National Practice Exam 4
A person buys the right to purchase land up until a stated date, at a specified price. Which of the following items would be used to create such an arrangement? Select one: A. An option agreement B. A deed C. An offer to purchase agreement D. A contract for deed
A. An option agreement- A option agreement provides the right to buy land at a stated price for a specified period of time. The correct answer is: An option agreement
What would most likely to be included in the sale of real property? Select one: A. An easement B. Enjoyment C. Trade fixtures D. A kitchen sink
B. Enjoyment- Enjoyment refers to one of the legal rights that ALWAYS accompanies property ownership. An easement may not always convey (ex. if it is an easement in gross). Trade fixtures are personal property of the tenant for the operation of business, and will not convey so long as they are timely removed. A kitchen sink could be either a fixture or a trade fixture. As a trade fixture, it would not automatically convey if it were timely removed. As a fixture, it would not automatically convey if there were an agreement to the contrary or severance was otherwise possible. Therefore, enjoyment is the best answer. The correct answer is: Enjoyment
Discount points increase yields for: Select one: A. Brokers B. Lenders C. Sellers D. Buyers
B. Lenders- Discount points are charges imposed by the lender to increase their yield on a loan, over and above the interest collected over the term. The correct answer is: Lenders
A lease where the tenant pays taxes and maintenance costs is a: Select one: A. Net lease B. Percentage lease C. Ground lease D. Gross lease
A. Net lease- In a net lease, the tenant (lessee) agrees to pay a fixed rental amount along with a pro rata share of the landlord's building costs, including taxes, insurance, utilities, and repairs. In a gross lease, the tenant pays a fixed rental amount and the landlord pays his own building expenses. In a percentage lease, the tenant pays a fixed percent of the income earned through the rented space. The correct answer is: Net lease
An option on real property is: Select one: A. Consideration B. A contract C. A license D. Both A and B
B. A contract- A valid option is an enforceable contract whereby the optionor (seller) gives the optionee (buyer) the right to buy the property for a specified price at any time until some specific date in the future. Like any contract, an option requires consideration to be enforceable, but the option itself is NOT sufficient consideration--the optionee must exchange something for the option (like money). The correct answer is: A contract
A husband and wife own property, and their mortgage payment is due on the 1st of the month. They are thirty days late on their payment when they receive a notice saying that they MUST make payment within ten days. If they fail to pay, the entire loan balance is due immediately. Which mortgage clause would set these terms? Select one: A. Alienation clause B. Acceleration clause C. Estoppel clause D. Forfeiture clause-
B. Acceleration clause- The acceleration clause states that the entire loan balence is due immediately if the borrower violates the covenants of the mortgage agreement (for example, the promise to make payments on time). The correct answer is: Acceleration clause
Tax assessment of real property according to value is known as: Select one: A. Appraisal B. Ad valorem C. Replacement cost D. Accretion
B. Ad valorem- One of the two principal methods of assessing real estate taxes is ad valorem (and the other is special assessment). "Ad valorem" is Latin for "according to value." Ad valorem taxes are based on the unique assessed value of the subject property. The correct answer is: Ad valorem
Deed restrictions usually affect: Select one: A. The current owner only B. Current and subsequent owners C. Subsequent owners only D. All property owners within local government boundaries
B. Current and subsequent owners- Valid deed restrictions affect both the current and subsequent owners. The correct answer is: Current and subsequent owners
A salesperson who engages in steering might be subject to all of the following results, EXCEPT: Select one: A. Suit in federal court by the Attorney General B. Immunity from suit due to broker's primary liability C. Investigation by HUD D. Private suit for money damages
B. Immunity from suit due to broker's primary liability- A salesperson is not shielded from fair housing liability simply because he acts on behalf of his principal (the broker). The salesperson would still be liable if he carried out an illegal act, regardless of who he did it for. The correct answer is: Immunity from suit due to broker's primary liability
