 per month for the next 15 years. Then the total balance will be due and legal title will change hands at that time. This is called a:

Land contract Explanation If title does not pass until he property has been paid in full then it is a land contract and the payments are going directly to the seller.

The term "property" as used in the contract includes:

Land; Improvements; Accessories

B. Investment-grade property

Large commercial properties valued well over $10 million are often referred to as:

The acronym MEC as used in the contract to buy and sell means the

Latest date upon which both parties have signed

TESTAMENT

Legal Document Declaring a Person's Wishes Regarding Disposal of Property When They Die.

Buyers and sellers in the contract should be identified by their:

Legal Name

RIPARIAN

Legal Right to Use Waters in Common with Other Owners Whose Land Abuts the Same Water.

TITLE

Legal facts Enabling a Person to Retain or Recover Real Property and to Show Right to POSSESS it. 1. CONSTRUCTIVE NOTICE 2. ACTUAL NOTICE 3. QUALITY OF CLAIM TO TITLE 4. EVIDENCE OF PROOF

Listings based on that price are

Legal in Colorado as long as the seller agrees

A valid deed includes

Legal or property description

The manager of a commercial building would normally be considered the agent of the

Lessor of the building

Uses of Life estates

Life estates have a number of uses: - They can serve as a "poor man's will." A person who owns property in fee simple title can deed property from himself as fee estate holder to himself as life estate holder, naming his son as remainderman. Thus, the property would still be his for the remainder of his life, but would pass to the son automatically upon his (the life tenant's) death. - They can be used to tie property up for future use. For Example - A person interested in a property could buy an estate in remainder, thus acquiring the right to the property upon the death of the owner. The owner would change ownership from fee estate to life estate and name the purchaser as the remainderman. The remainderman then acquires ownership of the fee estate upon the death of the life tenant. The price paid for the remainder interest would be based in part on the life expectancy of the life tenant.

When a buyer defaults on a contract and the seller chooses to retain the buyer's earnest money, the seller has agreed to

Liquidated damages

The commission agreement between the broker and the seller is usually found in the:

Listing Agreement

A management agreement is to a property manager like a

Listing agreement is to a broker

Which of the following statements about the Secondary Market is true?

Loans are made to individuals in the secondary market

D. Reverse mortgage

Many older, retired households are considered "house poor." Which of the following forms of loans has been designed to help mitigate this problem by offering additional monthly income to these homeowners in exchange for a portion of their housing equity?

Which of the following approaches MOST reliably estimates the sales price of a single-family residence

Market data

A salesperson licensee with no sponsoring broker:

May not receive commissions of any kind and may not practice real estate brokerage

Creditors suing a homeowner who has obtained a homestead exemption as provided by state law

May request a court ordered sale and have the proceeds in excess of the statutory exemption and exempted liens applied to the debts

Offering a property for sale without the knowledge and consent of an owner:

May result in license revocation or suspension

Which of the following can independent broker do under Colorado law?

May work independently without the supervision of another broker

D. A "cash-out" refinancing loan

Mortgage insurance rates vary with the perceived riskiness of the loan. Which of the following scenarios would result in a higher mortgage insurance premium?

For Federal income tax purposes, which of the following are costs of homeownership that may be deducted from gross income?

Mortgage loan interest, local property taxes, mortgage loan origination fees

B. teaser rate

Most Adjustable Rate Mortgage (ARM) loans have been marketed with a temporarily reduced interest rate commonly referred to as a:

A. Industry economies of scale

Most research oriented universities have different colleges, each with separate administrations, students, curricula, and facilities. However, the university continues to exist as a total unit because of:

Recording a deed gives constructive notice of ownership. What other action below gives constructive notice of ownership?

Moving in or taking possession of the property

Mr. and Mrs. Nichols own their property as joint tenants. Mr. Nichols wills all of his real and personal property to a son from a previous marriage. When Mr. Nichols dies, who will own the property and how? A. Mrs. Nichols will own the property in severalty B. Mrs. Nichols and the son will be joint tenants C. Mr. Nichols' son will hold a life estate in his father's half D. Mrs. Nichols' and the son will own as tenants in common

Mrs. Nichols will own the property in severalty

Meets and bounds legal description

Must commence and finish at the same identifiable spot

Listing agreements can be terminated by:

Mutual Agreement

The Intermediary Relationship Notice:

Names the appointed associates when intermediary with appointments is used.

Which of the following is not an ownership right to real estate

Navigable rivers running through the property

Brokers working for buyers under the exclusive right to buy contract may:

Negotiate an hourly fee to be paid in addition to any other compensation agreed

According to the Seller Financing Addendum, the interest rate is

Negotiated between the parties

The earnest money is:

Negotiated between the parties

A tenant leases property and agrees to pay taxes and insurance. This is a:

Net lease A lease in which the tenant also agrees to pay a portion f the taxes, insurance and common area is a net lease.

B. Earnings before deductions for interest, depreciation, income taxes, and amortization (EBIDTA)

Net operating income is similar to which of the following measures of cash flow in corporate finance?

When a party is considering consulting an attorney for advice in a transaction we should:

Never discourage the use of an attorney

a special assessment

New sidewalks installed only on one particular street will probably be paid for by

An elderly couple is selling their house, they accept an offer, but the closing hasn't happened yet. The couple gets in a car wreck and the man dies. Knowing it would be a hardship to make the surviving wife move, is she able to pay the broker's commission and get out of the contract?

No

When an appraiser is using the Market Data Approach, comparables should be:

No more than 6 months old.

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term

No notice is required

A couple signed a lease on an apartment for a period of 1 year. The lease does NOT contain an automatic renewal clause. The couple plans to move out at the end of the lease rather than renew it. How much notice MUST they give to comply with the lease term?

No notice is required

A broker with Seller Agency is showing a buyer the seller's home. Who is representing the buyer?

No one

Lester makes out a deed to Charlie, his partner. Lester signs the deed and has it acknowledged, after which he places it in a safe deposit box. shortly thereafter, he is killed in an accident. Will Charlie get the property? A. Yes, the deed is valid B. Yes, but it will first have to go through probate. C. No, Lester obviously left out an important step D. No, since Lester cannot pass property to anyone in the event of accidental death

No, Lester obviously left out an important step

An owner lists her home at a 7% commission rate and wants to net $45,000 after paying the mortgage balance of $68,000 and the broker's commission. To the nearest dollar, what should the selling price be to net her $45,000

None of the above

Davis, Hernandez, and Moore are vested as tenants in common on a parcel of land. Each received a pro-rata undivided interest in the parcel. The total price was $120,000. Davis put up 40% and Hernandez put up $22,500. What percentage does Moore own (to the nearest tenth of a percent

None of the above

Non freehold estates

Nonfreehold estates (also called less than freehold estates, leasehold estates, or chattels real) are limited in duration and are considered to be personal property interests. These estates may be created by a lease. A lease exists whenever one person holds possession of the real property of another under an express written or oral agreement, or under an implied agreement. The person who owns the real property and permits the occupation of the premises could be called the lessor or landlord. The person who occupies the property is called the lessee or tenant. -LIMITED DURATION -PERSONAL PROPERTY INTEREST Helpful Tip - Givers are identified with "or" at the end of the word, while receivers are identified with "ee" at the end. A grantor gives a freehold estate; a grantee receives it. A lessor gives a lease; a lessee receives it. A mortgagor (borrower) gives a mortgage; a mortgagee (lender) receives it.

Non Freehold estates

Nonfreehold estates are also referred to as less-than-freehold estates, leasehold estates, or chattel real. They are commonly created by a lease. The person who rents out the property is the lessor, while the person who occupies the property is called the lessee or tenant. The lessor has a reversionary interest while the lessee holds a leasehold interest. There are four types of leasehold estates: estate for years, periodic estate, tenancy at will, and estate at sufferance. An estate for years, generally called a lease, is a tenancy of definite duration that is clearly established at the beginning of the tenancy. A periodic estate is a tenancy that automatically renews itself on the last day of the term for a further term of the same duration until it is terminated by either party with proper notice. An estate or tenancy at will is created when a person enters into possession of real estate with the owner's consent and continues for an indefinite period of time at the will of the owner, as long as both parties consent. An estate at sufferance, the weakest possible tenancy, is created when a person retains possession of the premises without the owner's consent, such as when a tenant holds over after the expiration date of a lease without the consent of the landlord.