Sam Slick lists his home with Clueless Kelly, a broker. Two weeks later, Kelly learns that Sam has a reputation for dishonesty and a bad record with other brokers. Three weeks later, Kelly learns that Sam is speaking to other brokers behind her back. Kelly confronts Sam and terminates the listing. Which party breached the listing agreement? Select one: A. Sam, because he was speaking with other brokers B. Kelly, because she unilaterally terminated the agreement C. Sam, because he terminated the agreement D. None of the above
B. Kelly, because she unilaterally terminated the agreement- B. Kelly, because she unilaterally terminated the agreement
Three people own a piece of property as tenants-in-common. Two of the owners want to sell the property, but the third party does not. The two owners that want to sell: Select one: A. Cannot sell because all three must agree B. May file suit for partition C. May seek detachment D. May sever the third party's interest
B. May file suit for partition- Joint tenants and tenants-in-common may file suit for partition (a request for a court to divide concurrently owned property). If indivisible, a court might order the sale of the property and then divide the proceeds. The correct answer is: May file suit for partition
Who is an intermediary between a lender and a borrower? Select one: A. Insurance company B. Mortgage broker C. Federal Reserve Board D. FDIC
B. Mortgage broker- An intermediary is a go-between. A mortgage broker serves as the liaison between the people who have money to lend and the people who want to borrow money. Think of the mortgage broker in the same way that you would a real estate broker. The broker knows someone who wants to sell a house and also someone who wants to buy a house. He acts as the go-between and helps close the deal. The correct answer is: Mortgage broker
Which of the following items would NOT be a latent defect that the seller must disclose to the buyer? Select one: A. Termite damage B. Non-functioning furnace C. Seasonal flooding D. Cracked foundation
B. Non-functioning furnace- The broker must disclose all adverse material facts that she knows about the physical condition of the property. All of the listed items are latent defects (hidden or not readily discoverable by inspection), except the broken furnace. The broken furnace isn't a latent defect because it is more easily discoverable. The correct answer is: Non-functioning furnace
Under the usual listing agreement, a salesperson can: Select one: A. Accept or reject offers for the seller B. Place a "For Sale" sign on the property C. Deposit earnest money in her escrow account D. Advertise property at lower than the list price
B. Place a "For Sale" sign on the property- Under the usual listing agreement, the broker can place a "For Sale" sign on the property (and all advertising must be truthful, not misleading). The listing broker (agent) is accountable to the seller (principal) and the buyer for any monies received from either party. The salesperson cannot deposit earnest money in her own escrow account--it must be deposited in the broker's escrow account. Finally, all offers must be presented in a timely manner, but only the seller can decide whether to accept or reject those terms. The correct answer is: Place a "For Sale" sign on the property
A general agency empowers the agent to: Select one: A. Transact matters of all types for the client B. Transact the client's affairs in a certain business C. Perform only specific acts for the client D. Perform any legal act for the client
B. Transact the client's affairs in a certain business- A general agent is authorized to perform any and all acts associated with a specific service. The other choices are either too broad or too narrow. The correct answer is: Transact the client's affairs in a certain business
The Real Estate Settlement Procedures Act (RESPA) requires lending institutions to provide a Loan Estimate of closing costs: Select one: A. When the loan application is submitted B. Within 3 days of the loan application C. Within 3 days of closing D. Within 10 days of the loan application
B. Within 3 days of the loan application- The age of computers has made it possible for the lender to disclose estimated closing costs on the spot (at the time of loan application), but the law requires that the estimate be provided within 3 days of application. The correct answer is: Within 3 days of the loan application
Jill's property sells for $150,000. The state transfer tax is $1 per $1,000 and the county transfer tax is $0.50 per $1,000. How much must Jill pay in total transfer taxes? Select one: A. $175 B. $200 C. $225 D. $250
C. $225- Transfer taxes are calculated by the following formula: Total Transfer Tax = (Sales Price x State Tax) + (Sales Price x County Tax) State Tax = $1 / $1000 = 0.001 County Tax = $0.50 / $1000 = 0.0005 From here, we can add this information into the Transfer Tax Formula: Total Transfer Tax = ($150,000 x 0.001) + ($150,000 x 0.0005) Total Transfer Tax = $150 + $75 = $225 The correct answer is: $225