OPTIONAL DEED CLAUSES

Not Required (Optional) For a Valid Deed 1. HABENDUM CLAUSE 2. EXCEPTIONS OR RESERVATIONS, LIMITATIONS AND RESTRICTIONS 3. GRANTING CLAUSE

The escrow agent is

Not a party to the transaction

Life estate may be measured by life of more than one person

Not all life estates are for the life of the life tenant. A life estate may be measured by the life of someone other than the holder of the life estate. In such a situation, the life estate could extend beyond the life of the life tenant. For Example - Basil deeds Blackacre Ranch to Rosemary for the life of Sage. Rosemary is the life tenant and holds the life estate for as long as Sage remains alive. Sage has no interest or estate at all in the property. However, when Sage dies, Rosemary's life estate is terminated, and she loses the right of possession. If Rosemary were to die before Sage does, the estate would vest in Rosemary's heirs until Sage died. A life estate may be measured by the life of more than one person.

INVOLUNTARY ALIENATION

Not by Choice (Voluntary): Court Determines how the R.E. Property will be Transferred. E.G: IMMINENT DOMAIN, SHERIFF'S OR TREASURERS DEED, PRESCRIPTIVE SUIT, ADVERSE POSSESSION.

CONSTRUCTIVE NOTICE

Notice Given To World by RECORDATION. POSSESSION May also be Considered CONSTRUCTIVE NOTICE.

A broker can facilitate safeguards in relation to seller assisted down payments in all of the following ways except

Notifying the Colorado real estate commission of the true price of the property

The duty of ___________ means that an agent must follow all of the lawful instructions of the client.

Obedience

Which of the following is an agent's duty to a client?

Obedience, Accounting, Reasonable Care

The duties of a principal do NOT include:

Obedience.

Course Objectives

Objectives Upon completion of this lesson, the student should be able to: 1. Describe the two types of estates in land. 2. Define fee simple, determinable fee and fee simple subject to condition subsequent. 3. Describe a conventional life estate and differentiate between remainder interests and reversion interests. 4. Describe and compare the following four types of leasehold estates: estate for years, estate from period to period, estate at will and estate at sufferance.

PRESCRIPTIVE EASEMENT

Obtaining an Easement by OPEN, HOSTILE AND CONTINUOUS Use for a Statutory Period of Time. To Acquire INCORPOREAL Interests in Land by Long Continued Use.

A defect or a cloud on the title may be cured by:

Obtaining quitclaim deeds from all interested parties

A broker took a listing and later discovered that the client was previously declared legally incompetent. The listing is now

Of no value to the broker because it is now void

D. Commercial Banks

Of the $3.6 trillion in outstanding mortgage debt in the U.S., approximately 71% is privately held by institutional and individual investors. Which of the following institutions is the largest single source of private mortgage funds?

Every real estate contract must have a

Offer and acceptance

Where would you expect to find PMI?

On a high LTV conventional loan

Listing agreements are terminated:

On the termination date

B. Doctrine of Constructive Notice

Once a document conveying an interest in real property is placed in the public records it is binding on the public, whether or not they make an effort to learn of it. Based on the common law tradition, this policy is known as the:

Saleleaseback arrangement

One can have a freehold estate, dispose of various interests in the property, and still have the freehold estate. In most states, a property owner could sell the air, mineral or oil rights in property to a third party. A property owner could lease the land on a long-term lease, convey an easement for a right of way over the land, or assign a right of way to a railroad; none of these actions would alter the fact that he has a freehold estate. However, a freehold estate could be converted to a less-than-freehold estate by a saleleaseback arrangement. In this arrangement, an owner sells the property, terminating his freehold estate. At the same time he agrees to lease the property back from the purchaser under a long-term lease. This would result in him having a less than freehold estate. The seller/lessee gives up the title to the real estate to the buyer/lessor, and at the same time is able to retain possession of the property. It is the only way a freehold estate is changed to a less-thanfreehold estate.

B. The lease establishes schedule of rental rate increases over the term of the lease.

One complication that appraisers may face is the variety of lease types that may be available for a particular property type. Which of the following statements best describes a "graduated" or step-up lease?

A. Market Capitalization

One measure of the importance of a publicly traded asset class in the U.S. economy can be calculated by multiplying the number of publicly traded shares by the current market price of the stock. The result of this calculation is more commonly referred to as:

A. Regressive

One of the main criticisms of property taxes is that the property tax of lower income households is higher than that of higher income households, as a percentage of their respective incomes. In other words, taxes are criticized for being:

The mortgage that has priority is the

One which was recorded first

Mortgagor

One who gives the mortgage

The loan amount in Paragraph 3.B. of the sales contract includes:

Only the amount borrowed by the buyer

Sam listed his property with three different real estate brokers. In each agreement he reserved the right to sell the property himself without paying a commission. The type of listing that Sam signed with each broker was an:

Open Listing

The listing that allows any real estate broker to sell the property and allows the seller to sell it himself is:

Open listing

When actions lead another person to assume that one is an agent this is known as:

Ostensible agency

A. Subchapter S Corporation

Ownership forms for pooled equity investment can differ in terms of how the entity's cash flows are distributed to its investors. Which of the following ownership structures requires cash flows to be allocated to each shareholder in proportion to his or her ownership of the entity, thereby preventing special allocations to multiple classes of investors?

an interest that is classified as personal property

Ownership of common stock in a corporation gives

COVENANTS - THERE ARE 3 COVENANTS

PROMISE to Perform. ALL Conveying Deeds Have COVENANTS. Nonperformance is a Breach - Giving Right to Sue.

TREASURER'S DEED

PROPERTY TAX - Failure to Pay Property Taxes. ALL COVENANTS / NO WARRANTIES

A. Balloon Payment

Partially amortizing mortgage loans require periodic payments of principal, but are not paid off completely over the loan's term to maturity. Instead, the balance of the principal amount is paid at maturity in what is commonly referred to as:

GRANTEE

Party Receiving Title (DEED) or Interest in Real Property from the GRANTOR. The EE Does Not Have to Sign the Document and Does Not have to be Competent.

GRANTOR

Party Transferring Title (DEED) or Interest in Real Property to GRANTEE. The OR Must Sign the Document, Be at Least 18 Years Old and be Competent.

The Owner's policy of title insurance is always paid for by the:

Party indicated in the contract

TREC has a Real Estate Recovery Trust Account. What is NOT true about this account?

Payments out of the account are limited to $100,000 per transaction

EXECUTOR

Person Representing and Administrating the Deceased Estate

LEGATOR

Person giving Personal Property in a Valid WILL LEGATEE - One Who Inherits Personal Property

Fixtures are:

Personal property that has become part of the real estate

From an appraiser's point of view, ordinary wear and tear is an example of:

Physical deterioration

A builder has built a house. He has not paid the plumbers who worked on it. He sells the house to a young couple. What can the plumbers do to get payment for their contribution?

Place an M&M lien on the property.

Parcels A, B, and C are located side by side and owned by three different owners. A is worth $20,000, B is worth $27,000, and C is worth $16,000 for a total of $63,000. A developer believes that if all three can be purchased, the larger parcel would be worth $85,000. By assembling these under one owner they would be worth $22,000 more than their individual values. This demonstrates which principle of value

Plottage

Fannie Mae is a:

Popular name for the Federal National Mortgage Association It is not a government agency. It is a popular name for the Federal National Mortgage Association. It is a private corporation whose stock is traded on the New York Stock Exchange.

Which of the following would not affect supply

Population

Being within the extraterritorial jurisdiction of a municipality is an indication the property will

Possibly be annexed in the future

What is the advantage to the lender of a deed of trust as opposed to a traditional mortgage?

Power of sale clause resulting in quicker foreclosures

SCHEDULE A ON TITLE REPORT

Preliminary Title Report. Shows: 1) Search Date 2) Defines Estate Covered 3) Name of Insured 4) Legal Description

Under regulations regarding the practice of law by brokers a licensee may do all of the following except:

Prepare legal documents for a sale in which he is not involved as a broker

The Colorado real estate commission requires that all addenda that the broker wants added to a contract by and Sell be

Prepared by an attorney

Controlled by local ordinances does not normally regulate the:

Price of the property

One who hires an agent is called a:

Principal

Exclusions to the sale must be removed

Prior to delivery of possession

After a foreclosure sale the lender receives the:

Proceeds of the sale up to the outstanding debt plus court and collection costs

Proration

Process by which expenses are handled at the settlement of a real estate transaction for both the buyer and the seller pay their respective portions of the debt

Land, improvements and accessories are collectively referred to as the:

Property

LEGAL DESCRIPTION

Property Can be Located by Reference to Government Surveys or Approved Recorded Maps. Metes and Bounds, Rectangular, Etc. Required in Purchase Contracts, Deeds, Mortgages and Trust Deeds.