What is the sales price of the property if the loan-to-value ratio (LTV) is 80%, the buyer puts 20% down, and then pays $1,000 in cash for two points? Select one: A. $50,000 B. $55,750 C. $62,500 D. $70,000
C. $62,500- First, calculate the loan amount using the discount point information. Remember that a point is equal to 1% of the loan amount. 2 points = 2% of the loan amount = $1,000 0.02X = $1,000 X = $1,000 / 0.02 = $50,000 loan amount Next, note that the loan amount is 80% of the sales price. Use this to determine the full sales price for the property: 80% Sales Price = loan amount 0.80Y = $50,000 Y = $50,000 / 0.80 = $62,500 sales price The correct answer is: $62,500
Which of the following factors would have the LEAST affect on an appraisal? Select one: A. The real estate market B. Income to be derived from the property C. Location of the property D. Livelihood of the prospective buyer
D. Livelihood of the prospective buyer- The livelihood (the means by which a person makes a living) would have the least affect on the appraisal. What the buyer does for a living has absolutely no bearing on value. However, the real estate market, location, and income to be derived from the property all have considerable influence on the appraisal. The correct answer is: Livelihood of the prospective buyer
Under a net lease, what is the tenant NOT required to pay? Select one: A. Taxes B. Repairs C. Utilities D. Mortgage
D. Mortgage- Under the typical net lease, the tenant agrees to pay a pro-rated share of all of the listed items except the mortgage, which is paid by the landlord. The correct answer is: Mortgage
Which of the following items is the listing agent NOT required to disclose? Select one: A. To the seller: that the potential buyer is having financial problems B. To the seller: that the state plans to build a new highway near the property C. To the buyer: that they property is subject to seasonal flooding D. To the buyer: that the seller is going through a divorce
D. To the buyer: that the seller is going through a divorce- As agent or sub-agent, you have a duty of confidentiality to the principal. You must disclose a customer's financial information if you know about it and it could impact the transaction. You must also disclose the other items, except for the fact that a seller is going through a divorce--this could weaken the seller's bargaining position and violate your duty of confidentiality. The correct answer is: To the buyer: that the seller is going through a divorce
Larry sells property to David and the deed contains the following covenants: seisin, quiet enjoyment, against encumbrances, and further assurances. Following the transfer, David discovers utility poles on the property that lead to a nearby transformer. Larry failed to list the utility poles in the deed. Larry's failure to identify such encumbrances violates: Select one: A. The covenant of quiet enjoyment B. The covenant against encumbrances C. The covenant against grantor's acts D. None of the above
D. None of the above- A covenant against encumbrances is the grantor's guarantee that there are no encumbrances against the property except those specifically disclosed. The utility poles are indeed an encumbrance. However, the covenant against encumbrances is NOT breached by failing to list an open and visible encumbrance, like a power line or drainage ditch. Open and visible encumbrances provide actual notice to purchasers. Therefore, such encumbrances need not be listed in the deed. The correct answer is: None of the above
Betty and Billy had a contract for sale, but it discharged. Which of the following statements must be true about Betty and Billy's conduct? Select one: A. Both Betty and Billy fully performed B. Either Betty or Billy is in breach C. Both parties may seek damages D. Both B and C
A. Both Betty and Billy fully performed- A contract is only "discharged" after both parties fully perform. Therefore, neither party could be in breach or entitled to seek damages. The correct answer is: Both Betty and Billy fully performed
Many Korean families have purchased homes in a specific neighborhood of your community. Now, local merchants are marketing to the Korean clientele. A Caucasian resident listed his house with your firm and you add the property to the MLS. You also place a bilingual ad in the newspaper and a bilingual "For Sale" sign on the property. Are your actions discriminatory? Select one: A. No, this is proper marketing practice B. No, because you are targeting the market most likely to purchase the property C. Yes, because national origin is protected by the 1968 Fair Housing Law D. Yes, because bilingual ads are a form of steering
A. No, this is proper marketing practice- The actions of the broker in this situation do not constitute a violation of the law. However, showing a preference or limiting the advertisements to one particular group would be a violation. The correct answer is: No, this is proper marketing practice