ESCHEAT

Property Reverts to State in Cases Where a DECEDENT Dies INTESTATE Without HEIRS, or When the Property is Abandoned. Reverts to State After 5 Years.

All of the following statements about property managers are true

Property managers should have Errors and Omissions insurance; A management agreement is used to create the agency relationship; Property managers work to preserve property value while generating income for the property owner

All of the following statements about property managers are true:

Property managers work to preserve property value while generating income for the property owner; Property managers are always employees of the owner; Property managers should have Errors and Omissions insurance.

Which of the following events would automatically cancel a listing agreement?

Property owner's death

Which of the following events would AUTOMATICALLY cancel a listing agreement?

Property owner's death.

D. Commercial Building

Property rights can be divided into two classes, real and personal. Which of the following is an example of real property?

D. Community Property

Property rights created from marriage have a clear implication for real estate transactions. Which of the following marital property rights gives a spouse a one-half claim on all property acquired "from the fruits of the marriage?"

An example of involuntary alienation is:

Property transferred by adverse possession.

The process of dividing ongoing expenses between the buyer and seller at the closing is called:

Prorating

The division of ongoing expenses at closing is called:

Proration

C. Correspondent Relationship

Prospective borrowers often submit loan requests directly to lenders. However, commercial loan requests can also be submitted through another channel in which a permanent lender agrees to purchase loans or consider loan requests from a mortgage banker or broker. This type of business relationship is more commonly referred to as a:

Fair Housing Act of 1968

Protection from threats or acts of violence against those who assist and encourage open housing rights

The Recovery Trust Account

Protects consumers who suffer a loss due to illegal acts of licensees; Has two maximum payment amounts - $50,000 and $100,000; must transfer any amount over $3.5 million to the State's General Fund.

Purpose of a mortgage

Provide security for the loan

In a land trust which of the following is not a correct statement

Public records list all the beneficiaries

RECORDATION OF DEED Not Mandatory

Purpose: 1. Docket and Page assigned 2. Gives Enforcement of Claim to Title 3. Does NOT Guarantee Validity of the Deed 4. Provides CONSTRUCTIVE NOTICE 5. CHAIN OF TITLE - Property Ownership History 6. BUYER'S Responsibility to RECORD Note: In Order to RECORD a DEED, the DEED MUST BE SIGNED and ACKNOWLEDGED. It Does NOT Have to be DELIVERED.

AFFIDAVIT OR AFFIRMATION OF VALUE

Purpose: 1. Records with DEED 2. Contains: a) CONSIDERATION - Sale Price b) LEGAL DESCRIPTION c) PARTIES 3. Helps Determine ASSESSED Property Value For Taxes 4. MUST be Signed by BOTH the GrantEE and GrantOR 5. Recorded by - COUNTY RECORDER 6. SELLER PAYS Costs

The federal law that prohibits kickbacks or nondisclosures in a real estate closing is:

RESPA

The Federal Fair Housing Act prohibits discrimination based on:

Race, Sex, Religion

D. Arm's-length transactions

Real estate appraisal is often considered "more art than science," since identifying truly comparable properties is a subjective process. Therefore, it is essential that a comparable property transaction at least meets the requirement that it was fairly negotiated under typical market conditions. Which of the following types of transactions would be most appropriate for use in the sales comparison approach to valuation?

A. It is an estimate of the most probable selling price of a property in a competitive market.

Real estate appraisers generally distinguish among the concepts of market value, investment value, and transaction value. Which of the following statements best describes the concept of market value?

Someone looking for a tax advantaged investment similar to a mutual fund would probably invest in a

Real estate investment trust

C. Mortgage

Real estate is property, which can be either a tangible or an intangible asset. Which of the following would be considered an intangible asset?

B. Ad Valorem taxes

Real estate taxes represent the largest single source of revenue for a large portion of local governments. Most property taxes are applied in relation to the value of the property, or in other words, they are:

severance

Real property can be converted to personal property by

The rights, privileges and improvements that belong to the land and are conveyed when ownership transfers are a. attachments b. appurtenances c. restrictions d. improvements

Real property is often coupled with term appurtenances defined as rights, privileges and improvements that belong to the land,

B. First-time homebuyers

Recently, 15-year mortgages have increased in popularity amongst both borrowers and lenders. Which of the following groups of borrowers would typically be the least interested in a 15-year mortgage?

D. Marketable Title Laws

Recognizing that only recent conveyances alter the status of title, states have established laws that set limits on how far back a title search must go. These laws are commonly referred to as:

B. Constructive Notice

Recording documents in the public records informs anyone who may have a potential interest in a property of both the owner and lender. In so doing, it provides what is commonly referred to as ______________ of an interest in real property.

Regulation Z AKA the Truth-In-Lending Act

Regulates advertising that contains information regarding mortgage terms

Which of these Federal laws regulates the advertisement of a lender's credit terms (rates, payment, etc.)?

Regulation Z

the total interest.

Regulation Z requires that the borrower be fully informed of all of the following EXCEPT

Internet advertising by lenders is controlled by:

Regulation Z.

B. Income producing potential of the collateral property

Relative to residential loans, the underwriting process for commercial loans is more complicated. The commercial loan underwriting process focuses first on which of the following?

Usual expenses of the seller as stated in the contract include:

Release of existing lien

What is not considered an activity of servicing loans?

Renegotiating interest rates

If a licensee is receiving compensation from a residential service company, the compensation is

Reported to the attorney general for action

A licensee is not required to provide the IABS when the licensee meets with a party who is:

Represented by another licensee

WARRANTY FOREVER

Requires GRANTOR to Defend GRANTEE's Title Against ALL Unlawful Claims FOREVER. ONLY in GENERAL WARRANTY DEED.

The Equal Housing poster mentions discrimination in the sale or leasing of:

Residential Housing

TREC has promulgated forms for

Residential transactions

If conditions for purchase are included in a deed and these conditions are violated, what is the penalty

Return of the property to the original owner

Reversion Remainderman

Reversion is the right to future possession by the grantor creating the life estate. Reversion means the land will return to the grantor of the estate. For Example - In a deed in which the grantor, Sam Count, states "to Noah Count for his life, and then back to Sam Count," Sam would have a reversion interest. The second possibility is that the deed or will provides that, upon termination of the life estate, title will pass to a specified third party. That third party, called a remainderman, holds a remainder interest or estate in remainder during the entire term of the life estate. With an estate in remainder, upon termination of a life estate, title passes to a specified third party. For Example - Miller willed the benefits of his real property to Baker for Baker's lifetime, after which the property will pass to Smith. Smith has an estate in remainder. An owner of a fee simple estate can change his ownership to a life estate by conveying and reserving to himself a life estate in the property, and granting to a remainderman a remainder interest. Upon the death of the life tenant, the remainderman will get fee title to the property even if the life tenant had sold the life estate. For Example - Willow, a life tenant, sells her estate to Laurel. When Willow dies, Laurel's interest will be terminated and title will be in the remainderman.

Riparian rights

Rights of the owner of property located along the banks of a river

If the property is currently under an agricultural exemption, and the use of the property changes, the buyer may be charged a

Rollback tax

The appraisal method most commonly relied upon in residential lending is the:

Sales comparison approach

The IRS considers which of the following a violation of the independent contractor status?

Salesperson is told to work set hours; Salesperson is guaranteed a monthly minimum wage; Salesperson has his licensing fees paid by the broker

A broker has an Exclusive Right-to-Buy contract with a principal. Who is to be their customer?

Seller The Exclusive Right to Buyer is also know as the Buyer Agency agreement. It is the contract a buyer signs to engage a broker as a buyer's agent. Since the buyer is the principal, the only possible customer is a seller.

TREC promulgated contract forms provide for

Seller Finance, Third Party Financing, Assumption

The Third Party Financing Addendum for Credit Approval cannot be used for:

Seller Financing

A transaction broker owes what disclosure to a seller?

Seller may be liable for acts of the broker

If in Paragraph B(2) is checked, and 50% entered in the Addendum for Reservation of Oil, Gas, and Other Minerals,

Seller reserves 50% of whatever mineral estate the seller owns as of the closing date

The title commitment should be reviewed by the:

Seller, Buyer, Agent

An out-of-state seller sells a property in Colorado the closing company must withhold up to 2% of the

Selling price as possible income tax liability

When employing the cost approach to appraisal, the improvements and land are valued:

Separately

CHAIN OF TITLE

Sequential History of Real Property Conveyances, Encumbrances and Records of Ownership. From Original Grant Issued by a Sovereign Power or Government to the Present as Stated in Public Records.