The transfer of title from the government to an individual is called a(n): Select one: A. Public grant B. Dedication C. Foreclosure D. Accession
A. Public grant- This question states the classic definition of public grant. The correct answer is: Public grant
A broker executes a listing agreement with her client. The broker subsequently learns that the property is in foreclosure. Which of the following choices is the broker's best course of action? Select one: A. Sell the property before the foreclosure is completed B. Advise all prospective buyers of the pending foreclosure C. Rescind the listing D. Buy the property quickly
A. Sell the property before the foreclosure is completed- The broker owes fiduciary duties to her client, which include the duty to keep her client's financial position confidential. The broker cannot disclose the pending foreclosure without consent because it might weaken the seller's bargaining position. The broker also has a duty to disclose material information to prospective buyers. However, a pending foreclosure is not material if the broker finds a buyer in time--it does not impact the property in any physical way or diminish ownership rights for future owners. If the broker can't sell the property before the foreclosure goes through, the seller no longer has any property to sell. Meanwhile, there is no basis for the broker to rescind the listing agreement and the she risks violating a fiduciary duty in purchasing the property herself. Therefore, the best response is for the broker to sell the property before the foreclosure is complete. This satisfies her duty under the listing agreement. The correct answer is: Sell the property before the foreclosure is completed
What would the appraisal of a single-family residence probably NOT take into consideration? Select one: A. The potential rental income B. The location of the property C. The floor plan of the house D. The sales price of the house across the street
A. The potential rental income- The appraiser would place most emphasis on the market data (comparable sales) approach, which is based on the recent selling price of similar properties in the area. More likely than not, a single-family home would not be intended as a rental income property. Remember that the primary determination of value is situs, or "LOCATION, LOCATION, LOCATION". The correct answer is: The potential rental income
A joint tenant wants to sell his interest without consent from the other joint tenants. Can he do this? Select one: A. Yes, because each joint tenant may sell independently of the others B. Yes, because survivorship is present in joint tenancy C. No, because all co-owners must first agree to sever the tenancy D. No, because the unity of interest in a joint tenancy protects the other co-owners
A. Yes, because each joint tenant may sell independently of the others- One joint tenant may sell his or her interest independently of the others and without their consent, but could NOT sell the whole. Anyone who buys that interest will become a tenant-in-common with the others, not a joint tenant. The correct answer is: Yes, because each joint tenant may sell independently of the others
Paul purchased a home for $150,000. He obtained a 9.5% interest, 30-year loan for $120,000. The monthly payment is $1,009.03. What is the balance of Paul's loan after the second payment has been made? Select one: A. $120,071.32 B. $119,881.47 C. $118,990.97 D. $117,981.94
B. $119,881.47- First, we need to determine the interest and principal paid during Paul's initial payment: Annual interest = $120,000 x 0.095 = $11,400 annual interest Monthly interest = $11,400 / 12 = $950 monthly interest Monthly principal = $1,009.03 - $950 = $59.03 principal. Loan Balance = $120,000 - $59.03 = $119,940.97 new balance Now, we need to use the new balance to determine the interest and principal during the second month's payment: Annual interest = $119,940.97 x 0.095 = $11,394.39 annual interest Monthly interest = $11,394.39 / 12 = $949.53 monthly interest Monthly principal = $1,009.03 - 949.53 = $59.50 principal Loan Balance = $119,940.97 - $59.50 = $119,881.47 new balance. The correct answer is: $119,881.47
A developer has 25 acres, which he plans to sub-divide into 1/2 acre building lots. Of the total tract, he must dedicate 5% for streets, and 15% for recreation and open space. Each lot will sell for $19,560. What is the developer's potential income? Select one: A. $978,000 B. $789,375 C. $782,400 D. $391,200
C. $782,400- First, understand that the total number of acres to develop is 25. Next, deduct the amount of land that will not be sold as a building lot (streets and recreation), or 5 acres. Other property = 5% + 15% = 20% Sold property = 100% - 20% = 80% Sold property = 25 acres x 0.80 = 20 acres Next, calculate the number of 1/2 acre lots that can fit on the development and multiple the number of lots by the selling price: Number of Lots = 20 acres x 2 = 40 lots Profit = $19,560 x 40 = $782,400. If you forgot that these were 1/2 acre lots and multiplied by 20, you may have selected $391,200. The correct answer is: $782,400
The most predictable element of severance is: Select one: A. Attachment B. Intent C. Agreement D. Adaption
C. Agreement- You should avoid doubt by putting the severance agreement in writing. A written agreement is the best way to ensure questionable items (like fixtures) transfer. The correct answer is: Agreement
Which of the following is required for a contract to be valid? Select one: A. Must be written B. Property description C. Consideration D. All of the above
C. Consideration- The essential elements of a contract are: offer/acceptance, consideration, and a lack of defenses. The question does not specify a REAL ESTATE contract, which would require (in addition to the other essentials) that it be in writing and include a property description. The correct answer is: Consideration
The purpose of a recording act is to: Select one: A. Ensure title is marketable B. Raise revenue C. Create a local public record D. Protect property owners
C. Create a local public record- Recording acts create local public records that are available for public inspection and ensures public notice of all recorded information. The correct answer is: Create a local public record
A buyer-broker agreement may arise by all of the following means, except: Select one: A. Express agreement B. Ostensible agreement C. Custom D. None of the above are valid
C. Custom- An agency relationship with a buyer may be created by all of the methods identified, except by custom. While custom can be used to establish a relationship, it is generally a means to establish an agency relationship with the seller, not the buyer. The correct answer is: Custom
When leasing property under a net lease, the tenant could deduct all of the following as business expenses, EXCEPT: Select one: A. Maintenance B. Fire insurance C. Depreciation D. Utilities
C. Depreciation- Under a net lease, the lessee (tenant) pays for maintenance (upkeep) of the property, fire insurance, and utilities. Depreciation is an income tax deduction, available only to the owner and not the tenant. The correct answer is: Depreciation
Farmer Pete leases land to grow wheat. In April, Farmer Pete plants his crop, expecting to harvest in October. However, just before harvest time, his landlord successfully evicts him for nonpayment of rent. In October, Farmer Pete attempts to harvest his wheat. The wheat belongs to: Select one: A. The landlord, because Farmer Pete is no longer in possession of the property B. Farmer Pete, but he cannot re-enter the property without the landlord's permission C. Farmer Pete, because it is personal property D. The landlord, because the crops are affixed to the land
C. Farmer Pete, because it is personal property- Growing crops are known as fructus industriales, or emblements. Emblements remain personal property even before harvest, despite the fact that they are attached to the land. Landlords cannot deny tenants the right to enter and harvest crops after a lease terminates. The correct answer is: Farmer Pete, because it is personal property
Chris defaults on his house loan and the lender wants to auction the property (which secures the loan) in order to satisfy his debt. This is known as: Select one: A. Short sale B. Forfeiture C. Foreclosure D. None of the above
C. Foreclosure- A short sale happens when the defaulting borrower sells the property to a new buyer for less than the full amount owed to the lender. Foreclosure is the loss of property to pay off a debt. Forfeiture is losing the property because the person has disobeyed a condition in the deed. The correct answer is: Foreclosure
Jane decides to update the bathrooms before selling her home. By renovating the outdated bathroom fixtures, she has actually increased the value of her home. The outdated fixtures are an example of: Select one: A. Physical obsolescence -- curable B. Physical obsolescence -- incurable C. Functional obsolescence -- curable D. Functional obsolescence -- incurable
C. Functional obsolescence -- curable- Functional obsolescence is the loss of value that a building suffers due to outdated design or materials. Such obsolescence is curable if the deficiency is economical to correct, and incurable if it is not economical to correct. This situation is a curable obsolescence since bathroom fixtures are relatively inexpensive and the property value increased after such improvements were made. The correct answer is: Functional obsolescence -- curable
Nate rents a vacant lot from Zach for 30 years. Nate plans to erect a building on this land at his own expense. This lease is most likely a: Select one: A. Net lease B. Gross lease C. Ground lease D. Sale and lease back