Procedural Rule P-53 is a:

Set of regulations that govern agent/title company relationships

C. Education facility

Several techniques can be used to obtain an indication of land value. The cost approach to valuation would most likely be used for which of the following properties?

Which of the following terms describes the process of real property becoming personal property?

Severance.

Who holds the authority to carry out the eviction of a delinquent tenant from rented property?

Sheriff

If a home is to be sold, with lender's consent, at a price less than the outstanding balance on a mortgage, the sale is known as a

Short Sale

A single party listing

Should have no hold over

Which of the following is a requirement of a valid deed?

Signature of the grantor

DISCLAIMER DEED

Signed By One Spouse Before Purchase to Prevent the Property from Becoming COMMUNITY PROPERTY NO COVENANTS or WARRANTIES

B. Discounting

Since investors prefer to have money now rather than later, money received next week, instead of today, is not worth as much to those receiving it. Therefore an adjustment to the prospective cash flows is required. This process is referred to as:

A. Broker commission

Since the seller often has utilized the property for a portion of the year in which the transaction is being made, certain costs associated with the property will be prorated at the closing. All of the following items are subject to being prorated EXCEPT:

An appraisal is considered to be out of date if it is more than:

Six months

B. Clustering

Six suburban office building have been constructed along six consecutive blocks in Roseland, New Jersey. This is an example of:

LEGAL CONSIDERATION

Something of Legal Value Given in Exchange for a Promise. VALUABLE - Money, Personal Property, Goods or Services GOOD - Love and Affection

The most limited of all the agency relationships is called:

Special Agency

The relationship between a broker and a client created by a listing agreement is an example of:

Special Agency

Which of the following is NOT usually prorated at closing

Special tax assessments

Which of the following is NOT usually prorated at closing?

Special tax assessments.

A grantor does not wish to be responsible for defects in the title that arise from previous owners but will guarantee the title for the time the grantor has the ownership. What type of deed with the grantor convey

Special warranty deed

A lien filed by a contractor is a

Specific Lien

The default remedy that could result in the full execution of the contract is:

Specific Performance

Paragraph 7.D.(2) should include:

Specific repairs and treatments

D. negatively amortizing

Standard mortgage loans require monthly payments typically composed of two components: interest and principal repayments. When scheduled mortgage payments are insufficient to pay all of the accumulating interest, causing some interest to be added to the outstanding balance after each payment shortfall, the loan is said to be:

A. Handling money in trust for clients

State licensing laws prescribe behavioral requirements with which licensees must comply to keep their licenses. Licensing laws generally seek to prevent brokers from partaking in all of the following activities EXCEPT:

GRANTING CLAUSE

States the GRANTOR'S Intention to Convey the Real Property. DEED MUST Contain the Granting Clause TB VALID / ENFORCEABLE. GRANTING CLAUSE PREVAILS Over a HABENDUM CLAUSE.

Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable?

Statue of Frauds

A mechanics lien would be properly classified as a

Statutory lien

A property that has been the scene of a murder or an alleged haunting is:

Stigmatized

According to the TREC contract, accessories include:

Stoves

All of the following methods of describing land qualify as legal descriptions except:

Street address.

QUALITY OF CLAIM TO TITLE STRENGTH OF TITLE

Strength of TITLE (From Strongest to Weakest): 1. Recorded Deed with Possession 2. Unrecorded Deed with Possession 3. Recorded Deed and no Possession 4. Unrecorded Deed and no Possession 5. Abstract of Title (no Deed) and Possession

A licensee not associated with the client's broker but who is representing the client through a cooperative agreement with the client's broker is known as:

Sub-agent

A. $12,278.86

Suppose that a tenant is interested in renting out a two-bedroom apartment for $1000 a month for the next year. While the tenant requires rent to be paid at the beginning of the month, he will not be depositing the rental check into a local savings account until the end of each month. If the annual interest that the tenant can earn on this account is 5% and interest is compounded monthly, how much will the tenant have in his savings account at the end of the year?

Freehold estates usually include:

Surface, subsurface and air rights

In order to file a complaint of discrimination the complainant must:

Suspect that discrimination occurred

The Broker Lawyer Committee was created by:

TREC

The organization that has the authority to issue and revoke real estate licenses is:

TREC

Which of the following can oversee the licensing process of individuals?

TREC

Reservations of oil, gas and other minerals will generally be inserted in

TREC Addenda form