C. Ground lease- This is a textbook example of a ground lease. Nate will pay rent for use of the land for the duration of the lease (30 years). Nate may use any improvements that he builds during his leasehold, but Zack will own those improvements at the end of Nate's leasehold. The correct answer is: Ground lease
Under Truth-In-Lending requirements, the mortgagee: Select one: A. Is regulated on how much interest it may charge B. Must provide an accurate amortization schedule C. Must advise the borrower of the total interest paid if the loan is fully satisfied on the scheduled maturity date D. Must allow the loan to be assumed
C. Must advise the borrower of the total interest paid if the loan is fully satisfied on the scheduled maturity date- Under the Truth-In-Lending law, the lender (mortgagee) is required to disclose the cost of obtaining credit to the borrower. Usury laws (state laws), not TILA, limit the amount of interest a lender may charge. While Truth-In-Lending requires a lender to provide the total interest to be paid, it does not require that the lender provide an amortization schedule (a breakdown of each payment into the amount paid to principal and interest). Finally, Truth-In-Lending does not address the issue of assumptions. The correct answer is: Must advise the borrower of the total interest paid if the loan is fully satisfied on the scheduled maturity date
Barney owns a lot valued at $84,000. He purchases an adjoining lot for $66,000 and merges the two. The appraised value of the newly formed lot is $177,500. This is an example of: Select one: A. Accretion B. Avulsion C. Plottage D. Hypothecation
C. Plottage- This process of merging lots under one ownership is known as assemblage. The resulting increase in value is referred to as plottage value. The correct answer is: Plottage
A property is listed at $68,000. A full price offer is made without contingencies. In this situation, which of the following statements is correct? Select one: A. The seller must accept the offer B. The seller is not obligated to pay the commission C. The seller may refuse to sell D. The seller would be in violation of the Fair Housing Law
C. The seller may refuse to sell- Understand that a listing is not an offer, but an invitation for a buyer to submit an offer. Therefore, a buyer cannot accept a seller's listing--she must make an offer. Here, the broker earned his commission because he found a ready, willing, and able buyer on the terms of the seller. Whether he will ever collect is another issue. The correct answer is: The seller may refuse to sell
Dan and Daisy enter into a buyer-broker agreement. Dan believes that Daisy is in breach. May Dan terminate the contract? Select one: A. Yes, but Dan waives his right to specific performance B. No, unless there is a mutual agreement between Dan and Daisy C. Yes, but Dan risks causing a breach himself D. No, so long as Daisy is willing and able to perform
C. Yes, but Dan risks causing a breach himself- Dan has no right to specific performance because this is a personal service contract. One may terminate a contract with or without mutual consent (regardless of whether the other party is willing and able to perform). However, any time you terminate a contract, you risk a breach. If Daisy wasn't actually in breach, Dan's termination would be a breach of the contract. The correct answer is: Yes, but Dan risks causing a breach himself
A property sold for $40,625, with an 80% LTV and at 9% interest rate. If the monthly payment is $325, what is the remaining balance on the loan at the end of two months? Select one: A. $40,605 B. $40,584 C. $32,419 D. $32,337
D. $32,337- First, determine the full loan amount, interest payments, and principal for the initial payment: Loan amount = $40,625 x 0.80 = $32,500 Interest (annual) = $32,500 x 0.09 = $2,925 Interest (monthly) = $2,925 / 12 = $243.75 Principal = $325 - $243.75 = $81.25 Loan balance = $32,500 - $81.25 = $32,418.75 Now, determine the interest, principal, and balance for the second month's payment: Interest (annual) = $32,419.75 x 0.09 = $2,917.69 Interest (monthly) = $243.14 Principal = $325 - $243.14 = $81.86 Loan balance = $32,418.75 - $81.86 = $32,336.89 Rounded to the nearest dollar, the remaining balance after the second payment is $32,337. The correct answer is: $32,337
Building codes: Select one: A. Could be based on national standards B. Are enforced locally C. Involve a certificate of occupancy D. All of the above
D. All of the above- Building codes often include national, state, or local standards. They are issued and enforced by local authorities, and a certificate of occupancy must be issued to document conformity. The correct answer is: All of the above
Which of the following entities makes direct mortgage loans available to prospective borrowers? Select one: A. Life insurance companies B. Commercial banks C. Mortgage brokers D. All of the above
D. All of the above- Trick question! This one is a play on words to tempt you into an assumption. Note that the question asks you to identify entities that make direct loans AVAILABLE, not entities that MAKE DIRECT LOANS. All of the listed choices make direct loans, EXCEPT for mortgage brokers. However, in addition to the other choices, mortgage brokers make direct loans available by matching lenders with buyers. While arguably "unfair", this type of question illustrates how you must understand the content AND potential traps. The correct answer is: All of the above
Vernon presents an offer to a seller, with the provision that it must be accepted within 72 hours. Under which of the following circumstances would the offer terminate? Select one: A. Vernon dies before the seller accepts the offer B. The seller re-submits the offer with a minor change to the settlement date C. The seller proposes to wait a week before acceptance D. Any of the above would terminate the offer
D. Any of the above would terminate the offer- If Vernon dies before the seller accepts the offer, the offer terminates. Re-submitting an offer with a different settlement date and proposing to wait a week before acceptance are both counteroffers. Counteroffers are new offers that terminate the original offer. The correct answer is: Any of the above would terminate the offer
A condominium could be which of the following descriptions? Select one: A. Multi-story building B. Townhouse community C. Industrial office park D. Any of the above
D. Any of the above- We commonly think of a condo as an apartment-style building. However, condominium type ownership can be created anywhere, for any type of property. Some residential neighborhoods (consisting of only single-family homes) are under condominium rules and regulations. Each person owns their own home, but shares an interest in common elements like playgrounds, swimming pools, etc. Industrial property COULD be created as a condominium; the tenants would own their own buildings and share ownership in drive ways and parking facilities. The correct answer is: Any of the above
Under which type of contract would the seller withhold legal title to property until the terms of the contract have been fulfilled? Select one: A. Contract for sale B. Option C. Installment sales contract D. Any of the above
D. Any of the above- With a contract for sale, the seller holds title until closing when the seller presents the money in exchange for legal title. With an option, the seller holds title until the option is exercised. With an Installment contract, the seller holds title until the buyer pays the agreed upon purchase price in full. The correct answer is: Any of the above
Consistent with Fair Housing Laws, an owner of an apartment building rents exclusively to the elderly. Currently, 70% of his units are occupied and 30% are vacant. To continue renting exclusively to the elderly (without violating Fair Housing Laws), the owner may rent the next unit to all of the following persons, EXCEPT: Select one: A. A couple who are expecting a baby B. A 65 year old handicapped person C. A retired 53 year old widow D. Both A and C
D. Both A and C- Elderly housing is exempt from familial status protections if it falls into one of two categories: (i) all residents are 62 or older; or (ii) in at least 80% of units, at least one person is 55 or older. In this situation, because only 70% of the units are occupied, the landlord must rent the next unit to someone over age 55 if he hopes to retain the exemption. If the landlord rented to anyone younger, he would be further from satisfying either exemption category (all at 62yo, or 80% at 55yo). Therefore, the owner wouldn't want to rent to either an expecting couple or a retired 53 year old widow. The correct answer is: Both A and C
The government's right to take private property for public improvements is subject to all of the following requirements, except: Select one: A. The ownership interest held by the current owner B. Public purpose C. Economically profitable uses of the land by the owner D. Both A and C
D. Both A and C- The exercise of eminent domain requires a public use and just compensation for the taken property. The ownership interests of the current owner and whether the use is economically viable are irrelevant. The correct answer is: Both A and C
Which regulations are designed to control density and over-crowding? Select one: A. Buffer zoning B. A master plan C. Spot zoning D. Bulk zoning
D. Bulk zoning- Bulk zoning is used to control building density by imposing restrictions on setback lines, building height, and the percentage of open areas. The correct answer is: Bulk zoning
The period of time over which an income-prducing property gives benefit to its owner is called: Select one: A. Investment life B. Value life C. Physical life D. Economic life
D. Economic life- Economic life (useful life) is the period of time over which an income-producing property is expected to remain economically profitable to its owner. Economic life is SHORTER than physical life. The correct answer is: Economic life
